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.

EEOC confirms that it is not age discrimination to favor older workers

The EEOC on Friday published revised regulations on age discrimination that conform with the Supreme Court's 2004 ruling in General Dynamics Land Systems, Inc. v. Cline. Cline rejected the notion of "reverse age discrimination" and held that it is not age discrimination for an employer to favor an older employee at the expense of a younger employee, and that such disc. The EEOC's revised regulations, available here, clarify that the ADEA does not prohibit employers from favoring older employees over younger ones when both are protected by the Act:

It is unlawful for an employer to discriminate against an individual in any aspect of employment because that individual is 40 years old or older, unless one of the statutory exceptions applies. Favoring an older individual over a younger individual because of age is not unlawful discrimination under the ADEA, even if the younger individual is at least 40 years old. However, the ADEA does not require employers to prefer older individuals and does not affect applicable state, municipal, or local laws that prohibit such preferences.

Emotional distress damages are taxable

In rehearing Murphy v. IRS, decided 11 months ago, the same three-judge panel of the D.C. Circuit has reversed itself and held that damages for non-physical injuries such as emotional distress and mental anguish are taxable. Last August, that Court ruled that Marrita Murphy's $70,000, awarded for emotional distress and loss of reputation by the Department of Labor Administrative Review Board in a whistleblower case against her employer, was akin to an award for physical injuries and therefore tax exempt. This week, the Court held that the money should have been included in her gross income:

Murphy no doubt suffered from certain physical manifestations of emotional distress, but the record clearly indicates the Board awarded her compensation only “for mental pain and anguish” and “for injury to professional reputation.” Although the Board cited her psychologist, who had mentioned her physical aliments, in support of Murphy’s “description of her mental anguish,” we cannot say the Board, notwithstanding its clear statements to the contrary, actually awarded damages because of Murphy’s bruxism and other physical manifestations of stress.... At best — and this is doubtful — at best the Board and the ALJ may have considered her physical injuries indicative of the severity of the emotional distress for which the damages were awarded, but her physical injuries themselves were not the reason for the award.

Thus, it is not enough that the emotional distress has some physical symptoms (such as sleeplessness, loss of appetite, etc.), and it appears that unless physical injuries are the reason for the award or settlement, emotional distress damages will be taxable. Because discrimination and other employment-related cases rarely involve physical injuries, it is safe to assume that all non-economic damages will be taxable in most employment cases.

Harassment training must be effective to provide a defense

A case handed down by the Sixth Circuit last week provides a good example of how not to handle a sexual harassment investigation. In Parker v. General Extrusions, Inc., the plaintiff, Nancy Parker had been subjected to several years of pervasive harassment, the details of which you can read in the opinion, and which most companies would find patently inappropriate and would result in a full and complete investigation. Instead of investigating Parker's complains, however, witnesses testified at trial the company's responded by generally ignoring her, and by saying behind closed doors that the workplace was a mill-type environment, that she could work somewhere else if she was uncomfortable, and that the harassment was merely a joke. A jury awarded Parker $25,000 in compensatory damages and $75,000 in punitive damages. The district court tossed out the latter, holding that the company took the harassment complaints seriously and made a good faith effort to comply with Title VII. The Sixth Circuit disagreed and reinstated the punitive damages verdict. The company argued that because it had a sexual harassment policy and trained its employees on harassment, it made a good faith effort to comply with Title VII and should not be liable for punitive damages. To the contrary, witnesses at trial testified that they could not remember any harassment training taking place prior to Parker's complaints, and regardless the policy was not enforced. The company's HR manager testified that in his 21 years at the company, he could not remember ever disciplining any forepersons for not reporting a witnessed incident of harassment. On that basis (among others), the appellate court reinstated the verdict.

The lesson here is basic but one that is worth reinforcing. Harassment policies should be reviewed frequently and updated when necessary. Training should take place annually, and not merely as a reaction to an issue in the workplace. Policies should be uniformly enforced, and employees should be disciplined for failing to follow them. Combatting sexual harassment should be a company-wide initiative. Companies can never guarantee against a lawsuit by a disgruntled employee, but those that are proactive about workplace harassment will stand the best chance of successfully defending against such a lawsuit.

Move along, nothing to see here: DOL concludes FMLA is working

Raise your hand if you think the FMLA is working. I know I can't see you, but I have a pretty good feeling that a lot of hands will be in the air. Employees often don't understand when they are entitled to or eligible for leave, think they should have more than 12 weeks of leave, and that leave should be paid. Employers are baffled by the notice and certification process, frustrated with intermittent leave, and petrified of terminating anyone who takes FMLA leave for fear of a lawsuit. My perception, after advising clients on the FMLA for my entire career, is that the law can be a mess for everyone involved - employees and companies alike, and that no one really understands the FMLA's reciprocal duties and responsibilities.

Yet, a 181-page report published Tuesday by the Department of Labor (available in full here and in summary here), after receiving more than 15,000 comments from the public, concludes: "In the vast majority of cases, the FMLA is working as intended." The Report does confirm tension between employees' needs for intermittent leave to treat their own chronic health conditions and employers' needs to efficiently operate their businesses is the most prevalent complaint. "In some cases, the use of unscheduled intermittent leave appears to be causing a backlash by employers who are looking for every means possible ... to reduce absenteeism." It also confirms dissatisfaction with the medical certification process, in that employees don't like the time and cost of visits to health care providers to obtain certificates, and employers are frustrated with the lack of meaningful guidance to worker attendance. How can the DOL conclude that the FMLA is "working as intended", and yet at the same time report confusion and dissatisfaction with two of its most critical components, certification and intermittent leave? It's like saying the Indians played a great game last night, but their pitching was awful and the batters couldn't hit anything.

The open question is what will Congress do with this Report. Will it take the Report to mean that the status quo is fine, or will it use the Report as a means to introduce legislation that will expand upon the FMLA's protections for employees. Mandatory paid leave is certainly on this Congress's agenda. Expansion of the FMLA is a scary proposition for employers, who have a hard enough time dealing with the law as currently written. I encourage everyone to post comments here and let me know your thoughts on how the FMLA is working, and what, if anything, could be done to fix it.

Sixth Circuit holds that estoppel can bind a small employer to provide COBRA coverage

COBRA generally requires that group health plans sponsored by employers with 20 or more employees offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) at the employees' costs upon a job loss or other defined event. A small business should not assume, however, that merely because it has less than 20 employees that COBRA can never apply.

