Avoiding the EEOC

If statistics are any indicator, it is getting harder for Tennessee employers to avoid the EEOC. Of course, statistics are only as good as the underlying data but here, I want to present the underlying data and let you draw your own conclusions.

I'll start by recounting the fact that some of my clients (and I hear of other employers) think, "it won't happen to me" or "everyone in town" fails to comply with this rule, why should I? Here is why.

The EEOC has released its "Performance and Accountability Report" for FY 2009. While the report lets the EEOC say how well it is doing its job, it also includes basic information on the charges that are filed and the lawsuits the EEOC decides to file. (The EEOC divides charges between the federal and private sector so I will only address private sector data.)

I like to look at trends and one significant trend for employer is that in FY 2008, the EEOC received 95,402 private sector charges of discrimination, which, the EEOC says, is a 15.2% increase in all charges (including retaliation charges) filed in FY 2007. This means 12,000 more charges were filed in FY 2008 than in 2007 and that the EEOC is beginning FY 2009 with an "inventory" of nearly 75,000 charges. That means employers (and employees) will have to wait longer for the EEOC to investigate and resolve charges of discrimination unless, as the EEOC says it is trying to do, the EEOC makes "major improvements in case processing."

The EEOC also likes to mention how it conducts litigation. In FY 2008, the EEOC filed filed 290 lawsuits alleging some kind of discrimination or retaliation (as opposed to actions seeking enforcement of an EEOC subpoena). Now this is significant for Tennessee employers for several reasons. First, I can recall at least three lawsuits that the EEOC has brought against East Tennessee employers in the last one or two years. Second, the EEOC's success rate in litigation is statistically better (50 percent v. 38 percent) than that of private attorneys. (That doesn't reflect on the quality of representation so much as the disparity in litigation resources and the ability to select which lawsuits to bring.)

One other point the EEOC made was that its lawsuit statistics show it is under-filing age and disability discrimination claims (exactly how the EEOC measures this need not be explained here, it is enough to say this is what the EEOC believes). So, while employers should always be careful in making employment decisions, employers should also be aware that the EEOC wants to normalize its statistics on the age and disability lawsuits it brings.

It is hardly surprising that with the economy tanking, charge filings are up but to be up 15 percent in just one year is pretty dramatic. To put it in perspective, private sector charge filings were up 9 percent in FY 2007 (82,792 charges were filed), but up only a negligible amount (less than 500) in FY 2006 when 75,768 private sector charges of discrimination were filed as compared to the 75,428 filed in FY 2005, 79,432 in FY 2004 and 81,293 filed in FY 2003. And if you average all the prior fiscal years (where there were on average 78,943 charges filed) that means charge filings in FY 2008 are up 17.25 percent.

So, if this means anything, it is a reminder that difficult economic times means an increase in employment related litigation. Even more so that usual, a wise employer should carefully plan and document all of its employment decisions, conduct fair investigations before imposing discipline for misconduct and consult with competent counsel whenever there is any doubt about the approach to be taken in any given situation.

Fair Investigations – A Follow Up

In Sunday's post I addressed when an independent investigation will "sanitize" the employer's decision even if a biased subordinate employee might have otherwise influenced the employer to fire another employee. Yesterday, the Sixth Circuit issued another decision on independent investigations and it is worth revisiting the issue to show where an employer did something right.

Rock-Tenn fired a black employee for insubordination. The employee presented evidence that his immediate supervisor was biased but the employee failed to show the supervisor played any role – other than to file a written report on the insubordination incident - in deciding to fire him. The court ducked deciding whether or not the biased supervisor played a role in the decision by holding the employer had conducted an independent investigation during which it gave the employee the opportunity to present his side of the story and that the decision to fire the employee was made only after the employee was heard. So the difference between what Rock-Tenn did and what the employers in Madden and Martin did was to show they listened to the employee and formed their opinion only after hearing the employee's version of events. This case show that even where there is very strong evidence that the immediate supervisor is a first class bigot, the employer can still prevail by conducting an independent investigation.

One judge, however, dissented. I don't normally mention dissents – few attorneys read them and employers don't want to hear lawyers squabble about legal issues. It is worth discussing Judge Moore's points not so much because she is right but because of the impact her views would have on employers were they to prevail.

Judge Moore would have found Rock-Tenn liable because she thought the employer's investigation "severely deficient." While Judge Moore offers good HR policy advice, it is difficult to see how her criticisms of the investigation establish the employer intentionally discriminated against the employee. Citing Madden, Judge Moore faulted Rock-Tenn's investigation because no one "investigated the possible role that [the supervisor's] discriminatory animus may have played in the incident."

Here is where I think Judge Moore went too far. If an employer gives the employee a meaningful chance to present his (or her) version of events, how much more must an employer do to avoid being tagged in a discrimination suit? The employee here had filed two different EEOC charges and several grievances before his insubordination incident so it isn't as if he was timid about asserting charges of discrimination or unfair treatment. (In fact, the employee's grievance over this termination was sustained by an arbitrator.)

Now, I might would agree with Judge Moore had the employee presented some evidence that the supervisor's bias caused the incident that led to his insubordination. While the discrimination laws don't give an employee the license to be insubordinate, evidence that a supervisor's bias somehow triggers an employee's misconduct might be something an employer should investigate. I might also agree had there been some evidence that when interviewed the employee made claims that the employer then ignored. Neither situation occurred here, however.

Judge Moore states her position as being: "When an ultimate decisionmaker has knowledge of a supervisor's racial animus and that supervisor reports an employee in the protected class leading to his termination, management's investigation should not focus only on the employee's alleged misconduct. Instead, management should broaden the scope of the investigation to consider what role, if any, the supervisor's racial animus may have played in the events in question." No doubt, this would be a good rule from an HR point of view but countless decisions have held that courts don't act as "super-personnel departments." Hedrick v. Western Reserve Care System, 355 F.3d 444, 462 (6^th Cir. 2004).

Right now, Judge Moore's view is not the law and her decision cites no other court decision which has espoused her view. So far as I have found, the prevailing view is that an employer simply needs to give the employee a meaningful opportunity to tell his version of events and, of course, the employer needs to listen to the employee with an open mind before making the final decision. Indeed, the principal decision Judge Moore cites (for the reason I explain below) says this is all an employer need do. See Brewer v. Bd. of Trs. of Univ. of Ill., 479 F.3d 908, 920 (7th Cir.), cert. denied, 128 S. Ct. 357 (2007).

Of course, a prudent employer will err on the side of going overboard in an employee misconduct investigation. There is every good reason to do so for, as Judge Moore acknowledges, when an employer is faced with conflicting stories between two employees "there is probably no practical step an employer can take beyond independently investigating the misconduct charges that will reduce the chances of an employee's racism influencing its behavior." (quoting Brewer, supra).

When Two 20-minute Unpaid Breaks Don’t Add Up to 30 Minutes

Most Tennessee employers know that Tennessee Code Annotated § 50-2-103(h) requires them to provide employees who work six hours consecutively with a 30 minute unpaid rest or meal break. Last week, the Tennessee Attorney General addressed whether an employer complied with this requirement by providing two 20-minute unpaid breaks that the employees could take however they wish. The answer was "no" but there were qualifications.

Tenn. Code Ann. § 50-2-103(h) provides:

Each employee must have a thirty (30) minute unpaid rest break or meal period if scheduled to work six (6) hours consecutively, except in workplace environments that by their nature of business provide for ample opportunity to rest or take an appropriate break. Such break shall not be scheduled during or before the first hour of scheduled work activity.

A violation of this provision could subject the employer to a criminal prosecution (for a Class B misdemeanor) or a civil penalty from the Tennessee department of labor. So far, there is no definitive ruling on whether employees could sue privately for an alleged violation.

The attorney general's opinion said permitting two 20-minute breaks during the day would not comply with the statute because the statute requires at least one 30-minute unpaid break. The opinion also said, however, that the 20-minute breaks may let the employer fall within the "ample opportunity to rest or take an appropriate break" exception but that would depend on the specific facts.

The paragraph on the exception seems to muddy the waters. The statute provides that the exception applies when the "workplace environment" when the "nature of business" provides ample opportunity for work. If the AG is going to interpret the statute literally when it says "30 minutes" as if it read 30 consecutive minutes then it is somewhat inconsistent to say that breaks might be part of the nature of the business workplace environment.

As a practical matter, the opinion could result in employees receiving fewer or shorter unpaid breaks. If employees must have 30-minute consecutive breaks when working six consecutive hours this opinion means that the "six consecutive hours" necessarily includes work schedules where the employer provides 20 minute breaks.

Most employers know that under the Fair Labor Standards Act regulations, a 20 minute rest break is the minimum amount of time that can be given to employees without having to pay them for the entire break. And to be clear, Tennessee employers only have to provide one 30-minute unpaid break per shift. Nothing in federal or Tennessee law says employees must get even one 20-minute break and a 30-minute lunch break. But of course, nothing prohibits a Tennessee employer from providing additional unpaid breaks during the day.

