Sixth Circuit Finds Production of Irrelevant Confidential Documents During Discovery Is Not Protected Participation or Opposition Under Title VII

On Tuesday, the Sixth Circuit decided “the scope of protection that should be afforded to employees who disseminate confidential documents in violation of their employer’s privacy policy in the context of employment-related litigation.” In that case, the plaintiff had been fired after providing documents with confidential client information to the attorneys who were prosecuting a class action pay discrimination lawsuit on the behalf of her and other female employees. The Sixth Circuit held that her conduct was not protected by federal law and, therefore, the employer was permitted to discharge her for violating its confidentiality policy. Niswander v. The Cincinnati Ins. Co., No. 07-3738 (6th Cir. 6/24/08).

In Niswander, the plaintiff joined a class action pay discrimination lawsuit against her employer in 2003. She was a claims adjuster who worked from her home. She later came to believe that her employer retaliated against her for participating in that lawsuit, informed the human resources department in 2004 and filed an EEOC Charge the following year. She also informed the class action attorneys of her perceived retaliation and they indicated that they were interested in pursuing a claim on her behalf. When, in connection with the pre-trial discovery process, her attorneys asked her to provide copies of any documents “related to her employment” and “any documents you think might be even remotely helpful to our case,” she complied with their request so that they would not suffer sanctions from the court for failing to comply with the discovery process. Importantly, no lawsuit had been filed on her behalf allegation unlawful retaliation against her.

The plaintiff “admitted in her deposition that she had “no documents to support an equal pay [claim].” Instead, she sent documents that she believed were relevant to” the employer’s “alleged acts of retaliation against her. Some of the documents that Niswander sent were copies of e-mails back and forth with her supervisors related to her job performance. Other documents, however, were claim-file documents that allegedly would jog her memory regarding instances of retaliation, but that did not in and of themselves contain evidence of retaliation. In sending the documents to her lawyers, some of which included information about” her employer’s clients, the plaintiff “thought everything was confidential” and that “anything [she] produced was all between” her and the company’s attorneys. However, when her employer received copies of the confidential documents which she had given to her attorneys (to give back to her employer), it terminated her for violating its confidentiality policy.

Title VII prohibits employers from “discriminat[ing] against any of his employees . . .
because [the employee] has opposed any practice made an unlawful employment practice by [Title VII] [the so-called “opposition clause”], or because [the employee] has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under [Title VII] [the so-called “participation clause”]. 42 U.S.C. § 2000e-3(a).” In order to state a prima facie case of retaliation under Title VII, a plaintiff must show that (1) she engaged in protected activity (i.e., opposition or participation), (2) the employer knew of the employee’s protected activity, (3) the employee later suffered from an adverse employment action, and (4) there was a causal connection between the protected activity and the adverse employment action. Morris v. Oldham County Fiscal Ct., 201 F.3d 784, 792 (6th Cir. 2000). In Burlington Northern & Santa Fe Railway Co. v. White, 126 S. Ct. 2405 (2006), the Supreme Court held that “the scope of Title VII’s retaliation provision is broader than that of Title VII’s discrimination provision.”

In Niswander, the court was required to decide whether the plaintiff’s provision of the confidential records to her attorneys constituted protected participation or opposition. “’The distinction between employee activities protected by the participation clause and those protected by the opposition clause is significant because federal courts have generally granted less protection for opposition than for participation in enforcement proceedings.’ Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1312 (6th Cir. 1989). With respect to the participation clause, we have recognized that the clause’s ‘exceptionally broad protections . . . extend[] to persons who have participated in any manner in Title VII proceedings. ‘Johnson v. Univ. of Cincinnati, 215 F.3d 561, 582 (6th Cir. 2000) (citation and internal quotation marks omitted). “[O]nce the activity in question is found to be within the scope of the participation clause, the employee is generally protected from retaliation.”

