Thursday, March 31, 2011

Pending Tennessee Legislation

On Tuesday, April 5, 2011, dual committee hearings are set to convene concerning a bill that would let Tennessee employers offset from wages, amounts that the employee owes to the employer.  

The bill would cover wage advances (including personal use of a company credit card) and would require a written agreement that allows the employer to offset the wages by the amount owed and require the employer give the employee 14 days advance notice before the offset from wages takes effect.

No offset would be permitted if the employee "sends a sworn affidavit to the employer, and a copy of such affidavit to the department of labor and workforce development, no later than seven (7) days after receiving notification pursuant to subdivision (a)(3), contesting the amount owed."

Here are links to check the status of the wage offset bills pending in the Tennessee General Assembly and to read the Senate version of the wage offset legislation.

Avoiding the Claim of Selective Investigations of Employees

There is an interesting decision from the federal court of appeals in St. Louis discussing the theory that selective investigations of employees who are in protected groups can provide evidence of pretext.  The idea behind the theory is that investigating a member of the protected group but not non-members shows the decision maker is searching for a reason to impose discipline. 

To give an example, one cited in the decision, evidence that an employer required more extensive documentation of pregnant employee’s medical appointments than those of non-pregnant employees, in addition to employer’s comments, supports the jury’s finding of pregnancy discrimination.  

The employer in the appeal, however, avoided harm.  The allegedly selective enforcement was the viewing of a store's surveillance video shortly after the employee (the store supervisor) requested not to work a shift due to her pregnancy.  The evidence showed that area managers regularly reviewed surveillance videos.  In addition, the court further held that any question about why the manager reviewed the surveillance video was not material given the sound reasons for the supervisor's discharge (which the manager consistently enforced).

The decision whether to investigate often can't be objectively defined (though here, a showing of a standard practice helped).  The factual scenarios are simply to varied.  Even so, employers should nevertheless consistently investigate reports of misconduct once it comes to their attention.


Here is a link to the pregnancy discrimination decision in Weirman v. Casey's General Stores

Wednesday, March 30, 2011

Why Employers Should Document Policy Violations

An employee with Hepatitis C failed in his disability discrimination lawsuit because his employer took the time to document his performance problems (even before it knew of his condition) in his performance appraisal.  The employee (named Breen) sued his employer, Infiltrator ("the world’s leading manufacturer of plastic leachfield drainage chambers for environmental onsite wastewater solutions") under Kentucky's disability discrimination laws (which are the same as the pre-2008 ADA).  The decision, however, addresses an issue common to all employment discrimination or retaliation lawsuits, the importance of accurately documenting performance on a performance evaluation.  

Breen, the company said, was rude to customer service, one time in front of a major customer, he also shipped out new inventory (in violation of the "First in First Out" policy).  The court sustained his discharge largely because these issues had been identified as areas for improvement in his performance appraisal:
Even before Breen informed Infiltrator of his condition, the company identified Breen’s relationship with the customer service department, Breen’s adherence to the company’s First In First Out policy and Breen’s attitude as areas that needed improvement. These issues were important enough for the company to mention in his annual review as areas of improvement for the upcoming year.

Tuesday, March 29, 2011

Proximate Cause and Independent Investigations

At some point, I'll tidy up prior posts in this blog that may or may not be helpful in light of the Supreme Court's decision in Staub v. Proctor Hospital.  There, the Supreme Court rejected the "hard and fast" rule that an "independent investigation" could automatically eliminate alleged bias by a non-decision-maker who provided information that was relied upon in the adverse employment action.  To quote the decision:
As we have already acknowledged, the requirement that the biased supervisor’s action be a causal factor of the ultimate employment action incorporates the traditional tort-law concept of proximate cause. See, e.g., Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 457–458 (2006); Sosa, supra, at 703. Thus, if the employer’s investigation results in an adverse action for reasons unrelated to the supervisor’s original biased action (by the terms of USERRA it is the employer’s burden to establish that),then the employer will not be liable. But the supervisor’s biased report may remain a causal factor if the independent investigation takes it into account without determining that the adverse action was, apart from the supervisor’s recommendation, entirely justified.
But what is meant by "the traditional tort-law concept of proximate cause?"  To be honest, its use here seems out of place as it is a doctrine meant to relieve a remote tortfeasor (the person that is alleged to have caused harm to another) from liability.  Since employers, not biased supervisors, are liable for unlawful discrimination, using proximate cause to affect an employer' liability seems backwards.  The Court was not, we must assume, addressing the "traditional" effect of a proximate cause analysis but using it to illustrate the ultimate point, that the employer needs to show (and in some cases, such as USERRA, prove) that the supervisor's bias was not "a" cause of the employer's decision.

