Ohio Appeals Court: Death and Taxes May Be Certain, but the Timing Alone is Too Indefinite to Form a Binding Promise.

Last month, the Franklin County Court of Appeals affirmed summary judgment against a former corporate officer who had been promised employment for the life by the majority shareholder. Steele v. Mara Enterprises, Inc., No. 2009-Ohio-5716. In that case, the plaintiff worked his way up to become president of the corporation. When the founder died, his widow inherited his majority interest and eventually transferred her ownership to a trust. She promised him that he would keep his job as long as she was alive and in reliance on this promise, he turned down two offers of employment. Nonetheless, the Court found her promise to be too indefinite to support a promissory estoppel claim.

According to the Court’s opinion, after many years of employment, membership on the Board of Directors and the purchase of one share in the corporation, the plaintiff was fired after the Board all voted to resign and the new Board was elected. The Court found the verbal promises of employment for the lifetime of the majority shareholder to be too indefinite to be legally binding:

Death, although inevitable, is unpredictable. A future event that, by its very nature, could occur in ten minutes or ten years is too indefinite to constitute a "specific term" for purposes of promissory estoppel. Such statements are, at best, discussions of "possible future career developments and opportunities." . . . . Similarly, here, Laverne Hill's statements were tied to her own death and, as a result, suffered the same deficiency as those "promises" made in Callander: they fail to unambiguously promise continued employment for a specific period of time. Indeed, the statements lacked specificity in other aspects. The statements never included a discussion of job title, job responsibilities, compensation, or contingencies in the event the business closed or Laverne Hill decided to part with her ownership interest before her death. The complete lack of details suggests Laverne Hill's statements were anything but clear and unambiguous promises of continued employment. . . . .

In any event, even if the promise were sufficiently unambiguous, the Court questioned whether a majority shareholder could bind the corporation since she was not an officer, did not make these promises in a meeting of the Board members, was never ratified by the Board and never reduced to writing. On the contrary, the Employee Handbook (created by the plaintiff) provided that all employees were employed at will unless given a written contract.

Finally, the Court rejected the breach of fiduciary duty claim by a minority shareholder because the duty is owed by the majority shareholder (who was not named as a defendant) and not the corporation (who was the only named defendant).

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5716.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court: Nothing is Reasonably Reliable In a RIF or Public Litigation.

Last month, the Franklin County Court of Appeals affirmed the dismissal of a defamation and wrongful discharge suit brought by the former head of security for Capital University whose job was eliminated in 2006 during a budget crisis. Woods v. Capital Univ., No. 2009-Ohio-5672. Although the 54-year old plaintiff had been told in writing during his exit interview that his performance played no role in the elimination of his position (and he had received nothing but promotions prior to his termination), the university’s attorney was quoted in two local newspapers as attributing part of the termination decision to “job performance issues.” His responsibilities were divided and his public safety management responsibilities were given to a 28-year old safety officer. Nonetheless, the Court affirmed dismissal because the allegedly defamatory statements related to a matter of public concern, which required proof of actual damages or actual malice, and the redistribution of duties to existing employees cannot support an inference of age discrimination. Finally, his promissory estoppel claims were dismissed because the three verbal promises of continued employment were contracted by the terms of his written contract with the university.

According to the Court’s opinion, the plaintiff was eight years away from retiring from another college when he was hired by Capital to reorganize its public safety department. When he expressed reluctance to leave a secure position so close to his retirement age – particularly with friction that was likely to develop during the planned reorganization, he was assured by the VP/Treasurer that he would be employed at least eight years to retire at Capital. However, his offer letter only promised one year of employment. He was promoted the following year and given two more one-year appointments. When rumors surfaced about a possible budget deficit, he again sought reassurance about his job security and was again assured by the VP/Treasurer that his job was safe. When the VP/Treasurer was then fired, he sought and obtained similar assurance from the President, who then shortly thereafter left.

When an impending $12.5M deficit was revealed, a committee examined all positions and recommended the elimination of 72 positions, including that of the plaintiff. His termination letter informed him that his job was eliminated because of the budget difficulties and not because of his job performance. His public safety duties were reassigned to a 28-year old officer and his auxiliary duties to other employees. He then filed a lawsuit for $4.6M against Capital for age discrimination and promissory estoppel. The lawsuit received publicity in the local media and Capital’s attorney was quoted in two newspapers as stating that the plaintiff had been let go because of the budget difficulties and “job performance issues.” The plaintiff amended his claims to include the allegedly defamatory statements by the attorney. The trial court granted summary judgment to the defendants and the plaintiff appealed.

Defamation Claim

The Court of Appeals addressed the defamation claim first and found the attorney’s statement about the plaintiff being fired in part because of his job performance to be defamatory on its face (or defamation per se) since it had the tendency to hurt plaintiff’s career and ability to find another job. The Court rejected the defense attempt to

characterize this statement as vague and contend that if it is defamatory at all, it is only defamatory per quod. We disagree. No employer fires an employee for good job performance. The only reasonable reading of [the attorney’s] statement is that Capital terminated [the plaintiff’s] employment for two reasons, and one of those reasons was [the plaintiff’s] poor job performance. Thus, the statement in and of itself tends to injure [the plaintiff] in his occupation as any employer would hesitate before hiring a potential employee who underperformed in his previous job. Such a statement is defamatory per se.

