Are you facebooking as part of background checks?

Msnbc.com writes on the wealth of information employers can learn from a job applicant's Facebook and other social networking webpages.

Job candidates who maintain personal sites on Facebook or MySpace are learning — sometimes the hard way — that the image they present to their friends on the Internet may not be best suited for landing the position they’re seeking.

Although many employers are too old to qualify as members of the Facebook Generation, they’re becoming increasingly savvy about using social networking sites in their hiring due diligence. That has both job candidates and human resources professionals debating the ethics and effectiveness of snooping on the Web for the kind of information that may not come up in a job interview.

According to a March survey by Ponemon Institute, a privacy think tank, 35 percent of hiring managers use Google to do online background checks on job candidates, and 23 percent look people up on social networking sites. About one-third of those Web searches lead to rejections, according to the survey.

Social networking sites have gained popularity among hiring managers because of their convenience and a growing anxiety about hiring the right people, researchers say.

Big corporations long have retained professional investigators to check job applicants’ academic degrees, criminal records and credit reports. But until now the cost has deterred the ability of smaller firms to do the same level of checking, said Sue Murphy, a director of National Human Resources Association.

These online searches can reveal a wealth of information not otherwise attainable through a more customary background and criminal records search: risqué pictures, pictures of drug use or heavy alcohol use, poor writing skills, and radical political positions. Any one of these could convince a potential employer that a particular job candidate is not not a good fit or not worth the risk of hiring.

A word of caution -- if you choose to make these searches part of your hiring process, you should do so uniformly to avoid the appearance of disparate treatment. That is not to say that every job candidate for every position needs to be screened, but if you are going to screen one candidate for a particular position, you should do the same for all candidates, and apply the same standards based on the results. While the online search itself is lawful, it is still illegal to use that information in a disparate manner to unlawfully discriminate.

OCRC appears to bend on pregnancy leave regulations

Sunday's New York Times is reporting that Ohio business groups have successfully lobbied the Ohio Civil Rights Commission to revise its proposed maternity leave regulations. The article quotes various business organization leaders, in addition to the OCRC's Chairperson, in discussing the merits or lack thereof of the proposed regulations:

Jeanine P. Donaldson, who this year became the first woman to lead the commission, said the law on maternity leave needed to ensure that more women were protected against discrimination.

Ms. Donaldson said she was willing to bend on the number of weeks of guaranteed leave but hoped to preserve the stipulation that length of service would not affect eligibility.

“I don’t think a woman can decide when to get pregnant,” Ms. Donaldson said. “To choose motherhood over livelihood, I don’t think that is what the legislators had in mind.”

Business groups say the expanded leave would damage the economy. “There’s really no reason to change the current law,” said Tony Fiore, director of labor and human resources policy for the Ohio Chamber of Commerce.

Requiring small businesses to hold open positions would be a hardship, he said, as would the immediate eligibility for new workers at large corporations.

Ty Pine, legislative director for the Ohio branch of the National Federation of Independent Businesses, said the market was doing a good job of establishing reasonable maternity leaves for workers and businesses.

“We would like to maintain the current practice of reasonable time off without mandating specifically,” Mr. Pine said.

It now appears that some modified form of the revised OAC 4112-5-05(G) will go the legislature for approval. A revision to the amount of the guaranteed leave entitlement would take away rights that are already available to nearly all Ohio employees under judicial interpretations of the current 4412-5-05(G). I am amazed that the OCRC would bend so easily from a little bit of pressure from business lobbies. If the OCRC actually agrees to bend on the issue of the amount of available guaranteed leave, it will represent a genuine victory for small businesses. I will continue to post updates on this issue as the revised regulations are published.

