Monday, September 29, 2014

Direct evidence of age discrimination and the 6th Circuit

The 6th Circuit recently reviewed an appeal from the grant of summary judgment in an action where a principal of a high school alleged his contract was not renewed because of his age.  In Scheick v. Tecumseh Public Schools , the court reversed the summary judgment and reviewed the significance of three age related statements.

One statement allegedly made during an evaluation dealt the desire of the district that the plaintiff retire. Two other statements allegedly made by the superintendent addressed the desire to have someone younger in the position.  In granting summary judgment, the district court stated that there was no direct evidence of age discrimination.

The opinion considered the statements, and with respect to the retirement comment, the court stated that to find the statement to be direct evidence, the court would have to made a inference to conclude that the use of the word "retirement" was a proxy for age as opposed to either years of service or a desire that he leave the position voluntarily.  It found the statement was not direct evidence.

The court found that the statements about wanting someone younger were not ambiguous and represent direct references to age.  In the context of circumstances they were made, the court stated that it was clear it was the board that wanted a younger person. 

The EEOC filed an amicus brief and took the position that the presentation of direct evidence of age discrimination necessarily precluded the entry of summary judgment.  The court noted that this issue had not been addressed the Supreme Court in Gross v. FBL Financial Svcs., 557 U.S. 167, 177-78 (2009). (Age must be the but for cause of the employer's decision.)  The court rejected the EEOC's position.  Even when the direct evidence has been offered, the question to be asked is whether the evidence, taken as a whole is sufficient to permit a rational trier of fact to conclude that age was the "but for' cause of the decision.  The court stated that in this case, the evidence taken  in the light most favorable to the plaintiff is sufficient to permit a juror to conclude age was the "but for" cause.

Employers will continue to be faced with allegations of age based comments.  At least in the 6th Circuit, the EEOC's position that summary judgment cannot be granted be granted in light of presentation of direct evidence is not the law.

Wednesday, September 24, 2014

The EEOC and press releases...never mind.

The EEOC uses its press room page on its website to announce the filing of lawsuits and the settlement of cases.  So far in September, the agency has issued 12 press releases announcing settlements and 17 press releases announcing the filing of litigation.  What does the agency do when it falls far short of the statements made in a press release, and the employer prevails in the litigation?  Does the EEOC issue a press release commenting on the case?  Does the EEOC retract the original press release which is now inaccurate?  The answer of course is no.

Consider the agency's litigation against Kaplan Higher Education Corp.  The agency issued a press release dated 12/21/10 announcing that it was suing Kaplan for rejecting job applicants based on their credit history since at least 2008.  The press release went on to state that the practice had an unlawful discriminatory impact because of race and is neither job-related nor justified by business necessity.  This is pretty strong stuff for public consumption.

The litigation did not go as the agency had hoped, and its attempt to overturn summary judgment was met by language from the 6th Circuit seldom seen in appellate opinions.  The court noted that the EEOC used the practice it now challenged and "brought this case on the basis of a homemade methodology, crafted by the witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself."  This is also pretty strong stuff from a court.

Being sued by the EEOC is a no small matter, and the time and cost of defense for employers is significant.  The audience that would have access to the 6th Circuit's decision is far smaller than the audience of the original press release.

  On its website in the section concerning its role, the EEOC states that its role in an investigation is to fairly and accurately assess the allegations in the charge and to then make a finding.  Since the EEOC publicizes the cases where it decides to sue based on its "investigation," shouldn't it also announce when its assessment was not accurate as determined by a court where it had already stated the employer had discriminated? 

Friday, September 12, 2014

The Ravens' Tale: Investigations

The Baltimore Ravens are not your typical employer. The NFL is not your typical industry.  That being said, the Ravens' handling of the Ray Rice matter is a lesson in what not to do.  In hindsight, the organization realized its initial reaction was inappropriate and was able to use the release of a video as the excuse to take a "do over" and terminate Rice's contract.

As one columnist wrote, the video did not disclose anything new.  The victim was dragged out of an elevator.  Apparently Rice was candid about his actions and his striking of his now wife.  The owner of the Ravens has sent an open letter to the fans and the public explaining the team's actions.  In the letter, the owner stated, "We should have pursued our own investigation more vigorously.  We didn't and we were wrong."

The admission highlights the fact that employers need to conduct their own independent investigation even where there is a parallel criminal investigation.  There are a number of reasons why a criminal investigation may not result in the accused being charged, much less tried, as was the case here.  An employer who relies on a criminal investigation has a difficult time taking any action where there is no judicial determination because it has deferred to the criminal judicial system. The owner stated in his letter that the team had decided to defer action until the completion of court proceedings and halted its own fact finding which he acknowledged was a mistake. 

 In any event, an employer has an interest in pursuing its own investigation of whether conduct, especially off duty conduct, violates a policy or is otherwise subject to action.  As important as it is to conduct an independent investigation, it is also important to assess the result of the investigation and to determine what if any action is warranted based upon the facts.  In this case, the employer decided to defer to the actions of the NFL.

