Tough Day for Plaintiff Claims

Today, I learned about three different lawsuits, each of which were rejected by the courts on appeal. Tough day for plaintiffs; good day for employers. These courts rejected a claim by an employee who soiled herself after being denied a restroom break supported by medical documentation, by a police chief who was allegedly reported neglect of a mentally ill patient to his supervisor and by a medical resident who brought an ADA claim after a local hospital refused to reinstate him after he had been terminated for diverting controlled substances for his personal use even though he had completed a drug rehabilitation program.

This morning, the Sixth Circuit released two employment decisions. In the first, the plaintiff brought suit under Title VII for discrimination and for the intention infliction of emotional distress when her supervisor would not permit her to take a restroom break despite her medical condition. Worthy v. Materials Processing, Inc. No. 10-1138 (6th Cir. 7/27/11). The plaintiff had previously reported her medical condition to the HR Department, but it neglected to inform her supervisor that she would require restroom breaks. When the plaintiff told her supervisor that she needed the break because of a medical condition, he refused to relieve her on the production line. Accordingly, she ultimately soiled herself. A union grievance was filed, the HR Manager apologized for not passing on the information and the plaintiff was given two days of paid leave. Dissatisfied, she filed a Charge of Discrimination and, ultimately, a lawsuit. Oddly, there is no mention of the ADA in the Court’s decision. The Court concluded that Title VII only applied to material adverse employment actions, like promotions, hiring, demotions and firing, and not to employment decisions which “do not change [an employee’s] salary, benefits, title, or work hours,” even if they make the employee’s job “significantly more difficult.” It rejected the emotional distress claim on the grounds that the supervisor’s undisputedly petty and cruel behavior was not objectively outrageous and “utterly intolerable in a civilized community.”

In the second opinion released this morning, the Sixth Circuit rejected the ADA claim of a medical resident because his evidence of pretext was based on personal conjecture and speculation. Hall v. Ohio Health Corp., No. 10-3327 (6th Cir. 7/27/2011). The plaintiff had been terminated from two prior residency programs before beginning at Doctor’s Hospital. While there, he had been placed on academic probation and warned about inappropriate behavior (such as engaging in personal conversations when he was supposed to monitoring patients, inattention to detail, self-prescribing pain medication for a foot condition, disappearing during rounds, being unprepared, etc.). Finally, he was caught diverting pain medication to himself (by prescribing the medication to a patient and then taking it for himself). When confronted, he never admitted to having an addiction. Fed up, the Hospital terminated him, but advised him to reapply if he fixed his problems. After completing an addition program, the plaintiff reapplied to OhioHealth, but was rejected. The lawsuit followed. The Court found that the plaintiff could not show that the Hospital’s explanation was pretextual: his long history of unprofessional and unethical behavior, lack of requisite medical knowledge and his prior supervisor’s unwillingness to work with him again. Any evidence that he was rejected solely because of a former addiction was based only on his personal belief instead of evidence.

Finally, the Franklin County Court of Appeals rejected the wrongful discharge claim of a police chief who claimed that he was terminated for reporting an investigation into the neglect of a mental patient to the institution’s executive officer. Boyd v. Ohio Dept. of Mental Health, 2011-Ohio-3596. In particular, the plaintiff was investigating how a mental patient had been sent to a medical appointment without a mandatory police escort, which enabled the patient to escape. The incident had been reviewed by two institutional committees, but he continued to investigate – allegedly without the knowledge or approval of his boss. He claims that he was fired for reporting the investigation to her – allegedly in violation of O.R.C. § 5101.61(E), which “prohibits an employer from "discharg[ing], demot[ing], transfer[ring], prepar[ing] a negative work performance evaluation, or reduc[ing] benefits, pay, or work privileges, or tak[ing] any other action detrimental to an employee or in any way retaliat[ing] against an employee as a result of the employee's having filed a report [to the Ohio Department of Job and Family Services] under this section." Problem was, he never reported anything to ODJFS; he only reported the investigation to his boss. He asserted that his boss had authority to resolve any systematic problems with patient neglect and reports to her should be as protected as reports to ODJFS. However, the Court refused to expand public policy as reflected by the General Assembly in the statute.

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 Rejects Two Qualified Immunity Defenses Raised in Southern District of Ohio

As a general rule, government employees are immune under federal law from civil damages for acts conducted in the course of their employment because of a qualified immunity. However, that qualified immunity can be lost if the government official or employee engages in conduct which violates clearly established law. Today, the Sixth Circuit released two opinions which affirmed the denial of qualified immunity to two different employers from Southern Ohio because their alleged actions violated clearly established federal law. In the first decision, the employer fired a police officer after his wife distributed letters which were critical of city government. Sigler v. City of Englewood, No. 09-4223 (6^th Cir. 5/20/11). In the second decision, the Court rejected qualified immunity for school officials who failed to act upon student complaints of sexual harassment by fellow students and found that there was no collateral estoppel or res judicata from the disciplinary appeal hearings held to review the five-day suspension of the complaining female student. Evans v. Board of Education of Southwestern City School District, No. 10-4011 (5/23/11).

According to the Sigler opinion, the wife of the plaintiff police officer distributed a letter which was critical of his city government employer. He says that he never saw or heard about the letter until after she distributed it, but he did not inform his employer about the letter even after he found out. An internal affairs investigation was conducted. When initially asked about it, the plaintiff says he asked the investigating officer for a copy of it, but the officer said the plaintiff denied ever having read it. The plaintiff later admitted to having read it after his wife mailed it. The officer recommended that the plaintiff be terminated because he falsely denied having read the letter, was aware of who circulated the letter and never informed his employer about the letter, thus making him a participant. The officer contended that this violated departmental rules against dishonesty and withholding information. The City Manager accepted and acted upon the recommendation. The plaintiff then filed suit contending that he was terminated in retaliation for his marriage to the woman who distributed the letter pursuant to her First Amendment rights.

