Jottings By An Employer's Lawyer

Wednesday, December 29, 2004

Getting Paid to Read Books - Employee Sues?


This seems to be a week for Catch 22 stories. The facts are a little complicated, but it appears Patricia Freund, a New York state employee, raised questions about state workers attendance at Governor Pataki's non-denominational prayer breakfast. She went at the urging of her boss, but later complained to co-workers. According to her, in retaliation for her complaints:
Her duties were taken away from her and she was relegated to a back office where she now spends her time often reading books she brings from home. With benefits, her job costs taxpayers about $100,000 a year.
Her lawyer, "it's making her absolutely crazy." Check out the AP story in Newsday. A few New York taxpayers footing the bill for her quasi-employment and now the litigation costs, might go bonkers as well.

Thanks to Professor Gely for the tip on this story at the Labor Prof Blog.


Comments:
Good grief! For less than half of what she's making, I'd gladly sit around and read books all day.
Crime & Federalism
 
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Tuesday, December 28, 2004

Is That Bartender Wearing Makeup?


If you are at Harrah's and the bartender is female, the answer better be yes, if the bartender is male, the answer better be no. But the question decided today in Jespersen v. Harrah's Operating Company, Inc. (9th Cir. 12/28/04) [pdf] - - is that legal? Darlene Jespersen was a long tenured, and by all accounts excellent bartender for Harrah's who for many reasons chose not to wear make up. For many years that caused no problems, but in 2000 a new imaging program and her personal feelings collided. Ultimately, her refusal to wear makeup led to her discharge, a claim for sex discrimination and today's decision.

Over a vigorous dissent, the Court upheld Harrah's policy and Jespersen's discharge. The Court had to deal with two different arguments. First, its own test which permits different appearance standards for men and women, as long as they don't impose unequal burdens on the two sexes. Here the two parties had distinctly different views on how this test should be applied:
In doing so we must weigh the cost and time necessary for employees of each sex to comply with the policy. Harrah’s contends that the burden of the makeup requirement must be evaluated with reference to all of the requirements of the policy, including those that burden men only, such as the requirement that men maintain short haircuts and neatly trimmed nails. Jespersen contends that the only meaningful appearance standard against which the makeup requirement can be measured is the corresponding “no makeup” requirement for men.
The Court agreed with Harrah's approach and held that Jespersen's offer of "academic literature discussing the cost and time burdens of cosmetics" was no evidence of what was needed in this case, the burden on the male bartenders of complying with the grooming and dress policy vs. the burden of female bartenders of complying.

The second prong of Jespersen's attack was that the makeup requirement was based on a sexual stereotype which is prohibited by Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). The way around that for the Court, "In short, although we have applied the reasoning of Price Waterhouse to sexual harassment cases, we have not done so in the context of appearance and grooming standards cases, and we decline to do so here." And just in case there was any doubt about how the majority felt about the dissenting view on this point, "We thus disagree with the dissent’s assertion that 'Jespersen has articulated a classic case of Price Waterhouse discrimination. . . .' Dissent at 17474."

This was a widely publicized case and drew amicus briefs from the Lambda Legal Defense & Education Fund, the American Civil Liberties Union of Nevada, Northwest Women’s Law Center, California Women’s Law Center, The Gender Public Advocacy Coalition, the National Employment Lawyers Association, Alliance for Workers’ Rights, and The Legal Aid
Society — Employment Law Center on behalf of Jespersen and the Employment Law Equity, American Hotel & Lodging Association, and California Hotel & Lodging Association on behalf of Harrah's.

This case is unlikely to go quietly into the night. Look for en banc consideration and ultimately certiorari on this one. Two interesting choices for courts looking at this issue: do they take on what seems to be somewhat metaphysical arguments over the burdens of a policy on one sex versus another or do they venture into the treacherous waters of broadening the law of 'sexual stereotypes.' I can't imagine many judges see much appeal in either path.

It may take some time to get the answer. Unlike the 2nd Circuit which disposed of an FMLA claim 8 days after oral argument, see my post here, the case decided today was argued on December 3, 2003. Check back in 2006 for how this one finally turns out.

Update: It was affirmed, see posting on April 17, 2006, 9th Circuit Upholds Makeup Rule.

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Congrats to George's Employment Blawg


Dennis Kennedy, a true luminary in the blogging world has handed out his 2004 Legal Blogging Awards and recognized George Lenard's blog as the runner up (to Marty Schwimmer's The Trademark Blog) in the Best Practice - Legal Specific Blog. See George's comment here, This Blawg wins coveted award. Congrats to George and all the other winners, including Dennis who selected himself, along with Tom Mighell (Inter Alia) as "Best Legal Blogging Expert." One might argue a little immodest, but not likely to find many who would disagree.


Comments:
I must say the honor could have gone to many, many other excellent blogs, certainly including this one.

I'm George, of George's Employment Blawg, and I feel I've ceded some of the more legal-practice-specific ground to this blog, focusing more on HR practices and the bigger employment picture, particularly since Michael Harris joined me. I thus see us as running complementary blogs, much more than competitive ones.

This is a huge, fascinating, and ever-changing field, much bigger than any single blog can cover. Michael, you deserve an award too, especially given your longevity here.
 
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Monday, December 27, 2004

Yet Another FMLA Decision - This Time in 8 Days


In a shorter period than the time you need to give an employee to get a medical certification under the FMLA, the 2nd Circuit tossed an employee's FMLA claim. Argued on December 15th and decided on December 23, (both 2004) the Court obviously did not need a lot of time. Porter v. NYU Law School (2nd Cir. 12/23/04). It helped that the opinion could be short as all the Court needed to do was agree with the 1st and 6th Circuits, that the FLSA definition of willfulness was applicable to the FMLA. Under that test as set out by the Supreme Court:
an employer acts willfully when he or she “knew or showed reckless disregard for the matter of whether its conduct was prohibited by the [FLSA].” The McLaughlin Court added that “[i]f an employer acts reasonably in determining its legal obligation, its action cannot be deemed willful . . . . If an employer acts unreasonably, but not recklessly, in determining its legal obligation, then . . . it should not be . . . considered [willful.]”
Although not giving the specifics, the Court found under that test "the facts alleged by Porter cannot conceivably amount to willful behavior." Since he file more than 2 years after the claim arose, end of story. And just in case you were curious (as I was) none of the three judge panel was a NYU Law School grad.

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The Ultimate Catch 22


Could not help be caught by the irony expressed in a lawsuit recently filed in Travis county which had this brief description:
Request for judicial review of a chapter of the Texas Occupations Code which prevents anyone convicted of a crime from receiving a locksmith's license. Plaintiff was arrested on drug charges over 7 years ago and argues that this should not prohibit him from earning a living. He points out that, in fact, locksmith skills are often taught as vocational courses in correctional facilities.
Alan Brett O'Daniel v. The Texas Commission on Private Security. GN404143 (12/20/04).

And he thought was better off because he was not learning to make license plates!


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Thursday, December 23, 2004

Just In Time For Christmas - FedEx MDV Verdict


If nothing else the story at the cnn.com website, FedEx ordered to pay $1.5M in employment case is a stark reminder that being in an employment law jury trial right before the holidays, is probably not a good time from an employer's perspective. This case had a somewhat unusual twist in that the employee who sued, Ted Maines, was allegedly reprimanded for trying to promote two veteran minority employees rather than a recent hire who was white and female. The jury awarded Maines $201,000 in back pay and $1.37 million in compensatory damages (mental anguish). The limited good news for FedEx, the jury considered but did not award punitive damages.