The danger with unpaid breaks isn't that the Tennessee district attorney generals have their white collar crime unit out looking for employers to prosecute under § 50-2-103(h). Nor is it ordinary for the state DOL to impose a civil penalty for a violation. The real issue that arises in litigation is when employers impose unpaid breaks without adequately documenting that employees are not working (and making sure employees are not working for the DOL meal period regulationsrequire the employee be "completely relieved from duty" if the break is unpaid).

Unfortunately, it is quite easy for an employee to allege they were forced to take unpaid breaks but still expected to work. (Some employers make this allegation even easier by always complying with the regulatory requirements.) Wal-Mart recently which included allegations of employees being expected to work through unpaid breaks and in California, lawsuits of this nature are a dime a dozen.

To bring the issue closer to home, the Memphis Commercial Appeal reports that Baptist Memorial Hospital there is defending a collective action lawsuit under the FLSA brought by employees who claim the Hospital unfairly deducted half-hour meal breaks from their paychecks even if the employee worked through the meals. The deduction was automatic unless employees filled out an exception log.

So, if you want to provide unpaid meal breaks, you can do so. They must be a minimum of 30-minutes; two 20-minute breaks aren't enough. And make sure, whatever you do, you keep accurate records and do not ever let employees to perform anything more than de minimus tasks during the unpaid break. (I promise to write more on the de minimus issue later as it is a greatly misunderstood rule.)

Conducting a Fair Investigation Into Employee Misconduct

Two decisions from the Sixth Circuit issued around Thanksgiving serve to emphasize the importance of an employer conducting a quality investigation before it fires an employee for misconduct. While I'll try to simplify the facts somewhat, understanding some facts are important to understanding why the Sixth Circuit held, in both cases, why a jury could reasonably find the employer discriminated against the employees.

Madden v. City of Chattanooga, the court of appeals affirmed a bench trial liability finding in a race discrimination claim. The black plaintiff worked in the service department and was fired for setting off a firecracker at work. His supervisor reported him. Plaintiff never disputed doing the deed. White employees had also set off firecrackers at work without being disciplined and there was testimony that the same white supervisor who reported the plaintiff had been present when white employees set off firecrackers and he had not reported them. Another supervisor who saw white employees use firecrackers at work merely told the employees to "knock off" the horseplay.

Madden would be a routine disparate treatment case except for the fact that the decision to fire Madden was made by senior managers who, the facts showed, did not know that white employees had set off firecrackers and for whom there was no evidence of a biased motive. (The Seventh Circuit calls this a "cat's paw" type of case. Shager v. Upjohn Co., 913 F.2d 398, 405 (7^th Cir. 1990)). In a crucial footnote, the Sixth Circuit pointed out that the "scope and nature" of the City's investigation before firing Madden was "unclear" but appeared to have been "limited" to interviewing the biased supervisor and the plaintiff.

To explain, the federal courts of appeal widely diverge on when the bias of a subordinate is imputed to the decisionmaker and the Supreme Court has twice expressed an interest in resolving the dispute. But one recognized way to avoid the cat's paw problem altogether is to conduct an independent investigation because that investigation should break the causal chain between the biased report of the subordinate and the final employment decision. Wilson v. Stroh Companies, Inc., 952 F.2d 942, 946 (6th Cir. 1992) is one such decision and other courts have also recognized the principle. Pennington v. City of Huntsville, 261 F.3d 1262, 1270 (11th Cir.2001) ("[w]here a decisionmaker conducts his own evaluation and makes an independent decision, his decision is free of the taint of a biased subordinate employee."); Willis v. Marion County Auditor's Office, 118 F.3d 542, 547 (7th Cir.1997) ("[W]hen the causal relationship between the subordinate's illicit motive and the employer's ultimate decision is broken, and the ultimate decision is clearly made on an independent and a legally permissive basis, the bias of the subordinate is not relevant."). In Cariglia v. Hertz Equip. Rental Corp., 363 F.3d 77, 87 n.4 (1st Cir. 2004) while the court held a jury trial was required but the court also observed that the employer would have won had it given the accused employee a "meaningful chance to address the allegations against him").

Madden amounts to a crack-down on what the court held was a less than adequate investigation. Remember the crucial footnote? So, with an "unclear" investigation which was "limited," an employer hangs itself out to dry even if the decision is made by an undisputedly non-biased decisionmaker. It is hard to say what the employer did in the investigation but the court clearly faulted the employer for not finding out whether other employees had been allowed to engage in similar conduct without being disciplined.

The decision in Martin v. Toledo Cardiology Consultants, Inc. shows what happens when the court conclude the employer's investigation amounted to a fait accompli. The employee had worked in the same doctor's office for years but then a new doctor assumed control of the practice. The new doctor didn't exactly follow the best employment practices; he reorganized the office, designating "favorites" (all of whom were under 40) as "team leaders" and telling employees his treatment of the "favorites" would not be subject to question. The doctor complained to the plaintiff about some of her conduct (it was clear the court found these complaints petty to the point of harassment) and later confronted her with evidence that she had used of racial slur to describe a patient. The slur was allegedly heard by another doctor and one of the "favorites." During the meeting, plaintiff signed a document admitting to the racial slur. As a result, she received a salary reduction, was put on probation and ultimately fired over a dispute about the work she wanted to perform. At her deposition, however, she flatly denied making the racial slur.

Like Madden this case largely turned on the quality of the investigation. (Unlike Madden, of course, this case didn't concern an "independent" investigation within the meaning of the "cat's paw" cases because here the decisionmaker was supposedly biased against the plaintiff.) The decisionmaker made a number of mistakes but what seemed to most trouble the court was that he didn't seem to listen to the plaintiff when he asked if she had uttered the racial slur. To be sure, there was evidence she had said it and she did sign a document saying she had said something (the majority and dissenting opinions conflicted on this point) but the court described the plaintiff being presented with "documents that she could sign, quit, or be fired." And the plaintiff testified that she was single and helping to support her mother, so she needed the job and therefore signed the papers. So, despite evidence from two witnesses that plaintiff had referred to a patient in a racially derogatory manner, and despite the fact that she had signed a document admitting to using a racial slur, the court nevertheless found plaintiff's deposition testimony created a factual dispute as to whether or not the employer made a reasonably informed decision in disciplining her for the racial slur. (The investigation into the reasons given for firing plaintiff was not any better but I don't need to bury my point.)

In theory the quality of the investigation shouldn't matter but practically it does because a good investigation can remove any dispute over the facts. I easily found three fairly recent Sixth Circuit decisions where the employer won because it conducted a full investigation and fairly resolved any factual disputes which arose during it. By doing a full and fair investigation, the employers were able to show that the decision was honestly held based upon the facts it knew at the time. Abdulnour v. Campbell Soup Supply Co., LLC, 502 F.3d 496, 502 (6th Cir. 2007); Michael v. Caterpillar Fin. Servs. Corp., 496 F.3d 584, 588 (6th Cir. 2007); Wright v. Murray Guard, Inc., 455 F.3d 702, 707-709 (6th Cir. 2006).

So while none of these decisions say so, the quality of the investigations played a very significant role in the outcome. In Martin evidence that the outcome was predetermined helped kill the employer's defense. In Madden, while the plaintiff was interviewed, that alone was not enough. And Madden shows that an employer must always determine whether or not there have been prior similar incidents by other employees outside of the protected class. Had the employer in Madden shown that it had asked the employee whether or not he knew of any other times other employees had thrown firecrackers, no matter what the answer, the employer certainly would have been much better off in making the decision and/or in defending the lawsuit. And worst case scenario, if an employer ever has to defend a decision to a jury, a thorough and fair investigation unquestionably helps persuade jurors that no discrimination motivated the decision.

Christmas Bonuses and Overtime

One of the heart-warming stories over the long holiday weekend was about a family owned business who sold their business and gave employees sizable bonuses derived from the sale. The amount of the bonus was based upon years of service with the company. But being an employment attorney I am trained to look a gift-horse in the mouth and my immediate thought upon hearing the story was how could the bonus be structured so as to avoid overtime liability? After all, the Fair Labor Standards Act provides that all "remuneration for employment" must be included in the amount that is used to calculate overtime (this amount is called the "regular rate"). Thes statute then excludes certain payments, one of which is discretionary bonuses, another, gifts and payments on special occasions.

So, not all bonuses must be included in the regular rate, however. As to discretionary bonuses, both the fact of the payment and the amount must be discretionary. The Department of Labor regulations, 29 C.F.R. 778.211, explain that the employer must pay the amount without "prior promise or agreement" and there must not be a contractual right to the bonus. This type of bonus includes, the DOL says, attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, bonuses contingent upon the employee's continuing in employment until the time the payment is to be made and the like.

