More on laying off the protected

Last month I provided some tips on how to properly layoff employees who happen to fall into a protected class. Last week, in Bell v. Prefix, Inc., the 6th Circuit helped drive home my point, and teaches some important lessons on proper layoff techniques.

Jonathan Bell claimed that Prefix included him a layoff in retaliation for a recent FMLA leave of absence he took to care for his dying father. Between July 22 and August 5, 2005, Bell took 3½ days of approved FMLA leave while his father was hospitalized for heart surgery. At the same time, Prefix’s new general manager began an ad hoc termination of employees to save money during a substantial downturn in business. Bell’s termination came August 8, just two weeks after the start of his FMLA leave and three days after his last FMLA absence.

In reinstating Bell’s FMLA retaliation claim for a jury trial, because a reasonable jury could conclude that Prefix held a retaliatory motive in terminating Bell. The court focused its decision on the collective strength of five pieces of evidence:

1. When Bell had to leave work after receiving an emergency call from the hospital, the general manager belittled him in front of his co-workers, and in a raised voice “accused him of ‘abandoning’ Prefix when there was work to be done.”

2. In discussing Bell’s termination, the general manager commented that he needed to work more hours.

3. The general manager’s comments about poor work quality are directly contradicted by Bell’s only written performance review.

4. The close temporal proximity between Bell’s FMLA leave and the termination.

5. The lack of any formal structure for the RIF, or the use of any objective process or criteria in selecting employees for inclusion.

This case teaches employers some very important lessons in how to conduct a RIF.

1. It is important to have some structure for the RIF, whether it is written criteria (objective or subjective), past performance, ranking of employees, or some other basis. A rationale that can be justified is needed for why one employees was RIFed over another.

2. Discussions about who will or will not be included should be kept to a minimum. This point rings even more true if the decision is solely based on some objective criteria.

3. Assume that any comments that can in any way be twisted to appear discriminatory or retaliatory will come back to haunt you in later litigation.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #73

After last week’s glut of posts on the Employee Free Choice Act, I bring you this week’s EFCA-free WIRTW.

This week the Supreme Court held oral argument in Gross v. FBL Financial Services, which will hopefully give some much needed clarity on the proper standard for obtaining a mixed-motive jury instruction in discrimination cases. For details and analysis, read Marcia McCormick’s thoughts at the Workplace Prof Blog. Dan Schwartz at the Connecticut Employment Law Blog shares his insight as well.

Mark Toth at the Manpower Employment Blawg reports on the illegality of a policy that prohibits employees from working overtime while on light duty.

The Word on Employment Law with John Phillips provides some additional thoughts maternity and layoffs.

Eric Welter at the Laconic Law Blog reports on a poll finding that the FMLA is HR’s biggest headache.

Where Great Workplaces Start looks into the future and makes some predictions about the future of HR.

Christopher McKinney at the HR Lawyer’s Blog and Diane Pfadenhauer at Strategic HR Lawyer discuss careless twittering.

Finally, two blogs give their takes on The Office and the Michael Scott Paper Company: Rob Radcliff at Smooth Transitions and Michael Elkton at Trading Secrets.

 

 

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Think before having employees sign that arbitration agreement

Yesterday, the Supreme Court issued its opinion in 14 Penn Plaza v. Pyett, which enforced a provision in a collective-bargaining agreement that required union members to arbitrate statutory discrimination claims. My fellow bloggers have already provided some thoughtful analysis of this opinion – Michael Moore at the Pennsylvania Labor & Employment Blog, Michael Fox at Jottings By An Employer’s Lawyer, and Richard Bales at the Workplace Prof Blog.

The bigger question for employers to think about, though, is whether arbitration of employment claims makes business sense. Companies and their lawyers often use mandatory arbitration of employment claims for two reasons: (1) as a cost-effective alternative to court; and (2) as an insurance policy against runaway jury verdicts.