You might want to double-check those FMLA medical certifications

Check out this article from the Chicago Sun Times. On MyExcusedAbsence.com (and other websites like it) employees can purchase authentic looking doctors notes to excuse their absences from work. According to a testimonial on the website: "I've managed to take the 9 weeks off using these templates! It couldn't be any easier!" Needless to say, providing a fake document for any reason is grounds for immediate termination. However, consider the overburdened HR professional, confused already by the FMLA's myriad requirements. Does that person have the time to check the veracity of each and every note provided by an employee? Nevertheless, the next time you think an employee might by trying to game the system, you might want to take a harder look at that doctor's note. Under the FMLA employers have options to check the veracity of an employee's serious health condition:

• Grant provisional leave until you resolve any doubts about the validity of the serious health condition.
• Send the employee for a 2nd opinion at the employer's expense.
• Request recertification during the leave under certain circumstances.
• Require a fitness for duty exam before allowing the employee to return to work.

These tools, when used consistently, properly, and dovetailed with appropriate corrective action, can deter employees' frauds such as MyExcusedAbsence.com.

Bill Proposes Elimination of Damages Caps

On the heels of the passage of the Lilly Ledbetter Fair Pay Act, Congress continues to try to tinker with the federal employment discrimination laws. Senator Edward Kennedy has introduced legislation that would eliminate the caps on the amount of non-economic compensatory damages and punitive damages plaintiffs can recover in employment discrimination cases under Title VII and the ADA -- the Equal Remedies Act of 2007. Senator Kennedy bases this legislation on the inequities in available damages between race and national origin discrimination and all other forms of discrimination prohibited by Title VII and the ADA (sex, religion, disability, etc.). Employees suing under Title VII or the ADA are capped in the amount of damages they can recover, while employees suing under 42 U.S.C. 1981, which only prohibits race and national origin discrimination, has no such limits. Of course, the Senator could just propose capping damages under Section 1981. As with most of the other pro-employee legislation currently pending in Congress, there is little chance of President Bush actually signing the Equal Remedies Act into law. January 2009, however, is not that far off.

A weighty issue...

In June, I reported on a small but growing trend of overweight employees trying to claim coverage under the Americans with Disabilities Act. Perhaps because these claims are seldom brought, the Boston Globe reports that Massachusetts is considering legislation to cover "fat" (as well as "short") as a protected class. Such legislation finds support in studies which show that obesity holds back one's career. One possible explanation is that obesity is linked to greater health costs, which in turn raise group health plan rates.

One could argue that this legislation is superfluous because the ADA already protects these employees. While courts almost uniformly find that obesity is not a protected disability (as compared to morbid obesity), health conditions associated with obesity (such as diabetes, joint problems, respiratory difficulties, high blood pressure) are most likely protected. Moreover, because it is not only unlawful under the ADA to discriminate because of an employee's disability, but also because the employee is regarded as having a disability, it is arguably unlawful to refuse to hire, to discipline, or to terminate an overweight employee because of the risk of increased health costs from obesity-related illnesses.

Arbitration Fairness Act would ban mandatory ADR of employment disputes

Mandatory arbitration agreements have long been favored as a tool by employers to limit the risks associated with jury trials. If the Democrats have their way, however, that tool may soon no longer be available. The Arbitration Fairness Act is currently pending in both the House and the Senate. These bills would amend the Federal Arbitration Act to render invalid and unenforceable pre-dispute arbitration agreements that require arbitration of employment disputes. Such disputes could only be arbitrated if the employer and employee agree to submit to arbitration after the dispute arises. The law's purpose is to prevent those with less bargaining power, such as employees, from being forced to arbitrate and give up their right to a jury trial. If this bill becomes law (which is doubtful as long as there is a Republican in the White House), arbitrations of employment disputes will all but disappear. It is hard to imagine a situation where a plaintiff would agree to give up a jury trial to have a dispute decided by a panel of arbitrators. If you currently use or would like to use arbitration as a means to resolve claims by your employees, you should write your Congressperson and Senator and urge opposition of these bills.

I am not an anti-dentite!