Congress recognized, however, that only Scrooge would create a disincentive for employers to pay Christmas bonuses so a separate provision covers "sums paid as gifts, payments in the nature of gifts made a Christmas time or on other special occasions." There are two catches here. First, even a Christmas bonus must be a "gift" as in the employees must not have a contractual right to the payment but the DOL recognizes that employees tend to expect Christmas bonuses so the regularity of the payment is not a problem here.

A second catch is that the bonus cannot be based upon hours worked, production or efficiency for if it is, the amount must be accounted for in the regular rate. The DOL regulation, 29 C.F.R. § 778.212 further provides that the bonus can (without impacting overtime liability) be based upon the employee's "length of service with the firm." The bonus amount can also be based upon the salary or regular hourly rate so long as it is not based upon or derived from the hours worked, production or efficiency. The DOL also recognize that bonuses based upon total earnings, as opposed to straight-time earnings, need not be included in overtime calculations because mathematically, the bonus will already include pay for overtime hours worked. Combinations can also be made, such as where the bonus is based upon two weeks salary and an additional amount for years of service.

As any HR manager knows, no good deed goes unpunished, so if you are fortunate enough to be paying out year-end bonuses, be aware that there are overtime considerations that can and should be avoided.

Voluntary Affirmative Discipline Programs

I, along with my fellow attorneys at Kramer Rayson, are called a good bit about how to address employee misconduct. Often, the client is reluctant to lower the boom, for one reason or another. Not too long ago, my wife brought home an article about a federal program I had not heard about (which is not surprising because very few federal employees have heard about it either).

The federal government, at the encouragement of the Merit Systems Protection Board (the board that reviews various complaints by federal employees), encourages federal agencies to have a "voluntary alternative discipline program." The idea behind it is essentially the carrot or the stick approach. Instead of attempting to "correct" poor employee behavior by progressive disciplinary action, the employer offers the employee alternatives. A last chance agreement is a form of alternative discipline. What the federal government has done is back that idea up to earlier stages of the discipline process.

So, if an employee commits an offense justifying discipline short of termination, an alternative discipline program lets management offer the employee alternative remedies or sanctions. Anyone who has practiced criminal law will recognize the difference. For example, an employee's conduct might otherwise justify a written warning and six months probation or even a week-long suspension without pay. Alternative discipline gives the employee the choice between imposition of the penalty or accepting something else. In this case, the employee could be offered a suspended sentence type of arrangement (holding off on issuing the warning and probationary period as long as the employee stays out of further trouble). In other situations, such as where discipline is contemplated due to interpersonal relation problems (the ones that fall short of physical violence), the alternative discipline that could be offered is attending EAP sessions, anger management classes or even providing xx number of hours of community service. Where the misconduct involves misuse of company resources (e.g., excessive use of computer for personal business) alternative discipline can be to reimburse the government for the time wasted and the cost of the service. Under some models, the exact nature of the alternative discipline is negotiated with the employee.

Alternative discipline is not a substitute for progressive discipline. It is best used as a supplement to existing programs. Sometimes, punitive discipline is necessary (good examples of this are for harassers or workplace violence or where termination is the only real choice (i.e., a last chance agreement would be pointless)). Its use in any bargaining environment will need to be negotiated. A key component of the alternative discipline agreement is that it is a binding contract in which the employee accepts responsibility for the employee's conduct and releases all claims relating to the alternative discipline.

A good article on the program can be found at http://www.govexec.com/dailyfed/1008/101708b1.htm. The DHHS Guide for Implementing an Alternative Discipline Program describes it without using crushing detail, gives examples of alternative discipline, the topics that should be covered in any alternative discipline agreement as well as a form or two. And if you want to read the 59 page MSPB report, it is available here.

I will offer a word or two of caution. Proper documentation is crucial so please consider having an attorney or qualified HR Professional walk you through at least the first several attempts at Alternative Discipline. There are also some subtle issues under the Fair Labor Standards Act that require finesse whenever an employee agrees to repay an employer. Rather than withholding the amount from a paycheck, the employer should structure a repayment as a completely separate transaction from the pay it makes to the employee.

Honest Beliefs and Employer Investigations

For some time now, the Sixth Circuit has waged a debate over what has become known as the "honest belief" rule in discrimination law. (It is no "rule", of course, only legal precedent based upon a number of court decisions. Lawyers tend to label precedent we "like" as a "rule," and if we don't like it, well, we call it something else.)

Last week the Sixth Circuit decided an appeal involving the "honest belief" rule. The case provides Tennessee employers with more or less a "how to" guide on getting a discrimination claim dismissed. A hospital in Kentucky fired two employees after one took home x-rays of a patient. The patient in question happened to be the grand-daughter of one of the employees. The employee other aided grandma. There was no family dispute here; the grand-daughter hurt her arm and had x-rays done where grandma worked. Mom then forgot to take the x-rays with her (to give to another doctor) so she did what we all do, she called grandma. Grandma, however, knew the hospital had to have a signed permission form from mom to release the x-rays and forged, so the hospital concluded, mom's name on the permission slip. The hospital's concluded that the employees had violated the hospital's HIPAA rules by not having written permission.

The employees tried to argue they neither violated HIPAA nor the hospital's policies. The key point, the court said, was that the employer honestly believed the employees had violated hospital policy. The "rule" in the Sixth Circuit is confused but the general consensus is that a belief is honest if the employer can point to the specific facts it relied upon to make the decision and show it reasonably relied on those facts. (Saying the reliance has to be "reasonable" sounds suspiciously like saying the decision must be "fair" as opposed to nondiscriminatory but that is a topic for another day.)

Where the hospital won this case was during its investigation. Firing grandma for taking a grand-daughter's x-rays when grandma has mom's oral permission was pretty radical. But the investigation showed grandma and her co-worker knew they had to have written permission (they were so told when grandma asked for the x-rays) and then grandma "signed" mom's name to the permission slip. The hospital also met with both employees to hear their side of the story but ultimately decided that their justifications did not excuse the misconduct. (And smart hospitals take their HIPAA obligations seriously.)

The important point here is that when taking a serious employment action, the more effort that goes into the investigation, the more chance the employer has of winning a later lawsuit. Take this case. During the investigation, the hospital was apparently confronted with differing versions of events. It interviewed the employees but rejected their assertions. The hospital thus decided what it "believed" before it implemented any decision. Even though the court said the hospital's privacy policy could have been better defined, it still tossed their claims because disagreeing with what the investigation found was not enough. The employees had to show the investigation was dishonest.

Now, in theory, even if the employer had not conducted an investigation, it shouldn't have made a difference legally. Honest beliefs, after all, are not discriminatory even if they are stupid or ill-founded. In practice, however, it is difficult to convince a judge, much less a jury, that you are being honest when you don't even try.

West Wing, Retaliation and the Prima Facie Case

The murky title necessitates explanation. Frankly, I wanted to avoid adding to the almost 3,000 blog posts, many of which are entitled "post hoc, ergo propter hoc." So, since one of the early episodes of the West Wing very effectively used this as an episode title, I can avoid a cliché and am given a painless way to define the Latin term.

In the West Wing episode, the President utters the phrase and when no one immediately answers, says "27 lawyers in the room. Anyone know "Post hoc, ergo propter hoc"? Finally, one answers, "after it, therefore because of it," which is as good a definition as necessary for this post.

The point is that while causation (which courts also refer to as a "nexus) requires the cause to precede the effect (at least in our universe) that doesn't necessarily mean that what happens before the effect is the cause and it is a "logical fallacy" to suggest otherwise. Huskey v. City of San Jose, 204 F.3d 893, 899 (9th Cir. 2000).

Logical fallacies, however, seems to be the norm for retaliation claims these days. For the last several years, the judges on the Sixth Circuit have engaged in an extensive and utterly pointless debate over whether "temporal proximity" alone justifies a rebuttable presumption that two events which are close in time and are therefore causally related. (Employment lawyers call this the prima facie case, which simply translates to "at first view : on the first appearance".) Mickey v. Zeidler Tool & Die Co., 516 F.3d 516, 525 (6th Cir. Mich. 2008), admirably sought to reconcile the competing views but only seems to have agonizingly prolonged the dispute.

To be clear "temporal proximity" simply means "events near in time" but it has been so horribly misused (even being used in Mickey to refer to events that were not close in time) that it should be banished from the legal lexicon. For one, too close a focus on timing diverts attention away from other evidence that is likely to be much more probative of a retaliatory animus.

Where this intersects employment law is that employment discrimination claims necessarily determine causation. In discrimination claims, where causality focuses upon a person's status, timing is usually unimportant (except perhaps in disability discrimination claims). But in retaliation claims, where the causality focus looks to the relationship between two acts, timing takes on an importance it shouldn't.

