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    Welcome to the Labor and Employment Law Update where attorneys from SmithAmundsen blog about management side labor and employment issues. We cover topics including addressing harassment and discrimination in the workplace, developing labor law, navigating through ADA(AA), FMLA and workers’ compensation issues, avoiding wage and hour landmines, key legislative, case law and regulatory changes and much more!
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Another Law Prohibiting Discrimination Against Pregnant Women

Contributed by Karuna Brunk

Members of the U.S. House of Representatives and the Senate have introduced bills to add workplace protections for pregnant women.  The bills are modeled on the Americans with Disabilities Act, which offers certain accommodation protections for employees with disabilities. 

The Pregnancy Discrimination Act, an amendment to Title VII of the Civil Rights Act of 1964, already protects pregnant women from employers discriminating against them through hiring, firing, pay, and job assignments.  Additionally, the Americans with Disabilities Act currently entitles pregnant women to some accommodations based on certain pregnancy-related impairments.

Despite these existing protections, sponsors of the Pregnant Workers Fairness Act argue that the new law would close legal loopholes for pregnant women.  The law would specifically require employers to offer reasonable accommodations for pregnant workers.  For example, employers may be required to offer seats for pregnant workers in standing jobs, put in place lifting restrictions for pregnant women, or give pregnant workers the right to carry water or food on the job site.  The law would also explicitly prohibit employers from refusing to hire or promote a pregnant worker based on her need for accommodation. 

As discussed above, Title VII already prohibits discrimination based on pregnancy, and the ADA offers pregnant workers certain protections.  Thus, regardless of the potential of a new law, employers should be mindful of the following:

  • Treat pregnant women the same as all workers in the workplace through the hiring, firing, and promotion process.
  • The EEOC considers pregnancy conditions as a type of temporary disability.  Therefore, you must provide pregnant workers with the same type of accommodations that you would provide other individuals with disabilities – if you would provide another worker with an accommodation for lifting because of a back injury, for example, you should provide a pregnant worker with a similar accommodation if necessary.  This also applies to leave requests. 
  • The Family Medical Leave Act also comes into play for pregnant employees – eligible pregnant workers may take FMLA leave.  Therefore, disciplinary, termination, and layoff decisions need to be carefully considered when they involve individuals who have exercised their rights under the FMLA to avoid potential allegations of discrimination, retaliation, or interference.   

Finally, because pregnancy discrimination issues can be complicated and span multiple laws, it is a good idea to consult an attorney to discuss strategies, discipline measures, and how to appropriately handle medical leave.

Employer’s Prompt Investigation and Action Prevents Liability For Retaliation and Co-Worker Harassment Claims

Contributed by Jon Hoag

Once again, the court has reiterated that employers can avoid liability by promptly investigating and remedying claims of harassment.  In Jensen v. Styrolution Am. LLC, Judge Guzman of the Northern District of Illinois dismissed a retaliation and harassment complaint against the employer based on proof that the employer took prompt remedial action when it learned about allegations of harassment.

Jensen claimed that he was harassed by a male co-worker, Hefele.  Jensen reported the incidents to his immediate supervisor, who intervened.  Jensen admitted that the harassment would stop for a while, but he claimed it would eventually continue.  Jensen complained to his immediate supervisor when the harassment began to escalate and the complaint was communicated to upper management and human resources.  Human resources conducted an investigation and determined that both individuals had violated the company’s policies.  After the investigation, the employees were assigned to work different shifts and did not have any further dealings or interactions.  There were no further complaints of harassment. 

The court found that the employer properly intervened and took reasonable measures to put a stop to the harassment.  When the harassment picked back up and escalated, the supervisor reported the matter to upper management.  Most importantly, the employer conducted an investigation and took remedial action.  The court stressed that a prompt investigation is the hallmark of reasonable corrective action.  Furthermore, the employer’s findings through its investigation showed that the employer’s reason for terminating Jensen – violation of company policy – was honest.  As such, Jensen could not establish that he was retaliated against for complaining about harassment.

The courts do not require employers to make wise, accurate and well-considered decisions to avoid liability when making adverse employment decisions (although it doesn’t hurt).  The courts will look to see if the employer conducted a prompt and reasonable investigation to show that the employer’s lawful reason for the adverse action was honest.

