Tuesday, March 5, 2013

Beware saying too much when engaging in pre-suit settlement negotiations


Most lawsuits between employers and employees do not start out as lawsuits. They start out as conversations between the aggrieved employee's lawyer and the company's counsel. This order of events makes sense for both sides. If the parties can negotiate a deal pre-suit, everyone can save the time, expense, and aggravation of a protracted lawsuit. Additionally, a negotiated deal provides both sides certainty; once a lawsuit is filed, all bets are off and everyone's fate rests in the unpredictable hands of a judge or jury. 

When negotiating, Evidence Rule 408 (which bars the use of offers to compromise) provides everyone some peace of mind that the settlement offers will not end up in front of the jury at trial. This fact is important, because a company does not want a jury learning that an offer of settlement had been made. A jury might perceive such an offer as an admission of liability, or a floor below which its verdict cannot fall.

What happens, however, when, in the course of pre-suit negotiations, counsel makes statements that go beyond an offer of settlement, and discuss the merits of the underlying case? Bourhill v. Sprint Nextel Corp. (D.N.J. 1/23/13) [pdf] is a cautionary tale for employers' counsel responding to pre-suit settlement demands.

After Sprint terminated Bourhill, he retained an attorney to pursue a disability discrimination claim on his behalf. Before filing suit, Bourhill's attorney wrote the following to Sprint, to gauge the hope of a negotiated resolution:

While we have advised Mr. Bourhill that we are prepared to take his claims forward to litigation, he has advised us that he would prefer at this time to resolve this situation informally, by means of a [sic] adequate compensatory settlement. Please contact me, or have your attorney contact me, to discuss whether you desire to resolve this matter amicably, privately, and without resort to litigation. If I do not hear from you by February 22, 2010, we will proceed to take action to enforce Mr. Bourhill's rights.

Sprint's in-house counsel responded with a letter of his own, captioned, "Confidential/For Settlement Purposes Only".

I spoke to your assistant last week regarding your client's allegations that Sprint violated the New Jersey Law Against Discrimination. As I advised her, my investigation does not support your allegations. Mr. Bourhill's employment was terminated when, after being out of work for eight months, he went on long-term disability, a termination which was mandated by the Plan documents. Our records show his long-term disability benefits were approved through May 31, 2010. Even if Mr. Bourhill was able to return to work without restrictions in December 2009, Sprint does not grant employees one-year leaves of absences and, in this case, would have been prohibited from doing so by the Plan documents requiring termination of employment. While Mr. Bourhill remained free to re-apply for available positions at Sprint once he was cleared for work, our records show he failed to do so.

I also further noted that although your letter of February 3 inquires as to Sprint's interest in an amicable resolution, the letter does not request any specific relief. I asked your assistant if your client was attempting perhaps to use this letter as leverage to avoid repaying Sprint the overpayments he received in the amount of $7,564.57. She did not know but indicated you would get back to me. As I have not heard from you to date, I am following up via letter. In short, it is difficult to consider an amicable resolution without knowing the relief sought by your client. If you would like to get back to me with a specific proposal that also addresses the overpayments received by your client, I remain available. Thank you.

In the ensuing litigation, Bourhill's attorney attempted to use Sprint's counsel's letter to defeat Sprint's motion for summary judgment. Sprint objected, arguing that the letter was an inadmissible offer to compromise, barred by Evidence Rule 408. The trial court agreed with Sprint, but only as to the second paragraph of its letter, which discussed the money. The court allowed Bourhill to use the letter's opening paragraph, which discussed the merits of the termination. The court believed that it could divorce the two paragraphs from each other if the first paragraph was not logically connected to the second. Because the first paragraph discussed the merits of the case, and the second monetary compensation, the court redacted the second paragraph under Evidence Rule 408, and considered the redacted letter as part of the record on Sprint's motion for summary judgment.

This case teaches employers' counsel a valuable lesson. We can fall into a trap of Rule 408 myopathy -- that if we caption something "Rule 408 Confidential and Inadmissible Settlement Negotiations", courts will consider it as such and bar its use. As Bourhill makes clear, courts can divorce substantive statements from settlement negotiations, and only bar the latter. 

What is the lesson here? As a management lawyer, keep written settlement communications short and to the point -- the offer itself. If you have to discuss the merits of the case with the employee's lawyer, either do so over the phone or only put in writing what you live with a judge or jury considering.

Monday, March 4, 2013

Is an employer obligated to provide light duty to an employee returning from FMLA leave?


Many employers use temporary light duty assignments to enable ill or injured employees to return to work before they are fully healed. In fact, rehabilitation specialists will tell you that it is better for both the employee and the employer for one to return to work sooner on a modified assignment than to wait until full recovery. Is an employer required to offer light duty to an ill or hurt employee out on FMLA leave, or can an employer require an employee to remain on FMLA leave until full recovery? According to James v. Hyatt Regency Chicago (7th Cir. 2/13/13), light duty is not a right to which employees can insist under the FMLA.

