Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Six months ago, I predicted a renewed emphasis on reduction in force laws and regulations with the possibility of an economic slowdown looming.  With six months left to go in the year, I'm still feeling good (if you can feel "good" about such things) about that prediction. 

Is the economy still on the yellow brick road or are we walking deeper into the forest filled with lions, tigers and bears?

The statistics from the Equal Employment Opportunity Commission do not paint a rosy picture.  

The numbers of discrimination claims filed with the EEOC are up.  

And up by a lot.

In fact, the EEOC reported a 21 percent increase in charges for the first quarter of 2008, over the same period last year. 

So what can employers do? I talked a few weeks ago about one aspect of reductions in force -- namely compliance with the OWBPA (Older Worker Benefit Protection Act) and how compliance with that law can avoid one pitfall associated with a reduction in force. 

But another law that is commonly misunderstood is the WARN (Worker Adjustment and Retraining Notification) Act.  WARN is not a mandatory severance law; in other words, it doesn't mean that employers need to give employees severance when they are affected by a mass layoff or plant closing.

What WARN does require is that the employer give notice to employees who may be affected by a plant closing or mass layoff.  The Department of Labor has prepared this fact sheet for employers to answer some of the basic questions.   It is a law that is, frankly, fairly easy to comply with, and yet there are still some employers who are facing class actions for their alleged failure to comply. 

In addition to notice to employees, the employer must also notify the Connecticut Department of Labor of its proposed actions.  The state then posts them in monthly reports available here.  You can view July's report here.

What is fascinating about the reports thus far is that Connecticut has, as of now, avoided some of the mass layoffs that have plagued some of the other states.  The June reports for Connecticut show only 400 or so employees statewide who received WARN notices.  Moreover, numbers released over the weekend show that Connecticut employers have added jobs, not eliminated them.  Whether this trend continues will be an item to watch for in the second half of 2008.

In an upcoming post, I'll highlight some of the particulars of WARN in more detail.  Until then, try to avoid the fields of sleeping flowers.

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This should come as a surprise to no one, particuarly given my prior posts, but Foxwoods Casino (properly known as the Mashantucket Pequot Tribal Nation) today formally declined to bargain with the UAW over a contract for approximately 3000 table game dealers, setting up an appeal that will focus on sovereign immunity grounds. The Day first broke the story earlier this afternoon.

The Union's request for bargaining last week can be downloaded here. Foxwoods response today is available here. 

So, what's the general gist of the Tribe's argument declining bargaining?

In our view, the NLRB's effort to assert jurisdiction over Tribal gaming enterprises constitutes a serious breach by that agency of time-honored commitments made by the federal government to Indian Tribes in statutes and other laws that support and ecourage tribal self government and the building of strong tribal governmental institutions. 

The Tribe also goes on to note that the two presumptive nominees for President -- Senator Obama and Senator McCain -- have issued statements indicating their strong support for tribal sovereignty (though notably, not about this case). 

The Tribe included additional documents in support of its argument which are available here and here. 

Because the D.C. Circuit has already decided the San Manuel Casino case last year (which, in essence, allowed the NLRB to have jurisdiction over tribal casino workers), it is unlikely that the appeal will be filed there; instead, look for the Tribe to file in the Second Circuit where they will hope for a different outcome.   An appeal is not expected for at least several more weeks. 

Attorney General Richard Blumenthal issued a statement this afternoon "condeming" Foxwoods' decision.  Expect an amicus brief or intervenor brief from his office when the appeal is filed, as was done in the San Manuel case. 

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Connecticut's wage payment statutes, with the definition of wages found at Conn. Gen. Stat. 31-71a(3), certainly have left courts room to interpret the statute. After all, the definition of wages is merely: 

compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation.

If an employer does not pay "wages" properly, an employee can bring a civil action to collect such wages (along with attorneys fees, and double damages) under Conn. Gen. Stat. 31-72.

But what happens when an employer does not pay accrued vacation or sign-on bonuses? Is that a failure to pay "wages"?

