Court reminds us that harassment must be because of a protected class to be actionable

Williams v. Spitzer Auto World, Inc., decided this week by the Lorain County, Ohio, Court of Appeals, is a great illustration of the dangers the will befall corporate America if workplace bullying legislation becomes the law.

Michael Williams, an African-American, quit his job at Spitzer (it's been a busy couple of weeks for Spitzer) and alleged, among other things, racial discrimination, racial harassment, and constructive discharge. The jury found in favor of Spitzer on the harassment claim, but nevertheless awarded Williams damages on his constructive discharge claim. A constructive discharge is where "the employer's actions made working conditions so intolerable that a reasonable person under the circumstances would have felt compelled to resign." The intolerable working conditions, however, must be tied to some unlawful conduct by the employer for an employee to claim a constructive discharge. Because Williams had not proved his harassment claim, the appellate court ruled that his constructive discharge claim must therefore also fail.

This case is a perfect illustration of what's wrong with the anti-bullying movement. If groups like the Workplace Bullying Institute get their way and generalized workplace bullying becomes illegal, every employee who quits a job because of an alleged abusive boss will have a colorable constructive discharge claim. The violation of the anti-bullying law would provide the unlawful conduct necessary to support the constructive discharge claim. It is for this very reason that anti-bullying legislation would spell the end of employment at-will, as every employee who resigns because they don't like their boss would be able to claim a constructive discharge.

10 reasons why I love my job

The National Law Journal has published its 15th annual list of bizarre employment law cases. My favorite is actually number 10: "Maternity Wear, Pregnancy Suit":

Philadelphia-based maternity clothes retailer Mothers Work Inc. agreed to pay $375,000 to settle a suit alleging that it refused to hire qualified female applicants because they were pregnant. LaShonda Burns alleged the company would not hire applicants for sales positions who were "visibly pregnant" or who it learned were pregnant through interviews. Company president Rebecca Matthias denied any discrimination, but said the settlement was reached to avoid "huge" costs and "distractions" of protracted litigation. She added, "It's important to make sure our culture and policy are lived at every one of our stores."

What's next, the NAACP being sued for race discrimination?

What else I'm reading this week #25

It's a constant struggle to decide which is the hotter topic in employment law -- wage and hour lawsuits or retaliation claims. I've been focusing a lot of attention lately to the latter, so let's start this week's review with a pair of articles on the former. BLR's Daily HR Advisor asks the question, FLSA Class Action Overtime Suits—Are You Next? To help answer that question, Law.com gives everyone a lesson in Overtime 101. Workplace Horizons provides a timely update on an attempt to revitalize new regulations for SSA No-Match letters. For an explanation of what these new rules would mean, see New rules require termination of illegal immigrants

Mark Toth at the Manpower Employment Blawg asks if obesity discrimination is more prevalent than even race discrimination. I gave my thoughts on this issue last June: Supersized lawsuits - obesity-related claims expected to rise

The Workplace Prof Blog gives an academic perspective on a case in which Wal-Mart fired a manager for engaging in an improper affair with a coworker after it hired an investigator to follow the couple down to Central America to catch them in the act.

Monster.com's HR Guru gives some pointers on dealing with workplace violence.

Finally, my friend Donna Seale at Human Rights in the Workplace gives us a Canadian perspective on employers' responsibility for harassment by non-employees.

Failure to hire "because of litigation" may constitute retaliation

Another day, another retaliation case out of the 6th Circuit. In Cline v. BWXT Y-12, LLC, the company declined to hire Cline, a former employee, for an open position because the company was "in litigation with Mr. Cline and that he may not be the best person ... because of the litigation factor." That litigation involved a claim of age discrimination. The decision makers testified that while they knew of the litigation, they did not know that it involved allegations of age discrimination. The district court threw out the retaliation claim on summary judgment, finding that because the decision makers did not have "any knowledge of the substance of Cline's present suit," they could not have known that he had engaged in protected activity.

The appellate court disagreed, and found that because the decision makers "knew that Cline was involved in litigation with the company ... the evidence permits the inference that the decision makers were unwilling to hire someone in litigation with the company." That inference "creates a triable issue of fact over whether the decision makers knew of Cline's protected activity."

"Wait a second," you might say, "There can be all kinds of litigation Cline could have been involved in. Just because he sued the company doesn't mean that he was engaged in statutorily protected activity. And, even if he was, can't a company have a neutral policy against hiring anyone who has sued the company, regardless of the cause." The Court hears your protests:

Something more is required, the company says, because Cline’s evidence still does not show that the decision makers knew that the litigation involved an age-discrimination claim.... In one sense the company has a point. Cline’s evidence permits the inference that Mack and Zava would not hire someone—anyone—“in litigation” with the company, and that view might suggest unbiased neutrality. It thus might have made no difference to Mack and Zava whether the litigation involved age discrimination if they preferred not to hire anyone in litigation with the company without regard to the subject matter of the lawsuit—whether it was a tort action, a contract dispute or a civil rights complaint. But such an across-the-board explanation—that any litigation with the company precludes any individual from being hired (or for that matter being retained as a current employee)—would necessarily sweep up protected civil rights claims and non-protected claims. And if such an explanation suffices for one hiring decision, why couldn’t an employer adopt a company-wide policy against hiring or retaining anyone in litigation with the company? As long as the policy were consistently followed, the employer would rarely have reason to obtain knowledge about the substance of the litigation, and at any rate it could always fairly say that it was the ruthlessly neutral policy, not the protected activity, that caused the adverse action.

