ADA Claim Brought by Claustrophobic Attorney Allowed to Proceed

This post was contributed by Adam L. Santucci, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Harrisburg, Pennsylvania.

When the Americans with Disabilities Act definition of "disability" was expanded by the ADA Amendments Act of 2008, we told you to expect an increase in accommodation requests and disability discrimination claims. Many of you have experienced increased claims, and the courts are starting to feel your pain.

For example, a claustrophobic attorney has filed a claim against her former law firm alleging violations of the Americans with Disabilities Act and the Pennsylvania Human Relations Act. The crux of the attorney's claim is that the firm failed to accommodate her claustrophobia and anxiety. The facts of the case are interesting, and the eventual outcome could provide some helpful guidance to employers contemplating requests for accommodation.

The employee was previously assigned to one of the firm's offices in Moosic, Pennsylvania. However, she requested and was granted permission to transfer to the firm's Center City Philadelphia office. She was assigned an office on the 23rd floor.

Apparently, problems began on her first day at the Philadelphia office. According to her complaint, she began suffering from anxiety and claustrophobia immediately following her first elevator ride. [INSERT BIG CITY JOKE HERE]. She claimed that as a result of her anxiety at work, she was unable to eat or sleep.

The attorney allegedly sought accommodations from the firm as a result of her anxiety and claustrophobia, which she claims were denied. Under the ADA, covered employers must provide reasonable accommodations to qualified individuals with disabilities, except when such accommodations would cause an undue hardship. The attorney claimed that the firm was aware of her disability and that it had denied her requests for accommodation, including at least two requests to transfer to other office locations. The attorney claimed that the firm's failure to accommodate her ultimately led to her discharge.

The attorney's claims are interesting because, according to press reports, she had been to the Philadelphia office previously and as noted, specifically requested the transfer! In addition, the firm argued that it did in fact provide the attorney accommodations (including the ability to work from home for a period of time). Nonetheless, the court concluded that the case would survive the firm's motion to dismiss because the attorney had made the minimum showing necessary to proceed.

Certainly this does not mean that the attorney will succeed on her claim, and more interesting facts will probably come to light. While trying to keep the bad jokes to a minimum, this case will be interesting to watch for a number of reasons:

  • What happens when an employee's own request triggers the need for an accommodation?
  • If the firm told her to take the stairs, would that be a form of reasonable accommodation?
  • If she could not work in the office away from windows, how could she work in another office under similar circumstances?
  • Will the courts in the Third Circuit rule that telecommuting is a reasonable accommodation?
  • Is telecommuting a reasonable accommodation for an attorney?
  • Is an attorney who cannot ride an elevator or work in an office away from a window able to perform the essential functions of her job?

As requests for accommodation become more common, and employers are diving deeper into the interactive process, additional guidance from the courts on specific types of accommodation requests will prove helpful. The real question here is how far will employers need to go to be in compliance? Stay tuned.

A Game-Changing Misstep for Walmart?

This post was contributed by Jennifer J. Walsh, an Attorney in McNees Wallace & Nurick LLC's Labor & Employment Practice Group in Scranton, Pennsylvania.

A federal district court recently sanctioned Walmart for "spoliation of evidence" in an employment litigation case. Although Walmart has asked the Court to reconsider its decision or allow it to appeal the decision to the appellate court, there's an important lesson to be learned regardless of the outcome: Mind Your Rs & Ds. In other words, pay attention to your company’s retention and destruction of, well, everything employment-related, particularly if there is reason to suspect that litigation is a possibility. When an employer knows or has reason to know that litigation is possible, it has a duty to preserve all relevant evidence. If the company doesn't do that, and relevant evidence is destroyed, the Court has the discretion to punish, or sanction, the employer.

In Abdulahi v. Wal-Mart Stores East, L.P., Ibrahim Abdulahi's termination for poor performance came on the heels of his filing two discrimination complaints with the Equal Employment Opportunity Commission ("EEOC"). Mr. Abdulahi, assistant manager of Store 1181, was of Ethiopian national origin. He had a storied 15 year work history with his employer, consisting of disciplinary-type "coachings" alongside consistent "solid performer" evaluation ratings.

In the EEOC complaints, Abdulahi claimed that two of his superiors at Store 1181 were "belittling" him and treating him "different than other assistant managers," which treatment allegedly included negative comments and jibes about his ethnicity and accent. Two months after Abdulahi filed the EEOC charges, he was terminated for allegedly failing to lock the Garden Center entrance overnight. Walmart claimed that video surveillance confirmed that the gates were not locked.

So, what's the problem, you ask? Well, that video footage – the only objective evidence in support of Walmart's claim that Abdulahi was terminated for legitimate reasons - was not preserved, and was written over as a matter of the company's routine video storage and re-use practices. From Abdulahi's perspective, that video footage was the only way to establish that the gates were locked, and that Walmart's stated reason for firing him was a pretext for retaliation.

The Court agreed with Abdulahi, and sanctioned Walmart for failing to preserve the video footage. Walmart was on notice that litigation was reasonably foreseeable, since Abdulahi had already filed two charges of discrimination with the EEOC. Walmart's punishment for failing to preserve the video recordings is a stringent one: when this case goes to trial, Abdulahi will be entitled to a potentially game-changing jury instruction. The Court will tell the jury that Walmart's destruction of the video footage creates a presumption that Walmart's stated reason for firing Abdulahi (the unlocked Garden Center gates) was essentially a smoke screen, and that the real reason Walmart fired him was to retaliate against him for filing EEOC charges and complaining of discriminatory treatment. Game-changer, indeed.

If your company has a policy or practice of automatically destroying documents, materials, or information within a certain time frame, remember to halt that process until you preserve all information relating to an issue or person if litigation is reasonably foreseeable. This "preservation" requirement applies to electronically stored information too, so be sure to check your email systems for auto-delete parameters. Promptly taking the necessary steps to preserve information when litigation is reasonably foreseeable is most certainly the recommended route to avoid game-changing sanctions for spoliation of evidence.

President Obama Signs Executive Order Prohibiting Federal Contractors from Discriminating Based on Sexual Orientation and Gender Identity

Frustrated with Congress's failure to pass the Employment Non-Discrimination Act (ENDA) and consistent with his recent Executive Order to raise the minimum wage to $10.10 per hour for employees of federal contractors, President Obama once again signed an Executive Order on Monday amending Executive Order 11246 to include "sexual orientation" and "gender identity" in the list of protected classes federal contractors may not discriminate against.

In light of the President's action, Executive Order 11246, originally issued by President Lyndon Johnson, will now prohibit federal contractors from discriminating "against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin.” The Executive Order is not as broad as the proposed Employment Non-Discrimination Act, a law that would prohibit discrimination in employment based on sexual orientation or gender identity for all employers with 15 or more employees. There is no indication that Congress will act anytime soon to enact nationwide legislation prohibiting private employers from discriminating in hiring and employment on the basis of sexual orientation or gender identity.

Notably, the Executive Order does not contain any type of "religious exemption" meaning that religiously affiliated federal contractors and subcontractors must abide by the Executive Order. Under an Amendment to the Order issued by President George W. Bush, religiously affiliated contractors may favor individuals of a particular religion when making employment decisions. However, President Obama's Order does not allow religious organizations with federal contracts or subcontracts to consider sexual orientation or gender identity when making employment decisions. Federal law already prohibits discrimination against federal employees based on sexual orientation and President Obama's Order extends that protection to discrimination on the basis of gender identity.

What does this mean for many Pennsylvania employers? Frankly, not much. The Executive Order only applies to federal contractors and subcontractors. Unlike 18 other states and the District of Columbia, Pennsylvania does not have a law prohibiting employment discrimination based on sexual orientation or gender identity—however many of the Commonwealth's largest cities including Pittsburgh, Harrisburg, and Philadelphia do. While Pennsylvania employers are free to include sexual orientation and gender identity in the list of protected classes guarded by their discriminatory harassment policies, they are under no legal obligation to do so unless they are a federal contractor or subcontractor or covered by a local ordinance. Furthermore, according to the White House, 91% of Fortune 500 companies already prohibit discrimination based on sexual orientation; and 61% already prohibit discrimination based on gender identity.

The President's Executive Order requires the Department of Labor to prepare regulations to implement the requirements of his Order within 90 days. We will update you again when proposed regulations are released in mid-October.

EEOC Issues New Enforcement Guidance on Pregnancy Discrimination

The Equal Employment Opportunity Commission (EEOC) recently released updated enforcement guidance on pregnancy discrimination to help employers comply with both the Pregnancy Discrimination Act (PDA) and the Americans with Disabilities Act (ADA) when addressing pregnancy-related issues.

The PDA states that an employer may not discriminate against an employee or applicant for employment on the basis of pregnancy, childbirth, or related medical condition and that women impacted by pregnancy, childbirth, or related medical conditions must be treated the same as other persons similar in their ability or inability to work. The new EEOC guidance provides that the PDA not only covers a current pregnancy but also covers discrimination based on a past pregnancy or future pregnancy. The guidance also states that employers must provide light duty work for pregnant employees if the employer offers light duty assignments to employees with similar work restrictions as those who are not pregnant.

As you can see by looking at the guidance, it is quite lengthy. Here are some of the EEOC's key points all employers should know:

1) Despite the Supreme Court's decision in Burwell v. Hobby Lobby, the EEOC states that employers can violate Title VII if they provide health insurance that excludes coverage of prescription contraceptives, whether the contraceptives are prescribed for birth control or for medical purposes. The EEOC states that in order to comply with the law, "an employer's health insurance plan must cover prescription contraceptives on the same basis as prescription drugs, devices, and services that are used to prevent the occurrence of medical conditions other than pregnancy. For example, if an employer's health insurance plan covers preventive care for medical conditions other than pregnancy, such as vaccinations, physical examinations, or prescription drugs to prevent high blood pressure or to lower cholesterol levels, then prescription contraceptives also must be covered." My colleague, Eric Athey, examined this issue in his review of the Hobby Lobby decision. While this issue is yet to be examined by a court, employers should think carefully before excluding coverage for contraception from their insurance plans.

2) Neither an employee nor an applicant can be subject to discrimination because of a past pregnancy, childbirth, or related medical condition. This means that employees must continue to treat new mothers with caution when recently pregnant employees return from maternity leave. An adverse employment decision in close proximity to an employee's return to work could lead to a discrimination claim.

3) If an employer provides light duty work for employees who are not pregnant but who are similar in their ability or inability to work, the employer must also provide less physically demanding light duty work for pregnant employees.

4) While leave related to pregnancy, childbirth or related medical conditions can be limited to only females impacted by those conditions, if an employer extends leave to new mothers beyond the period of recuperation from childbirth (and beyond the amount of leave granted by the FMLA), it cannot lawfully refuse to provide an equivalent amount of leave to new fathers for the same purpose—this, according to the EEOC, means that if employers provide additional leave to mothers to bond with children, they must provide the same benefit to fathers. 

5) Pregnancy alone is not a disability under the ADA but pregnancy-related impairments are disabilities if they substantially limit one or more major life activities or did so in the past. Therefore, if a pregnant woman experiences difficulty walking or pregnancy-related carpel tunnel syndrome, employers may need to consider providing the pregnant employee with a reasonable accommodation unless doing so would create an undue hardship. The EEOC suggests that some reasonable accommodations for pregnant employees may include the redistribution of marginal, non-essential functions, modification of work schedules, and modifying workplace policies to allow pregnant workers to take more frequent breaks.

Note that much of what the EEOC states is just guidance. While the guidance is instructive and employers should look to it when making decisions, court decisions over the next few years interpreting laws governing pregnancy discrimination could deem this guidance moot.

Can Telecommuting Be a Reasonable Accommodation under the ADA?

This post was contributed by Tony D. Dick, an Attorney in McNees Wallace & Nurick's Labor & Employment Practice Group in Columbus, Ohio.

Last month, in EEOC v. Ford Motor Company, the Sixth Circuit Court of Appeals (covering Tennessee, Kentucky, Ohio, and Michigan) held for the first time that employers may be required to permit employees to telecommute as a reasonable accommodation for a disability.  While the decision is not binding on employers in the Third Circuit (covering Pennsylvania, New Jersey, and Delaware), the case is significant for employers operating in the Sixth Circuit’s jurisdiction and beyond as it clearly signals a willingness to expand the traditional concept of what constitutes an employer’s “workplace” as modern technology continues to evolve.

Case Background

The plaintiff in the case, Jane Harris, worked as a “resale buyer” for Ford which essentially required her to act as an intermediary between steel suppliers and third-party companies that produced steel parts for Ford. According to Ford, while a significant amount of Ms. Harris’s work time involved communicating with steel suppliers and parts manufacturers over the phone and inputting information in Ford’s computer system, regular face-to-face interaction with other members of the resale team and steel suppliers was a necessary component of the position as well.

Unfortunately, the plaintiff suffered from Irritable Bowel Syndrome (“IBS”) which routinely caused her to experience fecal incontinence and have accidents at work. As a result of her IBS, the plaintiff eventually requested that she be permitted to work from home up to four days a week as an accommodation for her condition. Ford management subsequently determined that Ms. Harris’s request was not reasonable in light of the fact that her position regularly required in-person contact with her fellow employees and Ford clients and denied her request. However, Ford proposed several alternative accommodations, including moving her desk closer to the restrooms and transferring her to another job within the company that would be more suitable for telecommuting. Ms. Harris rejected both of these proposed alternative accommodations and instead filed a charge of discrimination with the EEOC. The EEOC eventually initiated a lawsuit on Ms. Harris’s behalf raising claims of disability discrimination and retaliation in violation of the Americans with Disabilities Act.

Words of Caution for Employers

In reversing the lower court’s grant of summary judgment in favor of Ford, the Sixth Circuit determined that the EEOC presented sufficient evidence that would allow a jury to conclude that Ms. Harris could perform the essential functions of her job from home. Although the Court recognized that regular attendance at the employer’s physical workplace is undoubtedly an essential function of most jobs, due to advances in technology, “attendance” can no longer be assumed to mean an employee’s actual presence at the physical workplace. As the Court noted, “[t]he world has changed since the foundational [federal appeals court] opinions regarding physical presence in the workplace were issued: teleconferencing technologies that most people could not have conceived of in the 1990s are now commonplace. Therefore, we are not persuaded that positions that require a great deal of teamwork are inherently unsuitable to telecommuting arrangements.” The Court went on to hold:

"When we first developed the principle that attendance is an essential requirement of most jobs, technology was such that the workplace and an employer's brick-and-mortar location were synonymous. However, as technology has advanced in the intervening decades, and an ever-greater number of employers and employees utilize remote work arrangements, attendance at the workplace can no longer be assumed to mean attendance at the employer's physical location. Instead, the law must respond to the advance of technology in the employment context, as it has in other areas of modern life, and recognize that the 'workplace' is anywhere that an employee can perform her job duties."


As the Sixth Circuit’s opinion makes clear, it is no longer the case that jobs suitable for telecommuting are extraordinary or unusual. As a result, employers should be extra cautious when an employee requests telecommuting as a reasonable accommodation and not dismiss the request out of hand. Rather, an employer should use the interactive process to discuss and explore with the employee the aspects of the job that the employer believes could not be performed satisfactorily or would not be workable in a telecommuting context. And, carefully record the employee’s agreement or disagreement with these issues. If the request is rejected, the employer should clearly spell out in writing which specific duties of the job make telecommuting impractical. In addition, employers may want to re-examine their job descriptions to ensure they clearly and accurately articulate how job duties are best carried out.

Federal Judge Dismisses EEOC Complaint Claiming "No Dreadlocks" Policy Discriminates Based on Race

Previously we told you that the U.S. Equal Employment Opportunity Commission (EEOC) was suing an Alabama insurance company for allegedly discriminating against African American job applicants because the company's grooming policy prohibited dreadlocks. Last week, an Alabama federal judge dismissed the EEOC's intentional race discrimination claim that was brought against Catastrophe Management Solutions (CMS).

As you may recall, CMS made a conditional offer of employment to an African-American applicant provided that the applicant cut off her dreadlocks. CMS had a policy that stated "All personnel are expected to be dressed and groomed in a manner that projects a professional and businesslike image while adhering to company and industry standards and/or guidelines . . . hairstyles should reflect a business/professional image. No excessive hairstyles or unusual colors are acceptable…." When the applicant refused to cut her dreadlocks, CMS withdrew the offer. The EEOC alleged that CMS's policy violated Title VII of the Civil Rights Act of 1964 because the policy was racially discriminatory and that CMS refused to hire the applicant because she was black.

Judge Charles R. Butler, Jr. concluded that the EEOC failed to allege sufficient facts to support a plausible claim of intentional discrimination, finding that one's grooming habits are not immutable characteristics (such as sex or race) and are thus not protected by Title VII. The EEOC argued that the definition of race should encompass both physical and cultural characteristics. Judge Butler rejected this argument and cited numerous cases finding that hairstyles like dreadlocks and cornrows are not immutable characteristics unique to a particular race or group and are thus not protected by Title VII. Per Judge Butler, "A hairstyle, even one more closely associated with a particular ethnic group, is a mutable characteristic." However, Judge Butler made it clear that if the EEOC alleged that the policy was applied in a discriminatory manner (if for example the policy was only applied to African American applicants and employees), the EEOC could move forward with its claim. Employers with grooming policies should remember it is important that they enforce them equally and consistently across the board.

Recall that the applicant here never claimed she was wearing her dreadlocks because it was consistent with her religious beliefs. Had she made the claim, CMS likely would have had to allow the applicant to keep her dreadlocks because employers must reasonably accommodate an employee's religious beliefs and practices unless the accommodation would be an undue hardship for the employer's business operations.

Employee hairstyles continue to be a hot topic. For example, the United States Army recently released new regulations banning a number of hairstyles, prompting claims of race discrimination and the ire of many enlisted members. Stay tuned as the Alabama case is not the first "dreadlocks" case we have seen and it is likely not the last.

Pregnancy Accommodation Laws Abound

You may recall that we reported that United States Senator Bob Casey (D-PA) introduced the Pregnant Workers Fairness Act, which would adopt the reasonable accommodation framework of the Americans with Disabilities Act for pregnant workers and supplement the Pregnancy Discrimination Act.  Although the Pregnant Workers Fairness Act appears to have stalled in Washington (for now), other pregnancy accommodation laws are popping up.  Both New Jersey and the City of Philadelphia have recently passed such legislation.

On January 21, 2014, the New Jersey Pregnant Worker Fairness Act became law. The Act applies to essentially all employers in New Jersey. The Act provides additional protections for women working in New Jersey who may be affected by pregnancy, childbirth or related medical conditions. The Act adds pregnancy to the traits protected by the New Jersey Law Against Discrimination.

In addition, the Act requires employers to make reasonable accommodations for pregnant employees when it knows or should know that such accommodations are necessary, unless the proposed accommodation would cause an “undue hardship.’’  Potential accommodations may include restroom breaks, permission to carry a water bottle, periodic rest, assistance with manual labor, job restructuring, modified work schedules, or a temporary transfer to work that is less physically demanding or hazardous.

On January 31, 2014 the City of Philadelphia amended its Fair Practices Ordinance: Protections Against Unlawful Discrimination, to require that employers provide reasonable workplace accommodations for employees who have "needs related to pregnancy, childbirth or a related medical condition."   As with the New Jersey law, the amended Ordinance prohibits employment discrimination on the basis of pregnancy, childbirth and related medical conditions.  

The amended Ordinance also provides that an employer must provide reasonable accommodations that may be necessary due to to pregnancy, childbirth or a related medical condition.   The Ordinance states that a reasonable accommodation is an accommodation that will allow the employee to perform the essential functions of her job, unless the accommodation would pose an undue hardship.  Such accommodations could include restroom breaks, periodic rest for those who stand for long periods of time, assistance with manual labor, a leave of absence, reassignment and job restructuring.  

Please note that the amended Ordinance also requires that employers in Philadelphia post a notice in conspicuous places, notifying employees of these rights.

Please make sure that you are aware of any state or local laws regarding the accommodation of issues related to pregnancy and childbirth in the areas in which you operate.  Also be on the look out for any additional workplace posting requirements that may be required.   

NFL Hires Outside Investigator . . . Should You?

This post was contributed by Adam Santucci, Esq., an Associate in McNees Wallace & Nurick LLC's Labor & Employment Law Group.

The National Football League ("NFL") has hired an outside investigator to handle the complaint made by Jonathan Martin, an offensive lineman for the Miami Dolphins. The national news media cannot seem to get enough of this story, and the coverage has been relentless. The media, however, seems to have focused on the bullying angle. But for some of us, based on the reports, it looks like there was more than just bullying going on. If the allegations are true there may be violations of the league's workplace harassment policy as well. Given the dynamics here, and the high profile nature of the situation, we think it makes a lot of sense for the NFL (and the union) to bring in an investigator from the outside.

An employer's investigation of workplace harassment is often critical to its subsequent defense of any related lawsuits. A good investigation that results in appropriate corrective action typically means a good defense to a claim of workplace harassment. The law encourages employers to be proactive and promptly investigate incidents that occur and rewards employers who take those steps.

But who should conduct the investigation?

We often talk about this issue with our clients: who is the best person to investigate a complaint of workplace harassment? The answer is, it depends. In many instances, a fresh perspective is helpful. In others, using an investigator familiar with the players may be better.

  • Will this investigator be a good witness if necessary? As noted above, the investigation itself may be an issue in any subsequent litigation and the investigator may become a witness, so pick a good one!
  • Will the investigator be able to represent the employer if there is a lawsuit? In some instances, counsel who serves as the investigator may not be able to defend the case.
  • Is this a particularly difficult situation? Outside investigators often have experience in handling difficult cases, including cases that involve employees at the upper levels of the organization.
  • Is there an allegation that involves the Human Resources Department?
  • Evidence created by the investigation may be discoverable in subsequent litigation.
  • The use of an outside investigator may strengthen the appearance of impartiality.

Also keep in mind that the investigator must be impartial (and viewed as impartial) to be effective, and must be familiar with your policies. The investigator must also be a good communicator, because educating those involved during the process is important. You may even want to consider using two investigators in appropriate cases.

As the NFL situation indicates, picking an investigator is important, and there are certainly times when it is in an employer's best interest to use an investigator from outside of the organization.

EEOC Sues Insurance Company over Hair Policy

This post was contributed by Lee Tankle, a new associate in McNees Wallace & Nurick LLC's Labor and Employment Law Group

An Alabama insurance company is being sued by the U.S. Equal Employment Opportunity Commission (EEOC) for allegedly discriminating against black job applicants. The EEOC alleges that the insurance company's grooming policy prohibiting dreadlocks is discriminatory toward African Americans. 

In May 2010, Chastity Jones applied for a position and participated in a group interview with a Mobile, Alabama insurance claims company. Ms. Jones, an African-American, wore her blond hair in neat curls called "curllocks." Ms. Jones was offered a position as a customer service representative but later that day when she met with Human Resources to discuss her training schedule, the HR representative informed Ms. Jones that the company banned dreadlocks and she would need to cut them off in order to obtain employment. When Ms. Jones refused to cut her hair, her job offer was rescinded.

The EEOC argues that the insurance company's policies discriminate against African Americans based on physical and cultural characteristics in violation of Title VII of the Civil Rights Act of 1964. According to an EEOC attorney, the "litigation is not about policies that require employees to maintain their hair in a professional, neat, clean or conservative manner" but "focuses on the racial bias that may occur when specific hair constructs and styles are singled out for different treatment because they do not conform to normative standards for other races."

According to the District Director for the EEOC's Birmingham Office, "[h]air grooming decisions and policies (and their implementation) have to take into consideration differing racial traits, and cannot penalize blacks for grooming their hair in a manner that does not meet normative standards for other races." Some courts have suggested that employer policies banning "afro" hairstyles could be a race-based distinction in violation of Title VII.

This is not the first time the EEOC has brought suit over dreadlocks. In 2011, a Virginia-based transportation company paid $30,000 to settle an EEOC religious discrimination suit. The EEOC claimed the company violated Title VII when it refused to hire a Rastafarian because he wore his hair in dreadlocks. According to the EEOC, the applicant held the sincere religious belief that as a Rastafarian he could not and should not cut his hair in honor of Jah, the name given to the highest power in the Rastafarian faith.

Employers should remember that unless it would be an undue hardship for the employer's operation of a business, an employer must reasonably accommodate an employee's religious practices and beliefs. This could include allowing the wearing of certain head coverings like the Jewish yarmulke or Muslim headscarf or certain hairstyles or facial hair like Rastafarian dreadlocks or Sikh uncut hair and beard.

It is unclear what, if any, impact the federal government shut down will have on this matter. Please contact any of the McNees Labor & Employment attorneys if you have concerns that your grooming policies may be the target of a future discrimination allegations.

Supreme Court Issues Two Title VII Decisions Favorable for Employers

This post was contributed by Adam R. Long, a Member in McNees Wallace & Nurick LLC's Labor and Employment Law Practice Group.

At our recent Labor and Employment Law Seminar, we highlighted a number of outstanding legal cases that have the potential to have a significant impact on employer liability. On Monday, the U.S. Supreme Court issued decisions in two closely watched Title VII employment discrimination/retaliation cases. In each case, the Court clarified previously unsettled legal questions in favor of employers.