Pretty Woman, Walk on Down the Street [and out of the workplace] – Firing Attractive Female Employee Due to Wife’s Demand NOT Sex Discrimination

Contributed by Terry Fox

The media, particularly the Internet, is abuzz with reports related to the Iowa Supreme Court’s decision that loosely “makes it ok” to fire a pretty woman. Nelson v. James H. Knight, DDS, P.C., 11-1857 (Iowa Supreme Court 12/21/12). At first glance, the decision screams sex discrimination to most people. There was no dispute that the attractive female was an above average employee. On further analysis, however, the decision is in line with established case law and the underpinnings of discrimination law.

Dentist James Knight employed Melissa Nelson as a dental hygienist when she was just 20 years old. She worked for Dr. Knight along with other exclusively female hygienists and office help. After ten and a half years, Dr. Knight fired Ms. Nelson, who by that time was married with children. The dentist and his assistant were close, and the relationship grew in the ten years’ time she was employed, with the two exchanging text messages outside the office on professional and personal topics. However, when Dr. Knight took his children to Colorado to ski one winter, Mrs. Knight discovered the text messages between her husband and Ms. Nelson. When Dr. Knight returned from the ski trip, Mrs. Knight demanded that he fire Ms. Nelson “because ‘she was a threat to our marriage.’”

Dr. Knight had previously commented that Ms. Nelson wore too tight clothing, that she should wear a lab coat so as not to distract him. Mrs. Knight found Nelson flirtatious towards her husband. When Nelson complained of the lack of frequent intimacy with her husband, Dr. Knight responded by observing it was “like having a Lamborghini in the garage but not driving it”. Nelson regarded Dr. Knight as a friend and a father figure. There was no sexual relationship between them, but Dr. Knight was concerned there would be in the future.

The trial court granted Dr. Knight summary judgment when the fired employee sued, on the basis that the termination was due to a threat to his marriage, not because of the employee’s sex. The Iowa Supreme Court agreed. That court pointed to decisions from around the country allowing an employer to fire an employee where a consensual relationship in the workplace lead to jealousy once the relationship ended, as well as decisions allowing an employer to treat an employee better because of the favorite’s sexual relationship with the boss. Noting that neither Title VII or the Iowa Civil Rights Act are “general fairness laws” precluding an employer from treating its employees unfairly, the Court rejected the employee’s argument that liability should be imposed where an employee is fired to avoid sexual harassment by the boss.

It is clear that had Dr. Knight fired all the females in his office, it would have been a different case. He replaced Nelson with another female, so sex discrimination appeared not to be the cause. The termination came after Knight and his wife consulted their pastor and the pastor attended the termination meeting. Knight also met with Nelson’s husband on the evening of the termination, again with the pastor present.

A broad view of the Nelson decision is that, had it turned out differently, the floodgates of personal appearance and body-type litigation would have been opened. Small employers are particularly vulnerable to that type of litigation, due to more modest resources and because one person usually makes the sole hiring/firing determination.

EEOC Issues Draft Strategic Enforcement Plan for Comment

Contributed by Jill Cheskes

As has been discussed previously on this blog, the EEOC has shifted its investigatory and litigation tactics over the last few years in a tangible way that could affect any employer at any time before the agency.  Since 2006, the EEOC has focused extensive resources on ferreting out “systemic discrimination.”  This continues to be a prime focus of the EEOC.  The agency published their Strategic Enforcement Plan (SEP) on September 4, 2012 and is seeking public input prior to voting on it on September 30, 2012. 

The SEP indicates that the EEOC’s guiding principles are based on the belief that “targeted enforcement efforts will have the broadest impact to prevent and remedy discriminatory practices in the workplace.”  To that end, the EEOC has identified is nationwide priorities as:

  1. Eliminating Systemic Barriers in Recruiting and Hiring – the EEOC will be looking at both intentionally discriminatory hiring and recruiting practices as well as facially-neutral policies that have a disparate impact;
  2. Protecting Immigrant, Migrant and Other Vulnerable Workers – the EEOC will be targeting disparate pay, job segregation, harassment, trafficking and discriminatory policies that may be affecting these workers who are unaware of their rights;
  3. Addressing Emerging Issues – Identified as ADAAA issues, LGBT coverage under Title VII sex discrimination provisions, and accommodating pregnancy;
  4. Preserving Access to the Legal System – the EEOC will target policies intended to discourage access such as retaliation, overly broad waivers, settlement agreements that prohibit filing a charge or providing information to the EEOC and failure to retain records;
  5. Combating Harassment – the EEOC wants to re-evaluate its strategies in this regard including refocusing efforts on a national education and outreach campaign for both employers and employees. 

