Recently, the Missouri Legislature passed a bill that would make it more difficult for a plaintiff to obtain punitive damages. For a full discussion of the bill expected to be signed by the Governor, see the article from our colleagues by clicking here.
On March 25, 2020, a National Labor Relations Board Administrative Law Judge (“ALJ”) emphasized the broad reach of Section 7 of the National Labor Relations Act (“Act”) in non-union settings. Ground Zero Foundation d/b/a Academy for Creative Enrichment, Case 4-CA-245956. Charging Party was hired as a summer camp counselor, but was not paid for the ten minutes before the 8 am start or if the workday ended late due to trips. Without first filing a wage claim or complaining to the Company, she discussed the perceived underpayment with co-workers. She also texted with the president to complain about the rounding issue on behalf of both herself and the other counselors. At the end of the day, the president fired Hamill, saying: she was “a bad apple spreading negativity to the other employees”; Respondent’s handbook prohibited employees from discussing wages; Hamill should have spoken with the Company before raising the issue with other employees; and, she should been supervising the children on the bus rather than texting about her wage concerns. In a subsequent position statement, Respondent claimed Hamill was terminated for excessive use of her cell phone, neglect of campers, and insubordination (the last of which was never mentioned during the termination).
The ALJ found (a) the policy against co-workers discussing wages violated the National Labor Relations Act, (b) Hamill was engaged in protected concerted activity by raising the rounding issue among her co-workers and management, and (c) Hamill was unlawfully discharged for that protected activity – indeed, the ALJ found the evidence of this to be “overwhelming.” This was based not only on statements made during the termination meeting and other conduct by Respondent but also significant evidence of pretext, including shifting explanations for the termination, which indicated Respondent was trying to conceal its real reason.
This case provides important lessons to all employers. First, an employer cannot terminate an employee for raising collective concerns in an appropriate manner. Second, evidence of pretext undermining a defense arises from shifting explanations for discharge. Rebutting claims arising from adverse personnel decisions is effective when well-documented and consistent with past practice and lawful personnel policies.
As the Equal Employment Opportunity Commission’s FY 2019 report reflects 21.4% of all employment charges handled in 2019 were for age discrimination; 41.4% of all charges allege retaliation. Recently, seven former directors of a grocery store chain filed suit alleging age discrimination and retaliation arising from alleged transfer to failing stores and denial of the same job opportunities as younger employees. Cesario v. Jewel Food Stores, Inc. A federal district court in Illinois dismissed the claims due to the absence of proof of adverse personnel actions. The lack of evidence was established, in part, by reinstatement after a medical leave and the lack of proof that age factored into a discharge decision. In the end, the Court held that “despite their sweeping accusations, they [plaintiffs] each fail to present enough evidence of Jewel’s discriminatory or retaliatory animus or adverse actions sufficient to support claims of discrimination or retaliation.”
A word to the wise. Personnel decisions should be supported by provable, documented business reasons. Internal dispute resolution procedures should be available to seek redress for what employees see as unfair adverse personnel decisions. And, lastly, a group claim waiver in an arbitration agreement could have avoided a seven-plaintiff lawsuit that likely would have ben confusing to a jury.
New Jersey’s WARN Act (the Millville-Dallas Airmotive Plant Job Loss Notification Act) has been amended, effective July 19, 2020. N.J.S.A. § 34:21-1, et seq., to expand greatly its scope and requirements:
- Definitions: the terms below will change to expand the Act’s coverage of employers and their actions.
- Establishment- the Act no longer applies solely to a “single place of employment.” Instead, its scope will cover all of the employer’s facilities, i.e., “Establishment may be a single location or group of locations, including any facilities located in this State.”
- Full-Time and Part-Time Employees– Notices of layoff decisions – and the number of workers to be covered by the Act – now are mandatory for all workers. Similarly, the number of employees required for coverage under the Act also includes both full-time and part-time staff.
- Mass Lay Off– the new definition drastically expands the Act and provides that a mass layoff requires 50 or more employees terminated “at or reporting to the establishment” arguably expanding the definition to include out-of-state employees, remote employees, etc.
- Employer– the definition will expand to include: “any individual, partnership, association, corporation, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, and includes any person who, directly or indirectly, owns and operates the nominal employer, or owns a corporate subsidiary that, directly or indirectly, owns and operates the nominal employer or makes the decision responsible for the employment action that gives rise to a mass layoff subject to notification.”
- Notice: Previously, the Act mirrored the federal WARN Act in that covered employers were required to provide 60 days’ written notice to affected employees of a mass layoff or plant closing. The amendment expands that number to 90 days’ notice. If an employer fails to provide the required notice, it must pay an extra four weeks of pay to each employee who is provided less than 90 days’ notice.
- Severance: The amended Act requires an employer to pay one week’s severance for each full year of employment, in a lump sum, on the first regularly scheduled pay day following the employee’s last day of employment. The severance rate is either the employee’s regular rate over the last three years of employment or the employee’s final regular rate, whichever is greater. If an employee is subject to a collective bargaining agreement, company policy or employment agreement that provides for greater severance, the employer must pay that amount. This requirement makes it very costly to conduct a layoff.
- Waiver and Releases: Absent approval by the Commissioner of the Department of Labor or a court of competent jurisdiction, an employer cannot obtain a waiver of any severance payments. Because affected workers are guaranteed severance under the Act, requiring the signing of a general release for this severance may no longer satisfy the requirement to offer consideration in exchange for a release of claims. Employers should consult with legal counsel as to what they may need to offer to obtain a release of claims.