A recent Connecticut Superior Court case says "no".  In Tamborino v. Velocity Express, 2008 Conn. Super. LEXIS 1527 (June 6, 2008)(Tierney, J.) (registration needed to download), the Superior Court concluded that the definition of wages did not include such items.  Moreover, "wages" does not include post-termination COBRA insurance premiums.  Thus, the employee could not use the "wage" statutes to claim that the employer's failure to do so violated state law (and entitled him to attorneys fees for pursuing such a claim).

The case also discusses performance bonuses and says that in some cases, such bonuses may be "wages".  In this case, however, the court found that the employer's failure to pay such a bonus was not made in "bad faith" and declined to award the Plaintiff additional damages for such a failure.

For employers, the case is a reminder of the importance of using clear and plain language in offer letters and employment contracts.  If bonuses are to be contingent on achievement of certain goals, or discretionary, language can be included to that effect.  

As I indicated earlier this week in my post on "fairness", employees will become bitter if they believe that the employer is not living up to the terms of the "deal".  Ensuring that offer letters give employers the flexibility to run their business while also outlining the essential terms of employment can be crucial to avoiding misunderstandings later on. 

Photo courtesy of Library of Congress (Flickr) - Workers in 1940

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It's always interesting when the state agency responsible for enforcing discrimination claims is sued for discrimination itself. It's even more interesting when the agency takes a position that is opposite of the view of the EEOC.  But a case decided on July 7th by the Second Circuit Court of Appeals sets up that scenario. 

The case is Richardson v. CHRO (download here) and it resolves (at least in the Second Circuit) an important question for employers who have collective bargaining agreements with unions.  Namely, does Title VII (the federal anti-discrimination law on gender and race, among other protected categories) prohibit clauses that allow an employee to choose their remedy for discrimination complaints in a collective bargaining agreement or does such a clause constitute "discrimination". 

The Second Circuit, creating a split among the Courts of Appeals, agreed with the CHRO (and rejected the EEOC's interpretation).  In doing so, the Court said that such a clause is not prohibited by Title VII and is not discrimination.  

The Court's main holding is here:  

While there are limits on what a union may agree to in collective bargaining, Plaintiff’s union has not transgressed them by contracting to limit an employee’s legal recourse under certain circumstances. The collective bargaining agreement about which Plaintiff complains simply stipulates that an aggrieved employee may either arbitrate her grievance or file a charge with the CHRO describing that grievance.

Nor did the union discriminate against Plaintiff by adhering to the election-of-remedies provision after Plaintiff chose to file a charge with the CHRO. The union’s choice to adhere to its collective bargaining agreement in this case was indubitably non-discriminatory: the collective bargaining agreement does not constitute a waiver of any statutory rights under Gardner-Denver, and the defendants’ withdrawal from arbitration did not constitute retaliation because the forum-selection clause was a reasonable defensive measure to avoid duplicative proceedings in the two fora Richardson’s employer maintained for addressing discrimination complaints.

Here was the clause that the court approved of:

[D]isputes over claimed unlawful discrimination shall be subject to the grievance procedure but shall not be arbitrable if a complaint is filed with the Commission on Human Rights and Opportunities arising from the same common nucleus of operative fact.

In other words, the employee can aribtrate a discrimination complaint or file a charge with the state agency responsible for investigating discrimination complaints, but not both.  In so ruling, the Second Circuit upheld the lower court's granting of summary judgment to the CHRO and the union. 

As the Workplace Horizons blog is quick to note, (and as the decision acknowledges), this now creates a split in the circuits, meaning that at some point, the issue will be ripe for U.S. Supreme Court involvement.

In the short run, for employers this type of clause may be an important bargaining chip in negotiations with unions. Until now, some unions might balk at such a provision because they might believe it was unenforceable. This decision now gives both employers and unions some room to manuever in this area.  For employers looking to reduce costs, inserting such provisions may also help to avoid discrimination lawsuits by having employees use the grievance procedure instead.

