Employer electronic monitoring survey illustrates the importance of clearly defined policies

The Electronic Discovery Navigator is reporting that according to the 2007 Electronic Monitoring & Surveillance Survey from American Management Association (AMA) and The ePolicy Institute, more than half of all employers have fired an employee for e-mail or internet abuse. According to the report:

The 28% of employers that have fired an employee for e-mail misuse cited the following reasons:

• Violation of any company policy (64%)
• Inappropriate or offensive language (62%)
• Excessive personal use (26%)
• Breach of confidentiality rules (22%)
• Other (12%)

The 30% of employers that have fired an employee for internet abuse cited the following reasons:

• Viewing, downloading, or uploading inappropriate/offensive content (84%)
• Violation of any company policy (48%)
• Excessive personal use (34%)
• Other (9%)

The stat that really caught my eye is that of the 65% of companies that use software to block connections to websites they deem inappropriate for work, 18% prevent employees from visiting blogs. And, it's not only the reading of blogs that is getting employees in trouble. Both Ernie the Attorney and John Phillips' Word on Employment Law are reporting on a CNN producer fired for having a blog that CNN deemed to be unfriendly towards it. CNN has a policy in its handbook that prohibits employees from writing for any non-CNN outlet without network approval, and terminated the employee for his off-work musings.

Technology in today's workplace comes in too many forms to keep track. It's no longer just enough to have a policy that covers e-mail and internet access. Workplace technology is not going to get any less complicated, and it is important to have policies in place that keep up with the changes. Policies should also cover blackberries and other PDAs, cell phones, and even blogs. Companies have to be careful, however, not to overreach and be too draconian in what they try to accomplish with these policies. If you intend to hold employees accountable for what they do on their private free time (whether it's blogging, smoking, or any other lawful activity), it's best to have those expectations out in the open so that everyone is operating under the same ground rules, and people will have less of a reason to gripe if there is some adverse action taken.

What else I'm reading this week #20

This week starts off with a couple of stories that fall under the related categories of "You can't make this stuff up and "Why I love my job."

• The aptly named Lowering the Bar brings us the tale of an employee who was fired for trying to solicit a hooker on the company's dime and then filing for unemployment.
• From Above the Law, we have a story of a supervisor at a Utah motivational coaching business accused of waterboarding an employee in front of his co-workers as, well, motivation to work harder. The lawsuit also alleges that the managers also allowed the supervisor to draw mustaches on employees' faces, take away their chairs and beat on their desks with a wooden paddle.
• Meanwhile, The Laconic Law Blog and Overlawyered both bring us the story of two young women who claim that Southwest Airlines discriminated against them because they were too beautiful. For the curious, Wizbang has their photo. The following is Southwest Airline's very clever viral response to the claim [Hat tip to KnowHR Blog]:

Dan Schwartz at the Connecticut Employment Law Blog reports on his state's legislature's consideration of Workplace Bullying legislation. More than once, I've argued against this type of legislation - liability for a jerk boss has the real potential to put a stake through the heart of employment at-will. You can read my thoughts on this topic here and here.

Kris Dunn, The HR Capitalist, highlights the evils of "reply all." The comments to Kris' story relate some personal "reply all" horror stories.

George's Employment Blawg gives us a very thoughtful summary of the ERISA landscape post-LeRue.

BLR's HR Daily Advisor gives us 7 stupid things that supervisors say that beg for a lawsuit.

The Evil HR Lady blogs about the importance of computer and Internet use policies at work.

Finally, John Phillips' Word on Employment Law provide a state-by-state survey of which states require employers to provide employees time off to vote. Please note, as we approach March 4, that Ohio requires employers to give employees a "reasonable amount of time off" to vote, and that salaried employees cannot be docked.

High medical costs as direct evidence of disability discrimination

Federal courts of appeals continue to make family responsibility discrimination a hot button issue. Typically, we've seen family responsibility issues arise in the context of childcare. Today, we'll examine a family responsibility case that deals with associational disability discrimination, Dewitt v. Proctor Hospital, which permitted an employee with a terminally ill husband to pursue her ADA claim.

