Employment Law Update - Fall 2013

The U.S. Supreme Court Ends Term on High Note for Employers

In a session followed more avidly for its consideration of same-sex marriage issues than employment law, the Supreme Court issued two hotly-contested, 5-4 decisions during the last week of its Term, each of which provides employers with both significant guidance and some protection against employee suits. Critically, the two cases involved retaliation claims and harassment claims – the two most common types of Charges submitted to the Equal Employment Opportunity Commission ('EEOC'), according to current figures.

First, retaliation – the fastest-growing as well as most frequent category of discrimination charges: For years, the courts have struggled with employment actions that are motivated by both lawful and unlawful reasons. These 'mixed motive' cases were addressed by Congress in the Civil Rights Act of 1991, which generally permits a plaintiff to recover if discrimination was 'a motivating factor' in the employment decision, even if the employer shows the same decision would have been taken in the absence of discrimination. In University of Texas Southwestern Medical Center v. Nassar, the Supreme Court held that retaliation cases are outside the 'mixed motive' tent. So, if a retaliation-claim plaintiff proves that he/she was fired for both a lawful reason and in retaliation for a protected complaint, that retaliation plaintiff loses. Instead, a retaliation plaintiff must prove that he/she would not have been fired 'but for' the retaliation – it is not enough to show that retaliation is 'a motivating factor' in the company's employment decision.

Next, harassment: Determining who is, and who is not, a 'supervisor' can play a critical role in determining whether a company will be held liable for harassment committed by an employee. If a worker was harassed by a 'mere' co-worker, the company may not be held liable unless the company itself was negligent in controlling the harasser. However, if the harasser is a 'supervisor,' the company is strictly liable for any harassment that results in a 'tangible employment action.' Even where there is no 'tangible employment action,' harassment by a supervisor makes the company strictly liable unless the company can prove a separate 'affirmative defense' (that is, that the employer exercised reasonable care to prevent the harassment and that the employee failed to take advantage of the preventive or corrective opportunities the employer offered). Obviously, employees' lawyers argue that the least little bit of authority makes a harassing co-worker into a 'supervisor' – and that the employer is accordingly subject to automatic, strict liability, without the need for the plaintiff to prove any negligence by the company. Also, the EEOC took the more expansive view of who is a 'supervisor,' writing in its 1999 Guidance on harassment that a 'supervisor' is any co-worker who has the ability to exercise any significant direction over a plaintiff's work.

In Vance v. Ball State University, the Supreme Court rejected this broad view of employer liability, calling the EEOC’s position 'murky,' 'nebulous' and 'a study in ambiguity.' Rather, in order to expose a company to the higher risk of liability inherent in harassment by a supervisor, the company must have given the harasser the authority (even if not exercised in that particular case) to effect a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. The Court's clarification of the nature of a 'supervisor' for purposes of employment harassment cases will force many more plaintiffs to come forward with evidence that the company itself acted negligently – not just that some bossy co-worker acted inappropriately or even outrageously.

HR Manager Hit with Large Damage Award

Tech Systems, Inc. ('TSI') is a woman-owned small business located in Alexandria, Virginia. Shortly after management counseled their Human Resources Manager, Lovelen Pyles, about her work performance, the head of TSI’s IT Department discovered that someone had compromised the secure server room at TSI’s offices, physically disconnected many of the components, and otherwise sabotaged their computer system. TSI investigated and determined that Ms. Pyles had sabotaged the servers. Not surprisingly, TSI terminated her employment the following day and directed her to return her company-issued phone. But before returning her BlackBerry, Ms. Pyles forwarded emails containing TSI confidential information that she received in her role as HR Manager to other employees, vendors, and customers. Following the above-described misconduct, TSI initiated litigation in federal court alleging a number of legal claims, including a violation of the Computer Crimes Act and the Electronic Communications Privacy Act and a breach of the duty of loyalty Ms. Pyles owed TSI.

Following a two-day trial, a jury awarded TSI $300,000 in compensatory and punitive damages. On August 6, 2013, the Court ordered Ms. Pyles to pay TSI an additional amount in excess of $340,000 to compensate TSI for its litigation costs. Ms. Pyles is thus facing a huge liability resulting from the jury finding that she engaged in serious misconduct.

When contacted for this article regarding what message this case sends to HR professionals, TSI's lawyer indicated that this case emphasizes the importance of keeping company information confidential under any circumstances. The case also highlights how emotional reactions in the workplace can lead to catastrophic results for both employers and employees.

'Sleepy Time' At Work Required?

Every court in the country to consider whether 'sleeping' is a major life activity under the Americans with Disabilities Act ('ADA') has either concluded or assumed that it is. Sleep-impaired individuals seek 'reasonable accommodations' ranging from flexible work schedules (sometimes appropriate) to a complete free pass on never coming to work (uniformly unsuccessful). A recent Virginia federal court decision, Riddle v. Hubbell Lighting, Inc. breaks new ground in the range of accommodations sleep-deprived employees may seek.

