Defining the proper "decisional unit" is key in legitimacy of RIFs

Today, we'll finish up our series on releases and waivers of age discrimination claims by looking at how courts examine the scope of the decisional unit for purposes of making the requisite disclosures under the Older Workers Benefits Protection Act ("OWBPA") for a group reduction. For the previous two posts, see Offering of severance package found to be evidence of a constructive discharge, and Refresher on age discrimination waivers.

According to the 6th Circuit in Raczak v. Ameritech Corp., the purpose of OWBPA is to ensure that "workers who signed a waiver had a clear idea of what they were giving up, particularly that they had the ability to assess the value of the right to sue for a possibly valid discrimination claim." Thus, a valid waiver under the OWBPA in a group reduction must include information - ages and job titles - of everyone in the decisional unit, whatever that decisional unit may be, and the status of each individual with respect to whether the employee was selected for termination or retention. The law requires employers engaging in a group layoff to give employees need data to conduct a meaningful analyses to determine whether an employer engaged in age discrimination before agreeing to sign a severance agreement. They key in determining whether employees are truly comparing apples to apples is the scope of the "decisional unit" the employer uses to compile is list of affected and unaffected employees.

The OWBPA's regulations (29 C.F.R. § 1625.22) define the term "decisional unit" as follows:

[D]ecisional unit is that portion of the employer's organizational structure from which the employer chose the persons who would be offered consideration for the signing of a waiver and those who would not be offered consideration for the signing of a waiver. The term "decisional unit" has been developed to reflect the process by which an employer chose certain employees for a program and ruled out others from that program.

The regulations offer several examples to assist companies in selecting the proper decisional unit:

• If an employer is attempting to reduce its workforce at a particular facility and undertakes a decision-making process by which some of the employees at the facility are selected for a program and others are not, then the facility will be the decisional unit.
• If the employer seeks to reduce the number of employees at a facility by exclusively considering a particular portion or sub-group of its operations at a facility, then the decisional unit would be that sub-group or portion of the workforce at the facility.
• The decisional unit may be larger than one facility if an employer is attempting to combine operations from several facilities and considers employees in several facilities for termination.

Thus, they key factors for deciding the proper scope of the decisional unit include the identity of the decision maker and the employees actually considered for the RIF. Several cases provide additional examples of these principles in action:

Burlison v. McDonald's Corp.

McDonald's engaged in a nationwide corporate reorganization. It charged each regional manager with the task of determining which employees to keep for each new region. McDonald's offered each RIFed employee a severance package in exchange for a release of all claims. In its effort to comply with the OWBPA, McDonald's provided with each severance agreement a region-specific information sheet. Each of the 5 plaintiffs (all of whom were over 40) signed the releases and accepted the severance packages. Two years later, however, they sued for age discrimination, claiming that the releases were void because McDonald's had engaged in a nationwide RIF, for which the OWBPA required that it provide them nationwide information, and not just information limited to their region. The 11th Circuit found that because the decisions as to who to terminate were made on the regional level, the region was the proper decisional unit. Because the local managers made the decision, the nationwide unit had no relevance to the plaintiffs.

Kruchowski v. Weyerhaeuser Co.

While the employees in Burlison were rebuked for arguing for an overly broad decisional unit, the employer in Kruchowski v. Weyerhaeuser Co. was punished for selecting a unit that was too wide for the actual scope of the RIF. The plaintiffs were 16 of the 31 employees selected for a RIF at the defendant's mill. The OWBPA notice advised the RIFed employees that the "decisional unit" was all salaried employees at the mill. The court of appeals found that the waivers were invalid because the Notice misidentified the decisional unit as all salaried employees. The actual unit was all salaried employees who directly reported to the mill manager. 15 salaried employees did not report to the mill manager, yet were included in the Notice. According to the court: "Defendant itself ignored its structure and decision-making hierarchy when the notified plaintiffs of the 'decisional unit.'" Because the decisional unit of which the plaintiffs were notified and the actual decisional unit were two separate groups, the waiver was void.

Conclusion

RIFs are not do-it-yourself projects for businesses. They raise myriad employment law issues, not the least of which is the scope of the proper decisional unit for purposes of making disclosures under the OWBPA. It is crucial to get these waivers absolutely right, or companies risk paying severance and still getting sued for age discrimination. Don't put yourself in that position - seek professional help before carrying out a RIF.

Refresher on age discrimination waivers

Yesterday, we looked at Coryell v. Bank One Trust, which found that the offering of a severance package could constitute evidence of a constructive discharge. Even though the employee was losing his job as part of a corporate reorganization, the court believed a question existed as to whether he had any meaningful choice but to accept the severance package.

As I mentioned yesterday, the lawsuit could have been avoided if the company required Coryell to sign a severance agreement that included a valid release of claims as a condition to receive the severance package. In fact, I'd go so far as to say that it would take a very rare case for me to feel comfortable with an employee receiving severance of any kind without signing a release in return.
Severance agreements for employees age 40 or over present their own set of problems. The Older Workers Benefit Protection Act (OWBPA), which amended the federal Age Discrimination in Employment Act, requires that any releases and waivers of federal age discrimination claims be "knowing and voluntary." Simple enough, right?. What release is not entered into knowingly and voluntarily? Not so fast. The OWBPA specifically defines what a "knowing and voluntary" waiver means, and it is not as simple as it might sound:

1. The waiver must be part of an agreement between the employee and the employer.
2. The waiver must be written in a manner calculated to be understood by the employee.
3. The waiver must specifically refer to rights or claims arising under the ADEA.
4. The employee cannot be waiving any rights or claims that arise after the date he or she signs the agreement.
5. In exchange for the release, the employee must receive consideration in addition to that which he or she is already entitled.
6. The employee must be advised, in writing, to consult with any attorney before signing the agreement.
7. The employee must be given 21 days to consider whether to sign the agreement.
8. The agreement must provide for a period of at least 7 days following its execution for the employee to revoke the agreement, and the agreement cannot become effective or enforceable until that revocation period has expired.