Phillis Dewitt worked at Proctor Hospital as a clinical manager, and by all accounts was a valued employee. Dewitt and her husband, Anthony, were covered under Proctor's medical plan. Proctor was partially self-insured for its medical coverage. It paid the first $250,000 of annual covered medical costs, and anything above that "stop-loss" figure rolled into an insurance policy. Because it was self-insured, Proctor kept quarterly reports of all employees with claims over $25,000.

Throughout Dewitt's tenure at Proctor, her husband suffered from prostate cancer, and the high medical costs that went along with it. In September 2004, Dewitt's supervisor, Mary Jane Davis, confronted her about her husband's medical claims, specifically asking what treatment he was receiving and why his doctor hadn't put him in hospice yet. Davis repeated her inquiry in February 2005. In May 2005, Davis organized a meeting of Proctor's clinical managers and advised them that because of the hospital's financial troubles it required a "creative" effort to cut costs. Three months later, Proctor fired Dewitt and designated her "ineligible to be rehired in the future." Dewitt's husband died a year later.

In her lawsuit, Dewitt claimed "associational discrimination" under the ADA, that Proctor fired her to avoid having to pay for the substantial self-insured medical costs it incurred because of her husband. The 7th Circuit pointed out the associational discrimination plaintiffs fall into 3 categories: expense, disabled by association, and distraction. Dewitt's claim falls into the "expense" category, an employee fired because a family member has a "disability" costly to the company.

The Court found that Dewitt had presented a jury question on her disability claim and reversed the trial court's dismissal of her claim. Specifically, the Court found that she had presented "direct evidence" of discrimination. Proctor fired Dewitt 5 months after Davis' last conversation with her about her husband's medical treatment and costs, and 3 months after Proctor warned employees about "creative" cost-cutting measures. In the Court's words:

[T]he timing of Dewitt’s termination suggests that the financial albatross of Anthony's continued cancer treatment was an important factor in Proctor's decision.... One could reasonably infer that Dewitt was terminated after Proctor conducted its latest periodic analysis of medical claim "outliers" and, this time around, decided that its "wait and see" strategy with the Dewitts was costing the hospital tens of thousands of dollars every year. A reasonable juror could conclude that Proctor, which faced a financial struggle of indeterminate length, was concerned that Anthony—a multi-year cancer veteran—might linger on indefinitely.... Because Dewitt has established that direct evidence of "association discrimination" may have motivated Proctor in its decision to fire her, a jury should be allowed to consider her claim.

This case is an example of an employer who did just about everything wrong. It repeatedly grilled an employee about her husband's medical condition, and then clearly fired her because of the high cost of his medical care. From the employer's point of view, this case would be scary to present to a jury. It's difficult to think of a more sympathetic plaintiff in an employment case, which presents a real big problem for Proctor at trial.

While I don't mean to sound heartless, the concurring opinion makes a good point as to what is and is not "disability" discrimination. The ADA makes discrimination based on "disability" illegal; discrimination based solely on medical costs simply is not illegal. [ERISA discrimination is another issue entirely, which the court did not reach].

An employer's most likely concern about an employee who has a disabled relative, especially a spouse or child, is that the relative's medical expenses may be covered by the employer's employee health plan. There is a positive correlation between being disabled and having abnormally high medical expenses, just as there is a positive correlation between the age of an employee and his salary because most employees receive regular raises as long as they perform satisfactorily. Suppose a company encounters rough waters and decides to retrench by firing its most expensive employees. They are likely to be older on average than the employees who are retained, but as we said many years ago, "nothing in the Age Discrimination in Employment Act forbids an employer to vary employee benefits according to the cost to the employer; and if, because older workers cost more, the result of the employer's economizing efforts is disadvantageous to older workers, that is simply how the cookie crumbles." ...

[A]n employer who discriminates against an employee because of the latter's association with a disabled person is liable even if the motivation is purely monetary. But if the disability plays no role in the employer’s decision—if he would discriminate against any employee whose spouse or dependent ran up a big medical bill—then there is no disability discrimination. It's as if the defendant had simply placed a cap on the medical expenses, for whatever cause incurred, that it would reimburse an employee for. This appears to be such a case. So far as the record reveals, the defendant fired the plaintiff not because her husband was disabled but because his medical expenses—which might not have been any lower had they been due to a condition that did not meet the statutory definition of a disability—were costing the defendant an amount of money that it was unwilling to spend. All the evidence recited in the majority opinion concerns costs ("cutting costs," "high cost of Anthony's medical treatment," "financial albatross," etc.) that a person who had a nondisabling medical condition could equally incur. If cost was indeed, as appears to be the case, the defendant's only motive for the action complained of, the defendant was not guilty of disability discrimination.

