Ohio Healthy Families Act up for legislative consideration

As I reported in October, the Ohio legislature will this term consider the Ohio Healthy Families Act. The Act, if passed, will guarantee 7 sick days for all full time Ohio employees who work for companies with 25 or more employees, and a prorated number of days for part time employees. As today's Cleveland Plain Dealer reports, "If the Republican-led House and Senate fail to act within 120 days, the union-led coalition behind the Healthy Families Act will have the right to take the issue to the November ballot." That threat may spur the Republicans to pass the legislation, as having an issue such as this on the ballot in November will certainly draw more Democrats to the polls to vote for it, just as the Minimum Wage amendment did in 2006. This issue bears watching, and I will continue to post updates as this bill weaves it way through the legislature.

Federal court upholds punitive verdict with no compensatory damages

It has long been the law in Ohio that a jury cannot award punitive damages without also making a corresponding award of actual, compensatory damages. Further, since the United States Supreme Court decided State Farm Mut. Automobile Ins. Co. v. Campbell several years ago, it has also been the law that for a punitive verdict to satisfy due process, there cannot be an excessive disparity between the actual harm suffered by the plaintiff and the punitive damages award. The Supreme Court, albeit in dicta, suggested that "few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process."

A case earlier this week out of the 5th Federal Circuit, however, casts serious doubt on both of these long-held principles. In Abner v. The Kansas City So. RR, a racial harassment case, the court of appeals upheld a $125,000 punitive damage jury verdict with a mere grant of $1 in nominal damages by the court. Abner involved allegations of racial graffiti, a noose hanging outside a door, racially derogatory comments, and a company that failed to correct this improper behavior.

In reaching its conclusion, the court relied heavily on the statutory damage caps put in place by the Civil Rights Act of 1991. The court found that under the plain language of Title VII and Section 1981, an award of punitive damages need not be accompanied by any compensatory damages. The statutory damages cap takes care of any potential runaway jury verdicts. Also because of the statutory cap, the court was unconcerned with the 125,000-1 ratio between the punitive and nominal damages. If the plaintiff was not harmed by the alleged harassing conduct, how could he have been sufficiently subjectively offended by the conduct to sustain the harassment claim in the first place? The gap in common sense in allowing this punitive verdict to stand for an uninjured plaintiff is astounding. Civil lawsuits are supposed to compensate for harm suffered, not to punish for the sake of punishment. If there is no harm to remedy, then the law has no role in doling out punishment.

Let me also point out that the conduct that led to a $125,000 verdict in Abner is eerily similar to the same conduct over which the EEOC settled with Lockheed Martin for $2.5 million earlier this week. I can't wait until the next time I'm asked to evaluate a racial harassment case and have to provide a range of $125,000 and $2.5 million as the potential exposure. Does this disparity make any sense at all?

Hat tip to John Phillips at The Word on Employment Law and Ross Runkel's Employment Law Blog.

6th Circuit limits scope of "regarded as" disability claims

The Americans with Disabilities Act not only protects employees who have actual disabilities, but also those who have a record of a disability and those who an employer regards as disabled. Gruener v. The Ohio Casualty Ins. Co., decided yesterday by a unanimous panel of the 6th Circuit, defines the scope of regarded-as-disabled claims.

Sharyn Gruener, an IT technician for Ohio Casualty, suffered from a long history of degenerative joint disease in her knee, which ultimately resulted in a double knee replacement. After the surgery, she returned to work with restrictions on her ability to squat, crawl, kneel, lift more than 20 pounds, or carry more than 10 pounds. When her supervisor learned that had been asking her co-workers to help her perform certain tasks she could not do, such as plugging in computers and lifting heavy monitors, the company terminated her, concluding that she could not perform the essential functions of her position without asking co-workers to live, move, or plug-in computer equipment for her.

Following her termination. Gruener sued Ohio Casualty under two different theories of disability discrimination -- actual disability and regarded-as-disabled disability. The jury found against her on the former, and the trial court refused to instruct the jury on the latter.

The appellate court found that that the trial court did not err in refusing to give a jury instruction on the regarded-as-disabled theory. The ADA's regarded-as-disabled provision protects employees who are perfectly able to perform a job, but are rejected or terminated because of "myths, fears, and stereotypes" that go along with disabilities. The theory requires that the employer "entertain misconceptions about the employee," either by mistakenly believing that the employee has a physical impairment that substantially limits one or more major life activities, or mistakenly believing that an actual non-limiting impairment substantially limits one or more major life activities.

In this case, there was no dispute that Gruener could not perform the essential functions her job without the help of co-workers. Moreover, the only understanding Ohio Casualty has about her impairments, their limits, and her ability to perform her job came directly from her own doctor's valid, permanent work restrictions. Following the specific recommendations of a treating physician does not wrongfully view an employee through a stereotype of disability.

