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

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

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

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

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

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

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

Harassment Decision Demonstrates Importance of Clear Policies and Training

The federal court of appeals in Richmond issued a decision today which demonstrates the importance of having clear harassment policies and training first level supervisors about reporting harssment complaints. 

The lawsuit, brought by the EEOC (EEOC v. Xerxes Corporation) alleged a racially hostile work environment on behalf of two employees.  The employees say they complained to their supervisor months before the company did anything.  (The supervisor disputed having received any complaints.)  It was clear, that once more senior management learned of the conduct, they took prompt action that was reasonably calculated to end the harassing conduct.

The court of appeals upheld the dismissal of the EEOC's harssament claims for conduct that occurred after management learned of the conduct.  Ironically, this conduct was among the worst of the lot (assuming there are degrees of offensive racial conduct) consisting of anonymous hate-speech (e.g., KKK messages and the "N" word included in a written message) left in the locker of one African-American employees.  The employer promptly and effectively responded to these incidences, the court held, even though it never caught the perpetrator.  The employer called a meeting, threatened to fire the person if caught, and called in the police to investigate. 

The employer's problem was that the employees claimed to have reported to their supervisor a number of racial slurs that were directed at them but it was months before the company took action.  This allegation, the court held, created an issue of fact for the jury over whether the employer had effectively responded to their complaints. 

I don't often get to give advice on how to avoid issues of fact.  An issue of fact isn't discrimination.  There can be all sorts of factual disputes but if a jury believes the employer's testimony, the employer will win.  Factual disputes are only an issue because it is vastly cheaper for the employer to have the discrimination/retaliation claims dismissed prior to a full blown trial.


Here, the employer's policies played into the EEOC's goal of creating a factual dispute.  The court noted, for example, that "Plant employees were instructed to report any violations [i.e., harassing conduct] to their 'supervisor, Plant Manager, . . . or a member of Xerxes’ Compliance Committee.'"  The employer changed the policy (after the employees say the complained to their supervisor) to say that violations must be immediately reported to the supervisor and plant manager.

It would be interesting to see a policy that said harassing conduct must be reported to HR not the supervisor.  I tend to think a court might not look favorably on that policy because supervisors are considered to be agents of the employer.  A policy that says report violations to both is more likely to be enforced if the employee only reports to the supervisor.  Regardless, the safest course, even if not required, is to make sure supervisors are clearly and regularly trained to report up the command chain all reported misconduct. 

Whether or not this avoids an issue of fact, if a case goes to trial, evidence of this kind of training can be used to help convince a jury that no complaints were made to the supervisor.

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).

Even "Compelled" Statements During Harassment Investigation are Protected

The Supreme Court has issued its decision in Crawford v. Metropolitan Government of Nashville and Davidson County and not surprisingly held that Ms. Crawford's statements were protected by the "opposition" clause of Title VII. I previously discussed Crawford in a prior post so I won't say too much about it here.

Two points are noteworthy.

The Court generally held statements during an internal investigation that report harassing conduct are protected but the Court also observed: "It is true that one can imagine exceptions, like an employee’s description of a supervisor’s racist joke as hilarious, but these will be eccentric cases . . ."

The Court's decision rested solely on the opposition clause of Title VII. The Court did not address whether an employee's participation in an employer's harassment investigation was "participation" clause protected activity. That avoids at least one headache for employers.

Retaliation, Honest Beliefs and Employer Investigation

Taking a risk that I am harping on it too much, today's Sixth Circuit dismissal of a retaliation claim again confirms the value to an employer of conducting an investigation.

Understand my point of view: when my partners and I defend a lawsuit for an employer, we work hard to get the claims dismissed prior to a trial. (It isn't that we don't like trials, some of us do, but it is much more efficient and less risky for the client to get the claims dismissed early on.) With few exceptions, we have to show that even if the evidence were as the plaintiff says it is, our client should still win.

The decision today concerned a lady who alleged she had been harassed and then fired because she complained of harassment. Understand the timing, the employee complained about racial and sexual remarks by a co-worker, filed an EEOC charge, and was then terminated because, the employer asserted, she had filed a false injury report.