John Jordan, D.D.S. v. Ohio Civil Rights Commission, out of Fayette County, would not have made my radar except for the fact that it is the second case in as many weeks to involve pretty egregious acts by a dentist. In this case, the OCRC awarded Teresa Smith, a dental assistant, $45,568 for being subjected to the following sexual harassment by the good dentist, all within the span of a few weeks:

• Grabbing her from behind and pulling her towards him, on her second day of work.
• Telling her that his wife was going on vacation and suggesting a rendezvous.
• Describing the breeding habits of his horses in detail.
• Suggesting that she needed a "sugar daddy."
• Advising that several of his friends would "drop money" on her for sex.
• Recounting that the prostitutes in Vegas hated when men took Viagra because it wore them out.
• Relating to patients that she used to work in a strip club.
• Telling her that he could not tell about her body type because he hadn't seen her naked.
• Asking if he could show her nude photos.
• After a patient commented that she was left-handed, recounting that left-handed people make better lovers.

Maybe the ADA should consider a session on sexual harassment training at its next annual meeting.

Sixth Circuit confirms that it will not second-guess an employer's honest belief

The Sixth Circuit this week handed down two decisions that make it clear that pretext for discrimination or retaliation does not exist if the employer engages in a reasonable investigation and has an honest and good faith belief in the rationale for its employment decision. These cases are a good reminder that one of the best defenses to any discrimination, retaliation, or harassment claim is a thorough, well-documented investigation.

Michael v. Caterpillar Fin. Servs. Corp. concerned a six-year African-American employee who had a good employment record until her manager was replaced. Shonta Michael claimed that the discipline, including a very confrontational meeting in which the new manager aggressively yelled at her, was racially discriminatory and that she was retaliated against after she complained over the manager's treatment of her. Caterpillar, on the other hand, claimed that any conflict and discipline was solely because of legitimate performance issues. The Court skirted the issue of whether the disciplinary action (a performance plan) constituted an "adverse employment action," finding that regardless Michael could not prove that the employer's actions were pretext for discrimination or retaliation. Caterpillar's investigation included interviews of all of Michael's co-workers, many of whom found her difficult to work with. Michael claimed that her disagreement those facts established pretext. The Court disagreed:

Michael’s disagreement with the facts uncovered in Caterpillar’s investigation does not create a genuine issue of material fact that would defeat summary judgment “as long as an employer has an honest belief in its proffered nondiscriminatory reason.” The key inquiry in assessing whether an employer holds such an honest belief is “whether the employer made a reasonably informed and considered decision before taking” the complained-of action. An employer has an honest belief in its rationale when it “reasonably relied on the particularized facts that were before it at the time the decision was made.” “[W]e do not require that the decisional process used by the employer be optimal or that it left no stone unturned.” ... Caterpillar presented sound, nondiscriminatory reasons for the action that it took based on a reasonable investigation of events that occurred after Michael’s favorable performance review.

Because Caterpillar had extensive documentation of its investigation, it could reasonably rely on its conclusions with no finding of pretext or retaliatory animus.

By comparison, in Denhof v. City of Grand Rapids, the issue was whether the Grand Rapids Chief of Police reasonably relied upon a psychological fitness for duty exam in refusing to permit the plaintiff to return to work. The Court found that the Chief's reliance on the medical opinion was unreasonable because the doctor's written opinion showed that he had a preordained opinion on Denhof's unfitness for duty:

In his January 11, 2002, letter recommending a fitness for duty examination for Patricia Denhof, Dr. Peterson employed language that, at a minimum, suggested his opinion had already been formed. For instance, he noted that in view of the tension between Denhof and the department, “it is difficult to imagine how she could continue to work in this environment.” ... This language should have signaled to Chief Dolan, and indeed any reasonable recipient, that Dr. Peterson was predisposed to finding Denhof unfit for duty. Indeed, after comments like this, it is hard to see any possibility that Dr. Peterson’s examination would yield a result other than finding that Denhof should be separated from the police force. Instead, when Dolan was confronted with a psychologist who had already formed his opinion before examining the patient, he asked that doctor to proceed with the examination. In doing so, he forfeited the protection of the honest belief rule, because the jury could have easily concluded that his reliance on a doctor who had already made up his mind did not qualify as reasonable reliance.