I am no way suggesting, from either a legal, HR, or human perspective, that companies should do what Proctor did. However, I do think that Judge Posner's concurrence makes a compelling argument on whether an employment decision based solely on medical costs constitutes "disability" discrimination. Proctor's job at trial is to convince the jury that medical costs were its only reason for the discharge, and that the disability itself played no role, a difficult argument to make and difficult distinction for a jury to draw.

Surpeme Court defers to EEOC on the definition of a "Charge" of age discrimination

The U.S. Supreme Court has issued its second employment decision in as many days, as today it has issued its opinion in Federal Express v. Holowecki. [The opinion is available for download from the Court here.]

Recall that Holowecki raised the procedural issue of what constitutes a "charge" of discrimination submitted to the Equal Employment Opportunity Commission under the Age Discrimination in Employment Act. The plaintiff submitted an Intake Questionnaire, with an accompanying affidavit, to the EEOC, which alleged that Fed Ex had committed age discrimination. She did not, however, file a Charge of Discrimination until 6 months later. In the interim, the EEOC neither assigned a charge number, nor informed Fed Ex that it had received the Intake Questionnaire. The issue was whether the Intake Questionnaire constituted a "Charge" sufficient to start the proceedings with the EEOC.

A 7-2 majority of the Court deferred to the EEOC's regulations and policy statements, and held that the Intake Questionnaire was a "Charge" because it could be reasonably construed as a request for the EEOC to take remedial action to protect the employee's rights or otherwise settle a dispute between the employer and the employee.

My problem with this ruling is that Fed Ex never had any meaningful way to respond to the Intake Questionnaire. That form was never sent to it, and it had no notice that a proceeding had even been initiated until after the actual charge was filed 6 months hence. Thus, an employee can proceed to federal court on an age discrimination class action lawsuit, without the employer, who had no notice that a charge had even been filed with the EEOC, having the benefit of trying to settle the claim pre-lawsuit. During the EEOC's conciliation process, the stakes are decidedly much lower than they are once an actual lawsuit is filed. For one thing, claimants usually are not represented by counsel at the EEOC. The same is rarely true in federal court. This decision prejudices employers who will be denied any opportunity to resolve a case via the EEOC's informal conciliation process. The majority attempts to cure this problem by suggesting that the trial court stay the case to allow for mediation. That stay, however, ignores the crucial differences between a mediation before as compared to after a federal court case has been filed.

In concluding his dissent, Justice Thomas hits a home run in summarizing the key problems with the majority opinion:

The implications of the Court's decision will reach far beyond respondent's case. Today's decision does nothing—absolutely nothing—to solve the problem that under the EEOC's current processes no one can tell, ex ante, whether a particular filing is or is not a charge. Given the Court's utterly vague criteria, whatever the agency later decides to regard as a charge is a charge—and the statutorily required notice to the employer and conciliation process will be evaded in the future as it has been in this case. The Court's failure to apply a clear and sensible rule renders its decision of little use in future cases to complainants, employers, or the agency.

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This decision will have limited impact in Ohio, because employees have a private right of action under Ohio law without first going to the EEOC. However, because age discrimination claims under Ohio Revised Code 4112.99 are subject to a short 180-day statute of limitations, the Holowecki decision could impact those employees who miss that relatively short statute and have to go the EEOC for relief to enable a federal court filing under the ADEA.

Being upfront about a non-compete agreement can save a lot of headaches

Monday's Chicago Tribune had an interesting piece about the proliferation of non-compete agreements in today's business environment. Quoting from the article:

In an economy where information and relationships rule, businesses are quicker to try to limit the damage when people leave. And it's no longer just executives and high-tech workers whom companies worry about.... Employees encounter non-compete, non-disclosure and non-solicitation issues coming and going. The forms often sit in the stack of papers that new hires are asked to sign their first day on the job. And restrictive covenants invariably get tacked on severance offers in layoffs and firings.

The article quotes Diana Smith, managing director of The Novo Group, a Chicago recruiting firm, who advises that companies and job applicants should be up front and open about non-compete agreements:

"Companies that want to recruit from their competition will find ways to make it work. People should be really open in their discussions and not be afraid that it's going to stop the show. Chances are you're going to find a way to work around it."