If the release and waiver is provided as part of some severance program offered to a group of employees (such as a reduction in force), these requirements change. The 21 day period within which to consider the agreement is extended to 45 days. Moreover, at the start of that 45 day period (i.e., at the same time the employer gives the severance agreement to the employees), the employer must also disclose, in writing:

1. The eligibility criteria for inclusion in the group.
2. The job titles and ages of all individuals eligible or selected for the program.
3. The ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.

Meeting these criteria is vitally important. The absence of even one of these factors invalidates the entire release as to the employee's federal age discrimination claim. Thus, even if an employee signs a severance agreement, the employee is free to bring a federal age discrimination claim if one of the above eight elements is missing from the agreement. To make matters worse, under Oubre v. Entergy Operations and current EEOC regulations, an employee is not required to tender back the severance pay as a condition to bringing an age discrimination claim under an invalid waiver. As Dan Schwartz points out in his Connecticut Employment Law Blog: "Employers are advised to seek legal counsel before using a model agreement."

Tomorrow, we'll examine the disclosures required in a group separation, and look at some cases from Ohio and elsewhere that talk about how to define the scope of the job classification for purposes of making these disclosures.

Offering of severance package found to be evidence of a constructive discharge

With the exception of a "for cause" termination, I am firm believer that most terminations should be communicated with an offer of some amount of severance pay. It not only cushions the blow for the employee who may be losing his or her job through no fault of his or her own, but also presents an opportunity for the employer to get something positive out of bad situation. For one thing, an offer of severance should always be tied to a release by the employee of any and all possible claims against the employer. Thus, the employer is buying certainty that the employee will not sue. The severance agreement also gives employers the chance to gain benefits such as a cooperation clause and promises as to non-disparagement and confidential information.

Courts should be protecting severance agreements as good policy in promoting harmonious employer/employee relationships. Yet, in Coryell v. Bank One Trust, the Franklin County Court of Appeals held that an employee who accepts a severance package in lieu of termination can claim a constructive discharge sufficient to satisfy the 2nd element of the prima facie case of age discrimination (the suffering of an adverse action).

As part of a reorganization of Bank One, James Coryell (age 49) accepted a severance package that provided him with 52 weeks salary and benefits continuation. The severance documents expressly stated that Coryell could continue to seek a new position with the company. Coryell testified that he believed he had no better option than accepting the severance package. Although Coryell did continue to look for an internal position, he ultimately obtained an job with a different company during the pay continuation period. Coryell alleged that after his separation he was replaced by a 42-year-old, which constituted age discrimination.

Coryell pursued his age discrimination claim under the indirect method of proof, which requires a prima facie showing that:

1. the plaintiff is a member of the statutorily protected class;
2. the plaintiff suffered an adverse employment action;
3. the plaintiff was qualified for the position; and
4. the plaintiff was replaced by a substantially younger person or that a comparable, substantially younger person was treated more favorably.

The trial court found, as a matter of law, that Coryell was "neither directly nor constructively discharged because he chose between meaningful options when he accepted the severance package." Because he was not discharged, it concluded that he could not establish the second element of his prima facie case, that he suffered an adverse employment action.

Coryell is not the first time an Ohio court has faced the issue of whether an employee who accepts a severance package can claim discharge. In Barker v. Scovill, the Ohio Supreme Court found that an employee who was offered termination with severance pay "made a conscious ,well-informed, uncoerced decision [and] should not now be allowed to cry foul." In Caster v. Cincinnati Milacron, the Hamilton County Court of Appeals found that an employee who was offered either the opportunity to obtain other employment with the company, 12 weeks layoff with the potential for recall, or permanent severance with a $100,000 payout, and who chose the latter, could not claim termination.

The Coryell court, however, distinguished those precedents and found that Banc One constructively discharged him by offering the severance package.

When a plaintiff chooses termination in lieu of other options, courts will not construe his decision as an actual discharge. Rather, the plaintiff must show that he was constructively discharged, i.e., that his or her choice of termination was involuntary or coerced. Courts generally apply an objective test to determine whether a plaintiff was constructively discharged, asking "whether the employer's actions made working conditions so intolerable that a reasonable person under the circumstances would have felt compelled to resign." ...

Here, in support of his contention that he was constructively discharged, Coryell argues that appellees stripped him of his title, position, responsibilities, functions, supervisory role, and involvement in day-to-day operations and management, leaving him with no real position. ... We agree with Coryell that this evidence creates a question of fact as to whether Coryell had any meaningful choice but to accept the severance package.

This case is a cautionary tale for all employers. If you are going to offer a severance package, make sure to get something of value in return. The best return on the investment is a clear, comprehensive, and enforceable release of all potential claims by the employee against the company. Once the employee releases the age discrimination claim, it becomes irrelevant if the employee had meaningful choice but to accept the severance package, or was constructively discharged.

Waivers of age discrimination claims present their own unique problems - namely a federal statute known as the Older Workers Benefit Protection Act. The OWBPA has specific requirements a release of federal age discrimination claims must meet to be valid and enforceable. Tomorrow, we'll take a look at the OWBPA and try to give a short refresher course on its key provisions.