“’The opposition clause, on the other hand, covers conduct such as “complaining to anyone (management, unions, other employees, or newspapers) about allegedly unlawful practices; refusing to obey an order because the worker thinks it is unlawful under Title VII; and opposing unlawful acts by persons other than the employer—e.g., former employers, union, and co-workers.’ Johnson, 215 F.3d at 579. We have explained that ‘the only qualification that is placed upon an employee’s invocation of protection from retaliation under Title VII’s opposition clause is that the manner of [the employee’s] opposition must be reasonable.”

The court then held that the production of the confidential documents to her attorneys did not constitute protected participation because the documents were admittedly not relevant in any way to the pay discrimination claims being asserted in the pending lawsuit. “An individual’s delivery of relevant documents during the discovery process or the giving of testimony at a deposition clearly falls within the ambit of participating ‘in any manner’ in a Title VII proceeding. Hashimoto v. Dalton, 118 F.3d 671, 680 (9th Cir. 1997) (explaining that the purpose of the participation clause ‘is to protect the employee who utilizes the tools provided by Congress to protect his rights’).” However, to find that the plaintiff’s actions in this case constituted protected participation in the pay discrimination lawsuit, “would provide employees with near-immunity for their actions in connection with antidiscrimination lawsuits, protecting them from disciplinary action even when they knowingly provide irrelevant, confidential information solely to jog their memory regarding instances of alleged retaliation.”

Whether the plaintiff’s conduct constitutes protected opposition conduct depends upon a balancing of her interests with that of her employer. “A balance must be achieved between the employer’s recognized, legitimate need to maintain an orderly workplace and to protect confidential business and client information, and the equally compelling need of employees to be properly safeguarded against retaliatory actions. Allowing too much protection to employees for disclosing confidential information may perversely incentivize behavior that ought not be tolerated in the workplace—namely, the surreptitious theft of confidential documents as potential future ammunition should the employee eventually feel wronged by her employer. On the other hand, inadequate protection to employees might provide employers with a legally sanctioned reason to terminate an employee in retaliation for engaging in activity that Title VII and related statutes are designed to protect.”

Prior decisions had indicated that employees did not have the right to search their employer’s confidential personnel and other files in order to obtain documents in support of their discrimination claims. In another case, the court permitted an employee to provide his attorney with documents which he “innocently” obtained because they were on the hard drive of computer assigned to him by his employer.

“Based on the analysis applied by the courts in the cases discussed above, we believe that the following factors are relevant in determining whether Niswander’s delivery of the confidential documents in question was reasonable: (1) how the documents were obtained, (2) to whom the documents were produced, (3) the content of the documents, both in terms of the need to keep the information confidential and its relevance to the employee’s claim of unlawful conduct, (4) why the documents were produced, including whether the production was in direct response to a discovery request, (5) the scope of the employer’s privacy policy, and (6) the ability of the employee to preserve the evidence in a manner that does not violate the employer’s privacy policy. These factors are designed to take into account the employer’s ‘legitimate and substantial interest in keeping its personnel records and agency documents confidential’ and yet protect the employee’s alleged ‘need for surreptitious copying and dissemination of the documents.’”

In this case, the plaintiff “could have preserved the alleged evidence of retaliation in other ways; in particular, she could have taken notes of the incidents that she believed demonstrated retaliation instead of delivering documents that contained confidential policyholder information. Producing confidential documents for the sole purpose of jogging one’s memory, when there are readily available alternatives to accomplish the same goal, does not constitute the kind of reasonable opposition activity that justifies violating a company’s privacy policy.”

“Although employees deserve protection when they make reasonable attempts to preserve evidence of illegal employment practices, including discrimination and retaliation, ‘we are loathe [sic] to provide employees an incentive to rifle through confidential files looking for evidence that might come in handy in later litigation.’ O’Day, 79 F.3d at 763. To hold in favor of Niswander would turn the opposition clause into ‘a license to flaunt [sic] company rules or an invitation to dishonest behavior.’ Id. at 764. So even after viewing the evidence in the light most favorable to Niswander, we conclude that her production of the documents was not reasonable under the six factor test set forth above.”