So what is proximate cause? This discussion of proximate cause is from a court of appeals decision (not in the employment discrimination field but a suit by shareholders against a corporations directors alleging a breach of the duty of loyalty) issued today:
The term “proximate cause” is pervasive in American tort law, but that doesn’t mean it’s well understood. A common definition is that there must be proof of “some direct relation between the injury asserted and the injurious conduct alleged.” Hemi Group, LLC v. City of New York, 130 S. Ct. 983, 989 (2010), quoting Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268 (1992). But “direct” is no more illuminating than “proximate.” Both are metaphors rather than definitions. What the courts are trying to do by intoning these words is to focus attention on whether the particular contribution that the defendant made to the injury for which the plaintiff has sued him resulted from conduct that we want to deter or punish by imposing liability, as in the famous case of Palsgraf v. Long Island R.R., 162 N.E. 99 (N.Y. 1928) (Cardozo, C.J.). The plaintiff was injured when a heavy metal scale collapsed on the railroad platform on which she was standing. The scale had buckled from damage caused by fireworks dropped by a passenger trying, with the aid of a conductor, to board a moving train at some distance from the scale. She sued the railroad; it would have been unthinkable for her to sue the scale’s manufacturer, even though if heavy metal scales did not exist she would not have been injured. No one would think the scale’s manufacturer should be liable, because no one would think that tort law should try to encourage manufacturers of scales to take steps to prevent the kind of accident that befell Mrs. Palsgraf. The railroad was a more plausible defendant; its conductor had tugged the passenger aboard while the train was already moving. But how could he have foreseen that his act would have triggered an explosion, as distinct from a possible injury to the boarder? If an accident is so freakish as to be unforeseeable, liability is unlikely to have a deterrent effect.
Coming closer to our case, the defendants cite our decision in Movitz v. First National Bank of Chicago, 148 F.3d 760 (7th Cir. 1998). The plaintiff had bought a building in Houston in reliance on what he claimed was the defendant’s misrepresentation of its value. Had it not been for the misrepresentation he would not have bought it. Shortly after the purchase the Houston real estate market collapsed and his investment was wiped out. The misrepresentation had not caused that collapse but it had been a cause of the plaintiff’s buying the building and thus had contributed to his loss. Yet we ruled, without using the term “proximate cause,” that he could not recover from the defendant because (among other reasons) that would produce overdeterrence by making the defendant an insurer of conditions that he could not control. Id. at 763. That would be as futile as making the manufacturer of the scale an insurer of Mrs. Palsgraf’s loss.
Proximate cause does not mean "but for."  Each of the examples the court of appeals gave could be "but for" causes of the perils described.  It means too remote

There is a lot to be said about the decision in Staub but for now, employers should continue to investigate allegations of employee misconduct only they should be sure to establish that information from an allegedly  biased (assuming that fact is asserted to begin with) should be independently corroborated so that the supervisor's alleged bias is as remote to the decision as possible.

Sixth Circuit Affirms DOL Dismissal of Pilot's Retaliation Claim

Over the years (beginning in the 1970's) Congress has added a number of retaliation provision that are enforced by the Department of Labor.  Complaints are filed with OSHA (which has a special team of whistleblower investigators), a hearing is held before a DOL ALJ (there is no jury trial) who issues written findings which the losing party can appeal to a body called the Administrative Review Board (ARB), and from there, to one of the federal courts of appeals.
The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), 49 U.S.C. § 42121, added a retaliation provision that protects certain pilots who make safety-related complaints (I'm not being exact).  Today, the Sixth Circuit issued a decision involving a pilot ("Hoffman") who filed an AIR21 complaint against his employer (NetJets) alleging he was not promoted because he had made safety complaints about several aircraft he piloted.
There are some irrelevant procedural quirks to the decision. The only one that matters here is that this was not a summary judgment decision.  The question for the Sixth Circuit was whether the evidence supported the DOL ARB's ruling in favor of the employer.  The legal challenge came down to why others were promoted to an "initial operating experience (IOE) instructor."  The vacancy announcement for the position was pretty general.  It did not say anything about having international flight experience.  The employer, however, was having trouble recruiting pilots who could fly internationally so it wanted the instructor to have the ability to train the existing pilots.   This was a preferred, but not required, qualification.  The pilot, of course, lacked international flight experience and was not promoted. 
Normally, the absence of a crucial qualification from the position vacancy doesn't bode well for the employer when there is a challenged to a promotion decision.  It didn't hurt the employer here, however.  The court explained why:
even though international experience was not listed in the May 2004 IOE instructor position announcement, there was evidence that NetJets was indeed interested in promoting pilots who possessed such experience. This evidence included the following: Decker [Director of Flight Standards] testified that NetJets was having trouble qualifying pilots to fly their international routes and thus needed instructors who could train pilots in this area; the documentation shows that every candidate was individually evaluated in his or her amount of international experience; five of the seven successful candidates possessed such experience, and of these five, four received three points in the international experience category, the highest-possible score for the category; and Hoffman was questioned about his international experience during his interview. This undercuts Hoffman’s argument that the international-experience category, like the point system in general, was only a pretext to deny him a  promotion. Hoffman points out that two pilots received zero scores for international experience and were promoted nonetheless.  However, NetJets never contended that international experience was required for the promotion, only that it was preferred. Moreover, there is a stark comparison between these two successful candidates and Hoffman: even without any international-experience points, these two candidates received total scores of five and six, respectively, whereas Hoffman received a total score of only one.
 So while the better practice is to include all important criteria in the position vacancy announcement or the job description, it is not automatically fatal where the employer consistently evaluated every candidate using the criteria it failed to include in the position vacancy announcement and the promotion decision(s) reflect the fact that the criteria was in fact important to the selection decision.

