Suits In The WorkPlace

Overseas Whistleblowing?

Lou Michels — Fri, 16 May 2008 20:50:00 GMT

A recent case out of the Southern District of New York has serious implications for multi-national corporations with U.S. subsidiaries or anyone with employees working overseas. In O’Mahony v. Accenture, No. 07-7906 (S.D.N.Y., Feb. 5, 2008), the plaintiff was a partner at Accenture, LLP, a U.S. subsidiary of Accenture Ltd., a Bermuda-based company. O’Mahony was an Irish national working in the United States. Accenture moved her to France in 1992. Foreign employees in France are required to contribute to French social security and O’Mahony told her supervisors that Accenture needed to make those contributions. At some point, senior Accenture management, located in New York, told her that the U.S. tax partner for the company decided not to make the social security contributions and would effectuate the plan by concealing the length of O’Mahony's assignment in France. When O’Mahony objected to what she perceived to be tax fraud, an Accenture's senior manager, also located in New York, supposedly decided to reduce her level of responsibility, along with her compensation.

O’Mahony filed a complaint under the Sarbanes-Oxley Act, claiming that Accenture retaliated against her because of her objections to the tax fraud scheme.

Now it gets interesting. The Department of Labor initially dismissed O’Mahony's complaint on the grounds that each of the elements of her complaint occurred in France and that the DOL lacked jurisdiction over the claim because the whistleblowing provisions of Sarbanes-Oxley do not apply extraterritorially. The DOL administrative law judge upheld the dismissal on appeal and O’Mahony filed a petition for review with the DOL Administrative Review Board.

Probably figuring that the ARB wasn't going to upset the DOL apple cart by reversing its own administrative law judge, O’Mahony pulled the case out of DOL's administrative process and put it into federal court. This was an option because the ARB couldn't make the six-month deadline for processing claims under the Act.

Surprisingly, the federal court reversed the DOL dismissal, finding that although the statute does not apply to elements occurring overseas, in this case the alleged adverse decisions were all made in the United States. In other words, the actual work site or nationality of the employee doesn't matter; it's where the decisions to engage in fraud/Sarbanes-Oxley violations occur that drives the jurisdiction issue.

This decision could have some real fall-out for multi-national corporations, especially those with operating headquarters in the United States. There are plenty of places in the world (just about all of the former Soviet Union, for example) where companies must operate in ways that are not exactly compliant with every single local and national ordinance. An expatriate employee who raises this non-compliance can establish a Sarbanes-Oxley claim simply by alleging that he suffered an adverse employment action resulting from a decision made in the United States. In other words, moving these kinds of issues up the food chain to higher headquarters, when those higher headquarters are located in the U.S., might not be the best plan of attack for dealing with a complaint that might trigger Sarbanes-Oxley liability.

Raising the Roofies – Harassment Investigation 201

Rod Satterwhite — Tue, 13 May 2008 01:58:00 GMT

A former female attorney at a prominent Boston law firm has filed harassment charges, alleging that she was drugged at a holiday party by another employee. According to a Boston Globe story last week, the former associate filed a claim with the Massachusetts Commission Against Discrimination, alleging that the firm failed to adequately investigate her charges. The suit offers an important lesson in the need for both communication and follow up during – and after – a harassment investigation.

The facts, as alleged in the complaint, are that the female associate became dizzy at a holiday party and later went to the hospital, where traces of an anti-seizure medicine were found in her blood. She reported the incident to another female lawyer, who confided that a year earlier she too had been drugged, and also raped, by a firm employee.

The victim took all this information to HR, who – not surprisingly – conducted a prompt investigation, but could not determine whether she had been given the drug by another employee, or by someone else. The firm nevertheless provided personal safety training for its employees, but did not specifically issue a warning about the incidents themselves.

So far, so good, right? Reasonable steps in response to a difficult situation. It is not uncommon for a harassment investigation to produce inconclusive results, despite an employer’s best efforts. Sometimes you interview every possible witness, look at all the documents, but still just can't determine what happened or who's telling the truth. When that happens, you conduct policy reminders, relevant training (like here) or take other proactives steps that are reasonable.

However, your obligation does not always end there. And here’s where the complaint, if true, raises a few red flags for me. A few weeks after the drugging incident, at a dinner with firm employees, the complaining employee said she overheard a male employee brag about how he likes to use roofies (date rape drug, for those who thought the title related to either candy or building materials) on women and then have sex with them. (Side note of no legal consequence: I’m not quite sure how this topic came up during dinner, nor am I clear on why the guy, who apparently fancied himself quite the ladies’ man, tried to impress his dinner companions with confessions of a desperate felon. Boy, dating sure has changed since I was single . . . ).

Nevertheless, the complaining employee then took this new information to HR, who once again said they would investigate. According to the complaint, however, after several weeks, HR still had not talked with the male employee who supposedly made the comments. I call that "Problem Number 1."

