Do you know? Bankruptcy discrimination

The economy will continue to dominate the headlines in 2010. And, as the economy continues to struggle to rebound, it is likely that your business will have employees who have filed bankruptcy. The question is what do you do with this information.

Do you know that bankruptcy discrimination is unlawful under the Bankruptcy Code.

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt – (1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act; (2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or (3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

In other words, federal law prohibits an employer from terminating an employee or taking an other adverse action against an employee because that employee filed bankruptcy or is associated with someone else who filed bankruptcy.

Three key points to make about this statute:

1. With one exception, every court that has applied this statute has found that it only applies to termination decisions – not hiring decisions. Thus, employers are reasonably safe taking a bankruptcy into consideration when making a hiring decision.

2. The Fair Credit Reporting Act still applies to how employers obtain employee credit information from third parties, including information about bankruptcies. This law only impacts what employers do with the information once they get it.

3. Unlike Title VII, this statute is narrowly written to provide that the bankruptcy must be the sole reason for the adverse action before liability attaches. This is a high standard for a plaintiff to meet, and perhaps explains why we see so few of these cases.

---

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.

Something wicked this way comes – Congress’s 2010 employment law agenda

If political pundits are to be believed, the Democrats’ super-majority will go the way of the dodo in November’s mid-term elections. Without a 60-member super-majority, it will be that much more difficult for the current administration to make good on many of 2008’s campaign promises, which makes this year key for Democratic plans to revamp our employment laws. The Dems have an ambitious employment law slate. The following are the key employment law initiatives pending in Congress, ranked in order of the likelihood of passage this year, along with a discussion of what this will mean for your business if each passes (the full text of the legislation is hyperlinked).

1. Employment Non-Discrimination Act – ENDA would prohibit employers from discriminating or retaliating against actual or perceived gay, bisexual, or transgender employees or applicants. If this bill passes, you will have to cease discriminating on the basis of these classes, re-write your EEO policies, train your managers and supervisors to be more aware of issues that affect gay, bisexual, and transgendered people, and include these issues in all EEO and harassment training.

2. Protecting Older Workers Against Discrimination Act – In Gross v. FBL Fin. Servs., the U.S. Supreme Court held that there is no such animal as a mixed motive under the ADEA, and that to succeed on a federal disparate treatment age discrimination claim, a plaintiff must prove that age was the only cause of the challenged action. This legislation would overturn this case, and permit a plaintiff to establish age discrimination by demonstrating that age was a “motivating factor” for the adverse action. This bill will make it easier for plaintiffs to prove age discrimination, and make it more difficult for employers to defeat age claim on summary judgment. The result will be higher defense costs, more jury trials, and increased settlement values for federal age claims.

3. Healthy Families Act – The swine flu pandemic helped employee advocates prove their point that America’s workers’ need greater access to paid sick leave. This bill would require businesses with 15 or more employees to prove employees seven days of paid sick leave per year. If this bill passes, employers will have to rewrite employee leave policies to provide the required sick leave.

4. FMLA amendments: Family and Medical Leave Enhancement Act and Family Fairness Act – The former would expand the coverage of the FMLA to employers with 25 or more employees, and would expand the reasons for FMLA leave to include a child’s grandchild’s educational or activities extracurricular, or a child’s or elderly relative’s medical appointments. The latter would expand the FMLA’s coverage to include part-time employees. Passage of either of these bills would require employers to revisit and rewrite FMLA leave policies. Along with the Healthy Families Act, these amendments would further limit the ability of employers to manage and schedule employees’ working time.

5. Arbitration Fairness Act – The recent extension of the federal COBRA subsidy contained a provision that prohibits arbitration of Title VII claims for federal contractors who receive more than $1 million. This legislation would void all pre-dispute arbitration agreements that mandate arbitration of employment disputes, except for those contained in collective bargaining agreements. The enactment of this bill would require litigation of all employment disputes (a result, by the way, that I am not entirely opposed to).

