Employee Emails Relating to Data Breach and Payroll Problems Justifies Public Records Request

Last month, the Cuyahoga County Court of Appeals affirmed $1,000 in damages and $4,762.50 in attorneys’ fees for the plaintiff union which sought a month’s worth of emails involving three employees under Ohio’s public records law.  State ex rel. Cleveland Assn. of Rescue Emps. v. Cleveland, 2022-Ohio-3043.  The requested records involved how a data breach affected employee payroll records and the union sought information about this issue by seeking all emails between two employees and all of the emails to and from another employee.  Although the employer objected that the request was overly broad and unduly burdensome and insisted that the union narrow its request, it eventually produced approximately 300 pages to the union’s satisfaction.  The Court ruled that the union’s initial request was entirely proper and limited in scope (i.e. a month and three employees).  The Court also found that the employer acted with bad faith in refusing service of process which was addressed to predecessor employees.  Therefore, it awarded the union the statutory maximum damages and their attorneys’ fees in enforcing the public records request. 

In Ohio, public records are the people’s records. To that end, the public records act is to be construed liberally in favor of broad access and disclosure. The courts are to resolve any doubt in favor of disclosure. State ex rel. Plain Dealer Publishing Co. v. Cleveland, 106 Ohio St.3d 70, 2005-Ohio-3807, 831 N.E.2d 987, ¶ 20. Exemptions to disclosure under the public records act must be strictly construed against the public records custodian, and the government bears the burden of establishing the applicability of an exception. State ex rel. Morgan v. New Lexington, 112 Ohio St.3d 33, 2006-Ohio-6365, 857 N.E.2d 1208, ¶ 47.

Applying these principles, the court finds that the initial request was reasonable. It stated with clarity what records were requested, and the scope was limited to three specific Cleveland employees for a period of less than a month. A records requester is not necessarily required to limit its request by adding search terms. The failure to honor reasonable requests and the rapid closing of requests undermine the purpose of the public records act.

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

Sixth Circuit Rejects Plaintiff's Discrimination Claims Because Honest Belief Rule, Employee Handbook Rules and Vague Allegations Prevented Showing of Pretext

Yesterday, as I was participating in a webinar on the Honest Belief Rule, the Sixth Circuit affirmed an employer’s summary judgment in part because of – you guessed it – the Honest Belief Rule.  Okakpu-Mbah v. Postmaster, No. 21-2811 (6^th Cir. 2022).  The plaintiff had been fired at the conclusion of her 90-day probationary period for not working fast enough in sorting the mail.   The Court agreed that she could not show that the employer’s explanation was pretextual in light of documents showing that her efficiency had previously been rated as unacceptable, that she did not improve and, according to all of the other supervisors, was still working too slow by the time of her 80-day evaluation.  The Court also refused to find pretext from the use of a subjective standard for efficiency because there was no evidence that the employer had manipulated or abused the standard to single her out. It also refused to compare her to co-workers whose performance deficiencies were different and improved over time.  

According to the Court’s opinion, mail sorters receive 30, 60 and 80 day evaluations during their 90-day probationary period.  The Employee Handbook states that they will be separated during orientation as soon as it becomes evident that they are unable to meet the requirements of the position.  The plaintiff received a satisfactory 30-day probationary evaluation, except that her productivity was rated unacceptable. She denied receiving a 60-day evaluation (which was disputed).  However, as her 80-day evaluation approached, her supervisor reached out to other supervisors for their opinion.  One emailed that the plaintiff was very slow, did not grasp the concept, demonstrated no sense of urgency and sometimes had to be reassigned to a different task.  The local postmaster recommended that she be terminated.  She was terminated following her 80-day evaluation for inefficiency and brought suit alleging age, race and national origin discrimination and retaliation.  The district court granted the employer summary judgment.

The Court rejected the plaintiff’s argument that the employer’s explanation was pretextual because the rationale was insufficient to motivate the employer’s action.  She pointed to the fact that no other employee had ever been fired for working too slowly.  However, the Court summarily rejected her argument on the grounds that the Employee Handbook:

says that employees “should be separated as soon as it becomes evident that they are unable to meet the requirements of their positions.” Handbook § 584.35. Working inefficiently is sufficient to motivate the firing.