Gas prices dictate new types of employment policies

Yesterday's Cleveland Plain Dealer ran an article on new types of perks that companies are making available to their employee to offset the rising gas prices. The options discussed:

• Helping potential car poolers connect.
• Adjusting workweeks so some employees can put in four 10-hour days instead of five 8-hour days, or offering flex time options.
• Handing out maps of bike routes and riding tips.
• Accommodating, and even subsidizing, mass-transit use.
• Offering work-from-home options.
• Making available forgivable, low-interest loans to help employees buy dwellings near work.
• Providing gas gift cards as rewards.
• Raising mileage reimbursements.
• Catering in-house breakfasts and lunches

I have some concerns about some of these perks. For example, gas cards might be a great idea, but it may have a negative impact on those who do not own cars. Thus, consider combining a gas card program with a bus pass program to make sure that all employees are equally covered by the benefit. In other words, my standard disclaimer with any employment policy applies - make sure that it applies on a non-discriminatory basis.

What I'm reading this week #34

For the past 12 years, it has been the law in the 6th Circuit that an employer cannot discriminate against a female employee because she had an abortion (see Turic v. Hollan Hospitality). This week the 3rd Circuit joined suit, and held that the term "related medical condition" in the Pregnancy Discrimination Act includes an abortion. The case is Doe v. C.A.R.S. Protection, and you can read about it on the LawMemo Employment Law Blog and the Nolo Employment Law Blog.

WorkplaceHorizons posts this week on two separate recent legislative issues: the little known Child Labor Provisions of the Genetic Information Non-Discrimination Act, and a potential compromise between employers and disability rights advocates on the ADA Restoration Act. For my prior thoughts on the ADA Restoration Act, see ADA Restoration Act unnecessarily seeks to broaden the definition of "disability". While these changes would be a step in the right direction, it would be a big mistake to amend the ADA to affirmatively state that mitigating measures should not be considered when determining whether an impairment materially restricts an individual's major life activity.

The Pennsylvania Labor & Employment Blog has some information on a topic that often plagues HR professionals, whether an employer is required to continue an employee's accrual of vacation benefits while out on FMLA or military leave.

The Delaware Employment Law Blog reports on mixed results for employers from the Families & Work Institute's recent study of flexible work benefits among U.S. companies.

We'll finish this week's review with a trio of articles about e-discovery. HR Tech News reports that employment lawsuits cause the most e-discovery headaches, while Rush on Business tells us why document retention policies are so important for businesses to have in light of that news. Meanwhile, ediscoveryinfo gives us 5 key misconceptions that businesses have about electronically stored information and their e-discovery obligations.

Crusader seeks to ban cursing - should businesses comply?

Jim O'Connor runs the Cuss Control Academy. He believes that America has developed an addiction to swearing that needs to be curbed. According to Jim: "Swearing can be rude, crude and offensive. It can reflect a bad attitude that hurts your image and your relationships. People might perceive you as an abrasive person who lacks character, maturity, intelligence, manners and emotional control." He suggests that instead of cursing, people use substitute words such as "balderdash" instead of "bullshit."

So, do companies need anti-cursing policies? No. But, businesses should not totally ignore foul language either. Instead, it should be treated like any other workplace behavior - dealt with when it offends co-workers, alienates customers, or reaches a level so extreme or outrageous that it may create a hostile environment.

Courts sets boundary on associational discrimination claims

Recall in Thompson v. North Am. Stainless, the 6th Circuit recognized a claim for associational retaliation, and held that "Title VII prohibit[s] employers from taking retaliatory action against employees not directly involved in protected activity, but who are so closely related to or associated with those who are directly involved, that it is clear that the protected activity motivated the employer's action."

At the time, I questioned the practical application of the Thompson decision by asking, "How close is close enough?"

In Thompson, the relationship was a fiancee. It is safe to assume liability will also extend to action taken against spouses. What about boyfriends and girlfriends? How long do you have to date to be protected from retaliation? The same protection also will probably extend to parents and children. What about siblings? Grandparents? Cousins? 3rd cousins twice removed? In-laws? Friends? Carpoolers? The people you share your lunch table with? The person you sat next to in 3rd grade? How close is close enough for an employer to intend for its actions to punish the exercise of protected activity? Do employers now have to ask for family trees and class pictures as part of the orientation process?

Last month, the United States District Court for the District of Oregon, in EEOC v. Qwest Corporation, gave us some clarity on how close is close enough to support an associational discrimination claim. In that court's view, the law requires something more than just a friendship:

To maintain a claim of discrimination or harassment based on her association with a black person, plaintiff must show the existence of an association. The law requires something more than mere work-related friendship. There must be a significant connection between the plaintiff and the non-white person.

While I was writing tongue-in-cheek when I asked whether carpool buddies would be able to bring an associational retaliation claim under Thompson, it is refreshing to see a court take a practical look at this type of case and reject an associational claim made by a friend. As we try to figure out the limits of Thompson, these types of decisions are certainly worth following.

[Hat tip: Manpower Employment Blawg]

Just because paid family leave is a popular issue does not mean it is good for Ohio

Ohioans for Healthy Families, the union-backed group behind the Ohio Health Families Act, continues to try to gather enough signatures to have the OHFA placed on the November ballot. According to a May 28, 2008, press release by Ohioans for Healthy Families, the organization has:

already gathered over 50,000 new petition signatures and, with over 70% of Ohioans supporting paid sick day legislation, have no doubt whatsoever that we will be able to gather the number needed to put it on the November ballot. Personally, I think anyone running for legislative office this year while opposing paid sick days is playing political Russian roulette.