“The only factors that arguably weigh in Niswander’s favor are factors one and two, but even those do not weigh heavily in her favor. Although she had access to the documents through her employment, Niswander did not innocently acquire the documents in the same manner as the plaintiff in Kempcke, who came across evidence of potential age discrimination in a company computer that had been issued to him. See Kempcke, 132 F.3d at 445. Rather than innocently stumbling upon evidence of illegal employment practices, Niswander specifically searched through the CIC documents that she had at her home office for the purpose of uncovering evidence of retaliation. Such behavior cannot be classified as truly innocent acquisition.”

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/08a0221p-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.

IRS Increases Mileage Rates to $.585/mile Effective July 1, 2008

On Monday, the Internal Revenue Service “announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70. . . . The new six-month rate for computing deductible medical or moving expenses will also increase by eight (8) cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile. . . . The new rates are contained in Announcement 2008-63 on the optional standard mileage rates. Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Insomniacs can read the full IRS press release at http://www.irs.gov/newsroom/article/0,,id=184163,00.html.

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.

Supreme Court: Employer Bears Burden of Proving Disparate Impact of Facially Neutral Factors Was Based on a Reasonable Factor Other Than Age

On June 19, 2008, the Supreme Court held that the employer bears the both the burden of production and the burden of persuasion in raising as an affirmative defense to an ADEA disparate impact claim that its decision was based on a reasonable factor other than age (RFOA). Meacham v. Knolls Atomic Power Lab., No. 06-1505. In Meacham, the employer conducted a reduction in force (after more than 100 employees accepted voluntary buyouts) in which 30 of the 31 involuntarily reduced positions were held by an employee over the age of 40. Managers had been instructed to evaluate their staffs by four factors: years of service, "performance," "flexibility," and "critical skills." Twenty-eight of the involuntarily reduced employees sued, raising both disparate-treatment (i.e., intent) and disparate-impact (i.e., result) claims under the ADEA and state law, alleging that the defendant employer "designed and implemented its workforce reduction process to eliminate older employees and that, regardless of intent, the process had a discriminatory impact on ADEA-protected employees." In the ensuring class action, the plaintiffs’ expert opined “that results so skewed according to age could rarely occur by chance;4 and that the scores for "flexibility" and "criticality," over which managers had the most discretionary judgment, had the firmest statistical ties to the outcomes.”

In construing the ADEA statute, the Court recognized that the RFOA defense was listed along another affirmative defense for bona fide occupational qualification. The employer has always held the burden of proof and persuasion for the BFOQ defense. Similarly, under the FLSA and EPA, the employer has born the burden of proof and persuasion on the “reasonable factor other than sex” affirmative defense. While it might seem reasonable to assume a different interpretation of the burden in a disparate treatment case – since age is a factor in the prima facie case – and the RFOA defense seems superfluous, in the disparate treatment case (where age discrimination exists in fact when the unlawful treatment is not based on age), the RFOA defense is particularly applicable:

“[I]n the typical disparate-impact case, the employer's practice is "without respect to age" and its adverse impact (though "because of age") is "attributable to a nonage factor"; so action based on a "factor other than age" is the very premise for disparate-impact liability in the first place, not a negation of it or a defense to it. The RFOA defense in a disparate-impact case, then, is not focused on the asserted fact that a non-age factor was at work; we assume it was. The focus of the defense is that the factor relied upon was a "reasonable" one for the employer to be using. Reasonableness is a justification categorically distinct from the factual condition "because of age" and not necessarily correlated with it in any particular way: a reasonable factor may lean more heavily on older workers, as against younger ones, and an unreasonable factor might do just the opposite.”

“Here is what is so strange: as the Government says, "[i]f disparate-impact plaintiffs have already established that a challenged practice is a pretext for intentional age discrimination, it makes little sense then to ask whether the discriminatory practice is based on reasonable factors other than age." Brief for United States as Amicus Curiae 26 (emphasis in original). Conversely, proving the reasonableness defense would eliminate much of the point a plaintiff would have had for showing alternatives in the first place: why make the effort to show alternative practices with a less discriminatory effect (and besides, how would that prove pretext?), when everyone knows that the choice of a practice relying on a "reasonable" non-age factor is good enough to avoid liability?14 At the very least, developing the reasonableness defense would be substantially redundant with the direct contest over the force of the business justification, especially when both enquiries deal with the same, narrowly specified practice. It is not very fair to take the remark about Wards Cove in City of Jackson as requiring such a wasteful and confusing structure of proof.”

