Boardman Law Firm

LEGAL AND LEGISLATIVE UPDATE ON EMPLOYMENT LAW

Bob Gregg
September, 2010

LITIGATION

The Legal Update includes new developments and matters of interest throughout the United States. Be aware that our various federal circuit courts reach somewhat differing conclusions. So a federal court decision in another part of the country, and especially a different state's court decision, may not quite be "the law" in your jurisdiction. Some courts lead the way; others lag behind. The Legal Update lets you see the overall trends and compare them with your jurisdiction. Wisconsin is part of the Federal Seventh Circuit (Wisconsin, Illinois and Indiana).

Issue of the Month:
Violation of Electronic Discovery Rules

Pension plan committee penalized by court for failure to preserve electronic information. A university's employment pension plan sued the Bank of America over a dispute about its funds. However, in the discovery process, the bank found the university had failed to properly preserve all electronic records. The Electronic Discovery Rules require a party to ensure preservation of all relevant electronic records once it becomes aware that a dispute might result in litigation. All organizations should have an electronic retention plan in place for this purpose. The defendant bank asked the court to impose penalties upon the plaintiff. The court found that the university pension committee had failed to have a written preservation plan, failed to institute a "hold" against deleting emails and records, and then made only one indifferent collection effort after the discovery was requested. The court imposed monetary penalties, preclusion of much of the plaintiff's evidence, and an "inference" that all deleted documents would have been harmful to the plaintiff's case and the jury could consider their deletions as an attempt to destroy harmful evidence. It will be very difficult, or impossible, for a plaintiff to win a case where it is precluded from presenting much of its own evidence and the jury believes it was engaged in trying to cover up evidence. The court rejected the pension committee's argument that it was unaware of the Electronic Discovery Rules and the failure to preserve was "excusable neglect." The Rules have been in effect since 2006, and all employers, benefit plans and fiduciaries should be well aware of the obligations. Pension Committee of the U. of Montreal Pension Plan, et al. v. Bank of America Securities, et al. (S.D. NY, 2010). [This case should be a warning that plaintiffs, as well asdefendants, have a duty to preserve electronic information. Both parties should preserve early in any dispute and not wait until a threat of suit. Any organization which has not developed a written preservation plan to comply with the Rules, and has not educated all staff, should promptly do so.]

ARBITRATION

Attorney eliminates her own remedy. A shareholder and director of a law firm sued for sex discrimination, sexual harassment, unequal pay and retaliation. All shareholders had signed an agreement to arbitrate all disputes. However, she chose to reject the arbitration agreement and file for potentially greater damages under Title VII, the Equal Pay Act and the Pennsylvania Human Relations Act. The court ruled that as a top level shareholder/director, she did not qualify as an "employee" under these laws. She was in the class of "employer" instead of employee. The court dismissed the case. Having previously rejected the available arbitration process, she was now without any remedy. Kirleis v. Dickie, McCamey & Chilcote (3rd Cir., 2010).

Arbitrator cannot order reinstatement as a remedy for discrimination when there is hostility between plaintiff corporate counsel and company president. Menards, a big box home supply chain, was found to have engaged in intentional sex discrimination against its corporate legal counsel. There were also findings of overtly hostile personal relations between corporate counsel and the company president after she complained of discrimination, including findings of "intimidation" by the president when he abruptly fired her. In the post-termination arbitration award for discrimination and retaliation, she won $267,108 in back wages, $267,108 in liquidated damages for disparate pay and willful violation of the Equal Pay Act, $114,945 in back bonus and lost wages due to her wrongful discharge, $100,000 in emotional distress damages, $900,000 in punitive damages, and $129,120 attorneys' fees. However, the arbitrator, against both parties' wishes, also ordered reinstatement to the legal counsel position at double the prior pay, instead of front pay; reasoning that not doing so would be a continuing reward for Menards' illegal behavior, letting it get away with the firing. On appeal, the Wisconsin court let the damages stand, but reversed the reinstatement order. It reasoned that the environment was too poisoned for effective reinstatement. Further, legal counsel is a special position, requiring trust and cooperation. Forcing a company to have a legal counsel and president hostile to each other would constitute a breach of a client's right to effective legal counsel. The plaintiff is entitled to an additional award of front pay instead of reinstatement. Sands v. Menards, Inc., Wisconsin (Wis. S.Ct., 2010).