According to the EEOC's press release at its website, Maines was constructively terminated when a week after he complained about the treatment he viewed as discriminatory he was given the option of either taking a 5 grade demotion or a warning that he could be terminated for any future "mistake." When he said he could not accept either option, according to the EEOC:
Federal Express immediately issued a disciplinary warning letter containing a threat of termination as well as a verbal admonishment stating that the vice president wanted him to know that the very next mistake he makes would be his last as a Federal Express employee. Thereafter, Maines was subjected to intense scrutiny, including electronic monitoring. He believed that his phones were monitored and his work was subjected to a heightened level of review. As a result of his being targeted by Federal Express for retaliatory conduct, the terms and conditions of Maines' employment became so intolerable that he was forced to resign (constructive discharge).
A good reminder that lethal lawsuits can come in unanticipated packages.

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Wednesday, December 22, 2004

Planning For A Better 2005? Think About Your Incentive Programs


Because they may not be carrying the kick you had hoped for. At least that is the overall conclusion of the article, Incentive programs fall short with employees, survey finds at HR News. One sobering statistic, "55 percent of employees are unhappy with their company?s incentive programs." Part of the problem seems to be a lack of information (what a novel thought!) since employees who got weekly information about the progress of an incentive program were twice as likely to say they were content with the program as opposed to employees who heard about it only at the kickoff.

There are all kinds of issues related to incentive programs, from employees beginning to think of them as part of their regular (hence 'guaranteed') income to financial goals not being hit because of macro-economic issues that are really outside the control of the individuals. Maybe something to think about as you start considering all the things you will do better in 2005.


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Monday, December 20, 2004

Washington, Massachusetts, Oklahoma, California -- Bullying Legislation Headed Your Way: Wait a Minute, Oklahoma?


The bullybusters are back, with their reborn website:
Tuesday, December 14th, 2004: Welcome to the reborn Bullybusters website! We began the Campaign Against Workplace Bullying in 1997. Since then, we've helped over 4,300 individuals Bullied at Work. We've conducted three waves of systematic research and published two books. In addition, the first U.S. Anti-Bullying Legislation was proposed because thanks to our network of Bullybusters!
And according to the website, they hope to offer legislation in Washington, Massachusetts, Oklahoma, California. Three of those I can understand, but Oklahoma? Regular readers will know I have been keeping an eye on the advancement of arguments for a bullying cause of action, which already exists in Europe. I happened on the revised website, courtesy of a story in the Seattle Times, Bullying at work gains visibility which appears to be sourced by the Workplace Bullying and Trauma Worksite, a group apparently created by Drs. Gary and Ruth Namie, whose bios can be found at another of their websites, the Work Doctor.com.

I must admit to being somewhat skeptical about 'research' such as the 2003 Workplace Bullying and Trauma Institute Report on the Abusive Worksite that is self described as follows:
Source: Data were gathered in 2003 from anonymous and confidential online surveys posted at this website -- bullyinginstitute.org. A "nonscientific" sample of 1,000 volunteer respondents (a respondent is one who completes the survey) who visited the website seeking solutions to their vexing problems at work attributed to a directly experienced cruelty from one or more persons. The research was necessarily done from the perspective of targeted individuals. Participants had the option of completing all or some of the 22-section survey.
I am even more skeptical of the benefit of unleashing the American legal system on something as ill defined as "bullying."

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Comments:
I'm so proud to see that my home state (Oklahoma) is on the front lines of this urgent battle. But I don't think the state legislature has thought this one through very carefully. "Next on the docket, your honor, Brown v. Stoops, a cause of action for bullying." And to think that this comes from the state where we are fighting for the right to keep loaded weapons on an employer's property (wait, maybe that does make sense - how else to deter bullying?) Geesh. The wussification of America is nearly complete.
 
Bullying, harassment, hurting one's feelings--they're all about the same. Behavior, including mere words, can be an invitation to a breach of the peace. For example, a person who is in a place where he has no right to be, may be trespassing. If the person refuses to leave when asked, he has breached the peace because his refusal invites the use of modest force to remove him. Breach of peace has a long history. What is the world is the purpose of making a tort out of hurting another's feelings if breach of the peace provides a remedy? If the behavior does not even breach the peace, why make it actionable except to redistribute wealth with a forty percent commission to the plaintiff's lawyer? Breach of peace can of course be a tort as well as a minor crime if the breach causes damage.
 
Hello, My name is Donald you have a great blog here! I'm definitely going to bookmark you! I have a no investment work at home
site. It pretty much covers no investment work at home
related stuff.

Come and check it out if you get time :-)
 
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Saturday, December 18, 2004

Diabetic Overturns Summary Judgment in Bid for Criminal Investigator Job


Branham, an IRS employee with a long history of diabetes, desired a promotion to criminal investigator. After being tentatively selected, pending a physical examination, he was disqualified because of his diabetes. The trial court noted the double bind that bedevils a disability plaintiff:
On the one hand, in order to qualify as disabled under the Rehabilitation Act, the Plaintiff emphasizes those portions of the record, . . . which tend to show the gravity of his condition; but to demonstrate that he is nonetheless medically qualified and does not present a threat of harm, he does a 180-degree turn and points to . . . his diabetes as being under excellent control.
Branham was unable to maneuver those tricky waters before the trial court and summary judgment was granted in favor of the government.

But on appeal --a different result. The Court reiterated the importance of individual determination about disability, diabetic status alone is not enough. But here the focus was whether the major life activity of "eating" was substantially limited. Considering the side effects of the measures necessary for control of his diabetes, the court held Branham had at least raised a fact question:
He is significantly restricted as to the manner in which he can eat as compared to the average person in the general population. His dietary intake is dictated by his diabetes, and must respond, with significant precision, to the blood sugar readings he takes four times a day. Depending upon the level of his blood sugar, Mr. Branham may have to eat immediately, may have to wait to eat, or may have to eat certain types of food. Even after the mitigating measures of his treatment regimen, he is never free to eat whatever he pleases because he risks both mild and severe bodily reactions if he disregards his blood sugar readings. He must adjust his diet to compensate for any greater exertion, stress, or illness that he experiences.
Branham v. Snow (7th Cir. 12/17/04) [pdf].

The district court had also granted summary judgment on the government's contention that his condition created a direct threat to the safety of other agents. The 7th Circuit noted the debate among other courts of appeal as to who has the burden of proof on this issue, but found no need to revisit its view that the defendant does. Using that standard, the Court found the government had failed to carry its burden of showing that no rational jury could rule that his condition was not a threat.

Although brought under the Rehabilitation Act as the Court noted, the same principles would apply under the ADA.

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Thursday, December 16, 2004

Timing Is Everything -- In the Termination As Well


Michael Fitzgibbon, my north of the border counterpart has a thoughtful piece, Some Thoughts on the Timing of the Termination which explores the day, the time and the season. And although he may feel a little grinch like raising the issue, his advice might be one of the best gifts you give yourself this year.

