Employers cannot
prohibit employees from attending scheduled drills or annual training,
nor can employers force employees to reschedule such obligations. However,
the law provides time limits for employees to return to work after drills,
training or other military-related absences.
The National
Employers Resource Alliance has prepared a USERRA compliance kit to
further assist employers and employees in understanding their rights
and obligations under the law. A free copy of this kit may be obtained
by calling the Alliance at (800) 941-4511. You also may call your contact
at the Firm with any questions about the USERRA.| Back
to top
DEFAMATION
Law
Enforcement Background Checks. Due to concerns regarding
potential liability for defamation, employers these days who are asked
for job references concerning a former employee typically reveal very
little beyond basic, non-controversial information such as position
held and dates of employment. This option is not always available,
however, if the former employee has applied for a peace officer position
with a state or local law enforcement agency. California law requires
law enforcement agencies to conduct thorough background investigations
on all peace officer candidates, and also requires employers to cooperate
with these investigations. A recent decision by our California Court
of Appeal will make it easier for employers to defend lawsuits by
rejected peace officer candidates who try to blame a former employer
for giving a candid uncomplimentary referral. The employer in this
case was represented by BR&G founding partner Richard S. Rosenberg
and associate John J. Manier. The employer was contacted by the Los
Angeles Police Department when a former employee applied for a peace
officer position with the LAPD. She did not get the job and sued her
former employer. The employee alleged that the employer and one of
its managers defamed her by giving false information to the LAPD.
The Court of Appeal ruled any defamation claim was barred by the "absolute
privilege" under California law for so-called "official proceedings."
The employee argued that a change in the law in 1993 allows employers
to be sued if it can be established that the employer acted with "malice."
The court disagreed, saying that the privilege afforded to employers
in such circumstances is absolute. In addition, the court found that
the employee's other claim for alleged breach of contract was barred
as well because she signed a release and waiver of claims as part
of her application with the LAPD. The court ruled that this document
protected all responding employers as well. (Bardin v. Lockheed
Aeronautical Systems Co.)
Liability
For Statements Made In Litigation California law provides
special protection from lawsuits for defamation when what would ordinarily
be considered a defamatory statement is made in the course of a "judicial
proceeding." The theory behind this special protection is that litigants
should be free to speak their mind in a court case without fear of
being sued for defamation. However, the defendants in one case found
out the hard way that there are limits to this protection. The plaintiff
in this case left his sales representative job at Proton Tech Corporation
to work for its competitor, Excelsior Manufacturing. Proton's attorney
faxed a letter to Excelsior's CEO accusing plaintiff of engaging in
unfair competition and also claiming that he had been in jail for
repeatedly and violently assaulting his wife. According to the court
papers, Proton supposedly discovered later on that plaintiff actually
had been in jail for vandalism and shooting a gun at an unoccupied
vehicle, so it sent a second letter to Excelsior admitting its mistake.
The employee sued for defamation and the company tried to defend this
claim under the "judicial proceeding" privilege. The court disallowed
the defense, finding that the litigation privilege did not apply in
this case because the statements about plaintiff's criminal history
were false and were not even tenuously connected to Proton's unfair
competition claims. (Nguyen v. Proton Tech Corp.) | Back
to top
ALTERNATIVE
DISPUTE RESOLUTION
Enforceability
Of Pre-Dispute Arbitration Agreements In the last several
issues of the Update, we have reported on the contentious judicial
debate over employment-related ADR programs. The California Supreme
Court has finally stepped into the fray by agreeing to review a case
which addresses when so-called pre-dispute agreements to arbitrate
employment disputes may be enforced in court. (Armendariz v. Foundation
Health Psychare Services) As we reported in the Fourth Quarter
1998 Update, the state Court of Appeal in Armendariz ruled
that such agreements are generally enforceable. More recent lower
appellate court decisions in California, however, have reached different
results on the issue. For example, in Gonzales v. Hughes Aircraft
Employees Federal Credit Union, the court refused to enforce
a pre-dispute arbitration agreement which it found to be "one-sided"
and "unconscionable." Another appellate court panel, however, reached
the opposite result in Lee v. Technology-Integration Group.
These conflicting opinions have caused considerable confusion for
employers and employees alike. Hopefully, the state Supreme Court
will resolve these questions once and for all for California employers.
The court has not indicated when we may expect a decision in the Armendariz
case, but we will keep you informed of developments in future issues
of the Update.
Fee-Splitting
Provision In a case decided under federal law, the Tenth
Circuit U.S. Court of Appeal recently refused to enforce an arbitration
agreement which required employees to split the costs of arbitration.
The court noted that requiring employees to pay any money to obtain
justice is unfair and acts as an improper financial deterrent to pursuing
a claim. The company's arbitration provision required the employee
to pay half of the arbitrator's fees. If the employee could not pay
his share, the company would advance the entire fee. However, the
employee remained liable for one-half of the fee. The court objected
to this provision, because it created too great of a financial disincentive
for employees with discrimination claims to get their day in court.
The court noted that in many cases, the arbitration fee could be thousands
of dollars, an amount far in excess of what it could cost to initiate
a lawsuit. We have seen similar results in at least one California
federal trial court. Employers considering this type of decision must
be mindful that the fee splitting arrangement may invalidate the entire
ADR agreement. (Shankle v. B-G Maintenance Management of Colorado,
Inc.) | Back to top
WORKPLACE
HARASSMENT
The
Customer Is Not Always Right. In a rather jarring reminder
to employers, the Tenth Circuit U.S. Court of Appeals held that an
employer may be held liable when customers sexually harass an employee
and management-level employees who knew about it fail to step in to
protect the employee. The plaintiff in this case was a waitress at
a Pizza Hut restaurant. During the course of her employment, she complained
to her supervisor on several occasions that two regular male customers
made sexually offensive comments to her. The employee told her supervisor
that she did not like waiting on the two men. When the two next returned
to the restaurant, the supervisor instructed the employee to serve
them anyway. The men made several sexual comments to the employee
and one of them went so far as to grab her hair and breast and put
his mouth on her breast. This prompted the plaintiff to quit and sue
for sexual harassment. The court noted that since management had knowledge
of the customers' harassing behavior, it was obligated to protect
the employee from further acts of harassment. The manager's failure
to step in to protect the employee left the company liable for the
customers' actions. The court found that the company did not discharge
its obligation to protect the employee from further acts of harassment
and suggested that the manager could have done a number of things
to prevent the incident, such as having a male waiter or even the
manager himself serve the customers, or the manager could have asked
them to leave altogether. According to the court, an employer in this
circumstance acts at its peril in ignoring the employee's complaint.