Interesting footnote: The case was argued in February 2007 and decided in July 2008. Thus, for those that think the justice system always moves quickly, think again.

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Over the last week or two, I kept flagging various employment law posts that I wanted to followup or comment on, only to have two or three more pop up. Each of them probably merited a discussion, but, to use an overused cliche -- there simply isn't enough time in the day. 

So, I'm perhaps taking the easy way out in creating a whole post about posts.  But I will try to categorize them for a little easier reading.  I suggest taking a gander at these when you have an opportunity. 

Blogs Referencing This One

First up, there have been several blogs that have commented on some posts that I have done recently that you might find interesting. They are:

• Thoughts from a Management Lawyer discussed my post on Monday about "fairness";
• Blawg Review (a weekly review of the best law-related posts) lists this little blog as a "Star of the Blawgosphere" representing the great state of Connecticut in a holiday-related post;
• Jottings by an Employer's Lawyer was kind enough to mention this blog in his July 4th posting about the holiday and about efforts to bring unions together from around the world;
• Delaware Employment Law Blog recently discussed how construction-industry employers are being targeted and referred to a recent posting on the subject from this blog;
• The Laconic Law Blog had a post recently following up on the topic of caregiver and family discrimination and discusses my post last month about the nuances in Connecticut law (HR Daily Advisor had a similar post yesterday);
• New Jersey Employment Lawyer Blog had an interesting followup to my post about a new law requiring protection of social security numbers and notes that Michigan passed some similar legislation;
• Adjunct Law Prof blog commented over the weekend on the recent decision that awarded an employee's attorney $600 per hour in an employment discrimination case;
• Florida Employment Law Blog has a very notable post about what the effect on Florida employers would be if Barack Obama becomes President (hint: employment lawyers could get a lot busier) and cites a recent post of mine on the ADA Amendments Act of 2008 (though it should be noted that others, including the Ohio Employer's Law Blog and The Word on Employment Law, have done similar posts);
• Rogers & Tartaro Business Litigation blog picked up on the discussion on the various types of sexual harassment matters and the importance of understanding hostile work environment claims.   

Posts About HR-Related Issues

• Workplace Prof blog follows up on a New York Times story to discuss the employer backlash to certain immigration rules;
• Pennsylvania Labor & Employment Law Blog had a post about Corporate Social Responsibility and how it is a "way of life" for certain companies;
• Although not a blog, per se, Ford & Harrison had an interesting post that held that an employer who merely posts their summary plan descriptions on the company's intranet may not be sufficient to meet ERISA requirements -- at least in the Ninth Circuit (which includes many Western states, but not Connecticut);
• HR Capitalist reports on a recent decision by Google to raise the cost of employer-sponsored daycare -- a move that has left many employees unhappy.  It's an interesting case-study on managing employee expectations;

Employment Laws & Litigation

• It is sometimes too easy to brush off a runaway jury verdict, like the $46M one in Ohio last week, reported on by Ohio Employer's Law Blog and the Manpower Employment blawg.  But as the Ohio blog reminds: "Litigation is dangerous. Juries are unpredictable. Some cases cannot be resolved and need to be tried, but sometimes it's better to live to fight another day."
• Employee Screen IQ blog reports on some new FACT Act regulations that may affect some employers who conduct background checks;
• The Workplace Horizons blog reports on a recent NLRB case that finds that a provision prohibiting a temporary worker from discussing his compensation violates federal labor laws.  The decision should reinforce the fact that restrictive covenants for employees should be appropriately tailored.

As you can see, quite a list to add to your summer reading materials. 

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Yesterday, I reported that the NLRB had issued a decision certifying the election last fall of the UAW as the bargaining representative of the Foxwoods Casino Table Dealers.

Since that last post, the Mashantucket Pequot Tribal Nation has released a statement indicating that they will, in fact, appeal the decision.

The Day has the details in this report.  (The Hartford Courant's article is here but lacks the details of The Day's article.)  The UAW, as expected, has called on Foxwoods to now bargain with it, but Foxwoods has signaled that it will not.