Ms. Smith's point is important for employers to take to heart. Despite the existence of an agreement, companies may or may not have a real interest in enforcing a non-compete agreement against a former employee. Factors that the former employer might consider are the level of the employee, the circumstances surrounding the employee's departure, the employee's customer and industry contacts, and what trade secrets and other confidential information the employee was privy to.

Nevertheless, when an employee who has signed a non-compete goes behind the old employer's back to work for a competitor, the old employer is forced into action to send a message to all of the other employees who have signed non-compete agreements that the company takes them seriously and will enforce them if pushed to do so. Past enforcement is also a factor that courts look at in examining whether to grant an injunction enforcing a non-compete agreement.

On the other hand, what happens if the new employer picks up the phone and calls the old employer to ask for permission to hire the applicant despite the non-compete? The old employer may say yes if it does not want to run up attorneys' fees by attempting to enforce a non-compete against a marginal employee. Further, by allowing the new employer to hire the employee, the old employer will signal that it expects the same courtesy in the future - that is, at least a phone call before an employee is hired. And, if the old employer says no, the new employer has not lost anything, because hiring the employee will most likely result in litigation anyway.

Asking about the existence of a non-compete or other restrictive agreement should be boilerplate in virtually all hiring processes. Picking up the telephone and asking for an employee to be released from a non-compete for a particular job costs nothing, and could save significant heartache down the road by staving off litigation that the old employer may feel compelled to bring to save face.

The nation's focus turns to Cleveland (and lots of snow)

Today's snowstorm here in Cleveland notwithstanding, there will be a Democratic debate tonight. In honor of the debate, I suggest that anyone who has an interest on the candidates' position on labor and employment issues check out Presidential Politics – Predictions for the Workplace, by John Phillips. Even though the article was written almost two months ago, it's over-inclusive in its coverage of candidates. Because Senators Obama and Clinton have not changed their positions, the piece is as timely as to them as it was when is was written. Employment law issues have not gotten a lot of play in the campaign, and John's piece is the best primer on the subject I've come across.

There really is not all that much of a fundamental difference in the two candidates' positions on labor and employment law issues. If McCain (the presumptive Republican nominee) wins the general election, we can largely expect a maintenance of the status quo. If, however, either Senator Obama or Senator Clinton becomes our next POTUS, then it safe to assume that we will see some combination of the initiatives presented in the Civil Rights Act of 2008, the Fair Pay Restoration Act, the ADA Restoration Act, the Employment Non-Discrimination Act, and the Employee Free Choice Act. Just one more factor to consider as everyone goes to the polls on March 4 and in November.

Supreme Court issues ruling in "me, too" evidence case

As predicted, the Supreme Court has reversed the 10th Circuit's decision in Sprint/United Management v. Mendelsohn, which had held that "me, too" evidence in discrimination cases is per se admissible, and that a trial court must admit any testimony of other workers who claimed to suffer the same sort of bias against them, even if a different decisionmaker was involved. In a unanimous decision, Justice Thomas wrote that it was error for the appellate court to announce per se rule of admissibility and disregard the trial's court discretionary weighing of the evidence. Thus, the Federal Rules of Evidence do not require admission of testimony by nonparties alleging discrimination at the hands of persons who played no role in the adverse employment decision challenged by the plaintiff. Instead, the trial court should balance the evidence under Evidence Rule 403 to decide on its ultimate admissibility: "The question whether evidence of discrimination by other supervisors is relevant in an individual ADEA case is fact based and depends on many factors, including how closely related the evidence is to the plaintiff's circumstances and theory of the case."

This decision makes a lot of sense. It skirts the ultimate issue of whether "me, too" evidence is admissible or inadmissible because that decision should be fought in the trial court, which is in the best position to examine the evidence and weigh its relevance and admissibility. One can't judge whether evidence of discrimination by other supervisors is admissible without considering it in light of the context and theory of the case, all of which should be done by the trial judge. This decision may not give any guidance to trial judges on how and when to admit such evidence that some (including me) were hoping for, but that guidance would have impeded on their role as the ultimate gatekeepers of relevancy.

A copy of the Court's decision can be downloaded here.

[Hat tip: SCOTUS Blog]