Ohio court muddles the issue of counterclaims-as-retaliation

Friedrich Nietzsche once said, “It is impossible to suffer without making someone pay for it; every complaint already contains revenge.” Litigation, however, is no place for revenge. The question I am most asked by clients after they are sued, besides, “How much is this going to cost me,” and “After I win I can collect my attorneys’ fees from that bastard,” is, “How do I countersue that bastard for _________?”

A recent Ohio appellate decision will, unfortunately, muddle the answer to this question.

7th Circuit delivers employers an early Christmas gift in EEOC severance agreement case

In EEOC v. CVS Pharmacy, Inc., the EEOC challenged what I have previously described as several garden-variety, boilerplate provisions in a severance agreement. I’ve also previously predicted that a win for the EEOC in this case would be ruinous for employers.

Late last week, the 7th Circuit affirmed the decision of the district court, which had dismissed the EEOC’s lawsuit based on its failure to conciliate with CVS prior to filing suit.

And, the 7th Circuit agreed, affirming the case on those grounds. But, the 7th Circuit also went further, and offered hope to employers this federal courts will not stand for the folly the EEOC is trying to put forth by filing this type of case.

What can go wrong when co-workers date? A lot.

True confession time. I watch The Voice. It’s not like it’s at the top of my DVR, but, my remote always seem to stop on NBC between 8 and 10 on Monday and Tuesday nights. (My pick to win this season: Amy Vachal). So, when I heard that Team Shelton and Team Gwen had formed one team outside of work, I thought, “What a great opportunity to write a blog post on office romances.” (This is how the mind of blogger works).

What can do wrong with office romances? As it turns out, a lot. So, in the spirit of The Voice, here’s 10 reasons co-workers shouldn’t turn their chairs for each other.

Is digital “shunning” illegal retaliation?

Wired tells the story of an Australian tribunal, which ruled that an employee was illegally bullied at work, in part because a co-worker had unfriended her on Facebook.

Transfer this case to America, and assume that the employee is claiming retaliation based on the unfriending. Supposed Employee-A complains to HR that Employee-B is sexually harassing her, and, as soon as Employee-B finds out about the complaint, he unfriends Employee-A on Facebook. Does Employee-A have a claim for retaliation based on the unfriending?

The answer is likely no.

As a matter of law, an adverse action sufficient to support a claim for retaliation merely must be an action that would dissuade a reasonable worker from complaining about discrimination. Yet, the Supreme Court has stated that the adversity to support a claim for retaliation must be “material”, and that petty slights, minor annoyances, or a simple lack of good manners normally will not count:

We speak of material adversity because we believe it is important to separate significant from trivial harms. Title VII, we have said, does not set forth “a general civility code for the American workplace.” … An employee’s decision to report discriminatory behavior cannot immunize that employee from those petty slights or minor annoyances that often take place at work and that all employees experience…. It does so by prohibiting employer actions that are likely “to deter victims of discrimination from complaining to the EEOC,” the courts, and their employers…. And normally petty slights, minor annoyances, and simple lack of good manners will not create such deterrence….

A supervisor’s refusal to invite an employee to lunch is normally trivial, a nonactionable petty slight. But to retaliate by excluding an employee from a weekly training lunch that contributes significantly to the employee’s professional advancement might well deter a reasonable employee from complaining about discrimination.

Thus, an ostracism or shunning from a social network—one that serves no work-related purpose other than fostering congeniality among co-workers—likely should not support a claim for retaliation.

OSHA’s new burden of proof is a big burden for employers

Today, I’m going to talk about burdens of proof, a topic that might seem dry, but is vitally important to employers.

Last month I provided some insight into the 22 different federal statutes that protect whistleblowing employees from retaliation. The Occupational Safety and Health Administration administers the enforcement of each of these statutes’ anti-retaliation provisions. It’s now a whole lot easier for OSHA to enforce these laws against companies alleged of retaliation.

Earlier this year, OSHA published a memorandum entitled, Clarification of the Investigative Standard for OSHA Whistleblower Investigations. This “clarification” is actually a loosening of OSHA’s investigatory standard. Now, all OSHA needs to pursue a retaliation claim against an employer is “reasonable cause to believe that a violation occurred.”

What does “reasonable cause” mean? It means that all OSHA needs to take a whistleblower claim to hearing is a “belief that a reasonable judge could rule in favor of the complainant … that a violation occurred.” This “reasonable cause” finding requires significantly less evidence as would be required at trial to establish unlawful retaliation by the requisite preponderance of the evidence.

If you think of these burdens of proof as scales, the preponderance of the evidence necessary to carry the day at trial is sufficient evidence to tip the scale past the 50/50 mark. OSHA’s new “reasonable cause” standard, however, requires much less than this 50-percent-plus showing, maybe as little as enough to merely nudge the scales in the direction of that halfway point.

