Get Your Story Straight Before Taking Action

A decision released today from the Sixth Circuit illustrates that Tennessee employers need to get their story straight before firing an employee. 

Brookdale Senior Living, Inc. is, its website says, the nation’s largest owner and operator of senior living communities throughout the United States and a leading national provider of senior-related services. The plaintiff, David Eades was a Regional Director of Start-up Operations.  Eads thought his new supervisor harassed and degraded him because of his age (he was in his early 40s).  Eads complained about it to HR and later to the company president.  Eads and the company discussed a severance package and Eads was sent home with the assurance that he was not fired.  Eads later learned his supervisor was telling folks he had been fired and he could no longer access his email from outside of work.  

The court of appeals held Eads was entitled to a jury trial.  The problem for Brookdale was that, as the court said it was "advancing different reasons in its brief on appeal than it represented to the district court."  Even worse, Brookdale's assertions in the litigation were not the same as those it made in response to Eads EEOC charge.  Brookdale's in house counsel said in the response that Eads had been terminated for "lack of any performance in any position."  This answer was so far wrong that Brookdale's brief on appeal "explicitly denies having terminated Eades for performance issues" saying its counsel had made a mistake. As the court said, however, "Brookdale offers no evidence that either one suggested that the response was erroneous, nor does it explain how its Senior Vice President for Legal Services made such a 'mistake.'"

The inconsistency with the EEOC response was not the only problem. Brookdale's lawyers appear to have put to much "spin" on the severance discussions. They asserted that Eads said "he could not work with [his supervisor] and that he wanted a severance package, but this position is inconsistent with the record testimony of the attendees of that meeting."

The problem with Brookdale's case wasn't simply that it gave unsupported reasons for firing Eads.  Any one of the reasons Brookdale advance might have valid ones (had the facts been in support).  But when employer  and employer asserts different and inconsistent reasons for a decision, that is itself evidence of pretext, as the court said: “An employer’s changing rationale for making an adverse employment decision can be evidence of pretext.”  

In practice, there will be some debate as to what amounts to a "changing rationale."  Courts rightly look to whether the changing reasons are inconsistent, not merely changing.  For example, courts recognize that expanding on a reason already advanced does not ordinarily amount to taking an inconsistent position.  Here, however, Brookdale's assertion to the EEOC that performance was the sole reason for firing Eads could not be reconciled with its position in the litigation.  

By now, the lesson is obvious.  Before taking any employment action, employers need to investigate the  facts and make sure the explanation given at the start is something the employer can live with if litigation ensues.

Tennessee Employers, Get thee to Federal Court - 5/25/2011 Update

The General Assembly has passed a bill that has the effect of overruling the Gossett decision. The legislation is discussed in this post.

Yesterday, the Tennessee Supreme Court issued two decisions in employment retaliation claims that sent a chilling message to Tennessee employers.  The decisions impose new and troubling procedural requirements on employers who try to get retaliation (and perhaps discrimination) claims dismissed prior to trial.  If there ever was a reason not to remove a case to federal court when a Tennessee employer is sued, the Tennessee Supreme Court just removed it.

The primary decision is Gossett v. Tractor Supply where a 3 to 2 majority of the court held that the McDonnell Douglas analysis does not apply when an employer seeks summary judgment in a retaliation claim.

McDonnell Douglas v. Green  is a U.S. Supreme Court decision, early on in the history of Title VII, which set forth the procedure for analyzing discrimination claims. It is not a procedure (unlike the rules governing summary judgment), but a method of analyzing claims where there is not an admission of discrimination.  Later U.S. Supreme Court decisions (a case called Burdine is the most significant among them) refined the  analysis by saying the employee must prove the employer's illegal motive.  The pretext analysis I'm so fond of discussing here is one aspect of the McDonnell Douglas/Burdine analysis, as it has come to be known.

Summary judgment is a way for employers (among others) to get a discrimination/retaliation claim dismissed without a trial.  Trials are expensive.  To obtain summary judgment, the employers needs to show that there is no disputed fact that is material to the outcome.  In practice, this usually boils down to showing that the employee cannot prove that the employer's reason for the action is a pretext for discrimination/retaliation.  Pretext, of course, means a lie, a phony reason given to hide a real reason.

I will cut to the fundamental point, the Tennessee Supreme Court's reason for abandoning McDonnell Douglas/Burdine in when ruling on a motion for summary judgment is based upon the legally flawed premise that courts misinterpret precedent.  The court said, "[i]n addressing the issue of pretext, a court may fail to consider the facts alleged by the employee to show a prima facie case."  But for the justice system to work, courts have to presume other courts will follow precedent.

The belief that courts do not consider evidence that supports a prima facie case is contrary to a 10-year old decision of the U.S. Supreme Court.  In Reeves v. Sanderson Plumbing, the Court held that the pretext analysis includes the evidence from the prima facie case: "the trier of fact may still consider the evidence establishing the plaintiff’s prima facie case 'and inferences properly drawn therefrom … on the issue of whether the defendant’s explanation is pretextual.'"

Justifying a major departure from federal precedent on a flawed premise is bad enough.  But the reason for it is equally inconsequential.  The prima facie case raises a presumption that the employer can rebut.  The evidence it takes to establish a prima facie case is exceptionally minimal.  Basing this kind of a decision on a  concern that a court might ignore evidence used to support the prima facie case is like a football coach complaining about a referee's blown call after losing the game 41 to 3.

The Tennessee Supreme Court also said applying McDonnell Douglas at the summary judgment stage is confusing and "can result in the grant of a summary judgment despite the presence of genuine issues of material fact."  It is wrong about the first point.  Federal courts have for decades applied McDonnell Douglas to summary judgment motions without confusion.  The decisions the court cited as evidence of confusion generally involved "mixed motive" claims.  Mixed motive claims are confusing because they do not apply the McDonnell Douglas analysis.

The court's explanation for its second conclusion is sparse and deeply flawed.  To start with, as one federal court of appeals recently said, McDonnell Douglas is "designed to make it easier for plaintiffs to withstand summary judgment in discrimination cases, in the belief that a discrimination suit (unlike, for instance, an action for negligence or breach of contract), puts the plaintiff in the difficult position of having to prove the state of mind of the person making the employment decision."  Gacek v. American Airlines, ___ F.3d ___ (7th Cir. 2010) (emphasis added). 

The court cited only one decision where McDonnell Douglas supposedly resulting in summary judgment being granted inappropriately.  That was, remarkably, a 2007 decision from the Tennessee Supreme Court which held that timing alone could not establish a pretext for retaliation. The court now seems to be saying timing alone can defeat summary judgment in a retaliation claim. If so, that is a significant departure from its own recent precedent and inconsistent with federal court precedent.  (My views on how courts ignore logic in saying timing can be evidence of motive are pretty clear.)