Thus, to prove his retaliation claim, Cline will have to prove two facts:

1. That the company knew about the content of his claim; and
2. That the company did not have a policy against hiring (or retaining) individuals with litigation against the company.

This case poses the age-old question, "What does 'because of' mean in an employment lawsuit?" The answer, as with most things, is, "It depends." Cline presents a rational and common sense understanding that not all employment decisions that look retaliatory are retaliatory. I would never counsel someone to provide "engaged in litigation" as a reason for termination, because of the negative inferences that one can draw. But, if the decision maker does not know of the reason for the litigation, and the company can prove that it has a policy (written or unwritten) against hiring (or for firing) anyone who is in litigation against it, then the company genuinely has not engaged in retaliation.

Wal-Mart relents on reimbursement of medical costs

Last week I reported on Wal-Mart's lawsuit against a brain damaged ex-employee for the reimbursement of her health care costs. As of this morning, Wal-Mart has relented and will not pursue the collection of its costs. CNN.com quotes the letter Wal-Mart sent to the family: "We wanted you to know that Wal-Mart will not seek any reimbursement for the money already spent on Ms. Shank's care, and we will work with you to ensure the remaining amounts in the trust can be used for her ongoing care." Wal-Mart will also be modifying its health care plan to allow "more discretion" in individual cases.

Companies make decisions for any number of reasons. There are legal reasons (which guided Wal-Mart's original decision), business reasons, public relations reasons, moral reasons, and sometimes no reason at all. Just because something is permitted by law, however, does not mean that there are not better justifications not to take that action. In making any decision, employment related or otherwise, companies would be wise not to just consider whether a course of action is legal, but also what effect that action will have on its business, its relationship with its employees, and its public persona. Only thoughtful consideration of all of these factors will allow for fully informed corporate decision making.

Ohio court finds no public policy for opposing corporate accounting irregularities

One would think that in our post-Enron corporate environment, employees, even in non-public companies, would be free to oppose corporate accounting irregularities without fear of termination. Yet, in Schwenke v. Wayne-Dalton Corp., the Lorain County (Ohio) Court of Appeals ruled that an employee claiming he was terminated for that very reason had no claim.

Ronald Schwenke was the controller for Wayne-Dalton Corp., a privately held manufacturer of garage doors headquartered in Mt. Hope, Ohio. During Schwenke's employment he complained about certain inappropriate accounting procedures engaged in by Wayne-Dalton's President and its CFO, in addition to what he perceived as the misappropriation of corporate assets. His complaints fells on deaf ears, and he was simply told to "make it work," perform his duties as controller, and not question how the business was operated. When he refused to "make it work" he was fired. Schwenke claimed that his termination was in retaliation for his complaints, and that it violated Ohio's public policy against firing employees in retaliation for reporting inappropriate accounting procedures or misappropriation of corporate assets.

Schwenke did not claim protection under Ohio's whistleblower statute because he failed to follow the statute's very specific reporting requirements that one must follow to qualify as a protected whistleblower. Instead, he claimed there is "a public policy in support of not firing an employee, such as appellee, in retaliation for reporting inappropriate accounting procedures or misappropriation of corporate assets." The court of appeals disagreed:

[W]e find that appellee has failed to identify any source of public policy as the basis for his claims. Appellee ... did not identify any constitution, statute or regulation that might provide a basis for his claims. Nor did appellee cite or present the trial court with any legal authority in support of his argument that his termination violated public policy.

In other words, Schwenke lost not because a public policy does not exist, but because he failed to articulate one. I wonder if the result would have been different if Schwenke simply articulated the Sarbanes-Oxley Act, which establishes accountability standards for publicly traded companies, as the public policy supporting his claim.

The concurring opinion, however, goes further, and suggests that there is no public policy sufficient for protection:

Appellee has failed to identify any source of public policy as the basis for his claims. I believe Appellee's best argument is the fiduciary duty which exists between a corporation and its directors and its shareholders warrants recognition as a public policy exception to the at-will employment doctrine. I know of no case law, nor has Appellee identified any, which has recognized the breach of that fiduciary duty rises to the level of a matter of public policy. The fact no such case law exists does not preclude this Court from recognizing, and thereby creating, new common law. While the facts of this case suggest doing so may be equitable, I join my colleagues in refusing to do so....

