Ohio Supreme Court: No Unemployment Compensation for Employees Who Fail to Obtain and Maintain License Required by Job

This morning, a unanimous Ohio Supreme Court held that “When employment is expressly conditioned upon obtaining or maintaining a license or certification and an employee agrees to the condition and is afforded a reasonable opportunity to obtain or maintain the license or certification, an employee’s failure to comply with that condition is just cause for termination for unemployment compensation purposes.” Williams v. Ohio Dep’t of Job & Family Svs, 2011-Ohio-2897. In that case, the claimant applied for a promotion which required her to obtain her LISW certification within 15 months. With her employer’s consent, she postponed taking her first examination for health reasons, failed the examination when she ultimately took it and exhausted the 15 month deadline plus health-related extension before the next opportunity to take the examination 90 days later arose. Accordingly, she was fired. Although she was initially denied unemployment compensation, the Cuyahoga County Court of Appeals reversed the denial on the grounds that two other program managers (hired years earlier) lacked LISW certification.

Under Ohio’s unemployment compensation decisions, the Unemployment Compensation Act “does not exist to protect employees from themselves, but to protect them from economic forces over which they have no control. When an employee is at fault, he is no longer the victim of fortune’s whims, but is instead directly responsible for his own predicament. Fault on the employee’s part separates him from the Act’s intent and the Act’s protection. Thus, fault is essential to the unique chemistry of a just cause termination.”

Fault on an employee’s part is an essential component of a just cause termination. Fault, however, is not limited to willful or heedless disregard of a duty or a violation of an employer’s instructions. Id. at 698. Unsuitability for a position constitutes fault sufficient to support a just-cause discharge. “An employer may properly find an employee unsuitable for the required work, and thus to be at fault, when: (1) the employee does not perform the required work, (2) the employer made known its expectations of the employee at the time of hiring, (3) the expectations were reasonable, and (4) the requirements of the job did not change substantially since the date of the original hiring for that particular position.

The Court found that the claimant was aware of the LISW requirement when she accepted the position and was not treated unfairly. As for the argument that the LISW requirement was not evenly applied, the Court found that the other two employees were not similarly situated since they had been hired years earlier and had more experience. Moreover, the employer demonstrated that the only other program manager hired (before the claimant but after the other two program managers) had been similarly required to obtain her LISW certification as a condition of the promotion.

As the review commission noted, a company is entitled to increase the educational requirements for employment opportunities. Nothing in the record shows that the requirement — to obtain LISW certification within 15 months — was an unreasonable expectation or that other individuals were contemporaneously hired as program managers and were not required to obtain LISW certification. Thus, even if we were to adopt a requirement that any company policy must be fair and fairly applied before a termination for failure to follow that policy is deemed a just-cause determination, there is competent, credible evidence upholding the review commission’s decision that [Claimant’s] termination was for just cause.

The parties’ oral argument is available for viewing on the Supreme Court’s website.

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: First Amendment Petition Clause Does Not Protect Union Grievance or Lawsuit on Personal Concern

The Wal-Mart decision was not the only employment decision issued by the Supreme Court yesterday. The unanimous Court also rejected a § 1983 retaliation claim brought by a disgruntled police chief who asserted that the local city council was retaliating against him for successfully grieving and arbitrating his prior employment termination. Borough of Duryea v. Guarnieri, No. 09-1476. The Court found that the First Amendment right to petition government only creates a private right of action for employees under § 1983 when the petition involves a matter of public concern. It does not protect employees who pursue purely private matters, like the terms of their own employment.

According to the decision, the Chief had been fired and then reinstated after grieving and successfully challenging the decision in arbitration. The Council responded by issuing a number of directives to the Chief to clarify the terms of his employment when he returned. Among other things, he could not work overtime without authorization; the indoor smoking ban applied equally to the police department; and the police car is only to be used for official business. The Chief asserted that the Council was retaliating and, again, was successful in convincing an arbitrator that the directives be modified or withdrawn. The Chief also filed a §1983 lawsuit. The district court instructed the jury that his pursuing a union arbitration was constitutionally protected and it awarded him almost $100K in compensatory and punitive damages for the directives and denial of $358 in overtime. I can't make this stuff up.

