Sixth Circuit Affirms Dismissal When Co-Worker's Misconduct was Radically Different

In November, a divided Sixth Circuit affirmed the employer’s summary judgment on a race discrimination claim because the plaintiff failed to identify a co-worker who was similar in all relevant respects.   Johnson v. Ohio Department of Public Safety, 942 F.3d 329 (6^th Cir. 2019).  The Court found that the plaintiff’s misconduct was more egregious than and not sufficiently comparable to his co-worker’s misconduct when he asked out intoxicated women whom he had arrested while in uniform and had actually driven one of the women home, while the co-worker had only sent two off-duty Facebook friend requests.  Further, the plaintiff had been placed on a Last Chance Agreement after he pulled over a woman without probable cause in order to ask her out when the other had not.  Moreover, the first allegation against the co-worker had never been verified.  In addition, they had different supervisors.  Finally, they were disciplined for slightly different offenses and subjected to different standards because of the Last Chance Agreement. 

According to the Court’s opinion, the plaintiff had been placed on a Last Chance Agreement warning that he could be fired for any misconduct in the following two years after he asked out an intoxicated woman whom he had arrested for DUI and then later pulled her over without probable cause in order to ask her out and giver her his cell phone number.   However, he later arrested and handcuffed another intoxicated woman for DUI, asked her out, texted her, drove her home, failed to turn on the cameras in his cruisers, etc.   He was then fired.  He brought suit and claimed that he had been treated more harshly on account of his race than a white co-worker who had allegedly sent off-duty Facebook friend requests to two women he had previously pulled over and cited, only one of which had been verified.  The trial court granted summary judgment to the employer, finding  that "the quantum of misbehavior is radically different, so one would naturally expect a radically different disciplinary outcome.”

The Court affirmed the employer’s summary judgment on the grounds that the plaintiff had failed to identify anyone who was similarly-situated in all relevant respects who had been treated less harshly. 

“The Department disciplined the two troopers differently because their situations were different.”

When it comes to comparable seriousness, it is the particular conduct of the officers, not broad generalizations, that counts.  Drawn at too high a level of generality, the “comparable seriousness” test becomes meaningless.  True, stitches and open-heart surgery are both medical procedures.  But that does not mean they are of “comparable seriousness.”  Same here. 

The employees also had different supervisors, which is a factor in determining whether they are sufficiently comparable.

And they were subject to different standards.  [The plaintiff] signed a Last Chance Agreement after his first incident.  He was on notice that the Department would fire him if he committed another violation.  [The co-worker] received a warning that the Department may discipline him if he didn’t clean up his act.  The district court described this as a “crucial distinction.”’

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.

Defense Act Sneaks Ban-The-Box Legislation onto Federal Contractors

Just before its holiday break, Congress surprisingly passed the Fair Chance Act with the National Defense Authorization Act on December 20, 2019, and it will become effective on December 20, 2021 [two years after its effective date].  Section 1123 of the NDAA created new 41 U.S.C. §4714, which will prohibit federal contractors from seeking criminal background histories until after a conditional job offer has been extended, except where the applicant will have access to classified, law enforcement or national security information,  when "consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law," or when the job is exempted by regulations to be issued by the GSA prior April 21, 2021.  However, the FCA only applies to jobs which perform work related to the federal contract at issue (as opposed to the contractor’s other employees).   This is becoming a common occurrence to use the Defense Authorization Act to sneak in controversial employment laws.  

In particular, under §4714(a)(1)(B), the contracting executive federal agency:

shall require, as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant.

At present, this legislation raises more questions than it answers.  When is a criminal background check required “by law”?  Federal law?  State law (which the EEOC has never recognized as relevant in a discrimination analysis)? By common law (i.e., the law of negligent hiring)?  Why is access to cash, financial information, children or disabled adults not similarly protected when a run-of-the-mile criminal is more likely to seek cash or deviance than national security information?  Granted, the FCA directs the GSA in preparing the governing regulations to "giv[e] due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions."    How will this interact with the ADA’s similar requirement that medical information cannot be requested until a conditional job offer has been extended?  What jobs will be considered as “related to the work” of the federal contract?   Hopefully, these and other questions will be addressed with the implementing regulations or remedied by subsequent legislation.    

