Pennsylvania Employment Law Blog

Expanding the PA Human Relations Act

rbk@rkglaw.com (Roxanne Garner) — Wed, 14 May 2008 15:36:25 -0500

A lawsuit filed by the Greek Island of Lesbos wants to restrict the use of the word Lesbian. The island claims that Lesbians are the citizens of Lesbos and has no connection to the sexual orientation of a person. One plaintiff in the lawsuit claims that use of the word lesbian by the gay community is an insult to the identity of the inhabitants of Lesbos. While Andrea Gilbert, spokesperson for Athens Pride 2008 and a member of OLKE, told PinkNews.co.uk, "The claim is based in serious prejudice and hatred."

This is just one example of controversy surrounding issues of sexual orientation. On a local level, a recent poll in the Central Penn Business Journal revisited the House Bill 1400 and asked readers: Should Pennsylvania pass House Bill 1400, which would prohibit discrimination on the basis of sexual orientation and gender identity? Without providing the number of replies to the poll, the Journal reported that the reader response was 70% in favor and 30% opposed to passing the Bill. The reasoning and written feedback by readers in support of their position was widely varied.

House Bill 1400 proposes to expand the protections already offered under the Pennsylvania Human Relations Commission. The Pennsylvania Human Relations Act prohibits certain practices of discrimination because of race, color, religious creed, ancestry, age, national origin, handicap or disability and use of a support animal. House Bill 1400 proposes to include sexual orientation, gender identity or expression to the existing list.

This Bill defines "sexual orientation" as actual or perceived heterosexuality, homosexuality or bisexuality. "Gender identity or expression" is defined as actual or perceived identity, appearance, behavior, expression or physical characteristics whether or not associated with an individual's assigned sex at birth.

The Bill was co-sponsored by a record 70 members of the House, and in April 2007, the Senate sponsored a similar bill (SB761) with 22 co-sponsors. The Senate Bill remains in the Senate Judiciary Committee. The House Bill also counts among its sponsors Steve Glassman, Chair of the Pennsylvania Human Relations Commission.

Thirteen Pennsylvania municipalities have already enacted laws pointed at protections based on sexual orientation, gender identity or expression. House Bill 1400 was introduced on June 13, 2007, the matter was referred to the Committee on State Government on June 18, 2007, and the Bill continues to produce revolving rumblings from diametrically opposed factions.

Related Links on House Bill 1400:

Equality Advocates of Pennsylvania

Michael Mahler's Blog

American Family Association of Pennsylvania

Interaction Between FMLA & ADA - Don't Get Tripped Up

rbk@rkglaw.com (Christina Hausner) — Tue, 06 May 2008 15:34:14 -0500

The Family and Medical Leave Act (FMLA) turns 15 this year and workers’ rights advocates, the Bush Administration and the Labor Department are weighing in on proposed changes to the law. According to an April 24 article in the Washington Post,

“...workers would have to tell their bosses in advance when they take nonemergency leave, instead of being able to wait until two days after they left. They would have to undergo "fitness-for-duty" evaluations if they took intermittent leave for medical reasons and wanted to return to physically demanding jobs. To prove that they had a "serious health condition," they would have to visit a health-care provider at least twice within a month of falling ill. What's more, employers would have the right to contact health-care providers who authorized leave.”

As I reviewed these proposals it occured to me that some of these changes may serve to blur the distinction between the FMLA and the Americans with Disabilities Act of 1990 (ADA). It is not uncommon for employees to bring claims under both the FMLA and ADA. Avoid getting tripped up in the similarities of FMLA and ADA by understanding the distinctions between the two laws.

FMLA	ADA
is enforced by the Department of Labor (DOL)	is enforced by the Equal Employment Opportunity Commission (EEOC)
applies to employers with 50 or more employees	applies to employers with 15 or more employees
eligible employees must have been employed for at least 12 months and worked 1,250 hours in the previous 12 months of employment	no eligibility restrictions
only requires an individual (or family member) to have a "serious health condition"	only covers individuals with a disability
there may be individual liability	no individual liability
no punitive or emotional damages can be awarded	punitive and emotional damages can be awarded

Managing Employees with Personal Financial Problems

MMoore@mwn.com (Michael Moore) — Wed, 23 Apr 2008 14:25:19 -0500

The economic downturn affects businesses but also impacts the daily lives of employees. An employee’s personal financial problems can lead to bankruptcy, foreclosure and even divorce, any of which may impact his or her job and job performance.

Businesses must be prepared to respond to employee performance issues created by financial problems. Employers should be aware of legal limitations placed on their actions with regard to an employee’s financial problems. In addition, human resource professionals should appreciate the relationship between their performance management program and other resources to address employee issues created by financial distress.

Pennsylvania and federal laws limit actions employers may take against employees that file for bankruptcy or are subject to wage attachments. Many employers, particularly those in the financial sector, face customer relation problems when one of their employees doesn’t pay his or her bills or files for bankruptcy. Legal limitations on employer responses are as follows:

Garnishment/Attachment of Wages. Pennsylvania does not allow garnishment/attachment of wages for the repayment of personal debts, except in limited circumstances for child support, alimony or student loans. Employees may not be disciplined, discriminated against or discharged because of wage garnishments.