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Race and Treatment for Workers Compensation Injuries


Although it is clear we have made great strides in the area of racial relations, the Kansas City infozine story, Sobering' Disparity: African-Americans Receive Less Compensation for Job-Related Back Injuries, does bring one up short. Thanks to Jordan Barab at Confined Spaces for the pointer to this story. One of the researchers noted that there had been some expectation of differences, but not the contrast that was found:
We expected that African-Americans would incur shorter treatment periods, lower treatment costs, lower temporary total disability payments, lower disability ratings and lower settlement awards. The extent of it surprised us. It's pretty clear there is disparity in a system that's supposed to provide equal access for everyone.
Medical care expenditures for African-Americans with work-related back injuries were about one third of those spent for Caucasians.
Total disability settlements to African Americans were approximately half of those awarded to Caucasians.
Caucasians were rated nearly two times more disabled than African-Americans.
Lower back injuries, the type that were the subject of this study, are a major concern in the workers compensation area since there is not always objective evidence of injury, raising concerns about fraudulent claims. But those concerns are not germane to these findings. Treatment and even settlement are not racial issues, or at least they should not be.

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Federal Court Has Authority to Enforce Forum Selection Clause Under the FAA


Litigation about arbitration continues to grow, even as more of the substantive decisions are ultimately decided by arbitrators. In Sterling Financial Investment Group, Inc. v. Hammer (11th Cir. 12/16/04) [pdf] there was no dispute that the matter was to be submitted to arbitration, the question was where. Hammer had been hired by Sterling and moved to Florida. Shortly after he began work he was fired. He returned to Houston and initiated arbitration by filing with the NASD, requesting a Texas panel and the hearing in Texas. Sterling protested, arguing that the employment agreement which contained the arbitration clause provided that venue would be in Florida. When the NASD failed to agree and began to proceed in Texas, Sterling filed suit in Florida seeking to enjoin the Texas proceeding and compelling arbitration in Boca Raton, Florida. The district court agreed and now so has the appeals court.

Hammer's argument was that since all parties agree that arbitration is proper, the arbitrators should decide the venue and the federal courts should not "micro-manage" all the issues that could arise in an arbitration proceeding. Although conceding there was some support for that argument in the NASD rules, the Court did not agree. Instead it found the answer in the language of the Federal Arbitration Act itself:
A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement. .. . The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. The hearing and proceedings, under such agreement, shall be within the district in which the petition for an order directing such arbitration is filed. (emphasis in original opinion)
In addition to the language of the statute, the Court could look to a similar decision by the 2nd Court in Bear, Stearns & Co. v. Bennett, 938 F.2d 31 (2d Cir. 1991). In that case it was a Florida litigant who was forced to go to New York, the forum contained in the arbitration agreement.

Even in arbitration it appears, location is key, or at least something worth fighting about.

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Employer's Burden of Production Under McDonnell Douglas May Be Light, But Is Still Real


As the INS finds out as it suffers the reversal of a summary judgment because it failed to meet its burden of production under McDonnell Douglas. The Court started by reiterating what is well established law:
To rebut the presumption of discrimination created by the employee’s prima facie case, the employer must articulate a legitimate, nondiscriminatory reason for its decision. As this is a burden of production, the employer need not prove that it was actually motivated by its proffered reason.
Successfully doing so, removes the prima facie case and places the burden on the plaintiff of showing that there is a triable issue of fact on his or her claim. Patrick v. Ridge (5th Cir. 12/16/04) [pdf].The parties did not dispute that the plaintiff made a prima facie case that she did not receive a promotion either because of her age or in retaliation for filing an earlier claim of discrimination.

Instead, the focus was on the two reasons that the INS gave for not selecting her for the position. Its first reason was that she "was not sufficiently suited for the job." Unfortunately, the Agency did not express why she was not suited. Other than saying all candidates were evaluated not only for their work credentials and experience but how they would fit into the work group, the INS offered no further explanation. That failed to meet the burden of production because it failed to provide a reason "with 'sufficient clarity' to afford the employee a realistic opportunity to show that the reason is pretextual." Making the first of two, "as a matter of law" rulings the Court held:

We hold as a matter of law that justifying an adverse employment decision by offering a content-less and nonspecific statement, such as that a candidate is not “sufficiently suited” for the position, is not specific enough to meet a defendant employer’s burden of production under McDonnell Douglas. It is, at bottom, a non-reason.

The INS' second articulated legitimate reason fared no better. It claimed that it hired the best qualified person. Unfortunately, it did not even seek the candidate that it ultimately hired until it had eliminated a whole panel of applicants, including the plaintiff, as unacceptable. Using a "snapshot" view, the appeals court made its second matter of law holding:
We hold as a matter of law that an employer who offers the relative qualifications of the applicants as its legitimate, nondiscriminatory reason must show that, at the time it made the decision adverse to the complaining applicant, it already knew that the ultimately selected individual’s qualifications were superior.
To quote the Court again, "at bottom", the INS failed to meet what seems to be the minimal standard of articulating a legitimate reason for its action. Failing to meet that burden of production means the prima facie case remains intact at this stage and the case is remanded to the trial court for further action.

A good reminder not to overlook the simple things, some times they do mean a lot.


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Wednesday, December 15, 2004

10th Cir. - FMLA Regulation on "Worksite" Arbitrary, Capricious and Unenforceable


It seems it takes about a decade for a new employment statute to become widely known, cases to be filed and appellate decisions issued on a regular basis. Sure enough, the volume of appellate decisions seems to be increasing as we begin the 2nd decade of the FMLA. For the second time in a week, an appellate court has occasion to address one unusual aspect of the FMLA, the so called 50/75 rule.

In order to be an eligible employee (and thus eligible for FMLA leave) the employer must have 50 employees within a 75 mile range of the employee's worksite. As the 6th Circuit held last week, see my previous post, an employee ineligible because of the 50/75 rule can not bring a retaliation claim. In Harbert v. Healthcare Services Group, Inc. (10th Cir. 12/13/04), the issue was entitlement to FMLA leave itself. Harbert was an account manager for HSG which provided housekeeping and laundry services to long-term care institutions. She was assigned and worked on a daily basis at Sunset Manor in Brush, Colorado. She reported to a regional manager who was in Golden, Colorado. Under these facts the parties did not dispute that she was jointly employed by HSG and Sunset Manor. At issue was the DOL regulation defining "worksite" in cases of joint employment, 29 C.F.R. 825.111(a)(3):
For purposes of determining that employee's eligibility, when an employee is jointly employed by two or more employers (see 29 C.F.R. §825.106), the employee's worksite is the primary employer's office from which the employee is assigned or reports. The employee is also counted by the secondary employer to determine eligibility for the secondary employer's full-time or permanent employees.
The rub of course is that there were 50 employees within 75 miles of Golden, but not 50 employees within 75 miles of Brush. Under the regulation, Harpert was entitled to FMLA leave because she reported to Golden; HSG had denied her leave.

Since there was no argument for compliance under the regulation, HSG took another route and attempted to blow it up. Successfully as it turns out. Although the dissenting member of the panel, noted that it was "heavy medicine" to overturn a regulation, that is exactly what the Court found -- at least as applied in this circumstance, the regulation was "arbitrary, capricious, and manifestly contrary to the FMLA."

Although this exact fact pattern may not show up often, its significance may be that it is yet another FMLA regulation that an appellate court has refused to uphold. So far, the Clinton administration FMLA regulations have not fared all that well under Reagan/Bush (I and II) led courts. As more cases arise, stay tuned for more clashes.