In Thomas v. Miller, the Sixth Circuit today held that an employer with fewer than 20 employees can be equitably estopped from arguing that it is not covered by COBRA. In Thomas, the employer unquestionably had less than 20 employees at all times during Thomas's employment. It did not offer Thomas COBRA coverage after her termination, even though it had previously such coverage to another employee. When she suffered several post-employment strokes, Thomas sued her former employer, claiming that it had failed to offer COBRA coverage to her, as it had done for another former employee. The Sixth Circuit recognized that estoppel can bind a small employer to provide COBRA coverage even if the employer falls outside of the threshold size. Thomas's claim ultimately failed because her employer had not made an representations to her:

In order for a party to employ equitable estoppel against another party, the following elements must be satisfied. First, the party to be estopped must have used “conduct or language amounting to a representation of material fact.” Second, that party must have been aware of the true facts. Third, that party must have had an intention that the representation be acted on, or have conducted himself in such a way toward the party asserting estoppel that the latter had a right to believe that the former’s conduct was so intended. Fourth, the party asserting estoppel must have been unaware of the true facts. Finally, the party asserting estoppel must have detrimentally and justifiably relied on the representation.

No one ever represented to Thomas that she would be eligible for COBRA coverage. She merely assumed that fact by eavesdropping in their small office: "Without more, inferences drawn by a party from overheard conversations about another employee do not amount to representations to or about the overhearing party." Also, because Thomas only overheard the conversations of others, the employer harbored no intent for her to rely upon any statements.

Although Thomas could not prove her right to COBRA coverage based on the specific facts of her case, Thomas v. Miller nevertheless underscores a point made in an earlier blog post: misrepresentations will come back to bite you, and companies must judiciously select their words when talking to employees about benefits.

Employment at-will fights back

Ever since the Ohio Supreme Court decided Wiles v. Medina Auto Parts five years ago, Ohio appellate courts have been chipping away at the common law wrongful discharge tort. The latest effort to give some meaning back to "employment at-will" is DeMell v. Cleveland Clinic Foundation, which held that a statute that provides only a criminal penalty, and gives no civil redress to the aggrieved employee, sufficiently vindicates the at-issue public policy so as to render a tort action over the discharge unnecessary.

Traditionally, any employer can terminate the employment of any at-will employee for any reason. In 1990, however, the Ohio Supreme Court recognized an exception in tort to the employment at-will doctrine and allowed actions for a wrongful discharge that violates public policy. To assert this tort claim, the employee must show, among other things, that the dismissal jeopardizes a clear public policy manifested in a state or federal constitution, statute, or regulation, or the common law. In 2002, the Ohio Supreme Court in Wiles v. Medina Auto Parts limited the scope of the public policies that can support such a tort claim by holding that the claim is not available if there exists any alternate means to promote the claimed public policy. The Court reasoned that if a statutory remedy that adequately protects society's interests already exists, there is no need to recognize a common law tort claim for the same purpose.

Catherine DeMell was a 30-year employee of the Cleveland Clinic. After the Clinic terminated her employment, she claimed that she was wrongfully discharged for complaining that she was underpaid and for being forced to falsify her time records. She claimed that the public policy set forth in the Ohio Minimum Wage Standards Act supported her claim. The court of appeals disagreed and affirmed the dismissal of her claim, because the specific statute provides a criminal penalty for violations. Thus, even though DeMell could not personally be made whole under that specific statute, the statute's criminal enforcement protected society's overall interest. This case is part of growing trend of Ohio courts' following the lead of Wiles, limiting the public policies that will support a wrongful discharge claim, and giving employers more latitude in terminating employees.

Everybody hates Wal-Mart

Let's suppose you own pharmacy, and your female pharmacist leaves her post unattended and permits an unauthorized underling to dispense prescriptions. You have two choices: retain the employee and risk that her recklessness will result in the incorrect filling of a prescription (which could lead to serious liability concerns), or fire the pharmacist for her recklessness. A Massachusetts Wal-Mart chose the latter, and a jury punished it the tune of nearly $2 million (including $1 million in punitives). The employee claimed that Wal-Mart discriminated against her because of her sex and retaliated against her by firing her two weeks after she asked to be paid the same as her male counterparts. Apparently, one of the key issues was the lack of a specific policy prohibiting the plaintiff's misconduct, an issue on which the plaintiff presented an expert HR consultant to testify. According to Massachusetts Lawyers Weekly, settlement was never an option because the plaintiff insisted on a term to which Wal-Mart would not even discuss, an apology.

The lessons of this case are many. Employment decision should not be based solely on whether you will be sued for it, but you are always safer if you have a specific policy on which you can rely to support the decision. The lack of a policy seems to offend juries' notions of fundamental fairness. When all else fails, sometimes the simplest things (like an apology) may go a long way to avoid a jury at all.

English-only workplaces spark lawsuits

White Americans, what?
Nothing better to do?
Why don’t you kick yourself out?
You’re an immigrant too!

– Jack White, Icky Thump (2007).

Immigration reform continues to be a hot button issue, and a recent rash of lawsuits continues to fuel the debate over whether an “English-only” rule constitutes national origin discrimination. The EEOC’s position is that a “rule requiring employees to speak only English at all times in the workplace is a burdensome term and condition of employment” and presumptively “violates Title VII.” According to the EEOC, an “employer may have a rule requiring that employees speak only in English at certain times where the employer can show that the rule is justified by business necessity.” The majority of federal courts, however, have shown some tolerance of “English-only” rules. Generally, Courts will uphold an English-only rule if the employer can show a legitimate business justification for the requirement. Examples of legitimate business justifications that have been found to justify an English-only requirement are:

• Stemming hostility among employees.
• Fostering politeness to customers.
• Promoting communication with customers, coworkers, or supervisors who only speak English.
• Enabling employees to speak a common language to promote safety or enable cooperative work assignments.
• Facilitating a supervisor’s ability monitor the performance of an employee.
• Furthering interpersonal relations among employees.

Employers should be careful, however, to limit the reach of an English-only requirement only as far as it necessary to reach the articulated business rationale for the policy. For example, English-only requirements have been struck down as discriminatory where the policy included lunch hours, breaks, and even private telephone conversations. You should consult with employment counsel before implementing any English-language requirements in your workplace to ensure that the policy is not discriminatory as written or as applied.

