New rules for removing cases to federal court will impact employers

If you are an employer, or an attorney representing employers (and if you’re reading this blog I’d bet dollars to donuts you fall into one of these categories), the Federal Courts Jurisdiction and Venue Clarification Act of 2011 [pdf] will significantly impact you. Congress passed this bill last week, and PrawfsBlog notes that President Obama expects to sign it into law.

Without getting overly technical (for those who are not familiar with how the removal of cases from state court to federal court works), with some limited exceptions, a defendant has the right to take a case originally filed in state court into federal court if the plaintiff could have filed the case in federal court in the first place. There are two types of cases a plaintiff is jurisdictionally permitted file in federal court: those based on the diversity of the parties (where no plaintiff is a citizen of the same state as any defendant, and the amount in controversy exceeds $75,000), and those based on a federal question (where a claim arises under the Constitution, laws, or treaties of the United States).

The JVCA will make some significant changes in how we remove cases to federal court:

For all removed cases:

• In cases with multiple defendants, it will now be a statutory requirement that all defendants consent to the removal (codifying a long-standing judicial requirement).
• Each defendant will have its own 30-day period after receipt by or service on that defendant of the initial pleading or summons (clearing up a conflict among the circuits, some of which had denied a later-served defendant the benefit of a full 30-day period to file a notice of removal).
• If a later-served defendant is the first to file a notice of removal, earlier-served defendants may consent to the removal even though they had not previously initiated or consented to the removal (also clearing up a circuit conflict).

For removed cases based on a federal question:

• In cases that combine a federal question with non-removable state law claims (workers’ comp claims, for example), the JVCA will require the federal district court to sever the non-removable state law claims and remand them back to state court. This provision presents a risk of bifurcated lawsuits (and duplicative litigation?) in certain instances.

For removed cases based on diversity of citizenship:

• The JVCA adds a bad faith exception to the prohibition against the removal of cases after one year after the commencement of the action. A court can permit this late removal if it finds that the plaintiff acted in bad faith to prevent a timely removal (such as by deliberating hiding the real amount in controversy).
• The JVCA cures the conflict among the circuits in the calculation of the amount in controversy. It permits a defendant to state in the notice of removal the amount in controversy when the complaint is silent, and permits late removal if one learns the amount in controversy via discovery responses. This provision is significant in states like Ohio, which permit boilerplate $25,000 prayers for relief in common pleas court complaints. This provision removes that risk that a defendant who waited to remove a case following discovery on the amount in controversy risked remand based on a late-filed removal. 

It is no secret that employers and their lawyers usually prefer to be in federal court, and removal is often the way we get there. Because the JVCA will affect how we get certain cases into federal court, it is a significant development that warrants our attention. It will go into effect 30 days after President Obama signs it into law.

[Hat tip: @overlawyered]

Pop quiz: is this sexual harassment?

Readers, it's pop quiz time. Do the following allegations support an allegation of a hostile work environment?

• The Plaintiff’s manager stated that he had the best view in the house while walking behind plaintiff and another female employee.
• During a dinner in 2009 with refractive account managers, the manager made a comment about placing his wife in different sexual positions to conceive a boy or girl.
• The manager was present, and laughed, when one of his subordinates told a group of other employees that he did his best interviews with girls in bathing suits.
• During a 2008 National Sales meeting, the Regional Director hugged a female employee receiving an award on stage and mimicked an erection or had an erection. The manager witnessed the incident and just laughed.
• The Regional Director told plaintiff that she had nice legs and he had been watching her in her boots.
• The Regional Director asked plaintiff whether she knew that people referred to another female employee as “tits on a stick.”

According to the court in Kepreos v. Alcon Laboratories (N.D. Ohio 9/21/11), the answer is no:

The Court concludes that these isolated incidents, considered together, are just not severe or pervasive enough such that a reasonable jury could conclude that defendants created a hostile work environment. Accepting all of plaintiff’s evidence, no factfinder could determine that the workplace was permeated with discriminatory intimidation, ridicule, and insult sufficiently severe and pervasive so as to alter plaintiff’s conditions of employment.

Surprised? Because hostile environment claims are largely subjective, they are tricky to predict. One person’s (or judge’s, or jury’s) hostile environment is another’s isolated incident or workplace trifle. In addition, other facts in a case might sway the judge or jury to a different conclusion. For example, Alcon fired Kepreos because she had embezzled money via her corporate credit card. Do you think her dishonesty motivated the conclusion that her work environment wasn’t sexually hostile?
You might be thinking, if these claims are so unpredictable, how do you defend against them? The answer is prevention. Have a strong anti-harassment policy. Train all of your employees—from the CEO on down to the lowest paid hourly worker—on what the policy means and how it works. Give the policy teeth by consistently enforcing it, both by investigating all complaints and by taking appropriate remedial measures when needed. Create an environment where employees know they can complain without fear of retaliation and with confidence that their complaints will be taken seriously. By following these few steps, you will limit your opportunities to find your company on the receiving end of a tricky harassment lawsuit.