While I agree the corporate management practices found to exist by the jury in this case demonstrate a breach of the fiduciary duty to the corporation's shareholders ... I do not feel such rises to the level of a great societal wrong. This case brought to mind the Enron scandal. Unlike Enron, no corporate officer or board of directors' member of Wayne-Dalton has been alleged, much less shown, to have committed a criminal offense. Unlike Enron, Wayne-Dalton is not involved in the supply of public utilities. Unlike Enron, Wayne-Dalton's corporate management practices cannot be said to have any impact on the general public health and safety. Wayne-Dalton "wrongs" as found by the jury are not "societal" in nature.

The Enron analogy is fallacious. Enron was a publicly traded company. If Wayne-Dalton was a public company, Schwenke could have had a statutory whistleblower claim under Sarbanes-Oxley. The existence of that statutory remedy, however, would most likely nullify his public policy wrongful discharge claim, under the holding of Leininger v. Pioneer National Latex.

Nevertheless, the Schwenke case sends the wrong message to Ohio's privately held companies -- that they can terminate corporate watchdogs without fear of retaliation liability. Employees have to be free to oppose corporate accounting irregularities, even in non-public companies. Sarbanes-Oxley should provide a sufficient public policy to support these claims against non-public companies. I hope it does in the next case of this ilk.

Carnival of HR 30 is available

Please take a minute to surf over to Fortify Your Oasis and read this week's compilation of the blogosphere's best HR and employment relations posts.

6th Circuit recognizes claim for associational retaliation

The 6th Circuit continues to broaden the scope of retaliation claims, and in the process make it more and more difficult for employers in Ohio, Michigan, Kentucky, and Tennessee to manage against these claims. In Hawkins v. Anheuser-Busch, the 6th Circuit recognized a claim against an employer for retaliatory acts committed not by a manager or supervisor, but by a co-worker. Yesterday, the Court continued its expansion of retaliation liability and recognized liability for "associational retaliation."
Section 704(a) of Title VII of the Civil Rights Act of 1964 prevents retaliation by employers for two types of activity, opposition and participation:

It shall be an unlawful employment practice for an employer to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.

On its face, it seems clear that the anti-retaliation provision is limited to an employee who himself or herself opposes an unlawful employment practice, made a charge, or participated in a investigation, proceeding or hearing regarding a charge. Yet, in Thompson v. North American Stainless, decided this week by the 6th Circuit, the Court has held that the same anti-retaliation provision also protects a related or associated third party from retaliation.
Eric Thompson was engaged to Miriam Regalado, another North American Stainless employee. Three weeks after Regalado filed a sex discrimination charge with the EEOC, North American Stainless terminated Thompson for alleged performance reasons. The 6th Circuit reversed the trial court's dismissal of the retaliation claim, holding:

Title VII prohibit[s] employers from taking retaliatory action against employees not directly involved in protected activity, but who are so closely related to or associated with those who are directly involved, that it is clear that the protected activity motivated the employer's action. (emphasis added).

The Court found that even though the plain language of the statute would prohibit such a claim, not allowing the claim would frustrate the statute's purpose -- prohibiting conduct that would dissuade reasonable workers from engaging in protected activity. The Court also defended itself from possible criticism that it was taking too broad a reading of the statute and opening the door to a flood of claims:

Other courts have expressed concerns as to whether this decision will result in a flood of suits from relatives and associates of those who file EEOC charges.... The requirement of a prima facie case in general, and a causal link specifically protect employers from defending against meritless suits. Of greater concern to the court would be the result of a contrary ruling. That is, permitting employers to retaliate with impunity for opposition to unlawful practices, filing EEOC charges or otherwise participating in such efforts, as long as that retaliation is only directed at family members and friends, and not the individual conducting the protected activity.

In becoming the first circuit court to recognize a claim for associational retaliation, the court rewrote Title VII's anti-retaliation for public policy reasons. As the dissent further explained:

It was Congress’s prerogative to create – or refrain from creating – a federal cause of action for civil rights retaliation. Congress likewise was entitled to mold the scope of such legislation, making the boundaries of coverage either expansive or limited in nature. In enacting § 704(a), Congress chose the latter. The text of § 704(a) is plain and unambiguous in its protection of a limited class of persons who are afforded the right to sue for retaliation. To be included in this class, the plaintiff must show that his employer discriminated against him "because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter." 42 U.S.C. § 2000e-3(a) (emphasis added).
By application of the plain language of the statute, plaintiff Eric L. Thompson is clearly not included in the class of persons for whom Congress created a retaliation cause of action because Thompson, himself, did not oppose an unlawful employment practice, or make a charge, testify, assist, or participate in an investigation....
In essence, plaintiff and the EEOC request that we become the first circuit court to hold that Title VII creates a cause of action for third-party retaliation on behalf of friends and family members who have not engaged in protected activity. The majority has accepted this dubious invitation. In doing so, the majority rewrites the law.

