One of the biggest threats to an employer's competitive edge is the potential theft of the employer's trade secrets. Trade secrets include an employer's customer list, vendor list, market research, and financial projections. With the proliferation of computer networks in the workplace, including remote access, a disgruntled employee could steal the employer's trade secrets simply by downloading them to a disc or emailing them to a personal email account.
When an employee steals trade secrets, many employers have turned to the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. §1030, for injunctive relief and damages. The CFAA is essentially a criminal statute that permits some victims of computer hackers to maintain civil lawsuits against the hackers.
A person who accesses a computer "without authorization" or "exceeds authorized access" could be found liable under the CFAA. But while the CFAA provides a definition for the term "exceed authorized access" (to access a computer with authorization to obtain or alter information that the accesser is not entitled to obtain or alter), the CFAA does not provide a definition for the term "without authorization."
Because the CFAA has both criminal and noncriminal applications, courts are resolving any ambiguities in the statute in favor of lenity. See, e.g. LVRC Holdings v. Brekka, -- F.3d ----, 2009 WL 2928952 (9th Dist. Sept. 15, 2009, Case No. 07-17116) (employee who had emailed employer trade secrets to his personal computer did not violate the CFAA). The courts are narrowly construing the CFAA's terms so as to prevent convicting a criminal defendant under novel interpretations of the CFAA. Therefore, courts are generally interpreting "without authorization" as meaning with absolutely no permission to access the computer, such as an outside hacker. "Exceeds authorized access" generally means that the person had permission to access the computer but did not have permission to access the specific information.
If a disgruntled employee makes an electronic copy of an employer's trade secrets, these interpretations of the CFAA would not help the employer who gave the employee permission to access the trade secrets on the computer. Therefore, it is of the utmost importance that employers clearly define what information an employee is allowed to access. Employers should consult with their attorneys to prepare the documents that inform the employees which trade secrets they have permission to access.
September 22, 2009
September 20, 2009
Senator Baucus Mark-up of Senate Health Care Reform Bill
On September 16, 2009, Senate Finance Committee Chairman Sen. Max Baucus (D-Mt.) released his comments, or "marks", on a draft of the health care reform bill prepared by the Senate Finance Committee. It bans insurance companies from denying coverage based upon pre-existing conditions and mandates all Americans to obtain some form of health insurance. It does not include a public insurance option but allows the government to provide seed money to set up private, non-profit health care co-operatives.
The bill has not yet been introduced to the Senate or reconciled with the House's health care reform bill, America's Affordable Health Choices Act of 2009, H.3200, introduced July 31, 2009. Some marks of Sen. Baucus directly affect employers who offer health insurance coverage to their employees. The following is just a brief overview of some of those marks.
Safe Harbor Benefits received under a qualified small employer's cafeteria plans would still be eligible to be treated as a cafeteria plan if the plan excludes employees 1) under 21; 2) worked fewer than 1000 hours the preceding year or has worked less than one year; or 3) covered by a collective bargaining agreement. "Eligible small employers" would be employers who have employed an average of 100 or fewer employees a day for the past 2 years. If an employer is an eligible small employer and continues the cafeteria plan, it would remain an eligible small employer until it employs an average of 200 employees a day in one year.
Small Business Tax Credit Currently, the cost to an employer of providing health insurance coverage to its employees is tax deductible. Under Sen. Baucus's marks, the employer may be eligible for a tax credit instead of a deduction from gross income. To qualify for this tax credit, the employer would have to have 25 or fewer full-time employees during the year. Those employees could not earn an average of more than $40,000.00 a year. The phased-in tax credit would be up to 50% of the premiums the employer paid for employee coverage.
Employer Offer of Health Insurance Coverage Employers of 50 or more employees who do not offer coverage to employees would be required to pay a fee for each employee who qualifies for a tax credit for health insurance.
Excise Taxes In 2014, there would be an excise tax of 35% imposed upon employer-sponsored health coverage that exceeds threshold amounts: $8,000 for individual coverage and $21,000 for family coverage. The tax would be imposed pro rata on the issuers of the insurance and the plan administrator on amounts over the threshold. The employer must calculate the amount that is taxable to each insurance issuer and the plan administrator. Regardless as to whether an excise tax is imposed, employers would be required to report on the employee's W-2 form the value of the benefits the employee received from the employer.
Flexible Spending Arrangements An employee who reduces cash compensation to have that amount available for use as reimbursement for medical expenses (Flexible Spending Arrangement, or "Health FSA") currently does not pay any tax on the reduction in compensation. Under Sen. Baucus's marks, Health FSAs would be limited to $2,000 a year.
The bill has not yet been introduced to the Senate or reconciled with the House's health care reform bill, America's Affordable Health Choices Act of 2009, H.3200, introduced July 31, 2009. Some marks of Sen. Baucus directly affect employers who offer health insurance coverage to their employees. The following is just a brief overview of some of those marks.
Safe Harbor Benefits received under a qualified small employer's cafeteria plans would still be eligible to be treated as a cafeteria plan if the plan excludes employees 1) under 21; 2) worked fewer than 1000 hours the preceding year or has worked less than one year; or 3) covered by a collective bargaining agreement. "Eligible small employers" would be employers who have employed an average of 100 or fewer employees a day for the past 2 years. If an employer is an eligible small employer and continues the cafeteria plan, it would remain an eligible small employer until it employs an average of 200 employees a day in one year.
Small Business Tax Credit Currently, the cost to an employer of providing health insurance coverage to its employees is tax deductible. Under Sen. Baucus's marks, the employer may be eligible for a tax credit instead of a deduction from gross income. To qualify for this tax credit, the employer would have to have 25 or fewer full-time employees during the year. Those employees could not earn an average of more than $40,000.00 a year. The phased-in tax credit would be up to 50% of the premiums the employer paid for employee coverage.
Employer Offer of Health Insurance Coverage Employers of 50 or more employees who do not offer coverage to employees would be required to pay a fee for each employee who qualifies for a tax credit for health insurance.
Excise Taxes In 2014, there would be an excise tax of 35% imposed upon employer-sponsored health coverage that exceeds threshold amounts: $8,000 for individual coverage and $21,000 for family coverage. The tax would be imposed pro rata on the issuers of the insurance and the plan administrator on amounts over the threshold. The employer must calculate the amount that is taxable to each insurance issuer and the plan administrator. Regardless as to whether an excise tax is imposed, employers would be required to report on the employee's W-2 form the value of the benefits the employee received from the employer.
Flexible Spending Arrangements An employee who reduces cash compensation to have that amount available for use as reimbursement for medical expenses (Flexible Spending Arrangement, or "Health FSA") currently does not pay any tax on the reduction in compensation. Under Sen. Baucus's marks, Health FSAs would be limited to $2,000 a year.
September 16, 2009
Ohio House passes bill banning sexual orientation discrimination
On September 15, 2009, the Ohio House of Representatives passed Am.Sub.H.B.No. 176 which prohibits employment discrimination on the basis of sexual orientation or gender identity. The bill now moves on to the Ohio Senate where its fate is unclear.
If the bill becomes law, it would add "sexual orientation" and "gender identity" as protected traits in the workplace, similar to the protections that traits like race and religion currently have in the workplace. The term "sexual orientation" would not be limited to homosexuality under this bill. Rather, it would include "actual or perceived heterosexuality, homosexuality, or bisexuality."
The term "gender identity" in the bill would mean all gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth. This definition would include the codification of the United States Supreme Court's holding in Price Waterhouse v. Hopkins, 490 U.S. 228, in which the Supreme Court allowed an accountant to proceed with her lawsuit that alleged she was passed over for partnership because she was not feminine enough.
The bill would exempt religious associations and parochial schools from some of its provisions on sexual orientation and gender identity. But the exemptions would not apply to the associations or schools' secular business activities unrelated to their religious and educational purposes.
Even though the bill anticipates gender transition, it would not require the construction of new or additional facilities. Under the bill, it would not be an unlawful employment practice based upon gender identity to deny access to shower or dressing facilities where being unclothed would be unavoidable. But the employer must provide reasonable access to these facilities based upon the employee's gender identity at the time of the initial employment or upon notification that the employee is undergoing, or has undergone, gender transition.
The Ohio Civil Rights Commission would not be permitted to collect statistics from employers on employees' sexual orientation or gender identity. The bill would also not permit "disparate impact" claims on the basis of sexual orientation or gender identity. "Disparate impact" claims are based upon a neutral policy that has a negative impact on people with a protected trait.
Because some Ohioans feel strongly that sexual orientation is a choice, a choice to which those Ohioans may have strong objections, passage of the bill in the Ohio Senate is not assured. Nevertheless, many Ohio employers have voluntarily adopted policies against discrimination on account of sexual orientation or gender identity. Employers adopted these policies because they want to keep good employees, regardless of an employee's orientation or gender identity. This bill would make those policies the law of Ohio. If you feel strongly about this bill - one way or the other, you should call your State Senator's office and let him or her know.
If the bill becomes law, it would add "sexual orientation" and "gender identity" as protected traits in the workplace, similar to the protections that traits like race and religion currently have in the workplace. The term "sexual orientation" would not be limited to homosexuality under this bill. Rather, it would include "actual or perceived heterosexuality, homosexuality, or bisexuality."
The term "gender identity" in the bill would mean all gender-related characteristics of an individual, with or without regard to the individual's designated sex at birth. This definition would include the codification of the United States Supreme Court's holding in Price Waterhouse v. Hopkins, 490 U.S. 228, in which the Supreme Court allowed an accountant to proceed with her lawsuit that alleged she was passed over for partnership because she was not feminine enough.
The bill would exempt religious associations and parochial schools from some of its provisions on sexual orientation and gender identity. But the exemptions would not apply to the associations or schools' secular business activities unrelated to their religious and educational purposes.
Even though the bill anticipates gender transition, it would not require the construction of new or additional facilities. Under the bill, it would not be an unlawful employment practice based upon gender identity to deny access to shower or dressing facilities where being unclothed would be unavoidable. But the employer must provide reasonable access to these facilities based upon the employee's gender identity at the time of the initial employment or upon notification that the employee is undergoing, or has undergone, gender transition.
The Ohio Civil Rights Commission would not be permitted to collect statistics from employers on employees' sexual orientation or gender identity. The bill would also not permit "disparate impact" claims on the basis of sexual orientation or gender identity. "Disparate impact" claims are based upon a neutral policy that has a negative impact on people with a protected trait.
Because some Ohioans feel strongly that sexual orientation is a choice, a choice to which those Ohioans may have strong objections, passage of the bill in the Ohio Senate is not assured. Nevertheless, many Ohio employers have voluntarily adopted policies against discrimination on account of sexual orientation or gender identity. Employers adopted these policies because they want to keep good employees, regardless of an employee's orientation or gender identity. This bill would make those policies the law of Ohio. If you feel strongly about this bill - one way or the other, you should call your State Senator's office and let him or her know.
September 14, 2009
Employer Liability for Contractor's Discrimination
Ohio employers should be concerned about a recent decision in the United States Second Circuit Court of Appeals. Even though the Second Circuit does not include Ohio, this case could be persuasive authority for district and common pleas courts in Ohio.
