How to avoid a discrimination lawsuit in 5 easy steps

1. Don’t change your explanation about why an employee was fired mid-stream while in the midst of defending a discrimination claim.

2. Don’t refuse to assign meaningful work to a Muslim employee while at the same time keeping non-Muslim employees busy, or fire an employee for alleged lack of work, while at the same hiring others to perform the same exact assignments.

3. Don’t suggest to others that you speak over the phone about the employee, which suggests that you are trying to avoid a written record that can later be used against you.

4. Don’t tell people on 9/11 that “those people don’t belong
   here.”

5. Finally, and most importantly, don’t refer to a meeting about a Muslim employee’s supposed poor performance and termination as a “sand-nigger pile on.”

One Chicago law firm, in Hasan v. Foley & Lardner LLP (7th Cir. 12/15/08), failed to follow this advice. Remarkably, the district court, when faced with this mosaic of evidence, granted summary judgment to the employer. The 7th Circuit, however, reversed and sent the case back for trial:

Mr. Hasan submits that the facts in the record, while possibly weak proof of discrimination individually, together would allow a jury to infer that Foley terminated his employment because he is Muslim and of Indian descent…. Those facts include Simon’s and Hagerman’s anti- Muslim comments, Mason’s warning to Jaspan about Mr. Hasan’s religion, the suspicious timing of the downturn in his hours and evaluations following September 11, one partner’s testimony that Foley fired no other associates for economic reasons and did well financially in 2001 and 2002, the Business Law Department’s treatment of its other Muslim associates and Foley’s shifting justifications for firing Mr. Hasan….

The record shows that Simon attended the meeting at which the partners decided to fire Mr. Hasan and that he participated in that decision. That others were also involved in making that decision does not make Simon’s participation irrelevant…. There is also evidence in the record that Simon’s criticisms at that meeting incited anti-Muslim and racially charged commentary from other partners. Vechiola’s description of the meeting as a “sand-nigger pile on” suggests as much, as does Pfister’s comment that Simon had targeted Mr. Hasan just as he had targeted another lawyer, albeit unsuccessfully. Viewing the facts in the light most favorable to Mr. Hasan, the record would allow the rational inference that Simon not only participated in the decision to fire Mr. Hasan but also may have instigated it.

This case might not necessarily break new legal ground, but it is a good reminder that even those that should know better sometimes slip, and how a lapse in judgment can come back to bite an employer.

[Hat tip: MMMG Law Blog]

Do you know? Ohio’s Civil Theft Statute

Do you know? Ohio has a specific statute that allows for one to sue civilly for theft. Not only can one recover the amounts stolen, but also three-times that amount as liquidated damages. Because of this penalty provision, Ohio’s civil theft statute is a powerful tool to combat employee theft.

Ohio Revised Code 2307.61 is Ohio’s civil theft statute. It permits recovery for theft and willful damage of property. In addition to compensatory damages for the value of the property stolen or damaged, it also allows for the recovery of three times the value of the property as liquidated damages.

Moreover, it the amount at issue is less than $5,000, the owner of the stolen property is also entitled to recover costs (which includes the cost the written demand for payment, postage, and court costs) and attorneys’ fees if the following three conditions are met:

1. A written demand, via certified mail, for payment must be made at least 30 days prior to filing suit.

2. The written demand must identify the alleged theft offense, inform that suit will only be brought if repayment is not made within 30 days, and advise that the suit could result in a potential judgment that could include costs and attorneys’ fees. 

3. Repayment is not made or an agreement to repay is not reached within the 30-day period.

Pursuing a claim under this statute is not without some risk. If the defendant (for example, the employee accused of theft) prevails, he or she is entitled to recover the cost of defending the civil action plus any compensatory damages that may be proven. Because of this risk, it is important that an employer considering pursuing a civil theft claim has conducted a full investigation and is reasonably confident in its right to recover.

‘Tis the season… for employee theft

According to last week's Wall Street Journal Career Journal, theft by  employees may be reaching epidemic proportions.

In the wake of the recession, more businesses are facing a growing financial threat: employee theft. New research shows that employers are seeing an increase in internal crimes, ranging from fictitious sales transactions and illegal kickbacks to the theft of office equipment and retail products meant for sale to customers.

Employers suspect that workers are pilfering from them to cope with financial difficulties at home or in anticipation of being laid off.

What's more, it's often the most trusted workers who are committing the thefts….

Employers are hot targets for theft because workers “know their systems, controls and weaknesses, and they can bide their time waiting for the right opportunity,” says Mark R. Doyle, president of Jack L. Haynes International Inc., a provider of workplace crime-prevention services based in Fruitland Park, Fla.