By law, if the Coalition gathers an additional 120,683 signatures by August 6, the Ohio Healthy Families Act will appear on the November ballot.
A poll on MSNBC.com of over 10,000 people reveals that only 28% oppose government mandated paid family leave. Further, as the MSNBC article points out, the United States severely lags behind most of the civilized world (and even some of the third world) on paid family leave benefits. The issue isn't whether paid family leave is a good idea or a bad idea. The issue is whether the Ohio Health Families Act, as written, is good for Ohio businesses, which it is not.
Separate and apart from the myriad ambiguities and other drafting problems in the legislation, which I've discussed before (see Deconstructing the Ohio Healthy Families Act), Ohio simply does not need to be on the forefront of this issue. Only three states (California, Washington, and New Jersey) currently require paid family leave. Nothing about becoming the 4h state to join this movement will make Ohio a more attractive business climate. We should be passing legislation to draw companies to Ohio, not drive them away.
There will come a time when paid leave will be a reality for all but the smallest of businesses in this country. If Obama wins in November, I expect that time to come in the next 4 years. Assuming that the OHFA makes the November ballot, Ohio voters will have to look past their own self interests and consider the greater good of the state. Is it more important to have a few days of paid medical leave per employee, or have more businesses choose to call Ohio home, which creates more jobs and less of a tax strain for everyone?

Accuracy of background checks poses potential problem for employers

Business Week magazine this week is running a story on the lack of accuracy in credit reports. The article claims that inaccuracies are a huge problem in the background checking industry, and gives a few heart-wrenching anecdotal examples to support the allegation. Dan Schwartz, at the Connecticut Employment Law Blog, has done the math, however, and estimates that only 0.000023 percent of all background checks end up in a complaint being filed with the Federal Trade Commission. Dan's conclusion: "Are there issues with faulty records on some? Absolutely. But the numbers presented in this article hardly suggests a rampant problem with background checks."

It's the faulty records, however, that present the biggest risks to employers. Third party background checks by employers on current or prospective employees are governed by the federal Fair Credit Reporting Act ("FCRA"). It has very stringent requirements employers must comply with before obtaining or using a background check from a third party:

1. The employer must first disclose to the employee or applicant that a background check will be done and receive written consent.
2. The employer must then certify to the consumer reporting agency that it made the disclosure and has obtained written consent. An agency that does not ask for this certification, or provides a background check in its absence, should be a huge red flag about its credibility and the credibility of the information provided.
3. Finally, if you are going to take an adverse action based on information disclosed in the background check (such as not hiring someone), you must first provide the applicant or employee with a copy of the report you received along with a copy of the person's rights under the FCRA (available directly from the FTC). An employer must then wait a reasonable period of time (5 business days) before actually taking the adverse action, at which time the applicant or employee must be provided with an adverse action letter under the FCRA.

Any one of these steps can cause potential liability issues for an employer, but the only risk of any real damages stems from using an inaccurate report. Let's say, for example, a company violates the statute, but in the process learns of an applicant's bona fide criminal history. That history automatically disqualifies the person from consideration. Even though the statute has been technically violated, how has the person been harmed by not being hired for a job he or she was not qualified for in the first place? If, however, the criminal history was faulty (for example, the person was the victim of identity theft), and he or she is disqualified without having the opportunity to dispute the inaccuracy, that violation of the FCRA could open a company up to the fully panoply of employment-related damages.

Just because FCRA is seldom enforced does not mean that it should be ignored. Compliance is relatively simple, and failing to comply is an unnecessary risk for businesses to take.

What I'm reading this week #33

The Delaware Employment Law Blog has been posting at a voracious clip. My favorite post of theirs from this week is The 5 Medical Conditions That Employers Don’t Want to See in a Candidate. For those that are too lazy to click over, the post talks about an article from Philly Burbs, which writes that employers avoid hiring anyone with obesity, depression, hypertension, high cholesterol, or musculoskeletal disorders. Let me put this as gently as possible -- unless you want to get sued, DO NOT consider any of the latter four, and tread very lightly if you are going to consider obesity, as a criteria for employability.

Meanwhile, Dan Schwartz at the Connecticut Employment Law Blog gives some useful information on how to properly draft severance agreements for releases of federal age discrimination claims.

The Pennsylvania Labor & Employment Blog asks whether companies can fire employees for personal postings on-line (personal blogs, MySpace pages, etc.). For my thoughts on this topic from late last year, take a look at Can employers base employment decisions on employees' personal internet activities?.

BLR's HR Daily Advisor gives some pros and cons for written job descriptions.

The aptly named Labor and Employment Law Blog lists 10 tips for avoiding IRS problems with independent contractors. I've also written before on some of the special consideration that companies must take into account when retaining independent contractors, in Court confirms that independent contractors can be discriminated against.

Carnival of HR #34 is available

Michael Moore's Pennsylvania Labor & Employment Blog is hosting this fortnight's Carnival of HR, the 34th edition, which is now available.

Ohio legislature considers permitting weapons in cars

Yesterday, the Ohio House passed a bill that would allow legal gun owners to carry their weapon in a car. Today's Cleveland Plain Dealer reports that the Senate is expected to follow suit, and Governor Strickland is expected to sign this measure into law.

The bill both allows people with a license to carry guns in parking garages, and prohibits landlords from barring tenants from owning or carrying guns. One question that remains unclear is whether employers will be able to prohibit employees from keeping guns parked cars. Employers can lawfully prohibit guns from entering the workplace. An employee's ability to store a weapon in his glove box will have significant implications on workplace violence issues.

While Ohio has permitted the concealed carry of handguns for more than 4 years, employers can still lawfully prohibit guns (and other weapons) from entering the workplace. Under the current concealed carry law, employers also can prohibit guns in vehicles parked on the business' property. It remains to be seen if the proposed revisions affect this latter restriction.

As the Ohio Senate takes up this law for consideration, let me suggest that it takes the effort to make it very clear that businesses can still choose to prohibit the transportation of firearms onto their property in vehicles. Otherwise, we might be left with ambiguities that could cause confusion.

Is it possible that one-fifth of companies violate the FMLA?