In Halpert v. Manhattan Apartments Inc., Case No. 07-4074, the Second Circuit reversed a summary judgment that the District Court had entered in favor of Manhattan Apartments in an age discrimination claim. Michael Halpert had interviewed with Robert Brooks for a position to show rental apartments. In the interview, Halpert alleged that Brooks told him he was "too old" for the position. Manhattan Apartments maintained that Brooks was an independent contractor and not its employee.
The Court found that an employer could potentially be held liable for discrimination by an independent contractor who acts for the employer. The Age Discrimination in Employment Act (ADEA) prohibits an employer from refusing to hire an individual because of the individual's age. The Court stated: "That prohibition applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors, to fill that role." Title VII, the ADA, and the Ohio Civil Rights Act include similar prohibitions in regards to other protected traits.
The Court found that there was a factual issue as to whether Brooks was acting as the hiring agent for Manhattan Apartments when he interviewed Halpert or whether Brooks was simply hiring on his own. Even though Brooks and Manhattan Apartments submitted affidavits in which they stated that if Halpert had been hired, Brooks - not Manhattan Apartments - would have been compensating him, Halpert submitted evidence that could have indicated that Manhattan Apartments controlled the manner and means by which Brooks conducted interviews. Therefore, according to the Circuit Court, a jury had to determine whether Brooks was conducting interviews to hire for himself or for Manhattan Apartments. If a jury were to find that Brooks was conducting interviews to hire for Manhattan Apartments, Manhattan Apartments would be an employer under the ADEA and could be held liable under that law.
Halpert demonstrates that employers cannot isolate themselves from discrimination liability by simply using independent contractors who then hire employees for themselves. Employers need to be careful that they are not presenting these independent contractors as employees to prospective hirees. Wise employers should have an attorney review the degree of independence the contractors have and the hiring processes of the contractors.
In Halpert v. Manhattan Apartments Inc., Case No. 07-4074, the Second Circuit reversed a summary judgment that the District Court had entered in favor of Manhattan Apartments in an age discrimination claim. Michael Halpert had interviewed with Robert Brooks for a position to show rental apartments. In the interview, Halpert alleged that Brooks told him he was "too old" for the position. Manhattan Apartments maintained that Brooks was an independent contractor and not its employee.
The Court found that an employer could potentially be held liable for discrimination by an independent contractor who acts for the employer. The Age Discrimination in Employment Act (ADEA) prohibits an employer from refusing to hire an individual because of the individual's age. The Court stated: "That prohibition applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors, to fill that role." Title VII, the ADA, and the Ohio Civil Rights Act include similar prohibitions in regards to other protected traits.
The Court found that there was a factual issue as to whether Brooks was acting as the hiring agent for Manhattan Apartments when he interviewed Halpert or whether Brooks was simply hiring on his own. Even though Brooks and Manhattan Apartments submitted affidavits in which they stated that if Halpert had been hired, Brooks - not Manhattan Apartments - would have been compensating him, Halpert submitted evidence that could have indicated that Manhattan Apartments controlled the manner and means by which Brooks conducted interviews. Therefore, according to the Circuit Court, a jury had to determine whether Brooks was conducting interviews to hire for himself or for Manhattan Apartments. If a jury were to find that Brooks was conducting interviews to hire for Manhattan Apartments, Manhattan Apartments would be an employer under the ADEA and could be held liable under that law.
Halpert demonstrates that employers cannot isolate themselves from discrimination liability by simply using independent contractors who then hire employees for themselves. Employers need to be careful that they are not presenting these independent contractors as employees to prospective hirees. Wise employers should have an attorney review the degree of independence the contractors have and the hiring processes of the contractors.
August 23, 2009
Unconditional Employment Offers Reduce Plaintiffs' Damages Claims
In wrongful termination cases, employers face risks of large jury awards that include several months, and sometime years, of back pay - from the date of termination to the date of the jury award. In some cases, a jury could also award the plaintiff front pay for wages that the plaintiff would have earned after the date of the jury award had the plaintiff not been wrongfully terminated. Because wrongful termination cases do not usually go to trial until at least 18 months after the plaintiff filed the lawsuit (which is usually a year or more after the termination of employment), an employer could have significant exposure to a large jury award of anywhere from 2 to 5 years of the wages the plaintiff could have earned, plus interest, if the employer had not engaged in the allegedly discriminatory conduct.
Fortunately, an employer can perform a simple act which could eliminate the employee's claim for front pay and severely limit the claim for back pay. The employer could make an unconditional employment offer to the former employee of reinstatement to the employee's former position upon the same terms and condition of employment.
An unconditional offer does not resolve the employee's claim of wrongful termination. Nor does it eliminate the employee's claim for back wages. Instead, the unconditional offer could limit the claim for back pay from the termination date to the date of the offer or its rejection, but not beyond.
The United States Supreme Court examined unconditional employment offers in Ford Motor Co. v. E.E.O.C., 458 U.S. 219 (1982). In Ford Motor, three women filed charges with the EEOC claiming that Ford did not hire them because of their sex. Approximately two years after the women filed their charges, Ford offered positions to two of them. Ford's offers did not require the women to abandon or compromise their Title VII claims. Nevertheless, the women rejected Ford's employment offers.
The Supreme Court held that the women's claims to back pay could run up to, but not beyond, the date that they rejected Ford's employment offers, reasoning that the women could have mitigated their damages by accepting Ford's employment offers. The Court rejected the EEOC's argument that an employment offer that ends continuing liability for back pay must also include an offer of seniority retroactive to the date of discrimination.
An unconditional offer of employment or reinstatement can be an effective means by which an employer can drastically reduce the amount of damages that a court may award to an employment discrimination plaintiff. The unconditional offer cannot include any terms that would require the plaintiff to settle, compromise, or withdraw the discrimination claim. Employers facing discrimination claims should consult with their attorneys and strongly consider extending unconditional employment offers to the complaining parties.
Fortunately, an employer can perform a simple act which could eliminate the employee's claim for front pay and severely limit the claim for back pay. The employer could make an unconditional employment offer to the former employee of reinstatement to the employee's former position upon the same terms and condition of employment.
An unconditional offer does not resolve the employee's claim of wrongful termination. Nor does it eliminate the employee's claim for back wages. Instead, the unconditional offer could limit the claim for back pay from the termination date to the date of the offer or its rejection, but not beyond.
The United States Supreme Court examined unconditional employment offers in Ford Motor Co. v. E.E.O.C., 458 U.S. 219 (1982). In Ford Motor, three women filed charges with the EEOC claiming that Ford did not hire them because of their sex. Approximately two years after the women filed their charges, Ford offered positions to two of them. Ford's offers did not require the women to abandon or compromise their Title VII claims. Nevertheless, the women rejected Ford's employment offers.
The Supreme Court held that the women's claims to back pay could run up to, but not beyond, the date that they rejected Ford's employment offers, reasoning that the women could have mitigated their damages by accepting Ford's employment offers. The Court rejected the EEOC's argument that an employment offer that ends continuing liability for back pay must also include an offer of seniority retroactive to the date of discrimination.
An unconditional offer of employment or reinstatement can be an effective means by which an employer can drastically reduce the amount of damages that a court may award to an employment discrimination plaintiff. The unconditional offer cannot include any terms that would require the plaintiff to settle, compromise, or withdraw the discrimination claim. Employers facing discrimination claims should consult with their attorneys and strongly consider extending unconditional employment offers to the complaining parties.
April 20, 2009
Expanding coverage of sex discrimination laws
The legal definition of "sex discrimination" in the workplace has been rapidly expanding. "Sex discrimination" used to mean denying a woman equal opportunities in the workplace or demanding sex from a subordinate. "Sex discrimination" then came to include hostile work environment claims arising from boorish behavior in the workplace, such as hanging pornographic pictures or making lewd sexual comments.
There are now several cases that hold that sex discrimination claims may arise when an employee does not "act" the way the employee's gender is supposed to act, or if an employee is gay, or if an employee has been diagnosed with Gender Identity Disorder ("GID"), a condition recognized by the American Psychiatric Association, and is commonly referred to as transsexualism. Employers need to be mindful of the wide interpretation courts are giving to Title VII sex discrimination claims.
This trend to expand the definition of sex discrimination perhaps began in 1989 when the United States Supreme Court decided Price Waterhouse v. Hopkins, 490 U.S. 228. In Price Waterhouse, Ann Hopkins claimed that she was passed over for partnership in the accounting firm because of her sex. She claimed that the partners believed that she acted too aggressive because she was "overcompensating for being a woman." One partner advised her to "walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry." She sued claiming that sexual stereotyping had played a role in the firm's decision to not admit her to the partnership.
The Supreme Court agreed with Hopkins. According to the Supreme Court, "gender must be irrelevant to employment decisions." The Supreme Court found that the other partners' comments were made not only because Hopkins was a woman, but also because she did not conform to the stereotype of how a woman supposedly should behave in an office. According to the Supreme Court, Price Waterhouse discriminated against her because she failed to act like a woman.
In 2004, the Sixth Circuit applied the holding of Price Waterhouse to transsexualism and found that Title VII protects employees who have been diagnosed with GID. In Smith v. City of Salem, Ohio, 378 F.3d 566, Jimmie Smith claimed that the City of Salem violated Title VII when it fired him from the Salem Fire Department after he began "expressing a more feminine appearance on a full-time basis." Smith had been diagnosed with GID and he informed his immediate supervisor that his treatment could include the eventual physical transformation from male to female. According to Smith's complaint, the City then conspired to terminate his employment by requiring him to take a series of psychological tests, hoping that he would resign or refuse to take the tests, which would be grounds for termination.
The Trial Court dismissed Smith's case, claiming that his complaint did not state a claim under Title VII. The Sixth Circuit reversed, finding that his complaint stated a Title VII claim by alleging that his failure to conform to sex stereotypes regarding how a man should look and act was the driving force behind his termination. According to the Sixth Circuit, his complaint adequately pleaded claims of sex stereotyping and gender discrimination. The Sixth Circuit in Smith held that Price Waterhouse established that Title VII's reference to "sex" includes both the biological differences between the genders AND gender discrimination - discrimination based on a failure to conform to stereotypical gender norms. On remand, the case was dismissed by agreement of the parties shortly after a settlement conference.
Employers need to be aware of the expanding coverage courts are finding for Title VII cases, especially in the area of sex discrimination. The reasoning in Smith could easily apply to claims of sex discrimination based upon orientation. Many people have strong opinions regarding sexuality. But many people also have strong opinions regarding religion. A smart employer does not allow differences in religion to have any affect upon the work place. If an employer or employee is uncomfortable about a co-worker's religion, that discomfort must not play a role in any employment decisions. And an employer must enforce policies against creating a hostile work environment. Similarly, an employer should not allow discomfort regarding a co-worker's sexuality - whether it's orientation or identity - to play any role in employment decisions and should enforce anti-harassment policies so as to reduce the risk of creating a hostile work environment.
There are now several cases that hold that sex discrimination claims may arise when an employee does not "act" the way the employee's gender is supposed to act, or if an employee is gay, or if an employee has been diagnosed with Gender Identity Disorder ("GID"), a condition recognized by the American Psychiatric Association, and is commonly referred to as transsexualism. Employers need to be mindful of the wide interpretation courts are giving to Title VII sex discrimination claims.