Following closely on its heels is Problem Number 2: the employee stated she was uncomfortable working around the guy (I wonder why), but was told that if so, then she could move to another floor. No mention of a suggestion that he be relocated. Several weeks later, she was told that he was no longer with the firm, but by then she claims to have felt so uncomfortable that she had to leave the firm.

I don’t know whether these allegations are true or not. Regardless, I question whether the whole matter (or at least the litigation) could have been avoided with better follow through and better communication. First, when your investigation is inconclusive, and relates to a possible felony like rape, and you get new information about the potential culprit, you follow up on that information as fast as you possibly can. Whether the firm did so here is unclear, but if they did, it doesn’t sound like they communicated a sense of urgency to the alleged victim. For whatever reason, she concluded that they had failed to talk to the guy for several weeks even after she reported his not-apprpriate-for-dessert roofie confessions.

Second, you never transfer the complaining party in a harassment situation unless they request it. I rarely (if ever) say never, but in most cases it is a risk to transfer the victim, because, like here, the transfer may look, or be perceived as, retaliatory – even if it wasn’t meant to be so.

My employment lawyer Tarot cards suggest that this litigation might have been avoidable. Note that this person did not file the charge immediately after she was drugged, or after the other female said she had been drugged and raped, or even after the firm's initial investigation produced no conclusive results. The charge came only after she provided the firm with additional information, after several weeks passed with what looked like no action by the employer, and after she was told she could move if she had a problem with Mr. Roofie. Then she finally left and filed a charge. Hard to tell exactly how this one will play out. Whether or not the allegations are accurate, however, sometimes dropping everything else on your plate to follow up on an important lead in an investigation can make the difference between whether you get sued, or whether you keep a potentially good employee. Think about it.

Slave Driver Image Apparently Not Hostile Enough

Lou Michels — Tue, 29 Apr 2008 15:14:00 GMT

You would think that employers in Alabama would be sensitive to the whole slavery thing, having lost a war over it and serving as Ground Zero for the opening rounds of the civil rights movement in the 50s and 60s.

So that makes what happened at the Mobile Infirmary even more bizarre. There, a clinical pharmacy team leader had a screensaver on her computer bearing the permanent caption "Slave Driver" in flaming letters and depicting an illustration of the team leader standing threateningly over three black males in varying positions of supplication/distress. The team leader, who was Asian, apparently received the screensaver as a prank from one of her African-American interns some time earlier.

Not surprisingly, when a black clinical pharmacist started working in the area, she was offended by the image and complained. Nothing was done about the image, however, until the supervisor received a new laptop computer, about four months later.

Soon after the black pharmacist complained about the image, she began to receive work criticism that escalated into disciplinary action and a memo that was placed into her file characterizing her as "young, arrogant, inability to handle criticisms, and believes that she has a tremendous amount of experiences even though this is not the case." I guess "uppity" couldn't make it past the spell checker.

Ultimately, the employee was terminated in a downsizing. She sued for race discrimination based on her termination. Incredibly, she failed to plead a claim of hostile work environment, either in her EEOC charge or the lawsuit.

The court spent some time discussing this lapse, finding the failure to raise the issue in the charge and the lawsuit to be fatal. But the court also noted that the pharmacist could not even make a prima facie case of hostile work environment because the only thing that she claimed was hostile was the screensaver. Commenting that the image was "utterly inappropriate," the court noted that mere exposure to that image, without more, could not satisfy the requirement that the infirmary's conduct be sufficiently severe or pervasive to alter the conditions of employment.

In other words, without additional evidence of racially motivated hostile conduct, the single PhotoShopped screensaver of an Asian supervisor beating black employees (to which the plaintiff would have been exposed almost daily), was not enough.

I think this is a correct decision, because there was no other indication that the work environment was altered by racial epithets or conduct. I do not recommend that supervisors run out and start pushing the edge of the envelope by placing similar images on their computers, however. I wouldn't count on a plaintiff's lawyer missing that obvious a claim more than once. Odom v. Mobile Infirmary, No. 06-0511-WS (S.D. Ala. Mar. 17 2008).

Workers' Compensation Absence Does Not Equal FMLA Protection

Lou Michels — Tue, 29 Apr 2008 14:50:00 GMT

A recent case out of the 7th Circuit clarifies the confusing interplay between workers' compensation leave and leave covered by the FMLA.

The employee in this case suffered the all-too-common back injury and was out of work from January 19, 2004, through August, when he was released to return to work. The company's absenteeism policy tracked the minimum amount of leave required under the FMLA. Specifically, the employee was allowed 480 hours of time away under the company's handbook. The company was careful to note in its handbook that FMLA time runs concurrent with any short-term disability or workers' compensation covered absences. The company automatically terminated anyone who was unable to work for a total of more than 12 weeks, regardless of the reason for the absence.