If you believe a headline from yesterday's Cleveland Plain Dealer, 20% of employers violate the FMLA. Or, at least that is what a recent study conducted by the Families and Work Institute concluded:

"There are so many reasons you could imagine an employer not complying," said Kate Kahan, director of work and family programs for the National Partnership for Women and Families. "The bottom line is the same, which is the employee loses out. This is such basic protection that it's horrible." ...

When employees are shortchanged, researchers and employment lawyers said, a combination of factors is usually to blame.

The troubled economy may discourage workers from challenging policies that deny them the full leave, said Ellen Galinsky, president of the Families and Work Institute. It's rare that the Labor Department independently investigates leave compliance; usually, an employee must file a complaint or lawsuit.

Employers may not know about the 15-year-old Family and Medical Leave Act, or they may not properly understand it, Galinsky and others said. The law applies to any employer with 50 or more workers in one area.

"I really don't think there's a law out there that is more confusing and causes more problems for employers than Family Leave," said Richard Meneghello, a partner in the Portland, Ore., office of Fisher & Phillips, a national employment law firm. He expressed surprise that the noncompliance rate wasn't higher than the report's 20 percent.

A full copy of the report by the Families and Work Institute is available for download: 2008 National Study of Employers (NSE).

Department of Labor spokesperson Dolline Hatchett disagrees with the report: "We know of no independent verification of their number. Compliance rates are hard to verify without sophisticated sampling techniques, and there is insufficient data in their analysis to allow one to assess an employer's compliance with the law."

Whether true or not, one thing is certain - managing FMLA leave programs is one of the most difficult tasks facing HR professionals and other management. The FMLA has layers upon layers of requirements that must be followed, both in determining whether one is eligible for leave, in certifying and granting the leave, and in administering the leave and eventual return to work. These protocols become exponentially more complicated when an employee takes leave intermittently instead contiguously. Even for those employers who think they are comfortable with the FMLA, earlier this year the Department of Labor published its proposed new FMLA regulations, adding 477 pages of new and amended responsibilities.

Nevertheless, this study points out one truism, not only about the FMLA but employment law in general. Education is crucial. There are a wealth of seminars available all over the country on every employment law issue imaginable. If your organization is big enough, consider bringing in a lawyer to do some specialized training sessions for your personnel. And, most importantly, when in doubt pick up the phone and call someone who can give you an answer to your question. Ignorance is not an excuse if a company violates the FMLA or any other employment law.

Supreme Court issues 2 decisions expanding scope of retaliation claims

Last December, I asked the question, "How far to the right has the Supreme Court swung?" This morning, the U.S. Supreme Court issued 2 decisions that suggest that it might not have gone as far to the right as first thought. Each of today's cases expands the scope of retaliation claims under federal employment discrimination statutes. In each case, the Court went beyond the plain language of the statutes to find a retaliation claim.

In CBOCS West, Inc. v. Humphries, the Court ruled 7-2 (with Justices Thomas and Scalia dissenting) that 42 U.S.C. 1981 permits a claim for retaliation when an employee complains of race discrimination.

In Gomez-Perez v. Potter, the Court ruled 6-3 (with Chief Justice Roberts, and again, Justices Thomas and Scalia, dissenting) that the ADEA prohibits federal employers, as opposed to private employers, from retaliating against employees who file complaints alleging age discrimination.

What is interesting about both of these decisions is that neither section 1981 nor the amendments to the ADEA that impose federal sector liability include the word "retaliate." Nevertheless, the Court has read that word into the meaning of the statutes by finding that "discrimination based on race/age" necessarily encompasses retaliation.

These opinions will have little impact on employers in Ohio. Unless you are the federal government, Gomez-Perez v. Potter will not affect you at all.

CBOCS West, Inc. v. Humphries will have limited practical impact for Ohio employers. Because of this case, it is now clear that an employee can bring a race retaliation claim without first filing a charge of discrimination with the EEOC under Title VII. Of course, this is already the case in Ohio under R.C. 4112.99. Moreover, claims under 42 U.S.C. 1981 are subject to a 4-year statute of limitations, 2 years shorter than the time period an employee has to bring a state law retaliation claim under 4112.99.

What is important to Ohio businesses from these cases is that they continue to demonstrate that the Roberts Court may not be as pro-employer as one might have hoped. Under Chief Justice Roberts, pro-employee decisions are out-pacing pro-employer decisions at a 2-1 clip. Several more employment cases are on the Court's docket, including the important issue of whether Title VII's retaliation provision protects 3rd parties who participate in an internal investigation without a pending EEOC charge. The direction of the Court's employment law pendulum is very much in play, and will continue to swing as these decisions are handed down.

Ohio Supreme Court permits 3rd party discovery by employers in OCRC investigations

Often times, companies have to respond to administrative discrimination complaints in a vacuum. They have a vague understanding of the allegations based on the few sentences in the charge form, and are limited to the information in their own files and records. Companies rarely if ever have access to the OCRC's own materials, and discovery is not part of the process. In State ex rel. Am. Legion Post 25 v. Ohio Civ. Rights Comm., the Ohio Supreme Court opened the door to a whole new world of information to assist employers in defending against charges of discrimination, and held that at an employer's request the Ohio Civil Rights Commission must issue a subpoena during a preliminary investigation of an administrative complaint.

If you have been lucky to have never been part of an OCRC investigation, let me give you a quick summary of the process. Upon receipt of a complaint alleging discriminatory conduct, the Commission conducts a preliminary investigation into the allegations. The Commission's function during this first step is to discover evidence to determine if it is probable that an unlawful discriminatory practice has occurred. If the Commission determines there is no probable cause, it will dismiss the Charge. At that point, the employee has three options: 1) walk away; 2) appeal the dismissal to common pleas court; or 3) file a civil action under 4112.99. On the other hand, if the Commission finds probable cause, it will attempt to eliminate the discriminatory practice through conciliation. If conciliation fails, the Commission will issue a formal complaint prosecuted by the Attorney General's office at a formal hearing.