The district court denied the city's motion for qualified immunity on the grounds that retaliating against an employee because of the actions of the spouse clearly violates established First Amendment law. The Sixth Circuit affirmed and rejected the City's attempt to get the City Manager dismissed as a defendant:

Defendants finally argue that Sigler's alleged constitutional right should be construed more narrowly in determining whether it is "clearly established law." Defendants characterize the right as "whether a reasonable officer or official, standing in place of City Manager Smith or Chief Brownfield, would conclude that his actions violated Keith Sigler's First Amendment intimate association rights when Keith Sigler was terminated for violating the [City's] lawful rules and regulations." Phrasing it this way turns the qualified-immunity analysis upside down. When deciding whether a constitutional right is "clearly established law," one assumes that the right the plaintiff invokes was actually violated. Qualified immunity then excuses that violation if the right was not "clearly established law" such that the defendant should have known of it. The right Sigler invokes is the right not to be terminated in retaliation for his marital association. Assuming that Sigler was so retaliated against, defendants are only entitled to qualified immunity if it was not clearly established that such retaliation is unconstitutional. Defendants' characterization assumes away any retaliatory motive, which is Sigler's whole complaint, and instead assumes as true their purported motive for Sigler's termination. The court does not decide qualified immunity in so backwards a way.

The Court of Appeals also rejected the argument that there was not enough evidence of a factual dispute to submit the case to a jury:

The district court also implicitly held that the defendants might not be able to prove that they would have terminated Sigler even if he had not been married to Susan. The court dismissed the defendants' only evidence on this point—Smith's declaration that he would still have terminated Sigler—by stating that "[t]his, of course, is mere supposition." While abbreviated, both determinations indicate that the district court concluded that there was enough in the record to get to the jury on the questions of whether the marriage caused the termination and whether Sigler would not have been terminated if, other things being the same, he had not been married to Susan. For purposes of this interlocutory appeal, we must make the same assumptions. The alternative would be to read into the district court's holding a legal determination that Smith could be liable regardless of the extent to which Sigler's being married caused the termination. It is hard to read the court's analysis that way. We therefore lack jurisdiction to consider Smith's arguments to the extent that they challenge the factual assumptions of the district court regarding causation.

However, the Court agreed that there was insufficient evidence that the Chief of Police was sufficiently involved in the termination decision merely because he authorized the internal investigation and was aware of the City Manager's planned conduct.

In Evans, the female students complained repeatedly that they were being sexually harassed by two male students. However, no action was taken by the School. Among other things, there was an incident in the back of a school bus which put one of the plaintiffs in tears, which got the attention of a teacher, who sent the student to the Principal's office. After taking her statement, the Principal then suspended both her and the male student for five days, and called the police about the male student. The female student appealed the suspension, which was upheld because there was insufficient evidence that she resisted his advances. The following year, additional incidents occurred with another male student and the female student was repeatedly teased for having loose morals.

The School argued that the Principal was entitled to qualified immunity because collateral estoppels and res judicata attached to the appeals hearing of the female student's suspension and precluded her from later suing under § 1983 because of those incidents. However, the District Court and the Court of Appeals rejected that argument because the school appeal hearing did not address the same legal issue, could not consider the same relief and did not consider the broader course of conduct at issue in the § 1983 action (which covered the span of a few years).

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 Rejects Race Discrimination Claim of Plaintiff Discharged for False Expense Report

On Friday, the Sixth Circuit Court of Appeals affirmed the dismissal of a race discrimination case by the federal district court in Columbus. David Carson v. Patterson Companies, No. 09-4559 (6^th Cir. 2011). The plaintiff had been fired for falsifying his expense report by obtaining reimbursement for an expense that was direct billed by the supplier. Although the plaintiff claimed that he had earlier informed the company of a problem with the supplier's website and had never spent the funds, the Court concluded that the plaintiff failed to show that the employer's refusal to accept his explanation was a pretext to hide discriminatory animus.

According to the Court's decision, the plaintiff was hired in March 2007. Some of his business expenses were directly billed to the employer and others were billed to his corporate credit card. In December 2007, he attempted to purchase some supplies from a supplier's website and those supplies were supposed to be billed directly to the employer. However, when the website would not cooperate with a direct-bill arrangement, he had the expenses put directly on his corporate credit card. Although these expenses never appeared on his corporate credit card invoice, he still submitted a reimbursement request for these expenses and was reimbursed by the employer for those expenses. His practice was to keep a separate account for reimbursed expenses and he noticed that he still had leftover funds after paying his credit card bill. He assumed that he had never been charged for certain expenses that he had put on the credit card. He claims to have told his supervisor and let the matter go when he was allegedly told not to worry about it.

Of course, the discrepancy was later discovered in February 2008. The supervisor emailed the plaintiff for an explanation and received a response three days later only that the plaintiff was looking into it. A meeting was scheduled for the following Monday. The plaintiff explained that he had sought reimbursement for the direct-billed expenses because he thought his credit card had been charged and asked for more time to investigate. Convinced that the plaintiff had attempted to steal from the employer by falsifying an expense report, the supervisor fired him the following week. Again, the plaintiff failed to explain the discrepancy and only offered to return the disputed funds.

The plaintiff filed suit for race discrimination in his termination and compensation and the employer counterclaimed for the $757 that plaintiff had improperly been reimbursed. The district court granted summary judgment against the plaintiff. On appeal, the plaintiff argued that he was pursuing a mixed-motive theory of discrimination, but the Sixth Circuit found that he had failed to pursue that legal theory by arguing it explicitly below or raising it in his complaint.

The plaintiff argued that he was treated differently than white employees who had submitted incorrect expense reports. However, the Sixth Circuit found these employees not to be similarly situated because (1) they reported to a different supervisor; (2) had technical errors on their reports rather than seeking reimbursement for incorrect amounts or (3) corrected their mistakes (of charging personal expenses on their credit cards) immediately before they were actually reimbursed by the employer. In contrast, the plaintiff waited two months after he had been reimbursed and 13 days after being asked to explain the incorrect reimbursement request and never returned the money. The Court rejected the plaintiff's speculation that the supervisor was not the actual decisionmaker because there was no evidence on the record that he consulted anyone before terminating the plaintiff.

Although the plaintiff claimed that he had raised the issue with his supervisor when he received the credit card bill and realized that he had been reimbursed for more than the charges, he did not remind his supervisor of his when confronted in February, offer an explanation (about the malfunctioning website) or return the money. Accordingly, there was insufficient evidence of a disputed issue of material fact for a jury to consider if the case went to trial.