As OSHA’s summarizes:

Although OSHA will need to make some credibility determinations to evaluate whether a reasonable judge could find in the complainant’s favor, OSHA does not necessarily need to resolve all possible conflicts in the evidence or make conclusive credibility determinations to find reasonable cause to believe that a violation occurred. Rather, when OSHA believes, after considering all of the evidence gathered during the investigation, that the complainant could succeed in proving a violation, it is appropriate to issue a merit finding under the statutes that provide for litigation before an ALJ….

Needless to say, this loosening of the proof standard has the potential to be significant. Time will tell if if it will increase the number of whistleblower complaints filed by employees. I am confident, however, that under this new standard, employers will be facing more hearings and trials on federal whistleblower claims, and, further, that the stakes in this litigation has increased significantly.

Retaliation alphabet-soup

Employers typically think of retaliation in terms of the big employment statutes: Title VII, the ADEA, the ADA, the FMLA, and the FLSA. Yet, there exist dozens of federal statutes that protect employees from retaliation in a variety of federally regulated industries.

Indeed, just yesterday, Cleveland.com reported that Abdul-Malik Ali, the former head of airfield maintenance at Cleveland Hopkins International Airport, filed a complaint with the Department of Labor against Hopkins and the City of Cleveland, alleging they unfairly demoted him for blowing the whistle on Hopkins for having fewer than the required number of workers on runways last winter.

Ali says that on Feb. 19, the day after he told FAA inspector Michael Stephens about  understaffing, he was removed from his 15-year post as manager of field maintenance by Airport Director Ricky Smith.

Ali said he was transferred to the job of “assistant to the deputy commissioner,” instructed to clear out his office, moved to what he called a “mop closet” behind the cab booking stand on the terminal baggage level at Hopkins and given “make-work” assignments such as counting trashcans.

If true, I’d say the airport has issues. It also makes me feel less that good about flights we took last winter.

Employers that operate in a federally regulated industry need to be aware of the alphabet-soup of statutes that could give rise to a potential retaliation or whistleblowing claim. Thankfully, the Department of Labor provides a list, handily collated at (where else?) http://www.whistleblowers.gov/:

• Affordable Care Act: Protects employees who report violations of any provision of title I of the ACA, including but not limited to discrimination based on an individual's receipt of health insurance subsidies, the denial of coverage based on a preexisting condition, or an insurer's failure to rebate a portion of an excess premium

• Asbestos Hazard Emergency Response Act: Protects employees who report violations of the law relating to asbestos in public or private non-profit elementary and secondary school systems

• Clean Air Act: Prohibits retaliation against any employee who reports violations regarding air emissions from area, stationary, and mobile sources

• Comprehensive Environmental Response Compensation and Liability Act: Prohibits retaliation against any employee who reports alleged violations relating to cleanup of hazardous waste sites, as well as accidents, spills, and other emergency releases of pollutants and contaminants

• Consumer Financial Protection Act: Employees are protected for blowing the whistle on reasonably perceived violations of any provision of the Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any other provision of law that is subject to the jurisdiction of the Bureau of Consumer Financial, Protection, or any rule, order, standard, or prohibition prescribed by the Bureau

• Consumer Product Safety Improvement Act: Protects employees of of consumer product manufacturers, importers, distributors, retailers, and private labelers who report to their employer, the federal government, or a state attorney general reasonably perceived violations of any statute or regulation within the jurisdiction of the Consumer Safety Product Safety Commission

• Energy Reorganization Act of 1974: Prohibits retaliation against any employee who reports violations or refuses to engage in violations of the ERA or the Atomic Energy Act. Protected employees include employees of operators, contractors and subcontractors of nuclear power plants licensed by the Nuclear Regulatory Commission, and employees of contractors working with the Department of Energy under a contract pursuant to the Atomic Energy Act

• FDA Food Safety Modernization Act: Protects employees of food manufacturers, distributors, packers, and transporters from reporting a violation of the Food, Drug, and Cosmetic Act, or a regulation promulgated under the Act, and employees who refuse to participate in a practice that violates the Act

• Federal Railroad Safety Act: Protects employees of railroad carriers and their contractors and subcontractors who report a hazardous safety or security condition, a violation of any federal law or regulation relating to railroad safety or security, or the abuse of public funds appropriated for railroad safety, in addition to employees who refuse to work when confronted by a hazardous safety or security condition

• Federal Water Pollution Control Act: Prohibits retaliation against any employee who reports alleged violations relating to discharge of pollutants into water

• International Safe Container Act: Protects employees involved in international shipping who report to the Coast Guard the existence of an unsafe intermodal cargo container or another violation of the Act

• Moving Ahead for Progress in the 21st Century Act: Prohibits retaliation by motor vehicle manufacturers, part suppliers, and dealerships against employees for providing information to the employer or the U.S. Department of Transportation about motor vehicle defects, noncompliance, or violations of the notification or reporting requirements enforced by the National Highway Traffic Safety Administration or for engaging in related protected activities

• National Transit Systems Security Act: Protects transit employees who report a hazardous safety or security condition, a violation of any federal law relating to public transportation agency safety, or the abuse of federal grants or other public funds appropriated for public transportation, and also protects public transit employees who refuse to work when confronted by a hazardous safety or security condition or refuse to violate a federal law related to public transportation safety

• Occupational Safety and Health Act of 1970: Protects employees who exercise a variety of rights guaranteed under the Act, such as filing a safety and health complaint with OSHA, participating in an inspection, etc.