State ex rel. Am. Legion Post 25 v. Ohio Civ. Rights Comm. concerns the first step in this process -- the preliminary investigation. Carol Van Slyke, the charging party, filed a complaint with the OCRC against the American Legion Post 25 claiming that its executive director had sexually harassed her and fired her in retaliation for complaining about it. When contacted by the commission, the Legion explained that it had fired Van Slyke shortly after receiving an anonymous letter that she was a felony offender. During the investigation, the Legion requested, by letter from its attorney, that the OCRC issue a subpoena on its behalf compelling the production of information about her felony conviction. The Commission refused to issue the requested subpoena. The Commission did, however, during the investigatory phase, issue a subpoena on its own behalf for the same information. Because the information became the Commission's work product, the Legion was not permitted to review it. After the Commission issued a probably cause determination, the Legion filed suit to compel the OCRC to issue the requested subpoena.

In ruling that the Legion had a clear right to the issuance of the requested subpoena, the Court relied upon the plain language of R.C. 4112.04(B)(3)(b), which provides:

Upon written application by a respondent, the commission shall issue subpoenas in its name to the same extent and subject to the same limitations as subpoenas issued by the commission.

This decision provides employers with an important weapon in defending against OCRC complaints. Often times, employers are shooting in the dark responding to administrative charges. This case enables employers to defend charges on a much more level playing field by preventing the OCRC from limiting employer's access to factual information by hiding behind its curtain of agency work product. This tool is important for two reasons. First, and more obviously, it will enable employers to more efficiently gather key information at an earlier stage in the process to help get more charges dismissed as early as possible. Secondly, and perhaps more importantly, better access to information will limit unintentional misstatements by employers that a plaintiff could use against them in subsequent litigation.

No company wants to defend an OCRC charge. State ex rel. Am. Legion Post 25 v. Ohio Civ. Rights Comm., however, makes the process a little more palatable.

What I'm reading this week #32

The post of the week is from HR World, and comes in anticipation of next week's season finale of the best show on TV, Lost: 10 Things Every Manager Should Learn from "LOST".

I've recently discovered the Delaware Employment Law Blog, another excellent employment law resource, which this week gives us some thinking points for what it considers the top 5 wage and hour issues facing employers.

The Labor and Employment Law Blog also writes on a hot topic in wage and hour law, how to properly handle unpaid internships.

Staying on the topic of wage and hour laws, The Business of Management asks if the $100,000-a-year employee really deserves to be paid an overtime premium.

Michael Moore, who recently relaunched his blog as the Pennsylvania Labor & Employment Blog, provides his thoughts on an issue that more and more people may take to heart with gas prices passing $4 a gallon, telecommuting. If I can digress for a minute, when I started law school, I paid $.90 a gallon (now I sound like my grandparents talking about 5 cent movies). Last night, I waiting in a line 3 cars deep across 8 pumps to pay $3.76, which was more than 20 cents lower than any other gas station I've seen.

The Laconic Law Blog has some helpful pointers on properly handling severance pay.

Another recently launched blog, Nolo's Employment Law Blog, reports on the Families and Work Institute's study on work-life issues (such as job flexibility, time off, and health and retirement benefits). Despite all of the ink spilled about the importance of work-life balance to today's employees, the study found that not much has changed in terms of benefits employers have offered in the last 10 years. One clear trend is that employers are shifting more of the cost of these benefits to employees. For example, 16% of employers provide maternity leave with full pay, compared to 27% ten years ago. Also, only 4% of employers pay the full cost of family health coverage, compared to 13% ten years ago.

Finally, the Connecticut Employment Law Blog gives its take on handling anonymous workplace complaints.

Court rules that employee's cancer not sufficiently limiting for ADA protection

Employers often struggle with leaves of absence. The FMLA only requires 12 weeks of unpaid leave for a serious health condition. If, however, an employee has a disability covered by the ADA, an unpaid leave of absence longer than 12 weeks might be required as a reasonable accommodation. Before one can consider whether such an accommodation is reasonable or necessary, one must first address the threshold questions of whether the employee has a legally protected disability. Slane v. MetaMateria Partners, L.L.C., decided this week by the Franklin County Court of Appeals, tries to give us some guidance.

John Slane began working for MetaMaterials in October 2004. In June 2005 he was diagnosed with cancer. (Because he worked for MetaMaterials for less than 1 year, he was not FMLA eligible). He requested a 90-day leave of absence to allow for surgery, recuperation, and radiation treatment. Company policy provided a maximum of 30 days medical leave and 30 days personal leave, for a total of 60 days leave. A letter from the company to Slane dated July 22, 2005, stated that he would need to provide a written release statement from his health care provider upon his return to work.

On July 27, 2005, Slane completed a leave of absence form indicating that he began his leave on July 21, 2005, and expected to return to work October 21, 2005. The leave form was approved for a total of only 60 days leave, and specified that Slane had to provide a health care provider's release upon his return. Under company policy, if Slane did not return to work by September 19, 2005, with a release from his physician, he would be considered to have resigned.

In mid-October 2005, Slane informed his supervisor, Michael Gagel, that he was ready to return to work. Gagel told Slane that he would have to see if there was enough production for Slane to come back. Slane called again about two days later and, at that time, Gagel said that someone would be getting in touch. The next day, Slane tried to fill a prescription and was told at the pharmacy that he had no insurance. Slane called Gagel again, and Gagel told him he was checking on it. A week later, Gagel informed Slane that he did not have a job. Two days later the company confirmed that it had terminated Slane in September 2005 when he failed to return after the expiration of his approved 60-day leave of absence.