As can be seen by these initiatives, the EEOC’s number one priority remains to root out systemic discrimination by companies and is now focusing on hiring practices, which is likely something that most employers don’t address nearly as much as discrimination or harassment of existing employees. 

Additionally, the EEOC’s focus on vulnerable workers and emerging issues shows a true determination to address issues that are probably not fully on employers’ radar screens.  The EEOC’s SEP makes it clear that employers will continue to face many challenges when responding to charges of discrimination and will continue to have an aggressive approach by the EEOC.

Ignorance Can Be Bliss for Employers Facing Retaliation Claims

Contributed by Jon Hoag

The Director for one of ITT Technical Institute’s campuses reported what he believed to be irregularities that violated the Institute’s Participation Agreement with the U.S. Department of Education. He made these reports to his direct supervisor and the Director of Compliance. At approximately the same time, this Director’s campus came under scrutiny because it received low scores during an internal audit. In addition, several complaints were made about the Director’s conduct and management style.

Several ITT Vice-Presidents and the CEO discussed the Director’s performance and decided to terminate the Director’s employment.  The Director sued alleging that he was terminated in retaliation for engaging in conduct covered by the False Claims Act.  The Seventh Circuit assumed that the Director’s reports of irregularities were covered by the False Claims Act, but ruled that his retaliation claim still failed because he could not prove that he was terminated because of making reports under the False Claims Act.

The Seventh Circuit reiterated that in retaliation cases the decision-makers must have knowledge of the employee engaging in the protected activity in order for the employee to prove the termination was caused by engaging in protected activity.  The evidence showed that the decision-makers were never informed about the Director’s complaints, nor did they otherwise have any knowledge of the Director engaging in protected activity.  The Court refused to impute knowledge of protected activity merely because lower level supervisors in the organization had knowledge of such conduct.

Inasmuch as retaliation cases are on the rise, employers might be well served by keeping the decision-makers “in the dark” about certain types of protected activity.  There are obvious practical limitations with this type of strategy, but employers should certainly balance the pros and cons of how information about protected activity is disseminated.

Sexual Harassment of Lifeguard Yields $3.5m Pain and Suffering Jury Award

Contributed by Terry Fox

On August 24, 2012, a Washington, D.C., jury awarded Carmen Jean-Baptiste $3,500,000 for emotional distress for sexual harassment by her supervisor.  Jean-Baptiste was a 43-year-old lifeguard harassed by her male supervisor, Rodney Weaver.  Despite repeated complaints to others at the Takoma aquatic center about Weaver’s conduct, the harassment did not stop.  When Jean-Baptiste filed a written complaint, she was fired.

The jury foreman felt “embarrassed” by how the complaints by Ms. Jean-Baptiste were handled.  He stated that superiors ignored and stalled any action on the complaints.  The trial court has yet to award back pay damages to Ms. Jean-Baptiste.

This report is provided to those employers without enough worries to keep them up at night.  Some comfort may be taken from the limits provided by Title VII for private employers.  Non-monetary damages are capped by size of the employer to a maximum of $300,000 for a single employee complaint. However, state statutes sometimes have no limitations, as is the case with the Illinois Human Rights Act.  Pain and suffering is not limited in any manner by the Illinois Act, and punitive damages are also available.

Don’t Set Up Employee to Fail: Internal Email Precludes Summary Judgment for Employer in Age Discrimination Case

Contributed by Terry Fox

Employers are frequently faced with challenging terminations, often because they perceive a threat of litigation from the terminated employee.  Supervisors in these situations normally interact closely with human resources professionals.  In these instances, email communication should be closely monitored so as not to raise an inference of improper focus on the employee. 