The Court also rejected the plaintiff’s argument that her termination lacked a basis in fact based largely on the Honest Belief Rule.   The employer produced her 30-day evaluation showing that her productivity had been rated “unacceptable” and indicated that she never improved.  The employer also produced an email from one of her supervisors indicating that she worked very slowly and could not keep up with her co-workers.   Although the employer did not use objective metrics to measure productivity, the plaintiff’s own subjective view of her performance was insufficient to create a disputed issue of fact about whether the employer’s explanation was reasonably based on facts.   Her supervisor’s “belief about [the plaintiff’s] performance was reasonable. Not only was the belief based on [her] own observation, but also on the observations of other supervisors who all agreed she was working slowly.”  Because the supervisor’s conclusion was reasonable, the plaintiff “cannot show pretext by showing it was wrong.”

            [A]n employer’s use of subjective reasons in terminating an employee, without more, “does not raise an inference” of discrimination. . . . And [plaintiff] “has offered no evidence from which a reasonable juror could infer that the [employer] manipulated, abused, or misapplied that criteria to affect” her chances of being retained at the end of the probationary period. . . . . So even when an employer uses an “evaluation process [that] was haphazard” that alone cannot create a “reasonable inference” of discrimination.  . . . . And an employer’s “unwise business judgments” or “faulty evaluation system” does not establish an inference of discrimination either.

The plaintiff’s efforts to show that her inefficiency did not actually motivate her terminations failed largely from lack of specificity.  She did not show how other events were “’logically or reasonably tied’ to the adverse action against her, that the same “bad actors” were involved, or that the conduct was in close temporal proximity, among other factors.”   Among other things, she incorrectly claimed that four employees had been fired and could not show that her supervisor was involved in the termination of the fifth.    Her attempt to show better treatment of white coworkers failed because their negative evaluations related to their attendance and not to their productivity.  Thus, “[s]uperficial similarities between a disciplined employee and his colleagues” are not enough to make them comparators.”  Further, some of her alleged comparators improved their performance while the plaintiff did not.  The third comparator had a valid excuse for her absences. 

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 Addresses Union Issues Involving ERISA and Tacit Agreements on Arbitrability of Grievances in a Double-Breasted Shop

 Earlier this month, the Sixth Circuit Court of Appeals issued two interesting union-related decisions.  In one, it held the district court had jurisdiction to hear an ERISA claim even though the parties’ bargaining agreement had expired a years earlier because the union did not request the court to decide an unfair labor practice claim over the duty to maintain the status quo during negotiations. The other case involved whether a double breasted shop was subject to arbitration under the grievance procedure in a subsidiary’s bargaining agreement and whether the parent company had tacitly agreed to permit the arbitrator to decide the initial question of arbitrability by appearing at the arbitration.   The Court remanded the case to determine whether the parent company had tacitly agreed to permit the arbitrator (rather than a court) to determine arbitrability.  The Court also found that the employer’s motion to vacate the award was timely because it was filed within three months of the arbitrator’s supplemental award fixing damages even though it was filed four months after the arbitrator determined liability.

In Greenhouse Holdings v. Int’l Union of Painters and Allied Trades, the Kentucky employer owned 90% of a Tennessee subsidiary, which had a bargaining agreement and shared a similar name with the parent organization.  The union then filed an ambiguous grievance, which was submitted to arbitration.  The Union indicated that it believed that both the Kentucky and Tennessee operations were subject to the bargaining agreement while one management representative insisted that the Kentucky operations were non-union.  The arbitrator sided with the union and ordered wages paid to the Kentucky employees as well as the Tennessee employees.  The employer moved to vacate under the FAA.

The district court agreed that there was insufficient evidence that the employer had agreed that its Kentucky operations were subject to the bargaining agreement and had never signed the CBA.   However, the Sixth Circuit determined that this did not end the question and remanded the case for the trial court to re-examine the facts.  The employer may have tacitly agreed to arbitrate the arbitrability of the dispute (i.e., let the arbitrator decide whether it was subject to the bargaining agreement) instead of permitting a court to determine arbitrability.   If so, the court’s review of the issue would be much more limited and not de novo.

On one hand, the Union’s attorney suggests that Kinney spoke on behalf of Greenhouse at the arbitration. But on the other, Kinney states that he participated only on behalf of Clearview Tennessee. This dispute matters. If Greenhouse wasn’t at the arbitration, or if Kinney appeared on behalf of Greenhouse merely to object to the arbitrator’s authority, then the court can decide de novo whether Greenhouse was bound by the CBA. But if Greenhouse consented to arbitration and the question of whether it was bound by the CBA was clearly before the arbitrator, then a higher standard of review applies.