None of this is frankly unexpected.  Until the U.S. Court of Appeals (or the U.S. Supreme Court) decides the issue of sovereign immunity, this case is far from over.

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Leave it to a government agency to release a long-awaited decision right before the July 4th holiday.  Since it is a vacation week, this afternoon's post will be brief. I'll followup again when there is more to report, including press statements that are expected to be released on the subject. 

For those first looking for background on the election battles between the UAW and Foxwoods, you can see my prior posts here.

So what's the news for today? Well, not surprisingly, the NLRB, in a decision officially released on June 30, 2008, certified the election last fall of the table game workers at Foxwoods casino.  You can download the brief decision here.  Much of the decision rests on the evaluation of the objections that Foxwoods raised to the election, and the run-up to the election. The NLRB found that none of the issues raised by Foxwoods warranted a new election.

The decision means that the UAW can now request that Foxwoods begin negotiations and bargaining over a contract. But don't expect that to happen. Foxwoods can refuse to bargain with UAW, which will just lead to another series of motions and appeals. This decision doesn't address once of the "big" issues that remain out there: namely, the tribe's contention that it is protected by the doctrine of sovereign immunity.

As I've said before, I would expect this case to continue in litigation until either a federal appellate court rules on the election, or it is appealed all the way to the U.S. Supreme Court.  The UAW certainly passed another hurdle today in its bid to represent workers, but the real battles remain to come.

The Day has covered this story before and I've just noticed that they have a brief post today.  Reporter Heather Allen has done an admirable job at providing solid reporting on the subject so I'm sure she'll also have more in the upcoming days if needed.

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The "reasonable accommodation" requirements under the ADA continue to be a source of questions and confusion for employers.

However, on the topic of whose responsibility it is to raise the issue of a reasonable accommodation, the law has been fairly clear in the Second Circuit (which covers Connecticut, New York and Vermont) that it is the employee that bears the burden of making that initial request. 

Indeed, back in 2006, the Second Circuit stated that “[G]enerally, it is the responsibility of the individual with a disability to inform the employer that an accommodation is needed.” Graves v. Finch Pruyn & Co., 457 F.3d 181, 184  (2d Cir. 2006). 

Yesterday, however, an important decision affirming a jury verdict against Wal-Mart, the Second Circuit clarified that "generally" doesn't mean "always".  The case, Brady v. Wal-Mart Stores (download here), sets forth a whole new range of instances where the employer now has an obligation to reasonably accommodate an employee whose disability is "obvious", even when that disability may only be "perceived":

Indeed, a situation in which an employer perceives an employee to be disabled but the employee does not so perceive himself presents an even stronger case for mitigating the requirement that the employee seek accommodation. In such situations, the disability is obviously known to the employer, while the employee, because he does not consider himself to be disabled, is in no position to ask for an accommodation. A requirement that such an employee ask for accommodation would be tantamount to nullifying the statutory mandate of accommodation for one entire class of disabled (as that term is used in the ADA) employees. We therefore hold that an employer has a duty reasonably to accommodate an employee’s disability if the disability is obvious—which is to say, if the employer knew or reasonably should have known that the employee was disabled.

So what type of response is actually needed from the employer in that circumstance? The Court states that all that is required is that the employer engage in the "interactive process" to work with the employee to determine of the disability needs to be reasonably accommodated.

What does this mean for employers in Connecticut? It raises a whole host of issues.  What does it mean that a disability is "obvious"? What is obvious to one person may not be obvious to another. For example, one employer could view the employee as exhibiting classic signs of chronic manic depression, while another may not.  Issues such as blindness may be "obvious", but the other categories may not be as "obvious".  In the Brady case, the employee had cerebral palsy -- which wasn't exactly the most "obvious" type of disability (particularly given that there are various presenting symptoms of cerebral palsy). 

Another issue for employers is the risk of bringing of the issue of a "reasonable accommodation" when the employee may not even be disabled. The employer, in such a circumstance, risks being labeled as an employer who "perceives" the employee has a disability.  Thus, the employee could actually be forming the foundation of a disability claim, rather than preventing it in the first place. 