In this case, a manufacturing engineer was diagnosed with 'disabling fibromyalgia,' which he alleged caused him to sleep poorly, grow tired at work, and fall asleep at his workstation 'on one or two occasions.' He asked for what he felt was a reasonable accommodation under the ADA when he 'told his supervisor that he could ably perform his job if [the company] accommodated him by waking him up when he fell asleep.' The very next day, the employee alleged, the company claimed he fell asleep at his work station, suspended him, sent him home, and fired him three days later.

Despite obvious practical concerns of an employer having to repeatedly wake up an employee to get him to do his job, the court declined to dismiss the employee's ADA claim, holding 'he has stated a claim for failure to accommodate.' Some ray of light for the also-weary eyes of employers: the court did express some skepticism about whether the employee ultimately could prove he was protected by the ADA in the first place, noting that the same court 'has previously noted that a plaintiff who could not stay awake at work would likely not be a 'qualified' individual under the ADA.'

October Obamacare Notice Deadline Approaches

On or before October 1, 2013, every employer must provide a Notice to every employee regarding the opening of the new health insurance Marketplace and advise the employee of the availability, quality and cost of the Company's group health insurance (if any). This Notice is intended to ensure that every employed person in the country has the information needed to shop for health insurance and determine their eligibility for any government provided health insurance subsidies ('advance premium tax credits' and 'cost sharing reduction') available through the Marketplace. Shopping begins October 1 and the insurance products become effective on January 1.

Ask Even if They Don't Tell

Stephanie Crockett was in trouble at work. She received a final written warning from her employer, Mission Hospital in Asheville, N.C., and met with her supervisor, Harry Kemp, about her situation alone in an unused office. After the meeting, Crockett left work early and took six days of FMLA leave. When Crockett returned to work, her department director and an HR representative met with her because Kemp reported that Crockett had continued to misuse her cell phone while on the job and 'flashed' him to keep him from reporting her. During the meeting, Crockett said it was Kemp who had done something 'horrific' to her but refused to provide any details.

The hospital suspended Crockett but immediately began to investigate her allegations by meeting with Kemp, interviewing other employees, and meeting with Crockett two more times. Crockett filed a formal complaint of sexual harassment with the hospital, but still refused to provide details of the alleged conduct. The hospital again met with Kemp (who denied the allegations and committed suicide later that day) and Crockett. The hospital ultimately fired Crockett for taping her interactions with patients and coworkers, including her meetings with HR.

After being fired, Crockett sued the hospital. In that lawsuit she claimed that, during her meeting with Kemp, he forced her to lift her shirt and bra, asked her for a kiss, and kissed her cheek twice. However, the trial and appellate courts both ruled in favor of the hospital on Crockett's harassment claim. The courts found that the hospital was entitled to a legal defense due to Crockett's repeated refusal to provide details of what she claimed her supervisor did. The hospital had an established anti-harassment policy and complaint procedure, which had been disseminated to its employees and pursuant to which the company took immediate action to investigate Crockett's claims. The courts decided that Crockett failed to take advantage of the hospital’s anti-harassment procedures when she refused to cooperate in the investigation. As a result, the courts held that the hospital was not liable to Crockett for harassment.

Practical Pointer

Employers face the possibility of high damage awards and damage to their reputations when they fail to take reasonable steps to prevent harassing conduct in the workplace. Employers should ensure they have adequate anti-harassment policies in place and train their employees, especially supervisors, on their policies and complaint processes. And employers should investigate all claims of harassment, no matter how trivial they seem.

30th Annual Employment Law Update - The Times They Are A Changin'

Dealing with change is necessary for anyone involved with the American workplace. Kaufman & Canoles is pleased to announce a conference dedicated to past, present and future changes in employment law. The 30th Annual Employment Law Update - 'The Times They Are A Changin' will be held on Thursday, November 14, 2013 at the Virginia Beach Convention Center.

The K&C Employment Law Team will be joined by a variety of human resource professionals to present educational workshops designed to make your season of change a good one. Workshops will include presentations from a number of current and former representatives from relevant government agencies, including the EEOC, VEC and Workers Compensation Commission. This year’s program will also include a special luncheon presentation by Humorist, Author and Motivational Speaker Steve Kissell and a special 30th Anniversary gift from David Nygaard Fine Jewelers for one lucky attendee.

Topics include: Documentation Strategies; the Risks of Social Media faced by Employers; Reducing Employer Liability for Workers Compensation and Unemployment Compensation; Investigating Employee Complaints; Effective Discipline and Discharge; Employer Compliance with the Affordable Care Act, and more!

The 30th Annual Employment Law Update will provide essential information for HR Professionals and small business owners. Additionally, attendance at this conference qualifies for 5 credit hours toward PHR and SPHR Recertification through the Human Resource Certification Institute (HRCI). For more information or to register online, click here or contact Erin R. Holland at erholland@kaufcan.com.

The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances.


The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2017.

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