An employer who is signatory to a collective bargaining agreement would be unlikely to get a "do over" after taking action.  It would be difficult to convince an arbitrator that the "newly discovered" evidence warranted an increase in the penalty when the relevant facts were already known and disciplinary action taken.  While the Ravens made a mistake in not conducting their own investigation, they compounded it by seizing on the video to take action which was warranted from the outset.

Sunday, August 31, 2014

Loyalty: Extinct under the NLRA?

§8.01 of the Restatement Third of Employment Law states that employees owe a duty of loyalty to their employers in matters related to the employment relationship.  Employers realize that under the Obama Board, the inclusion of that statement would violate the act because it is overly broad and would chill employees in the exercise of § 7 rights.  The Board has recently decided a case where it has reviewed terminations because of employee activity that could be considered disloyal.

In MikLin Enterprises, Inc. , the Board upheld a finding of a violation of the Act in the employer's termination and disciplining of employees who took part in a union sponsored sick days campaign.  The employer was a Jimmy John's franchisee.  The employer did not provided sick days and required employees to find their own replacements if calling in sick.  The union assisted the employees in a campaign utilizing press releases and posters placed in local businesses and at the employer's stores.

The posters contained side by side pictures of sandwiches with the notation that one was made by a healthy employee and one was made by a sick employee.  The poster asked if the viewer could tell the difference and stated that the Jimmy John employees do not get sick days.  The poster stated, "We hope your immune system is ready because you are about to take the sandwich test..."  The union's contact information was on the posters.

In a 2-1 decision, the majority stated that the test in deciding whether employee communications to third parties was protected is set forth in NLRB v. Electrical Workers Local 1229(Jefferson Standard), 346 U.S. 464 (1953).  The Jefferson Standard test focuses on whether the communications indicate that they are related to an ongoing labor dispute and whether they are so disloyal, reckless or maliciously untrue to lose protection.  The majority stated that the Board also considers whether the communication is made at a critical time in the initiation of the company's business and whether they are reasonably calculated to harm the company's reputation and reduce its income.  Concerted activity that is otherwise proper does not lose its protected status simply because it is prejudicial to the employer.

The majority rejected the argument that the standard should be different in the food industry than other businesses.  The majority  noted that although the public may be alarmed by a potential health threat in the food industry, they could not say the public would be any less sensitive to inferences of safety problems in school buses. 

In addressing the issue of disparagement, the majority stated that the press releases and posters did not allege that any sandwiches were actually contaminated or that customers had become ill.  Rather, there was only the suggestion of the realistic potential for illness resulting from the handling of food by workers who are sick.  Indeed, there is no lack of data establishing that the preparation and handling of food by sick workers poses a danger to public health.

The naiveté of the majority is breathtaking.  As they acknowledged, there is a very real public concern for the public health risk in consuming contaminated food.  The posters pointed out that there is no way of telling the difference between contaminated and uncontaminated food.  So what would be the reasonable reaction of the consumer?  Avoid the stores.  Go to a competitor.  That is precisely what the reasonable impact would be.  As the dissent recognized, the posters were clearly designed to attack the reputation of the employer in the eye's of the public and the employer's income.  At the very least, the dissent noted the posters demonstrated a reckless disregard for the inevitable, detrimental  consequences.

It will be interesting to see what the Board's position will be if the employees are laid off due to the loss of business and allege retaliation that they were laid because of their concerted activity which caused the loss.  Urging the public to avoid the employer's sure looks like disloyalty, whatever that means today.

Thursday, August 21, 2014

EEOC and wellness programs: A preview of things to come?

Employers have been waiting for the EEOC to provide direction with respect to its position on wellness programs and the impact of the ADA on them.  Last May, the EEOC held a hearing where it heard from a broad spectrum of interested groups on the topic.  In the press release issued after the meeting, the EEOC noted that the speakers indicated guidance was needed to avoid violations of federal law.  Acting Associate legal counsel Christopher Kuczynski stated that the ADA allows for employers to ask for medical information in connection with voluntary wellness programs and that the meaning of "voluntary" merited further clarification by the Commission.  To date, no official position has come out of the meeting.

A recent case filed on August 20 against a Wisconsin employer shows, at least in one case, what the EEOC is thinking.  The EEOC filed suit on behalf of an employee who refused to participate in the company's wellness program.  The suit seeks to enjoin the continued operation of the program to the extent it requires employees to undergo unlawful medical exams and medical inquiries and to reinstate the terminated employee and make her whole.

According to the Complaint, the company began a wellness program in March of 2009.  The program included a fitness component where employees were required to use a range of motion machine.  The program included a health risk assessment requiring the self disclosure of medical history and to have blood work performed.  The employee questioned whether the program was voluntary and whether the medical information obtained would be kept confidential.  The employee was told not to express opinions to co workers and that the meeting was to address her "attitude" concerning the program.  In April of 2009, she declined to participate and thereafter was required to pay the full amount of insurance coverage--$413.43 per month. The company also assessed a $50 penalty per month for her refusal to participate.  She was fired in May of 2009 because she objected to and refused to participate in the program according to the Complaint.