Sixth Circuit opens the floodgates to federal court

I have a confession to make. I am a procedure nerd. Civil Procedure was my favorite class in law school, and cases that raise interesting procedural issues still get me excited. Putting my personal oddities aside, I still think that Klepsky v. United Parcel Service, Inc. could prove to be one of the most important cases decided this year by the Sixth Circuit, as it greatly expands the class of employment cases that can be removed from state court to federal court.
Thomas Klepsky, a Cleveland-area driver for UPS and a union member, started his lawsuit in the Cuyahoga County Court of Common Pleas, asserting Ohio statutory and common law whistleblower claims. UPS removed the case to federal court on the grounds that the federal Labor Management Relations Act ("LMRA") completely preempted Klepsky's state-law claims. Over Klepsky's objection the district court kept jurisdiction and ultimately dismissed his claims on their merits. On appeal, the Sixth Circuit, concerned over the propriety of the federal courts' jurisdiction, requested that the parties be prepared to discuss the issue at oral argument.
By way of some background for those that do not often find themselves in federal court, there are two types of subject matter jurisdiction that permit a plaintiff to originally file an action in federal court, diversity jurisdiction (where none of the plaintiffs are citizens of the same state as any of the defendants, and the amount in controversy exceeds $75,000), and federal question jurisdiction (where a claim arises under the Constitution, laws, or treaties of the United States). If a plaintiff files such an action in state court, a defendant has the option to remove it to federal court. It is no secret that employers and their lawyers usually prefer to be in federal court, and removal is often the proper implement to get there.
Typically, the availability of a defense under a federal law (such as preemption) is not enough to support removal to federal court, and a plaintiff can avoid a federal forum by pleading only state law claims and suing at least one non-diverse defendant. However, in limited circumstances, where a federal law completely preempts state law on a relevant subject matter (such as ERISA, or, as in this case, the LMRA where a claim requires the interpretation of a collective bargaining agreement), removal is proper despite the lack of a federal claim in the complaint.
Consistent with precedent, the Sixth Circuit found that Klepsky's state law causes of action did not support preemption. However, the Court, in a novel turn, held that one of the remedies pleaded by Klepsky, reinstatement, supported complete preemption and permitted removal:

We find that this single request is enough to support preemption here, as it would require interpretation of the terms of the CBA, and implicates a right created under the CBA.... Even if he does not explicitly rely on terms of the CBA pertaining to reinstatement, his request for reinstatement would, at a minimum, seem to implicate such rights and require interpretation of the CBA. For this reason, we find that preemption exists under the LMRA, and that removal based on federal jurisdiction was proper here.

Thus, because the complaint contained a boilerplate request for reinstatement, which would require an interpretation of the collective bargaining agreement (via application of seniority clauses, etc.), removal was proper.
Ignoring whether this case was decided rightly or wrongly, it nevertheless has serious implication for the availability of a federal forum to decide state law claims. Plaintiffs who are union employees will now have a difficult time defeating a removal petition. Clearly, any unionized plaintiff who prays for reinstatement will be subject to having his or her complaint removed from state court. I will be keeping a close eye on cases in this Circuit to see if Klepsky is applied to prayers for front pay (the flip side of reinstatement), prayers to be made whole, or catch-all prayers under which a court could reinstate. My prediction is that this decision will prove to a blessing to employers, who often go to great lengths to get into federal court, a curse to employees, who often try to avoid federal court like the plague, and a potential docket clogging disaster to the district courts, who will most likely see their already heavy caseloads become that much busier.

Proceed with caution if docking employees' pay

Eve Tahmincioglu of msnbc.com has posted this article, in which she advises employees, "Employers can legally reduce salary, fine workers for infractions." She states that more employers are fining employees or docking their pay as a means to control employees and better enforce work rules. Nevertheless, I caution that anyone reading this blog tread very carefully before adopting this advice for your company. While such a practice is permitted under the federal Fair Labor Standards Act, I have grave concerns as to whether it would pass muster under Ohio's wage payment statute. The Ohio law only permits paycheck deductions in certain specific circumstances, none of which on their face cover disciplinary docking of pay.

Moreover, this practice also raises issues under the FLSA. Docking exempt employees' pay could jeopardize their exempt status. You do not want to put an employee's exempt status in jeopardy under any circumstances, for fear of owing back overtime for any hours worked in excess of 40 for all work weeks for up to two years. Such a mistake could prove very costly.

Employers who are considering docking employees as discipline for work rule violations should not do so without having their counsel draft a carefully worded document for employees to sign that explains the penalties and authorizes the deductions from their wages. Companies should also consider the effect such a program could have on employee morale and retention.

Supersized lawsuits: obesity-related claims expected to rise

According to this article in last week's USA Today, employers can expect discrimination claims based on obesity to rise. The article cites 400-pound Stephen Grindle, an Ohio truck driver fired because of his weight, and 325-pound Michael Frank, a New York teacher denied tenure after his boss described him as "so big and sloppy," as examples of an emerging trend by the obese to try to claim protection under the ADA as "disabled." According to the EEOC, those that are morbidly obese (more than 100 pounds overweight) should be entitled to protection under the ADA as disabled. By comparison, more than 32% of the adult population is categorized as "obese" (more than 30 pounds overweight). Few of these claims have been brought under the ADA, and they rarely if ever succeed. Because of this increased awareness and publicity, coupled with the expanding American waste band, this type of claim should be on employers' radar screens. Moreover, because obesity can be caused by a medical condition (such as a thyroid problem) or cause a medical conditions (such as diabetes), employers must be careful not to discriminate against the underlying medical issue or fail to reasonably accommodate it if necessary.

Home care workers denied overtime

Even though I'm busy sunning and golfing and relaxing, the blog never rests. The front page of the business section of the Hilton Head Island Packet caught my eye.

The Supreme Court yesterday upheld the right of the Department of Labor to exclude home care workers from overtime pay under the Fair Labor Standards Act. While this case has a narrow impact, I'm sure it's a huge relief to employers of home health workers, who could have been economically crippled if the decision went the other way.

Supreme Court adopts recklessness standard for willful Fair Credit Reporting Act claims

In the employment context, the federal Fair Credit Report Act ("FCRA") requires specific notice and consent before an employer can conduct a background check on an applicant or employee, and pre-adverse action and adverse action notices before a company can take an adverse action (refusal to hire, termination, demotion, etc.) against an applicant or employee. If this language is foreign to you, you should contact your employment counsel to ensure that your application process complies with this law. Compliance is important, because there are damages and penalties, including attorneys' fees and costs, available for an aggrieved individual. For a negligent violation, a plaintiff is entitled to additionally recoup actual damages only. For a willful violation, the panoply of available damages expands to include statutory penalties and punitive damages.

In a potentially employee-friendly ruling, the Supreme Court has ruled that a willful violations of the FCRA do not merely cover intentional and knowing violations, but also reckless violations. The Court distinguished between civil law, where "willfulness" nearly always includes a component of recklessness, and criminal law, where it requires purpose and intent. The Court then adopted the common law definition of recklessness - an objectively assessed high risk of harm. By blurring the distinction between negligence and willfulness by injecting an aspect of reasonableness into the damages calculus, the Court has made it potentially more difficult for employer to avoid the higher damages that go along with a finding of willfulness.