The Court found the Third Circuit was way out there in permitting this miscarriage of justice (albeit the Third Circuit found no basis for the punitive damages). When a government employee brings a §1983 claim under the First Amendment for retaliation concerning the Free Speech Clause, the employee is required to show that the employee was speaking as a citizen on a matter of public concern:

If an employee does not speak as a citizen, or does not address a matter of public concern, "a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior." Ibid. Even if an employee does speak as a citizen on a matter of public concern, the employee's speech is not automatically privileged. Courts balance the First Amendment interest of the employee against "the interest of the State, as an employer, in promoting the efficiency of the public services it performs through its employees.

This framework "reconcile[s] the employee's right to engage in speech and the government employer's right to protect its own legitimate interests in performing its mission." . . . There are some rights and freedoms so fundamental to liberty that they cannot be bargained away in a contract for public employment. "Our responsibility is to ensure that citizens are not deprived of [these] fundamental rights by virtue of working for the government." . . . Nevertheless, a citizen who accepts public employment "must accept certain limitations on his or her freedom." . . . The government has a substantial interest in ensuring that all of its operations are efficient and effective. That interest may require broad authority to supervise the conduct of public employees. "When someone who is paid a salary so that she will contribute to an agency's effective operation begins to do or say things that detract from the agency's effective operation, the government employer must have some power to restrain her." . . . Restraints are justified by the consensual nature of the employment relationship and by the unique nature of the government's interest. (citations omitted)

The Court saw no reason that the Petition Clause should be treated differently with respect to public employees where the Chief's claim could just as easily have been brought under the Free Speech clause. While the Free Speech clause protects an individual's right to free speech, the Petition Clause protects a citizen's right to petition the government (including the courts) for redress. While an arbitration proceeding is a form of judicial proceeding, in this case the Chief's grievance related solely to himself and was not otherwise a matter of public concern. That being said, the Free Speech clause and the Petition Clause may not always be treated as equivalent.

The substantial government interests that justify a cautious and restrained approach to the protection of speech by public employees are just as relevant when public employees proceed under the Petition Clause. Petitions, no less than speech, can interfere with the efficient and effective operation of government. A petition may seek to achieve results that "contravene governmental policies or impair the proper performance of governmental functions." Garcetti, 547 U. S., at 419. Government must have authority, in appropriate circumstances, to restrain employees who use petitions to frustrate progress towards the ends they have been hired to achieve. A petition, like other forms of speech, can bring the "mission of the employer and the professionalism of its officers into serious disrepute." Roe, 543 U. S., at 81. A public employee might, for instance, use the courts to pursue personal vendettas or to harass members of the general public. That behavior could cause a serious breakdown in public confidence in the government and its employees. And if speech or petition were directed at or concerned other public employees, it could have a serious and detrimental effect on morale.

When a petition takes the form of a lawsuit against the government employer, it may be particularly disruptive. Unlike speech of other sorts, a lawsuit demands a response. Mounting a defense to even frivolous claims may consume the time and resources of the government employer. Outside the context of public employment, this Court has recognized that the Petition Clause does not protect "objectively baseless" litigation that seeks to "'interfere directly with the business relationships of a competitor.'" . . .

Unrestrained application of the Petition Clause in the context of government employment would subject a wide range of government operations to invasive judicial superintendence. Employees may file grievances on a variety of employment matters, including working conditions, pay, discipline, promotions, leave, vacations, and terminations. See Brief for National School Boards Association as Amicus Curiae 5. Every government action in response could present a potential federal constitutional issue. Judges and juries, asked to determine whether the government's actions were in fact retaliatory, would be required to give scrutiny to both the government's response to the grievance and the government's justification for its actions. This would occasion review of a host of collateral matters typically left to the discretion of public officials. Budget priorities, personnel decisions, and substantive policies might all be laid before the jury. This would raise serious federalism and separation-of-powers concerns. It would also consume the time and attention of public officials, burden the exercise of legitimate authority, and blur the lines of accountability between officials and the public.