(Lockard v. Pizza Hut, Inc.)
Quick
And Effective Response Can Prevent Harassment Liability
The Fifth Circuit U.S. Court of Appeals has provided yet another example
of how an express anti-harassment policy and complaint procedure,
along with a quick and effective response to employee complaints,
can protect an employer against liability. The court recently found
that an employer was not liable for an executive's alleged sexual
harassment because the employer promptly and effectively responded
to the complaint. The plaintiff in this case claimed that her supervisor
had made various crude sexual comments and gestures to her and became
angry when she warned him that he was harassing her. She reported
the incident to other managers and the human resources director pursuant
to the company's sexual harassment policy. The human resources director
reported her complaint to the company president, who immediately reprimanded
the supervisor and suspended him without pay for one week. When the
employee later expressed concern about possible retaliation, the president
met with her in person and assured her that she would never have to
work with this manager again. The president also stated in writing
that under no circumstance would she be subjected to retaliation.
The president even offered to pay for counseling. Despite all this,
the employee still sued for sex harassment. The court threw out her
claim based in part on the fact that the employer moved quickly and
decisively to remedy the situation and protect the employee from a
recurrence. (Indest v. Freeman Decorating Inc.)
By contrast,
the Tenth Circuit U.S. Court of Appeals recently concluded that an
employer's sex harassment policy was ineffective and its response
to a complaint of sex harassment was inadequate, even though the discipline
it applied to the alleged harasser appeared to be rather severe. These
events took place on a college campus. According to court papers,
the plaintiff's supervisor exposed himself to her and offered her
Fridays off with pay if she would engage in oral sex. He also threatened
to "make her life miserable" if she did not comply with his sexual
demands. The day after the employee complained, a security officer
called the campus police to investigate the allegations. Plaintiff's
police complaint resulted in the supervisor's arrest. The college
suspended the harasser and later transferred him. Despite all of this,
the court ruled that the harassment policy was inadequate because
it failed to provide a reporting facility during weekend and evening
hours, failed to define the policy's requirement of a "formal" complaint,
and failed to provide supervisors with instructions on how to address
informal complaints. Additionally, the court found that the college's
response was neither quick enough nor sufficient. (Wilson v. Tulsa
Junior College)
Defamation
Based On Harassment Investigation. Sexual harassment
investigations require the utmost care because of the extremely sensitive
and potentially damaging nature of the accusations. Even an unsubstantiated
complaint can be a career-altering event in many instances. Thus,
employers must take great care to limit the scope of the investigation
to what is necessary and train those involved to be circumspect about
what they say and to whom. One recent case addressed the novel question
of whether an employer could be sued for defamation by a man accused
of harassment. The plaintiff claimed that he was defamed when the
investigators documented in writing all harassment complaints. A California
Court of Appeal rejected the defamation claim. Prior court decisions
have emphasized that employers must be encouraged to investigate all
harassment complaints, without fear of a lawsuit by the accused harasser.
In this case, a female receptionist complained to a supervisor that
another female was sexually harassing her. Consistent with the employer's
policy, the supervisor documented the conversation and provided a
memo to the personnel department. The court found that because workplace
interaction always carries at least a danger of a sexual harassment
lawsuit, statements made during a sexual harassment investigation
are covered under the so-called "interested persons" privilege under
California defamation law. This means that both parties (here, the
supervisor and the employer) have an interest in the communicating
complaint information, such as to assist in preventing future harm.
This privilege can only be overcome if the plaintiff can establish
that the employer acted with "malice," meaning a reckless disregard
for the truth. The court found that the accused harasser failed to
prove that the employer in this case acted with malice. The employer's
policy required supervisory employees, who may not have any training
in factual investigation, to document and report all sexual harassment
claims without having to ascertain the truth of those complaints.
The court found this policy was reasonable and did not establish malice.
To hold otherwise would discourage full reporting and investigation
and fly in the face of all sexual harassment laws, according to the
court. (Bierbower v. FHP, Inc.)
Equal
Opportunity Harasser In a case that proves that being
a jerk in general is not against the law, the Seventh Circuit U.S.
Court of Appeal found that an employee failed to state a claim for
race or gender harassment where there was undisputed evidence that
her supervisor was a crude individual who treated all of his co-workers
poorly, regardless of their gender or race. Under the law, in order
to state a claim for discrimination or harassment, an individual must
show that he or she was singled out for adverse treatment because
of some protected classification, such as race, gender, age, nationality,
or religion. In this case, the employee had submitted two formal complaints
about her supervisor to management. Following an investigation, the
company determined that she was not being singled out for poor treatment
since a number of white males also complained about being mistreated
by the supervisor. In fact, the plaintiff had herself testified that
her supervisor cursed at all employees on the production line, white
and black, male and female. (Hardin v. S.C. Johnson & Son)
Harassment
By Ex-Spouse Co-Worker. The Eighth Circuit U.S. Court
of Appeal recently affirmed a jury verdict in favor of Kristine Bosley
on her sexual harassment claim against her former employer, Excel
Corporation. Ms. Bosley contended that her ex-husband Rock Johnson
(also an employee) harassed her on the job by calling her sexually
harassing names and threatening to kill her male friend (whom she
later married). The jury found that company management failed to respond
to Ms. Bosley's complaints. Instead, on one occasion when Ms. Bosley
pushed Johnson away from her, it was Ms. Bosley who was escorted off
the premises and suspended. Later, she saw Johnson in another room
and believed he had yet to be disciplined. She pushed past a supervisor
to enter the room and was terminated for allegedly "striking" the
supervisor. The Eighth Circuit upheld the jury's finding of liability
and award of back pay, but sent the case back to the trial court to
recalculate Ms. Bosley's front pay damages. (Excel Corp. v. Bosley)
Harassment
Claim Based On Prisoners' Conduct Rejected. There are
few limits to an employer's duty to maintain a harassment-free workplace.
