Wednesday, July 16, 2014

You can take my word for least for now

In Klein v. HP Pelzer Automotive Systems, Inc. , the Michigan court of appeals reversed the lower court's grant of summary disposition on the claim that the employer breached an express contract to pay severance.  It vacated an award of damages and remanded for entry of an order dismissing the case.

The case arose during the economic downturn in the automotive industry.  In a letter dated 11/2/09, the plaintiffs were advised in writing that a reorganization would be taking place but that their jobs would not be at risk.  They were also told that if their employment "is terminated or ended in any manner in the future," they would be entitled to a minimum of severance pay equal to one full year compensation.  In a letter dated 6/7/11, the then president of the employer advise them in writing that the 11/2 letter and the severance terms outlined in it were rescinded effective immediately.  The plaintiffs who were husband and wife.  They responded the next day in writing rejecting the attempted rescission and shortly thereafter resigned and sued.

In reversing the lower court, the court of appeals held that the phrase ended in any manner in the future rendered the promise a gratuity and not a unilateral offer of a contract.  The plaintiffs were not required to keep working after receiving the letters, and according to the plain language of the letter, the plaintiffs could resign immediately and collect the severance pay offered.  Without sufficient consideration, the promise of severance pay was not legally binding.  According to the court, the policy arguably continued until the letter revoking it was sent, ending the policy. 

The court addressed the claims of breach of implied contract and promissory estoppel which had not been addressed by the lower court since the interpretation of the first letter was a question of law.  It rejected both claims.  When hired, the plaintiffs signed personnel forms stating that changes in compensation, employment, and benefits could be modified or eliminated at any time with simple written notice which was in fact received.  The 2009 letter articulated a severance pay policy what could be changed at will and did not articulate a promise.

The decision will certainly cause bother employee and employer attorneys to reflect on their drafting of similar policies and responses to policies in the future.  It remains to be seen whether the phrase ended in any manner in the future will be adopted in light of this decision.  It would have been helpful if the court would have explained in greater detail why the phrase made the promise a gratuity and not a unilateral offer of a contract.  I would expect in the future employees will not be content to rely on similar representations but will press the employer for a written agreement that is no longer able to be unilaterally modified or ended.

Wednesday, July 9, 2014

Noel Canning: now what?

Noel Canning has been decided; the Supreme Court invalidated President Obama's NLRB recess appointments.  Approximately 436 decisions were issued over the 18 month period by the "recess" Board.  So now what?  Chaos?  The Board won't function?  Probably not.  The aftermath of the Supreme Court's New Process Steel decision invalidating the two member Board was not the nightmare it could have been.  Many cases had been settled or compliance had been completed.  There are about 100 cases in various federal courts that will be affected by the Noel Canning decision.

The Supreme Court's decision will not have any impact on the how the Obama Board will decide cases.  Employers who expect the end to the NLRB's foray into the non union sector with its oversight of employer personnel policies and practices will be disappointed.  The rationale of the "recess" Board is alive and well in the current Board with respect to the broad interpretation of concerted, protected activity and the tendency to find employer policies either directly violated or tend to chill the exercise of employee § 7 rights.  Current General Counsel Griffin was one of the recess Board members, and his views will shape the litigation strategy of the General Counsel's office.

What has gotten lost in the aftermath of the Noel Canning decision is the fact that Member Schiffer's term expires on December 16, 2014 after the November election.  One thing that will be certain is after that time, absent a new appointment, the Board will be comprised on an even number of Democratic and Republican members.  Employers can expect a major push to implement as much of the Obama Board's agenda as possible, including the overturning of Register Guard and the implementation of the new streamlined and expedited representation procedure. Things are going to get very interesting.

Thursday, June 26, 2014

Say what you mean to say...employment at will

Since the Michigan Supreme Court issued its decision in 1980 in Toussaint v. Blue Cross Blue Shield of Michigan and identified how an employer's actions could cause it to change the presumption of "at will" into "just cause" employment, employers who have wanted to continue to be "at will" have been careful in the language used in applications and in handbooks.  The Michigan court of appeals in Brugger v. City of Holland upheld the dismissal of the case in an unpublished 2-1 decision where the language used was unnecessarily confusing.