In Vance v. Ball State University, a 5-4 majority of the Court held that an employee qualifies as a "supervisor" for purposes of Title VII harassment liability only if the employee "is empowered by the employer to take tangible employment actions against the victim." In its analysis, the Court expressly rejected the EEOC's more expansive definition of "supervisor," which included any employee who had "the ability to exercise significant direction over another's daily work," even if the employee lacked the authority to take tangible employment actions.  

In University of Texas Southwestern Medical Center v. Nassar, the same 5-4 majority confirmed that to establish a Title VII retaliation claim, an employee must prove that the alleged protected activity was a "but for" cause of the employer's alleged adverse action. With this decision, the Court rejected the lower standard of proof used in Title VII discrimination claims, which requires proof only that the retaliation was a "motivating factor" in the employer's action. The "but for" causation standard is the same standard endorsed by the Court in 2009 for discrimination claims arising under the Age Discrimination in Employment Act.

Both Vance and Nassar will assist employers when defending against Title VII discrimination and retaliation claims. The Court in Vance limited the scope of employees who will qualify as "supervisors" for purposes of Title VII's harassment liability. If the alleged harasser does not qualify as a "supervisor," the plaintiff will need to prove that the employer was negligent in allowing the harassment to occur, a showing not necessary for supervisor-based harassment. With its Nassar decision, the Court made it more difficult for plaintiffs to prove Title VII retaliation claims by necessitating proof of but-for causation. In light of the ever increasing number of Title VII retaliation claims filed with the EEOC and in court, the Nassar decision could have a significant impact for litigants moving forward.   

DOL Issues Guidance on Definition of "Son or Daughter" under FMLA

This post was contributed by Tony D. Dick, Esq., an Associate in McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

The Department of Labor (DOL) recently issued additional guidance to employers regarding the definition of “son or daughter” under the Family Medical Leave Act (FMLA) as it relates to an adult child. Under the FMLA, an eligible employee may take leave to care for a son or daughter who is 18 years old or older if the following four conditions are met: (1) the adult child has a disability as defined by the Americans with Disabilities Act (ADA); (2) he or she is incapable of self-care as a result of the disability; (3) he or she has a serious health condition; and (4) the adult child is in need of care due to the serious health condition.

A lingering question has been whether the onset of the child’s disability had to occur prior to the child turning 18 in order for the adult child’s parent to be eligible for FMLA leave. DOL has now clarified that it is irrelevant whether the onset of the disabling condition occurred before or after the child turned 18. DOL’s interpretation falls in line with the majority of courts that have decided the issue.

In addition, in light of the broader definition of “disability” under the Americans with Disabilities Act Amendments Act of 2008 (ADAAA), DOL has offered further guidance on the impact of those changes on the FMLA. Among other things, the ADAAA broadened the definition of “major life activities” and expanded the definition of “disability” to include episodic conditions that periodically flair up and substantially limit a major life activity. Since the FMLA’s inception, DOL has utilized the definition of disability under the ADA in defining a “son or daughter” who has reached the age of 18. DOL has now explicitly taken the position that the expanded definition of disability under the ADAAA should apply to the definition of “son or daughter” under the FMLA.  It remains to be seen whether courts will adopt DOL’s position.

Finally, DOL has issued guidance concerning FMLA leave used to care for an adult child who has become disabled during military service. Under the FMLA’s military caregiver provision, a parent of a covered service member who sustained a serious injury or illness is entitled to up to 26 weeks of FMLA leave in a single 12-month period. Acknowledging that the servicemember’s injury or illness could have an impact that lasts beyond the single 12-month period covered by the military caregiver leave entitlement, DOL clarified that the servicemember’s parent may take FMLA leave to care for a son or daughter in subsequent years because of the adult child’s serious health condition. 

DOL’s recent guidance is just the latest example of it construing the FMLA generously in favor of employees. Employers should train managers and HR personnel who handle leave requests on these new changes to ensure compliance with the law.

EEOC Issues Guidance on Potential Application of Title VII and ADA to Employees Who Have Experienced Domestic Violence, Sexual Assault, or Stalking

This post was contributed by Tony D. Dick, an Associate in McNees Wallace and Nurick LLC's Labor and Employment Group in Columbus, Ohio.

The Equal Employment Opportunity Commission (EEOC) recently issued a “Questions and Answers” sheet emphasizing that although Title VII and the Americans with Disabilities Act (ADA) do not expressly prohibit employers from discriminating against the victims of domestic violence, sexual assault, or stalking, these laws may create liability for employers in certain circumstances. For instance, employers may be liable under Title VII for treating such victims less favorably based on sex or sex stereotypes or for permitting sexual harassment against these individuals. Likewise, denying a reasonable accommodation to an employee with a violence-related disability or permitting different treatment of an employee with a disability stemming from an incident of domestic violence or sexual assault may violate the ADA. The document provides a number of illustrative examples of these potential pitfalls facing employers:



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U.S. Senate Introduces Pregnant Workers Anti-Discrimination Bill

Earlier this month Senator Bob Casey (D-PA) introduced the Pregnant Workers Fairness Act to the Senate floor. The proposed bill, which would supplement the Pregnancy Discrimination Act enacted by Congress in 1978, borrows the reasonable accommodation framework of the Americans with Disabilities Act. Specifically, the bill would require employers to provide reasonable accommodations to employees limited by pregnancy, childbirth, or related medical conditions. Such accommodations could include providing stools for pregnant employees whose jobs require significant periods of standing, permitting pregnant workers to carry water bottles, modifying lifting requirements, or reassigning non-essential tasks. The bill would also prohibit employers from firing employees because of pregnancy or requiring them to take pregnancy leave.

The Pregnancy Discrimination Act currently prohibits employers from discriminating against employees for being pregnant. Most employers--including those in Pennsylvania--are not, however, required to make an accommodation on account of an employee’s pregnancy. (A small handful of states, most notably California, have passed their own pregnancy-related disability laws.)

A companion bill was previously introduced in the House of Representatives in May but has made little advancement. We will keep you apprised of significant legislative developments through our blog.

EEOC Guidance Highlights the Risks of Using Criminal History Checks in Hiring

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Lancaster, Pennsylvania.

According to the Equal Employment Opportunity Commission ("EEOC" or "Commission"), if current incarceration rates continue, 1 in 3 African-American men and 1 in 6 Hispanic men will be incarcerated during their lifetimes. The rate for white men is only 1 in 17. Given this disparity in incarceration rates, the EEOC has long been concerned that employer policies restricting hiring based on prior criminal convictions may unfairly deprive minorities of employment opportunities. In Enforcement Guidance issued on April 25, 2012, the EEOC outlined its approach for determining whether an employer's criminal history screening policies violate Title VII on the grounds of either "disparate treatment" or "disparate impact."

Disparate Treatment. Obviously, employers cannot hold applicants to tougher screening standards on the basis of their race or national origin. An employer that considers an applicant's prior criminal history during the hiring process must do so on a consistent, non-discriminatory basis. A disappointed minority applicant with a criminal history may be able to prove he was subject to unlawful discrimination by showing inconsistencies in the hiring process, derogatory statements regarding a particular class or evidence suggesting that certain protected classes are held to a stricter screening standard than other groups.

Disparate Impact. Under Title VII, employers may also be liable for hiring policies that are consistently enforced if the policy disproportionately screens out a particular protected class and the employer cannot show that the policy is job-related for the position and consistent with business necessity. The EEOC's recent Guidance notes that an employer may be liable for the "disparate impact" of a hiring policy even if the employer has a racially balanced workforce. In order to establish that a hiring policy that relies on criminal history information is job-related for the position and consistent with business necessity, the employer will need to show that it operates "to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position." The EEOC notes two ways an employer can establish this: 1) by validating the criminal conduct screen for the position under the Uniform Guidelines on Employee Selection Procedures; or 2) developing a "targeted screen" which considers a number of factors, including the nature of the crime, the time elapsed and the nature of the job and then conducting an individualized assessment for the people excluded. In other words, if a screening policy has a disparate impact on certain protected classes, an employer must be able to show that the policy is nevertheless reasonable and necessary.

Other Laws. Title VII is only the tip of the iceberg when it comes to laws governing the use of criminal background checks in hiring.

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Department of Labor Issues New Fact Sheets on Retaliation

This post was contributed by Tony D. Dick Esq., an Associate in McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

More and more employers are recognizing what employment attorneys have long known. The most prevalent type of employment discrimination claim is not one based on race, sex, religion, disability or age. Rather, it is one alleging unlawful retaliation. In fact, in 2010, for the first time ever, retaliation claims surpassed race discrimination claims to become the most common type of claim filed with the Equal Employment Opportunity Commission (EEOC). This trend is not expected to end anytime soon.

Just before the holidays, the United States Department of Labor released three new fact sheets offering further guidance to employers on the topic of retaliation under the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). Each of these statutes contain specific provisions prohibiting employers from taking adverse employment actions against employees for asserting rights covered under these laws.

Fact Sheet #77A: Prohibiting Retaliation Under the FLSA, provides general information concerning the FLSA’s prohibition of retaliating against any employee who has filed a complaint or cooperated in an investigation where an FLSA violation is alleged. The fact sheet also incorporates last year’s U.S. Supreme Court decision in Kasten v. Saint-Gobain. There, the Court held that an employee’s verbal complaint about alleged wage and hour violations can be sufficient to trigger the anti-retaliation protections under the FLSA.

Fact Sheet #77B: Protection for Individuals under the FMLA, reiterates that employers are prohibited from retaliating against employees who exercise their right to take FMLA leave or any other FMLA right, complain about or oppose any unlawful practices under the FMLA, or participate in proceeding concerning FMLA rights. In addition, the fact sheet provides specific examples of prohibited retaliatory conduct under the FMLA. Examples include: refusing to authorize FMLA leave for an eligible employee, discouraging an employee from using FMLA leave, manipulating an employee’s work hours to avoid responsibilities under the FMLA, using an employee’s request for or use of FMLA leave as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions, and counting FMLA leave under “no fault” attendance policies.

Fact Sheet #77C: Prohibiting Retaliation Under the MSPA articulates that certain agricultural employers may not “intimidate, threaten, restrain, coerce, blacklist, discharge, or in any manner discriminate against any migrant or seasonal agricultural worker” who files a complaint under the MSPA, participates in any proceeding under the Act, or exercises any MSPA right. The fact sheets also identifies what employers are subject to the statute and outlines the MSPA’s enforcement mechanisms.

As you can see, retaliation is hot topic,and retaliation claims are trendy.  Now more than ever, employers, and more importantly supervisors and managers, must be aware of the risks of retaliation claims.

EEOC Targets Employers' Leave of Absence and Attendance Policies

Does your company’s leave policy call for an employee’s termination following the expiration of his or her leave entitlement?  Does your company charge “attendance points” against employees regardless of the reason for the absence?  Does your company require employees to be released to work without restrictions before they are permitted to return from a medical leave?  If so, beware: “inflexible” leave of absence and attendance policies are being targeted by the Equal Employment Opportunity Commission (“EEOC”) and plaintiffs under the Americans with Disabilities Act (“ADA”). 

Recently, McNees Wallace & Nurick LLC's Labor and Employment Group developed and distributed an Employer Alert warning employers about the risks in these areas and providing valuable guidance.  To read the Employer Alert click here

Follow Up: A Reminder Regarding the Importance of Supervisor Training

This post was contributed by Kelly Horein, a Summer Associate with McNees Wallace and Nurick LLC. Ms. Horein will begin her third year of law school at Boston University School of Law in the fall, and she expects to earn her J.D. in May 2012.

Two weeks ago we discussed the importance of providing discrimination and harassment training to supervisors and managers. To follow up on that post, we thought it would be a good idea to provide a brief overview of the key aspects of an effective supervisor training program.

As we previously mentioned, the Equal Employment Opportunity Commission (EEOC) has clearly stated that it is important to train all supervisors and managers, and not just those charged with receiving and investigating complaints. In addition, we suggest that employers provide training to all new supervisors, provide annual training sessions, and provide additional training sessions when changes are made to harassment policies. It is also important to document when training sessions are conducted, who attends those sessions, and the content of each session.

An effective training session should cover key topics, designed to help supervisors prevent harassment and remedy harassment that does occur, and these key points include:

  • educating supervisors regarding what conduct is inappropriate;
  • ensuring supervisors understand that they are required to report complaints of harassment or incidents they observe;
  • ensuring supervisors understand that employees are permitted to make both informal and formal complaints of harassment, and that all such complaints must be investigated;
  • describing the multiple channels through which employees can make complaints;
  • detailing the complaint investigation and resolution process; and
  • ensuring supervisors understand that retaliation is strictly prohibited.

A quality training session will be designed to educate supervisors and managers on appropriate workplace behavior and to help them avoid engaging in discriminatory conduct. Supervisors must be trained to appropriately respond to complaints and to report incidents of harassment. Supervisors should also be aware of the consequences for failing to do so. As you can see, merely reiterating the content of a policy during a training session does not constitute effective supervisory training. Some states, such as California, even have specific requirements for supervisor training, including the minimum duration and frequency of such training.

Employers can also benefit from regularly training supervisors in a broader range of human resources issues, including hiring and interviewing techniques, discipline and performance management, employee privacy, Family and Medical Leave Act requirements, wage and hour issues, and maintaining a safe workplace.

McNees Wallace & Nurick's Labor and Employment Group can help employers develop effective training programs.  McNees can also provide a list of suggested supervisory training topics, suggested re-training time lines and course materials. You can contact a McNees attorney by clicking here.

A Reminder Regarding the Importance of Supervisor Training

This post was developed with the assistance of Kelly Horein, a Summer Associate with McNees Wallace and Nurick LLC. Ms. Horein will begin her third year of law school at Boston University School of Law in the fall, and she expects to earn her J.D. in May 2012.

According to the Equal Employment Opportunity Commission (EEOC), employees filed a record number of workplace discrimination charges last year. As a result, it is now more important than ever for employers to take steps to prevent unlawful discrimination and harassment in the workplace.

Most savvy human resource professionals know that they must maintain antidiscrimination policies with adequate reporting procedures to help avoid liability. However, it is just as important to train supervisors and managers regarding the implementation of those policies. Unfortunately, when times get tough, employers are often forced to cut costs and training is usually one of the first items on the chopping block. If your organization scaled back training during the economic downturn, it may again be time to rally support for supervisor training.

Effective training for supervisors and managers actually helps reduce costs in the long run, because it helps supervisors prevent claims before they are filed. The United States Supreme Court and the EEOC have emphasized the importance of supervisor training in the context of discrimination and harassment claims. Indeed, training is recognized under the law as an essential part of an "affirmative defense" to claims that supervisors engaged in harassment. If an employee alleges that harassment by a supervisor created a hostile work environment, then the employer may raise a two-part defense. An employer is not subject to strict liability for a supervisor's conduct where the employer can show that (1) the employer took reasonable measures to prevent harassment and promptly correct it when it occurred and (2) the employee failed to take advantage of established mechanisms for filing complaints.

Human resources professionals can be instrumental in helping their employers take "reasonable measures to prevent harassment." However, the Third Circuit Court of Appeals, which covers Pennsylvania, has stated that in order to show that an employer took such reasonable measures, the employer must do more than simply adopt an antidiscrimination policy.

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Philadelphia's Recently-Amended Fair Employment Practices Ordinance Is a Good Reminder to Employers: Be Aware of Local Ordinances

Does your Company make a practice of checking for local ordinances that prohibit discrimination in employment? It should! Employers may be most familiar with the primary state and federal anti-discrimination laws, such as the Title VII of the Civil Rights Act of 1964, the new Genetic Information and Nondiscrimination Act and the Pennsylvania Human Relations Act. The state and federal statutes prohibit discrimination and harassment on the basis of race, color, religion/creed, national origin, sex, age, disability and genetic information. Employers must be careful, however, to ensure that they are aware of local ordinances that provide additional prohibitions on discrimination – including ordinances like Philadelphia’s Fair Practices Ordinance, which prohibits discrimination based upon additional protected characteristics.

For example, the cities of Harrisburg, York and Philadelphia all prohibit discrimination on the basis of multiple characteristics in addition to those listed above, including sexual orientation and/or gender identity. Recently, Philadelphia enacted an amendment to its Fair Practices Ordinance that expanded the characteristics on the basis of which discrimination is prohibited. The ordinance now prohibits discrimination on the basis of familial status, domestic or sexual violence victim status and genetic information, in addition to marital status, sexual orientation and the other protected classes identified above. The amendment to Philadelphia’s Fair Practices Ordinance became effective June 21, 2011. 

Even if your Company does not operate within the City of Philadelphia, remember to check for local ordinances that might impact your policies! Employers should carefully review their equal employment opportunity, discrimination and harassment policies, as well as their manager/supervisor and employee training materials, to ensure that they cover all protected characteristics at the federal, state and local levels.  

The Use of Social Media in Hiring Decisions: Tempting Fruit from a Poisonous Tree

This post was contributed by Christopher Gibson, a Summer Associate with McNees Wallace and Nurick LLC.  Mr. Gibson will begin his third year of law school at Wake Forest in the fall, and he expects to earn his J.D. in May 2012

With unemployment in the United States hovering around 9.2%, human resources offices across the country are being bombarded with job applications like never before. The overworked employees of these often understaffed offices are charged with wading through a figurative sea of applications, all while dealing with the increasingly zany behavior of some applicants. According to CBS News, "[o]ne man sent a shoe to his prospective employer with a note that read, 'I want to get my foot in the door.' " Another "handed out personalized coffee cups, so no one would forget his name." In this high stress environment, some human resources professionals might see using social media as a quick and easy way of separating the wheat from the chaff – narrowing the field of possible applicants significantly in a short amount of time. But before signing into Facebook or pulling up your favorite search engine, keep in mind the immortal words of Clint Eastwood in Dirty Harry: "You feelin' lucky?"

Every human resources staff member knows that, especially when interviewing a potential new employee, some topics are strictly off limits. Asking one of these "off limits" questions can put your company at serious risk of being sued for discrimination. The trouble is, by resorting to the use of social media, this kind of "off limits" information can be collected from a potential employee even before his or her interview.

Imagine for a moment that you are the director of human resources for a mid-sized paper supply company. You receive around fifty resumes in response to a job posting to fill the position of "Assistant to the Regional Manager." One applicant – Alex Jackson – catches your eye as one of the top applicants for the job. According to Alex's resume, Alex has been working in the paper industry for around six years and has a bachelor's degree in management from a New York Ivy League school. Alex has been published in several trade magazines, is active in the community and has excellent references.

You decide to pull Alex's Facebook profile just to get a better feel for the applicant; what's the worst that could happen, right?

As you expected, what you find is fairly innocuous – Alex is a 42 year old Caucasian female who is very active in the Catholic church. She has recently married and has a one year old son. Two of her recent wall posts read, "Going out to happy hour for the fourth night in a row! Can't stop, won't stop!" and "Please pray for my mother as she recovers from her most recent bout with cancer." Eventually, your organization decides to go in another direction and Alex is not interviewed or hired for the job.

So again, what's the worst that could happen?

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UPDATE: Supreme Court Decertifies Class In Dukes v. Wal-Mart

This post was contributed by Brett E. Younkin, Esq., an Associate and a member of McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio. On May 17, 2011, Brett reported that the United States Supreme Court was considering an important decision regarding class action suits.


You may have heard the cheers emanating from Bentonville, Arkansas (the location of Wal-Mart's corporate headquarters), and the corporate headquarters of other large employers following the United States Supreme Court’s announcement of its decision in Wal-Mart, Inc. v. Dukes, __U.S. ___ (2011) (PDF). On June 20, 2011, the Court decertified the class-action status of the 1.6 million current and former female employees in their decade-old suit against the world’s largest private employer. Betty Dukes and her two co-plaintiffs had alleged a nationwide pattern of discriminatory pay and promotion practices by the company, despite its published policy of non-discrimination. However, the Court unanimously disagreed and overruled the Ninth Circuit Court of Appeals, which had allowed the case to proceed as a class action. The decision created what may be viewed as a higher burden of proof for establishing class action status.

While the Court was unanimous in deciding that this particular class should be decertified, only five of the justices joined in the entire ruling. In the majority opinion authored by Justice Scalia, the Court found that commonality was the key to certifying a class under Federal Rule of Civil Procedure 23 – “claims must depend on a common contention . . . which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” To attempt to resolve “literally millions of employment decisions at once” would not result in a unified answer for why a particular employee was disfavored. “Without some glue holding together the alleged reason for those [discriminatory] decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question.” The Court noted that the dissent from the lower court was correct in that the plaintiffs had “little in common but their sex and this lawsuit.”

Additionally, the opinion strongly rejected the plaintiffs' expert witness testimony because, among other things, a litany of the expert’s peers had denounced his approach, analysis, and conclusions. The Court also concluded that while anecdotal evidence may be relevant, a hundred stories out of millions of employment decisions throughout 3,400 stores did not prove a pattern of discrimination.

What does this decision mean for employers? It certainly will have an impact in the litigation context if an employer finds itself in the unfortunate position of facing a class action lawsuit. In addition, the Court's decision affirmed the use of anecdotes as evidence of discrimination and, therefore, inappropriate comments made by corporate leaders may be used as evidence of a corporate-wide discriminatory practice. As a result, employers are well advised to include corporate executives in refresher training regarding discrimination and harassment.

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Dukes v. Wal-Mart: Supreme Court Justices Debate Merits of Class Certification Discriminatory Pay & Promotion Claims

This post was contributed by Brett E. Younkin, Esq., an Associate and a member of McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

The receipt of a federal lawsuit is generally viewed as a bad day for any employer; seeing that a plaintiff is seeking class action status on behalf of hundreds or thousands of current and past employees is enough to turn a bad day into an unenviable nightmare. Such was the situation when Wal-Mart, one of the country’s largest employers, was notified that a female manager, Betty Dukes, was suing the company on behalf of all female managers alleging a pattern and practice of discriminatory pay and promotion practices. Ms. Dukes alleged that despite the company’s non-discrimination policy, the Arkansas-based employer paid their female managers at lower rates than their male counterparts on a nationwide scale and women were promoted less often than men.

Recently, the issue of certifying the class of female employees became the focal point of what many view to have been one of the liveliest oral arguments before the United States Supreme Court in years. During each side’s hour-long presentation, it seems that the Justices spoke almost as much as the attorneys, often-times overlapping each other’s questions and even interrupting a colleague’s question in an attempt to make their own point. However, the result of the heated debate is far from clear. Will Wal-Mart be faced with a multi-million dollar class action for discriminatory practices or will it be just another single-litigant against one of the world’s largest retail empires?

Class certification is governed by Rule 23 of the Federal Rules of Civil Procedure and generally requires (1) that there to be too many potential members to identify and join each of them; (2) a common question of law or fact; (3) a commonality of claims or defenses; and (4) that the representative parties will adequately protect the interests of the entire class. It’s generally agreed that the potential plaintiffs here would meet most of these requirements. However, the focus of the discussion before the Court was whether the proposed class of female managers truly shared common legal and factual issues. One key question from Justice Kennedy has led many to speculate that Ms. Dukes and her potential class members have a fatal flaw in their argument.

During the plaintiffs' presentation, Justice Kennedy asked the rather straight-forward question: “What is the unlawful policy that Wal-Mart has adopted?” The response was that the store managers have “unchecked discretion” in the decision-making process and have used that power to create a culture of discrimination throughout the corporation. The problem with this response is that it contradicts the position that Wal-Mart’s headquarters enforces a consistent, nationwide policy, which is a key aspect of the plaintiffs' case and may be necessary to establish corporate-wide liability.

The plaintiffs' attorney tried to argue both sides of an opposing view – that there is a top-down corporate culture to discriminate against females, and that the actual decision-makers in the individual stores themselves have too much power and discretion. It was on this point where Justice Scalia accused the plaintiffs' counsel of trying to “whipsaw” the Court stating that the power given to store managers is too subjective while there is a corporate culture to guide those same managers to discriminate against women. While the commonality issue appeared to weigh in Wal-Mart's favor, how the court will decide the case is unclear at this time. A decision is expected sometime this summer, and we will be sure to provide an update when it is issued.

EEOC Issues Final Regulations Implementing the ADAAA

On March 24, 2011, the Equal Employment Opportunity Commission (EEOC) issued the final version of the regulations (pdf) implementing the Americans with Disabilities Act Amendments Act (ADAAA).  The final regulations were modified as compared to the EEOC's initial proposed regulations, and the changes to the regulations made will likely be welcomed by employers.  For more information from the EEOC on the ADAAA please click here.

Even with the changes, the regulations make clear that the ADAAA broadened the definition of disability under the Americans with Disabilities Act (ADA).  Under the ADAAA that far more impairments will now meet the definition of disability.  Importantly however, the regulations state that whether or not an individual has a disability will still be determined on a case-by-case basis. 

The ADAAA and the regulations attempt to shift the focus in ADA claims from whether or not an individual has a disability to whether or not prohibited discrimination has occurred.  As a practical matter for employers, this approach will shift the focus to the interactive process and the information exchanged during that process. 

Third Circuit Rules that Private Employers May Discriminate Against Applicants on Basis of Prior Bankruptcy

This post was contributed by Eric N. Athey, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Law Practice Group.

Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Uniformed Services Employment and Reemployment Rights Act, and the Age Discrimination in Employment Act are widely known as the primary federal laws governing employment discrimination. Many employers are surprised to learn that the U.S. Bankruptcy Code also contains employment discrimination provisions. Section of 525 of the Code prohibits certain types of employment discrimination against individuals who have claimed bankruptcy. However, this obscure provision is rarely the subject of lawsuits and, consequently, there is little guidance from federal courts as to its meaning. In Rea v. Federated Investors, the U.S. Court of Appeals for the Third Circuit considered the fundamental question of whether Section 525 prohibits a private sector employer from discriminating against a job applicant in the hiring process on the basis of his prior bankruptcy.

Mr. Rea applied for employment with Federated Investors in 2009 through a placement firm and, after a successful interview, was informed that he would not be hired due to a 2002 bankruptcy. Rea filed suit in federal court claiming that Federated discriminated against him in violation of Section 525 of the Bankruptcy Code.

Section 525(a) of the Code states that it is unlawful for any "governmental unit…[to]…deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under [the Code]" solely because the individual has been a debtor under the Code, has been insolvent or has not paid a debt that is dischargeable under the Code. Clearly, a government employer could not have refused Mr. Rea employment solely on the basis of his prior bankruptcy without violating Section 525(a). However, as a private sector employer, Federated was governed by Section 525(b) of the Code.

Section 525(b) of the Code, unlike subsection (a), makes no mention of "denying employment to" an individual who has declared bankruptcy. Section 525(b) reads: "No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under [the Code]" solely because the individual has been a debtor under the Code, has been insolvent or has not paid a debt that is dischargeable under the Code. The issue presented in the Rea case was whether 525(b) could be interpreted to prohibit private employers from discriminating against job applicants on the basis of prior bankruptcies.

Mr. Rea argued that Section 525(b)'s prohibition against "discriminat[ion] with respect to employment against" individuals who have filed for bankruptcy should be interpreted to protect job applicants. However, the Third Circuit noted that "where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely…" Since Section 525(a) specifically includes "denying employment to" individuals as unlawful discrimination – and 525(b) does not - the Court concluded that private sector employers are not prohibited from discriminating against applicants on the basis of prior bankruptcies.

This recent decision may come as particularly welcome news for employers in the financial services industries who may be reluctant to employ individuals with multiple prior bankruptcies. Although the Rea decision certainly gives private sector employers greater flexibility in the hiring process, it is important to remember that terminating or discriminating against a current employee solely on the basis of a prior bankruptcy remains unlawful.

United States Supreme Court Approves "Cat's Paw" Theory of Liability

On March 1, 2011, the United States Supreme Court again increased employers' exposure to employment discrimination claims. In Staub v. Proctor Hospital, 562 U.S. ___ (2011) (pdf), the unanimous Court concluded that employers may be held liable for unlawful discrimination if a lower level supervisor influences an adverse employment decision, even if the decision is ultimately made by an independent manager. The theory that an employer may be liable when it relies on facts supplied by a biased supervisor when making an adverse employment decision is known as the "cat's paw" theory.

Staub claimed that Proctor Hospital's Human Resources (HR) Manager relied on facts supplied by Staub's supervisors, who were acting with anti-military animus in violation of the Uniform Services Employment and Reemployment Rights Act (USERRA), when the HR Manager terminated him. Staub admitted that the HR Manager did not have anti-military animus, but claimed that the facts provided by his supervisors were false, and that his supervisors provided the false facts because the supervisors wanted him fired because of his military Reserve obligations.

The focus of the Court's decision was whether the supervisors' anti-military animus was "a motivating factor in the employer's action," in violation of the USERRA. Importantly, and unfortunately for employers, the Court pointed out that the "motivating factor" language from the USERRA is also found in Title VII of the Civil Rights Act. Therefore, it is clear that the "cat's paw" theory is viable under Title VII.

The Court found that the actions of the supervisors, and the independent actions of the HR Manager, could be aggregated to produce a discriminatory employment action. Because the supervisors were agents of the Hospital, their actions could be imputed to the Hospital. If supervisors are motivated by unlawful discrimination, intend to cause the adverse action, and the intended action actually occurs, then the employer will be liable because the supervisors were acting on behalf of the employer. The decision leaves open the question of whether or not an employer may be held liable if an employment decision is influenced by non-supervisory coworkers.

The Court's "cat's paw" theory requires a showing that: (1) a supervisor; (2) acting within the scope of his or her employment; (3) performed an act that was motivated by discrimination; (4) which was intended by the supervisor to cause an adverse employment action; and (5) the act was a proximate cause of the adverse employment action. If such a showing is made, then the employer may be liable for discrimination.

The cat's paw theory seems strikingly expansive, because the proximate cause element of the theory could expose employers to liability in extremely attenuated circumstances. Therefore, employers must take action now to brace for claims involving the cat's paw theory. First, employers should ensure that their discrimination and harassment policies and procedures are up-to-date, and that they contain adequate reporting mechanisms. All employees must be made aware of the available discrimination reporting procedures.  In addition, these procedures should not require that employees first make reports of discrimination to their immediate supervisors. Please click here to view our prior post on this issue.

Also, if and when an employee reports discrimination, the employer must conduct a thorough investigation and take appropriate action. Employers considering terminating an employee should also conduct a thorough investigation and should attempt to establish the relevant facts independently if possible.  This is true particularly if there have been allegations of discrimination raised against the employee's supervisor before or during the termination process.

U.S. Supreme Court Widens the Scope of Retaliation Claims under Title VII

This post was contributed by Anthony D. Dick, Esq., an Associate and a member of McNees Wallace & Nurick LLC's Labor and Employment Practice Group in Columbus, Ohio.

The number of retaliation-based charges of discrimination filed with the Equal Employment Opportunity Commission (the “EEOC") has doubled from approximately 18,000 to 36,000 in the last ten years.  Last week, the United States Supreme Court issued a decision that surely will cause this trend to continue.  In a unanimous decision, the Court held in Thompson v. North American Stainless (pdf) that an employee who claimed he was terminated because his fiancée engaged in protected activity, could bring a retaliation claim against their mutual employer under Title VII of the Civil Rights Act of 1964 ("Title VII").

Plaintiff Eric Thompson met and eventually became engaged to Miriam Regalado while both worked for North American Stainless (“NAS”).  Subsequently, Regalado filed a charge of discrimination with the EEOC, claiming NAS discriminated against her because of her sex. Approximately three weeks later, NAS fired Thompson.  Thompson filed suit, alleging his termination was in retaliation for his fiancée’s protected activity.

Both the U.S. District Court for the Eastern District of Kentucky and the Sixth Circuit Court of Appeals ruled that Thompson did not have standing to sue for retaliation under Title VII because he had not engaged in any protected activity under the law.  The Sixth Circuit reasoned that the plain language of Title VII did not contemplate third-party retaliation claims.  The statute specifically provides that:  “It shall be an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by this title, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this title.” 

In an opinion written by Justice Scalia, the Supreme Court determined that NAS’s alleged conduct was prohibited by Title VII.  The Court ruled that the anti-retaliation provision of Title VII must be construed broadly to prohibit any employer action that would “have dissuaded a reasonable worker from making or supporting a charge of discrimination.”  Applying this rule, the Court found that a reasonable employee certainly would be dissuaded from engaging in protected activity if she knew that the consequence would be her fiancé’s termination from the company.

NAS argued unsuccessfully that this standard will force employers into an unenviable position of having to try to identify whether an employee who is about to be terminated has a close relationship with someone who recently engaged in protected activity before taking an adverse action that could expose it to a third-party retaliation claim.  In rejecting this argument, the Court noted that, "[a]lthough we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII." 

The Court refused to articulate a bright-line rule concerning how close a relationship must be to afford third-party retaliation protection, stating in pertinent part, “[w]e expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.”

In analyzing Thompson’s standing to sue under Title VII, the Supreme Court went on to find that the term “person aggrieved” under the statute includes a plaintiff who falls within the "zone of interests" sought to be protected by Title VII.  Thus, if Title VII “arguably sought” to protect that person’s rights, he or she has standing under Title VII; however, if the individual has interests that are only “marginally related to or inconsistent” with the purposes of law, no standing to sue exists.

According to the Supreme Court, Thompson had standing to pursue his own retaliation claim against NAS because he fell within the amorphous “zone of interests” contemplated by Title VII.

It should be clear that this case expands the bounds of employers’ potential liability under Title VII.  Now, more than ever, employers should use caution when taking adverse action against an employee whose spouse, family member, domestic partner or fiancé(e) recently engaged in protected activity.  And, as always, employers should document the specific reasons for employee terminations and follow established company policies to limit later arguments by a terminated employee that he or she was terminated because of a retaliatory motive on the part of the employer.

Effective January 10, 2011, New GINA Regulations Will Impact Common HR Practices

Today, Adam R. Long, Esq. of McNees Wallace & Nurick LLC's Labor and Employment Group issued an Employer Alert titled "Effective January 10, 2011, New GINA Regulations Will Impact Common HR Practices."

The Employer Alert discusses the Genetic Information Nondiscrimination Act of 2008 (“GINA”), which prohibits the use of genetic information in employment decisions and restricts an employer’s ability to request, require, or purchase genetic information. GINA also requires employers to treat all genetic information as confidential medical information and places restrictions on the disclosure of genetic information. GINA applies to all employers who are covered by Title VII of the Civil Rights Act of 1964.  The Equal Employment Opportunity Commission has issued regulations that take effect on January 10, 2011, and clarify a number of GINA’s key employment-related requirements and prohibitions.

To read the Employer Alert click here

Third Circuit Holds Ledbetter Fair Pay Act Does Not Save Untimely Failure-to-Promote Claims

A recent decision by the Third Circuit Court of Appeals allows employers to breathe a sigh of relief. In Noel v. Boeing Co. (pdf), the court concluded that an otherwise untimely discrimination claim, alleging that the employer discriminated against an employee by failing to promote the employee, is not rendered timely by the Ledbetter Fair Pay Act (the "Act") (pdf). The court's decision limits the reach the Act, and it is now clear that claims involving discrete acts of discrimination are not covered by the Act.

The decision involved discrimination claims under Title VII of the Civil Rights Act brought by Emmanuel Noel, an African-American employee at Boeing's Ridley Park, Pennsylvania facility. Basically, Noel claimed that Boeing failed to award him off site job assignments, which allowed for higher pay and per diem payments, and failed to promote him to a higher pay grade around September 2003. At that time, two white employees were promoted to a higher pay grade. In March 2005, Noel filed a complaint with the Equal Employment Opportunity Commission (EEOC), and eventually filed a lawsuit in June 2006. Noel's suit alleged multiple counts of race and national origin-based employment discrimination and retaliation, but the trial court held for Boeing on all counts. Noel appealed only the trial court's finding that his failure to promote claim was untimely.

Under Title VII, an employee in Pennsylvania must file a complaint with the EEOC within 300 days of the alleged discriminatory act or it will be deemed untimely. Noel's complaint was filed with the EEOC in March 2005, well beyond the 300 day filing period following the alleged discriminatory promotion decision in September 2003. For this reason, the trial court dismissed his failure to promote claim. On appeal, Noel argued that the Act saved his otherwise untimely failure to promote claim.

The Act, passed by Congress in 2009, was in response to the Supreme Court's decision in Ledbetter v. Goodyear Tire & Rubber, Co., Inc. On January 29, 2009, we posted information regarding the Act and the Court's Ledbetter decision. The Act extended the time line for filing complaints of discrimination and states that "in pay discrimination matters an unlawful employment practice occurs each time an individual is affected by application of a discriminatory compensation decision." As a practical matter, this means that each time an employee receives a pay check that contains the effects of a discriminatory pay decision, the 300 day countdown for filing a complaint of discrimination with the EEOC is restarted.

Noel argued that the Act's paycheck rule made his claim timely because each time he received his pay check he felt the effects of the 2003 failure to promote decision. The Third Circuit disagreed. The court found that in order for an untimely claim to be saved by the Act, the claim must involve pay discrimination and the plaintiff must point to some discriminatory compensation decision or practice.

The court first held that Noel did not allege a pay discrimination claim because he did not allege that he received less pay for doing equal work. The court noted that the white employees were promoted, and as a result, they were not doing the same work as Noel. The court concluded that this was not a pay discrimination claim, which alleges lower pay for equal work.

The court then went on to address whether a failure to promote claim is a discriminatory compensation decision under the Act. The court concluded that in accordance with the plain language of the Act, only decisions involving compensation are covered, and discrete employment decisions, such as promotion decisions, are not within the scope of the Act. A failure to promote claim is not a discriminatory compensation decision, and therefore Noel's untimely failure to promote claim was not saved by the Act.

The court also found support for its decision in Justice Ginsburg's blistering dissent in the Ledbetter decision, which many believe prompted Congress to pass the Act. In her dissent, Justice Ginsburg distinguished discriminatory compensation decisions, which may go undetected by employees for years, and discrete actions which are immediately felt by employees. Justice Ginsburg specifically referenced failure to promote decisions as discrete acts.

The court held that the Act was only intended to save untimely discriminatory pay decisions, and not all employment decisions. The court's rationale and decision should apply to other discrete employment actions, such as demotions and terminations. This is a good sign for employers, who under the Act may face liability for discriminatory pay decisions years or even decades after those decisions are made.

The Internet - The Next Frontier for the ADA: Will Your Website Comply?

Members of McNees Wallace & Nurick LLC's Litigation Group published a Litigation Newsletter that contains an article that may be of interest to readers of our blog. The article, "The Internet – The Next Frontier for the ADA: Will Your Website Comply?" discusses a recent notice issued by the Department of Justice, which indicates that the Department is considering adopting accessibility guidelines for websites under the Americans with Disabilities Act.

Please click here to view the Litigation Newsletter.

U.S. Supreme Court Issues Unanimous Opinion Allowing African-American Firefighters To Sue City Of Chicago Asserting Racial Discrimination Disparate Impact Claims

This post was contributed by Bruce D. Bagley, Esq., a Member in McNees Wallace & Nurick LLC's Labor and Employment Practice Group.

It's not often that all nine members of the U.S. Supreme Court agree on the disposition of an employment law matter, but that's what happened in Lewis v. City of Chicago, issued on May 24, 2010 (No. 08-974) (pdf)

The City of Chicago gave a written test in 1995 to 26,000 applicants for firefighter positions. In January 1996, the City notified the applicants of their test results, and depending on their scores, applicants were designated well-qualified (scoring 89 or above), qualified (scoring between 65 and 88), or not qualified (scoring below 65). They were further informed that only the well-qualified were likely to be hired but that the list of those who were merely qualified would be retained in case the well-qualified list was exhausted as positions were filled.

On March 31, 1997, Crawford Smith, a Black applicant who had scored in the qualified range and had not been hired, filed an EEOC Charge along with five other similarly situated applicants. They alleged that the City's practice of hiring only applicants who scored over 89 had a disparate impact on Black applicants. Under Title VII of the Civil Rights Act, an employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin is unlawful, unless the employer can demonstrate that the challenged practice is job-related for the position in question. 42 U.S.C. §2000e-2(k)(1)(A). Smith argued that since he was deemed qualified there was no job-related reason to limit hiring to those who scored over 89.

The EEOC issued a right-to-sue notice and the applicants filed suit in federal district court. The City filed a motion for summary judgment, contending that the applicants had waited too long to file with the EEOC. There is a 300 day limitations period under Title VII for filing with EEOC, and in this case the Charge was filed more than a year after the applicants had received their test results. But, the City hired applicants from the well-qualified pool during the 300 day period prior to the filing of the Charge, and continued to periodically hire from the pool as additional fire fighters were needed.

At the district court level, Crawford and the other applicants prevailed. The court denied the City's summary judgment motion, finding that the City's "ongoing reliance" on the 1995 test results constituted a continuing violation under Title VII. On appeal, the Court of Appeals for the Seventh Circuit reversed the district court, holding that "the hiring only of applicants classified 'well-qualified' was the automatic consequence of the test scores rather than the product of a fresh act of discrimination." The Court of Appeals found that the applicants should have filed their Charge with EEOC within 300 days of receiving the test results.

The Supreme Court strongly disagreed with the Seventh Circuit Appeals Court. Even if a plaintiff does not file a timely charge challenging the adoption of a practice, the Court stated, the plaintiff may nevertheless assert a disparate impact claim in a timely charge challenging the employer's application of that practice. Writing for the unanimous Court, Justice Scalia was unmoved by arguments from the City and its amici (or "friends of the court") that employers could now face disparate impact suits for practices they have used regularly for years, noting "…it is not our task to assess the consequences of each approach and adopt the one that produces the least mischief. Our charge is to give effect to the law Congress enacted."

It is fair to say that few observers would have predicted such a unanimous holding in this matter by the Court. Could the Court have been influenced by Congress' enactment of the Lilly Ledbetter Fair Pay Act, reversing the Court's 2007 decision in Ledbetter v. Goodyear Tire and Rubber (pdf)? In Ledbetter the Court had held a gender-based discrimination claim was not timely filed where the employee claimed her wage disparity with male co-workers resulted from personnel decisions made years earlier.

In any event, employers must now devote even greater attention to determining whether seemingly benign practices such as relying on higher test scores may disproportionately impact members of a protected class. Years can go by but each time the employer applies that practice employees will have a fresh 300 day period in which discrimination allegations can be raised. 

Keep Supervisors Out of Harassment Policy Reporting Procedures

Oftentimes, it seems like the requirements of the law conflict with long held workplace beliefs, and in some cases common sense. One staple of workplace dogma is the notion that employees should always bring issues to supervisors first, so that issues can be addressed, and hopefully resolved, at the lowest possible level. According to the law, however, when it comes to discriminatory harassment, supervisors should be left out of the loop.

A recent case, Gorzynski v. JetBlue Airways Corp.(PDF), illustrates this point. In JetBlue, the Company had a policy that allowed employees to bring complaints to their immediate supervisor, Human Resources, or any member of management. The plaintiff, a former employee at the time she filed her suit under Title VII, alleged that her former supervisor had created a hostile work environment by, among other things, making sexual comments, grabbing her and other women, and tickling women. While she was employed, the Plaintiff only complained about this alleged harassment to the supervisor.

The Company argued that reporting the harassment only to the supervisor, the same person engaging in the alleged misconduct was not reasonable, and therefore, the Company was entitled to rely on the Faragher/Ellerth affirmative defense to discriminatory harassment claims. The Faragher/Ellerth defense is a defense against liability that is available to employers in certain circumstances if two conditions are met. First, the employer must take reasonable measures to prevent and quickly correct any harassing conduct; and second, the employee must unreasonably fail to take advantage of the preventative or corrective measures available. The trial court agreed with the Company that the former employee's failure to report the alleged harassment to another point of contact was unreasonable, and dismissed her harassment claim.

The Second Circuit Court of Appeals, however, rejected the Company's argument. The Court of Appeals stated that the former employee's allegations made out an actionable hostile work environment claim based on sex, and went on to hold that employees do not have to shop around for someone to address their complaints. Instead, whether an employee reasonably took advantage of the employer's complaint reporting procedure will be decided on a case-by-case basis. The Court of Appeals determined that in this case, a jury could find that the former employee's actions were not unreasonable because she was following the Company policy by reporting the conduct to her supervisor.

There were some additional facts in this case that were detrimental to the Company's argument. However, it still provides a reminder that insufficient harassment policies will prevent employers from asserting the Faragher/Ellerth affirmative defense, which is a means for having harassment claims dismissed. The Gorzynski decision makes it more difficult to get harassment claims dismissed early, because the Faragher/Ellerth defense will now be judged on a case-by-case basis, at least in the Second Circuit.

Even though this decision is not controlling in Pennsylvania courts, Pennsylvania employers should take time to review their discriminatory harassment policies, including sexual harassment policies, and ensure that supervisors are not designated as a reporting point of contact. Instead, reporting points of contacts should be limited to Human Resource staff and upper management personnel, and employees should be directed to utilize alternative points of contact if one point of contact is the alleged harasser.

EEOC Issues Proposed Regulations Defining Employers' Affirmative Defense Under ADEA

On February 18, 2010, the Equal Employment Opportunity Commission (EEOC) published a Notice of Proposed Rulemaking (NPRM) addressing the meaning of the “reasonable factors other than age” defense under the Age Discrimination in Employment Act (ADEA). The ADEA prohibits employers from discriminating against employees or job applicants based upon their age, but protects only those employees or applicants who are 40 years or older. In addition, the ADEA provides employers with statutory defenses, which include provisions for a “bona fide occupational qualification" defense and a “reasonable factors other than age” defense.

The “reasonable factors other than age” (RFOA) defense precludes liability for actions otherwise prohibited under the ADEA so long as the employment decision is based upon reasonable factors other than age. The EEOC's NPRM takes into consideration two relatively recent United States Supreme Court cases, Smith v. City of Jackson and Meacham v. Knolls Atomic Power Laboratories, which each evaluated disparate impact claims under the ADEA. Disparate impact claims involve the allegation that an employer’s practice, although neutral on its face, has a discriminatory impact on a protected class – under the ADEA, workers aged 40 years or more. 

Specifically, and with the Supreme Court’s Smith and Meacham holdings in mind, the EEOC proposes to revise the federal regulations to illustrate that under the RFOA defense, the evaluation of an employer’s practice “turns on the facts and circumstances of each particular situation and whether the employer acted prudently in light of those facts.” Thus, the EEOC’s proposed approach attempts to balance employers’ rights to make reasonable business decisions with the ADEA’s goal of protecting older workers from facially neutral employment practices that disparately impact their employment. In addition, the proposed amendments provide guidance as to the factors that will be considered in evaluating an employer's facially neutral practice under the ADEA.

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Third Circuit Distinguishes "Sexual Stereotyping" from "Sexual Orientation" Discrimination

In Prowel v. Wise Business Forms, Inc., the Third Circuit reversed a district court's granting of summary judgment in favor of an employer on a claim of gender stereotyping discrimination. The claim was brought by an admittedly homosexual employee who alleged he was subject to gender discrimination, retaliation and religious discrimination based on his effeminate actions and mannerisms. The Third Circuit acknowledged that Title VII does not protect employees from discrimination based upon their sexual preference, but may allow claims for gender stereotyping. The Third Circuit noted that a “gender stereotyping” claim was first recognized by the Supreme Court as a viable cause of action in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989).

In reversing summary judgment, the Third Circuit held that

"…every case of sexual orientation discrimination cannot translate into a triable case of gender stereotyping discrimination, which would contradict Congress’s decision not to make sexual orientation discrimination cognizable under Title VII. Nevertheless, [an employer] cannot persuasively argue that because [an employee] is homosexual, he is precluded from bringing a gender stereotyping claim. There is no basis in the statutory or case law to support the notion that an effeminate heterosexual man can bring a gender stereotyping claim while an effeminate homosexual man may not. As long as the employee — regardless of his or her sexual orientation — marshals sufficient evidence such that a reasonable jury could conclude that harassment or discrimination occurred “because of sex,” the case is not appropriate for summary judgment."

The Court's decision raises obvious issues for employers in dealing with sexual harassment and sex discrimination claims. Employers cannot automatically assume the sexual orientation claims will be dismissed by a court as unprotected under Title VII. The allegations of discrimination must be evaluated in light of gender stereotypes.

In Prowel, the employee alleged the following facts in support of his claim:

"Prowel identifies himself as an effeminate man and believes that his mannerisms caused him not to “fit in” with the other men at Wise. Prowel described the “genuine stereotypical male” at the plant as follows:

[B]lue jeans, t-shirt, blue collar worker, very rough around the edges. Most of the guys there hunted. Most of the guys there fished. If they drank, they drank beer, they didn’t drink gin and tonic. Just you know, all into football, sports, all that kind of stuff, everything I wasn’t.

In stark contrast to the other men at Wise, Prowel testified that he had a high voice and did not curse; was very well-groomed; wore what others would consider dressy clothes; was neat; filed his nails instead of ripping them off with a utility knife; crossed his legs and had a tendency to shake his foot “the way a woman would sit”; walked and carried himself in an effeminate manner; drove a clean car; had a rainbow decal on the trunk of his car; talked about things like art, music, interior design, and decor; and pushed the buttons on the nale encoder with 'pizzazz.'"

Pennsylvania Supreme Court Rules that Small Employers may not be Liable for Employment Discrimination

In Weaver v. Harpster, the Pennsylvania Supreme Court ruled that small employers (three or fewer employees) may  not liable for acts of employment discrimination. Under the Pennsylvania Human Relations Act (PHRA), employers with four or more employees are prohibited from discriminating against their employees on the basis of sex.  At common law, an employer may terminate an at-will employee for any reason unless that reason violates a clear mandate of public policy emanating from either the Pennsylvania Constitution or statutory pronouncements. In this case, the Court  addressed the intersection of the PHRA and the public policy exception to at-will employment, namely, whether an employer with fewer than four employees, although not subject to the PHRA's prohibition against sexual discrimination, nevertheless is prohibited from discriminating against an employee on the basis of sex. Because the PHRA reflects the unambiguous policy determination by the legislature that employers with fewer than four employees will not be liable for sex discrimination in Pennsylvania, the Court concluded that a common law claim for wrongful discharge, resulting from sex discrimination, will not lie against those employers.