Typically, damages in such situations are presumed without proof or pleading. However, in this case, the Court found the statement to also have limited protection from the First Amendment. Because the plaintiff worked for a private college, he was not a general public figure. Moreover, the fact that he filed a lawsuit – by itself – did not render him a limited purpose public figure. However, the fact that he sought $4.6M in damages from a significant private institution which was having very public budget difficulties rendered the issue of the reduction in force and his lawsuit a matter of public concern – as evidenced by the significant media coverage. Therefore, the claim was governed by the United States Supreme Court’s decision in Gertz v. Robert Welch, Inc. (1974), 418 U.S. 323, 345-46, which concluded that:

in such cases, the states could define for themselves an appropriate standard of liability, so long as they did not impose liability without fault. Gertz, 418 U.S. at 347. Subsequently, Ohio adopted the ordinary negligence standard as the standard of liability for actions involving a private individual defamed in a statement about a matter of public concern. Landsdowne v. Beacon Journal Publishing Co. (1987), 32 Ohio.St.3d 176, 180. In addition to requiring an element of fault, the Gertz court also limited the type of damages recoverable in defamation cases involving private individuals and statements regarding a matter of public concern. Given the constitutional command of the First Amendment, . . . the states could no longer permit recovery of presumed or punitive damages, at least when liability was not based upon a showing of actual malice. Gertz, 418 U.S. at 349, . . . Thus, in Ohio, a plaintiff must prove either: (1) ordinary negligence and actual injury, in which case he can receive damages for the actual harm inflicted; or (2) actual malice, in which case he is entitled to presumed damages.

Thus, the plaintiff was required to show actual malice or actual injury (i.e., “out-of-pocket loss, impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering”). However, the plaintiff’s testimony that he felt that his job hunt was impaired by “google searches” of the attorney’s statement was too speculative to support proof of actual injury. Moreover, he failed to introduce any evidence that the attorney knew that his statement was false at the time it was made. Therefore, summary judgment on his defamation claim was upheld.

Retaliation

The plaintiff also claimed that the attorney’s defamatory statement was made in retaliation for the plaintiff’s consultation with an attorney following his termination. However, the Court refused to infer causation (i.e., the defamatory statement from the consultation with counsel) based on the passage of two months between the demand letter from the plaintiff’s attorney and the newspaper accounts repeating the defamatory statement. Because there was no other evidence of causation or proving a link between the two events, the Court affirmed summary judgment.

Age Discrimination

Typically, a discrimination claim requires that the plaintiff show that he was replaced by someone outside the protected class. The Court noted that this is extremely difficult, if not impossible, to show when the plaintiff was fired in a reduction in force:

When a discharge results from a work force reduction, an employee is not replaced, instead his position is eliminated. Barnes v. GenCorp Inc. (C.A.6, 1990), 896 F.2d 1457, 1465. Logically, then, a plaintiff discharged as part of a work force reduction cannot offer evidence that he was replaced by a substantially younger person to satisfy the fourth element of the prima facie case. Moreover, even if such a plaintiff demonstrates that his discharge permitted the retention of substantially younger persons, no inference of discriminatory intent can be drawn. Id. In the context of a work force reduction, the discharge of the plaintiff and retention of a substantially younger employee is not "inherently suspicious" because a work force reduction invariably entails the discharge of some older employees and the retention of some younger employees. Brocklehurst v. PPG Industries, Inc. (C.A.6, 1997), 123 F.3d 890, 896. Permitting an inference of intentional discrimination to arise from the retention of younger employees "would allow every person age 40-and-over to establish a prima facie case of age discrimination if he or she was discharged as part of a work force reduction." Barnes at 1465.

{¶57} Consequently, when a plaintiff's position is eliminated as part of a work force reduction, courts modify the fourth element of the prima facie case to require the plaintiff to " 'com[e] forward with additional evidence, be it direct, circumstantial, or statistical, to establish that age was a factor in the termination.' " Kundtz v. AT & T Solutions, Inc., 10th Dist. No. 05AP-1045, 2007-Ohio-1462, ¶21 . . . The purpose of this modified requirement is to ensure that, in work force reduction cases, the plaintiff has presented evidence to show that there is a chance that the work force reduction is not the reason for the termination. Asmo v. Keane, Inc. (C.A.6, 2006), 471 F.3d 588, 593 . . .

Nonetheless, the plaintiff can also show discrimination if he was in fact replaced instead his duties being eliminated, consolidated or distributed among a number of different people:

An employee is not eliminated as part of a work force reduction when he or she is replaced after his or her discharge. However, a person is not replaced when another employee is assigned to perform the plaintiff's duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work. A person is replaced only when another employee is hired or reassigned to perform the plaintiff's duties.

In this case, the plaintiff’s 2004 promotion involved him assuming certain duties outside the public safety department. When his position was eliminated in 2006, those duties were reassigned and only his public safety duties were given to the 28-year old officer. The reassignment of his auxiliary duties were more than cosmetic or superficial duties. Thus, there was sufficient evidence to show that his position was eliminated and his duties distributed in a genuine reduction in force. Therefore, without additional evidence or direct evidence of age discrimination, summary judgment on this claim was affirmed.

Promissory Estoppel.

Plaintiff brought this claim based on the three separate promises of job security which he received both before and after he was hired by Capital. As explained by the Court:

Promissory estoppel provides an equitable remedy for a breach of an oral promise, absent a signed agreement. Olympic Holding Co. v. ACE Ltd., 122 Ohio.St.3d 89, 2009-Ohio-2057, ¶40. In order to succeed on a claim for promissory estoppel: "The party claiming the estoppel must have relied on conduct of an adversary in such a manner as to change his position for the worse and that reliance must have been reasonable in that the party claiming estoppel did not know and could not have known that its adversary's conduct was misleading." . . . The elements necessary to prove a claim for promissory estoppel are: (1) a clear, unambiguous promise, (2) the person to whom the promise is made relies on the promise, (3) reliance on the promise is reasonable and foreseeable, and (4) the person claiming reliance is injured as a result of reliance on the promise.

