LEGAL AND LEGISLATIVE UPDATE
ON EMPLOYMENT LAW
December 2007
by
Bob Gregg
rgregg@boardmanlawfirm.com
Boardman Law Firm
www.boardmanlawfirm.com
STILL TIME TO REGISTER!
WorkSource Wisconsin Seminar
December 12, 2007, 7:00 a.m. - 12:00 p.m.
Italian Conference Center, Milwaukee, Wisconsin
Nationally noted speaker, Neil Romano, along with experts on employment law, accommodations and new developments. Part of a statewide seminar series ― free! Qualifies for SHRM recertification credits! Register with Jennifer Gundlach Klatt at gundlach@uwstout.edu or fax 715-232-5008, or call WorkSource Wisconsin, The Employer’s Guide to Disability and Employment, toll-free 866-460-9602.
LEGISLATION AND ADMINISTRATIVE ACTION
House passes sexual orientation discrimination bill.The House has passed Bill HR 3685, which would add sexual orientation to the Federal Title VII employment discrimination categories. Religiously affiliated organizations are exempt from coverage, just as in some other existing Title VII areas. “Gender identity” was proposed, but then withdrawn as an included category. The bill now goes to the Senate. Nineteen states and a large number of localities already prohibit sexual orientation discrimination.
EEOC issues new ADEA rules. The EEOC has revised its Age Discrimination in Employment Act regulations. The new version adopts recent court decisions which allow employers to give more favorable treatment to older employees—those in the upper limits of the over-40 protected age group―and can even allow employers to advertise for older applicants without violating the law. For more information, go to www.eeoc.gov.
Illinois allows jury in state discrimination cases. In addition to the federal laws, each state has its own anti-discrimination statutes or Fair Employment Acts, which affect even very small companies that are not covered by federal laws. Historically, these cases are decided by administrative agencies and a hearing examiner. This is changing. As of January 1, 2008, Illinois will become the 39th state to allow equal employment cases to go outside the Human Rights Agency and be tried by a jury in state court. This may increase damage awards to plaintiffs, since jurors are generally more generous than hearing examiners. It will definitely and dramatically increase the costs of litigation to both parties, since courts have far more procedures and generally are two to three times more expensive than the administrative hearing process.
LITIGATION
Issues of the Month
There are two issues with two cases each that deserve special attention this month. One is so common and so much a part of human nature that we should periodically have reminders that workplace humor, even among friends, should stay within certain boundaries. The other issue involves the shifting legal definitions as to who is and is not covered by employment laws and employment taxes.
Just Joking Among Friends?
Joking with the boys warrants demotion. A male manager shared a series of sex jokes and other off-color emails with his male subordinates—over 30 emails in a month. None of the recipients complained, but the emails violated the computer use policy and were caught by the IT monitoring system. The manager received a disciplinary demotion, which he challenged as “excessive” under the Civil Service rules. The Civil Service Commission, then the state court, both ruled that though the level of offensiveness was not serious enough to fire the manager, the emails show “an abuse of the authority entrusted to him in light of his leadership position” and clearly warranted demotion and loss of pay. Webb v. State Civil Service Comm. (Pa. Commwth. Ct., 2007).
Was it harassment or just joking between friends? The court dismissed the national origin harassment case of a Hispanic laboratory worker. Over a five-year period, the supervisor repeatedly called the worker “wetback,” “brown cow” and “stupid Mexican.” The supervisor also said that she had a “Mexican brain” that couldn’t understand numbers. (Even though many comments were outside the Title VII statute of limitations, some did occur within the 300 days before filing, so all could be used as evidence.) The court agreed that these comments standing alone could be racially hostile. However, during that same timeframe, the lab worker and supervisor regularly socialized on and off the job. They and their spouses took a week-long vacation together. She sent friendly greeting cards to the supervisor’s house and described him as a “great boss.” During the whole time, she said nothing about finding the comments unwelcome or offensive. She raised a concern only after the supervisor did not select her for a promotion. The plaintiff claimed she was too intimidated by the supervisor to raise the issue previously, but the court did not buy this excuse. It decided that the social relationship was far “more prolonged and extensive than usual among office colleagues,” discrediting the claim of intimidation. “The failure to report the behavior over this long time, combined with the unusually extensive social relationship she maintained with him would prevent a reasonable . . . finding that she viewed her work environment as hostile.” Bannon v. U. of Chicago (7th Cir., 2007).