This trend to expand the definition of sex discrimination perhaps began in 1989 when the United States Supreme Court decided Price Waterhouse v. Hopkins, 490 U.S. 228. In Price Waterhouse, Ann Hopkins claimed that she was passed over for partnership in the accounting firm because of her sex. She claimed that the partners believed that she acted too aggressive because she was "overcompensating for being a woman." One partner advised her to "walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry." She sued claiming that sexual stereotyping had played a role in the firm's decision to not admit her to the partnership.
The Supreme Court agreed with Hopkins. According to the Supreme Court, "gender must be irrelevant to employment decisions." The Supreme Court found that the other partners' comments were made not only because Hopkins was a woman, but also because she did not conform to the stereotype of how a woman supposedly should behave in an office. According to the Supreme Court, Price Waterhouse discriminated against her because she failed to act like a woman.
In 2004, the Sixth Circuit applied the holding of Price Waterhouse to transsexualism and found that Title VII protects employees who have been diagnosed with GID. In Smith v. City of Salem, Ohio, 378 F.3d 566, Jimmie Smith claimed that the City of Salem violated Title VII when it fired him from the Salem Fire Department after he began "expressing a more feminine appearance on a full-time basis." Smith had been diagnosed with GID and he informed his immediate supervisor that his treatment could include the eventual physical transformation from male to female. According to Smith's complaint, the City then conspired to terminate his employment by requiring him to take a series of psychological tests, hoping that he would resign or refuse to take the tests, which would be grounds for termination.
The Trial Court dismissed Smith's case, claiming that his complaint did not state a claim under Title VII. The Sixth Circuit reversed, finding that his complaint stated a Title VII claim by alleging that his failure to conform to sex stereotypes regarding how a man should look and act was the driving force behind his termination. According to the Sixth Circuit, his complaint adequately pleaded claims of sex stereotyping and gender discrimination. The Sixth Circuit in Smith held that Price Waterhouse established that Title VII's reference to "sex" includes both the biological differences between the genders AND gender discrimination - discrimination based on a failure to conform to stereotypical gender norms. On remand, the case was dismissed by agreement of the parties shortly after a settlement conference.
Employers need to be aware of the expanding coverage courts are finding for Title VII cases, especially in the area of sex discrimination. The reasoning in Smith could easily apply to claims of sex discrimination based upon orientation. Many people have strong opinions regarding sexuality. But many people also have strong opinions regarding religion. A smart employer does not allow differences in religion to have any affect upon the work place. If an employer or employee is uncomfortable about a co-worker's religion, that discomfort must not play a role in any employment decisions. And an employer must enforce policies against creating a hostile work environment. Similarly, an employer should not allow discomfort regarding a co-worker's sexuality - whether it's orientation or identity - to play any role in employment decisions and should enforce anti-harassment policies so as to reduce the risk of creating a hostile work environment.
April 17, 2009
Changes to Ohio Mini-COBRA Premium Assistance
Many companies in Ohio employ less than 20 employees and are not subject to the federal COBRA law, which provides a qualified terminated employee the opportunity to continue his or her group health insurance. These smaller employers are covered by Ohio's "mini-COBRA" law, Ohio Rev. Code §3923.38.
Governor Strickland recently signed Sub. H.B. 2. This legislation amended Ohio's continuation coverage laws. Any group health insurance policy issued or renewed after April 1, 2009 must now include the following changes to Ohio continuation law:
Similar to the premium assistance for continuation coverage provided by the American Recovery and Reinvestment Act of 2009 (ARRA), an employee is determined to have been involuntarily terminated if he or she was given the option to resign or be fired, and elected to resign. Also similar to ARRA, an employee is terminated for gross misconduct if the misconduct involved criminal or highly unethical behavior. An employee's negligence or insubordination by itself would not render that employee ineligible for continuation coverage.
Like ARRA premium assistance for continuation coverage, under Ohio mini-COBRA, an employee needs to pay only 35% of the premium. But unlike ARRA, the employer will not have to advance the remaining 65% of the premium. Instead, the insurer receives a tax credit for 65% of the premium.
The Ohio Department of Insurance's website (www.ohioinsurance.gov) has additional information on the changes to Ohio mini-COBRA.
Governor Strickland recently signed Sub. H.B. 2. This legislation amended Ohio's continuation coverage laws. Any group health insurance policy issued or renewed after April 1, 2009 must now include the following changes to Ohio continuation law:
- Coverage has been extended to 12 months from 6 months.
- The participant is no longer required to be eligible for unemployment compensation benefits.
- Employees must be involuntarily terminated, other than for gross misconduct.
- Continuation coverage must include prescription drug coverage if it is included in the group coverage.
Similar to the premium assistance for continuation coverage provided by the American Recovery and Reinvestment Act of 2009 (ARRA), an employee is determined to have been involuntarily terminated if he or she was given the option to resign or be fired, and elected to resign. Also similar to ARRA, an employee is terminated for gross misconduct if the misconduct involved criminal or highly unethical behavior. An employee's negligence or insubordination by itself would not render that employee ineligible for continuation coverage.
Like ARRA premium assistance for continuation coverage, under Ohio mini-COBRA, an employee needs to pay only 35% of the premium. But unlike ARRA, the employer will not have to advance the remaining 65% of the premium. Instead, the insurer receives a tax credit for 65% of the premium.
The Ohio Department of Insurance's website (www.ohioinsurance.gov) has additional information on the changes to Ohio mini-COBRA.
April 12, 2009
COBRA Rights for the Voluntarily Resigned
During the current recession, many employers are offering severance packages to their laid-off employees. The employers offer the employees several weeks or months of pay if the employee agrees to release the employer from almost every imaginable claim. Under these severance agreements, the parties agree that the employee voluntarily resigned and was not laid-off or involuntarily terminated.
Under the American Recovery and Reinvestment Act of 2009 (ARRA) that President Obama signed on February 17, 2009, involuntarily terminated employees may be eligible for premium assistance for their COBRA continuation coverage. (The end result of this premium assistance is that the former employee pays 35% of the premium and the federal government picks up the remaining 65%.) But the term "involuntarily terminated" raises a question regarding former employees who accepted a severance package for their voluntary resignation - Are these former employees eligible for the ARRA premium assistance for COBRA coverage?
The answer to this question is - it depends on the circumstances. While the statements of voluntary resignation in severance packages usually prevent employees from receiving unemployment compensation benefits, the employee would still most likely be eligible for COBRA continuation coverage if the employee pays the entire premium. Under COBRA, an employee may be eligible for continuation coverage for any termination that was not the result of the employee's "gross misconduct". 29 U.S.C. §1163. Because a voluntary resignation is a termination, most of the voluntarily resigned would be eligible to participate in COBRA coverage.
Unlike COBRA, the ARRA premium assistance does not apply to all employees terminated for any reason besides gross misconduct. To be eligible for this premium assistance, the employee must have been involuntarily terminated. An involuntary termination and a voluntary resignation may appear to be terms that are mutually exclusive of each other. But the United States Department of Labor (DOL) recently provided guidance to employers and employees in Notice 2009-27 regarding premium assistance for COBRA benefits under ARRA.
According to the DOL's Notice, an involuntary termination is a termination due to the employer's unilateral authority to terminate the employment where the employee was willing and able to continue his or her employment. Most severance agreements that indicate the employee voluntarily resigned are usually offered by an employer to protect the employer from wrongful termination claims. If the employer would have terminated the employee without the employee's voluntary resignation, and the employee knew he or she would be terminated if the employee did not agree to resign, then, according to the Notice, the termination is involuntary and the employee would be eligible for premium assistance.
Nevertheless, the employee would not be eligible if the employer's termination of the employment was the result of the employee's gross misconduct. "Gross misconduct" is not the equivalent of "terminated for cause". Gross misconduct usually involves behavior that is criminal or highly unethical, such as stealing from the employer or providing the employer's trade secrets to a competitor. An employer could terminate an employee for cause, such as the result of excessive absenteeism or insubordination, but such causes usually do not rise to the level of gross misconduct. Therefore, the employee would most likely still be eligible for COBRA continuation coverage and for the premium assistance.
For many loyal employees, being laid-off jeopardizes their health coverage and the coverage of their families. If an employer wants to allow these employees to maintain health coverage for a relatively reasonable premium payment during the current recession, the employer should contact an employment attorney to prepare severance agreements that would allow these employees to receive premium assistance for their COBRA continuation coverage.
Under the American Recovery and Reinvestment Act of 2009 (ARRA) that President Obama signed on February 17, 2009, involuntarily terminated employees may be eligible for premium assistance for their COBRA continuation coverage. (The end result of this premium assistance is that the former employee pays 35% of the premium and the federal government picks up the remaining 65%.) But the term "involuntarily terminated" raises a question regarding former employees who accepted a severance package for their voluntary resignation - Are these former employees eligible for the ARRA premium assistance for COBRA coverage?
The answer to this question is - it depends on the circumstances. While the statements of voluntary resignation in severance packages usually prevent employees from receiving unemployment compensation benefits, the employee would still most likely be eligible for COBRA continuation coverage if the employee pays the entire premium. Under COBRA, an employee may be eligible for continuation coverage for any termination that was not the result of the employee's "gross misconduct". 29 U.S.C. §1163. Because a voluntary resignation is a termination, most of the voluntarily resigned would be eligible to participate in COBRA coverage.
Unlike COBRA, the ARRA premium assistance does not apply to all employees terminated for any reason besides gross misconduct. To be eligible for this premium assistance, the employee must have been involuntarily terminated. An involuntary termination and a voluntary resignation may appear to be terms that are mutually exclusive of each other. But the United States Department of Labor (DOL) recently provided guidance to employers and employees in Notice 2009-27 regarding premium assistance for COBRA benefits under ARRA.
According to the DOL's Notice, an involuntary termination is a termination due to the employer's unilateral authority to terminate the employment where the employee was willing and able to continue his or her employment. Most severance agreements that indicate the employee voluntarily resigned are usually offered by an employer to protect the employer from wrongful termination claims. If the employer would have terminated the employee without the employee's voluntary resignation, and the employee knew he or she would be terminated if the employee did not agree to resign, then, according to the Notice, the termination is involuntary and the employee would be eligible for premium assistance.
Nevertheless, the employee would not be eligible if the employer's termination of the employment was the result of the employee's gross misconduct. "Gross misconduct" is not the equivalent of "terminated for cause". Gross misconduct usually involves behavior that is criminal or highly unethical, such as stealing from the employer or providing the employer's trade secrets to a competitor. An employer could terminate an employee for cause, such as the result of excessive absenteeism or insubordination, but such causes usually do not rise to the level of gross misconduct. Therefore, the employee would most likely still be eligible for COBRA continuation coverage and for the premium assistance.
For many loyal employees, being laid-off jeopardizes their health coverage and the coverage of their families. If an employer wants to allow these employees to maintain health coverage for a relatively reasonable premium payment during the current recession, the employer should contact an employment attorney to prepare severance agreements that would allow these employees to receive premium assistance for their COBRA continuation coverage.
April 5, 2009
Claims of Stereotyping
A recent case out of the federal Circuit Court in Boston illustrates the dangers that employers face when they make employment decisions based upon a commonly held belief about members in a subclass of a protected class, and not upon a member's qualifications or conduct. In Chadwick v. Wellpoint, Inc., the employee successfully argued to the Circuit Court of Appeals that she should have an opportunity to demonstrate to a jury that her employer's decision not to promote her was based upon the sex-based stereotype that mothers of young children are more likely than fathers of young children to neglect work duties in favor of childcare obligations.