The fatal flaw in his argument, however, is that he signed written contracts which promised him only employment for a year at a time. Therefore, his reliance on the oral promises was not reasonable under the circumstances:

[C]ourts cannot enforce an oral promise in preference to a signed writing that pertains to exactly the same subject matter, but has different terms. Ed Schory & Sons at 440. Thus, "[p]romissory estoppel does not apply to oral statements made prior to the written contract, where the contract covers the same subject matter.

The Court rejected the plaintiff’s argument that his employment letters were not binding contracts, but only acknowledgment of certain terms. The Court also rejected the argument that the plaintiff’s reliance on promises made during the budget crises were reasonable under the circumstances. In any event, the plaintiff did not provide any evidence that he relied on the promises to his detriment since there was not evidence that he rejected a job offer in reliance on the promises. On the contrary, despite the promises being made to him during the budget crises, he promptly began searching for another job and submitting his resume to other employers.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5672.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court: Structure of Employment Agreement Implied Non-Compete Clause Into Founder’s Retirement Clause.

Last month, the Franklin County Court of Appeals affirmed summary judgment in favor of an east-side dental practice in a declaratory judgment action involving its obligation to make retirement, or deferred compensation, payments under an employment agreement to its founder who retired after a serious illness and then opened up a competing dental practice after his recovery. Drs. Kristal & Forche, D.D.S., Inc. v. Erkis, 2009-Ohio-5671. The dispute centered on the meaning of “retirement,” which was not defined in the agreement. The Court implied the non-competition obligation from the fact that the Professional Services Agreement signed by the defendant dentist contained a resignation clause which permitted him to leave the practice for any reason upon 90 days notice, but, unlike the retirement clause, did not obligate his remaining partners to provide him with deferred income during his retirement. Therefore, the Court concluded that “retirement” meant from the profession, not just the dental practice, or the resignation clause would be rendered superfluous.

According to the Court’s opinion, the defendant dentist formed the practice, which was ultimately joined by two additional dentists. They formed a professional corporation and each signed professional services agreements. The agreements provided that each dentist could resign upon 90 days notice. The agreement also provided that the defendant dentist could retire at any time and at any age and be entitled to over $1.1M in deferred compensation paid out in monthly installments of $40,000. Retirement was not defined in the agreement. The only other clauses where a dentist was entitled under the agreement to deferred compensation was when the dentist died or became disabled, which also involved leaving the profession, rather than just the practice.

In early 2003, the defendant dentist became seriously ill, accepted disability payments under the agreement and retired in May 2003. The practice purchased back his shares and paid him $306,000 in retirement compensation through May 2005. He then made a remarkable recovery and opened his own competing practice in October 2004, which involved soliciting some of his former employees and clients. The practice then filed a declaratory judgment action in August 2005 concerning its obligation to continue making retirement payments to the defendant dentist on the grounds that the defendant dentist had breached his agreement by competing against it and, by soliciting clients and referral sources, had decreased its revenue to the point that it could no longer afford to fund his “retirement.”

The practice argued that “retirement” meant from the profession, not just the practice. As a result, by the defendant-dentist’s competition against them, he breached the agreement by returning to the profession and relieved them of their obligation to make retirement payments to him. Thus, under the practice’s interpretation, the agreement’s retirement clause imposed an implied non-compete obligation upon the defendant dentist. In turn, the dentist argued that “retirement” meant any and all retirements and did not require him to remain unemployment or to leave the profession permanently.

The Court agreed with the practice’s argument because (1) the voluntary and involuntary termination provisions permitted the dentist to leave the practice without requiring the practice to provide deferred compensation and (2) deferred compensation was only required if the dentist left because of death, disability or retirement. Therefore, the Court could infer the parties’ intent from the structure of the agreement to define “retirement” as meaning from the profession, rather than just the practice.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5671.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

EEOC Revises Its “Equal Employment Opportunity Is the Law” Poster To Reflect November 21 Effective Date of Genetic Information Nondiscrimination Act

The EEOC has posted on its website the new EEO Is the Law poster which reflects the November 21 effective date of GINA. Every employer with more than 15 employees and most federal contractors are required to post a notice about the rights of applicants and employees under Title VII, the ADA, the ADEA, the GINA, the Equal Pay Act, Executive Order 11246, the Rehabilitation Act and the Vietnam Era Veterans Readjustment Assistance Act, etc. Employers may post a supplemental poster next to their existing poster of employees news rights under GINA and the ADAA or may post an all new poster which incorporates the new rights under GINA. Employers may print out these posters in English and Spanish directly from the EEOC website or may order larger (and more readable) version to be mailed.

GINA was enacted in 2008 and has broader application to employers and healthcare providers than its name implies. Title I applies to group health plans sponsored by private employers, unions, and state and local government employers, issuers in the group and individuals health insurance markets, etc.

Sixth Circuit: “Reasonable Time for Negotiations” or “It’s Déjà Vu All Over Again.”