For a copy of the Court's decision, see Safeco Insurance Co. of America v. Burr.

Immigration Reform Bill Would Overhaul Employee Verification Process

Everyone should be familiar with the I-9 form. With that form, employers simply review certain identification documents submitted by job applicants to assure the government they appear to be valid and the person appears to be authorized to work in the U.S. An immigration reform bill pending in the Senate, however, would radically overhaul that system by requiring employers to verify electronically the identity of all U.S. workers, no matter how long they have been at their job. Employers who don't comply would be subject to fines, while employees rejected by the government database would have to challenge its accuracy to keep their jobs. If the bill becomes law, employers would have 18 months to comply for all new hires, and three years for all current employees. Not surprisingly, the proposal has drawn complaints from business and civil liberties groups. I will let everyone know if and when this bill becomes law.

Hustling into court

Law.com has issued its annual list of the top 10 examples of workplace wackiness. My personal favorite is number 10, which answers the age old question of whether you can be subjected to a hostile work environment if you choose to work for Larry Flynt:

The California Superior Court in Los Angeles has certified an arbitrator's decision that Hustler magazine publisher Larry Flynt must pay $1.1 million to a former secretary who alleged that having to comply with Flynt's trysts with prostitutes in his private office created a hostile work environment. Elizabeth Rene Raymond alleged that she had to participate in an "early warning system" when Flynt's wife was approaching the executive offices during one of these trysts.

For the full list, go here.

Ohio Supreme Court Recognizes Claim for "False Light" Invasion of Privacy

Historically, Ohio recognizes three separate invasion of privacy torts: (1) the unwarranted appropriation or exploitation of one’s personality, (2) the publicizing of one’s private affairs with which the public has no legitimate concern, and (3) the wrongful intrusion into one’s private activities. Today,the Ohio Supreme Court, in Welling v. Weinfeld, recognized a fourth invasion of privacy theory as a tort in Ohio -- the "false light" theory. In so ruling, Ohio joins the majority of other jurisdictions that have recognized this tort.

Under the false light theory, it is a tort to give "publicity to a matter concerning another that places the other before the public in a false light ... if (a) the false light in which the other was placed would be highly offensive to a reasonable person, and (b) the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed." The purpose of this theory is to close a loophole in the defamation laws, which protect reputation in the community by publication of falsehoods. The false light theory, conversely, protects one's own personal sensibilities. By way of example, the Court cited to several examples of conduct that would be actionable as a false light invasion of privacy but not necessarily as defamation, such as falsely portraying someone as a victim of sexual harassment or having a terminal illness. Such false accusations might not damage one's reputation, but nevertheless could cause them harm that is not remedied by defamation law.

While this theory of recovery is new, the lessons to be learned are not. Be very mindful of information that is spread in your workplace and about your employees. Private matters, such as medical information, investigations of misconduct, or other personnel matters, should remain private. Negative job references should rarely be given. These proactive measures will help lessen the risk of claims of this ilk being brought.

Can't get away from the office

I'm off to vacation starting Friday, and the blog will be going on a brief one-week hiatus. Do vacations even exist anymore? According to Monday's Chicago Tribune, the answer may be no. The article cites a survey from earlier this year by WorkPlace Media, which found that 81% of us check our work-related e-mails or voice mail while on vacation. Of course, this tethering to the office is made much easier by the proliferation of Blackberries and Treos. I know I will be hooked to my Treo from Hilton Head (much to the chagrin of my family) so that I can stay on top of the myriad balls that will inevitably be in the air when I'm out of town.

Our Blackberried workforce raises another interesting question: is time spent outside the office e-mailing from a Blackberry compensable time under the Fair Labor Standards Act? According to a recent article by Jeffrey M. Schlossberg, Adjunct Professor of Law, Hofstra Law School, time spent outside the office may very well be compensable time, requiring the payment of overtime for non-exempt employees. Mr. Schlossberg correctly argues that because employers provide these technological tools with the understanding that employees will use them during off-work hours, the time spent is probably compensable, subject to a regulation that de minimus time is not necessarily covered. Those of us with smart phones know, however, that the time spent using them is never de minimus, and often obsessive.

For companies that provide Blackberries and other portable e-mail devices to their employees, this issue is one that is definitely worth considering in your next wage and hour audit.

Sticks and stones may break my bones...

As long as harassment has been illegal, the lynch pin of its unlawfulness has always been the protected characteristic of the person being harassed. Harassment in and of itself is not unlawful, but instead harassment because of sex, race, age, religion, disability, national origin, etc. The Supreme Court has long made it clear that the employment discrimination laws are not a "code of general civility." Legislative pushes in 13 different states are attempting to change that to make general workplace bullying illegal. There are even two different organizations promoting these legislative efforts, bullybusters.org and bullyinginstitute.org. Bullybusters identifies itself as the "National Coordinators of U.S. State Legislative Initiatives to Stop Workplace Bullying." The purpose of these bills is to extend protection to all employees from abusive work environments regardless of protected group status. Thankfully, Ohio is not one of these states (yet). It would be an understatement to say that these laws, if passed, would hamstring the ability of companies to manage their workforces. Anti-bullying laws could also provide a death-blow to employment at-will by eliminating protected classes. It would not be a stretch to imagine an employee suing for constructive discharge as a result of being bullied.

Nevertheless, because this issue is perceived to be an epidemic, it is one that could achieve a groundswell of popular support. According to a March 2007 survey conducted by the Employment Law Alliance, 44% of workers claim to have been bullied on the job, and an astounding 64% feel they should have the right to sue if bullied. Only 16% could emphatically say that those bullied should not be able to sue. The survey lists specific examples of perceived workplace injustices that employees report as "bullying":

1. Making sarcastic jokes or teasing remarks (60%)
2. Criticizing performance in front of others (59%)
3. Interrupting in a rude manner (58%)
4. Giving a dirty look (56%)
5. Raising one's voice or yelling (55%)
6. Deliberately ignoring (54%)
7. Making personal insults (50%)
8. Demeaning or embarrassing comments in person or by email (40%)
9. Spreading rumors or inappropriately sharing confidential information (40%)
10. Making inappropriate physical contact (17%)
11. Physically threatening (11%)

Robert Sutton, Professor of Management Science and Engineering in the Stanford Engineering School, published an entire book on this topic, The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't. According to Professor Sutton, there are a dozen common, everyday tools bullies use, a list that closely mirrors the incidents of bullying reported in the Employment Law Alliance survey.

