NLRB: Illegal Employer Conduct After an Election Petition Was Filed
Statements of Benefits in an Employee Handbook Can Create Contractual Obligations
An Indianapolis-based sales representative requested leave under the Family and Medical Leave Act (FMLA) and filed a worker’s compensation claim after he was involved in a work-related car accident. The employer approved the leave and stated in a letter that the employee was guaranteed reinstatement of his job or an equivalent position if he returned to work within 12 weeks. The explanation contained in the letter was identical to that contained in the employer’s employee handbook. The employer later informed the salesman that he was a “key employee,” hired a replacement and offered the salesman another position, which would have required him to move to California. The employee did not respond to the offer and was fired. The trial court found that the employee was ineligible for FMLA leave and entered judgment in favor of the employer. On appeal, the United States Court of Appeals for the Seventh Circuit directed the trial court to consider whether the statements in the employer’s handbook and letters were sufficient to establish a binding contract, thereby obligating the employer to provide benefits not otherwise required under the FMLA. Additionally, the appellate court held that the statements in the handbook regarding the right to leave might prevent the employer from later disclaiming the benefits offered. Accordingly, an employer must be careful of the language it uses in its handbooks and when communicating with employees regarding their eligibility for benefits because contractual rights may be created.
Peters v. Gilead Sciences, Inc., No. 06-CV-4290 (7th Cir. July 14, 2008)
Contact for more information: Paul J. Cherner
Inability to Work Overtime Not Protected by ADA
A factory worker was diagnosed with multiple sclerosis and was restricted from working overtime by her doctor. Soon thereafter, she notified a human resource manager at the plant where she worked. The human resources manager agreed that the employee could sit down and take extra breaths when she needed to rest. The employee later began leaving her post on an assembly line to rest, often without clocking out. The employer claimed that the employee’s absence was disrupting production on the line, including overtime, and fired her. The employee sued under the Americans with Disabilities Act (ADA). In affirming a judgment entered against the employee, the United States Court of Appeals for the Eighth Circuit recognized that employees had been required to work overtime on 22 Saturdays the previous year. But it concluded that the employee’s inability to maintain her position on the line and to work mandatory overtime rendered her unable to perform the essential functions of her job. Because all employees worked overtime, that court determined that the employee was not only unqualified for her job, but for all jobs at the plant. Although employers should attempt to accommodate disabled employees, no accommodation is required unless it allows the employee to perform the essential functions of her job, including mandatory overtime.
Tjernagel v. Gates Corp., No. 07-3101 (8th Cir. July 9, 2008)
Contact for more information: Daniel L. Farris
Providing Negative Reference Violates Settlement Agreement
An employee filed suit alleging that her former employer breached a settlement agreement by disclosing to a job consultant that the employee had sued the employer for employment discrimination. Under a settlement agreement between the employee and her former employer, when giving future job references, the employer was supposed to confirm only that the employee had worked for the employer, the dates of her employment and her last position. The employer was later contacted by a job consultant. When asked about the employee, the former employer informed the consultant that the employee had sued the former employer several times. The job consultant testified that the additional information he received caused him to remove that employer from the employee’s resume, which left a 20-year gap in the employee’s work experience. Although the lower court granted summary judgment to the employer, the United States Court of Appeals for the Seventh Circuit reversed and remanded the employee’s breach of settlement claim. The appellate court held that a party is damaged if he or she is denied the benefit of her bargain. Here, the employee’s expected benefit from the settlement agreement was to be a more competitive candidate when seeking future employment based on a good reference from her long-time employer. The court held that the jury could have determined that negative information regarding the 20-year job gap on her resume could detrimentally affect her prospect of finding job. Employers must adhere to the provisions of a settlement agreement, especially with respect to references.
Matthews v. Wisconsin Energy Corp., No. 07-1780 (7th Cir. July 7, 2008)
Contact for more information: Tom H. Luetkemeyer
Abuse of Intermittent FMLA Leave Supports Employee’s Termination
A night-shift employee for an auto parts manufacturer was allowed to take periodic medical leaves due to recurring migraine headaches. After noticing that many of the employee’s leave requests coincided with busy times for the lawn mowing business of her husband, the employer hired an off-duty police officer to monitor the employee’s activities. On a day the employee had requested time off due to the onset of a migraine, she was observed filling two lawn mowers with gas, traveling to a local cemetary and proceeding to mow the grass there. Based on this information, the employee was terminated. The employee subsequently filed suit, alleging a violation of the Family and Medical Leave Act (FMLA). The United States Court of Appeals for the Seventh Circuit held that the employee’s claim failed because she could not establish that she had taken leave for the intended purposes, a fundamental showing for an FMLA interference claim. Specifically, the Seventh Circuit held that an employer does not violate the FMLA when in refuses to reinstate an employee based on an “honest suspicion” that he or she was abusing his or her leave. While employers need not suffer clear employee abuses of FMLA leave rights, they must use caution to ensure that the “honest suspicion” can be supported through credible evidence, as it was here.