This week, the Sixth Circuit affirmed an August 2008 bargaining order by the NLRB involving the voluntary recognition of a union by a small plumbing company in May 2000, two decertification petitions submitted by the employees in March 2002 and May 2003 and two sets of negotiations, the last of which ended in May 2003 and none of which resulted in an initial bargaining agreement. Town & Country Plumbing & Heating, Inc. v. National Labor Relations Board, Nos. 08-2242/2384 (6th Cir. 11/9/09). By the time the employer decided to fight in June 2003, the dispute sat at the NLRB for five years when it was finally resolved against the employer by the NLRB on stipulated facts. In short, the NLRB found that the employer had failed to recognize the union for the required six month period in compliance with the parties’ settlement agreement because the NLRB does not recognize the “modern” business practice of correspondence or telephones and, instead required the parties to meet face-to-face before the clock started ticking on the six-month period.

The union began an organizational campaign in early 2000, which culminated in unfair labor practices being filed against the employer. When the General Counsel issued a complaint, the employer instead decided to informally settle the complaint by voluntarily recognizing the union in May 2000 and providing back pay to twelve employees. The employer and union then negotiated in good faith for almost two years without ever reaching an initial bargaining agreement. In March 2002, the employees filed a decertification petition and the employer withdrew recognition from union on March 14, 2002. The union again filed ULP charges, the General Counsel again issued a complaint and the employer again agreed to settle the complaint by voluntarily recognizing the union and negotiating in good faith in October 2002.

Unfortunately for the employer, this settlement agreement contained a clause that it did not become effective until approved by the NLRB – which did not happen until February 3, 2003 and it was not judicially approved by a Court until September 2003. Notwithstanding this, the employer immediately attempted to negotiate with the union, submitted proposals and responded to information requests by the union. The parties agreed in writing to a limited wage increase for five employees on October 30, 2002. However, for a variety of reasons, the union refused to meet face-to-face with the employer until January 16, 2003. The parties then met two more times, but exchanged information and proposals several times over the next five months and came close to reaching an initial agreement.

As in 2002, the employee again submitted a decertification petition to the employer and, as in 2002, the employer withdrew recognition from the Union on June 27, 2003 – almost eight months after they began negotiating in writing in October 2002, but only five months after the Board approved the formal settlement agreement on February 3, 2003 and 5.5 months after they met face-to-face for their first bargaining meeting on January 16, 2003. Again, the union filed a ULP and, again, the General Counsel issued a complaint. However, this time, the employer decided to fight. The parties waived a hearing before an ALJ and instead issued stipulated facts directly to the NLRB, which did not rule on the dispute until August 2008 – more than eight years after the employer first recognized the union for the first time.

The NLRB decided that it was in the interest of industrial peace to require the employer to negotiate with the union for at least six months before honoring any decertification petition submitted by the employees. The NLRB was not influenced in any way by the 22 months when the employer had already bargained with the union without reaching a bargaining agreement in 2000-2002. The NLRB’s prior decision in Lee Lumber requires a presumptive six-month bargaining period following an adjudicated unfair labor practice during which a union has an irrebuttable presumption of majority status after re-recognition. In this case, the employer argued that the six-month period began in October 2002 when the parties exchanged and agreed upon proposals, information, and limited wage increases, but the union argued that the six month period did not begin until February 3 when the settlement agreement was approved by the Board. The NLRB ultimately split the baby and decided that the six months did not begin until the parties first met face-to-face on January 16, 2003. Accordingly, six months had not passed when the employer withdrew recognition on June 27, 2003 after receiving its second decertification petition in two years.

The Court affirmed the Board’s decision as reasonable and not unduly prejudicial of the employees’ rights to be free of an ineffective union since the employer was only required to recognize the union for another six months before it could, once again, entertain a third decertification petition and withdraw recognition from the union for a third time in this never-ending story . . . ..

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/09a0729n-06.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit: Judgment for Employer is Affirmed on Sexual Harassment Claim When Investigation and Termination Was Handled Properly.

This morning, the Sixth Circuit Court of Appeals affirmed summary judgment in favor of a hospitality industry employer on a sexual harassment claim when the employer properly investigated and terminated the employee. Balding-Margolis v. Cleveland Arcade d/b/a Hyatt Regency Cleveland, No. 09-3017 (11/10/09). Retired Justice Sandra Day O’Connor was part of the panel which issued the decision. The plaintiff was a long-time waitress who was found to have violated many cash-handling procedures over a period of time, including rules against increasing the amount of her tip on a customer’s credit card payment. After she was fired, she alleged that, among other things, she had been subjected to a hostile work environment and treated differently on account of her age and sex.

According to the Court’s decision, when the plaintiff was hired, she was given copies of several policies, including the employer’s sexual harassment policy (which permitted her to bring concerns to her manager, the Director of Human Resources and a national toll-free hotline), and that she could be immediately terminated for violating cash-handling procedures. Her employment was also governed by a bargaining agreement with the UNITE HERE union. “[T]he Cash Handling Rules generally prohibited an employee from altering a guest check; required that an employee follow proper procedures; and prohibited an employee from handling checks, cash, and credit cards in an improper manner. The restrictions on altering a guest check included prohibitions on changing the tip amount or closing out a check that differed in any way from the customer’s signed receipt.” Notwithstanding these rules, and the fact that she was a trainer who oriented new employees about these rules, “[i]n October 2005, she was issued a warning when two guests left the restaurant without providing a valid form of payment. In January 2006, [plaintiff] received another warning because of a large cash variance following her shift. In May 2006, [plaintiff] received a third warning—a “Final Written Warning”—for adding an additional eighteen-percent gratuity without the customer’s permission.”