6. Paycheck Fairness Act – This bill would provide for compensatory and punitive damages for FLSA violations, and would shift the burden in Equal Pay cases to employers to prove that differences in pay are sex-based and are related to job performance. Wage and hour claims already are the most difficult for employers to handle. This legislation would increase this difficulty, and further underscore employers’ need to be proactively vigilant with wage and hour compliance.

7. Employee Free Choice Act – Enough’s been written about the EFCA. If you are unaware of it, the EFCA would eliminate secret ballot elections for union representation and provide for binding arbitration for first-contract collective bargaining agreements. Next to President Obama’s universal health care, the EFCA is the most controversial legislation the Democrats are putting forth. Because of this controversy, and the hits they have taken during the health care debate, I do not think the EFCA will be pushed this year. And, without a big push from its supporters, I don’t see it becoming law.

---

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 #109

Because of how the holidays fell this year, it’s been a few weeks since I’ve been able to recap what else is happening in the L&E Blawgosphere. Here’s what everyone missed.

• Make a New Year's Resolution to Review Your Anti-Harassment Policies – from New York Labor and Employment Law Report.

• EEOC Warns about Background Checks – via employeescreenIQ Blog.

• Senator Dodd's Legacy With Employers Is Clear: Family and Medical Leave Act – from Dan Schwartz’s Connecticut Employment Law.

• Paid Suspensions: You Don't Use Them Unless You're Pretty Sure They're Not Coming Back – from Kris Dunn, The HR Capitalist.

• No Right to Representation for Accused Nonunion Employees in Workplace Investigations-But for How Long? – via Debra Reilly’s Workplace Investigations Blog.

• Summary Judgment: Myths and Realities – at Patrick Smith’s Iowa Employment Law.

• Why the Philadelphia Eagles (Still) Need a Social-Media Policy – from Molly DiBianca at Delaware Employment Law.

• Recession Litigation Takes Off – via The Word on Employment Law with John Phillips.

• Preliminary Injunction Barring Retaliation Offers a Stern Reminder to Employers – from WorkplaceHorizons.

• ‘Tis the season (for seasonal affective disorder, that is) – from Sindy Warren at the Warren & Hays Employment Law Blog.

• Paying Exempt Employees Who Serve Jury Duty – from the Overtime Advisor.

• Do ‘Team Leaders’ Have the Same Harassment-Reporting Duties as Supervisors? – from Mindy Chapman’s Case In Point.

• Leave of absence taken in order to recover from a disability is not necessarily a “reasonable accommodation” under the ADA – from Employment Law Matters.

• Chart of EEOC Charges 1997-2009 – via Philip Miles’s Lawffice Space.

---

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 termination is not always a termination when the FMLA is involved

On December 5, 2002, James Randolph suffered a severe episode of depression, blacked out, and failed to report for work. Because December 5 was Randolph’s last day of probation for prior attendance violations, his employer terminated him. When Randolph awoke from his blackout, he discovered a voicemail message on his cell phone from his supervisor terminating him. With that discovery, Randolph had a break-down, abandoned his plans to call work to explain his absence, aborted a trip to his doctor, and drove to his mother’s house. It was his mother who, late that night, spoke to the same supervisor, stating that Randolph was having a nervous breakdown and suffering from a recurring condition that warranted medical leave. Randolph had a similar conversation the following day with the personnel department, but his employer refused to reverse its termination decision.

In Randolph v. Grange Mutual Casualty Co. (Franklin Cty. 12/22/09) [pdf], the court of appeals reversed the trial court dismissal of Randolph’s FMLA claim, and concluded that a jury issue existed on whether the company interfered with Randolph’s attempt to take unforeseeable FMLA leave on December 5. Under the FMLA, “[w]hen the approximate timing of the need for leave is not foreseeable, an employee should give notice to the employer of the need for FMLA leave as soon as practicable under the facts and circumstances of the particular case.”