However, a federal judge in the Southern District of Ohio ruled that
a prison secretary cannot sue her employer based on sexually harassing
conduct committed by prisoners. As the court stated, "It is absurd
to expect that a prison can actually stop all obscene comments and
conduct from its inmates - people who have been deemed unsuitable
to live in normal society. The most we can expect and require prisons
to do is to implement and enforce policies reasonably calculated to
minimize such harassment and protect the safety of its employees."
Needless to say, the prison's defense in this case will not be available
to most employers. (Powell v. Morris)
Punitive
Damages. In general, to obtain punitive damages under
federal job bias laws (such as Title VII), a plaintiff must show that
the discriminating or harassing employee was very high up in the corporate
hierarchy or that higher management approved the harassing behavior.
The Eleventh Circuit U.S. Court of Appeal recently reversed a federal
jury award of $250,000 in punitive damages in a race harassment and
discrimination case, finding that two Wal-Mart employees failed to
show that high-level management knew about the discrimination. The
court noted that the managers here may have misused the authority
delegated to them by Wal-Mart, but that neither of them were high
enough in the corporate hierarchy to allow their discriminatory acts
to be the basis for punitive damages against the company. (Dudley
v. Wal-Mart Stores Inc.) It should be noted that California courts,
by contrast, have ruled that a manager's place in the corporate hierarchy
is not important, and instead look to factors such as whether the
manager has enough policy-making discretion to bind the company. A
case which addresses these issues, White v. Ultramar, Inc.,
is still pending before the California Supreme Court. | Back
to top
MANAGERIAL
LIABILITY
As we reported
in our Third Quarter 1998 Update, the California Supreme Court in
Reno v. Baird ruled that individual managers could not be
sued for employment discrimination under the state's job bias statute.
Consistent with that decision, the California Court of Appeal has
now held that supervisory personnel cannot be held individually liable
for discrimination under the ADA. The court explained that in using
the word "agent" in the definition of an employer under the ADA, Congress
only intended to ensure that employers will be held liable if supervisors
take actions later found discriminatory. (Le Bourgeois v. Fireplace
Manufacturers, Inc.)
The news is
not so good, however, for individual managers sued for retaliation.
A federal judge in the Central District of California recently
held that our state's job bias law, the Fair Employment and Housing
Act ("FEHA"), allows individual managers to be sued for acts of retaliation.
The court noted that while the FEHA states that only employers or
their "agents" can be liable for discrimination, "any person" may
be liable for retaliation and harassment. (Liberto-Blanck v. City
of Arroyo Grande) | Back to top
CORPORATE
LIABILITY
Parent
Corporations. In some good news for California employers,
the California Court of Appeal has finally established a definite
"bright-line" rule for determining when a parent corporation can be
liable for the employment discrimination of a subsidiary. The court
found that parent and subsidiary corporations will not be
considered a "single employer" for purposes of imposing liability
in employment discrimination suits unless the parent company actually
controls the daily operations of the subsidiary company. In this case,
plaintiff worked for a publication owned by Sutton Industries. However,
in her suit for sex and age discrimination, she only sued Sutton's
parent company Capital Cities/ABC, Inc.. The court found that Capital
Cities could not be held liable for the alleged discrimination because
it was not plaintiff's employer. The court emphasized that common
ownership or control is never enough to establish parent liability.
Instead, the plaintiff must provide evidence of the parent's control
over day-to-day operations and employment decisions of the subsidiary.
(Laird v. Capital Cities/ABC, Inc.)
Small
Employers Many federal employment discrimination statutes,
including Title VII, the ADEA and the ADA, only cover employers with
15 or more employees. Several federal appellate courts have struggled
to develop a test for when a parent corporation's employees should
be counted towards calculating the number of persons employed by a
subsidiary corporation. In two separate cases, the Seventh Circuit
U.S. Court of Appeals recently decided that a parent corporation's
employees should not be counted. The two employers who were sued both
had fewer than 15 employees. In reaching its decision, the court rejected
the four-part test which other courts have frequently applied in making
this determination. This test considers: (1) the interrelation of
operations; (2) common management; (3) common ownership; and (4) centralized
control of labor relations and personnel. The Seventh Circuit chastised
this standard as "vague and useless." Instead, the court applied its
own variation of the test and found that small employers would not
be exempted from discrimination statutes where: (1) a parent company
would be liable for the subsidiary's debts, torts, or contract breaches;
(2) the enterprise split itself into a number of small entities with
the intent to avoid liability under discrimination laws; or (3) the
parent company directed the allegedly discriminatory act, practice
or policy. (Papa v. Katy Industries; EEOC v. GJHSRT) | Back
to top
DISABILITY
DISCRIMINATION
Disability
Benefits And ADA Eligibility In a late-breaking development,
the United States Supreme Court has just decided that an employee
who claims to be "totally disabled" for purposes of obtaining Social
Security Disability Insurance ("SSDI") benefits is not
automatically barred from pursuing a claim under the
Americans with Disabilities Act ("ADA"). The plaintiff in the case
before the Court, Carolyn Cleveland, suffered a disabling stroke in
January 1994 while employed with Policy Management Systems Corporation.
