Ohio Supreme Court rewrites, and protects, the tripartite relationship between attorney, client, and insurer

If your business has employment practices liability insurance, or deals with insurance companies for other coverages, you are probably aware of the strange three-headed relationship that exists between you (the insured), your insurance company, and the attorney your insurance company hires to defend you in litigation. One question that always arises in this unique relationship is whether an attorney-client relationship only exists between the attorney and you (the insured), or if it also exists between the attorney and the insurance company. The answer to this question is significant, because if there is no attorney-client relationship between counsel and the insurance company, then the attorney-client privilege will not shield communications between them.

Conventional wisdom in Ohio has been that no attorney-client relationship exists between an insurance company and retained counsel. The seminal case on this issue was Swiss Reinsurance Am. Corp. v. Roetzel & Andress. Earlier this week, however, the Ohio Supreme Court—in State ex rel. Dawson v. Bloom-Carroll Local School District (11/29/11) [pdf]—flipped conventional wisdom on its head. The case focused on the issue of whether someone could compel disclosure, under Ohio’s public records law, of communications between a school district’s insurance carrier and its legal representative. It has much broader implications for the relationship between an attorney and an insurance carrier. The Court concluded that because an attorney-client relationship existed between the insurer and the insured’s retained counsel, the resulting privilege shielded any such communications from disclosure:

In effect, the insurance company stands in the shoes of the district…. Where a person approaches an attorney with the view of retaining his services to act on the former’s behalf, an attorney-client relationship is created, and communications made to such attorney during the preliminary conferences prior to the actual acceptance or rejection by the attorney of the employment are privileged communications.

This case solves a huge problem for employers’ insurance counsel, and consequently for employers. Under Swiss Reinsurance, and because of the lack of any privilege, communications between employment defense insurance counsel and the insurance company were made at the client’s risk. Thanks to a common sense ruling from the Supremes, these communications are now rightfully protected. Counsel should now be able to speak as freely with the insurer as we do with our clients.

Booze, Sex and HR: maintain perspective; accept corporate responsibility

In the spirit of the holiday party season, Mike VanDervort made the following challenge on his blog, The Human Race Horses: On November 30, 2011, write a blog post using the three-word theme of “Booze, Sex and HR.” This is my entry.

Life is full of perspective-defining events. Each chapter in one’s life creates a new perspective that helps shape each successive chapter. One of the chapters that helps define who I am as a management-side employment attorney is the three summers I worked during my college years at a Philadelphia t-shirt wholesaler. The first summer I ran myself over (true story) driving its beat-up delivery van. The next two summers I worked inventory. In retrospect, management must have figured that the college kid could count better than he could drive. The warehouse was full of colorful characters, including one whose idea of employee engagement was to hide buckets of KFC amid the racks of boxes (another true story), and another who complained about not receiving a raise by burning an effigy of the Jewish owner spray-painted with a swastika and the phrase “Die Cheap Jew” (yet another true story). And who could forget the African-American who was (not so) affectionately referred to as either “Ape” or “Gorilla” or simply “N—-er,” depending on people’s whims on any particular day. Suffice it to say this job provided a ton of perspective.

When I returned for my final summer, I noticed that one of the star employees was missing. When I asked what happened to him, I was told that he was fired following that year’s Christmas party. After over-indulging, he decided it was a good idea to strip down to his underwear, grab the owner’s wife on the dance floor, and, well, you can picture the rest.

There is no set of circumstances under which an employee can grind the boss’s wife without consent and in a state of semi-undress and enjoy any expectation of job security. Yet, all of the fault does not lie with this (rightfully terminated) employee. Employers must take some level of ownership over their employees’ holiday party antics when they make available the tools of overindulgence. Holiday parties are supposed to be a celebration of, and a thank you for, the past year. These celebrations and thank-yous do not have to be fueled by enough liquor to drop an elephant.