Monday, March 28, 2011

Obesity and the EEOC's ADA Final Regulations

A running debate in ADA case law is whether or not obesity is a covered impairment.  Decisions have gone both ways under the ADA as it was originally enacted.  Older EEOC guidance on what is a disability said that severe obesity was itself an impairment but that being overweight without a physiological disorder was not itself an impairment.  (The leading case on morbid obesity, Cook v. Rhode Island, 10 F.3d 17, 24 (1st Cir. 1993), actually turned on the “regarded as” definition of a disability and if an impairment is not a disability for actual disability purposes, it is also not a disability for perceived disability purposes. See 29 C.F.R. § 1630.2(i).)

On Friday, the EEOC issued final regulations construing the 2008 Amendments to the ADA (which take effect on May 24, 2011).  Since one major purpose of the 2008 Amendments was to increase the coverage for individuals with a disability, I was curious what these regulations said about whether obesity is a covered impairment.  The regulations (and comments to them) do not address the issue directly.  The comments do explain, however, that

The definition of the term ‘‘impairment’’ does not include physical characteristics such as eye color, hair color, left-handedness, or height, weight, or muscle tone that are within ‘‘normal’’ range and are not the result of a physiological disorder.
So, nothing appears to have changed.  The question goes unanswered.

Of course, after the 2008 Amendments, employer are best off assuming most any impairment is a disability and acting accordingly.  There are recognizing exceptions, of course, for temporary and minor injuries, but better to be safe than act on a mistaken belief that an employee does not have a disability.

Proving Pretext: Honest Belief v Denying Underlying Facts

There is much in a discrimination/retaliation decision the Sixth Circuit issued on Friday but the part that struck me was one that most employers don't think about at the time they are making an employment decision.  It is an important point, however, especially in light of the Supreme Court's decision in Staub v. Proctor Hospital.

The plaintiff in Bahma v. Mercy Hospital, worked as a Nuclear Medicine Technologist and, after he challenged at least one failure to promote him, was fired for engaging in unsanitary work practices an inappropriate patient care.  The incidences were documented and in many cases, the patient was the one who originally complained.  In ruling for the hospital on the retaliation claim, the court providing one of the best examples of the difference between supporting an employment action with an "honest belief" and the employee's denial of the underlying facts:
The evidence indisputably shows that Mercy received several patient complaints regarding Bhama’s infection-control procedures and professionalism in the months preceding his termination, including one stating that Bhama disposed of a blood-soaked cotton ball with his bare hands and immediately afterwards tried to administer an injection without washing up. Bhama never denied that Mercy received these complaints, he simply denied the truth of the allegations and dismissed them out of hand as inadmissible hearsay.
The message for employers should be pretty clear.  Before taking action, properly investigate and make sure employment action is supported by the facts.  If the employee disputes the facts, make sure the investigation fully explains why the employee's assertions are not accepted or believable.

