Sixth Circuit: USERRA Claims Subject to Arbitration Clause in Employment Agreement.

Today, the Sixth Circuit held that an optometrist’s claims that he was discriminated against in violation of USERRA was subject to the arbitration clause he signed when he was hired. In Landis v. Pinnacle Eye Care LLC, 07-6204 (6th Cir.), when the plaintiff optometrist signed his employment agreement upon being hired in 1995, it contained an arbitration clause where he promised “to ‘resolve any controversy, dispute or disagreement arising out of or relating to [the] Agreement’ through negotiation or, if negotiation proved unsuccessful, through arbitration governed by the American Arbitration Association.” He claims that he negotiated revised terms of employment in 2004 when he was called up by the National Guard to serve in Afghanistan. However, when he returned to work in 2005, the defendant employer refused to honor the alleged modified terms of employment and allegedly “threatened that any further
involvement with the military would adversely affect his career.”

When the plaintiff optometrist filed suit over the breach of the modified agreement and threats about his military career, the district court stayed the action on account of the arbitration clause in his employment agreement and referred the entire matter (including the claims against the individual defendants) to arbitration. The Sixth Circuit agreed because the plaintiff’s claims “fall within the scope of the employment agreement since Article VIII, Section 8.7 of the agreement states that ‘[t]his Agreement constitutes the entire agreement between Practice and Optometrist pertaining to the employment relationship between Practice and Optometrist.’ Therefore, any termination or modification of employment necessarily relates to ‘the employment relationship’ and is subject to the arbitration clause.” Moreover, the claims against the individual defendants (who were not parties to the employment agreement) “were subject to the arbitration clause of the employment agreement. These parties were employers within the meaning of USERRA, 38 U.S.C. § 4303(4)(A), and the claims against them arose in their capacities as managers” of the employer’s offices. Finally, although a few district courts in other jurisdictions disagreed, the Sixth Circuit found that there was nothing in the statutory language of USERRA or its history to indicate that it was not subject to the Federal Arbitration Act to the same extent as Title VII, the ADEA and other federal employment statutes.

Insomniacs can read the full decision at http://www.ca6.uscourts.gov/opinions.pdf/08a0285p-06.pdf.

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

Franklin County Court of Appeals Upholds Termination of County Employee For Inappropriate Conduct at Reynoldsburg Tomato Festival.

In July, the Franklin County Court of Appeals affirmed the termination of a county employee for engaging in distasteful and inappropriate behavior towards, and mistreatment of, members of the public while representing the county at the Reynoldsburg Tomato Festival. Maurer v. Franklin County Treasurer, 2008-Ohio-3468 (7/10/08). In particular, evidence showed that, while he had been assigned to staff the county office’s fair booth, he sat in the chairs of the adjacent church booth, played with the children’s toys and then – over their protests -- wiped his hands on the skirts, thighs and calves of the two young women staffing the church booth. The women reported his conduct, which was then investigated. His termination followed a previous one-day suspension and mandatory sexual harassment training for giving a co-worker a candy valentine saying “big boobs.”

Following an investigation of his misconduct, he was informed that it was being recommended that he be terminated because "it has been alleged that you acted and spoke inappropriately and thus sexually harassed two women at the Reynoldsburg Tomato Festival." The letter further informed [the employee] that his conduct violated R.C. 124.34(A) because "it constitutes immoral conduct, discourteous treatment of the public, mistreatment of the public and sexual harassment * * *." His conduct also violated internal office policies. Indeed, “because [his] mistreatment of the public was a major offense in [the office’s] progressive discipline policy that permitted [his] immediate discharge from employment, the court concluded [his] conduct toward [the two young women[ warranted termination of his employment.”

The employee attempted to defend his behavior by arguing that it had been welcomed. In particular, he testified that the women had likewise wiped their hands off on his shorts and laughed when he, in turn, wiped his hands off on their skirts. However, the ALJ from the SPBR found his testimony to be inconsistent and, thus, not as credible as the testimony of the two women.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/10/2008/2008-ohio-3468.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: Employers Should Sometimes Leave Competing Former Employees Well Enough Alone.