• Pipeline Safety Improvement Act: Protects employees who report violations of federal laws related to pipeline safety and security or who refuse to violate such laws

• Safe Drinking Water Act: Prohibits retaliation against any employee who reports alleged violations relating to any waters actually or potentially designated for drinking

• Sarbanes-Oxley Act of 2002: Protects employees of certain companies who report alleged mail, wire, bank or securities fraud; violations of the SEC rules and regulations; or violation of federal laws related to fraud against shareholders. The Act covers employees of publicly traded companies and their subsidiaries, as well as employees of nationally-recognized statistical rating organizations

• Seaman’s Protection Act: Protects employees who report to the Coast Guard or another federal agency a violation of a maritime safety law or regulation, and also seamen who refuse to work when they reasonably believe an assigned task would result in serious injury or impairment of health to themselves, other seamen, or the public

• Solid Waste Disposal Act: Prohibits retaliation against any employee who reports alleged violations relating to the disposal of solid and hazardous waste (including medical waste) at active and future facilities

• Surface Mining Control and Reclamation Act: Protects truck drivers and other employees who refuse to violate regulations related to the safety of commercial motor vehicles or who report violations of those regulations

• Toxic Substances Control Act: Prohibits retaliation against any employee who reports alleged violations relating to industrial chemicals produced or imported into the United States

• Wendell H. Ford Aviation Investment and Reform Act of the 21st Century: Protects employees of air carriers and contractors and subcontractors of air carriers who, among other things, report violations of laws related to aviation safety

Insubordination or protected conduct? 6th Circuit has the answer.

Is there a line that separates an employee’s insubordinate outburst from an expression of protected conduct? Yazdian v. ConMed Endoscopic Technologies, Inc. (6th Cir. 7/14/15) suggest that the answer may be “no”.

Reza Yazdian, a former territory manager for ConMed, believed that he was being singled out because of his national origin or religion. He chose, however, to express that belief to management in a less-than-professional manner, which included becoming combative during a disciplinary meeting.

The 6th Circuit concluded that it should be up to a jury to decide whether, despite Yazdian’s “combative” style, the company nevertheless terminated him because of his expression of protected conduct.

Yazdian cites as direct evidence of retaliation that Sweatt [his manager] specifically referenced Yazdian’s protected statements as examples of insubordination. When Sweatt provided ConMed with examples of Yazdian’s communication problems and “unwillingness to accept and apply constructive coaching,” Sweatt cited Yazdian’s hostile-work-environment and discrimination comments as examples. Sweatt described Yazdian’s claim that Sweatt was “creating a hostile working environment for [him],” as “unprofessional” and “totally unacceptable.” Sweatt cited the incident when Yazdian said to Sweatt, “I guess you don’t like my race either” as an example of Yazdian’s alleged “unwillingness to accept and apply constructive coaching.” And, crucially, Sweatt testified that he made the decision to fire Yazdian immediately after this phone call in which Yazdian said the following: (1) that Yazdian was going to file a lawsuit, (2) that Sweatt was creating a hostile work environment, and (3) that Yazdian would respond to the warning letter with charges.… [T]hese documents are direct evidence from which a reasonable jury could conclude that Sweatt believed Yazdian’s protected activity constituted insubordination, and therefore that Sweatt terminated Yazdian because of the protected statements that Yazdian had made.

Employee have a right to express protected conduct without reprisal, just as employers have the right to discipline or terminate insubordinate employees. When the expression of protected conduct swallows the alleged insubordination, you should expect most courts to do as the 6th Circuit did here, and side with the employee. Act accordingly, and be careful not to confuse protected expressions of opposition to alleged discriminatory employment practices with insubordination.

6th Circuit: reasonable belief about unlawful conduct enough for SOX retaliation

It’s hard to imagine that in the eight-plus years I’ve written this blog, there is any area of employment law that on which I have not yet touched—except, I think, the Sarbanes-Oxley Act. Today, that changes.

For the uninitiated, Sarbanes-Oxley (or SOX) is a federal statute, enacted in reaction to a several corporate and accounting scandals (think Enron), which establishes conduct standards for public company boards, management and public accounting firms.

In Rhinehimer v. U.S. Bancorp Investments, Inc. (6th Cir. 5/28/15) [pdf], the 6th Circuit addressed the standard for protected conduct under SOX’s anti-retaliation provisions. Does the plaintiff have to prove an underlying fraud, or it is sufficient for the plaintiff to have a reasonable belief that a fraud was committed?

