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July 2009 Legal & Legislative Update |
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LEGISLATION Comparable-worth bill. Senate Bill 904/House Bill 2151 proposes amending the Federal Equal Pay Act to provide equal pay for “jobs which are equivalent in skill, responsibility and working conditions.” This law would create “comparable worth,” instead of just equal pay for the same work. The proposal also expands the Equal Pay Act from only gender to also include discrimination on race and national origin. Employers would be required to make public disclosure of job categories and pay scales. Healthy Families Act (HFA) introduced. The federal HFA has been introduced into both the House and Senate. It would require employers with 15 or more employees to provide 56 hours of paid Family and Medical Leave to all employees. The HFA is Senate Bill 1152 and House Bill 2460. The “new” FMLA rules may be the old version soon. Three bills (HR 2132, 2161 and 1723) have been introduced to change the federal FMLA. HR 2132 would expand FMLA to cover care for domestic partner, same-sex spouse, parent-in-law or grandparent. HR 2161 would reverse several of the FMLA rule changes which went into effect January 2009, such as allowing settlement of FMLA rights without review and approval by DOL or the courts; prohibit an employer from approving or denying FMLA leave based on compliance or noncompliance with employer leave request policies; reverse regulations that would allow an employer to directly contact an employee’s medical provider; restore previous “fitness-for-duty” certification rules for employees who take intermittent leave; and revise the recertification timelines. HR 1723 would provide 12 weeks of paid FMLA by establishing a federal trust fund to which both employers and employees would contribute. Domestic partners included in Wisconsin FMLA. The new budget bill, signed by Governor Doyle, expands the state FMLA to add domestic partners as family members for an employee’s FMLA use. Wisconsin employers should modify their policies to reflect the change. LITIGATION The Legal Update includes new developments and matters of interest throughout the United States. Be aware that our various federal circuit courts reach somewhat differing conclusions. So a federal court decision in another part of the country, and especially a different state’s court decision, may not quite be “the law” in your jurisdiction. Some courts lead the way; others lag behind. The Legal Update lets you see the overall trends and compare them with your jurisdiction. Wisconsin is part of the Federal Seventh Circuit (Wisconsin, Illinois and Indiana). THEME OF THE MONTH
Banned by the Customer At times, third parties can call the shots. When customers ban employees from their premises, eliminating their primary work, does that allow termination of the employment or must alternatives be found? The following two cases have opposite outcomes. The second case illustrates the importance of thinking in advance about how a customer or other third party’s actions can affect employment, and being prepared. In both of the following cases, the employees engaged in problem behaviors. However, what does an employer do when the customer acts for an illegal purpose against an innocent employee, such as rejection of sexual advances or other discriminatory reasons? Would terminating the employment for lack of work make the employer an accomplice in discrimination? Spitting salesman validly fired. A 53-year old snack salesman lost his age discrimination case. A grocery store manager saw him spitting on packages to wipe off the expiration date and keep the aged stock on the shelf. He was then banned from all of the grocery chain’s stores, and as a result, fired by his employer. He claimed age discrimination because a younger salesperson had been banned from a customer’s store but not fired. The court found the situations not similar. The younger employee was asked not to come into one store where her cousin was employed because there was a family dispute issue. In the present case, the plaintiff was banned from all stores in a grocery chain due to overt, inappropriate and unhealthy behavior. Cantu v. Frito Lay, Inc. (Tex. Ct. App., 2009). Caught between the union and the customer. A contractor had a permanently-placed mechanical crew working on equipment at a customer’s manufacturing plant. The senior mechanic had just started his break when the customer’s plant manager radioed about an equipment power outage and smoke. The mechanic replied that he was on break and would deal with it later. The plant manager radioed again, saying there were now flames coming out of the ceiling by the equipment. The mechanic replied that he was still on break. Other workers were dispatched to the scene, and the senior mechanic joined them later, once his break was over, and fixed the problem. The customer was angry and banned the mechanic from ever entering its property again. Since there was no other work available, the contractor terminated the mechanic. The union grieved the termination. The arbitrator ruled in favor of the union, finding that there were not sufficient grounds under the provisions of the collective bargaining agreement (CBA) to terminate the mechanic. The arbitrator agreed that the contractor could not force the customer to lift its ban on the mechanic because it was not a party to the CBA. However, the CBA’s provisions did not allow the discharge and had to be followed, so the mechanic was still due pay until suitable work was available. The contractor could try to deal with future, similar situations in the next CBA negotiations. In re UGL Unicco (2009). Discrimination U.S. Supreme Court Ricci, et al. v. Destefuno, et al. (June 29, 2009). In a 5 to 4 decision, the Supreme Court reinstituted a test for firefighter promotion. The city of New Haven, Connecticut, had rejected