Quarter-billion dollar verdict in sex discrimination suit highlights risks of family responsibility discrimination

In October 2009, Working Mother magazine named Novartis Pharmaceuticals one of its 100 best companies for working families, lauding its flexible work schedules, job-sharing, telecommuting, and customizable child-care offerings. According to a federal jury in Manhattan, all was not what it seemed at Novartis. That jury found that Novartis had discriminated against women over pay and promotions. The cost to Novartis: $3.3 million in compensatory damages to the 12 name plaintiffs, and another $250 million in punitive damages to a class of 5,600 female sales reps and entry-level managers. The allegation that perhaps led the jury to award more than a quarter-billion dollars was this gem from a Novartis manager explaining his preference against hiring young women: “First comes love, then comes marriage, then comes flex time and a baby carriage.” That statement has not only cost Novartis a whopping 2.6% of its annual revenue, but also its reputation as a great workplace for working moms.

One of the very first posts I wrote on this blog (almost three years ago to the day) discussed a $2.1 million verdict handed down by a Cuyahoga County jury against Kohl’s. In that case, the plaintiff claimed discrimination because of her parenting role for her two young children. Witnesses testified at trial that as she was being passed over for promotion after promotion, managers asked questions like: “You’re not going to get pregnant again, are you?” and “Did you get your tubes tied?” Following the trial, the Cleveland Plain Dealer quoted one juror’s explanation for the multi-million dollar verdict: “I think she was very poorly treated because she was pregnant, because she wanted to have a family.”

Ashby Jones, writing at the Wall Street Journal’s Law Blog, quotes Mike Delikat, the chair of Orrick’s employment law practice, who thinks that this verdict is the beginning of a dark age for employers:

“It should clearly cause the employer community to sit up and look at its potential exposure in this area,” said Delikat. “You’re going to see more class-actions filed, and more individual claims of gender and race discrimination. It could be a bonanza.”

Delikat said that the Novartis ruling was a “game changer,” in that it provided a new arrow for plaintiffs lawyers to tuck into their quivers. “How many employers are going to be willing to take a case now that we have a case like this on the books?” he asked. “The case is going to encourage even more defendants to settle—and pay a lot more than they used to.”

While I’m not ready to go as far as Mr. Delikat, there is real danger that lurks for employers in these types of cases. People think that women are entitled to have a career and a family, and juries continue to punish employers that prioritize the former over the latter. If employers have not been paying attention to family responsibility discrimination, they better be now.

For more coverage of this story, I recommend the perspectives of my fellow bloggers: Delaware Employment Law Blog, HR Lawyer’s Blog, Maryland Employment Law Developments, San Antonio Employment Law Blog, UndercoverLawyer, LawMemo Employment Law Blog, and Jottings By An Employer’s Lawyer.

For more on issues and trends in family responsibility discrimination, I recommend a few of my earlier posts:

• Caregiver discrimination, three years later
• EEOC releases “Employer Best Practices for Workers with Caregiving Responsibilities”
• Is the glass ceiling self-imposed?
• Is mommy bias real?
• “Maternal Profiling” listed as buzzword of 2007

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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 textbook example of Facebook firing

I spent the summer between my junior and senior years of high school bussing tables in a nursing home dining room. Not the world’s most glamour job, but it paid $8 an hour, which in 1989 was a lot of money. Needles to say, we had our fair share of difficult people to deal with. One of my co-workers would retaliate by spitting in the resident’s food. Had he been caught by management, there is no doubt he would have been fired.

Flash forward 21 years – social media is the new spitting. Unlike spitting, however, social media is public, and much easier to discover. When a waitress at a Charlotte restaurant was stiffed on a tip from a difficult table, she took her grievance to Facebook, “Thanks for eating at Brixx, you cheap piece of ---- camper.” Two days later, her managers fired her for violating company policies against speaking disparagingly about customers and casting the restaurant in a negative light on social networks.

There are three important lessons to take away from this tale that is becoming all too common.

1. Your employees are on Facebook, Twitter, blogs, and myriad other websites, saying things both good and bad about your business. Your business needs to harness the good and discourage the bad.

2. If an employee makes disparaging comments about your business on the Internet, you are within your rights as an employer to fire that employee.

3. But, you are selling your business short if you don’t have a policy that warns employees of the potential punishments for illegitimate and irresponsible uses of social media, as well as instructs them about legitimate and responsible uses.

For more on putting together an appropriate social media policy, check out my earlier thoughts on 7 must-haves for your policy.