Laurie Chadwick believed that she was the frontrunner for a management position at Wellpoint. She received excellent reviews at her most recent performance evaluation. She was already performing several of the responsibilities of the management position. But Wellpoint gave the promotion to another woman who shared the same position as Chadwick, but for six years less than Chadwick. Also, the performance evaluations of the woman Wellpoint promoted were not as high as Chadwick's evaluations.
Shortly before Wellpoint decided to give the promotion to the other woman, the Wellpoint employee who made that decision discovered that Chadwick had three six-year-old triplets in addition to an eleven-year-old son. Chadwick was also taking one college course a semester during her employment. The woman that Wellpoint promoted had two children, ages nine and fourteen.
Chadwick brought suit under Title VII, claiming that Wellpoint discriminated against her on account of her sex. The Circuit Court found that Chadwick was entitled to a jury trial based upon three statements made by Wellpoint employees, each of whom was involved in the promotion decision:
The Circuit Court classified Chadwick's claim as a "sex plus" claim. The "plus" describes the case where the employer does not discriminate against all members of a protected class. In Chadwick, the "plus" refers to the allegation that Wellpoint discriminated against mothers of young children, as opposed to discriminating against all women. But regardless as to whether this case was a "sex plus" claim or just a sex discrimination claim, the Court noted that every sex discrimination case comes down to one simple question: Did the employer take an adverse employment action at least in part because of an employee's sex?
The United States Supreme Court has taken notice of the stereotype that women, not men, are responsible for family caregiving. Examining the specific facts of Chadwick reveals that this stereotype does not apply to this case. Chadwick's husband was the primary caretaker for the children. He worked off-hour shifts, nights, and weekends when Chadwick was home with the children.
Under Chadwick, an employer is not free to assume that family responsibilities would make a woman, because she is a woman, a poor worker. The Chadwick decisionmaker explained to Chadwick that the decision not to promote her had nothing to do with what Chadwick "did or didn't do." The Court found that a jury could interpret this statement to mean that Wellpoint was penalizing Chadwick not for something she did but for something she simply is. The Court further found that a jury could interpret the decisionmaker's "Bless you!" email as a statement that the decisionmaker felt badly for Chadwick because Chadwick's life apparently must have been so difficult as the mother of three young children.
Chadwick demonstrates that sex discrimination claims can arise from a variety of events. These claims do not always arise from boorish behavior, sexual comments, or requests/demands for sex. Sex discrimination claims could also arise from well-intentioned conduct that was premised upon sexual stereotypes. To reduce the risk of being the subject of a claim based upon stereotyping, an employer should examine its employment policies to assure that those policies are not based upon employees' characteristics, but are instead based upon employees' actual conduct and qualifications.
Laurie Chadwick believed that she was the frontrunner for a management position at Wellpoint. She received excellent reviews at her most recent performance evaluation. She was already performing several of the responsibilities of the management position. But Wellpoint gave the promotion to another woman who shared the same position as Chadwick, but for six years less than Chadwick. Also, the performance evaluations of the woman Wellpoint promoted were not as high as Chadwick's evaluations.
Shortly before Wellpoint decided to give the promotion to the other woman, the Wellpoint employee who made that decision discovered that Chadwick had three six-year-old triplets in addition to an eleven-year-old son. Chadwick was also taking one college course a semester during her employment. The woman that Wellpoint promoted had two children, ages nine and fourteen.
Chadwick brought suit under Title VII, claiming that Wellpoint discriminated against her on account of her sex. The Circuit Court found that Chadwick was entitled to a jury trial based upon three statements made by Wellpoint employees, each of whom was involved in the promotion decision:
- When the ultimate decisionmaker had discovered that Chadwick had triplets, she sent Chadwick an email stating, "Oh my - I did not know you had triplets. Bless you!"
- During Chadwick's interview, an interviewer asked her how she would respond if an associate did not complete a project on time. When Chadwick did not give an answer the interviewer liked, the interviewer replied, "Laurie, you're a mother. Would you let your kids off the hook that easy if they made a mess in their room? Would you clean it or hold them accountable?"
- When the ultimate decisionmaker informed Chadwick that she did not get the promotion, the decisionmaker stated, "It was nothing you did or didn't do. It was just that you're going to school, you have the kids and you just have a lot on your plate right now." In the same conversation, the decisionmaker stated that, "if the interviewers [all of whom were women] were in your position, they would feel overwhelmed."
The Circuit Court classified Chadwick's claim as a "sex plus" claim. The "plus" describes the case where the employer does not discriminate against all members of a protected class. In Chadwick, the "plus" refers to the allegation that Wellpoint discriminated against mothers of young children, as opposed to discriminating against all women. But regardless as to whether this case was a "sex plus" claim or just a sex discrimination claim, the Court noted that every sex discrimination case comes down to one simple question: Did the employer take an adverse employment action at least in part because of an employee's sex?
The United States Supreme Court has taken notice of the stereotype that women, not men, are responsible for family caregiving. Examining the specific facts of Chadwick reveals that this stereotype does not apply to this case. Chadwick's husband was the primary caretaker for the children. He worked off-hour shifts, nights, and weekends when Chadwick was home with the children.
Under Chadwick, an employer is not free to assume that family responsibilities would make a woman, because she is a woman, a poor worker. The Chadwick decisionmaker explained to Chadwick that the decision not to promote her had nothing to do with what Chadwick "did or didn't do." The Court found that a jury could interpret this statement to mean that Wellpoint was penalizing Chadwick not for something she did but for something she simply is. The Court further found that a jury could interpret the decisionmaker's "Bless you!" email as a statement that the decisionmaker felt badly for Chadwick because Chadwick's life apparently must have been so difficult as the mother of three young children.
Chadwick demonstrates that sex discrimination claims can arise from a variety of events. These claims do not always arise from boorish behavior, sexual comments, or requests/demands for sex. Sex discrimination claims could also arise from well-intentioned conduct that was premised upon sexual stereotypes. To reduce the risk of being the subject of a claim based upon stereotyping, an employer should examine its employment policies to assure that those policies are not based upon employees' characteristics, but are instead based upon employees' actual conduct and qualifications.
April 4, 2009
Interference with Employee Benefits
A recent decision by the Sixth Circuit Court of Appeals provides some guidance to employers to avoiding unlawful interference with employees' benefits. The Circuit Court ruled that even though the unionized employer did not deny that its desire to reduce pension benefits played a role in its decision to shut down a plant, this desire, in and of itself, was not enough for the employees to satisfy their burden of proof that the employer's other reasons for shutting the plant down were merely a pretext.
In Crawford v. TRW Automotive U.S. LLC, the employer closed one of its manufacturing plants due to overcapacity. The employer was using only 10% of the plant's square footage, but still paying high fixed costs and overhead to maintain the plant. At the time of its closure, three employees at the plant were less than one year away from being fully vested in the pension plan and four other plant employees were less than two years away from fully vesting. Most of the plant's employees needed more than five years for their pension benefits to fully vest. The employer did recall two of the laid-off employees, based upon seniority, to work at another plant owned by one of the employer's subsidiary. The recalled employees established their pension benefits eligibility while working at the other plant.
Despite the employees' contention that the employer poorly ran their plant and could have placed some new work at that plant instead of at another plant, the Circuit Court found that the employer's stated reason for closing the plant - unused capacity and high maintenance costs - was not a pretext for interfering with the employees' pension benefits. Even though the reduction of the pension benefits was incidental to the employer's decision to close the plant, the employees were unable to prove that the reduction in pension benefits was a motivating factor in that decision.
Crawford provides valuable lessons for employers in the present economic climate. It is unfortunate that due to circumstances beyond an employer's or employee's control, an employer may have to lay off many loyal, hard-working employees. To reduce the risk that some of the laid-off employees might sue the employer for wrongful interference with pension benefits, an employer should consult with an employment attorney and consider offering severance packages to the laid-off employees.
In Crawford v. TRW Automotive U.S. LLC, the employer closed one of its manufacturing plants due to overcapacity. The employer was using only 10% of the plant's square footage, but still paying high fixed costs and overhead to maintain the plant. At the time of its closure, three employees at the plant were less than one year away from being fully vested in the pension plan and four other plant employees were less than two years away from fully vesting. Most of the plant's employees needed more than five years for their pension benefits to fully vest. The employer did recall two of the laid-off employees, based upon seniority, to work at another plant owned by one of the employer's subsidiary. The recalled employees established their pension benefits eligibility while working at the other plant.
Despite the employees' contention that the employer poorly ran their plant and could have placed some new work at that plant instead of at another plant, the Circuit Court found that the employer's stated reason for closing the plant - unused capacity and high maintenance costs - was not a pretext for interfering with the employees' pension benefits. Even though the reduction of the pension benefits was incidental to the employer's decision to close the plant, the employees were unable to prove that the reduction in pension benefits was a motivating factor in that decision.
Crawford provides valuable lessons for employers in the present economic climate. It is unfortunate that due to circumstances beyond an employer's or employee's control, an employer may have to lay off many loyal, hard-working employees. To reduce the risk that some of the laid-off employees might sue the employer for wrongful interference with pension benefits, an employer should consult with an employment attorney and consider offering severance packages to the laid-off employees.
March 31, 2009
Employees' Right to Privacy
Most employers provide fair warning to their employees that the employees should not have any expectation of privacy for any communications they send or receive using the company's computer. Employees can usually find these warnings in the employee handbook. Communications from a company computer - even if made on an employee's personal email account - can become property of the employer.
But employers need to be aware of the limits of such a policy. Under the federal Stored Communications Act (SCA), an employer may not intentionally access an electronic communication service's facility without authorization, or exceed such authorization, to obtain an electronic communication while it is electronically stored in such a facility. In plain English, the SCA forbids an employer from hacking into an employee's personal email account at AOL, Yahoo, or Google to obtain archived emails, even if the employee sent or received those emails on a company's computer.
Employers who violate the SCA could be liable to the employee for the employee's actual, out-of-pocket damages caused by the violation, plus any profits the employer may have derived as a result of the violation. The court may also assess punitive damages against an employer who willfully or intentionally violated the SCA, and award the employee reasonable attorney's fees and costs. The employee may also have a claim under Ohio law against the employer for invasion of privacy.
A recent case out of the District Court for the Southern District of New York illustrates how an employer may run afoul of the SCA. In Pure Power Boot Camp v. Warrior Fitness Boot Camp, an employer accused a former employee of stealing trade secrets. The former employee had used the employer's computer to send and receive personal emails on the employee's personal Hotmail account. The employee had stored the password for access to his personal Hotmail account on the company's computer, so the employer was able to easily access the employee's personal emails through Hotmail.
Pure Power Boot Camp ruled that the emails stored on the Hotmail system were electronic communications the the SCA protected. The employee's use of the employer's computer to receive and send personal emails did not authorize the employer to access the employee's emails electronically stored by Hotmail. Therefore, the employer's access to these stored emails violated the SCA.
The Court noted that emails stored on a personal computer do not fall under the SCA. A personal computer is not the equivalent of an electronic communication service provider's system. Therefore, the employer may have been able to examine its own computers without violating the SCA.
