Should companies move their employment work to small and mid-sized law firms?

Last week, the Legal Intelligencer, as posted on Law.com, reported on the filing of a legal malpractice lawsuit by a nonprofit agency, the The Bair Foundation, against one of the world's largest law firms, Reed Smith. Now, you may ask yourself, why would the Ohio Employer's Law Blog care about a legal malpractice lawsuit filed in suburban Pittsburgh. The answer comes in two parts: 1) the underlying case was a religious discrimination case that was tried in federal court in Cleveland and resulted a nearly $200,000 jury verdict, and 2) the Bair foundation was charged $960,409 to defend the garden-variety discrimination case. According to the Law.com article:

The foundation said in the complaint that it was originally told the case would cost them $50,000. That was then upped to $112,000 during the case....

"In implementing its ambitious strategy of capturing global clients, which Reed Smith boasts results in 'a constant increase in revenue per partner,' it has acknowledged that comparatively small regional or local law firms can or perhaps should service smaller clients," the complaint stated. "This is so because such firms typically charge much lower fees than 'white shoe' international law firms like Reed Smith and are therefore more affordable to these smaller clients. However, Reed Smith has inexplicably continued to represent certain much smaller clients which lack substantial financial resources, such as Bair, a not-for-profit charitable foundation."

The foundation's [current] attorney, Bruce C. Fox of Obermayer Rebmann Maxwell & Hippel in Pittsburgh, said no explanation was ever given as to why the fees increased to nearly $1 million. He said his client was "badly taken advantage of."

Fox said he doesn't think large, international firms should represent clients like the Bair Foundation because of global law firms' economic models.

The lawsuit alleges inappropriate billing practices, including over-staffing the case, failing to adequately describe billing entries by subject matter or activity, and raising billing rates without notice.

The Bair Foundation's predicament illustrates two key trends to watch in the legal profession for 2008, as discussed in Robert Denney Associates' 19^th Annual Report on What’s Hot and What's Not in the Legal Profession (hat tip to Tom Kane at The Legal Marketing Blog): Labor and Employment continues to be a hot practice area, and mid-size firms are thriving by "attracting clients faced with the high rates – and often poor service – of the large firms." KJK has 31 lawyers, so I have a stake in this discussion. That stake, however, does not change the fact that the small and mid-size firms have as much to offer, if not more, than the large institutional firms. It's not just a question of hourly rates, but also more economical staffing, increased efficiency, and better client communication, all with the same or better quality of legal work. My hope is that these issues cause companies of all sizes to consider small and mid-sized law firms the next time they are sued in an employment case.

Supreme Court grants cert petition in Huber v. Wal-Mart Stores

Huber v. Wal-Mart Stores poses the following question: if an employer has an established policy to fill vacant job positions with the most qualified applicant, is that employer nevertheless required to reassign a qualified disabled employee to a vacant position even if that disabled employee is not the most qualified person for the job. The Supreme Court has agreed to review the decision of the 8th Circuit, which answered that question in the negative.

Pam Huber worked for Wal-Mart as a dry grocery order filler, earning $13 per hour. A permanent injury to her arm and hand left her unable to perform the essential functions of her job. As a reasonable accommodation for her disability, Huber asked that Wal-Mart reassign her to a vacant and equivalent position. Instead of agreeing to reassignment as the reasonable accomodation, Wal-Mart told Huber that she could apply and compete for the position. Huber ended up not being the most qualified applicant. Wal-Mart hired someone else for the job, and placed Huber in a janitorial position that paid her less than half of what she made before her injury.

Huber filed suit under the ADA, claiming that she should have been reassigned to the open position as a reasonable accommodation. Wal-Mart defended on the ground that it had a legitimate non-discriminatory policy of hiring the most qualified applicant for all job vacancies and was not required to violate that policy to accommodate Huber's disability. In a very rare instance, the trial court granted summary judgment in Huber's favor, which the 8th Circuit reversed.

The 8th Circuit's analysis starts with the general principle that reassignment to a vacant position generally qualifies as a reasonable accommodation under the ADA. According to the 8th Circuit, however, the ADA is not a mandatory preference act, and it should not violate the ADA for an employer to make a legitimate non-discriminatory decision to hire the most qualified candidate, even if it results in a disadvantage to a disabled employee. Also, the ADA does not entitle a disabled employee to his or her preferred accommodation, only a reasonable accommodation. Thus, the 8th Circuit concluded: "The ADA does not require Wal-Mart to turn away a superior applicant for the router position in order to give the position to Huber. To conclude otherwise is affirmative action with a vengeance. That is giving a job to someone solely on the basis of his status a member of a protected class." (internal quotations omitted).