Carris James spent his 22-year career with the Hyatt Regency Chicago as a banquet steward. In March 2007, he suffered a non-work-related eye injury and required surgery. The company offered him FMLA leave, which he accepted. Before his medical leave ended (which his collective bargaining agreement had extended beyond the FMLA’s required 12 weeks), James faxed a note from one of his physicians, which stated that James could return to work with certain lifting and bending restrictions. Those restrictions would have prevented him from returning to his banquet steward position. When Hyatt refused to offer light duty, James sued.

James argued that Hyatt interfered with his FMLA entitlement when it did not reinstate him to a light duty position. The court disagreed. It relied on the plain language of the FMLA’s regulations: “If the employee is unable to perform an essential function of the position because of a physical or mental condition … the employee has no right to restoration to another position under the FMLA.” Because light duty is not an “equivalent” position, the FMLA does not mandate restoration to a light duty position. It only protects employees who can return and perform all of the essential functions of their position. Because James’s doctor only released him to light duty, the company had no obligation under the FMLA to bring him back to work.

While the answer to this issue under the FMLA is fairly straight forward, often times the ADA will dictate a different result. Before denying light duty to an employee returning from FMLA leave, you must consider whether the ADA requires the light duty as a reasonable accommodation. If you have light duty available, and do not have to create a light duty position to accommodate the employee, the ADA will likely require the consideration of temporary light duty as a reasonable accommodation.

Friday, March 1, 2013

WIRTW #263 (the “never go to work” edition)


I’m writing this week’s recap from the comfort of my home study, a fact that strongly suggests my opinion on Yahoo’s recent mandate prohibiting its employees from telecommuting. What do some other bloggers think?

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

Discrimination

Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

Until next week…

Thursday, February 28, 2013

New FMLA forms, posters, coming next week


If you are an FMLA-covered business, you need to know that FMLA posters and forms you use are about to change.

The U.S. Department of Labor (DOL) recently issued new FMLA regulations. The substance of these new regulations, which go into place March 8, relate to the FMLA's military leave provisions and airline flight crew personnel. For your convenience, the DOL has prepared a side-by-side comparison of the old and new regulations.

Importantly, the regulations require covered employers to post a new, updated FMLA poster no later than March 8, 2013. The new poster is available for download at the DOL's website:
http://www.dol.gov/whd/regs/compliance/posters/fmlaen.pdf 

Finally, the FMLA has also made available new certification, eligibility, and designation forms, which are also available for download on its website:
http://www.dol.gov/whd/fmla/2013rule/militaryForms.htm

Wednesday, February 27, 2013

How long is too long for an unpaid medical leave of absence? Not two weeks and a day.


Unpaid medical leaves of absence are the bane of many employers. There should be little doubt that employers must consider an unpaid leave as a possible reasonable accommodation for an employee’s disability. Thus, when considering unpaid leaves, the key question typically isn’t if the leave should be granted, but, instead, for how long.

I don’t have an answer to the question, “For how long,” other than long enough to provide the employee a reasonable opportunity to return to work, and not forever. The answer depends on the facts and circumstances of each employee, each leave request, and each company. One answer I can provide with certainty, however, is that when an employee asks for “one more day” of unpaid leave, most often an employer will act unreasonably (and in violation of the ADA) by denying the request.

Such was the case with a recent settlement between the EEOC and a Maryland medical practice. Per the EEOC,

Doneen King, a medical practice representative whose duties included answering phone calls and scheduling appointments, was unable to work for two weeks while undergoing medical treatment for her disability, Crohn’s disease, including two emergency room visits and a hospitalization…. [W]hen King requested an additional day of unpaid leave as a reasonable accommodation, the medical practice instead terminated her.

University of Maryland Faculty Physicians, Inc.’ lateness and attendance policy violated the [ADA] because it did not provide for exceptions or modifications to the attendance policy as a reasonable accommodation for individuals with disabilities.

The medical practice paid $92,500 to the terminated employee. It also agreed to a three-year consent decree that prohibits it from violating the ADA, requires it to revise its attendance policy to permit disability-related accommodations, mandates management training on the ADA and reasonable accommodations, and obligates the employer to report to the EEOC on its compliance with the consent decree.

