A lesson in union avoidance

No company does more to avoid unions than Walmart. Case in point - Wal-Mart Stores Inc. (NLRB 6/20/08). In the summer of 2000, Walmart's Kingman, Arizona, Tire and Lube Express (TLE) employees contacted United Food and Commercial Workers. The Union filed a representation petition on August 28. Two days later, a labor relations team from Walmart's corporate headquarters arrived at the store. During the organizing campaign, members of that labor relations team did such things as: threaten to postpone any merit pay increases for the TLE employees during any contract negotiations; engage in surveillance of employees' union activities; grant benefits and improved working conditions to discourage employees from supporting the Union; discriminatorily and disparately apply and enforce its no-harassment policies to the detriment of employees who supported the Union; and discharge and deny COBRA coverage to employees for supporting the Union.

It is not much of a surprise that the NLRB found that Walmart engaged in unfair labor practices. The point, however, is not whether Walmart violated the NLRA, but in how Walmart handled the litigation. The organizing campaign started in August 2000. The NLRB issued its final decision and remedial order nearly 8 years later. And that timeline does not include any appeals to federal court, which will add at least another 12 - 18 months. Does anyone doubt for a second that Walmart's strategy is to drag this process out as long as possible, making it as costly, difficult, and time consuming for the union and its members? Does anyone want to wage a bet on how long it will take Walmart to actually sit down and bargain with this union? By the time Walmart has exhausted all of its appeals on every claim the Union could possibly bring, will any of the original LTE employees be left at the store? If not, how can the Union say a majority of the bargaining unit even wants a union? The de-certification petition will surely follow.

The lesson from this case is that a successful organizing campaign is not necessarily the end game for a unionized workforce. The laws might be tilted towards the unions, but for companies that have the resources and the patience, the process can be used to their advantage to ultimately break the union.

Ohio Supreme Court takes a stand against liability for bullying (sort of)

Fontella Harper and Beverly Kaisk were neighbors in a public housing project. Apparently, Kaisk had problems living next door to an African American family, and let them know about it, frequently and offensively. Harper complained to building management, who took no corrective action. Kaisk's lease included a provision requiring tenants to conduct themselves in a manner that "will not disturb the neighbors' peaceful enjoyment of their accommodations," and the landlord could have terminated the lease "for serious or repeated violations of material terms of the lease."

Harper sued the landlord for housing discrimination based its failure to take corrective action of the racial harassment. Yesterday, in Ohio Civil Rights Commission v. Akron Metropolitan Housing Auth., the Ohio Supreme Court held that a landlord is not liable for failing to take corrective action against a tenant whose racial harassment of another tenant created a hostile housing environment.

You might be asking, what does a housing discrimination case have to do with employment law? The plaintiff argued that a landlord should be liable for a hostile environment on the same basis that an employer can be held liable. The Court disagreed:

[I]mposing liability on an employer who knew or should have known about coworker harassment was an application of negligence liability....This liability of an employer for an employee's negligence derives from the established principles of agency law.... None of those factors apply to the liability of a landlord for the actions of a tenant. The agency principles that govern employer-employee liability have no parallel in the context of landlord-tenant disputes....

The amount of control that a landlord exercises over his tenant is not comparable to that which an employer exercises over his employee. As the appellants observe, a landlord does enjoy a measure of control through his ability to evict tenants. In the present case, the lease signed by Kaisk gives the AMHA authority to evict a tenant who disturbs other tenants' "peaceful enjoyment of their accommodations." The power of eviction alone, however, is insufficient to hold a landlord liable for his tenant's tortious actions against another tenant.... We therefore reject the argument that our precedent in the employment context applies to the cause of action at issue here.

It's not earth-shattering news that agency principles hold employers liable for discriminatory (e.g., sexual, racial, etc.) harassment of one co-worker by another. This case, however, also speaks to the Court's unwillingness to extend harassment liability beyond the current parameters of the law. The Court could have reasoned a duty to correct from the power to evict, and from that duty fashioned a remedy for the harassed tenant. The Court, though, expressly rejected that argument.

For those who hold out hope that Ohio courts might recognize a general cause of action for workplace bullying, this opinion is a strong signal that our state's highest court would reject such an attempt.

Medical questions during job interview doom employer in discrimination case

Doe v. Salvation Army, decided last week by the 6th Circuit, provides employers with a valuable lesson on the dangers of asking the wrong question during a job interview.

Doe (whose proceeded pseudonymously to protect his confidentiality) had a history of paranoid schizophrenia. During a job interview with the Salvation Army, Doe was told of the requirements for the job, including the expected work days. Doe advised that he could not work on Fridays because, "[he] had to see [his] doctor, and . . . pick up [his] medicine." Doe claims that the interviewer asked him in response, "what kind of medication," to which Doe responded "psychotropic medicine." Doe claims the interviewer then ended the meeting and Doe was ultimately rejected for the job.