This case is a good warning about “banter among friends.” Though the employer won, it had to go through the EEOC and the federal court and appeal process to do so, spending close to $100,000 in defense costs (if you consider that a “victory”). Friendships often go sour, and what we thought was “banter” becomes “evidence.” One should be able to have friends and fun and humor at work, but both of these cases show that a good rule is to avoid workplace banter, and comments and emails about national origin, gender, sexuality, race, religion and other EEO topics while at work—even with your best buddies.
Employees or not? What you label them is not necessarily so.
Independent contractors and partners are not “employees.” There are no wage requirements, no tax withholding, no SSI payments, and they are not eligible to file “employment lawsuits” like employees or the “shareholders” of law, accounting, architecture, etc., firms can. Two cases illustrate the perils of stretching these definitions.
Independent Contractors? Wishful thinking results in $4.5 million liability for cleaning company. Far too many employers have tried to label workers as Independent Contractors in order to avoid payment of state and federal taxes, SSI, benefits, unemployment compensation, and to escape wage and hours rules and other liabilities associated with having employees. Far too often this is wishful thinking or stretching the limits, and the workers do not meet the federal or state criteria for Independent Contractor status. Chao v. S. California Maid Services & Carpet Cleaning (C.D., Cal., 2007) is a good illustration. The cleaners were found to be employees, not Independent Contractors. The company was then liable for several years of improper wage payments, failure to keep proper employment records and failure to withhold and pay the employment taxes. It paid $4.5 million in back pay, taxes and penalties—more than wiping out anything it “saved” by trying to pass off its workers as Independent Contractors. Further, now that the workers have been found to be employees, some of them may individually file other sorts of employment law cases which Independent Contractors could not, thus creating even more liability for the company. This case should be a warning to those companies that are glossing over the Independent Contractor rules and trying to save a few bucks. If the workers do not solidly meet the requirements, there may be a lot more liability down the road.
Law firm settles partnership age discrimination case for $27.5 million. A long-running battle has ended with a large law firm agreeing that its “lower level” partners were in reality employees who were covered by the ADEA. EEOC v. Sidley, Austin LLP (N.D. Ill., 2007). The firm has 1,700 attorneys and several levels of “partnership.” Only the top level actually exercise management control and vote on crucial matters. A number of older, lower level partners were involuntarily retired or “reorganized out.” The EEOC took the position that they were employees, despite the “partner” label, and should be able to file age discrimination cases. In an earlier round of the litigation, a preliminary decision found sufficient basis that the lower levels had such a lack of true involvement and authority that they did not fit the true definition of partner and allowed the case to continue toward trial. The settlement will result in payments to each of the affected former “partners” of $122,169 to a high of $1.8 million. This is not a definitive ruling. Since it is a settlement, no court has actually ruled on this “partnership” issue. So though it is fair warning, there is no binding precedent and some other firm could still argue that their junior partners were exempt from the employment laws.
DISCRIMINATION
Sex
Finding year-old pornography is not harassment. A male manager retired. A year later, a female employee routinely cleaning file drawers and storage lockers found an unlabeled videotape. She played it to see where it should be filed and discovered it was pornography left behind by the retired manager. The male manager had engaged in harassment of female staff, including her, which was a factor in the retirement. She filed a harassment case, claiming that the video had been left behind specifically for her to find and was a continuing act of sexual harassment. The court ruled against her. First, it held that an employer should not be required to search every nook and cranny to assure that departing employees don’t leave anything inappropriate behind. Second, the tape was in a general storage cabinet, accessed by a number of employees, male and female, so it was just as likely another person would have made the discovery; it was not targeted specifically at her, or women. Third, though offensive, the one instance in a year’s time was not sufficiently severe or pervasive to rise to the level of illegal harassment. Cooledge v. Consolidated City of Indianapolis and Marion County (7th Cir., 2007).