A year later, her supervisor noticed that her credit card tips equaled almost 1/3 of her receipts for the day (not including cash tips). “The high tips-to-sales ratio was suspicious and caused [her supervisor] to audit [plaintiff’s] transactions that day. [He] concluded that there were problems with one-third of [her] sales, including receipts for discounted meals that lacked the required discount coupons; ten checks without a signed copy of the room charge, credit card, or other documentation; and two unsigned receipts with listed tips that exceeded the actual food-sales amount. [He] conducted an audit of the two workers with whom [she] had been serving that day but found no similar discrepancies.” He then went back and audited the prior few weeks and involved the Controller and Human Resources Manager, confirmed that there consistently were similar violations and decided to terminate her employment. She “was given the opportunity to explain the various discrepancies, but she failed to do so.”

During the termination meeting, [plaintiff] made general complaints regarding the way that [her supervisor] had administered the staff, but she made no complaints of sex- or age-based discrimination or harassment. Following her termination, Hyatt continued auditing [her] receipts for five dates in April 2007, revealing additional discrepancies. Because [she] had alleged during her termination meeting that [her supervisor] was attempting to get her fired and that he had papered her file and/or stolen the supporting documentation that she needed to explain the discrepancies, Hyatt conducted an audit of [her] transactions during a two week period prior to [his] employment at Hyatt. That audit revealed similar cash-handling problems. Hyatt also conducted an audit of all the checks closed out by the servers on April 25, May 1 through 4, and May 8, 2007, and found that none of them had discrepancies or cash-handling violations similar to [her] discrepancies.

Plaintiff then filed an EEOC Charge and union grievance alleging sexual harassment and age discrimination. Hyatt conducted an investigation, interviewed co-workers and did not find any basis for her claims. She then filed suit in federal court.

The Court concluded that she could not satisfy a prima facie case of age discrimination because she could not show that she was replaced by a substantially younger employee or that younger employees were treated more favorably. A bartender was not her “replacement” because he had already worked in the restaurant part-time before her termination. A “person is not replaced when another employee is assigned to perform the plaintiff’s duties in addition to other duties, or when the work is redistributed among other existing employees already performing related work. A person is replaced only when another employee is hired or reassigned to perform the plaintiff’s duties.”

She also could not show that others were treated more favorably because their alleged violations were not the same.

She claims that the younger employees’ practice of marrying alcohol and their admitted but unproven failure to turn in receipts were sufficiently serious to merit comparison to the disciplinary violation that led to her termination—the cash-handling-policy violation and misappropriation of funds. . . . This is not the case. Marrying alcohol may be a violation of Ohio law, but [she] never engaged in the practice and was never disciplined for not participating. The fact that [she] was terminated for engaging in an illegal practice does not automatically make marrying alcohol and [her] infraction comparable. Misappropriation of funds and marrying alcohol are different circumstances involving distinguishable conduct.

Plaintiff also brought pay discrimination claims because trainers at non-Cleveland Hyatt hotels were paid more than her... However, she presented no evidence that she was paid less than co-workers outside of her protected class in Cleveland “‘for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. . . . . [She] concedes that she was the only server-trainer in Cleveland, and she has presented no evidence that other non-protected employees held “substantially equal” jobs and were paid more. . . . . . [She] further concedes that those employees who were paid a higher rate had greater seniority and were being paid pursuant to the provisions of the CBA.” She also presented no evidence about the age or sex of the non-Cleveland trainers, even if they could be considered as part of the same establishment.

The Court found that the plaintiff presented a prima facie case of sexual harassment, especially based on two allegations of improper physical contact and her supervisor’s daily bragging about his sexual life:

(1) The Director of Sexual “once invited [her] to lie down in his room;”
(2) The Security Director once told [her] that she was attractive;”
(3) The Director Security “once hit [her] on the buttocks and “untied [her] apron, which was tied in the back;”
(4) Her supervisor “once commented that he had a large penis;”
(5) Her supervisor “once told [her] that he had sex with one of her customers, [her] to provide a free meal to that customer, and then “put his hands . . . against the wall and dry humped it or did a pelvic thrust against it,” stating “I did her, I did her,”;
(6) Her supervisor “had once asked a female line cook to do the “boobie dance,” which involved putting the cook’s “hands underneath her chest” and moving them “up and down” and shaking “her hips;”
(7) Her supervisor “repeatedly bragged to [her] about the day that he had sexual intercourse with a fellow Hyatt server and [her] female co-worker at the Hyatt;”
(8) Her supervisor “repeatedly talked to [her] ‘about a sexual relationship he had with a former co-worker, how that co-worker was pregnant, how [he] needed to mail that pregnant woman a check so that the woman can pay for an abortion,” and how he wanted [plaintiff] to put [his] check in the mail.”

In light of her evidence of sexual harassment, Hyatt would be liable for the supervisor’s actions unless it could show by a preponderance of the evidence “that it exercised reasonable care to prevent and correct promptly any sexually harassing behavior” and that [the plaintiff] ‘unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.’ . . . Generally, an employer satisfies the first part of this two-part standard when it has promulgated and enforced a sexual harassment policy.”

The Court found that Hyatt had an effective sexual-harassment reporting policy and that the plaintiff failed “to take advantage of Hyatt’s corrective policy was unreasonable.”

Although her post-deposition affidavit states that she complained to Hyatt management verbally over thirty times, [her] deposition testimony indicates that she never complained to anyone concerning [her supervisor’s] harassment and discriminatory conduct other than to [her supervisor] himself. Her deposition testimony further establishes that she never complained to anyone about [the Security Director’s] conduct. [Plaintiff] failed to make these complaints notwithstanding that she testified that she was aware of the open-door policy, the complaint procedure, and the fact that if her immediate supervisor failed to act on her complaint she could go elsewhere. [She] clearly took advantage of the complaint process with regard to a variety of run-of-the-mill matters, but she failed to take advantage of the policies when it mattered most.