Employee Bankruptcy. Section 575 of the Bankruptcy Act protects employees and applicants from discrimination if an individual:
- is or has been a debtor under this title or a debtor or bankrupt under the Act;
- has been insolvent before the commencement of a case under the Act or during the case but before the grant or denial of a discharge; or
- has not paid a debt that is dischargeable in a case under this title or that was discharged under the Act.

Courts have limited the reach of this provision by requiring that the discrimination be "solely because" of the individual's bankruptcy participation.

Worries About Temptation for Theft. Businesses may become concerned that an employee in financial distress may be more likely to embezzle and react by trying to find out the scope of an employee’s credit problems. The Fair Credit Reporting Act limits an employers use of employee credit information. A business’ usual financial controls should be uniformly applied, but, if inadequate, should be revised for all employees.

Financially distressed employees may exhibit other performance problems ranging from declining productivity to depression. The usual performance management system should be utilized to correct deficiencies; however, special attention should be paid to other resources like the EAP and Debt/Credit counseling. Some businesses may wish to go further. Susan S. Windham believes that Financial Distress for Employees Means Lower Profits for Employers. She advocates workplace financial education as the answer.

Restaurants Face Unique HR Compliance Challenges

MMoore@mwn.com (Michael Moore) — Thu, 10 Apr 2008 14:03:35 -0500

The EEOC announced a $505,000 sexual harassment settlement with a McDonald’s Franchise on behalf of a class of young female employees, including teens. The EEOC contended that a male supervisor engaged in serious harassment including physical contact, sexual comments and offers of favoritism. In addition to the monetary award, the franchisee was required to provide letters of apology to the victims, conduct training on sexual discrimination for its franchise locations, and post nondiscrimination notices in its workplaces.

The EEOC has a national http://www.eeoc.gov/initiatives/youth/index.html initiative designed to educate young workers on their employment rights. There is a stand-alone website that has been featured on MTV.com highlighting discrimination protections.

Restaurant operators face difficult HR compliance issues based on several factors including the following:

Workforce Demographics: Diversity management is a challenge for the entire food service industry. EEOC workforce demographic information for the Accommodations & Food Service Industry reports a workplace composition for workers (operatives, laborers and service) that are 52% female and 47% minority. While managers for the same group are 68.8% male and 74% white. The prevalence of younger workers adds to the management challenge.
Wages and Employee Turnover: Lower wage earners make for job hoppers. Pennsylvania reports food service worker wages ranging from $15.05/hr for serving workers to between $7.37 and $7.70/hr for fast food cooks and counter attendants.
Management Turnover: The Restaurant Industry Blog by Kenneth Rexrode notes that turnover of managers and employees necessitate constant training and inhibit the development and continuity in a management staff.
Dispersed Operations: Some restaurant operations, particularly franchised operations have multiple locations and depend upon managers traveling between locations. This can make for spotty supervision and training.

Solving compliance problems may be a matter of adopting effective policies on EEO compliance, training managers and educating employees. The most frequent misstep I see is concentrating too much control in a site manager so that employees feel they have no avenue to direct concerns to higher levels.

The Political Future of Affirmative Action

MMoore@mwn.com (Michael Moore) — Mon, 31 Mar 2008 16:31:40 -0500

As Pennsylvania’s Primary Election approaches, one of the unexpected political issues is affirmative action. Newsweek columnist Seth Colter Walls discusses the situation in Obama’s Postracial Test. The column describes the election battleground created by state ballot initiatives like California’s Proposition 209 and Michigan’s Proposal 2 that prohibit public institutions from considering race, sex or ethnicity in hiring, contracting for goods/services or college admissions. Similar ballot initiatives may appear in Arizona, Colorado, Missouri, Nebraska and Oklahoma. For now, Newsweek's Dahlia Lithwick states in her column, A Complicated Record On Race, that both sides think Mr. Obama agrees with them.

The Timeline of Affirmative Action began with the Civil Rights Act of 1964 and has taken many forms since then. Most of us in the employment world are familiar with the Affirmative Action Programs created by Executive Order 11246. However, there are many other state and federal programs which create preferences based on gender and race. These programs have judicial approval provided the government can pass the “strict scrutiny test” by demonstrating that there is a compelling need for the program and the program is narrowly tailored to meet the need. As the economy contracts, the most contentious areas of debate may focus on government “set-aside” programs for purchased goods and services.

The United States Supreme Court has considered contracting programs in three of its decisions. In its 1980 decision in Fullilove v. Klutznick, the Supreme Court ruled that some modest quotas were perfectly constitutional. The Court upheld a federal law requiring that 15% of funds for public works be set aside for qualified minority contractors. The "narrowed focus and limited extent" of the affirmative action program did not violate the equal rights of non-minority contractors, according to the Court—there was no "allocation of federal funds according to inflexible percentages solely based on race or ethnicity."