Even though an employer may have adequately informed its employees that they should have no expectation of privacy regarding personal emails sent or received on the company's computer, an employee does not surrender all rights to privacy by using a company's computer to send personal emails. If an employer is concerned about an employee using a company computer to send or receive personal emails, the employer should consult an attorney to discuss whether there are any lawful ways by which the employer can access those personal emails.
But employers need to be aware of the limits of such a policy. Under the federal Stored Communications Act (SCA), an employer may not intentionally access an electronic communication service's facility without authorization, or exceed such authorization, to obtain an electronic communication while it is electronically stored in such a facility. In plain English, the SCA forbids an employer from hacking into an employee's personal email account at AOL, Yahoo, or Google to obtain archived emails, even if the employee sent or received those emails on a company's computer.
Employers who violate the SCA could be liable to the employee for the employee's actual, out-of-pocket damages caused by the violation, plus any profits the employer may have derived as a result of the violation. The court may also assess punitive damages against an employer who willfully or intentionally violated the SCA, and award the employee reasonable attorney's fees and costs. The employee may also have a claim under Ohio law against the employer for invasion of privacy.
A recent case out of the District Court for the Southern District of New York illustrates how an employer may run afoul of the SCA. In Pure Power Boot Camp v. Warrior Fitness Boot Camp, an employer accused a former employee of stealing trade secrets. The former employee had used the employer's computer to send and receive personal emails on the employee's personal Hotmail account. The employee had stored the password for access to his personal Hotmail account on the company's computer, so the employer was able to easily access the employee's personal emails through Hotmail.
Pure Power Boot Camp ruled that the emails stored on the Hotmail system were electronic communications the the SCA protected. The employee's use of the employer's computer to receive and send personal emails did not authorize the employer to access the employee's emails electronically stored by Hotmail. Therefore, the employer's access to these stored emails violated the SCA.
The Court noted that emails stored on a personal computer do not fall under the SCA. A personal computer is not the equivalent of an electronic communication service provider's system. Therefore, the employer may have been able to examine its own computers without violating the SCA.
Even though an employer may have adequately informed its employees that they should have no expectation of privacy regarding personal emails sent or received on the company's computer, an employee does not surrender all rights to privacy by using a company's computer to send personal emails. If an employer is concerned about an employee using a company computer to send or receive personal emails, the employer should consult an attorney to discuss whether there are any lawful ways by which the employer can access those personal emails.
March 27, 2009
Investigation and Consistent Discipline
A recent decision by the Sixth Circuit Court of Appeals underscores the importance for an employer to properly investigate allegations that an employee engaged in wrongful behavior. In Sybrandt v. Home Depot, U.S.A., Inc., the Court of Appeals affirmed the District Court's judgment in favor of the employer because the employer thoroughly investigated allegations that an employee violated a company policy regarding computer user-identification codes.
In Sybrandt, a 14-year employee had violated the retail employer's "no-self-service" policy on employee transactions. As part of the investigation, a loss-prevention manager and a human resources supervisor interviewed the employee. Their conclusion was that the employee had violated the policy even though there was no evidence that indicated that the employee gained any benefit from the violation. The investigators provided the information they gathered to one of the employer's employment practices managers who asked them to do more factfinding. After the investigators provided a written description of security-camera footage of the violation and provided witness statements, the employment practices manager recommended that the employer terminate the employee. The employer followed the employment practices manager's recommendation and terminated the employee for violating the "no-self-service" policy.
The employee then filed a lawsuit claiming that she was terminated on the basis of her sex, and that the employer's stated reason for the termination was a pretext used to hide sex-based discrimination. The Circuit Court rejected the employee's claims, finding that the employer had an honest belief in its stated nondiscriminatory reason for the termination. The Court based its finding upon the employer's thorough investigation. The Court also noted that the employment practices manager had consistently recommended termination for employees who violated the "no-self-service" policy.
Sybrandt provides valuable guidance to employers who are faced with the task of disciplining employees. The employment practices manager felt he did not have sufficient information or documentation to properly discipline an employee, so he ordered the investigators to continue their investigation. Even though there was no evidence that this long-term employee had acted dishonestly, the employer did not depart from its practice of terminating employees who have violated its policies. Furthermore, the employer was able to produce evidence of prior discipline of employees who violated its policies.
The two reasons why this employer won this case are: 1) the employer's thorough investigation of the allegations; and 2) the employer's consistent application of discipline. With the employer's investigation and consistent discipline, the employer was able to prevail because it was able to conclusively demonstrate that it had a legitimate nondiscriminatory reason for the termination.
In Sybrandt, a 14-year employee had violated the retail employer's "no-self-service" policy on employee transactions. As part of the investigation, a loss-prevention manager and a human resources supervisor interviewed the employee. Their conclusion was that the employee had violated the policy even though there was no evidence that indicated that the employee gained any benefit from the violation. The investigators provided the information they gathered to one of the employer's employment practices managers who asked them to do more factfinding. After the investigators provided a written description of security-camera footage of the violation and provided witness statements, the employment practices manager recommended that the employer terminate the employee. The employer followed the employment practices manager's recommendation and terminated the employee for violating the "no-self-service" policy.
The employee then filed a lawsuit claiming that she was terminated on the basis of her sex, and that the employer's stated reason for the termination was a pretext used to hide sex-based discrimination. The Circuit Court rejected the employee's claims, finding that the employer had an honest belief in its stated nondiscriminatory reason for the termination. The Court based its finding upon the employer's thorough investigation. The Court also noted that the employment practices manager had consistently recommended termination for employees who violated the "no-self-service" policy.
Sybrandt provides valuable guidance to employers who are faced with the task of disciplining employees. The employment practices manager felt he did not have sufficient information or documentation to properly discipline an employee, so he ordered the investigators to continue their investigation. Even though there was no evidence that this long-term employee had acted dishonestly, the employer did not depart from its practice of terminating employees who have violated its policies. Furthermore, the employer was able to produce evidence of prior discipline of employees who violated its policies.
The two reasons why this employer won this case are: 1) the employer's thorough investigation of the allegations; and 2) the employer's consistent application of discipline. With the employer's investigation and consistent discipline, the employer was able to prevail because it was able to conclusively demonstrate that it had a legitimate nondiscriminatory reason for the termination.
March 22, 2009
Employers - Watch that overtime!
In the current economic climate, many employers have adopted restrictive policies against an employee working overtime. But if an employer fails to actively enforce its "no unauthorized overtime" policy, the employer would still be obligated to pay overtime to any non-exempt employee who works more than 40 hours in a week.
Under the Fair Labor Standards Act (FLSA), if an employee works more than 40 hours in one week, the employer must pay that employee one-and-a-half times the employee's normal hourly rate for all time worked in excess of 40 hours. There are several types of employees who are exempt from this provision of the FLSA, such as executives, administrative support personnel, and professionals. The United States Department of Labor has issued regulations that define which employees are exempt.
Some employers have adopted strict policies against overtime work, requiring all overtime work to be pre-approved. But adopting a policy will not prevent an employer from being required to pay overtime to an employee who worked unauthorized overtime. The employer must also take steps to enforce the policy.
According to the Department of Labor regulations, unrequested work that is permitted is considered work time for which an employee must be compensated. If the unrequested work means the employee worked more than 40 hours in a week, the employee must be paid for those extra hours at the overtime rate.
The Department of Labor places the onus upon employers to exercise control to see that unwanted work is not performed. The regulations state that the employer has the power to enforce its rule against unapproved overtime and must make every effort to do so. If an employee continues to work after the end of a shift to correct the employee's own mistakes or to complete a project and the employer knows or has reason to believe that the employee is continuing to work, the work performed after the end of the shift is still work time and counts against the 40-hour workweek.
The Labor Department regulations do not permit an employer to sit back and accept the benefits of an employee's work without compensating that employee. To prevent unwanted overtime work, an employer must be vigilant. Because of the variety of settings in which employees now perform their work (i.e., the employer's office, at home, at a client's office, etc.), an employer should consult with an employment attorney to discuss ways by which an employer may enforce its policy against unauthorized overtime.
Under the Fair Labor Standards Act (FLSA), if an employee works more than 40 hours in one week, the employer must pay that employee one-and-a-half times the employee's normal hourly rate for all time worked in excess of 40 hours. There are several types of employees who are exempt from this provision of the FLSA, such as executives, administrative support personnel, and professionals. The United States Department of Labor has issued regulations that define which employees are exempt.
Some employers have adopted strict policies against overtime work, requiring all overtime work to be pre-approved. But adopting a policy will not prevent an employer from being required to pay overtime to an employee who worked unauthorized overtime. The employer must also take steps to enforce the policy.
According to the Department of Labor regulations, unrequested work that is permitted is considered work time for which an employee must be compensated. If the unrequested work means the employee worked more than 40 hours in a week, the employee must be paid for those extra hours at the overtime rate.
The Department of Labor places the onus upon employers to exercise control to see that unwanted work is not performed. The regulations state that the employer has the power to enforce its rule against unapproved overtime and must make every effort to do so. If an employee continues to work after the end of a shift to correct the employee's own mistakes or to complete a project and the employer knows or has reason to believe that the employee is continuing to work, the work performed after the end of the shift is still work time and counts against the 40-hour workweek.
The Labor Department regulations do not permit an employer to sit back and accept the benefits of an employee's work without compensating that employee. To prevent unwanted overtime work, an employer must be vigilant. Because of the variety of settings in which employees now perform their work (i.e., the employer's office, at home, at a client's office, etc.), an employer should consult with an employment attorney to discuss ways by which an employer may enforce its policy against unauthorized overtime.
March 20, 2009
Does Title VII Protect Sexuality?
A recent decision by the Sixth Circuit Court of Appeals may have opened a door for gays and lesbians to seek protection under Title VII against employment discrimination. The Sixth Circuit covers the states of Michigan, Ohio, Kentucky, and Tennessee. To reduce the risk of a discrimination charge, and to bolster a defense against such a charge, employers should adopt policies prohibiting harassment or discrimination against any employee based upon the employee's sexuality.
In Barrett v. Whirlpool Corp., three Caucasian employees alleged that their employer discriminated against them on account of their association with and advocacy for certain African-American co-workers. The employees claimed that the associational discrimination against them created a hostile work environment.
The Court noted that Title VII protects employees who are victims of discriminatory animus towards third persons who are members of a protected class and with whom the employee associates. Barrett cited to a prior case in which the Sixth Circuit had held that a Caucasian employee could state a claim under Title VII if an employer took adverse actions upon learning that the employee's child was bi-racial. In the prior case, the Sixth Circuit had noted that the employee was discriminated against because his race was different than his child's race. Therefore, according to the Court in the prior case, the employer discriminated against the employee based upon his race.
Barrett clarified that the degree of association between the employee and the third person is not relevant. According to Barrett, an employee does not need to be a close family member to the third person, or even a close friend, to state a Title VII claim.
Of the three plaintiffs, Barrett found that only one stated a claim under Title VII. The successful plaintiff alleged that she was physically threatened because of her association with African-American employees and that the employer took no corrective action after she complained. The successful plaintiff also alleged that her supervisor attempted to prevent her from applying for a promotion because of the supervisor's disapproval of the employee's friendship with an African-American co-worker. She alleged that these actions were taken against her because she was a Caucasian associating with an African-American. Barrett's language suggests that its holding is not limited to an employee's association with another co-worker but would also apply to an employee's association with a non-employee.