Likewise, the Court rejected her retaliation claim. She failed to testify in her deposition about any instances of complaining to management about any sex or age discrimination, even though she complained in writing and verbally about a number of other matters. In order to invoke the protections of federal or state law, an employee needs to be direct in complaining about discrimination:

a vague charge of discrimination in an internal letter or memorandum is insufficient to constitute opposition to an unlawful employment practice. An employee may not invoke the protections of the Act by making a vague charge of discrimination. Otherwise, every adverse employment decision by an employer would be subject to challenge under either state or federal civil rights legislation simply by an employee inserting a charge of discrimination.

In any event, the Court also concluded that even if the plaintiff could satisfy her prima facie case, the employer had shown a legitimate, nondiscriminatory and non-retaliatory reason for firing her.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/09a0732n-06.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Court of Appeals: Whistleblower Protection Is Not Available When Employee Submitted Complaint to OIG Which She Did Not Write Herself.

Yesterday, the Franklin County Court of Appeals affirmed the dismissal of a civil service proceeding where an administrative assistant was placed on 30-day suspension for submitting a complaint to the Office of Inspector General about an incident in her workplace because her husband wrote it for her and she was less than honest about the circumstances during the investigation. Ressler v. Ohio Dept. of Transp., 2009-Ohio-5857. The Court agreed that she was not entitled to protection under Ohio’s Whistleblower statute because her husband wrote the complaint instead of her even though she was the person who admittedly submitted the complaint to the OIG.

According to the Court’s opinion, ODOT’s chief inspector chewed out a number of employees about a missing computer hard drive. The employee heard about the incident after the fact, told her husband about it and later faxed an anonymous complaint about the incident (written by her husband) to the OIG. The complaint said that the investigator twice “threatened employees by saying he was going to drop a bomb on District 5” if the hard drive did not appear by quitting time on Friday. The investigator allegedly "said it he was acting like a mad man. He was shaking his finger in the employees [sic] faces. He would ask a question but before you could answer he would start yelling again." The complaint also indicated that employees were afraid and did not want to return to work unless the investigator was removed. Remarkably, the OIG treated this as a bomb threat.

In its subsequent investigation, the employee initially denied any involvement in the complaint, but later admitted that she faxed it without reading it or knowing its contents. The OIG’s office found her to be evasive and uncooperative and subsequently wrote the ODOT Director to report that she "committed acts of wrongdoing by sending false statements to this office and providing false testimony under oath." Accordingly, ODOT suspended her for 30 days for failure of good behavior and failing to cooperate in an official investigation. She appealed the suspension to SPBR and claimed protection as a whistleblower under R.C. 124.341. The SPBR dismissed both claims for lack of jurisdiction. The SPBR did not have jurisdiction over a suspension or over whistleblower claims where the employee was not the author of the complaint. On appeal, the trial agreed.

R.C. 12.341 prohibits retaliation against employees who file reports. The relevant portion of the statute provides:

If an employee in the classified or unclassified civil service becomes aware in the course of employment of a violation of state or federal statutes, rules, or regulations or the misuse of public resources, and the employee’s supervisor or appointing authority has authority to correct the violation or misuse, the employee may file a written report identifying the violation or misuse with the supervisor or appointing authority. In addition to or instead of filing a written report with the supervisor or appointing authority, the employee may file a written report with the office of internal auditing created under section 126.45 of the Revised Code.

. . . If an appointing authority takes any disciplinary or retaliatory action against a classified or unclassified employee as a result of the employee’s having filed a report under division (A) of this section, the employee’s sole and exclusive remedy, notwithstanding any other provision of law, is to file an appeal with the state personnel board of review within thirty days after receiving actual notice of the appointing authority’s action.

The clear language of the statue only requires an employee to file a written report. The Court has recognized that “the primary objective of R.C. 124.341 is to protect state employees who report violations or misuse from retaliation." However, notwithstanding this fact, the Franklin County Court of Appeals has refused to protect employees who file reports under this statute unless they also wrote the report. According to the Court:

retaliation based on the mere transmission of a report is tenuous at best, explaining "the statutory scheme clearly contemplates that the employee making the report play a bigger role than that of mere courier . . . We thus concluded an employee's responsibility for delivering the writing is not sufficient to comply with the statute's reporting requirements.

In this case, the employee was indisputably suspended in part for her role in sending the complaint to the OIG. However, she “did not author the letter on which she now relies for whistleblower protection. Although [she] was responsible for the letter's transmission to the appropriate authority, her being a "mere courier," . . . is not sufficient. Simply causing the letter's transmission, without any part in the letter's authorship, does not meet the written report requirement under R.C. 124.341.” Moreover, her suspension was based on more than faxing the complaint to OIG; it was also based on her evasive and uncooperative behavior during the subsequent investigation.

It would be a more interesting case if the employee had claimed to be more than a “mere courier” and had, instead, admitted knowledge and agreement with the contents of the complaint as being the basis for her faxing it to the OIG.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5857.pdf.


NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Court of Appeals Affirms SERB Finding that Cincinnati Assistant Fire Chiefs Are Not Managers.

Yesterday, the Franklin County Court of Appeals affirmed a SERB ruling that Assistant Fire Chiefs were not management level employees and, thus, could join the IAFF bargaining unit. Cincinnati v. State Emp. Relations Bd., 2009-Ohio-5782. While the trial court noted that there was some evidence in the record supporting the City’s argument (that its four Assistant Chiefs were managers), it concluded that it must presume the correctness of the SERB factual findings when they were supported by substantial evidence. The Court of Appeals concluded that it could only reverse the factual conclusions for an abuse of discretion, which it did not find. In particular, the evidence showed that many of the Assistant Chief’s former management and administrative duties were transferred to the new Executive Officer hired in July 2007 and who began to act as the Chief in his absence (rather than the Assistant Chiefs).