Separate and apart from whether one agrees or disagrees with the Court's judicial activism, its holding creates genuine logistical problems for employers. If Title VII protects those "who are so closely related to or associated" with employees who engage in protected activity, it simply begs the question, how close is close enough? In Thompson, the relationship was a fiancee. It is safe to assume liability will also extend to action taken against spouses. What about boyfriends and girlfriends? How long do you have to date to be protected from retaliation?
The same protection also will probably extend to parents and children. What about siblings? Grandparents? Cousins? 3rd cousins twice removed? In-laws? Friends? Carpoolers? The people you share your lunch table with? The person you sat next to in 3rd grade? How close is close enough for an employer to intend for its actions to punish the exercise of protected activity? Do employers now have to ask for family trees and class pictures as part of the orientation process?
These questions, none of which the Thompson court answers, could hamstring employers from making any employment decisions for fear of doing something against someone who has some relationship to someone else who complained about something last October. The implications of this case have the potential to reach that level of silliness. The best course of action is still to make legitimate personnel decisions for bona fide business reasons and let the chips fall where they may. Fear of being sued will freeze your workforce, and bad employees will continue to get a free pass and remain employed. No company wants to get sued, but sometimes you have to take that risk to rid yourself of a bad worker. The Thompson case just makes it that much more likely that if you take action against an employee, you may have to defend that decision in court.

Repeat after me: "I will not pull a cheesy April Fools' Day prank."

I thought I'd share with everyone Mark Toth's (from the Manpower Employment Blawg) excellent thoughts on how not to get sued on April Fools' Day:

Done right, workplace humor can be a great thing for employee morale. Done wrong, it can be a disaster.

The idea is not to prohibit all workplace fun, jokes and pranks but rather to (1) help employees know where the line is and (2) take appropriate action if the line is crossed.

Here's a simple solution: consider adopting a policy prohibiting "potentially unwelcome, offensive or harmful workplace jokes or pranks." Enforcing such a policy should be fairly straightforward. Pranks that involve any of the following should never be allowed:

• race, gender or other protected or physical characteristic
• threats
• physical contact, including ingestion of unwelcome odors or substances
• weapons (even toy ones) or other potentially dangerous objects/substances
• damage to property or a person's reputation
• interference with a person's ability to do his/her job

If a joke/prank crosses the line, strongly consider taking disciplinary action.

Consider this -- what about a prank that involves putting a co-worker's stapler in jello?

Some alternatives to arbitration of employment claims

Last week, the U.S. Supreme Court decided Hall Street v. Mattel, which held that the Federal Arbitration Act is the exclusive grounds for vacating or modifying an arbitration award, and that parties may not contractually agree to expanded grounds of judicial review. Briefly, the parties had entered into an agreement in which they agreed to the de novo review of the arbitration decision of their environmental dispute. The Supreme Court held that such provision was not valid under the FAA. Thus, a court can only overturn an arbitrator's decision are where: (1) the award was procured by corruption, fraud, or undue means; (2) there was evident partiality and/or corruption; (3) the arbitrators were guilty of other misconduct; or (4) the arbitrators exceeded their powers.

While arbitration continues to the favored method used by employers to limit their potential exposure in front of a jury, let me discuss two other possible alternatives.

Contractual Waivers of Jury Trials

First, employers can have employees sign agreements waiving the right to ask for a jury in any subsequent legal disputes. More than 20 years ago, in K.M.C. Co. v. Irving Trust Co., the 6th Circuit stated: "It is clear that the parties to a contract may by prior written agreement waive the right to jury trial.... [T]he constitutional right to jury trial may only be waived if done knowingly, voluntarily and intentionally." The contract should clearly and unambiguously advise the employee that by signing the agreement the employee is giving up any and all rights to have any claims related to his or her employment raised by a jury. The more broadly the waiver is drafted, the more likely it will cover an employment-related claim, provided it is otherwise knowing and voluntary.

In light of Hall Street v. Mattel, jury trial waivers have one key advantage over more traditional arbitration agreements -- you are not giving up any appeal rights, and an appellate court's review of a bench trial will be much wider than a court's review of an arbitration award. Of course, this factor cuts both ways. At the same time, though, a bench trial eliminates the risk of a runaway jury awarding obscenely high damages, so it may be a more simply and preferable option to a traditional arbitration agreement.

Agreements to Shorten the Statute of Limitations

Secondly, employers can attempt to limit the amount of time employees have to assert employment claims. In Thurman v. DaimlerChrysler, Inc., the 6th Circuit held that a clause in an employment application limiting the statutory limitations period for filing a lawsuit against the employer was valid. Thurman's employment application with DaimlerChrysler contained a clause waiving any statute of limitation and agreeing to an abbreviated limitations period in which to file suit against the employer. Specifically, the clause stated:

READ CAREFULLY BEFORE SIGNING I agree that any claim or lawsuit relating to my service with Chrysler Corporation or any of its subsidiaries must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary.