In early July, the Ohio Court of Appeals in Stark County not only affirmed the trial court’s refusal to enforce the plaintiff-employer’s non-competition agreement against a competing, former employee, but the court also affirmed a significant damage award of $180,000 against the employer and in favor of the former employee on the employee’s unfair competition claim. United Studios of America v. Laman, No. 2007CA00277, 2008-Ohio-3497 (7/7/08). The basis for the employee’s successful counter-claim was that the employer only brought the non-competition lawsuit to cause the employee to incur legal fees.

In Laman, the employer operated a mobile photography studio which provided portraits at grocery stores and shopping malls, etc. in several states. Since at least 2000, the employer required all employees to sign an employment agreement which contained the following non-competition clause:

“Employee acknowledges that Company will expend considerable time, effort and expense in the training of employee and the methods used by Company; that Employee will acquire confidential and valuable knowledge and information as to Company's accounts, customers and business patrons, as well as confidential and valuable knowledge and information concerning the methods and forms developed and used by Company; and that Employee will acquire such knowledge and experience that upon leaving Company's employment for any reason, his engaging directly or indirectly, either alone or in association with any other person or firm, in the family portrait photography business will cause unfair disclosure of such valuable knowledge and information, irreparable harm and financial loss to Company."

The defendant employee signed such a clause when he was hired and he was later promoted to Vice President of the Company. Nonetheless, he eventually resigned from the plaintiff employer and formed his own photography business in Colorado. He then obtained a contract to provide portraits to customers of Safeway of Colorado. There is no discussion in the court’s opinion whether the plaintiff employer operated in Colorado or whether the employee competed against the employer in other states.

The court explains that the plaintiff employer filed suit against the former employee for breach of his non-competition agreement. The lawsuit apparently only sought monetary damages and did not seek equitable relief. When the employee failed to respond to the complaint, the employer moved for default judgment. However, on the same date, the employee requested and later obtained permission to not only file an answer to the complaint, but to file counter claims against the plaintiff employer for, among other things, unfair competition. The trial court granted summary judgment to the employee on the non-competition claims and on his counterclaims. Following a damages hearing, the court awarded damages to the employee in the amount of $180,260.39, including $116,468 in punitive damages and $58,234 in attorney fees.

The employer argued on appeal that the trial court erred in dismissing its non-competition claim on the grounds that the employer failed to prove that it suffered any damage from the breach of the non-competition clause. After all, according to the employer, the contract itself acknowledged that the employer would suffer harm from any breach of the non-competition provision. The court was unmoved:

“A contractual provision acknowledging harm will occur in the event of a breach, without more, is insufficient to withstand summary judgment. Where, as here, a party makes a claim for money damages, the party must demonstrate actual damages. [The employer] filed the within action alleging claims for breach of contract, breach of fiduciary duty, breach of Ohio Trade Secrets Act and intentional interference with contractual relationships. [The employee] moved the trial court for summary judgment on all of the above claims alleged in the complaint, and for summary judgment as to its counterclaim for unfair competition. [The employee’s] motion for summary judgment raises the issue that [the employer’s] claims must fail because Appellant has no evidence demonstrating damage or injury resulting from [the employee’s] actions. In response, [the employer] merely cites the contract provision stipulating damage to[the employer]. The contract did not include a provision for liquidated damages. While the contract provision stipulating to damages and irreparable harm may well provide grounds for an equitable injunction, we find [the employer’s] claims require proof of actual damages, and [the employer] failed to meet the burden.”

In contrast, the court affirmed the employee’s damage award because the employee “presented admissible evidence establishing [the employer’s] motives in filing the instant action were to cause [the employee] to incur legal fees and costs. Accordingly, the trial court properly granted summary judgment in favor of” the employee on his counterclaim for unfair competition against the plaintiff employer.

Insomniacs can read the court’s decision in full at http://www.sconet.state.oh.us/rod/docs/pdf/5/2008/2008-ohio-3497.pdf.

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

EEOC Issues New Guidance on Religious Discrimination and Accommodation in the Workplace.

Noting that the number of religious discrimination charges had more than doubled between 1992 and 2007, yesterday the EEOC issued new compliance guidance to employers about workplace discrimination on the basis of religion. This new guidance involved a new section for the EEOC compliance manual, a Q&A for employers of common issues and a manual of best practices. Among other things, the guidance addresses an employer’s options when an employee proselytizes at work and/or objects to performing a job duty – such as providing birth control – because of religious beliefs. It also addresses potential First Amendment concerns and what constitutes "undue hardship" for purposes of denying a requested accommodation.