While this case does not set earth shattering precedent in regarded-as-disabled cases, it does provide some added comfort for employers who rely upon an employee's treating doctor's work restrictions in making personnel decisions. It also further illustrates an issue that I wrote about earlier this week - discrimination cases are largely about harbored stereotypes and the impact they have on one's perception of another to perform a job.

What else I'm reading this week #12

Last week I reported on Arbino v. Johnson & Johnson, in which the Ohio Supreme Court upheld the constitutionality of Ohio's tort reform legislation. Teri Rasmussen at the Ohio Practical Business Law Counsel provides a detailed examination of the opinion. She also questions my supposition that tort reform does not apply to discrimination claims. So that my conclusion is clear, in light of the Ohio Supreme Court's recent narrowing of the public policy tort, discrimination claims under Ohio law are now almost certainly purely statutory. Because they present statutory claims, any caps on damages for those claims would have to come from an amendment to the statute. There are a host of non-statutory employment tort claims (defamation, intentional infliction of emotional distress, tortious interference, to name a few) that are impacted by the tort reform caps on damages.

On to other matters.

Kris Dunn, The HR Capitalist, always an excellent resource, writes about the NLRB's Register-Guard decision, and concludes that it stinks to have to say no to girl scout cookies to keep unions out of your workplace.

If a union does come knocking, Guerilla HR gives some helpful advice on what to do and what not to do in response. Most importantly, do not threaten or intimidate employees about their union support.

John Phillips' Word on Employment Law discusses employee privacy rights (or lack thereof) in off-work, personal Internet activity. For my thoughts on this issue, see Can employers base employment decisions on employees' personal Internet activities? As a bonus, John gives us a very thorough crib sheet covering the Presidential candidates' positions on various labor and employment issues.

Finally, Michael Moore at the Pennsylvania Employment Law Blog draws some good lessons from yesterday's reported $2.5 million settlement by the EEOC on behalf of one employee for a racial harassment claim. According to the EEOC's press release, the now wealthy employee was the target of repeated verbal abuse by coworkers and a supervisor, including calling him the "N-word" and saying "we should do to blacks what Hitler did to the Jews." For the company's part, it failed to discipline the harassers and instead allowed the discrimination to continue unabated even though it was aware of the unlawful conduct. I'm as against this type of conduct as anybody, but $2.5 million? Seems awfully excessive for someone who was subjected to words, no matter how offensive they might be.

"Maternal Profiling" listed as buzzword of 2007

With the calender barely having turned to 2008, I'm still catching up reviewing year end lists for 2007. One list, the New York Time's Buzzwords of 2007, should be of particular interest to employment lawyers, employers, and HR personnel. It lists "maternal profiling" as one of the phrases that took its place in the national conversation for 2007. Maternal profiling is defined as:

Employment discrimination against a woman who has, or will have, children. The term has been popularized by members of MomsRising, an advocacy group promoting the rights of mothers in the workplace.

A trip over to MomsRising.org reveals some frightening statistics about the workplace impact of maternal profiling. It cites one study which found that mothers are 79% less likely to be hired than non-mothers with equal resumes and job experiences. It cites another study that women without children make 90% as compared to a comparable man, as compared to 73% for women with children and 60% for single moms. It cites one final study that mothers were offered $11,000 less in starting pay than non-mothers with the same resumes and job experience, while fathers were offered $6,000 more.

I've spent a lot of time this year writing about family responsibility discrimination in light of the EEOC's recent enforcement guidance on the subject, and the $2.1 million verdict against Kohl's Department Stores for repeatedly passing over a qualified mom for promotion. Maternal profiling may have been one of the buzzwords of 2007, but it certainly appears that family responsibility discrimination is going to be a key employment issue in 2008 and beyond. Depending on how the political winds blow after the November elections, FMLA expansion, paid sick and parental leave, and incentives for family-friendly work programs will all be in play in 2009.

I am not suggesting that everyone rewrite their leave policies, but those who can afford to be family-friendly will have an advantage in recruiting and retention of employees for whom it is an important benefit (i.e., most people between the ages of 25 and 50). At a minimum you should be building the concept of maternal profiling into your harassment and EEO/diversity training. Discrimination in largely subconscious, and education is the first step towards prevention.

Hat tip to Carrie Kurzon at the New York Employment Lawyer Blog.

An argument for broader protection of confidential and proprietary information

Nelson Jewellery Arts Co. v. Fein Design Co., out of the 9th District Court of Appeals, involves two companies fighting over what we can only assume is a key employee. As is often the case in such disputes, the old employer claimed that the employee took with him to the new employer certain confidential and proprietary information, such as pricing and customer information. The appellate court, however, rejected the claim because the information did not meet the statutory definition of a "trade secret." It was readily ascertainable by other means such as telephone books and trade publications, and the company did not take reasonable measures to maintain the secrecy of its alleged confidential information. Therefore, the claim was dismissed. In so ruling, the court rejected any common law protection over the information, and limited the law's reach to that narrow category of corporation information that meets the specific statutory definition of a "trade secret" pursuant to O.R.C. 1333.61(D):

(D) "Trade secret" means information, including the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, pattern, compilation, program, device, method, technique, or improvement, or any business information or plans, financial information, or listing of names, addresses, or telephone numbers, that satisfies both of the following:

(1) It derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.