The Court held that the abbreviated limitations period contained in the employment application was reasonable, and that all of Thurman's claims against DaimlerChrysler were time barred by the six-month limitations period. The Court paid particular attention to the "read carefully before signing" language, and noted that it was in bold and placed conspicuously directly above Thurman’s signature acknowledging that she read and understood the document. It also found the specific language used was clear and unambiguous.

The advantage of using these types of clauses is that you can limit the duration of potential liabilities. For example, in Ohio employees have 6 years to file discrimination claims (other than age) under R.C. 4112.99. A clause such as the one in Thurman would shorten that time frame from 6 years to 6 months, a dramatic improvement.

I normally don't put disclaimers directly in my posts. But, these ideas are merely something to think about for your business. Please do not try this at home. For example, although not raised in the Thurman case, statute of limitations waivers should not seek to limit the statutory window for filing charges with administrative agencies because of the potential for a retaliation claim. Talk to a lawyer before implementing either of these options.

Employer must pay employee for time spent at the doctor

If an hourly employee is injured on the job, and the employer's workers' compensation carrier subsequently sends the employee to a doctor's appointment to re-evaluate the work-related injury, must the employer pay the employee for the time spent at the doctor? According to the 8th Circuit in Howser v. ABB, the answer is yes.

In the case, ABB offered Howser two choices for her doctor's appointment: it would compensate her for the time missed from work but deduct that time from her accrued paid leave benefits, or she could take an unpaid absence. Because she took the unpaid absence, ABB did not compensate her for the 3.8 hours she spent at the doctor's appointment. The Court held that because ABB's workers' comp administrator, its agent, directed her to attend the appointment, the 3.8 hours were "hours worked" under the FLSA for which she should have been paid:

Under the FLSA, an employer must pay an employee a minimum wage per hour worked.... Department of Labor regulations state that "time spent by an employee in waiting for and receiving medical attention on the premises or at the direction of the employer during the employee's normal working hours on days when he is working constitutes hours worked." 29 C.F.R. § 785.43.

This case is a good reminder that if you require a non-exempt employee to do something, you will probably have to pay for it.

What else I'm reading this week #24

One story that has received a lot of press this week, but that I have not touched, is the $100 million tip pooling judgment received by Starbucks lead employees. This claim seems to be unique to California wage and hour laws, which requires all employees, even supervisors, to receive their fair share of tips. Kris Dunn, The HR Capitalist, has what is probably the best take I've read on this case.

Mark Toth over the Manpower Employment Blawg, however, has the post of the week. Click on over to read about a grievance filed by the Teamsters complaining that a school had violated its collective bargaining agreement by using goats instead of union workers to clear brush.

Dan Schwartz at the Connecticut Employment Law Blog writes about the "ministerial exception" to Title VII and a case in the 2nd Circuit which held that it is unconstitutional to apply Title VII to certain religious institutions.

Rush Nigut's Rush on Business asks whether it is a good idea for employers to permit employees to start side businesses.

The Washington Labor, Employment, and Employee Benefits Law Blog reports on criminal charges brought against an employee who took company documents. In a bizarre twist, the employee is actually blogging about his own criminal trial. Keep in mind that civil liability also exists under the Computer Fraud and Abuse Act for employees who intentionally damage computer records.

Suits in the Workplace illustrates the dangers of ignoring a litigation hold in discovery.

Finally, the Labor and Employment Law Blog has a piece on how to use corporate wellness programs not only to reduce health care costs, but also limit potential liability.

Wall Street Journal on the surge of pregnancy discrimination claims

This morning's Wall Street Journal has a piece on the growth of EEOC pregnancy discrimination charges. According to the Journal:

Pregnancy-bias complaints recorded by the Equal Employment Opportunity Commission surged 14% last year to 5,587, up 40% from a decade ago and the biggest annual increase in 13 years.... The groundswell reflects both changing demographics and a new activism among mothers. It also shows that even now, 30 years after passage of the federal Pregnancy Discrimination Act, there is still confusion about what protections it provides. "I thought we were protected," said an advertising executive during a recent gathering of 100 working mothers. "Then I find out we can be fired while we're pregnant, employers can refuse to hire us -- what exactly are our rights?"

While employers can indeed fire, lay off or refuse to hire pregnant women, they can't single them out for worse treatment -- and they must be able to prove they held men to the same standards or asked male job candidates comparable questions.... Many women who bring complaints are surprised to learn that they don't have special protection from adverse treatment. One manager for a publishing company thought she was being discriminated against when her employer fired her for poor performance while pregnant, says Kimberlie Ryan, a Denver employment attorney. In fact, the manager couldn't prove her bosses knew she was pregnant when they decided to fire her, says Ms. Ryan. To succeed in a claim, a woman generally must be able to prove an adverse action was motivated by her pregnancy or her status as a mother.