Friday, March 25, 2011

6th Circuit Rejects ADA Claim from Poor Performing State Employee

In a published (and therefore binding precedent) decision issued today, the Sixth Circuit upheld the poor performance-based firing of an individual with a disability by Tennessee Department of Mental Health and Developmental Disabilities.  The interesting thing about the decision is that the employee (named Whitfield) blamed some, but not all, of her performance issues on her disability and the Department's failure to "successfully" accommodate them.  The court rejected this approach saying:
Although Whitfield attributes her spelling errors to a lack of spell check in the computer program used to input complaints, she made serious spelling and grammatical errors even in programs that had a spell-check feature. In December 2007, nearly three months into her employment, Whitfield neglected to enter the required county on numerous inspection forms and, on another form, entered the wrong county. And although she had difficulties using her computer due to her disability, she also made errors in assignments that were not performed on a computer, such as organizing files alphabetically. On other occasions, she mailed letters without zip codes or complete addresses. Many of Whitfield’s errors can be attributed to nothing more than  Whitfield’s lack of attention to detail, and Whitfield admitted as much in her deposition, stating that she “just wasn’t looking that close” when addressing mailings. At bottom, Whitfield routinely made serious errors that were unrelated to her disability or to a lack of accommodations.
In this context, Whitfield must do more than point to the facts that Defendants knew she was disabled and failed to provide all of her requested accommodations. Although these facts may help Whitfield establish her prima facie case of discrimination under the ADA, in order to survive Defendants’ motion for summary judgment, she needs to show that Defendants’ explanation for her termination could be deemed pretextual. Whitfield focuses only on the problems she had entering complaints into the computer, arguing that, if she had been given all the accommodations she requested, she would have not had the same problems, and, further, other employees made similar errors or were not required to enter complaints at all. Appellant’s Br. at 18–21. Although Whitfield succeeds in creating a genuine issue as to whether she could have adequately performed that particular function with the proper accommodations, she does not address the serious errors she routinely made while performing tasks that were not at all impacted by her disabilities, such as confirming that an envelope has a zip code before dropping it in the mail. Because Whitfield does not create a genuine issue of material fact as to whether she was fired due to her disability, summary judgment in Defendants’ favor was proper.
The holding let the court avoid addressing whether the Department had failed to reasonably accommodate the employee.  The Department had made several attempts to accommodate her but there were technological limitations that the IT employees could not overcome relating to placement of her monitor and the use of a one-handed  keyboard.

Employers must still make reasonable accommodations, of course, but this decision provides reassurance that an employer may terminate a disabled employee for poor performance, especially where the performance issues are not caused by the disability.  Terminations for performance issues that are caused by a disability require more thought but even the EEOC acknowledges that employees with a disability may be held to the same performance standards as other employees so long as the employee is provided the reasonable accommodations "required to assist an employee in meeting a specific production standard."

Another aspect of the decision is worth mentioning.  The court expressly rejected the employee's argument that all she needed to do to get to a jury was to establish a prima facie case.  Given it is very easy to establish a prima facie case, that provides employer with greater security when dealing with employee performance problems.

Wednesday, March 23, 2011

Separating Protected Complaints from Misconduct

An Air Tran employee in Dayton convinced the Sixth Circuit to reverse summary judgment for his employer in a Title VII retaliation claim.  The employee had complained to his station manager that his immediate supervisor was racially biased.  The employee, in the supervisor's mind, was a poor performer and caused problems.  In a meeting where the employee was suspended for misconduct, the station manager told him (allegedly)  "I'm tired of your complaints" against the supervisor.  While there were other reasons the court reversed summary judgment, the station manager's alleged statement was a major factor.

Perhaps the station manager did not mean to include the racial complaints in the set of complaints she was "tired" of receiving but the lesson is that employers should always be careful not to make comments that could be taken as criticizing protected activity.  That includes being careful not to make broad and ambiguous comments of the type allegedly made here.

The name and link to the unpublished decision is Hill v. Air Tran Airways (6th Cir. 3/23/2011).

FIfth Circuit Rejects USERRA Hostile Work Environmennt Claim

Several Air Force and Air National Guard Reserve pilots for Continental Airlines filed a lawsuit under USERRA (Uniformed Services Employment and Reemployment Rights Act) alleging that comments made by their managers created a hostile work environment. The comments, the court decision said, were:
“If you guys take more than three or four days a month in military leave, you’re just taking advantage of the system.”; “I used to be a guard guy, so I know the scams you guys are running.”; “Your commander can wait. You work full time for me. Part-time for him. I need to speak with you, in person, to discuss your responsibilities here at Continental Airlines.”; “Continental is your big boss, the Guard is your little boss.”; “It’s getting really difficult to hire you military guys because you’re taking so much military leave.”; “You need to choose between
CAL and the Navy."
 Assuming these comments were made, the court nevertheless held that USERRA did not provide the pilots with any relief.  Discrimination under USERRA, the court reasoned, includes
the denial of any “benefit of employment.” The language . . . defining the word “benefit” and the phrase “benefit of employment”  includes the long list of terms “advantage, profit, privilege, gain, status, account, or interest.” But [USERRA] does not refer to harassment, hostility, insults, derision, derogatory comments, or any other similar words.
The decision is precedent for Texas, Louisiana and Mississippi.  There is contract precedent so Tennessee employers should exercise caution in relying upon it.  It also serves as a reminder that employers should not make tolerate negative comments about military service, or the disruption absences caused by military service.