The city stated in its handbook that employees in the plaintiff's classification would not be terminated except for just cause as defined in the handbook.  The handbook defined just cause as existing: ..whenever a covered employee engages in any action or conduct, whether or not specifically identified in this Handbook, that warrants discharge.  The City, in its sole discretion, determines whether the employee's action or conduct warrants discharge.  Ok, just cause really isn't really just cause as it is commonly understood. 

The plaintiff was discharged for job performance and his communications skills.  He sued for wrongful discharge.  The trial court dismissed the case finding it was precluded by the handbook.  The majority relied on an earlier court of appeals case which held where an employer reserves for itself the sole discretion to determine what is just cause, an employee cannot state a claim, and the court cannot second guess the employer's decision.

The dissent relied on the language in Toussaint where the Michigan Supreme Court stated that a promise to terminate for cause only would be illusory if the employer were to be the sole judge and final arbiter of the propriety of its action.  The dissent said the a "sole discretion" clause renders "just cause employment" meaningless and converts the standard to at will.  Having announced a just cause standard, the city is obligated to permit a jury to assess the reasonableness of its decision.

At a minimum, an employer who wants to maintain "at will" employment acts at is own risk by using "just cause" in its handbook or policies.  "Just cause" and "sole discretion" are mutually exclusive.  The language used by the city creates needless confusion.  Why not just say that an employee may be terminated when he or she engages in any conduct or action that, in the city's discretion, warrants discharge?  Why risk creating confusion or a dispute of fact that a judge decides should be resolved by a jury?  If an employer wants to have "at will" employment, just say it.

Wednesday, June 18, 2014

Is the EEOC the new NLRB?

Historically employers have viewed the NLRB as the agency that deals with unions and employers and collective bargaining even though the agency's mandate is broader.  The National Labor Relations Act protects employees who engage in or refrain from engaging in protected, concerted activity.  The NLRB was simply not that much of a factor in the non union sector with respect to the day to day application of policies and procedures.

Under the Obama NLRB, employers are discovering just how broad the scope of protected, concerted activity can be when given an expansive interpretation.  In a world where private sector union membership is in the single digits, the NLRB's expansion into the non union workplace has resulted in a new source of work for the Board.  Areas which have been subject to scrutiny for unlawfully interfering with protected, concerted activity include employee handbooks; social media use policies; arbitration procedures; and employee use of company email. The NLRB's position on the illegality of arbitration procedures continues even though at least one court of appeals has refused to enforce its position.  Employers have had to scramble to review their policies and procedures in a world where there seems to be a presumption that if policies do not directly interfere with protected, concerted activity, they "chill" such activity in violation of the Act. 

Now employers are having to deal with an EEOC that has identified issues it feels need to be addressed as part of its strategic enforcement plan whether based on reality or agency perception.  The EEOC has the broad statutory mandate to enforce laws prohibiting discrimination based on race, color, sex, religion, national origin, among others.  The strategic enforcement plan seems to focus on Discrimination 2.0.  In challenging barriers to recruitment and hiring, the EEOC has taken the position that it is better situated to address these issues that individuals or private attorneys who have difficulty obtaining the relevant information.

The EEOC's efforts under its strategic plan with respect to hiring have not had the results that were expected. The judicial repudiation of the agency's attack on employer use of credit history and criminal recordings in the Kaplan and Freeman decisions was unequivocal.  The fact that the EEOC had a similar policy with respect to review of applications was not lost on the courts.

Now the EEOC is challenging an employer separation agreement in a suit against CVS which it claims employee access to the agency and to full legal recourse.  As Jon Hyman noted in his blog, the EEOC's position would have a dramatic impact on settlement of claims.  The employer included language in the severance agreement that nothing in the agreement would interfere with an employee's right to participate in a proceeding with any agency enforcing discrimination and expressly allowed employees to cooperate in an agency investigation.  The EEOC considered the language to be insufficient since it was only a "single qualifying sentence" in a five page agreement.  Is the case based on a complaints from employees? Apparently not, as the EEOC press release indicated that the agency believes that numerous employees were subject to the overly broad release.  The EEOC's approach sounds strikingly similar to the rationale given in the Kaplan and Freeman litigation.