At this stage of the proceeding, there is nothing that explains what transpired between May of 2009 and the filing of the lawsuit other than the allegation in the Complaint than mediation was attempted in April of 2012 and in August of 2012, the EEOC determined it was unable to resolve the matter by informal means and so advised the company. 

In the press release announcing the filing of the suit, the regional attorney for the Chicago office is quoted as stating that wellness programs have to be voluntary.  Imposing penalties such as shifting 100% of the premium cost to the employee or firing an employee who chooses not to participate makes the program involuntary.  According to the regional attorney, having to choose between responding to medical exams and inquiries which are not job related in a wellness program on the one hand or being fired on the other hand is no choice at all.

So, this is the EEOC's first suit challenging a wellness program.  It appears that the position of the EEOC will be developed through litigation and potential settlements.  Employers should start reviewing their wellness programs to see how it compares to the program subject to litigation.  The shifting of the entire cost of coverage for non participation to the non participating employee negates the voluntary aspect of the least that is the current legal position.

Sunday, August 17, 2014

Still causing problems: Employee handbooks and at will employment

For many employers, employee handbooks are used to detail what is expected of employees without binding employers to follow any particular policy.  It is the "have your cake and eat it" approach which is part of a larger strategy to maintain at will employment.  Problems arise however when employers include policies that may be interpreted as creating a legitimate expectation of just cause employment.

In Walsh v. Kraft Foods Global, Inc.,  the Michigan court of appeals rescued the employer from a jury verdict of over $1.2 million dollars.  When the plaintiff was hired, he signed an employment application which contained the typical at will disclaimer.  He was promoted to district sales manager and hired numerous sales representatives who signed similar disclaimers.  As a district sales manager, he was given a resource guide that contained a progressive system of discipline for sales representatives.

After being terminated, the plaintiff filed a lawsuit asserting he had a just cause contract or at least a legitimated expectation for just cause employment based upon the provisions in the employee handbook dealing with issue resolution and arbitration as well as the district sales manger's guide.  The employer was unsuccessful in its motion for summary disposition before trial and motions for a directed verdict  or Judgment NOV.  The jury based its verdict on the issue resolution policy and the resource guide.

The court of appeals reversed the denial of the motions for a directed verdict and JNOV and vacated the judgment.  The court found that there was not contract for a definite period of time nor for just cause.  With respect to the issue resolution policy in the employee handbook, the court stated that no promise existed because the handbook contained a specific disclaimer stating it did not constitute a contractual obligation of any kind with any employee.  The court also noted that the employer retained the discretion not to apply its policies to any individual employee.  With respect to guide, the court noted it did not apply to sales managers and only guided district managers regarding how to discipline their employees.

The case highlights the danger of including policies that employers do want to be binding such as confidentiality, non compete, and arbitration in a document which the employer has proclaimed not to be a contract and the confusion which the inclusion can create with respect to the issue of at will employment.  While the employer prevailed, it did so only after the expense of a trial and an appeal.
The courts will take employers at their word when they say an employee handbook is not a contract.  Efforts to enforce an arbitration procedure set forth in an employee handbook with the disclaimer of not being a contract may not be enforced.  Employers should make sure that those policies they want to be binding are presented in a format to be binding and not in the employee handbook.

Wednesday, August 13, 2014

Expanding its horizon: the NLRB and safety and wage/hour claims

The Office of the General Counsel has issued a one page memorandum--OM-14-77--advising the Regions that in the course of conducting investigations of unfair labor practice charges, the charging party or witnesses should be apprised of their right to contact OSHA or the Wage Hour Division of the Department of Labor to discuss the filing of a complaint with those agencies.  Such action may occur at any stage of the investigation or case intake process when a witness divulges facts that may suggest the employer has violated OSHA or the FLSA. 

The specific directions in the memo state  If the Region believes that an employer may have violated a substantive or anti-retaliation provision of the OSH act or the FLSA, the Board agent should notify the charging party that he or she(or their representative) has the right to file a complaint with OSHA or WHD, respectively.  If the Region learns that there is a parallel investigation into the violation of their statutes, the Region should coordinate the case processing with the DOL. 

So, it looks like the Board agents will be busy interpreting OSHA and the FLSA in addition to the NLRA. The memo states the Regional personnel are not expected to be experts in the construction of the two statutes and suggests that it may be appropriate for Regional management to partner with OSHA or WHD to develop training vehicles for their employees. 

Ok, the Regional personnel are not expected to be experts but can feel free to make a determination of a probable violation.  There may be some interesting issues that arise if the agencies share information  provided by employers during the investigations.  Is an affidavit given to the NLRB to be shared with the WHD or OSHA?  How long before the NLRB ventures into the realm of Title VII, the ADA, and the ADEA?