Vail v. Raybestos Products Co., No. 07-3621 (7th Cir., July 21, 2008)
Contact for more information: Linda K. Horras
Infertility Treatment Covered by Pregnancy Discrimination Act
An employee sought leave from her employer to undergo in vitro fertilization (IVF), a procedure that takes weeks to complete and often requires multiple treatments in order to produce a successful pregnancy. Several months after the employee returned from her initial leave, she made a second leave request because the first IVF treatment was unsuccessful. Around the time of her second leave request, the employee was informed that a corporate reorganization required the consolidation of her position with another and that she was being terminated. The employee subsequently sued, alleging a violation of the Pregnancy Discrimination Act (PDA), an act included within the gender discrimination provisions of Title VII of the Civil Rights Act of 1964, as amended. The trial court granted summary judgment to the employer, ruling that infertility is a medical condition that afflicts both men and women, and could therefore not lead to a gender-based personnel decision. On appeal, the United States Court of Appeals for the Seventh Circuit reversed, drawing a distinction between the gender-neutral condition of infertility and the gender-specific treatment the employee was undergoing. Because IVF is only available to women, the Seventh Circuit held that the employee’s allegation that she was terminated for undergoing it stated a valid claim under the PDA. While it remains to be seen what impact this holding will have generally, employers must exercise caution when making personnel decisions involving employees on leave, or seeking leave, related to pregnancy.
Hall v. Nalco Co., No. 06-3684 (7th Cir., July 16, 2008)
Contact for more information: Scott M. Gilbert
Public Employers’ Reasonable Expectation of Privacy in E-mails or Text Messages
Members of a city’s SWAT team were provided with pagers that were allotted 25,000 characters per month, after which the city was required to pay any overage charges. SWAT Team members were told that if they agreed to pay the monthly overage charges, the police department would not review their text messages to determine if they were personal or work related. For several months, the employees paid the monthly overage charges. However, the city began auditing the text messages to see if they were exclusively work related, in which case an increase in the number of characters the officers were permitted would be allowed. The audit revealed that many of the messages sent during normal work hours were personal in nature and sexually explicit, prompting an internal affairs investigation. The employees sued, arguing that the audit violated their Fourth Amendment rights against unreasonable searches. The United States Court of Appeals for the Ninth Circuit concluded that if the city had simply followed its general policy on computer, internet and e-mail use, the employees would be unable to claim any reasonable expectation of privacy in the content of their text messages. The city’s policy provided that access to the internet and the municipality’s e-mail system was not confidential; that the city reserved the right to monitor and log all network activity including e-mail and internet use; and that employees should not expect privacy when using those resources. However, that policy was not being followed. Because the city had also agreed not to review the employees’ text messages if they paid any monthly overage charges, the employees were entitled to claim an expectation of privacy in the content of their text messages. Public employers should make certain that their electronic use policies are clearly conveyed and consistently followed to avoid invasion of privacy claims.
Quon v. Arch Wireless Operating Co., Inc., No. 07-55282 (9th Cir., June 18, 2008)
Contact for more information: Steve M. Puiszis
Improper Bicycle Purchase Serves as Legitimate Basis for Termination
A purchasing supervisor at a large international company was fired after using her position to purchase her husband a new bicycle. The husband, a maintenance employee at the same company, rode his original bicycle around the facility. After that bicycle was damaged, his supervisor denied a request to replace it. The purchasing supervisor wife then altered an approved requisition form in order to add a bicycle for her husband. The company fired the purchasing supervisor once it realized she had modified the form. The purchasing supervisor sued claiming age and gender discrimination. In upholding the judgment entered against the purchasing supervisor, the United States Court of Appeals for the Eighth Circuit held that plaintiff did not show that the company treated similarly situated male employees differently and, therefore, that there was no inference of gender discrimination. Employers must confirm stray facts in terminating employees who commit fraud or misconduct.