Apple’s social media policy: a lot to like … and one huge thing to hate

How does a hip, cutting-edge company like Apple handle its employees’ use of social media? Apparently, pretty well. 9 to 5 Mac got its hands on the Apple Retail Blogging and Online Social Media Guidelines, and published the details. There’s a lot to read (it's a long policy), and a lot to like.

For example, Apple’s policy strikes an appropriate balance between the management of its reputation and respect for employees’ lives online or away from work:

In general, what you do on your own time is your business. However, activities that affect your job performance, the performance of other Apple employees, or Apple’s business interests are still covered by company policies and guidelines. This applies whether you engage in these activities in or outside of work, and whether or not you identify yourself as an Apple employee….

Be thoughtful about how you present yourself in online social networks. The lines between public and private, and personal and professional are blurred in online social networks. If you identify yourself as an Apple employee or are known to be one, you are now connected to your co-workers, Leaders and even Apple’s customers. You should ensure that content associated with you is consistent with Apple policies.

Apple’s concluding remarks for its employees serve as an excellent boilerplate for any company looking to implement a social media policy:

In sum, use your best judgment. Remember there may be consequences to what you post or publish online including discipline if you engage in conduct that Apple deems inappropriate or violates any Apple policies. If you’re about to post something and you are concerned whether you are following these guidelines or any Apple policy, please discuss it with your Leader or HR before posting.

All is not rosy with Apple’s policy, however. Tim Cook, if you’re reading, give me a call. I have some concerns over what the NLRB might say about the following piece of your policy and its potential to hinder employees’ rights to engage in protected concerted activity:

Respect the privacy of your coworkers. Blogs, wikis, social networks and other tools should not be used for internal communications among fellow employees. It is fine for Apple employees to disagree, but please don’t use your external blog or other online social media to air your differences. Do not discuss your co-workers without their permission, and ask permission before posting their picture. By respecting your co- workers’ privacy you will be helping to maintain the professional work environment at Apple.

Apple, you might want to reconsider a policy that gags your employees and prevents them from “using social media to air … differences.” You don’t want to end up as the biggest notch on the NLRB’s social media belt.

I’m guessing they don’t practice employment law

Wikipedia defines the “casting couch” as “the trading of sexual favors by an aspirant, apprentice employee, or subordinate to a superior, in return for entry into an occupation, or for other career advancement within an organization.” You shouldn’t need to be an employment lawyer to know that the casting couch is a big no-no, right? (Public service announcement: when searching Google Images for “casting couch,” make sure SafeSearch is set to “strict.”)

The ILSCCP Blog (which stands for the Illinois Supreme Court Commission on Professionalism) brings us the story of Samir Zia Chowhan, a (now suspended) Chicago immigration attorney. In his search for a new legal assistant, Mr. Chowhan posted an ad on Craigslist, entitled, “Loop lawyers hiring secretary/legal assistant.” Innocent enough? Did I mention that Mr. Chowhan listed the ad in the “Adult Gigs” section, and that the ad noted that the job called for “additional duties for two lawyers in the firm.”

In response to an email inquiry from a potential applicant, Mr. Chowhan described the “additional duties” the assistant would be expected to provide for him and his partner:

As this is posted in the “adult gigs” section, in addition to the legal work, you would be required to have sexual interaction with me and my partner, sometimes together sometimes separate. This part of the job would require sexy dressing and flirtatious interaction with me and my partner, as well as sexual interaction. You will have to be comfortable doing this with us.

Here’s where the story gets really bizarre. The email also described the firm’s unique interviewing process:

[A]s part of the interview process you’ll be required to perform for us sexually (i didn’t do this before with the other girls i hired, now i think i have to because they couldn't handle it). Because that aspect is an integral part of the job, I think it’s necessary to see if you can do that, because it'll predict future behavior of you being able to handle it when you have the job.

In his defense (insert sarcastic tone), Mr. Chowhan made it clear that previous hires “have not been able to handle the sexual aspect of the job” and that he did not “want you to do anything that you’re not comfortable with.”

One applicant, skeeved by the whole process, filed a complaint with the Chicago Attorney Registration and Disciplinary Commission, which resulted in Mr. Chowhan’s one-year suspension from the practice of law.

Am I alone in thinking that he deserved more?