The complete §4714 will read as follows:

SEC. 1123. PROHIBITION ON CRIMINAL HISTORY INQUIRIES BY CONTRACTORS PRIOR TO CONDITIONAL OFFER. (a) CIVILIAN AGENCY CONTRACTS.— (1) IN GENERAL.—Chapter 47 of title 41, United States Code, is amended by adding at the end the following new section: ‘‘§4714. Prohibition on criminal history inquiries by contractors prior to conditional offer 

(a) LIMITATION ON CRIMINAL HISTORY INQUIRIES.— ‘‘(1) IN GENERAL.—Except as provided in paragraphs (2) and (3), an executive agency— 

(A) may not require that an individual or sole proprietor who submits a bid for a contract to disclose criminal history record information regarding that individual or sole proprietor before determining the apparent awardee; and

(B) shall require, as a condition of receiving a Federal contract and receiving payments under such contract that the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant. 

(2) OTHERWISE REQUIRED BY LAW.—The prohibition under paragraph (1) does not apply with respect to a contract if consideration of criminal history record information prior to a conditional offer with respect to the position is otherwise required by law. 

(3) EXCEPTION FOR CERTAIN POSITIONS.— 

(A) IN GENERAL.—The prohibition under paragraph (1) does not apply with respect to— ‘‘(i) a contract that requires an individual hired under the contract to access classified information or to have sensitive law enforcement or national security duties; or ‘‘(ii) a position that the Administrator of General Services identifies under the regulations issued under subparagraph (B). 

(B) REGULATIONS.— 

(i) ISSUANCE.—Not later than 16 months after the date of enactment of the Fair Chance to Compete for Jobs Act of 2019, the Administrator of General Services, in consultation with the Secretary of Defense, shall issue regulations identifying additional positions with respect to which the prohibition under paragraph (1) shall not apply, giving due consideration to positions that involve interaction with minors, access to sensitive information, or managing financial transactions. 

(ii) COMPLIANCE WITH CIVIL RIGHTS LAWS.—The regulations issued under clause (i) shall— ‘‘(I) be consistent with, and in no way supersede, restrict, or limit the application of title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) or other relevant Federal civil rights laws; and ‘‘(II) ensure that all hiring activities conducted pursuant to the regulations are conducted in a manner consistent with relevant Federal civil rights laws. 

(b) COMPLAINT PROCEDURES.—The Administrator of General Services shall establish and publish procedures under which an applicant for a position with a Federal contractor may submit to the Administrator a complaint, or any other information, relating to compliance by the contractor with subsection (a)(1)(B). 

(c) ACTION FOR VIOLATIONS OF PROHIBITION ON CRIMINAL HISTORY INQUIRIES.— ‘‘(1) FIRST VIOLATION.—If the head of an executive agency determines that a contractor has violated subsection (a)(1)(B), such head shall— ‘‘(A) notify the contractor; ‘‘(B) provide 30 days after such notification for the contractor to appeal the determination; and ‘‘(C) issue a written warning to the contractor that includes a description of the violation and the additional remedies that may apply for subsequent violations.

‘‘(2) SUBSEQUENT VIOLATION.—If the head of an executive agency determines that a contractor that was subject to paragraph (1) has committed a subsequent violation of subsection (a)(1)(B), such head shall notify the contractor, shall provide 30 days after such notification for the contractor to appeal the determination, and, in consultation with the relevant Federal agencies, may take actions, depending on the severity of the infraction and the contractor’s history of violations, including— ‘‘(A) providing written guidance to the contractor that the contractor’s eligibility for contracts requires compliance with this section; ‘‘(B) requiring that the contractor respond within 30 days affirming that the contractor is taking steps to comply with this section; and ‘‘(C) suspending payment under the contract for which the applicant was being considered until the contractor demonstrates compliance with this section. 