the test results because of disparate impact. Almost all who qualified for promotion were White; African American candidates had no chance of being promoted for the next two years. The city was concerned about the apparent discriminatory end result of the test and any resulting discrimination suits. Title VII prohibits disparate impact in testing. If a test has an apparently discriminatory result, the employer can then only use the result if it can show the test is still “validly” job related, regardless of the skewed outcome. “Invalidity” allows suit for discrimination. The Firefighters Union and the top scoring White candidates sued under Title VII and 42 U.S. Code 1983 (Constitutional Equal Protection) to force their promotion to go through. They lost in the district and appellate courts (which conservatively used established precedent for the decision). The Supreme Court ruled that though the test had a clear adverse impact, the city did not have strong enough evidence to show the test was actually invalid. The majority opinion held that the city took a look at the racial outcome but then did not do the second step of closely examining the test for the elements of invalidity before rejecting its results. Thus, the city’s decision was based on the appearance of race, without any other significant evidence. In the process, the court also added confusion for future testing cases, especially for private sector employers. Apparently
“activist” court. The decision seems to depart
from established precedent and radically change the established
standard in at least two ways. Reversal of
standard. Normally the “validity test” is a defense employers
use when defending a disparate impact challenge to use of a test,
with the plaintiffs having the ultimate burden of proof. This
decision seems to impose a new reverse obligation. Before an
employer can act to correct any concerns about discriminatory impact
of a selection device, the employer must establish evidence of the
test’s invalidity, with the employer having the burden to do so.
The court seemed to impose a
Constitutional standard into Title
VII. The majority opinion stated that it was deciding
only the Title VII case and did not need to reach the §1983
Constitutional claim. Though repeatedly stating that it was ruling
only on the Title VII issue, the court seemed to adopt the
much more stringent Constitutional standards which usually are only
applicable to public sector cases under §1983. It required a
“strong basis” evidentiary standard and a seemingly
narrowly-tailored approach. Though a city could expect that
standard in a Constitutional Equal Protection case under 42 U.S.
Code 1983, this would be a much tougher standard than has previously
been applied to Title VII cases and to private sector employers.
Statute of Limitations Old tenure denial results in one of the first Lilly Ledbetter Fair Pay Act decisions. Under the recent Fair Pay Act amendments to Title VII, old decisions may give rise to current cases each time a pay check continues the effects of that ancient decision. A university professor was denied tenure in 2004. This negatively affected her compensation from then on. She failed to file suit for several years, until well after the standard Title VII statute of limitations. The court held that the professor’s recently-filed case fit within the new law’s expanded timeframe and could proceed to trial. Gentry v. Jackson State University (S.D. Miss., 2009). Age Unauthorized discounts compounded. A store manager received the standard 20% employee discount on the purchase of a dishwasher and oven. He then used his manager’s “override” code to apply another 70% in seasonal discounts and other refunds, thus paying only 10% of the total price. Multiple discounts and using one’s code for a personal purchase violated company policy. When this was discovered, he tried to deny and cover up the multiple transactions. He was fired. He sued for age discrimination, claiming that his manager had made prior “ageist” remarks and that the stated reasons for discharging him were “inconsistent.” (One letter stated “violation of company policy” and another stated “ethics violations” as the reasons for discharge.) The court dismissed the case. Any age-related comments were “stray remarks” not tied to the termination. Violating “policy” and “ethics” were not inconsistent reasons; both could equally describe the manager’s acts. No younger employee had been treated in a more favorable manner. Braymiller v. Lowe’s Home Centers, Inc. (5th Cir., 2009). Gender You probably did it -- because you’re male! The Second Circuit Court of Appeals ruled in favor of a man who was fired due to gender stereotyping. A female co-worker accused him of harassment. He denied the harassment. The company did no investigation whatsoever. The employer was afraid of being sued by the woman so informed the male employee he was being fired because “she knows a lot of attorneys and you probably did what she said you did because you’re male!” The court ruled that this gender stereotyping is illegal sex discrimination under Title VII. An employer may not stereotype men as having an innate propensity to harass and discharge a man on that “invidious” presumption. Sussman v. Gamache (2nd Cir., 2009). [No one “corners the market” on harassment. Over one-fourth of sexual harassment cases are filed by men. Past Legal Update issues contain a number of cases in which women were the perpetrators of harassment. All incidents should be fairly explored before any discipline or discharge.] HR manager takes promotion then sues over pay of her replacement. A female Human Resource manager earned $41,548 per year. She took a promotion to a job paying $45,600. The company hired a male HR manager to replace her and paid him $62,500. The former manager sued under the Equal Pay Act, claiming she also should have been paid at that higher rate. The company defended by claiming it