In City of Richmond v. Croson, the Supreme Court went the other way ruling that an "amorphous claim that there has been past discrimination in a particular industry cannot justify the use of an unyielding racial quota." It maintained that affirmative action must be subject to "strict scrutiny" and is unconstitutional unless racial discrimination can be proven to be "widespread throughout a particular industry." The Court maintained that "the purpose of strict scrutiny is to ‘smoke out' illegitimate uses of race by assuring that the legislative body is pursuing a goal important enough to warrant use of a highly suspect tool. The test also ensures that the means chosen `fit' this compelling goal so closely that there is little or no possibility that the motive for the classification was illegitimate racial prejudice or stereotype." This case involved affirmative action programs at the state and local levels—a Richmond program setting aside 30% of city construction funds for black-owned firms was challenged. For the first time, affirmative action was judged as a "highly suspect tool."

In Adarand Constructors, Inc. v. Peña, the Court again called for "strict scrutiny" in determining whether discrimination existed before implementing a federal affirmative action program. "Strict scrutiny" meant that affirmative action programs fulfilled a "compelling governmental interest," and were "narrowly tailored" to fit the particular situation. Although two of the judges (Scalia and Thomas) felt that there should be a complete ban on affirmative action, the majority of judges asserted that "the unhappy persistence of both the practice and the lingering effects of racial discrimination against minority groups in this country" justified the use of race-based remedial measures in certain circumstances.

ESOPs and Company Stock Matches to 401(k): The Bear Stearns Lesson

MMoore@mwn.com (Michael Moore) — Tue, 18 Mar 2008 16:22:12 -0500

Charley Blaine hit the nail on the head with his observation about the Bear Stearns' fallout appearing in his posting MSN moneyblog:

My guess is that Bear Stearns' 14,000 employees will be the biggest losers. The company's employee-stock-ownership plan owned 23% of the shares as of Feb. 14. The shares that day had a market value of $2.18 billion. It's almost gone now. Needless to say, Bear Stearns employees aren't happy. Check here for a sampling of their anger.

ESOPs and matches in company stock have long been touted as aligning incentives, but this selling point can lead to litigation when the company stock takes a dive or the employer files for bankruptcy protection. It's even more disastrous for employees who have been “incentivized” to put so many of their retirement eggs in one basket. If the company tanks, an employee loses a job and a big chunk of retirement savings.

A statistical profile of Employee Ownership as published by the National Center for Employee Ownership estimates the number of plans, participant employees and asset value for ESOPs and 401(k) plans with significant company stock matches. For early 2008, the estimates are as follows:

Type of Plan	Number of Plans (as of early 2008)	Number of Participants (as of early 2008)	Value of Plan Assets (as of early 2008)
ESOPs, stock bonus plans, & profit sharing plans primarily invested in employer stock	9,774	11.2 million	$928 billion+
401(k) plans primarily invested in employer stock	748	1.5 million	$133 billion

The prevalence of company stock based incentives may make employees nervous in light of the high profile failures. Human Resources may need to manage expectations in its recruiting and retention activities.

Retaliation Claims: Five Things Every HR Generalist Should Know*

MMoore@mwn.com (Michael Moore) — Fri, 14 Mar 2008 08:52:11 -0500

The EEOC’s Report of Discrimination Charge filings notes that Retaliation claims rose 18% to a record high, doubling since 1992. There were 26,663 retaliation based charges filed in 2007 up from 22,555 the previous year. The trend might be explained, in part, by employees filing both a discrimination charge and a retaliation claim; increased awareness by employees, or employers mishandling employee internal complaints of discrimination.

Claims of retaliation take a very predictable path like the one recounted in a recent EEOC lawsuit. Vanguard Group settled a suit filed by the EEOC for a racial retaliation claim for a payment of $500,000. The suit was based upon an employee’s complaint to management that he was being treated less favorably and discriminated against based on his race. Thereafter, the EEOC contended that the employee began to experience acts of retaliation, including unfavorable changes in his work conditions and assignments, from the managers he accused of race discrimination. The EEOC alleged that this pattern of retaliation resulted in the employee’s termination. The following may help HR Generalist avoid mishandling internal complaints.

What is Unlawful Retaliation?

An employer may not fire, demote, harass or otherwise "retaliate" against an individual for filing a charge of discrimination, participating in a discrimination proceeding, or otherwise opposing discrimination. The same laws that prohibit discrimination based on race, color, sex, religion, national origin, age, and disability, as well as wage differences between men and women performing substantially equal work, also prohibit retaliation against individuals who oppose unlawful discrimination or participate in an employment discrimination proceeding. Retaliation occurs when an employer, employment agency, or labor organization takes an adverse action against a covered individual because he or she engaged in a protected activity.

What is “Adverse Action” by an Employer?