In Phillips v. StellarOne Bank, Ca.No. 7:11-cv-oo440 (7/16/12 W.D. Va.), the human resources professional involved did not pay close attention to her choice of words.  As a result, the employer was denied early exit from the federal age discrimination and FMLA lawsuit, instead facing a jury trial.  In this case, a 51-year-old employee, Phillips, fell out of favor with his supervisor, apparently based on performance issues.  His supervisor gave him a negative performance evaluation in 2009 and put him on an improvement plan. 

Phillips’ supervisor vetted the proposed performance improvement plan with the company’s human resources department.  The response was transmitted via an email that became central to the lawsuit.  The email stated:

“There is a lot of room for him [Phillips] to “trip up” after this warning considering all the areas where he is below expectation and the magnitude of improvement needed.  I recommend that you consider how strict you are going to be on this (i.e., zero tolerance the next time he does not provide a timely report) and communicate accordingly so that he knows this is a true warning – and that his job is truly on the line.”

The author of this email testified that she assumed “trip up” meant setting performance goals so that Phillips couldn’t meet them.  The court found that a jury could conclude that this email, alone or with other evidence, proved the employee was meeting his employer’s legitimate expectation and that age and/or scheduled FMLA leave was the true reason for the termination.

While certainly no employee should be set up to fail, in challenging terminations where litigation is a strong likelihood, employers may want to consult competent counsel to vett the many issues involved.

EEOC Systemic Discrimination Initiatives: View From the Battlefields

Contributed by Jill Cheskes

Since at least 2005, the EEOC has publicly committed itself to focusing on and rooting out systemic discrimination across the U.S.  On February 2, 2012, the EEOC approved its strategic plan for the fiscal years 2012-2016 indicating that it will dedicate a significant amount of resources to remedying systemic discrimination.  Although this already had been a focus of the EEOC, in light of the fact that charges of discrimination with the EEOC are at an all-time high and the EEOC’s budget was cut, the agency has had to “think strategically about how best to target its efforts to ensure the strongest and broadest impact possible in its efforts to stop unlawful employment discrimination.”  The EEOC has decided that the best way to do this is to focus on “big cases.” 

Unfortunately for employers, what this means is that every charge filed with the EEOC now has the potential and ability to result in scrutiny of company-wide practices.  The EEOC’s initiatives are patently apparent when objectively looking at how the EEOC investigators are conducting investigations into a standard single complainant charge.

The EEOC is frequently sending out broad requests for information for a class of employees for employment practices that might not even be implicated in the individual charge.  For example, a charge of race discrimination alleging discrimination in discipline and termination has been effectively held to allow the EEOC to investigate hiring practices.

With more and broader requests for information being submitted, employers are pushing back on these requests on a more frequent basis.  In turn, this is resulting in the EEOC issuing subpoenas, something which is well within their authority to do.  This has, in turn, resulted in civil actions to enforce the subpoenas when employers continue to balk at these requests. 

An additional practical effect of the EEOC’s strategic plan is more “cause” findings being entered on a class-wide basis even if the underlying charge is on behalf of an individual.  The cause findings result in conciliation efforts between the EEOC and the employer, which have largely become an exercise in futility for employers who are finding it difficult to get information on the alleged class members in order to effectively conciliate cases.  Frustrations aside, employers need to conscientiously attempt to conciliate and document every step of the process in order to have any ability to fight a large and, perhaps, unexpected, class after litigation is filed.

Additionally, employers are seeing more and more Commissioner Charges being filed, which can be extremely broad thereby allowing for even broader investigation attempts.  Finally, the effect of this strategic plan has resulted in more class action or systemic-based lawsuits.

Dealing with the EEOC can be a landmine and litigation is erupting all over on all of these issues.  While the case law is still developing, employers should understand all these nuances when defending cases before the EEOC.

District Court Sides With Employee Who Cuts The Cheese (Or, How The Scope of Title VII Retaliation Is Expanding)

Contributed by Allison Chaplick

Over the last several years, the U.S. Supreme Court has expanded the scope of retaliation claims brought under Title VII of the Civil Rights Act of 1964. Title VII prohibits an employer from discriminating against an employee who “opposed any practice” prohibited by Title VII or who “made a charge, testified, assisted, or participated in any manner in an investigation, proceeding or hearing” under Title VII.  42 U.S.C. § 2000e-3(a).  These are commonly known as the “opposition clause” and the “participation clause.”