Spencer H. Lewis, Jr., district director of the EEOC’s Philadelphia District Office, provides the takeaway for employers: “It is not only a good business practice to provide reasonable and inexpensive accommodations that allow employees with disabilities to remain employed, it is required by federal law.” In other words, think long and hard before you deny a request for unpaid time off for an employee’s medical issue, and, when in doubt, call your employment counsel for a sanity check.

photo credit: Derek Bridges via photopin cc

Tuesday, February 26, 2013

Ohio attempts to ban employers from seeking social media passwords (take 2)


Last week, seven Ohio democratic senators introduced Senate Bill 45, which would prohibit employers “from requiring an applicant or employee to provide access to private electronic accounts of the applicant or employee.” It is identical to last year’s S.B. 351, which never made it out of committee. I have a feeling this year’s S.B. 45 will meet a similar fate, which is a good thing. For an analysis of what this bill says, you can read last year’s blog post on S.B. 351.

This bill has lots wrong with it.

  1. It attempts to add to Ohio’s protected classes. It would elevate asking an employee for a social media login or password to the same level of importance  as discrimination based on race, sex, religious, national origin, age, disability, and military status. For a practice in which few, if any, employers engage, such protections are over reaching and beyond ridiculous.

  2. It contains no exceptions for internal investigations. Suppose, for example, Jane Doe reports that a co-worker is sending her sexually explicit messages via Facebook. You have an absolute duty under both Title VII and Ohio’s employment discrimination statute to investigate and take whatever remedial action is necessary to ensure that any misconduct ends. Yet, this bill would prohibit you from even asking the accused to provide access to his Facebook account as part of your investigation.

  3. It contains no exceptions for regulated industries. For example, registered representatives have special rules that dictate what they can or cannot say to clients and prospective clients via social media. FINRA requires employers to track and maintain records of the communications between registered reps and the public. Yet, this bill would prohibit a securities firm from requiring its registered reps to turn over these communications. It would also prohibit the firm from even asking for access to a rep’s social media account to investigate a customer complaint or regulatory issue.

  4. Check out the penalties. In addition to civil fines, violations bring into play the full panoply of damages available under Ohio’s civil rights statute, including compensatory damages, pain and suffering, emotional distress, and punitive damages.

Just because something is a bad HR practice does not mean we need a law to regulate it. Nevertheless, the solution proposed by S.B. 45 has so many problems that, as proposed, it presents an unworkable and dangerous solution to an illusory problem.

photo credit: totumweb via photopin cc

Monday, February 25, 2013

Does social media change the meaning of “solicitation?”


Consider the following scenario. Your company uses sales representatives to sell its products. To protect your company’s relationship with its other employees, you require all sales reps to sign a no-solicitation agreement as a condition of their employment. Under the agreement reps cannot “directly or indirectly solicit, entice, persuade or induce any … employee … of the Company … to terminate or refrain from renewing or extending his or her employment, association or membership with the Company … or to become employed by or enter into a contractual relationship” with the employee executing the no-solicitation agreement.

If an employee connects with co-workers on Facebook or any other social network, and then leaves your company, has he violated the no-solicitation agreement by maintaining the connections?

According to the court in Pre-Paid Legal Services, Inc. v. Cahill (E.D. Okla. 1/22/13), the answer is, “No.”

In this case, PPLSI complains that Facebook posts that tout generally the benefits of Nerium as a product and Defendant's professional satisfaction with Nerium constitute solicitations presumably because some of Defendant's Facebook “friends” are also PPLSI sales associates and may view Defendant’s posts….

PPLSI has not shown any intent on Defendant’s part to solicit current PPLSI associates…. There was no evidence presented that Defendant’s Facebook posts have resulted in the departure of a single PPLSI associate, nor was there any evidence indicating that Defendant is targeting PPLSI sales associates by posting directly on their walls or through private messaging.

In other words, because the employer could not demonstrate any intent on the part of the departed employee to solicit other employees via Facebook, the mere fact that they are Facebook friends is not enough to violate the no-solicitation covenant. Presumably, the same logic would hold true if the no-solicitation covenant applied to customers instead of employees.

One case does not equal dogma (although Cahill did discuss and agree with another similar case from an Indiana appellate court). These cases are highly fact specific and depend as much on the court's perception of the parties’ equities as they do on the language of the challenged agreements.

If, however, you are concerned about ex-employees using Facebook, Twitter, LinkedIn, and other social networks to lure employees or customers, why not include language in your no-solicitation agreement to cover such a possibility?

“Solicitation” includes, but is not limited to, offering to make, accepting an offer to make, or continuing an already existing online relationship via a Social Media Site. “Social Media Site” means all means of communicating or posting information or content of any sort on the Internet, including to your own or someone else’s web log or blog, journal or diary, personal web site, social networking or affinity web site, web bulletin board or a chat room, in addition to any other form of electronic communication.

By defining “solicitation” to include passive social media connections and activities, you are at least putting yourself into a position to have a court consider shutting down an ex-employee for maintaining online relationships.