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LEGAL AND LEGISLATIVE UPDATE
ON EMPLOYMENT LAW
September 2007
by
Bob Gregg
rgregg@boardmanlawfirm.com
Boardman Law Firm
www.boardmanlawfirm.com
LEGISLATION AND ADMINISTRATIVE ACTION
Wisconsin Legislature considers adding punitive damages to Wisconsin Fair Employment Act (WFEA). The Senate Labor Committee is holding hearings on SB-165, a proposal to add unlimited punitive damage awards to cases brought under the state’s anti-discrimination laws. If passed, this would result in greater damage awards than are given by federal courts. The current state law provides “make whole” relief (back pay, attorney fees and benefits). The Wisconsin Society for Human Resource Management and several business groups have opposed the bill. It will certainly add to business costs. Unlike federal law, the state law covers very small employers; it is likely that some of these will be bankrupted simply by the extra defense costs. The proposed changes could also backfire on plaintiffs. The WFEA was intended to be a less formal process than federal court―to give a useable and sensible process to the average person. Many parties use it successfully without an attorney. A punitive damage provision will add a much greater level of complexity, and no employer will dare proceed without legal counsel. This means no plaintiff would be likely to endure in the process without also getting legal counsel. This is all well and good for the “big cases.” However, many, many plaintiffs with “run of the mill” claims, who will not be able to afford or attract an attorney, may drop through the cracks. They will be overwhelmed by the more complex process and the greater number of defense attorneys. Wisconsin may turn its easy-to-use, less formal process into another federal court-type proceeding where the regular person simply gets shut out.
LITIGATION
CONSTITUTION
Local illegal alien laws violate Constitutional preemption clause. In the wake of Congress’ lack of action on immigration, many local governments have passed ordinances barring illegal aliens from employment, etc. Fines and penalties are imposed on any employer who knowingly, or, in some instances, unknowingly, has illegal workers. In Lozano v.. Hazleton, PA (M.D. Pa., 2007), a federal circuit court has struck down these local laws. Under the Constitution, the federal government has authority for foreign affairs, including immigration, and federal law “preempts” and nullifies any other state or local laws on this matter.
PRIVACY
Criminal background check violates FCRA notice provisions. A group of railway workers has filed an administrative suit alleging that several rail industry contractors and service providers violated their Fair Credit Reporting Act rights when doing criminal background checks. In re H&M International Transportation, Inc. (Fed. Trade Commission, 2007), the FCRA applies to employment screening or investigation conducted by a third party (credit agencies, security firms, placement agencies, consultants, etc.). The law requires written notice of the background search and the opportunity to know of and dispute any findings that result in employment decisions (hiring, firing, non-assignment, etc.). The complaint alleges that: (1) Many employees received no notice; (2) When notices were given, they were incomprehensible to non-English readers; (3) Employees were fired due to the checks, but not told why and not given a chance to refute the findings; and (4) Many of the findings were wrong. People were fired based on misspelled names, typos, identity theft, criminals with similar names, yet never given the chance to know of and correct the record. [For more information on the FCRA and background checks, request the Boardman articles Use and Abuse of References or Boardman’s seminar, The Murderer Has the Room Keys―Pre-Employment Background Checks.]
FAMILY AND MEDICAL LEAVE ACT
Settlements: Department of Labor disagrees with its own rules. The Fourth Circuit Federal Court has joined others in holding that employees may not sign a release of FMLA rights. So any layoff severance agreement or private settlement of dispute of current or possible FMLA rights is invalid, unless the DOL gives formal approval. Taylor v. Progressive Energy, Inc. (4th Cir., 2007). This decision is based on the language of 29 Code of Federal Regs. 825.220(d) which clearly states a preclusion of “prospective and retrospective waiver” of FMLA rights. This, of course, creates a major problem for any employer wishing to give a severance agreement or get a settlement of a dispute in exchange for a release. You can pay the severance, but the employee still has the right to sue you under the FMLA. The DOL is now stating that it really didn’t mean what the rule seems to say. It does not want to discourage settlements or severance pay. The rule was intended to keep employers from pressuring workers into signing away FMLA rights when they take a job or prior to taking a leave―before they exercised their rights. It was not supposed to discourage negotiations and settlement of disputes or hamper exit incentives. DOL filed an amicus brief in the Taylor case trying to explain its position. However, the court stuck to the apparent clear language of the rule and ignored what DOL said it “really meant.” Now the avenue for fixing the issue is either to make an appeal to the Supreme Court or amend the rule. Given DOL’s slow action on amending rules (see July 2007 Legal Update), the Supreme Court may be faster.
DISCRIMINATION
Sex
Hotbed of office affairs and hostile husband defenses win case. A federal circuit court reversed a sex discrimination verdict, finding the employer’s defenses valid. A female employee was fired following an affair with a company salesman. He was retained. The woman’s husband had made threats of violence toward the salesman. The evidence showed that out of the company’s 17 employees, 12 had engaged in workplace affairs and not one, male or female, had ever been fired. So it was unlikely gender was involved this time. The company’s claim that it fired the woman because it feared violence by her husband and did not want to have a continuing threatening situation was credible. She stood out not due to gender, but due to the threats “associated with” her continuing presence in the workplace. Hossack v. Floor Covering Assoc. (7th Cir., 2007).