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"Exceptionally Endowed Young Woman" Is Both Direct Evidence and Court Speak For ....


"a young chippie with big tits", at least it was in Glanzman v. Metropolitan Management Corp. (3rd Cir. 12/14/04) [pdf]. The more descriptive words were part of a statement made by the plaintiff's boss to her co-workers that he would like to replace the her with just such a person. Although not the most colorful parts of the statement, it was the "young" that caused the problem, as the Court held this statement enough was sufficient to constitute direct evidence of discrimination, thus sending the case into the mixed motive world first announced in Price Waterhouse.

As a result, what the Court described as "the heavy burden" to show that it would have terminated Glanzman in any event, passed to the employer. Fortunately for the employer, Glanzman, an apartment manager, had done enough wrong, that the employer was able to meet this high standard even on summary judgment. Among her problems, multiple occasions where she both misused funds and lied about it, a number of times where she was not where she was supposed to be during working hours, she misused company employees to work on her own property and finally was caught in a scheme to steal a dishwasher. As the Court noted, it was not even necessary that all of these bad acts were true, just that the employer reasonably believed them to be. Finding that to be the case, the Court found there were a "surfeit of legitimate reasons to fire her." So, even though employers are justifiably concerned at being forced into the mixed motive arena, it is clear in the right case, that all is not lost.


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Sunday, December 12, 2004

Discrimination Claims of "Confederate Southern American" Fall


Last week it was the Church of Body Modification that the 1st Circuit faced, this week the 3rd Circuit gets the claim of a discharged security guard, who argues it was because of his national origin, "Confederate Southern American" and also his religion which arises from the same identity and the design of the Confederate flag. Storey v. Burns International Security Services (3rd Cir. 12/9/04) [pdf].

Once again, the all too obvious questions -- is this really a valid national origin, or is this really a religion -- get a pass:
For the sake of argument, we will assume that “Confederate Southern-American” is a valid national origin, and that the Confederate flag has some religious significance for members of this group.
Here, the Court found that Storey was really fired for refusing to remove Confederate flag stickers (4 to be precise) from his lunchbox. And since he did not make it clear that displaying the flags was significant to his religion, his case failed. Surely, there is a line somewhere that might raise the question of what is a valid religion, but if the Church of Body Modification or Confederate Southern-American, don't get us there, I can only wait with bated breath to see what does!

Comments:
The C.S.A. Confederate Southern American is the only ethnic group who have no civil rights, but that is subject to change.This man shuld not have to choose between his work and the symbles of his berth right.
Arkansas League of the South
 
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4th Cir. Upholds ERISA Plan's Requirement of Attorney Signed Subrogation Agreement


Employee benefit plans often have subrogation provisions which require an employee injured by a third party who sues and recovers to reimburse the plan for the benefits it has paid. The plan in question, took that one step further and required a signed subrogration agreement from the employee and his attorney that the plan would be paid "before all others." The attorney took the position that his fees should not be placed behind ERISA plan and refused to sign. The net result was severe in this case, since the employee not only did not get advances for the injuries caused by the third party, but since it was his only connection to the plan, he and his dependents were ultimately severed from the plan and lost all benefits.

Although the plan was challenged on numerous grounds, they all failed. Simply put, was nothing wrong with the requirement of the Plan that it be repaid -- first. Kress v. Food Employers Labor Relations (4th Cir. 12/10/04) [pdf].

And just in case, anyone should misunderstand the Court's position, "Throughout this litigation, Kress’s arguments have proceeded on the premise that the Fund’s provisions are somehow inimical to participants’ interests. But that is hardly the only interpretation that one could give them." Instead the Court noted the Fund provided advances when injuries were caused by third parties, even though it had no obligation to do so. Kress could have not accepted the advances and sued in tort with no obligation to the Fund. However, he could not accept the benefits, but choose not to accept the terms under which they were offered. (The legal equivalent of - you can't have your cake and eat it too.) Finally, the Court noted while he referred to the loss of all his benefits as "retaliatory," the Plan language clearly spelled out what would happen, and it was his attorney who refused to sign the agreement. Pretty clear where the Court thought the problem was in this case. Wonder if there might soon be a claim against the attorney who refused to sign?

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FMLA Retaliation Only For "Eligible Employees"


Although all employers with more than 50 employees are covered by the FMLA, whether or not an individual employee is entitled to rights is based on other criteria. Among those who are not eligible employees, "any employee of an employer who is employed at a worksite at which such employer employs less than 50 employees if the total number of employees employed by that employer within 75 miles of that worksite is less than 50.” 29 U.S.C. § 2611(2)(B)(ii). Sandra Humenny was one such employee.

Yet, when she was terminated and felt that it was in part because she had expressed a need to take care of her sick mother, she filed a suit claiming, among other things, that she had been retaliated against for attempting to exercise rights under the FMLA. Her employer challenged her claim, arguing that in order to bring a cause of action for FMLA retaliation, she must be an eligible employee. Her argument -- since she was dismissed her for “attempting” to assert rights to which she, in good faith, believed she was entitled under the FMLA she should be allowed to sue. After all the retaliation provision refers to 'individuals' not 'employees.' Nice try, but wrong, said the Court, agreeing with the employer that to bring a suit for FMLA retaliation one must be an eligible employee. Humenny v. Genex Corp. (6th Cir. 12/8/04) [pdf].

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Playing the Reference Game - More than Name, Rank & Social Security Number?


The official policy of most companies is to only give basic, neutral information. But many reference checkers have ways to try get more, and often succeed. And on the counter-offensive, commercial firms will check to see exactly what your prior employer is saying about you for a small fee. See Find Out What References Are Really Saying About You for the tricks of the trade.

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Age Discrimination By the Senator? At Least the Case Goes Forward


When the Congressional Accountability Act of 1995 was passed, applying for the first time eleven employment laws to Congress and its staff, the hope among some (or at least me) was that Congress might be more sensitive to the impact of those laws, particularly to how they could be manipulated. If it has, its been without the benefit of much ligitation. However, what may be the first case actually brought against a member of Congress (or technically his office, see discussion below) is now wending its way through the courts. Rita Bastien's six year career as a Senate aide to Senator Ben Nighthorse Campbell ended when she was terminated in 2000 at age 61. Rather than going quietly into the Colorado night she sued alleging age discrimination act.

Senator Campbell was not willing to take the suit quietly either, urging that the case be dismissed under the so-called "speech and debate" clause, which provides that "for any Speech or Debate in either House, [members of Congress] shall not be questioned in any other Place." U.S. Constitution, Article I §6 ¶1. The CAA retained the protection of that provision. Given Senator Campbell's view, almost every act of a Congressional staffer would be covered by the "speech and debate" clause and thus excluded from coverage. The district court agreed with the expansive view, dismissing Bastien's case, which would seem to effectively gut the CAA insofar as it is applied to members of Congress.

However, in a decision that must discuss every case ever decided under the "speech and debate" clause, the Circuit Court of Appeals took a more narrow reading of what constitutes legislative activity and allowed the suit to continue. Bastien v. Office of Senator Ben Nighthorse Campbell (10th Cir. 12/10/04). The Court did take pains to say that it was not addressing whether the "speech and debate" clause might at least require some evidence to be excluded, even if it did not bar the suit.