Important safety tip here -- such a policy may run afoul of the Americans with Disabilities Act, unless the company is conducting a case-by-case review of the employee's status and job requirements at the 12-week point.

The company scrupulously followed the FMLA notice requirements when the employee went out as a result of the injury, telling the employee how much FMLA leave he had left and that the leave would run concurrently with worker's compensation and short-term disability. In this case, the employee had already used more than half of his 480 hours, and the company terminated him at the end of his FMLA entitlement due to excessive absenteeism.

The employee sued for exercising his workers' compensation rights, wrongfully requiring him to utilize FMLA leave, rather than temporary total disability time, and terminating him after he attempted to return to work with restrictions in a light-duty position.

Both the district court and the court of appeals rejected all of the employee's claims. The court of appeals first noted that the plaintiff could not establish that the employers' reason for terminating him -- excessive absenteeism -- was a pretext for covering up improper motivation. The court held that an employer may fire an employee for excessive absenteeism even if the absenteeism is caused by a compensable injury under the workers' compensation system. The court also noted that the employer had every right, under the law, to place plaintiff on FMLA leave even if the employee did not want to use his FMLA entitlement. The court noted that the employer in this case had provided the employee with appropriate notice of his FMLA status and the fact that it intended to run FMLA leave concurrently with either workers' compensation or some other type of paid leave of absence.

This is a reasonably clear-cut win for a company that shows the benefits of complying with the FMLA notice requirements for concurrent running of leave of absence and FMLA time off. Under these circumstances, the employer is covered and can actually run a manageable workers' compensation and FMLA leave of absence policy.

There Are Limits, Even in Sexual Harassment Cases

Lou Michels — Wed, 09 Apr 2008 14:35:00 GMT

Among the many problems that arise in sexual harassment cases are attacks on witness credibility as a result of the subject matter. Specifically, it's not uncommon to see embarrassing questions at deposition or in court about people's sexual histories, their sexual partners (in particular, their coworkers), their own viewing of pornography, participation in off-color activities, etc. These inquires, usually directed at the coworkers, but occasionally at the plaintiff, are arguably "relevant" in order to show that a person was not offended by some crude sexual come on or picture, or that they willingly participated in the conduct they are now claiming was problematic, or to support the hostile work environment claim. Obviously, eliciting this information in a public forum can be a powerful deterrent to proceeding further with the litigation, or an incentive to quickly settle the case.

But there are limits, and a recent Ohio state court opinion demonstrates this pretty clearly.

Three female employees sued their car dealership employer for sexual harassment, along with civil assault and battery, retaliation and intentional infliction of emotional distress, among other things. They alleged the usual litany of boorish and inappropriate behavior -- see my previously posted comments on the totally unoriginal conduct of sexual harassment defendants. At trial, the defense sought to introduce evidence about one woman’s piercings and sexual promiscuity, ask about the voluntary presence in a strip club of another female plaintiff, and question the third about a videotape she made depicting her engaging in sex acts with her husband.

Although objected to initially, the attorneys for the women did not object at trial to questions about piercings, tattoos and sexual promiscuity. Specifically, the defense called one plaintiff's mother who testified about her daughter's piercings and tattoos and gave an opinion about her promiscuity--some parents have far too much knowledge about their adult kids’ activities. The dating history of the other two plaintiffs was also reviewed without objection. The failure to object not only means the evidence comes in, but that it can't be made the subject of an appeal. But I cannot understand how this testimony could even have passed a smell test for relevance given the facts of the case.

The plaintiff's lawyer apparently found her voice when one of the women was asked about whether she had ever visited a strip club. The trial court also allowed this question to go forward (the plaintiff had, in fact, visited a club). The appellate court upheld the trial court's ruling on the grounds that the woman in question claimed as part of her hostile work allegation that strippers entered the workplace during working hours and created an "uncomfortable atmosphere." The court allowed the question, holding that the woman's having been in a strip club on her own time and with people of her own choosing undermined her statement that she would feel uncomfortable at work in the presence of strippers. So the company’s defense was not that strippers weren’t there, but that the victim couldn’t be offended because she’d seen exotic dancers (to use the Duke lacrosse case vernacular) before. Yikes.

It apparently never occurred to either of the courts that conduct welcome in an off-duty, non-work setting among the presence of family or friends might be grossly inappropriate and uncomfortable when observed in the workplace. I think this is an astounding evidentiary slip that created all kinds of fair trial issues for this particular plaintiff.

The appellate court finally woke up, however, in reviewing the sex tape issue. One of the women had been filmed by her husband, without her knowledge, in their bedroom together. Incredibly, the trial court allowed the questioning of the female witness concerning this episode, apparently on the theory that the fact that the plaintiff made a sexually-oriented tape with her husband somehow proved that she would not be offended at the sight of pornography in the workplace. This ruling allowed the defense to inform the jury during opening statements that the plaintiff starred in a “pornographic film.”

