Posts belonging to Category employment law

Layoffs and Litigation

Gavel and JudgeSome employees may breathe a sigh of relief after surviving not one but two reductions in force. Roger Maxwell filed a lawsuit.

Maxwell, a disabled veteran and former manager of customer service with the U.S. Postal Service in Bloomfield Hills, Mich., filed an internal EEO charge in 2004 (for reasons not specified in Roger L. Maxwell v. Postmaster General of the United States).

Sometime after the EEO proceedings concluded, Frances Chiodini—an HR manager representing the Postal Service during the proceedings—adopted “an undisguised attitude of hostility toward [Maxwell] and undertook, over time, consistent adverse actions against Plaintiff in his employment,” according to the suit.

Among the allegations:

• Chiodini took adverse actions against Maxwell because he is male, and wrongfully rejected him from consideration for a promotion, which was subsequently awarded to a less-qualified female applicant.

• Maxwell was not included in a 2009 reduction in force, depriving him of a promotion and pay raise.

• His position was not upgraded from EAS-20 to grade EAS-21, while a “similarly situated” female was upgraded.

• Maxwell was not included in a 2010 downsizing, which again deprived him of a promotion and pay raise.

That’s right. Maxwell claims that emerging with his job after two rounds of layoffs adversely impacted his employment with the Postal Service.

How so?

As a disabled vet, Maxwell maintains he would have had certain rights in the event his position was included in a reduction in force, in the form of either an automatic upgrade to a new role or the permission to vie for a new position at a higher level. Instead, he was involuntarily transferred to a different facility, according to the complaint.

Maxwell subsequently sued, claiming retaliation and gender bias. While the Postal Service argued the transfer didn’t qualify as an adverse employment action, a trial court recently found that the transfer—which occurred in lieu of a promotion—could potentially constitute an adverse action.

The ruling is “fairly fact-specific and at a very early stage of litigation,” but the Maxwell case still holds lessons for employers and HR, says Eric Stevens, a Nashville, Tenn.-based attorney with Littler Mendelson.

“The transfer, in and of itself, appeared to be a neutral event,” says Stevens. “There was no change in compensation, duties, title or working conditions. Typically, such a move would not be considered a materially adverse change.”

However, he notes, the appeals court considered the potential effect of the transfer—disqualifying the plaintiff from an alleged automatic upgrade and pay increase—and found that effect sufficiently material to allow Maxwell to continue with the portion of his lawsuit relating to the transfer.

“There are occasions in which an employee may have been subject to inappropriate, possibly even unlawful treatment in the past,” continues Stevens. “Some employers, when they become aware of such circumstances, feel bound to avoid managing the employee as others would be managed because of that past improper conduct.”

This opinion demonstrates that, in the absence of a “longstanding and demonstrable policy of discrimination, an employer will not necessarily be liable for past, discrete violations,” he says.

“While no such violations should be countenanced by the employer, if one does occur, the employer should deal with it appropriately, and then continue to treat the aggrieved employee the same as any other employee.”

A Valuable Legal Lesson

courtroomThis recent Michigan court ruling may seem like a bit of a puzzler, but it could also be instructive for employers.

The United States Court of Appeals for the Sixth Circuit is sending the case of Deleon v. Kalamazoo County Road Commission to trial, ruling the plaintiff can proceed with suing the county for an adverse employment action motivated by discrimination—after being granted the very job transfer he had previously sought.

According to the suit:

In 2008, Kalamazoo County employee Robert Deleon applied for an internal transfer to the position of equipment and facilities superintendent. According to the job description, the role entailed working primarily in an office as well as a “garage where there is exposure to loud noises and diesel fumes.”

Initially passed over for the job, Deleon was involuntarily transferred into the position when it became available again in 2009. He subsequently sued the county, claiming the transfer was a retaliatory adverse employment action, in addition to alleging the working conditions in his new job led to him developing bronchitis as well as a cough and sinus headaches due to the aforementioned diesel fumes.

According to Kalamazoo County, Deleon never withdrew his initial request for the transfer, and did not complain at the time he received it.

In its ruling, however, the appeals court found Deleon had provided sufficient evidence that he was exposed to toxic and hazardous diesel fumes on a daily basis, and that his work environment was “objectively intolerable.” The court also noted that Deleon applied for the position under the impression the move would include a $10,000 raise; a raise he never received, advancing the argument that his transfer was involuntary.