Perhaps worst of all, the court provides no guidance for lower courts on the rule that now apply to retaliation claims on a summary judgment motion.  (Saying the summary judgment rules apply is not guidance.)  Is the employee still required to establish the employer's reason for the adverse action is a pretext (in a case where there is no admission of bias by the employer)?  The decision leaves it open for employees' lawyers to argue that summary judgment can never be granted in a retaliation claim were the employee can establish a prima facie case.

Another point needs to be made (or else I'll be misquoted).  As best I can tell, both decisions were common law retaliatory discharge claims.  The court never says its decision applies to discrimination claims under the Tennessee Human Rights Act (THRA).  It is implied but since neither appeal concerned a THRA claim, the issue is still open.  Suppose, for a moment, this ruling applies to a THRA claim.  It is common for an employee to bring a THRA claim and a federal discrimination claim in the same lawsuit.  Gacek held that McDonnell Douglas is substantive law, not a procedural rule.  That means state courts hearing federal discrimination claims must follow McDonnell Douglas even in ruling on motions for summary judgment.  Nothing in Tennessee's summary judgment procedures permits a state court to refuse to apply U.S. Supreme Court precedent on federal claims.  So, on the same facts, summary judgment could be granted on the federal claim but not on the state claim not because of any difference in federal or state discrimination laws, but solely because of the way the Tennessee Supreme Court has said to apply summary judgment.

I've carried on with this quasi-rant too long.  The best advice for any Tennessee employer is to insist that your attorney remove to federal court all claims that can be removed (the rules on this are complex but a discussion of them is beyond the point I want to make here).  The Tennessee Supreme Court's decision only affects summary judgment motions in state court.  (State courts will continue to apply the McDonnell Douglas analysis as a matter of substantive law (such as at trial or on post-trial motions)).  Federal courts apply federal rules applicable to summary judgment even when ruling on state law claims.

It may be that in any one case, summary judgment isn't appropriate.  Federal courts, however, have developed and apply rules that give the employer a fair shot at obtaining summary judgment (and do so in a way that does not trod on employees, either). Unfortunately, that is no longer true in state court.

When What Happens in Vegas Won't Stay in Vegas

Prospect Airport Services has some 4000 employees nationwide, some of these provide gate services (such as wheelchair assistance) at the Las Vegas airport. Prospect found itself on the wrong end of a sexual harassment lawsuit by the EEOC when a female co-worker began propositioning a male employee. Today, the Ninth Circuit Court of Appeals held the female's harassment was severe enough to warrant a trial even though the female touched the male only once.

The female attempted to begin the relationship with a note which said she was “turned on” and wanted to “go out" with the male but the male told her he was not interested. She continued with several more notes, including a photograph of herself, "a head and shoulders-type shot with a pressing together of the breasts. . . . no clothing on that portion . . . . the cleavage of the breasts sort of together." She persisted, telling him she "gave a “very good bath wash and body massage" adding, “I do want you sexually and romantically.”

The male made several complaints to his supervisor who promised to address it but did not. He later complained to her supervisor who supposedly told the male he "did not want to get involved in personal matters" but did tell the female co-worker to stop. Instead of stopping she increased the frequency of her suggestive comments and enlisted co-workers to pressure the male. Some asked him if he was gay (he wasn't). The male was finally fired for poor performance which he attributed to the constant harassment.

Female to male harassment claims are rare, of course, though we can speculate that if they are going to happen, they are as likely to happen in Las Vegas as anywhere. The court rejected any suggestion that a different standard applied because the victim was male:

It cannot be assumed that because a man receives sexual advances from a woman that those advances are welcome. [The male] suggested this might be true of other men (the district court decision noted that [the male] "admits that most men in his circumstances would have 'welcomed'" her advances). But that is a stereotype and welcomeness is inherently subjective, (since the interest two individuals might have in a romantic relationship is inherently individual to them), so it does not matter to welcomeness whether other men might have welcomed [the female's] sexual propositions.

But perhaps more interesting, and equally applicable regardless of whether the male is the harasser or victim, is the holding that the conduct was severe or pervasive enough to amount to actionable harassment even though the only contact by the female was a kiss on the cheek.  This was not "severe" harassment but it was pervasive because the female's: 

pursuit of [[the male] was relentless. She would not leave him alone, despite his repeated clear rejections of her overtures. She recruited other co-workers to deliver messages to him; the campaign broadened to include the whole workplace. Other workers began mocking [the male] for his failure to respond to [the female's] sexual advances. [The male] described over six months of constant (and often daily) sexual pressure and humiliation from [the female] and other co-workers.

This being co-worker harassment, the male also had to show the employer's response to his complaints was inadequate.  Here, the court said, there was no contest:

His immediate supervisor . . . failed even to tell [the female]  to stop. He repeatedly brought his concerns to others in management, and a manager told [the female]  to stop, but management did nothing about it when [the female]  did not stop, and management knew she had not. Instead the assistant general manager told [the male] Lamas to sing to himself “I’m too sexy for my shirt.”

While the moral of the story is probably obvious, employers who rely on a stereotyped view of any harassment complaint are asking for costly litigation.  Any employee who complains about harassment should be taken seriously and the complaint investigated.  The complaint may ultimately be proven to be meritless  for any number of reasons but that should not be assumed at the start based upon stereotyped beliefs.  And, of course, supervisors and managers should be trained how to deal with (or report) harassment complaints.

Learning from Others' Mistakes - Things Tennessee Employers can Learn from the Obama Administration's Handling of the Shirley Sherrod Matter

One of the primary reasons I started this blog was to help employers learn from others' mistakes.  It struck me in listening to the media coverage about Shirley Sherrod that the administration has given employers a great example of how not to go about firing someone.  No matter what your political affiliation, every employer can learn from the mistakes the Obama Administration made.

Of course, I'm only going on what I read or heard from the news media.  Some facts are debated (but I won't let a few debated facts stand in the way of good lesson).  Sherrod, of course, was the Agriculture Department official who was summarily fired when the Administration learned, presumably through the news media, that she had given a speech in which she admitted to discriminating against a white farmer.  As the story goes, the video of Sherrod's speech had been selectively edited to make her remarks appear more damning than they actually were.  Sherrod's entire speech showed she was not, in fact, biased but was relaying a story about overcoming bias.