The employee claimed she had injured her back when a co-worker (the person she had accused of making harassing remarks) moved a truck while she was standing in its flatbed. The employer investigated even to the point of conducting a hearing where it received testimony (while the decision doesn't explain why a hearing was held, it was likely to satisfy some provision in the union contract). The co-worker and four other employees said they didn't see her in the bed of the truck and that she was, in fact, standing beside the truck when it was started. At the hearing, and at trial, the employee adhered to her story, saying the four witnesses were lying to protect the co-worker.

In dismissing her claim, the court avoided addressing the temporal proximity issue (or the more interesting question about the filing of an EEOC charge over the harassment claim after the employee had been suspended pending an investigation into the making of a false report. Rather, the court held that even if the employee had not filed a false report (as she continued to assert) and even if the four witnesses were lying to support their co-worker, the employer's investigation was sufficient justification for firing the employee. As I said earlier, when an employer is faced with competing versions of events, "there is probably no practical step an employer can take beyond independently investigating the misconduct charges that will reduce the chances of an employee's racism influencing its behavior." Brewer v. Bd. of Trs. of Univ. of Ill., 479 F.3d 908, 920 (7th Cir.), cert. denied, 128 S. Ct. 357 (2007).

Why is this so important? At the start I said employers benefit from early dismissals of lawsuits and to get them dismissed we have to show the material facts are not disputed. Here, there was a factual dispute - was the employee in the bed of the truck when it was started - but the employer's investigation resolved that fully and fairly. The investigation made the factual dispute immaterial because the focus was then on the honesty of the employer's decision, not on whether or not the employee had in fact filed a false report. Had the investigation not occurred (such as had the employer promptly fired the employee based solely upon the co-worker's story), or had it been slipshod, the court could have held a jury needed to determine whether the employer retaliated against the employee.

New Year’s Resolutions for Employers

If you are the sort of person that makes New Year's resolutions, perhaps you might want some hints as to some of the ways you, as a Tennessee employer, can help make 2009 less risky, from an employment litigation perspective.

Everyone's New Year's wish would be to avoid being sued but in today's climate, that is unrealistic. It takes very little money ($350.00, currently) to file a federal court lawsuit - much less in most Tennessee courts - and there are a good number of attorneys who will front that cost for an employee. In some instances, the only thing between you and a lawsuit is the retainer many attorneys charge before filing a suit. Pretty much any adverse employment action can be the basis for some kind of discrimination or retaliation claim even if it is not ultimately meritorious. It isn't as if there is some magical screening device to make sure only potentially valid suits get filed.

Now that I have your attention, what I tell folks is that while you can't always prevent a lawsuit, there are things that can be done to help increase the likelihood of getting the lawsuit dismissed early in the litigation process. Best of all, most of these things won't cost you anything (and if they do it is money well spent). So, here are a few resolution suggestions with links to several "best practices" my partners and I put together to give employers some things to think about. I am not going into important details here because that is supplied on the linked pages.

Have an employee handbook that accurately reflects your employment practices. Employees should acknowledge receipt of the handbook in writing and this page should include a statement where the employee acknowledges employment is "at will" and that the handbook is not a contract of employment for a definite term.

Have a policy (in your handbook) prohibiting harassment of any kind. Train all your employees about your harassment policies.

If you receive a complaint about sexual harassment or other illegal harassment, investigate it immediately.

If you get sued or if you receive a charge from the EEOC or THRC, place a "litigation hold" on your relevant documentation and electronic information.

Have sound hiring practices which rely upon accurate job descriptions, train you hiring managers, use structured interviews and document the reason for every decision (including for employees who are not hired).

Establish and follow a written compensation policy that addresses all the factors that go into a pay increase (or decrease) decision, which compares (and only compares) employees in similar or the same jobs, and includes a contractually imposed limitations period.

Have an Employee Technology Use policy that addresses all devices, tells employees you have the right to monitor use, forbid illegal activity, and ensure employees observe confidentiality requirements of customers.

Properly manage employee absenteeism and tardiness. Have a sound policy, keep careful notes, know which laws you must observe (i.e., based upon employee numbers) and retain all correspondence from employees and physicians relating to absences.

Take simple steps to avoid entanglement with Employee Benefit (ERISA) problems.

As I said, following these resolutions won't necessarily keep you out of court or avoid the EEOC altogether but if followed, they will help ease the financial pain such an encounter normally causes.

And finally, have a Happy New Year.

Why Should You Acurately Document Performance Problems?

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

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

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

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

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

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

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