Do you know? Sexual orientation and gender identity discrimination

It strikes me as appalling that in the year 2009 there are still minority groups against whom it remains legal to discriminate. An employer can blatantly state that the reason for an employee’s termination is that employee’s sexual orientation, with little risk of legal repercussion. Recognizing this anachronism, some courts have permitted claims by creative attorneys under Title VII for sexual stereotyping. Such recognition, however, varies from judge to judge and court to court, with no uniformity or certainty.

If the Ohio legislature has its way, however, this type of discrimination will end. House Bill No. 176 seeks to add “sexual orientation, gender identity and expression” to the categories of protected classes against whom it is illegal to discriminate in employment decisions in Ohio. Under the statute as proposed, “Sexual orientation” would include “actual or perceived heterosexuality, homosexuality, or bisexuality,” and “gender identity and expression” would include the gender-related identity, appearance, or expression of an individual regardless of the individual’s assigned sex at birth.” The latter is much more controversial than the former, and will also likely be the subject of vigorous debate in Washington D.C. over a potential federal ban of the same types of discrimination.

Many companies have already made the personal decision to prohibit these types of discrimination. For those that have not, if sexual orientation and/or gender identity discrimination becomes illegal policies will have to be rewritten and employees and management will have to be retrained. Keep watching this space for further updates on this important issue.

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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.

Confidentiality of personnel records help protect employers from defamation liability

Most people are not confrontational by nature. Maybe that is why many employers are lax about accurately documenting employees’ performance problems. People like to give others the benefit of the doubt, not make waves, and not hurt feelings. It only becomes a problem when an employee becomes an ex-employee and files a lawsuit. At that point, it becomes difficult to explain why an employee with good performance reviews and scant written discipline was fired for performance problems.

One thing that businesses should not have to worry about from negative information in employees’ personnel files is defamation liability. Outlaw v. Werner (Cuyahoga County 5/21/09) [PDF] involved a patient who sued her doctor for defamation based on negative information written in her chart. In affirming the dismissal of her defamation claim, the court commented that defamation liability cannot be premised on information that is kept confidential. Most employers would agree that employees’ personnel files are confidential. Indeed, not even the employee has a right to see his or her own file. Nevertheless, it is not a bad idea to build a policy into your handbook making clear that personnel files are confidential.

For more on the importance of accurately documenting employees’ performance histories and problems, take a look at the following posts from the archives:

• A textbook example in handling a problem employee.
• ‘Tis the season… for employee theft.
• Failure to document performance problems dooms employer's defense.
• Penny-wise, pound-foolish employment practices.
• And finally, Document, document, document!

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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 #81

This week’s top labor and employment story is undoubtedly President Obama’s nomination of Judge Sonia Sotomayor to the U.S. Supreme Court. For coverage of this historic event, read the thoughts of my fellow bloggers: Compensation Cafe; Connecticut Employment Law Blog; HR Lawyer’s Blog; Jottings By An Employer’s Lawyer; The Word on Employment Law with John Phillips; Warren & Hays; and World of Work.

I recently discovered an excellent blog on workplace conflict and corporate cultures -- I Hate People...But It's Nothing Personal. For a good idea of what this blog is all about, I recommend their post on management checking out employees’ Facebook pages.

Also on the topic of social networking, Anne Barnes’s Compensation Force discusses management efforts to regulate this exploding media.

This week also brings us a couple of interesting posts on sexual harassment. Mindy Chapman’s Case in Point talks about how to handle same-sex harassment complaints. On.point reports that a judge has reduced a sex harassment verdict from $100,000 to $26,500 to account for the plaintiff’s habit of exposing her own genital piercing to co-workers.

In age discrimination news, Jennifer Warren at the Warren & Hays Blog suggests that younger employees are being more greatly affected by the recent wave of layoffs. Patrick Smith at the Iowa Employment Law Blog reports on the rise of age claims and provides some practical tips on how to avoid them.

It looks like federally mandated paid sick leave is becoming more and more likely, at least according to Michael Haberman’s HR Observations and Michael Moore’s Pennsylvania Labor & Employment Blog.