The Court released Barrett on February 23, 2009, so it is too soon to see how courts apply its holdings to other types of Title VII claims. (Any one of the parties may appeal Barrett to the United States Supreme Court. The deadline for such an appeal is May 26, 2009.) But a credible argument could be made that Barrett should apply to gays and lesbians.
All employees are members of a protected class based upon their gender. This means that employers may not discriminate against men or women. Because Barrett recognizes Title VII claims for associational discrimination without regard to the degree of association, one could argue that Barrett would recognize a Title VII claim for associational discrimination for a male employee who has a close association with another male - a much closer association than the successful Caucasian Barrett plaintiff had with the African-American co-worker. If this male employee was subjected to insults for being gay - or even terminated for being gay, this employee could argue that he was harassed and discriminated against because of his gender. The male employee could argue that a female employee who has a close association with a male would not be subject to the same harassment and discrimination.
A court could apply Barrett to the harassment and discrimination against this hypothetical male employee and find that Title VII protects employees from this kind of associational discrimination. Even though Title VII and the Ohio Civil Rights Act do not expressly include sexuality as a protected status, these laws do not exclude sexuality as a protected status either. (The Americans with Disabilities Act and the Ohio Civil Rights Act both expressly exclude homo sexuality and lesbianism from their definitions of a disability.) Therefore, Barrett could be interpreted to protect employees who are closely associated with members of their same sex.
In response to Barrett, an employer should adopt policies against harassment or discrimination based upon sexuality. If an employer adopts such policies and enforces them, the employer might avoid being found liable for associational discrimination.
In Barrett v. Whirlpool Corp., three Caucasian employees alleged that their employer discriminated against them on account of their association with and advocacy for certain African-American co-workers. The employees claimed that the associational discrimination against them created a hostile work environment.
The Court noted that Title VII protects employees who are victims of discriminatory animus towards third persons who are members of a protected class and with whom the employee associates. Barrett cited to a prior case in which the Sixth Circuit had held that a Caucasian employee could state a claim under Title VII if an employer took adverse actions upon learning that the employee's child was bi-racial. In the prior case, the Sixth Circuit had noted that the employee was discriminated against because his race was different than his child's race. Therefore, according to the Court in the prior case, the employer discriminated against the employee based upon his race.
Barrett clarified that the degree of association between the employee and the third person is not relevant. According to Barrett, an employee does not need to be a close family member to the third person, or even a close friend, to state a Title VII claim.
Of the three plaintiffs, Barrett found that only one stated a claim under Title VII. The successful plaintiff alleged that she was physically threatened because of her association with African-American employees and that the employer took no corrective action after she complained. The successful plaintiff also alleged that her supervisor attempted to prevent her from applying for a promotion because of the supervisor's disapproval of the employee's friendship with an African-American co-worker. She alleged that these actions were taken against her because she was a Caucasian associating with an African-American. Barrett's language suggests that its holding is not limited to an employee's association with another co-worker but would also apply to an employee's association with a non-employee.
The Court released Barrett on February 23, 2009, so it is too soon to see how courts apply its holdings to other types of Title VII claims. (Any one of the parties may appeal Barrett to the United States Supreme Court. The deadline for such an appeal is May 26, 2009.) But a credible argument could be made that Barrett should apply to gays and lesbians.
All employees are members of a protected class based upon their gender. This means that employers may not discriminate against men or women. Because Barrett recognizes Title VII claims for associational discrimination without regard to the degree of association, one could argue that Barrett would recognize a Title VII claim for associational discrimination for a male employee who has a close association with another male - a much closer association than the successful Caucasian Barrett plaintiff had with the African-American co-worker. If this male employee was subjected to insults for being gay - or even terminated for being gay, this employee could argue that he was harassed and discriminated against because of his gender. The male employee could argue that a female employee who has a close association with a male would not be subject to the same harassment and discrimination.
A court could apply Barrett to the harassment and discrimination against this hypothetical male employee and find that Title VII protects employees from this kind of associational discrimination. Even though Title VII and the Ohio Civil Rights Act do not expressly include sexuality as a protected status, these laws do not exclude sexuality as a protected status either. (The Americans with Disabilities Act and the Ohio Civil Rights Act both expressly exclude homo sexuality and lesbianism from their definitions of a disability.) Therefore, Barrett could be interpreted to protect employees who are closely associated with members of their same sex.
In response to Barrett, an employer should adopt policies against harassment or discrimination based upon sexuality. If an employer adopts such policies and enforces them, the employer might avoid being found liable for associational discrimination.
March 19, 2009
Ohio Legislative Update
Recently, two bills have been introduced in the Ohio Senate regarding labor and employment law relations.
S.B. 31, introduced 2/10/09 by Senator Thomas F. Patton (R-Strongsville), would create a testimonial privilege for communications between a representative of an employee organization and a bargaining unit member. The bill would apply only if the communication was made while the employee organization representative was acting in a representative capacity. The bill has been assigned to the Senate Judiciary Civil Justice Committee.
S.B. 34, introduced 2/10/09 by Senator Dale Miller (D-Cleveland), and co-sponsored by five others, would require the Ohio Department of Administrative Services to create a health insurance program that permits municipalities, employers of less than 500 employees, and nonprofit organizations to purchase for their employees the same policies provided to state employees. The bill has been assigned to the Senate Insurance, Commerce, & Labor Committee.
S.B. 31, introduced 2/10/09 by Senator Thomas F. Patton (R-Strongsville), would create a testimonial privilege for communications between a representative of an employee organization and a bargaining unit member. The bill would apply only if the communication was made while the employee organization representative was acting in a representative capacity. The bill has been assigned to the Senate Judiciary Civil Justice Committee.
S.B. 34, introduced 2/10/09 by Senator Dale Miller (D-Cleveland), and co-sponsored by five others, would require the Ohio Department of Administrative Services to create a health insurance program that permits municipalities, employers of less than 500 employees, and nonprofit organizations to purchase for their employees the same policies provided to state employees. The bill has been assigned to the Senate Insurance, Commerce, & Labor Committee.
March 17, 2009
Pregnancy Discrimination Case in the Ohio Supreme Court
On March 11, 2009, the Ohio Supreme Court heard oral arguments in Allen v. Totes/Isotoner Corp., Case No. 2008-0845. The employer had terminated an employee who pumped milk from her breasts in the women's bathroom on unauthorized breaks. The employee claimed that the employer had discriminated against her on account of her gender and her pregnancy. She claimed that lactating women - as opposed to breastfeeding women - are a protected class. According to the employee, breastfeeding is the social act of nursing an infant while lactation is the secretion of milk from the mammary glands and is an aspect of pregnancy or childbirth. She also claimed that other workers were permitted to take unscheduled breaks to tend to bodily functions or discomfort, but lactating women were not permitted to do so.
The employer countered those arguments and claimed that the employee was terminated because she unilaterally added a paid work break to her schedule. According to the employer, the parties had agreed to a break schedule that took into account the employee's desire to pump milk from her breasts so that she could continue breastfeeding her infant at home. The employer argued that if the break schedule did not suit her body's lactation schedule, she could have requested a change to her break schedule. The employer also argued that lactation is not an aspect of pregnancy that is protected by the Ohio or Federal Pregnancy Discrimination Act.
The Supreme Court is expected to address whether breast-pumping in the workplace is protected under the Ohio Pregnancy Discrimination Act, and if so, what kind of accommodations must an employer make to lactating women.
The employer countered those arguments and claimed that the employee was terminated because she unilaterally added a paid work break to her schedule. According to the employer, the parties had agreed to a break schedule that took into account the employee's desire to pump milk from her breasts so that she could continue breastfeeding her infant at home. The employer argued that if the break schedule did not suit her body's lactation schedule, she could have requested a change to her break schedule. The employer also argued that lactation is not an aspect of pregnancy that is protected by the Ohio or Federal Pregnancy Discrimination Act.
The Supreme Court is expected to address whether breast-pumping in the workplace is protected under the Ohio Pregnancy Discrimination Act, and if so, what kind of accommodations must an employer make to lactating women.
March 15, 2009
It's all fun and games until someone loses a job
A recent decision of the Sixth Circuit Court of Appeals underscores the importance for employers to be vigilant against inappropriate conduct in the workplace. Even though the employer prevailed in Hensman v. City of Riverview, the Court based its holding more upon the infrequency of the inappropriate conduct rather than upon the inappropriateness of the conduct.
The employee in Hensman had taken a medical "stress leave" after being the recipient of what she claimed was six weeks of sexual harassment, which, she claimed, had resulted in a sexually hostile work environment. The plaintiff acknowledged that her supervisor had never sexually propositioned her or groped or fondled her. Instead, she claimed that the hostile work environment arose from the following conduct:
(1): Her supervisor had hugged her on three separate occassions - twice when he was complimenting her on her job performance, and once after the two of them had had an argument after he had said that he had "sensed a tension between them."
(2): Her supervisor had made comments two separate times about her being "voluptuous."
(3): Her supervisor had said he was too distracted by her beauty to listen to her.
(4): Her supervisor had walked too closely behind her.
(5): Her supervisor had closed the door to his office when he met with her.
(6): When her supervisor had accidentally locked himself out of his office before a meeting with the union president late one night, he called the plaintiff because she was the only other person who had a key to the office. She told him to come by her house to get the key. When he came by at 11:30 p.m., he had told her that she looked cute in her pajamas.
(7): Her supervisor had called her by the wrong name.
(8): On her last day of work, her supervisor had grabbed her arm in anger when she said she was going home because she felt sick.
Even though the District Court threw out the case without a trial, this case illustrates the importance of being aware of perception. The supervisor probably believed that none of his conduct created a hostile work environment for the plaintiff. After all, she did not complain for six weeks - not until the day before her last day. But she perceived his conduct as harassment.
Most of the conduct described above is objectively inappropriate for a workplace. If the plaintiff had complained about it to her supervisor's superiors before her last day, the employer would have had to take some corrective action, such as telling the supervisor to behave more appropriately. If the plaintiff had not left her job but instead endured the inappropriate conduct for a few more months, a court could have easily found that there were enough examples of inappropriate conduct such that such conduct permeated the workplace with discriminatory intimidation, ridicule, and insult.
To reduce the chance of becoming a defendant in an employment discrimination case, employers should be pro-active in training their staff to not engage in inappropriate conduct. Although there is no method by which an employer can be guaranteed that it will not be sued for employment discrimination, a good employment law attorney can show an employer ways to minimize that risk and to improve the employer's defenses to such a claim.
The employee in Hensman had taken a medical "stress leave" after being the recipient of what she claimed was six weeks of sexual harassment, which, she claimed, had resulted in a sexually hostile work environment. The plaintiff acknowledged that her supervisor had never sexually propositioned her or groped or fondled her. Instead, she claimed that the hostile work environment arose from the following conduct:
(1): Her supervisor had hugged her on three separate occassions - twice when he was complimenting her on her job performance, and once after the two of them had had an argument after he had said that he had "sensed a tension between them."
(2): Her supervisor had made comments two separate times about her being "voluptuous."