Using logic that would have applied equally to the stripper situation had it been thinking clearly, the appellate court noted that the defense's argument on the videotape "would allow a complete stranger to pursue sexual behavior at work that a female worker would accept from her husband or boyfriend." The appellate court reversed the trial court's finding and ruled that the videotape had no relevance to any issue in dispute. The court remanded the case for retrial.

The case is Conti, et al. v. Spitzer Auto World Amherst, Inc., 2008 Ohio - 1320; No. 07 CA 009121 (Ohio App. 9th Dist. March 24, 2008).

USERRA conundrums

Lou Michels — Sat, 05 Apr 2008 14:26:00 GMT

A new USERRA case gives a useful review of the limits of claims against employers when veterans return from military service.

In Woodard v. New York Health and Hospital Corp., No.1:04cv05297 (E.D.N.Y., March 17, 2008), the employee worked in a management position overseeing surveys of healthcare centers to evaluate their accreditation and regulatory practices. She also served in the Army Reserve as a major, taking three weeks of military leave when she was hired in 1995, and completing her annual Reserve requirements thereafter.

Woodard took an extended military leave from October 2001 until March 29, 2004. On her return, she was not returned to her former job (which was still vacant) but instead assigned to a quality assurance area that was understaffed. Nevertheless she retained her management title and the same salary grade.

Woodard sued claiming that she was discriminated against because her pay increase was reduced following an evaluation in 2001 and because her new position upon return in 2004 did not involve managerial duties, but instead required a number of “secretarial” functions.

Initially the court ruled that Woodard made a prima facie case of USERRA discrimination because her pay raise, which was only half of what it should have been, occurred in close proximity to her return from military leave and because her supervisor referred to her military leave of absence in a memo justifying the reduced pay raise.

Important safety tip here: in memos, employee evaluations, emails, or polite conversation, do not refer to protected factors in the same sentence as adverse employment actions.

But the court then noted that merely making a prima facie case, and perhaps even showing pretext, is not enough if you don’t have damages. In this case, the employer retroactively credited Woodard with a pay increase equivalent to what she would have received if she had been working full time, without the leaves of absence. This effectively mooted her USERRA discrimination claim.

Woodard’s re‑employment claim is subject to a somewhat more confusing analysis. In fact, you might be able to make a case that the court got this one wrong. It is undisputed that Woodard was not put back in her old job, but was moved laterally to an understaffed position that had slightly different duties, although she retained her title and salary. The employer justified not putting her back in the same position by noting that the company was operating on a very tight budget that precluded new hiring and employees were being moved around throughout the hospital to ensure critical positions were filled. Other employees were assigned to perform the essential elements of Woodard’s old job, which the court said essentially caused “her old job to disappear”.

Given that the requirements for the job were still there, I’m pretty sure that an employer does not get the flexibility under USERRA to simply shift somebody out of their old job and into a new one because it was able to manage staffing the old position with the remaining employees. The language of the statute is clear—it requires a return to work in the position the employee would have had if she had not left. The court’s opinion is not clear on how the employer demonstrated that it could not have reassigned the duties of the new position to remaining employees when Woodard returned and simply put Woodard back into her old job. I think this may be an issue revisited on appeal because it seems inconsistent with the plain language of the statute.

In other words, you don’t get to reassign an employee simply because other people have proved capable of doing her job while she’s gone. If the obligations to perform those tasks remain, and the company has not reorganized that position out of existence, I think a good case could be made that the requirement to put the employee back in that position remains and the employer’s obligation is to shuffle staffing to make up for any other shortfalls rather than having the burden fall on the returning service member.

The EEOC and “No Re‑employment” Clauses

Lou Michels — Sat, 05 Apr 2008 13:51:00 GMT

On April 3, at an ABA Labor and Employment Law Section meeting in California, an EEOC attorney stated that the Commission will oppose so-called “no rehire” or “re‑application” clauses in settlement agreements, or any other type of employment agreements. A no rehire clause is typically used to preclude an employee, who has left the company and filed an EEOC charge or a lawsuit, from setting up a retaliation claim by re-applying for work at the same company. As the EEOC surely knows, a former employee applying under these circumstances confronts the employer with a choice: either rehire the employee (who was frequently a problem employee in the first place) or deny the application and set‑up an endless loop of retaliation claims when the employee files a charge saying that the reason she wasn’t hired is because of the previous protected conduct of filing a charge of discrimination.

This is the kind of shortsighted viewpoint that makes the EEOC actually work against its statutory role as a conciliator. In fact, the Commission’s opposition to these clauses reduces the likelihood of settlement or conciliation. Without a “no rehire” provision, an employer really can’t rid itself of claims from the aggrieved employee. It’s not uncommon to see ex-employees try to get a job with a former employer (in a career and location where they feel comfortable, know the job, and may know the personnel) after filing an EEO charge.