In my experience, however, arbitration can prove just as costly as court. More and more arbitrators are allowing plaintiffs to engage in discovery that is nearly as expansive (and expensive) as what is permitted by trial courts. Additionally, employers have to add into the equation the cost to file the claim, which the employer usually shares. With the American Arbitration Association, these fees can run anywhere from $950 to a cap of $65,000. These fees do not include the arbitrators’ time, which often exceeds $500 per hour, and includes all pre-hearing conferences, discovery and motion practice, the actual hearing time, and the drafting of the opinion. It is not hard to see how in many cases the defense costs associated with arbitration outweigh defense costs in a traditional court proceeding.

Given these high costs, there is a much better alternative to hedge against a runaway jury verdict – contractual jury trial waivers. A properly drafted jury trial waiver accomplishes the following goals:

1. No appeal rights are lost. Judicial review of arbitration awards is very narrow. An appellate court, however, will have a much wider scope of review of a bench trial.

2. A bench trial eliminates the risk of a runaway jury awarding obscenely high damages.

Before asking your employees to sign that arbitration agreement, consider whether there are other viable alternatives to reach the same goal, such as a jury trial waiver.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Poor communication of layoffs raises significant risks

According to CNN, French workers are holding management hostage over their refusal to negotiate severance:

Hundreds of French workers, angry about proposed layoffs at a Caterpillar factory, were holding executives of the company hostage Tuesday, a spokesman for the workers said….

The workers were angry that Caterpillar had proposed cutting more than 700 jobs and would not negotiate, said Nicolas Benoit, a spokesman for the workers’ union….

Benoit said all the workers wanted to do was negotiate with Caterpillar and they were upset that the company did not show up to two earlier scheduled negotiating sessions.

In the face of a layoff, your workers likely will not take the drastic step of physically taking people hostage. They are much more likely to take your business hostage in another way – through costly and time-consuming litigation.

The only insurance policy against a laid-off employee filing suit is a well-drafted severance agreement. The key to getting an employee’s signature on that agreement is treating the employee with dignity. Don’t let an employee find out that he or she is going to be included in a layoff by email, text message, or workplace gossip. As difficult as it will be, have a face-to-face conversation with each laid-off employee:

1. Script out what you plan to say ahead of time. The message should be clear yet compassionate.

2. Have an HR representative or other witness present in the room, just in case any dispute arises down the road as to what was said.

3. Keep the lines of communication open, both for the laid-off and those left behind. Both groups will likely have questions. Being available to answer them is crucial.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Charging for pre-employment medical exam

The Americans with Disabilities Act sets limits on when and how employers can ask applicants or employees medical questions. At the pre-employment stage, an employer is allowed to ask any medical questions and conduct medical examinations, as long as two conditions are met: 1) it does so for all entering employees in the same job category; and 2) the applicant has been provided a conditional job offer and has not yet started working.

A question sometimes arises to whether an employer must pay for a pre-employment medical exam. The ADA and Ohio’s parallel law are oddly silent on this issue, which leads me to conclude that an Ohio employer can require an applicant to bear the cost of the medical exam.

The bigger question, though, is whether you want to charge job applicants for medical exams in the first place, of if you want to eat those costs as part of recruitment and hiring. Because the overwhelming majority of employers choose the latter, passing the costs onto applicants could pose real problems in recruiting quality employees.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

How to layoff the protected

Sunday’s New York Times ran an articles called When the Stork Carries a Pink Slip. It makes the point that there is nothing illegal about including pregnant women or women on maternity leave in a layoff. The same holds true for minorities, those over 40, the disabled, those out on FMLA leave, or anyone who happens to find themselves in any of the other groups protected by state or federal discrimination laws. What is illegal, however, is to include a pregnant women in a layoff because she’s pregnant.