Three weeks later, she filed an SSDI application in which she asserted
that she was totally "disabled" and "unable to work." In April 1994,
Cleveland's condition improved to the point where she was able to
return to her job. The Social Security Administration ("SSA") denied
Ms. Cleveland's benefit application in July 1994 due to her return
to work. Four days later, Ms. Cleveland was fired. In September 1994,
she asked the SSA to reconsider its denial of benefits, and provided
the following statement: "I was terminated . . . due to
my condition and I have not been able to work since. I continue to
be disabled." She added that she had "attempted to return to work
in mid April" and had "worked for three months," but was terminated
because she "could no longer do the job" in light of her "condition."
In September 1995, Ms. Cleveland was awarded SSDI benefits retroactive
to the date of her January 1994 stroke. One week before obtaining
these benefits, Ms. Cleveland sued her former employer for violation
of the ADA, claiming that the company failed to provide her "reasonable
accommodation" after her stroke. Two lower courts ruled that the company
was entitled to summary judgment -- meaning that Ms. Cleveland's lawsuit
would be dismissed without a trial -- because the statements in Ms.
Cleveland's application for SSDI benefits barred her from showing
that she was a "qualified individual with a disability" under the
ADA. The U.S. Supreme Court set aside these lower court rulings. The
Court stated that the law does not create "a special legal presumption"
against an SSDI benefit recipient's success under the ADA. However,
the Court also cautioned that "an ADA plaintiff cannot simply ignore
her SSDI contention that she was too disabled to work." Instead, the
plaintiff "must explain why that SSDI contention is consistent with
her ADA claim that she could 'perform the essential functions' of
her previous job, at least with 'reasonable accommodation.'" In such
cases, the Court stated that summary judgment without a trial may
be appropriate. As for Ms. Cleveland's case, the Court sent it back
to the lower court to decide whether her explanation for the discrepancy
between her SSDI application and her ADA claim is adequate. (Cleveland
v. Policy Management Systems Corp.)
Supreme
Court Hears Three More ADA Cases. The United States Supreme
Court recently heard oral arguments in three additional important
cases which address the scope of the ADA. In one of the cases, Kirkingburg
v. Albertson's, Inc., a driver who is nearly blind in one eye
was terminated because he was denied certification for visual acuity
under the federal Department of Transportation's regulations. Our
Ninth Circuit U.S. Court of Appeals ruled last year that the employer
violated the ADA by terminating the nearly blind truck driver because
he was able to obtain a waiver under an experimental program administered
by the Federal Highway Administration. The two other cases before
the Supreme Court address whether a correctable medical condition
qualifies as a "disability" under the ADA. In both of these cases,
the Tenth Circuit U.S. Court of Appeals ruled that an impairment must
be viewed in its corrected state to determine whether it
falls under the ADA's definition of "disability." The Tenth Circuit
rejected the ADA claims of airline pilots whose vision was fine with
glasses, but without corrective lenses was worse than 20/100, and
that of a truck mechanic whose high blood pressure was controllable
by medication. (Sutton v. United Airlines Inc.; Murphy v. United
Parcel Service) The Court is expected to render decisions in
these three cases by late June.
Failure
To Control Disability. On a related issue, the Eighth
Circuit U.S. Court of Appeals has concluded that an employee cannot
make out an ADA claim where the employee fails to control
a controllable disease. In this case a diabetic police officer suffered
two hypoglycemic episodes while on duty which required emergency medical
care. A medical evaluator determined that the officer should not hold
a position in which he possessed a gun because he could be a danger
to the public. When the city removed him from active duty and asked
him to either resign or be demoted, the officer opted instead to file
suit under the ADA. The court found that the police officer could
not properly state a claim of disability discrimination because he
was not terminated for suffering from diabetes, but rather for his
failure to control the disease. (Burroughs v. Springfield)
Defining
Reasonable Accommodation And Undue Hardship. Under the
ADA, employers are required to reasonably accommodate an employee
with a disability unless doing so creates an "undue hardship" on the
employer. The definition of the terms "reasonable accommodation" and
"undue hardship" remain frequently-contested issues. In yet another
attempt to clarify these terms, the Tenth Circuit U.S. Court of Appeals
found that an employer overstated the hardship associated with allowing
a relay truck driver with one arm to switch to a power steering tractor
whenever one was available. The company argued that driving a tractor
without power steering was an essential function of a relay driver's
job and that switching trailers to different tractors caused unacceptable
delay. Based on this delay and attendant expense, the company asserted
that the employee's proposed accommodation was unreasonable. The court
did not agree. The disabled employee maintained that although he needed
to use power steering tractors as much as possible, he was willing
to drive a non-power steering tractor when no power steering tractor
was available. In affirming a $46,000 verdict for the plaintiff, the
appellate court decided that the company exaggerated the potential
disruption of its operations. The court noted that about 70% of the
company's tractors had power steering and the company routinely allowed
drivers to switch to tractors for other reasons, such as desire for
air conditioning. Thus, it could not assert that allowing such a switch
under these circumstances would cause undue hardship. (Masterson
v. Yellow Freight Systems, Inc.)
The Sixth Circuit
Court of Appeals sent a case back to the trial court to determine
what would constitute reasonable accommodation for a disabled cookie
packer and maintenance line worker at a Frito-Lay plant who could
not control her bowels. Here, the employee had requested that her
manager allow her to use the restroom whenever she needed to. However,
her supervisor said that was not possible because she would have to
be replaced several times an hour and that she should simply wear
sanitary underpants as an accommodation. The Sixth Circuit ruled that
plaintiff's condition was indeed a "disability" under the ADA and
ordered the company to determine an accommodation for her based on
the facts and circumstances as they currently exist. (Workman
v. Frito-Lay Inc.)
Multiple
Sclerosis To state a valid claim under the ADA, an employee
must be able to show that the employee is qualified to perform the
essential functions of the job (with or without an accommodation).
In this case, the Eighth Circuit Court of Appeals determined that
the employee was unable to do so. By way of background, the plaintiff's
performance had begun to decline to the point that her supervisor
had to counsel her on numerous occasions and an important account
was taken away from her because of errors and customer complaints.
