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Want to use a Last Chance Agreement? Careful, it could be used against you.

Posted on February 5, 2013 by smithamundsen

Contributed by Michael Wong

While Last Chance Agreements (LCAs) have grown in popularity as a way to protect an employer’s decision to terminate an employee, the Central District of Illinois’s decision in EEOC v. Cognis has created a concern for employers that use LCAs.

In EEOC v. Cognis, the court issued a bold statement by granting the EEOC summary judgment and finding an employer, Cognis, had violated Title VII by terminating an employee after he revoked his promise to abide by an LCA. 

In the case, the employee was offered an LCA after his poor performance resulted in verbal warnings, counseling and a suspension. The LCA stated that “in lieu of termination,” the employee agreed to accept the terms of the LCA, including a release and waiver of any claims under state and federal employment law in relation to his right to employment with Cognis or his status under the LCA.  The employee understood that if he did not agree with all of the LCA terms, including the release and waiver, he would be immediately terminated.

After signing the LCA, the employee questioned whether he had waived his civil rights, including his ability to file an EEOC charge of discrimination.  Cognis’ response was simply that it would not alter the LCA.  Cognis did not explain if, or how, the LCA impacted the employee’s civil rights or ability to file a charge of discrimination. After learning that the LCA would not be modified, the employee revoked the LCA indicating that he refused to give up his civil rights.  Cognis then terminated the employee because he was unwilling to remain bound by the terms of the LCA.

In granting summary judgment against the employer, the court held that the employee’s revocation of the LCA was a protected activity and the employer’s decision to terminate his employment after the revocation (even though the employer was simply reverting to its prior decision to terminate the employee) constituted an adverse employment action, because it “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” While the court refused to apply the same rational to the EEOC’s class claims, it specifically stated that it “believes that a jury could reasonably conclude that Cognis feared protected activity from poorly performing employees if they were terminated, and therefore offered LCAs which required the poorly performing employees to give up their civil rights as their sole alternative to termination.” 

Employers should carefully review their last chance agreements to determine whether they could fall into the same pitfall as Cognis. Revising the language of a last chance agreement to clarify an employee’s rights may provide some protection from the Central District’s decision. Regardless, employers should now be more careful when terminating an employee who refuses to sign or wants to revoke his or her promise to abide by a last chance agreement.

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EEOC Approves Its Highly Anticipated Strategic Enforcement Plan – Adds Equal Pay to List of Nationwide Priorities

Posted on January 10, 2013 by smithamundsen

Contributed by Samantha Esmond

On September 10, 2012, we blogged about the EEOC’s proposed Strategic Enforcement Plan (SEP), which had been released for public comment.

On December 18, 2012, the EEOC announced that it officially approved its highly anticipated SEP for 2013-2016 with bipartisan support. The EEOC’s press release can be accessed at:
http://www.eeoc.gov/eeoc/newsroom/release/12-18-12a.cfm

According to the EEOC, the purpose of the SEP is “to focus and coordinate the EEOC’s programs to have sustainable impact in reducing and deterring discriminatory practices in the workplace.” Notably, the final version of the SEP has added “equal pay enforcement” to its list of national priorities.

The approved SEP identifies and highlights the following areas as national priorities:

  1. Eliminating barriers in recruitment and hiring;
  2. Protecting immigrant, migrant, and other vulnerable workers;
  3. Addressing emerging and developing employment discrimination issues (such as certain ADA issues, including coverage, reasonable accommodation, qualification standards, undue hardship, and direct threat, accommodating pregnancy-related limitations under the ADAAA and the Pregnancy Discrimination Act, and coverage of lesbian, gay, bisexual, and transgender individuals under Title VII’s sex discrimination provisions);
  4. Enforcing equal pay laws;
  5. Preserving access to the legal system; and
  6. Preventing harassment through systematic enforcement and outreach.

In addition to the above nationwide priorities, the SEP directs the 15 EEOC district offices to develop their own District Complement Plans by March 29, 2013, identifying, among other things, their own local enforcement priorities and describing how the district office will implement the SEP nationwide priorities.

It is also anticipated that the EEOC will take a more aggressive approach and give priority to systematic cases – those pattern or practice, policy, and/or class cases – where the alleged discrimination has a broad impact on a particular industry, occupation, business, or geographic area. While systematic cases generally involve a class of individuals, they may also originate from a single charging party alleging that an employment policy is discriminatory.

The approval of the SEP provides employers with insight into the types of issues the EEOC will likely target in the coming years. With the intensified investigative and enforcement efforts of the EEOC, employers will continue to face many challenges when responding to and defending against charges of discrimination.

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

Posted on January 3, 2013 by smithamundsen

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.

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EEOC Collects Record Amount in Monetary Relief

Posted on December 11, 2012 by smithamundsen

Contributed by Jon Hoag

A recent EEOC press release announced that the EEOC collected a record $365.4 million dollars from private employers last year.  The EEOC highlighted this record-breaking level of monetary relief recovered as evidence that it was successful in its objective of strategic law enforcement.  The EEOC stressed that approximately 10% of the monetary relief came from systemic charges of discrimination, which was four times the amount received in the previous fiscal year.