hired the new manager using the going “market rate” for the job, without any gender consideration. However, the court rejected that argument as “insufficient as a matter of law.” The going market rate was the same during the female HR manager’s tenure. The new male hire had no more, perhaps less, experience. There appeared to be no other explanation except gender for paying a woman so far below market rate and being willing to suddenly pay a man so much more. Drum v. Leeson Electric Corp. (8th Cir., 2009). This case does not mean any company must establish and pay “market rate.” One is free to pay far less. However, new hires or replacements should also be brought in at the lesser rate in order to assure non-discrimination. Disability High-speed car chase not excused by disability. A soup salesperson with depression experienced an alleged severe episode while driving a company car. He pointed a gun at other drivers, then led police on a high-speed car chase until he crashed into a truck. He was fired for violating car use and other company policies. He sued, claiming his disability caused the incident and that the company should have considered that and not fired him. The court disagreed. A company is entitled to enforce its policies and fire people for serious violations as long as all are treated equally. The ADA does not give employees a dispensation from discharge for serious infractions. Llewellyn v. Campbell Sales Co. (7th Cir., 2009). [Be aware that lesser policy violations may require forbearance from discharge and the opportunity for treatment, etc., if the violation was due to disability.] Inflexible drug test violates ADA. A company’s drug test identified illegal and legal prescription drugs which might affect safety. Employees who tested positive for prescription medications which could affect safety were not hired or were removed from safety-sensitive duties. Seven employees presented medical information that their medications had been evaluated by their doctors and posed no safety concerns, but were removed from their jobs nonetheless. They sued. The court ruled that the employer’s inflexible presumption that a particular medication created a safety problem in all circumstances, in all people, and failure to consider medical information otherwise, violated the ADA. The ADA requires consideration of individual circumstances. Bates, et al. v. Dura Automotive Systems, Inc. (M.D. Tenn., 2009). ADA plaintiff must prove disability, not piggyback on other agency determinations. The ADA requires proof that a condition substantially impairs a major life activity. In Toscano v. Warren County Dept. of Human Services (3rd Cir., 2009), the plaintiff alleged that he was not hired due to disability. His evidence of disability was an SSI determination of disability. The court dismissed the case for failure to establish disability. The definition of disability and the process of proof are different under various other programs, such as SSI, than under the ADA. Thus, one must present proof of ADA disability and not simply rely on some other agency’s prior, and sometimes old, determinations. A similar decision was made in Bowers v. Dept. of Veterans Affairs (S.D. Texas, 2009), in which the discharged plaintiff’s evidence of disability was a VA determination of 50% service-connected disability. Even the VA did not have to accept its own determination of “disability” when defending an ADA or Rehabilitation Act case. The plaintiff must present fresh proof of current impairment. Retaliation Menards sued by own attorney -- court orders reinstatement. The Wisconsin Court of Appeals has ordered Menards to pay damages and reinstate a corporate legal counsel. The plaintiff, a Vice-President and Executive General Counsel, complained internally about gender-based pay discrimination. She then alleged that she was retaliated against. In binding arbitration, a panel of arbitrators found Menards had violated the Equal Pay Act, Title VII, and the Wisconsin Fair Employment Act. It awarded back pay, punitive damages and reinstatement to higher pay and back bonuses. The plaintiff appealed, contending she should be awarded front-pay instead of reinstated, because the company owner was hostile toward her and had already engaged in retaliation. Menards also appealed, contending that there should be no reinstatement because the discrimination complaints had materially altered the attorney-client relationship. The court disagreed with both parties. In-house legal counsel is no different than any other employee, and the discrimination laws provide for reinstatement. It also held that not reinstating would reward a discriminating employer, allowing it to rid itself, for a price, of people who raise valid complaints, rather than correcting its behaviors. Sands v. Menards, Inc. (Wis. Ct. App., 2009). This case is very unusual in that both parties appealed, each asking for the same thing -- no reinstatement. Yet, the court rejected both and imposed its own view, to the dismay of the parties who now must work together closely and resolve their discomforts. Union did not discriminate, but post-case behavior generates valid retaliation action. Five African American members sued their union for racial discrimination in its hiring hall and recall from layoff practices. They lost. The court found no discrimination. After the case was over, the union made public postings repeatedly naming the five members and how much they had cost and harmed the union to defend the case. In the resulting case, the court agreed that this was a valid claim for retaliation. The union’s actions held the five members up for public disapproval and negative treatment by other members and could be seen as designed to have a “chilling effect” on anyone else who might wish to ever complain about discrimination. Franklin v. Local 2 of Sheet Metal Workers Int. (8th Cir., 2009). |
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