To start, the Court noted that “public employees” have the right under Ohio Revised Code 4117.03 to join unions unless they are, among other things, “management level employees” as defined by 4117.01. In turn, § 4117.01(L) defines a management level employee as "an individual who formulates policy on behalf of the public employer, who responsibly directs the implementation of policy, or who may reasonably be required" on the public employer's behalf "to assist in the preparation for the conduct of collective negotiated agreements, or have a major role in personnel administration."

After the Executive Officer position was created in 2007, the Assistant Chiefs testified that they no longer filled in for the Chief and could not authorize purchases. While they presided over grievance hearings and could recommend disciplinary action, their recommendations had to be first approved (and could be changed) by the Chief, the Law Director and the City Manager. They could not settle grievances on their own authority. While they implement and enforce the bargaining agreement, all interpretation is left to the Human Resources Department. Admittedly, the Assistant Chiefs review District Chiefs (who in turn review Captains, who review Lieutenants, etc.). There was also evidence that they had no control over setting policy, although they could make recommendations.

While Assistant Chiefs had participated on the management team in bargaining negotiations in 2001 and 2003, they thereafter refused to participate on the grounds that they were IAFF members (even though not part of the bargaining unit). Therefore, they did not meet the statutory definition under that clause, either.

The Court rejected the City’s argument that the Assistant Chiefs outrank the Executive Officer at a fire scene because the Department followed “incident command” where the ranking officer was in Charge, whether it was the Chief, the Assistant Chief, the District Commander, Captain or Lieutenant. In contrast with the management level Captains in Twinsburg Fire Fighters, Local 3630 v. SERB, the Cincinnati Assistant Chiefs never or rarely “recommended changes to the Standard Operating Procedures and Guidelines that were adopted, updated the personnel manual, . . . re-wrote the driver's training manual without needing approval of the content, . . . enforced discipline, were in charge of fire safety programs and safety committees, and represented management during contract negotiations.”

Finally, the Court rejected the City’s argument that the Assistant Chief’s testimony should be disregarded when they accepted the benefits of a contract (which then became a City Ordinance) which gave them a 16% raise on account of their non-bargaining unit and fiduciary status. The Court agreed with the trial court that the analysis was governed by Revised Code 4117 instead of a written agreement between the parties.

Insomniacs can read the full opinion at http://www.sconet.state.oh.us/rod/docs/pdf/10/2009/2009-ohio-5782.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Dismisses FMLA Claim of Employee Hit By Car for Lack of Specific Medical Evidence Despite Employer’s Own FMLA Violation.

This morning, a divided federal Sixth Circuit Court of Appeals affirmed the dismissal of an FMLA claim, but on different grounds than the trial court. Stimpson v. UPS, 08-2263 (6th Cir. 11/3/09). The Court found that the employee did not qualify for FMLA leave because he failed to show that he suffered from a serious health condition even though he had been injured when his bicycle was hit by an automobile, visited an emergency room, was prescribed medication and produced statements from two different physicians that he was unable to work for several weeks. Rather, the Court was influenced by the plaintiff’s failure to fill the drug prescription given to him in the ER and the lack of specificity by his medical providers. Nonetheless, the Court also rejected the argument that the plaintiff failed to give sufficient notice of his need for FMLA leave and noted that the employer violated the FMLA when it only gave the employee 72 hours to produce a medical statement under the collective bargaining agreement because the FMLA gave the employee 15 days to produce such a statement. However, the employer’s violation did not save the employee’s FMLA claim because he failed to produce the requested medical statement within fifteen days.

As described by the Court, the plaintiff was riding his bicycle (while intoxicated) when it was struck by a car around 3:30 p.m. on April 29, 2006. The motorist was cited for following him too closely. He denied medical treatment at the scene, but later visited an ER where he was prescribed medication after complaining about lower back pain and the physicians noted extensive bruising where he had collided with the road pavement in the earlier accident. He was also diagnosed with an acute lumbar strain. He was discharged 2.5 hours after checking in. Even though he never filled the medical prescription, he returned to the ER the next day because of his back pain and was promptly discharged for failing to fill his earlier prescription. There was evidence that he also notified his supervisors at UPS about his accident, but he did not return to work for about three weeks, failed to call off daily under regular UPS procedures and failed to provide medical documentation of his inability to work before May 22. UPS claims that it verbally requested medical documentation and sent him a letter requesting medical documentation to be submitted within 72 hours (as required under the CBA). When the plaintiff failed to submit medical documentation before May 12 (because, as he claimed, he had moved and did not receive the UPS letter until May 22), he was terminated.

On May 23, the plaintiff filed a grievance with the union and submitted three medical statements that he could not work until May 20. When his grievance was denied, he filed an Unfair Labor Practice Charge with the NLRB on the grounds that he was being retaliated against for his prior union activities (in that he had previously been terminated by UPS for union activities and was reinstated by court order in September 2005 after an earlier ULP Charge he filed with the NLRB). However, unlike his prior ULP Charge, the NLRB dismissed this Charge. He then filed his FMLA lawsuit.

The District Court granted summary judgment to UPS because it concluded that the plaintiff was not eligible for FMLA leave in that -- even disregarding his earlier unlawful termination – he had not worked 1250 hours in the prior 12 months and had failed to give proper notice of his need for FMLA leave. In addition, the trial court questioned whether he suffered from a serious health condition under the circumstances.