This movement is frightening. Readers of this blog know that I am a strong advocate of employers treating employees fairly. Fair treatment, that is, treating employees the way you would want to be treated if you were in their shoes, is the best proactive approach employers can take to avoid litigation. But, do we really need laws that make it illegal for a manager to be a jerk. We are creating a society of wusses. It's ridiculous that kids can't play dodgeball anymore because the less athletically gifted might get hurt (lest anyone prejudge my biases, I was the kid in the middle of the circle getting pounded by red rubber balls). It's just as ridiculous that a manager cannot throw a tantrum, justified or not. Bosses come in all shapes and sizes, and have varying degrees of "touchy-feeliness." Those that cannot handle working for a bullying boss will find work elsewhere, and the companies that tolerate or foster these types of managers will be left with a revolving-door workforce that ultimately hurts the bottom line. Bullying, however, is not akin to the historic, invidious, systemic discrimination that needs legal intervention to remedy. Let us all hope that common sense prevails and this movement dies a quick death.

U.S. Supreme Court limits pay discrimination claims

Today, the United States Supreme Court, in Ledbetter v. Goodyear Tire & Rubber Co., ruled in a 5-4 decision that in cases alleging discrimination in pay, the federal statute of limitations begins to run when the pay-setting decision is made. Thereafter, an aggrieved employee has only 180 days or 300 days (depending on the particular state) in which to file an EEOC charge, or forever be time barred from challenging the discriminatory pay setting decision under federal law.

In Ledbetter, Lilly Ledbetter, an 19-year Goodyear employee, alleged that Goodyear had discriminatorily denied her raises throughout her tenure, because of her sex and in violation of Title VII. She filed her EEOC charge well in excess of 180 days past the last denial of a raise. Ledbetter did not claim that the relevant Goodyear decision makers acted with discriminatory intent either when they issued her checks during the EEOC charging period or when they denied her a raise in 1998. Instead, she claimed that her charge (and therefore her lawsuit) was timely because each paycheck she received with the allegedly discriminatory pay rate was, in and of itself, an act of discrimination for purposes of challenging the long-ago decisions. Thus, each paycheck was unlawful because each would have been larger if she had been evaluated in a nondiscriminatory manner prior to the EEOC charging period and during her entire tenure. Thus, according to Ledbetter, her 1998 rate of pay was unlawful because it carried forward the effects of the prior 18 years of uncharged discriminatory pay decisions. The District Court agreed with her and permitted her claim to proceed to a jury, which awarded her more than $3 million in back pay, compensatory, and punitive damages.

The Supreme Court, however, overturned that decision, and in doing so diverged with the vast majority of the appellate courts that have looked at this issue. Writing for the majority, Justice Alito opined that “current effects alone cannot breathe life into prior, uncharged discrimination.... Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her. She did not do so, and the paychecks that were issued to her during the 180 days prior to the filing of her EEOC charge do not provide a basis for overcoming that prior failure.” According to the Court, its narrow reading of the statute of limitations "reflects Congress’s strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation."

Ohio is a deferral jurisdiction, so employees in this State have 300 days to file EEOC charges of discrimination. This case has important implications under federal employment discrimination law, because a charge of discrimination is a prerequisite for the filing of any lawsuit under Title VII. I question, however, the overall effect this decision will have on companies that do business in Ohio. Under Ohio law, an employee can bypass the Ohio Civil Rights Commission and the EEOC and simply institute a private cause of action under Ohio Revised Code 4112.99 for all acts of discrimination. Such lawsuits have an astounding 6 year statute of limitations for all forms of discrimination, except age discrimination, which has a 6 month statute. This statute of limitations and the lack of any administrative exhaustion is one of the few areas where Ohio law differs from its federal counterpart. Until the Ohio legislature closes this anomaly, local businesses will probably not feel much effect from Ledbetter.

Jury hits Kohl's big in "family responsibility discrimination" case

To help drive home yesterday's post about family responsibility discrimination, a Cuyahoga County jury today awarded a former assistant manager for Kohl's Department Stores $2.1 million. The plaintiff, Teresa Lehman, claimed that she was discriminated against because of her parenting role for her two young children. According to the Cleveland Plain Dealer, the evidence at trial showed that in "two-month period, five store-manager jobs went to less-experienced and less qualified men than Lehman, or to women with no children or women who assured their bosses that they would have no more children." At the same time, Lehman, who had previously been told by her bosses that she was manager material and on track for a promotion, was passed over and transferred to less desirable stores. Witnesses testified at trial that Lehman's bosses asked her questions such as: "You're not going to get pregnant again, are you," "Did you get your tubes tied," "I thought you couldn't have any more kids," "Are you breast feeding," and "Are you having any more kids?"

In a lesson that all employers should take to heart, the Plain Dealer quotes juror Linh Duong's explanation of the panel's sentiments: "I think she was very poorly treated because she was pregnant, because she wanted to have a family."

This stunning success for Teresa Lehman will further underscore for employees and plaintiffs' lawyers that judges and juries will not give a free pass to employers whose decisions exhibit an intent to discriminate against women who want to work and have a family at the same time. I wrote yesterday that this type of discrimination should be a lesson in HR 101. Companies need to pay careful attention to verdicts such as this one. This issue bears close watching, as it appears it will be a hot button issue in employment law for the foreseeable future.

Is Failing to Promote a Work/Life Balance Actionable Discrimination?

If you scour Federal and Ohio anti-discrimination laws, you will not find “caregiving” as a protected characteristic. Yet, according to the EEOC’s May 23, 2007, Enforcement Guidance, Unlawful Disparate Treatment of Workers with Caregiving Responsibilities, employers that disparately treat employees who have caregiving responsibilities may be guilty of actionable discrimination. 

According to the EEOC, the Guidance is intended to address the connection between caregiving roles, such as motherhood, and employment discrimination. It does so, not by creating “a new protected category,” but by illustrating “circumstances in which stereotyping or other forms of disparate treatment may violate Title VII or the prohibition under the ADA against discrimination based on a worker’s association with an individual with a disability.” The EEOC’s intention is to clarify “how the federal EEO laws apply to employees who struggle to balance work and family,” says EEOC Vice Chair Leslie E. Silverman. This form of discrimination is being referred to as “family responsibility discrimination” (or “FRD”).

As examples of family responsibility discrimination, the EEOC provides a 27-page laundry list that should be HR 101 for all but the most myopic of employers:

• Asking female applicants, but not male applicants, if they have children (sex discrimination); 
• Making derogatory comments about a female employee after she becomes pregnant (sex discrimination); 
• Quizzing a female job applicant on how she would handle her job and her family at the same time (sex discrimination); 
• Forcing pregnant employees to take unpaid leaves of absence (sex/pregnancy discrimination); 
• Refusing to permit a male employee to take permissible paternity leave, or denying a request for part-time status to enable one’s wife to return to work full-time, because it is not “masculine” (sex discrimination); 
• Permitting a white employee time off to care for an ill child, but not a black employee (race discrimination); 
• Failing to hire an employee who has to care for a disabled child (disability discrimination); 
• Repeated negative comments about breastfeeding, motherhood, or pregnancy (sexual harassment).