For more on this story, I recommend Philip Miles’s Lawffice Space, The Word on Employment Law with John Phillips, Megan Erickson’s Social Networking Law Blog, and Molly DiBianca at the Delaware Employment Law Blog. And thanks to Joe Lustig for bringing this to my attention.

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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? Admissibility of settlement offers

Sometimes, employers are blindsided by a lawsuit. The first you might learn that an ex-employee is suing you is when you are served the complaint and summons. Other times, however, the filing of a lawsuit is preceded by a back-and-forth between attorneys hoping to resolve the dispute outside of court. To what extent can you freely communicate with an ex-employee’s attorney without fear that your words and statements will come back to haunt you in a trial if the negotiations break down? Eid v. Saint-Gobain Abrasives (6th Cir. 5/12/10) [pdf] provides some guidance.

After his termination from Saint-Gobain, Kenneth Eid retained counsel for the purpose of asserting an employment discrimination claim. Prior to filing a claim, Eid’s attorney sent a letter to Saint-Gobain announcing Eid’s intention to pursue a claim but inviting a negotiated resolution. Saint-Gobain’s associate general counsel responded in writing with a discussion of Saint-Gobain’s internal investigation into Eid’s allegations and witnesses interviews. The responses concluded that the “termination was handled in our judgment in an appropriate fashion,” and “[t]here is no basis for the organization to consider a settlement with your client.”

Prior to trial, the court excluded the general counsel’s letter under Evidence Rule 408. Following a defense verdict, Eid appealed that decision.

Evidence Rule 408 prohibits a party from introducing into evidence:

• offers to settle; and
• conduct or statements made in settlement negotiations regarding the claim.

The 6th Circuit found that the trial court properly excluded the letter, despite the refusal to engage in any further settlement negotiations:

A party will often adopt a hardline position at the beginning of negotiations in order to extract greater concessions from an opponent. It would ignore the realities of negotiation to hold that such a position necessarily means that the parties are not engaged in compromise negotiations. Such a rule would also run contrary to the purposes of Rule 408, as it would invite undue caution in settlement negotiations, and would facilitate the admission of communications that contain puffing, posturing, and various irrelevancies.

The 6th Circuit also found that the discussion of the internal investigation was within the protections of Rule 408.

In other words, you can respond to an employee’s pre-suit settlement overtures with a reasonable degree of confidence that a jury will not some day be reading your lawyers comments about the strengths and weaknesses of your case.

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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.

What employers need to know about EEO

On Friday, I had the pleasure of appearing on Newton Software’s podcast, Equal Employment Opportunity & Affirmative Action: What Every Employer Needs to be Aware of and Why. For a half-hour, host Joel Passen and I talked about the proactive steps employers can take to stay ahead of curve on EEO compliance issues. If you missed it, you can catch up either on Joel’s blog, on BlogTalkRadio, or on iTunes. The latter two also allow you to subscribe to Joel’s excellent and informative weekly podcast.

Thanks to Joel for inviting me to appear, and I look forward to taking you up on your invitation to return.

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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 #127

The nomination of Elena Kagan to the Supreme Court was the top legal story of the week. Here’s a snippet of the blogosphere’s commentary on the nomination.

• The Employment Law Decisions of Supreme Court Nominee Elena Kegan – from Michael Fox’s Jottings By An Employer’s Lawyer

• Out-of-context quotes and Kagan (II): Miers, Media Matters, Jon Stewart, and Me – from PointOfLaw Forum

• A “Diverse” Supreme Court? – from Discriminations

• Constitution Requires Ivy Credentials – from The Word on Employment Law with John Phillips

• Kagan and the Magic Number Three – from Settle It Now Negotiation Blog

• It’s Official, It’s Kagan - New SCOTUS Nominee – from Philip Miles’s Lawffice Space

• Dumbing Down the Narrative – from Popehat

• Kagan the Next Supreme? – from Manpower Employment Blawg

As for the rest of the best of the week…

Social Media

• The NLRB and Social Media Policies – from Labor Relations Today

• Using Social Media for Selection – 3 Things Employers Should Consider – from Where Great Workplaces Start

• Facebook Privacy: More Changes & Controversy (Weigh In!) – from Megan Erickson’s Social Networking Law Blog

• 25 Things About Me (and My Visit to Facebook Headquarters) – from Dan Schwartz’s Connecticut Employment Law Blog

Discrimination

• Got Milk? Understand the Link Between Federal & State Breastfeeding Laws – from Mindy Chapman’s Case In Point

