More on “do overs”: the unconditional offer of reinstatement

As I mentioned on Monday (Do-overs), an unconditional offer of reinstatement can be a useful tool to minimize or even avoid liability in a discrimination lawsuit. To be effective, however, the offer must truly be unconditional. In other words, the reinstatement offer should:

• Return the employee to the former position, with the same responsibilities, compensation, and benefits.

• Make clear that the employee is free to continue pursuing any and all claims against the company, and that the employee is not required to sign a release or give up any rights as a condition of reinstatement.

• Emphatically state that the employer will neither retaliate nor tolerate any retaliation against the employee.

• Create an open door for the employee to discuss any concerns about returning to work, or issues that arise after the employee returns to work.

Once the offer is made, the employer must be prepared to take the employee back if the offer is accepted. Thus, before making such an offer, it is important to consider if, in fact, an employer really and truly wants the employee back. Was the employee a good, worthwhile, productive employee that provided an asset to the company? Or, did the employee have serious performance, conduct or attendance problems? Are managers and supervisors wiling to take the employee back despite the lawsuit? Are you reasonably confident that the employee will not be retaliated against, and is the company prepared to act quickly and deal decisively with anyone found to have retaliated?

These questions must be considered before deciding whether to offer to bring back an ex-employee. Otherwise, the potential of limiting back pay and front pay may not be worth the cost of brining back an unworthy employee.

Union sit-in illustrates working of WARN Act

Last week, Republic Windows and Doors, a Chicago manufacturer, announced that because Bank of America had cancelled its line of credit, it would be closing immediately. Since last weekend, its employees have been staging a mass sit-in inside the factory in protest the company’s lack of notice of the shut-down. They claim that federal law entitled them to a minimum of 60 days’ notice. (See In Factory Sit-In, an Anger Spread Wide). The employees claim that they will continue to occupy the factory until a resolution is reached.

The federal law that spurred the workers protest is the Worker Adjustment and Retraining Notification Act, which is more commonly known as the WARN Act. The WARN Act generally applies to any employer with 100 or more employees, not counting employees who worked less than 6 months in the last 12 months and employees who work an average of less than 20 hours a week.

It requires a covered employer to give affected employees 60 days’ notice of any plant closing or mass layoff. It is common misconception that WARN requires severance pay. In fact, all it requires is 60 days’ notice to affected employees. However, an employer can bypass the notice by paying employees in lieu of the WARN notice. For example, if a plant shuts down immediately without any notice, all affected employees would be entitled to 60 days’ pay in lieu of WARN notice.

The Republic Windows story raises an important exception under the WARN Act: the unforeseeable business circumstances exception. When the closing or mass layoff is caused by business circumstances that were not reasonably foreseeable at the time that 60-day notice would have been required (i.e., a business circumstance that is caused by some sudden, dramatic, and unexpected action or conditions outside the employer's control), 60 days’ notice under WARN is not required. Instead, the employer is only required to give as much notice as is practicable in light of the unforeseen circumstances.

There is little doubt that Republic Windows is relying on the unforeseeable business circumstances exception for its lack of WARN notice to its employees. Despite (or maybe because of) the current credit crunch, a court would most likely not require Republic Windows to accurately predict Bank of America’s actions. The issue for Republic Windows and its employees will most likely hinge on two facts: when did it first learn that its specific line of credit was in jeopardy, and how long could it have continued operating before shutting its doors. Public and political pressure may end up winning the day for the employees, but my best guess is that Republic Windows is probably on right side of the unforeseeable business circumstances exception.

More Employee Free Choice Act ads

Business organizations have decided to fight fire with fire, putting out their own advertisements on the dangers of the Employee Free Choice Act. Below is a very clever advertisement put out by UnionFacts.com, a non-profit union watchdog organization:

Click here for more information on the Employee Free Choice Act.

Do you know? Child labor rules

While I was watching Rudolph the Red Nosed Reindeer with my family and something struck me. The elves making toys for Santa looked awfully young. Is it possible that the North Pole lacks child labor laws? Is this how Santa keeps his costs down? After all, he needs toys for hundreds of millions, if not billions, of children.

Do you know? What are Ohio’s child labor laws?

Ages 14 and 15

• When school is in session: i) they cannot work between the hours of 7 p.m. and 7 a.m.; ii) they cannot work for more than 3 hours on any school day; and iii) they cannot work more than 18 hours during any school week

• When school is out of session: i) they cannot work between the hours of 9 p.m. and 7 a.m.; ii) they cannot work more than 8 hours per day; and iii) they cannot work more than 40 hours per week.