An adverse action is an action taken to try to keep someone from opposing a discriminatory practice, or from participating in an employment discrimination proceeding. According to the EEOC, examples of adverse actions include:

Employment actions such as termination, refusal to hire, and denial of promotion;
Other actions affecting employment such as threats, unjustified negative evaluations, unjustified negative references, or increased surveillance; and
Any other action such as an assault or unfounded civil or criminal charge that is likely to deter reasonable people from pursuing their rights.

On the other hand, the EEOC states that adverse actions do not include petty slights and annoyances, such as stray negative comments in an otherwise positive or neutral evaluation, "snubbing" a colleague, or negative comments that are justified by an employee's poor work performance or history.

What is “Protected Activity” by an Employee?

Protected activity includes either opposing a practice reasonably believed to be unlawful discrimination or participating in a discrimination procedure.

Opposition is informing an employer that you believe that he/she is engaging in prohibited discrimination. Opposition is protected from retaliation as long as it is based on a reasonable, good-faith belief that the complained of practice violates anti-discrimination law; and the manner of the opposition is reasonable. The EEOC cited examples of protected opposition to include:

Complaining to anyone about alleged discrimination against oneself or others;
Threatening to file a charge of discrimination;
Picketing in opposition to discrimination; or
Refusing to obey an order reasonably believed to be discriminatory.

According to the EEOC, examples of activities that are NOT protected opposition include:

Actions that interfere with job performance so as to render the employee ineffective; or
Unlawful activities such as acts or threats of violence.

Participation means taking part in an employment discrimination proceeding. Participation is a protected activity even if the proceeding involved claims that ultimately were found to be invalid. Examples of participation include:

Filing a charge of employment discrimination;
Cooperating with an internal investigation of alleged discriminatory practices; or
Serving as a witness in an EEO investigation or litigation.
A protected activity can also include requesting a reasonable accommodation based on religion or disability.

Promptly Investigate Comments and Complaints Concerning Discrimination

Some HR action should be taken on all communications from employees that could later be “characterized” as either opposition or participation. At a minimum, get the facts underlying a comment about “unfairness” or “discrimination”. Obviously, you can spend your entire workday chasing down spurious remarks. You can circumvent a lot of problems merely by developing a practice of asking “what do you mean when you say it’s discriminatory?” Not taking complaints or comments seriously can be costly.

Monitor Supervisors for Adverse Actions following an Employee Complaint

I would wager that most acts of “retaliation” go unnoticed on HR’s radar screen because no one is actively monitoring the situation. If someone has complained about discrimination by a supervisor, HR should follow up informally with the employee to make sure that there is no real or perceived retaliation.

* Not meant to be exhaustive.

Scandal Management: Any Lessons for Human Resources?

MMoore@mwn.com (Michael Moore) — Tue, 11 Mar 2008 15:42:48 -0500

Today’s headlines about Governor Eliot Spitzer’s link to a prostitution ring recount another scandal involving a high level government official. Spitzer attempted to “manage” the scandal by calling a press conference, his spouse at his side, apologizing for his behavior and describing the rest as a “private matter”. After this "ritual of repentance", Spitzer is “weighing his resignation”. To this, I refer back to a statement attributed to Representative Dick Armey who was asked if he had been in President Clinton’s place after the Monica Lewinsky scandal would he have resigned? He purportedly responded: “If I were in the President’s place I would not have gotten a chance to resign. I would be laying in a pool of my own blood, hearing Mrs. Armey say : ‘How do I reload this damn thing?’”

While I don't advocate this approach, an organization's or individual's response to a scandal can make or break it. Human Resources professionals may be called upon in times of turmoil to be the spokesperson for the organization. I have no training in public relations, but from a legal perspective here are some things I can say don’t play well for future litigation:

The “categorical denial” that proves otherwise like “I never had sexual relations with that woman”.
Legalistic answers like those that turn on the definition of “is”.
Opinions offered without facts or investigation.
Any comments made by a company official in handcuffs or an orange prison jump suit.

Occasionally, I will get contacted by a company facing adverse publicity. Here are some general rules that I remind clients when they call in a crisis:

Consider the quick engagement of a PR firm.
You don’t have to say anything and that may be the best course.
Identify one spokesperson and tell everyone else to refer questions there.
Plan what you will say and provide a written press release
If you don’t know the facts, don’t speculate
If you don’t have something to say then don’t talk.
You don’t have to answer questions and be very careful if you do.
You can end a press conference of interview at any time, just try to do it gracefully.

EEOC Reports 9% Increase in Discrimination Charges for 2007

MMoore@mwn.com (Michael Moore) — Mon, 10 Mar 2008 12:05:19 -0500

The number of Discrimination Charges filed with the EEOC increased to 82,792 in 2007, up from 75,768 the previous year. Race, Gender and Retaliation charges were the most frequently reported charges. The EEOC’s nonsensical reporting style makes it difficult to glean much more information since the report doesn’t account for individuals claiming multiple types of discrimination. Also irritating for employers is the EEOC’s explanation for the increase in the number of charges:

EEOC Commission Chair Naomi C. Earp chastised employers in her press release noting that “Corporate America needs to do a better job of proactively preventing discrimination and addressing complaints promptly and effectively. To ensure that equality of opportunity becomes a reality in the 21st century workplace, employers need to place a premium on fostering inclusive and discrimination-free work environments for all individuals.”

