Why employees sue

At the conclusion of a day-long plaintiff’s deposition in an FMLA and disability discrimination lawsuit, it was clear to me that my client had not only not violated any laws, but bent over backwards to do everything possible to accommodate the plaintiff. The company had treated this employee so well, I asked a question that I had never asked in another deposition—why are you suing?

It seems to me that they treated you fairly. They gave you an initial medical leave of more than 12 weeks, they provided you every accommodation you requested for your medical conditions, they provided you a second medical leave of more than 12 weeks, and you received several raises during your employment. Why are you suing this company?

The answer she gave floored me—not because it was damaging to my case, but because something that seemed so trifling caused the lawsuit. Her answer: “They started fighting my unemployment.”

Employees sue when they feel disrespected or when they perceive unfair treatment. It is not simply enough for an employer to treat employees well during their tenure. Employers should also strive to treat employees well in conjunction with their terminations and even thereafter. Sure, there are exceptions. I would never suggest that a serial harasser deserves a pass, or that the employee who stole from you should receive unemployment or a good job reference. If you don’t want to be sued, though, don’t make a terminated employee feel like a common criminal by having security escort them to the door (unless you legitimately and reasonably perceive a safety risk). It’s okay not to give a glowing recommendation to a marginal ex-employee, but resist the urge to trash him or her to a prospective employer. Don’t fight unemployment except in the most clear-cut cases. These little things could go a long way to an ex-employee reaching the decision to let bygones be bygones and not see you in court.

Do you know? What is the Paycheck Fairness Act are why should employers be concerned?

Today’s USA Today reports that the Obama Administration is going to make a renewed push for the passage of the Paycheck Fairness Act:

President Obama plans to press Congress today to pass pay-equity legislation that would make it easier for women to sue employers who pay them less than their male counterparts, the White House said Monday. “Women deserve equal pay,” White House senior adviser Valerie Jarrett said in an interview, citing government statistics that show women earn 77 cents for every dollar men earn. “It’s a very fundamental right.”

It would be hard to make an argument against this bill if all it did was guarantee equal pay for equal work. The Paycheck Fairness Act, however, goes much further by limiting the ability of businesses to defend against such claims, which should make businesses very concerned that this issue has reached the top of the President’s agenda.

The Paycheck Fairness Act (the full text of which is available here) makes 5 key changes to federal wage and hour laws:

1. Modified defense. Paycheck Fairness would impede the ability of employers to defend against sex discrimination wage payment claims. An employer can currently defend against an Equal Pay Act claim by showing that the pay difference between men and women was caused by “any factor other than sex.” Paycheck Fairness would alter this standard by requiring employers to show “a bona fide factor other than sex, such as education, training, or experience,” that is not sex-based, but is job-related to the position and consistent with business necessity. Moreover, even if an employer makes this showing, the employee could still prevail by showing that the employer refused to adopt an alternative employment practice that would serve the same business purpose without producing the same wage differential.
   
2. Enhanced damages. The current Equal Pay Act’s remedies include back pay and liquidated damages that are capped at the amount of the back pay. Paycheck Fairness would steepen the remedies for sex discrimination in wage payments by allowing for uncapped punitive and compensatory damages.
   
3. Non-retaliation. Paycheck Fairness would prohibit an employer from retaliating an employee who inquired about, discussed or disclosed the wages of the employee or another employee, unless discussing wages is part of an employee’s essential job function. While the National Labor Relations Act already covers this conduct, Paycheck Fairness’s enhanced remedies are much more extensive than those available under the NLRA.
   
4. Class actions. Paycheck Fairness would change sex discrimination wage payment class actions from “opt in” classes to “opt out” classes, making classes in these cases larger and easier for employees to join.
   
5. Reporting. Paycheck Fairness would require the EEOC to issue regulations on the collection of pay information from employers. It would also require the Office of Federal Contract Compliance Programs to use its “full range of investigatory tools” for investigation, compliance, and enforcement.
   

Employers should be very worried about the prospects for Paycheck Fairness. If it passes, employers will face increased risk and higher damages for sex discrimination wage claims. Perhaps the heavier burden, though, will be the significant compliance obligations from newly-empowered federal agencies.

Court recognizes “sabotage defense” in retaliation cases

Alvarez v. Royal Atlantic Developers, Inc. (11th Cir. 7/2/10) [pdf] asks this question: Can an employee who engages in protected activity pursue a retaliation claim if an employee slated for termination is fired sooner rather than later because of an exercise of protected activity? The court recognized that in certain circumstances, a legitimate and reasonable fear that an irate employee will use his or her position within the company to sabotage operations will justify termination, even if the company finds about the risk from the employee’s exercise of protected activity (such as a written complaint letter).