A recent retaliation decision from the Tennessee court of appeals in Kinsler v. Berkline LLC, held post hoc reasoning applies to all types of retaliation claims in Tennessee. It relied upon Allen v. McPhee, 240 S.W.3d 803, 823 (Tenn. 2007), which had held "that close temporal proximity of a complaint and a materially adverse action are sufficient to establish a prima facie case of causation."

Philosophical and logical issues aside, one mistake many cases (including Kinsler) make is in ignoring what occurs before the supposed "cause" of the "effect." In Kinsler, for example, the employee claimed he had been unlawfully fired 3 days after he refused a workers compensation settlement. But the employee had been injured, sought workers compensation benefits and had filed some type of an action seeking to be paid comp benefits long before he refused the settlement. Those events were remote in time and an employer bent on retaliating against an employee who wants workers' compensation benefits might just as well have based a decision on those events as it did on the event that immediately preceded the firing.

Now, for all we know, the settlement was the "cause" of the employee's firing but there was no evidence of this other than the timing (according to the decision, at least) and the employee's supposition. But if that is all there is to go on, then it is just as reasonable to say seeking workers compensation benefits had no roll in the firing.

Those decisions which have held that temporal proximity, when coupled with "other evidence of retaliation", to quote Mickey, can show "causation" (and by that I still mean a rebuttable presumption of causation) may provide comfort to an employer's lawyer but are no better in rationale. After all, if there is "other" evidence of retaliation, what does it add to say there is or is not a "temporal proximity" between events?

Along these lines disciplinary action antecedent to the protected activity is oft overlooked in the "temporal proximity" analysis. This occurs, even though as the Supreme Court in Clark County School District v. Breeden, 532 U.S. 268, 273 (2001), explained, employers "proceeding along lines previously contemplated, though not yet definitively determined, is no evidence whatever of causality." Or, as another court has said, "Where timing is the only basis for a claim of retaliation, and gradual adverse job actions began well before the plaintiff had ever engaged in any protected activity, an inference of retaliation does not arise." Slattery v. Swiss Reinsurance America Corp., 248 F.3d 87 (2nd Cir. 2001).

Or suppose that between the cause and effect, there is an "intervening" cause. Take Freeman v. Ace Tel. Ass'n, 467 F.3d 695, 696 (8th Cir. 2006), where the employee was fired three weeks after he told the board of directors that the company's mileage reimbursement policy might result in violations of federal income tax laws. While this sound pretty bad from a purely timing perspective, a week before the employee was fired, he sent the board a sworn statement admitting (as the board had suspected) that he had been in a sexual relationship with a female subordinate employee, lied to the board about it and had even used a company credit card to buy Viagra to continue the sexual relationship. Not surprisingly, the court held, the "intervening events undermines any causal inference that a reasonable person might otherwise have drawn from temporal proximity."

Where does this leave Tennessee employers? An employer that makes a "knee jerk reaction" is asking for it. A judge and jury don't need "temporal proximity" to understand an employer's motive when the employer fires the employee right when the employee complains. And whatever philosophical problems there may be with "temporal proximity," it is not smart to hand an employee a termination notice soon after the employee complains unless the employer has antecedently documented the employee's misconduct or an event after the complaint clearly justifies the action.

ERISA, Bargaining Agreements, Health Plans and Oral Modifications

One cost of doing business for most employers is health care for employees and retirees. The Sixth Circuit is the retiree health care forum of choice because of rulings from that court which impose a very strong but rebuttable "inference," UAW v. Yard-Man, Inc., 716 F.2d 1476, 1482 (6th Cir. 1983), that retiree medical benefits are vested if established by a bargaining agreement.

To vest makes a benefit forever unalterable, or at least, unforfeitable, a difference that comes into play because ERISA does not require vesting of non-retirement benefits. So employers have a choice whether or not to impose on itself the cost of providing lifetime retriee health benefits.

A recent Seventh Circuit decision was interesting not so much because it addressed the vesting issue, it didn't, but because it dealt with a retiree health care plan the employer could alter, but didn't do so validly.

The facts are not terribly important. You only need to know that the employer used unused sick leave to pay, partially, for retiree medical benefits by agreement with the union. The employer, with the knowledge, apparently, of the union, didn't observe the allocation in the plan so it overcharged the retirees, in effect, by drawing too much from the sick leave fund. The overcharged retiree sued, claiming the employer didn't comply with the terms of the CBA.

The employer argued the union had orally approved of the arrangement and that made it legal even if the CBA said otherwise. In the ordinary employer/union bargaining context, this argument might have had strength, for subsequent oral modifications to a CBA are not outright prohibited, just foolish, but in any event, there are strings attached. (The string in this case was to give notice to the affected employees.)

ERISA, however, requires benefits plans be "maintained pursuant to a written instrument,” and this, the court said, included modifications. That hosed the employer's argument that the oral agreement with the union defeated the retiree's claim.

Now comes the important point. Courts have increasingly recognized an exception to the "written instrument" requirement in the case where an employer representative promises something to an employee that the plan does not thus causing the empoyee to rely on the misbegotten promise. Lawyers call this "promisory estoppel", an overused and largely misunderstood legal term that prevents someone from promising something the person knows (or is charged with knowing) won't happen or can't be delivered.

How, then, the court asked, is its holding consistent with promissory estoppel claims? It isn't. Rather, the court announced, promissory estoppel claims (at least the ones that would vary the terms of a benefit plan) must themselves be based upon a written promise. It is true, as the court said, most promissory estoppel claims (or misrepresentation claims) in the ERISA context are based upon something said in writing. After all, for years, we employment lawyers have drilled into employers' heads that they must document, document and document. (Writing, of course, is interpreted liberally in this electronic age - where a sufficiently clear video can be irrefutable evidence.)

But there are decisions, at least one in the Sixth Circuit, where the writing requirement was, at least by outward appearances, no impediment to the imposition of a vested (and costly) retiree health care plan. One example is James v. Pirelli Armstrong Tire Corp., 305 F.3d 439, 449 (6th Cir. 2002), where the court's decision did not mention whether or not the promise that altered the written plan was in writing but it seems not to have been. The Sixth Circuit decisions do not seem to acknowledge the writing requirement / oral modification conflict even exists. So the employer was bound by the HR representative's inaccurate promise of lifetime retirement benefits to employees who were contemplating and later took eary retirement. The employer probably got what it deserved here by (1) not training the HR representative or (2) not answering all questions in writing.

The Seventh Circuit decision hints at some protection even though, ironically, it was the employer who wanted to rely on the oral modification. That protection requires some common sense. Statements about benefits, including possible future benefit, are not to be made by the untrained or unknowing. They should always be made in writing after careful review by ERISA counsel or benefits personnel to ensure the writing is consistent with the terms of the plan.

Protecting Participation in an Employer's Sexual Harassment Investigation

Last week the U.S. Supreme Court held oral arguments in Crawford v. Metropolitan Government of Nashville and Davidson County. Scotusblog.com is a highly regarded blog that lets everyone easily keep track of Supreme Court cases. Yesterday, they published a summary of the argument which you can review here. If you don't want to take their word for it, you can read the official transcript of the oral argument from the Supreme Court's website here.

The case concerns a sexual harassment investigation in which several female employees, one of whom was the plaintiff (Ms. Crawford), were called to meet with the investigator. During this meeting, Ms. Crawford said that she and other female employees had been harassed. Six months or so later, Metro terminated Crawford on what she said were unfounded charges of embezzlement and drug use. She sued claiming her termination was in retaliation for her statements during the investigation.

As scotusblog.com's summary reflects, the Supreme Court appears to be leaning toward holding Crawford's statements to be protected under Title VII. The Sixth Circuit had rejected this reasoning saying Crawford cooperated with the investigation "by appearing for questioning at the request" of the investigator. To oppose unlawful activity, the court held, an employee needs to take some action. Crawford v. Metro. Gov't of Nashville & Davidson County, 211 Fed. Appx. 373 (6th Cir. 2006). Forgetting the fine legal distinctions at issue in the case, any employer that takes action against an employee because of what the employee said during the employer's internal investigation of a sexual harassment allegation acts on very thin ice. I've addressed that previously so enough said.

But the more important point, which might not be addressed by the Court but is nevertheless worth mentioning, is whether an employee's participation in the employer's internal sexual harassment investigation (regardless of what is said) constitutes protected activity.

Under the Title VII retaliation provision (as well as many others), an employee can oppose unlawful activity or the employee can "participate" in a proceeding or investigation into whether the employer's conduct violated Title VII. For opposition clause protected activity, what the employee says is what matters. For participation clause activity, all that matters is the fact of the participation itself.

In the Sixth Circuit's view, Metro's internal investigation was not participation clause activity because "at a minimum, an employee must have filed a charge with the EEOC or otherwise instigated proceedings under Title VII."