In CBOCS West v. Humphries, the U.S. Supreme Court permitted a retaliation claim brought by an employee who was complaining about discriminatory conduct aimed at another employee.  This was significant because typically, the run-of-the-mill retaliation case has to do with an adverse action taken against an employee for complaining about his/her own discriminatory treatment.  Then, in Crawford v. Metropolitan Gov’t., the high court held that the opposition clause afforded protection to employees who participated in an employer’s internal investigation into complaints of discrimination lodged by another employee.

These rulings lead to last week’s decision from the Northern District of Illinois in Flores Gomez v. Restaurant One Limited Partnership d/b/a Spiaggia Restaurant and Café.  In this case, the plaintiff was a formaggaio, or cheese steward, at Spiaggia Restaurant in Chicago.  Spiaggia’s attorneys met with several of the restaurant’s employees to investigate claims of race discrimination brought in a charge of discrimination filed with the EEOC by a former Spiaggia employee. Flores was one of the employees who met the Spiaggia’s attorneys.  Seven months later,Flores was terminated for allegedly serving gratuitous wine to customers without getting a manager’s authorization to do so. Flores claimed he was terminated in retaliation for speaking with Spiaggia’s attorney.

The district court noted that the Seventh Circuit had not taken a position on the issue of “whether participation in an internal investigation begun after a charge filed with the EEOC should be treated as participation in the official investigation.”  Having carte blanche, the district court held that participating in an internal investigation commenced in response to an EEOC charge or Title VII lawsuit is statutorily protected activity under the “participation clause.”

This ruling is important for one reason: with more and more charges of discrimination filed these days, employers and their attorneys are justifiably engaging in the same internal investigation that Spiaggia performed to understand the allegations or form defenses to allegations of discrimination.  Now, under Spiaggia, employers must be aware that for each employee who participates in an investigation is now cloaked with the protections afforded under Title VII that prohibit retaliation for engaging in protected activity.

Perhaps Monty Python was right about the cheesemakers…

Seventh Circuit: Among the Myriad of Protected Classes, Illegal Immigrant Status Is NOT One of Them

Contributed by Carly Zuba

Time for a quick labor and employment pop quiz…

Question: What do race, color, sex, national origin and gender all have in common?

Answer: They are all considered Title VII “protected classes,” meaning that covered employers cannot use these characteristics to discriminate against employees.

Question: Is immigration or citizenship status considered a protected class, thus falling under the umbrella of national origin protection?

Answer: No!  In fact, the Seventh Circuit recently weighed in on this precise question in Cortezano v. Salin Bank & Trust Co., deciding that Title VII does not protect against discrimination based on citizenship or immigration status.

The Facts:  While employed at Salin Bank, Cortezano named her husband as joint owner of her Salin Bank account and assisted him in opening his own personal and business accounts.  Cortezano’s husband was a citizen of Mexico who entered the United Stated without a valid visa.  At some point during her employment, Cortezano informed her supervisor of her husband’s illegal immigration status.  Salin Bank then embarked on an investigation and eventually terminated Cortezano, allegedly for refusing to attend a meeting regarding the investigation.  Cortezano sued Salin Bank, alleging Title VII national origin discrimination, among a number of other claims.

The Ruling:  The Seventh Circuit decided that even if it assumed that Title VII provides bias protections based on the race or national origin of an employee’s spouse – an open question in the Seventh Circuit – Cortezano’s claim fails because she alleged discrimination based on her husband’s immigration status, and not his Mexican ancestry.  The court noted that the phrase “national origin” has been defined by the U.S. Supreme Court as the country from which one or one’s ancestors came; the phrase has nothing to do with whether an individual who came from another country came to this country illegallySince the employer’s internal investigation concentrated on the husband’s undocumented status as opposed to the husband’s race or national origin, the court found that the bank’s actions did not violate Title VII.

While this case provides helpful guidance regarding the extent of Title VII protections, employers should always consult with their labor and employment attorneys before taking adverse actions based on a particular employee’s status.

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