(2) It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

This case raises the question of what corporate information should the law protect. Is is just information that meets the statutory definition of a trade secret, or is some broader category of information worthy of legal protection? It seems that companies should be able to stop employees from walking out the door with corporate information whether or not such information qualifies as a trade secret. After all, that which a company creates is its property, and it should be able to prevent its disclosure to or use by a competitor. Limiting such protection merely to "trade secrets" is overly restrictive, and ignores the property interest that businesses have in their documents, data, and other information.

How do we help put ourselves in the best position to protect stuff that may not meet the high threshold of a trade secret? Let me make a few suggestions:

1. Put provisions in employee handbooks that define the scope of the company's property - not just as trade secrets, but as all confidential and proprietary information, and everything that is created by or for the company.
2. Separate and apart from the employee handbook, have all employees who will come in contact with any information you might want to protect sign an agreement that defines what belongs to who, and specifically sets forth the company's right to the information at the end of employment.
3. When an employee leaves, have that employee sign a receipt that all company property and information has been returned, and that the employee is not taking anything with him or her. Where the separation is not voluntary, it may not always be easy to have the employee sign something on his or her way out the door. In that case, you can still protect yourself by sending the employee a certified letter reminding him or her of the corporate policy and their agreement to it.
4. If you think the ex-employee is not being forthcoming with you, correspond with the new employer, placing it on notice that you will hold it responsible for any of your information that is in its possession.
5. When all else fails, litigate. Bear in mind, however, that adherence to steps 1 - 4 will put you in a much better light should you have to litigate to seek protection over your information, whether or not it qualifies as a trade secret.

9th Circuit creates new affirmative defense under the ADA

Earlier this month I reported on the EEOC's Fact Sheet on Employment Tests and Selection Procedures. United Parcel Service provides an example of one such screening criteria, and gives some hope to employers who use medical or other criteria to screen out certain disabled employees.

UPS imposes a Department of Transportation hearing standard on all package-car drivers, even though the standard only applies to those who drive vehicles over 10,000 pounds. UPS disqualifies from employment any employee or applicant who cannot meet that standard, whether or not the vehicle that individual will operate is over or under the 10,000 pound threshold. Last week, the 9th Circuit, in Bates v. United Parcel Service, reversed a lower court, which had held that application of the standard to those who do not drive covered vehicles violated the ADA.

Section 12113(a) of the ADA makes it a defense to a disability discrimination claim "that an alleged application of qualification standards, tests, or selection criteria that screen out or tend to screen out or otherwise deny a job or benefit to an individual with a disability has been shown to be job-related and consistent with business necessity, and such performance cannot be accomplished by reasonable accommodation." This defense breaks down into three elements: 1) job-relatedness; 2) consistent with business necessity; and 3) that job performance cannot be accomplished by reasonable accommodation.

As evidence of the lawfulness of its hearing qualification standard, UPS offered up the DOT standard to show that a certain level of hearing is necessary to safely drive even non-DOT-regulated vehicles. The 9th Circuit found the 10,000 pound threshold irrelevant to whether UPS could lawfully rely on the DOT safety standard as a qualification standard for all driver positions:

To be sure, DOT's regulation does not apply to the category of vehicles at issue in this case. However, that circumstance does not mean that the standard has no relevance to the employer's safety argument. UPS is entitled to use as some evidence of its business necessity defense the fact that it relied on a government safety standard, even where the standard is not applicable to the category of conduct at issue.... Thus, while certainly not dispositive of UPS's showing of job-relatedness, business necessity or the reasonableness of potential accommodations, UPS's reliance on the government safety standard with respect to other vehicles in its fleet should be entitled to some consideration as a safety benchmark.

Thus, employers are entitled to rely on objective safety criteria (such as governmental regulations) as a qualification for a position, even if the at-issue regulations are not mandated for the specific position. Such reliance, however, is not dispositive as to the lawfulness of the qualification. Instead, one must examine the congruence between the safety standard and the position to which it is being applied. In other words, is there a bona fide, demonstrable correlation between the standard and performance of the essential functions of the position?

While this decision does not bind companies in Ohio, it should give employers everywhere some solace that objective screening criteria will not necessarily be found to be discriminatory, even if they effectively screen out from consideration for a position all disabled applicants and employees. It also lets employers know that they can employ reasonable selection criteria and safety standards without fear of necessarily being second-guessed by a court.