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.

Sixth Circuit Rejects Attempt to Expand ADA Interference Clause and §1985 Conspiracy Claim to Non-Employer

On Friday, the Sixth Circuit Court of Appeals affirmed summary judgment in an ADA and §1985 conspiracy action brought against a hospital by a former nurse of a group physician practice which had employed her.   Post v. Trinity Health-Michigan, No. 21-2844 (6^th Cir. 8/12/22).  After her employer terminated her (claiming budgetary reasons) and filed for bankruptcy, the nurse filed suit against the hospital where her had performed her duties alleging that she had been terminated on account of her disability and that the hospital had interfered with her ADA rights and conspired with her employer to terminate her in violation of the ADA.   The Courts found that the ADA – including the interference clause – only applied to employers, which the Hospital was not.  Further, it similarly concluded that §1985 only applied to constitutional causes of action and certain protected classes and could not overlap with statutory causes of action under the ADA. “[A] plaintiff can assert a claim of interference with employment-related rights under § 12203(b) only against an employer (or the few other entities listed in 42 U.S.C. § 2000e[1]5(b)).”

According to the Court’s opinion, the plaintiff nurse had been employed by the defendant hospital for a number of years.  However, the hospital outsourced her department to a physician group practice, terminated her employment and she continued to work in the same rooms, but for the group practice instead of the hospital.  At some point, she suffered a concussion while at work, received workers compensation and attempted to recover enough to return to work.  However, she lost her hospital privileges while she was off work and neither her employer, nor the hospital would permit her to practice her craft in a simulation room prior to returning to work as suggested by her treating physician.   Her employer also would not certify her ability to return to work under the circumstances as necessary to regain her hospital privileges.  Ultimately, she was terminated by the practice for budgetary reasons and the practice filed for bankruptcy shortly thereafter.  Unable to sue her employer, she brought suit against the Hospital for interfering with her ADA rights and for conspiring to deprive her of rights under the ADA.   Oddly enough, she never alleged that the hospital was a joint employer with the group practice.

The ADA’s interference clause does not explicitly apply to employers:

It shall be unlawful to coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of his or her having exercised or enjoyed, or on account of his or her having aided or encouraged any other individual in the exercise or enjoyment of, any right granted or protected by this chapter. 42 U.S.C. § 12203(b).

It also applies to other ADA sections governing the government and public accommodations.  Could this, for example, apply to people who illegally park in spaces reserved for the handicapped? However, the Court found the structure of the ADA  and the remedial section’s incorporation by reference to Title VII (which only applies to employers) clarified that the interference clause only applied to employers (and others not at issue in this litigation).   

            Both the plain text of the ADA and our precedent on a related question rebut [the plaintiff’s] boundless reading. These sources instead demonstrate that, in this employment setting, the interference provision authorizes suits only against employers (and a few other entities that are irrelevant in this case).

                . . . .

To summarize things in reverse: Title VII permits suit only against employers (and a few other irrelevant entities). 42 U.S.C. § 2000e-5(b), (f)(1). The ADA’s employment subchapter adopts Title VII’s remedial framework. Id. § 12117(a). And the ADA’s interference provision, in turn, adopts the employment subchapter’s remedial framework when a suit raises an employment complaint. Id. § 12203(c). The statutory chain of cross-references thus leaves no doubt that the interference provision in § 12203(b) likewise permits suit only against employers.

The Court also analogized the interference section to the retaliation section, which applies to “persons,” which the Court had earlier held only applied to employers.  While the Court indicated that it might have been willing to entertain a joint-employer theory, she never alleged such a theory and thus, waived that argument.

Section 1985 is a reconstruction era statute signed by President Grant to fight the KKK.   One of its long clauses, contains a 255-word sentence creating a damages action against those who, as relevant here, “conspire” “for the purpose of depriving” “any person or class of persons” of “the equal protection of the laws” or “equal privileges and immunities under the laws[.]” 42 U.S.C. § 1985(3).”

This claim fails because [the plaintiff] has not shown that any conspiracy deprived her of the “equal protection of the laws” or the “equal privileges and immunities under the laws[.]” 42 U.S.C. § 1985(3). To avoid turning § 1985(3) into a generic tort law covering any injury inflicted by two parties, the Supreme Court has interpreted these two phrases to require “some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators’ action.” . . . But our court has substantially limited any non-race-based theory. We have held that § 1985(3) reaches only conspiracies targeting a person based on a classification (like racial discrimination) that would receive heightened scrutiny under the Supreme Court’s equal-protection framework. See . . . . Unfortunately for [the plaintiff], this holding means that § 1985(3) does not “cover” conspiracies grounded in “disability-based discrimination” because that type of discrimination is subject to deferential rational-basis review.