Jon Hyman’s Ohio Employer’s Law Blog correctly notes that the increased number of charges has many origins other than a lack of corporate commitment to equal employment opportunity. The unfortunate bias here seems to be the EEOC’s presumption that employers aren’t doing enough to prevent discrimination claims without regard to any evaluation of the merit of charges.

Union Growth in Pennsylvania

MMoore@mwn.com (Michael Moore) — Thu, 06 Mar 2008 08:54:47 -0500

The Bureau of Labor Statistics recently published statistics on Union Membership for 2007 which note a slight increase in the percentage of the national workforce which is unionized. Union workers now account for 12.1% of all wage earners down from 20.1% in 1983. The BLS report notes some interesting trends on national data:

Workers in the public section had a union membership rate nearly five times that of private sector employees.
Education, training, and library occupations had the highest unionization rate among all occupations, at 37.2 percent, followed closely by protective service occupations at 35.2 percent.
Among demographic groups, the union membership rate was highest for black men and lowest for Hispanic women.
Wage and salary workers ages 45 to 54 (15.7 percent) and ages 55 to 64 (16.1 percent) were more likely to be union members than were workers ages 16 to 24 (4.8 percent).

Overall union membership as a percentage of the Pennsylvania workforce increased from 13.6% to 14.7%. The regional trends in Pennsylvania are nicely summarized by Jim T. Ryan of the Central Penn Business Journal in his posting “Unions see more members”. I agree with Jim’s conclusion that growth in union membership is largely attributable to hiring by unionized companies and not by union organizing of new companies. Union organizing efforts could get a real shot in the arm if the Employee Free Choice Act becomes law. I have previously blogged on the impact of Union Card Check Legislation.

Pennsylvania Enacts New Open Records Law: Public Access to Government Personnel Records

MMoore@mwn.com (Michael Moore) — Tue, 04 Mar 2008 09:30:29 -0500

In response to heavy lobbying by the Pennsylvania Newspapers Association, Pennsylvania enacted legislation overhauling what was largely regarded as one of the worst open records laws in the country. The “Right-to-Know Law” is generally effective January 1, 2009, and applies to the public records of state and local agencies, the state legislature, municipalities and the judicial system. All records are presumed to be public records unless subject to specific exemption, protected by legal privilege or exempt by regulation or judicial order. The exemptions applicable to employment related public records are as follows:

Medical, psychiatric or psychological records;
Personal identification information like social security, telephone or other personal financial information except that a government employee’s name, position, salary and employment contract are not considered personal identification information;
Employment records including the following:
- Reference letters and recommendations;
- Performance reviews;
- Civil service test results;
- Employment applications of those not hired;
- Written criticisms of an employee;
- Grievance material including documents related to discrimination and sexual harassment; and
- Preliminary disciplinary or discharge information; however, the “final action” of an agency that results in demotion or discharge is a public record;
Collective bargaining strategy or negotiations and arbitration proceedings except as to the final contract or arbitrator’s decision; and
Trade secrets or confidential proprietary information.

The Right-to-Know Law is a big change from the prior law that protected personnel records. Salaries of Pennsylvania’s public employees were not subject to disclosure under the previous open records law leading to great speculation about Penn State Coach Joe Paterno’s salary. Had the secrecy of JoPa’s salary not been resolved by a 2007 lawsuit, it would have been subject to disclosure under the new law. By the way, his salary is around $500,000.

Ageism

MMoore@mwn.com (Michael Moore) — Thu, 28 Feb 2008 14:15:32 -0500

The subject of “ageism” is a hot topic in the press and among employment commentators. As Baby Boomers grow older so does the percentage of the United State population perceived as old and protected by age discrimination laws.

According to AARP, the percentage of people 65 and older who work has grown from 10.8 percent in 1985 to 16 percent last year. For people ages 55 to 64, the numbers also are up, from 54.2 percent in 1985 to 63.8 percent in 2007. The statistics on the aging workforce are astounding as demonstrated by Ira Wolfe in his book and blog called The Perfect Labor Storm 2.0. This effect is seen everywhere and plays out differently in different forums.

In politics age is a negative. Michael Hirsh of Newsweek writes about McCain’s Unseen Adversary: Ageism in which he cites some survey information and posits that “Indeed, according to a survey done by the Pew Research Center, Americans are a lot less comfortable voting a man in his 70s into the Oval Office than they are voting for a woman or an African-American for president.”

In law, age is a positive. Mark Sherman of The Boston Globe notes that the Supreme Court considering 5 ageism cases the growing prevalence of which he attributes to the aging population. He also notes that it “There is only one antibias law - the one against discrimination based on age - that would cover all nine Supreme Court justices, if such laws applied to them.”

In the workforce age is both a positive and a negative. Kate Lorenz at CareerBuilder.com opines that Ageism on the Job can be turned into an advantage by older workers because of their education, sophistication and clout.

