Bob Gregg, Legislative Director

EMPLOYMENT LAW UPDATE

January 2013

by

Bob Gregg, Legislative Director

Jefferson County HRMA

Boardman & Clark Law Firm

www.boardmanclark.com

LEGISLATION AND ADMINISTRATIVE ACTION

EEOC states that employers can discriminate in favor of disabled or older workers. An EEOC Opinion Letter states that nothing in the ADA or ADEA prohibits an employer from hiring only people with disabilities, or people over 40, or from discriminating against people somewhat over 40 in favor of people even older. The language of these laws cover only one-way discrimination; they do not cover those without disabilities or the more youthful. This is different from the other EEO laws, which prohibit discrimination against any race, any religion, any national origin and both genders, equally; one cannot discriminate in favor of one over another. Employers should be cautious about any reliance upon this EEOC Letter. It will only apply if the rejected party's complaint is limited solely to being of a younger age or being non-disabled. The moment the plaintiff claims that a preference for a disabled or older person led to rejection of qualified people of a different race, sex, national origin, etc., then the EEOC will likely see a viable discrimination case. So the Letter probably has only a very limited real life application.

Federal minimum wage eclipsed state by state. The federal minimum wage of $7.25 per hour has been criticized by some as a "poverty wage," yet defended by others as valid compensation which will cost a loss of jobs if increased. Any change has become mired in Congressional politics. State by state the federal wage is becoming less relevant, as the amount for all workers in the state is raised above $7.25. Many municipalities and counties require a "living wage" or "prevailing wage" significantly higher than the minimum to be paid by all companies receiving government contracts. The following states have joined the higher than federal minimum wage group effective January 2013: Colorado $7.78; Florida $7.79; Missouri $7.35; Montana $7.65; Ohio $7.85; Oregon $8.95; Rhode Island $7.75; Vermont $8.60; and Washington $9.19.

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).

National Labor Relations Act, Social Media and Privacy

Employee's Facebook activity could not be disciplined, but watch out for ex-spouses. Three pre-school employees created a Facebook page titled "Don't U Hate It When . . ." They used Facebook to express frustrations--sometimes about their work, sometimes about their management--with some insulting comments and a lot of profanity. One of the employees was in the process of a divorce, and her soon-to-be ex-husband, out of pure spite, forwarded the Facebook contents to the employee's manager for the purpose of getting her in trouble. It worked. All three were fired. In addition, the manager forwarded the contents to other program managers to assure that no one else would hire the three of them. When the discharges were challenged, the arbitrator found the employees' critique of managers was protected activity. Much of the profanity was about non-work issues and not proper for the employer to consider at all. There was no justification for the manager to share the information with others. On the other hand, the employees had no privacy claims; Facebook is public, and the employees should have known the postings could be seen. Further, the employer was not engaged in an effort to look into employees' media use; the husband sent it, unsolicited. Finally, the arbitrator had no jurisdiction over the vindictive husband who started the whole mess. In re Vista Nuevas Head Start and Michigan AFSME Council 25 ( 2012).

Insurance Contracts

The undefendable--company president's willful and wanton behavior eliminates insurance coverage. A clothing company had employment practice liability (EPL) insurance to defend against discrimination and other claims. The policy excluded coverage for intentional "willful wanton" behavior. The HR manager filed a sexual harassment complaint, alleging that the company president had engaged in a prolonged pattern of intentional overt sexual propositions and touching her. An independent investigator hired by the company found evidence to support the charges, plus the president's similar behaviors toward four other female employees. The insurance carrier refused to provide coverage for the claim due to the intentional willful nature of the alleged harassment. The company president sued the insurance company, demanding coverage. The court ruled for the insurer, finding the exclusion of coverage for willful behavior was valid and the president's acts fell within that provision. Manganella v. Evanston Insurance Co. (1st Cir., 2012). There is a lesson in this case, besides just having your executives avoid willful wanton behaviors. Be cautious about the terms of insurance coverage. An intentional willful act exclusion is not unusual. However, no company can control every employee, and there may well be cases in which one of your lower level employees does an intentional act. Is the company then not covered by the EPL policy? Most plaintiffs' attorneys will automatically allege "intentional" harassment, in order to get bigger damages. So will the exclusion eliminate coverage in most cases?