First, as I understand it, Sherrod was fired without being given any opportunity to tell her side of the story.  She claims she was driving when she got a call from a deputy secretary in her department who told her he need her immediate resignation.  She then had to pull over the car and type her resignation letter into her Blackberry.  While there are times when an employer need not hear the employee's side of the story, those times are exceptionally rare.  The far better course, as I explained a while back, is to listen to the employee's version of events before making a decision.

Second, it seems reasonably clear that senior officials in the Agriculture Department decided to fire Sherrod without conducting any investigation, much less a meaningful one.  Sherrod maintains (as any employee would) that she told her supervisors to listen to the entire speech she gave but they ignored her.  The lesson here is, of course, that before an employer fires an employee (especially for  misconduct), the employer should conduct a pretty extensive investigation.  Knee jerk reactions, as I have explained, are likely to cause legal problems for employers.

Third, the Agriculture Department is in the midst of a lawsuit brought by African American farmers who alleged that they suffered racial discrimination in USDA farm loan programs.  According to the Congressional Research Service, the suit alleges that the USDA had discriminated against black farmers from 1983 to 1997 when they applied for federal financial help and again by failing to investigate allegations of discrimination.  One of Sherrod's contentions has been that the participants in this pattern of discriminatory conduct were never discipline for it but that she was fired for only one "offense." Let's suppose, for the moment, that this is true and that Sherrod had confessed to inappropriate conduct toward white farmers.  In meeting out discipline for misconduct, employers should always consider whether the current discipline is consistent with past discipline.

The interesting question this poses, however, is what does an employer do when it wants to change course and no longer follow a past practice?  The Agriculture Department, so the Congressional Research Service says, has been trying to address the discrimination issues for years.  It is not too much of a stretch to think that the Agriculture Department has tried in more recent years to prevent discrimination in loan applications.

To use a less serious example, suppose an employer realizes one day that its relaxed internet use policy is causing problems so it decides to prohibit all personal use of the Internet on work computers.  Absent a union, an employer is not ineluctably bound by its past practices (especially when they are unlawful ones).   But an employer that wants to make a "clean break" with its past practices should do so by unmistakably communicating that policy change to all affected employees.

Before the Sherrod matter, I would never have dreamed I would ever need to write a blog post about such an obvious subject.  But apparently there are employers, even big ones, who make some pretty stupid mistakes.

COBRA - In Case You Were Wondering

Unless you have been under a rock, you'll have noticed that last week, the President signed the Unemployment Compensation Extension Act of 2010.  In the past, similar bills also included an extension of the COBRA premium assistance program.  That did not happen this time.

The Department of Labor has updated its COBRA webpage to clarify that the COBRA premium reduction under ARRA is not available for individuals who experience involuntary terminations after May 31, 2010.

DOL issues Fact Sheet on Break Time for Nursing Mothers under the FLSA

From time to time, the Wage and Hour Division issues "fact sheets" on certain topics.  The latest topic addresses the provision in the Health Care Reform bill requiring employer to provide a "reasonable break time for an employee to express breast milk" for up to 1 year after the child's birth. The Wage and Hour Fact sheet does not go into too much detail.

The Fact Sheet states: "Only employees who are not exempt from the FLSA’s overtime pay requirements are entitled to breaks to express milk."  So exempt employees need not, as a matter of federal law, be provided with breaks.  That is not clear from the statutory language.

Tennessee law makes no such distinction but the federal provision has some teeth for non-exempt employees because it is an amendment to the minimum wage provision in the Fair Labor Standards Act. This means there is a private right of action but it is not clear what damages could be collected or whether any penalty could be imposed if the employer fails to provide the breaks.

Refusing to Return Employee to Work that Poses "High Risk of Re-Injury" Is Not Retaliatory

The Tennessee court of appeals has upheld the dismissal of a workers compensation retaliation lawsuit brought by an employee who was discharged when two board certified physicians determined that if she was returned to work she had a high risk of re-injuring herself. 

The idea that an employer need not return an employee to a job that would be likely to cause future injury is not new.  See Cannon v. Levi Strauss & Co., 29 Fed. Appx. 331 (6th Cir. 2002) (an ADA "regarded as" claim where employer terminated employee because her physician said continued work sewing pants put her at high risk for future carpel tunnel injuries).  What is relatively new is its application to workers compensation retaliation claims (though even here, a decision from years ago had held that an employer did not retaliate against an employee by firing the employee when the employee could not return to work because of a workers' compensation injury).

Yesterday's court of appeals decision today makes this point directly:

There is no evidence in the record that Plaintiff’s filing of workers’ compensation claims played any role whatsoever in the decision not to return her to work. The prohibition against retaliating against employees who file workers’ compensation claims does not guarantee an employee the right to return to work when such return poses a high risk of re-injury. Stated another way, the prohibition against retaliation does not guarantee employees the right to return to work and to continue reinjuring themselves until they are so disabled that they are permanently and totally disabled and can never work again.

Of course, getting to the point of proving that the employee's return to work is likely to cause the employee harm might take some work.  What impressed the court here was that the employer relied upon the advice of "two physicians who are board certified in occupational medicine" (one of whom was the employer's on-site physician).  While relying on a physician who is board certified in occupational medicine clearly helps, the decision does not say that board certification itself is necessary.

What should matter is that the physician has the expertise to make the decision (board certification certainly helps here) and the medical decision evaluates the employee's abilities (as opposed to making assumptions based upon labels).  

Ten years ago, Chattanooga found itself on the wrong end of a disability discrimination decision when it unreasonably relied upon a physician's advice that an HIV positive individual was not qualified to be a police officer.  There, the Sixth Circuit explained why the City's reliance was not reasonable:

Dr. Dowlen's "report" consists of two scribbled lines at the bottom of a boilerplate evaluation form. While the psychiatrist in Pesterfield clearly made an individualized determination as to the plaintiff's medical condition and its effect on his ability to fulfill his job requirements, there is no indication that Dr. Dowlen did anything of the sort. Moreover, the record is replete with factual evidence available to the City at the time --particularly Holiday's successful performance of police jobs that Dr. Dowlen claimed he was unqualified to do -- that flatly contradicted Dr. Dowlen's unsubstantiated conclusion. Under these facts, the City was not entitled to simply rely on the physician's recommendation as the basis for withdrawing its employment offer to Holiday.

Holiday v. Chattanooga, 206 F.3d 637 (6th Cir. 2000).

Employers are often presented with conflicting medical opinions (sometimes from the same physician).  Courts have held that an employer who fairly evaluates competing medical opinions do not discriminate against an employee because of the employee's disability.  Knapp v. Northwestern University, 101 F.3d 473 (7th Cir. 1996) ("in the midst of conflicting expert testimony regarding the degree of serious risk of harm or death, the court's place is to ensure that the exclusion or disqualification of an individual was individualized, reasonably made, and based upon competent medical evidence.").