Let me suggest that if you decide to fire an employee for poor performance while that employee is on maternity leave, you have a well-documented paper trail of issues, and that the first the employee will be hearing about these issues is not during the termination. Otherwise, it will be difficult to overcome a claim that the performance problems were invented as a pretext to terminate a pregnant employee.

Wal-Mart lawsuit for reimbursement of medical costs illustrates important HR issue

Wal-Mart is at the center of a huge public relationship mess after it has asked a former employee to reimburse most of the $470,000 its health plan paid for medical costs following a traffic accident. CNN.com has the details:

[Debbie] Shank suffered severe brain damage after a traffic accident nearly eight years ago that robbed her of much of her short-term memory and left her in a wheelchair and living in a nursing home.

It was the beginning of a series of battles -- both personal and legal -- that loomed for Shank and her family. One of their biggest was with Wal-Mart's health plan.

Eight years ago, Shank was stocking shelves for the retail giant and signed up for Wal-Mart's health and benefits plan.

Two years after the accident, Shank and her husband, Jim, were awarded about $1 million in a lawsuit against the trucking company involved in the crash. After legal fees were paid, $417,000 was placed in a trust to pay for Debbie Shank's long-term care.

Wal-Mart had paid out about $470,000 for Shank's medical expenses and later sued for the same amount. However, the court ruled it can only recoup what is left in the family's trust.

The Shanks didn't notice in the fine print of Wal-Mart's health plan policy that the company has the right to recoup medical expenses if an employee collects damages in a lawsuit.

Just because your company is legally entitled to do something does not mean that it should. Take the FMLA as an example. Section 104(c)(2) of the FMLA provides that if an employee fails to return from an FMLA leave of absence for less than 30 days, and for a reason other than the continuation, recurrence, or onset of a serious health condition or some other circumstance beyond the employee's control, the employer may recover any premiums that it paid to maintain group health coverage for the employee during the period of FMLA leave.

Is it a good idea to exercise this right? Consider the new mom who decides after her FMLA leave expires to stay at home with her newborn. That decision will absolutely leave the employer in the lurch. The employer might want to do something to send a message to other employees not to take advantage of the FMLA by taking the time off and then choosing not to return. But consider: 1) mechanically, how do you go about exercising this right; and 2) what negative message does it send if you go to court to collect this money? Keep in mind, even if you have written authorization from an employee to make certain paycheck deductions for sums owed, FMLA leave is unpaid. By the end of an employee's leave, there almost certainly will not be any pay left from which you will be able to make a deduction.

Take a look at some of the comments posted on CNN.com to its story:

Although this is a very stupid thing for a company that makes Billions to do, this doesn't surprise me really. Our society has migrated away from action based on morals and ethics to one that is only concerned about the letter of the law.

One of the most unconscionable things I have ever seen. Another reason to hate Wal-Mart and to never spend another cent there... I'd rather pay double somewhere else than help support a company capable of something like this.

Hey Wal-Mart why don't you just send your attorneys to the lady's house and dump her out of her wheelchair???

Before you decide to seek reimbursement from a former employee, think long and hard about the effect on your current employees, and whether it's good for your business to have them bringing these types of resentments against your business into the workplace.

An update on this story is available.

Plaintiff's history of homemade porn is not fair game in harassment suit

Whether or not a plaintiff was subjectively offended by an alleged hostile environment is a key element of proving any sexual harassment claim. One would think, then, that if a plaintiff is claiming that she was a offended by being subjected to porn in the workplace, it would be fair to cross examine her on her own history of home-made porn movies. No so, however, according to the Lorain County (Ohio) Court of Appeals, in Conti v. Spitzer Auto World Amherst, Inc.

Kristina Conti and two co-workers claimed that they were subjected to a sexually hostile work environment while employed at Spitzer Auto World. They claimed that two male sales managers subjected them to near-daily sexual harassment, including forcing them to view pornography on their computers, rubbing up against them from behind and touching their buttocks, and routinely questioning them about the color and type of their underwear, their private sex lives, and their interest in different sexual positions.

Spitzer's counsel engaged in following Q&A with Conti at trial, in an attempt to show that she could not have been personally offended by such conduct:

Q. Well, I hate to have to ask you this. But did viewing your videotape refresh your recollection as to whether you knew that adult film was being made? ...

A. You're asking how I felt about it?

Q. No ma'am. I'm asking you, isn't it true you knew it was being filmed?

A. I did not know it was being filmed.

Q. You would agree with me it was an adult film, correct?

A. Yes.

Q. And you would agree with me, you were in it, correct?

A. Yes....

Q. You would agree with me at the very end of the tape, Ms. Conti, you said, "Should I turn this thing off now," didn't you?

A. I don't know exactly, but my recollection of what I said was something along the lines that this thing better be off, or turn this thing off.