In short, employers in Connecticut (and New York for that matter) may want to consider their approaches to "reasonable accommodation".  There will not be a one-size-fits-all approach to this issues and this decision just raises a whole new set of questions to think about in dealing with employees who may have disabilities.

The case has a few other issues that were discussed by the Wait a Second blog.  It also hasn't been a particularly good week at the courts for Wal-Mart either. 

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Let me preface this post by acknowledging the obvious: This upcoming story is a bit like watching a car wreck. You know you shouldn't look and it really doesn't have anything to do with you, and yet you can't help but stare.  The story of a new lawsuit probably doesn't merit a post, but some lawsuits are just too outrageous to leave alone.  And while I normally attach pictures to the posts, for reasons that will be obvious in a moment, I'm going to hold back on the pictures for this one.  (If you're really curious, The Smoking Gun has posted pictures though I caution that they may not be appropriate for your workplace.)

So what's the car wreck? A new lawsuit filed in federal court last week by a teacher who claims she was forced to resign after an appearance on the Howard Stern show. But it wasn't just "any" appearance, it was an appearance for a contest on the "Hottest Wife/Ugliest Husband".  CT News Junkie had the story on it a few days ago as did the Meriden Record-Journal.  Because it is picking up interest in some employment law circles (H/T Delaware Employment Blog), I'll add a bit of perspective on it. 

The lawsuit, filed by Marie Jarry can be downloaded here.  She alleges that on April 30, 2008, she called in sick to work. She worked as an elementary school teacher in Southington, Connecticut.  The next day, however, she appeared with her husband on the Howard Stern show.  She then alleges that the school day after she returned to work, she was told not to report to class.   She was told, allegedly, that she violated the "morality" clause of her contract and that she had also used a sick day (when she was not sick).  She alleges that she was then pressured to resign. 

She has brought claims against her employer under Section 1983 (claiming her procedural due process rights were violated), Section 1983 (for gender discrimination and violation of her equal protection rights), negligent infliction of emotional distress, and negligence (under Conn. Gen. Stat. 52-557n).    She has also sued her union under a claim of "duty of fair representation".  (The lawsuit claims it has seven counts, but there are only five listed).  All told, she has sued the Southington school board, her former union, and the school superintendent.  No appearance has been made for the defendants yet. 

In thinking about this case, I can't help but think of the irony of this case compared with a case down south last month which held that a female employee was subjected to a "hostile work environment" because of the "vulgar radio programming" in her workplace. And what was that vulgar programming? The Howard Stern show of course (you can read the court's fairly graphic discussion here). 

While the particulars of this case will play out in court, what is striking about the complaint is the unwillingness to acknowledge that the teacher bears any responsibility for what occurred. After all, the teacher called in "sick" (when she wasn't) and appeared in a bikini on a radio show that courts have noted for its "vulgarity".  Did the teacher really think that no consequences would flow from her actions? And what did she expect the school board to do? Ignore what happened?

It's hard to see from the facts alleged that the school system is in the wrong here.  (As I've cautioned readers in the past, however, allegations in a complaint are only that -- allegations -- and that nothing should be taken as a proven fact).  The school system heard about allegations of one of their teachers and after discussions with her about the appropriateness of her conduct (and the seriousness of the allegations), she resigned -- rather than face additional publicity and possibly a firing. 

For employers, the lawsuit is an example that even when the employer believes it is right in its employment decisions, it may still face a lawsuit for its actions.  Proper documentation and following procedures are steps that employers can always take to increase the likelihood that their actions will be upheld by courts later on, if lawsuits are brought. 

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During some of the seminars that I teach on sexual harassment prevention, one of the topics that is covered is describing the difference between quid pro quo harassment and hostile work environment harassment.

On Wednesday, the Connecticut Appellate Court taught that same lesson in reviewing a case in which an employee (who lost a trial) claimed that certain jury instructions on quid pro quo harassment should have been given.