Discrimination

Age

"He's going to leave here at 62, and I'll see to it! It is difficult to defend an age discrimination case when the discharged employee's manager makes comments like the above. The manager also stated, "He's been here long enough and he ought to go on Social Security." The manager claimed the employee was terminated for poor performance. However, the court found that her overt statements about age undermined the poor performance defense. Hale v. ABF Freight Syst. (6th Cir., 2012). A message from this case is that even if there might have been a performance problem, a manager can destroy any defense of a case by unwise, prejudicial statements. These may be made in angry frustration over real poor performance, but will overshadow any performance issue and lose the case.

Six-and-a-half years makes a difference. The ADEA protects older workers and applicants, including those older than others within the over-40 group. However, the courts recognize "approximately the same" age. Thus, a 60-year-old cannot effectively claim it was age discrimination to hire a 58-year-old, because they are approximately equal in age. The 6th Circuit has adopted a six-year range. A 57-year-old tech college employee was fired and replaced by a 51-year-old. The employer argued that the case should be dismissed under the six-year approximately same age rule. However, the court found a six-and-a-half year age difference, and ruled that there was enough difference in age to allow a prima facie ADEA case. Blizzard v. Marion Tech College (6th Cir., 2012).

Sex

The price is right for ex-game show model--$8.5 million. A model on the Price is Right TV game show alleged that she was terminated due to pregnancy and filed a pregnancy discrimination case under California law. A jury found that as soon as the show producer learned of the pregnancy there were a variety of negative comments about pregnancy, physique, post-partum effects, etc., and the desire to not keep the employee. There was evidence of similar prior treatment of other pregnant employees. Though the model had excellent reviews prior to pregnancy, the employer claimed it did not recall her after her maternity leave because "she just wasn't that good." The jury found this to be pretext. It awarded $8.7 million. $7.7 million was in punitive damages under California's Fair Employment Act. Cochran v. Price is Right Productions and Freemantle Media (Cal. Superior Ct., 2012).

Disability

$5 million settlement due to discriminatory leave policy. A trucking company's leave practice automatically terminated anyone unable to return to work after 12 weeks of medical leave, regardless of reason. This conformed with the FMLA but violated the ADA, which requires consideration of a "reasonable amount of leave." The EEOC brought suit due to the failure to consider disability exceptions to a rigid policy. In addition to the money, the settlement also included revision of policies, training of supervisors and employees, and appointment of a monitor--at company expense--to assure ADA compliance. EEOC v. Interstate Distributor Co. (D.Co., 2012). [For years the courts have ruled that the FMLA and ADA have different requirements, and simply allowing the 12 weeks for FMLA is not sufficient for ADA compliance. The courts have also routinely found fault with rigid leave policies and "no fault" (no excuse) attendance discharge policies which do not allow the interactive consideration process required by the ADA.]

Family & Medical Leave Act

School district has burden of proving that teachers did not work enough hours. A teacher was denied tenure at the end of his probationary period, though he received the highest possible ratings in almost all evaluation areas. The downfall was the "excessive absence" due to gall bladder surgery in the months before. He sued, claiming FMLA retaliation. The district defended by claiming the teacher had not worked the 1,250 hours necessary to be covered by FMLA--he was three hours short. However, he claimed to have regularly worked an hour a day outside of normal hours on items integral to teaching--preparing lessons, materials, etc. The court found that under the FMLA, the employer has the burden to "clearly demonstrate" that an employee did not work enough hours to be eligible. The court recognized that teachers often devote extra time "outside the contract negotiated hours." Since the school district could not prove otherwise, the court found in favor of the teacher on the hours issue. Donnelly v. Greenburgh Central School Dist. (2nd Cir., 2012).

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