These changes are significant and the impact on employers is still uncertain. Employers should consult with a Jackson Lewis attorney to ensure proper policies and procedures are in place and certainly before taking any action that may trigger the requirements of the Act.
On January 28, 2020, the Southern District of New York allowed a hostile work environment claim to proceed based upon allegations of racial slurs, demeaning comments, and relegation of Hispanic to the least favorable job assignments and shifts. Ramirez v. NYP Holdings, Inc. The Court permitted this claim to proceed despite dismissing other claims under Title VII, Section 1981, and state and local law arising from discipline, up to and including discharge. In this instance, plaintiff was suspended indefinitely and then fired after engaging in an altercation with a White coworker because his suspension violated a last chance agreement.
In sum, that totality of the allegations, not each considered alone, often drives decisions by the courts in hostile environment harassment cases.
The absence of an adverse employment action by an employer routinely is fatal to a claim of discrimination (absent proof of constructive discharge). This bedrock principle was reiterated recently in a case where an applicant alleged that she was forced to resign after failing a physical abilities test. Jane D. Dicocco v. William P. Barr (E.D. Va.) All new hires were required to pass the test because the job itself involved “hazardous duty law enforcement positions.” After this female applicant failed the test, she was permitted to retake it within 24 hours, but declined to do so. While the applicant claimed she was too tired to retake test, the Court found that “her decision to resign rather than retake the exam and potentially fail a second time” was too speculative to support her claims.
The take-aways are significant. First, a test must be job-related and adverse impact on the basis of gender or other characteristic should be explored and addressed. Second, after failing, offering a second chance helps to avoid charges of unfair administration. Third, if an applicant cannot perform essential job functions for non-medical reasons, he or she is not qualified.
The Second Circuit recently held that an employer did not violate the Americans with Disabilities Act when it refused to transfer, and then terminated, an employee because of his inability to perform his job due to migraines caused by the stress of his job. Woolf v. Strada. In this case, Plaintiff began to suffer migraines that left him temporarily incapacitated and which negatively impaired his work. Plaintiff alleged that his migraines were related to stress at work, which worsened when he received negative performance reviews. Plaintiff provided medical documentation and requested a transfer. The Company denied the transfer because of his poor performance reviews. However, it granted his request for intermittent medical leave with full pay. After he received another poor performance review, Plaintiff was discharged.
The Second Circuit found for the employer, holding that “where a plaintiff’s condition leaves him unable to perform only a single, specific job, ‘he has failed to establish a substantial impairment to his major life activity of working.’” Because Plaintiff did not attempt to show that his work-causing migraines limited his ability to work in a range of jobs, the Court concluded that there was no ADA violation. While it might have been a safer course of action to have transferred him and continued progressive discipline, the discharge was found to be lawful.
It should be noted that this result would not be the same under many state and local laws that provide broader coverage than the ADA (including not requiring a showing of substantial limitation on a major life activity).
Based on a set of somewhat unusual facts, a federal district court in Ohio ruled that an employer that refused to rehire a recently retired individual to his former position will need to argue at a jury trial that its decision was not based on age. In Rose v. City of Toledo, a 62-year-old employee retired from the City Water Department, and shortly thereafter, applied for two positions within the Water Department (one of which was to be rehired into his former position). The employer interviewed eight candidates (including the plaintiff). Despite being the third highest scorer on the exam, plaintiff was not hired for any position. Rather, his former position was filled by the fourth-highest scorer, and the remaining positions were filled by the lowest ranked applicants (all of whom were more than 10 years younger). At deposition, the employer’s administrator testified that despite his experience doing the identical job, the plaintiff was not selected because he was not viewed as a “long-term” candidate due to his recent retirement. This statement, combined with the large difference in ages amongst the candidates, created an inference of discrimination. Thus, the Court denied the employer’s motion for summary judgment.
This ruling is a reminder that business decisions are subject to scrutiny even though they may seem sensible to the one making the decision. Perhaps a better course of action is to adopt a rule barring rehire within a specified period of time after resignation, discharge, or retirement.
A Georgia EMT sued her former employer, alleging sexual harassment and retaliation in violation of Title VII. Plaintiff alleged that sexual comments during the four months created a hostile environment. The comments included an owner calling Plaintiff attractive, saying he loved chocolate milk in apparent reference to her in a text that also included images of “tongue” emojis, and asking about her sex life with her boyfriend. Despite these comments, the lawsuit was dismissed and affirmed by the Eleventh Circuit. D’Marius Allen v. Ambu-Stat LLC. The Circuit Court concluded that the alleged comments, even if true, did not rise to the level of “severe or pervasive.” Moreover, the Court held that isolated comments, spread over four months, could not be described as frequent.
While this decision could be considered a “win” for employers, it is important to note that under certain recently adopted state laws, the result may be different. For example, the “severe and pervasive” standard has been eliminated (and replaced with a far lower, easier to satisfy standard) in New York. Consequently, had this plaintiff been working in New York, the Court may have reached a different conclusion.
In light of the #MeToo movement, employers should continue to stay informed of changes in the law and train supervisors accordingly.
An Ohio appellate court reversed enforcement of an employment arbitration agreement, holding that the agreement was both substantively and procedurally unconscionable because it required the parties to submit to arbitration all claims arising among them, even those unrelated to the employment relationship. Please click here for a complete analysis by our colleagues.