The facts in Rhinehimer are not complicated. Prior to taking a disability leave, Rhinehimer, a certified financial planner, transferred some of the assets of a long-term, elderly client into low risk, conservative investments. While on leave, Rhinehimer’s assistant alerted him to the fact that a co-worker moved some of those assets into riskier investments. Believing those moves to be contrary to the client’s estate plan, Rhinehimer sent an email to his supervisor complaining about the transactions. Upon his return from leave, Rhinehimer was disciplined for his “unprofessional” email. That email spawned an investigation by FINRA. When Rhinehimer informed his employer that he had retained an attorney in response to the FINRA investigation, he was fired.

At issue on appeal was whether a plaintiff claiming retaliation under SOX must allege the specific elements of fraud relating to the underlying transaction, or if a reasonable, but mistaken, belief about the illegality of the underlying (mis)conduct will support the retaliation claim.

The 6th Circuit held for the more liberal proof standard.

Although it is true that Plaintiff had no specific knowledge of whether Harrigan had omitted or misrepresented material information in his communications with Purcell, much less any knowledge of whether Harrigan did so intentionally or with reckless disregard, these gaps in Plaintiff’s knowledge are immaterial. Even if, in fact, everything about the trades were above board, courts universally recognize that [SOX] protects employees who reasonably but mistakenly believe that the conduct at issue constitutes a violation of relevant law.… 

The information that was available to Plaintiff was more than adequate to allow him reasonably to believe that the trades were the result of conduct constituting unsuitability fraud. When USBII retaliated against him for reporting that information, it therefore violated Sarbanes–Oxley’s whistleblower protections.  

If you are a publicly-trade company, employees who lodge complaint about financial improprieties or other financial issues require special treatment. If faced with one of these complaints, do not get hung up on the rightness or wrongness of the complaining employee’s belief about the illegal conduct, because, if you later fire that employee, it appears the reviewing court will not care. 

“Stop harassing me!” = protected conduct to support retaliation claim, says 6th Circuit

What happens when the alleged perpetrator of sexual or other unlawful harassment is also the person to whom the victim lodges a complaint of harassment? If the alleged perpetrator later fires (or causes the firing of) the victim, has the victim engaged in protected conduct (opposition of the harassment) to support a retaliation claim? According to the 6th Circuit, in EEOC v. New Breed Logistics (4/22/15) [pdf], the answer is yes.

The jury concluded that Calhoun, a supervisor, sexually harassed three women (Hines, Pearson, and Pete), retaliated against them after they objected, and further retaliated against a male employee (Partee) “who verbally opposed Calhoun’s sexual harassment and supported the women’s complaints.” The evidence at trial was that Calhoun laughed and responded “that he wasn’t going to get in trouble, that he ran th[e] area, [and that] anybody who went to [HR] on him would be fired.” Calhoun then fired each of the four employees, claiming performance and attendance issues. 

As the threshold issue, the 6th Circuit had to determine whether complaints or objections made to the accused harasser constitute protected activity to support a retaliation claim. The 6th Circuit had little difficulty concluding that these four employees had engaged in protected activity:

We conclude that a demand that a supervisor cease his/her harassing conduct constitutes protected activity covered by Title VII. Sexual harassment is without question an “unlawful employment practice.” If an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful harassment—the opposition clause’s broad language confers protection to this conduct. Importantly, the language of the opposition clause does not specify to whom protected activity must be directed…. Here, at the very least, all four complainants requested that Calhoun stop his sexually harassing behavior before their terminations. Consistent with our holding today, these complaints constitute protected activity.

While I agree that this holding makes sense, consider the awful position in which it could place employers who are lax with their termination decisions. An employer is vicariously liable for the actions of a supervisor or manager (e.g., harassment or retaliation). Thus, an employer will be liable for the rogue actions of a harasser trying to protect his or her turf from an objecting employee.

The solution? More diligence and scrutiny of termination decisions by HR departments and senior management. One cannot merely rubber stamp a manager’s or supervisor’s decision to terminate. If that individual harbors a discriminatory animus, we know that the cat’s paw will nab you. Now, we also know, per New Breed Logistics, that retaliation liability has the same potential issues when an alleged harasser is involved.

Bottom line: Do not rubber stamp termination decisions. Fact-check and confirm before allowing the company to pull the trigger.

Federal appeals court rejects “retaliatory rehiring” claim

As part of massive reorganization, Allstate severed the employment of approximately 6,200 employee agent. In connection with the layoff, Allstate offered all of the employee agents the opportunity to convert their employment status into that of an independent contractor selling Allstate insurance products, provided that they signed a release of all legal claims against Allstate, including federal employment discrimination claims.

In filing suit on behalf of the employees, the EEOC took the position that conversion from an employee to an independent contractor, coupled with a general release, constitute unlawful retaliation under the federal civil rights laws.