The tension between “young” and “old” is summed up in Granny verses the Mercedes:

EEOC Intake Questionnaire is a "Charge" according to the Supreme Court

MMoore@mwn.com (Michael Moore) — Thu, 28 Feb 2008 08:55:07 -0500

In Federal Express Corp. v. Holowecki, the United State Supreme Court ruled that the EEOC’s Intake Questionnaire adequately meets the requirements of a “Charge” to trigger an employee’s rights to sue his or her employer in court. The plaintiff submitted to the EEOC an Intake Questionnaire with an affidavit contending that her employer was engaging in age discrimination. The EEOC did nothing with the Questionnaire for six months. The employer was not notified and no charge number was assigned. The employee subsequently filed a Charge of Discrimination and proceeded almost directly to court avoiding the EEOC’s conciliation process entirely.

Justice Thomas the former Chairman of the EEOC points out the practical problems with the lack of a clear definition on what constitutes a Charge and the implications on notice to employers. His comments are somewhat ironic since the crux of the problem is the EEOC’s failure to turn the Intake Questionnaire into a Charge of Discrimination and mail it out to the employer. The Court does not hold the EEOC accountable for these administrative failings by allowing a vague assertions to trigger the judicial process:

The implications of the Court's decision will reach far beyond respondent's case. Today's decision does nothing—absolutely nothing—to solve the problem that under the EEOC's current processes no one can tell, ex ante, whether a particular filing is or is not a charge. Given the Court's utterly vague criteria, whatever the agency later decides to regard as a charge is a charge—and the statutorily required notice to the employer and conciliation process will be evaded in the future as it has been in this case. The Court's failure to apply a clear and sensible rule renders its decision of little use in future cases to complainants, employers, or the agency.

The EEOC issued a Memorandum addressing the timeliness of notice to employers noting that an Intake Questionnaire may constitute a Charge if it contains a “clear request for the agency to act.” The Memorandum also notes that notice of a charge must be sent to respondents within 10 days of receiving the charge.

Thanks to Jon Hyman at the Ohio Employer’s Law Blog who has a great analysis of the impact on employers who lose the ability to conciliate claims.

Supreme Court Restricts Evidence of Employer's Alleged Discrimination against other Employees

MMoore@mwn.com (Michael Moore) — Tue, 26 Feb 2008 15:42:30 -0500

The United State Supreme Court issued its decision limiting the role of so called “me too” evidence in discrimination cases. In Sprint/United Management v. Mendelsohn, the Court ruled that an employee does not have an automatic right to introduce testimony by nonparties alleging discrimination at the hands of the company where the alleged discriminatory actions involve supervisors who played no role in the employment decisions related to the employee in the case.

The Ohio Employer’s Law Blog has a legal analysis of the ruling. The practical effect limits the types of evidence that courts (and hopefully administrative agencies like the EEOC) will consider in accessing the merits of a discrimination claim. Evidence of an employer’s treatment of “similarly situated employees” may be considered but must be closely related to the employee’s circumstances and theory of the case. Who is “similarly situated” becomes the issue.

Employee Cell Phone Use: Adopt a Policy on Talking, Texting, and E-mailing while Driving

MMoore@mwn.com (Michael Moore) — Mon, 25 Feb 2008 12:21:02 -0500

We have all witnessed dangerous driving maneuvers by individuals talking on cell phones. What if this driver is one of your employees? What if the employee causes an accident while conducting company business on a cell phone?

Employers may be liable for accidents where an employee’s job-related cell phone use contributed to the accident. Whether the cell phone use is within the scope of employment depends upon many factors including such things as the employee’s job duties, who provided the phone, when the accident occurred, whether it was a business call, and whether the employee was complying with the employer’s policy on cell phone use.

Don Heyrich at the Washington Labor, Employment & Employee Benefits Law Blog notes a $5.2 million settlement by an employer whose employee caused a serious traffic accident while talking on her company-supplied cell phone. Details of the case appearing in a newspaper account describe a very typical scenario for employees who multi-task while driving. There is no mention as to whether the employer had a policy prohibiting or limiting employee cell phone use while driving, so the impact of such a policy on the employer’s liability is unclear.

Company’s can try to manage their liability by adopting a policy on cell phone use and then enforcing it. A policy should consider the following:
Directing employees to comply with all applicable state and local laws governing cell phone use. Banning cell phone use while driving.
Requiring employees to use hands-free devices while driving.
Providing company cell phones with hands free features.
Prohibiting the use of text message and e-mail features while driving.
Requiring employees to pull over to take phone calls.
Instructing employees to avoid or to terminate phone calls involving stressful or emotional conversations.
Limiting the scope of job descriptions for some positions exclude using cell phones while driving.
Prohibiting cell phone use in adverse weather or difficult traffic conditions.
Restricting driver cell phone use to brief conversations.
Emphasizing safety while taking phone calls on the road.

Will the Supreme Court's Decision in LaRue Result in a "Slew of Meritless Litigation?"