The case is “a classic example” of the challenges employers face in defending against discrimination claims, says Joel S. Barras, a Philadelphia-based partner in Reed Smith’s labor and employment practice.

Employers often spend tens of thousands of dollars in these cases, “which typically involve disproving a negative,” he says. “[It’s] no wonder there’s a cottage industry of plaintiffs’ lawyers who indiscriminately file claims against ‘deep-pocket’ employers, which only serve to detract focus from the cases of actual discrimination and retaliation.”

Nevertheless, this particular decision holds a valuable lesson for employers and HR, says Barras.

“The takeaway … is to always go the extra step, even if the outcome seems obvious.

“Common sense alone may not guarantee summary judgment,” he continues, advising employers in similar situations to ask the applicant if he or she still wants the job, clearly describe the working conditions, and make sure the candidate truly understands what the job entails.

There is a direct correlation between the amount of time and effort HR professionals expend on the front [end] of employment decisions and the chances for getting discrimination and retaliation suits dismissed quickly and relatively inexpensively.”

Broadening Definitions Under the ADA

In case you missed it, employers were recently given further insight as to what qualifies these days as a disability under the ADA Amendments Act of 2008.

On Jan. 23, the Fourth Circuit Court of Appeals ruled that, as long as a temporary impairment is sufficiently severe, it would qualify as a disability, reversing a district court decision regarding a wrongful-discharge claim.

200249331-001The case involved Carl Summers, who, as a senior analyst for Altarum Institute, fell and injured himself while exiting a commuter train. Summers, who underwent leg surgery and was told by doctors he might not be able to walk normally for at least seven months, was provided with short-term-disability benefits. He suggested that he start working part-time from home and gradually return to full-time work, but representatives from Altarum failed to follow up on Summer’s return-to-work plan or suggest any alternative reasonable accommodation. The firm eventually terminated him, installing another analyst in his position.

In Sept. 2012, Summers filed a complaint under the ADA, alleging he was wrongfully terminated because of his disability.

In its ruling, the Fourth Circuit said “an impairment is not categorically excluded from being a disability simply because it is temporary” and that Summer’s alleged impairment “falls under the amended Act’s expanded definition of disability.”

I asked Paul Mollica, of council with Outten & Golden LLP in Chicago, for his thoughts on what the decision—which many believe could be the first ruling of its kind under the ADAAA—means for employers.

Going forward, he told me, employers are going to need to accept that the “lessons learned up to this point aren’t true anymore” and “retool” accordingly.

Is Anti-Unemployment Discrimination Going Global?

I received an interesting email the other day suggesting the European Union may be in the early stages of adopting legislation to classify individual unemployment as an equal-employment-opportunity issue.

134518530 -- unemployedActually, according to the source, Brussels, Belgium-based Ius Laboris, the suggestion is more like a tiny whisper, but it is safe to say the EU’s general directorate has expressed interest in passing pan-European legislation to classify individual unemployment as an EEO matter.

“In essence,” the email says, “this would mean ‘unemployment’ was a protected category on a par with race or religion, prohibiting employers and employment agencies from asking employees about their current employment status in a job interview, and creating the threat of legal action if a business was demonstrated to have discriminated against an applicant on the basis of unemployment.”

Not sure where this is going and/or in what time frame, IL’s spokesperson tells me. And though it comes on the heels of similar moves across the United States, it’s hard to tell how far the anti-unemployment-discrimination momentum will take us on this side of the pond either.

At the time I wrote this news piece on New York’s passage of such legislation, this is where things stood here: “New York City is only the most recent jurisdiction where legislative action has been taken to protect the unemployed. States that have already passed laws against such discrimination include Oregon (passed in March 2012) and New Jersey (2011). The District of Columbia passed a similar bill in May 2012. And as of May 2013, five states — New York, Pennsylvania, Massachusetts, Iowa and Minnesota — have introduced bills during the 2013 legislative session, with another 17 states considering doing so.” Sources tell me this is still the case.

Wondering how this trend will be impacted if the unemployment figures continue to suggest steady job growth, as noted in this Associated Press piece released Wednesday.

Whatever the case, I’m compelled to share with you HREOnlineTalent Management Columnist Peter Cappelli’s column from several years ago, advising against such discrimination because it simply doesn’t make business sense.