In EEOC v. Allstate Ins. Co. (2/13/15) [pdf], the Third Circuit flatly rejected the EEOC’s folly.

It is hornbook law that employers can require terminated employees to release claims in exchange for benefits to which they would not otherwise be entitled. Nothing in the employment-discrimination statutes undermines this rule….

According to the Commission, Allstate could have complied with the antiretaliation statutes by simply firing all its employee agents for good, instead of giving them the opportunity to sell Allstate insurance in a different capacity. We are confident that federal laws designed to protect employees do not require such a harmful result….

The EEOC here fails to articulate any good reason why an employer cannot require a release of discrimination claims by a terminated employee in exchange for a new business relationship with the employer.…. [W]e are not persuaded by the Commission’s efforts to arbitrarily limit the forms of consideration exchangeable for a release of claims by a terminated employee.

In other words, the employer, and not the EEOC, gets to decide the post-employment benefit to provide an employee in exchange for a release of claims—whether it’s severance pay, continued health benefits, an engagement as a independent contractor, or something else. As long as the consideration is not something to which the employee is already entitled, a court will not second-guess its sufficiency.

Employers seek to halt EEOC’s efforts to drum up plaintiffs for its “Onionhead” lawsuit

You may recall the lawsuit filed the EEOC claiming that a New York employer forced its employees to join a religion called “Onionhead.”

Now, Employment Law 360 reports that the company’s counsel is trying to block the EEOC from reaching out to the company’s employees to seek additional plaintiffs for its lawsuit.

The employers have asked the federal judge hearing the case to block the EEOC from any further “solicitations of Defendants’ current and former employees for participation in the lawsuit.” You can download a copy of the employers’ letter to the court here [pdf].

According to the company, the EEOC’s letters, printed on government letterhead, provided the employees a one-sided description of the case, omitted a statement that liability has yet to be decided, and created the impression that the employee must contact the EEOC.

Decide for yourself.

If the employer is true, the EEOC is going to have issues. A federal agency cannot misrepresent litigation to drum up support among employees. It also cannot provide employees a mistaken impression that they must cooperate.

At the same time, however, employers faced with alleged misconduct like that alleged in the Onionhead lawsuit must tread very carefully so that they do not unlawfully retaliate against the employees by interfering with their participation rights. For example, an employer cannot forbid employees from cooperating with the EEOC, or even dissuade them from contacting the agency.

What should employers do?

• They can tell employees that it is their choice whether to contact, or cooperate with, the EEOC.
• They can tell employees to be truthful when talking with the EEOC.

What must employers do? 

• They must guarantee employees that they will not suffer any retaliation, no matter their choice.

Employers faced with an EEOC investigation should know that the agency is using these tactics, so that they can proactively, and lawfully, respond by delivering the right message to their employees.

Jury verdict teaches that “open door” policies must still comply with EEO laws

There exists an inherent tension  between open-door and other self-reporting policies and the EEO laws.

Consider, for example, a recent $100,000+ jury verdict against a trucking company for disability discrimination. The company maintained a written “Open Door” policy, and an unwritten policy that prohibited any driver who self-reported alcohol abuse from ever returning to driving. The EEOC sued after an employee who availed himself of the Open Door policy to self-report an alcohol addiction was banned from any future driving for the company. Even though the company offered the driver a part-time dock position as an accommodation, the EEOC successfully argued that the employer failed to “make an individualized determination as to whether the driver could return to driving and provide a reasonable accommodation of leave to its drivers for them to obtain treatment,” and that “to maintain a blanket policy that any driver who self-reports alcohol abuse could never return to driving—with no individualized assessment to determine if the driver could safely be returned to driving—violates the ADA.”

Employees need to be able to engage in protected activity without any retribution or other negative consequences. In this case, the employer learned of a disability and failed to engage in the interactive process for a reasonable accommodation. In others, employers might retaliate against an employee who uses an open-door policy to complaint about discrimination or harassment.

Open-door policies are laudable. They foster the communication that is necessary between employees and management necessary for a healthy (and hopefully union free) work environment. With that openness, however, comes responsibility—the responsibility to learn information without retaliating. Employees need to train management so that they know what to do with protected information once they learn it, and how to act without violating any of our EEO laws. Without this training, employers are setting up their open-door policies and programs for a litigation fail.

The full press release about this jury verdict is available here.

Why retaliation claims should keep you up at night

In early 2009, Aker Plant Services terminated the employment of Tommy Sharp as part of workforce reduction. When Sharp asked his supervisor why the company chose him, as opposed to his less experienced, less senior co-workers, the supervisor replied that the company decided to keep younger employees who could stay with the company longer. Sharp then sued for age discrimination.