According to the Court, the employer could not have an honest belief about Denhof's lack of fitness to return to work because, according to the opinion the doctor upon whom it was relying was predisposed. Thus, the decision could not have been bona fide.

I'm troubled by the ease with which the Denhof panel writes off the employer's reliance on a medical opinion and delves into the motivations of the psychologist. The doctor's language does not seem nearly as clear to the me as it did to the Sixth Circuit. Moreover, if an employer cannot have an honest belief about a medical opinion what can it hold an honest belief about? Nevertheless, these two cases reaffirm the honest belief rule, and demonstrate that courts will not second-guess a personnel decision if it is based on a rational, reasoned, honest belief.

The more things change the more they stay the same

According to today's Columbus Dispatch, the Ohio Civil Rights Commission is considering adopting new regulations under which pregnant employees would be entitled to 12 weeks of unpaid maternity leave immediately upon their date of hire. These new rules would apply to any employer with 4 or more employees, as opposed to the federal FMLA's 50-employee limit. Finally, these new state rules would require employers to offer a pregnant employee a light-duty assignment where practical and to reinstate a worker to her former position or an equivalent post when she returns to work. Before any changes can take effect, they must be approved by the Joint Committee on Agency Rule Review, a legislative panel. If the panel approves the changes, they could take effect in September. A copy of the proposed regulations, which amends OAC 4112-5-05(G), are available from the OCRC here, and redlined here.

It is unclear why the OCRC feels these new rules are necessary. It is true that the FMLA only applies to companies with 50 or more employees and to employees with at least one year of employment who have worked a minimum 1,250 hours in the previous 12 months. As this May 22, 2007, post makes clear, Ohio law already requires at least 12 weeks of maternity leave for all pregnant employees. Further, the federal Pregnancy Discrimination Act and its Ohio counterpart already require that employers treat pregnant employees the same as other employees with similarly disabling medical conditions. In other words, if a pregnant employee requests light duty to accommodate pregnancy symptoms, the company must treat that employee's request the same as it would any other similarly disabled employee's request. Similarly, an employer that terminates a pregnant employee during maternity leave does so at its own peril regardless of whether she is FMLA-eligible or not. Such disparate treatment is pregnancy discrimination under current laws.

These proposed new rules do nothing more than codify the status quo. They seem to simply jump on the "family responsibility discrimination" bandwagon. If any good is to come from of these new rules it is that employers will be further educated about maternity leave rights of Ohio employees, which will still remain a minefield for the unwary HR professional. These new rules, however, are not groundbreaking, and should not cause any change in the law or how companies administer maternity leaves.

Family Responsibility Discrimination gains more coverage

Family responsibility discrimination continues to gain traction. It was front and center in a featured piece in yesterday's New York Times Magazine available here, (free online registration required). Aside from providing a nice summary of the legal landscape in this evolving amalgam of discrimination, the article makes five interesting point:

• The U.S. lags behind the rest of the developed world, most of which has much more flexible family leave laws.
• More than 50% of family responsibility discrimination claims are successful, which is significantly higher than the less than 20% success rate for other types of discrimination.
• These lawsuits result in six and seven figure verdicts.
• Even conservative courts are embracing these claims, under the umbrella of "family values."

These points are intertwined, and warrant serious attention from companies. Almost all judges and jurors can relate to caregiving. Even former Chief Justice Rehquist, not known for his liberal viewpoints, in Nevada Dep't of Human Resources v. Hibbs, wrote, "The fault line between work and family [is] precisely where sex-based overgeneralizations has been and remains strongest." The New York Times article makes the point that until either Congress amends the FMLA to extend family leave, other laws are passed, the aggrieved will continue to push reform via discrimination lawsuits, a potentially costly prospect for companies.