Unlike the NLRB which has it own administrative decision making process, the EEOC must seek relief in the federal courts.  Employers can hope that the courts will engage in the same scrutiny as occurred in the credit check litigation.  The objectives of the strategic enforcement plan are not objectionable; what is objectionable is that the EEOC is trying to create cases to establish a priority.  It seemingly has enough to do without mission creep.  It was challenging enough for employers to deal with the NLRB and its view of protected, concerted activity.  The specter of EEOC enforcement based on its interpretation of a practice, policy or procedure with the ensuing cost of litigating with the EEOC is more that employers should have to contemplate. 

Wednesday, June 11, 2014

Public policy terminations in Michigan

Over the years, plaintiffs in Michigan have tried unsuccessfully to get the courts to expand the public policy exception to at will employment.  Recently, the Michigan court of appeals and the 6th Circuit reviewed cases where the plaintiffs again sought to use public policy as the basis to challenge their discharges.  The Michigan court of appeals agreed with the lower court's finding of a valid public policy claim while the 6th agreed with the district court that there was no basis for a claim.

In Landin v. Healthsource of Saginaw, Inc.,  the plaintiff was employed as an LPN and alleged he was terminated for reporting the negligence of a co worker which he believed was a direct factor in a patient's death.  The trial court reviewed the law concerning public policy exceptions as defined by the Michigan Supreme Court in Suchodoloski v. Michigan Consol. Gas Co., 316 N.W. 2d 710(Mich. 1982)(per curiam).  The Michigan Supreme Court identified three exceptions to the at will rule:  exercising a right guaranteed by law; executing a duty required by law; or refraining from violating the law.  Initially, the trial court did not identify which exception applied but later stated that Michigan law recognizes a cause of action for wrongful termination in violation of the statute that prohibits health facilities or agencies from discharging an employee who in good faith reports the malpractice of a health professional.

The court of appeals found that the first exception would apply and that the right to report acts of malpractice is consistent with and implicit in the purposes of the Public Health Code and its statutory regulations.  The court rejected the defendant's argument that the action was in effect preempted by the Michigan Whistleblowers' Protection Act.  The court stated that the plaintiff did not report a violation of the Public Health Code; he accused a co worker of malpractice.  There is no requirement that in order to establish a claim of malpractice, an employee must allege a violation of the health code.  Allowing employers in the health field to terminate employees who report alleged cases of malpractice would be to the detriment of the public and in direct violation of the health code.  The jury's verdict for the plaintiff was affirmed.

In Hoven v. Walgreens,  the plaintiff was a pharmacist who held a license to carry a concealed weapon.  One night robbers entered the store where he worked and pointed a gun at the plaintiff who fired several shots at the robbers.  Walgreens interviewed the plaintiff concerning the incident and terminated him for violating the company's non-escalation policy.  In his complaint, the plaintiff identified multiple  sources of public policy: the 2nd Amendment of the Constitution; the Michigan Constitution; jury instructions involving the use of deadly force; two sections of Michigan's Self-Defense Act; the provision dealing with carrying a gun in violation of state law; and the licensing provisions of the concealed weapons law.  The district court granted Walgreen's motion to dismiss.

The 6th Circuit noted that the case was one of first impression and reviewed the Suchodolski  exceptions and found none were applicable.  None of the sources contained an explicit statement of legislative intention that he could rely on.  He was alleging that he was terminated for exercising his right of self defense and not for the refusal to violate a law in the course of his employment.  The sources of the of the alleged public policy simply did support his argument.  He did not claim he was fired for carrying a validly licensed handgun.

Monday, June 2, 2014

Threatening the boss: the NLRB weighs in

An employee who is engaging in protected, concerted activity and is responding to an employer's unfair labor practice may nevertheless lose the NLRA's protection when the employee engages in indefensible or abusive conduct towards supervisors.  The typical scenario occurs during conversations or meeting when an employee becomes angry or threatens management while discussing his or her concerns.

This was the scenario in Plaza Auto Center where the Board decided in a 2-1 decision that an employee did not lose protection in spite of his language and actions.  The decision was the second time the Board reviewed the case; it was on remand from the 9th Circuit.  It had earlier found the employee could not be fired for his conduct.