As a relatively new dad, I can personally report that caregiving is largely the mom’s role, (although we enlightened 21st century dads try to do our fair share). Be that as it may, companies that are not flexible in accounting for that caregiving role of their female employees are losing and will continue to lose good employees. For companies to retain those employees, they will have to become flexible so that working moms do not have an incentive to leave the workforce. One would think that businesses would self-correct to ensure against losing good employees. The fact that the EEOC was compelled to publish this Guidance suggests that the job market is doing the exact opposite to the detriment of many well qualified employees.

This Guidance will certainly spur more discrimination charges and lawsuits based on these issues, as they are now front and center for the plaintiffs’ bar. To avoid being subjected to such claims and to be able to effectively defend them, employers will have to adopt more flexible policies and a more open mind on the role of caregivers in the workplace.

Lessons from Childrens' Lit

“Farmer Brown has a problem. His cows like to type. “

So starts Click Clack Moo, Cows That Type, my soon to be one year old daughter’s favorite book. In Click Clack Moo, Farmer Brown’s cows and hens decide that they need electric blankets to keep warm at night in the barn. They deliver their demand to Farmer Brown on notes typed by the cows on a typewriter. When Farmer Brown refuses their demands, they go on strike, withholding milk and eggs. Ultimately, in a deal brokered by the duck, Farmer Brown agrees to accept the cows’ typewriter in exchange for electric blankets. The labor dispute ended, and the cows and hens went back to producing milk and eggs. The deal backfired on Farmer Brown, though, as Duck absconds with the typewriter and leverages it into a diving board for the pond.

Click Clack Moo teaches us some valuable lessons:

1. Fair Treatment: The best means to avoid collective action by your employees is to treat your employees fairly. The barn was cold, and the cows and hens perceived that they were being forced to work in intolerable conditions. When Farmer Brown refused even to consider any concessions, they went on strike. If you want your employees to work hard, not unionize, and not file lawsuits, treat them fairly. Maintain reasonable, even-handed work rules and policies. Apply them equally. Don’t discriminate. There is no guarantee that you’ll stay out of court, but if you end up there, you’ll have a much easier time convincing a judge and a jury of the rightness of your decision if you are perceived as being fair, reasonable, and even-handed. 


2. Litigation is an Answer, But Not Always the Best Answer: Even in employment cases, where there are so many emotions in play on both sides of the table, it is only the most frivolous of cases that cannot not be resolved at some dollar figure. It is the job of the employer, working with its attorney, to strike the right balance between the cost of litigation and the cost of settlement. Convictions often get in the way, and often times litigation and trial is the only means to an outcome. But, you should always keep an open mind towards a resolution. 


3. Don’t Go It Alone: When resolving any case, make sure all your loose ends are tied up in a tidy agreement. Farmer Brown missed this last point. A well drafted agreement that included Duck would have avoided the added expense of the diving board. If Farmer Brown had retained competent counsel, he could have potentially avoided the problem with Duck (who probably went to law school).

Pregnancy discrimination claims on the rise

It certainly seems like we are in the midst of another baby boom. Everywhere you look there are either pregnant women or women pushing strollers or lugging infant car seats. So perhaps it is not surprising that given the fact that women are much more career oriented now than 20 years ago, pregnancy discrimination claims are on the rise. With $4 gasoline on the horizon and the cost of living getting more expensive every day, few families are afforded the luxury of living on one income.

Eve Tahmincioglu from msnbc.com succinctly summarizes the law against pregnancy discrimination in the workplace: "Pregnancy discrimination is indeed illegal.... You cannot refuse to hire a woman because she is pregnant. You cannot fire her because she is pregnant. You cannot demote her or dock her pay because she is pregnant. Even if you ask a woman about her child-rearing plans, and don’t do the same of your male job applicants or employees, that’s a no-no." And yet, despite the fact that every company knows it cannot discriminate because of pregnancy, according to David Grinberg, an EEOC spokesperson: “The increase in pregnancy discrimination charge filings and lawsuits is cause for concern.... [P]regnancy discrimination lawsuits by EEOC have increased about threefold from six or fewer per year in the early to late 1990s, to 16 or more per year since 2001." Pregnancy discrimination charges charges filed with the EEOC, state and local agencies jumped nearly 19 percent to a record 4,901 last year.

The Pregnancy Discrimination Act is not the only law employers must worry about when dealing with pregnant employees. The Family and Medical Leave Act mandates 12 weeks of unpaid leave for employees for childbirth and related care, and makes it illegal to terminate an employee during that leave or in retaliation for taking the leave. The FMLA, though, only applies to employers with 50 or more employees and to employees to worked at least 1,250 hours in the preceding 12 months.

Many Ohio small businesses are therefore under the mistaken impression that maternity leave is not required of them. Ohio law, however, begs to differ. Separate and distinct from the FMLA's 50 employee/1,250 hour prerequisites, section 4112-5-05(G) of the Ohio Administrative Code provides that a female employee must be granted a leave of absence for a reasonable period of time on account of childbearing. This requirement applies regardless of whether an employer has a maternity or leave of absence policy. According to the Ohio courts that have examined this provision, a "reasonable period of time" may exceed 12 weeks depending on the circumstances.

This area of the law is a minefield for the unwary employer. The federal PDA intersects with the FMLA, which then intersects with Ohio law, all creating a trap that can prove very costly for an employer that terminates a woman while pregnant or shortly after childbirth. These issues will continue to plague employers as more women return to work after childbirth. The safest course of action is to grant all women 12 weeks of maternity leave, regardless of their tenure and the size of your business, and not to terminate an employee following childbirth without consulting your attorney first.

Ohio bans sexual orientation discrimination for state employees

Governor Strickland on Thursday signed an Executive Order that protects all State workers from discrimination based on sexual orientation or gender identity in hiring, layoffs, firings, transfers, promotions, demotions, compensation and eligibility for training programs. The Order restores protections first put in place by Governor Celeste and 1983, continued by Governor Voinovich, but removed by Governor Taft in 1999.