The fact that the employee is willing to return to the workforce notwithstanding her earlier claim that it was a hostile environment, managed by racists, sexists, or discriminates against the elderly, casts more than a little doubt on the veracity of the original charge, but the Commission seems to ignore this.

The speaker at the ABA conference stated that the reason the Commission opposes these clauses is that frequently the employee does not realize how broad in scope the no rehire clause actually is. In other words, the Commission wants to save the employee from her own bad judgment. Saving people from themselves has never been a particularly successful philosophy for a government program and it doesn’t work well here either. Employers should know that if they are involved with the Commission, a no rehire clause may be a showstopper as far as settling the charge or case is concerned.

Litigation Hold Means "Hold"

Lou Michels — Tue, 25 Mar 2008 12:22:00 GMT

A recent federal decision in Georgia penalizes a company for failing to execute on a litigation hold put in place by the company's general counsel.

Connor v. Sun Trust Bank, No. 1:07-cv-0650 (N.D. Ga., Mar. 5, 2008) is a wrongful termination case alleging a violation of the Family and Medical Leave Act. Connor was notified that she would be terminated approximately one month after coming back from maternity leave at the beginning of January, 2007. Her supervisor, who made the termination decision, sent an email to senior managers of Connor's group on February 12, 2007, explaining the reason for the termination.

Eleven days later, the bank received a letter from Connor's attorney cautioning it to preserve any documents relating to Connor's firing. The next day, the bank's general counsel instructed several employees, including the supervisor and the human resources director, to preserve all relevant documents in their possession or control, including their emails. The bank's email system automatically deletes email after thirty days, and back-up tapes are overwritten after ten days; employees must archive emails to save them past these dates.

The February 12 email was not produced in discovery and the plaintiff got a copy of it through some other means (presumably from some sympathetic coworker). Notwithstanding the standard "no harm, no foul" rule in discovery, the court determined that spoliation of evidence had occurred given that the supervisor was told to retain any email and failed to do so. The court found that the bank had acted in bad faith by failing to produce the missing email, but limited the sanction to an instruction to the jury about the appropriate inference to draw from the absence of evidence.

What this means in plain English is that the jury would be instructed that the destruction of the February 12 email indicated that the bank or the supervisor wanted to hide the document because it contained incriminating evidence. The lesson here is fairly straightforward. A litigation hold means “hold”, and the bank's counsel should have taken steps to ensure that the instructions were followed by these key bank managers. In addition, the bank should have had a policy indicating that emails relating to terminations should be printed out and forwarded to human resources for inclusion in the personnel file. This routine step would have prevented this spoliation charge.

Employees and Computer Fraud

Lou Michels — Fri, 14 Mar 2008 17:53:00 GMT

I have written before about employees going ballistic on their bosses' computer systems and the risks employers face in these situations. A recent case out of a federal court in Illinois (Wong & Assoc. v. Nichols, No. 07C6277, Jan. 16, 2008) discusses the application of a federal legal remedy, the Computer Fraud and Abuse Act, or CFAA, that can be applied in both a criminal (read that as U.S. Attorney, federal judge, federal prison type of situation) and a civil one, where you merely get sued for money damages. However, the statute has some fairly specific requirements that have to be shown before bringing down the wrath of the federal government on one of your employees for misconduct.

In this case, the employer brought a CFAA action against a former employee who walked out with confidential company information that he had taken off the company's computer system. That's all he did -- copied information down and left. He didn't try to hide his theft by wiping his hard drive, stealing a computer system, or any other nefarious act.

In tossing out the CFAA cause of action, the court noted that the statute requires both that there be "damage" to the computer system (defined as impairment to the integrity or availability of data, a program, a system or information) and "loss" (defined as any reasonable costs to the victim incurred in responding to an offense, or suffered as a result of the interruption of service). The court said that simply taking the data, without damaging the computer system and causing lost revenue as a result, was not a violation of the CFAA and dimissed the case.

My experience is that cyber thieves are normally not content to simply copy data out of their systems for their own purposes. Typically, they try to hide it by deleting files, erasing drives, or removing pieces of hardware. Under these circumstances, which are similar to the case mentioned in an earlier post here, the CFAA undoubtedly applies as long as the employer can show some cost of repair or restoration

Faking It

Lou Michels — Thu, 13 Mar 2008 15:18:00 GMT

The Wall Street Journal recently discussed a psychological test designed to spot personal injury plaintiffs who are faking their conditions. The test, known as the Fake Bad Scale (as opposed to a similar test for negligence, known as the "My Bad" Scale), is a variation of the well-known Minnesota Multiphasic Personality Inventory ("MMPI"), and, in fact, has been endorsed by and made a part of the MMPI regimen. The test focuses on claimants who state that they have injuries, or are experiencing pain, with no or little discernible physical cause.

Use of the test is apparently widespread -- one study found that it has been administered by 75% of neuropsychologists. Coincidentally, these are often the people who appear as expert witnesses at trial for or against plaintiffs in assessing psychological impact of personal injuries. The 43 true/false questions are integrated into the MMPI and then scored to see if there is an indication that the person is a malingerer.