When Eliuth Alvarez got wind of her boss’s plans to replace her as the company’s controller, she wrote a letter of protest, complaining, among other things, about what she perceived to be discrimination against her based on her national origin. The company accelerated Alvarez’s termination because of the letter. It argued that it had to get rid of Alvarez when it did because the it feared that she might vindictively use her position as controller, with access to company computers and bank accounts, to sabotage operations.

The court recognized that in certain circumstances, such a fear is justified:

Suppose an employee with reason to believe that she has been discriminated against works in the control room of a nuclear power plant, and in her letter complaining of discrimination says that: “I’m mad as hell and I’m not going to take it anymore!” Or suppose she is a pilot and makes that statement in her letter of complaint. Or suppose she was not in a position to endanger the public, but her letter complaining of discrimination makes it clear that she is psychologically unstable and a danger to those who work around her. Discrimination laws do not require that their goals be pursued at the cost of jeopardizing innocent life or that employers tolerate a serious risk that employees in sensitive positions will sabotage the company’s operations. We are confident that if an employer removes an employee because of a reasonable, fact-based fear of sabotage or violence, the anti-retaliation provisions of our laws will not punish that employer for doing so.

In the specific circumstances of this case, however, the court was not persuaded that fear of sabotage motivated the employer’s decision to move up the termination:

Unless Royal Atlantic convinces a jury that it had a reasonable basis for fearing that unless it fired her immediately Alvarez would sabotage its operations or harm others, and there was no less drastic means of reliably preventing that other than firing her, Alvarez will be entitled to damages for the length of time she would have remained on the job if she had not sent the October 3, 2006 letter complaining of discrimination.

A few questions to consider if you a planning on using this defense in your next retaliation case:

• Did the employee’s position offer the opportunity to do real harm to the company?

• Did the employee make real threats against the company or anyone else, or provide a legitimate and reasonable basis to infer that he or she would disrupt operations?

• Did the company have no options other than termination (such as reassigning duties until a replacement could be hired) to protect itself from the feared sabotage?

• Did the employee’s continued employment pose a physical danger to other employees or the public?

The more of these questions to which you can answer yes, the better chance you will have to prevail on this defense.

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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 #135

The post of the week belongs to Dan Schwartz at the Connecticut Employment Law Blog, who correctly identifies the major shortcomings with the National Sexual Harassment Registry recently launched by eBossWatch. It is a must read for anyone with a job.

Here’s the rest of what I read this week:

Litigation

• Depositions: Quit wasting time and money – from What About Clients?

• Does Your Firm Suffer from OCD? – from Stephanie Thomas’s The Proactive Employer

• FACTS? We (the jury) Don't Need No Stinking Facts. (Or, do we?) – from Deliberations

• Can Costs of Employment Arbitration Be Unfair to Employer? – from Paul Kirgis at ADR Prof Blog

• Metadata Scrubbing: Are Lawyers Finally Getting the Message? – from Ride The Lightning

• ABA Reports That Pro Se Representation Is Increasing, To The Litigants’ Detriment – from Cleveland Law Library Weblog

Discrimination & Harassment

• Harassment Case Against Steven Seagal Dismissed – from Lowering the Bar

• Novartis Enters Settlement Agreement for Remaining Members of Gender Bias Suit – from HR Hero’s Human Resources News

• Discrimination from the Bottom Up – from Richard Bales at Workplace Prof Blog

• EEOC Vice-Chair: What's Particularly Important for Employers? – from HR Daily Advisor

• Western District of Virginia Refuses to Dismiss Sexual Harassment Suit – from Laconic Law Blog

• Fitness-for-duty exam does not support a “regarded as disabled” claim – from Employment Law Matters

• 1st Circuit: Sexual desire is not a necessary element of a hostile work environment claim – from Work Matters

Wage & Hour

• 9th Cir: Jury Decides Employment Status – from Alaska Employment Law

• Department of Labor Examines New Approach for Enforcing Federal Employment Laws – from Wyatt Employment Law Report

• If you were the judge: Employee’s performance review referred to FMLA-covered absences – from HR Cafe

• Hot Times in HR – from Jim Brennan at Compensation Cafe

Social Media & Technology

• Do you text and drive? TeleNav survey shows about 1/4 of you do – from Smartphones and Cell Phones

• Be Careful What You Tweet – from Mark Toth’s Manpower Employment Blawg

• Social Media Policy – from NJ Hess Associates Blog / Patterns of Work

LeBron James

• On Leadership: Gilbert's Letter to LeBron - Leader or Looney? – from Kris Dunn, The HR Capitalist

• LeBron James’ Employment Background Check: He Stole Our Hearts – from Nick Fishman at the employeescreenIQ Blog

• Dan Gilbert and LeBron: Dealing with a departing employee – from Sindy Warren at the Warren & Hays Employment Law Blog

• The King Has No Clothes, Lebron’s Lessons For Work – from Workplace Fairness

• LeBron James? He’s Just a Glimpse at Your Employee of the Future – from TLNT

• LeBron Is Not Taking Less Money: A Quick Tax Overview – from Wills & Wealth

• LeBron James Faces ‘Reverse Paternity Suit’ Filed by Alleged Father – from Inside Opinions: Legal Blogs

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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.