Since there are no citations to any other case under the CAA against a Congressional member, this appears to be a case of first impression. And it does not appear that there have been any administrative decisions either, at least there are none in the list on the website of the Office of Compliance, the agency set up to administer the Act. And Congress didn't exactly put themselves at risk in the legislation, since the cause of action can only be brought against the "Office" of the Senator or Representative, not them personally. And any award is paid out of the budget of the Office of Compliance, not by the member of Congress or even his or her own budget. So maybe it is not too surprising, that to date there has been very little impact on the way members of Congress view employment legislation and the ensuing litigation. Of course, if the Supreme Court agrees with the 10th Circuit and allows Ms. Bastien's suit to continue, others may well follow, and a decade later, Congress may begin to truly "feel the pain" that employers have felt for sometime now.


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Friday, December 10, 2004

Our Clients $200,000 - Us, $2.5 Million


At least that is the request by the lawyers who represented a group of 80 Wal-Mart employees in a wage and hour class that went to trial in Oregon. Although they did recover, the net amount owed was $211,000 for the 83 workers for underpaid overtime, penalties and interest. According to the story at Worldlink, that's a modest $2,500 per worker. The claim for attorneys fees now being submitted to the Court is a little more immodest, $2.57 million dollars.

There is no question that a substantial amount of lawyer time was expended - the case featured two trials, and according to plaintiffs' counsel, 60 motions by Wal-Mart and 200 depositions. It poses a classic question - should the lawyers be rewarded based on effort, or on results? While plaintiffs' lawyers in a contingency fee mode operate on the latter basis, under a fee shifting statute like the FLSA, they often opt for the former. My guess --- the attorneys fees will exceed the amount awarded to the plaintiffs, but won't be as much as requested by plaintiffs' counsel.

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Lessons For Dealing With Jerkiness


Roger Zaslow, has some helpful thoughts in his WSJ article, Why the Biggest Jerks Get Ahead on the Job. The most discouraging comment from the experts -- "admit you are powerless over the jerks in your life." Undoubtedly true -- unless you are powerful enough to distance yourself from them.

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Two Time Losers - Not in the Traditional Sense


Probably what two Oregon Agriculture department officials are feeling like as the 2nd discrimination suit in which they were the key actors went against the state, this time a loss of $425,000. According to the story at the KATU website, State employees could be punished over discrimination suit, this was not the first time that the conduct of John Szczepanski, assistant director, and Jeff Hyatt, export program manager had been at the center of a loss. In 2003 the verdict was more than a million dollars. An Ag department spokesman said the terminations that led to both suits were the cause of budget cuts, but they also say that they are reviewing whether there is sufficient basis to discipline the two employees. Hardly a vote of confidence.


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Thursday, December 09, 2004

The Complete Primer on §1981 Statute of Limitations Law


Early this year the Supreme Court held that under §1981, the federal four year statute of limitations applied rather than the applicable state statute of limitations. Jones v. R.R. Donnelley & Sons Co., 24 S. Ct. 1836 (2004). Or that at least was the general take on the Donnelley case. However, as Cross v. Home Depot (10th Cir. 12/8/04) [pdf] shows, it is a little more precise than that.

Cross's §1981 claim was his failure to be promoted from Assistant Store Manager to Store Manager. Although a four year statute would be applicable to any §1981 claim that would not have been actionable before Congressional amendments to §1981 in 1991, if the claim would have been actionable before the amendment, then the state's residual statute of limitations (here 2 years) would be applicable.

As a result Home Depot argued that the promotion from assistant store manager to store manager was so substantial that it rose to the "level of an opportunity for a new and distinct relation between the employee and the employer" which would have been actionable before the amendments, and thus governed by the 2 year statute of limitations. The trial court agreed and granted summary judgment to Home Depot when Cross failed to point out any evidence to support his argument that "8 store managers positions were filled in Colorado" during the 2 year time period considered by the trial court.

Unfortunately, on appeal, the 10th Circuit reversed the lower court's ruling that a promotion from Assistant to Store Manager would have been sufficient to create a new relationship which means that the four year statute was applicable. So the Court reversed and remanded. However, in a final twist, even though it conceded that Cross's failure to point out the evidence of promotions in the 2 years period that were considered was a mistake, it refused to reverse the summary judgment. On remand, Cross is limited to showing he was denied a promotion only in the first two years covered by the expanded four year period.




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Secretary of Labor Chao To Stay For 2nd Term


Today's announcement by the White House that Secretary of Labor Elaine Chao would be returning as Secretary of Labor put to rest the rumors that she might move to Transportation if the current Secretary, Norman Mineta chose not to return. According to the announcement both Chao and Mineta will continue in their current roles for the 2nd term. Bush Asks Chao, Mineta, Jackson And Norton To Stay. Secretary Chao was at the center of one of the fiercest administrative fights in President Bush's first term over the revised white collar regulations.


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Tuesday, December 07, 2004

Another Black Eye For Air Force - Top Lawyer May Face Sexual Charges


Although not technically sexual harassment since the conduct was consensual, the Air Force's top lawyer is said to have engaged in improper relationships with more than a dozen women over the last decade. According to the story, Air Force's Top Lawyer May Face Charges in the Washington Post, Maj. Gen. Thomas J. Fiscus may have run afoul of the strict rules of the military against fraternization. Another concern -- service members who were charged with adultery, harassment or similar issues since Fiscus became the Air Force's top lawyer in February 2002 may seek to have their cases reopened.

Coming on the heels of the long running scandal of how sexual assaults were handled at the Air Force Academy, see Air Force Officials Blamed for Lapses in Sexual Assault Reporting, this is clearly not the Air Force's shining hour.

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Vets Are Docs For FLSA Purposes


Since vet bills seem to be a major expenditure in our household, it is comforting to know that veterinarians are "engaged in the practice of medicine" and thus fall within a subset of professional employees who are not required to be paid on a salaried basis in order to be exempt. That was the issue in Clark v. United Emergency Animal Clinic (9th Cir. 12/7/04) [pdf], where vets at the all nite emergency clinic were paid on a shift basis, rather than receiving a set salary. Did that mean they were non-exempt? Not if they were deemed to be "engaged in the practice of medicine." Although the Secretary of Labor did not choose to specifically mention vets in the regulations discussing this niche of the wage and hour law, neither the district nor appeals court had trouble finding that vets are properly classified as "engaged in the practice of medicine." So the vets paid on a shift basis were properly classified as exempt from the FLSA. Just because they practice their healing powers on Fido not Grandma, does not make it any less the practice of medicine. Or, it often seems, any cheaper.

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Harassment Settlement - A Million Whoppers (More or Less)


I once had a client who liked to measure proposed settlement dollars in how much he would have to sell to replace the money he was contemplating paying to make a business problem go away. Liked is probably not the right word, but you understand the concept. The EEOC press release, Burger King Franchise Pays $400,000 for Alleged Sexual Harassment of Teens detailing what it took to settle a case at one fast food restaurant made me do some rudimentary math to figure the cost out in Whoppers.

According to some very surface internet research, profit margins at fast food restaurants in the 2003 time frame were in the 15 to 20% range. (See Chicago Sun story posted at a website for McDonald's franchisees). Apply the 15% figure to a $2.50 Whopper with cheese, and divide that into the $400,000 settlement figure and if my math and theoretical concept are correct, that's a million plus Whopper settlement.