MMoore@mwn.com (Michael Moore) — Thu, 21 Feb 2008 11:21:58 -0500

The United State Supreme Court ruled that ERISA allows individual claims by plan participants for breach of fiduciary duty that result in losses to an individual account rather than only to the entire plan. In LaRue v. DeWolff, Boberg, & Assoc., Inc., an employee brought an ERISA claim against his employer who was the plan administrator of a 401k plan. The employee claimed $150,000 in losses to his 401k account caused by his the failure to make the changes the employee directed in the investments held in his account. The employee claimed that the failure to make the changes was a breach of fiduciary duty under ERISA. The Court noted the change in the retirement plan landscape from defined benefit plans to defined contribution plans necessitates the recovery of fiduciary breaches in a participant’s individual account. The Court did not decide whether the employer breached its fiduciary duty.

The effect of allowing breach of fiduciary duty claims by individual participants is yet unknown. John Phillips at The Word on Employment Law observes that “Many are predicting that the Court’s ruling will result in a slew of meritless litigation from employees whose 401(k) plans aren’t doing as well in a shaky economy.” Some additional observations about ERISA plan administration may help evaluate this premise:

Defined Contribution Plans typically identify the employer as the Plan Administrator but very few employers actually administer their plans.
The Employer acting as Plan Administrator will contract out investment and other day-to- day “administrative” activities to other providers such as banks, mutual funds, consultants, etc.
These other providers may or may not be “fiduciaries” within the meaning of ERISA. So ERISA-type claims by participants may not lie against them.
An ERISA fiduciary breaches its duty if it fails to discharge his duties with respect to a plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
An employer may limit its fiduciary liability by selecting competent expert advisors and then monitoring their performance. The Boston ERISA & Insurance Litigation Blog’s post on The Benefits of Relying On Investment Managers is a great summary of this concept. The DOL also has tips for selecting and monitoring service providers including consultants and auditors.
If other providers fail to perform there responsibilities their liability may be limited to contractual damages and subject to limitations of contractual indemnity. Employers should carefully review contacts with providers that limit liability of a provider with terms like “gross negligence.”
The result may be that the employer faces the ERISA claims alone and is left with contract claims against the providers for resulting damages.
ERISA provides for attorney’s fees for successful employee claims.

The answer may be that LaRue opens another avenue for lawsuits against employers, but an employer that carefully selects and monitors its relationships with pension plan providers will be in a better place to defend claims that it breached its fiduciary duty.

Romance in the Workplace: Happy Valentine's Day

MMoore@mwn.com (Michael Moore) — Thu, 14 Feb 2008 10:46:33 -0500

I consulted the on line Encarta Encyclopedia for the origins of Valentine’s Day and found the following description:

The holiday probably derives from the ancient Roman feast of Lupercalis (February 15), also called the Lupercalia. In an annual rite of fertility, eligible young men and women would be paired as couples through a town lottery. Briefly clad or naked men would then run through the town carrying the skins of newly sacrificed goats dipped in blood. The women of the town would present themselves to be gently slapped by the strips and marked by the blood to improve their chances of conceiving in the coming year.

In one sense, the holiday’s evolution to cards and candy has been well received, at least by the goat population. I don’t think Lupercalis is celebrated at the EEOC. Nonetheless, workplace romance gone bad accounts for a significant number of sexual harassment claims as noted on my prior post Fishing off the Company Dock: A Legal Perspective. Similar advice and anecdotal observations appear at the Ohio Employer’s Law Blog’s post on When office romances go bad and the Washington Labor, Employment & Employee Benefits Law Blog’s post on Romance in the Workplace & “Love Contracts”.

So what are the legal ins and outs of office romance and how can a business employ prophylactic measures to protect itself. Here is a list of things I can recommend:

Implement a Strong Policy Against Sexual and other Harassment

The EEOC has issued extensive guidance on sexual harassment policies and there ability to reduce an employer's liability for harassment. One of the most critical components of such a policy is an effective complaint procedure to redress claims of harassment.

Develop a Policy on Office Romance without calling it "Fraternization"

It doesn't take a NASA scientist to realize organizations may need a policy addressing workplace romance (or maybe it does). According to Office Politics, thirty-five percent of companies have no formal workplace romance policy. Develop a policy, but avoid overly broad definitions and in particular the word "fraternize' which was the court's primary objection in the in Guardsmark case.

Train Supervisors

Supervisory training on sexual harassment can demonstrate a company's good faith attempts to comply with the law. Such training should explain the types of conduct that violate the employer's anti-harassment policy; the seriousness of the policy; the responsibilities of supervisors and managers when they learn of alleged harassment; and the prohibition against retaliation.

Proactively Evaluate and Confront Situations

Most employers are content to sit passively and watch "As the World Turns". Many will not act unless it "becomes a disruption". Consider some proactive steps. If the romance is between co-workers, make sure they understand that it cannot impact productivity. If it is between a supervisor and subordinate, evaluate whether there should be changes in the reporting structure. Don't automatically transfer or reassign the female in the relationship or you will risk a discrimination claim.