Why I love being an employment lawyer

This article, courtesy of the Wall Street Journal's Law Blog, needs no further explanation: The Best Dentist Related Lawsuit Ever. You'd think after 10 years of this I would stop being surprised or entertained at what goes on in places of employment. The biggest surprise is that the dentist was sued for outrage, battery, invasion of privacy, false light, public disclosure of private acts, medical negligence, lack of informed consent, affliction of emotional distress, and retaliation, but not sexual harassment.

And for the Seinfeld fans:

Elaine: Maybe you were still under the gas.Maybe you were hallucinating you're coming out of the gas but you were still under the gas.

Jerry: I don't think so. I think they were getting dressed and not only that - my shirt was out!!!

Elaine: Your shirt was out?

Jerry: I think so.

Elaine: Well, what kind of shirt was it?

Jerry: You know! Like a tennis shirt.

Elaine: Oh! Well - You don't tuck those in?

Jerry: Sometimes I tuck 'em sometimes I don't

Elaine: Well. Were you tucked?

Jerry: I think I was tucked!

Elaine: All right then say you were. I mean - what do you think could have happened?

Jerry: I don't know but I was spitting out and rinsing like there was no tomorrow.

Elaine: Ughhhh!

Jerry: Is this guy a dentist or Caligula?

The Jimmy, Seinfeld Episode 105 (original air date March 16, 1995).

Foreign accents as direct evidence of national origin discrimination

According to the EEOC:

An employment decision based on foreign accent does not violate Title VII if an individual's accent materially interferes with the ability to perform job duties. This assessment depends upon the specific duties of the position in question and the extent to which the individual's accent affects his or her ability to perform job duties. Employers should distinguish between a merely discernible foreign accent and one that interferes with communication skills necessary to perform job duties. Generally, an employer may only base an employment decision on accent if effective oral communication in English is required to perform job duties and the individual's foreign accent materially interferes with his or her ability to communicate orally in English. Positions for which effective oral communication in English may be required include teaching, customer service, and telemarketing. Even for these positions, an employer must still determine whether the particular individual's accent interferes with the ability to perform job duties.

In re Rodriguez demonstrates these principles. Jose Rodriguez applied and was rejected for two vacant supervisory positions at FedEx, despite the hiring manager believing him to be qualified for the positions. The Human Resource Manager, Adkinson, however, expressed concern that Rodriguez was difficult to understand and that his Hispanic accept and speech pattern would adversely affect his ability to rise through the company's ranks. Witnesses also attributed to Adkinson disparaging comments about Rodriguez's "language" and "how he speaks." After trying to be promoted for nearly a year, Rodriguez ultimately gave up, resigned, and sued FedEx for national origin discrimination. The Sixth Circuit held that Adkinson's comments concerning Rodriguez's accent was direct evidence of national origin discrimination, and sent the case back to the district court to determine FedEx would have refused to promote Rodriguez even without a discriminatory motive. In reaching that conclusion, the Court reinforced that "accent and national origin are inextricably intertwined," and that the EEOC "recognizes linguistic discrimination as national origin discrimination." It is probably little solace for FedEx that the court of appeals affirmed the dismissal of the hostile environment, constructive discharge, and retaliation claims. Now it will have to prove to a jury the legitimacy of its termination in the face of the HR Manager's comments.

Jury verdict underscores rights of veterans

A federal jury in Portland, Oregon, returned a $985,000 verdict in favor of a National Guardsman terminated by Target after his return from military duty. The jury found that the employee was fired when he tried to come back to his old job and that it retaliated against him for asking for reinstatement. The evidence at trial was that Target management told the employee that his enlistment following 9/11 "would not be beneficial to his future career," that he was demoted following his return from active duty, and when the National Guard intervened on his behalf to have his previous position restored, Target terminated him. The jury awarded $85,000 in economic damages and $900,000 in punitive damages for the retaliatory termination. It found the demotion, however, lawful.

