My New Year's resolutions for everyone

While it may be trite, the approach of a new year causes us to reflect on the past year and make some resolutions on how to better ourselves for the coming year. While we generally think of these resolutions in personal terms, it makes sense also to think of them from an organizational viewpoint. With that in mind, let me suggest some resolutions for your employment practices to make 2008 a better, more compliant year than 2007:

1. Review your employee handbooks and other personnel policies.
2. If it's been longer than 2 years since you did company-wide harassment training, schedule it for 2008.
3. Make sure you are using the new I-9 form for all new hires.
4. Audit your wage and hour practices.
5. Make a concerted effort to document all discipline and performance problems.
6. Do not make promises to your employees that you cannot keep.
7. Make hiring and firing decisions based on performance.
8. Be more understanding of your employees' family responsibilities outside of the office.
9. Employ the golden rule - treat your employees as you would want to be treated.
10. Above all else, try to have some fun at work.

My hope for everyone (except me) is that 2008 brings no lawsuits, no EEO charges, no sexual harassment complaints, no wage and hour audits, and no disgruntled employees. Be happy and be safe, and I'll see everyone in 2008.

President Bush expected to veto FMLA expansion

In what can only be described as a surprising turn of events, and in a lesson that would make any grade school civics teacher proud, President Bush is expected to use a pocket veto to kill the National Defense Authorization Act for Fiscal Year 2008. That bill includes an expansion of FMLA leave rights for the families of wounded service members. A couple of weeks ago, I reported that the President would be hard pressed to veto a bill that authorized $696 billion in military programs. Now, as the New York Times is reporting, the White House has stated that the President will veto the bill. At issue is one specific section over which the Iraqi government is concerned that Iraqi assets in American banks could be vulnerable to claims from victims of Saddam Hussein.

Given the overwhelming majority this bill passed both the House and Senate, one could assume that these issues will be resolved after Congress resumes in the new year. I'm done making predictions about this legislation, however, after my last prediction turned out to be wrong. All I can is to watch this space for further updates about this potential expansion of FMLA rights.

Hat tip to the Connecticut Employment Law Blog.

What else I'm reading this week #11

Given the mid-week holiday, it's still been pretty active in the blogosphere. As always, please take the time to click through these links and support my fellow employment law and HR bloggers.

John Phillips' The Word on Employment Law reports on a story that's had a lot of traction this week, Wikipedia's failure to discover the criminal history of its former COO, and draws some important lessons on the importance of conducting background checks for critical positions.

HR World blogs on how to handle bullying bosses. You can also read my thoughts on this issue here: Sticks and stones may break my bones...

The Manpower Employment Blawg draws some important lessons on FMLA leaves of absence from a case which held that formal notice is not necessary for an employee to be entitled to FMLA leave.

Finally, Texas' HR Lawyer's Blog discusses some employment law pitfalls that await those who carelessly e-mail.

Ohio Supreme Court upholds constitutionality of tort reform legislation

Arbino v. Johnson & Johnson, decided today by the Ohio Supreme Court, upheld the constitutionality of legislation that caps the amount of non-economic and punitive damages available in Ohio tort actions. The at-issue legislation applies to all "tort" claims except medical, dental, optometric, and chiropractic claims, and civil actions for damages for a breach of contract or another agreement. There is no exception for employment-related claims, such as intentional infliction of emotional distress, defamation, or wrongful discharge public policy claims.

The tort reform statute caps non-economic damages at the greater of $250,000, or 3 times the economic loss, to a maximum of $350,000 for each plaintiff or $500,000 for each occurrence that is the basis for the claim. There is no statutory cap for economic losses. Punitive damages are capped at 2 times the total amount of compensatory damages. However, for small employers (5o0 or less employees for manufacturing companies, and 100 or less employees for all others) and individuals, punitive damages are capped at the lesser of 2 times the total compensatory damages, or 10% of the small employer's or individual's net worth measured at the time the tort was committed, up to a maximum of $350,000.

No court has yet to rule whether this tort reform legislation specifically applies to statutory employment discrimination claims. While there is a clear distinction between common law tort claim, and statutory claims, one could certainly argue that discrimination claims, which are claims for harm to the person, are tort claims covered by the statute. Most likely, however, these claims are not covered by this tort reform because of their statutory nature. Regardless, this case marks another milestone in what has become a very business-friendly Supreme Court.

EEOC allows employers to reduce retiree health benefits at age 65

Pursuant to a new Rule published yesterday by the EEOC, employers can take Medicare into account when structuring retiree health benefit packages without violating the age discrimination laws. The rule clarifies the long standing practice of most companies that provide retiree health benefits, by which they reduce their health insurance expenses for retired workers once they turn 65 and qualify for Medicare. In other words, employers can lawfully spend more on retirees under the age of 65 years than those over 65 without running afoul of age discrimination laws. Practically, though, retirees in both age groups will most likely receive essentially the same benefits, just at a lower costs to employers.

A copy of the EEOC's new Rule on Retiree Health Benefits is available here, along with a Q&A explaining the Rule here.

7th Circuit holds that hostile environment is not defined by statutory limitations period

The facts of Bright v. Hill's Pet Nutrition explain that Elizabeth Bright was subject to pervasive harassment because of her sex during the her employment for the pet food company:

Elizabeth Bright was hired at the Richmond plant during February 2000, ... and quit in November 2002.... Bright was assigned to a Processing Team, where she worked for about 10 months before being transferred to a Stretchwrap Team. Between October 2001 and November 2002, ... and Bright [was] assigned to a Stretchwrap Team. Bright filed her charge of discrimination early in 2003 and filed suit later that year.