The case itself, Griffin v. Yankee Silversmith Ltd (officially released on July 8, 2008), won't set the employment field ablaze like some other decisions this year.   The facts resolve around an employee who claimed that her employment ended in retaliation for complaining about sexual harassment.  On appeal, the employee claimed that the jury should have been told about quid pro quo harassment she endured and instructed on that subject, not simply on a "hostile work environment" theory.

The Appellate Court disagreed noting that the employee didn't raise that issue in the Complaint and the evidence didn't support such a claim of quid pro quo harassment.

In doing so, the court noted that quid pro quo harassment is just different from "hostile work environment" harassment:

Quid pro quo sexual harassment, as its name suggests, conditions employment on the return of sexual favors; hostile environment sexual harassment is conduct that ‘‘has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment."

The court added that these distinctions are also found in Connecticut's anti-harassment statute Conn. Gen. Stat. 46a-60(a)(8). 

So what's the takeaway from this case? I've been trying to think of something groundbreaking, but the fact is that there isn't much to take away from a case like this. 

For employees, it will be making sure a Complaint is plead correctly so that evidence can be submitted at trial to support a theory. For employers, it just emphasizes the fact that state courts are seeing more of these cases. 

Ultimately, perhaps the best "lesson" from this case is to understand the difference in the types of harassment.  For employers, this can also lead to a greater understanding about how to prevent it from occurring in the workplace. 

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A very big day in labor & employment law and ERISA cases at the U.S. Supreme Court this morning  I'll post more detailed updates as warranted (and when time allows), but for now, here are the brief highlights (H/T ScotusBlog) .

• In Meacham v. Knolls Atomic Power Laboratory (06-1505), the court was asked to decide, in an ADEA disparate impact suit, whether workers or employers bear the burden of persuasion in determining whether the employment decision was based on “reasonable factors other than age.” The Court concluded that an employer defending a disparate-impact claim under the ADEA bears both the burden of production and the burden of persuasion for the “reasonable factors other than age” (RFOA) affirmative defense under §623(f)(1). The court also rejects a "business necessity" defense for the employer, saying it has no place under ADEA.  For more background on the case, see the ScotusWiki . 
  
• In MetLife v. Glenn (06-923), the Court was asked to whether a claim administrator of an ERISA plan who also funds the plan benefits constitutes a “conflict of interest” that must be weighed in a judicial review of the administrator’s benefit determination. The Supreme Court concluded that it does.  In the court's view, a plan administrator’s dual role of both evaluating and paying benefits claims creates the kind of conflict of interest referred to in the Firestone case.   That conclusion is clear where it is the employer itself that both funds the plan and evaluates the claim, but a conflict also exists where, as here, the plan administrator is an insurance company.  Again, for more background, see the ScotusWiki.
  
• In Kentucky Retirement Systems v. EEOC (06-1037), the Court was asked to decide on the relevance of age as a potential factor in the distribution of retirement benefits to disabled workers establishes a prima facie case of discrimination under the ADEA. In other words, could "pension status" been seen as a proxy for "age". The Court held, under the circumstances of the case, that pension status was not a proxy for age.  in other words, where an employer adopts a pension plan that includes age as a factor, and that employer then treats employees differently based on pension status, a plaintiff, to state a claim under the ADEA, must adduce sufficient evidence to show that the differential treatment was “actually motivated” by age, not pension status.  As usual, the ScotusWiki has the detailed background on the case.  
  
• In Chamber of Commerce v. Brown (06-939), the Court was asked to decide whether federal labor law preempted a California state law that barred employers from using state money to influence union organizing campaigns. The Court found that the California law was pre-empted by federal law, meaning, in essence, that the state law cannot be enforced.  Although Connecticut does not have a similar law, it provides a framework for looking at any other proposed legislation that would place limits on the effect of the NLRA.  Background on that case is available from the ScotusWiki here.
  