Crossing Over to the Daaahhhrk Side … Mwahahaha …

Thought this might make for a good Halloween post — a piece written by Merrily Archer, founder, president and CEO of Denver-based EEO Solutions and a former trial attorney for the U.S. Equal dv1137057-- dark sideEmployment Opportunity Commission. It’s all about … (steady your hobgoblin nerves) … the pro-employer daaahhrk side (insert eery music and a witch’s cackling howl).

Actually, the only scary part of Archer’s post is her first subhead — you guessed it: “The Dark Side.” Alarming, though, is the deep divide she describes between those going after the “evil” employers — those “villains” accused of discrimination, harassment, etc. — and the employers (and HR departments) themselves, simply trying to survive and comply in a “victim”-sided system.

Whatever faction you favor, you have to admit Archer knows each one well — each side of the ever-widening “good-guy/bad-guy” chasm, as she describes it. She’s walked and lived them both. Here’s a small reflection on her stint as an “employer-hater”:

I’d grown accustomed to the rhetoric: The EEOC and [Plaintiff Employment Lawyer Association] people did ‘God’s work’ and helped ‘victims’ of discrimination. By contrast, employers, especially the ones they were currently suing, were malevolently unenlightened, law-flouting discriminators that would discriminate, harass and retaliate with reckless abandon without their vigilance and the threat of liability.”

And a sampling of her growing disenchantment and concern that all was not necessarily right with the ship she happened to be on:

After doing ‘God’s work’ at the EEOC, however, I’d reached very different conclusions: (1) the people most ostensibly dedicated to improving the workplace make the worst employers; (2) in the most Machiavellian sense, rhetoric about ‘God’s work’ and ‘changing hearts and minds through litigation’ often just masks ego and greed; (3) the identity of the righteous ‘good guys’ is seldom clear; (4) discrimination and an employer’s ability to disprove discrimination are two very different things. Not surprisingly, when I left the EEOC to begin my employer-focused practice in 2000, my EEOC colleagues and the PELA people told me that I was joining the ‘Dark Side,’ even the ‘Forces of Evil.’

And here’s what she witnessed and went through as HR practitioners fell prey to governmental aggression:

In the victim/villain melodrama of discrimination litigation, the EEOC and PELA people cast — and treat — HR managers as incompetent boobs or raging racists. After hours of intense deposition questioning, this treatment could make most HR practitioners cry … . As a defense attorney, I’ve had to intervene in the most condescending, unconscionable bullying of HR practitioners and managers in depositions and investigations, all ostensibly in the name of vindicating another person’s rights. But to the EEOC and employee-side counsel that perpetuate [that] victim/villain paradigm, the inherent ‘evil’ of discrimination justifies their abuse of other humans accused of it. When you’re doing God’s work, after all, all is allowed.”

Lastly, as an attorney criticizing attorneys, she argues in favor of both sides uniting to rid workplaces of working conditions that, in many cases, definitely do need to change:

In theory, the EEOC, employers, civil-rights groups, and the HR community share much common ground in advancing equal-employment opportunity, but for a victim/villain model made by attorneys, for the benefit of attorneys. Employment discrimination, workplace inclusiveness and the costs to employers of EEO disputes are complex, multifaceted social problems that deserve more analysis than victim/villain caricatures. Our progress toward full inclusiveness, after all, depends on our ability to find common ground, not deepen divides.”

Granted, other voices deserve to be heard on this apparent and troubling divisiveness between the EEOC and the employers it was created to keep an eye on. But Archer’s alone sure sheds some illuminating light on a problem I, for one, didn’t know much about: the other “victims” on the ”dahhrrk side” of business.

Tomorrow’s the Exchange-Notice Deadline

If you haven’t done a thing yet to become compliant with the Affordable Care Act’s Oct. 1, 2013, deadline for posting and distributing your public-healthcare-exchange notices … well … kinda too late at this point, right?

99274052--gavel and hourglassThe good news is there’s no penalty in place yet for ACA noncompliance. That won’t be ushered in now until Jan. 1, 2015, when the emplyoyer mandate is enforced. And the U.S. Department of Labor also just announced several days ago that there will be no penalty for failing to comply with the exchange-notice deadline tomorrow.