Regardless of the accuracy of either the rationale or the math, there is very little dispute that it will take a lot of burgers to make up for this problem. According to the attorney for the seven workers who brought the suit (six were in high school when the alleged harassment occurred):
The girls complained to several assistant managers who felt helpless to assist them because [the alleged harasser] was their boss, too. They finally figured out how to go over [the harasser's] head, and when they complained to headquarters, they let him resign. The question is why it took four to five months to get reported right.
Under the settlement agreement, the company will do more than pay the $400,000, in addition it:
will conduct extensive sexual harassment training for management personnel, including eight hours of training for several upper-level managers, distribute the revised sexual harassment policy and procedure to all restaurant employees, and more prominently post an 800-number hotline for reporting harassment throughout their restaurants.
Those actions are not without cost, but probably not a million whoppers worth.

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8th Circuit Adopts Standard of Willfulness for FMLA - And the Power of Recorded Words


The 8th Circuit today joins the 1st and 6th Circuits in applying the FLSA standard of willfulness in determining whether the 2 or 3 year statute of limitations is applicable under the FMLA. The standard: "the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” Hanger v. Lake County, Minnesota (8th Cir. 12/7/04) [pdf]. The Court helpfully pointed out what is not sufficient to prove reckless disregard under the statute:
the employer’s general knowledge regarding a statute’s potential applicability; and
its failure to obtain legal counsel on whether there is a potential FMLA violation,
apparently even combined, is not sufficient to make the 3 year statute of limitations applicable.

Since that was the only evidence here, the 2 year statute was applicable, sinking the case of Ms. Hanger who sued more than two years after she returned from FMLA leave. She claimed it was was not the same or an equivalent position to which she returned. Although the pay and benefits were the same, she no longer was to communicate directly with the Board of Commissioners, but had to go through a Ms. Parkinson, hired while Hanger was on leave and retained even after Hanger returned. Hanger also was forced to submit time sheets for the first time. However, since all those conditions were in place two years before she sued, Hanger's case was dismissed with no ruling on the merits.

Although disappointing, it would probably be worse if Hanger had not already had some measure of satisfaction against the County. Within two weeks of her return, an incident between her and her now new supervisor, Ms. Parkinson, led her to resign and complain that her rights under the Minnesota Veterans Preference statute had been violated. At a hearing on her claim, three Commissioners testified that they never intended to put Parkinson in a position of authority over Hanger. Unfortunately for the Commissioners, that testimony was contradicted by the tape recording of the meeting preceding Hanger's return where the Board "specifically discussed where to put Ms. Parkinson in the chain of command," and "Commissioner Chair Nelson stated that he intended to place Ms. Parkinson in a position of authority over Ms. Hanger." Faced with the tape recording, the Commissioners withdrew their opposition to her Veterans claim and reinstated Hanger to her former position with full responsibilities.

Although today the Commissioners won the FMLA claim, one suspects that this matter was a valuable reminder to the Commissioners of the power of recorded words, whether in a letter, email or a tape recording.

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Will GPS Be In Your (or Your Boss's) Stocking this Christmas?


This still may not yet be the year that GPS has its break through in consumer electronics, but it is coming. The major retailers all have multiple gps products in their Christmas catalogs although the cost is still in excess of the sweet spot for most consumers. But now that they are making the holiday offerings, you can bet it is only a matter of time before the technology is commonplace. It is already soon enough to be aware of their application in the workplace.

For an introduction check out an overview from Robert C. Goldberg, the General Counsel of the Business Technology Association, Employee Monitoring Technology Use Must be Fair and from an employee oriented view point, On Your Tracks: GPS Tracking In the Workplace, from the National Workrights Institute. Professor Rafael Gely at the Labor Prof Blog caught one of the first instances of the issue becoming a subject of collective bargaining in talks between the City of Chicago Parks department and Service Employees International Union Local 73. You can see how the union felt about the possibility of Big Brother monitoring by checking out the story in the Chicago Sun Times.


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Monday, December 06, 2004

Why the Supreme Court is Over the 9th Circuit - Police Masturbation Video Not OK


Sometimes (often?) you wonder about the collective wisdom of the 9th Circuit. Fortunately, the Supreme Court doesn't have much reluctance in bringing them back to earth when needed. Today is just such a case. City of San Diego v. Roe (U.S. 12/6/04) [pdf]. Perhaps marking the first intersection of e-bay, employment and the highest court, the Court today held that the City of San Diego had not violated the free speech rights of a former police officer who had the temerity to:
make a video showing himself stripping off a police uniform and masturbating. He sold the video on the adults-only section of eBay, the popular online auction site. His user name was 'Codestud3@aol.com,' a word play on a high priority police radio call. 356 F. 3d 1108, 1110 (CA9 2004).
Following a fellow officer finding a reference to a SD police uniform for sale on e-bay and searching for other references by 'codestud3', an internal affairs investigation was begun. During the investigation:
in response to a request by an undercover officer, Roe produced a custom video. It showed Roe, again in police uniform, issuing a traffic citation but revoking it after undoing the uniform and masturbating.
What happened to a good old fashioned bribe?

Besides being amazed about the commercial viability of a market for his product, I am surprised (but less amazed) that the 9th Circuit found, "Roe's conduct fell within the protected category of citizen commentary on matters of public concern." Apparently, "central to the Court of Appeals' conclusion was that Roe's expression was not an internal workplace grievance, took place while he was off-duty and away from his employer's premises, and was unrelated to his employment."

In its per curiam opinion, without awaiting the need for oral argument the Supreme Court put this one squarely where it belonged:

Although the boundaries of the public concern test are not well-defined, Connick provides some guidance. It directs courts to examine the "content, form, and context of a given statement, as revealed by the whole record" in assessing whether an employee's speech addresses a matter of public concern. ... In addition, it notes that the standard for determining whether expression is of public concern is the same standard used to determine whether a common-law action for invasion of privacy is present. Id., at 143, n. 5. That standard is established by our decisions in Cox Broadcasting Corp. v. Cohn, 420 U. S. 469 (1975), and Time, Inc. v. Hill, 385 U. S. 374, 387?388 (1967). These cases make clear that public concern is something that is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public at the time of publication. The Court has also recognized that certain private remarks, such as negative comments about the President of the United States, touch on matters of public concern and should thus be subject to Pickering balancing. ...

Applying these principles to the instant case, there is no difficulty in concluding that Roe?s expression does not qualify as a matter of public concern under any view of the public concern test. He fails the threshold test and Pickering balancing does not come into play.

Connick is controlling precedent, but to show why this is not a close case it is instructive to note that even under the view expressed by the dissent in Connick from four Members of the Court, the speech here would not come within the definition of a matter of public concern. The dissent in Connick would have held that the entirety of the questionnaire circulated by the employee "discussed subjects that could reasonably be expected to be of interest to persons seeking to develop informed opinions about the manner in which . . . an elected official charged with managing a vital governmental agency, discharges his responsibilities."461 U. S., at 163 (opinion of Brennan, J.). No similar purpose could be attributed to the employee’s speech in the present case. Roe’s activities did nothing to inform the public about any aspect of the SDPD’s function-ing or operation. Nor were Roe's activities anything like the private remarks at issue in Rankin, where one co-worker commented to another co-worker on an item of political news. Roe's expression was widely broadcast, linked to his official status as a police officer, and designed to exploit his employer's image.