Bright presented evidence that the men routinely vexed the women in an effort to make them quit. The tactics included unwelcome sexual overtures and sex-related chatter, streams of misogynistic invective, refusal to train (team leaders tried to get women to view pornographic images on the men's computers, and, when women declined, the men would declare that they had no time for training), assigning women to the dirtiest jobs (which team leaders called "women’s work"), and threats of violence, some of which were fulfilled (for example, Bright's dog was shot, supposedly as a warning to her). According to one of Bright's witnesses, on being told that men referred to female workers as "whores," "c**ts," and "bitches," Vanderpool replied: "a hostile work environment is a productive work environment." ...

Hill's Pet Nutrition contended that none of this testimony should be believed. It did, however, concede having, a problem with pornography in the workplace, and it suspended 11 men for two weeks in March 2002 in response to their accumulation and viewing of inappropriate materials on the firm's computers. The employer maintains that this step solved the only problem that women had encountered at work.

The trial judge instructed the jury that it could not consider anything that happened to Bright before March 29, 2002, 300 days before she filed her EEOC charge, and could not consider any of the incidents related to the pornographic images. With that instruction, the jury returned a verdict against Bright.

According to the 7th Circuit, the trial court's instruction to the jury about which evidence it could not consider was in error. The evidence that predated the statutory filing period was relevant to the totality of the hostile environment in which Bright worked:

[A] hostile working environment must be treated as one unlawful practice even if the employee moves from one team to another.... [A] hostile environment in a single posting is one practice. Bright was part of a Stretchwrap Team for 22 months, from the beginning of 2001 until she quit in November 2002, but the judge allowed the jury to consider only the events of the final eight months, from April through November.... [T]he judge should have allowed the jury to consider the working conditions that Bright encountered for her entire employment at the Richmond plant.... [I]t is inappropriate to draw lines by time.

Moreover, to the extent that the employer remedied some or all of the harassment, the proper evidentiary ruling would not be to exclude the pre-remedy harassment, but instead to permit the jury to consider such evidence as part of parcel of its decision as to the employer's liability (i.e., was the employer negligent in responding to complaints of harassment or remedying the harassment):

When an employer takes steps such as the suspensions and purge of objectionable material from the computers' hard drives, these acts matter not to the duration of the unlawful practice or the evidence a plaintiff may offer, but to the question whether the employer is responsible. "[A]n employer can be liable ... where its own negligence is a cause of the harassment. An employer is negligent with respect to sexual harassment if it knew or should have known about the conduct and failed to stop it. Negligence sets a minimum standard for employer liability under Title VII".

Hill's Pet Nutrition may be able to show that its handling of the sexual images solved part of the problem and prevents attribution. Similarly it may be able to show that it neither knew nor should have known about some of the events that Bright encountered. If an employee unreasonably fails to take advantage of preventive or corrective opportunities, and the employer consequently does not know about the problem, then it cannot be held liable. The fact that an employer has raised these contentions, however, does not curtail the scope of the employee's proofs.... Unless the evidence is so lopsided that the employer is entitled to judgment as a matter of law, both the plaintiff and the employer must be allowed to present their full evidentiary cases at trial, and the district judge should instruct on all of these issues.

This case illustrates the important role that companies play in remedying and correcting harassment in the workplace, and how those efforts, or lack thereof, come into play in a sexual harassment trial. Employers will not be able to escape or minimize liability simply by relying upon Title VII's 300-day statute of limitations as a point in time by which to compare working conditions, and argue that because conditions were better during the 300 day period as compared to prior, the judge or jury should not consider the totality of the employee's work environment.

Court treats bias against transsexual job applicant as gender discrimination

Since the Supreme Court decided Price Waterhouse v. Hopkins 18 years ago, it has been well established that Title VII's protections against gender discrimination also encompass sexual stereotypes. An employer violates Title VII by punishing employees for failing to conform to sex stereotypes, including stereotypes regarding dress and appearance. For example, it is illegal for an employer to take action against an male employee for having feminine mannerisms, or against a female employee who is too macho or aggressive.

Recently, in Schroer v. Billington (as reported here by CCH), the federal district court for the District of Columbia permitted a male-to-female transsexual job applicant to continue her Title VII sex discrimination case against the Library of Congress. The Library withdrew is job offer for a research position after Schroer disclosed that he was under a doctor's care for gender dysphoria, and that consistent with the treatment, he would present at work as a woman, change his name, and dress in traditionally female clothing. Schroer claimed discrimination based on a failure to comply with the Library's sex stereotypical notions about women's appearance and behavior, and not on her status as a transsexual. Because the claim was grounded on a failure to conform to sexual stereotypes, it fell under Title VII.

In so ruling, the D.C. Court followed the lead of the Sixth Circuit in Smith v. Salem, which, as far as a I know, the only other case to recognize such a cause of action. Smith v. Salem not only protected the transsexual plaintiff because of sexual stereotyping, but also based on a rationale that Title VII's reference to "sex" encompasses biological differences between men and women. The Court in Schroer, though, differentiated between Smith v. Salem's two different legal theories. Based upon the recent legislative wrangling over the Employment Non-Discrimination Act of 2007, it rejected the latter. It relied upon the ENDA's legislative history, which took out protections for gender identity (i.e., transsexual and transgender individuals) (see House approves law to protect gay workers).

The difference is not merely one of semantics. Schroer concerned a motion to dismiss - that is, did the complaint state a legally recognized cause of action? The case will now continue to discovery and a likely Motion for Summary Judgment. The key issue in the case will be whether the Library rescinded the job offer because of her transsexual status, or because of sexual stereotypes. Only the latter will be permitted to go to a jury under Title VII. As the ENDA's Congressional debates illustrate, Title VII does not protect the former, nor will it, at least in the foreseeable future.