Nick Fishman at the Employeescreen IQ Blog discusses background screening in a down economy.

Your HR Guy talks about why exit interviews don’t work.

World of Work reports on a Montana Supreme Court decision which held that exotic dancers are employees and not contractors.

Smooth Transitions shares some thoughts on how to prosecute a trade secret claim against an ex-employee.

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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.

A cautionary lesson in litigation management

10 years ago, an Atlanta restaurant fired its highest ranking female manager. Last month, a federal jury finally dismissed her sexual harassment case. The latest verdict was the third handed down by a federal jury in the last five years. In the interim:

• The employer won the first jury trial in 2004.
• The employee appealed, and the 11th Circuit sent the case back down for retrial, but ordered a mediation before case could be retried.
• At the second trial, the employee won a $2.05 million verdict.
• This time, the employer appealed, and the 11th Circuit again sent the case back down for retrial, with yet another court-ordered mediation.
• Facing insurmountable defense costs and having to post a bond to secure the multi-million dollar verdict on appeal, the restaurant went into bankruptcy.

Law.com quotes the plaintiff’s lawyer, Edward D. Buckley III: “The moral of the story is that there is real value to settling these kinds of cases for both parties. That is something that there were many occasions when it could have occurred, but unfortunately it didn't. The 11th Circuit urged us to engage in meaningful settlement discussions. At least one of the district judges involved in the case urged us [to settle] and tried to facilitate that. Unfortunately, it didn't happen.”

Let this case serve a lesson for all businesses. This case spun out of everyone’s control – the lawyers and the parties. If everyone had put emotion aside (and their is no doubt that three trials and two appeals over 10 years is fueled purely by anger or spite, and not common sense and reason), the plaintiff would have realized that a guaranteed something is better than a roll of the dice, and the employer would have realized that paying a settlement is better than losing everything on principle.

I’m not arguing that the parties should have caved as soon as the case was filed. Indeed, some cases can only be resolved by a trial. After that trial, however, the parties should have listened to the court and viewed the verdict for what it was -- an opportunity to settle, not a reason to fight on.

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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.

The (im)morality of layoffs?

Money, not morality, is the principle commerce of civilized nations.

--Thomas Jefferson

In the May 24 New York Times, ethicist Randy Cohen argues that it is unethical for American businesses to engage in mass layoffs:

These days such mass layoffs are sadly unsurprising, but are they ethical?… They are not, at least until more benign tactics have been exhausted….

To deprive thousands of people of their livelihood can have a catastrophic effect on them, their families and their communities. For a company to get through a recession, suffering may be unavoidable, but ethical management means minimizing that hardship, spreading the pain equitably and bearing some responsibility for its consequences….

Before adopting the ethics of the overcrowded lifeboat, before tossing thousands of non-millionaires over the side, gentler — and more equitable — methods must be tried. Everyone’s hours might be reduced, diffusing the pain. Dividends to stockholders can be eliminated. Pay cuts can be instituted company-wide, with the deepest reserved for the highest paid (that is, those most able to endure them).

Mr. Cohen is selling employers short. I work with a lot of companies, many of which have, with much regret, been forced to downsize their workforces in the past few months. I can assure you it is never a decision taken lightly, or without careful deliberation. Certainly, layoffs are an opportunity for employers to shed some dead weight. Many good employees are also impacted, though. Those businesses that can offer economic help to severed employees do so, in varying sized packages. Others have considered alternate plans, such as furloughs, alternate work schedules, or wage reductions.

For some businesses, however, whether because of the need of their operations or the composition of their workforces, layoffs are the only viable option. A paycheck for some is better than a paycheck for none.

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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? When it is lawful to take deductions from an employee’s pay?

For an employer to claim that an a professional, administrative, or executive employee is “exempt,” and therefore ineligible to receive overtime compensation, the employee must be salaried. An employee is paid on a salary basis when the employee receives the same amount of pay each pay period, without any deductions.