Presented with conflicting medical information, the EEOC suggests employers consider: 

(1) the area of expertise of each medical professional who has provided information; (2) the kind of information each person providing documentation has about the job's essential functions and the work environment in which they are performed; (3) whether a particular opinion is based on speculation or on current, objectively verifiable information about the risks associated with a particular condition; and, (4) whether the medical opinion is contradicted by information known to or observed by the employer (e.g., information about the employee's actual experience in the job in question or in previous similar jobs).

Court of Appeals Recognizes Public Interest Exception to Retaliation Claims

The Court of Appeals in Atlanta issued an interesting decision today.  To simplify the facts to their essence (the decision is 34 pages long), no one was good enough for the employer's CFO.  The plaintiff was the third in a line of employees fired when their performance did not measure up to the CFO's impossible standards.  As the court said, the CFO "was indiscriminately persnickety."

Seeing the writing on the wall, the employee fired off an email complaining about discrimination.  She lost the discrimination claim because, the court said, there was no evidence this employee was treated better than her two predecessors.  (For this the court cited what it called the Vince Lombardi rule: "someone who treats everyone badly is not guilty of discriminating against anyone.")

But a meritless discrimination claim can spawn a meritorious retaliation claim.  Here, however, the evidence established that the CFO had decided to fire the employee before she sent the complaining email; the CFO had even started looking for another person to mistreat.

What turned this case into a problem was that the CFO fired the employee immediately upon learning about the employee's complaint instead of sticking with the plan to fire the employee once a successor was hired.

Rather than permit the employee to sue for the firing, the court held she could only sue for the premature firing.  She would been fired anyway, the court said, so the only thing she could recover for was the financial loss during the period she would have remained at work.

What made the case interesting is that the company argued the employee was fired when she complained because it was afraid that the employee might vindictively use her position (remember she worked for the CFO) and the access it granted her to sabotage the company’s operations.  That, the court said, could justify  firing the employee earlier than planned.  The court explained:

Discrimination laws do not require that their goals be pursued at the cost of jeopardizing innocent life or that employers tolerate a serious risk that employees in sensitive positions will sabotage the company’s  operations. We are confident that if an employer removes an employee because of a reasonable, fact-based fear of sabotage or violence, the anti-retaliation provisions of our laws will not punish that employer for doing so. 

What was a good theory failed in its implementation.  The company failed to show its concerns were justified enough to warrant dismissal of the retaliation claim.  The court observed that the employee's email made no threats.  The company also failed to show that it had any other basis for thinking she would try to disrupt operations, nor was there evidence that there were "no means short of firing [the employee] that it could have used to protect itself from the sabotage it feared, such as reassigning her to other duties until it found a replacement."

So while the court recognized an exception to a retaliation claim, it also made it clear that the exception will need to be supported by something more than speculation and unfounded fears by the employer.

What the decision also shows, however, is that rushing to judgment is never a good idea.  Without some well-founded basis for thinking there was an eminent danger or risk, the company should have had the strength of its own convictions and not altered its course.

You can read the decision on the Eleventh Circuit's website: Alvarez v. Royal Atlantic Developers.

Avoiding Pretext - Job Descriptions and EEOC Responses

A federal court of appeals recently upheld a jury verdict for an employee in an age discrimination claim.  The decision shows what happens when an employer explains a hiring or promotion decision by relying on a criteria not mentioned in the vacancy announcement.

National American University was hiring a director of admissions for its Rapid City, South Dakota campus.  The employee worked for the university and sought the promotion.  She was one of three finalists but was not offered the job when the two preferred candidates declined it.  Instead, the university broadened its search ultimately offering the job to a substantially younger candidate.

At trial, the University explained its refusal to promote the plaintiff on the ground that she lacked management experience.  While a director of admissions would seemingly need "management experience" the position vacancy announcements failed to mention it.

Worse, in its EEOC response, the University asserted the employee had "struggled" with her performance and had received "mediocre" ratings.  Yet, at trial, the University abandoned this explanation and its witnesses praised the employee's performance.

The lessons from the decision are pretty basic.  Make sure hiring or promotion decisions can be and are explained by reference to criteria stated in the job description.  While employers are not rigidly bound by what is in the position vacancy, it is a mistake to explain a promotion decision by citing criteria that are not in the job description.

The decision also illustrates the importance of making sure the response to an EEOC charge will be the reason asserted at trial.  It is often tempting, in responding to an EEOC charge, to "embellish" by asserting problems the employer had with the employee, even if the problems were not considered in reaching the decision at issue. If that is what the University did here, it backfired

Silently Revisiting Gross v FBL - Does the "Causation Standard" Make a Difference

I'm back.  The press of work and other good causes prevented me from updating the blog.  For that I apologize.

I was prompted to write a post because of a Sixth Circuit decision that came out today.  A teacher at a high school in Michigan sued the school claiming he had been retaliated against under the first amendment for having filed a prior lawsuit alleging harassment of his daughter by another teacher.  (While constitutional retaliation clams are sometimes different than statutory retaliation claims, those differences are unimportant here.)

What caught my eye was the court's description of the causation standard.  In 1977, in a case called Mount Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 285–86 (1977), the Supreme Court said that constitutional retaliation claims required the plaintiff to establish that the improper motive played a "substantial" or "motivating" factor in the decision.  The Court didn't explain but cited to a companion case decided the same day, Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U.S. 252 (1977), which explained, among other things, that the constitution did not require a "sole cause" showing but that the evidence in that case failed to show a racial bias motivated the decision.

Skipping forward to today, the Sixth Circuit set out the "substantial or motivating factor" standard from Mt. Healthy saying "we have interpreted this inquiry to mean that a motivating factor is essentially but-for cause—without which the action being challenged simply would not have been taken." (Quotations omitted.)

That caught my eye because  the 1991 amendments to Title VII - which said a plaintiff can prevail if he or she shows discrimination was a "motivating factor" - have led many to argue that "motivating factor" is a lower or lesser standard than "but for" causation.  Most court decisions simply assume that there is a difference.  (But see Harper, The Causation Standard in Federal Employment Law: Gross v. FBL Financial Services, Inc., and the Unfulfilled Promise of the Civil Rights Act of 1991, 58 Buffalo L. Rev. 69 (2010) (discussing difference but ultimately drawing unsupported conclusion that Congress must have  intended there to be a difference between a "motivating" and "substantial" factor).  The Supreme Court decision in Gross didn't help this by contrasting the Title VII language from the language in the ADEA: "Unlike Title VII, the ADEA's text does not provide that a plaintiff may establish a discrimination by showing that age was simply a motivating factor."  Gross v. FBL Financial Services, Inc., 557 U.S. ____ (2009).  Loose language read out of context is the bane of any jurist or lawyer.  Read in context, the Court seems to have been attempting to explain its holding - that the dual motive theory does not apply to the ADEA.