As part of the EEOC’s new strategic plan, it will release the amounts it recovers on an annual basis. We should expect that the EEOC will strive to exceed the record $365.4 million it collected this fiscal year.  To do so, the EEOC will continue to seek out systemic claims and look for opportunities to bring a class-based claim, including requests for company policy information during investigations.  Based on recent guidance and decisions issued by the EEOC, the focus on systemic discrimination is likely to be in the area of background checks in hiring and employer leave/attendance policies as related to the making of reasonable accommodations under the amended ADA. 

It seems that one the EEOC’s main objectives may be to obtain monetary relief for alleged victims of discrimination.  This is unfortunate news for employers.

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Illinois Employment Law Update – Fall 2012

Posted on September 26, 2012 by smithamundsen

Contributed by Jeff Risch

As the Chair of the Illinois Chamber’s Employment Law & Litigation Committee, I want to make certain that our readers receive the latest changes and updates courtesy of Springfield.  Be assured that our labor group continues to be on the frontline on key local, state and federal workplace regulation. 

Social Networking Limits (HB 3782):  This measure provides that it is unlawful for an employer to request a password or other account information in order to access an employee’s or prospective employee’s social networking website.  HB 3782 allows for employers to maintain lawful workplace policies regarding internet use, social networking site use and electronic mail use.  This legislation allows employers to obtain information about an employee or prospective employee in the public domain.  Governor Quinn has signed this legislation as Public Act (PA) 97-875.  It is effective January 1, 2013.

Equal Pay Act – Individual Liability (SB 2847):  As amended, individual liability under the Equal Pay Act occurs when the employer knowingly and willfully evades the payment of a final award or final judgment under the Act.  Effective on January 1, 2013, the Governor signed as PA 97-903.

Service Members Protections (SB3287):  This measure creates the Illinois Service Member Civil Relief Act which provides certain legal protections afforded to service members (and family members where specified) are subject to stated provisions of law. Amends the Illinois Administrative Procedure Act to set forth a provision concerning stays of contested case hearings for service members.  Amends the Illinois Human Rights Act to provide that a violation of specified provisions regarding legal protections for military personnel constitutes a civil rights violation under the Illinois Human Rights Act.  This is now PA 97-913, with an effective date of January 1, 2013.

Employment Discrimination (HB 3915):  Changes the term “handicapped” under the Illinois Human Rights Act to “disability”.  NOTE: We can expect that the ADA (as amended) will continue to be relied on as highly persuasive authority in interpreting employers’ obligations related to disability protections under the IHRA. Governor Quinn signed as PA 97-877 with an August 2, 2012 effective date.

Prevailing Wage Notice (HB5212):  Provides that a public body or other entity shall notify contractors and subcontractors of changes in prevailing wage rates.  However, the notification requirement will be met by including in the contract that the prevailing rate is established by the Department of Labor and available on the IDOL website — shifting the responsibility yet again on the contractor and small business owner.  Effective January 1, 2013 as PA 97-964.

UI Administrative Changes (HB 5632):  Has been signed into law as PA 97-791 and goes into effect January 1, 2013.  The new law cleans up obsolete language and makes other non-substantive changes.  It requires payments be made to the Department of Employment Security instead of the Director.  It addresses several federal conformity issues including:

  1. Illinois law now provides for a monetary penalty for individuals who fraudulently obtain UI benefits that are greater than 15 percent of the amount that was fraudulently obtained.
  1. Illinois law now requires an employer account to be charged for benefits that were incorrectly paid if the incorrect payment was the result of the employer (or employer’s agent) failing to timely respond to information requests from the state UI agency and the employer (or agent) has established a pattern of failing to timely respond.
  1. Illinois law now requires employers to report to the state new hire directory the names of all employees rehired after having been separated for at least 60 days.

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EEOC Issues Draft Strategic Enforcement Plan for Comment

Posted on September 10, 2012 by smithamundsen

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.

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

Posted on August 3, 2012 by smithamundsen

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.

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EEOC Systemic Discrimination Initiatives: View From the Battlefields

Posted on July 11, 2012 by smithamundsen

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.

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

Posted on June 25, 2012 by smithamundsen

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…

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EEOC Decides Title VII Prohibits Gender Identity Discrimination

Posted on May 18, 2012 by smithamundsen

Contributed by Jon Hoag

The United States Equal Employment Opportunity Commission (EEOC) has ruled that discrimination against transgender individuals is sex discrimination under Title VII. This is the first time for the EEOC to hold that Title VII covers discrimination based on gender identity and the decision could have a sweeping impact. EEOC decisions are not controlling on the courts, but the federal courts often give deference to EEOC interpretations and decisions.

The case only involved the procedural issue of whether Title VII extended to the complainant’s allegations of gender identity. The EEOC decided in the affirmative and remanded the matter to the federal agency to determine if the employer discriminated based on the complainant’s gender identity. According to the complainant, she was denied a position with the ATF because she disclosed that she was in the process of transitioning from a male to a female. The complainant states that shortly after this disclosure, she was told that the position could not be filled because of budget cuts. The complainant was concerned about the timing and inquired further about the position only to find that the position had not been eliminated and was actually filled by another candidate. 

The complainant filed a charge of discrimination based on sex and gender identity. In reaching its decision that gender identity is covered by Title VII, the EEOC relied on federal decisions that have addressed Title VII in the context of gender stereotypes and identity. While some federal courts have found Title VII applies to gender identity discrimination, it is anticipated that the EEOC decision will prompt direct and consistent application of Title VII to gender identity discrimination claims. Employers…you know what to do…stay tuned and stand ready to adjust your policies and procedures accordingly.

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