Layoffs are supposed to be blind at to issues of race, sex, age, etc. But, if you are making these decisions in the dark, you are making a big mistake that could prove very costly. Before a layoff is implemented, it is crucial to review the demographics of who is staying and who is leaving:

1. You want to make sure that neutral selection criteria do not have a disparate impact on a particular protected group.

2. You want to make sure that it does not look like the layoff targeted a particular protected group.

3. You want to identify those risky inclusions (such as the new mom on maternity leave or the employee with a history of FMLA-leaves) who may need some additional incentive to sign off on a severance agreement and release.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #72

I’ve never been a huge fan of Arlen Specter, Pennsylvania’s senior Senator. When I was a junior in high school, I participated Presidential Classroom, a week-long educational program in D.C. all about the federal government. One of the perks of the program was special meet-and-greets with our Congressman and Senators. Growing up in Philly, I was very excited to meet Sen. Specter, especially since his dad and my granddad somehow knew each other from their old neighborhood. When he blew off our scheduled appointment (the only one of three to do so), he made my list.

This week, however, the Senator took a huge step towards redemption by publicly stating that he will not support the Employee Free Choice Act. Because he’s previously supported the EFCA, and because he’s a Republican, his vote is critical for supporters to reach the 60 votes needed to end a filibuster and bring the bill to a vote. The following blogs have extensive coverage of Sen. Specter’s big announcement: Michael Moore at the Pennsylvania Labor & Employment Blog, the EFCA Report, Michael Fox at Jottings By An Employer’s Lawyer, EFCA Updates, and Dan Schwartz at the Connecticut Employment Law Blog, who has the video and transcript of Specter’s speech.

In other EFCA news this week, a group comprised of the CEO’s of Starbucks, Whole Foods, and Costco have come up with their own compromise on the controversial labor bill. For the details, jump over to the EFCA Report and The Word on Employment Law with John Phillips.

In some local news, Above the Law reports on a gender discrimination lawsuit filed in Summit County. According to the complaint, the alleged harasser is of foreign dissent, and HR cited “cultural differences” to explain why he referred to the plaintiffs as a “Bunch of B*tches,” “Hormonal Messes,” and a “F*cking Lesbian.”

Meanwhile, Molly DiBianca at the Delaware Employment Law Blog shares her thoughts on cursing in the workplace.

Kara Maciel at the EBG Trade Secrets & Noncompete Blog reports on what happens when one gentlemen’s club tries to poach dancers from another.

OnPoint has the details of a Florida case in which a Virginia jury rejected the sex discrimination claim of a female dock worker caught relieving herself outdoors.

Anthony Zaller at the California Employment Law Report writes on a topic I covered earlier this week, the DOL’s intent to step up wage and hour enforcement.

Ross Runkel’s LawMemo details a case in which an employer snooped on an employee’s private AOL email account that the employee accessed from a work computer. Workplace Privacy Counsel suggests that employers draft policies covering employees’ use of personal Internet-based email accounts using company computers.

Point of Law, on the hidden costs associated with layoffs – litigation costs.

Jason Morris at Employeescreen IQ Blog, on whether former bankers wear a scarlet letter in their current job searches.

Rob Radcliff’s Smooth Transitions has 9 pointers on hiring employees covered by non-compete agreements.

Mark Toth at the Manpower Employment Blawg gives his thoughts on a report about the high incidents of employee data theft.

Corporate Voices for Working Families suggests that family-friendly work benefits might take a big hit during the recession.

David Yamada’s Minding the Workplace reports that Massachusetts has introduced a workplace bullying bill in its legislature. For my thoughts on workplace bullying laws, see Sticks and stones may break my bones...

Carl Bosland at The FMLA Blog reminds us that every lawsuit boils down to two key issues, liability and damages, and winning on the latter is just as important for employers as the former.

Ted Moss at COSE Mindspring, on shield laws for job references. For my thoughts on this misunderstood issue, take a look at Do you know? Ohio law protects employers that give negative job references.

Finally, some gallows humor to end the week – Frank Roche at KnowHR links to an online game called “Layoff.”