The Court's seven justice majority continued its support for the employment at-will presumption by declining to recognize an additional public policy exception based on Pennsylvania's statutes or Constitutional protections. The  two justice dissent would have found a public policy exception to the at-will employment presumption based on both the PHRA and Pennsylvania Constitution. Small employers should keep in mind that they escape coverage of the PHRA, but may be covered by local ordinances prohibiting employment discrimination.

Supreme Court Rejects choice of Lawsuits Defense

A governmental employer cannot throw out a employment promotion test because it thinks that the test results have a disparate impact against a minority group unless there is a "strong basis in evidence" to believe it will be liable for discrimination unless it rejects the test results. Fear of litigation alone cannot justify an employer’s decision that is based on race even if the employer will be sued regardless of which group it favors.

In Ricci v. DeStefano, the City of New Haven, Connecticut used a validated test to select firefighters for promotion. However, the results the promotion examination to fill vacant lieutenant and captain positions showed that white candidates had scored higher than other minority candidates. Strong public opposition to use of the test followed. Confronted with arguments both for and against certifying the test results—and threats of a lawsuit either way—the City threw out the results based on the statistical racial disparity.

White and Hispanic firefighters who scored well on the exams but were denied a chance at promotions by the City’s refusal to certify the test results, sued the City, alleging that discarding the test results discriminated against them based on their race in violation of Title VII. The City responded that had it certified the test results, it could have faced Title VII liability for adopting a practice having a disparate impact on minority firefighters.

The District Court granted summary judgment for the City, and the Second Circuit affirmed. The Supreme Court reversed holding that City discriminated against the White and Hispanic firefighters who passed the test because there was not a strong basis in evidence to throw out the test scores in response to their disparate impact. The City conducted hearings on the test results and determined that there was a statistical adverse impact on minority employees. This showed that there was at least a prima facie case of disparate impact. However, this fear of litigation alone cannot justify the City’s reliance on race to the detriment of individuals who passed the examinations and qualified for promotions. To reject the test, the City needed to go further and show that the exams at issue were not job related and consistent with business necessity, or if there existed an equally valid, less discriminatory alternative that served the City’s needs. Based on the record the parties developed through discovery, there was no substantial basis in evidence that the test was deficient in either respect.

Under Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional, disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action. The Court’s analysis held that the City’s actions would violate Title VII’s disparate-treatment prohibition absent some valid defense. All the evidence demonstrates that the City rejected the test results because the higher scoring candidates were white. Without some other justification, this express, race-based decision-making is prohibited. The question, therefore, is whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination.

The Court held that certain government actions to remedy past racial discrimination—actions that are themselves based on race—are constitutional only where there is a “strong basis in evidence” that the remedial actions were necessary. The same interests are at work in the interplay between Title VII’s disparate-treatment and disparate-impact provisions. However, the Court gave little other guidance on how employers may use tests in the hiring and promotion processes.

Supreme Court Age Discrimination Decision in "Mixed-Motive" Cases Invites Legislative Reversal

The United States Supreme Court decision in Gross v. FBL Financial Services, Inc. creates a rift between the treatment of so called "mixed-motive" cases under the ADEA and Title VII. Under Title VII, an employee may allege that he suffered an adverse employment action because of both permissible and impermissible considerations—i.e., a “mixed-motives” case. If a Title VII plaintiff shows that discrimination was a “motivating” or a “ substantial” factor in the employer’s action, the burden of persuasion shifts to the employer to show that it would have taken the same action regardless of that impermissible consideration.

The Supreme Court declined to apply the mixed-motive burden shifting to ADEA cases holding that a plaintiff bringing an ADEA disparate-treatment claim must prove, by a preponderance of the evidence, that age was the “but-for” cause of the challenged adverse employment action. The burden of persuasion does not shift to the employer to show that it would have taken the action regardless of age, even when a plaintiff has produced some evidence that age was one motivating factor in that decision.

Congress amended Title VII to explicitly authorize discrimination claims where an improper consideration was “a motivating factor” for the adverse action, see 42 U. S. C. §§2000e–2(m) and 2000e–5(g)(2)(B),while leaving the ADEA language unchanged. The Supreme Court viewed this omission as a congressional policy statement and declined to recognize the so called "mixed motive" analysis in ADEA claims. However the Courts' opinion invites Congress to fix the discrepancy by legislatively negating the Court's decision much like it did in with both the ADA Amendments Act and the Ledbetter Fair Pay Act:

Unlike Title VII, the ADEA’s text does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor. Moreover, Congress neglected to add such a provision to the ADEA when it amended Title VII to add §§2000e–2(m) and 2000e–5(g)(2)(B), even though it contemporaneously amended the ADEA in several ways, see Civil Rights Act of 1991, §115, 105 Stat. 1079; id., §302, at 1088.

Expect Congress to harmonize the treatment of Title VII and ADEA claims so that the mixed motive analysis applies to both. Congress should really fix the differentiation between age discrimination cases and other discrimination claims. For some reason unknown to me, Congress placed protections from age discrimination in the Fair Labor Standards Act (governing topics like minimum wage and overtime) rather than just adding "age" to the list of Title VII's protected classifications. As a result, federal age discrimination claims have different rights, procedures, and damages.

Who is a "Management Level Employee" for Imputing Notice of Co-worker Harassment to an Employer?

An employer's liability for co-worker harassment exists if the employer knew or should have known of the harassment and failed to take prompt remedial action. In other words, an employer may be liable for non-supervisory co-worker harassment if the employer was negligent in failing to discover the co-worker harassment or in responding to a report of harassment. Knowledge of a sexually hostile work environment arises when a "management level employee" obtains enough information to raise the probability of sexual harassment in the mind of a reasonable employer.

In its decision in Huston v. The Proctor & Gamble Paper Products Corp., the Third Circuit Court of Appeals concluded that an employee’s knowledge of allegations of co-worker sexual harassment may typically be imputed to the employer in two circumstances:

  1. "where the employee is sufficiently senior in the employer’s governing hierarchy, or otherwise in a position of administrative responsibility over employees under him, such as a departmental or plant manager, so that such knowledge is important to the employee’s general managerial duties. In this case, the employee usually has the authority to act on behalf of the employer to stop the harassment, for example, by disciplining employees or by changing their employment status or work assignments. The employee’s knowledge of sexual harassment is then imputed to the employer because it is significant to the employee’s general mandate to manage employer resources, including humanresources;" or
  2. "where the employee is specifically employed to deal with sexual harassment. Typicallysuch an employee will be part of the employer’s human resources, personnel, or employee relations group or department. Often an employer will designate a human resources manager as a point person for receiving complaints of harassment. In this circumstance, employee knowledge is imputed to the employer based on the specific mandate from the employer to respond to and report on sexual harassment."

The court went on to clarify that mere supervisory authority over the performance of work assignments by other co-workers is not, by itself, sufficient to qualify an employee for management level status unless the worker has  a mandate generally to regulate the workplace environment. This reasonably bright line test should help employers to avoid allegations of constructive knowledge of workplace problems; provided, job descriptions clearly define the employee's job duties. Employers should examine generalized policy statements that create a "duty" to report workplace harassment or mistreatment.

Employment Law implications of Obesity and BMI after the ADA Amendments Act

The ADA Amendments Act re-wrote the definition of disability so that it will likely include obesity-related health conditions and perhaps obesity itself as a protected disability. Before the ADA Amendments, being overweight and even obese was not generally considered a "disability". For example in EEOC v. Watkins Motor Lines, Inc., a court determined that non-physiological morbid obesity was not a protected disability.

The EEOC is considering regulations regarding the equal employment provisions of the ADAAA.  In December 2008, the EEOC commissioners deadlocked along party lines on whether to approve former Chair Naomi Earp’s proposed regulations. According to the EEOC’s agenda, a notice of proposed rulemaking will be issued by August of this year.  I predict that obesity will become a protected disability requiring employers to reasonably accommodate the condition.  I also expect that the correlation between BMI and obesity will be challenged by agruing that disqualifying an employee based on a high BMI consistitutes "regarded as" disability discrimination.

The ADA changes have important implications for businesses including employment discrimination claims, health plan design, and wellness program administration. There are several issues that merit discussion when examining obesity such as following. 

What is Body Mass Index (BMI)? BMI has become the unofficial scientific measure for assessing obesity. BMI is a function of height and weight (BMI calculator). The Center for Disease Control classifies a person who has a BMI of less than 18.5 as underweight; normal is 18.5-24.9; overweight is 25-29.9; obese is over 30; and extremely obese is over 40.

What is the BMI analysis telling us about our weight? A Report by the Trust for America's Health recently disclosed statistics about obesity trends. In the Report, Pennsylvania had the 24th highest rate of adult obesity with 25.7 percent of its population having a BMI over 30. The Report correlated obesity figures with other factors like Diabetes and Hypertension rates. It also noted levels of admitted physical activity (or inactivity). Twenty-Four percent of Pennsylvanians admit no physical activity.

How good is BMI as a measure of obesity? Martica Heaner points out the limitations of BMI in her posts BMI Blues and Is Body Mass Index a Bad Measure?:

The BMI works well for research purposes, but doesn’t necessarily translate precisely to the individual. Unfortunately, it tends to convey that people that exercise regularly, for example, are overweight, when they are not actually overfat. A fit person tends to have more muscle, so their body weight is a reflection of body fat as well as muscle and other lean tissue.

Since the problem with being overfat is that health risks are increased, a BMI in the overweight range is probably not a negative indicator for a fit person. Regular exercise, low body fat and increased muscle mass are all factors that tend to outweigh any health risks suggested by a higher BMI.

Is there correlation between high BMI and bad health? According to the CDC, the BMI ranges were established based on the health consequences associated with obesity as determined by different BMIs. Some, like Paul Campos in his book, The Obesity Myth, challenge this conclusion. However, the correlation between high BMI and bad health is quickly becoming an assumption.

Other than being incorrectly labeled "overweight" or "obese", why should we care whether BMI is a accurate health status predictor? BMI is fast becoming the legal standard for determining whether someone is "obese" and therefore a "health risk". Those with high BMIs can face increase cost and eligibility barriers for certain employee benefits.

Individual insurance policies for life, disability and medical insurance almost universally use underwriting procedures that take into account BMI as a basis for determining insurability and premium. A survey by the Texas Office of Public Insurance Counsel found that insurance company individual health plan underwriting guidelines used BMI as a basis to deny coverage, charge a higher premium, and offer less coverage. The California Insurance Commission has made comments alerting consumers about BMI as a basis for insurance denial.

Some group health plans are community rated and not subject to medical underwriting. These plans calculate premium based on the expected claims of the community not the individual employer group. Other group health insurance programs can be subject to medical underwriting in which BMI analysis and other factors will be used to price the coverage for the group. An employer with a compliment of employees with potential for high claims (including high BMI) will face higher premiums or denial. Likewise, self-insured medical plans that utilize stop loss coverage may undergo medical underwriting where BMI will be factored into the rate for reinsurance.

Group health plan wellness program incentives may be keyed to BMI targets for premium discounts and other incentives. The availability of incentives to those with high BMI is subject to limitations including situations when it is "unreasonably difficult" or "medically inadvisable" for a participant to attempt to achieve the BMI standard.

Arbitration of Discrimination Claims upheld by U.S. Supreme Court

The United States Supreme Court upheld a provision in a collective-bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law. Accordingly, there is no legal basis for the Court to strike down an arbitration clause in a collective bargaining agreement, which was freely negotiated by a union and company, and which clearly and unmistakably requires employees to arbitrate the age-discrimination claims. However, the Court declined to rule on specific factual issued related to whether the waiver of discrimination claims under the contract by employees' in this case was clear and unmistakable. It also would not rule on whether the contract waived substantive rights protected by federal law which could not be vindicated in an arbitration. These issues were not properly before the Court.

The decision in 14 Penn Plaza LLC v. Pyett has important implications for unionized employers who face employment discrimination charges and lawsuits. These claims may be forced into the arbitration forum and out of court depending on the language in the contract. The scope of the arbitration clause including any limitations will be an important focus of future litigation.

Time to Re-evaluate Employment Practice Liability Insurance

Employment Practices Liability Insurance (EPLI) can provide valuable protection; particularly,  given the predicted rise in employment related legal claims and enhanced government enforcement initiatives. Furthermore, EPLI remains a relative bargain in the continued “soft” insurance market and employers should consider adding or increasing insurance coverage to protect against employment claims. EPLI insurance is somewhat quirky and the following are some considerations when evaluating policies:

1.         Coverage: EPLI policies usually cover claims of wrongful discharge, workplace harassment and discrimination. Many offer a more comprehensive list of covered acts, including negligent hiring/supervision/evaluations, invasion of privacy, defamation and intentional infliction of emotional distress. Coverage typically applies to claims made by full time employees so as to exclude those by part-timers, temporary, seasonal and independent contractors. In comparing policies, look for one that has the most expansive coverage. 

2.         Exclusions: EPLI policies exclude many claims based on the statute that creates the legal right or the activity that gives rise to the claim. Exclusions apply to the Fair Labor Standards Acts; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act (WARN); the Consolidated Omnibus Budget Reconciliation Act (COBRA); the Employee Retirement Income Security Act (ERISA); the Occupational Safety and Health Act (OSHA); the costs associated with providing "reasonable accommodation" under the Americans with Disabilities Act (ADA); as well as claims arising out of downsizing, layoffs, workforce restructurings, plant closures or strikes. Punitive damages are always excluded. Carefully evaluate the excluded claims in light of your business practices. In the case of multi-state operations, be aware that some state laws create substantial employment rights that must also be evaluated under the policy language.

3.         Policy Limits and Deductibles: Policy limits and deductibles usually apply on a per claim and aggregate basis. For example, coverage may be limited to $250,000 for each separate claim with an overall aggregate cap of $1 million for all claims. Employers must formulate their insurance goals in setting the appropriate deductibles and limits. Some employers view EPLI insurance as catastrophic coverage and are willing to accept a high deductible that allows them to handle smaller claims themselves. However, other employers are looking for more blanket coverage.

4.         Defense Costs, Selection of Counsel and Settlement: Defense costs are usually included within the EPLI policy’s limits, which has good and bad points. Many times, the legal expense is the largest cost to an employer in dealing with merit less claims. However, including defense costs means that every dollar an employer spends defending a claim reduces the amount available for settlement or to pay a judgment. Since the existence of insurance coverage must be disclosed as part of discovery in most law suits, a plaintiff’s attorney will factor insurance coverage into his or her case evaluation. The defense cost feature may influence plaintiffs’ counsel to try to settle early, rather than force an employer to incur litigation costs that will only erode the insurance dollars available for potential settlement. Employment claims often have significant employee relations ramifications making settlement a particularly important issue. Insurers view employment claims the same as any other insurance matter by evaluating only the potential for liability and the amount of damages. The employer and insurer may be at odds over settling a case. EPLI policies address this stalemate by either giving the insurer the right to settle without the employer’s approval or, more frequently, giving an employer control over settlement, but adding a “hammer clause”. These clauses are designed to limit the insurer’s potential exposure if the policyholder passes up an opportunity to settle a claim recommended by the insurer. Hammer clauses provide that if there is an offer to settle a claim that the policyholder refuses accept, then the insurer will not be liable for a subsequent settlement or judgment in excess of a rejected settlement amount.  

5.         Policy Types and Insurance Company Notification: EPLI policies are typically written on a “claims made” basis meaning that the claim must be incurred during the coverage period and reported to the insurer during an extended reporting period. Employers who have already experience significant layoffs prior to the effective date of coverage will not have claims arising from those actions covered by new insurance; however, if an employer increases coverage, it may be able negotiate a retroactivity for the larger policy limits. Since employment actions may take years to turn into a claims, an employer may be left with no coverage if the policy is dropped or tail coverage isn’t purchased. Untimely notice to an insurance carrier can void coverage for and employment claim.

Employment Discrimination Litigation will Increase in 2009 and Beyond

Business downsizing, a poor job market, and increased government enforcement will dramatically increase employment discrimination lawsuits for the foreseeable future. We got a glimpse of this trend with the Equal Employment Opportunity Commission (EEOC) release of 2009 charge statistics noting a record number of discrimination claims filed last year. The EEOC report shows that 95,000 charges were filed, up 15%. The agency also reports financial recoveries of $376 million for victims of discrimination.

Charge activity for 2009 should rise exponentially. The economy shed 2.4 million jobs in the last 4 months mostly due to permanent layoffs. Job prospects are bleak with current unemployment at 8.1 %, the highest level in 25 years. The Obama Administration's budget increases spending on Department of Labor enforcement activities.

Employees have up to 300 days to bring a discrimination charge with the EEOC so many of the potential claims from recent layoffs haven't yet been filed. An employee's proclivity to sue an employer for discrimination is related in part to economics. In a good economy, employees find new jobs quickly and don't look back. While unemployed, economic and emotional factors may motivate employees to pursue litigation. Recent news reports describe the plight of many workers facing job loss and financial ruin.

Employers limited in use of Genetic Information

The Genetic Information Nondiscrimination Act of 2008 (GINA) was enacted to curtail the use of genetic history in employment-related areas. GINA includes two titles. Title I, which amends portions of the Employee Retirement Income Security Act (ERISA), the Public Health Service Act, and the Internal Revenue Code, addresses the use of genetic information in health insurance. Title II prohibits the use of genetic information in employment, prohibits the intentional acquisition of genetic information about applicants and employees, and imposes strict confidentiality requirements.

The law is effective November 21, 2009. The EEOC has begun its regulatory and information process with the issuance of EEOC's Questions & Answers on GINA and Proposed Regulations.

Ledbetter now Law: Employers must Focus on Compliance

President Obama signed into law the Ledbetter Fair Pay Act nullifying the U.S. Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Company. Previous posts on the content and effect of the law are as follows:

Ledbetter Fair Pay Act passed by Senate and awaiting Obama Signature

Bad News: Ledbetter Fair Pay Act and Paycheck Fairness Act Pass the House.

Record Retention Nightmare Created by Ledbetter Fair Pay Act

An employer's first concern should be the revival of claims otherwise thought extinguished under the Ledbetter decision. The law is retroactive to overrule the Supreme Court standard for assessing the timeliness of wage discrimination claims. A wage-based discrimination claim in Pennsylvania can now be filed within 300 days of the last paycheck affected by the discriminatory pay action.

An employer's next focus should be on creating a pay and evaluation system that preserves evidence supporting the nondiscriminatory basis of the decisions. The system must capture both witnesses' recollections and records associated with the decisions for all similarly situated employees.

The difficulty in defending these "old" claims lies in documenting both the decision made relative to the employee bringing the claim and the treatment of comparable employees. The legal analysis of a discrimination claim involves a comparison of the compensation paid to a member of a protected class as compared with those outside the protected class. If a compensation disparity is shown, the employer must demonstrate a legitimate nondiscriminatory reason for the difference in compensation. Once demonstrated by the employer, the employee may show that the employers reason is a pretext for discrimination. Much of this analysis will change if the Paycheck Fairness Act also becomes law.

The EEOC has a road make for its analysis of compensation discrimination claims under its Compliance Manual. The types of evidence the EEOC collects and evaluates in assessing a claim includes the following:

  • Initially the EEOC determines if a wage differential exists by evaluating documents including the following:
    • Organization charts and other documents which reflect the relative position of the charging party in comparison to other employees, including written detailed job descriptions;
    • Written descriptions of the respondent's system for compensating employees -- including collective bargaining agreements; entry level wage rates or salaries; any policies or practices with regard to periodic increases, merit and other bonus compensation plans; and the respondent's reasons for its pay practices; and
    • Job evaluation studies, reports, or other analyses made by or for the employer with respect to its method of compensation and pay rates.
  • If a compensation differential(s) exists, the employer should be asked to produce a non-discriminatory reason for the differential. If a an employer leaves the pay disparity unexplained, or provides an explanation that is "too vague, is internally inconsistent, or is facially not credible," the investigator should find "cause." If the employer does provide a nondiscriminatory reason, an inquiry should be made into whether it satisfactorily explains the pay differential.
  • The EEOC requests information explaining the pay decisions of comparable or similarly situated employees. The EEOC may also request pay information for similarly situated employees to evaluate a disparate impact case based on a statistical analysis of compensation decisions and treatment.


Title VII's Antiretaliation Protections can extend to an Employee's Involvement as a Witness in an Employer's Internal Investigation

In its decision in Crawford v. Metropolitan Government of Nashville and Davidson City, the United States Supreme Court considered the scope of Title VII protections from retaliation for employees who act as witnesses in an employer's internal investigation into harassment. The Court held that an employee's involvement in the employer's internal investigation constituted opposition to unlawful employment practices when she responded to her employer's questions in a manner disapproving of accused harasser's sexually obnoxious behavior toward her. The Court's decision unfortunately does not create a bright line standard for employers defining the scope of an employee's involvement in an internal investigation which can trigger protections from retaliation. Employers should tread very carefully in this area.

Continue Reading...

Ledbetter Fair Pay Act passed by Senate and awaiting Obama Signature

The Senate passed the Lilly Ledbetter Fair Pay Act of 2009 by a vote of 61 to 36 with both Pennsylvania Senators supporting the legislation.   President Obama has previously stated he will sign the law.

The Ledbetter Fair Pay Act redefines the "accrual" of a compensation discrimination claim as follows:

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice.

Violations of the law entitle employees to recover compensatory and punitive damages including recovery of back pay for up to two years preceding the filing of the charge, where the unlawful employment practices that have occurred during the charge filing period are similar or related to unlawful employment practices with regard to discrimination in compensation that occurred outside the time for filing a charge.

The law is retroactive to the May 28, 2007 (the date of the Supreme Court's Ledbetter decision) effectively reviving all claims that are pending or after that date.

Forces employers to modify their pay practices and evaluation procedures including the following:

  • Better justify and document their compensation decisions.
  • Review promotion procedures which may fall under the law because of the attendant compensation adjustment.
  • Create an institutional memory that captures the basis for compensation and promotion decisions.
  • Design a record retention system that allows for the defense of claims.

Next on the Senate Agenda will likely be the Paycheck Fairness Act (S. 182).

Thanks to the Connecticut Employment Law Blog for insights.

OFCCP's Accessible On-Line Application Requirement

Employers that rely on a web-based application and recruiting processes should examine their websites for compliance with the ADA’s employment provisions which require accessibility and accommodation in the hiring process.   A recent OFCCP Directive sets forth the agency's policy on review of employer websites where applications are solicited:

Effective immediately, all compliance evaluations shall include a review of the contractor's online application systems to ensure that the contractor is providing equal opportunity to qualified individuals with disabilities and disabled veterans. The review should include whether the contractor is providing reasonable accommodation, when requested, unless such accommodation would cause an undue hardship. In this directive, the term "online system" shall include, but not be limited to, all electronic or web-based systems that the contractor uses in all of its personnel activities.

Website accessibility is a growing issue as we discussed in a prior post highlighting a lawsuit under the ADA against Target Corporation's commerce site: Business Websites Face Americans with Disabilities Act Accommodations Claims. Given the OFCCP's initiatives on systemic discrimination, this area is ripe for compliance activity.

The OFCCP has recommended the following action steps in a recent webinar:

  • Prominently display a notice outlining your reasonable accommodation process, & provide timely & effective accommodation.
  • If kiosks are used, ensure that they are physically accessible.
  • Allow people who cannot use the online system because of a disability to apply in an alternate way.
  • Consider designing online systems using universal design techniques & interoperable technology to:
    • Reach out to and receive applications from qualified applicants with disabilities, and
    • Minimize the need for individual reasonable accommodations.

Resources for evaluating accessibility of system including the interoperability with assistive technologies can be found at Accessible Systems Racing League. The OFCCP's Power Point Training Program entitled Accessible Online Applications Systems and Tools for Achieving Them is also a good resource.

Bad News: Ledbetter Fair Pay Act and Paycheck Fairness Act Pass the House.

Congress has passed The Lilly Ledbetter Fair Pay Act of 2009 (H.R. 11) and The Paycheck Fairness Act (H.R. 12). Anaylsis of the new legislation to come.

The Ledbetter Fair Pay Act is discussed in a prior post on Record Retention Nightmare Created by Ledbetter Fair Pay Act .  The Paycheck Fairness Act changes the burden of proof in gender based pay claims requiring the employer to affirmatively demonstrate that any pay differential is not based on sex. Employers who cannot meet this burden face unlimited compensatory and punitive damages. The EEOC would be required to collect employer payroll information based on sex, race, and national origin thereby targeting its enforcement activities. The Bill also changed rules on class actions automatically including employees in such claims unless they specifically opt out.  PFA subjects employers to wage related class actions with unlimited damages and makes it easier for employees to prove such claims.

Ann Bares analyzes the impact of the new law from a compensation perspective in her post: Dear Legislators: A Missing Link to Paycheck Fairness?


ADA Amendments Act Compliance Tips

The ADAAA was effective January 1, 2009 requiring employers to focus their approach to disability accommodation. The Job Accommodation Network (JAN) of the Office of Disability Employment Policy recently published a compliance resource identifying four Practical Tips which can be expanded upon as follows:

Review Job Descriptions, Qualification Standards and Accommodation Procedures

Developing job descriptions is a daunting task for employer and many don't know where to start. JAN has a good resource explaining the role and function of job descriptions. The resource also gives some basic parameters on what should be included.