This verdict highlights the rights held by employees who take military leaves of absence. Military leaves are covered by the federal Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). USERRA provides reemployment protection and other benefits for veterans and employees who perform military service. The law applies to all members of the United States military, reserves, and national guard. Under the statute, military service is not only defined as actual active duty, but also inactive duty training. In sum, USERRA requires that all employers must grant military leave for all full-time and part-time employees for up to a period of 5 years, provided the employee provided appropriate documentation for the leave. Employers have no obligation to pay employees during a military leave, and employees have the option to use, but cannot be required to use, accrued paid time off (such as vacation days) during the leave. If a military absence was 90 days or shorter, the employer must restore the employee to his or her former position. If a military absence was 91 days or longer, the employer must restore the employee either to his or her former position if it is still available, or if it is not available, to a job that is equal to the former position in status and pay. Upon an employee’s return from a military leave of absence, the employee must be compensated at the rate of pay he or she would have received had he or she continued working during the period of leave. The employee must also be restored to full participation in benefit plans.

It is a good idea to have a military leave policy so that all supervisors and managers understand the rights and responsibilities under this law.

Federal minimum wage increases today

Today is July 24, which means that the federal minimum wage increases from $5.15 to $5.85 an hour. The Department of Labor is even nice enough to print a new wage and hour poster to hang in your business.

For Ohio businesses, this increase does not mean much, because last November's ballot initiative already raised this State's minimum wage to $6.85. Regardless every Ohio employer subject to the FLSA's minimum wage provisions must post, and keep posted, in a conspicuous place in all of their establishments the federal wage and hour poster. The federal minimum wage may again have meaning to Ohio employers when it increases to $7.25 two years from today.

Small claims court needs reform

Did you know that a company cannot represent itself in an Ohio small claims court? An employee is free to go to small claims court and file any claim $3,000 or under against an employer, and the employer must hire an attorney to represent it at court. Even though a corporation is defined as a "person" under the law, and an individual can appear pro se, a company that tries to exercise the same right will be barred under the guise of the unauthorized practice of law. This rule needs to be fixed. Because the cost of defense often outweighs the cost of the claim, how is justice served if companies have little incentive to litigate? Often, however, companies want to challenge the claim, because at stake is the sanctity of a policy that the employer has spent time and money having drafted, implementing, and enforcing. Also, companies need to send the message that they will not roll over even for small claims brought by employees. So, what you are left with is a company that may not want to pay to fight the claim, and if they do pay to fight it, a pro se plaintiff that will be outmatched in court by having to face cross examination by a hired professional. This system is crying out for reform. Ohio law should be amended so that a company can appear in small claims court through a corporate officer and without an attorney. This amendment will allow the system to work as it is intended, so that small claims can actually be tried with small costs and small hassle.

Mind your (mis)represenations - part 3

The Sixth Circuit has recently published two opinions on the issue of employer misrepresentations under ERISA and COBRA: Thurman v. Pfizer, Inc. (reported here) and Thomas v. Miller (reported here). The latter expressly recognizes a claim for equitable estoppel under COBRA. The former holds that ERISA does not preempt a state law misrepresentation claim when the misrepresentation relates to the benefits provided by ERISA-governed plan. Last week, the First Circuit (which covers federal courts in Maine, Massachusetts, New Hampshire, Rhode Island, and Puerto Rico), in Zipperer v. Raytheon Co., reached the opposite result, and held that ERISA does preempt state law claims of negligence, equitable estoppel, and negligent misrepresentation stemming from an erroneous estimate of retirement benefits that led to an employee's voluntary early retirement.