This case illustrates these risks and costs. Guarnieri's attorney invited the jury to review myriad details of government decisionmaking. She questioned the council's decision to issue directives in writing, rather than orally, Tr. 66 (Apr. 14, 2008); the council's failure to consult the mayor before issuing the directives, id., at 105 (Apr. 15, 2008); the amount of money spent to employ "Philadelphia lawyers" to defend Guarnieri's legal challenges, id., at 191–193:7–10 (Apr. 14, 2008); 152–153 (Apr. 16, 2008); and the wisdom of the council's decision to spend money to install Global Positioning System devices on police cars, id., at 161–162 (same). Finally, the attorney invited the jury to evaluate the council's decisions in light of an emotional appeal on behalf of Guarnieri's "little dog Hercules, little white fluffy dog and half Shitsu." Id., at 49:13–14 (Apr. 14, 2008). It is precisely to avoid this intrusion into internal governmental affairs that this Court has held that, "while the First Amendment invests public employees with certain rights, it does not empower them to 'constitutionalize the employee grievance.'" Garcetti, supra, at 420 (quoting Connick, 461 U. S., at 154).

If the Petition Clause were to apply even where matters of public concern are not involved, that would be unnecessary, or even disruptive, when there is already protection for the rights of public employees to file grievances and to litigate. The government can and often does adopt statutory and regulatory mechanisms to protect the rights of employees against improper retaliation or discipline, while preserving important government interests. Cf. Garcetti, supra, at 425 (noting a "powerful network of legislative enactments"). Employees who sue under federal and state employment laws often benefit from generous and quite detailed antiretaliation provisions. See, e.g., Pa. Stat. Ann., Tit. 43, §1101.1201(a)(4) (Purdon 2009); §1101.1302.These statutory protections are subject to legislative revision and can be designed for the unique needs of State, local, or Federal Governments, as well as the special circumstances of particular governmental offices and agencies. The Petition Clause is not an instrument for public employees to circumvent these legislative enactments when pursuing claims based on ordinary workplace grievances.

. . . .

Articulation of a separate test for the Petition Clause would aggravate potential harm to the government's interests by compounding the costs of compliance with the Constitution. A different rule for each First Amendment claim would require employers to separate petitions from other speech in order to afford them different treatment; and that, in turn, would add to the complexity and expense of compliance with the Constitution. Identifying petitions might be easy when employees employ formal grievance procedures, but the right to petition is not limited to petitions lodged under formal procedures.

The Court then discussed at length why employees should be treated differently from citizens when petitioning government on matters of purely private concern. In particular, it examined the private petitions brought by American colonists and in the early days of the republic and why these private petitions are distinguishable from employee private petitions when it comes to constitutional protection under §1983.

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: Three Wal-Mart Plaintiffs Brought Wrong Type of Class Action to Recover Back Pay

This morning, the Supreme Court unanimously held that the three class representatives (i.e., named plaintiffs) who brought the nationwide class action against Wal-Mart proceeded under the incorrect Rule of Civil Procedure. Wal-Mart Stores, Inc. v. Dukes, No. 10-277. Because the plaintiffs sought back pay on behalf of each member of the class of 1.5 million women – and the amount of that back pay would differ for each of the 1.5M members of the class – the lawsuit should have been brought – if at all – under Civil Rule 23(b)(3) (which requires notice to the class and option to opt-out) instead of Civil Rule 23(b)(2). However, the Court split 5-4 on whether the plaintiffs satisfied the threshold requirements in Civil Rule 23(a), with the majority finding that there was insufficient proof that the 3 plaintiffs and 120 fact witnesses adequately demonstrated that each subjective employment decision being challenged shared a common question of law or fact with all of the 1.5M class members.

The provisions of Civil Rule 23 which are at issue are in relevant part:

(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:

(1) the class is so numerous that joinder of all members is impracticable,

(2) there are questions of law or fact common to the class,

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and

(4) the representative parties will fairly and adequately protect the interests of the class.

(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:

. . .

(2) the party opposing he class has acted or refused to act on grounds that apply generally to the class, so that final injunctive or corresponding declaratory relief is appropriate respecting the class as a whole; or

(3) the court finds that the questions of law or fact common to the class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the likely difficulties in managing a class action.

There was no dispute at the Court that seeking relief for individualized back pay awards could never be obtained under Civil Rule 23(b)(2). Wal-Mart would have a separate defense for each of the 1.5M class members and the Court of Appeals' proposal to randomly select class members was rejected. The amounts of back pay awarded would vary by class member based on length of employment, job title, location, comparison to wages of male counterparts, etc.