The scoring differential between people who are known to be malingering, people who had been instructed to try to fake malingering, and the truly injured is fairly significant, at least according to the reported research. People with a score above 20 on the 43-question scale are tending toward fakery. For purposes of marking people as possible malingerers, the test administrators use a cut off of more than 23 points.

Of course, the test is under attack by the personal injury plaintiffs' bar, as well as some psychologists. At least one court has tossed the test results out as evidence, although the court's analysis seems suspect. Specifically, the court looked at individual questions rather than the total question package, finding that a test that gives points for malingering when a plaintiff gives honest answers to questions based on actual injuries, was improper.

Other researchers state that the test gives too many false positives, claiming that it was unlikely that so many patients could have fooled doctors into diagnosing them incorrectly.

As somebody who has both used and challenged psychiatric/psychological testimony in court, I don't find it difficult at all to believe that large numbers of patients could fool mental health physicians or social workers. The field is rife with inconsistent application of standards, overly subjective analyses, and incomplete investigations of patients' complaints.

There's an interesting discussion of the issue, replete with comments from professionals, here, under the March 12 entry.

For a culture that embraces psychological analyses of all types, the idea that there would be substantial push-back to a test that might cut down on false claims is surprising. But the pushback is also consistent with our natural inclination in this culture to refuse to confront unpleasant truths.

Listening Post

Lou Michels — Mon, 10 Mar 2008 14:16:00 GMT

An interesting article in E-Discovery Advisor magazine notes the increasing use of so-called "unified messaging systems" ("UMS"), which integrate email and voicemail systems. The upshot of this is that voicemail recordings, most of which are now digitized anyway, are now considered as permanent as email, and, therefore, discoverable. The new changes to the Federal Rules of Civil Procedure relating to the discovery of electronically stored information clearly include voicemail systems.

From a practitioner's perspective, voicemail is just about the only thing that is more persuasive to a jury than email regarding what people were really thinking about something. Voicemail recordings have been used in several high profile trials to conclusively show not only that a certain act occurred, but the state of mind of the person who performed it. The real time, unvarnished, expository nature of a voicemail communication is extremely persuasive. The fact that it frequently reflects the emotional state of the listener only bolsters its credibility for a jury as an indicator of what's really going on.

As a result, the long term preservation of voicemail messages, either through a UMS or such common features as voiceover internet systems, runs the risk of inadvertently giving litigants evidence that previously could only be obtained by wiretapping. Companies involved in changing over their phone systems to a UMS or similar system should consider protocols to ensure that messages are not retained past their useful life. For example, voicemail message recipients might be required to listen to their voice messages daily and delete them after listening unless the message is a business record or subject to a "legal hold" placed on communications as part of a lawsuit or investigation. Storage criteria for these kinds of messages should be specific and compliance should be part of a regular audit by internal or external counsel. Recording telephone conversations (which is possible with most voicemail systems, albeit with some effort) should never be allowed unless done with client or participant consent, and only in specific cases.

As with email, in terms of retaining messages, for most employers, less voicemail stored in the system will definitely be more.

Some Thoughts on the Recent Supreme Court Employment Law Opinions

Lou Michels — Mon, 10 Mar 2008 14:09:00 GMT

The Supreme Court recently decided two cases relating to employment law issues. In the first, involving Federal Express, the Court attempted to resolve the issue of what has to be submitted to the EEOC to comply with the requirement that an employee file "a charge" alleging unlawful age discrimination to begin the litigation process under the ADEA. The second case, which involved Sprint as a defendant, related to a more serious issue of whether coworker testimony about how they had been treated could be admitted to support an individual plaintiff's discrimination claim.

In the FedEx case, the employee filed an intake questionnaire and detailed affidavit supporting her age claim, but did not file a formal written charge of discrimination on a form typically used by the EEO. The Court noted that the EEOC’s position--a charge was a filing which, taken as a whole, should be construed as a request by the employee for the EEOC to take whatever action necessary to vindicate the employee's rights--was entitled to substantial deference. As noted above, this written filing generally occurs using a particular piece of paper, but sometimes it doesn't. The Court determined that the EEOC's uneven application of the standard was not enough to void it, and, therefore, the documents ultimately filed were sufficient to meet the charge requirement under the statute.

If the administrative phase of the EEOC proceedings were more significant in the overall litigation process, this decision might be big news. As it is, relatively few of the cases that make it to litigation are disposed of by pointing out some failure in the nature of the charge actually filed with the Commission. The Court's interpretation of the EEOC regulations is consistent with its general rule that federal agencies can set their own standards as long as those standards are reasonable.