So what does this mean, practically? Anyone who thinks they can coherently explain the difference (or that there is a difference) between a "contributing", "motivating", "substantial", "causal" or "because of" / "but for" factor is trying to sell you the Brooklyn Bridge.  I've been practicing employment law for 20 plus years and would not begin to try and explain it.  Employers certainly shouldn't get way-laid by concerns over causation or motivation.

Claryfing FMLA Service and Benefit Rules

The Seventh Circuit in Chicago issued an interesting FMLA decision today.  The decision addressed how to calculate the 1,250 hours of service requirement and whether removal of absenteeism "points" is a benefit of employment.

To be eligible for FMLA leave, an employee must have worked 1,250 hours in the preceding 12 months. The employee argued that the employer should have given her credit toward the 1,250 hours for the time she was on a prior FMLA leave.  Without these hours, she didn't have enough for her second leave to qualify for FMLA protection.  The court disagreed:

There is no basis for such a contortion of the statute—no hint in the statute or elsewhere that Congress envisaged and approved such a circumvention of the requirement that an applicant for FMLA leave have worked 1,250 hours in the preceding 12 months.

The second issue addressed in the decision was more interesting.  It takes a little explaining but it is worth it.  Employers commonly have absenteeism policies that accrue points for employees per absence.  Points are then  removed when the employee has worked a defined period of time.  The Seventh Circuit decision, the absenteeism policy provided for termination when the employee reached 8 absenteeism points in the preceding 12 months.  A point is then removed 12 months after it is imposed.  The 12 months period, however, excluded time spent on leave so that if an employee took a two month leave during the 12 months, the employee would have to avoid accruing 8 points over a 14 month period.  This practice has considerable  logical appeal.  If an employer cannot count the period an employee is on FMLA leave toward the absenteeism point system then it makes sense to exclude that period from the period counted.  It is crucial, of course, that the policy apply to all leaves not just FMLA leaves.

The employee argued that expanding the 12 month period for while she was on FMLA leave denied her a benefit and the FMLA provides that taking FMLA leave “shall not result in the loss of any employment benefit accrued prior to the date on which the leave commenced.” 29 U.S.C. § 2614(a)(2).  

The court agreed that removing points after 12 months was an employment benefit protected by the FMLA but ultimately ruled the employer had not retaliated against the employee by extending the 12 month period.  

The FMLA prohibits loss of benefits only when those benefits have "accrued prior to the date on which the leave commenced." 29 U.S.C. § 2614(a)(2) and the FMLA further provides that it does not entitle an employee to "the accrual of any  . . . employment benefits during any period of leave."  So, the court explained:

If removal of absenteeism points. . . is an employment benefit, it is one that accrues 12 months after an absence. Until then the employee has no right to have an absenteeism point removed. An employee who worked for 11 months and was on leave the other month (say he began work on January 1 and was still employed on December 31, but was on leave during the month of July) cannot add the month that he was on leave in order to obtain a benefit available to an employee who  worked for 12 months rather than 11, because the employee is not entitled to “the accrual of any . . . employment benefits during any period of leave."

While the decision upholds the employer's practice it also demonstrates that employers must be careful when  designing a "no fault" absenteeism program so that it does not run afoul of the FMLA.

Will Congress Extend Premium Assistance for COBRA Benefits Again?

As the law currently provides, the COBRA premium assistance program expires on March 31, 2010.  That is, any employee involuntarily terminated after March 31, 2010, must still be offered COBRA coverage but the employee will not be able to pay only the 35% and have the federal government reimburse the rest through a payroll tax credit.

There is, however, a bill pending in Congress that would extend the COBRA premium assistance program to cover involuntary terminations that occur on or before April 30, 2010.  The bill passed the house but a final vote in the Senate was filibustered and no vote is expected before March 31, 2010.

The Senate is, in fact, in recess and isn't expect to consider the bill until April 12, 2010, so neither employers nor employees will know until mid-month whether the COBRA premium assistance program will apply to involuntary terminations that happen in April 2010.  Should the program be extended, which seems probable, expect it to apply retroactively, to all involuntary terminations during April 2010.

A prior post addressed the COBRA notices employers will need to send out to affected employees.  Expect something similar to be required if the COBRA premium assistance program gets extended in mid-April.

DOL Changes its Position FLSA Exemption for Mortgage Loan Officers

Today, the DOL issued its first wage and hour opinion of the current administration.  The DOL has historically issued a number of opinion letters each year and the absence of any new opinion letters has been puzzling.  The DOL has decided to change how it issues official pronouncements.  In an email notice sent out today, the DOL explained:

In order to provide meaningful and comprehensive guidance and outreach to the broadest number of employers and employees, the Wage and Hour Administrator will issue Administrator Interpretations when determined, in the Administrator’s discretion, that further clarity regarding the proper interpretation of a statutory or regulatory issue is appropriate. Administrator Interpretations will set forth a general interpretation of the law and regulations, applicable across-the-board to all those affected by the provision in issue. Guidance in this form will be useful in clarifying the law as it relates to an entire industry, a category of employees, or to all employees. The Wage and Hour Division believes that this will be a much more efficient and productive use of resources than attempting to provide definitive opinion letters in response to fact-specific requests submitted by individuals and organizations, where a slight difference in the assumed facts may result in a different outcome. Requests for opinion letters generally will be responded to by providing references to statutes, regulations, interpretations and cases that are relevant to the specific request but without an analysis of the specific facts presented. In addition, requests for opinion letters will be retained for purposes of the Administrator’s ongoing assessment of what issues might need further interpretive guidance.

(Sorry for the long quote but for some of us, knowing the process is as important as the result.)

The first "Administrator Interpretation" takes the position that the typical duties of a Mortgage Loan Officer does not qualify the employee as being in an administrative exempt position.  In a lengthy, eight page analysis,  the DOL explained that "mortgage loan officers typically have the primary duty of making sales on behalf of their employer; as such, their primary duty is not directly related to the management or general business operations of their employer or their employer’s customers."  

The DOL did not take a position on whether Mortgage Loan Officers might be exempt under a different exemption.  It noted that employers had argued loan officers are exempt as commissioned employees but cautioned that the employer would need to qualify as a "retail or service establishment."