Later on, the employee was diagnosed with multiple sclerosis and then
was in and out of the hospital for several months. When her condition
improved, she returned to work. Her supervisor determined that the
improvement was just not enough and she was discharged. The court
noted that despite the company's attempts to accommodate plaintiff
by granting her paid sick leave, helping her obtain medical treatment,
and shifting some of her work responsibilities, she still was unable
to perform the essential functions of her job. Thus, the court found
that she was not a qualified individual with a disability under the
ADA. (Mole v. Buckhorn Rubber Products)
Facial
Scar Most employers do not realize that the ADA can protect
persons with severe cosmetic disfigurements. In a recent case, the
employee claimed that he was terminated in violation of the ADA because
he had a six-inch facial scar across his chin. The Sixth Circuit Court
of Appeals found that he failed to prove that he was fired because
of his appearance. The employee was a major account executive. The
employee alleged that following the accident which caused his scar,
his supervisors made disparaging remarks, including jokingly referring
to him as "scarface" on at least three occasions. The court found,
however, that the evidence clearly established that plaintiff was
terminated for unsatisfactory performance. The court noted that even
if his scar was "regarded" as a disability by his supervisors, the
company advanced a legitimate, non-discriminatory reason for his discharge
and he could not show that it was a pretext for discrimination. (Van
Sickle v. Automatic Data Processing)
Bizarre
Conduct In a peculiar case, the Tenth Circuit U.S. Court
of Appeal concluded that a company president fired for unexplained
trespassing in the homes of area residents failed to state a claim
under the ADA. The plaintiff was first discovered inside the home
of a member of the company's board of directors on a Sunday morning
when the family regularly attended church. After this incident, the
plaintiff promised the chairman of the board that he would never enter
anyone's home without permission. He was, however, subsequently charged
with criminal trespass after being discovered in the home of yet another
company employee. Plaintiff claimed that prior to his dismissal, he
had confided to the board of directors that he had a drug problem.
He sued under the ADA, claiming that he was fired in violation of
the ADA because the directors thought he might have a drug problem
and thus "regarded" him as disabled. The court held that the plaintiff
had failed to produce evidence that members of the board believed
that the plaintiff's perceived drug problem met the ADA standard of
limiting one or more major life activities as defined by the ADA (such
as working, walking or caring for oneself). Furthermore, the court
noted that the plaintiff failed to produce evidence that he was fired
on the basis of any perceived disability or conduct attributed to
it. (Nielson v. Moroni Feed Company)
Attendance
Is Essential Job Function. The Seventh Circuit recently
reminded plaintiffs of what might otherwise be considered a rather
obvious concept - attendance is an essential function of most jobs
and an employee's inability to show up for work demonstrates that
he or she is not "qualified" under the ADA. In this case, plaintiff
claimed that after her mother passed away, she began to suffer from
bouts of severe depression and anxiety. She asked the company to allow
her to take numerous breaks each day and an unpredictable amount of
time off work when her symptoms demanded. The company denied her request
since she was one of only two customer service representatives in
the office and it would be difficult for one employee to cover her
absences. The court found that plaintiff had failed to prove that
she was a qualified individual with a disability under the ADA since
she could not show that she was able to attend work regularly at the
time she was terminated. (Corder v. Lucent Technologies, Inc.)
Chrysler
Settles With Applicant Rejected After Medical Exam Chrysler
learned an expensive lesson in how not to use medical exams. Chrysler
recently paid $75,000 to settle an ADA suit brought by the Equal Employment
Opportunity Commission on behalf of a job applicant who claimed that
the company withdrew its job offer based on the results of a mandatory
pre-employment physical exam. After the exam, the company allegedly
refused to hire the applicant for an assembly line position based
on the medical restrictions placed on him by the company physician
(as a consequence of a previous hip injury which caused him to limp).
The company defended its decision on the grounds that the applicant
could not work in a production environment because of his physical
condition. The decision to settle came after an independent medical
examiner found that the applicant in fact was able to perform the
essential job functions, and thus was a qualified individual under
the ADA. The agreement also calls for Chrysler not to automatically
exclude or restrict individuals with physical restrictions from working
without first conducting an individualized assessment as to that individual's
ability to perform the essential functions of the job. (EEOC v.
Chrysler Corp.)
Substantial
Impairment Under ADA Not all physical or mental conditions
meet the definition of a disability under the ADA and analogous state
laws. In determining whether an individual is disabled under the ADA,
it is necessary to determine whether the disability causes the employee
to be "substantially" limited in one or more so-called major life
activities and the disability precludes the employee from working
in a broad class of jobs. The Fifth Circuit U.S. Court of Appeals
was faced with this issue when a plaintiff claimed that Delta Airlines
failed to accommodate her because she could not wear a steel-toe shoe
which was required for work in the cargo area. The plaintiff explained
that one of her legs was longer than the other, thus preventing her
from wearing the required shoe. Thus, the company determined that
plaintiff could not work in the cargo position and transferred her
to a customer service agent position. The employee didn't like the
move and sued for failure to accommodate. The court first determined
that moderate difficulty in walking did not rise to the level of a
"substantial impairment" as contemplated by the ADA. Thus, she did
not have a disability under ADA. The court also explained that disqualification
from a single position or a narrow range of jobs does not support
a finding that an individual is substantially limited from the major
life activity of working. (Talk v. Delta Air Lines Inc.)
Sleeping
Is A Major Life Activity The Tenth Circuit U.S. Court
of Appeal has ruled that sleeping does qualify as a "major
life activity." Thus, a person who has a sleep disorder is "disabled"
under the ADA. Unfortunately for the plaintiff in this case, however,
the court also found that she failed to show her sleep problems were
severe, long term, or permanently impacted her life. The court further
noted that plaintiff was able to control her sleep problem with medication.
Accordingly, the court rejected the plaintiff's ADA claim. (Pack
v. K-Mart Corp.)
Alcohol-Consuming
Bus Driver. In a case that proved to be a no-win situation
for the employer, a federal judge in Pennsylvania concluded that a
bus driver could state a claim under the ADA even though he was fired
after twice testing positive for alcohol in violation of federal regulations
prohibiting consumption of alcohol by operators of transport vehicles.