The Sprint case is something of a disappointment. The plaintiff here also sued for age discrimination (these cases are going to become more and more prevalent over the next decade as the Boomers do not go gently into that good night) and, at trial, sought to introduce testimony by five other former Sprint employees who claimed that they too had also been victims of age discrimination at Sprint. None of the individuals worked in the plaintiff's group, nor had any of them worked with the supervisors in her chain of command. Sprint, of course, moved to exclude this testimony, saying it was irrelevant to the central issue of whether plaintiff's supervisor terminated her because of her age. The trial court agreed, stating that evidence of discrimination against employees not similarly situated to the plaintiff proved nothing. The 10th Circuit Court of Appeal treated the trial court's ruling as an application of a per se rule that evidence from employees with other supervisors was irrelevant to proving discrimination in an ADEA case. It reversed the district court, determined that the evidence offered was relevant and not unduly prejudicial, and remanded for a new trial.

The Supreme Court dealt with this case on more of a procedural issue, rather than a substantive ruling. Specifically, the Court noted that the court of appeals failed to give due deference to the trial court. Accordingly, the Supreme Court kicked the case back to the court of appeals and told it to try again.

In remanding, the Court noted that this type of "me too" evidence should not be excluded per se, but rather, must be viewed on a case-by-case basis, to see if it comes in. This is pretty standard stuff -- anyone who's tried one of these cases knows that the issue of evidence exclusion turns on how the parties plan to use it at trial and what other evidence actually comes in at trial. Frequently, preliminary motions excluding evidence are reversed during the course of the trial based on witnesses' testimony and the judge's assessment of what's been proved. Rather than provide a rigid standard, the Court pushed the case back to the trial judge to explain the nature of his rulings.

Neither of these cases is particularly momentous, and neither provides any real guidance for employers. There are still important cases out there to be resolved this term, so stay tuned.

Retaliation Doesn't Just Belong to Supervisors

Lou Michels — Mon, 25 Feb 2008 17:20:00 GMT

A case with fairly terrifying facts out of the Sixth Circuit shows clearly that a company can be liable for retaliation by a coworker with no managerial responsibility, even when the actions taken are not part of the employee's job or done in support of a company end.

The case sets some new benchmarks for sexual harassment and retaliation, even by my somewhat inflated standards. Four female employees of Anheuser-Busch alleged sexual harassment and retaliation on the part of one of their coworkers who worked on the brewery line at the Anheuser-Busch plant in Columbus, Ohio. The company had an initial indication of problems in 1993, when it determined that the coworker wrote several harassing and threatening notes to a female employee, who had her car sideswiped in the company parking lot after she made a report to management. Anheuser-Busch fired the male coworker, but he was reinstated as a result of the union filing a grievance on his behalf.

From 1999 forward, the male coworker targeted a series of women with sexual explicitly remarks and physical contact. The women complained to their supervisors and the company investigated the alleged conduct. Several weeks after the initial report of a problem, someone set fire to one of the women's cars at her home. Although the woman alleged that the male coworker was responsible (he had a history of physical threats and intimidation against any number of people at the plant), the company did not investigate and told the woman that she should stop making comments because she could be sued for slander. The investigation determined that the male coworker had engaged in inappropriate conduct, but did not discipline him. Instead, the complainant received a letter informing her that the company had been unable to substantiate her allegations of harassment and that she should contact management if she had any questions.

The company later received an anonymous letter indicating that the brewery botched the investigation by failing to interview people on the line about the male coworker's conduct and noting that almost everyone was afraid of him because of his past actions. The letter went on to identify instances of threats made to employees, people having their tires slashed on their cars, and threats to kill any woman who was responsible for him losing his job. After yet another complaint from female employees, the company investigated and ultimately fired the male coworker. Shorlty after his termination, someone burned down one of the complaining employees’ house. The male coworker was suspected, but before anything else could be done, he shot his girlfriend and killed himself.

Although the district court granted summary judgment against the female plaintiffs, the court of appeals reversed the retaliation claims of one of the women and sexual harassment claims she brought along with another of the female plaintiffs. In doing so, the court recognized that a coworker's acts in retaliation for reporting sexual harassment can be charged to the employer's account, where supervisors or members of management have knowledge of the coworker's retaliatory behavior and either condone it or fail to respond to it so inadequately that the employer can be said to be indifferent or unreasonable under the circumstances.

Most circuit courts of appeal agree with this position, but it bears repeating again. We typically worry about supervisor retaliation in Title VII cases, because the link between the conduct and the interest of the company is apparent. But this decision makes it clear that retaliation performed for a strictly personal reason can also create claims against a company.

There are several messages in this opinion, but the clearest for me is that a company that allows a situation like this one to continue to fester is ultimately going to get tagged with the conduct of the non-managerial harasser. When an employer has clear indications of a problem, and, in essence, throws up its hands once it loses a union grievance, that's simply unacceptable. The court drove that point home.