But, penalties or no, if you haven’t gotten your ducks lined up, there’s much to be done. This post on The National Law Review website spells out in detail just what’s required of you, effective tomorrow — the same day all exchanges must be open for enrollment for coverage starting Jan. 1, 2014:

The health-insurance-exchange notice must provide employees with information necessary to make informed decisions about their health insurance. The notice must explain what the web-based exchange is; include information about the premium subsidies that may be available if an employer’s plan is unaffordable or does not provide minimum value; and explain the consequences if an employee decides to purchase a qualified health plan through the exchange instead of employer-sponsored coverage. (The notice does not, however, need to explain what insurance options may be available online.) The notice may be distributed electronically or via hard copy, and while there is no requirement to obtain an employee’s signature, employers may want to track delivery and receipt of the notice. Additionally, after Oct. 1, 2013, employers are required to provide notices to new hires within 14 days after the date of hire.”

The Law Review post also contains links to the two model notices the DOL has made public — one for employers that do offer health plans to their employees and another for those that do not.

And remember, this notice requirement applies to all employers subject to the Fair Labor Standards Act, whether they’re consiered “applicable large employers” (employing at least 50 full-time-equivalent employees) or not. Where that “large employer” differentiation will apply will be in the enforcement of the delayed employer mandate. (No doubt I’m sharing things most of you are fully aware of, but I figure it doesn’t hurt to remind.)

I contacted Lori Basilico — a partner at Boston-based Edwards Wildman Palmer specializing in employee benefits — just to get her sense of what tomorrow’s deadline would bring. Since the DOL’s notice that there would be no penalty for Oct. 1 noncompliance, she told me, there won’t be too much frantic scuffling.

Besides, she says, “most of my clients seem to be complying with it anyway.”

The real confusion lies in what’s coming in 2015 and what that means you’d better be doing in 2014 to get ready, says Basilico. The biggest confusions among employers, she says, are twofold. One conundrum is whether they’re “applicable large employers,” penalizable under the new law. The stickler here is what constitutes an FTE — which could, in turn, impact your 50-or-more count. The law sets the definition of FTE at 30 hours a week or more, but what about “part-timers and other people who don’t necessarily work around hours counted?” says Basilico. “For universities, there’s confusion around adjunct professors, for instance.”

The second big confusion — actually integral with the first — has to do with who’s full-time and who’s part-time. “This gets very confusing for people hovering at, say, 29 to 30 hours a week,” she says. Maternity leave and Family and Medial Leave Act leave might also muck up the waters, as might the ACA’s “look-back” clause designed to help employers accurately count their FTEs prior to the employer-mandate enactment … as might the fact that that date was extended a year from January 2014 to January 2015 awhile back … as might the fact that, under the law, part-timers’ hours can be aggregated to equal FTE counts … the “as might” list goes on.

Yes, Basilico says, “it’s going to be difficult for awhile, but as soon as employers get this figured out, once a couple years have gone by [and they've lived with the law and gotten it under their belts], this will be easier … .”

And how are employees feeling about all this? In a recent Tell It Now poll, timed to coincide with tomorrow’s exchange-notification deadline, Chicago-based ComPsych asked employees in its database, “How concerned are you about upcoming healthcare changes (ACA/’Obamacare’)?” Seventy-five percent said they were either very worried or somewhat worried. Here’s the actual breakdown:

  • 47% said, “I’m somewhat worried: I’m not sure how I will be impacted or what to expect.
  • 28% said, “I’m very worried: The changes will impact me significantly, and I don’t know where to turn for information.
  • 25% said, “I’m not worried: The changes won’t impact me/I know what to expect.

If nothing else, this should provide you with some impetus to examine your communication initiatives around “Obamacare” to ensure they’re relieving whatever worries they possibly can. And what better time to get started than the day your exchange notification is due?


Health-Risk Assessments Under Greater Scrutiny

Health-risk assessments seem to be provoking more and more ire lately: first, professors and other employees at Penn State University revolted after the university announced that employees and their dependents who wanted to continue receiving healthcare benefits from the organization would either complete an HRA or else pay a $100 monthly surcharge. PSU backed down and will no longer require employees to complete the HRA. In the wake of that debacle, U.S. Rep. Louise M. Slaughter, D.-N.Y., has asked the Equal Employment Opportunity Commission to investigate wellness programs that require HRAs and to create guidelines designed to prevent employers from using the information to discriminate against workers.