Job descriptions provide a written record of the qualification standards and essential functions of a position for the purpose of assessing whether and employee or applicant is "qualified" and for evaluating reasonable accommodations or establishing undue hardship. From a legal perspective, a well-written job description is essential to defending an ADA claim.

Written accommodation procedures promote communication and uniformity. The federal government has developed a lengthy process that may be a reference for employers developing a procedure. The government's procedures are extremely detailed and employers should be careful to develop a process which they can follow or they risk claims based on procedural missteps.


Focus Job Actions of Performance and Conduct

The ADAAA refocuses compliance from determining whether a disability exists to evaluating reasonable accommodations. Employers need to assess what an employee (i) can and cannot do in light of the job's essential functions or (ii) has or hasn't done under its work rules. The EEOC has issued Guidance on Applying Performance and Conduct Standards to Employees with Disabilities.


Train Frontline Supervisors and Managers

Many disability compliance problems start with a frontline supervisor's reaction to a performance problem. Dealing with the employee's disability, managing coworker reactions, and keeping medical information confidential are only some of the issues which confront managers. Comments made by supervisors can create claims based on retaliation or being "regarded as" disabled.


Document Actions and Decisions

A written record of an employers actions and decisions has many benefits in terms of both clear communication with employees and defense of ADA claims. The transitory nature of many workplaces make tangible records more important than ever to establish an institutional memory of important events.


Thanks to the Delaware Employment Law Blog for the pointing out the JAN resources.

Record Retention Nightmare Created by Ledbetter Fair Pay Act

Ledbetter Fair Pay Act (H.R. 2831/ S. 1843) is on the fast track with full support of the Obama Administration. LFPA overturns the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co. effectively eliminating the 180 or 300-day statute of limitations for filing a wage-related discrimination claim. The Bill allows family members and others affected by discrimination to file claims and reinstitutes the Paycheck Accrual Rule for determining when a claim arises. It also allows claims based on paychecks and annuity payments which would permit retirees to bring claims.

Ms. Leddbetter's discriminatory pay claims originated from pay raises allegedly denied her based on supervisor's discriminatory evaluations of her performance conducted over a period between 1979 and 1998. The U.S. Supreme Court held that the pay setting was a discrete act triggering the180 day limitations period for filing a discrimination claim, therefore a timely discrimination claim must be based on acts of discrimination occurring within the 180 day period. Leddbetter argued that“[E]ach paycheck that offers a woman less pay than a similarly situated man because of her sex is a separate violation of Title VII with its own limitations period, regardless of whether the paycheck simply implements a prior discriminatory decision made outside the limitations period”.

The effect of the argument is to call into question decisions of supervisors made almost 20 years before the employer received notice of the alleged discrimination. Leddbetter counters that she had no way of knowing about her discriminatory treatment because of the confidentiality of the performance reviews and salary adjustments

In its Ledbetter decision, the Supreme Court enunciated a classic application of the statute of limitations governing the time period for bringing legal claims:

Statutes of limitations, which "are found and approved in all systems of enlightened jurisprudence, represent a pervasive legislative judgment that it is unjust to fail to put the adversary on notice to defend within a specified period of time, and that "the right to be free of stale claims in time comes to prevail over the right to prosecute them. These enactments are statutes of repose; and although affording plaintiffs what the legislature deems a reasonable time to present their claims, they protect defendants and the courts from having to deal with cases in which the search for truth may be seriously impaired by the loss of evidence, whether by death or disappearance of witnesses, fading memories, disappearance of documents, or otherwise. (emphasis added). 

The implication's are huge for employers in terms of faulty memories, missing witnesses, and mountains of documents. Defense of decades old discrimination claims will necessitate the retention of more documents for longer time periods. The expense associated with storage and production of documents (whether paper or electronic) may be staggering. Imagine a Request for Production of Documents or subpoena that demands access to 20 or 30 years of employer records associated with the evaluations and salary adjustments for an employee (or retiree) claiming pay discrimination. Add in all of the employee's peer comparators who were similarly situated over the same time period for a truly nightmarish perspective. Now the rationale for the statute of limitations becomes clearer.

Human Resources Legal Compliance Checklist for 2009

Human Resource Professionals face a demanding legal compliance year in 2009. The following five items should be added to your "To Do" list for the first quarter of '09:

ADA Amendments Act Compliance (effective 1/1/2009):  The amendments greatly expand the definition of disability refocusing compliance on determining whether the employee is "qualified" and evaluating reasonable accommodations. Employers should consider the following:

  • Revising job descriptions to define essential job functions and minimum qualifications.
  • Formalizing the interactive process for assessing disability issues.
  • Educating supervisors on the expanded ADA coverage.

E-Verify Registration and Immigration Compliance (effective 1/15/2009):  Government contractors and subcontracts may need to register for and use the E-Verify System for new and existing government contracts. Employers who may be covered should inventory their existing contracts and review prospective contracts and subcontracts to determine whether they are covered by the regulations.

U.S. Citizenship and Immigration Services (USCIS) has amended regulations governing the types of acceptable identity and employment authorization documents that employees may present to their employers for completion of the Form I-9, Employment Eligibility Verification. Under the interim rule, employers will no longer be able to accept expired documents to verify employment authorization on the Form I-9. There are other changes to the types of acceptable documents. Employers must use the revised Form I-9 (not yet issued) for all new hires and to re-verify any employee with expiring employment authorization beginning January 31, 2009. The current version of the Form I-9 will no longer be valid as of February 2, 2009.


FMLA Regulations Implementation (effective 1/16/2009):  Amendments to the FMLA's regulations require action by employers in the following areas:

EFCA and RESPECT Act Planning:  This pending legislation has enormous potential consequences for employers. Developing an action plan should include the following items:

Wage & Hour Self-Audit:  As evidenced by Wal-Marts recent record settlement, wage and hour lawsuits will play prominently in 2009. A self-audit of compliance practices can mitigate these claims particularly in the following areas;

  • Employee classification (exempt vs. non-exempt)
  • Off the clock work (starting times, breaks and meal periods)
  • Donning and Doffing
  • Child labor

ADA Amendments Act Webinar: December 4, 2008

Webinar Registration

Congress recently passed legislation amending the Americans with Disabilities Act, which will greatly expand the coverage of the Act.  On Thursday December 4, 2008, McNees Wallace & Nurick will host a 45 minute webinar to discuss these new changes to the ADA and what employers should know before the amendments take effect on January 1, 2009.  Please join Samuel N. Lillard and Michael A. Moore, attorneys with McNees Wallace & Nurick’s Labor & Employment Law Practice Group, as they tell you exactly what the new legislation means for employers and what your business should do to comply with the new amendments and avoid costly litigation.

Thursday, December 4, 2008 12:00 PM - 1:00 PM EST : Online Registration link here.

HR GENERALIST RESOURCES: Inclement weather policies in Pennsylvania

With the first measurable snowfall hitting many parts of Pennsylvania this week, it's time to start thinking about inclement weather policies. Closing a business for any reason can have a dramatic impact on customers and employees.  Many employers struggle with business closings and delays necessitated by inclement weather. Good communication and planning can help eleviate some of the issues created weather-related closures.  However, there are a few legal issues thrown in this wintery mix.  I recommend adopting a policy that addresses at least the following three areas:

Will employees be paid for the time when the business is closed?

Nonexempt employees need not be paid for time when they do not work because the business is closed. Exempt employees must be paid their salary for the week regardless of the business closing. PTO or vacation may be charged, but exempt employee salaries may not be docked for time when the business is closed. A Department of Labor Compliance Assistance Letter details some of the Wage and Hour considerations applicable to the payment of wages for exempt employees.


Will employees be paid if they don’t report to work due to inclement weather when the business is open?

Nonexempt employees need not be paid for times they are absent from work. Exempt employees need not be paid for a whole day absence taken due to inclement weather. An exempt employee absent for part of a day may be forced to use vacation or PTO time. If the exempt employee has no vacation or PTO time, his or her salary may not be docked for a partial day absence.  The same Department of Labor Compliance Assistance Letter addresses this situation.


Can an employer discipline or discharge and employee for failing to report to work due to weather conditions when the business is open?

An employer may generally apply its normal attendance policy to weather related absences; however, most will make an exception for absences due to weather if the employee makes a reasonable effort to get to work. Collateral issues abound such as childcare, public transportation, and the “snow phobic” employee (chionophobia). With the ADA Amendments Act, this may be an area of accommodations. Keep in mind that “exceptions” should be uniformly made to avoid discrimination claims.


There is one major legal exception. Under Pennsylvania law (43 P.S. §§ 1481-1485), an employer may not discipline or discharge an employee who fails to report to work due to the closure of the roads in the county of the employer's place of business or the county of the employee's residency, if the road closure is the result of a state of emergency declared by the Governor.  The most obvious and likely scenario is a snow storm or other inclement weather.


Employers are not required to pay an employee who is a no show based on road closures, unless a union contract dictates otherwise.  An employee who can prove the employer's "knowing and intentional" violation of the law may recover lost pay, be reinstated or have discipline revoked, and may collect attorneys fees and costs.The law does not apply to the following jobs: drivers of emergency vehicles, essential corrections personnel, police, emergency service personnel, hospital and nursing home staffs, pharmacists, essential health care professionals, public utility personnel, employees of radio or television stations engaged in the gathering and dissemination of news, road crews and oil and milk delivery personnel.

Final FMLA Regulations issued with an Effective Date of January 16, 2009

The Department of Labor issued 762 pages of regulations covering the FMLA. . As expected, 2009 will be a busy year for Human Resources Professionals because of compliance and legislative changes.  The following is a brief summary of the regulatory changes:

Military Caregiver Leave: Implements the expanded FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 workweeks of leave in a 12-month period.
Leave for Qualifying Exigencies for Families of National Guard and Reserves: The expanded FMLA protections allow families of National Guard and Reserve personnel on active duty to take FMLA job-protected leave to manage their affairs — "qualifying exigencies." The rule defines "qualifying exigencies" as: (1) short-notice deployment (2) military events and related activities (3) childcare and school activities (4) financial and legal arrangements (5) counseling (6) rest and recuperation (7) post-deployment activities and (8) additional activities where the employer and employee agree to the leave.
The Ragsdale Decision/Penalties: The updated rule contains technical changes to be consistent with the U.S. Supreme Court's decision in Ragsdale v. Wolverine World Wide Inc. The court ruled that the regulation's so-called "categorical" penalty (requiring an employer to provide 12 additional weeks of FMLA-protected leave after the employee had already taken 30 weeks of leave) was inconsistent with the statutory limit of only 12 weeks of FMLA leave and contrary to the law's remedial requirement that an employee demonstrate individual harm. The new rule removes these penalties and clarifies that if an employee suffers individual harm because the employer did not follow the notification rules, the employer may be liable for the leave and penalties.
Waiver of Rights: Employees may voluntarily settle their FMLA claims without court or DOL approval. However, prospective waivers of FMLA rights are prohibited.
Serious Health Condition: The six individual definitions of "serious health condition," are continued with guidance on their implementation. First, the rules clarify that if an employee is taking leave involving more than three consecutive calendar days of incapacity plus two visits to a health care provider, the two visits must occur within 30 days of the period of incapacity. Second, they define "periodic visits to a health care provider" for chronic serious health conditions as at least two visits to a health care provider per year.
Light Duty: Time spent in "light duty" work does not count against an employee's FMLA leave entitlement, and the employee's right to job restoration is held in abeyance during the light duty period. If an employee is voluntarily doing light duty work, he or she is not on FMLA leave.
Perfect Attendance Awards: Companies need not grant a "perfect attendance" award to an employee who does not have perfect attendance because he or she took FMLA leave — but only if the employer treats employees taking non-FMLA leave in an identical way.
Employer Notice Obligations: All employer notice requirements into a "one-stop" section of the regulations to clear up some conflicting provisions and time periods. Further, the final rule clarifies and strengthens the employer notice requirements to employees in order that employers will better inform employees about their FMLA rights and obligations, and allow for a smoother exchange of information between employers and employees.
Employee Notice: Employee must follow the employer's normal and customary call-in procedures, unless there are unusual circumstances. The final rule modifies the current provision that had been interpreted to allow some employees to notify their employers of their need for FMLA leave up to two full business days after an absence, even if they could provide notice sooner.
Medical Certification Process (Content and Clarification): The rule limits who may contact the health care provider and bans an employee's direct supervisor from making the contact. The rule address the requirements of HIPAA's medical privacy rule to communications between employers and employees' health care providers.


Employer's Strategic Planning for an Obama Administration

President-Elect Obama told his hometown crowd that "Change has come to America." Through his election speeches, website and co-sponsorship of Senate Bills there is a road map of what changes will likely be coming to the American workplace.

Employers would be well served by examining the impact of likely legislation on their business and planning accordingly. The most significant changes will likely come from the Employee Free Choice Act  and RESPECT ACT which will reshape union organizing. The building trades, healthcare, and manufacturing will be the first to feel the effects, but so will business that were not traditionally union targets like financial services.  The balance of Senator Obama's legislative agenda involves expanding existing areas of employment protection through the Paycheck Fairness Act, Ledbetter Fair Pay Act, Employment Non-Discrimination Act.

Prior posts have summarized the content of these bills and their impact on the workplace. In the coming weeks, we will provide more extensive guidance on planning to meet the changes posed by these and other legislative initiatives.

Related Posts:
Employer's Guide to the Election
Obama Victory may give rise to Unprecedented Unionization of the American Workplace

Bosses do not Deserve RESPECT

ADA Amendments may Open the Door for Nicotine Addiction Claims

Today’s smokers [are] more addicted to nicotine according to a new study, which notes that 73% of those trying to quit are “highly dependent”. The Center for Disease Control and Prevention estimates that 20.2% of Americans are smokers. Pennsylvania has a slightly higher rate of smoking at 21.5 % with 51.9% attempting to quit. Many of these smokers are also employees.

Smokers are feeling the heat in the workplace through smoke-free workplace policies. Jon Hyman at the Ohio Employer’s Law Blog has a post asking Are there legal risks with smoking bans?  He notes that pushing back on these employer initiatives are  29 states which have enacted laws protecting employees who smoke from discrimination.

Pennsylvania has no law protecting smokers from discrimination. To the contrary, Pennsylvania’s new Clean Indoor Air Act mandates smoke-free workplaces and precludes employees from smoking indoors. However, the law allows employers to prohibit smoking anywhere on company property; it does not prevent the continuation of outdoor smoking areas. Employers are left with the sometimes delicate task of crafting a policy concerning outdoor smoking and monitoring the break schedules of employees who wish to smoke. In addition, many wellness programs have targeted smoking with cessation programs coupled with both financial incentives and penalties.

The Americans with Disabilities Act was recently amended to expand the definition of “disability” to the point that it may encompass nicotine addiction. The few ADA cases on “smoking” as a disability have not recognized a claim based on the pre-amendment definition of disability. However, the rationale for denying disability status to “smoking” or “nicotine addiction” is squarely predicated on the remedial nature of the condition exempting it from coverage of the ADA as expounded in Sutton v. United Airlines, Inc. The ADA Amendments expressly abrogated Sutton.  In the only published case of which I am aware, the court in Brashear v. Simms set forth the following rationale in dismissing a smoker’s ADA claim:

…[E]ven assuming that the ADA fully applies in this case, common sense compels the conclusion that smoking, whether denominated as “nicotine addiction” or not, is not a “disability” within the meaning of the ADA. Congress could not possibly have intended the absurd result of including smoking within the definition of “disability,” which would render somewhere between 25% and 30% of the American public disabled under federal law because they smoke. In any event, both smoking and “nicotine addiction” are readily remediable, either by quitting smoking outright through an act of willpower (albeit easier for some than others), or by the use of such items as nicotine patches or nicotine chewing gum. If the smokers' nicotine addiction is thus remediable, neither such addiction nor smoking itself qualifies as a disability within the coverage of the ADA, under well-settled Supreme Court precedent.

Pennsylvania employers can and must adopt policies prohibiting smoking in the workplace. However, employers may well be required to reasonably accommodate nicotine-addicted employees much as they would need to do so with other addictions, like drugs and alcohol. The scope of such accommodations must be explored. Section G of the EEOC’s Guidance on Applying Performance Standards to Employees with Disabilities may prove helpful.


UPDATE:  How will this new wrinkle weigh in the mix: Under Obama will smoking become  "cool" again?

Employer's Guide to the Election

The election rhetoric has been relatively quiet on employment-related topics, except for the brief mention in the last debate. Candidate Obama has a clear agenda employment legislation based on his co-sponsorship of various bills and other media comments. Candidate McCain’s position is less clear. Detailed below is a summary of the key legislative initiatives considered by Congress in 2008, all of which have passed the House of Representatives except the RESPECT Act.

Employee Free Choice Act (H.R. 800 and S. 1041)

Summary:  The EFCA amends the NLRA to change the procedures for union certification and first contract negotiation. The primary components of the act are as follows:

  • Allows NLRB certification of a relevant bargaining unit upon authorization card showing from 50% plus one of employees bypassing secret ballot election.
  • Mandates initial collective bargaining contract be negotiated within 120 days or first contract is produced by an arbitrator covering employees for 2 years.
  • Provides new fines for employer unfair labor practices.

Impact:   EFCA is a monumental change to the NLRA. Much has been made of the abrogation of the secret ballot election, but equally dramatic are the limitations placed on collective bargaining and contract determination by an arbitrator if no agreement is reached in 120 days of negotiations.   If enacted, EFCA will result in unprecedented organizing activity with employers losing their ability to demand an election and engage in hard bargaining over a first contract.

Candidate Positions:  H.R. 800 passed the House but did not receive enough votes for consideration by the Senate. Candidate Obama is a co-sponsor of the Senate Bill and supports its passage. Candidate McCain opposes the Senate Bill.

Prior Posts:  NOW is the Time for Employers to Gear up for the Employee Free Choice Act (Unions Are)


Employment Non-Discrimination Act (H.R. 3685/ no Senate Bill)

Summary:  ENDA adds sexual orientation to the protected classes under Title VII for all employers except religious organizations. It allows reasonable access to adequate facilities that are not inconsistent with the employee’s identified gender, but does not require domestic partner benefits or protect “gender identity”.

Impact:  ENDA adds a protected class to employment discrimination protections allowing compensatory and punitive damage claims against employers.     

Candidate Positions:  H.R. 3685 passed the House but did not receive enough votes for consideration by the Senate.  No legislative position by either candidate.   Candidate Obama’s website expresses support for the legislation.


Ledbetter Fair Pay Act (H.R. 2831/ S. 1843)

Summary:  FPA overturns the Supreme Court’s decision in Ledbetter v. Goodyear Tire and Rubber Co. effectively eliminating the 180 or 300-day statute of limitations for filing a wage-related discrimination claim. The bill allows family members and others affected by discrimination to file claims and reinstitutes the Paycheck Rule for determining when a claim accrues. It also allows claims based on paychecks and annuity payments which would allow retirees to bring claims.

Impact:  FPA virtually eliminates the statute of limitations for wage-related claims.

Candidate Positions:  H.R. 2831 passed the House but did not receive enough votes for consideration by the Senate.  Candidate Obama is a cosponsor of the Bill. Candidate McCain has expressed no opinion on the Bill.


Paycheck Fairness Act (H.R. 1338/ S. 766)

Summary:  PFA changes the burden of proof in gender based pay claims requiring the employer to affirmatively demonstrate that any pay differential is not based on sex. Employers who cannot meet this burden face unlimited compensatory and punitive damages. The EEOC would be required to collect employer payroll information based on sex, race, and national origin thereby targeting its enforcement activities. The Bill also changed rules on class actions automatically including employees in such claims unless they specifically opt out.

Impact:  PFA subjects employers to wage related class actions with unlimited damages and makes it easier for employees to prove such claims.

Candidate Positions:  H.R. 1338 passed the House but did not receive enough votes for consideration by the Senate.  Candidate Obama is a cosponsor of the Bill. Candidate McCain has not taken any position on the Bill.


RESPECT ACT (H.R. 1644/ S. 969)

Summary:  The so-called Re-Empowerment of Skilled and Professional Employees and Construction Tradesworkers (RESPECT) Act would change the NLRA definition of “supervisor” to exclude “working supervisors” who do not spend a majority of their worktime in strictly managerial duties excluding the tradition duties of assigning work and directing the activities of others.

Impact:  Respect would allow many working or front line supervisors to join a union dividing their loyalties to the company, as they would be permitted to assist in the unionization of the company.

Candidate Positions:  Candidate Obama is a cosponsor of the bill and Candidate McCain has taken no position on the Bill.

Prior Posts: Bosses do not Deserve RESPECT


If there is a Democratically-controlled House, Senate, and President, it is likely that some or all of the above legislation will be enacted in 2009. Others have commented on the HR landscape following the election:

What The Future of HR Looks Like in 2009

Small business owner’s guide to the election

Employer Dress Code Standards: "Neat, Clean and Professional" may not be Enough

The New York Times article Tattoos Gain Even More Visibility discusses the rising popularity of body art and challenges facing employers in regulating employee dress. The article focuses on tattoos but raises the larger issue of employer dress code standards and their challenges in terms of both employee retention and legal compliance.

Jon Hyman at the Ohio Employers Law Blog notes that Employment decisions based on tattoos are not discriminatory and I would add “per se”. In fact, most courts defer to an employer’s evaluation of dress standards focusing on whether the policy is discriminatory or fails to reasonably accommodate religious practices. For example, in Coulter v. Costco Wholesale Corp., a court determined that “Costco has made a determination that facial piercings, aside from earrings, detract from the "neat, clean and professional image" that it aims to cultivate. Such a business determination is within its discretion. As another court has explained, ‘Even assuming that the defendants' justification for the grooming standards amounted to nothing more than an appeal to customer preference, . . . it is not the law that customer preference is an insufficient justification as a matter of law.’"

Courts may not question the business reason for the dress code standard, but the application of the standard across the pool of applicants and employees is clearly, where discrimination can occur. Discrimination is more likely to occur where managers are called upon to subjectively evaluate compliance. As noted in the NYTimes article, “Defining what the courts in the Cloutier case called a “neat, clean and professional” workplace image becomes more challenging when you consider that in 2006, a Pew Research Center survey found that 36 percent of people age 18 to 25, and 40 percent of those age 26 to 40, have at least one tattoo.” The difficulty arises from both the prevalence of tattoos and the excessive subjectivity of the standard.

Human Resource Professionals and managers loathe their role as fashion policy, but the subjectivity of some dress code standards invites claims of discrimination. For example, an employer requires all applicants to have a “neat, clean and professional appearance”. If hiring managers are called upon to describe this qualification standard, it is likely that all will have different measures.  If the subjective dress standard disproportionately disqualifies applicants in a protected class, it may be challenged as discriminatory.

Kris Dunn at the HR Capitalist gives a great perspective on customer preference in his post  Your Employee's Tattoo Is Causing a Consumer Confidence Issue....John Phillips at The Word on Employment Law also comments on the subject in his post  Coming to Your Workplace: Visible Tattoos.

Managing Layoffs and Reductions in Force

As the economic meltdown cascades through the financial, banking and related sectors, many employers are planning staff cuts.  Selecting employees for lay off must be collaboration between managers and human resources. HR must be able to influence the process to reduce legal risks and assuage the anxiety of remaining employees:

Establishing Business Justification and Layoff Selection Criteria:

The business justification for the reduction in force or layoff must be established. The justification for layoff typically gives rise to the selection criteria. For example, if a large contract was lost, the production and support functions related to the lost contract will be the focus or the layoff.

Layoff decisions may be challenged under discrimination laws, so it is advisable to develop selection criteria that support the business reasons for selecting one employee over another. Unless dictated by union contract, employers have discretion in developing the selection criteria which can include factors like, seniority, relative skills, performance, and/or disciplinary record.  More than one factor may be used.

Forced Ranking Systems are sometimes utilized to rank employees against one another from the top down based on performance criteria. The subjectivity in forced ranking can be challenged as discriminatory unless uniformly and rationally applied.

Evaluating Impact of Selection Criteria including Bumping, Transfer and Recall Rights:

Once employees are identified for layoff, the results of the section criteria must be assessed in terms of disparate impact and other special circumstances. A disparate impact analysis should be conducted to assess whether the selection criteria have resulted in the disproportionate layoff of members of a protected class. Likewise, special circumstances should be evaluated such as employees with recent employment complaints, union activity, FMLA leaves, etc.  Consider documenting the final layoff decisions, but not the deliberations leading up to them.

Thought must be given to collateral job rights employees may have under employment policies and practices. Typical areas involve shift or department transfers, supervisor demotion in lieu of layoff, and voluntary layoffs. Likewise, the parameters of recall, if any, should be described.

WARNA Obligations:

Federal and state plant closing/mass layoff laws must be considered. Although Pennsylvania has no state law equivalent to WARNA, employers with multi-state operations must assess the application of such laws. Coverage under WARNA can be complex as it has look back rules which aggregate layoffs for determining triggering events. WARNA coverage will trigger the sixty-day notice period which has a tremendous impact on layoff planning raising issues of pay in lieu of notice, retention, and publicity.