(d) DEFINITIONS.—In this section: 

(1) CONDITIONAL OFFER.—The term ‘conditional offer’ means an offer of employment for a position related to work under a contract that is conditioned upon the results of a criminal history inquiry. 

(2) CRIMINAL HISTORY RECORD INFORMATION.—The term ‘criminal history record information’ has the meaning given that term in section 9201 of title 5.

(2) CLERICAL AMENDMENT.—The table of sections for chapter 47 of title 41, United States Code, is amended by adding at the end the following new item: ‘‘4714. Prohibition on criminal history inquiries by contractors prior to conditional offer.’’

(3) EFFECTIVE DATE.—Section 4714 of title 41, United States Code, as added by paragraph (1), shall apply with respect to contracts awarded pursuant to solicitations issued after the effective date described in section 1122(b)(2) of this subtitle.  [That section, in turn, provided:

 (2) EFFECTIVE DATE.—Section 9202 of title 5, United States Code (as added by this subtitle), shall take effect on the date that is 2 years after the date of enactment of this subtitle. 

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.

DOL Clarifies FLSA Regular Rate Calculation With New Regulation

Last week, the federal Department of Labor issued a new regulation updating how employers may calculate the “regular rate” for purposes of paying overtime compensation.  The regulation makes explicit that certain types of compensation may be excluded from the regular rate, including paying out unused paid time off and sick time, paid meal breaks (with certain exceptions), certain longevity bonuses, tuition reimbursement, and other perks, etc.  The new regulation will become effective on January 15, 2020.   There is a lot going on in employee compensation in the next month because, as previously reported here, the minimum salary for exempt employees will also rise on January 1 to $35,568/year (or $684/week) and the Ohio minimum wage increases on January 1 to $8.70/hour.  


As explained by the DOL, the new regulation will simplify the calculation of the regular rate by excluding perks that many employers provide to employees so that employers can avoid confusion and litigation, such as:

·       the cost of providing certain parking benefits, wellness programs, onsite specialist treatment, gym access and fitness classes, employee discounts on retail goods and services, certain tuition benefits (whether paid to an employee, an education provider, or a student-loan program), and adoption assistance;

·       payments for unused paid leave, including paid sick leave or paid time off;

·       payments of certain penalties required under state and local scheduling laws;

·       reimbursed expenses including cellphone plans, credentialing exam fees, organization membership dues, and travel, even if not incurred "solely" for the employer's benefit; and clarifies that reimbursements that do not exceed the maximum travel reimbursement under the Federal Travel Regulation System or the optional IRS substantiation amounts for travel expenses are per se "reasonable payments";

·        certain signing bonuses and longevity bonuses;

·       the cost of office coffee and snacks to employees as gifts;

·       discretionary bonuses, by clarifying that the label given a bonus does not determine whether it is discretionary and providing additional examples and;

·       contributions to benefit plans for accident, unemployment, legal services, or other events that could cause future financial hardship or expense.

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.

OCRC Issues Guidance on Service Animals in Employment

In August, the Ohio Civil Rights Commission issued an updated Technical Policy to provide guidance concerning the use of service animals by employees with disabilities.  In it, the OCRC reflects that employers could be required to permit service animals, such as dogs and monkeys to enable an employee to perform the essential functions of his or her position.  The employer is permitted to ask questions about the nature and extent of the employee's disability and animal's assistance.  Employers can also prohibit service animals when they are not housebroken or are out of control, are threatening, hostile, aggressive,  unusually disruptive, etc. and cannot be restrained, etc.   It is up to the employee to control his or her animal and the parties should engage in the interactive process to establish parameters, etc. 

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 Rejects Successor Liability Based on S-Corp Election

Last week, the Ohio Court of Appeals reversed judgment in favor of the Ohio Department of Job and Family Services concerning whether an entity constituted a successor in interest for unemployment compensation liability merely because it elected S-Corp status for three jointly owned subsidiaries which otherwise satisfied the statutory test to be an employer.   Employer’s Choice Plus, Inc. v. Ohio Dept. of Job & Family Servs., 2019-Ohio-4994.  Even though the Internal Revenue Code deemed the S-Corp election of the subsidiary corporations to constitute a liquidation of the subsidiaries for purposes of calculating income taxes, Ohio law only imposes successor liability when there has been an actual transfer or conveyance of possession or control of some legal interest in property.  Because the legal fiction of “deeming” a liquidation for income tax purposes was not equivalent to a transfer of ownership or possession, the statute was not satisfied and the parent company was not a successor employer.