This is not the place to go long into the legal distinctions. If you want to see the "no win" scenario example, look at Merritt v. Dillard Paper Co., 120 F.3d 1181, 1183 (11th Cir. 1997), where the court held that the employer could not lawfully fire an employee because, during his deposition testimony in a sexual harassment lawsuit, he admitted engaging in some of the harassing conduct. The admission was costly to his employer and they fired him as a result. The employee could be fired for harassing employees, the court said, but not because he testified truthfully about harassing them.

To return to reality (subject to change by the Court), the threshold for participation clause activity is clear and easy to apply. It requires the instigation of some formal legal proceeding, such as the filing of a lawsuit or charge of discrimination. Booker v. Brown and Williamson Tobacco Co., Inc., 879 F.2d 1304, 1313 (6th Cir. 1989). Courts and Congress, however, don't often favor employers (or employees, as the street to ambiguity never runs one way) with bright line rules, and here, the government (representing the views of the EEOC) at argument favored having the participation clause protect employees who cooperate in an employer's internal investigation.

Why does it matter? In most cases it won't. In many employer investigations, employee statement are likely to fall within the "opposition" clause. But take the Dillard Paper example. Suppose, instead of being at a depositon, the harasser had been summoned to meet with the HR manager investigating the underlying harassment charge and then admitted to engaging in horrific conduct toward the vicitimized employee? If the EEOC gets its way, may the employer, at this point, fire the harasser? After all, the employer is under pretty strong legal pressure to fire the harasser (even though the cases say this not always required).

Title VII was never meant to immunize employees from the consequences of their own unlawful conduct. But if any statement, even an admission of harassing conduct, is protected if it is made during an employer's investigation, where does that put the employer who wants to rid the workplace of all individuals who might harass other employees?

With the Supreme Court leaning heavily toward reversing the Sixth Circuit on the opposition clause issue, it may leave the participation clause issue for another case. But for now, it is enough to say there is a risk. So be careful not to put yourselves in any situation where you might end up having to defend your position to the Supreme Court.

The ADA Amendments of 2008 - Part 2 - "Regarded As" claims

As promised, this post continues where the prior post quit, with the “regarded as” definition of disability. As one court has said, the “regarded as” definition:

actually makes a better fit with the elaborate preamble to the Act, in which people who have physical or mental impairments are compared to victims of racial and other invidious discrimination. Many such impairments are not in fact disabling but are believed to be so, and the people having them may be denied employment or otherwise shunned as a consequence. Such people, objectively capable of performing as well as the unimpaired, are analogous to capable workers discriminated against because of their skin color or some other vocationally irrelevant characteristic.

Vande Zande v. Wisconsin Dep't of Admin., 44 F.3d 538, 541 (7th Cir. 1995).

However well meaning it may be, and I do not doubt the sincerity of the goal, the 2008 ADA Amendments include sloppy drafting. It provides that one has a disability if one is “regarded as” having “such an impairment” (emphasis added). Now, to digress, I long ago banished the word “such” from my documents unless I can use it the way Shakespeare used it, e.g., “parting is such sweet sorrow.” Lawyers tend to use “such” to avoid clarity.

In the ADA, however, "such" is an unmistakeable reference to the requirement in the first two definitions that an impairment must substantially limit a major life activity. The amendment, however, then defines a definition (remember that “regarded as” already defines what is a “disability”) to make the “such” in the “regarded as” definition superfluous:

(A) An individual meets the requirement of ‘being regarded as having such an impairment’ if the individual establishes that he or she has been subjected to an action prohibited under this Act because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.
(B) Paragraph (1)(C) shall not apply to impairments that are transitory and minor. A transitory impairment is an impairment with an actual or expected duration of 6 months or less.

The stated reason for this change is to legislatively overrule that part of Sutton which had held that being disqualified from a single job is insufficient and that to meet the regarded as standard the individual must show that they were perceived as unable to perform a broad range of jobs utilizing the same skills. At the same time, Congress requires the impairment to be substantial enough to last at least 6 months or more.

Whether the legislation, read literally, accomplishes its goal is doubtful beause the definition of a definition is circular. To be “regarded as” having a disability the individual must also establish she has been “subjected to an action prohibited” by the ADA. How exactly does one establish that an action is prohibited by the ADA without establishing that on has a disability in the first place?

The House report explains that the regarded as definition of disability “was meant to express the Committee’s understanding that unfounded concerns, mistaken beliefs, fear, myths, or prejudice about disabilities are often just as disabling as actual impairments, and its corresponding desire to prohibit discrimination founded on such perceptions.”

In keeping with this goal, what Congress meant to say was that one is regarded as having a disability “if the individual shows that an action (e.g., disqualification from a job, program, or service) was taken because of an actual or perceived impairment, whether or not that impairment actually limits or is believed to limit a major life activity.”

As a practical matter, the new definition will no longer examine what the employer believed about the limitation to a major life activity but ask, whether the employer, at the time it took the adverse employment action, believed the employee had a non-transitory mental or physical impairment. Some might read this to say that an employer cannot take an employment action based upon the actual mental or physical impairment. But because Congress retained the myths and prejudice explanation in the legislative history, any “regarded as” claim will still examine whether or not the employer’s action was based upon myths and prejudices instead of sound medical judgment.

That is, as many courts have explained, to show one is “regarded as” having a disability, one must show the employer “entertained misperceptions” about his abilities. Gruener v. Ohio Cas. Ins. Co., 510 F.3d 661, 665 (6th Cir. 2008); citing Mahon v. Crowell, 295 F.3d 585, 592 (6th Cir. 2002) (defendant "was not wrongly viewing [the employee] through a stereotype of disability, 'but rather follow[ed] the specific recommendations of [a] treating physician'" (quoting Cannon v. Levi Strauss & Co., 29 F. App'x 331, 336 (6th Cir. 2001)).

On other points, Congress resolved one debate in the courts by specifying that it is not a discriminatory act for an employer to not provide a reasonable accommodation when someone is “regarded as” having an impairment. This recognizes that the only realistic accommodation in this situation was to not regard the individual as having an impairment. After all, how does one accommodate a myths or a prejudice short of eliminating it?

There are other provisions in the ADA amendments worth mentioning. The Amendments prohibit “reverse” ADA claims, i.e., claims which allege discrimination on account of not having a disability. As far as I knew, reverse ADA claims were exceptionally rare to non-existent. And employers who are also places of public accommodation should remember that the broader definitions of “disability” will also affect the employer’s public accommodation obligations.

The ADA Amendments Act of 2008

Perhaps it was lost in the news about the Wall Street bailout but there has been little noted about the September 25, 2008, passage of substantial revisions to the Americans with Disabilities Act.

The "ADA Amendments Act of 2008," which takes effect on January 1, 2009, has as its primary purpose the goal of legislatively overturning almost every Supreme Court decision that had interpreted the ADA as it was originally enacted. Congress and the Courts like to play a game - Congress writes an ambiguous statute, a court interprets the ambiguity in a way Congress decides it doesn't like, and then Congress rewrites the ambiguous statute by blaming the court's interpretation of the ambiguous provisions. (If the Civil Rights Amendments Act of 1991 is any indicator, the "corrective" amendments usually create even more ambiguities.)

Third branch politics aside, what changes are in store for Tennessee employers?

The primary focus of the amendment was to change the definition of disability. As most know, the ADA defines disability in three ways. While Congress did not change the first two definitions of "disability," it codified additional terms so it could significantly broaden who has an impairment that substantially limits a major life activity.

First, with limited exceptions, Congress decreed that "mitigating measures" are not to be considered in the disability determination. That is, medications, other medical devices, or behavioral modifications are not to be considered in determining whether an impairment substantially limits a major life activity. The same is true of impairments that are episodic or in remission, so long as the limitations would be substantially limiting when active. These changes are designed to legislatively overrule Sutton v. United Airlines Inc., and other cases which had held mitigating measures should be considered. The lone exception is for "ordinary eyeglasses or contact lenses."

Second, Congress codified the EEOC's list of illustrative "major life activities," adding several others, including reading, concentrating, thinking and communicating." Working, which is in the EEOC regulation, was also added as was a separation category for "major bodily functions" such as the immune systems and the "reproductive functions."

Third, Congress said that the phrase "substantially limits" is not to be interpreted as held in Toyota Motor Manuf. v. Williams, that the phrase means the impairment must "prevent or severely restrict" the major life activity. Congress did not say what degree of substantial limitation" is used, specifying that the EEOC should revise its regulations to meet Congress' intent.