“What happened at Penn State was appalling to me,” Slaughter told the New York Times yesterday.

Slaughter’s no stranger to the issue of medical privacy: She’s the author of the Genetic Information Nondiscrimination Act.

Here’s what Slaughter wrote in her letter to the EEOC (referencing the PSU program):

While the employer wellness program has recently suspended this fee, their plan still raises concerns about the type of information that can be collected through wellness programs and the definition of ‘voluntary’ participation. It is my strong hope that EEOC promptly drafts subregulatory guidance stopping this type of abuse and ensuring strong nondiscrimination protections for employees in wellness programs.”

Matthew T. Brodie, a law professor at St. Louis University, told the Times that HRAs could potentially have a discriminatory financial impact on women employees by, for example, asking them about whether they plan to get pregnant. Female employees who decline to participate because of privacy concerns over that particular question may be disproportionately affected, he said.

Although the EEOC had indicated earlier this year that it planned to issue guidelines on HSAs to ensure they don’t conflict with federal antidiscrimination laws, no such guidance has been issued yet.

Largest Verdict in EEOC History Just Awarded

149796345--juryA Davenport, Iowa, jury awarded the U.S. Equal Employment Opportunity just yesterday the largest-ever verdict in the agency’s history — more than $240 million — in a case involving the long-term abuse of workers with intellectual disabilities.

The class-action case against Hill Country Farms Inc., doing business as Henry’s Turkey Services, was actually covered by me back in April 2011 in this news analysis. Here, too, is the ruling by the U.S. District Court for the Southern District of Iowa, Davenport Division, in September 2012, granting the EEOC partial summary judgment to move forward and also ordering the Goldthwaite, Texas, company to pay the workers $1.3 million for unlawful disability-based wage discrimination.

Coupled with yesterday’s awards of $2 million and $5.5 million for each of the 32 mentally disabled turkey processing-plant workers, for punitive and compensatory damages, respectively, the total judgment — to be exact — comes to $241.3.

The links above, along with this release by the EEOC, spell out all the sad, sordid details of this now-historic case. But just to recap here, the EEOC lawsuit says that, for many years, the owners and staffers of Henry’s Turkey subjected the workers to abusive verbal and physical harassment; restricted their freedom of movement; and imposed other harsh terms and conditions of employment, such as requiring them to live in deplorable and substandard living conditions, and failing to provide adequate medical care when needed.

The EEOC also claims verbal abuses, including frequently referring to the workers as “retarded,” “dumb ass” and “stupid.” Members of the class reported acts of physical abuse as well, including hitting, kicking, at least one case of handcuffing, forcing the men to carry heavy weights as punishment and being dismissive of complaints of injuries or pain.

“The verdict sends an important message that the conduct that occurred here is intolerable in this nation, and hopefully will help to restore dignity and acknowledge the humanity of workers who were mistreated for so many years,” says EEOC Chair Jacqueline A. Berrien.

According to this Fox News account, an attorney for Henry’s didn’t respond to a message seeking comment. But the company’s president, Kenneth Henry, told the Quad-City Times after the trial  that he planned to appeal, calling some of the evidence “terribly exaggerated.”

The news account also says it’s highly unlikely the now-defunct Henry’s Turkey Service has anywhere near enough remaining assets to cover the $7.5 million in damages each man was just awarded.

“Do you think I can write a check for that?” Kenneth Henry, 72, the company’s president, told the newspaper.

But federal officials are vowing to recover every last cent they can for the men, who had been “virtually enslaved” for many years, according to developmental psychologist Sue Gant, who  interviewed them at length for the EEOC, the account states.


Harassment by Association

legalCan an employee’s connection to someone in a protected class be the basis for a successful harassment lawsuit?

It may be, according to the California appeals court ruling that allows former firefighter David Derr to proceed with his claim that a supervisor regularly harassed him for defending his lesbian daughter.

Derr, employed by the Kern County Fire Department for 29 years, claims James Rummell—who became department captain and Derr’s supervisor near the end of Derr’s tenure—made anti-gay remarks in his presence sometime during Rummell’s first year as supervisor. Upon learning Derr’s daughter was gay, Rummell allegedly started to regularly harass him about his daughter’s homosexuality.