While Sharp’s age discrimination lawsuit was pending, a staffing agency attempted to place him for a temporary position at Aker. The company, however, immediately rejected Sharp’s candidacy,  notifying the staffing agency, via email, as follows:

Yes, we do know Tom. He does acceptable work as a designer, but he violated a DuPont mandate on the use of electronic recording devices on company property when last employed here. There are combustible materials in the plant that can potentially be ignited by the use of cell phones, recorders, cameras, etc… [sic] DuPont maintains a zero-tolerance approach to safety violations on its property so, unfortunately, we will not be able to consider Mr. Sharp for this role.

Sharp then brought a second suit, this time for retaliation. The district court dismissed the retaliation claim, concluding that the 15-month gap between Sharp’s initial notification of an intent to sue for age discrimination and the email to the staffing agency severed any potential causal connection between the two events.

The 6th Circuit, however, in Sharp v. Aker Plant Services Group (6th Cir. 1/13/15) [pdf], disagreed:

Considering the evidence in the light most favorable to Sharp, one could reasonably infer that Aker declined to rehire Sharp in retaliation for his then-pending discrimination action. Yes, it was fifteen months later…. Aker terminated Sharp before he filed his age-discrimination lawsuit, and therefore could not retaliate against him in any manner until he returned seeking temporary employment a year and a half later. Evidence showing that an employer had no opportunity to retaliate sooner supports a finding of temporal proximity.

Retaliation are the most dangerous claims that employers face. This employer likely felt safe refusing Aker’s placement because of the 15-month gap. That time gap, however, was tempered by the fact that the company no longer employed Aker, and its next interaction with him was the claimed act of retaliation. When an employee engages in protected activity, you must treat that employee with added care, as any act that could dissuade an employee from engaging in protected activity could give rise to a retaliation claim.

Adverse actions come in all shapes and sizes

Consider these facts, taken from Kudla v. Olympic Steel (Ohio Ct. App. 11/20/14). Employee, age 65, is fired from his job as part of a corporate reorganization. Employer has a change of heart, however, and rescinds the termination after Employee lawyers up and alleges age discrimination. He claimed, however, that his employment following his rehire was substantively different, including a forced move out of his prior office into a cubicle, the exclusion from meetings, and the placement on surveillance.

Based on these facts, the court of appeals had little problem deciding that the trial court should have allowed Kudla to present his claim to a jury:

He contends that he was essentially demoted and cites in support of his contention, for example, that many of his responsibilities, except clerical ones, were reassigned to his younger coworkers, and that he was moved out of his office into a cubicle.

Olympic Steel, on the other hand, denies Kudla's demotion claim and cites that his pay was not reduced, his job title did not change, and he still performed important work for the company. The company also contends that putting Kudla in a cubicle was a temporary situation necessitated by the reorganization of the human resources department; as part of the reorganization, Kudla no longer needed to discuss personal, confidential information with employees and managers and, thus, he did not need an office….

[W]e find that a genuine issue of material fact exists as to whether Kudla did suffer an adverse employment action.

It is not impossible to terminate, or otherwise take an adverse action against, an employee on the heels of protected activity. Moreover, something as innocuous as moving an employee out of his office could be deemed sufficiently “adverse” to support a retaliation claim.

Bad employees cannot bulletproof themselves merely by complaining about discrimination. However, you must have a rock-solid legitimate non-retaliatory and non-pretextual reason for your action to survive the lawsuit that is likely to follow.

EEOC 0-2 on severance-agreement lawsuits … but does it matter?

Recall that in October, a Chicago federal court dismissed a lawsuit filed by the EEOC against CVS, claiming that the pharmacy retailer’s severance agreements violated Title VII by employing allegedly retaliatory language. That court, however, failed to reach the merits of the case, instead dismissing the EEOC’s claims on procedural grounds (the agency’s failure to engage in pre-suit conciliation), thereby depriving employers guidance on whether certain garden-variety provisions in employment agreements violate Title VII’s anti-retaliation provisions. I held out hope that the practical guidance employers seek on this issue would come from a similar lawsuit pending in Colorado.

Last week, a Denver federal court dismissed that other EEOC severance-agreement-as-retaliation lawsuit. Like the earlier CVS dismissal, however, the dismissal in EEOC v. CollegeAmerica Denver was on procedural grounds, and offers little practical import for employers moving forward on this important issue.

Perhaps if there is any solace for employers looking to sue separation agreements to halt future litigation, and not to buy a future lawsuit by the EEOC, employers can look to footnote 3 in the EEOC v. CVS decision:

The “covenant not to sue” provision prohibits an employee from “initat[ing] or fil[ing] … a complaint or proceeding asserting any of the Released Claims.” The general release of claims is set out in ¶ 7 of the Agreement, but that section also includes the caveat that the release does not limit “any rights that the Employee cannot lawfully waive.” However, there is a specific carve out for an employee’s “right to participate in a proceeding with any appropriate federal, state or local government agency enforcing discrimination laws”; and further provides, “nor shall this Agreement prohibit [the employee] from cooperating with any such agency in its investigation.” … The verb participate is defined as “to be involved with others in doing something” and “to take part in an activity … with others.” http://www.merriam-webster.com/dictionary/participate. It is not reasonable to construe “the right to participate in a proceeding with any appropriate federal … agency,” to exclude the right of the employee from filing an EEOC charge. And, even if the Separation Agreement explicitly banned filing charges, those provisions would be unenforceable and could not constitute resistance to the Act.