What is not addressed in this legislation is the statement in Sutton (relying on the EEOC regulations) that the major life activity of "working" is to be considered a "residual life activity, considered, as a last resort, only 'if an individual is not substantially limited with respect to any other major life activity.'" In fact, because Congress gave the EEOC the right to define what is a "disability" its definition of "working" as a major life activity, with the House report stating Congress did not mean to change the EEOC’s regulation as it applies to “working” as a major life activity. Thus, the requirement that the court must examine a broad range of jobs or a class of jobs rather than a solitary job will have even greater legal force.

Nor did Congress overrule the holding in Williams that in determining whether someone is substantially limited in manual tasks, a court must look at all the manual tasks, not just those used on the job.

Congress also amended the third definition of disability, which provides that an individual is disabled if they are regarded as having a substantially limiting impairment. This post is long enough, however, so I will address this change, its ambiguous language, its practical effect and any remaining changes in my next post.

Accommodations, the Interactive Process, and Supervisors who Listen

Today, the Sixth Circuit reversed the dismissal of an ADA claim because the supervisor didn't want to deal with the employee's accommodation request. Now, procedurally, to get a case dismissed prior to trial, the court must assume the employee's testimony is true so who knows what the truth is. The facts according to the employee were that she worked at a Dollar General Store as a cashier. She suffered from degenerative osteoarthritis of her cervical and lumbar spine and other conditions. For some time her supervisors allowed her to use a stool to sit on when she worked but other employees complained that she was getting preferential treatment. Without the stool, the employee couldn't work and so she took medical leave. On return, she was not permitted to use a stool and was told she would be limited to 3 five minute breaks per 6 hour shift. She refused and promptly obtained a doctor's note saying she could return to work and that it would be "beneficial" to let her use the stool. The supervisor, she said, refused to look at the note. She left work and the employer fired her for job abandonment.

The abandonment claim came down to whether or not the employer refused her request for a reasonable accommodation. In a case that comes down to whether or not an employee was reasonably accommodated (or offered an accommodation), the cases specify that "When a party obstructs the process or otherwise fails to participate in good faith, ‘courts should attempt to isolate the cause of the breakdown and then assign responsibility.'" This standard derives from the EEOC's "interactive process" for resolving what kind of an accommodation would be reasonable and effective.

The employer lost - at the early dismissal stage - because it was responsible for the breakdown in the process. It wasn't just that the employer refused to let the employee use a stool, though that was a significant part of the employer's failing. It was that when the employee brought in a note saying she could work if she used a stool, the employer did nothing other than to reject that as an accommodation. Had the employer continued to work with the employee, the result might have been different. For example, the employer in this case argued it proposed a reasonable accommodation of letting her take several breaks. The employee apparently wanted "unlimited" breaks (the decision isn't clear on this). That would probably have not been a reasonable request but if the employer had sat down with the employee and tried to work out a specific break schedule - or even a process for giving her a few more breaks as needed upon a reasonable request to her supervisor - the result here would have been different.

So, employers should make sure the supervisors know that in "negotiating" an accommodation, it is crucial that they listen. They don't have to agree with the employee's request - just listen to it and say, we will consider it and get back to you as soon as possible. The employee cannot assume the worst and the ADA puts the employer in control by saying that if the employer proposes a reasonable accommodation, the employee doesn't get to reject it (as long as, of course, the accommodation is genuinely reasonable).

How Not to Return a Veteran to Work after Military Leave

A few weeks ago, the Sixth Circuit handed the Metropolitan Nashville-Davidson County ("Nashville") a major defeat in a rather unusual case involving a soldier who returned from military leave.

The facts are important to understanding Nashville's argument but they are not simple to follow. Sergeant Petty worked as a Nashville police officer and member of the Army Reserve for years before being called to active duty in 2003. He ultimately transferred to Kuwait where he work in the supply stores. During an inspection, a still (he was from Tennessee, after all) was discovered and that ultimately led to Sergeant Petty with violating orders (against making or possessing alcohol) and conduct unbecoming an officer. In early 2005, asked to resign “for the good of the service,” and all charged against him were dropped and his discharge was characterized officially as “under honorable conditions (general)."

Petty asked to return to work on February 28, 2005, and Nashville began implementing its return to work process which is supposed to "ensure that every individual entrusted with the responsibility of being a Metropolitan Police Officer is still physically, emotionally, and temperamentally qualified to be a police officer after having being absent from the Department." During this process, Petty admitted some (but not all) of the details surrounding his arrest and when he was returned to work, Nashville launched an investigation into whether he was truthful in his return to work processing but ultimately concluded the allegation was unfounded and closed the investigation.

It didn't end there because Nashville continued to examine the reasons for Petty's discharge, ultimately learning that he had resigned in lieu of court-martial and had not disclosed this on his return to work application. Petty was then assigned to answering phone calls from the public, which is considered demeaning work, apparently.

In holding Nashville violated Petty's return to work rights under USERRA, the Sixth Circuit focused narrowly on whether Petty had provided the relevant form even if he didn't provide all of the relevant form. The information Petty omitted was not required, the court reasoned, as the only criteria that mattered under the statute was whether or not Petty had been discharged from military service under "honorable conditions." Once that question was answered, nothing else mattered, the court said, and Nashville "was not permitted to delay or otherwise limit Petty’s reemployment rights in any way" including by requiring Petty to "comply with its return-to-work process." Nashville had no right to ensure that returning officers were qualified to return to work because Congress decided returning veterans rights took precedence over Nashville's policies (it is this point on which Nashville has asked the court to reconsider its decision). The only qualification an employer may examine is a physical one; qualifications based upon whether the veterans conduct during military service are not permitted short of examining whether the discharge was under honorable conditions.

Piling it on, Nashville, the court said, had no reason to conduct a second "investigation" because it was "spawned" by the first invalid refusal to permit Petty to return to work. Nashville's choice, the court intimated, was to reinstate and then determine whether or not Petty was qualified, discharging him if necessary and consistent with the other USERRA provisions that prohibit discrimination against employees for taking military leave.

The final blow was the court saying Nashville had discriminated against Petty by refusing to permit him to work "side" jobs because he was under investigation. That was a benefit to which Petty was entitled and the fact that Nashville was conducting an invalid investigation meant that its denial on that basis was also invalid.

Employees returning from military leave must be promptly (within 2 weeks at most) reinstated. Doubts about the employee's non-physical ability to meet the current job qualification requirements must be resolved as part of the normal work rule processes and may not delay reinstatement.

If upheld, the decision presents a stark lesson for employers and illustrates some of the thorny issues posed by USERRA. But for his military leave, Nashville would have been entirly justified in refusing to hire or rehire Petty because of his legal difficulties in Kuwait (or Kentucky, for that matter). So the fact that the legal difficulties occurred on military leave required, the court unmistakably held, Nashville to ignore them, even if they raised genuine concerns about the returning employee's dishonesty.

Discipline for False Accusations of Harassment

Most sexual harassment policies include some kind of a warning about what could happen to an employee who makes a false accusation of harassment. The clause is not meant to discourage harassment claims but to ensure that employees do not use the potentially career-ending allegation of harassment as a way of exacting retribution for personal disputes.

A recent federal court of appeals decision from Missouri (which governs employers in the Midwest and north-Midwest states) helped clarify when employer may take action for falsely reporting harassment.

The male employee was the subject of a complaint by a female co-worker who reported that the male had gotten angry with her when they were discussing a policy matter. At the same time, the male reported to the HR department that the female had asked whether he had a girlfriend, made inappropriate sexual comments to him and that she had engaged in affectionate contact such as hugging or placing her head in his lap, He also said she had shown up one Sunday morning and asked to take him to church.

During the investigation, the female employee denied the allegations saying the male employee was pursuing her. She also produced a hand-drawn map the male had given her showing how she could get to his house. When confronted with this evidence, the male said: “I guess I was wrong for doing this.” The city ultimately fired him not only for making a false report but for his history of losing his temper on the job. A disciplinary board upheld the termination. The male employee sued claiming his termination was in retaliation for reporting the female employee's sexual advances.

Citing one of its prior decisions, the court of appeals explained why this case was one of the unusual situations where the court of appeals could hold as a matter of law the employer honestly believed the employee had made a false harassment complaint. The court of appeals contrasted the facts in this case with the situation that occurred in a 2005 case. Gilooly v. Mo. Dep’t of Health and Senior Servs., 421 F.3d 734 (8th Cir. 2005).

In Gilooly, the court had said a jury had to resolve whether the employer had retaliated against an employee who was terminated when the employer decided she had made a false harassment complaint. That decision, the latest decision explained, was made because the employer’s disbelief in the employee was founded solely on the statements of other employees and witnesses rather than on independently verifiable evidence or independent corroboration . . . from neutral non-parties. So, under this rule, "when an employer is presented with a 'he said, she said' set of facts involving two employees, and the employer chooses to disbelieve and discipline the employee who had engaged in protected opposition to unlawful activity, then the employee’s claim of retaliation must go to a jury."