Factually, Zipperer is no different that Thurman. Both deal with an improper calculation of retirement benefits, albeit at different stages (acceptance of employment versus retirement). In both cases the employee took action in direct reliance upon that calculation. And yet, the cases reach the exact opposite conclusion. The Zipperer court certainly seems to get the better of the argument. ERISA preempts any state law causes of action that "relate to" an ERISA plan, because Congress has determined that employee benefit plans need uniform administration. As the magistrate judge concluded in the case below in Zipperer:

Allowing a cause of action to proceed for the negligence in making the representation or the negligence in maintaining and transferring the pertinent records amounts to an alternative enforcement mechanism to enforce (or estop the employer from denying) extra-contractual benefits. Such claims inevitably and directly conflict with the carefully chosen and carefully limited remedies provided under ERISA.... Regardless of the label of the state law claims, in essence they seek extracontractual benefits not authorized by the terms of the Plan. Such an end run around the carefully crafted benefits Raytheon chose to provide amounts to an attempt to authorize remedies beyond those provided by the Plan.

In other words, a claim that alleges misrepresentation about benefits owed under an ERISA plan must relate to that plan. While I understand the Sixth Circuit's concern about holding employers to their representations, the issue is not whether an employer can escape liability at all, but whether liability will be imposed under state law or ERISA.

Regardless of whether the claim must be brought under state law or ERISA, the lesson for employers does not change: companies must judiciously select their words when talking to employees about benefits or other terms and conditions of employment, and misrepresentations should be avoided at all costs.

Sedona Conference publishes the Second Edition of its Sedona Principles Addressing Electronic Document Production

For those interested in e-discovery, the Sedona Conference, one of the country's preeminent legal think tanks in the areas of antitrust law, intellectual property, and complex litigation, has published The Sedona Principles (Second Edition): Best Practices Recommendations and Principles for Addressing Electronic Document Production, available for download from the Sedona Conference here. The First Edition, published prior to the recent amendments to the Federal Rules of Civil Procedure, is widely considered to be the bible of best practices for e-discovery. The Second Edition reflects the new language found in the amended Federal Rules, and updates the language and commentary on metadata and the imposition of sanctions.

Are we overreacting to Ledbetter?

Today's New York Times reports on current efforts by Senate Democrats to introduce equal pay legislation in light of the Supreme Court's ruling in Ledbetter v. Goodyear Tire & Rubber Co. Recall that in May the Supreme Court ruled 5 to 4 against Lilly Ledbetter, who discovered, after working at Goodyear for nearly 20 years, that her male co-workers had been receiving higher salaries. The Justices started her 180-day statute of limitations upon alleged discriminatory pay decision, time barring her suit.

In light of Ledbetter, the House last month introduced and passed the Lilly Ledbetter Fair Pay Act, which would allow pay discrimination claims to be filed within 180 days of the issuance of a discriminatory paycheck. It seeks to amend Title VII, the ADEA, the ADA, and the Rehabilitation Act to specify that for a claim of compensation discrimination because of race, color, religion, sex, national origin, age, or disability, the discriminatory pay act does not occur, and the statute of limitations does not begin to run, until "an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice." In other words, the aggrieved employees would have, depending on the state, 180 or 300 days from the receipt of each alleged discriminatory paycheck to file a charge with the EEOC to challenge the pay decision as discriminatory. According to the New York Times article, Senators Edward Kennedy, Hillary Clinton, Barack Obama, and others intend to introduce similar legislation in the Senate.

If this legislation becomes law (which is doubtful while Bush is still President), pay discrimination claims would have a floating statute of limitations, potentially granting all employees the right to sue in perpetuity. Statutes of limitations serve several important purposes, including promoting certainty, in that a company needs to know that it will reach a point in time when a decision cannot be challenged in court, and recency, in that at some point in time employees leave companies, memories of events fade, and evidence becomes stale. Lilly Ledbetter, for example, sued for a decision nearly 20 years hence. Who at Goodyear still has any knowledge about that decision? Senator Kennedy is quoted as saying, “The rules for filing equal-pay claims should reflect basic fairness.” Fairness, however, works both ways, for the employer and the employee. Granting a perpetual statute of limitations fosters a perceived fairness for one at the expense of the other.