DISCRIMINATION

National Origin

"Vince Lombardi Rule" decides case. In Alvarez v. Royal Atl. Developers (11th Cir., 2010), a fired comptroller sued for discrimination based on Cuban national origin under Title VII and the Florida Civil Rights Act. She had worked for a brother-sister family-owned company, and the sister, the CFO, was her manager. The court found that though there were a few negative comments about Cubans, they were not by anyone who had any decision-making authority over her. The evidence showed that the sister/CFO was a harsh and unfair supervisor, "persnickety" and "impossible to please." In fact, she had gone through a whole series of comptrollers, and the plaintiff had managed to last the longest -- four months before discharge. Though unfair, the court found the CFO's management was "indiscriminate."

She had been "impossible" and unfair to all comptrollers similarly. In dismissing the discrimination charge, the court cited the "Vince Lombardi Rule" established in the case Baldwin v. Blue Cross/Blue Shield (11th Cir., 2007), "No player could accuse the great coach of discrimination because he treated all of them like dogs!" [Be cautious. Before one decides that a "uniform" harsh supervisory style is a good defense to discrimination charges, remember that Wisconsin is debating the Abusive Workplace Act, which would make abusive management, in general, a viable case. Will the legislature provide an exemption from the law for coaches?]

Race

Health care facility honoring patients' requests to have no treatment by Black staff constitutes illegal harassment. A nursing home ordered an African American nursing assistant to not provide treatment or care to residents who had expressed a desire to "not have any care by Black people." Her work sheets had daily reminders of the no-contact request. She had to go to other areas of the facility to find White staff when there was a care need for the no-contact patients, a routine event. She also got negative comments from other staff (some of whom had to go out of their regular routine to do this care). The court ruled that this created a hostile environment and was racial harassment under Title VII. The employer's defense claimed that Indiana state law and federal law required it to honor patients' stated care requests, citing cases on patients' rights to same-sex care. The court rejected this defense because (1) the facility made no showing of any racial exclusion in state or federal laws; (2) even if a state law did have such, it would be preempted by Title VII federal discrimination laws; and (3) the laws only provided exclusions for same-sex privacy care. "The privacy interest that is offended when one undresses in front of a doctor or nurse of the opposite sex does not apply to race. Just as the law tolerates same-sex restrooms or same-sex dressing rooms but not white-only rooms to accommodate privacy needs, Title VII allows an employer to respect a preference for same-sex health providers, but not same-race providers." Chancy v. Plainfield Health Care Center (7th Cir., 2010).

Sex

Women's prison cannot deny lieutenant promotions to male guards. Nevada's Department of Corrections could not show a bona fide occupational qualification (BFOQ) for female-only posting of lieutenant positions at the women's prison and rejecting male applicants. In defense of the sex discrimination case, the state argued that male lieutenants were more likely to commit or condone sexual abuse of female inmates, that male correctional officers are susceptible to "being compromised" by female inmates, and that female officers possess an "instinct" regarding other women's behavior that would make them less susceptible to inmate manipulation and more effective as correctional lieutenants. However, there was no tangible evidence to support this opinion; it seemed to be more gender stereotyping than validated evidence. The court found no proof that all males would condone improprieties or be incapable of effective and proper supervision of guards or inmates. Breiner v. Nevada Dept. of Corrections (9th Cir., 2010). [Employers may well be able to justify a gender BFOQ for some positions, but not for all. Customer, patient or inmate privacy may create a BFOQ, even a requirement, for same-gender service and some gender specific hiring. However, that must be carefully studied and backed up with solid evidence of the validity of the BFOQ.]

Disability

"Available vacancy" must be available to other regular employees. The ADA requires placing disabled employees into an available vacancy if there is no reasonable accommodation which enables them to perform their current job. In Duvall v. Georgia-Pacific Consumer Products LP (10th Cir., 2010), the company had decided to outsource a group of jobs; they were filled by contracted workers. Mr. Duvall, who had a pulmonary condition, could not perform his job and requested transfer to one of the outsourced positions he used to hold, which happened to be vacant at the time. This was denied, and he had to take a much lower-paying alternative job. He sued. The court ruled that the outsourced jobs were not "available positions" under the ADA. No non-disabled employee was eligible for these jobs. The ADA does not require opening a job that would not be open for a non-disabled person.