Reasonable Accommodation and Religious Beliefs

Lou Michels — Thu, 14 Feb 2008 17:20:00 GMT

I've had occasion in this blog to comment on religious discrimination cases several times. A new decision by the 4th Circuit does a very nice job of laying out the parameters to be considered by an employer in determining whether to grant a request to deviate from its work procedures to accommodate someone's religious beliefs.

Plaintiff belongs to the Living Church of God. Among other things, his religious beliefs prohibit him from working from sundown on Friday to sundown on Saturday and on several other religious holidays. The holidays typically total 20 days a year, including 14 that do not already coincide with part of the weekly Sabbath. The employee initially did not encounter a problem because he worked only during day shifts on weekdays and was able to use his company vacation days for non-Sabbath observances.

Unfortunately, this situation did not remain static. The company restructured its operations, forcing the plaintiff to change shifts as a result of being bumped by employees with more seniority in the plant. It became immediately apparent that the plaintiff could not continue to attend all of his religious obligations while meeting his work schedule. The company, which was operating under a collective bargaining agreement, had a fairly flexible time off policy, including 15 vacation days, 3 floating holidays, the ability to swap shifts 8 times per year with another employee, and the ability to take 60 hours of unpaid leave for any reason. The company also allowed an employee to use up to 3 vacation days in 1/2-day increments, if necessary. However, an employee exceeding 60 hours of unpaid leave is terminated.

Notwithstanding these options, plaintiff could not maintain his religious observance schedule. He requested permission to extend his unpaid leave of absence, something the company had allowed on a one-time or non-recurring event basis. But because his request was for something that was going to recur, the company denied his request. Plaintiff was ultimately terminated when he failed to show up for work on one of his religious holidays.

The district court granted summary judgment and the case went up before the 4^th Circuit. The court noted that an employer can prevail on a case of religious accommodation discrimination if it can show either that it provided the employee with a reasonable accommodation for the religious observance or that providing an accommodation would have caused an undue hardship to the employer. Undue hardship is defined as something that results in more than a de minimus cost. The plaintiff contended that an employer provides a reasonable accommodation only when it completely eliminates the conflict between the religious practice and the work requirement. The 4th Circuit dealt with this easily, noting that the requirement was for a reasonable accommodation; an employer was not required to offer an alternative work arrangement that totally eliminated any potential conflict. The court stated that the employer's seniority-based bidding system for work shifts is a significant accommodation to the needs of its employees, and that the additional flexibility in the work schedule further bolstered the employer's claim that it had attempted a reasonable accommodation. The court also approved the employer's granting the employee the opportunity to take additional 1/2 days of time off above the CBA entitlement, as well.

The important point of the court's opinion is this -- an employer's existing policies can be sufficiently flexible to comprise a reasonable accommodation for religious claims. In this case, the court cited the employer's collectively bargained attendance programs, without modification, as sufficient evidence of reasonable accommodation efforts. A second important holding by the court: an employer may consider the feelings and morale of its workforce in assessing whether additional modifications of its policies will be an undue hardship. The court specifically noted that evenhandedness and fairness are of paramount importance to the functioning of any workplace. In a particularly telling statement, the court said, "Coworkers have rights, too."

We are seeing an increasing number of workplace accommodation claims for religious practices. This decision provides some well thought out guidance on the limits of what an employer has to do to satisfy its obligations under the law in dealing with these claims.

An Argument for Hands-on Risk Management of Workers Compensation Claims

Lou Michels — Wed, 06 Feb 2008 21:14:00 GMT

As I have noted previously, for commentary purposes, some cases are simply too good to pass up. Such a case came before the North Carolina Court of Appeals recently. Penny M. Rumple Richardson vs. Maxim Health Care, et al. is a workers’ compensation case where even the parties’ names have associated innuendo.

The case is an appeal of a workers’ compensation award to a woman who claimed that she was injured in an on-the-job car accident. She sought compensation for, among other things, the replacement of her breast implants. Following the accident, the plaintiff noted that one of her breasts seemed to be deflating and the other one was “rippling” (or perhaps rumpled). She had both implants replaced and then filed a claim for the surgery.

The Court first cited a portion of the workers’ compensation statute that says “injuries shall include breakage or damage to eyeglasses, hearing aids, dentures or other prosthetic devices which function as a part of the body.” I’m not really sure that breast implants actually “function” in the same manner as dentures, but the Court found that the claims themselves were properly before it and then looked to whether the damage to the implants was a result of the accident. In finding there was proper compensation for damage to one implant (the one that deflated) but not the other, the Court looked to the testimony of the plastic surgeon who said that the rippling affect might have been due to under-filling of the implant initially. Why there had been no rippling previous to the accident was not explained. The lower commission decision found that if a claimant has to replace one breast implant, then, in the interest of symmetry, it would seem logical that the other side would need to be replaced as well. But the Court of Appeals rejected this balanced analysis and awarded compensation for replacement of only one implant.

Let’s hope the plaintiff can afford the bill for getting the rest of this ironed out.