Vicarious release held ineffective

Edwards v. Ohio Inst. of Cardiac Care is not earth shattering for what it says, but I write because of the novel argument made by the employer in trying to escape a jury verdict. It is well-settled Ohio law that supervisors and managers are jointly and severally liable with their employers for their own acts of discrimination. After suffering a $200,000 jury verdict on a sexual harassment claim, the employer in Edwards made the novel argument to the appellate court that the plaintiff's pretrial settlement with the accused supervisor extinguished the company's liability. While the Court seemed impressed with the creativity of the argument, it ultimately rejected it (the case was reversed on other grounds relating to the jury instructions). The Court reasoned that the supervisor is not liable simply as the employer's agent, but is liable because the statutory definition of "employer" in R.C. 4112.02(A)(2) includes individual supervisors and managers whose conduct violates the law. In other words, the supervisor and the company are co-employers. Thus, a settlement with one does not extinguish the liability of the other. In other words, if you want to obtain a release, you have to make sure you are a party to the agreement.

FMLA waivers pose a potential trap

There are few worse feelings than being sued by an employee with whom you had previously negotiated a severance or settlement agreement and learning that the release of claims that had protected you from that very eventuality is invalid. Taylor v. Progress Energy, Inc., decided last week by the Fourth Circuit, presents that very dilemma under the FMLA, and holds that no waiver of any claim or right under the FMLA is valid unless it is first approved by the Department of Labor or a court.

Section 825.200(d) of the regulations for the FMLA states: "Employees cannot waive, nor may employers induce employees to waive, their rights under FMLA." At issue in Taylor was whether 825.200(d)'s proscriptions apply to any claim under the FMLA, certain types of FMLA claims, or only future FMLA claims. First, the Court concluded that the regulation applies to all types of FMLA claims: those regarding substantive rights (i.e., denials of leave), those regarding proscriptive rights (i.e., retaliation), and those regarding remedial rights (i.e., actions to recover damages). Secondly, because there is nothing in the text of 825.200(d) that distinguishes between past and future claims, and because the word "waive" has a retrospective connotation, the regulation applies to any claim under the FMLA, past or future. The Court so ruled because of the strong policies that merit protection under the FMLA: "[W]ith respect to the FMLA, ... settlements that are cheaper than compliance would encourage noncompliance, thereby undermining the Act's purpose of imposing minimum standards for family and medical leave."

The Sixth Circuit has not addressed this issue, but at least two other courts have, with each reaching the opposite result from Taylor. The Fifth Circuit has held that section 825.200(d)'s prohibition against waivers only applies to prospective waivers of substantive rights such as rights to leave, reinstatement, etc. The Eastern District of Pennsylvania interprets 825.200(d) even more narrowly in holding that it does not prohibit an employee from waiving any past FMLA claims as part of a severance agreement or settlement.

Because this issue is open in the Sixth Circuit, Ohio employers would be prudent to tread conservatively and obtain judicial or DOL approval of any agreement that contains any waiver of any rights under the FMLA, or at a minimum include indemnification language (an issue not addressed by Taylor) in such agreements to cover any future lawsuits. Ultimately, the Sixth Circuit could (and should) adopt the common sense approach and permit a waiver of past FMLA claims as part of a severance or settlement agreement. After all, no one pays an employee severance or a settlement to leave unreleased claims that could later mature into a lawsuit. Releases are intended to cover all past conduct and claims, which is why the employee is paid a sum of money to which he or she would not otherwise be entitled. However, there is certainly a risk that the Sixth Circuit will find Taylor persuasive and find all unapproved FMLA waivers null and void.