The plaintiff was suspended for six weeks after first testing positive
for alcohol in 1995 and enrolled in an addiction awareness program.
He tested positive again in 1996 and was terminated. The employer
argued that the ADA does not cover public transportation employees
at all because they are covered by federal regulations. The court
disagreed and found that plaintiff could make out an ADA claim on
the basis that he was a recovering alcoholic. In addition, the court
found evidence that the company terminated the plaintiff in part because
they regarded him as having an impairment or because he had a "record"
of such impairment. (Wilson v. Southeastern Pennsylvania Transportation
Authority) | Back to top
EEO/DISCRIMINATION
Defense
Attorneys' Fees A widely-publicized pregnancy discrimination
lawsuit against a Los Angeles law firm ended with the worst possible
result for the plaintiff, Shari Cohen Rosenman. After a jury reached
a verdict in favor of the law firm on her pregnancy discrimination
claim, a Los Angeles Superior Court judge ordered Rosenman to pay
the law firm $150,000 in attorneys' fees and $80,000 in other litigation
costs. In most cases, an employer who successfully defends a job bias
suit can only recover "costs" such as deposition expenses, process
server fees and expenses incurred in reproducing exhibits used at
trial. While a successful plaintiff is almost always allowed to recover
attorneys' fees, a victorious employer is usually left to pay its
own attorneys' fees unless it shows that the plaintiff's claims were
unreasonable, meritless or vexatious. In practice, most judges reject
defense requests for attorneys' fees under this stringent standard.
However, the judge in this case questioned Rosenman's credibility
and noted that the law firm appeared to have "bent over backward"
to accommodate Rosenman during her pregnancy. The judge concluded
that the lawsuit was unreasonable and meritless. (Rosenman v.
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro)
Pregnancy
Leave Policies The California Court of Appeal has ruled
that leave of absence policies contained in a collective bargaining
agreement which distinguished between work and non-work related injuries
did not discriminate against pregnant employees. The lawsuit
was brought by pregnant employees who had worked for Lucky stores.
Under the collective bargaining agreement, they were eligible for
six months' leave for pregnancy disability and non-work related injuries.
They complained that the collective bargaining agreement allowed a
longer leave of up to one year for non-pregnancy conditions (i.e.,
work related injuries). The court noted that Lucky's policy provides
more pregnancy leave than required under the FEHA, and that the distinction
between work related and non-work related injuries was not based on
sex or pregnancy. Since pregnancy was only one of numerous non-work
related conditions, the court concluded that the policy was neutral
and only "incidentally" affected pregnant employees. (Spaziano
v. Lucky Stores)
Race
Bias Claim Barred By Representations Of Total Disability
In a case which involves issues similar to those raised in the U.S.
Supreme Court's Cleveland decision discussed above at pages
9-10, the California Court of Appeal has precluded an employee from
going forward with his race discrimination and harassment claims based
on previous representations of "total disability" which he made in
an application for long-term disability benefits and in a workers'
compensation settlement agreement. The plaintiff was terminated pursuant
to a company policy because he was unable to return to work after
a six-month disability leave. The employee filed for long-term disability
benefits and provided a statement from his doctor that he was unable
to perform the job duties in his regular occupation, or any other
occupation for that matter. The employee also filed a claim for workers'
compensation benefits, which the parties later settled. The workers'
compensation settlement contained a release of claims as well. Nevertheless,
the plaintiff filed suit against his former employer and two supervisors.
The court held that because plaintiff made statements that he was
completely unable to perform his job duties, he could not now assert
a completely contradictory position in his discrimination claim. (Drain
v. Betz Laboratories)
Bias
In Promotions Plaintiffs who wish to state a legitimate
discrimination claim based on failure to promote have an added burden
to overcome. In a recent case, the Second Circuit U.S. Court of Appeal
held that a plaintiff who alleges unlawful failure to promote must
identify a specific position for which she applied and was rejected,
rather than simply make a generic claim that she unsuccessfully "sought"
to be promoted. The plaintiff, an African-American female receptionist
at Coach Leather Stores in New York, charged that the retailer's unlawful
pattern and practice of discrimination dissuaded her from even applying
for another position. She specifically claimed that Coach rejected
her requests for promotion because the company preferred to hire and
promote people with a "Coach look," a term allegedly used to describe
"young, slim, Caucasian, blond females." The court found that the
woman failed to state a legitimate case of race discrimination because
she had not identified a specific job for which she applied and was
rejected in favor of a non-minority applicant. The court logically
concluded that if generally requesting a promotion was sufficient
to establish a discrimination case, employers would be unfairly burdened
in their promotion efforts. (Brown v. Coach Stores, Inc.)
Business
Practices Impacting Older Workers Not Discriminatory
"Disparate impact" discrimination occurs when an employer's policies
or practices negatively impact a specific protected category of individuals.
As the First Circuit U.S. Court of Appeals recently noted in a case
against Raytheon Company, disparate impact liability is meant to combat
prejudice arising from a characteristic that is entirely unrelated
to a person's ability to do the job, such as race, age, gender or
nationality. In this case, the court found that Raytheon was forced
to reevaluate all of its upper-echelon salaried employees due to revenue
loss from Pentagon cutbacks, and it was for this reason that the plaintiff
was downgraded. Moreover, the plaintiff failed to provide any evidence
that Raytheon "rigged" the restructuring to ensure that he, or any
other older employee, would be unfairly demoted. The court thus dismissed
the plaintiff's claim for age discrimination. (Mullin v. Raytheon
Co.)
Retaliation
For Testifying In Sex Bias Lawsuit. A recent Fourth Circuit
decision shows the perils employers face for taking action against
employees who testify in any discrimination action - even one against
another employer. The plaintiff in this case had her deposition
taken in a sex bias lawsuit brought against a deputy United States
Marshal in South Dakota, where the plaintiff previously worked. During
her testimony, however, the plaintiff offered wide-ranging criticisms
of her then-current employer, the South Carolina Marshal's Office.