(3): Her supervisor had said he was too distracted by her beauty to listen to her.
(4): Her supervisor had walked too closely behind her.
(5): Her supervisor had closed the door to his office when he met with her.
(6): When her supervisor had accidentally locked himself out of his office before a meeting with the union president late one night, he called the plaintiff because she was the only other person who had a key to the office. She told him to come by her house to get the key. When he came by at 11:30 p.m., he had told her that she looked cute in her pajamas.
(7): Her supervisor had called her by the wrong name.
(8): On her last day of work, her supervisor had grabbed her arm in anger when she said she was going home because she felt sick.
Even though the District Court threw out the case without a trial, this case illustrates the importance of being aware of perception. The supervisor probably believed that none of his conduct created a hostile work environment for the plaintiff. After all, she did not complain for six weeks - not until the day before her last day. But she perceived his conduct as harassment.
Most of the conduct described above is objectively inappropriate for a workplace. If the plaintiff had complained about it to her supervisor's superiors before her last day, the employer would have had to take some corrective action, such as telling the supervisor to behave more appropriately. If the plaintiff had not left her job but instead endured the inappropriate conduct for a few more months, a court could have easily found that there were enough examples of inappropriate conduct such that such conduct permeated the workplace with discriminatory intimidation, ridicule, and insult.
To reduce the chance of becoming a defendant in an employment discrimination case, employers should be pro-active in training their staff to not engage in inappropriate conduct. Although there is no method by which an employer can be guaranteed that it will not be sued for employment discrimination, a good employment law attorney can show an employer ways to minimize that risk and to improve the employer's defenses to such a claim.
March 12, 2009
Consistent Application of Employment Policies
A recent decision by the Sixth Circuit Court of Appeals underscores the importance for employers to consistently apply their employment policies. In Morgan v. New York Life Ins. Co., the Court of Appeals affirmed a jury verdict of $6,000,000.00 in compensatory damages for the plaintiff in an age discrimination suit. (The Court remanded the $10,000,000.00 in punitive damages back to the District Court on the basis that it was excessive.)
Tommy Morgan was a managing partner in New York Life's Cleveland office when he was terminated. After working at New York Life for almost 6 years, New York Life terminated him, claiming that he failed to meet the manpower requirements in New York Life's written manual. At the time of the termination, Morgan was 50 years old. New York Life replaced him with a 40-year-old manager from the Orlando office.
According to New York Life's performance criteria, Morgan was required to have 99 agents working in his office by a specific date. Even though Morgan had 102 agents working in the Cleveland office on the specified date, New York Life negated four of those agents because they split commissions with other agents in the Cleveland office, thereby bringing the number of agents that New York Life included in its count down to 98.
The Sixth Circuit concluded that evidence of New York Life's deviations from its normal practices for other managing partners - who were younger than Morgan - was sufficient for the jury to find that New York Life terminated Morgan on the basis of age. Younger managers who fell short of New York Life's goals were not sanctioned or terminated. In some cases, those younger managers received favorable treatment.
For its younger managing partners, New York life appeared to be willing to consider extenuating circumstances, such as a managing partner's pregnancy. But New York Life rigidly applied its manpower formula to Morgan without any consideration for extenuating circumstances, such as an employee in the Cleveland office who embezzled millions of dollars and was - presumably - terminated. Additionally, the evidence indicated that younger managing partners received favorable treatment than older managing partners. For example, a younger managing partners was praised for helping an older managing partner "reach a retirement decision."
This case illustrates one of the most overlooked maxims in employment law: "No good deed goes unpunished." Many managers probably do not want to terminate an employee who narrowly missed a goal, but is an otherwise exemplary worker. But if the manager does not discipline that exemplary worker in compliance with the company's policies, that manager is increasing the risk of a discrimination lawsuit when an employee who also narrowly missed a goal is terminated or otherwise disciplined.
An employer's written employment policies might be a defense to some discrimination lawsuits. But unless those policies are consistently applied, the employer is runs a risk of making employment decisions appear to be based upon an employee's status as a member of a protected class. To make sure that they are consistently applying their employment policies, employers should consult with an employment attorney.
Tommy Morgan was a managing partner in New York Life's Cleveland office when he was terminated. After working at New York Life for almost 6 years, New York Life terminated him, claiming that he failed to meet the manpower requirements in New York Life's written manual. At the time of the termination, Morgan was 50 years old. New York Life replaced him with a 40-year-old manager from the Orlando office.
According to New York Life's performance criteria, Morgan was required to have 99 agents working in his office by a specific date. Even though Morgan had 102 agents working in the Cleveland office on the specified date, New York Life negated four of those agents because they split commissions with other agents in the Cleveland office, thereby bringing the number of agents that New York Life included in its count down to 98.
The Sixth Circuit concluded that evidence of New York Life's deviations from its normal practices for other managing partners - who were younger than Morgan - was sufficient for the jury to find that New York Life terminated Morgan on the basis of age. Younger managers who fell short of New York Life's goals were not sanctioned or terminated. In some cases, those younger managers received favorable treatment.
For its younger managing partners, New York life appeared to be willing to consider extenuating circumstances, such as a managing partner's pregnancy. But New York Life rigidly applied its manpower formula to Morgan without any consideration for extenuating circumstances, such as an employee in the Cleveland office who embezzled millions of dollars and was - presumably - terminated. Additionally, the evidence indicated that younger managing partners received favorable treatment than older managing partners. For example, a younger managing partners was praised for helping an older managing partner "reach a retirement decision."
This case illustrates one of the most overlooked maxims in employment law: "No good deed goes unpunished." Many managers probably do not want to terminate an employee who narrowly missed a goal, but is an otherwise exemplary worker. But if the manager does not discipline that exemplary worker in compliance with the company's policies, that manager is increasing the risk of a discrimination lawsuit when an employee who also narrowly missed a goal is terminated or otherwise disciplined.
An employer's written employment policies might be a defense to some discrimination lawsuits. But unless those policies are consistently applied, the employer is runs a risk of making employment decisions appear to be based upon an employee's status as a member of a protected class. To make sure that they are consistently applying their employment policies, employers should consult with an employment attorney.
March 11, 2009
Employee Free Choice Act Introduced
Congress is now considering the Employee Free Choice Act of 2009 (EFCA). On March 10, 2009, identical bills were introduced into the House and the Senate. Rep. George Miller (D-Cal.) introduced the bill (H.R. 1409) into the House with Ohio co-sponsors John A. Boccieri (D-Alliance), Steve Driehaus (D-Cincinnati), Marcia Fudge (D-Warrensville Heights), Marcy Kaptur (D-Toledo), Mary Jo Kilroy (D-Clintonville), Dennis J. Kucinich (D-Cleveland), Tim Ryan (D-Niles), Zachary J. Space (D-Dover), Betty Sutton (D-Barberton), and Charles A. Wilson (D-St. Clairsville). Senator Edward M. Kennedy (D-Mass.) introduced the Senate bill (S. 560) with Ohio Senator Sherrod Brown (D) as a co-sponsor.
This bill proposes several changes to the certification procedures of labor unions and to the collective bargaining process.
Union Certification
Under the EFCA, if a union files a petition with the National Labor Relations Board that claims that a majority of employees in a unit wish to be represented by the union, the Board verifies that a majority of the unit's employees signed valid authorizations designating the union as their bargaining representative. The Board also determines whether the employees form a unit that is appropriate for collective bargaining. If the Board finds that a majority of the employees in the unit designated the union as their representative, and finds that the unit is appropriate for collective bargaining, the Board then certifies the union as the representative without a secret ballot election by the employees.
Initial Collective Bargaining Agreements
Under the EFCA, the employer and union must begin negotiating a collective bargaining agreement within 10 days after the employer receives the request for collective bargaining. If the employer and the union fail to reach an agreement on the terms of a collective bargaining agreement within 90 days of negotiating, a federal mediator will attempt to bring them to an agreement by mediation and conciliation. If the mediation does not result in a collective bargaining agreement within 30 days, then a federal arbitration panel will settle the dispute and prepare a collective bargaining agreement whose term will be 2 years.
Enforcement
Under the EFCA, if an employer terminates an employee while employees - unbeknownst to the employer - were seeking representation, the Board shall conduct a preliminary investigation to determine whether the employer committed an unfair labor practice. This preliminary investigation will take priority over all other cases except other cases of an employer's alleged unfair labor practice. If the Board finds that the employer committed an unfair labor practice, the Board is required to award the employee three times the employee's back pay. For willful or repeated violations, the Board may assess a civil fine of up to $20,000.00 per violation.
Congress has not finalized the EFCA. Because the bill could radically change labor-management relations, Ohioans are encouraged to contact their representatives and senators and let their thoughts be known on the EFCA.
This bill proposes several changes to the certification procedures of labor unions and to the collective bargaining process.
Union Certification
Under the EFCA, if a union files a petition with the National Labor Relations Board that claims that a majority of employees in a unit wish to be represented by the union, the Board verifies that a majority of the unit's employees signed valid authorizations designating the union as their bargaining representative. The Board also determines whether the employees form a unit that is appropriate for collective bargaining. If the Board finds that a majority of the employees in the unit designated the union as their representative, and finds that the unit is appropriate for collective bargaining, the Board then certifies the union as the representative without a secret ballot election by the employees.
Initial Collective Bargaining Agreements
Under the EFCA, the employer and union must begin negotiating a collective bargaining agreement within 10 days after the employer receives the request for collective bargaining. If the employer and the union fail to reach an agreement on the terms of a collective bargaining agreement within 90 days of negotiating, a federal mediator will attempt to bring them to an agreement by mediation and conciliation. If the mediation does not result in a collective bargaining agreement within 30 days, then a federal arbitration panel will settle the dispute and prepare a collective bargaining agreement whose term will be 2 years.
Enforcement
Under the EFCA, if an employer terminates an employee while employees - unbeknownst to the employer - were seeking representation, the Board shall conduct a preliminary investigation to determine whether the employer committed an unfair labor practice. This preliminary investigation will take priority over all other cases except other cases of an employer's alleged unfair labor practice. If the Board finds that the employer committed an unfair labor practice, the Board is required to award the employee three times the employee's back pay. For willful or repeated violations, the Board may assess a civil fine of up to $20,000.00 per violation.
Congress has not finalized the EFCA. Because the bill could radically change labor-management relations, Ohioans are encouraged to contact their representatives and senators and let their thoughts be known on the EFCA.
March 8, 2009
Risks of Recessionary Layoffs
Faced with the prospect that the current recession might not soon end, many employers have to face the difficult task of laying off loyal and hard-working employees. Even when an employer approaches the layoffs with as much dignity and respect as possible, any termination can lead to a claim of wrongful discharge.
As Ellen Simon points out in her excellent Employee Rights Post, (http://www.employeerightspost.com/admin/trackback/115913) using statistical analysis to compare the laid off workers' demographics with the workers who are not laid off could still lead to discrimination lawsuits. Under a statistical analysis, managers would make the initial decisions about who should be cut and who should stay. Before implementing the layoffs, the managers would review EEO statistics to determine whether there are a disproportionate number of protected-class members (i.e., women, minorities, workers over 40, workers with disabilities) on the list of employees marked for termination.