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: Students Who Are Actually Learning Are Not Employees Under the FLSA

This morning, the Sixth Circuit Court of Appeals issued a rather rare child-labor decision. In it, the Court was required to decide whether students at a vocational school were student-learners or employees due minimum wage for the "work" they performed at the school (in a nursing, farming, maintenance or other workplace setting). The Court rejected the Department of Labor employee-trainee test in favor of one that determines whether the individual or the school primarily benefits from the services performed. In other words, "the proper approach for determining whether an employment relationship exists in the context of a training or learning situation is to ascertain which party derives the primary benefit from the relationship." In particular, the Court agreed that the students primarily benefitted from the work because the students were not displacing regular employees in performing essential services. Indeed, all of the work could be performed by the instructors without the assistance of the students if that were the defendant school's aim. Moreover, the education received by the students was effective at teaching necessary skills. Solis v. Laurelbrook Sanitarium and School, Inc., No. 09-6128.

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 Enforces Employee’s Waiver of USERRA Claims

This morning, the federal Sixth Circuit Court of Appeals affirmed summary judgment in favor of an employer in a claim brought under USERRA on the grounds that the plaintiff had signed a waiver of all claims, including those based on "veteran status" in his separation agreement. Wysocki v. IBM, No. 09-5161 (6^th Cir. 6/16/10). The plaintiff alleged that he had been terminated on account of his military service in Afghanistan. In particular, he claimed that IBM refused to provide him training to update his job skills when he returned to work and then terminated him without cause. The Court found that his USERRA claim was waived in his separation agreement even though it did not specifically refer to USERRA.

IBM responded to the complaint with a motion to dismiss, which the court converted to a summary judgment motion. The plaintiff argued that USERRA claims were not waivable under 38 USC § 4302(b). The Court reviewed the statutory text at 38 U.S.C. § 4302, which establishes that:

(a) Nothing in this chapter shall supersede, nullify or diminish any Federal or State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that establishes a right or benefit that is more beneficial to, or is in addition to, a right or benefit provided for such person in this chapter.

(b) This chapter supersedes any State law (including any local law or ordinance), contract, agreement, policy, plan, practice, or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter, including the establishment of additional prerequisites to the exercise of any such right or the receipt of any such benefit.

. . . .

While § 4302(b) supercedes any law, plan or agreement that "reduces, limits, or eliminates in any manner any right or benefit provided by this chapter," its application is limited by § 4302(a), which exempts any law, plan or agreement that is "more beneficial to, or is in addition to, a right or benefit provided for such person in this chapter" from the operation of § 4302(b). Therefore, the critical inquiry is whether the Release is exempted from the operation of § 4302(b) by § 4302(a), because the rights it provided to [the plaintiff] were more beneficial than the rights that he waived.

While some authorities and courts have contended that USERRA rights may not be waived, the Sixth Circuit cited legislative history to the contrary. "Clearly, the ability to waive their USERRA rights

without unnecessary court interference, if they believe that the consideration they will receive for waiving those rights is more beneficial than pursuing their rights through the

courts, is both valuable and beneficial to veterans." It also concluded that veterans should be able to decide for themselves whether the consideration they are receiving for a release is more valuable than their USERRA rights. Therefore, it found that waivers were not conceptually barred by the USERRA statute and could be enforced, as was the plaintiff's waiver enforced in this case.

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: Retired Employee Can Assert ERISA Claim Based on False Information Provided in Written Benefit Estimate

Last week, the federal Sixth Circuit Court of Appeals in Cincinnati issued a decision recognizing for the first time that a plaintiff can assert an estoppel claim against a pension plan under ERISA when the plaintiff relied to his detriment upon a written and certified estimate of his monthly retirement benefit in making his decision to retire and then was then told two years later that his actual benefits were substantially lower than the prior estimate, that his future benefits would be reduced accordingly and that he was requested to repay approximately $11,000 to the retirement plan. Bloemker v. Laborers Local 265 Pension Fund, No. 09-3536 (6^th Cir. 5/19/10). However, the Court affirmed the dismissal of the plaintiff's statutory and breach of contract claims.

According to the Court's opinion, the plaintiff's 2005 annual statement of status estimated that he "would be entitled to to a monthly benefit pension of

$2,666.99." Interested, he contacted the third-party administrator of his pension plan "to discuss the possibility of early retirement. He received a letter from her

stating that if he were to retire on April 1, 2005, he would be eligible for "approximately $2,564.00 per month, single life annuity, payable for your lifetime only."

Based on this, the plaintiff applied for early retirement benefits on February 10, 2005" and on March 1, 2005, he received a Benefit Election Form which was stamped by the TPA, stated that he would receive $2,339.47 per month for his life, and contained a certification stating:

Based on our records of your hours worked under the Plan and the contributions which have been made on your behalf, we hereby certify that you are entitled to receive the retirement benefit specified above, and that the amount shown for any optional forms of payment are equivalent to your basic benefit.

The plaintiff retired and in 2006 received a letter from the TPA indicating that a computer error caused it to miscalculate his early retirement benefits, that he was entitled to $500/month less than previously indicated and that he needed to repay the approximately $11,000 he had been overpaid to date. The plaintiff filed suit after exhausting his administrative remedies under the plan. In his suit, he alleged that the Plan and the TPA should be equitably estopped from denying him the larger retirement benefit on account of their material misstatements on which he relied to his detriment. He also alleged that the Plan and TPA breached a written contract to him in the application for benefits and that the TPA breached its statutory fiduciary duties to him. The trial court dismissed his claims

In the past, the Sixth Circuit has – unlike other circuit courts -- been reluctant to recognize estoppels claims against pension plans because estoppel "cannot be applied to vary

the terms of the unambiguous plan documents." In addition,

pension benefits are typically paid out of funds to which both employers and employees contribute. Contributions and pay-outs are determined by actuarial assumptions reflected in the terms of the plan. If the effective terms of the plan may be altered by transactions between officers of the plan and individual plan participants or discrete groups of them, the rights and legitimate expectations of third parties to retirement income may be prejudiced.

The Court remains unwilling to accept estoppels claims based on oral or verbal statements by low level employees which modify the written terms of the plan. "This policy concern is

greatly lessened when the representations at issue are made in writing, and, particularly here, where the representations constituted formal certifications."

Under Sixth Circuit precedent,

the elements of an equitable estoppel claim are: 1) conduct or language amounting to a representation of material fact; 2) awareness of the true facts by the party to be estopped; 3) an intention on the part of the party to be estopped that the representation be acted on, or conduct toward the party asserting the estoppel such that the latter has a right to believe that the former's conduct is so intended; 4) unawareness of the true facts by the party asserting the estoppel; and 5) detrimental and justifiable reliance by the party asserting estoppel on the representation.