The Salvation Army argued, and the district court agreed, that Doe was rejected for safety concerns, not for reasons solely based on his disability. The 6th Circuit, however, found there to be a genuine issue of material fact as to whether the decision not to hire Doe was based solely on his disability:

It was immediately after Doe revealed his specific medications that Snider abruptly ended the interview. Snider testified that he ended the interview stating, "I did not say flat out no," but rather, "I'll have to check [the insurance] out." As we now know, he did not do so.

An employer may not base a hiring decision on a perceived notion that the applicant’s disability renders him incapable to perform the job. The district court stated that "[c]ourts have unanimously held that an individual with a disability 'cannot perform the essential functions of a job if his handicap poses a significant risk to those around him.'" But in May 2005, Snider ended Doe's interview not because he concluded that Doe's employment as a driver would pose a risk to others, but because Snider "wasn't going to take a chance" on Doe.

The Salvation Army got in trouble because it sought the wrong information in the wrong way. The employer provided legitimate information - the required work hours - an essential function of the job. Unprompted, Doe then voluntarily disclosed medical information. At that point, the interviewer should have simply confirmed that Doe could not meet that particular essential requirement and moved on to a different topic. At that point the company could have rejected Doe based on his inability to work the required hours, a decision that would not have been tainted by the inappropriate follow-up question, "What kind of medicine?"

6th Circuit decides standard of proof for mixed motive cases

Disparate treatment claims under Title VII are categorized as either single-motive claims (where only an illegitimate reason motivated the employment decision), or mixed-motive claims (where both legitimate and illegitimate reasons motivated the decision). Mixed-motive claims are specifically covered in 42 U.S.C. 2000e-2(m): "An unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice, even though other factors also motivated the practice."
In Desert Palace v. Costa, the U.S. Supreme Court found that a plaintiff may prove a Title VII mixed-motive case by either direct or circumstantial evidence, and held that to obtain a mixed-motive jury instruction, "a plaintiff need only present sufficient evidence for a reasonable jury to conclude, by a preponderance of the evidence, that ‘'race, color, religion, sex, or national origin was a motivating factor for any employment practice.'" The opinion left open the issue of whether the McDonnell Douglas burden-shifting framework should apply to a summary judgment analysis of mixed-motive discrimination claims based on circumstantial evidence as it applies to single-motive discrimination claims based on indirect evidence.
Since Desert Palace, the 6th Circuit has been silent on the issue of the proper evidentiary framework to apply to mixed-motive cases at the summary judgment stage. Some circuits have expressly applied the McDonnell Douglas analysis, some have applied a modified McDonnell Douglas approach, under with a plaintiff can rebut the employer's legitimate non-discriminatory reason either with evidence of pretext or evidence of the mixed motive.Yet another approach is to permit the plaintiff to rebut the employer's legitimate non-discriminatory reason with evidence that a discriminatory reason more likely than not motivated the decision.
In White v. Baxter Healthcare Corp., decided last week, the 6th Circuit finally weighed in on this issue:

The McDonnell Douglas / Burdine burden-shifting framework does not apply to the summary judgment analysis of Title VII mixed-motive claims. We likewise hold that to survive a defendant’s motion for summary judgment, a Title VII plaintiff asserting a mixed-motive claim need only produce evidence sufficient to convince a jury that: (1) the defendant took an adverse employment action against the plaintiff; and (2) "race, color, religion, sex, or national origin was a motivating factor" for the defendant’s adverse employment action.... This burden of producing some evidence in support of a mixed-motive claim is not onerous and should preclude sending the case to the jury only where the record is devoid of evidence that could reasonably be construed to support the plaintiff’s claim.

The Court, however, did not totally dismiss any applicability of McDonnell Douglas to mixed-motive cases:

Although the employee need not establish a McDonnell Douglas prima facie case to defeat a motion for summary judgment on a mixed-motive claim, setting forth a prima facie case of discrimination under McDonnell Douglas can aid the employee in showing that an illegitimate reason motivated the adverse employment decision. [Likewise, in] assessing whether an employee has demonstrated that an illegitimate reason was a motivating factor in the employer’s adverse decision, the court should also consider evidence presented by the employer that the protected characteristic was not a motivating factor for its employment decision. (quoting Wright v. Murray Guard, Inc., 455 F.3d 702, 720 (6th Cir. 2006) (Moore, J., concurring)).

Thus, to survive summary judgment in a mixed-motive case, the plaintiff need only show:

1. an adverse action, and
2. some evidence that the protected class was a motivating factor for that adverse action.

This burden is low, and will likely make it much easier for plaintiffs in the 6th Circuit (and most likely Ohio state courts, which follow 6th Circuit precedent) to defeat summary judgment in a mixed-motive case. It will also create an incentive for employees to frame their cases as mixed-motive cases, because these cases will be more likely to go to a jury under this standard than single-motive cases under the traditional McDonnell Douglas standard.