The Court refused to consider differing precedent in other Circuits without a superior decision from the en banc court or the Supreme Court.  In any event, §1985 typically requires some action by the state (i.e., government) to have a cause of action, but the nurse had only sued a private hospital.   In addition, the Supreme Court had previously “cautioned against allowing a plaintiff to use § 1985(3) to enforce a right” that was governed and precluded by Title VII “when the remedial limits in that statute would bar the plaintiff from suing directly under it.”

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 FMLA Interference Claim When Employee Was Fired for Missing Work Due to Isolation Order During 2020 Pandemic

Last month, the Sixth Circuit Court of Appeals affirmed the dismissal of an employee’s FMLA interference claim when she was fired after missing work for three weeks because of an upper respiratory infection during the COVID pandemic after her physician had advised her to stay home for 10 days and the Health Board advised her to self-quarantine because she had been exposed to COVID. Nuttal v. Progressive Parma Care Center LLC, No. 21-4199 (6^th Cir. 7/26/22).   The Court excused the employer’s failure to provide her with new FMLA eligibility or designation notices and concluded that she could not show interference with FMLA leave because she had not given her employer notice that she suffered from a serious health condition that incapacitated her or required continuing care from a physician by simply referring to her physician’s direction or the isolation order.   She had never been incapacitated and did not require continued medical care.  She had already been provided with eligibility notices with prior FMLA requests within the year and her eligibility had not changed.  A designation notice was not required until she provided a medical certification, which was never received.  Because she had already been on notice of her FMLA rights and obligations, she could not show that she had been prejudiced by the lack of a designation notice.  Interestingly, the Court never addresses the Families First Cornavirus Relief Act and how notice of an isolation order could trigger the FMLA.    

According to the Court’s opinion, in March 2020, the plaintiff developed an upper respiratory infection after being exposed to COVID.  Her physician advised her to remain home for 10 days and the Board of Health directed her to remain home until she had been symptom free for 72 hours and 1 week after symptoms first appeared.  She immediately notified her supervisor that she needed time off work.  She advised HR a few days later and was directed to use her accrued vacation and then apply for unemployment.  In early April, she asked her physician to send HR a letter about needing to remain home, but it was apparently never sent.  She continued to keep her employer informed and expressed concern about contracting COVID and her hesitancy to return to work.  On April 17, she was released to return to work and immediately informed her employer, which had already posted her job and told her that she was no longer needed.   

The plaintiff filed suit on the grounds that the employer never provided with her the required FMLA notices and interfered with her FMLA leave.  The trial court found that the plaintiff had not given adequate notice of her intent to take FMLA leave, that the employer provided required notice and she could not show the failure to provide an additional notice interfered with her FMLA leave.

The Sixth Circuit focused exclusively on the regular FMLA regulations and never cited to the Families First Cornavirus Relief Act, which was enacted by March 19, 2020:

A “serious health condition” is an illness that involves “continuing treatment by a health care provider.” 29 U.S.C. § 2611(11)(B). Illnesses like the common cold and the flu, which can be treated with bed rest, fluids, and over-the-counter medication, generally do not qualify as serious health conditions. 29 C.F.R. § 825.113(c)–(d). “Calling in ‘sick’ without providing more information will also not be considered sufficient notice to trigger an employer’s obligations under the Act.” Id. § 825.303(b).

The plaintiff alleged that she had been her employer on notice when she texted her supervisor that she had been directed by her physician to quarantine for two weeks, sent a copy of the Health Board’s isolation order and provided her physician’s contact information in case HR required more information. 

But she told them nothing about the severity of her illness—which in fact did not require continuing treatment by her doctor. See id. § 825.115(a)(1). . . . . . In short, Nuttall gave no indication that she sought time off because she had a serious health condition that incapacitated her. She thus cannot make out a prima facie case that Parma Care Center interfered with her rights under the FMLA.

As for the lack of eligibility notice, she had already been sent two such notices within the prior 12 months and her eligibility had not changed.  “When ‘an employee provides notice of a subsequent need for FMLA leave’ within 12 months ‘due to a different FMLA-qualifying reason, and the employee’s eligibility status has not changed, no additional eligibility notice is required.’ Id. § 825.300(b)(3).”    However, the employer apparently never notified her with 12-month period it was using – meaning that she was entitled to rely on the 12-month period most advantageous to her under 29 C.F.R. § 825.200(e).  Since a new calendar year had started since her last FMLA request, she asserted that a new eligibility notice was required because she would have provided the medical certification form if it had ever been requested.