The Court found these elements to be satisfied by the plaintiff's allegations in this case. It found the defendants' alleged gross negligence sufficient to constitute constructive fraud. Moreover, while it generally has found that a plaintiff can not prove justifiable reliance on a misrepresentation if the misstatement contradicted unambiguous plan documents, in this case, the plaintiff alleged that "it would have been impossible for him to determine his correct pension benefit given the complexity of the actuarial calculations and his lack of knowledge about the relevant actuarial assumptions."

We hold that a plaintiff can invoke equitable estoppel in the case of unambiguous pension plan provisions where the plaintiff can demonstrate the traditional elements of estoppel, including that the defendant engaged in intended deception or such gross negligence as to amount to constructive fraud, plus (1) a written representation; (2) plan provisions which, although unambiguous, did not allow for individual calculation of benefits; and (3) extraordinary circumstances in which the balance of equities strongly favors the application of estoppel.

The Court affirmed the dismissal of his fiduciary duty claims and breach of contract claims.

Section 1132(a)(1)(B) of ERISA provides that a plan beneficiary may bring suit "to recover benefits due to him under the terms of his plan." 29 U.S.C. § 1132(a)(1)(B). As discussed above, the written ERISA plan documents govern the rights and benefits of ERISA plan beneficiaries. . . . . Where a retirement plan creates benefits in excess of those established by ERISA, however, those rights may be enforceable in contract under federal common law. . . . Furthermore, when additional documents operate to modify or amend the plan, a beneficiary can rely on those modifications to determine his benefits. . . . .

However, the Benefit Election form submitted by the plaintiff "did not purport to be an amendment or a modification to the Plan. Nor did it purport to create a separate contract for benefits in addition to those provided by the Plan. Instead, it simply claimed to provide the actuarially certified benefit [the plaintiff] was entitled to, based on the Plan." Thus, there was no basis for asserting a claim for breach of contract.

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: Requiring 100% Fit for Duty Precludes Judgment as a Matter of Law for Employer on Perceived Disability Claim

This morning, the Sixth Circuit Court of Appeals in Cincinnati reversed a judgment entered as a matter of law on a perceived disability claim brought under the ADA by a female UPS driver on the grounds that the employer's insistence that she be 100% fit for duty within 30 days of returning to work reflected its judgment that she was physically incapable of performing a wide range of jobs under its light duty program and because it questioned the sincerity of the employer's explanation about the 30-day requirement. Watts v. UPS, No. 08-3779 (6^th Cir. 2010). However, the Court affirmed the dismissal of the plaintiff's sex discrimination claim when the trial court ordered a new trial (where the jury found in favor of the employer) after the jury in the first trial awarded the plaintiff over $200,000 in damages on the sex discrimination claim, but its answers to special interrogatories were contradictory.

According to the Court's opinion, the plaintiff was the only female driver in that county between 1999 and 2004. However, after a work-related injury in 2000, she was off work until 2003. Although there was contradictory evidence, the plaintiff asserted that she was released to return to work with restrictions in Fall 2002, but the employer refused to permit her to return until she was 100% fit for duty within 30 days of reinstatement. It also suggested that she pursue a reasonable accommodation on account of a disability. The employer contended that the seniority provisions of its collective bargaining agreement only permitted light duty assignments of up to 30 days before the assignment became permanent and, thus, employees could only work light duty for 30 days. The plaintiff produced evidence that this 30 day requirement had not been imposed on certain male employees and was not described in the employer's written descriptions of the light duty program. The plaintiff filed a grievance, but it was denied. When the employer refused to reinstate her, she filed Charges with the EEOC that she was being discriminated against on account of her sex and disability. She ultimately filed a lawsuit in federal court, but the trial court entered judgment as a matter of law in favor of the employer on the perceived disability discrimination claim and the jury was not permitted to consider it because the trial court concluded that the plaintiff only proved that the employer considered her temporarily impaired. The jury awarded over $200K in damages to the plaintiff on her sex discrimination claim and answered a special jury interrogatory that she was treated differently than male employees in the light duty program, but denied in other special jury interrogatories that she had proven sex discrimination or pretext in how she was treated. The trial court then ordered a new trial and the second jury ruled in favor of the employer on the plaintiff's sex discrimination claim. The plaintiff then appealed to the Sixth Circuit.

The Sixth Circuit had no difficulty finding sufficient evidence to support the plaintiff's perceived disability discrimination claim under the ADA even though her claim pre-dated the ADA Amendments Act which broadened the scope of the ADA and made alleging such claims easier:

When a defendant flatly bars a plaintiff from working at any job at the defendant's company, that is generally sufficient proof that the employer regards the plaintiff as disabled in the major life activity of working so as to preclude the defendant being awarded judgment as a matter of law.

The Court relied on its prior decisions in Wysong v. Dow Chemical Co., 503 F.3d 441 (6th Cir. 2007) and Henderson v. Ardco, Inc., 247 F.3d 645 (6th Cir. 2001) (where the plant manager told the plaintiff: " You know what company policy is . . . you have to be 100 percent to work here") where the employer refused to permit the plaintiffs to return to work in any capacity or position with any physical or medical restrictions because they were not 100% fit following an injury or illness. Because the employer's light duty program encompassed a wide variety of jobs ("including answering phones, filing, gassing up and washing vehicles,"), its refusal to permit the plaintiff to participate reflected a judgment that she was physically incapable of performing a wide variety of jobs.

In Henderson, this court interpreted an injured employee being told that she had to be "100%" to work there as tending to indicate that the defendant regarded her as disabled in a wide spectrum of jobs sufficient to defeat the defendant's motion for summary judgment. See Henderson, 247 F.3d at 654. Similarly, in Wysong this court interpreted an employer's statement that the plaintiff could not return to work until she had received "a [medical] release to work without restrictions" as evidence that the defendant "perceived Wysong as being unable to work anywhere at the plant, and thus, unable to perform the same broad class of work anywhere else." See Wysong, 503 F.3d at 453. The Kaufmann/Germann statements here – that there was no work for Watts unless she could present a full medical release – present a situation similar to the full-medical-release requirement in Wysong and the 100% rule in Henderson. The jury could have concluded that the statement indicated that UPS perceived Watts as being unable to perform the broad class of jobs available at the UPS Hamilton facility.

Moreover, the Court questioned the legitimacy of the employer's explanation that an employee had to be 100% fit because of the bargaining agreement's seniority provisions because the 30-day rule did not flow from the CBA, was not applied to certain male employees and was not described in the employer's written descriptions of the light duty program. Thus, it concluded that there was evidence that the employer's explanation for not placing the plaintiff in the light duty program was pretexual and a mere disguise for unlawful discrimination.