The Court also agreed on other facts: There were only three plaintiffs and anecdotal testimony from only 120 women of alleged discrimination. Wal-Mart's corporate policy prohibited discrimination on the basis of sex, but promotion and compensation decisions were left to the individual store, district and regional managers based on their own discretion. There is no national corporate policy on factors to be utilized in making promotion or compensation decisions and no national oversight of such decisions. The plaintiffs' primary complaint is that the national hands-off policy and corporate culture has effectively resulted in discrimination against women, allegedly in violation of Title VII. The Court also agreed that subjective decisionmaking can be the basis of a disparate impact employment discrimination lawsuit in certain circumstances.

The dissent noted that 70% of Wal-Mart hourly employees are women, but only 33% of management is female.

The plaintiffs' "largely uncontested descriptive statistics" also show that women working in the company's stores "are paid less than men in every region" and "that the salary gap widens over time even for men and women hired into the same jobs at the same time." 222 F. R. D., at 149. The selection of employees for promotion to in-store management "is fairly characterized as a 'tap on the shoulder' process," in which managers have discretion about whose shoulders to tap. Id., at 148. Vacancies are not regularly posted; from among those employees satisfying minimum qualifications, managers choose whom to promote on the basis of their own subjective impressions.

The majority in turn noted that the evidence was misleading because most, or even all, of the alleged discrimination could be coming from only a few stores or a couple of regions and it does not logically follow that every manager (whether male or female) is discriminating against all women as alleged in the lawsuit. No evidence was put on about employment practices in 14 states and only one or two witness was produced to represent alleged discrimination in another 25 states. Moreover, there was only evidence produced about 235 of Wal-Mart's 3,400 stores. "Even if every single one of these accounts is true, that would not demonstrate that the entire company "operate[s] under a general policy of discrimination," Falcon, supra, at 159, n. 15, which is what respondents must show to certify a companywide class." In other words, a lawsuit might have been appropriate in some states and in some regions, but the truth of that does not mean that a national class action is appropriate.

Commonality requires the plaintiff to demonstrate that the class members "have suffered the same injury," Falcon, supra, at 157. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways—by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention—for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of class wide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

. . .

To be sure, we have recognized that, "in appropriate cases," giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since "an employer's undisciplined system of subjective decision making [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination." Id., at 990–991. But the recognition that this type of Title VII claim "can" exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation—and surely most managers in a corporation that forbids sex discrimination—would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact—such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U. S. 424, 431–432 (1971). And still other managers may be guilty of intentional discrimination that produces a sex based disparity. In such a company, demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's. A party seeking to certify a nationwide class will be unable to show that all the employees' Title VII claims will in fact depend on the answers to common questions.

. . .

Even if [the statistical evidence] established (as it does not) a pay or promotion pattern that differs from the nationwide figures or the regional figures in all of Wal-Mart's 3,400 stores, that would still not demonstrate that commonality of issue exists. Some managers will claim that the availability of women, or qualified women, or interested women, in their stores' area does not mirror the national or regional statistics. And almost all of them will claim to have been applying some sex-neutral, performance-based criteria—whose nature and effects will differ from store to store. . . . Other than the bare existence of delegated discretion, respondents have identified no "specific employment practice"—much less one that ties all their 1.5 million claims together. Merely showing that Wal-Mart's policy of discretion has produced an overall sex-based disparity does not suffice.

While the dissent argued that the majority was confusing Rule 23(a)(2) with 23(b)(3) and that the plaintiffs should be given the opportunity on remand to proceed under Civil Rule 23(b)(3), the majority contended that there was not a single question of common law or fact under Civil Rule 23(a) tying all 1.5M women together because they ""held a multitude of different jobs, at different levels of Wal-Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed. . . . Some thrived while others did poorly. They have little in common but their sex and this lawsuit."