The court of appeals ruled that the trial court abused its discretion in allowing that line of questioning. The court found that the evidence should have been excluded because it was not relevant to the harassment. It reasoned that permitting cross examination of a plaintiff about a sex tape she made with her husband does not tend to prove that she welcomes the sight of pornography at work. It may prove that she likes privately to film her and her husband having sex, but it does not prove that she welcomes sexual advances from a coworker or viewing porn starring people other than her and her husband.

There is something viscerally appealing about cross examining a sexual harassment plaintiff concerning her home videos. Yet, I get the point that what one does in the privacy of one's home with one's spouse doesn't necessarily translate to the same level of comfort with one's coworkers. At the end of the day, I think the court in this case got it wrong. More so in sexual harassment cases than any other type of employment case, credibility is key. In a he said/she said scenario, the jury has to be able to evaluate which party is more likely to be stretching the truth. If a plaintiff makes home pornos, can't a jury conclude that she is less likely to find pictures of other people having sex offensive? Shouldn't the jury have the right to evaluate her credibility in light of her obvious lack of prudishness? Certainly the evidence is relevant to her subjective state of mind in her level of offense at the porn. The question is how relevant, and whether it is simply too prejudicial. The trial court felt that it was not too prejudicial and admitted it, and the appellate court went too far in overruling that evidentiary ruling.

I'm curious to see if this case get retried, and if it comes out differently with Ms. Conti's home movies no longer before the jury.

My thanks to Donna Seale

For those who have been following my discussion with Donna Seale at Human Rights in the Workplace, she has posted what will be the last of our back and forth on Internet addiction and disability discrimination. For those who have not been following it, you can catch up with these links:

• My initial post: Is Internet addiction a protected disability?
• Donna's 1st response: Internet addicts: the next wave in accommodation claims?
• My rebuttal: Dealing with Internet addiction under the ADA
• Donna's 2nd response: Internet addiction - part two
• My conclusion: More on internet addiction
• Donna's conclusion: Internet addiction: the discussion continues

There's nothing else to say other than thank you to Donna for taking part in what turned into a powerful demonstration of what blogging can accomplish.

Would you promote your poor performers?

Would you promote an employee who ranked a 2 out of 10 on his or her last performance review? That is exactly what the Democratic and Republican parties are asking us to do. The Presidential campaign is referred to as one long job interview. Yet, the 3 people who are applying for the job get low marks from the public. According to RealClearPolitics, only 21% of the country approves of the job Congress is doing. Yet, John McCain, Hillary Clinton, and Barack Obama are all sitting Senators and vying for this promotion.

More on internet addiction

Donna Seale at Human Rights in the Workplace is continuing our discussion on the differences between American and Canadian disability discrimination law and Internet addiction. Her latest is as follows:

As for Mr. Hyman's comments that even if an employer paused to consider accommodating an Internet addicted employee the employee would still have to perform the essential duties of the job, I completely agree. Where we part company is on the approach to the actual question of accommodation. While it may not be easy to think up possible ways an employer could accommodate an Internet addicted employee who needed to use the Internet and e-mail to do her job, the law in this country still requires an employer to engage in that process. Failure to actually engage a process to consider what could be done to accommodate is, in and of itself, sufficient to trigger liability under Canadian human rights law even if no accommodation could ultimately be provided. (Besides, aren't there blocking devices employers can use to block employee access to non-work related Internet sites? -- speaking from a real non-techie perspective -- but I digress). In any event, accommodation is an individualized process and would have to be considered from the perspective of what would need to be done to accommodate the specific employee in question in their specific job in question, which may require a lot of an employer or, perhaps, not.

Let me respond as follows:

1. It is entirely defensible to terminate an employee with a disability if you don't know the employee has a disability, and you cannot make an accommodation if you don't know that one is needed.
2. If an employee requests an accommodation, the employer must engage in an interactive process to determine if there is a reasonable accommodation available that will enable the employee to perform the essential functions of his or her job with or without reasonable accommodation. Any accommodation that is provided need not meet the employee's preference -- it just must be reasonable.
3. In all likelihood, this interactive process will result in a dead-end for an employee who claims an Internet addiction. While there is software and other techie solutions to block access to certain websites, those solutions are expensive, hard to implement, and will probably cause an undue hardship on the employer.

In sum, I agree with Donna's conclusion:

Tread lightly whenever an employee raises a potential disability issue connected to their inability to do their job because whatever actions you take after being advised of the potential disability (whether it is Internet addiction or something else) may be considered discriminatory. Forewarned is forearmed.

Companies should not turn a blind eye to potential accommodation issues. Indeed, doing that could result in liability where it does not otherwise exist. In the case of an addiction, however, employees should not be able to lean on the ADA as a crutch to save their jobs when they permit their addiction (whether it's the Internet, sex, drugs, or something else) to pervade the work environment.