Perhaps what is more interesting about this administrative interpretation is that it "withdraws" (legalese for "rejects") a 2006 DOL ruling which had concluded mortgage loan officers could qualify for the administrative exemption if their primary duties were not "sales."  The difference in positions (between the 2006 and 2010 rulings) seems to be that the 2006 ruling had permitted officers who were making loans to individuals in their personal capacity to qualify as exempt.  The 2010 ruling explained:

work for an employer’s customers does not qualify for the administrative exemption where the customers are individuals seeking advice for their personal needs, such as people seeking mortgages for their homes. Individuals acting in a purely personal capacity do not have “management or general business operations” within the meaning of this exemption. However, if the customer is a business seeking advice about, for example, a mortgage to purchase land for a new manufacturing plant, to buy a building for office space, or to acquire a warehouse for storage of finished goods, the advice regarding such decisions might qualify under the administrative exemption.

Employers who have relied upon the 2006 ruling need to understand that they can no longer rely upon the 2006 ruling to establish that they made a good faith attempt to comply with the FLSA.  That doesn't mean an employer is now liable because they relied in the past on the 2006 ruling.  It simply means that they will have to re-evaluate their position in light of today's ruling.

DOL Releases Updated COBRA Notice For Recovery Act Extension

The DOL has released several model COBRA notices that employers may use when providing notices of the availability of premium reductions and additional election periods for health care continuation coverage.  The notices cover the March 2, 2010 premium assistance extension.

The DOL includes other model forms as well.  These are included in various packages the DOL has created to cover different situations.  The packages include the following disclosures:

• A summary of ARRA’s premium reduction provisions.
• A form to request the premium reduction.
• A form for plans (or issuers) that permit qualified beneficiaries to switch coverage options to use to satisfy ARRA’s requirement to give notice of this option.
• A form for an individual to use to satisfy ARRA’s requirement to notify the plan (or issuer) that the individual is eligible for other group health plan coverage or Medicare.

COBRA Premium Assistance Extended Again

Yesterday, Congress and the President extended COBRA premium assistance again.  The has updated the introduction on the COBRA webpage at http://www.dol.gov/COBRA to reflect the Temporary Extension Act of 2010. Hopefully, the DOL will soon release the new information as the TEA does more than simply extend the premium assistance period for a month.  I add links to the updated the fact sheet, FAQs and other materials when the DOL updates its COBRA webpage.

Religious Practices that Discriminate Because of Gender

Consider the following scenario:

You have recently hired a male employee.  When you are introducing him to his co-workers, an African-American co-worker offered her hand to greet him but he refused to shake hands. The new employee explained that he did not touch women because of his Muslim religion. When a human resources manager spoke with him about the incident, the new employee said that it was the co-worker’s female gender, not her race, which prompted his response.

What do you do?  You have an obligation to accommodate the new employee's religious practices but you also have to make sure that his religious practices do not create a hostile environment for women.

This scenario was presented to the EEOC for an opinion last year.  The EEOC's associate general counsel  responded by letter in an "informal" (non-binding) opinion.  Her answer was to say it depends on what is an undue hardship under the religious discrimination principles of Title VII:

• courts have found, and the Commission has stated, that encroaching on co-workers’ ability to perform their duties or subjecting or threatening to subject co-workers to a hostile work environment “will generally constitute undue hardship.
• a showing of undue hardship requires more than speculation about negative consequences or expressions of discomfort, irritation, or annoyance by co-workers.

What if the newly hired employee is a sales person?  Can the employer consider customer offense in deciding whether the new employee's refusal to shake hands with a woman is an undue hardship?

• The courts also are inclined to find undue hardship if the employee’s religious expression can be perceived by customers as the employer’s own message.

The employer, the EEOC said, should evaluate the actual impact the new employee has.  If he "conveys negativity about women" (or conveys "an intent to demean based on gender") then the employer can take action but if he get along fine with women, they should not.  The same rule would apply to interactions with co-workers.  

When an employer is faced with what we can call the "no win" scenario, there are at least two key points to remember.  

• I have never heard of a court criticizing or punishing an employer for providing appropriate training to its employees.  Bad training, of course, is a different story.
• It is far better to document observations than to make conclusory statements.  If you are like me, and don't well recall details, writing down what you observe ("just the facts") is crucial.  Getting in court and simply saying, to use this scenario as an example, the new guy didn't get along with women because of his religion, is only going to increase the fees you pay your attorney.

Impact of Gross on ADEA Claims

I cautioned earlier that the Supreme Court's decision in Gross v. FBL Financial shouldn't be taken by employers as dramatically making it harder for employees to prove age discrimination.  I have also said that newspaper reports saying Gross requires employees to prove age was the "sole" cause are dead wrong.

A recent decision by the  federal court of appeals in Atlanta (deciding appeals from Florida, Georgia and Alabama) illustrates that Gross doesn't  immunize an employer from its stupid mistakes and loose statements nor does it require employees to prove age was the sole cause of their firing.

A non-profit employed an older worker as a fundraiser.  She was moved to a different job for poor performance (instead of being fired - no good deed goes unpunished).  She was shortly later fired for poor performance in the new job.  The employee fought back by putting on evidence that her boss made the following age statements:

• “I need someone younger I can pay less"
• "you are very old, you are very inept. What you should be doing is taking care of old people. They really need you. I need somebody younger that I can pay less and I can control.”
• “[Plaintiff] is too old to be working here anyway.”

The employer tried to argue that under Gross, it should win because it would have fired the employee for poor performance, even if the decision had age issues (he denied making the statements).  The court didn't buy it, saying the jury had to decide whether age was the reason for the firing.

EEOC Proposes Definition of "Reasonable Factor Other Than Age"

In light of recent Supreme Court decisions construing disparate impact liability under the ADEA, the EEOC has issued a proposed rule meant to define what is a "reasonable factor other than age" or RFOA.  (This is one of the potential rules I mentioned in December.)

The EEOC's definition won't have a significant impact on the routine age discrimination claim most employers face.  It could, however, result in an increase in the number of disparate impact claims asserted in ADEA lawsuits, particularly in IRIF claims.

The RFOA defense only applies when the proof establishes that the employer has engaged in conduct that is "otherwise prohibited" by the ADEA.  In an intentional discrimination claim it will be unusual (but not theoretically impossible) for an employer to be able to show that its conduct is intentionally discriminatory but yet reasonable.  (Some "reasonable" factors are hard wired  into the ADEA and implementing regulations, most relate to employment benefits, allowing employers to "discriminate" against older workers in end result where the cost of providing the benefit is equal to what it costs for a younger employee).

So, the RFOA defense will appear most in disparate impact claims, where the employer has a facially neutral practice that adversely affects older workers.