The Court was unimpressed.  It concluded that the prior FMLA notices had adequately informed her  of her rights and obligations:

[She] has not presented evidence that a FMLA notice in 2020 would have made a difference. Her choice in 2019 to fill out the FMLA paperwork—even though she states she did not ultimately take FMLA leave—is evidence that she knew her FMLA rights and the FMLA process. And without taking FMLA leave in 2019, no 12-month period could start, so the calculation method chosen by Parma Care Center is irrelevant. Simply put, [her] failure to provide evidence that Parma Care Center’s lack of notice in the 2020 calendar year precluded her from completing the same paperwork again for her respiratory illness is fatal to her claim.  Her knowledge of her FMLA eligibility in 2019 precludes the possibility of harm, even if the center had to provide notice.

Because Nuttall cannot prove that Parma Care Center’s alleged lack of notice actually caused her harm, she cannot prove yet another one of the elements needed for a prima facie case of FMLA interference, and her claim fails. We need not address the other elements.

The Court never indicates why the FFCRA did not apply in this case and it seems likely that the employer was a large employer with over 500 employees.

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 Denied When Physician Indicated Claimant Had No Work Restrictions But Would Know When to Leave Job

 Last week, a divided Franklin County Court of Appeals affirmed the denial of unemployment compensation to a claimant who had given notice of resignation and then a week later failed to return to work. Boynton v. Ohio Dept. of Job & Family Servs., 2022-Ohio-2597.   The Court found that the employee did not have “just cause” to resign her position because she had failed to first attempt to resolve any issues with her employer before submitting her resignation.   Moreover, her physician had stated that he had not placed her on work restrictions or advised her to quit her job, rendering her medical complaints irrelevant. 

According to the Court’s opinion, the claimant had worked as a cashier for a retail establishment for a few years.  Because of, among other things, lower back pain, her employer had accommodated all of her requests, including reducing her work hours and permitting her to rest one leg on a basket.   However, one day, she indicated that she was giving her two-week notice of resignation for several reasons, including to care for her ill fiancé, her low back pain and dissatisfaction with the employee rewards system.  After a disagreement with a co-worker a week later, however, she informed the manager about her emotional distress, and left work early.  She later told her manager that she would not be returning to finish her two-week notice because of COVID concerns. 

The Court noted that employees cannot receive unemployment compensation following a voluntary resignation unless they had just cause to resign

"Traditionally, just cause, in the statutory sense, is that which, to an ordinarily intelligent person, is a justifiable reason for doing or not doing a particular act." Rider v. Dir., Ohio Dept. of Job & Family Servs., 10th Dist. No. 16AP-854, 2017-Ohio-8716, ¶ 9. Under this standard, " 'an employee is required to cooperate with the employer to resolve work-related problems. * * * If the employee does not cooperate or give the employer sufficient time to accommodate the employee's needs [and] concerns, that employee will usually not be found to have just cause if he or she quits.' " . . . " 'Essentially, an employee must notify the employer of the problem and request it be resolved, and thus give the employer an opportunity to solve the problem before the employee quits the job; those employees who do not provide such notice ordinarily will be deemed to quit without just cause, and, therefore, will not be entitled to unemployment benefits.' "

The claimant did not dispute that she failed to discuss her reasons for resignation with her employer before her resignation, except with respect to her medical ailments.   However, again, there was no evidence that she had ever indicated that the accommodations that she had requested and been provided were inadequate prior to her resignation (although there was evidence that the accommodations had not resolved her back pain issues).   She had provided with her unemployment application a statement from her treating physician that he had never placed her on work restrictions or advised her to resign, but that she would know when it was time to leave.

The ODJFS found that she lacked good cause to resign because she had not attempted to resolve with her employer any of these three issues before giving notice.  The Court’s majority found that there was adequate evidence in the record to support this conclusion. 

The dissent found that the physician’s comment that “she will know when it is time to not work anymore” satisfied her burden of proving good cause because it was clear no reasonable accommodation would be possible to permit her to continue working as a cashier.  The employer also had been on notice that her prior accommodations had not solved the issue with her back pain, but made no further suggestions.    Further, the dissent would not penalize her for leaving work prior to the completion of her two-week notice because she had been unwell and was legitimately concerned about COVID.