Despite the general rule against deductions from salaries, the Department of Labor’s rules permits employers to make deductions without risking an employee’s exemption in seven specific instances:

1. When an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability.   
   
2. For absences of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.   
   
3. While an employer cannot make deductions from pay for absences of an exempt employee for jury duty, attendance as a witness, or temporary military leave, the employer can offset any amounts received by an employee as jury fees, witness fees, or military pay for a particular week against the salary due for that particular week.
   
4. For penalties imposed in good faith for infractions of safety rules of major significance.    
   
5. For unpaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules imposed pursuant to a written policy applicable to all employees.  
   
6. For any time not actually worked during the first or last week of employment.
   
7. For any time taken as unpaid FMLA leave.
   

It is critical for businesses with salaried employees to familiarize themselves with these rules. A mistaken deduction could prove costly. Generally speaking, if an employer makes a deduction from the amount paid, the exemption will be lost during the time period during which the improper deduction was made. The lost exemption does not only apply to the affected employees, but also to all employees in the same job classification working for the same managers responsible for the actual deduction.

The Department of Labor also provides a safe harbor for employers that have a clearly communicated policy that prohibits the improper pay deductions, and which includes a complaint mechanism, reimburses employees for any improper deductions, and makes a good faith commitment to comply in the future.

Before you implement a policy or practice of docking the pay of salaried employees, it is best to consult with experienced employment counsel to evaluate employees’ job classifications and exemptions, to examine the proposed deductions, and to review or draft an appropriate safe harbor policy.

WIRTW #80

This week’s most popular topic is the Supreme Court’s AT&T v. Hulteen [PDF] decision. That case held: “An employer does not necessarily violate the PDA when it pays pension benefits calculated in part under an accrual rule, applied only pre-PDA, that gave less retirement credit for pregnancy than for medical leave generally.” I agree with Michael Fox that “[i]f the case had gone the other way, it is possible to imagine how it could have had broad ramifications. However, given its narrow holding, it seems unlikely to be very important beyond its impact on the parties.” For more details and commentary, click over to the following laundry list of employment blogs: California Workforce Resource Blog, Connecticut Employment Law Blog, Daily Developments in EEO Law, Delaware Employment Law Blog, Labor & Employment Law Blog, LawMemo Employment Blog, Nolo’s Employment Blog, SCOTUS Blog, Workplace Prof Blog, and World of Work.

Social networking and its impact in the workplace continue to be a hot topic among employment bloggers:

• Where Great Workplaces Start suggests that employees maintain separate on-line profiles for their personal and professional lives.

• BLR’s HR Daily Advisor provides a concise primer on workplace web 2.0 issues.

• HR World discusses the natural disconnect between employers and employees on the issue of social networking.

• The ABA Journal reports on the legal issues of Twitter.

• Dan Schwartz at the Connecticut Employment Law Blog compiled a list of 10 employment law twitterers to follow.

• For those that tweet, you can follow me @jonhyman.

In related news, Robert Ambrogi at the Legal Blog Watch notes that a New Zealand judge has okayed service of process by Facebook.

Sindy Warren at the Warren & Hays Employment Blog discusses the recent trend in courts protecting transgendered employees.

Donna Seale’s Human Rights in the Workplace gives the following very good advice – have regular harassment training.

Natalie Beck at the Employeescreen IQ Blog talks about the dangers that lurk when companies skip background checks.

Kris Dunn, The HR Capitalist, gives his very pro-business take on the EFCA’s binding arbitration requirements.

The Iowa Employment Law Blog lists some challenges HR will face this year.

Fair Labor Standards Act Law suggests that employers read the fine print in their EPL policies to check if wage and hour claims are covered. My guess, based on past experience, is that they are not.

Frank Roche’s KnowHR Blog asks, “How do you handle weirdos at work?”

Finally, Texas attorney Michael Maslanka at Work Matters quotes the Talmud for some words to live by for employers and employees alike: “What is hateful to you, do not to your fellow man. This is the law: all the rest is commentary.” In other words, follow the golden rule and all else should fall into place.

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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.