The Court found that Slane's claim failed because he did not have a legal disability. Cancer may be a disability, but to qualify as such one must show that it substantially limits a major life activity. The Court found that Slane's temporary physical impairment, albeit serious, did not rise to the level of a legally protected "disability":

Without a doubt, Slane's cancer of the right maxillary sinus was a severe disease or condition that necessitated surgery, removal of much of his right jaw, and radiation treatment. His cancer surgery left him with an "impairment" ... In terms of the duration of his physical impairments, Slane needed approximately 90 days to recuperate from treatment. The surgery left him with some difficulty in pronouncing his "s's" as well as difficulty producing saliva. After recuperating from his treatment, Slane testified that he was able to return to work with only minor limitations. The only permanent limitations were difficulty pronouncing his "s's," the need to clean his nose more frequently, and a dry mouth necessitating the need to drink water on a regular basis. Clearly, Slane presented evidence that he has a physical impairment as that term is used in the statute.

Merely having a physical impairment does not make one disabled for purposes of Ohio's disability discrimination statutes. Slane also needed to demonstrate that his physical impairment substantially limits a major life activity. "Substantially limits," as used under the ADA suggests "considerable" or "to a large degree." ... In terms of major life activities, Slane testified that, by October 2005, he could see, hear, think, climb, grasp, lift, sit, rise, walk, eat, breathe, swallow, brush his teeth, brush his hair, and sleep without difficulty. ... Slane's own testimony belies his claim that his cancer substantially limits his ability to perform the major life activities of speaking, breathing, eating, drinking, or swallowing as he had alleged.

This case leaves a bad taste in my mouth. An employee, suffering from cancer, who had a piece of his jaw replaced with a prosthesis, should be protected as having a "disability." This case would allow a termination of female employee with breast cancer post-mastectomy. That result just doesn't sit right with me. At a minimum, this issue seems like a fact issue a jury should decide, not a legal issue for the court.

If Slane was disabled, the company could have had problems. While it had a clearly defined policy only permitting a 60-day maximum leave of absence, it probably should have held his job for the additional 30 days. The ADA does not require an indefinite leave of absence as a reasonable accommodation, but it does require some leave of absence. Six months is generally considered the outside parameters of what is reasonable. In this case, the company knew of a definite return date, but nevertheless stuck by its written policy of 60 days. That formalism could have gotten the company into trouble for failing to reasonably accommodate Slane's disability. On a jury of 8, at least 6 (if not all 8) would have someone close to them touched by cancer, a calculus that could have spelled doom for the company. The court bailed it out by finding that Slane did not have a disability in the first place.

President signs GINA - genetic information discrimination now unlawful

As expected, this afternoon President Bush signed the Genetic Information Nondiscrimination Act ("GINA") into law.

GINA adds "genetic information" to the list of classes of employees protected by the federal employment discrimination laws. It makes it unlawful for an employer to fail or refuse to hire, or to discharge, any employee, or otherwise to discriminate against any employee with respect to the compensation, terms, conditions, or privileges of employment of the employee, because of genetic information with respect to the employee. "Genetic information" means, with respect to any individual, information about such individual's genetic tests, the genetic tests of family members of such individual, and the manifestation of a disease or disorder in family members of such individual. It does not include information about an individual's age or sex, which of course are already protected classes. As is the case with Title VII, GINA only applies to companies with 15 or more employees.

GINA also makes its unlawful for an employer to request, require, or purchase genetic information about an employee or an employee’s family member except:

1. Where an employer inadvertently requests or requires a family medical history;
2. Where an employer offers health or genetic services as part of a wellness program, the employee authorizes the disclosure in writing, and protections are in place to prevent the employer from discovering individually identifiable genetic information;
3. Where an employer requests or requires family medical history from the employee to comply with the FMLA's certification provisions;
4. Were an employer purchases documents that are commercially and publicly available (including newspapers, magazines, periodicals, and books, but not including medical databases or court records) that include family medical history;
5. Were the information involved is to be used for genetic monitoring of the biological effects of toxic substances in the workplace, but only if written notice is provided to the employee, the employee authorizes the monitoring in writing, the monitoring is required by and complies with a specific law, the employee receives the results, and protections are in place to prevent the employer from discovering individually identifiable genetic information; or
6. Where the employer conducts DNA analysis for law enforcement purposes as a forensic laboratory, but only to the extent that such genetic information is used for analysis of DNA identification markers for quality control to detect sample contamination.

If an employer obtains genetic information about an employee, it must maintain the information on separate forms and in separate medical files and threat it as a confidential medical record of the employee, similar to the treatment of other medical information under the ADA. The employer is only permitted to disclose the genetic information to the employee upon a specific written request, in response to a court order, to comply with the FMLA's certification procedures, or other very limited circumstances.

Employees have the same rights and remedies for alleged violations of GINA as they do for alleged violations of Title VII.

While genetic information discrimination may not be the most rampant problem facing employees, GINA nonetheless marks the first significant statutory change to the federal discrimination laws since 1991. Any such change should be cause for all companies to take a look at their current policies and HR practices to make sure that they account for this new protected class.

Interracial Association Discrimination found unlawful

Associational discrimination has become a hot employment law topic. The ADA expressly authorizes claims based on one's association to a person with a disability. Earlier this year, the 6th Circuit recognized an associational retaliation claim based on one employee's close relation to another employee who engaged in protected activity. Now, the 2nd Circuit has joined the 6th Circuit in permitting an associational discrimination claim based on the plaintiff's interracial relationship.