What tipped the balance against sending the case to the jury was that the employer had "hard evidence" (the hand drawn map and the male's admission) that the male's complaint was false. It was also relevant that the independent review board upheld the employee's termination.

The holding in this case and the 2005 decision shows that it is probably a bad idea to impose discipline in any "he said, she said" situation. Rather, before an employer disciplines an employee for falsely reporting harassment, the employer is well-advised to have have compelling and independently verifiable evidence that the report is false.

EEOC issues Guidance on Performance and Conduct Standards under the ADA

Yesterday (September 3, 2008), the EEOC issued guidance for employers on when an individual with a disability can be held to performance standards and conduct requirements. The EEOC seemed to express incredulity that employers needed the guidance, saying it receives "numerous questions" on the topic.

As has become traditional for federal agencies that regulate employment, the guidance is in a question and answer format (30 questions in all) and it gives several examples.

The one question I held my breath about was "If an employee’s disability causes violation of a conduct rule, may the employer discipline the individual?" I'm not sure why I expected the EEOC to complicate the answer to this question but the answer (Yes, as long as the "conduct rule is job-related and consistent with business necessity") relieved me.

Other topics included what an employer should do when an employee asserts that a disability caused the conduct for which the employee is about to be disciplined ("the employer may still discipline the employee for the misconduct" but should engage in the "interactive process" to determine whether a reasonable accommodation could "address the problem").

Other topics covered are when an employer may have to modify attendance requirements (time off or adjusting start or end times for work), dealing with alcohol or drug use, and imposition of a dress code.

One interesting topic, at least for Tennessee employers, is that the EEOC states that "Although employers may have to grant extended medical leave as a reasonable accommodation, they have no obligation to provide leave of indefinite duration." The Sixth Circuit has not provided employers with very clear guidance on this point.

Dicta in Cehrs v. Northeast Ohio Alzheimer's Research Center, 155 F.3d 775, 784 (6th Cir. 1998), complicates the issue. What the court actually held was that there is no "presumption" that uninterrupted attendance is an essential function of every job and that an employer may be required, as a reasonable accommodation, to grant a medial leave. Citing a district court decision, the court of appeal stated that there is no “per se rule that an unpaid leave of indefinite duration (or a very lengthy period, such as one year) could never constitute a ‘reasonable accommodation’ under the ADA.” Cehrs, 155 F.3d at 782.

On the other hand, the Sixth Circuit has also held that the duty to reasonably accommodate does not require the employer to wait indefinitely for an employee's medical condition to be corrected. Gantt v. Wilson Sporting Goods Co. , 143 F.3d 1042, 1047 (6th Cir. 1998). Nor are employers under a duty to keep employees on unpaid leave indefinitely until a position opens up. Rather, if an employer knows that a position for which the disabled applicant is qualified will become vacant in a short period of time, the employer may be required to offer the position to the employee. See 29 C.F.R. pt. 1630 app. at 407-08. Monette v. Electronic Data Systems Corp., 90 F.3d 1173, 1187 (6th Cir. 1996).

So, I'll say it again. When faced with a situation where a medical leave seems to be turning into an indefinite period of time, employers should exercise caution and are well advised to consult with qualfied counsel for specific guidance.

Why Should You Acurately Document Performance Problems?

Today's decision of the court of appeals in Chicago points to the benefit of accurately documenting performance difficulities of employees, especially new employees.

As city in southern Illinois hired a jailer who, after some months on the job, got a mixed performance review. She did somethings OK, but the employer documented her slow work and lack of attention to detail were areas for improvement. She later complained about sexual harassment by a co-worker, her complaints were investigated, but her performance continued to lag. The employer called a meeting with her to discuss the performance. She brought a tape recorder to the meeting to surreptitiously record it, which under Illinois law constitutes a felony (unlike Tennessee law). The employer found out, had her house searched and the employee arrested when the tape was found.

The employee initially argued that she recorded the meeting to get evidence for her harassment suit and because the city admitted it had her arrested for illegally taping the meeting, the city effective admitted retaliating against her. The court turned this argument away as resting "upon a transparently overbroad view of the scope of the statute’s protection" because Title VII "does not grant the aggrieved employee a license to engage in dubious self-help tactics or workplace espionage in order to gather evidence of discrimination."

The employee next argued that the city criticized her performance after she complained, which showed, supposedly, bias against her. The court rejected this as well because the documented evidence was that the post-complaints performance criticisms were consistent with the critical evaluations made before she ever complained. That by itself, the court said, undermined any inference that her complaint and termination were related or that the employer's critiques of her performance were not genuine.

Employers hear the mantra of documentation alot and this case shows why. It is well understood that even valid complaints about an employee's performance can nevertheless be seen as pretextual if the employer ignores them until after the employee complains. In representing employers, we argue the employer's honest belief is what matters. It is hard to make this point effectively when the employer overlooks conduct that it would have otherwise had every right to criticize. It also mattered, in this case, that the employer did not "heap" more criticism on the employee after she complained. It did the smart thing and kept documenting the same performance difficulties noted before she complained.

Of course, this case also shows that an employer does not have to ignore, post-complaint misconduct at pain of being held liable for a retaliation claim. The employee's violation of the Illinois eavesdropping statute hadn't happened before her harassment complaint so, without evidence that this was dishonest, there was no reason the employer had to ignore this violation simply it arose after the employee complained.

Had the city employer not documented the performance issues before the employee complained about harassing conduct, the case might have come out differently. What may be also helpful to note is that the documentation was not elaborate. It simply listed the areas where the employee needed improvement. It takes something, in other words, but it doesn't take much.

Hostile Environments, Confederate Flags and Women in Combat

Most private employers don't find themselve on the receiving end of suits that implicate the first amendment. Public employers, schools and universities, face it constantly, having to balance the risk of disruption (or non-compliance with harassment laws) with not impinging on the protected speech of employees or students. The task is a daunting one.

Last week, a federal court jury in Tennessee deadlocked on whether Anderson County High School's prohibition on wearing clothing depicting the confederal flag violated a students constitutional rights. Shortly afterwards, the Sixth Circuit issued a decision holding William Blount High School did not violate students' rights when it prohibited the wearing of a confederate flag. Each county argued its policies were geared toward prohibiting disruptions in schools, presented some evidence that racial disruptions had occurred in the past. Both pointed out that their policies meant that the confederate flag itself was not singled out for banishment but that the disruptive clothing policy applied to any clothing that was disruptive, such as Malcolm X shirts to use an example both courts cited. The Sixth Circuit held the school did not have to show that the wearing of confederate flag insignia would actually cause a disruption, it needed to show its decision reasonably forecast that it would cause a substantial disruption.

Compare these decisions to a court decision which struck down Temple University's sexual harassment policy because it infringed the free speech rights of a student who wanted to be able to discuss women in combat and in the military. The university policy prohibited any "expressive, visual or physical conduct” when that conduct “has the purpose or effect of unreasonably interfering with an individual’s work, educational performance, or status; or . . . has the purpose or effect of creating an intimidating, hostile, or offensive environment.”

The problem with this, the court held, was that it let the university impose sanctions for speech based solely on the motive of the speaker and without testing whether the speech is likely to cause a material disruption to the school environment. "Absent any requirement akin to a showing of severity or pervasiveness—that is, a requirement that the conduct objectively and subjectively creates a hostile environment or substantially interferes with an individual’s work—the policy provides no shelter for core protected speech."

Some of the difference in results can be explained by the fact that courts provide grade schools with substantially more flexibility than in a university setting, a policy that permits the more stringent enforcement of discipline among pre-adults. My point is that these cases are a harbinger for public employers, some of whom also face complex decisions about employee expression in the workplace. Public employers have a significant ability to prevent disruption in the workplace so it may be they can have a facially neutral policy that prohibits the wearing of clothing that would likely cause disruption. How an employer would show what would cause a disruption remains to be seen, as courts will require some showing of a disruption.

But public employee speech in the workplace that does not pose a risk of disruption poses a more difficult problem. In that circumstance, a public employer could probably not point to its harassment policies as providing a justification for prohibiting employee speech. Speech alone, one would think, could only rarely rise to the level being severe or pervasive enough to be actionable. But then how does one deal with racial epithets? Any employer, public or private that does take reasonable steps to prevent that kind of speech risks being held liable for racial harassment. Of course, it is the rare case where speech constitutes the only basis for a harassment complaint, and non-expressive conduct motivated by a prohibited characteristic is not protected speech.

I don’t envy the public employer who must sort this out.

Employers May Not Retaliate Against Employees Who Take FMLA Leave

This won't be earth-shattering. It will eliminate any doubts (that most employers didn't have in the first place).