The Court of Appeals agreed with the plaintiff that there was a material factual dispute about how many hours he would have worked in the prior 12 months if he had not previously been unlawfully terminated. Even though the NLRB only required payment of a certain amount of back pay (less than 1250 hours), it failed to address the plaintiff’s claim that he would have worked additional hours and such evidence had been submitted to the District Court. Accordingly, summary judgment on that issue was inappropriate.

The Court also found sufficient evidence that the plaintiff had properly notified UPS of his accident and potential need for FMLA leave. The Court also noted that UPS acted entirely properly by notifying the plaintiff in writing that it wanted more medical information before designating FMLA leave. The Court did not address the question of whether the plaintiff was required to call off each day as required by UPS internal procedures.

However, the Court found that UPS violated the FMLA by only giving the plaintiff 72 hours written notice of the need for medical documentation:

The regulations state that “[t]he employee must provide the requested certification to the employer within 15 calendar days after the employer’s request, unless it is not practicable under the particular circumstances to do so.” 29 C.F.R. § 825.305(b). While UPS argues that its labor agreement with the Teamsters allows it to provide a shorter time period of seventy-two hours, the FMLA expressly provides that no collective bargaining agreement, such as that UPS has with the Teamsters Union, may diminish any protection granted by the FMLA. 29 U.S.C. § 2652(b). The fifteen-day period expired on May 20, 2006, two days before [the plaintiff] submitted his medical information. However, UPS terminated [the plaintiff] on May 12, 2006, well before the expiration of the fifteen-day period. [The plaintiff] missed the deadline, but UPS had first terminated him under a mistaken understanding of the applicable deadline.

Section 2652(b) of the FMLA provides that: “The rights established for employees under this Act or any amendment made by this Act shall not be diminished by any collective bargaining agreement or any employment benefit program or plan.”

Ultimately, the Court majority concluded that UPS’s mistake was irrelevant because even if he had submitted the information within fifteen days, the plaintiff failed to show that he suffered from a serious health condition. The plaintiff had never been admitted as an inpatient. His failure to fill his ER prescription also meant that he could not show a regiment of continuing care. “For example, an outpatient procedure with a follow-up appointment is not a “regimen of continuing treatment.” See Morris v. Family Dollar Stores of Ohio, Inc., No. 07-3417, 2009 U.S. App. LEXIS 6852, at *17-18 (6th Cir. Mar. 31, 2009).”

Surprisingly, the Court also found the medical statements submitted by his physicians to be deficient:

While [the plaintiff] has produced three separate notes from physicians stating that he could not return to work, the most detailed notation given on the forms is that [the plaintiff] cannot work “for medical reasons.” These notes fall far short of the requirement that any doctor’s certification must contain at a minimum “(1) the date on which the serious health condition began, (2) the probable duration of the condition, (3) the appropriate medical facts within the health care provider’s knowledge, and (4) a statement that the employee is unable to perform [his] job duties” in order to be valid.

The Court was also influenced by the fact that the plaintiff failed to follow his physician’s treatment advice:

[The plaintiff] also has not provided any other medical evidence to counter the emergency treating physician’s final diagnosis of bruises and mild back pain. Importantly, none of the medical information [the plaintiff] has provided suggests that his back pain significantly limited his movement or lifting ability, particularly when treated with the prescription [the plaintiff] refused to take. Because [the plaintiff] cannot demonstrate that he suffered from a serious health condition, he is not eligible for FMLA leave.

In short, even though two different physicians indicated that the plaintiff should not return to work for three weeks and even though there was no contrary medical evidence offered by the employer, the Court disregarded their expert medical opinions of the treating physicians and focused, instead, on the particular diagnosis and the fact that the plaintiff failed to follow medical advice (which presumably lengthened his period of disability).

In contrast, the dissent concluded that UPS would be required to first notify the plaintiff why his medical certification was deficient before he could be terminated for failing to satisfy his burden of proof. The majority dismissed this concern on the grounds that the plaintiff failed to submit any medical documentation within fifteen days. Thus, only when medical certification has been timely submitted would an employer be required to permit an employee to cure a deficiency.

The dissent also noted that while bruises probably are not serious health conditions, an acute lumbar strain could be:

Symptoms vary depending on the severity of the strain, but “[t]ypically, the patient with a low back strain moves with care, particularly when sitting down or standing up.” Id. Treatment “includes patient reassurance, brief bed rest during the acute phase of low back pain, a firm mattress with a bed board, and the judicious use of analgesics or nonsteroidal anti-inflammatory drugs (NSAIDs).” Id. ¶ 15A.46. Additionally, “the patient should be instructed to avoid activities that intensify back pain.” Id. The recovery period depends upon the severity of the strain. Although “[t]he acute back strain patient generally experiences gradual improvement over a period lasting approximately two weeks,” patients with severe strains may not recover for up to three weeks. Id. ¶ 15A.47. Finally, there is a “significant likelihood of recurrence,” and “[w]hile the first episode of back pain is usually the briefest and least severe, the vast majority of such patients are at risk of developing another episode of back pain that will be more severe and longer lasting.” Id. Clearly, an acute lumbar strain can be a “serious health condition that makes the employee unable to perform the functions of [his] position.” 29 U.S.C. § 2612(a)(1)(D).

The majority dismissed this concern as merely hypothetical in light of the lack of evidence and specificity in the medical statements.

Insomniacs may read the full opinion at http://www.ca6.uscourts.gov/opinions.pdf/09a0712n-06.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.