Grange argued that Randolph did not provide notice of his need for FMLA leave as soon as practicable on December 5, citing to the nearly 9-hour gap between when he awoke from his blackout and when his mother finally contacted his supervisor. The appellate court rejected that argument, concluding that it should be up to jury to conclude whether Randolph’s fragile emotional state excused him from not contacting his employer upon coming to. In other words, what is “as soon as practicable” is a fact question, not a legal question.

Employees’ medical issues should raise a bunch of flags for employers, who must proceed with caution whenever taking action against such an employee. As the Randolph case points out, this caution could even extend to rescinding a termination in the right circumstances.

---

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.

Repeat after me – Don’t bring guns to work

Driving into work this morning, I listened to a legitimate debate over whether the NBA should suspend Gilbert Arenas and his teammate, Javaris Crittenton, for pulling guns on each other during a late-2009 locker room confrontation. While a D.C. grand jury considers whether to indict Arenas, he tweets that he is the new John Wayne.

There is simply no excuse that an employee can make for this level of egregious misconduct. Arenas claims that he was joking when invited Crittenton to choose one of three guns to settle their gambling debt disagreement, but that does not even come close to excusing the misconduct. Yet, the media is having a legitimate debate over whether the NBA should fine Arenas, suspend him, or wait for the criminal justice system to have its say.

Let me make this real simple for everyone. If an employee brings a gun into your workplace, that employee should be fired, period. The fact that we can even have a discussion over the fate of Gilbert Arenas underscores the point that the world in which professional athletes live and work is not the same as ours.

---

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? An employee’s (lack of) right to representation at an investigatory interviews or disciplinary meeting

Yesterday I discussed the illegality of firing an at-will employee for consulting with an attorney. Despite an employee’s right to talk to a lawyer about issues going on in your workplace, non-union employees do not have a right to representation at investigatory interviews or disciplinary meetings. In a union setting, rank-and-file employees enjoy what are called Weingarten Rights – the right to union representation at these encounters.

Those same rights do not extend to a non-union setting. In IBM Corp. (June 9, 2004) [pdf], the National Labor Relations Board concluded that “the right of an employee to a coworker’s presence in the absence of a union is outweighed by an employer’s right to conduct prompt, efficient, thorough, and confidential workplace investigations.” While the holding only mentioned a coworker representative, the employer had denied the employee’s request for a coworker or an attorney to be present.

It is important to note, however, that the federal courts and the NLRB have gone back and forth on this issue over the years, and that IBM was a tight 3-2 decision of a Bush-appointed NLRB. Even the IBM majority recognized that one could reasonably interpret the National Labor Relations Act to reach the opposite conclusion. Because President Obama has already appointed a new Chairperson, and will fill three other vacancies on the NLRB, there is a good chance this rule will change if the issue makes its way back to D.C. in the next three years.

For now, employers are well within their rights to prohibit employees from having representation during investigatory interviews or disciplinary meetings.

Lessons from (a) Leach – retaliation for talking to an attorney is a no-no

One of big stories that broke while I was off last week was the firing of Texas Tech head football coach Mike Leach. The university initially suspended Leech after a player accused him of locking him in a closet following a concussion. The school later changed the suspension to a termination after Leach filed a lawsuit seeking a restraining order to allow him to coach in the team’s bowl game.

In Ohio, Texas Tech’s actions could lead to a wrongful discharge claim, provided that the employee is at-will. Ohio law does not allow an at-will employee to be fired solely for consulting an attorney. Ohio law also does not allow an employee to be fired for filing a lawsuit. While an at-will employee generally can be fired for any reason or no reason, an exception exists when the termination jeopardizes a clear public policy. Access to legal services and access to the courts are such public policies.

What does this mean for employers? Simply that you cannot terminate an employee who you suspect may be consulting with counsel. These employees are protected as if they had come to you directly with a complaint about harassment or discrimination, or engaged in any other protected activity.

Come back tomorrow as we take this question to the next level, and answer the question of what happens when an employee asks to have counsel present at a disciplinary or termination meeting.