[Editor's Note: In January 2011, the EEOC announced a $3.2M settlement with Supervalu arising out of the termination of employees following medical leaves of absence under a policy that employees could only return to work if they were medically certified to be 100% fit for duty].

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: Disability Leave and Receipt of Social Security Benefits Do Not Destroy ADEA Claim Following a RIF.

This morning, the Sixth Circuit Court of Appeals in Cincinnati affirmed the dismissal on summary judgment of an age discrimination claim brought by a salesperson who took disability leave shortly after being notified that his position was being eliminated in a reduction in force. Johnson v. Franklin Farmers Cooperative, No. 09-5483 (6^th Cir. 2010). However, it did so for different reasons than the trial court – which had found that the plaintiff failed to show that the employer's explanation was a mere pretext for discrimination. Rather, consistent with similar claims, the Court ultimately agreed that the plaintiff could not show that he had been replaced, or selected for the RIF based on his age, when his duties were reassigned among the remaining employees. However, before reaching this unsurprising conclusion, the Court also rejected several arguments raised by the employer, including: (1) that the plaintiff did not suffer an adverse employment action when he took short-term and long-term disability leave after being notified that his position was being eliminated and (2) that his disability leave and receipt of social security benefits rendered him unqualified for his position. Nonetheless, the Court rejected the trial court's conclusion that the plaintiff had shown that he had been replaced by a younger employee when it found indisputable evidence of a RIF and imposed a higher burden of proof on the plaintiff to show that his age had been a factor in his selection for the RIF. Thus, it affirmed summary judgment for the employer.

The Court rejected the employer's argument that the plaintiff could not show as part of his prima facie case that he suffered an adverse employment action when he applied for short-term disability benefits (and then received LTD and social security benefits) shortly after being notified on September 5 that his position was to be eliminated in the RIF and before the position was actually eliminated on September 30. The employer denied the plaintiff's request that he be permitted to continue working for another 19 months (when he would qualify for full retirement benefits) and the plaintiff testified that he would have continued working if his position had not been eliminated (regardless of the content of his disability benefit applications). "Viewed in a light most favorable to [the plaintiff], the evidence supports [the plaintiff's] assertion that he involuntarily ceased working two weeks before [the employer] would eliminate his job, and that [the employer] brought about a significant change in his employment status. The prima facie showing is not intended to be onerous." Instead, such an argument would be better evaluated, if at all, at the pretext stage of analysis.

The Court also rejected the employer's argument that the plaintiff could not prove as part of his prima facie case that he was qualified for the salesperson job when he had submitted applications stating that he was completely unable to work. However, the Court found that the plaintiff had adequately explained the apparent inconsistency by, among other things, affidavits from co-workers, the employer's General Manager and former customers about how well he performed his job before he began his disability leave.

The Court rejected the trial court's conclusion that the plaintiff had been replaced by a younger employee. According to the Court's opinion, the employer selected three employees for the September 30 RIF because of a budget deficit, but it rehired one of them in November and delayed the termination of the other until he qualified for retirement on December 30. In addition, the General Manager admitted that some of his business decisions were influenced by the existence of the pending litigation because he did not want to have to admit that he actually needed an outside salesperson, like the plaintiff (thus, implying that he was merely waiting for the conclusion of the litigation to formally name the younger employee as the employer's outside salesperson). The plaintiff's duties had been distributed among two younger employees. The Sixth Circuit found that the employer had legitimately conducted a RIF despite the above facts because the retired employee was not replaced and the rehired employee was brought back to replace another departing employee. Thus, the employer's headcount following December 30 was three less than it had been when it announced the RIF on September 5.

The Court also found that the plaintiff's duties had been assumed by two younger employees, who continued to perform their existing job duties. " An employee is not replaced for purposes of the fourth element of a prima facie case of discrimination 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."

Because the plaintiff's termination took place in a RIF, the Court imposed a higher burden of proof on him to show that he was impermissibly selected for the RIF on account of his age:

Where . . . there is a reduction in force, a plaintiff must either show that age was a factor in eliminating his position, or, where some employees are shifted to other positions, that he was qualified for another position, he was not given a new position, and that the decision not to place him in a new position was motivated by plaintiff's age. . . . . The purpose of the additional evidence requirement is to ensure, in reduction of force cases, that the plaintiff has presented evidence to show that there is a chance the reduction in force is not the reason for the termination.

Ultimately, the Court concluded that the plaintiff could not meet the higher burden of proof which applies in a RIF. The plaintiff admittedly did not have direct evidence of age discrimination and could not show an inference of age discrimination simply from the fact that two younger employees were retained instead of him. Finally, the General Manager's admission that his business and promotional decisions were influenced by the fact of the litigation was insufficient to carry the plaintiff's burden of proof.

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: Job Applicants Did Not Knowingly Waive Limitations Period or Judicial Review of Claims

This morning, the Sixth Circuit issued an opinion reversing summary judgment in favor of an employer which had required all job applicants to agree to a six month statute of limitations for all employment claims and to waive their right to file a lawsuit (in favor of non-union labor-management internal grievance review board). Alonso v. Huron Valley Ambulance, Inc., No. 09-1812 (6^th Cir. 2010). The Court determined that the plaintiffs' signatures on the forms were not knowing and voluntary sufficient to waive their statutory rights under the circumstances of the case. Surprisingly, the Court did not address the substantive or procedural safeguards which existed or were lacking in the employer's dispute resolution process. Instead, it focused almost exclusively on how the information was haphazardly presented to the plaintiff employees during the application process. In particular, the plaintiffs were not given enough detail about the process until more than a month after they were hired (and had signed the agreements) and were never given the opportunity to revoke the agreements.

According to the Court's opinion, all employees were required to sign job applications which contained the following provisions:

The last page of the application contained a section preceded by the phrase, "PLEASE READ THE FOLLOWING BEFORE SIGNING." The section contained, among other things, notice of an internal grievance procedure for employment related disputes, and a six-month limitations period for any employment-related claims. The internal grievance procedure provision provided:

Any dispute arising out of or in connection with any aspect of my employment by the Company, or termination thereof, including by way of example but not limitation, disputes concerning alleged civil rights violations, breach of contract or tort, shall be exclusively subject to review by the Grievance Review Board. Any decision of the Review Board shall be binding to both parties, and enforceable in circuit court.