Carder v. Continental Airlines,  (5th Cir. 3/22/2011).

Tuesday, March 22, 2011

Family Dollar Store Manager Found Exempt under FLSA

A Family Dollar Store manager has lost an appeal of an FLSA exemption lawsuit.  The employee, Irene Grace, claimed she was not exempt because she performed a high percentage of non-managerial, manual tasks.  The court, applying the DOL Wage Hour Division regulations as they existed before the 2004 changes, disagreed, saying:
In this case, Grace was in charge of a separate retail store, seeking to make it profitable. While she catalogs the nonmanagerial jobs that she had to do, claiming that they occupied most of her time, she does so without recognizing that during 100% of the time, even while doing those jobs, she was also the person responsible for running the store. Indeed, there was no one else to do so, and it cannot be rationally assumed, nor does the record support a claim, that the store went without management 99% of the time. Grace also fails to acknowledge the importance of performing nonmanagerial tasks in a manner that could make the store profitable, the goal of her managerial responsibility.
The decision, Grace v. Family Dollar Store, from the Fourth Circuit, can be read at http://pacer.ca4.uscourts.gov/dailyopinions/opinion.pdf/092029.P.pdf

US Supreme Court Says Oral FLSA Complaints are Protected

Resolving a split in the federal courts of appeals, the Supreme Court today held that an oral complaint of a violation of the Fair Labor Standards Act is protected conduct under the FLSA's anti-retaliation provision.  Here is the interesting part:

[T]he statute requires fair notice. Although the dictionary definitions, statutes,regulations, and judicial opinions we considered . . . do not distinguish between writings and oral statements, they do suggest that a “filing” is a serious occasion, rather than a triviality. As such, the phrase “filed any complaint” contemplates some degree of formality, certainly to the point where the recipient has been given fair notice that a grievance has been lodged and does, or should, reasonably understand the matter as part of its business concerns.

Moreover, the statute prohibits employers from discriminating against an employee “because such employee has filed any complaint.” [29 U.S.C.] §215(a)(3) (emphasis added).And it is difficult to see how an employer who does not (or should not) know an employee has made a complaint could discriminate because of that complaint. But we also believe that a fair notice requirement does not necessarily mean that notice must be in writing.

* * *

To fall within the scope of the antiretaliation provision, a complaint must be sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an assertion of rights protected by the statute and a call for their protection. This standard can be met, however, by oral complaints, as well as by written ones.
The full decision in Kasten v. Saint-Gobain Performance Plastics Corp. can be read at http://www.supremecourt.gov/opinions/10pdf/09-834.pdf

A New Approach and An Old Subject

I've been silent for a long while - too long - largely because of the press of work, the holidays, and the feeling that blog posts were repeating topics already addressed.   It has become obvious that I simply do not have the time to post lengthy blog posts along the lines I have previously done.   What I hope to do is put up shorter posts on more basic subjects but also post, as the issue arise, links to decisions that impact Tennessee employers. I welcome your comments on the new approach.

There was, as  a matter of fact, a rather interesting racial harassment appeal arising out of Maine.  It touches on the issue of when discipline for harassing conduct was adequate even if not fully effective in preventing future harassing conduct.  Employer encounter this a good bit. 

Two of the black plaintiff's co-workers made overtly racial remarks (not the kind I will repeat here though they are set forth in the decision).  He complained and the company owner "became irate and berated the men, making clear that such misconduct unacceptable" and that a repeat performance would result in their termination. The warning wasn't entirely successful but the plaintiff never again complained to the company owner, choosing to file a lawsuit after leaving employment due to a work related injury.

Siding with the employer, the court's decision has several good statements about the duty an employer has when an employee complains about harassing conduct:
  • there is no legal rule that requires treating hateful speech as the workplace equivalent of a capital
    offense
  • the imposition of employee discipline is not a rote exercise, and an employer must be accorded some flexibility in selecting condign sanctions for particular instances of employee misconduct.
  • The plaintiff's argument that the sanction must have been inadequate because it was ineffective to stop the harassment is nothing more than a post hoc rationalization.  An employer's disciplinary decision must be evaluated in real time; it cannot be evaluated in hindsight.
You can read the full decision at http://www.ca1.uscourts.gov/pdf.opinions/10-1387P-01A.pdf