A Dollar General store in Tennessee fired a computer programmer who had a serious health condition. The project on which she was working was behind schedule and missing deadlines. Shortly after she requested FMLA leave, Dollar General began imposing discipline on her. A few weeks later, she was fired. She said at trial that when she was terminated, a supervisor told her "because of your health, I don't think you can do the job." The jury found Dollar General had fired the employee because she took FMLA leave.

On appeal, Dollar General argued that the FMLA does not prohibit employers from terminating employees who have taken FMLA leave. Read literally, Dollar General was correct. The relevant statutory language simplys says that it is unlawful to discriminate against someone "for
for opposing any practice made unlawful by this subchapter." An individual who requests FMLA leave exercises her rights under the FMLA but doesn't necessarily do so by saying the employer is engaging in an "unlawful" practice. Of course, the DOL FMLA regulations say: "employers cannot use the taking of FMLA leave as a negative factor in employment actions" but regulations cannot increase the rights that Congress chose not to add.

The problem is, as the court recognized, that the right to take FMLA would be all but meaningless if an employer could use that leave against the employee. Courts have, moreover, been willing to imply a retaliation prohibition even where the statute does not expressly prohibit retaliation, as I explained in a prior post. It is hardly surprising, therefore, for the Sixth Circuit to read the FMLA as protecting employees because they had exercised FMLA rights. (Given these other decisions, I find some of the Sixth Circuit's reasoning unnecessary but I can't quibble with the results.)

The decision isn't going to come as a shock to most employers in Tennessee. Still, there is merit to reminding Tennessee employers that they should exercise caution and use some common sense when imposing discipline on employees who have taken FMLA leave.

Arbitration of USERRA Claims

For the first time in a while, courts are having the opportunity to construe the terms of the Uniformed Services Employment and Reemployment Rights Act of 1994. Because USERRA has a structure somewhat different than the more common federal discrimination statutes it poses increase risks and correspondingly greater obligations on employers who have employees on military leave.

Answering one of the open questions, the Sixth Circuit today held in this decision that the terms of USERRA did not clearly prohibit arbitration of USERRA claims. That means that general arbitration agreements can lawfully mandate arbitration of USERRA and other claims.

Drafting a valid arbitration clause is not simple so employers should consult with counsel before deciding to impose one on employees. Courts have invalidated arbitration clauses for a number of reasons such as because they slanted too much in the employer's favor, imposed a disproportionate cost on the employee to invoke it, or did not permit the arbitrator to award full relief authorized by the statute. Properly drafted, however, an arbitration clause will be enforced.

Proving an Unlawful Motive under ERISA's Retaliation Provision

I cut my employment law teeth by defending against retaliation claims so I have a special affinity for those that raise unusual issues. A recent First Circuit decision (a court that rules on decisions from New England and Puerto Rico) caught my eye and gives me an opportunity to talk about two important points employers should heed. (This court does not set precedent for Tennessee cases so employers, as always, should not blindly assume the decision will protect them.)

Employers are often surprised by the number of federal retaliation statutes. I don’t have an exact count but can safely say there are over 30 different statutes which prohibit retaliation by certain employers for certain conduct engaged in by employees. These days, employees can engage in “protected activity” in a variety of ways. Some ways are familiar (making complaints of unlawful discrimination) others are new (complaints by airline employees about airline safety) others are industry specific (complaints about corporate misconduct for publicly traded companies or nuclear energy safety) or conduct specific (complaints about unlawful environmental pollution). Thanks to CBOCS West v. Humphries (which I discussed here), we know that one of the oldest statutes which prohibits retaliation was passed after the civil war. The oldest that expressly prohibits retaliation is, of course, the National Labor Relations Act, where the protected conduct involves unionizing.

One of the less familiar retaliation provisions appears in the Employee Retirement Income Security Act (ERISA). This statute, as most know, governs benefits and the theory behind this retaliation provision is that, what good would it be for an employee to seek or obtain a benefit if an employer could turn around and make life difficult on the employee as a result. So, ERISA includes a retaliation statute that prohibits employers from retaliating against an employee because the employee sought or obtained benefits. It also prohibits an employer from “interfering” with an employee’s right to a benefit.

To keep things from getting completely out of hand, however, courts uniformly interpret the ERISA retaliation statute to require more than simply a termination following an application for or an award of ERISA benefits. The employee must, as in almost any retaliation claim, show the employer intended to harm (in the employment sense) an employee because the employee had or requested ERISA governed benefits. The classic example would be where an employer terminates an employee because the employee has caused or about to cause an increase in the company’s health care expenses. See Dewitt v. Proctor Hospital, 517 F.3d 944 (7th Cir. 2008) (this may also violate the Americans with Disabilities Act if the employee has a disability).

Despite its age, ERISA retaliation claims are still just unusual enough that some employers will still act without thinking about the consequences. A recent decision, however, provides employers with something of an encouragement to think through the consequences of their actions.

Parametric Technology notified a number of employees that they were going to be laid off. One, a software engineer, shortly before the termination date, notified the PT that he wanted to take short term disability benefits. HR, thinking the claim “odd” (their words) consulted with in-house counsel before forwarding the claim to the insurer who ultimately approved the disability benefit. The employee then looked for work, getting hired by a consulting company that was to provide employees to PT. Thus, PT saw the software engineer back working at its facility (though now a subcontractor employee) when it thought he was still receiving disability benefits and fired him for double-dipping.

The software engineer argued the double-dipping motive wasn’t the real reason for his persona non-grata status pointing to the fact that HR treated his request for benefits with skepticism and to their consulting with counsel before processing the claim paperwork. The court didn’t buy it: employer skepticism (alone) is ordinarily not unlawful because “ERISA does not impose upon an employer a duty to buy a pig in a poke, and caution is a far cry from discriminatory animus.”

And consulting with counsel before proceeding, the court said, was anything but discriminatory. “A personnel officer faced with a novel situation hardly can be faulted for opting to secure the advice of counsel concerning that situation.” And, "the prudent step of seeking a lawyer's advice is not the stuff on which a finding of discriminatory intent can be premised."
At the risk of sounding self serving, there is a lesson here for employers who are faced with an employee who complains or requests any contractually agreed upon or statutorily mandated right. It is better to review the situation carefully, consult with counsel if doubts remain, before proceeding precipitously.

Preventing Workplace Violence

Last Sunday's tragedy here in Knoxville then Friday’s workplace shooting outside of Philadelphia brought to mind an extremely unpleasant topic. Simply put, all employers should address violence in the workplace in the hope that at least one tragedy can be prevented. There may be no sure way to prevent all workplace murders (any more than there is a way to prevent all murders) but I thought I might mention that there are warning signs employers can use to identify a potential for workplace violence.

The issue is too complex for one (or even several blog posts). Besides, there are a number of well-written publications that better address it. (One is “Threats Pending Fuses Burning: Managing Workplace Violence” by Dennis A. Davis, whom I heard speak on the subject at Kramer Rayson’s Labor and Employment Seminar in 2006.)

While mass murders are more likely to make the news, workplace violence is not just about them. The FBI, in its “Workplace Violence, Issues in Response” reminds us that mass murders are relatively infrequent (despite their publicity) and it is “the threats, harassment, bullying, domestic violence, stalking, emotional abuse, intimidation, and other forms of behavior and physical violence that, if left unchecked, may result in more serious violent behavior.”

Not surprisingly, there is a good bit of similarity between the FBI publication and Dennis Davis’ book. Most incidences of workplace violence, Dennis said, don’t happen without warning to someone even if it is not one of the intended victims. Dennis breaks down workplace violence into three “stages” graded by their increasing potential for violence. Each stage has recognizable characteristics. I won’t try to condense Dennis’ book (or his talk) here but it is an eye-opener. OSHA and the CDC (with NIOSH) have also published Internet sources that will help an employer address and reduce the risk of workplace violence.

What surprises most people when they hear about workplace violence prevention is the link between an individual’s violent tendencies and some of the more “mundane” issues that arise in the workplace. Dennis and the FBI make this point repeatedly. The FBI: “Prevention programs that do not consider harassment in all forms and threats are unlikely to be effective.” Or as Dennis’ book says, “violence starts with thoughts and moves first to language then to actions.”

The FBI recommends employers act before a tragedy by developing a “workplace violence strategy.” Support it from the “top”, tailor it to your workplace, training managers and employees to spot, report and prevent some of the behaviors that might lead to violence, and conduct practice exercises. All employers should have a prevention program that compliments the harassment policy and provides procedures for investigating, assessing and addressing violent behavior. One thing I like about the FBI’s approach is the way it describes the “zero tolerance” policy an employer should adopt. Rather than imposing a "zero tolerance" mandatory penalty approach, employers should make it clear that zero tolerance means: “no threatening or violent behavior is acceptable and no violent incident will be ignored."

My description of these texts grossly oversimplifies the issues. The FBI report and Dennis’ book cover the issues and concerns in detail. I simply wanted to mention that there are resources out there that might prevent another tragedy.