In this vein, I offer the following as a public service announcement for employers and HR departments everywhere:

• Host responsibly. An office holiday party is not the same as a college frat party.
• Consider holding your party mid-week (or even mid-day), instead of a Friday or Saturday night.
• Limiting the availability of alcohol will curb overconsumption. Making sure enough food is available will also keep people’s drinking in check.
• Limiting consumption will help to limit employees’ misbehavior, legal risks, and potential liabilities (think drunk drivers, sexual and other harassment, fights, and other incivility better left to a Sunday tailgate)
• When employees overindulge, don’t be afraid to cut them off. Make sure trained bartenders and designated sober management-team members are monitoring consumption.
• Just in case, have cab vouchers, designated drivers, and hotel rooms available for those who cannot safely navigate their own way home.

Have a happy and safe holiday season.

RIP Patrice O'Neal

Earlier today, it was announced that comedian Patrice O'Neal passed away. He succumbed to complications from a stroke he suffered last month. Entertainment Weekly offers the details.

Patrice was one of the funniest people on the planet, and he will be missed. Our relationships with celebrities are funny. We feel like we know people we've never met just because we see them on tv or hear them on the radio. I offer my condolences to his family and friends.

In his memory, enjoy an old post of mine discussing one of his bits on sexual harassment.

Supreme Court to hear case on scope of outside sales exemption (and hopefully scope of DOL’s power)

Do you employ outside salespeople (pharmaceutical reps, for instance)? If so, then you are going to want to pay attention to what will transpire at the U.S. Supreme Court next year.

Yesterday, the Court agreed to hear Christopher v. SmithKline Beecham. This case will address two issues:

1. Whether deference is owed to the Secretary's interpretation of the Fair Labor Standards Act's outside sales exemption and related regulations; and 
2. Whether the Fair Labor Standards Act's outside sales exemption applies to pharmaceutical sales representatives.

While issue #2 is more practical, issue #1 has the potential to have the greatest long-term impact. It is no secret that the DOL—with its sweeping enforcement scheme and broad regulatory interpretations—is the bane of employers everywhere. This case has the potential to serve as a judicial referendum on the scope of its regulatory authority. A rebuke by the Supreme Court of the DOL on this narrow issue could signal that the agency’s powers are not as broad as it currently envisions, reigning in the DOL’s other attempts to broaden employee rights via regulatory interpretations.

For more coverage of this important wage and hour development, please click over and read the thoughts of others who got to this headline before me:

• SCOTUS will hear FLSA pharma sales rep case – from LawMemo Employment Law Blog
• SCOTUS Grants Cert. in FLSA Case – from Lawffice Space
• Supreme Court to Hear Arguments on Outside Sales Exemption – from SmartHR
• Supreme Court to Decide Whether Pharma. Sales Reps Are Covered by Outside Sales Exemption – from ZR Workplace Law
• Supreme Court To Decide Whether Pharmaceutical Sales Representatives Meet The FLSA’s Outside Sales Exemption – from The Wage and Hour Litigation Blog
• Supreme Court To Decide Classification of Pharmaceutical Representatives – from Wage and Hour Law Update
• Pharmaceutical Sales Representative Case Goes to Supreme Court – from Wage & Hour Insights

“SAY IT! SAY IT!” Yelling as an essential function

Did you know that the ability to yell at one’s students is an essential function of a teacher? According to Johnson v. Cleveland City School District (6th Cir. 11/15/11), because the ability to “verbally control” resistive students is an essential function of an elementary or middle school teacher, Sha’Ron Johnson was not otherwise qualified for her position with the Cleveland schools and therefore could not succeed on her ADA claims.

After a 1988 car accident damaged Johnson’s spinal cord, she suffered from Cervical Myelopathy, which caused her body to weaken over time, and which could be aggravated by stress or over-exertion. As a result, Johnson’s doctors provided the school district documentation that she “not be required to verbally control resistant behavior in students that persists after initial warning.” The school district, believing that “verbally controlling” students was an essential function of an elementary or middle school teacher or counselor, terminated her employment.