According to the Court’s opinion, the parent company and the subsidiary companies were all owned by the same individual and their separate payrolls were paid out of the same bank account.  That sole shareholder elected S-Corp status for the subsidiary companies.  The IRS regulations provide that "[i]f an S corporation makes a valid QSub election with respect to a subsidiary, the subsidiary is deemed to have liquidated into the S corporation."  Further, "[a] corporation that is a QSub shall not be treated as a separate corporation" and that "[a]ll assets, liabilities, and items of income, deduction, and credit of a QSub shall be treated as assets, liabilities, and items of income, deduction, and credit of the S Corporation."  Following an audit, the ODJFS determined that – even though each of the subsidiaries employed and paid at least one employee each year more than $1500 – that only the parent corporation was a statutory employer for unemployment purposes and that it constituted a successor employer following the S-Corp election.  The appeal followed.


The Court noted that an employer can only become a successor employer for unemployment purposes if it (1) voluntarily seeks and obtains from ODJFS that status after substantially all, or a clearly identifiable portion,  of the employer’s assets have been transferred to it or (2) involuntarily if all of the employer’s trade or business has been transferred to it.   In this case, ODFJS “effectively concluded the QSub election constituted a transfer of the trade or business,” but the Court disagreed because the plain meaning of “transfer” did not include or encompass the legal fiction employed in the IRS regulations.

Although the method or mode of a transfer may encompass a broad range of possibilities, there still must be a conveyance of possession or control of some legal interest in property.  Here, the conveyance of possession or control must be a legal interest in a trade or business.  That concept is not a broad one.

 . . . . Given the common, everyday meaning of the verb form of the word "transfer," we do not find any ambiguity in the express statutory requirement that there be a conveyance of some trade or business from one employer to another to trigger successor-in-interest status under R.C. 4141.24(F) or (G).  Although a QSub election may be deemed a liquidation of a subsidiary corporation into the parent for purposes of federal taxation, such election does not effectuate any conveyance of a trade or business under either state or federal law.  The fact that federal tax law and Ohio tax law are co-extensive does not change the express requirements of unambiguous statutes. Without some conveyance of possession or control of a trade or business from one employer to another, there can be no successor-in-interest liability under the express terms of R.C. 4141.24(F) or (G).  

Relying on the Supreme Court’s opinion in Chevron, the Court refused to grant any deference to an agency interpretation which conflicted with the plain meaning of the statute: “courts grant no deference to an administrative agency's interpretation of a statute when that interpretation conflicts with the express terms of an unambiguous statute.”


In addition, ODJFS also erred in concluding that none of the subsidiaries could qualify as statutory employers.  Ohio Revised Code § 4141.01(A)(1) “sets forth the definition of the term "employer" for purposes of unemployment compensation law.”

In relevant part, the statute defines an "employer" as follows: "Employer" means * * * any individual or type of organization including any partnership, limited liability company, association, trust, estate, joint-stock company, insurance company, or corporation, whether domestic or foreign, * * * who  . . . .

 (a) Had in employment at least one individual, * * * in either the current or the preceding calendar year whether or not the same individual was in employment each such day; or  

(b) Except for a nonprofit organization, had paid for service in employment wages of fifteen hundred dollars or more in any calendar quarter in either the current or preceding calendar year[.] 

The Court found that the undisputed evidence presented at the hearing showed that each of the subsidiaries during the relevant time period “had at least one employee receiving wages of $1,500 or more. . . . . Based on this undisputed evidence, and applying the definition of "employer" set forth in R.C. 4141.01(A)(1),” it was an abuse of discretion to conclude that none of the subsidiaries  constituted “employers under that statutory definition.”


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.