According to court records, the harassing behavior reportedly included comments about how gays were “led in that direction” or had experienced childhood traumas that “twisted” them, as well as emails sent to Derr from Rummell’s wife saying his acceptance of his daughter’s homosexuality was a “blatant opposition to the commands of God.” Court records indicate Derr told Rummell he “did not want to hear any more such commentary,” and reiterated that he had a gay family member.

Derr was eventually granted a shift change, but Rummell allegedly continued to stay behind after his own shifts ended in order to further harass Derr, who began to show physical symptoms of stress including insomnia, chronic diarrhea and headaches. Derr attended counseling, but the fire department’s employee assistance program terminated the sessions after three appointments, reportedly informing Derr that “no further treatment was available” and that he should “suck it up” with regard to handling his treatment at the hands of Rummell.

Derr ultimately retired in July 2009, citing Rummell’s abuse among the reasons. He subsequently sued the department, claiming harassment. A lower court dismissed Derr’s complaint, but the appeals court decision reversed that ruling.

This state-level decision only applies to California-based companies, but exemplifies a “noticeable trend” in the workplace, says Ron Chapman, Jr., a Dallas-based labor and employment attorney with Ogletree, Deakins, Nash, Smoak & Stewart.

“Employees are becoming increasingly assertive, and that includes speaking out against perceived wrongs toward others,” says Chapman. “In other words, even when the employee affected by the alleged misbehavior does not complain, one of his or her co-workers might.”

Employers and HR leaders must react accordingly to protect employees as well as the organization, he says.

Depending on the circumstances, it could be unlawful if the person who complains becomes the target of harassment or retaliation, even if the underlying behavior complained about was directed at someone else. To help avoid liability and promote best practices, human resource professionals should update their policies and training programs to ensure they cover this type of scenario.”

Taking Aim at Pharma, Again

It’s been roughly three years since we reported that East Hanover, N.J.-based Novartis Pharmaceutical Corp., the U.S. arm of the Swiss drug maker, had been fined $250 million in punitive damages. It ultimately agreed to pay $152 million.

We mentioned at the time that the jury verdict served as a reminder of the very steep price companies can pay if they’re on the losing end of one of these class-actions.

Glass CeilingOf course, that was prior to the Supreme Court’s Wal-Mart Stores Inc. v. Dukes decision, which made it a lot more difficult to certify class actions.

Well, the attorneys representing the plaintiffs in the Novartis case, Sanford Heisler LLP, are back, this time announcing a class-action case against Tokyo-based Daiichi Sankyo, in which six current and former female representatives are alleging discrimination.

In the complaint, the plantiffs’ attorneys allege that …

Daiichi Sankyo pays female sales employees less than male employees for doing the same work; promotes or advances female sales employees at a slower rate than male sales employees; treats pregnant employees and working mothers of young children adversely compared to non-pregnant employees, male employees, or non-caregivers; and subjects women to other discriminatory terms and conditions of employment.

And that …

 … a discrete group of predominantly male Daiichi executives and senior sales managers keep a tight rein on employment decisions, including decisions regarding sales employees’ compensation, advancement, and other terms and conditions of employment. Through this male-dominated leadership structure, the company has approved and implemented policies, practices and decisions that have systemically discriminated against female employees.

Several reporters were told by the company via email that it does not comment on pending litigation and “complies with all laws regarding equal opportunity and non-discrimination.”

I spoke to Tom Lewis, shareholder and chair of the Employment Litigation Group at Stark & Stark in Lawrenceville, N.J., to get his thoughts on the action.

Lewis predicts that the plaintiff’s attorneys will likely put “front and center” the fact that the firm is Japanese … that “a Japanese company wouldn’t treat its female employees as well as an American company would.”

“But let’s remember,” he adds, “that a class-action lawsuit like this has to be proven”—and that may not be easy.

Lewis notes that he’s represented many foreign-owned companies and his experience is that they “often go above and beyond the call of duty to make sure that, culturally, they’re complying with the laws of this country.”

He also suggests it makes perfect sense that the plantiff’s attorneys would select San Francisco to file the suit in, since the employment laws in California are much more employee-friendly.

We’ll have to watch and see how this case eventually plays out. But this much is certain: The plaintiffs in this case will have a tougher hill to climb in gaining class-action status.