In Tetro v. Elliott Popham Pontiac, the 6th Circuit permitted an employee to proceed with a Title VII race discrimination claim based on his biracial child:

A white employee who is discharged because his child is biracial is discriminated against on the basis of his race, even though the root animus for the discrimination is a prejudice against the biracial child. ... If he had been African-American, presumably the dealership would not have discriminated because his daughter would also have been African-American. Or, if his daughter had been Caucasian, the dealership would not have discriminated because Tetro himself is Caucasian. So the essence of the alleged discrimination in the present case is the contrast in races between Tetro and his daughter. This means that the dealership has been charged with reacting adversely to Tetro because of Tetro's race in relation to the race of his daughter. The net effect is that the dealership has allegedly discriminated against Tetro because of his race.

In Holcomb v. Iona College, the 2nd Circuit allowed a white assistant basketball coach to claim that he was fired because he was married to an African-American woman:

[W]here an employee is subjected to adverse action because an employer disapproves of interracial association, the employee suffers discrimination because of the employee's own race.

Unlike associational retaliation claims, this type of associational discrimination claim makes sense under the statute. The adverse action is being taken "because of" the employee's race. The genesis of the discrimination is the fact that the employee is a different race than his spouse, which is "because of" his race.

The bottom line for employers - the race of your employees' spouses and children is none of your business. Supervisors and managers should not go out of their way to inquire about it. Diversity training should incorporate a component making employees aware that this type of discrimination is unlawful and will not be tolerated.

How to apply new email soliciation rules

Late last year, the NLRB issued its decision in Register-Guard, which determined that an employer can lawfully prohibit union-related use of company email systems if the employer has a consistently enforced policy prohibiting "non-job-related solicitations." If it was not clear before, after Register-Guard it is clear that an employer's email system is company property and "employees have no statutory right to use [the company's] e-mail system for Section 7 purposes." (For my prior discussion of this case, see NLRB rewrites employee solicitation rules).

To date, the NLRB has decided 5 cases under the Register-Guard standard. To help employers understand the position the NLRB will take on limitations placed on corporate email systems and other employee communications, it has summarized those 5 cases in a published memorandum, which I will further summarize for everyone.

Case #1: The employer had historically allowed the union to use the company's email system to conduct union business and to communicate with the employer about labor relation matters at the facility. Recently, the employer sent a letter to the union stating that it had knowledge that the union was inappropriately using the company's e-mail system by sending broadly distributed emails to company managers outside the facility. The letter cautioned that further similar activity could result in immediate suspension of the union's email account. The NLRB found the rule to be lawful because it concerned how the union was permitted to use the employer's email system and did not otherwise prohibit the union from engaging in protected communications outside the plant or to broad groups of managers.

Case #2: Both before and after the union's organizing campaign began, the employer maintained a no solicitation rule which, on its face, prohibited solicitation for any purpose during working time and in work areas. The employer, however, was inconsistent with its enforcement of the policy. For example, the employer warned and/or disciplined employees engaged in union solicitation activity, yet permitted non-union-related solicitations such as school fund raisers and Avon sales. Because the employer permitted direct solicitations for non-union/non-work purposes, its prohibition of union-related solicitations was discriminatory.

Case #3: The employer had a handbook provision which stated that its email system is intended for reasonable and responsible business purposes and is not intended for personal use, and that employees may not solicit during working time for any purpose. After sending an email communication about a union meeting, an employee received a written warning for using the email system for solicitation purposes in violation of handbook provision. Other employees, however, frequently sent non-work related emails while at work and during working times (such as chain letters, jokes, party invitations, and solicitations for candy sales) and were not disciplined. The NLRB concluded that the employee was unlawfully singled out because of the union-related content of his email. Case #4: An employee, who was dissatisfied with working conditions, circulated an email petition to try to drum up support to take the concerns to management. When the Board of Directors learned who was responsible for the petition, it terminated him for insubordination for participating in the "anonymous email scheme" and inappropriately using the employer's computers in violation of its policy. The NLRB concluded that the employer unlawfully discharged the employee for engaging in protected concerted activities when seeking the support to address working conditions. An employer may not rely on an employee's failure to adhere to a rule that prohibits protected activity as a basis for discipline. Further, because the employer's email policy allowed reasonable personal use of the computer and the employer permitted employees' extensive use of the Internet, email and other company equipment for their personal purposes, it disparately enforced its email policy against protected concerted activity.

Case #5: An employee union organizer led a delegation of union supporters into one of the employer's stores. The group handed the store manager a letter announcing of the formation of a union, together with a written list of demands regarding wages and working conditions. Simultaneously, other union members and supporters distributed union leaflets outside of the entrance. At the time of this event, the employer maintained two bulletin boards, one for official employer announcements and another for employee personal or general non-work-related matters. The employer had no written policy concerning the use of these bulletin boards. The next day, the main union supporter posted on the employee bulletin board the list of demands that had been given to the store manager, along with the union leaflet. The letter and leaflet were removed, yet other personal announcements remained. Thereafter, he noticed that all items that had been previously posted on the general employee bulletin board had been removed and employer materials were now posted there. The store manager informed the union organizer that employees were no longer allowed to post anything on the employee bulletin board. The NLRB concluded that the employer had an anti-union motive and that its actions were directly in response to the union activity. There was no disparate enforcement of a written company-wide policy, but an unwritten policy that was abruptly changed in response to union activities.

Conclusion: If an employer permits a union representing its employees to use the employer's email system, it can place reasonable limits on that use. If, however, an otherwise valid rule is promulgated or enforced for anti-union reasons, Register-Guard will not protect the employer's actions. The key is consistency. A neutral policy should be in place before any union activity or communication occurs. That reasonable policy should then be uniformly and consistently applied and enforced to avoid running afoul of the NLRA's protections for union and other concerted activities.

[Hat-tip: Manpower Employment Blawg]