In litigation lockdown, silence in golden

When I was 17 years old I was in a car accident, the details of which are unimportant to this story. What is important, though, is that a week later, I saw the woman I hit in the library, but she didn't see me. She was telling the librarian all about the accident, including how she wasn't that badly injured, but that her attorney told her to keep treating so that they could ask for more money in her lawsuit.

When your company is sued, you need to instruct your employees to exercise extreme caution in who says what around whom. I refer to it as "litigation lockdown." You may not know which of your employees are friends with the plaintiff. And, as my story illustrates, you cannot always control who overhears what is said. Especially in the workplace, little is private. Walls are often paper-thin. You never know who might be listening to what is intended to be private conversation.

Suffice it to say the woman I hit got much less money than she otherwise might have because I was in the right place at the right time. Don't end up over-paying in case because of similar carelessness.

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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.

Compliance and training key to victory in overtime lawsuit

A New York federal court recently dismissed a wage and hour collective action that sought unpaid overtime for “off-the-clock” work. The plaintiffs in Keubel v. Black & Decker claimed their employer maintained a policy of refusing to pay employees for any hours worked over 40 in a week. The court concluded that Black & Decker did not have to compensate employees for time worked that it did not know about or could not reasonably have known about. In support of its conclusion, the court relied upon Black & Decker’s wage and hour compliance and training, including written wage and hour and work time reporting policies, an anti-retaliation policy, an anonymous hotline for reporting violations, and regular training of all employees at all levels on wage and hour compliance:

It is undisputed that there was a company wide written policy concerning accurately recording all hours worked on ones time sheets, including overtime. Indeed, Black & Decker maintains a Code of Ethics that requires all employees to maintain the integrity of company records, explains the company’s commitment to obeying all laws expressly, including all wage and hour laws, and requiring employees to report what they believe to be violations of the Code of Ethics. As part of the effort to reinforce the Code of Ethics with all employees, Black & Decker mailed a copy of a brochure entitled “Doing What’s Right” to all employees on April 10, 2006, which summarized the critical aspects of the Code of Ethics.

Black & Decker sent out a series of e-mails to all current employees, which focused on topics addressing the Code of Ethics. In fact, an e-mail sent to all employees in January 2007 regarding accurate business records provided that all employees were required to “ensure that business records (for example time cards, travel and expense reports, invoices, and purchase orders) are honest, complete and not misleading.” It directed employees to “watch out for falsifying records or documents” and to beware of “[a]ssisting anyone with or going along with the creation of inaccurate or misleading records.” Employees were told, “If you are asked or aware of efforts to alter, destroy, conceal, falsify or not create business records, report this to your supervisor immediately[.]” In addition, employees were given an e-mail address and phone number by which they could make anonymous reports of violations. Significantly, no complaint was ever made by plaintiff through this process, nor was any anonymous complaint made regarding plaintiff’s supervisors. Based on these undisputed facts, plaintiff cannot meet his burden of proving that Black & Decker had actual or constructive knowledge of the hours he worked off-the-clock.

I’ve said it before, and in light of this case I’ll say it again—policies, training, and other compliance initiatives are crucial in preventing and ultimately winning litigation. KJK offers a proprietary (and complementary) 200-point HR and employment practices audit, which includes wage and hour compliance. This examination of your practices and procedures is the first step in making your organization litigation resistant.

[Hat tip: ELT, Inc. Blog, c/o Fair Labor Standards Act Law]

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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? Eligibility for FMLA leave

FMLA leave continues to be one of the most confounding HR issues for employers. The first issue you often face is whether an employee seeking leave is eligible for the leave sought.

To be eligible for FMLA leave, an employee must meet two criteria:

1. The employee must have been employed for at least 12 months. These months, however, do not have to be consecutive and do not even have to immediately precede the request for FMLA leave. As long the employee has worked for the employer for a total of 12 months over any duration of time, this criteria is met.

2. The employee must have at least 1,250 hours of service during the previous 12-month period. “Hours of service” means hours worked. Thus, non-working time, paid or unpaid, such as vacations, holidays, furloughs, sick leave, other FMLA leave, and other time-off, do not count in the calculation of hours of service. This rule, however, has two key exceptions. First, an employee returning from fulfilling his or her National Guard or Reserve military obligation must be credited with the hours of service that would have been performed but for the period of military service in determining whether the employee worked the required 1,250 hours. Secondly, time that an employee would have worked but for an unlawful termination also counts towards the required 1,250 hours.

Because of these eligibility requirements, it is important to keep accurate records of work hours, even for exempt employees. If an employer does not keep an accurate record of hours worked, it will be presumed that the employee worked enough hours.

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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.