According to today's Columbus Dispatch, however, the Governor has concerns that any legislation by which Ohio joins the 20 other states that ban such discrimination in all employment might be unconstitutional. The problem, according to the Governor and his legal counsel, is that the 2004 amendment to the Ohio Constitution banning marriage may be so broadly worded that it could make such wider employment protections unconstitutional. The Dispatch quotes the Governor as saying, "Would I be sympathetic to efforts to end discrimination within the private workplace? Yes. Would I need to see the specifics of such legislation before I would ever commit myself to supporting or opposing it? Absolutely." Governor Strickland added that he wants "Ohio to be a place where all citizens are valued and included and allowed to fully participate without fear or concern that they may be the subject of discrimination based upon who they are." The article also notes that many private sector employers already ban such discrimination as part of their own internal EEO policies.

While the national push seems to be in favor of a broad ban against this type of discrimination, it is plausible that the 2004 measures enacted to help re-elect George Bush could have long lasting implications for workplace rights long after Mr. Bush leaves office.

EEOC issues new EEO-1 Form for 2007

As most companies should be aware, the EEO-1 Report is a confidential government form required of employers with 100 or more employees or with 50 or employees and with government contracts of $50,000 or more. It requires those employer to annually provide to the Employment Opportunity Commission and the Department of Labor, Office of Federal Contract Compliance Programs a count of their employees by job category and by ethnicity, race, and gender. The annual deadline for filing September 30. You may not be aware, however, that for the 2007 filing year the EEOC has approved a revised EEO-1.

The new EEO-1 Report subdivides the current job category for “Officials and Managers” into two levels based on responsibility and influence within the company: Executive/ Senior Level Officials and Managers (who plan, direct and formulate policy, set strategy and provide overall direction; in larger organizations, within two reporting levels of CEO), and First/Mid-Level Officials and Managers (who direct implementation or operations within specific parameters set by Executive/Senior Level Officials and Managers; oversee day-to-day operations). It also moves business and financial occupations from the Officials and Managers category to the Professionals category, for the express purpose of improving data for analyzing trends in mobility of minorities and women within Officials and Managers.

The revised form also makes a number of changes to the race and ethnic categories. The revised EEO-1 report: adds a new category titled "Two or more races"; divides "Asian or Pacific Islander" into two separate categories; renames "Black" as "Black or African American"; renames "Hispanic" as "Hispanic or Latino"; and strongly endorses self-identification of race and ethnic categories, as opposed to visual identification by employers.

Separate and apart from the new categories, the self-identification aspect of the new EEO-1 Form is the most intriguing facet of this new program. The EEOC wants to employers to shy away from visually identifying employees' race and ethnicity, ostensibly to avoid stereotyping, and instead is encouraging employers to ask employees and new hires to self-identify. The EEOC endorses what it calls the "Two Question Format." Employers are first to ask if an employee is Hispanic or Latino (ethnicity), and second ask what race/races the employee considers himself or herself to be. The EEOC even goes so far as to suggest that employers may ask, but are not required to ask, employees to specify particular races instead of simply checking “Two or More Races.” Even if, however, employees supply detailed race data, employers should count such employees in the “Two or More Races” category on the new EEO-1. This process should make for some very interesting workplace conversations as we get closer to the September filing deadline.

Silence is not always golden - confidentiality policies may violate NLRA

The National Labor Relations Act makes it unlawful for an employer, in a union or non-union shop, to interfere with, restrain, or coerce employees exercising their right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. One such protected activity is discussing terms and conditions of employment. In Cintas Corp. v. NLRB, the United States Court of Appeals for the D.C. Circuit upheld a ruling by the National Labor Relations Board that Cintas’s corporate confidentiality policy violated the Act because employees could construe the policy to prohibit discussions of wages or other terms and conditions of employment.

Cintas’s policy, contained in its employee handbook, stated: "We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters." Cintas used to the term "partners" synonymously with "employees." The quoted language is typical of corporate confidentiality policies. Furthermore, while the policy stated that a violation of the policy could result in discipline, Cintas had never disciplined any employees for discussing wages or other terms and conditions of employment.

The Court determined nevertheless that the mere maintenance of such a policy violated the Act. It reasoned that because employees could reasonably believe that the policy forbids any discussion of terms and conditions of employment, a reasonable interpretation of the policy could have a chilling effect on employees.

Thus, to be lawful under the NLRA corporate confidentiality policies must be sufficiently limited by specific context or language so as to be clear to employees that the rules do not restrict their rights to discuss the terms and conditions of employment. The Court provided as an example of a lawful policy one that is limited only to disclosure of proprietary information or trade secrets.

E-discovery provides a potential weapon against litigating employees

After Target Stores terminated Judith Teague's employment, she claimed gender discrimination and filed a charge of discrimination with the EEOC and a subsequent lawsuit in federal court. During discovery in the lawsuit, Target learned that Teague owned a home computer on which she conducted a comprehensive on-line job search and exchanged e-mails about her termination and the discrimination claim. Target asked for the computer in discovery in support of its defenses to her back pay and discrimination claims. Teague claimed, however, that in August 2004 the computer "crashed" and she disposed of it. Because of her spoliation of relevant evidence, the District Court granted Target an adverse inference instruction -- that is, at trial the jury would be permitted to infer from Teague's destruction of evidence that any such evidence that would have been found on the computer would have favored Target. In so ruling, the Court relied on several facts. First, Teague had an obligation to preserve her computer because it contained electronic evidence relating to her claim against Target and her efforts to mitigate her damages. Secondly, because at the time of disposal she had already filed her EEOC charge and hired an attorney to pursue litigation, she discarded the computer with a culpable state of mind.

Thus, the Court announced that it would sanction Teague by giving an adverse inference instruction to the jury at trial. Not surprisingly, within two weeks of that Order, the case was settled and dismissed on terms that one can only assume were very favorable to Target.

Employers have been fearful that the recent e-discovery amendments to the Federal Rules of Civil Procedure would prove to be expensive and burdensome in managing myriad e-mails, documents, and information stored daily on corporate servers. Teague v. Target Corporation shows that e-discovery also is a potential trap for unwary employees and a potential weapon for employers to add to their arsenal of litigation tools. Companies should considering asking in discovery for e-mail addresses and computer information from all plaintiff-employees. As Target found out, you never know what you will find. As Teague v. Target Corporation points out, it's often what you do not find that proves the most helpful.

Age discrimination lawsuits continue to rise

In an article that will probably not come as much of a surprise to employers, according to today's Houston Chronicle baby boomers continue to battle age-based bias the workplace. What may be surprising, however, is the amount of dollars being spent to resolve cases in which companies almost certainly did not practice age discrimination, and large sums of money that can be at risk once cases are placed into juries' hands. The article discusses a claim filed by the EEOC against Lucent Technologies, settled for $195,000, as compared to a $1,275,000 age discrimination verdict against the University of Missouri-St. Louis in favor of its former basketball coach. Closer to home, a jury in federal court in Cleveland last fall awarded a former New York Life local manager $16 million (including $10 million in punitive damages) in an age discrimination case. As the workforce ages, so will the frequency of claims based on age discrimination.