The EEOC says that "a reasonable factor is one that an employer exercising reasonable care to avoid limiting the employment opportunities of older persons would use."  To decide this you look to various criteria.  I won't go deep into these criteria here.  They can be summed up as follows: An employer taking action that adversely affects employees should (1) make sure it is aware of the effect of the decision on older workers (indeed, on all classes), (2) evaluate the severity of the impact on older workers, (3) consider whether there is some other, less harmful, means of achieving the same goal, and (4) conduct training of managers on how to avoid age-stereotyping.

I said at the outset that the RFOA defense will apply primarily in disparate impact cases.  But as I was reading through the EEOC's comments, what struck me was that this rule will have a significant impact on reduction in force litigation when older employees are disproportionately laid off.

Employers need to realize that disparate impact age claims can be brought (in the same complaint that alleges intentional age discrimination) to challenge the result of any "practice" the employer adopts, including "practices" the employer does not "officially" adopt.   If there is a statistical disparity, it won't be too hard for an employee to argue that there is a  "practice" that causes the skewed statistics.  (One practice can be, the EEOC says, where the employer gives "supervisors unchecked discretion to engage in subjective decision making.")

At that point, the employer will need to be able to show, in an IRIF case, that the criteria used to select employees to be laid off were  "reasonable" and based on some factor other than age.  While the employer does not have to adopt an employment practice that has the least severe impact on older workers,ignoring ways to lessen the impact will not look good.  Employers must also remember that under existing EEOC regulations (not modified by this proposed rule): "A differentiation based on the average cost of employing older employees as a group is unlawful" (with certain exceptions for benefit issues).

Pending Tennessee Legislation Permitting Mandatory Direct Deposit - Debit Cards

Earlier this week, the Tennessee Senate Commerce, Labor & Agriculture Committee passed a bill (SB2633/HB 3095) that would amend Tenn. Code Ann. 50-2-103 so that employers could require employees to be paid by direct deposit or, if the employee does not want direct deposit, by a prepaid debit card.

 If a debit card is issued, it must permit the employee to make one no cost withdrawal from it (such as at an ATM within the network) for up to the full amount on the debit card.  That could pose problems for ATM withdrawals where there are daily limits on the amount that can be withdrawn.  The employee would then have to go into a bank and obtain the funds from a teller.

There would also be certain disclosure requirements for debit card use, namely, the employer must explain any fees the employee would have to pay for using the debit card.

Employers can do this now with the consent of the employee.  This bill - if it passes - would permit employers to require employees chose between direct deposit or debit cards instead of, as now, cash or checks.

The bill is being promoted by Visa.  Visa's lobbyist explained (the video of the committee meeting can be seen here) that over 20 other states have passed laws or adopted regulations of this nature.  Visa's interest, obviously, is in increasing the use of debit cards as they get a percentage (from the merchant) of every dollar spent.  I'm told by at least one bank that they do not charge an additional fee for obtaining a debit card over and above the fees charged for making direct deposits.

Must an Employer Provide Lodging as a Reasonable Accommodation

I'm always looking for unusual legal precedents.  I shouldn't be surprised when they come from unusual sources. I receive emails from the Government Accountability Office listing the Comptroller General decisions they issue.  The Comptroller General of the U.S. GAO issues legal decisions and legal opinions on appropriations law, bid protests, and other issues of federal law.  Agencies can ask the Comptroller General for advice on whether federal law permits a specific expenditure. 

Today's e-mail from the GAO addressed whether the Department of Housing and Urban Development, Office of Inspector General, could us appropriated funds to pay for a reasonable accommodation for an employee who wanted the IG's office to provide her with lodging closer to where she would be performing audits.  

The Comptroller General decision addresses an unusual accommodation request.  Federal employees, by statute, are paid lodging expenses when they are "away from the employee's designated post of duty."  The employee's need for lodging, however, was not away from her post of duty.  There was, in other words, no authorization for paying the employees lodging for these trips. 

The Comptroller then addressed whether the appropriated funds could be spent nonetheless, as part of a reasonable accommodation, and concluded they could not because the requested accommodation was not reasonable:

An employer, however, is not required to provide for accommodations that fall outside the scope of employment, like commuting. Laresca v. American Telephone and Telegraph, 161 F. Supp. 2d. 323 (D.N.J. 2001). In this case the employee's drive is akin to a commute, traveling from the employee's home to the work site. Reasonable accommodations are directed at enabling an employee to perform the essential functions of the job itself, 29 C.F.R. sect. 1630.2(o)(1)(ii), and federal courts have held that activities like commuting to and from the workplace fall outside the scope of a job. Consequently, an employer is not obligated to provide a reasonable accommodation for such activities.

The Comptroller General encouraged the IG's office to find some other accommodation that would be effective.

Sixth Circuit Clarifies Reduction in Force Standards

Today's decisions from the Sixth Circuit included a reduction in force age discrimination case, Harriet Schoonmaker v. Spartan Graphics Leasing, LLC, that helps to clarify the legal standards for RIFs and addresses other issues that commonly arise in RIF litigation.  The employer had between 50 and 75 employees and, as is not uncommon for employers of that size, did not have detailed RIF procedures.  When the employer decided to cut two employees because work was slow, they made a "consensus" decision to cut from the third shift because it was the least productive. One employee (not the plaintiff) was cut because she had been giving the job as a favor and was retiring soon. As to the 58 year old plaintiff, the employer chose a 29 year old because, as the decision says, plaintiff "was sometimes hard to work with" and the other employee was "the better team player." Both were equally qualified but the employer felt the other employee was "more productive" even though there were no work records to support this one way or the other.


Several parts of the decision are significant.  

• First, the court clarified that, in a RIF, the retaining a younger employee and laying off an older employee is not by itself enough to establish a prima facie case.  There had been some doubt about this because of loose language in a prior decision.
• Second, the court re-emphasized that an employee cannot show an employer's decision is discriminatory by arguing that she was more qualified or more productive than the employee retained.
• Third, the decision shows that minor discrepancies during a RIF do not necessarily amount to proof of discrimination.

Tennessee Court of Appeals Upholds Breach of Employment Contract Claims

Yesterday the Tennessee Court of Appeals issued a decision involving two physicians who sued Methodist Healthcare-Memphis Hospitals when the hospital decided that the doctors had "voluntarily relinquished" their medical staff privileges.  The physicians argued this decision breached their contract with the hospital and tortiously interfered with their patient relationships (at least those patients who had insurance through the hospital).  The hospital took the action it did because the physicians failed to obtain malpractice insurance coverage that satisfied the requirements in the hospital's bylaws (which the court assumed amounted to a contract of employment).