Sex and Retaliation
Calling police on supervisor is protected activity. A university employee alleged that his supervisor threatened violence after he repeatedly rejected her sexual advances. He said that she spit in his face, knocked papers out of his hands and allegedly slashed his tires. So he called the campus police for protection. The university then fired him for “unnecessarily disruptive behavior” in getting police involved instead of using the employee anti-harassment process (which he had tried previously). The court ruled that the employee could proceed to trial. If indeed there were violent acts, the university cannot void a person’s right to police protection simply because it might be disruptive to the workplace, and an employer cannot deem legitimate complaints of sexual harassment and attempts to be protected from violence as “unprofessional.” Scarborough v. Bd. of Trustees of Florida A&M University (11th Cir., 2007).
National Origin
Alaska’s English-only law is unconstitutional. The State Supreme Court struck down a new law making it illegal for state and local government employees to conduct business in any language other than English. The law violates the State Constitution and the U.S. Constitution’s First Amendment and is not “narrowly tailored” to serve a “compelling government interest.” Though the law was probably motivated by legislators’ desire to get on the political bandwagon over illegal immigration by Spanish speakers, the law’s practical effect would be the inability of government employees to communicate with a still significant number of Native American citizens who speak only their own languages. [Of course, if the law had created special exceptions for the several Native American languages, then the Constitution’s Equal Protection Clause would give rise to questions such as, “What’s wrong with other languages? . . . Why some exceptions and not others?” Then it gets very messy for the legislature.]
Race
Lay-off OK—but the manner it was carried out was discriminatory. A health agency laid off eight hospital workers due to budget cuts. One Hispanic worker and two White workers were given advance notice, allowed to wander around and say goodbye to co-workers and clean out their desks and depart without supervision. Five African American workers were called in and laid off without notice, given no time to do anything, had their personal items inspected and even taken as they left, and were under such tight security escort as they retrieved personal items and were escorted out that the co-workers thought the five had been arrested and were going to jail. The court found the original lay-off action was valid, but it was then executed in a particularly harsh and discriminatory manner. Trustees of Health and Hospitals of City of Boston v. Mass. Comm. Against Discrimination (Mass. Sup. Ct., 2007).
White officer’s discharge was not discriminatory. A White police officer was discharged for use of excessive force toward an African American arrestee. He claimed that African American officers who used excessive force in arresting African Americans were not fired. The evidence showed that the White officer was not “similarly situated” to the other officers. Two African American officers were accused of excessive force, but there was no evidence to corroborate the allegations, but there was a video showing the White officers’ actions. White officers also were not discharged when there was not corroboration. Another African American officer that the plaintiff used as a comparison was not found to have used “inappropriate” force when he fired his gun into a car which was dragging him down the street. There were no similarly-situated officers who were treated better, so the discrimination case was dismissed. Henry v. Jones (7th Cir., 2007).
FAMILY AND MEDICAL LEAVE ACT
Request for FMLA is not necessary in obvious situation. The normal rule is that in both FMLA and ADA the employee has the initial burden to notify management of either a disability condition or the need for FMLA leave. However, all rules have exceptions. One is when the condition or need for leave is blatantly obvious. This situation most often arises when the employee has emotional trauma or a mental disability which may impair his or her ability to recognize and go through the formal request procedures. In Stevenson v. Hyre Electric Co. (7th Cir., 2007), the employee had a traumatic reaction when a stray dog got in the building and invaded her work station. Over the next days, she had difficulty coming to work. When she was there, her behavior was so erratic and bizarre that she was removed from work and taken home by the company. She saw a doctor, who prescribed anxiety drugs and she called to say she would not be in to work for a few days due to being ill, but did not ask for FMLA leave. She was then fired for unexcused absence. Then the company changed the locks because she was so bizarre in behavior, they were afraid she might not understand that she was fired and come back in. The court ruled that the employer had “constructive knowledge” that the absence (incapacity for over three days) qualified for FMLA, the unusual behavior was so obvious that “it gave sufficient notice of the need for FMLA leave without the employee saying a word.”