Severance Benefits and Releases:

Careful consideration must be given to describing the benefit package, if any, offered to employees. If an employer is offering benefits that exceed those already provided by policy or mandated by law, it should consider obtaining a release. The federal Age Discrimination in Employment Act (ADEA) contains special rules for waivers of rights of claims of age discrimination including a 45-day consideration and seven-day revocation period for such releases. Furthermore, the ADEA contains informational requirements that mandate publication of summary of employee demographic information in connection with the release.

Communications Plan:

Effective communication is paramount in reducing employee legal claims and assuaging the anxiety of remaining employees. Everything that is said about the reasons for the layoff will be scrutinized in litigation. Consider scripting communications for group meetings and avoid individual discussions of the reason for selection. Large layoffs may generate news media interest for which a press release is a helpful way to influence the message.



Jerry Kalish at the Retirement Plan Blog made a great observation about layoffs in his post Does a reduction in force or layoff beget a partial termination of a retirement plan?.  He refers to the IRS rules on partial termination of a retirement plan based on the significant reduction in plan participation resulting from the layoff.  IRS Guidance entitled 401(k) Resource Guide - Plan Participants - Plan Termination includes the following summary:

Although a 401(k) plan must be established with the intention of being continued indefinitely, an employer may (fully) terminate its 401(k) plan at its discretion. In certain cases, a partial plan termination is deemed to occur. Whether a partial termination occurs depends on the individual facts and circumstances of a given case. In general, a partial termination is deemed to occur when an employer-initiated action results in a significant decrease in plan participation. As an example, a partial termination may be deemed to occur when an employer reduces its workforce (and plan participation) by 20%.

"Excessive Subjectivity" and Discrimination - A New EEOC Sex Discrimination Lawsuit

On September 23, 2008, the EEOC filed a lawsuit in the United States District Court for the Western District of New York against Sterling Jewelers Inc., the largest specialty retail jeweler in the United States. The EEOC's Complaint alleges that Sterling "pays its female retail sales employees less than male employees performing substantially equal work and denies female employees promotional opportunities for which they are qualified." The lawsuit seeks relief on behalf of a class of potentially thousands of current and former female employees of Sterling throughout the U.S. Sterling owns and operates the Kay Jewelers and Jared The Galleria of Jewelry stores and various regional retail jewelry establishments.

In both the Complaint and press release issued by the EEOC on September 24, 2008 to announce the lawsuit, the EEOC claims that Sterling's system for making promotion and compensation decisions is "excessively subjective" and has resulted in both disparate treatment and disparate impact sex discrimination. The "excessive subjectivity" claim is the primary allegation of unlawful discrimination in the complaint.


The use of subjective criteria in employment decisions often is unavoidable. Simply put, purely objective criteria is not always available or appropriate for hiring, compensation, promotion, and discharge decisions. "Excessive" subjectivity, however, can give rise to allegations of discriminatory treatment and systematic bias. Employers and their counsel often struggle to balance the desire to use all appropriate criteria when making employment decisions, including both objective and subjective criteria, with the knowledge that "excessive subjectivity" in the decision-making can create perceptions of bias and increase the potential for discrimination claims. 


Of course, determining what is "excessive subjectivity," as opposed to typical subjectivity common in many employment decisions, can be difficult. This problem is more significant for larger employers that lack a centralized structure for employment decision-making. An employer with more independent decision-makers has a greater chance for "excessive subjectivity," especially if the employer has not promulgated clear guidelines or requirements for the decision-making process.


The EEOC has made clear that it views "excessive subjectivity" in compensation and promotion systems as a high priority enforcement issue for the agency. The Sterling case, with its nationwide scope and focus on this issue, emphasizes the EEOC's commitment. Employers and their counsel should be aware of this issue and review their hiring, compensation, and promotion procedures to determine whether changes could produce a better structured, less subjective system.

ADA Amendments expand Disability Coverage

President Bush will sign legislation amending the Americans with Disabilities Act, which overwhelmingly passed through Congress. The ADA Amendments Act is designed to convey Congressional intent that “the primary object of attention in cases brought under the ADA should be whether entities covered under the ADA have complied with their obligations, and to convey that the question of whether an individual’s impairment is a disability under the ADA should not demand extensive analysis.”

The goal of expanding the coverage of the ADA is achieved by changing the definition of “disability” to:

  • Prohibit the consideration of measures that reduce or mitigate the impact of impairment—such as medication, prosthetics and assistive technology—in determining whether an individual has a disability under the law.
  • Cover workers whose employers discriminate against them based on a perception that the worker is impaired, regardless of whether the worker has a disability.
  • Clarify that the law provides broad coverage to protect anyone who faces discrimination on the basis of a disability.

Congress expressly reversed several Supreme Court decisions that restricted the scope of the ADA. Congress rejected the standard that ameliorative effects of mitigating measures must be considered in determining whether a person is disabled found in Sutton v. United Air Lines, Inc. Congress also rebuked the Court in its restrictive interpretation of “disability” by rejecting the terms “substantially limits ” and “significantly restricted” because the terms as outlined in Toyota Motor Mfg, Kentucky, Inc. v. Williams are too narrow.


The ADA amendments will  refocus disability discrimination lawsuits downplaying the examination of whether an employee meets the definition of disability.  Daniel Schwartz of the Connecticut Employment Law Blog discusses the practical impacts.

EEOC Guidance Addresses Employee Performance and Conduct Issues Under the ADA

On September 3, 2008, the EEOC issued "a comprehensive question-and-answer guide addressing how the Americans with Disabilities Act (ADA) applies to a wide variety of performance and conduct issues."  The guidance contains a brief introductory section that includes some general legal requirements and definitions and then sets forth 30 questions and answers on various ADA-related subjects, including performance, conduct, and attendance issues, dress codes, drug and alcohol use, and confidentiality. Included within the EEOC's answers are numerous points of generally applicable "practical guidance."

The EEOC's new guide does not have the legal effect of federal regulations or change the ADA's existing accommodation and discrimination requirements. It does, however, contain a useful resource on an often difficult and complicated issue, namely what to do when an employee's performance or conduct problems may be, or are, caused by a disability. Among the guidance provided by the EEOC are the following:


Job Performance


  • An employee with a disability may be required to meet the same production standards, whether quantitative or qualitative, as a non-disabled employee in the same job. Lowering or changing a production standard because an employee cannot meet it due to a disability is not considered a reasonable accommodation.  However, a reasonable accommodation may be required to assist an employee in meeting a specific production standard.
  • An employer should evaluate the job performance of an employee with a disability the same way it evaluates any other employee’s performance.
  • If an employer gives a lower performance rating to an employee, and the employee responds by revealing she has a disability that is causing the performance problem, the employer still may give the lower rating. If the employee states that her disability is the cause of the performance problem, the employer should follow up by making clear what level of performance is required and asking why the employee believes the disability is affecting performance. If the employee does not ask for an accommodation, the employer may ask whether there is an accommodation that may help raise the employee’s performance level.
  • Ideally, employees will request reasonable accommodation before performance problems arise, or at least before they become too serious. Although the ADA does not require employees to ask for an accommodation at a specific time, the timing of a request for reasonable accommodation is important, because an employer does not have to rescind discipline (including a termination) or an evaluation warranted by poor performance.

Conduct Problems


  • If an employee’s disability does not cause the misconduct, an employer may hold the individual to the same conduct standards that it applies to all other employees. In most instances, an employee’s disability will not be relevant to any conduct violations.
  • If an employee’s disability causes a violation of a conduct rule, the employer may discipline the individual, if the conduct rule is job-related and consistent with business necessity and other employees are held to the same standard. The ADA does not protect employees from the consequences of violating conduct requirements, even where the conduct is caused by the disability.


  • An employer may have to modify its attendance policies for employees with a disability as a reasonable accommodation, absent undue hardship.
  • Although employers may have to grant extended medical leave as a reasonaable accommodiation, they have no obligation to provide leave of indefinite duration.  Granting indefinite leave, like frequent and unpredictable request for leave, can impose an undue hardship on an employer's operations.

Business Websites Face Americans with Disabilities Act Accommodations Claims

Target Corp. has agreed to pay $6 million in damages to plaintiffs in California unable to use its online site as part of a class action settlement with the National Federation of the Blind. The issue centers on the Americans with Disabilities Act’s requirements that retailers and other public places to make accommodations for people with disabilities. Target had argued that the ADA covered only physical spaces. The California court held that the ADA covers an online retailer’s website. Websites can be made more accessible through screen-reading software that converts text into speech for visually impaired access. The court certified the case as a class action before it settled.

The case has important implications for retailers who may now face class action lawsuits. Employers that rely on a web-based application and recruiting processes should also examine their websites for compliance with the ADA’s employment provisions which require accessibility and accommodation in the hiring process.   A recent OFCCP Directive sets forth the agency's policy on review of employer websites where applications are solicited:

Effective immediately, all compliance evaluations shall include a review of the contractor's online application systems to ensure that the contractor is providing equal opportunity to qualified individuals with disabilities and disabled veterans. The review should include whether the contractor is providing reasonable accommodation, when requested, unless such accommodation would cause an undue hardship. In this directive, the term "online system" shall include, but not be limited to, all electronic or web-based systems that the contractor uses in all of its personnel activities.

Benchmarking against the Federal Government's EEO Performance

The EEOC released its Annual Report on the Federal Workforce for Fiscal Year 2007 (period October 2006 to September 2007).  For those employers who may be benchmarking against the federal government, it seems to me that the government performs at a level that the EEOC would never accept from other employers. Here is a sampling of report’s findings:

·         The federal government employs almost 2.6 million workers of which 56.8% are men and 43.2% are women.

·         The federal workforce’s demographic composition is 7.8% Hispanic or Latino; 65.8% White; 18.4% Black or African American; 6% Asian; 0.2% Native Hawaiian/other Pacific Islander, 1.7% American Indian/Alaskan Native; and 0.2% reported 2 or more races.

·         Hispanic or Latinos, Whites, women and persons of Two or More Races remained below their overall availability in the national civilian labor force, as reported in the 2000 census (CLF).  Black or African Americans, Asians, Native Hawaiian/Other Pacific Islanders, American Indian/Alaska Natives and men remained above their overall availability in the CLF.

·         Federal employees and applicants filed 16,363 complaints alleging discrimination.

·         Unlawful discrimination was found in 2.8% of the 7,673 cases that were closed on the merits.

·         85% of federal agencies provided their EEO staff with required training.

·         58% of federal agencies have an Anti-Harassment Policy.

The good news is that the government is evaluating its EEO performance and publishing the results.

Discrimination Claims can cut to the Core of an Organization's Values

 Many organizations take great pride in their employment practices striving to keep them free from employment discrimination. For such companies, a discrimination charge or lawsuit strikes at the very core of the organization’s values.  For example, AARP was recently sued for age discrimination by an employee who alleges she was passed over for promotions, laid off, and never recalled despite openings. The irony of such claims plays well in the media, but shouldn’t derail the organization’s efforts if properly managed.

Organizations need to develop an approach to address high profile public relations matters in advance. The approach should coordinate internal and external communications among company officials, PR firms and attorneys and could include the following:

·         Immediate press release or comment to the media. You may only get one chance to blunt the media impact of a discrimination claim so having something more to say than “no comment”. Lawyers fear public comments about pending litigation because of the lack of control and the potential that statement may be used to impeach the company official who made them. Comments need not address the merits of the claims, but can reaffirm the organizations commitment to its core values. However, comments to the media should be handled by authorized employees and there should be a clear employment policy prohibiting other managers from speaking to the media about official company positions.

·         Internal communications to employees. Employees are sometimes forgotten in the rush to deal with external communications. Information about lawsuits should not be left to the rumor mill. Employers may be limited in what they can say about the facts, particularly if the litigant is still employed. However, at the very least, internal communications should include the fact of the suit, a denial of wrongdoing, and a reaffirmation of EEO policies.

·         Use of non-public forums for dispute resolution. The EEOC, state discrimination agencies and the courts have alternated dispute resolution mechanisms including mediation. ADR can be an effective, less costly and more private forum of resolving discrimination claims.

Obviously, public disclosure of a discrimination claim can hurt a company’s image. Managing internal and external communications with advanced planning can mitigate the adverse impact.

Revisiting Baseline Qualifications For Certain Positions: How Objective Qualifications, When Used Properly, Can Save The Day In Defending A Discrimination Claim

In Makky v. Chertoff, the Third Circuit Court of Appeals recently addressed the importance of objective job qualifications in evaluating the merits of a discrimination claim. Employers that establish clear baseline standards for position through their job descriptions, advertisements and other records are better able to defend discrimination claims by showing that the applicant or employee does not meet minimum qualifications for the position.

The Makky case involved the termination of employment of Dr. Wagih Makky who was employed by the United States government in the Federal Aviation Administration and Transportation Safety Administration for fifteen years. In his various positions, Dr. Makky was required to obtain security clearance. A descendant of Egypt, Makky was the only Muslim and only person of Arab descent in his division. Makky's security clearance was suspended due to safety concerns, including his dual citizenship with Egypt, foreign relatives and associates, foreign countries visited, and alleged misuse of his government computer. Makky was placed on paid administrative and subsequently terminated when the TSA issued its final denial of security clearance. Although Makky appealed the determination through the government's processes, the determination was upheld.

Makky filed a lawsuit including a claim for employment discrimination under Title VII of the Civil Rights Act. Makky's Title VII claim was premised on a mixed motive theory of discrimination which recognizes that an employment decision can at times be based on both (1) a legitimate non-discriminatory reason and (2) discriminatory animus. Here, Makky argued that while he was suspended without pay and terminated because he did not pass the security clearance, the TSA's actions were also motivated by discriminatory animus based on his national origin because the agency did not offer him other positions or keep him on paid leave. Although the Court recognized that the analysis is factually sensitive , it held that when a plaintiff does not possess the objective baseline qualifications to do his or her job, the discrimination claim will fail on its face because he or she cannot establish a prima facie case of discrimination. Applying the holding to the facts at hand, the Court found that Makky's inability to retain a security clearance rendered him expressly unqualified for the TSA position. Analogizing Makky's situation to a more mainstream occupation, the Court explained, "if the hospital employing a person who has been performing surgery learns that the employee falsified his or her qualifications and never went to medical school, that employee could not establish a prima facie mixed-motive case irrespective of allegations of racial or ethnic discrimination."

So what can an H.R. specialist take away from Makky? When a position requires a baseline objective qualification, like a license or degree, make sure it is expressly stated in all hiring materials including: (1) job advertisements; (2) position descriptions; and (3) application materials. Notably, if the degree or license it is merely the company's "preference" for someone in the position, it is important to consider whether making the "preference" appear as a "qualification" may lead to problems in the future. For example, suppose that Company X states that a sales position requires a Bachelor's Degree. When Company X interviews its two top choices, however, the female candidate who possess a Bachelor's Degree has the personality of dry toast, while the male candidate who has waitered all his life and does not have a Bachelor's Degree has a dynamic sales personality and will surely do well with Company X. If Company X believes that the male applicant is better suited for the position than the female applicant, should the Bachelor's Degree have been a required qualification in the first place? Probably not. Accordingly, it is important to have a process in place to review your company's job advertisements and position descriptions before posting for openings. While certain baseline objective qualifications can often be beneficial in refuting a prima facie discrimination claim, turning a mere "preference" into a "qualification" can have the opposite result because it may be used as evidence of a discriminatory motive.

HR GENERALIST RESOURCES: EEOC Issues New Compliance Assistance on Religious Discrimination and Accommodation

On July 22, 2008, the EEOC issued a new section of its Compliance Manual addressing the subject of religious discrimination. The section "provides guidance and instructions for investigating and analyzing charges alleging discrimination based on religion." The new section does not change a Pennsylvania employer's legal obligations, imposed by Title VII of the Civil Rights Act of 1964 ("Title VII") and the Pennsylvania Human Relations Act ("PHRA"), as amended, with respect to religious discrimination and accommodation. It does, however, provide a handy reference tool for many religious discrimination issues and offer some insight into the EEOC's current thinking on this often difficult subject. 

As a protected trait under both Title VII and the PHRA, religion may form the basis of disparate treatment, harassment, retaliation, and failure to accommodate claims by applicants and employees. The EEOC's new section is divided into five sections reflecting the different types of possible religion discrimination claims:

  • Coverage issues, including the definition of "religion" and "sincerely held," the religious organization exception, and the ministerial exception.
  • Disparate treatment analysis of employment decisions based on religion, including recruitment, hiring, promotion, discipline, and compensation, as well as differential treatment with respect to religious expression; customer preference; security requirements; and bona fide occupational qualifications.
  • Harassment analysis, including religious belief or practice as a condition of employment or advancement, hostile work environment, and employer liability issues.
  • Reasonable accommodation analysis, including notice of the conflict between religion and work, scope of the accommodation requirement and undue hardship defense, and common methods of accommodation.
  • Related forms of discrimination, including discrimination based on national origin, race, or color, as well as retaliation.

In addition to the standard harassment, disparate treatment, and retaliation requirements, the EEOC continues to recognize and enforce the following employer obligations:

  • Reasonable Accommodation. Once on notice, an employer must reasonably accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless providing the accommodation would create an undue hardship. A reasonable religious accommodation can be any adjustment to the work environment or requirement that will allow the employee to practice his religion. Examples of such accommodations may include allowing flexible scheduling, voluntary substitutions or swaps, job reassignments and lateral transfers, and modification of grooming requirements and other workplace practices and rules.
  • Undue Hardship. An employer need not accommodate an employee's religious beliefs and/or practices if doing so would impose an undue hardship on the employers' legitimate business interests. The undue hardship defense to providing religious accommodation requires a showing that the proposed accommodation in a particular case poses a “more than de minimis” cost or burden. This standard is far lower than that required for an undue hardship under the ADA, which is defined in that statute as “significant difficulty or expense."
  • Religious Expression and Participation. Employers must permit employees to engage in religious expression, unless the religious expression would impose an undue hardship on the employer. Generally, an employer may not place more restrictions on religious expression than on other forms of expression that have a comparable effect on workplace efficiency. Likewise, employees cannot be forced to participate, or not participate, in a religious activity as a condition of employment.

In addition to a description of the applicable legal requirements, the EEOC's new Compliance Manual section on religious discrimination also contains questions-and-answers and "best practices" information designed to assist employers with their compliance obligations. 

The issuance of this new compliance assistance demonstrates that the EEOC remains focused on religious discrimination and accommodation issues. For this reason and numerous others, employers also should be aware of and compliant with these requirements.

First Amendment Free Speech Protections Limit University's Enforcement of its Sexual Harassment Policy

A Federal Appeals Court in Philadelphia enjoined Temple University from enforcing its “facially overbroad” sexual harassment policy because some speech that creates a “hostile or offensive environment” may be protected speech under the First Amendment. In DeJohn v. Temple University, the Third Circuit Court of Appeals invalidated a public university’s Policy on Sexual Harassment that reads like that of many private employer’s, finding fault with the italicized language:

For all individuals who are part of the Temple community, all forms of sexual harassment are prohibited, including the following: an unwelcome sexual advance, request for sexual favors,  or other expressive, visual or physical conduct of a sexual or gender-motivated nature when… (c ) such conduct has the purpose and effect of unreasonably interfering with an individual’s work, educational performance, or status; or (d) such conduct has the purpose or effect of creating an intimidating, hostile or offensive environment.

The court found three areas of the policy language that were overboard so as to potentially stifle protected free speech:

  • The phrase “gender-motivated nature” is too indefinite taking into account the speaker’s motivations not limiting only the affect of speech and possibly inhibiting expression of a broad range of social issues. The Court also cautioned that “we must be aware that ‘gender’ to some people, is a fluid concept.”
  • The phrase “conduct which has the purpose and effect of unreasonably interfering” is too broad as it prohibits speech that “intends” to cause disruption. The university may only prohibited speeches that it reasonably believes will actually and materially disrupt the learning environment. (Interestingly, the “purpose and effect” language used by the EEOC.)
  • The phrase “unreasonably interfere[s] with an individual’s work” is too restrictive because it may encompass speech that creates a hostile or offensive environment but is protected nonetheless. A policy may prohibit speech that “substantially” interferes by using an additional standard like “severe and pervasive.”

Many employees in the private sector believe they have a constitutional right to say whatever they want in the workplace.  This is not the case and employees in the private sector may be disciplined for violating workplace conduct standards.

Private employers are not subject to the free speech protections of the First Amendment.  They can also take solace in the fact that a federal court is less likely to wordsmith their employment policies. The case shows the difficulty that all employers face in regulating workplace speech and conduct.  There are obvious challenges in drafting a harassment policy that is not so replete with legalese that is becomes incomprehensible to the workforce.

Legal System to Blame for Humorless Work Environment?

Hard economic times, perpetual threat of layoffs, workers stretched too thin could all be contributing to the “increasingly humorous American workplace” according to MSNBC author Eve Tahmincioglu in her post No joke! The workplace needs a good laugh. However, others are pointing to our legal system’s clamp down on “hostile work environments” as the cause of a joyless workplace:

What’s exacerbating the joylessness this recession has spawned, some believe, is decades of joke slap-downs in offices and factories. “The whole issue of political correctness has gone too far when it comes to the criteria for determining an offensive comment,” says Thierry Guedj, workplace psychology expert and professor at Boston University. “If anybody is offended, then it’s offensive. The criteria has become much too personalized. It only takes one person being slightly upset at something for it to become offensive.” It started in the 1980s, he continues, got worse in the 1990s and “has now reached its maximum.”

It is true that more claims of workplace harassment are being filed. The EEOC received 27,112 charges of harassment in 2007, up almost 18% from the prior year. Employer’s settlement payments of $65.6 million for these charges are no laughing matter. From a legal perspective, should employees be worried about injecting humor into the workplace and is an employer’s “joke slap-down” necessary? If your humor doesn’t demean people based on their membership in a protected class, then joke away.

It is the “off-color jokes” and other “humor” related to gender, race, national origin, religion or other protected classifications that can be considered harassment. These types of comments always find their way into allegations of discrimination or harassment when a complaint is filed. However, there is an important distinction between remarks uttered by a supervisor (quid pro quo harassment) verses those spoken by a co-worker (hostile environment harassment).

Potentially discriminatory remarks or jokes spoken by a decision maker are evidence of discriminatory motive in adverse employment decisions as noted by the Supreme Court in Ash v. Tyson Foods. A couple of off-color jokes followed up by a disciplinary suspension may give a discrimination charge some merit. On the other hand, mere utterance of a joke or other inappropriate remarks by a co-worker may not sufficiently affect conditions to create a hostile environment as noted in Meritor Savings Bank v. Vinson.   But that’s your risk.

According to EEOC Policy Guidance, a "hostile environment' harassment takes a variety of forms, many factors may affect this determination, including: (1) whether the conduct was verbal or physical, or both; (2) how frequently it was repeated; (3) whether the conduct was hostile and patently offensive; (4) whether the alleged harasser was a co-worker or a supervisor; (5) whether the others joined in perpetrating the harassment; and (6) whether the harassment was directed at more than one individual. 

Severity and the pervasiveness of alleged hostile activities are the focus of the legal analysis. This is a very fact sensitive inquiry which depends in part on what a reasonable person would find offensive. For example, the New Jersey Supreme Court has held that some racial slurs and jokes are so historically offensive that their use in the workplace, even once, can lead to liability for an employer who doesn’t respond appropriately. A single utterance of an epithet can create a hostile work environment if it is viewed as “severe” and it is aimed at the individual rather than a generalized comment.  

Professor Guedj is correct that workplace humor has changed; but, perhaps the change was needed.  The impact of hypersensitivity is theoretically mitigated by the reasonable person standard.  However, the gray of the law may have led some workplace humorist to abstinence. Alternatively, practicing “safe humor” could include the following prophylactic measures:

  • Evaluate the content of the humor; some words and subjects are never appropriate for the workplace.
  • Know your audience.
  • Save your stand up routine for the comedy club where patrons are willing participants.
  • Don’t make jokes personal by singling out one individual as the butt of your humor.
  • Stop joking with people who seem uncomfortable with it.
  • Don’t ridicule co-workers who don’t like your humor
  • Try ask whether someone is offended by the humor.
  • If a co-worker’s joke offends you, then say something to the jokester.
  • Don’t e-mail jokes to everyone in the office.
  • Take seriously complaints about inappropriate humor, but remember the conduct must offend a reasonable person.


Investigating Employee Misconduct based on Electronic Evidence may be limited by the Weakness of an Employer's Policies

The prevalence of e-mail and texting communications can aid an employer in its investigation of workplace misconduct; provided, the employer’s policy adequately preserves its right to access the data. However, overstepping rights to access e-mail and other electronic communication media can result in criminal prosecution under state and federal law.