Harassment
Use the policy, not self-help. An employee thought a gay co-worker was making unwelcome advances, staring at him in the restroom. He reacted by sending anonymous, intimidating electronic messages to the gay co-worker. The sender was fired when the messages were traced to him. He then filed a harassment suit. The case was dismissed because the plaintiff had failed to use the company’s anti-harassment policy to allow the company to solve any problem. His self-help remedy was not protected by the law. Bernier v. Morningstar, Inc. (7th Cir., 2007).
National Origin
Comments about accent. An Hispanic employee for FedEx was in a management training program and was qualified for, but denied, three supervisory openings. The evidence showed that a manager had made comments about the employee’s accent and speech patterns, including that the way he speaks will harm “his ability to rise through the company.” The employee complained about these comments and denial of promotion, but the company took no corrective action. He then sued. The court ruled that the comments were direct evidence of national origin discrimination. In re Rodriquez (6th Cir., 2007). Employers should also be aware that under Title VII, hiring should be done on qualifications for the current job. Only in special circumstances can a hiring decision be based on what might happen in the future (ability to rise through the company). Hiring for “future potential” would require the employer to show a concrete “progression plan” or strategic plan linked to that job category.
Disability
Split of opinion: no personal liability for ADA employment retaliation. A federal circuit court has ruled that individual corporate officers are not personally liable for employment retaliation under the ADA. Albra v. Advan, Inc. (11th Cir., 2007). The ADA does not include personal liability for general disability discrimination, but the anti-retaliation provisions have different wording, and courts have made individual managers and business owners pay damages. Now, the 11th Circuit has found differently. This is not the end of the issue. An important purpose of the Supreme Court is to eventually address splits of opinion between lower level courts and reach a “law of the land” decision. So, we will wait to see. Also, this was an employment case. The 11th Circuit distinguished its decision from earlier cases finding personal liability for ADA retaliation against non-employees (contractors, citizens, parents of disabled students, service recipients). So those rulings are still very much in effect.
Employers must provide job-related medical information. The ADA requires an “interactive process” in which the employee and employer must communicate, cooperate and share information to explore accommodations. The employee must provide reasonable medical verification of the disability, its effects on work, as well as documentation of the need for any accommodations or leaves of absence. In Yeager v. TSA (W.D. Wash., 2007), the employee refused to provide medical evidence to support a disability leave. He claimed that the information request violated his privacy rights. When he was then fired, he sued under the ADA, alleging retaliation for having exercised his rights. The court ruled against him, finding that the employee had violated his obligation to engage in the interactive process. What did the employer do right? The request for medical information was narrow. It asked for only information on the specific condition at issue, and it specified that only information relevant to the job and the leave of absence was needed. A too-broad request for medical records would violate the ADA and privacy rights.
A similar result was reached in Talley v. Family Dollar Stores (N.D. Ohio, 2007), in which an employee failed to provide medical documentation of the need for a stool to accommodate a back/leg condition.
Request for flexible arrival time is unreasonable accommodation for school bus driver. A school bus driver’s attention deficit disorder caused frequent lateness. She requested a reasonable accommodation of “flexible arrival times,” meaning the okay to be late to work on an ongoing basis. The school district stated that it could accept a five-minute flexibility. However, the driver wanted no time limit on lateness and could not predict how late or how frequent these incidents would be. She wanted an open-ended flexibility. The district declined and then soon fired the driver for continued late arrival. She sued. The court dismissed. It found her request was for an unreasonable accommodation. Being on time is an essential function of a school bus driver. Late students disrupt the classes, and consistent lateness harms the students’ education. Lateness interferes with the daily bus safety check prior to going out, and students’ health and safety is jeopardized standing out in the weather waiting for the unpredictable arrival of the bus. Simon v Bellville School District (W.D. Wash., 2007).
NATIONAL LABOR RELATIONS ACT
Graduate research assistants can unionize; teaching assistants still cannot. The National Labor Relations Board has ruled that graduate research assistants working on university affiliated projects but paid by university affiliated research foundations and subcontractors may form unions, bargain and strike. In re Research Foundation of the State University of New York (NLRB 2007) and Research Foundation of the City University of New York (NLRB 2007). This is a very different decision than In re Brown v. University (NLRB 2004) in which the Board held that teaching assistants may not unionize. In Brown, the Board decided that teaching assistants were paid, but the teaching was furtherance of their university education, rather than a “purely economic” relationship. In the current New York cases, the Board sees a different relationship. The foundations and grant contractors are NOT the university. They are separate corporations, which often do licensing, sales and other business. The graduate researchers were in more of a “work relationship.” They were not “enrolled” at the foundations or contractors; they were employed.