It is unclear in the 6th Circuit how this case would have come out, and there are courts (such as the 10th Circuit) that differ and hold that the ADA requires employers to automatically award an open position to a qualified disabled employee if even better qualified applicant are available and despite an employer's policy to hire the best person for the job.

A ruling for the employee in this case would undermine one of the most important commandments of employment law - Thou shalt hire the most qualified person for all open positions. When you don't hire the best person, it could lead a court to second-guess your judgment and question why a member of a protected class was overlooked in favor of the second/third/fourth/whatever best person. Which illustrates another important principle of employment law - when you're explaining, you're losing.

Has the time come for a workplace porn audit?

Last week I wrote about the importance of monitoring workplace technology in the context of a Second Circuit case, which held that the mere presence of pornography in the workplace can be enough to create an objectively hostile work environment (Computer awareness should be important part of harassment policies and training). This lesson hits a little closer to home today, as the Cuyahoga County Court of Appeals has reversed a trial court's grant of summary judgment in a sexual harassment case. In Johnson v. Olmsted Township, the plaintiff, a female police department employee, claimed that a male co-worker had once shown her a pornographic magazine and had once comments about her putting her legs behind her head. Based on those two isolated incidents, the appellate court found that a jury question existed on the severity or pervasiveness of the alleged conduct:

A single act of sexual harassment may be sufficient to create a hostile work environment if it is such a nature and occurs in such circumstances that it may reasonably be said to characterize the atmosphere in which a plaintiff must work. David subjected Johnson to the pornographic magazine in the company of other male officers. The episode a few months later where Davis commented on his perception of Johnson's agility was also made in the presence of male coworkers. The presence of male coworkers makes Davis' act humiliating, which can be considered severe.

If an appellate court is going find two isolated incidents sufficient to hold a jury trial in a harassment claim, perhaps companies have to rethink internal initiatives to head off lawsuits involving porn in the workplace. The headline may be tongue-in-cheek, but the message is real - courts will be more prone to give employers a pass in cases where they acted proactively in trying to rid the workplace of porn than where they stuck their heads in the sand and failed to sanitize the environment.

What else I'm reading this week #8

The Evil HR Lady has had a busy week:

Internal Policy, on whether a company has an obligation to rehire a former employee.

Dress Codes, giving some advice on workplace dress codes and how to address violations.

Pregnancy, also from the Evil HR Lady, on when is the best time for a pregnant employee to disclose the fact of her pregnancy.

While we're on the topic of pregnancy/leaves of absence, take a look atTaking Time Off From Work Without Fearing a Pink Slip, from the Wall Street Journal's CareerJournal.com, on the general legal issues surrounding medical leaves.

New report claims workplace bills would kill jobs, from WorkplaceHorizons.com, on a report by Congressional Republicans detailing how the recent rash of Democratic employment legislation will end up costing people jobs.

Inclement Weather Policies: Don't Get Lost in the Storm, from the Pennsylvania Employment Law Blog, discussing inclement weather policies.

Age Discrimination Releases and Remedies from Suits in the Workplace, reporting on two recent federal court decision dealing with the enforceability of age discrimination releases under the Older Workers Benefit Protection Act.

Finally, How to Get Recruiters To Sign a Contract NOT To Poach Your Employees, from The HR Capitalist, on the wisdom of no-poaching agreements.

Don Imus case illustrates the difficulty of dealing with language in the workplace

There's been a lot of ink spilled this week in both the print media and the blogosphere about the return of Don Imus to the airwaves. (See Who’s the language police for Don Imus? and Imus Is Back, Chastened but Still Proudly Obnoxious). Recall that CBS Radio and MSNBC fired Imus in April after a firestorm erupted from his calling Rutgers women's basketball players "nappy-headed hos." In a post on The Word on Employment Law, John Phillips suggests most HR professionals and employment lawyers would agree with Imus's termination, and that often such comments by senior management and executives are overlooked because "money talks." That argument ignores CBS's hypocrisy in firing Imus over the type of statement that made him such a valuable commodity in the first place. Imus's popularity, and his ability to make millions of dollars for his employers, stems from his controversial nature and his propensity to make comments such as "nappy-headed hos." In fact, he has said much worse over the years, and, once he feels safe in his new job, will probably do so again. That is why he has a job in the first place.

It's difficult to draw any generalized employment law lessons from the Don Imus case because his case is so unique, just as it is difficult to draw any lessons on collective bargaining from the Writers Guild strike. Suffice it to say that language in contextual - it always has been and it always will be. In most contexts and most workplaces, "nappy-headed hos" should not be tolerated, and should result in an investigation, appropriate discipline, and some diversity and sensitivity training. These obligations exist whether an employee complains or not, as supervisors and managers have an affirmative duty to stamp out offensive conduct and the use of offensive language when they come across it or learn of it. The best lesson to draw is simply that companies act at their own peril by condoning or ignoring the use of offensive language in the workplace.