WIRTW #203 (the “Blawg 100” edition)

The American Bar Association has published its list of the best legal blogs—the Blawg 100. For the second year in a row, I am honored to be selected. These are the kind words the ABA wrote about my blog (and me):

Even readers outside of Ohio will benefit from Clevelander Jon Hyman’s consistent employer-side posts and reading list roundups. Chicago-area lawyer and fan Tim Eavenson writes, “I made a joke once that my career motto was ‘Do whatever Jon Hyman does.’ When it comes to blogging, that’s not far off. Jon posts breaking news … before I’ve even gotten my coffee. Even when there’s 50 posts on a topic by noon, Jon’s take will be unique. Style-wise, Jon’s writing is exactly what employers are looking for: professional and personable. He writes plainly and has fun, but never lets it get in the way of the point. Anybody who pays somebody else should be reading Jon’s blog.”

Flattered? You bet!

The Labor & Employment category includes 8 other worthy reads:

• Molly DiBianca’s Delaware Employment Law Blog
• Donna Ballman’s Screw You Guys, I’m Going Home
• Dinita James’s Arizoneout (a new blog to me, and one I am looking forward to following)
• Robin Shea’s Employment & Labor Insider
• Jeff Nowak’s FMLA Insights
• Mike Maslanka’s Work Matters
• Eric Meyer’s The Employer Handbook
• Dan Schwartz’s Connecticut Employment Law Blog

If you are so inclined, register at abajournal.com and vote (through Dec. 30) for your favorite blawgs.

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

Discrimination

• Hans Bader uncovers a Catch-22 in EEOC enforcement – from PointOfLaw Forum
• Duty to Provide Commuting Accommodations? – from Laconic Law Blog
• Massachusetts Becomes 16th State to Provide Protection Against Discrimination on Basis of Gender Identity – from Wisconsin Employment & Labor Law Blog
• Waterstone on Genetic Discrimination – from Workplace Prof Blog
• Employees Fired for Pornographic Emails Lose Age-Discrimination Case – from Delaware Employment Law Blog

Social Media & Workplace Technology

• Can I Fire This Twit Over That Tweet? – from Lindsay Walker at i-Sight Investigation Software Blog
• Workplace Social Media CYA – from Jessica Miller-Merrell’s Blogging4Jobs
• Social Media Fail, Airline Style – from Harvard Business Review
• Quote of the Day: Another Judge Forces A Facebook Password Handover – from Kashmir Hill’s The Not-So Private Parts

HR & Employee Relations

• Is there a Herman Cain in Your Workplace? – from Kara Mignanelli at Social Axcess
• Be a Jerk: The Worst Business Lesson from the Steve Jobs Biography – from The Atlantic
• Dress Codes: Is Your Ban on Iverson Jerseys and Stretch Pants More About Control Than the Customer? – from The HR Capitalist, Kris Dunn
• Subtle Signals of Disengagement – The “Out of Office” Email... – from Paul Hebert at Fistful of Talent
• Would You Like Fries with that Identify Theft? Thoughts on Limiting Liability for Employee Misconduct – from Jason Shinn’s Michigan Employment Law Advisor
• Lessons from the Penn State Scandal: Reporting Child Abuse at Work – from Employment Essentials
• Onboarding Strategies for Getting Seasonal Workers Up to Speed – from Workplace Insights

Wage & Hour

• I’m exempt but my boss tracks me every minute – from Evil HR Lady, Suzanne Lucas
• Can I Dock Employees for Inclement Weather Days? – from Texas Employer Handbook
• Synagogue youth workers wage-hour suit – from Walter Olson’s Overlawyered
• End-of-Year Bonuses, the Regular Rate of Pay and Overtime – from Russell Cawyer’s Texas Employment Law Update
• Wage and Hour Misclassification Costs Oracle $35 million – from Rush on Business
• How to Explain Stock Options to a Dog – from Compensation Cafe
• Firing an Employee for FMLA Fraud Is Legal, But the Proof Is Hard – from Labor & Employment Law Perspectives
• Employees Take Note: Showing Pictures of Your Boyfriend's Privates Will Doom Your FMLA Lawsuit (or Any Other Lawsuit) – from Jeff Nowak’s FMLA Insights

Labor Relations

• Labor board approves controversial union election rule in 2-1 vote – from The Hill
• NLRB Approves Ambush Election Rule – from The ChamberPost
• NLRB Acts on Quickie Election Proposal – from EFCA & Labor Law Reform Blog
• Here’s a sneak peek into how union-election rules will soon change – from Eric Meyer’s The Employer Handbook Blog
• NLRB: Lockout Equals “Reemployed” – from Labor Relations Counsel

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.