The problem with this statistical analysis is that the employer is still considering employees' membership in the various protected classes when making decisions that affect the terms and conditions of employment. If the employer considers an employee's gender, the terminated employee could still argue that his or her sex played a role in the termination decision. A jury might not care about statistical analysis when a terminated employee of one race made five times the sales of a retained employee of a different race.
Even though using statistical analysis might seem like a neutral manner by which to decide which employees to lay off, it still may expose an employer to discrimination lawsuits. Unfortunately, there is no method for determining who to lay off that will guarantee that no terminated employees will claim discriminatory treatment. The best that an employer can hope to do under these circumstances is seek legal advice regarding reducing the risk of discrimination lawsuits.
As Ellen Simon points out in her excellent Employee Rights Post, (http://www.employeerightspost.com/admin/trackback/115913) using statistical analysis to compare the laid off workers' demographics with the workers who are not laid off could still lead to discrimination lawsuits. Under a statistical analysis, managers would make the initial decisions about who should be cut and who should stay. Before implementing the layoffs, the managers would review EEO statistics to determine whether there are a disproportionate number of protected-class members (i.e., women, minorities, workers over 40, workers with disabilities) on the list of employees marked for termination.
The problem with this statistical analysis is that the employer is still considering employees' membership in the various protected classes when making decisions that affect the terms and conditions of employment. If the employer considers an employee's gender, the terminated employee could still argue that his or her sex played a role in the termination decision. A jury might not care about statistical analysis when a terminated employee of one race made five times the sales of a retained employee of a different race.
Even though using statistical analysis might seem like a neutral manner by which to decide which employees to lay off, it still may expose an employer to discrimination lawsuits. Unfortunately, there is no method for determining who to lay off that will guarantee that no terminated employees will claim discriminatory treatment. The best that an employer can hope to do under these circumstances is seek legal advice regarding reducing the risk of discrimination lawsuits.
March 2, 2009
Upcoming Ohio Supreme Court Decisions
On February 18, 2009, the Ohio Supreme Court heard oral arguments on three cases on Ohio's employer intentional tort statute - Ohio Rev. Code §2745.01. That statute sets out the requirements that an employee must meet to bring an intentional tort claim against his or her employer. The parties sought clarification of some of the terms in that statute and a determination of whether the statute complies with the Ohio Constitution.
Klaus v. United Equity, Inc., Case No. 2008-0894. Issues: 1) Whether the "deliberate intent" requirement in an intentional tort claim against the employer requires the employee to establish that the employer was consciously aware of the consequences of an egregious risk of injury that fell outside the risks to which the employee is ordinarily exposed. See Ohio Rev. Code §2745.01(B). 2) Whether the employee must demonstrate that harm is substantially to result from the employer's conduct AND that the employer was aware that harm was substantially certain to occur.
Kaminski v. Metal & Wire Products Company, Case No. 2008-0857. Issue: Whether Ohio Rev. Code §2745.01 complies with Article II, Section 34 of the Ohio Constitution regarding passing laws that provide for the welfare of employees and with Art. II, Section 35 regarding passing laws for workers' compensation.
Stetter v. R.J. Corman Derailment Services, LLC, Case No. 2008-0972. Issue: whether Ohio Rev. Code §2745.01 complies with: 1) Article I, Section 5 of the Ohio Constitution regarding a citizen's right to a jury trial in civil cases; 2) Art. I Section 1 regarding a citizen's right to a remedy by law; 3) Article I, Section 16 regarding a citizen's right to due process including access to open courts to remedy injuries; 4) Art. II, Section 2 regarding equal protection and application of laws; 5) Art. II, Section 32 regarding limits on legislative powers; and 6) Art. II, Sections 34 and 35 regarding laws that provide for the welfare of employees and laws for workers' compensation; and whether Section 2745.01eliminates a common law cause of action for employer intentional tort, replacing it with a statutory cause of action.
Klaus v. United Equity, Inc., Case No. 2008-0894. Issues: 1) Whether the "deliberate intent" requirement in an intentional tort claim against the employer requires the employee to establish that the employer was consciously aware of the consequences of an egregious risk of injury that fell outside the risks to which the employee is ordinarily exposed. See Ohio Rev. Code §2745.01(B). 2) Whether the employee must demonstrate that harm is substantially to result from the employer's conduct AND that the employer was aware that harm was substantially certain to occur.
Kaminski v. Metal & Wire Products Company, Case No. 2008-0857. Issue: Whether Ohio Rev. Code §2745.01 complies with Article II, Section 34 of the Ohio Constitution regarding passing laws that provide for the welfare of employees and with Art. II, Section 35 regarding passing laws for workers' compensation.
Stetter v. R.J. Corman Derailment Services, LLC, Case No. 2008-0972. Issue: whether Ohio Rev. Code §2745.01 complies with: 1) Article I, Section 5 of the Ohio Constitution regarding a citizen's right to a jury trial in civil cases; 2) Art. I Section 1 regarding a citizen's right to a remedy by law; 3) Article I, Section 16 regarding a citizen's right to due process including access to open courts to remedy injuries; 4) Art. II, Section 2 regarding equal protection and application of laws; 5) Art. II, Section 32 regarding limits on legislative powers; and 6) Art. II, Sections 34 and 35 regarding laws that provide for the welfare of employees and laws for workers' compensation; and whether Section 2745.01eliminates a common law cause of action for employer intentional tort, replacing it with a statutory cause of action.
March 1, 2009
Upcoming US Supreme Court Decisions
14 Penn Plaza, LLC v. Pyett, Case No. 07-581. Issue: Whether an arbitration clause in a collective bargaining agreement that waives the union members' right to a judicial forum for their statutory discrimination claims is enforceable. Oral argument held on December 1, 2008.
Gross v. FBL Financial Services, Inc., Case No. 08-441. Issue: Whether an employee must present direct evidence of discrimination to obtain a mixed-motive instruction in a non-Title VII discrimination (Age Discrimination in Employment Act). Oral argument set for March 31, 2009.
Ricci V. DeStefano, Case No. 07-1428. Issue: Whether a municipality may reject the results of an otherwise valid civil service selection that yields unintended racially disproportionate results, for reasons of race, absent the demonstration required by Title VII. Oral argument set for April 22, 2009.
Gross v. FBL Financial Services, Inc., Case No. 08-441. Issue: Whether an employee must present direct evidence of discrimination to obtain a mixed-motive instruction in a non-Title VII discrimination (Age Discrimination in Employment Act). Oral argument set for March 31, 2009.
Ricci V. DeStefano, Case No. 07-1428. Issue: Whether a municipality may reject the results of an otherwise valid civil service selection that yields unintended racially disproportionate results, for reasons of race, absent the demonstration required by Title VII. Oral argument set for April 22, 2009.
February 27, 2009
March 2009 Legislative Update
Members of the 128th Ohio General Assembly have introduced the following bills in February of 2009 that may affect many Ohio employers.
H.B. 46, introduced 2/24/09 by Representative Peter S. Ujvagi (D-Toledo), and co-sponsored by three others, would permit employees who resign to accompany the employee's spouse on a military transfer to be eligible for unemployment compensation benefits. The bill would still require the employee to actively seek work in the new locality to continue to receive unemployment compensation benefits. The bill has not been assigned to a committee yet.
S.B. 21, introduced 2/10/09 by Senator Nina Turner (D-Cleveland), and co-sponsored by Timothy J. Grendell (R-Chesterland), would create a nonrefundable tax credit for tax years 2010 and 2011 for the employment of persons who have been convicted of felonies. The employee must be a "qualified reforming felon", which includes being hired within one year after being released from incarceration and whose family meets certain income requirements. The bill has been assigned to the Senate Ways & Means & Economic Development Committee.
H.B. 48, introduced 2/24/09 by Representative Peter S. Ujvagi (D-Toledo), and co-sponsored by 11 others, would provide two weeks of unpaid leave for any qualified employee who is the spouse or parent of a member of the uniformed services on active duty or is injured while serving in a combat zone. The employer would be required to continue to provide benefits to the employee during the leave, but not salary or wages. The employer must restore the employee to the same or similar position after completion of the leave. The bill has not been assigned to a committee yet.
S.B. 17, introduced 2/10/09 by Senator Kevin Coughlin (R-Cuyahoga Falls) and co-sponsored by 7 others, would permit employers the option to offer, and to employees the option to accrue and use, compensatory time off. Instead of paying time-and-a-half for overtime work (in excess of 40 hours in any one workweek), an employer may allow an employee to accrue 1-1/2 compensatory time off for every overtime hour worked. The employee would have to initiate and request the compensatory time off. An employer may not require an employee to agree to take compensatory time off instead of overtime pay as a condition of employment. An employer who violates this law could be liable to the employee for twice the amount of unpaid overtime wages, plus attorney's fees. The bill has been assigned to the Senate Insurance, Commerce, & Labor Committee.
H.B. 40, introduced 2/24/09 by Representative Tom Letson (D-Warren), and co-sponsored by 15 others, would require employers to allow a parent to exercise court-ordered parenting time without terminating employment or reducing pay. The bill would apply to only employers of 50 or more employees. The bill has not been assigned to a committee yet.
H.B. 46, introduced 2/24/09 by Representative Peter S. Ujvagi (D-Toledo), and co-sponsored by three others, would permit employees who resign to accompany the employee's spouse on a military transfer to be eligible for unemployment compensation benefits. The bill would still require the employee to actively seek work in the new locality to continue to receive unemployment compensation benefits. The bill has not been assigned to a committee yet.
S.B. 21, introduced 2/10/09 by Senator Nina Turner (D-Cleveland), and co-sponsored by Timothy J. Grendell (R-Chesterland), would create a nonrefundable tax credit for tax years 2010 and 2011 for the employment of persons who have been convicted of felonies. The employee must be a "qualified reforming felon", which includes being hired within one year after being released from incarceration and whose family meets certain income requirements. The bill has been assigned to the Senate Ways & Means & Economic Development Committee.
H.B. 48, introduced 2/24/09 by Representative Peter S. Ujvagi (D-Toledo), and co-sponsored by 11 others, would provide two weeks of unpaid leave for any qualified employee who is the spouse or parent of a member of the uniformed services on active duty or is injured while serving in a combat zone. The employer would be required to continue to provide benefits to the employee during the leave, but not salary or wages. The employer must restore the employee to the same or similar position after completion of the leave. The bill has not been assigned to a committee yet.
S.B. 17, introduced 2/10/09 by Senator Kevin Coughlin (R-Cuyahoga Falls) and co-sponsored by 7 others, would permit employers the option to offer, and to employees the option to accrue and use, compensatory time off. Instead of paying time-and-a-half for overtime work (in excess of 40 hours in any one workweek), an employer may allow an employee to accrue 1-1/2 compensatory time off for every overtime hour worked. The employee would have to initiate and request the compensatory time off. An employer may not require an employee to agree to take compensatory time off instead of overtime pay as a condition of employment. An employer who violates this law could be liable to the employee for twice the amount of unpaid overtime wages, plus attorney's fees. The bill has been assigned to the Senate Insurance, Commerce, & Labor Committee.
H.B. 40, introduced 2/24/09 by Representative Tom Letson (D-Warren), and co-sponsored by 15 others, would require employers to allow a parent to exercise court-ordered parenting time without terminating employment or reducing pay. The bill would apply to only employers of 50 or more employees. The bill has not been assigned to a committee yet.
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