Company cannot use a double-bind defense. A salesman requested and was granted FMLA leave for cancer treatment. After the 12 week leave, he was still unable to return and requested an additional three-month ADA leave. This was denied, and he was discharged for being unable to return to work. He sued. The company defended by claiming that because the salesman was unable to perform the essential functions of the job during the extra three months, he was not a "qualified person with a disability" and did not come under the ADA's protection. The court rejected this argument. A reasonable leave of absence (in addition to FMLA) is a form of reasonable accommodation. The whole purpose of an ADA leave is because the person cannot perform essential job functions for a time and needs leave to recuperate and then be able to do the work. Obviously, if one could do the essential functions, they would not need an ADA leave. So, requiring one to be able to do those functions as a "qualified person with a disability" in order to request a leave would nullify this entire provision of the ADA. The employer's argument would create a virtual impossibility for anyone requesting a reasonable leave of absence. The court also ruled that the employer had abrogated the "interactive process" requirement. It discharged the salesman immediately after he requested the three-month extension, without any discussion or serious consideration of the request. Bernhard v. Brown & Brown of Lehigh Valley (E.D. PA, 2010).

Department can impose fitness for duty evaluation upon reasonable evidence that officer may pose potential harm. A police officer suffered head injury in an off-duty accident. He then began exhibiting angry outbursts, disruptive behavior in meetings, and told others he began shaking and felt he was losing control during a traffic stop. The Department ordered a fitness evaluation which resulted in a conclusion of not fit for duty. He was placed on leave. His own doctor also evaluated him as presently unfit for duty but, with treatment, possibly fit at an unspecified future date. When FMLA expired, the officer did not respond to requests for further information as to his treatment status, fitness or possible date of ability to resume duties. He was terminated. He then sued for violation of the ADA, claiming that fitness evaluation may only be ordered if a disability actually has caused a deterioration or problem in performance, not on a speculative possibility of such. The court disagreed. Especially in a job with a high risk of harm to others, an employer does not have to wait until the person actually does real harm or injury before ordering a fitness evaluation and placing the person on leave. The plaintiff's interpretation of the ADA would place employers in a position of liability for anyone harmed by the "foreseeable" situation. Also the Department did not engage in speculation or unfounded presumptions; there was evidence to create valid concerns about the officer's ability to continue performing the job. Brownfield v. Yakima, WA (9th Cir., 2010).

FAMILY AND MEDICAL LEAVE ACT

Fear of bulletproof vest ends employment. Most police officers wish for protection from bullets. However, in Gates v. Lebanon City (W.D. MO, 2010), an officer had a severe anxiety reaction when informed that all police officers would be required to wear bulletproof vests. He became so agitated about the issue that he could not work and was hospitalized for anxiety. He was granted FMLA. He then did not supply medical verification of fitness to return to work and was terminated at the end of the 12 weeks. In the resulting suit, the court found the failure to supply a fitness report was valid grounds to end the employment. The court also dismissed the officer's ADA case, finding that he was not a "qualified person with a disability" because even if the Department had made a no-vest reasonable accommodation, he still had not presented evidence of fitness to return to work and perform police duties, whether or not he wore a vest.

Cleaning absent mother's flooded basement is not FMLA event. A hospital medical technician was granted intermittent FMLA to provide his mother's basic home care and transport her to medical appointments. He then failed to report to work for a week without notice. He admitted some days were not with excuse but claimed three were FMLA to provide the care of cleaning his mother's flooded basement. He was fired for a week of unexcused absence. In the FMLA case, the court ruled for the hospital. The employee had provided no information that the absence qualified for FMLA leave. There was no medical verification that the mother's medical needs required an immediate cleaning of the basement. Further, the facts showed that mom was out of the house - on vacation - during the week the house flooded and was being cleaned. So, there was no immediate effect upon her health at all. Laure v. Pontiac Osteopathic Hospital (E.D. Michigan, 2010).