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

Franklin County Court of Appeals Affirms $105K in Damages for Same Sex Harassment

Earlier this month, a unanimous Franklin County Court of Appeals affirmed $105,000 in damages for a same sex hostile work environment harassment claim. Tod v. Cincinnati State Technical & Community College, 2011-Ohio-2743. In Tod, the female plaintiff complained about her female manager referring to her "Barbie doll figure," the size of her chest, her figure, as a "bit**" and other similar comments throughout her employment. After 14 months of documenting the problems, she finally reported the problem to human resources and then began to feel retaliated against. She then found another job, but did not report her present employment out of fear of further retaliation. She was then fired from both jobs. The Court rejected the employer's attempt to argue that the harassment was welcomed, not reported in a timely basis, or sufficiently hostile. The Court also rejected the contention that the harassment was not based on sex because the manager's comments were inherently sexual.

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: Union Fundraising is Not Constitutionally Protected Speech

This morning, the Sixth Circuit reversed a trial court which had found that disciplinary action taken against a fire union for fundraising activities was unlawful retaliation. Doherty v. City of Maryville, No. 09-5217. In that case, the IAFF Local Union had signed a contract with a telemarketing firm to sell concert tickets to raise money for union activities. Thinking the calls were coming from the City, several citizens complained about rudeness and threats. The City met with the union officials who signed the contract and warned them that they would be fired if the City received any more complaints. The City did not ask the union to cancel the fundraiser. The union cancelled the telemarketing contract and then renewed the contract, but with a revised script. When the City received additional complaints, it put a letter of reprimand in the union officer’s file. After the union and the officer filed suit for violation of First Amendment rights, the trial court denied the City’s motions for summary judgment and judgment as a matter of law and the jury found against the City. On appeal, the Sixth Circuit concluded the trial court erred in examining the totality of the circumstances (i.e., the content of the telemarketing calls and the intended uses for the funds). Instead, the only conduct at issue was the signing of the telemarketing contract and that conduct was commercial, not protected political, speech. “As a matter of law, the conduct in question — i.e., the act of contracting with a third party to make telemarketing calls — did not touch on a matter of public concern.”

“When a plaintiff is a public employee who is claiming retaliation by his employer (the government) for his speech or his associations, his speech or association is protected only if (1) it touches on a matter of public concern and (2) there is no overriding state interest that would be undermined by the employee’s speech or association.”

The only activity that is relevant in this case is the Plaintiffs’ act of contracting with a third-party telemarketing organization to make fundraising phone calls. In their summary judgment pleadings, the Plaintiffs conceded that they allege retaliation by the City solely because of their involvement with the phone calls. There is absolutely no evidence in the record that the Plaintiffs were targeted because of their membership in the union or because of the union’s other community activities. Rather, all the evidence shows that they were targeted because they were in charge of this particular fundraising activity.
. . .
This was a business transaction, and the conduct had a commercial focus. Furthermore, the subject of the contract, making phone calls, was also commercial in nature. Doherty testified at trial that the purpose of the phone calls was to sell a product—tickets to a concert. The act of signing a business contract does not fall within traditional understandings of matters constituting a public concern

Although courts “evaluate several factors to determine whether speech is a matter of public concern, including “the focus of the speech; the point of the speech in question; to what purpose the employee spoke; the intent of the speech; or the communicative purpose of the speaker,” the Court found the trial court erred:

by examining a much broader array of activity; it looked at everything that the union did in the community, as well as the contract with FireCo and the phone calls that FireCo made. The district court further erred by suggesting that the Plaintiffs may have been disciplined for the positive aspects of the phone calls (as opposed to the threatening and misleading aspects). Local 4053’s activity, other than the act of contracting with FireCo, is irrelevant to the retaliation claim at hand.

. . .

The Plaintiffs argue that because the phone calls aimed to raise money for the union’s broad activities, some of which are matters of public concern, the act of contracting with a telemarketer to make those phone calls is also a matter of public concern. Even if we were to ignore the attenuated nature of the link between the contract and potential issues of public concern, the fact that the purpose of the FireCo contract was to raise money for union activities does not change the nature of the contract itself. “[A]n employee’s speech, activity, or association, merely because it is union related, does not touch on a matter of public concern as a matter of law.” . . . Similarly, FireCo’s passing references during the calls to some of the union’s protected activities do not transform the nature of the calls (much less the contract to make the calls). We have held that “the proper inquiry is not what might be incidentally conveyed by the speech, and that passing or fleeting references to an arguably public matter do not elevate the speech to a matter of public concern where the focus or point of the speech advances only a private interest.”

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.