Ages 16 and 17

• When school is in session: i) 11 p.m. before a school day to 7 a.m. on a school day (6 a.m. if not employed after 8 p.m. the previous night); and there are no limits on hours worked per day or week.

• When school is not in session, there are no limits on starting or ending times, or hours worked per day or week.

Unlike adult workers, all minors are required to have a 30 minute uninterrupted break when working more than 5 consecutive hours.

Prohibited Occupations

All minors are prohibited from working in the following occupations:

• Slaughtering, meat-packing, processing rendering
• Operation of power driven slicers; bakery machines; paper product machines; metal forming; punching or shearing machines; circular and band saws; guillotine shears; woodworking machines
• Manufacture of brick, tile, and kindred products
• Manufacture and storage of chemicals or explosives, or exposure to radioactive and ionizing radiation substances
• Coal mining and mining other than coal
• Logging and saw milling
• Motor vehicle, railroads, maritime , and longshoreman occupations
• Excavation operations, wrecking, demolition, and shipbreaking
• Power-driven and hoisting apparatus equipment
• Roofing operations

Only 14 and 15 year olds are prohibited from the following occupations:

• Manufacturing and warehouse occupations (except office and clerical work)
• Public messenger services occupations
• Work in freezers; meat coolers and all preparations of meats for sale (except wrapping, sealing labeling, weighing, pricing and stocking)
• Transportation; storage, communications, public utilities; construction and repair
• Work in boilers or engine rooms; maintenance or repair of machinery
• Outside window washing from window sills, scaffolding, ladders or their substitutes
• Cooking, baking, operating, setting up, adjusting, cleaning, oiling, or repairing power-driven food slicers, grinders, food choppers cutters, baker type mixers
• Loading or unloading goods to and from trucks, railroad cars or conveyors
• Work with cars and trucks involving pits, racks, or lifting apparatus
• Inflation of tires mounted on rimes equipped with a removable retaining ring
• For-profit door-to-door employment (unless the employer is registered with the Ohio Dept. of Commerce Division of Labor & Worker Safety)

Court allows a “do-over” to defeat discrimination claim

I vividly remember playing baseball in the street in front of my house as a child. Every once in a while something would interfere with the game (a stray dog, a car) and the effected team would call for a do-over. A do-over would wipe the play as if it never happened. In Jackson v. UPS (8th Cir. 12/4/08), the 8th Circuit inserts the rule of do-overs into employment discrimination law.

Jackson worked at UPS as an hourly employee. In May 2006 she received a promotion. On her first day in the new position she caused an accident, after which UPS demoted her back to her prior position with the corresponding reduction in pay. Jackson immediately challenged the demotion through both a union grievance and an EEOC charge. Within three months, UPS decided that it had erred in demoting Jackson. It settled the grievance with the union and reinstated Jackson to the higher paying position with full back pay.

In the ensuing discrimination case, UPS argued that Jackson did not suffer an adverse employment action because it reversed its decision and reinstated her with full back pay and no loss of seniority or any other employment benefit. Jackson argued that UPS’s initial decision constituted an actionable adverse employment action.

In affirming the district court’s summary dismissal of Jackson’s discrimination claim, the 8th Circuit held that “a demotion or denial of a promotion, even when accompanied by a loss in pay, is not an adverse employment action when it is corrected in a timely manner”:

In the present case, UPS recognized its mistake, took corrective action, and reinstated Jackson with full back pay and no loss of seniority or any other employment benefit. During her three-month period of disqualification, Jackson performed her prior work as a shuttle driver and was compensated accordingly. The only damages that might remain are interest on Jackson’s back pay and stress that Jackson alleges accompanied her disqualification. This court has consistently held that “[an] adverse employment action must be one that produces a material employment disadvantage.” … The small amount of interest Jackson might recover does not constitute a material disadvantage.

It’s unclear whether this rule is good law in the 6th Circuit or Ohio, but the lesson to take from this case is a good one. If you’ve been sued and you’re reasonably confident that your company messed up, don’t be afraid to at least consider an offer to bring the person back to work, to the same or equal position, and with full back pay and restoration of other lost benefits. It’s called an “unconditional offer of reinstatement.” It may not bar liability like the Jackson case, but if done correctly it will cut-off economic damages such as back pay and front pay (while making it very hard for a plaintiff to prove a right to punitive damages), and go a long way to convincing a judge and a jury that your company might just not be the evil malicious discriminator the plaintiff is trying to paint you as. Come back tomorrow for a quick lesson on the mechanics of an unconditional offer of reinstatement.