The 6th Circuit agreed: because Johnson was medically unable to “verbally control” students, she was not qualified for any available positions:

As the District explained to Johnson in its letter on July 17, 2007, these restrictions are “problematic.” They seek to exempt Johnson from “the requirement of disciplining students and maintaining order in the classroom,” which is “an essential function of the job.” The District’s letter explained that “[t]he consequences of a failure to maintain such order result in a direct threat to the safety and security of you, the students, and other faculty, staff, and students in the building,” and fail “the responsibility of the District to provide an orderly environment to its students for learning.” …

“Teachers and counselors, whether working with large groups, small groups, or one-on-one, are required to deal with the students in their care, not only when they are quiet and well behaved, but also when they are loud, restless, and possibly belligerent…. Teachers, counselors, and other adults employed at schools need to be physically, mentally, and emotionally capable of managing and controlling students in those circumstances.”

What is the takeaway for employers? Just because the ADA (as amended by the ADAAA) renders virtually every medical condition a protected disability does not render employers defenseless. Essential functions come in all shapes and sizes. When handling an accommodation request from a disabled employee, do not omit consideration of all facets of the job.

WIRTW #202 (the “thankful” edition)

I learned something new yesterday. I learned, from my kindergartener, that the first Thanksgiving feast lasted three days. I am thankful that I am able to learn something new every day—whether from my kids, or from the bloggers and tweeters I follow and whose thoughts I share with you at the end of each week.

The Thanksgiving holiday (and a much needed couple of days off) moves my weekly summary up a couple of days to Wednesday. Even though the week has been short, its been busy. Here’s what I read this week:

Discrimination

• Issue: Doctors, Diapers, and … Discrimination? – from Employment Law Matters
• Pregnancy Discrimination Case Against Chicago Law Firm Allowed to Proceed to a Jury – from Wisconsin Employment & Labor Law Blog
• Is Your Adverse Impact Analysis Arbitrary? – from Stephanie Thomas’s The Proactive Employer Blog
• Federal Express’ Six-Month Limitation on Statutes of Limitations in Employment Disputes Approved – from Fitzpatrick on Employment Law
• A Big Problem: Obesity Discrimination In The Workplace – from Hunton Employment & Labor Law Perspectives™
• Numbers Show That Sexual Harassment Claims on the Decline – from Dan Schwartz’s Connecticut Employment Law Blog
• Can an Evangelical Christian Ask For a Religious Accommodation? (re: Sharing His Faith) – from The HR Capitalist, Kris Dunn
• Public Criticism of Discrimination Claim as Retaliation – from Phil Miles’s Lawffice Space
• The 2011 EEOC Performance and Accountability Report – from Employment & the Law

Social Media & Workplace Technology

• Managing Your Social Media Mullet—Part 1 – from Jessica Miller-Merrell’s Blogging4Jobs
• Social Media Training is Important – and More Companies Need To Do It – from Lindsay Walker at i-Sight Investigation Software Blog
• What To Do When An Employee Violates Your Social Media Policy – from MonsterThinking
• Can you access an ex-employee’s Facebook posts if she sues? – from Eric Meyer’s The Employer Handbook Blog
• Employers Can Discover Employee Facebook Posts, But… – from Social Media Employment Law Blog
• The Worst Way To Lose A Job – from Kashmir Hill’s The Not-So Private Parts
• The Outshiners… – from William Tincup at Fistful of Talent
• Great sex and social media, it’s all about the response – from Mike VanDervort’s The Human Race Horses
• Out on the Town, Always Online – from John Leland at The New York Times
• No 1st Amendment Protection for Teacher’s Facebook Posts – from Delaware Employment Law Blog