Additionally, the statute of limitations provision provided:

I further recognize that if employed by the Company, I agree, in partial consideration for my employment, that I shall not commence any action or other legal proceeding relating to my employment or termination thereof more than six months after the termination of my employment and agree to waive any statute of limitations to the contrary.

Once employees were hired, they were given a procedural manual during orientation. The manual describes the four-step grievance process and directs them to an internal policy, which, among other things, provides that "The Grievance Review Board's decision will be final and binding on both the employee and the company."

One of the plaintiffs was ultimately terminated for allegedly falsifying military leave and taking (prescription) drugs which put him in an altered mental state. He utilized the grievance process and then after his termination was upheld, he filed a lawsuit under USERRA, OSHA's whistleblower statute and an unnamed federal statute prohibiting retaliation for filing EEOC Charges. His wife (and co-worker) did not utilize the grievance procedure, but filed a similar lawsuit alleging harassment, and retaliation.

Although the plaintiffs challenged the employer's dispute resolution process on a number of grounds (including USERRA's absence of limitations period and waiver provisions), the Court only addressed whether the plaintiffs' waiver was knowing and intelligent:

Here, Appellants were educated and gave no indication that they did not understand the waivers they were signing, and they successfully used the grievance process on multiple occasions prior to contending that they did not knowingly and intelligently waive their right to a judicial forum. The waiver, however, did not include any information regarding the Grievance Review Board or the procedures that would be used in place of a judicial proceeding. The initial waiver, signed as part of the four-page employment application, read:

Any dispute arising out of or in connection with any aspect of my employment by the Company, or termination thereof, including by way of example but not limitation, disputes concerning alleged civil rights violations, breach of contract or tort, shall be exclusively subject to review by the Grievance Review Board. Any decision of theReview Board shall be binding to both parties, and enforceable in the circuit court.

Plaintiffs alleged "that they were not given any further information regarding the Grievance Review Board until they received an Employee Handbook at Orientation, nearly a month after they were hired. The Employee Handbook outlined the Grievance Review Board procedures in general terms as a four-step process. The Handbook instructed employees to reference Administrative Policy #415, which was located online. That Policy, in turn, provided a detailed explanation of how the Grievance Review Board operated."

At the time the [plaintiffs] signed waivers of their rights to a judicial forum, they had no idea what the Grievance Review Board process entailed. They were never informed of their right to revoke their waiver. They were not given any documentation regarding the process until almost a month after they began their employment with HVA. Even then, the document they were given described the process in general terms, and pointed them to a website where they could find additional, more detailed information. They cannot be said to have knowingly and voluntarily waived their right to a judicial forum when they were not informed of the alternative procedures until a month after they began working for HVA. Cf. Seawright, 507 F.3d at 971 (explaining extensive efforts taken by defendant employer to inform employees of new dispute resolution procedures before requiring employees to waive all rights to a judicial forum).

The court rejected the provisions shortening the statute of limitations on the same grounds.

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 Puts Burden on Employer to Assure that Harassment Stops After Employee’s First Complaint.

Today, the federal Sixth Circuit of Appeals released an unanimous opinion affirming the award of $1,039,504 in compensatory and punitive damages, back pay, and front pay (but which does not yet include court costs or attorney fees) to a female plaintiff who quit her job paying less than $10/hour after only five weeks on the job because she was sexually harassed by co-workers. West v. Tyson Foods, Inc., No. 08-6516 (6^th Cir. 4/16/10). While the amount of the verdict is enough by itself to get an employer's attention, this case is particularly instructive in watching how many times management dropped the ball despite having good policies and procedures in place because apparently no one was enforcing those policies or administering those procedures when it came to this plaintiff. Moreover, the Court found that the employer was on notice of the continuation of the sexual harassment following the employee's first complaint even though she did not complain to her supervisor again before walking off the job permanently. Therefore, this is a particularly instructive case for human resources professionals.

According to the Court's opinion, the plaintiff worked on an assembly line. She attended an employee orientation which covered the employer's sexual harassment policy twice, and was informed that all sexual harassment complaints would be investigated within two weeks and that the investigation would be kept confidential. Nonetheless, in that same first week, she was harassed verbally by a number of co-workers and within two more weeks the harassment escalated to inappropriate touching which put her in tears. When she reported the harassment to the lead lineperson and her supervisor – giving names and examples of the offending the conduct, she was advised not to take it personally because they're like that to all women and it was because she was "hot." When they saw she was not amused, they said they would look into it, asked her not to report this to HR and then later offered her a transfer to a different location. While the plaintiff thought that her supervisor would report this to HR, instead he just watched out for her for a few days. Nonetheless, the harassment continued for the next two weeks, escalated to groping and she stopped going to work after being followed out to the parking lot by the alleged harassers because she feared getting raped. The employer notified her that it was treating her absence as job abandonment and fired her.

The employer refused to give her the last paycheck until she completed an exit interview. At that point, she met with her first HR employee for 45 minutes and recounted in detail how she had been harassed, how she had reported it to her supervisor and how it had continued even after he transferred her to another location. He promised that an investigation would be conducted within two weeks in accordance with company policy. However, instead of specifically alerting someone or investigating it himself, the HR employee passed on his notes (on the exit interview form) to the inbox of an HR clerk and the form was never seen again. Yet another employee quit because of sexual harassment shortly thereafter and, again, no investigation was conducted.

More than a month later, the plaintiff filed a Charge with the EEOC and the employer received it a few weeks later. At that point, an investigation commenced and a search of over 2300 files was made to find the missing exit interview form. When the form could not be found, a cursory investigation was conducted, but it did not include the HR employee who conducted plaintiff's exit interview, or the offending employees. The employer told the EEOC that it had conducted an investigation after the plaintiff's exit interview, that her complaints to her supervisor had been nonspecific and that she asked him not to report it to HR. Apparently, however, the employer disciplined a number of employees for not reporting the plaintiff's concerns to HR, but not the HR employee who conducted her exit interview.

Most of these facts did not come out, however, until litigation commenced at the end of the year and the employees and supervisors testified under oath. The Court refused to exclude evidence of the employer's post-termination investigation on the grounds that it showed how the employer failed to take prompt remedial action and had shown manifest indifference to her concerns (which was relevant to punitive damages). It also instructed the jury that it was permitted to conclude that the employer "lost" the exit interview notes because the information was favorable to the plaintiff. The jury found in favor of the plaintiff and the trial court agreed during post-trial motions.