WIRTW #58

Or what I’ve been reading for the last two weeks, thanks to last week’s Thanksgiving hiatus.

According to Roger Matus’ Death by Email, there are 10 things you should never put in an email, for fear they will come back to haunt you in litigation. For example, “10. Is this actually legal.” Click on over for the entire list.

The Labor & Employment Law Blog provides a thorough summary of the Employee Free Choice Act and its dangers, and lists some basic union avoidance tips companies can use to prepare for the prospect of card check union recognition. In other EFCA news, EFCA Updates suggests that President Obama might consider facing down the unions on the EFCA in light of our current economic mess, and Point of Law gives some thoughts on the lesser publicized, but equally dangerous, mandatory arbitration provision of the EFCA.

Another popular topic is firing and layoffs. If you need them, HR World has some basic tips on how to fire employees. BLR’s HR Daily Advisor notes that with layoffs usually bring them two other dreaded l-words, litigation and liability. By way of illustration, the Wall Street Journal Law Blog has an interesting post on laid off law firm associates turning to the courts for help. Finally, for those who’ve survived a layoff, George’s Employment Blawg asks the important questions – what’s your plan now to help the company thrive and survive.

Overlawyered brings the story of the Canadian Supreme Court’s ruling that an obese airline passenger has a right to two airline seats for the price of one.

The Delaware Employment Law Blog updates us on the travails of Robert Irvine, the displaced Food Network host fired earlier this year for resume fraud (see Firing of Food Network host illustrates resume fraud). It looks like all is forgiven, and he is headed back to his old show to re-take the reigns from Cleveland’s Michael Symon.

The Connecticut Employment Law Blog reports on a 2nd Circuit case discussing the meaning of “similarly situated” in discrimination cases.

The Pennsylvania Labor & Employment Blog points out an interesting anomaly about 2009 – it will have 27 bi-weekly pay periods instead of the customary 26.

Jottings by an Employer’s Lawyer reports on a $1.8M verdict awarded by a federal court jury in Pittsburgh to a women who was fired after she failed to return from her maternity leave. She received this astronomical verdict even though the company had rehired her at her former salary. In fact, she took a four day vacation from the defendant to attend the trial.

Work Matters asks if all we need is love vacations.

Corporate Voices for Working Families discusses workplace lactation programs.

What's New in Employment Law? reminds us that discrimination laws do not protect against bad managers, only decisions and actions with a discriminatory basis.

Settle It Now Negotiation Blog brings us a timely post about holiday party liability.

Human Rights in the Workplace presents six ways to avoid age discrimination liability.

Trading Secrets comments on a trade secret dispute between IBM and Apple, and the effect of the inevitable disclosure doctrine.

World of Work distinguishes between cosmetology teachers and day care teachers for purposes of overtime eligibility under the FLSA. According to the Department of Labor, the former are exempt, while the latter are non-exempt.

The Privacy Law Blog questions what privacy rights will look like in President Obama’s administration.

Workplace Prof Blog reports on an NLRB Administrative Law Judge’s finding that CNN committed “widespread and egregious misconduct” in terminating a subcontractor to avoid its employees’ labor union.

Ex-employees are not covered by the ADA for handling of post-employment benefits

In McKnight v. General Motors (6th Cir. 12/4/08), the 6th Circuit was presented with the question of whether disabled former employees have standing under the ADA to bring suit against their former employers for discrimination with respect to the payment of post-employment fringe benefits. At issue in the case was whether GM’s pension plans give equal access to disabled and non-disabled employees.

In ruling for GM, the Court adopted the reasoning of a 9th Circuit decision, Weyer v. Twentieth Century Fox Film Corp. (9th Cir. 2000):

Title I says that “[n]o covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual.” A “qualified individual” is someone who “can perform.” That definition uses the present tense. Thus, one must be able to perform the essential functions of employment at the time that one is discriminated against in order to bring suit under Title I. In addition, one must be discriminated against “because of the disability”—which requires that the disability exist at the time of the discrimination and be the motivation for the discrimination.

Thus, the Court concluded “that disabled former employees are not ‘qualified individuals’ with a disability under Title I of the ADA.”

This decision, while significant, has limited applicability to most employers. For example, one should not interpret this decision to mean that no ex-employee has standing to sue under the ADA. To the contrary, an employee who could perform the essential functions of the job at the time of the challenged decision still has standing to sue. This decision has no impact on the run of the mill ADA plaintiff who claims a denial of a reasonable accommodation or a termination from employment because of a disability. This decision only impacts those decisions that affect an individual after an individual ceases employment – pension and benefit decisions, for example.