The speech in question was detrimental to the mission and functions of the employer. There is no basis for finding that it was of concern to the community as the Court?s cases have understood that term in the context of restrictions by governmental entities on the speech of their employees.

SCOTUS has its usual quick and incisive look at the decision, here. And they raise a concern that in the second part of the opinion, from which I quote above, the Court may arguably have gone too far. While I certainly appreciate the concerns about narrowing the breadth of discussions, you have to admit in a very non-scholarly fashion - police, masturbating --- PLEASE!

UPDATE: For more information, including a 'picture' of Officer Roe, check out the news article in the Gay City News shortly after the 9th Circuit decision.

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"Me Too" Evidence and the Peculiar West Virginia Single Digit Rule


No, this does not have anything to do with the much appreciated full five finger wave applauded by President Bush on his recent trip to Canada.* Instead it is about an unusual decision emanating from the Supreme Court of Appeals of West Virginia, McKenzie v. Carroll International Corporation, (W.Va. 11/12/04) as described by Brian Peterson in his eponymous log devoted to that state's jurisprudence, Brian Peterson's West Virginia Legal Weblog.

The issue is one of great concern to all management side employment lawyers --- being deluged with evidence of former employees about their particular scrapes with the employer to which they attribute discriminatory motives, in a lawsuit brought by yet another employee. Many courts shy away from such evidence, as did the trial court here, realizing that it quickly turns into a series of mini-trials, which is inherently confusing not to mention the probability of harm to the defendant employer. Here a defendant's jury verdict was undone because the trial court excluded such evidence.

And for future guidance, the Court added what Brian refers to as the "best 9 rule" footnote:
Obviously we do not believe that a plaintiff should be allowed to parade dozens of witnesses to testify about their alleged discrimination experiences with an employer, but a single digit number of witnesses, as in this case, is not too burdensome or repetitious.
Best of luck to those defending West Virginia employers, perhaps in their last case before they move their facility elsewhere!


*President Bush dismissed concerns Tuesday about strained ties between the United States and Canada, thanking those Canadians who turned out to wave "with all five fingers" during his first official visit. CNN. com.

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Even the Mascot Sues


Viliami Fehoko, better known as Vili the Warrior, the mascot for the University of Hawaii Warriors (formerly the Rainbow) is alleging discrimination against his former employer, the Polynesian Cultural Center. He is Tongan and they prefer Samoans according to the story in the Pacific Business News. Vili is one of the best recognized figures in Hawaii:

dressed as a snarling "warrior," his face painted black and green, Fehoko charges along the sidelines of football games and men's volleyball matches, cheering on UH and snarling at opponents. A year ago, he grabbed headlines for antics at a UH football game that included taunting opposing players, throwing a bracelet at a cheerleader and putting wrestling moves on the other team's mascot. While some suggested that the character of Vili be retired, support from fans and coach June Jones.

For more on his run in with Big Al, the elephant mascot of the University of Alabama and other issues Vili has had (complete with pictures of Vili) check the story from Honolulu Star-Bulltin earlier this year. According to the lawsuit his termination at the popular tourist center followed a run-in a week earlier with a "guest" of the center who had snatched a ukulele Fehoko was playing.

Given his apparent "anger management" issues, probably not a good time to apply for an NBA position.


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Sunday, December 05, 2004

Habitat for Humanity - Sexual Harassment Charge Leads to Founder's Departure


Although it sounds as if there were more than just the allegations brought by a female staffer of Millard Fuller's conduct on a trip to the Atlanta airport, the end result is that he is leaving the charitable housing organization he founded in 1976. Allen Breed of the AP has the story. The most recent allegations are not the first, and Fuller's explanation that he is from a "touchy-feely country culture" is not the sort of thing that inspires confidence in a defense lawyer's heart.

And in a weekend that has follow up stories on the settlement of a sexual harassment suit by one of the Twin Cities largest auto dealers after he was ordered to answer questions about his sexual conduct at his deposition, see Hecker suit aftermath, it is just a reminder that in many different places and at all levels, this appears to be a problem that will be with us for as long as ... well as certainly as long as I am writing this blog.


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Friday, December 03, 2004

Congratulations to Workers Comp Insider


For being named "best of the web" for safety and loss control services by Business Insurance magazine. Perhaps its for such interesting postings as this story on California workers compensation judges filing their own claims for workers compensation. Here's the money quote:
Workers comp judges in [California] are six times more likely to file claims than judges in other state departments. And in a number of these cases, the judges hired the same attorneys – and used the same doctors -- who appear regularly in their courts. In addition, the claims are ultimately heard before their colleagues on the bench!
I don't profess to know anything about California workers compensation law, but unless there are some pretty dilapidated buildings in which workers compensation justice is being dispensed in the Governator's state, I would guess a lot of those are "stress" related claims. Hmmm.

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Signature Not Required for Arbitration Agreement, But Absence Can Lead To Fact Question


And when the fact question is decided against you at the trial court, the presumptions strongly favor the appellate court affirming. Faced with a personnel file with no acknowledgement signed by the employee, the employee's affidavit that she did not receive critical parts of the arbitration program, and the trial court's ruling that there was no arbitration agreement, here is what the Court said:
We may not overturn the trial court’s decision unless that court could reasonably have reached only the opposite decision.
Unable to say that was the case, the Court upheld the denial of the motion to compel arbitration. In re: Dillard Department Stores, Inc. (Tx. App. - El Paso 11/24/04) [pdf].

Managing the logistical issues of an arbitration program for an employer of any size is no small feat, but for a larger employer in numerous locations it is almost physically impossible to do so without some slip ups. It is amazing how often it seems the slip up had to happen with one who ultimately sues.

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Thursday, December 02, 2004

More Than You Probably Want to Know About USERRA From the 5th Circuit


In a military city, at a time when troops, involving a substantial number of national guard and reservists, are on the ground in hostile combat, a lawsuit brought by firefighters who also are reservists claiming that the City of San Antonio was violating their rights because of their military service is bound to be politically sensitive. And when the Circuit Court of Appeals is going to reverse a decision in favor of the reservists, you could reasonably expect a detailed explanation of why such a result was necessary. Which is exactly what happened today in Rogers v. City of San Antonio (5th Cir. 12/2/04) [pdf].

The issue was whether or not the City's practice of treating the firefighters as "absent" as opposed to "constructively present" when away on reserve duty for the following benefits was a violation of Uniform Services Employment and Reemployment Rights Act of 1994:
(1) lost straight-time pay;
(2) lost overtime opportunities;
(3) missed upgrading opportunities;
(4) bonus day leave;
(5) perfect attendance leave;
and (6) a twenty-seven hour cap on lost overtime.
Ultimately the Court reversed summary judgment which had been granted in favor of the reservists in all 6 categories. On the first 3, it rendered judgment in favor of the City. On the latter 3 it found factual issues and remanded to the trial court for further proceedings.