“Title VII protects all aspects of religious observance and practice as well as belief and defines religion very broadly for purposes of determining what the law covers. . . . Religion includes not only traditional religions like “Christianity, Judaism, Islam, Hinduism, and Buddhism, but also religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or that seem illogical or unreasonable to others. An employee’s belief or practice can be “religious” under Title VII even if the employee is affiliated with a religious group that does not espouse or recognize that individual’s belief or practice, or if few – or no – other people adhere to it. Title VII’s protections also extend to those who are discriminated against or need accommodation because they profess no religious beliefs. Religious beliefs include theistic beliefs (i.e. those that include a belief in God) as well as non-theistic “moral or ethical beliefs as to what is right and wrong which are sincerely held with the strength of traditional religious views.” Some courts have held that Title VII also protect members of the wiccan faith. Nonetheless, “mere personal preferences are not religious beliefs.”

“The prohibition against disparate treatment based on religion also applies to disparate treatment of religious expression in the workplace. For example, if an employer allowed one secretary to display a Bible on her desk at work while telling another secretary in the same workplace to put the Quran on his desk out of view because co-workers “will think you are making a political statement, and with everything going on in the world right now we don’t need that around here,” this would be differential treatment in violation of Title VII.”

Once an employer is on notice that a religious accommodation is needed, Title VII requires the employer “to reasonably accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an undue hardship. Under Title VII, the undue hardship defense to providing religious accommodation requires a showing that the proposed accommodation in a particular case poses a “more than de minimis” cost or burden. Note that this is a lower standard for an employer to meet than undue hardship under the Americans with Disabilities Act (ADA) which is defined in that statute as “significant difficulty or expense.”

For instance, a “government employer may contend that granting a requested religious accommodation would pose an undue hardship because it would constitute government endorsement of religion in violation of the Establishment Clause of the First Amendment.”

“An accommodation would also pose an undue hardship if it would cause more than de minimis cost on the operation of the employer’s business. Factors relevant to undue hardship may include the type of workplace, the nature of the employee’s duties, the identifiable cost of the accommodation in relation to the size and operating costs of the employer, and the number of employees who will in fact need a particular accommodation. Costs to be considered include not only direct monetary costs but also the burden on the conduct of the employer’s business. For example, courts have found undue hardship where the accommodation diminishes efficiency in other jobs, infringes on other employees’ job rights or benefits, impairs workplace safety, or causes co-workers to carry the accommodated employee’s share of potentially hazardous or burdensome work. Whether the proposed accommodation conflicts with another law will also be considered.”

“Although religious accommodations that infringe on co-workers’ ability to perform their duties or subject co-workers to a hostile work environment will generally constitute undue hardship, general disgruntlement, resentment, or jealousy of co-workers will not. Undue hardship requires more than proof that some co-workers complained; a showing of undue hardship based on co-worker interests generally requires evidence that the accommodation would actually infringe on the rights of co-workers or cause disruption of work. If an employee’s proposed accommodation would pose an undue hardship, the employer should explore alternative accommodations."

“Title VII requires employers to accommodate only those religious beliefs that are religious and “sincerely held,” and that can be accommodated without an undue hardship. Although there is usually no reason to question whether the practice at issue is religious or sincerely held, if the employer has a bona fide doubt about the basis for the accommodation request, it is entitled to make a limited inquiry into the facts and circumstances of the employee’s claim that the belief or practice at issue is religious and sincerely held, and gives rise to the need for the accommodation. Factors that – either alone or in combination – might undermine an employee’s assertion that he sincerely holds the religious belief at issue include: whether the employee has behaved in a manner markedly inconsistent with the professed belief; whether the accommodation sought is a particularly desirable benefit that is likely to be sought for secular reasons; whether the timing of the request renders it suspect (e.g., it follows an earlier request by the employee for the same benefit for secular reasons); and whether the employer otherwise has reason to believe the accommodation is not sought for religious reasons. However, none of these factors is dispositive. For example, although prior inconsistent conduct is relevant to the question of sincerity, an individual’s beliefs – or degree of adherence – may change over time, and therefore an employee’s newly adopted or inconsistently observed religious practice may nevertheless be sincerely held. An employer also should not assume that an employee is insincere simply because some of his or her practices deviate from the commonly followed tenets of his or her religion.”