Regardless of the strangeness of the result, the Court reiterated that the plaintiff still bears the burden of producing enough evidence to show that age discrimination has resulted from a specific employment practice which is responsible for statistical disparities against older workers. In the final analysis, the Court acknowledges that “there is no denying that putting employers to the work of persuading factfinders that their choices are reasonable makes it harder and costlier to defend than if employers merely bore the burden of production; nor do we doubt that this will sometimes affect the way employers do business with their employees.” Moreover, “as the outcome for the employer in City of Jackson shows, "it is not surprising that certain employment criteria that are routinely used may be reasonable despite their adverse impact on older workers as a group."

Insomniacs can read the full decision at http://www.supremecourtus.gov/opinions/07pdf/06-1505.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.

Supreme Court Upholds Less Deferential Standard of ERISA Review Against TPA Insurance Company.

On June 19, 2008, the Supreme Court affirmed the Sixth Circuit Court of Appeals in Metropolitan Life Ins. Co. v. Glenn, No.. 06-923. In that case, Sears purchased long-term disability insurance from MetLife and appointed MetLife as the Third Party Administrator of the LTD claims of Sears’ employees. Sears’ LTD Plan also gave MetLife discretionary authority to determine employees’ eligibility for benefits. When the plaintiff applied for LTD, MetLife initially granted her application for 24 months of benefits. However, after encouraging her to apply for SSI benefits (which she obtained), it then determined that she was ineligible for extended benefits in that one of the medial reports submitted indicated that she was capable of performing sedentary work.

The Supreme Court had previously noted in Firestone Tire & Rubber Co. v. Bruch, 489 U. S. 101, the proper judicial standard of review for ERISA benefit claims under §1132(a)(1)(B). First, courts should be "guided by principles of trust law," analogizing a plan administrator to a trustee and considering a benefit determination a fiduciary act. Next, the principles of trust law require that de novo review be utilized unless the terms of a benefits plan provide otherwise. Finally, if the terms of the benefit plan grant the administrator or fiduciary discretionary to determine the participant’s eligibility for benefits, the court should utilize a deferential standard of review as appropriate. However, if the administrator or fiduciary with such discretion "is operating under a conflict of interest, that conflict must be weighed as a 'facto[r] in determining whether there is an abuse of discretion.’”

In Glenn, the Court determined that this analysis from Firestone applied equally to an insurance company acting as both the insurer and the TPA and not just an employer who acts as both the fiduciary evaluating the claims and the employer which funds the benefits. That "[e]very dollar provided in benefits is a dollar spent by ... the employer; and every dollar saved ... is a dollar in [the employer's] pocket" is equally applicable to this situation. Nonetheless, the Court reiterated that the TPA was still entitled to a deferential standard of review pursuant to the terms of the LTD plan, but that – in light of the conflict of interest inherent in an insurance company deciding for itself whether to award benefits out of its own accounts -- the reviewing court was permitted to consider a number of factors, including ”(1) the conflict of interest; (2) MetLife's failure to reconcile its own conclusion that Glenn could work in other jobs with the Social Security Administration's conclusion that she could not; (3) MetLife's focus upon one treating physician report suggesting that Glenn could work in other jobs at the expense of other, more detailed treating physician reports indicating that she could not; (4) MetLife's failure to provide all of the treating physician reports to its own hired experts; and (5) MetLife's failure to take account of evidence indicating that stress aggravated Glenn's condition.”

Insomniacs can read the full decision at http://www.supremecourtus.gov/opinions/07pdf/06-923.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.

Ohio Appeals Court: Employee’s Speculation Does Not Convert a Lateral Transfer Into a Constructive Discharge.