46.6 million reasons to think about settlement

In the largest verdict Ohio history, and what might be the largest single-plaintiff employment verdict ever, a Cuyahoga County jury has awarded $46.6 million to Ronald Luri against garbage hauler Republic Services. Cleveland.com reports that Luri was fired after he refused to fire three employees in their 60s. The jurors reported that they were outraged by Republic's conduct after it fired Luri: "The jurors said the key piece of evidence was an email penned by Luri's boss, Jim Bowen, the Ohio area president. Attorneys Shannon Polk and Richard Haber presented a computer expert who found that Bowen had post-dated the memo and added two paragraphs critical of Luri's job performance two weeks after Luri filed the lawsuit."

There are many lessons to be learned from this story, but none more important than this - companies need to be aware of the risks that are inherent any time they step into the courtroom in an employment case. In Ohio, only 6 out of the 8 jurors must agree on the verdict. Of the 8 total jurors, it is a sure bet that at least 6 will more naturally identify with the employee than the employer, which means that the company is usually playing from behind.

Secondly, as far as employers are concerned, an employee's performance history must be frozen in time as of that employee's termination date. Nothing will anger a jury more than a company that looks like it is trying to cover its actions, either by destroying damaging documents or creating helpful ones. The shenanigans the jury found to have taken place after Mr. Luri was fired was a significant factor in the verdict, and if his personnel file was frozen on his termination date, I predict that the verdict would have looked much different.

Unsurprisingly, it is reported that Republic will likely appeal the verdict. Regardless of how much of the $46 million holds up, employers should use this information as a wake up call. Litigation is dangerous. Juries are unpredictable. Some cases cannot be resolved and need to be tried, but sometimes it's better to live to fight another day.

What I'm reading this week #38

I'm here a day early with this week's best from the blogosphere, starting with 2 posts from the New York Times' Shifting Careers series: Blogging About Layoffs, the Legal Implications, and Can Ex-Bosses Object When Ex-Employees Start Businesses?

The FLSA Blog has an interesting post on crisis planning for class action lawsuits.

The Delaware Employment Law Blog writes on a topic of the utmost importance to everyone this time of year - the office thermostat.

The Connecticut Employment Law Blog, meanwhile, reminds everyone of the important distinctions between hostile work environment and quid pro quo sex harassment claims.

The Pennsylvania Labor & Employment Blog opines that the Supreme Court's D.C. gun ban decision should have little impact on employers.

Finally, the Laconic Law Blog points everyone to the new I-9 form that employers must use beginning July 1. The only difference is its effective date; otherwise the form is unchanged.

Everyone have a fun and safe July 4th weekend, and I'll see everyone back on Monday.

More on compensation for meal periods

Yesterday, a Minnesota judge ruled that Wal-Mart violated state wage and hour laws by failing to provide meal and rest periods to more than 56,000 of its employees. The judge found evidence of more than 2 million separate violations, and awarded the class of employees $6.5 million in back wages. The judge will hold a second hearing on possible penalties, which could exceed $2 billion.

In light of this news, now is as good a time as any to revisit my post from a couple of weeks ago on whether employees' meal periods counted as "hours worked" under the FLSA:

A bona fide meal period, however, is not considered hours worked. To be a bona fide meal period the employee must be totally relieved of his or her work duties. According to the Department of Labor: "The employee is not relieved if he is required to perform any duties, whether active or inactive, while eating."

So, what does it mean to be "totally relieved of one's work duties?" The 6th Circuit falls in line with most of the federal courts in applying the "predominant benefit" test to determine whether an employee's meal period is compensable. Under this test, first applied by the 6th Circuit in Myracle v. Gen. Elec. Co., the employee bears the burden to prove that the normally non-compensable meal period should be compensable because it is spent predominantly for the employer's benefit. The key inquiry is whether the employee engaged in the performance of any substantial duties during the lunch break. As long as the employee can pursue his or her mealtime adequately and comfortably, is not engaged in the performance of any substantial duties, and does not spend time predominantly for the employer's benefit, the employee is not entitled to compensation under the FLSA for a lunch break. Thus, for example, it may not matter if an employee is "on call" during a meal break, unless the employee's meal is actually disturbed.

As most employment law issues, it is best to set out expectations about meal breaks in a clear policy. For example: "Each employee is entitled to a 30-minute lunch break each day. That lunch break is unpaid. Because it is unpaid, it is the employee's time to spend as he or she sees fit. Employees should expect to enjoy their lunch breaks without interruption by a co-worker, supervisor, or manager, except in the event of a emergency that requires an employee to cut his or her lunch break short. No employee is permitted to work through a lunch break without the prior approval of his or her immediate supervisor." Of course, such a policy is only as good as how it is enforced.