The legal argument was over which section of USERRA applied to the reservists' claim. The reservists argued that the issue was controlled by Section 4311(a) that provides:
A person who is a member of, applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform services in a uniformed service shall not be denied initial employment, reemployment, retention in employment, promotion, or any benefit of employment by an employer on the basis of that membership, application for membership, performance, service, application for service, or obligation.
The City argued instead that it was controlled by Section 4316(b)(1):
[A] person who is absent from a position of employment by reason of service in the uniformed services shall be - (A) deemed to be on furlough or leave of absence while performing such service; and (B) entitled to such other rights and benefits not determined by seniority as are generally provided by the employer of the person to employees having similar seniority, status, and pay who are on furlough or leave of absence under a contract, agreement, policy, practice, or plan in effect at the commencement of such service or established while such person performs such service.
The Court's opinion thoroughly (36 pages) reviews the history of legislation designed to protect the employment rights of those serving in the uniformed services, along with its judicial construction. For anyone interested in the issue or a case under USERRA, it should serve as a great starting point. Following that exhaustive review of these two sections, the Court held the City's view was correct.

At the risk of oversimplification, it found that §4311(a) was an anti-retaliation provision, while §4316(b)(1) was designed for exactly this situation. Its purpose was to ensure that on issues involving non-seniority issues, military personnel were given "equal but not preferential" treatment to employees on non-military leaves of absence. In the 6 categories about which questions were raised it found no dispute that was true on the first 3, but there were fact issues as to whether there was equal treatment on the last 3.

The Court did generally agree with the reservists on the applicable statute of limitations under USERRA. It did not rule on the reservists' claim that there is no USERRA statute of limitations and that the claims are subject to being barred only by the doctrines of laches or estoppel, because it found that argument was raised too late in the litigation. It did however agree that the statute of limitations was at least four, not two years as urged by the City.

I was critical in a recent posting of the 1st Circuit for failing to address the central question on religious discrimination in a case involving the Church of Body Modification. Although I didn't call it a court appearing to be too "politically correct", that thought ran through my mind. By contrast, this decision by the 5th Circuit is I think appropriately "politically correct." It takes great pain to explain in detail the rationale for its decision adverse to a group that is uniformly honored and respected for all that they do -- put most starkly -- risking their lives to protect ours.

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Some Things About Wage and Hour Are Complicated, But Some Aren't


There are aspects of wage and hour law which can be quite complicated and involve judgment calls on which reasonable minds can differ. But the issue highlighted in this recent New York Times story, Employees go public about jobs that require working off the clock, is not. Knowingly allowing or requiring employees to work more than 40 hours without recording the time is not complicated, just wrong. The money quote, this time meant literally:
Many people who study business practices say off-the-clock work has become more prevalent because middle managers face greater pressure to lower labor costs and because the managers' bonuses may even be tied to cutting those costs. Off-the-clock work is most often found, they say, at workplaces that employ many immigrants, such as farms and poultry-processing plants, but the phenomenon has spread, especially among low-wage companies in the service sector. "There's more of this stuff going on than 10 and 20 and especially 30 and 40 years ago," said David Lewin, a human resources professor at the Anderson School of Management at UCLA. "There are a lot of incentives to engage in these kinds of practices, because they result in higher profits for the company, and they can lead to higher bonuses for local managers."
Employers should stop the practice because it is wrong, but if that is not enough incentive, they should check the growing number of collective action suits being brought under the FLSA and some of the rather hefty payments being made to resolve those claims.

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Wednesday, December 01, 2004

A Piercing Problem - 1st Cir. Ducks the Real Question


In a cutting edge decision, the 1st Circuit today upholds Costco's dress policy against a challenge by an employee who argued her right to wear her eyebrow piercing was required by her religious beliefs as a member of the Church of Body Modification (CBM). Cloutier v. Costco (1st Cir. 12/01/04). According to the Court's opinion:
The CBM was established in 1999 and counts approximately 1000 members who participate in such practices as piercing, tattooing, branding, cutting, and body manipulation. Among the goals espoused in the CBM's mission statement are for its members to "grow as individuals through body modification and its teachings," to "promote growth in mind, body and spirit," and to be "confident role models in learning, teaching, and displaying body modification."
The Court also found that the CBM's website was its primary mode of attracting adherents. Included is an application to become a minister of the CBM. When Cloutier was terminated for refusing to remove her eyebrow piercing while working, she filed a charge of religious discrimination with the EEOC which found the her belief in the CBM creed to be "religiously based as defined by the EEOC." A very interesting choice of words.

Given that background one might think the central question to be addressed by the Court is the first element of a prima facie case of religious discrimination, did a bona fide religious practice conflict with an employment requirement? However, that question was decided by neither the district nor the appeals court. In the latter's words:
Determining whether a belief is religious is "more often than not a difficult and delicate task," one to which the courts are ill-suited. Thomas v. Review Bd. of Indiana Employment Sec. Div., 450 U.S. 707, 714 (1981). Fortunately, as the district court noted, there is no need for us to delve into this thorny question in the present case. Even assuming, arguendo, that Cloutier established her prima facie case, the facts here do not support a finding of impermissible religious discrimination.
Unfortunately, the Court's refusal means many employers can now anticipate challenges brought by the CBM faithful (or similar groups) resulting in more litigation, more costs, and at least in many's eyes, questions about the sanity of our legal system.

The district court found that Costco had made a reasonable accommodation, to allow Cloutier to cover her piercing with a band aid or wear a clear plastic retainer, which Cloutier refused. Thus even assuming it was a religious belief, Costco met its burden of accommodation. Unfortunately, there was a dispute as to the timing of the offer of accommodation -- was it before or after the termination? The district court was not bothered that the offer of accommodation might have been after the termination, but the appeals court was. Surveying other courts, it found a split in the circuits. It could have weighed in on that debate, but once again the court played artful dodger:
Even this limited discussion illustrates that the question of whether a post-termination offer extended during the EEOC mediation process can be a reasonable accommodation raises difficult issues. We have yet to consider this question directly and decline to do so here on the limited summary judgment record.
Instead the court based its affirmance of summary judgment for Costco on "an alternative ground advanced by Costco -- namely, that the only accommodation Cloutier considers reasonable would impose an undue hardship on Costco."

Cloutier's only accepted accommodation was a complete exemption from Costco's ban on facial jewelry. Why would that be an undue hardship? The Court's answer:
Granting such an exemption would be an undue hardship because it would adversely affect the employer's public image. 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." Sambo's of Georgia, Inc., 530 F. Supp. at 91.
Although perhaps distinguishable, in many contexts customer preference has proved not to be a justifiable basis for a discriminatory practice. One of the most famous for those old enough to remember the initial "Love Flights" of Southwest Airlines was their "customer preference" argument in support of their female only flight attendant policy. If you have flown SWA in the last 20 years, you know how successful that argument was for them.

Rather than stretch to get a result, the Court should have answered the tough question. Some day some court will.

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Tort Claims Against Lab for Improper Drug Tests Not Preempted by Federal Statute


If you have an interest in the potential liability of a drug testing lab under various state causes of action, including negligence, you might want to check out Chapman v. Lab One (8th Cir. 11/30/04) [pdf]. Ruling in consolidated cases originally filed in the state courts of Iowa and Nebraska, the Court holds the Federal Railroad Safety Act, as amended by the Federal Omnibus Transportation Employee Testing Act of 1991, did not preempt a wide variety of state law claims brought against a drug testing laboratory which reported positive drug tests. The Court did not decide the issue of whether such claims against employers would be preempted by the same statutes.


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