The Supervisor's Response to the Plaintiff's Complaint Was Ineffective and He Was at Fault for Not Confirming with Her that the Harassment Had Stopped.

The Court of Appeals affirmed because "[v]iewing the evidence in the light most favorable to [the plaintiff], the jury reasonably could have found that [the employer] knew or should have known of the harassment and that [the employer's] response reflected an attitude of permissiveness." In addition,

a reasonable jury could have concluded from the evidence that [her supervisor] failed to take a number of steps that would clearly be necessary to establish a base level of reasonably appropriate corrective action under the circumstances, such as speaking with the specific individuals identified by [the plaintiff], following up with [the plaintiff] regarding whether the harassment was continuing, and reporting the harassment to others in management. [The supervisor's] failure to do these things at any time supports the conclusion that his response was neither prompt nor appropriate.

The Court had little sympathy for the supervisor when he testified that he thought the harassment had stopped because the plaintiff never complained to him again because she could have relied on his promise to "take care of it." This finding alone should trouble employers because other court decisions have protected employers from continuing harassment claims when the plaintiff failed to notify the employer that the initial remedial actions were insufficient. This case puts the burden on the employer to check back with the complaining employee to ensure that the remedial actions were effective.

The Court also rejected the employer's contention that it could not be held liable for the harassment because it did not have knowledge of it. As the court noted: "In the context of sexual harassment claims, actual notice is established by proof that management knew of the harassment." Thus, when the plaintiff told her supervisor, who had authority to receive sexual harassment complaints and to conduct an investigation, the employer was put on notice as well. To the extent that the employer's ignorance was based on the plaintiff's failure to complain a second time to her supervisor about the continuation of the harassment, "management's ignorance was the result of [the employer's] failure to respond appropriately to the original complaint by, for example, investigating the complaint, speaking to the harassers, or checking back with [the plaintiff], and such failure cannot be used as a shield against a claim of sexual harassment."

The Loss of a Key Piece of Evidence Can Be Held Against an Employer.

The Court also found that it was appropriate to instruct the jury that if it:

believe[s] that the [exit interview] notes are missing as the result of the unjustified or careless actions or inactions of [the employer], or any of its agents, then you may, but are not required to, draw an inference that the missing evidence would be favorable to the Plaintiff and adverse to the Defendant.

The Court also rejected the employer's argument that it was an abuse of trial court discretion to permit evidence about the plaintiff's complaint during her exit interview and the employer's post-termination investigation because it was not relevant to her constructive discharge claim and would confuse the jury about when liability attached for the sexual harassment. However, such evidence was relevant to the plaintiff's claim for punitive damages because the employer's post-termination conduct was relevant to its good faith in responding to her complaint. Moreover, considering the significant amount of other evidence about the employer's indifference and the existence of sexual harassment, the prejudicial affect on the jury was found to be minimal.

The Plaintiff's Constructive Discharge Was Foreseeable and Caused by the Employer's Indifference.

The Court also rejected the employer's attack on the plaintiff's constructive discharge claim:

A claim of constructive discharge requires a determination that "working conditions would have been so difficult or unpleasant that a reasonable person in the employee's shoes would have felt compelled to resign." Held v. Gulf Oil Co., 684 F.2d 427, 432 (6th Cir. 1982). "To determine if there is a constructive discharge, both the employer's intent and the employee's objective feelings must be examined." Logan v. Denny's Inc., 259 F.3d 558, 569 (6th Cir. 2001). An employer's intent can be shown if the employee quitting is a foreseeable consequence of the employer's actions. An employee who quits has "an obligation not to assume the worst, and not to jump to conclusions too fast."

In this case, because there was evidence that the employer tolerated "badgering, harassment, or humiliation" in that at least the plaintiff's supervisor was aware of the alleged harassment and failed to adequately address them. "The jury could have reasonably found that this evidenced a deliberate choice to allow intolerable working conditions." Moreover, the Court found it was foreseeable – even likely that the plaintiff would resign under the circumstances.

It is foreseeable that, after weeks of continuous physical and verbal harassment that goes unaddressed, an employee in [the plaintiff's] position would choose to resign. Further, it cannot be said that [she] "assumed the worst" or "jumped to conclusions." She waited beyond the two-week period from her initial complaint to [her supervisor] within which [the employer's] policy assured her an investigation would be completed, and an employee subject to continuous verbal and physical harassment is not "jumping to conclusions" when she resigns under those conditions.

Punitive Damages Were Appropriate.

Finally, the Court found that punitive damages were appropriate in light of the employer's reckless disregard for the plaintiff's civil rights. She could show that her supervisor and the HR manager who conducted her exit interview acted in the risk of violating her civil rights by not reporting her harassment complaint to HR and not conducting an actual investigation because management training had included anti-harassment training. In addition, the jury could believe that the employer attempted to mislead the EEOC by claiming that it had promptly conducted an investigation after her exit interview instead of waiting several weeks until it received her EEOC Charge. Finally, considering the different versions of events given at trial, the jury could also find that the employer was untruthful.

Although the employer could have avoided punitive damages by showing that it acted in good faith, this requires more than proof that a policy has been adopted. Instead, an employer must prove an effective implementation of its antiharassment policy. In this case,

[A]lthough there was evidence that [the employer] communicated its policy to its employees with some frequency, there was also substantial evidence that the policy was disregarded in its implementation and enforcement. There was evidence of widespread disregard of the policy by employees in engaging in harassment, by supervisors in not reporting to HR incidents of harassment or failing to conduct follow-up investigations, by co-workers in not reporting incidents of harassment, and by HR managers in not investigating reports of harassment. Further, the investigation, when it did take place, was, as the district court stated, "notably flawed." [The employer's] complete failure to follow through, twice, on complaints of harassment by [the plaintiff], followed by a deficient investigation in response to the EEOC's inquiry, does not fulfill "Title VII's objective of motivating employers to detect and deter Title VII violations."

Employers can learn from this decision by reminding its own staff – as well as front line management – of the importance of reporting sexual harassment concerns to HR and then promptly investigating them instead of hoping that they will just go away on their own. When even a new employee making just above minimum wage can win in excess of a million dollars after working just five weeks, it is time for production and HR supervisors to understand how important it is to report and fully investigate sexual harassment complaints.