Philadelphia: Impact of Union Influence

MMoore@mwn.com (Michael Moore) — Wed, 13 Feb 2008 06:13:03 -0500

A very interesting article by Matthew Teague entitled The Last Union Town appears in Philadelphia Magazine. It chronicles the dominance of labor unions in Philadelphia’s political, social and economic life by examining the fight over non-union workers bidding on work for the Convention Center Expansion. The article is a lightning rod for disagreement as one can see by the venom in the User Comments. There is also a great deal of interesting blog commentary on Philadelphia’s Union dominance including the following:

The Union-Free Employer

PAWaterCooler

Unions are Lacking in Leadership!

Blonde Sagacity

Philly Unions: Now I Understand Why so Many of You Don’t…

PhillyBlog.Com

Non-Union workers at Conv. Center?!?

Employment Practice Liability Insurance: Five Things every HR Generalist should Know.*

MMoore@mwn.com (Michael Moore) — Tue, 12 Feb 2008 11:44:02 -0500

Employment Practices Liability Insurance (EPLI) may be a relative bargain in the continued “soft” insurance market and employers should consider adding or increasing insurance coverage to protect against employment claims. EPLI insurance is somewhat quirky and the following are some considerations when evaluating policies:

Coverage: EPLI policies typically cover claims of wrongful discharge, workplace harassment and discrimination. Many offer a more comprehensive list of covered acts, including negligent hiring/supervision/evaluations, invasion of privacy, defamation and intentional infliction of emotional distress. Coverage typically applies to claims made by full time employees so as to exclude those by part-timers, temporary, seasonal and independent contractors. In comparing policies, look for one that has the most expansive coverage.
Exclusions. EPLI policies exclude many claims based on the statute that creates the legal right or the activity that gives rise to the claim. Exclusions apply to the Fair Labor Standards Acts; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act (WARN); the Consolidated Omnibus Budget Reconciliation Act (COBRA); the Employee Retirement Income Security Act (ERISA); the Occupational Safety and Health Act (OSHA); the costs associated with providing "reasonable accommodation" under the Americans with Disabilities Act (ADA); as well as claims arising out of downsizing, layoffs, workforce restructurings, plant closures or strikes. Punitive damages are always excluded. Carefully evaluate the excluded claims in light of your business practices. In the case of multi-state operations, be aware that some state laws create substantial employment rights that must also be evaluated under the policy language.
Policy Limits and Deductibles: Policy limits and deductibles usually apply on a per claim and aggregate basis. For example, coverage may be limited to $250,000 for each separate claim with an overall aggregate cap of $1 million for all claims. Employers must formulate their insurance goals in setting the appropriate deductibles and limits. Some employers view EPLI insurance as catastrophic coverage and are willing to accept a high deductible that allows them to handle smaller claims themselves. However, other employers are looking for more blanket coverage.
Defense Costs, Selection of Counsel and Settlement: Defense costs are usually included within the EPLI policy’s limits, which has good and bad points. Many times, the legal expense is the largest cost to an employer in dealing with merit less claims. However, including defense costs means that every dollar an employer spends defending a claim reduces the amount available for settlement or to pay a judgment. Since the existence of insurance coverage must be disclosed as part of discovery in most law suits, a plaintiff’s attorney will factor insurance coverage into his or her case evaluation. The defense cost feature may influence plaintiffs’ counsel to try to settle early, rather than force an employer to incur litigation costs that will only erode the insurance dollars available for potential settlement. Employment claims often have significant employee relations ramifications making settlement a particularly important issue. Insurers view employment claims the same as any other insurance matter by evaluating only the potential for liability and the amount of damages. The employer and insurer may be at odds over settling a case. EPLI policies address this stalemate by either giving the insurer the right to settle without the employer’s approval or, more frequently, giving an employer control over settlement, but adding a “hammer clause”. These clauses are designed to limit the insurer’s potential exposure if the policyholder passes up an opportunity to settle a claim recommended by the insurer. Hammer clauses provide that if there is an offer to settle a claim that the policyholder refuses accept, then the insurer will not be liable for a subsequent settlement or judgment in excess of a rejected settlement amount.
Policy Types and Insurance Company Notification: EPLI policies are typically written on a “claims made” basis meaning that the claim must be incurred during the coverage period and reported to the insurer during an extended reporting period. Since employment actions may take years to turn into a claims, an employer may be left with no coverage if the policy is dropped or tail coverage isn’t purchased. Untimely notice to an insurance carrier can void coverage for and employment claim.

* Not intended to be Exhaustive.

New Proposed FMLA Regulations published by DOL.

MMoore@mwn.com (Michael Moore) — Mon, 11 Feb 2008 09:08:55 -0500

The Department of Labor released the new proposed FMLA regulations on Monday, February 11, 2008. I am in the process of digesting the new regs and will post a summary shortly. Thanks to Michael Fox at Jottings By An Employer’s Lawyer for the early release tip.