There are a variety of methods to provide reasonable accommodations to its employees, including: changing work schedules, permitting voluntary shift swapping, changing an employee’s job tasks or providing a lateral transfer; making an exception to dress and grooming rules to permit religious clothing or beards, etc.; permitting the use of the work facility for a religious observance (like prayers); accommodating religious objections to the payment of union dues or agency fees through donations to charities; and accommodating prayer, proselytizing, and other forms of religious expression among non-objecting co-workers.

“Some employees may seek to display religious icons or messages at their work stations. Others may seek to proselytize by engaging in one-on-one discussions regarding religious beliefs, distributing literature, or using a particular religious phrase when greeting others. Still others may seek to engage in prayer at their work stations or to use other areas of the workplace for either individual or group prayer or study. In some of these situations, an employee might request accommodation in advance to permit such religious expression. In other situations, the employer will not learn of the situation or be called upon to consider any action unless it receives complaints about the religious expression from either other employees or customers. “

According to the EEOC, “employers should not try to suppress all religious expression in the workplace. Title VII requires that employers accommodate an employee’s sincerely held religious belief in engaging in religious expression in the workplace to the extent that they can do so without undue hardship on the operation of the business. In determining whether permitting an employee to pray, proselytize, or engage in other forms of religiously oriented expression in the workplace would pose an undue hardship, relevant considerations may include the effect such expression has on co-workers, customers, or business operations.”

For example, “if an employee’s proselytizing interfered with work, the employer would not have to allow it. Similarly, if an employee complained about proselytizing by a co-worker, the employer can require that the proselytizing to the complaining employee cease. Moreover, if an employee was proselytizing an employer’s customers or clients in a manner that disrupted business, or that could be mistaken as the employer’s own message, the employer would not have to allow it. Where the religiously oriented expression is limited to use of a phrase or greeting, it is more difficult for the employer to demonstrate undue hardship. On the other hand, if the expression is in the manner of individualized, specific proselytizing, an employer is far more likely to be able to demonstrate that it would constitute an undue hardship to accommodate an employee’s religious expression, regardless of the length or nature of the business interaction. An employer can restrict religious expression where it would cause customers or co-workers reasonably to perceive the materials to express the employer’s own message, or where the item or message in question is harassing or otherwise disruptive.”

When an employee objects to a particular job duty or task (such as providing birth control or the “morning after pill” or singing “happy birthday”) on the basis of a religious belief, the employer should consider “appropriate accommodations may include relieving the employee of the task or transferring the employee to a different position or location that eliminates the conflict. Whether such accommodations pose an undue hardship will depend on factors such as the nature or importance of the duty at issue, the availability of others to perform the function, the availability of other positions, and the applicability of a CBA or seniority system. The employee should be accommodated in his or her current position if doing so does not pose an undue hardship. If no such accommodation is possible, the employer needs to consider whether lateral transfer is a possible accommodation. “ By way of example, the EEOC described the following situations:

1) “Kim, a server at a restaurant, informed her manager that she would not be able to join other waitresses in singing “Happy Birthday” to customers because she is a Jehovah’s Witness whose religious beliefs do not allow her to celebrate holidays, including birthdays. There were enough servers on duty at any given time to perform this singing without affecting service.” If the manager refuses any accommodation to Kim, she would likely prevail in a Title VII action “because the restaurant could have accommodated her with little or no expense or disruption.”

2) “Neil, a pharmacist, was hired by a large corporation that operates numerous large pharmacies at which more than one pharmacist is on duty during all hours of operation. Neil informed his employer that he refused on religious grounds to participate in distributing contraceptives or answering any customer inquiries about contraceptives. The employer reasonably accommodated Neil by offering to allow Neil to signal to a co-worker who would take over servicing any customer who telephoned, faxed, or came to the pharmacy regarding contraceptives.”