In particular, the plaintiff accused the South Carolina office of
mismanagement, destruction of office documents, wasting funds, discrimination
and other inappropriate conduct. The plaintiff was later told that
her testimony in the South Dakota lawsuit showed "poor judgment" on
her part, and she was terminated from her South Carolina job. The
Fourth Circuit ruled that the plaintiff's termination violated Title
VII, which prohibits retaliation against persons who "participate"
in proceedings under the statute. The court even went so far as to
hold that the plaintiff's participation activity need not be "reasonable."
Instead, the mere fact that the plaintiff testified in a deposition
- even if her testimony was not relevant to the proceeding - is enough
to protect the plaintiff against retaliation under Title VII. (Glover
v. South Carolina Law Enforcement Division) | Back
to top
OLDER
WORKERS' BENEFIT PROTECTION ACT
The Older Workers
Benefit Protection Act ("OWBPA") requires that employees be provided
21 days in which to either accept or reject the employer's early retirement
offer. In a case of first impression, the Eighth Circuit has held
that employers have the same 21 days in
which to revoke the early retirement offer. The court noted that because
the Act's language did not expressly provide for whether the employer
could revoke the offer within 21 days, and since the employee did
not have to wait the full 21 days before accepting or rejecting the
offer, no "irrevocable power of acceptance" was created by the Act.
That is, nothing in the Act required that the offer remain open for
21 days for the employee to either accept or reject. The employer
was thus free to revoke the offer within the 21-day period if the
plaintiff did not accept the offer first. The court stated that this
interpretation was consistent with the purpose of the OWBPA, which
is to ensure that an employee does not waive any rights under the
ADEA, unknowingly or involuntarily. (Ellison v. Premier Salons
International Inc.) | Back to top
LABOR
RELATIONS
Walk-Out
Unprotected The Seventh Circuit sided with an employer
and found that a group of restaurant workers in Illinois who walked
of the job in protest of their supervisor's discharge had no protection
under the federal labor laws. The court noted that while the employees
had a protectable grievance, their means of addressing it through
a Friday night walk-out was an unreasonable response. (Bob Evans
Farms, Inc. v. NLRB)
Hotel's
Defamation Suit Against Union Barred The Monterey Plaza
Hotel was precluded from suing the Hotel Employees & Restaurant
Employees Local 483 and one of its organizers for defamation based
on a false statement the union organizer made during a news broadcast.
The union organizer had made a false statement during the news broadcast
that the government had determined that the Hotel illegally terminated
two employees. In fact, no such finding was made and a hearing had
yet to be held. The California Court of Appeal noted that since this
suit arose from the union's exercise of its right of free speech during
a major labor dispute, the Hotel would have to show that it was likely
to succeed on its defamation claim. The court found that the Hotel
failed to meet this burden. While the statement, standing alone, could
have been construed as false, in context of the entire news broadcast
- during which the Hotel's general manager was also provided an opportunity
to speak - no reasonable viewer could have interpreted that there
had been a final determination that the firings were illegal. Thus,
the Hotel failed to make out a case for defamation and its case against
the union was dismissed. (Monterey Plaza Hotel v. Hotel Employees
& Restaurant Employees Local 483) | Back to
top
FAMILY
AND MEDICAL LEAVE
Adoption
Of Adolescent In general, the federal Family Medical
Leave Act ("FMLA") requires employers with 50 or more employees to
provide up to 12 weeks of leave, with continuation of health insurance
coverage because of the placement of a child in the home by adoption
or foster care. The term "son or daughter" is defined by the Act as
a biological, adopted, or foster child, a stepchild, a legal ward,
or a child of a person standing in loco parentis who is either
under age 18 years of age or over age 18 but incapable of self-care
because of a mental or physical disability. The regulations provide
that an employer is required to grant FMLA leave before the actual
placement or adoption of a child if an absence from work is required
for the placement for adoption or foster care to proceed. For example,
the employee may be required to attend counseling sessions, appear
in court, consult with his or her attorney or the doctor(s) representing
the birth parent, or submit to a physical examination. Despite the
broad language of the Act, the Fifth Circuit ruled that an employee
who was fired from his job after returning from unpaid leave to bring
his previously adopted children from the Philippines had no claim
under the FMLA. The court stated that while it recognized the importance
of child/parent bonding and of a parent's presence in early child
rearing, it refused to extend the "placement for adoption" language
to encompass plaintiff's situation of bringing two adolescent children
to the United States. The court further stated that the Act contemplated
circumstances in which a child is placed in a home before the adoption
is finalized. (Bocalbos v. National Western Life Insurance Co.)
| Back to top
IMMIGRATION
NEWS
The Immigration
and Naturalization Service ("INS") has announced an interim rule,
effective February 9, 1999, amending the type of documents that can
be used to verify alien employment eligibility. The INS has extended
the validity period for I-94 Forms that are issued to alien employees
upon arrival in the U.S. from 180 days to one year. Additionally,
the interim rule adds the Employment Authorization Card, Form I-688B,
to the list of documents an individual can present in verifying employment
eligibility. If you have any questions about this rule, please call
your contact at the Firm. | Back to top
HIRING
FRAUD
Some employers
exaggerate the company's growth and potential in attempting to entice
new employees to accept a job offer. A recent Ninth Circuit case decided
under Oregon law reminds employers that this can be a big mistake.