The decision isn't a remarkable one in the traditional HR sense.  It is a reminder that employment relationships are contractual, albeit usually a contract for at will employment.  Employers, however, must take care to observe  any contractual terms when they take action involving a contract employee.  The doctors were not, of course, employees in the strict sense but the same basic rules apply nonetheless.

In the world of contract law, a party that breaches the contract can't complain when the other party later refuses to perform the contract. Here, the court held the physicians could not complain when the hospital "fired" them because they failed to maintain a contractually required condition (insurance).  The lesson here is that any contract of employment should be clear in stating what is a condition the employee must maintain.  If driving is required, then the contract should say so.  Don't leave conditions of employment to chance.  Of course, being specific about the job prerequisites is a good practice even when there is no employment contract.

Ricci v DeStefano - Clarifying What it Means for Affirmative Action

This is for the federal government contractors.  The Office of Federal Contract Compliance Programs (OFCCP) enforces certain obligations contractually imposed on larger companies that contract with the government.   The rules OFCCP enforce require contractors to, among other things, have affirmative action plans. 

Ricci v. DeStefano raised some questions about these affirmative action plans but only if they were being relied upon to fullfil a quota, something genuine affirmative action eschews.

The OFCCP looks to remedy systemic discrimination, however, so it is only natural for the OFCCP to clarify that Ricci does not significantly (if at all) change the agency's procedures or a contractor's obligations.  Some highlights:

• Ricci does not affect how OFCCP examines the use and impact of selection procedures, such as tests.
• Ricci does not change a contractor's affirmative action obligations under the mandates enforced by OFCCP.
• Ricci indicates that an employer's failure to conduct an appropriate job analysis, or to validate a test or other selection procedure prior to its implementation, places an employer in a position that may be difficult to defend should the test be found to have an adverse impact after it is used.

Seventh Circuit holds ADA Does not Adopt Mixed Motives Damages Provision from Title VII

When I previoulsy wrote about the age discrimination decision in Gross v. FBL Services, which held the mixed motives analysis doesn't apply to age discrimination claims, I deliberately avoided explaining what was meant by mixed motives analysis.  I simply said that in a Title VII mixed motives claim, "the employee can partially win."

Today's Americans with Disabilities Act decision from the Seventh Circuit requires me to more fully explain what I meant. 

Because of amendments to Title VII in 1991, if a jury finds that the employer's motives were not entirely pure but that it would have nevertheless made the same decision, the court may award the employee limited relief.  The employee cannot get damages (including backpay) nor can the court order the employee be  reinstated.  The employee can get other injunctive relief (i.e. an order prohibiting future discrimination) and can recover attorney fees (which can add up to a lot).

The 1991 amendments, however, divided up this into two different statutes.  One statute (42 U.S.C. 2000e-2(m) states (essentially) that if the employer had an illegal motive but would made the same decision nonetheless, the employer is nevertheless liable to the employee (the "liablity" provision).  The other statute (2000e-5(g)(2)(B)) limits the relief the employee can obtain in such a situation (the "remedy" provision).

Just a year before the Title VII amendments, Congress enacted the ADA.  Instead of establishing new procedures within the ADA itself, Congress simply invoked by reference the Title VII procedures (several statutes were invoked but the one we are currently concerned with is section 2000e-5).  This is why employees must file charges of discrimination with the EEOC in ADA claims.  The ADA does not, however, invoke 2000e-2, which is, to repeat, where Congress, a year later, inserted a provision making employers liable (but with limited relief) if race, sex, religion or national origin actually motivated the decision even if the decision would have been the same without that illegal motive.

In the Seventh Circuit ADA claim, the jury found that the employer (Rockwell) terminated the employee because of her perceived disability.  The jury also found, however, that Rockwell would have terminated the employee even if it did not believe she had a disability.  The district court granted the employee injunctive relief (requiring Rockwell to put a copy of the judgment in the employee's personnel file) and her attorney fees (which the court reduced from $153,290.54 to $30,658.11, because of the jury's finding).

The Seventh Circuit decision wiped out even this "limited" relief by holding that because Congress did not expressly invoke the mixed motives liability provision (2000e-2) in the ADA, its invocation of the mixed motives remedy provision (2000e-5) was not enough after the Supreme Court's decision in Gross.

I don't ordinarily discuss here questions of statutory interpretation.  This decision is important because it further demonstrates the impact of the Supreme Court's decision in Gross.  It makes trying or briefing an ADA claim simpler.  Of course, it doesn't mean employers should be less cautious or more sloppy in making decisions, especially now that the ADA has been amended to vastly increase the number of folks who have "protected" disabilities.  It is far better to convince a jury (or judge) that the decision was completely free from bias. 

DOL Prepares COBRA Premium Assistance Extension Notices

My prior post covered the December 2009 extension of premium assistance for employees involuntarily terminated and extending the assistance to those employees who lost their job between December 2009 and February 2010.  One of the requirements was that Plan Administrators send notices to affected employees.  The DOL has now prepared notices and these can be found at http://www.dol.gov/ebsa/COBRAmodelnotice.html

Because Congress waited until December to extend the notice, there will be COBRA participants who lost their job more than nine months before Congress extended the assistance period to 15 months.  As the DOL explained, “In addition, individuals who had reached the end of the reduced premium period before the legislation extended it to 15 months will have an extension of their grace period to pay the reduced premium. To continue their coverage they must pay the 35 percent of premium costs by February 17, 2010, or, if later, 30 days after notice of the extension is provided by their plan administrator.”

The DOL explains that these "transition period" individuals:

• must be provided this notice within 60 days of the first day of the transition period. An individual's "transition period" is the period that begins immediately after the end of the maximum number of months (generally nine) of premium reduction available under ARRA prior to its amendment. An individual is in a transition period only if the premium reduction provisions would continue to apply due to the extension from nine to 15 months and they otherwise remain eligible for the premium reduction.

Suppose, for example, a former employee's nine month assistance expired 12/1/2009.  The notice must be sent to the former employee before the end of January 2010.  The employee would have until February 17, 2010 in which to pay the December premium.  (If the full premium was paid, the employee is entitled to a refund.)

Calculating when the COBRA premium payment is due requires some thought.  I read the extension provision as saying that any premium (for a transition period former employee) that would be due January 1, 2010, need not be made until February 17, 2010 (instead of being due January 30, 2010, as it would under the 30 day grace period).  A premium payment due February 1, 2010, must be received no later than March 2 (i.e., 30 days later).  Fortunately, the DOL interprets the December extension as extending the grace period rather than the due date.