Recent high profile firings of Philadelphia TV anchors highlight the role of electronic evidence in an employer’s investigations and the pitfalls of illegal access to private computer data, in this case by an employee. Fired TV newscaster Larry Mendte was charged July 21, 2008 with hacking into the e-mail of his younger co-anchor. Mendte was previously fired based on an independent investigation by CBS as he allegedly hacked into Lane’s e-mail account from work and home and then revealed information to news outlets about Lane’s legal troubles. Lane was fired in January by CBS after she was accused of assaulting a New York City Police Officer and other public gaffes which gained media attention. Lane since sued KYW-TV, claiming that the station exploited her, tore her down and defamed her on her way out the door. She also claims that KYW management failed to investigate leaks of personal information about her and also engaged in a pattern of "deep-seated gender-discriminatory animus" toward her and other female employees.  Undoubtedly, CBS's investigation into the circumstances of both firings will be the critical issues in subsequent lawsuits.

Federal and State laws protect employers and employees from unauthorized access to computers, servers and electronic data. There may be additional limitations on an employer’s access to employee e-mails and text messages sent from employer accounts when the messages are stored on third party provider’s servers and are not stored on employer’s internal network. In Quon v. Arch Wireless Operating Co. Inc., a federal appeals court in California held that a public employer cannot access the content of text messages and e-mails sent at work because the data was stored on a third party service provider’s server and the employees had a reasonable expectation of privacy in these accounts. An employer’s e-mail policy may eliminate the expectation of privacy as to e-mails stored on its servers.  However, the text messages held by “remote computing service” are protected under the Stored Communications Act and cannot be obtained by an employer without the employee’s consent.

Employers must carefully draft policies related to employee use and access to all electronic media so as to preserve its property interest in the data, ensure rights to unfettered access and prevent misuse of the media and information.

Tobacco Free Workplace Policies may be integrated with Wellness Programs

As the effective date of Pennsylvania’s Clean Indoor Air Act approaches, businesses may wish to seize the opportunity to create a comprehensive tobacco-free workplace program including wellness initiatives. The no smoking law applies to all indoor work areas and permits an employer to completely prohibit smoking on its property. However, legal and employee relations considerations suggest an integrated approach to workplace smoking.

Smoking-related business cost are well documented. The Center for Disease Control has the following statistics on smoking:

  • For 1997–2001, cigarette smoking was estimated to be responsible for $167 billion in annual health-related economic losses in the United States ($75 billion in direct medical costs, and $92 billion in lost productivity), or about $3,561 per adult smoker.
  • An estimated, 20.8% of all adults (45.3 million people) smoke cigarettes in the United States.
  • Among current U.S. adult smokers, 70% report that they want to quit completely. In 2006, an estimated 19.2 million (44.2%) adult smokers had stopped smoking for at least 1 day during the preceding 12 months because they were trying to quit.

Design of an effective wellness program to address smoking can take many forms and requires collaboration between insurance brokers, benefit providers and legal advisors in light of limitations placed on certain aspects of their design including HIPAA's Nondiscrimination Requirements.    HIPAA regulations affect the design of wellness programs that take into account "health factors" when providing incentives under the program. Programs such as the following that do not take into account a participant's health factors when a reward is given or withheld for participation by an employee or beneficiary:

  • Health Assessments
  • Diagnostic testing that does not take into account test results
  • Preventive care encouragement incentives such as waivers of co-pays or deductibles
  • Smoking cessation programs so long as the benefit is received regardless of whether the employee quits smoking
  • Health education seminars
  • Gym membership reimbursement

Wellness programs that give rewards for healthy conduct or that penalize unhealthy activities (like smoking) must meet all of the five following standards:

  • Limited Reward:       All rewards offered under the program must not exceed 20% of the cost of coverage (total amount of employee and employer contribution). The reward can be in the form of a discount or rebate of premium or contribution; waiver of deductible, copayment or coinsurance; or the value of a benefit provided under the plan.
  • Reasonably Designed to Promote Health or Prevent Disease:    The plan must have a reasonable chance of improving health or preventing disease in a way that is not overly burdensome.
  • No More that Annual Qualification for Award:    Individuals eligible to participate must be given the opportunity to qualify at least once a year.
  • Uniform Reward Availability for "Similarly Situated" Individuals: The reward must be available to all similarly situated individuals and there must be a reasonable alternative for receiving the reward for any individual for whom it is unreasonably difficult due to a medical condition or for whom it is medically inadvisable to attempt to obtain the applicable standard. Physician verification may be required.
  • Plan Material must Describe all Terms:     The plan must describe all terms of the program and the availability of a reasonable alternative. The following language may be used to satisfy the alternative:

"If it is unreasonably difficult due to a medical condition for you to achieve the standards for the reward under this program, or if it is medically inadvisable for you to attempt to achieve the standards for the reward under this program, call us at            and we will work with you to develop another way to qualify for the reward."

Business initiatives to regulate off duty conduct have some legal risk. However, courts have so far rejected smoker’s claims of disability based upon nicotine addiction.

Use of Subjective Hiring Criteria May Require Procedural "Safeguards"

Most hiring decisions are predicated in some part on subjective criteria. Let’s take for example, “Attitude and communication skills” which are on the top the hiring criteria for Phil Gerbyshak at Slacker Manager’s based on his post 5 Must Have Skills. Undoubtedly these traits were assessed by one or more members of the Phil’s hiring team based on how the candidates presented themselves at the interview. This hiring approach is universally practiced by companies across the country and loathed by government enforcement agencies.

The EEOC and OFCCP have initiatives targeting an employer’s selection process. The EEOC announced its focus on employment testing and screening resulting in a fact sheet Employment Tests and Selection Procedures. Likewise, OFCCP has a program targeting Systemic Discrimination, which examines criteria used in the hiring process. Subjective criteria are scrutinized because of the fear that they will be manipulated for a discriminatory purpose.

Courts examining subjective hiring criteria have not outright prohibited their use, but have cautioned against their advancement because they are “easily fabricated”. Recently in Wingate v. Gage County School District, the Eighth Circuit Court of Appeals ruled that an employer’s use of subjective criteria did not create an inference of age discrimination when objective criteria were also utilized to make the employment decision.

The legal analyses of subjective hiring criteria revolve around theories of disparate treatment or disparate impact. The measure of compliance has its origin in the Uniform Guidelines on Employee Selection Procedures, which define interview questions as means of selection criteria and set forth the parameters for compliance.

The legal compliance for disparate treatment focuses on the following:

  • Whether the subjective criteria are job related
  • How they are measured
  • Whether the criteria are uniformly applied

According to Section 30 the OFCCP Compliance Manual, employers that utilize subjective hiring criteria will be evaluated for disparate treatment based, in part, upon their use of “safeguards” in the hiring process:

Safeguards consist of efforts made by the contractor to limit the possibility of differential application of the selection criteria/processes. In other words, treating members of a minority group or women differently than others in the application/evaluation of the criteria/processes. An example of a uniformly applied subjective process with safeguards could be an interview where all persons who pass the required test are interviewed regardless of minority or sex status; all interviewers are professionally trained in interviewing; all persons interviewed are asked the same questions; responses are documented; and answers are all evaluated in the same manner.

The legal compliance hurdles for disparate impact have a slightly different focus. The EEOC describes this process as follows:

  • If the selection procedure has a disparate impact based on race, color, religion, sex, or national origin, can the employer show that the selection procedure is job-related and consistent with business necessity? An employer can meet this standard by showing that it is necessary to the safe and efficient performance of the job. The challenged policy or practice should therefore be associated with the skills needed to perform the job successfully. In contrast to a general measurement of applicants’ or employees’ skills, the challenged policy or practice must evaluate an individual’s skills as related to the particular job in question.
  • f the employer shows that the selection procedure is job-related and consistent with business necessity, can the person challenging the selection procedure demonstrate that there is a less discriminatory alternative available? For example, is another test available that would be equally effective in predicting job performance but would not disproportionately exclude the protected group?

Employers who want to assess attitude and communication skills should consider the following additions to their hiring procedures:

  • Make attitude and communication skills an express criteria in job descriptions and summaries of minimum job requirements
  • Describe its job relatedness and business justification
  • Assess whether the criteria is creating an adverse impact
  • Implement “safeguards” in the hiring process describe in OFCCP Guidance

Switching to a Paid Time Off Program (PTO) has Practical and Legal Implications

Traditional leave programs segregate time off into categories like vacation, sick time and personal time requiring HR professionals to track both the time off and the reason it is being taken. Sick time abuses are addressed by tightly monitoring the reasons for sickness-related absences and disciplining employees for excessive absenteeism. Many employers have decided to get away from policing the circumstances of an employee's absence by just creating a bank of paid time off that can be used for any reason. Once PTO is exhausted, time off is unpaid and subject to the attendance discipline policy. This certainly sounds like a great idea, but here are some practical and legal considerations in converting from a traditional sick pay program to a PTO plan:

Timing the Change Over to PTO:

Changes in leave policies should be coordinated with either the end of the leave year period or some other workplace change like moving to a four-day workweek. The obvious choice is converting to PTO bank at the end of the year, since most employers administer their time off programs on a calendar/fiscal year. For employers using anniversary date leave years, it is too difficult administratively to run dual programs, so they should pick a date and change over for everyone.

Effect on Four-Day Workweeks

Employers need to remember that a change in workweek from five eight days to four day ten hour days also affects time off policies. A handbook or CBA may describe time off (PTO, vacation, holidays, personal and sick time) in terms of “days”. However,

a workday, which used to be an 8-hour day, is now a 10-hour day. The 8-hour day was 20% or the workweek, but the 10-hour-workday is 25% of the workweek. If a day expands to 10 hours, employees are getting more time off and, as a result, the company is losing 5% productivity. If a day stays at 8 hours then employees can’t cover the whole day off. Converting the whole PTO bank to hours can address this situation. (see Energy Expenses And Gas Prices Motivate Employers To Move To Four Day Workweek: What Are The Legal Issues?)

Addressing the Perception of a "Take Away":

Converting to PTO means combining vacation, sick days, personal days, and other time off into one bank. Employers almost never credit the entire amount of sick time to PTO banks. Therefore, employers need to address the perception that employees are losing sick time. I have found that referring to the statistic mentioned in the prior posting (average 8 sick days, use 5) makes some sense. Based on this ratio, I convert 60% of sick days to PTO and couple it with an explanation about trade offs.

Dealing with Accumulated Sick Time:

Some employers allow the accumulation of unused sick time as an incentive not to use it. (This practice drives accountants crazy). The accumulated time may be used in some of the following ways: to satisfy a waiting period for STD/LTD; as a pay out upon separation, typically at a reduced percentage (50%); or it is simply forfeited. Employers may seize the opportunity to clean up their balance sheet and pay out a portion of the accumulated time or convert it to PTO. This approach softens the blow of the perceived take away mentioned above. However, an employer's flexibility in dealing with accumulated sick time depends on its written policy and practice with regard to payouts. Be careful not to create a claim for unpaid fringe benefits under the Pennsylvania Wage Payment and Collection Law.

Exhausting PTO:

Employees who use all of their PTO are unpaid for additional absences and are subject to discipline under the attendance policy. Some traps for the unwary include: the prohibition on salary docking for exempt employees; additional unpaid leave as an accommodation under the ADA, and discrimination claims under the ADA.

Administering FMLA:

FMLA administration becomes more challenging in a PTO program since the employer is not necessarily aware of the reason for an absence. A serious health condition under the FMLA triggers an obligation to notify an employee of his or her FMLA rights and starts the counting of the time against the 12 weeks of leave. Employers must also address the concurrent use of PTO and FMLA leave in their policies.

Integrating STD and other Leave Programs:

Some sick leave policies were designed to integrate with the waiting period for STD benefits. A move to PTO creates a disconnect. The disconnect can be mitigated by allowing an employee with accumulated sick time to use it to satisfy the waiting period if he or she becomes eligible for STD benefits. Otherwise, PTO or unpaid time is used during the waiting period. Employers might address hardships by creating a PTO donation program where employees may donate unused PTO to a fellow worker who needs additional time.

Contesting Unemployment Claims:

 An employer's proof of willful misconduct to deny unemployment benefits will generally look at the incident that gave rise to the discharge. If the reason is a violation of employer's attendance policy, the employee can show that the violation was not his or her fault. An employee who is fired for excessive absences after "squandering" PTO, may still be eligible for unemployment if the absence that gave rise to termination was for a legitimate illness.

Drafting a Policy:

A written policy on PTO is strongly suggested and it should address at least the following areas:

  • Accrual Basis or Award Basis
  • Notice of Absence
  • Unused PTO carryover or forfeiture
  • Concurrent use of FMLA and PTO
  • Consequences of Exhausting PTO
  • Discipline/Discharge

The Genesis of a New Frontier in Employment Law: What's "GINA" Got To Do With You?

On May 21, 2008, President Bush signed into law the Genetic Information Nondiscrimination Act of 2008 ("GINA"). GINA amends three employment-related laws including: (1) Title VII of the Civil Rights Act (Title VII); (2) the Employee Retirement Insurance Security Act (ERISA); and (3) the Fair Labor Standards Act (FLSA). While most of the provisions will become effective in 2009, it is important for employers to be familiar with GINA's basic concepts and provisions to better prepare for the Act's implementation.


At the time of GINA's passage, thirty-five states had laws relating to discrimination in employment based on genetic information. Pennsylvania does not. As the state laws vary, one of Congress's goals in enacting GINA is to provide for an umbrella federal provision applicable to all persons in the U.S. GINA does not preempt state laws that provide more protection for genetic information. Notably, this law is responsive to many efforts in the medical community to personalize medical care, such that diagnosis and treatment plans would be tailor made for each patient based on his or her genetic make up.

What Is "Genetic Information" Under GINA?

Under GINA, “genetic information” is broadly defined to include information about: (1) an individual's genetic tests, (2) the genetic tests of the individual's family members, and (3) the manifestation of a disease or disorder in a family member. “Family member” is defined to include an individual’s spouse or dependent child by birth or adoption, and certain other relatives of such individual, individual’s spouse or dependent child. “Genetic information” does not include information about the sex or age of any individual.

How Does GINA Amend Title VII?

The GINA amendments to Title VII are effective November 21, 2009. Specifically, GINA:

1.            Makes it an unfair employment practice for employers, employment agencies and others to discriminate against individuals based on “genetic information” in hiring, firing and other terms and conditions of employment; and

2.            Makes it unlawful to limit, segregate, or classify employees in any way that would deprive or tend to deprive the employee of employment opportunities or otherwise adversely affect the status of the employee because of genetic information.

            Notably, GINA provides that the Equal Employment Opportunity Commission has one year to issue implementing regulations and that an individual’s rights and remedies under GINA are analogous to those provided under Title VII; except no disparate impact claims are available under GINA.

Moreover, GINA generally prohibits employers from requesting, requiring or purchasing genetic information except under specific circumstances, such as for genetic services offered by the employer and for purposes of complying with the Family and Medical Leave Act (FMLA). Like the Americans with Disabilities Act, GINA provides that to the extent an employer has genetic information, the employer must keep the information confidential. GINA is dissimilar from the ADA, however, because GINA prohibits discrimination based on the possibility of contracting a disease per family history or testing, whereas the ADA prohibits discrimination based on current/past/perceived disability.

How Does GINA Amend ERISA?

GINA's amendments to ERISA are effective May 21, 2009. Under GINA, an ERISA-covered group health plan cannot:

  • Request, require or purchase genetic information for underwriting purposes or in advance of an individual's enrollment;
  • Adjust premiums or contribution amounts of the group based on genetic information; or
  • Request or require an individual or family member to undergo a genetic test except in limited situations specifically allowed buy GINA.

Under GINA's amendments to ERISA, a group health plan's noncompliance may present significant liability for both the plan and its sponsor. Participants or beneficiaries will be able to sue noncompliant group health plans for damages and equitable relief. If the participant or beneficiary can show an alleged violation would result in irreparable harm to the individual's health, the participant or beneficiary may not have to exhaust the typical administrative remedies before suing in court.

            How Does GINA Amend HIPAA?

            HIPAA, the Health Insurance Portability and Accountability Act of 1996, covers genetic information with additional safeguards.  HIPAA protects the privacy of an individual's medical information. GINA amends HIPAA to specifically state that genetic information should be considered medical information and receive the same privacy protections.  In addition, HIPAA now specifies that genetic information without a current diagnosis of illness is not a pre-existing condition. The HIPAA amendments will be published in the Federal Register no later than 60 days after GINA's enactment and will be effective upon publication.

How Does GINA Amend The FLSA?

In addition to creating an entirely new protected trait, GINA also contained amendments to the child labor provisions of the FLSA. The amendments to the FLSA are effective as of May 21, 2008. Specifically, the amendments (1) increase the penalty for child labor violations by $1,000 per violation and (2) raise potential employer liability to $50,000 where a violation causes the death or serious injury of a minor.  This amount can be doubled for repeat or willful violations.

How To Prepare For GINA?

Although not currently effective, it is recommended that employers take a proactive position on preparing their enterprises for GINA. Some things to consider include:

·        Revising EEO and Anti-Harassment Policies to include "genetic information."

·        Monitoring your group healthcare plan to assure that it will be in compliance, afterall GINA provides for plan sponsor liability.

·        Creating a policy to flag genetic information provided for FMLA leave v. genetic information provided for other forms of leave. As of now, it appears that only FMLA leave situations fit within the leave exception to GINA.

·        Create a policy wherein genetic information is stored in the same manner as all medical documents submitted for ADA purposes (i.e. confidentially).

·        Stay Tuned to What the Agencies Issue During The Next Year!

OFCCP Audits Focus on Systemic Discrimination

The OFCCP reports a record $51.7 million recovered for 22,251 workers. Of the recovery, 98% was collected for cases of systemic discrimination in the application process because of unlawful employment policy or practice according to a published account. Much of the monetary recovery came from the 14 cases of systemic discrimination referred to litigation with the DOL’s lawyers.

Government contractors are selected for audit in several ways including the use of a mathematical model that predicts the likelihood of a finding of systemic discrimination. The model analyzes data from five years of OFCCP compliance evaluations to formally identify and characterize relationships between reported EEO-1 workforce profiles and findings of discrimination. The OFCCP publishes compliance lists for one year audit cycles beginning in October of each year.

We have been involved in many of these style OFCCP audits and the approach is the same. The audit is triggered by an anomaly in a business' EO Survey which shows a statistical disparity in either hires or terminations. For example, the percentage of minority applicants differs by more than 80% from the percentage of minorities hired (the four-fifths rule). The investigation into the disparity in the hiring process follows the road map set out in the OFCCP's Compliance Manual as follows:

  • Summarizing the hiring process by obtaining an employer's summary
  • Establishing the minimum objective criteria for the position.
  • Evaluating the Pass/Fail Points for disparate impact (i.e., when does an applicant move to the next step of the process).
  • Evaluating both the objective and subjective criteria for uniform application to all applicants and for business relatedness.
  • Evaluating specific safeguards as to the application of selection criteria including how well each is documented for each applicant.
  • Measuring statistical disparity by Impact Ratio Analysis (IRA) of each step and criteria.

There are many problems with the OFCCP's investigatory process, a few of which are described as follows:

1.    The OFCCP loathes subjective hiring criteria. I had a client who required that its customer service candidates be "personable and friendly". The OFCCP started out with the position that this was not a "job-related" criteria. When that didn't fly with its own legal department, the OFCCP interviewed every hiring manager and asked them to define how it applied the "personable and friendly criteria". When the hiring manager responses weren't exactly the same, the OFCCP found adverse impact because the hiring procedures weren't uniformly applied to all applicants.

2.    The OFCCP's standard for adequate record keeping of each hiring decision is extremely high and it finds that inadequate records are a form of systemic discrimination.

3.    Finding adverse impact based on the four-fifths rule is a joke in terms of its lack of statistical significance. The rule has its origin in the EEOC's Uniform Guidelines on Employee Selection Procedures. However, knowing that the OFCCP uses this flawed measure makes it all the more important to use this measuring stick when self-assessing your employment practices.

Once the OFCCP makes a finding of a prima facie case of pattern and practice discrimination, it will presume that all members of the class are victims of discrimination and assess liability against the contractor.   The employer can only argue about who is eligible for an award and how much. This is where an employer must decide to dig in its heals and litigate or settle.

A settlement with the OFCCP for systemic discrimination in the hiring process will include back pay plus interest and job offers to the affected class, internal mandated and OFCCP approved training, follow up reporting to the OFCCP and publicity in the form of an OFCCP Press Release.

Employer Bears The Burden Of Proving That Employees Were Terminated For Reasonable Factors Other Than Age

On June 19, 2008, the United States Supreme Court is its decision in Meacham v. Knolls Atomic Power Laboratory holding that an employer defending a disparate impact claim under the Age Discrimination in Employment Act (ADEA) bears the burden of persuading the factfinder that its use of "reasonable factors other than age" (RFOA) was reasonable.

As part of a reduction in force, Knolls developed a review system to determine which managers to lay off. Under Knoll's system, managers were scored on their "performance," "flexibility," and "critical skills." Managers were also given points based on years of service. Based on its review system, Knoll's terminated 31 managers, 30 of whom were over the age of 40. 

Twenty-eight of the terminated managers filed suit in the District Court for the Northern District of New York alleging both disparate treatment and disparate impact claims under the ADEA. At trial, the plaintiffs relied on a statistical expert's testimony that the result of Knoll's review system was so skewed that it could not have occurred by chance. The jury found for the plaintiffs on the disparate impact claim, but not on the disparate treatment claim. Knolls appealed the decision to the Second Circuit Court of Appeals.

Following the Supreme Court's decision in Smith v. Jackson, the Second Circuit ruled in favor of Knolls and vacated the judgment. Meacham appealed the case to the Supreme Court citing the Ninth Circuit Court of Appeals decision in Criswell v. Western Airlines, Inc., which placed the burden on the plaintiff to prove that the employer's RFOA was unreasonable. The Supreme Court agreed to decide the issue, and vacated the judgment of the Second Circuit.   

In its decision, the Supreme Court focused on the fact that the language of the RFOA exemption appears alongside the exemption for bona fide occupational qualifications (BFOQ). These exemptions provide an affirmative defense "where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age." 29 U.S.C. § 623(f). Based on how Congress drafted the RFOA and BFOQ exemptions, the Court concluded that the legislature intended the two exemptions to be treated the same. As the BFOQ exemption has always been treated as an affirmative defense, the Court concluded that the RFOA exemption should also be treated as an affirmative defense. As such, the Court ruled that the employer has the burden of persuading the factfinder that its RFOA was reasonable.    

While the Court did reiterate that a plaintiff cannot establish an ADEA disparate impact claim merely by pointing to a generalized policy that has caused a disparate impact, the Court did admit that this decision "makes it harder and costlier to defend than if employers merely bore the burden of production; nor [did the Court] doubt that this [decision] will sometimes affect the way employers do business with their employees."

U.S. Supreme Court Decides Several Employment-Related Cases

On June 19, 2008, the United States Supreme Court issued four employment-related decisions that are briefly summarized as follows:

Meacham v. Knolls Atomic Power Laboratory:  The government ordered its contractor to reduce its workforce. The contractor had its managers select employees for layoff based on factors including performance, flexibility, critical skills and seniority. The resulting reduction in force netted 31 employees, 30 of which were over 40. Several laid off employees sued claiming the neutral factors used for layoff had a disparate impact on older workers.

The Court noted that the employees in a disparate impact case must isolate and identify specific employment practices that are allegedly responsible for the statistical disparity disfavoring older workers. The employer must prove that the neutral factors constitute “reasonable factors other than age”. Reasonableness differs from business necessity.

Chamber of Commerce v. Brown:  The Court struck down a California law that prohibited employers who receive state funding from using those funds to “assist, promote, or deter union organizing.” The Court held that the NLRA preempts state laws that attempt to regulate areas that the NLRA protects or prohibits.

Kentucky Retirement System v. EEOC:  Kentucky’s pension program imputed additional years of service for workers in “hazardous positions” who became disabled so as to credit them with service to reach “normal retirement” under the plan. An employee who worked past normal retirement age and then became disabled challenged the plan on the basis of age discrimination. He argued that the disability pension calculation disadvantaged older workers based on their aged.

The Court noted the distinction between “age” and “pension status”. When an employer adopts a pension plan that includes age as a factor, and that employer treats employees differently based on pension status, a plaintiff must prove that the differential treatment was “actually motivated” by age and not pension status to prevail under the ADEA.

Metropolitan Life Insurance Co. v. Green:   A life insurance company was the administrator of an employer’s long-term disability plan so it decided an employee’s eligibility for benefits and paid the claim out of its pocket. The insurer determined that an employee was not eligible for benefits and the employee appealed.

The Court analyzed the standard of review of a plan administrator’s denial of benefits under ERISA when the administrator is both the decision maker and the payer of benefits. In such a situation, the administrator has a conflict of interest, which a court may consider as a factor in accessing whether the decision is an abuse of its discretion under the plan. The administrator’s decision is entitled to “deference” and the court may not substitute its judgment for that of the administrator; however, it may consider the conflict as part of its assessment.

Hat tip to Connecticut for being faster by a nose.

Job Duty of Getting Coffee for Boss is not Sexual Harassment and Early Departure With Pay is Not Actionable Retaliation

The act of getting coffee is not a gender specific act that can form the basis for a sexual harassment claim according to a recent court decision in Klopfenstein v. National Sales and SupplyThe plaintiff had asserted that being compelled to perform what she considered to be a ‘servile task’ was, in and of itself, gender discrimination and gender based harassment so clearly stereotypical as to not specifically require comparator evidence. In essence, the plaintiff was contending that asking a female employee, regardless of the position that she held, to get coffee for her boss was per se because of her gender. Keep in mind that the plaintiff was a receptionist who did not object to getting coffee and refreshments for clients and vendors.