In other words, the CVS court, albeit in dicta, believes that the EEOC is chasing an unsupportable claim by arguing that covenants not to file charges violate Title VII’s prohibitions on retaliation.

Employers, however, should not lull themselves into a false sense of security. Neither employer won either of these cases on the merits. For whatever reason, this issue is on the agency’s radar, and it will likely seek another case to prove its point regarding these agreements.

For now, the prudent course of action is to make sure that your agreements clearly and unambiguously, in a provision separate and distinct from the release, waiver, and covenant not to sue, state that employees retain their federally protected rights. I am using something like the following:

Nothing in this Agreement is intended to, or shall, interfere with Employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of any of the provisions of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against any of the Released Parties, regardless of who filed or initiated any such complaint, charge, or proceeding.

“He liked breasts” is never an appropriate response to a harassment complaint

Ruby Blackmon claimed that for a ten-month period, her second-level manager inappropriately stared at her breasts three to 10 times per day, would sexually rub her back, and would breath on her back and ear. Blackmon made ten different complaints to an HR manager, an administrative manager, and her immediate supervisor, all of which were ignored, except for one occasion when her immediate supervisor simply told her that the alleged harasser “liked breasts.” To make matters worse, on the heels of one complaint, her immediate supervisor gave her a negative evaluation. She filed suit after her termination.

Surprisingly, the district court granted this employer’s motion for summary judgment. Not surprisingly, the 6th Circuit reversed in Blackmon v. Eaton Corp. (10/16/14), concluding that genuine issues of material fact exists on the objectively hostile nature of the work environment and on whether there existed a causal nexus between Blackmon’s complaints and her termination.

We know that “He liked breasts” is an inappropriate response to a harassment complaint. What is an appropriate response? Here are 10 steps to follow if you receive a harassment complaint from an employee.

1. If you are not the person in your organization trained to address and investigation these situations, immediately refer the matter to the person who is. If no one is, hire a consultant or attorney who specializes in these issues to do the investigation for you. One word of caution. If you hire an attorney to do the investigation, do not make the mistake of assuming that the investigation will be privileged. It likely won’t be, meaning that the lawyer conducting the investigation might not be able to represent your company in any subsequent lawsuit.
2. Separate the complaining employee from the accused harasser. If that means you need to send someone home, with pay, while you complete the investigation, so be it. Better you eat a few days pay than risk the accused making matters worse by harassing again.
3. As soon as possible, interview the complaining employee (or, if someone else made the complaint, the victim), the accused, and any witnesses.
4. Don’t demean, belittle, or joke about the alleged victim. It will undermine the objectivity of your investigation.
5. Compile and review any pertinent documents. Don’t forget social media accounts, email, and text messages. They are your best friends in these cases.
6. Guard against retaliation, and ensure all employees that their participation will be free of retaliation.
7. Review all information and make a reasoned decision as to the credibility of those involved and what happened.
8. Take prompt and effective remedial action, and communicate your conclusions to the complaining employee.
9. Document the investigation.
10. Never, never, never retaliate.

This is what a retaliatory waiver of EEOC rights looks like

In case you missed it last Friday, a federal judge dismissed the EEOC’s lawsuit against CVS, which had challenged as retaliatory various garden-variety provisions in the retailer’s employment separation agreement.

On that same day, the EEOC announced the filing of another lawsuit, which also challenged as retaliatory a provision in an employment document. Unlike the CVS lawsuit, however, this lawsuit likely has merit.

The EEOC alleges that a Florida restaurant franchisor operator requires, as a condition of employment, all applicants and employees to submit all employment-related claims to binding arbitration, and waive their rights to file discrimination charges with the EEOC. You can read the allegedly offending arbitration clause here.

Unlike the challenged clauses in the CVS case, this clause expressly prohibits individuals from pursuing discrimination charges with the EEOC (or its state or local counterparts). The employment discrimination laws, however, prohibit as retaliatory any effort by an employer to require employees to forsake their rights to see redress with the EEOC. Thus, in my opinion, as a management-side employment lawyer, this employer’s agreement has problems.

The proper way to draft an arbitration agreement, or other agreement that waives certain rights or remedies, is to carve out EEOC charges. You would say something like this:

Nothing in this Agreement is intended to, or shall, interfere with the employee’s rights under federal, state, or local civil rights or employment discrimination laws to file or otherwise institute a charge of discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of this Agreement. Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such brought against the Employer, regardless of who filed or initiated any such complaint, charge, or proceeding.