In Operating Engineers v. Rieth-Riley Construction, the Court reversed the dismissal of the union’s ERISA complaint, but noted that the case may still be ultimately dismissed (on summary judgment) for the same reason.  The union agreed to the termination of the 2013 multi-employer bargaining agreement and refused to accept ERISA contributions from the defendant employer, until the employer discovered an old bargaining agreement (which had expired and been replaced many years earlier), reflecting a previous 9(a) relationship with the union.  The employer insisted on negotiating a new agreement with the union and, thus, maintaining the status quo under NLRA rules.  The union accepted the contributions and then, a year later when negotiations had soured, sought to audit the employer for delinquent contributions and brought suit under ERISA to enforce payment of the allegedly delinquent contributions.  While the union could not attempt to litigate an unfair labor practice charge through ERISA, it could sue the employer for breach of contract under ERISA.  The lack of a live contract – since the bargaining agreement had expired and been replaced years ago – was not a jurisdictional requirement to bring an ERISA action, but it might result in the lawsuit being dismissed on summary judgment or at trial:

The trial court determined that the

source of the obligation . . . . acted as “an essential jurisdictional fact” that it had to “determine before proceeding forward.” . . . And here, [the employer] and the Funds “never entered into another contract” after the CBA expired.  Nor did any independent agreements bind the parties. Without a contract, the court found [the employer’s] contribution duty “[arose] solely” from its “statutory status quo obligation under federal labor law.” . . . . And without a contract, the court held it lacked jurisdiction to hear the Funds’ claim.  So it directed the Funds to the NLRB and dismissed their suit without prejudice.

                 . . . .

Here, the Funds brought an ERISA claim, not an unfair-labor-practices claim. They argued that [the employer] failed to make its “promised [contractual] contributions,” not that it violated the NLRA by refusing to bargain or maintain the status quo. . . . . Because the Funds ask us to find that [the employer] breached a contract, not that it violated the NLRA, their claim does not fall into Advanced Lightweight’s ambit.

Of course, in the end, the Funds’ contract claims may fall flat for the reasons the district court gave.  But those findings go to the merits of the Funds’ ERISA claim, not our jurisdiction to hear it. To the extent that the district court concluded otherwise, it erred.

                 . . .

[Assuming the employer] is right about the contracts; they don’t exist. Even so, a deficient contract claim by itself doesn’t  convert[] the Funds’ complaint into an unfair labor practice claim” and “divest[]” this court of jurisdiction. . . . . Rather, it would mean what a deficient claim always does in this context: The Funds lose on the merits.

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.

Unemployment Compensation Claimant Fined and Penalized for Knowingly Underreporting Bartending Tips and Income Each Week

Earlier this month, the Stark County Court of Appeals concluded that an unemployment compensation claimant was liable for a substantial fine and denial of future u/c compensation as a penalty for knowingly understating her bartending income after she had been laid off from her steel plant job. Carden v. Ohio Dept. of Job & Family Serv., 2022-Ohio-2786.    In short, the claimant reported that she was receiving $100/week in bartending wages and tips, when she knew that she was being paid more than that and never updated or changed her weekly estimate.  Not only was she responsible for repaying the $4,820 overpayment, but she was also fined 25% -  $1,205 -- and declared ineligible for 18 weeks of u/c if she applied again before 2027 due to her fraudulent claims.  Although the common pleas court relieved her of the fine and ineligibility sanction on the grounds that it was an honest mistake, the appellate court found fraudulent intent was implied by her admitted knowledge of her repeated erroneous reports.

According to the Court’s opinion, the claimant took a part-time bartending job after she was laid off.  When she filed her initial reports, she reported $100 in weekly income and did not amend or change her weekly reports after she started to receive tips in her paychecks on top of her hourly wages. She “testified she did not know she could amend her claim after receiving her paychecks, and did not know she could wait to report her earnings until she received her paycheck.”  However, when it was pointed out that a booklet had been “mailed to her which explained this procedure for reporting and amending claims, she testified she did not recall receiving the booklet, although she admitted she might have” and just “didn’t understand it fully.”   She admitted that there was not “a week where she had no tip income, although tip income varied.”

While other counties require a subjective intent to take from the State that to which the claimant is not entitled, this Court noted that it had previously ruled that fraudulent intent for purposes of filing false unemployment claims does not require a subjective intent:

“[F]or purposes of [R.C. 4141.35], fraud simply refers to the making of a statement that is false, where the party making the statement does or should know that it is false.”  . . . The party's “subjective intent * * * is irrelevant to a determination of whether [he or she] made fraudulent misrepresentations pursuant to R.C. 4141.35.” Id. at ¶ 35. The intent to commit fraud may be inferred from intrinsic or extrinsic evidence, as well as from the surrounding circumstances.