HR & Employee Relations

• The Cost of Litigating Competition Cases – from Legal Developments In Non-Competition Agreements
• If you can, give your employees a rest for Thanksgiving – from Robin Shea’s Employment and Labor Insider
• When the CEO refuses to stop dishonesty – from Evil HR Lady, Suzanne Lucas
• Cheating in the Work Place – from Rob Radcliff’s Smooth Transitions
• It’s the holiday season: time to check your solicitation policy – from John Holmquist’s Michigan Employment Law Connection
• 9 Tips For Planning the Company Holiday Party – from Russell Cawyer’s Texas Employment Law Update
• When Employee Misconduct Becomes Criminal - Understanding The Fifth Amendment in Parallel Proceedings – from Michigan Employment Law Advisor by Jason Shinn
• Lessons from Penn State – from Beth Mirza at SHRM  

Wage & Hour

• Paying Employees During Bad Weather Closings – from Mike Haberman’s Omega HR Solutions
• Does An Exempt Employee Who Calls In Sick The Day Before Thanksgiving Get Holiday Pay? – from Wage & Hour Insights
• FLSA Computer Exemption To Get Revised: A Good Thing For Employers – from Wage & Hour - Development & Highlights
• Employer deemed to have interfered with Family Medical Leave Act (FMLA) benefits – from Employment Law Bits

Labor Relations

• NLRB bias is a menace to business – from Rep. Trey Gowdy in The Post and Courier
• NLRB Member Hayes: Board Plans to Ignore its Rules to Push Through “Quickie Elections” – from Seth Borden’s Labor Relations Today
• NLRB Trying to Ram Through Pro-Union Ambush Election Rules – from The ChamberPost
• Breaking: NLRB Member Hayes Details Outrageous Pearce Strong-Arming on Quickie Election Rules – from Labor Relations Institute
• NLRB To Vote On Finalizing Some Election Rules – from Workplace Prof Blog
• NLRB sets vote on portions of proposed election rule – from LawMemo Employment Law Blog
• Whining, Sniveling Employee or Protected Concerted Activity? – from Minnesota Labor & Employment Law Blog 

Sympathy for the Devil (as religious discrimination)

I haven’t always been a lawyer. During a previous life (high school and college), I spent weekends and summers as a bar mitzvah DJ, a nursing home busboy, and a warehouse loading dock guy. At one of those warehouses, I worked with a man by name of Harland Jester. (I provide his name because he named his son “Court,” and this context provides the necessary color for the rest of the story.) Harland was an interesting cat. He believed, for example, that the Freemasons ran the world from a secret office on the 36th floor of Rockefeller Center, and the Lee Iacocca saved Chrysler by making a pact with the devil. This warehouse was full of colorful characters in addition to Harland, many of whom enjoyed a good practical joke. One such joke, played at Harland’s expense, involved a sketch on Harland’s work desk of Mr. Iacocca shaking hands with Satan, with both saying, “Harland, we’re watching you!” Harland did not find the joke nearly as funny as the rest of us, and complained to management. For its part, the company took the path of least resistance, repainting his desk and requiring everyone at attend sensitivity training.

Suzanne Lucas, the Evil HR Lady, shared a story this morning about another employer which could have taken a lesson from my summer job. Billy Hyatt sued Pliant Corp. after it fired him for refusing to wear a sticker with the number 666 (representing the number of consecutive accident-free days) on it. According to the Workplace Prof Blog, Mr. Hyatt’s complaint alleges that he “asked a manager for a religious accommodation on day 666,” and was fired after he refused to work on that day at all.

Sometimes, the path of least resistance makes sense. Is it silly for an employee to refuse to wear “666” on a sticker? Yup. Was the employer within its rights to fire that employee? Maybe. Could the employer have avoided the cost (in legal fees, bad publicity, and a potential settlement or judgment) by simply exempting this employee from the sticker requirement for that one day? Absolutely. Even if this employer was legally in the right in firing this employee—and think about the reasonable accommodation requirements for an employee’s religious beliefs—sometimes it’s just not worth the cost to be right.