Binghamton University considers adding a law school

You may wonder why a lawyer in Cleveland, Ohio, would care if Binghamton University (nee, the State University of New York at Binghamton) is thinking about opening a law school. I happened to have spent my formative years studying (and other things) in the gray, snowy hills of the Southern Tier. Comments to this news on the Wall Street Journal's Law Blog are not very positive, and repeatedly question whether there is a need for another law school. Let me suggest that BU has an opportunity to think outside the box and try something different with legal education in this country. Whether it's less of a focus on the Socratic method and more on practical lawyering skills, problem solving, and case studies, integrating actual legal practice into the required curriculum through a clinical and internship program integrated with the community, or something else entirely, Binghamton can set itself apart by starting from scratch with a new kind of legal education that gives students an alternative. I'm proud to be a Binghamton alum, and I am proud that it is thinking about branching out into my chosen profession. I hope it continues to make me proud by creating a first rate legal institution. Qualifying for March Madness this year would be nice too.

EEOC issues guidance on testing and selection procedures

The EEOC yesterday published a fact sheet offering some guidance for employers on the use of employment tests and selection procedures, and how they are treated under the anti-discrimination laws. Some examples of such tests and selection procedures are cognitive tests, physical ability tests, sample job tasks, personality tests, medical exams, psychological tests, English proficiency tests, credit checks, and criminal background checks. The latter two are also covered by the Fair Credit Reporting Act, which requires specific written consent by the employee, along with other specific notice and disclosure requirements (check with your counsel). The EEOC recommends that Title VII, the ADA, and the ADEA be taken into consideration in the application of any of these tests or selection procedures. For example (and not to state the obvious), do not give whites one test and blacks another, or give an agility test only to employees over the age of 40 (I'm not making this up).

The area where the discrimination laws are usually implicated is when a neutrally applied test disparately impacts one group over another. For example, does a physical exam that is given to all job applicants disproportionately screen out female applicants? If it does, is it otherwise job-related and supported by business necessity? Typically, if a neutrally given test evaluates one's skills as a related to the particular job in question it will usually past muster.

The ADA has specific statutory provisions and regulations that apply to medical inquiries and testing:

• When hiring, an employer may not ask any questions about disabilities or require medical exams until after it makes a conditional job offer to the applicant.
• After making a job offer, but before the individual starts working, an employer may ask disability-related questions and require medical exams as long as it does so for all individuals entering the same job category.
• With respect to current employees, an employer may ask questions about disabilities or require medical exams only if doing so is job-related and consistent with business necessity. Examples of permissible inquiries of testing of current employees would be if the employer has a reasonable, objective belief that an employee cannot perform the job's essential functions or will pose a direct threat because of a medical condition, or if an employee requests a reasonable accommodation.
• Reasonable accommodations must be made in any employment testing or screening to enable a qualified individual with a disability to take the test, unless such accommodation poses an undue hardship.
• All employee medical information must be kept confidential, maintained securely and separately from personnel files, and only disclosed to supervisory personnel on a need to know basis.

The EEOC also gives some employer best practices for testing and selection. Many of these are common sense, but for the sake of completeness, I am going to list them all anyway:

• Employers should administer tests and other selection procedures without regard to race, color, national origin, sex, religion, age (40 or older), or disability.
• Employers should ensure that employment tests and other selection procedures are properly validated for the positions and purposes for which they are used. The test or selection procedure must be job-related and its results appropriate for the employer's purpose. While a test vendor's documentation supporting the validity of a test may be helpful, the employer is still responsible for ensuring that its tests are valid under the EEOC's Uniform Guidelines on Employee Selection Procedures.
• If a selection procedure screens out a protected group, the employer should determine whether there is an equally effective alternative selection procedure that has less adverse impact and, if so, adopt the alternative procedure. For example, if the selection procedure is a test, the employer should determine whether another test would predict job performance but not disproportionately exclude the protected group.
• To ensure that a test or selection procedure remains predictive of success in a job, employers should keep abreast of changes in job requirements and should update the test specifications or selection procedures accordingly.
• Employers should ensure that tests and selection procedures are not adopted casually by managers who know little about these processes. A test or selection procedure can be an effective management tool, but no test or selection procedure should be implemented without an understanding of its effectiveness and limitations for the organization, its appropriateness for a specific job, and whether it can be appropriately administered and scored.

For more information, the EEOC's Fact Sheet on Employment Tests and Selection Procedures is available here.