Bearden v. International Paper Co., No. 07-3456 (8th Cir., June 26, 2008)
Contact for more information: Aimee E. Delaney
EEOC Required to Provide Notice Before Disclosing Confidential Information
A hotel and casino operator faced a number of complaints with the Equal Employment Opportunity Commission (EEOC) for, among other things, violations of the Age Discrimination in Employment Act (ADEA). To aid the EEOC’s investigation, the employer provided the agency with confidential information. Later, the employer sued the EEOC arguing that agency policy permitting its employees to disclose an employer’s confidential information to potential ADEA plaintiffs without prior notice violated the Administrative Procedure Act (APA), the Freedom of Information Act (FOIA) and the Trade Secrets Act (TSA). The United States Court of Appeals for the D.C. Circuit concluded that the policy was “arbitrary and capricious” and violative of the APA. The court was unable to base its holding on a TSA violation because the employer did not present evidence that the EEOC disclosed any information that caused “substantial harm to the competitive position of the person from whom the information was obtained.” Nevertheless, the court did determine that the EEOC’s disclosure policy created an irreconcilable conflict with FOIA regulations, which require the agency to provide a submitter with explicit notice of a FOIA request for confidential commercial records. In turn, the court enjoined the EEOC from enforcing its disclosure policy. The decision is a limited victory for employers because “the injunction may be dissolved if and when the Commission provides an explanation for its disclosure policy that satisfies the standards to which agency action must be held pursuant to the APA.” Nevertheless, employers that have been required to produce confidential information to the EEOC should be aware that relief from further disclosure may be available.
Venetian Casino Resort LLC v. EEOC, No. 06-5361, (D.C. Cir., June 27, 2008)
Contact for more information: James R. Pirages
Employer Fired Manager Due to DUI Arrests, Not Bias
An employer had a policy requiring its employees to report any felony or misdemeanor arrest within five days if its occurrence. One of the employer’s managers was arrested for DUI. Instead of reporting it to the employer, the employee requested leave under the Family and Medical Lave Act (FMLA) for inpatient alcohol treatment. The employer approved the leave, and the employee was in rehabilitation for 11 weeks. Upon her return, she asked to attend one-hour daily meetings of Alcoholics Anonymous. The employer approved. On her way to an AA meeting, the employee bought two small bottles of wine and drank one. Her car then sustained a flat tire. A police officer subsequently stopped to offer help. He ultimately arrested the employee for DUI. When the employer learned about the second arrest, it fired the employee for violating the self-reporting policy. The employee sued, alleging violations of Title VII of the Civil Rights Act of 1964, as amended, the Florida Civil Rights Act, the Americans With Disabilities Act and the FMLA. The court dismissed the employee’s claims, explaining that the employer fired the employee for a legitimate, nondiscriminatory reason, namely because the employee failed to report two arrests in violation of company policy. The court reiterated that if an employer’s explanation for termination is legitimate and nondiscriminatory, then the employee must meet the reason head on and rebut it. Employers should be aware of the importance in identifying legitimate, nondiscriminatory reasons for employment changes.
Davis-Dietz v. Sears Roebuck & Co., No. 07-15381 unpublished opinion (6th Cir., June 27, 2008)
Contact for more information: Justin M. Penn
Rehab Act Hiring Claim Revived Because of Dispute Concerning the “Record of Impairment”
During a job interview, a supervisor told the applicant that he would have to work three days a week. The applicant replied that he could not work on Fridays because he had to see his doctor and pick up his medicine on that day. The supervisor asked the applicant what kind of medicine he was taking. When the applicant responded that he was taking “psychotropic medicine,” the supervisor ended the interview. The applicant was not hired for the position and later sued alleging that the Rehabilitation Act prohibits discrimination against an individual because of a “record of” an impairment. The United States Court of Appeals for the Sixth Circuit reviewed the underlying facts in reviving the applicant’s Rehabilitation Act claim and explained that there was a genuine dispute about the employer’s failure to hire the applicant because the supervisor had admitted understanding that the applicant had “some type of disorder” and gave inconsistent descriptions about the employer’s failure to hire the applicant. Employers should be aware that some questions and topics are inappropriate for job interviews, including those related to an applicant’s health.
Doe v. Salvation Army, No. 07-3822 (6th Cir., July 1, 2008)
Contact for more information: Andrew B. Cripe
NLRB: Illegal Employer Conduct After an Election Petition Was Filed
A union filed a petition for an election to represent employees who worked at a tire and lube center. The employer reacted with a series of actions, some of which the National Labor Relations Board (NLRB) later determined were legal, and others of which were found to have been illegal. The employer’s threat to unilaterally discontinue its past practice of awarding merit increases was determined to be illegal, as was the employer’s decision to repair a cooling system because it was designed to induce the employees to vote against the union. Also found to have been illegal was the employer’s discharge of a union supporter and the denial of COBRA benefits to him, and the employer’s failure to enforce a no-harassment policy to protect union supporters from being harassed by other employees. The employer’s decision to assign a regional personnel manager to manage the tire and lube center while the regular manager was on a medical leave of absence was determined to have been legal, even though the regional personnel manager had no managerial experience in a tire and lube center. There was no evidence of any illegal surveillance activities, and after nine days, a manager with tire and lube experience worked at that location until the regular manager returned from the medical leave. This NLRB decision demonstrates that employers must carefully analyze all actions taken for their possible effect on employees after a petition for an election is filed.
Wal-Mart Stores, Inc., 352 N.L.R.B. No. 103, July 3, 2008
Contact for more information: Thomas Y. Mandler
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.