Consider the following statistics:

• 20% of employers say workplace theft has become a moderate to very big problem recently.
• 18% have noticed a recent rise in monetary theft among employees, such as fraudulent transactions or missing cash.
• 24% have detected an increase in stolen nonmonetary items, such as retail products and office supplies.
• 25% of all reported internal frauds are committed by senior-level employees with an average tenure of 7½ years.
• In 2007, 1 out of every 28 employees was caught stealing, an 18% increase from the prior year.

What can employers do to curb this disturbing trend? I suggest a five-step attack:

1. Communicate: Employees need to know that theft of any nature and in any amount simply will not be tolerated. This message should be delivered in writing through the employee handbook or a stand-alone corporate ethics policy. Also, it is incumbent upon the highest levels of management to set a good example for all employees to follow. The best defense against employee theft is fostering an environment of ethics and integrity.

2. Investigate: Proper investigation requires having the tools in place to detect theft or fraud and acting swiftly when misconduct is discovered. Proper tools include surveillance cameras, tracking devices, and routine audits of books and records. Also, if something just doesn’t look right (has an employee started submitting unusually large expense reports without sufficient documentation, for example?) ask questions. Don’t just assume that a good employee cannot succumb to temptation. A company may also want to consider bringing in a third-party to conduct the investigation, depending on the sophistication and amount of the theft.

3. Document: Once a theft is detected, a company has to act swiftly to complete a full investigation. This investigation includes interviewing any potential witnesses and gathering all necessary documents to support to a case against the employee. Documentation is key both to support a termination decision and to go after an employee for restitution. Companies should also consider filing a police report in cases of employee theft.

4. Terminate: No other form or discipline should be an option. Theft is a serious offense. It represents a total breakdown of trust between a company and an employee. If an investigation concludes that an employee has stolen from the company, that employee should be immediately fired.

5. Litigate: Employers have two choices – filing a civil lawsuit to recover the stolen funds or property, or seeking criminal prosecution. Companies can run these options in tandem, but in my experience overburdened prosecutors’ offices are less likely to pursue an indictment if a civil case is pending, since the company already has a way to be made whole. In considering whether the pursue legal action against an employee, companies have to balance the potential deterrent effect on current employees versus the potential negative effect on employee morale. Because of these concerns, litigation will not be appropriate in all cases of employee theft.

Tomorrow, we’ll examine one of the best tools Ohio employers have to combat employee theft through the courts, Ohio’s civil theft statute.

WIRTW #59

I had planned on doing an elaborate post on the inherent risks to employers from holiday parties. The Connecticut Employment Law Blog and the Pennsylvania Labor & Employment Blog beat me to it. Click on through for some timely and helpful tips on managing liability risk at your holiday party.

Staying on the holiday theme, the Delaware Employment Law Blog asks if employees with families receive better treatment at work during the holiday season.

A few posts this week follow-up on earlier posts of mine:

• Last month I reported on Anheuser-Busch, an NLRB decision that held that an employer can discipline employees for misconduct even though the employer learned of the misconduct by unlawful means (in that case, security cameras that the employer installed without bargaining with the labor union. Workplace Prof Blog reports that the D.C. Circuit has affirmed the NLRB’s decision.

• Workplace Prof Blog also reports that the Republic Windows sit-in strike has ended, with each employee receiving eight weeks’ severance, all accrued vacation pay, and two months’ health care. For my earlier thoughts on this issue, go to Union sit-in illustrates WARN Act.

• Last week’s WIRTW talked about the 10 things you should never put in an email. Roger Matus’ Death by Email follows up on his earlier list by giving us a checklist of 36 things to consider before hitting send.

The HR Lawyers Blog retorts that the bad economy has shifted employment lawyers from the employment agreement business into the severance agreement business. If you’re considering severance pay, also consider some severance benchmarking data presented by Compensation Force.

Workplace Privacy Counsel presents the first federal appellate court to uphold a termination based on content found on MySpace.

George’s Employment Blawg tells how to provide reasonable accommodation for employees with hearing impairments.

World of Work reports that Walmart has settled its Minnesota wage and hour case for $54.25 million.

The Evil HR Lady points out the dangers of operating without a written leave policy.

Finally, I present what has become a weekly roundup of Employee Free Choice Act posts:

• LaborPains.org tells us that the SEIU has set aside an astounding $10 million to “unelect” any politician that changes his or her position on the EFCA. I’ll probably have more thoughts on this issue next week.

• Workplace Horizons presents President Obama’s top 10 list for labor (are you surprised that the EFCA is number 1?).

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.