The hearing officer had found that individuals are deemed to intend the natural consequences of their actions.  She admittedly knew that her weekly reports were inaccurate, but made no effort to correct them and merely continued reporting the same incorrect amount every week.  The common pleas court found that she was overwhelmed by the stress of her layoff and raising four children, simply did not understand the process and would not have reported any earnings if she had intended to commit fraud.  Yet, under the standard for reviewing administrative decisions, the trial court was bound to affirm the UCBR’s decision if there was any evidence in the record to support it, instead of re-weighing the evidence. “Regardless of whether or not she reviewed and understood the booklet, she knew or should have known she was consistently under-reporting her income, yet failed to amend her earnings reports.”

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.

Hamilton County Court of Appeals Affirms Employer's Summary Judgment When Response to Co-Worker Harassment Complaint Was Swift and Effective.

 Last week, the Hamilton County Court of Appeals affirmed an employer’s summary judgment on a sexual harassment claim.  Klotz v. Game On Sports Bar & Grill, 2022-Ohio-2847.  The plaintiff alleged that a co-worker had intentionally harassed her three times on one shift.  After conducting an immediate investigation, warning the co-worker, working with the plaintiff so that she would not be alone again with the co-worker, contacting all other female employees and agreeing to not schedule the plaintiff with that co-worker again in the future, the employer warned them both when the plaintiff started a verbal altercation.  The court focused only on whether the employer could be held liable for co-worker harassment and concluded that the employer had not been negligent in its response to the plaintiff’s original complaint.  Neither the plaintiff nor any other employee suffered harassment before or again after the employer took action.  The fact that the employer took action within the week of the complaint and no other incidents were reported was sufficient to prevent liability.  “When an employer has actual notice of coworker harassment, an employer generally is entitled to summary judgment on a sexual-harassment claim where the employer’s response was aimed at preventing, and did prevent, future harassment.”

According to the Court’s decision, the employer never published a sexual harassment policy.  The plaintiff bartender alleged that the fill-in cook intentionally thrusted his pelvis into her buttocks area three times on the first night that they were scheduled to work together alone.   Three other servers had mentioned to the owner’s wife only a few days earlier that the same cook had made them uncomfortable by invading their personal space in tight spaces.  However, they later denied that they felt sexually harassed and did not think it was worth mentioning to management.  The owner met with the cook, who denied the allegations, reviewed video surveillance from the evening in question (which did not substantiate the allegations) and warned the cook that he would be fired if there were any further similar incidents.  No documentation was placed in the cook’s personnel file.   The owner however texted all female employees about having warned the cook and encouraged them to report any further inappropriate incidents by him, another employee or guest.  No one did.  When, the plaintiff objected to working alone again with the cook the following week on a pre-scheduled shift, the owner agreed to work with her, agreed to never schedule them together again and offered to review the video footage with her to get additional context.  When she started a fight with the cook at the end of the shift, the owner told them to stop and she resigned without ever reviewing the video.  Later, the owner reported the incident to the police, who also reviewed the video and declined to press charges.

The plaintiff’s claim was for hostile work environment by a co-worker.  Under Ohio law,

In order to establish a claim of hostile-environment sexual harassment, the plaintiff must show (1) that the harassment was unwelcome, (2) that the harassment was based on sex, (3) that the harassing conduct was sufficiently severe or pervasive to affect the “terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment,” and (4) that either (a) the harassment was committed by a supervisor, or (b) the employer, through its agents or supervisory personnel, knew or should have known of the harassment and failed to take immediate and appropriate corrective action.

In short, an employer is only liable for co-worker harassment when its own negligence leads to a continuation of the hostile work environment or causes harassment. “The Sixth Circuit Court of Appeals has held an employee must show that the employer’s response to the employee’s complaints manifested an indifference or unreasonableness considering the facts the employer knew or should have known.”

While the absence of a sexual harassment policy could have caused the employer to lose an affirmative defense if the alleged harasser had been a supervisor, it was not a factor in co-worker harassment.  Supervisor harassment can cause vicarious liability, while co-worker harassment is evaluated with a negligence standard.  Further, the plaintiff made the complaint to the owner even in the absence of a sexual harassment policy. “Thus, it is too speculative to conclude in this case that the lack of written sexual-harassment policy caused the sexual harassment or led to the continuation of the claimed hostile-work environment.”

The actions taken by the employer in the week following the plaintiff’s complaint were effective and sufficient to prevent additional incidents and to avoid liability.

Here, the evidence demonstrates Game On took Klotz’s allegation seriously by (1) issuing a warning to McCoy within hours of Klotz’s complaint, (2) contacting Klotz and all the female servers to urge them to come forward immediately if they experienced anything inappropriate, and (3) taking steps to ensure that Klotz never had to be alone with McCoy again. These actions were undisputedly effective in preventing future harassment.

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.