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: Employer’s Summary Judgment Reversed Where Plaintiff Was Denied Deposition of Kmart Chairman and SVP of Finance

This morning, a divided Sixth Circuit Court of Appeals reversed summary judgment entered in favor of Sears Holding Corporation f/k/a Kmart Holding Corporation on an age discrimination claim brought by the former Senior Vice President of Sales/Division President because he had been denied the opportunity to depose the Chairman of the Board and Senior Vice President of Finance of the company about potentially ageist comments after establishing a prima facie case of age discrimination. Marsico v. Sears Holding Corporation, No. 07-2231 (6^th Cir. 3/26/10). The Court's majority found the denial of the plaintiff's motion to compel discovery to be an abuse of discretion by the trial judge because the alleged comments were equivocal and the plaintiff had shown that he had been replaced by someone who was considerably younger than him. He had been employed by Kmart for 30 years.

In particular, the Court's decision reflects that there had been deposition testimony that the new post-bankruptcy Chairman (who was 41) mentioned to the plaintiff that he had "been around here a long time" and there were some non-specified things that he did not like about store operations. He was also alleged to have said that what was "wrong with these Kmart people, that old way of thinking." Plaintiff was then demoted to a Vice President position for Super Kmart in September 2003, was replaced as SVP by and began reporting to someone who was substantially younger, and, after he make that Super Kmart more profitable than Kmart, his salary was cut. After his demotion, the president offered in November 2004 to help find him another job elsewhere. When plaintiff protested and argued that he could still help the company, the president explained that the Chairman did not "think that someone's that's been around for 30 years can fix Kmart." At the end of that month, Plaintiff was informed that his VP position was being eliminated, but the SVP felt that he could be transferred to Sears after the merger of Kmart and Sears (although the VP of HR told plaintiff he disagreed). The new SVP suggested that he look for another job because no one cared about the sacrifices and contributions he had made for the company in the past. The SVP also allegedly told him that the SVP of Finance also wanted him gone from the company. Plaintiff resigned in February 2005 because of the age discrimination he had suffered and the hostile work environment.

While agreeing that the alleged comments made by the Chairman were not necessarily indicative of discrimination, they were ambiguous enough to justify asking him to clarify and explain them in a deposition because they could indicate discriminatory intent. (The dissent noted that it was inconceivable that comments post-bankruptcy comments about the business savvy of Kmart's former officers could be construed as discriminatory as opposed to describing failed business strategies). In short:

It was through the discovery already conducted that Plaintiff obtained the evidence represented by
witnesses' comments, and given the substance of the comments, there is enough evidence of discriminatory intent such that additional discovery should have been permitted. No one but Lampert and Crowley can testify as to whether the comments cited by Marsico were motivated by age discrimination as indicated by the context and circumstances in which the comments were made. Plaintiff should have been allowed to elicit such testimony and use it in responding to Defendant's motion for summary judgment. Accordingly, we conclude that the district court abused its discretion in denying Plaintiff's motion to compel the depositions and hold that Marsico may depose both Lampert and Crowley.

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: ADA Applies to Teachers in Church Sponsored Schools.

[Editor's Note: The Supreme Court heard oral arguments on this case on October 5, 2011].

This morning, the Sixth Circuit reversed a judgment which had been entered in favor of a Lutheran church and its elementary school on an ADA discrimination claim brought by a former teacher. EEOC v. Hosanna-Tabor Evangelical Lutheran Church and School, No. 09-1134 (6th Cir. 3/10/10). The District Court had granted the School summary judgment on the retaliation claim on the grounds that the teacher fell within the ministerial exception to the ADA and he would not inquire into why she had been fired. The Sixth Circuit reversed on the grounds that the primary duties of teacher showed that she was not a ministerial employee.

According to the Court’s opinion, the teacher spent about 45 minutes of each class day in religious activities with her students. After she developed narcolepsy and took an approximately 7-month leave of absence, the School refused to reinstate her in part because of a concern for the safety of her students and because it had already made arrangements with a substitute teacher. Indeed, it decided on its own that she was physically unable to return and offered to pay a portion of her medical insurance for the next ten months if she resigned even though her doctor had released her to return to work without restrictions. Because she appeared for work the day after her physician released her and made clear that she would sue the School after she was told that she would likely be fired, the School indicated that she would be terminated for being disruptive and insubordinate and that she had damaged her relationship beyond repair by threatening to sue the School. When her attorney explained how the School’s actions violated the ADA and that she would file a Charge with the EEOC if the matter were not resolved, the School fired her. Two years later, the EEOC filed suit on her behalf against the School.

The ministerial exception permits “preference in employment to individuals of a particular religion” and to “require that all applicants and employees conform to the religious tenants of such organization.” 42 U.S.C. § 12113(d). However, although based on the First Amendment, this exception is very narrow and is not meant to obviate the ADA. According to legislative history, “However, a religious organization may not discriminate against an individual who satisfies the permitted religious criteria because that individual is disabled. The religious entity, in other words, is required to consider qualified individuals with disabilities who satisfy the permitted religious criteria on an equal basis with qualified individuals without disabilities who similarly satisfy the religious criteria.”

“The question of whether a teacher at a sectarian school classifies as a ministerial employee is one of first impression for this Court. However, the overwhelming majority of courts that have considered the issue have held that parochial school teachers such as Perich, who teach primarily secular subjects, do not classify as ministerial employees for purposes of the exception.” In general, “an employee is considered a minister if “the employee’s primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship.” In this case, the teacher’s “employment duties were identical when she was a contract teacher and a “called” teacher and that she taught math, language arts, social studies, science, gym, art, and music using secular textbooks.” Her duties were also virtually identical to those of the teachers who were not entitled ministers. That she teaches at a religious school does not necessarily convert a teacher to a ministerial employee. That the School “has a generally religious character–as do all religious schools by definition–and characterizes its staff members as “fine Christian role models” does not transform [her] primary responsibilities in the classroom into religious activities.”

Similarly, it did not matter that she had specialized religious training and a religious title. “The governing primary duties analysis requires a court to objectively examine an employee’s actual job function, not her title, in determining whether she is properly classified as a minister. In this case, it is clear from the record that Perich’s primary duties were secular, not only because she spent the overwhelming majority of her day teaching secular subjects using secular textbooks, but also because nothing in the record indicates that the Lutheran church relied on Perich as the primary means to indoctrinate its faithful into its theology.”

While the Court did not want to intrude on church theology, it noted that the School’s employee manual included an EEO policy and that the focus of the court would be on the plaintiff’s disability and whether the School violated the ADA, not church theology (except as whether church theology was a genuine defense). In this case, however, the School did not identify church doctrine as a reason for firing the teacher in her termination letter.

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: “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.