Late last month, Montgomery County Court of Appeals affirmed the dismissal of wrongful, constructive discharge claim against an employer which arose out of the plaintiff’s transfer to a similar job at a location 15 miles from his former job. Lookabaugh v. Spears, 2008-Ohio-1610. The court also dismissed defamation claims against the employer’s customer whose complaints about the plaintiff motivated his transfer because the customer had a qualified privilege to complain. Although the plaintiff speculated that the new job would not be reliable and prevented him from regularly checking on his ill wife during lunch, the court noted that a "[p]art of an employee's obligation to be reasonable is an obligation not to assume the worst, and not to jump to conclusions." Farris v. Port Clinton Sch. Dist., 2006-Ohio-1864, ¶64. Moreover, a lateral ‘transfer without a change in benefits, salary, title, or work hours is usually not an adverse employment action. Policastro v. Northwest Airlines, Inc.,” 297 F.3d 535, 539 (6th Cir 2002).

The plaintiff accepted the job in part in order to obtain health insurance because his wife had been ill. Although the job regularly required him to travel, he could often check on his wife during his lunch break. After a customer (who had long-standing conflicts with the plaintiff) complained and threatened to move his business if the plaintiff continued to work there, the employer transferred the plaintiff to the same job 15 miles away. The plaintiff rejected the transfer. After filing suit, the plaintiff claimed that the transfer was an adverse job action which forced him to resign because (1) there had not been a job previously available at the new location (i.e., it was a “ghost job” which had been created for him as a pretext), (2) the offered job was not comparable, and (3) his was no longer the decision-maker regarding his employment.

As noted by the court, an adverse employment action generally “occurs when it results in a material change in wage or salary, a less distinguished title, a material loss in benefits, significantly diminished material responsibilities, or other indices that might be unique to the particular situation. Hollins v. Atlantic Co., 188 F.3d 652, 662 (6th Cir. 1999). A significant increase in the employee's commute may be a factor in whether a transfer is an adverse employment action. Keeton, 429 F.3d at 264-65 . . . . In determining whether the transfer is an adverse employment action, courts generally employ an objective test. See Mauzy, 75 Ohio St.3d at 588-89; Policastro, 297 F.3d at 539, citing Kocsis v. Multi-Care Mgmt., Inc., 97 F.3d 876, 886 (6th Cir. 1996). An employee's subjective belief that one position is more desirable is irrelevant to whether the transfer is an adverse employment action. E.g., Policastro, 297 F.3d at 539; Tessmer v. Nationwide Life Ins. Co.,” Franklin App. No. 98AP-1278 (9/30/99).
The court rejected the plaintiff’s argument that the transferred job was not comparable. Although the plaintiff complained about the employee turnover rate at the new location, the seasonal downturns in working hours, and the new manager’s temper, the plaintiff “assumed that he would be fired from” the new location. The plaintiff “cannot base a constructive discharge claim based on an unsubstantiated assumption that his worst fears would come true. ‘Part of an employee's obligation to be reasonable is an obligation not to assume the worst, and not to jump to conclusions.’" Farris v. Port Clinton Sch. Dist., 2006-Ohio-1864, ¶64.

The fact that the plaintiff” would no longer be able to visit his wife during lunchtime does not render the position at [the new location] incomparable to the [former] position. Although [the plaintiff] benefitted from living close to the [former] facility by being able to check on his wife at lunchtime, that benefit was a subjective reason for [the plaintiff] preferring the [former] position. However, being able to go home at lunchtime was not a benefit of employment offered by Landmark to its employees. [The plaintiff] was not promised that he could go home at lunchtime, and he indicated that he did not go home every day because he was not always in the area during lunchtime. His position with Landmark . . . . . required him to travel to customers' properties throughout the day. Although [the plaintiff] would have preferred to work at the facility within a mile of his home, the addition of a ten to fifteen mile commute did not constitute a material change in the terms of his employment.”

Because there was no evidence that the plaintiff had been constructively discharged, he also could not prevail on his claim that his "discharge" had violated public policy.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/2/2008/2008-ohio-1610.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.