The event which triggered the termination was a meeting between the employee and his manager and the owner of the company.  The employee had earlier complained about commissions, the cost of the vehicles, and the failure to be paid a draw.  At the meeting the employee was told if he was unhappy and did not trust the company, he did not have to continue to work.  The meeting took place in a small office.  The employee called the owner a "f----ng mother f---; a f------g crook; an ass----; and added that he was stupid; nobody liked him; everyone talked behind his back.  As he spoke, the employee stood up; pushed his chair aside; and told the owner that if he fired him, he would regret it.  He was subsequently fired.

The 9th Circuit remanded the case to the Board in light of an inconsistency it noted in the Board's analysis.  The court stated that the factors used to determine whether an employee's conduct results in a loss of protection is found in the Board's Atlantic Steel Co. decision.  The four factors are:  the place of the discussion; the subject matter of the discussion; the nature of the employee's outburst; and whether the outburst was provoked in any way by the employer's unfair labor practice charge.

The court stated that implicit in the Board's analysis that the outburst was not sufficient to cause a loss of protection was the requirement that the action be accompanied by physical conduct or at least a threat that is physical in nature.  The court reached this conclusion in light of the fact that the Board found seemingly immaterial the administrative law judge's finding the employee personally denigrated the owner with obscene and insulting language.  If so, the rule is at odds with its own precedent.  The court remanded the case with directions that the Board either reject, with reasoned explanation the judge's credibility and factual findings concerning the meeting or adopt the findings.

On remand, the panel majority decided that in applying an objective standard, the conduct was not menacing, physically aggressive, or belligerent.  The statement that the employer would regret firing him was ambiguous and the act of getting up was not menacing in light of the small office and the fact the chair would have to be moved to get up.  Where as here, the outburst was away from the workforce and no employee overheard it or witnessed it, the employer interest in maintaining discipline is not impaired by extending the Act's protection to the employee.  The dissenting member stated that the holding that a profane, sustained, ad hominem attack on a senior manager in the work force because of its connection to Section 7 activity unnecessarily impedes an employer's ability to deal with such conduct if engaged in by one worker against another.

Under the banner of an "objective" standard, the panel majority broke the employee's conduct into parts and examined each part to determine, in effect, whether it was "bad" or not.  By isolating the employee's actions, the panel majority artificially lessens the impact of the event.  An employee cursing at the owner; suddenly standing up and telling the owner he would regret terminating him would certainly make the reasonable employer be concerned about the employee's intentions.  It appears that the panel majority has added a requirement of some overt physical act to accompany the language.  The panel majority did not factor in the nature of the employer's conduct which might have provoked the employee.  The fact the employer mentioned to the employee that his complaints were " a lot of negative stuff"  hardly seems to be fighting words in the absence of accompanying conduct to provoke the employee.

One would expect a second trip to the 9th Circuit.  In the meantime, employers will have be aware that similar conduct, unaccompanied by physical threats or actions may still be found to be protected under the Board majority's rationale.

Friday, May 23, 2014

OSHA retaliation and the NLRB: Come on over

In memorandum OM-14-60, the NLRB General Counsel's office announced on May 21, 2014, that it had entered into a program with OSHA with respect to OSHA retaliation claims which are untimely under that statute.  Section 11(c) provides that claims of retaliation must be filed within 30 days.  The NLRA has a statute of limitations of 6 months.  OSHA estimates that between 300-600 cases are dismissed each year as untimely.

Under the program, an OSHA representative who determines that complaint is untimely will refer the individual to and provide contact information for the appropriate NLRB field office. The memorandum notes that many employee safety activities may be protected under both statutes.

The key will be whether the activity is "concerted" or is he individual acting alone to benefit only himself.  Under an Obama Board, employers can expect an expansive, encompassing interpretation of "concerted."  The threshold will be set low, and in reality, given the topic of safety and its impact on all employees, the lack of concerted activity will be a rare occasion.  Employers can expect the NLRB to become as involved in workplace safety issues as it has in the other aspects of workplace policies and procedures.