3) Alternatively, if instead, “Neil leaves on hold indefinitely those who call on the phone about a contraceptive rather than transferring their calls, and walks away from in-store customers who seek to fill a contraceptive prescription rather than signaling a co-worker. The employer is not required to accommodate Neil’s request to remain in such a position yet avoid all situations where he might even briefly interact with customers who have requested contraceptives, or to accommodate a disruption of business operations. The employer may discipline or terminate Neil for not meeting legitimate expectations.”

“The employee should be accommodated in his or her current position if doing so does not pose an undue hardship. If no such accommodation is possible, the employer needs to consider whether lateral transfer is a possible accommodation. For example, if a pharmacist who has a religious objection to dispensing contraceptives can be accommodated without undue hardship by allowing the pharmacist to signal a co-worker to assist customers with such prescriptions, the employer cannot choose instead to accommodate by transferring the pharmacist to a different position. Moreover, if the pharmacist cannot be accommodated within his position, the employer cannot transfer the pharmacist to a position that entails less pay, responsibility, or opportunity for advancement unless a lateral transfer is unavailable or would otherwise pose an undue hardship.

Insomniacs can read the EEOC press release in full at http://www.eeoc.gov/press/7-22-08.html and the other EEOC materials on religious discrimination in full at http://www.eeoc.gov/policy/docs/qanda_religion.html and http://www.eeoc.gov/policy/docs/religion.html and http://www.eeoc.gov/policy/docs/best_practices_religion.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.

Appeals Court Guarantees Higher Salary of Classified Employee Who Was Demoted Without Cause from Unclassified Position to Former Classified Position

In late June, the Hamilton County Court of Appeals held that a civil servant carrying the full protections of a classified employee but employed in an unclassified position is entitled to retain the pay of that unclassified position after a demotion back to a civil service job when the demotion was not based upon cause and the employer failed to obtain a signed waiver from the employee (in accordance with its own rules) when temporarily promoting him to the unclassified position (which was later abolished). Gissiner v. City of Cincinnati, No. 2008-Ohio-3161 (6/27/08). The Court held that only O.R.C. § 124 protected a classified employee from a pay cut for no-cause demotion, although it did not provide him with bumping rights because the unclassified position was not covered by the statute.

By way of background, the plaintiff was "temporarily promoted" from classified position of Senior Human Resources Analyst to the unclassified position of acting municipal investigations manager for the City. However, although he received a raise with the promotion he “did not did not sign a waiver giving up his classified status when he changed positions.” When the managerial position was later abolished in a reorganization, he was returned to his former classified position and the lower pay rate.

In the first phase of litigation, the plaintiff appealed both the demotion and his pay cut to the civil service commission, which dismissed the claim for lack of jurisdiction. However, the court of appeals reversed “because Rule 1.4(2)(A) of the city's Personnel Policies and Procedures Manual required a written waiver of classified status, and because the City had not secured [the plaintiff’s prior] waiver in accordance with [that] rule.” Accordingly, “[t]he case was remanded for an administrative hearing so that the commission could determine whether [the plaintiff’s] demotion was contrary to his property right to maintain his pay during ‘good behavior and efficient service.’”

At the next civil service hearing in the second phase of the litigation, the plaintiff “testified that he was reduced in pay by $32,106.86, that he had served as Manager for over 15 months in good behavior, and that he had received the assurances of several city officials, including two city managers, that he would not be reduced in pay. His testimony was not refuted.” Nonetheless, the civil service commission again affirmed the plaintiff’s demotion and pay cut, but on different grounds. The Court then held that “c]lassified civil servants have tenure during ‘good behavior and efficient service,’ can be discharged or reduced only for cause as set forth in R.C. 124.34, and have displacement rights if their jobs are abolished. Because [the plaintiff] did not waive these rights, he carried them with him to his unclassified position.”

While the Court acknowledged that O.R.C. § 124 did not apply to make the unclassified position a permanent classified position or to give the plaintiff bumping rights, “[o]ne could only conclude from the evidence presented to the commission that [the plaintiff] was reduced in pay and that this reduction contravened his rights as an employee with classified status.” In addition, “the City is estopped from opposing an award of back pay because it created this anomaly by failing to secure [the plaintiff’s] written waiver of his classified status, as required by its own rule, and by promising that [the plaintiff] would not be reduced in pay. We will not penalize [the plaintiff] under these circumstances.”

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/1/2008/2008-ohio-3161.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.