The importance of following established criteria

In Dunlap v. Tennessee Valley Auth., decided last week by the 6th Circuit, illustrates the dangers employers face when deviating from established criteria in the hiring process.

David Dunlap, a 52-year-old African American, was one of 21 applicants for 10 positions with the TVA. Before it began interviewing, the selection committee decided that the interview would account for 70% of an applicant's final score and technical expertise would account for the other 30%. While the committed would score each candidates after his or her interview, the committee would also review the the scores from all of the prior interviewees and re-score them. This "score-balancing" caused the final scores to vary widely from the initial scores. For example, Dunlap's attendance record of only a few days off for family illness was scored a 3.7, while two white applicants with the same answer scored a 4.2 and 4.5. Dunlap's perfect safety record received a 4, while another white applicant with two prior accidents scored a 6.

After the interviews, the 21 applicants were ranked in order of most to least qualified. Dunlap ranked 14th. Of the 10 hirees, only one was black. Dunlap alleges that the combined weight of his more than 20 years of technical and supervisory experience made him a more qualified applicant than some of the other applicants who were hired, some of whom had only minimal supervisory experience and poorer safety records. Dunlap scored the same on the technical part of the application as five of the selected white candidates, but he scored much lower on the interview. He alleged that the interview process was biased to select less qualified candidates and hide racial preferences. The Court agreed.

The Court found that the TVA's hiring matrix was a pretext for racial discrimination:

First, the selection committee determined that the interview would account for seventy percent of an applicant’s final score, and technical expertise would account for thirty percent, therefore transferring the bulk of the final score from an objective measurement (merit and experience) towards a subjective measurement (communication skills). The TVA’s "Principles and Practices" on filling vacant positions, however, mandate that "merit and efficiency form the basis for selection of job candidates," stating that "education, training, experience, ability and previous work performance serve as a basis for appraisal of merit and efficiency."

Thus, because the hiring matrix for these positions differed from the employer's established policies, the Court found the use of the matrix was pretextual. The Court also found that the interviewers' manipulation of the scores to ensure that certain people would rank in the top 10 was also evidence of pretext.

TVA's failure to follow its own established policies and practices is what ultimately doomed it in this case. If it had hired the same 9 white candidates instead of Dunlap, but instead relied solely on objective technical criteria as its "Principles and Practices" required, and had not balanced scores after each interview, it would have been close to impossible for Dunlap to have proved discrimination. The objective criteria were supposed to hire the 10 best candidates, not the nine best white candidates and one token African American.

The use of objective criteria, whether in hiring, or for selecting employees to be included in a RIF, is a great way to insulate your organization from a claim of discrimination. Those criteria, however, must be safe from scrutiny. When a subjective component is introduced, such as interviewing or "score leveling", it looks more and more like something other than objective qualifications are the deciding factor. Courts and juries like to think that companies hire and retain the best, most qualified people. If a plaintiff can show that numbers that were supposed to be objective are anything but, those same judges and juries will look for an explanation as to why. Often times, the answer they will find is discrimination.

Dealing with Internet addiction under the ADA

Last week, I asked whether the ADA affored protection to Internet addicts. I concluded that the ADA would not protect an employee who spends all hours of the workday surfing the Web for non-work reasons:

Rest assured, though, that even if the DSM recognizes Internet or email addiction as a bona fide mental disorder, employers should still be able reasonably to regulate use at work without running afoul of the ADA. Just as the ADA does not entitle an employee who claims sex addiction to sexually harass co-workers, the ADA is almost certainly not going to permit an Internet addict not to perform his or her job.

Donna Seale at Human Rights in the Workplace, a blog on Canadian employment law issues, suggests that under Canadian discrimination laws, the result might be different:

While I agree with the premise that employers have a legitimate interest in ensuring employees remain productive and do not misuse company technology, the pendulum in Canada in relation to the accommodation of disability in the workplace has clearly swung in the direction of employees. As a result, I'm not so certain that Canadian employers who attempt to take a strictly black and white approach to the enforcement of technology use policies (for example) won't come into conflict with human rights legislation.

I agree that issues in employment relations are never black and white. Even something such as an "Internet addiction" falls into some shade of gray. I just think this issue leans much closer to either pole than the middle. If an employee is not doing his or her job, and is caught surfing the Net all hours of the day, the employer should have right to terminate that employee, whether for lack of productivity, theft, or violation of a technology use policy.

If the employee says in response to the termination, "But I am addicted to the Net," the employer has a choice. It can (1) carry through with its decision, (2) reconsider its decision and try to make a reasonable accommodation for the employee, or (3) hold the employee's job while the employee seeks help. The magnanimous employer may choose #2 or #3, but I don't think the ADA requires it.

The situation may be different if the employee requests an accommodation for the addiction before the termination decision, but in that case the employee still has to be able to perform the essential functions of the job with that accommodation. If the employee's job requires Internet and email access, it's hard to imagine an accommodation that would enable to employee to work.