In this case, the plaintiffs applied for and were offered jobs with
the company. Before accepting the positions, they completed "at-will"
employment agreements stating that they could be terminated with or
without cause and with or without notice. The plaintiffs also relocated
to Eugene, Oregon, where the plant was located. The plaintiffs claimed
that during the interview process, they were told that the company
expected to grow about 20% in the following year. In reality, however,
the company was planning to close the facility altogether, but the
closure was contingent on a number of factors. The company argued
that the individual who made the statements to the plaintiffs was
not aware of the potential closure. The Ninth Circuit rejected the
company's argument and found that the plaintiffs had presented sufficient
evidence that the defendants had concealed a known fact that was material
to the plaintiffs' accepting the job offers. The court also noted
that it was irrelevant that the company agent who conducted the hiring
did not know of the possible plant closure, finding that the company
essentially committed fraud by failing to disclose this material fact
to the agent and thus allowed the agent to make "innocent" misrepresentations
to the plaintiffs. The court even allowed the plaintiffs' spouses
to sue for misrepresentation under Oregon law, based on evidence that
the company authorized the plaintiffs to convey the company's alleged
false statements to the spouses. While the result in this case might
have been different had it been decided under California law, particularly
as to the spouses' claims, employers still must be very careful when
making representations to induce job applicants or employees to relocate.
(Mead v. Cedarapids, Inc.) | Back to top
WRONGFUL
DISCHARGE
Discharge
Of Candy-Eating Employees Costs Wal-Mart $20 Million
Four Wal-Mart clerks who were discharged for eating candy and nuts
from damaged packages were awarded $5 million each - for a total of
$20 million - in a wrongful discharge lawsuit in Kentucky. Wal-Mart
subjected each of the plaintiffs to accusatory interviews in which
they were confronted with videotaped evidence which showed them eating
the snacks, as well as unlawfully-obtained audiotapes of employee
conversations. The plaintiffs admitted their guilt, but claimed that
the Wal-Mart store where they worked had an unwritten policy which
allowed employees to consume snacks in packages which were damaged
from shipping. Although Wal-Mart contended that the plaintiffs violated
the company's anti-theft policy, there was evidence that 90 percent
of the store's employees consumed the same kinds of snacks. The plaintiffs
also contended they were berated and reduced to tears when they were
interrogated by store management. Their lawsuit alleged claims for
intentional infliction of emotional distress, slander and invasion
of privacy. The jury trial lasted three days. Wal-Mart indicated that
it intends to appeal the $20 million verdict. (Stringer v. Wal-Mart
Stores Inc.)
Doodler's
Discharge Upheld A New York appellate court has upheld
an arbitrator's decision that a hospital worker was properly discharged
for altering his paycheck. The employee made the absurd claim that
he had unintentionally changed the check amount. According to the
employee, he inadvertently changed a "3" to an "8" on the paycheck
while doodling with a pen as he was talking on the telephone. When
the employee tried to cash the check, the clerk refused to cash it
and marked it void. The employee then took the check to the payroll
office to obtain another check. Instead, the check was confiscated
and the employee was arrested for forgery. The criminal charges were
later dismissed, but the company dismissed the employee for attempted
fraud. The employee's union pursued a grievance on his behalf. However,
an arbitrator ruled in favor of the company, and the appeals court
found "substantial evidence" to support the arbitrator's decision.
(Local 375 v. New York City Health and Hospitals) | Back
to top
* * *
A vexing ADA
issue is whether an employee who claims to be totally disabled for
one purpose is still entitled to be accommodated under the ADA. As
we reported in our last issue of the Update, the U.S. Supreme Court
is expected to decide this very issue by late June. In the meantime,
our Ninth Circuit U.S. Court of Appeals recently has decided two cases
which address this issue. Joining the majority of federal appellate
courts, the Ninth Circuit held that neither application for nor receipt
of disability benefits automatically bars a claimant from
establishing that she is nevertheless a "qualified person with a disability"
under the ADA who is entitled to accommodation. If the evidence shows
that the employee is able to perform the essential functions of her
job with accommodations, the requirements of the ADA must be followed.
In one case, the plaintiff, a sales associate for Wal-Mart, suffered
from a fainting disorder. Following a series of fainting episodes
at work, she began an extended medical leave of absence. Plaintiff
received temporary disability benefits after certifying that she was
unable to perform her regular duties. Different doctors provided differing
opinions as to when she would be able to return to work. Ultimately,
Wal-Mart fired plaintiff, citing her alleged failure to submit a leave
of absence form and claiming it needed to fill her position during
the holidays. The lower court threw out the case, finding that plaintiff
was not a qualified individual under the ADA based on the statements
she made on her disability application. On appeal, the Ninth Circuit
reinstated the lawsuit, noting that such statements should not be
considered alone, but rather they must be considered in light of all
the evidence - including the individual's medical certifications.
The Ninth Circuit also noted that the ADA requires that the plaintiff
be able to return to work "with or without accommodation," and that
in this case, unpaid medical leave may have been a reasonable accommodation,
but was not considered by either Wal-Mart or the lower court. Finally,
the Ninth Circuit rejected Wal-Mart's claim that plaintiff posed a
significant risk to herself and to customers because her doctor testified
that the risk of injury, while possible, was very slim. (Nunes
v. Wal-Mart Stores, Inc.)
Similarly, in
Lujan v. Pacific Maritime Association, a dock worker was
injured on the job and applied for social security benefits based
on his disability and inability to work. His benefits were ultimately
terminated when he was able to perform some kinds of work. The employee
went to a union hiring hall and found work as a casual longshoreman.
Subsequently, all casual employees were required to submit to a physical
exam. The employee took the test and failed. He filed suit against
the union and the company, claiming violations of the ADA, the FEHA
and other state laws. The Ninth Circuit ruled that due to the different
definitions of "disability" employed by various state agencies, it
was possible to qualify for disability benefits under one definition
and still satisfy the ADA's definition of a qualified person with
a disability. Thus, according to the Ninth Circuit, an individual's
statements that he is disabled or totally disabled for purposes of
disability benefits are not necessarily inconsistent with his claim
under the ADA that he is a qualified individual with a disability
who must be accommodated. | Back to top
The Ballard,
Rosenberg & Golper Employment Law Update is published as a service
for clients and business associates of the Firm. While every effort
is made to ensure accuracy, it is not intended to serve as legal advice.
Copyright 1999, Ballard, Rosenberg & Golper. All rights reserved.
Additional copies of this publication are available upon request.
Editorial
Staff: Richard S. Rosenberg, Reed E. Schaper, John J. Manier and Erin
N. Medina.