Because this clause protects the EEOC’s right to investigate and remedy violations of, and otherwise enforce, the law, it should pass muster with the EEOC. (Of course, before you implement any such language in your agreements, you must consult with your own employment counsel).

My advice to the employer in this case is to settle with the EEOC as soon as possible on the best terms possible, and avoid the expense of a costly uphill legal battle that will be difficult to win.

BREAKING: Federal judge dismisses EEOC severance agreement lawsuit against CVS

The Chicago Tribune is reporting that U.S. District Judge John Darrah has granted CVS’s motion to dismiss a lawsuit filed by EEOC, which challenged the company’s severance agreements as overly broad and retaliatory. 

Recall that the lawsuit challenged several garden-variety terms in standard employee severance agreements, including non-disparagement, confidentiality, and a covenant not to sue (which expressly disclaimed EEOC charges).

When the EEOC filed this lawsuit earlier this year, I exclaimed that a ruling for the agency could be ruinous for employers. Kudos to this judge for recognizing the folly of the EEOC’s position.

The Tribune reports that the court granted CVS’s motion at a hearing, and said that a written opinion would follow. I’ll have full coverage of this significant rebuking of the EEOC’s extreme position as soon as the opinion publishes.

In the meantime, this is not the end of this issue. It is possible, it not probable, that the EEOC will appeal this dismissal to the 7th Circuit. Also, the EEOC has filed a similar case in at least one other court. There is always a chance that another judge will see this issue the EEOC’s way, creating a split, and a headache for employers.

[Hat tip: Ameet Sachdev]

Protected activity doesn’t protect against poor performance

Yesterday brought us two different 6th Circuit cases upholding dismissals of lawsuits in which the employees alleged that their terminations followed their exercise of protected activity.

• In Wilson v. Cleveland Clinic Foundation, the hospital fired a patient transporter for failing to follow proper procedures for moving a post-surgical patient. That incident was not her first breach of protocol, as the hospital had previously suspended her for leaving a corpse unattended in a patient room. She had filed an EEOC charge after the corpse incident.
• In Travers v. Cellco Partnership, the employer fired an employee with a history of performance problems on her first day back from FMLA leave, after she made yet another on-the-job mistake.

These cases illustrate that it is not impossible for fire an employee on the heels of protected activity. In both cases, the court concluded that there existed no factual dispute as to the veracity of the performance problems, and that each was a terminable offense.

“Terminability,” however, is the key. If an employee can show either that stated reason for the termination (1) had no basis in fact, (2) did not actually motivate the employer’s action, or (3) was insufficient to motivate the employer’s action, then the employer cannot prevail on summary judgment.

Consistency is crucial. How did the Clinic and Verizon treat other employees who committed similar violations? If the treatment is consistent, it becomes difficult for the employee to establish either of the three indicia of pretext, even if the termination follows on the heels of the protected activity.

What can you learn from these cases? Protected activity does not per se protect a poor performer from termination, provided that you can demonstrate a history of treating similarly situated poor performers similarly.

When the cat’s paw strikes retaliation

What happens when a decision-maker acts with an innocent motive, but unwittingly carries out the retaliatory motive of a subordinate? Does the cat’s paw impute the unlawful intent to the otherwise innocent manager or supervisor? In Seoane-Vazque v. The Ohio State University (6th Cir. 8/19/14) [pdf], the 6th Circuit held that while the cat’s paw applies to retaliation claims, it is still bound by the higher but-for causation standard the Supreme Court applied to retaliation claims in University of Tex. S.W. Med. Ctr. v. Nassar.

Following Nassar, “a Title VII plaintiff alleging retaliation cannot establish liability if her firing was prompted by both legitimate and illegitimate factors.” … So long as the untainted factors were sufficient to justify [the] ultimate decision, the University will be entitled to summary judgment.

Thus, in any claim alleging retaliation under Title VII, courts must apply the stricter “but for” causation standard, regardless of the identity of the purported decision-maker. As a result, retaliation claims remain harder for employees to prove, and easier for employers to win on summary judgment.

This all makes for an interesting academic discussion, but once you reach these platitudes of burden of proof and causation, you’ve already lost. You’ve already fired an employee who engaged in protected conduct. You’ve already gotten sued. And, you’ve already spent a tidy sum investigating the complaint, taking discovery, and preparing a (hopefully winning) motion for summary judgment. You’ve spent $100,000 (or more) to justify the termination of a marginal employee. In that case, have you really won?

What’s the safer course of action? Only terminate as a last resort. Treat employees who engage in protected activity with kid gloves. Make an informed decision early in any case whether it is one worth fighting or settling. Better yet, consider severance pay in exchange for a release claims in all but the most egregious of terminations. Nassar’s “but-for” causation standard may shift employers’ decisions to fight over flight in more cases, but employers should resist the litigation urge, which is usually a losing proposition for all. I know this is odd advice coming from a litigator, but a termination decision must be fully informed, and the vast void of litigation costs must be a key part of that decision.