Despite the absence of any contention that she was subject to sexual advances, the plaintiff also sought to characterize her being required to get coffee as what she called “quasi quid pro” harassment.   Rather than being required to submit to a sexual advance, the gravamen of a quid pro quo theory, the plaintiff contended that she was required to conform to an outdated gender stereotype. This theory also rejected.

Finally, the plaintiff sought an expansive interpretation of what may constitute adverse action sufficient to support a claim of retaliation. After being advised that she would be discharged and paid for the rest of her last day, the plaintiff implored her employer to work through the end of the day. When she subsequently indicated that she might file a complaint, she was told to leave but still was paid for the rest of the day. The court noted that this could not constitute materially adverse action by the employer that might well dissuade a reasonable person from making a complaint. If anything, the Court noted, such a worker’s resilience in pursuing a charge or complaint “would likely be emboldened”

The court granted the employer's motion for summary judgment ruling that a female receptionist/data entry clerk could not make out a prima facie case for retaliation, sexual harassment or gender discrimination. National Sales and Supply was represented by Brian F. Jackson and Marcy L. McCullough of McNees Wallace & Nurick LLC.

Genie cannot be put Back in the Bottle once Botched EEOC Filing gets to Court

The U.S. Supreme Court’s Federal Express v. Holowecki decision lowered the bar on what qualifies as a “charge” for purposes of an employee satisfying the procedural prerequisites for getting into court on a federal discrimination claim. Commentators, like Jon Hyman at the Ohio Employer’s Blog, have criticized Holowecki as unfair to employers:

My problem with this ruling is that Fed Ex never had any meaningful way to respond to the Intake Questionnaire. That form was never sent to it, and it had no notice that a proceeding had even been initiated until after the actual charge was filed 6 months hence. Thus, an employee can proceed to federal court on an age discrimination class action lawsuit, without the employer, who had no notice that a charge had even been filed with the EEOC, having the benefit of trying to settle the claim pre-lawsuit. During the EEOC's conciliation process, the stakes are decidedly much lower than they are once an actual lawsuit is filed. For one thing, claimants usually are not represented by counsel at the EEOC. The same is rarely true in federal court. This decision prejudices employers who will be denied any opportunity to resolve a case via the EEOC's informal conciliation process.

The Supreme Court’s decision noted this unfairness and suggests that staying the court proceedings to allow conciliation and settlement might mitigate it:

The employer’s interests, in particular, were given short shrift, for it was not notified of [employee’s] complaint until she filed suit. The court that hears the merits of this litigation can attempt to remedy this deficiency by staying the proceedings to allow an opportunity for conciliation and settlement. True, that remedy would be imperfect….

In Holender v. Mutual Industries North, Inc., the Third Circuit cited the Supreme Court’s language and remanded a case involving a technically deficient charge of discrimination to the district court that granted summary judgment with a footnote instruction to “entertain a motion under Holowecki to stay the proceedings while the parties try to settle this matter.”  Although the Third Circuit is merely following a directive from the high court, staying the proceedings doesn’t address the problems created for an employer and is a waste of time for the following reasons:

  • The damage to an employer’s case is already done by belated notice of the employee’s discrimination claim. Documents have not been preserved and witnesses may be unavailable because the employer wasn’t notified within the 300-day limitations period for filing a charge. Notice failures could add years to the limitations period.
  • The EEOC’s conciliation process is predicated on the agency’s “expertise” in addressing employment claims and benefits from informality. This point was noted by the Court in its comment that “[o]nce the adversary process has begun a dispute may be in a more rigid cast that if conciliation had been attempted at the outset.”
  • The federal court process has ample settlement opportunities without staying the proceedings.

Employee's Abortion As Basis For Discrimination Claim

A company’s termination of a female worker's employment for missing work in violation of an attendance policy is illegal discrimination if the termination decision is sufficiently related to the woman’s exercise of her right to an abortion. On May 30, 2008, the Third Circuit Court of Appeals issued its decision in Jane Doe v. C.A.R.S. Protection Plus, Inc., and held that:

Clearly, the plain language of the [Pregnancy Discrimination Act], together with the legislative history, and the EEOC guidelines, support a conclusion that an employer may not discriminate against a woman employee because she has exercised her right to have an abortion. We now hold that the [PDA’s] term “related medical conditions” includes an abortion.

The Third Circuit reversed a district court's decision, which granted summary judgment in favor of a company that operated a business insuring used cars. The Third Circuit found that there were issues of fact that must be resolved by a jury, not a judge. 

The decision also noted the following items unique to a pregnancy discrimination case:

  • There are three elements to a prima facie case of pregnancy discrimination to be proven by an employee:
    • She is or was pregnant and her employer knew she was pregnant
    • She was qualified for her job;
    • She suffered an adverse employment action; and
    • A nexus exists between the pregnancy and the adverse employment action that suggests unlawful discrimination.

The legal analysis for pregnancy discrimination claims follows the rubric set forth for Title VII discrimination claims. Set forth below is a brief overview of the analysis as discussed in Jane Doe v. C.A.R.S. Protection Plus, Inc.

Employee's Prima Facie Case:

  • A nexus can be demonstrated by showing that the pregnant employee was treated less favorably that similarly situated non-pregnant employees. Anemployer's more favorable treatment of temporarily disabled non-pregnant workers raises an inference of discrimination.
  • A discriminatory motive can be demonstrated by remarks by a company decision maker critical of pregnancy or abortion and by the temporal proximity between the abortion and the employee’s separation from employment.

Employer's Burden of Production:

  • An employer may defend a discrimination claim by producinga legitimate nondiscriminatory business reason for an employee’s termination. For example, in Jane Doe v. C.A.R.S. Protection Plus, Inc., the employer’s justification for the employee's termination was job abandonment for failing to call in under its absenteeism policy. 

Employee's Burden to Prove Pretext:

  • The employee must then show the justification is a mere pretext for discrimination by evidence that either casts doubt upon the employer’s reason as fabricated or shows that discrimination was the employer’s true motivation. The evidence of record in Jane Doe v. C.A.R.S. Protection Plus, Inc., created a material issue of fact regarding whether C.A.R.S.'s legitimate nondiscriminatory reason was pretextual.

Social views aside, it appears that in the Third Circuit an abortion is now a recognized activity, covered under the PDA, for which an employee cannot be treated differently in the terms and conditions of her employment. Irrespective of an employer's social views, employers must now recognize the differing treatment of employees who have undergone an abortion presents the possibility for claims under the PDA, and most likely the Pennsylvania Human Relations Act.

Carnival of HR # 34

The Carnival of HR has its usual compliment of excellent postings on interesting topics.

Leading off is a discussion of the two sides of generational differences in the workforce. Dr. Ira Wolfe from the Perfect Labor Storm 2.0 posts on Gray ceiling disrupts succession plans for Gen Xers which discusses the recruiting challenges created by older workers remaining in the workforce and impeding the career advancement of younger employees. On the other side, Jon Agno of So Baby Boomer: Life Tips posts on Boomer Executive Challenges in which he fears that decades of institutional memory may be wiped out leaving organizations without many of the skills and insider knowledge businesses had taken for granted. 

Blogging is the subject of several of the Carnival submissions. Lisa Rosendahl at HR Thoughts asks the question “Why do you blog?” and answers it by stating that  “In doing so, you may very well be creating your legacy”. Her post is called "Moving Forward While Capturing the Past." Perhaps there is another answer to that question found in a post by Totally Consumed in which he comments On Personal Branding and Anonymous Blogging. The queen of anonymous blogging, The Evil HR Lady, chimes in recognizing that “I Haven’t Complained About Recruiters Lately.”

Legal risks sometimes cross the minds of HR pros.  Jon Ingham’s Strategic Capital Management (HCM) Blog assesses risk in his contribution Human Capital Risk and Reporting which argues that risk is an important area for all HR professionals. Dan Schwartz of the Connecticut Employment Law Blog kicks off our summer with some legal thoughts in his post called Start of the Summer Season: HR Topics to Ponder Now Before They AriseJon Hyman of the Ohio Employer’s Law Blog comes up with another compelling title for his post called Cat fight on aisle 6: court leaves open the possibility that a handbook can create a contract.  Most importantly, we should all keep in mind of Marcy McCullough’s post evaluating whether we can be dooced for On-Line Postings And Your Corporate Image: Can You Terminate Employees For Personal Postings?!?

Speaking of minds, Alvaro Fernandez at SharperBrains offers a superb introduction to what working memory is and why it is critical for our productivity, complemented with daily tips on Try Thinking and Learning Without Working Memory. Nina Simosko’s post describes "Comfortable Misery", a state of mind wherein you are miserable, but you have gotten used to it.  She states that far too many people live in "comfortable misery". A subsequent post offers a survey on the topic. If you are looking for a coping mechanism, the Career Encouragement Blog notes that it's okay to acknowledge that sometimes you are irrelevant on a particular project or even in a whole job. That’s Job Search Rule # 30 for those who are counting. I wonder if comfortable misery is one of the “10 Things I Learned About Working in HR” as recounted by Dan McCarthy at Great Leadership when he makes observations about his 18 month develop assignment as an HR generalist.

Employee benefits and compensation are the subjects of several posts. Michael D. Haberman at HR Observations advocates helping employees at the gas pump as an employee benefit in his post Pumping Up Your Employees: No Rah-Rah, Just Help With Gas.   Ann Bares at Compensation Force posits that merit pay systems create a dilemma that occurs when the short-term interests of individuals are at odds with the long-term interests of the grouping her post  “The Tragedy of the Commons and Merit Pay”.  Wayne Turmel who is the host of The Cranky Middle Manager Show submits a post called Lousy Quality and Small Portions in which he confronts the paradoxes of middle managers. Greg Pernula at i4cp writes about a recent survey that found a majority of companies lack various support, training or education when it comes to workplace diversity matters.

There are lots of insights on Talent Management and Employee Empowerment. Wally Block’s Three Star Leadership Blog observes that The best and the brightest are not always the best fit because setting out to hire "the best and the brightest" without attention to ethics, work habits, or organizational fit is just asking for trouble and minimizing your chances for success. Steve Roesler at All Things Workplace writes in his post titled “Making Change? Pay Attention to High Achievers” that, when it comes to making change, the talented people you think will be most helpful just might be the least. Chris Young of Maximizing Possibilities thinks that Talent Management is an increasingly important strategic issue for most organizations.  Given the value placed on effective talent management practices the question must be asked: “Is talent management too important to be left to HR?”   Alice Snell’s at Taleo’s Talent Drives Performance Blog  has a post called “Strategic Is As Strategic Does” that explains how embedding talent management into the business process—facilitated by HR and owned by line managers and employees—puts strategy into action. Susan Heathfield at Guide to Human Resources discusses Employee Empowerment as the goal of forward thinking HR processes and practices in her post Want Empowerment? You Get What You Request and Reward.

To add to our international flair, Frank Mulligan at Talent in China tries to explain the skills shortage for both professionals and workers in a land of 1.3 billion people, with the added contradiction of a shortage of jobs for Chinese graduates in his post "The Ups & Downs of China's Labor Shortage".  Somewhere in Ireland, Rowan Manahan of Fortify Your Oasis conducted a radio interview on job equality somewhat irreverently titled and unlikely to pass prudish US internet filters.

All good stuff for us to consider as we address today’s challenges. Thanks for all those who contributed to this Carnival. Jon Ingham’s Strategic Capital Management (HCM) Blog will host the June 11th Carnival of HR.

On-Line Postings And Your Corporate Image: Can You Terminate Employees For Personal Postings?!?

Freedom of Speech is a right granted by The United States Constitution and enjoyed by all Americans. Employees exercising their free speech rights by blogging, posting on MySpace and YouTube may be surprised to learn limits of their Constitutional protections and should acquaint themselves with the term “dooced”.

Generally, employees of private sector employers have no constitutional “free speech” rights in the workplace and beyond.  A quick civics’ lesson reveals that the Bill of Rights creates limits on the government’s actions to curb constitutional rights but does not typically restrain private employers from restricting an employee's speech and expression.

Employees should pause before reporting to work wrapped solely in a flag, speaking their mind or blogging about the cruelties of their employer. Freedom of speech may only go as far as an employer’s tolerance for commentaryPennsylvania courts have rejected wrongful discharge claims based on First Amendment protections asserted by employees who were terminated for criticisms of their employers. Geary v. U.S. Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974) and Wagner v. General Elec. Co., 760 F.Supp. 1146 (E.D. Pa. 1991).

Every employee owes the employer a duty of loyalty. The duty of loyalty owed by an employee to his or her employer is fairly broad and may encompass: "harmful speech, insubordination, neglect, disparagement, disruption of employer-employee relations, dishonor to the business name, product, reputation or operation, or nondisclosure of important information to the employer." Lee, Konrad, Anti-Employer Blogging: Employee Breach of the Duty of Loyalty and the Procedure for Allowing Discovery of Blogger's Identity Before Service of Process is Effected.

Employee comments need not be made at work. Employees have been fired for blogging and posting on MySpace. In one of the more infamous cases Ellen Simonetti, a flight attendant for Delta Air Lines, was fired in 2004 because of her "Queen of the Sky" blog content. Simonetti posted provocative pictures of herself in a Delta uniform on a Delta airplane.

The airline, concerned for its image, found her inappropriate actions to be grounds for her termination. While the case remains unsettled due to an administrative discharge under bankruptcy laws, Simonetti has gone on to publish a book and is reportedly trying to seal a movie deal—all based on her termination from employment for her blog. 

An employer’s power to terminate an employee for expressions of opinion is not absolute. Notable exceptions exist for “union activity”, anti-retaliation provisions of discrimination laws, and Sarbanes-Oxley Act compliance.  An excellent discussion of the law in these areas appears in a New York Law Journal article by Jeffery S. Klein and Nicholas J. Pappas entitled When Private Sector Employer Fires Worker for Blogging.

Many employers have chosen to adopt policies on employee communications for a whole range of purposes. Policies can be helpful in defining an employee’s actions in the following areas:

  • Authority to comment to news media on official matters
  • Authority to communicate with or about customers and vendors
  • Use of work time
  • Use of employer’s computer and other resources
  • Disclosure of confidential or proprietary information
  • Prohibition on content of communication that is disloyal, discriminatory, inflammatory, threatening, or disparaging of the company, its employees, customers, products, etc.
Since many corporations have blogs, they have also developed blogging policies and guidelines. IBM’s Blogging Policy is an example of one employer’s approach.

Applicants with Criminal Records: The Pros and Cons

Anyone who has spent any time recruiting knows that it is difficult to sift through a pile of applications without finding several job seekers with criminal convictions. About 3.2 percent of the U.S. adult population, or one in every 31 adults, was in the nation’s prisons or on probation or parole at the end of 2006.   Getting Out of Prison and Into a Job posted by Eve Tahmincioglu highlights the job search difficulties for convicted felons. It also reports that 700,000 people are released from prison annually, two-thirds of which are back in prison within 3 years. Similar demographic facts are compiled by Dr. Ira Wolfe in his book The Perfect Labor Storm 2.0 .

Many employers shy away from this pool of available labor even though it might be socially compelling to give someone a "second chance".  Federal and State governments have reacted to this situation by creating tax incentives for employers who hire convicted felons.  A federal tax credit of $2,400 is available for employers who hire ex-felons. Philadelphia offers a $10,000 tax incentive. Both programs have minimum employment periods.

Employers must weigh the following with regard to applicants with criminal convictions:

  • Prohibited Employment: State and federal laws may prohibit employment of a convicted felon in certain jobs such as financial services, teaching, adult and childcare, law enforcement, etc.
  • Negligent Hire:  Many states recognize legal claims by customers and employees when an employer negligently hires an employee when the employer knew or should have known that the employee would pose a safety risk to others. Applicants with criminal convictions for violent crimes may fall into this category.
  • Disparate Impact Discrimination: The EEOC’s guidance on the consideration of arrest records notes that blanket exclusions from hiring will likely have an adverse impact on minorities. Employers should establish a business justification for use of criminal record by evaluating the nature and gravity of the offense, the time that has passed since the offense, and the requirements of the job sought.
  • Limitations on the Use of Criminal History: Section 9125 of Pennsylvania’s Criminal History Record Information Act states that felony and misdemeanor convictions may be considered by an employer only to the extent to which they relate to the applicant's suitability for employment in the position for which he has applied. Employers must give a rejected applicant written notice that the criminal conviction was used in whole or in part as the basis for the employment decision.

Legal issues in Telecommuting: Gas Prices make Businesses Reconsider Policies

As gas prices approach $4.00 per gallon, more employees desire the telework options that have typically been of greater interest to workers for “family reasons”. Companies that formerly dismissed telework programs now find that attracting and retaining employees may depend on increased flexibility around attendance at the office. While productivity and IT issues abound, there are also some important legal considerations, including the following:

  • Worker’s Compensation: Employees who work at home have worker’s compensation coverage for injuries that occur in the scope of their employment. Employment scope excludes activities that are not in furtherance of the employer’s business or that are purely for the personal convenience of the employee.   Working at home blurs this distinction.

A carefully drafted policy can address some of the legal concerns including the following:

  • The class of jobs eligible for the telework based on an analysis of the position’s essential functions.
  • Limits on employees in those classes of eligible jobs based criteria such as performance, disciplinary record, time with company and time in the job realizing that ADA accommodation may trump these requirements.
  • Job performance and productivity standards including the consequences of not meeting these standards.
  • Restriction defining the “workday” and the “work location”
  • Prohibitions on performing personal activities while working during the workday.
  • The system for tracking hours of work including clear delineation of work/nonwork time and settling limits on overtime.
  • Compensation for travel to and from company office.
  • Safety mandates for the home work environment.
  • Protections for IT and other confidential/proprietary information.
  • Systems for addressing problems that arise when the employee is fired or quits.

Managing Workplace Romance requires more than a "Love Contract"

Kris Dunn at the HR Capitalist has a post on The "Love Broker" - Making Your Employees Sign A Workplace Relationship Prenup... Are such contracts really necessary and do they offer any legal protection? 

While taboos on workplace romance may have eased, legal and morale problems persist.   Office surveys show that 40% of workers admitted they have dated a co-worker. However, the same survey states that 84% of businesses do not have policies on workplace romance. David Javitch notes in his post on Dealing with an Office Romance, that there may be even bigger workplace risks for morale problems created by perceived favoritism and the looming sexual harassment claim. Courts can hold an employer liable for the sexual favoritism created by a supervisor's romantic involvement with a subordinate. Sexual harassment claims remain high with the EEOC reporting over 12,500 claims filed in 2007 resulting in EEOC settlements totaling almost $50 million. Million Dollar verdicts are common.

Love Contracts”  are usually called Consensual Relationship Agreements by the lawyers who draft them.  Agreements are typically used when a supervisor is dating a subordinate but can also apply to co-workers.  The agreements attempt to provide the employer with a defense to a a sexual harassment claim by documenting that the relationship is consensual (not unwelcome).  Employees view them as intrusive and HR managers loath monitoring the workplace rumor mill to determine if a contract is necessary.

Love Contracts have limited utility absent a broader policy and training approach. Employers should consider the following in addressing workplace romances:

Implement a Strong Policy against Sexual and other Harassment

The EEOC has issued extensive guidance on sexual harassment policies and their ability to reduce an employer's liability for harassment.   One of the most critical components of such a policy is an effective complaint procedure to redress claims of harassment. The risk of sexual harassment claims skyrockets when supervisors fish off the company dock.   Sexual harassment by a supervisor means automatic liability for a company, if it culminates in a tangible employment action like termination or discipline.

Develop a Policy on Office Romance without calling it "Fraternization"

The D.C. Court of Appeals in Guardsmark v. NLRB overruled an employer's no fraternization rule because it violated the rights of employees to engage in concerted activities. The court examined an employer’s policy that stated employees must not “fraternize on duty or off duty, date or become overly friendly with client’s employees or with co-employees.”  The court ruled that the generic term “fraternize” was overly broad because employees might infer that it prohibited both romantic relationships (which the employer could reasonably regulate) and fraternal relationships involving the discussion of terms and conditions of employment (that are protected by section 7).

Train Supervisors

Supervisory training on sexual harassment can demonstrate a company's good faith attempts to comply with the law. Such training should explain the types of conduct that violate the employer's anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

Proactively Evaluate and Confront Situations

Most employers are content to sit passively and watch an office romance unfold. Many will not act unless it "becomes a disruption". Consider some proactive steps. If the romance is between co-workers, make sure they understand that it cannot affect productivity. If it is between a supervisor and subordinate, evaluate whether there should be changes in the reporting structure. Do not automatically transfer or reassign the female in the relationship or you will risk a discrimination claim.

Sex may Sell, but Gender-based Employment Decisions are Unlawful Discrimination

The EEOC announced a $1 million settlement for sex discrimination against men arising from a restaurant’s preference for hiring and promoting only women into bartending positions. The lawsuit highlights the tension between a business’s marketing efforts and legal compliance. What marketers may pander to in the name of “customer preference,” employment laws prohibit as discrimination.

Businesses spend millions of dollars to find out what motivates customers to buy by evaluating their preferences. Demographics play an important role in tying the right product to the right market. Also critical is having the “right” salesperson to make the pitch.

A business’s natural, but unlawful reaction may be to make staffing decisions based upon appealing to a target demographic group.  The “customer preferences” for the right salesperson cannot create employer hiring or promotion criteria for someone of a particular gender, religion, age, etc. Courts have universally rejected this form of customer preference, except in the narrow case where it is a Bona Fide Occupational Qualification (BFOQ). A BFOQ may exist where it is necessary for the purpose of authenticity or genuineness, such as, a model for gender specific clothing. 

In its lawsuit, the EEOC said that Razzoo's, a Cajun food restaurant chain, refused to hire or promote men to the position of bartender. The EEOC had evidence that the restaurant's management set up and communicated to managers by e-mail, a plan for an 80-20 ratio of women to men behind the bar. Male applicants and servers were told that management wanted mostly “girls” behind the bar. Men who worked as servers at the restaurant were generally denied promotion to bartender because of their gender. The few men who were promoted to bartender were not allowed to work lucrative “girls-only” bar­tend­ing events.

The EEOC’s settlement with Razzoo shows a developing trend in the agency of making an employer improve its approach to human resources. In addition to paying $775,000 to be divided among a class of male applicants, male servers, and male bartenders who were discriminated against, Razzoo's was also required to retain the services of a human resources consultant or to develop an in-house human resources department spending no less than $225,000 for these human resources services.   Razzoo's agreed to injunctive relief requiring training on equal employment opportunity for all its employees, the posting of an anti-discrimination notice, and EEOC monitoring of employee complaints of discrimination.

Suzanne M. Anderson, EEOC supervisory trial attorney and lead counsel on the lawsuit, summed up the EEOC’s position by saying that, "Some may think that sex sells drinks, but gender ratios are illegal… Razzoo's decision to hire and promote by gender is a clear violation of federal law. A hiring ratio is illegal whether it is 80-20 whites to blacks or 80-20 women to men."   It will be interesting to see how far the law will go in policing an employer’s efforts to appease a customer preference. For example, would an OBGYN practice be subject to an EEOC lawsuit if it specifically hired a female doctor based on the preference of its patients?

Supreme Court allows Intake Questionnaire to proceed as a Charge

In Federal Express Corp. v. Holowecki, the United State Supreme Court ruled that the EEOC’s Intake Questionnaire adequately meets the requirements of a “Charge” to trigger an employee’s rights to sue his or her employer in court. The plaintiff submitted to the EEOC an Intake Questionnaire with an affidavit contending that her employer was engaging in age discrimination. The EEOC did nothing with the Questionnaire for six months. The employer was not notified and no charge number was assigned. The employee subsequently filed a Charge of Discrimination and proceeded almost directly to court avoiding the EEOC’s conciliation process entirely. 

Justice Thomas the former Chairman of the EEOC points out the practical problems with the lack of a clear definition on what constitutes a Charge and the implications on notice to employers. His comments are somewhat ironic since the crux of the problem is the EEOC’s failure to turn the Intake Questionnaire into a Charge of Discrimination and mail it out to the employer. The Court does not hold the EEOC accountable for these administrative failings by allowing a vague assertions to trigger the judicial process:

The implications of the Court's decision will reach far beyond respondent's case. Today's decision does nothing—absolutely nothing—to solve the problem that under the EEOC's current processes no one can tell, ex ante, whether a particular filing is or is not a charge. Given the Court's utterly vague criteria, whatever the agency later decides to regard as a charge is a charge—and the statutorily required notice to the employer and conciliation process will be evaded in the future as it has been in this case. The Court's failure to apply a clear and sensible rule renders its decision of little use in future cases to complainants, employers, or the agency.

The EEOC issued a Memorandum addressing the timeliness of notice to employers noting that an Intake Questionnaire may constitute a Charge if it contains a “clear request for the agency to act.” The Memorandum also notes that notice of a charge must be sent to respondents within 10 days of receiving the charge.