• Not Just Any Release Will Do: Drafting Valid Releases for a Reduction-in-Force – from New York Labor and Employment Law Report

• Accommodating family status in the workplace: the great prima facie case debate – from Donna Seale’s Human Rights in the Workplace

• Federal Bill Aims to Ban Credit Reports for Employment Screening – from Nick Fishman’s employeescreenIQ Blog

• Third Cir. Rules that Side Effects from Treatment May Be an ADA Impairment – from Maribeth Minella at the Delaware Employment Law Blog

• Washington’s Next Acronym?: POWADA—the Gross v. FBL Financial Services, Inc. Override – from Fitzpatrick on Employment Law

• Title VII Sex Discrimination and Retaliation/Subject Matter Jurisdiction re Attorneys’ Fees – from The Labor and Employment Law Blog

Wage & Hour

• Plaintiff’s Attorney’s Fees Can be Very High – from San Antonio Employment Law Blog

• Increased DOL Enforcement Calls for Proactive Measures – from CPEhr

• DOL Plans To Amend Regulatory FLSA Recordkeeping Requirements – from Hunton Employment & Labor Law Perspectives™

• The Offer Of Judgment: Sometimes The Magic Works, Sometimes It Doesn’t – from Wage & Hour - Development & Highlights

Miscellaneous

• Are They or Aren’t They Confidential? Performance Review Content Now Under Public Scrutiny – from Becky Regan at Compensation Cafe

• Trade Secrets on Copy Machine Hard Drives? – from Trade Secrets Blog

• Big Brother, Big Implications: Creating an Employee Monitoring Policy Without Creating Additional Legal Liability – from Pennsylvania Labor and Employment Blog

• NLRB - The National Union Encouragement Board – from The ChamberPost

• DOL Announces “Plan/Prevent/Protect” Business Compliance Program – from Washington D.C. Employment Law Update

• Unauthorized Access Doesn’t Apply to E-Mail, Judge Rules – from Law.com

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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.

Presenting: The Top 5 Issues Confronting Your HR Practices

Yesterday, KJK's Labor & Employment Group presented our first Breakfast Briefing of the year, The Top 5 Issues Confronting Your HR Practices. We had an ambitious agenda, covering the classification of employees, health care reform, workplace technology, the ADAAA, and hiring. Thanks to everyone who attended and helped make our event successful. For those that could not attend, below are the PowerPoint slides. Keep you eyes on this space for updates on our next Breakfast Briefing later in the year.

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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.

Battle of the accommodations

Almost a month ago, I wrote about how businesses should go about opening their doors to employees’ pets. At the time, I flagged potential ADA issues as one possible risk to having a pet-friendly workplace:

If an employee is allergic to animals, pet owners must understand that they may have to leave their animals at home as a reasonable accommodation. Other possible accommodations include creating sufficient separation between the allergic employee and the pet, segregating the pet to a specific part of the facility, or improving ventilation. Ignoring the pleas of an allergic employee, though, will open you up to potential ADA liability.

In response to my post, Stephanie Thomas, who follow each other on Twitter, asked the following question:

I dismissed it as an academic question. Perhaps I was being too hasty. Yesterday, Walter Olson’s Overlawyered brought us a story that illustrates this exact problem. According to an article by Steven Greenhouse in the May 10 New York Times, the city of Indianapolis has gotten itself into trouble with the EEOC for allowing a disabled employee to bring a service dog into work that caused a co-worker to have an asthema attack. From Mr Greenhouse’s story:

On the first day Ms. Kysel took Penny to work, one of her co-workers suffered an asthma attack because she is allergic to dogs. That afternoon Ms. Kysel was stunned when her boss told her that she could no longer take the dog to work, or if she felt she could not report to work without Penny, she could go on indefinite unpaid leave…. Ms. Kysel filed a complaint with the Equal Employment Opportunity Commission, asserting that her employer had discriminated against her by failing to accommodate her disability.

According to the EEOC (as quoted by Mr. Greenhouse):

When you have two people with disabilities … you don’t treat one as inherently more important than the other. What the employer has to do is work out some sort of balance between the accommodations needed.

In other words, not even the EEOC knows how to handle this perplexing situation. The lesson for employers is two-fold: 1) employment law is the land where bizarre happens; and 2) when in doubt, call your lawyer. We may not know the answer, but we can at least give you the peace of mind that you’re not totally crazy in not knowing what to do.