The lessons for employers are several. First, well documented legitimate reasons for a termination are more important now than ever, as the stakes in these cases continue to rise. Secondly, judges and juries will punish companies where there exists a perception that the employee was treated unfairly, often times regardless of any discriminatory motive. Finally, all legal issues aside, employers should guide themselves by the golden rule - treat employees as one would want to be treated if in their shoes. Juries are comprised of many more employees than employers, and if those jurors feel that the plaintiff-employee was treated the same way the jurors would want to be treated, the jury will be much less likely to punish the employer, and the dollars needed to resolve the case will be much lower, if needed at all.

Are new protected classes on the horizon?

While some companies voluntarily choose to implement policies that state that they will not discrimination on the basis of sexual orientation, under federal law and the law of most states (including Ohio) it is perfectly legal for employers to make employment decisions based on that characteristic. With the Democrats now controlling Congress, however, change in the law might be on the horizon. Pending in Congress is the Employment Non-Discrimination Act of 2007. That bill would prohibit would prohibit discrimination on the basis of perceived or actual gender identity (which is defined as gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth) or sexual orientation (which is defined as homosexuality, heterosexuality, or bisexuality). While most reasonable people can agree in principle that discrimination in any form is wrong, I question the inclusion of "perceived" in the bill's protection, especially when courts often protect sexual stereotypes as a form of gender discrimination. This bill is still a long way from becoming law, but it does bear watching as passage in its current form would potentially open a new floodgate of litigation.

Another bill that is currently pending on Capitol Hill is the Genetic Information Nondiscrimination Act of 2007. Among other changes, that bill, which overwhelmingly passed by a vote of 420-3 in the House, makes it an "unlawful employment practice," as that term is used by the Equal Employment Opportunity Commission, for an employer, employment agency or labor organization to use genetic information in making hiring, firing, or promotion decisions. In other words, genetic discrimination would be treated in the same way as other forms of discrimination. While I'm not sure how an employer would necessarily acquire employees' genetic information, given the overwhelming support in the House, it's fair to assume this bill will soon become law, and also bears watching.

A Cautionary Hiring Tale

In May 2004, Pfizer hired Dr. Dale Thurman as a veterinary pathologist. Thruman claims that prior to hiring, Pfizer's recruiting manager, Ruth Butts, orally told him that under the company's pension plan, he would be eligible for retirement at age 62 with a full pension benefit of $3,100 per month. Relying on that statement, Thurman quit his job in Ohio and moved to Michigan for the position at Pfizer. Shortly after he started working, Pfizer informed Thurman in writing that the pension calculation Butts gave him was incorrect, and the actual benefit amount would be $816 per month, a sizeable difference. And, like any disgruntled employee, he took his dispute to court, suing Pfizer for fraud and misreprentation. Pfizer defended the lawsuit, asserting that because the claims relate to its pension plan, the claims are exclusively governed by ERISA and the state law claims are preempted. The District Court agreed and dismissed the doctor's complaint.

In Thurman v. Pfizer, Inc., however, the Sixth Circuit disagreed, and in the proceed provided some cautionary language for employers in making representations during the hiring process. Critically, because Thurman sought damages based on what he lost by quitting his old job (i.e., lost of stock options, salary, benefits, and moving expenses) and not damages incurred by relying on Butts' representation (i.e., the higher pension benefit), the remedy sought was not plan-related and therefore the state law claims did not implicate ERISA. According to the Sixth Circuit, the claims were garden variety mispresentation claims that were too far attentuated from the Plan to invoke ERISA or its preemption provision:

What we have here is simply a case of a person who left his old employer based on promises made by his new employer. These promises could have concerned anything — for example, an increase in wages, more vacation days, or free parking. Here, these promises just so happened to concern retirement benefits. We see no reason to bind employers to some promises used to induce acceptance of an employment offer, but give them a "get out of jail free card" when their promises concern the scope of a plan governed by ERISA.

The Court then admonished employers to be more carful in what they tell applicants, and advised that a company will not be able to hide behind ERISA if a misreprentation made during the hiring process causes the applicant to rely to his or her detriment in accpeting the position:

We simply hold that employers who misrepresent certain benefits provided by ERISA-governed plans to prospective employees cannot later use preemption as an end-run around liability for fraudulent or innocent misrepresentations. If adhering to promises regarding ERISA-governed plans proves too cumbersome for employers, then during the recruitment process, those employers must simply be more careful before informing potential employees of the ERISA-governed benefits to which they might be entitled. This is a duty created by state law, with which we see little basis for federal law to interfere.

The Song Remains the Same -- Has Burlington Northern Really Changed the Landscape of Retaliation Claims?

While Ohio and federal anti-discrimination laws have long prohibited an employer from retaliating against an employee who makes a claim of discrimination, opposes an act of discrimination, or participates in any manner in an investigation, proceeding, or hearing related to a claim of discrimination, the frequency of these claims continue to rise. Historically, courts would look for some economic impact before deciding that a job action was retaliatory.

On June 22, 2006, the United State Supreme Court decided Burlington Northern & Santa Fe Railway Co. v. White, a case that many employers feared would radically alter the landscape of retaliation claims, loosen the meaning of “retaliation,” and expand the parameters of those employees earning the law’s protection. The Court clarified that an employer need not take an ultimate employment action (such as termination, demotion, or transfer) against an employee for retaliation to occur. Instead, any “materially adverse action” could constitute actionable retaliation. The Supreme Court explained the level of seriousness to which the employment action must rise before it becomes “adverse” and therefore actionable:

[A] plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination. We speak of material adversity because we believe it is important to separate significant from trivial harms…. The anti-retaliation provision … prohibit[s] employer actions that are likely to deter victims of discrimination from complaining to the EEOC, the courts, and their employers…. And normally petty slights, minor annoyances, and simple lack of good manners will not create such deterrence….

Thus, the key determination in whether an employer has subjected an employee to an adverse employment action is the distinction between material adversity and trivial harm.

A recent Sixth Circuit decision illustrates that courts continue to rely heavily upon the economic impact of the alleged retaliatory conduct in determining its material adversity. In Halfacre v. Home Depot, U.S.A., Inc., Halfacre’s performance evaluations changed significantly for the worse after he filed an EEOC charge. The Sixth Circuit reversed the district court’s grant of summary judgment to the employer on the retaliation claim, rationalizing that if a lower evaluation actually impacted the potential for raises or promotions, the bad review would constitute an adverse employment action.

In the words of the Supreme Court: “Context matters.” That context has been, and seems to remain, largely about economic impact.