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The Connecticut Supreme Court today ruled (in a decision that will be "officially released" on June 24, 2008) that an agreement between an employer and his employees to defer an employee's past wages until the employer receives revenue sufficient to pay those wages, is contrary to public policy , therefore, an invalid defense in a criminal prosecution for failure to pay wages.

The case, State of Connecticut v. Lynch (available here) is somewhat unusual because there are not very many criminal prosecutions of a failure to pay wages. Most cases arise in the civil context. But not here.  Here, the employer failed to pay wages for several pay periods and then tried to get employees to agree that their back wages and future wages would be contingent on future revenue of the company.

You may recall a case a few months ago  Ravetto v. Triton Thalassic Technologies (discussed in this earlier post)  which held than an agreement to defer accural of wages in the future does not violate public policy.  Indeed, back then, the court noted:

We cannot conclude as a matter of law, however, that an employer experiencing financial hardship that honestly informs employees that it cannot meet payroll and that does not promise them that future payment will be made is acting unreasonably when it allows employees to continue to work with the hope of future payment. This is particularly true where the employees are experienced business people and members of management who choose to continue working in the hope that their services to the employer will improve the financial status of the company. We can imagine circumstances in which such a choice by employees may inure to their benefits particularly when the financial hardship is short-lived and the financial status of the company ultimately improves. In the present case, we recognize that Triton ultimately did pay the plaintiffs the wages that were due them.

So, what's the difference here? Here, the Court says that the Agreement at issue applied by prospectively but also retroactively and as such, violated public policy. In fact, at the time that the employer proposed this "agreement", the employer had already missed several payroll periods.  Thus, the Court said that an agreement to postpone accural of wages violates public policy when applied retroactively.  In the absence of an agreement on when wages accrue, it's safe to assume that they accrue when the employee performs work.

What's the takeaway for employers from this case? First and foremost, keep up with obligations of payroll.  In the extreme case, the Connecticut Department of Labor can and will file criminal charges against employers that fail to keep up. Failure to pay wages is not one of those "grey" areas. Set up a payroll system and stick to it.

But if the company begins getting cash flow problems, it may consider setting up agreements with employees that may make payment future wage payments contingent on revenue.  This often happens in small, start-up ventures where the work is being done ahead of revenue coming in the door. 

These agreements will be heavily scrutinized so getting sound legal advice on this issue (as many others) should help ensure that the agreement will hold up later on.  The Court took great pains to note that agreements on when the employee accrues wages may be okay, but employers should still tread carefully because of the important public policy of paying employees wages "on time".

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A few months ago, I reported on the District Court's decision in Amara v. CIGNA, an important class-action case on ERISA retirement benefits and on alleged misrepresentations made by the Company about retirement benefits.  Over the last few months, then, the court was asked to consider the issue of what is appropriate relief from the decision. 

Late Friday, Judge Mark Kravitz issued his decision on what the appropriate remedy should be from his decision. But then, sua sponte (a nice Latin phrase meaning, in essence, "on my own"), the Court decided to stay its own judgment on the appropriate relief.  What does that mean? In essence, the court threw up its hands and conceded that the issues of damages and liability were so "unclear" that there was no good way to predict that the decision would even be upheld on appeal:

The Court also recognizes that the benefits awarded by this opinion are substantial, and that the law on which they are based is anything but settled. In light of the complexity of the issues and the weighty interests at stake, as well as the possibility that some or all of this opinion and the Liability Decision may be reversed on appeal, the Court believes that a stay is appropriate.....

The lack of clear guidance in the law and the unusual factual circumstances present in this case have convinced the Court that the outcome of any appeal is far from certain, and the Court believes a stay is therefore both appropriate and necessary.

So what relief did the court propose? Well, the language the court uses (see you if you can make sense of it) shows that it is reluctant to impose draconian consequences on CIGNA and instead proposes a bit of a compromise: 

In light of CIGNA's statements in those publications that all early retirement benefits would be protected and CIGNA's failure to warn of wear away, the Court orders and enjoins the CIGNA Plan to reform its records to reflect that all class members must now receive "A+B" benefits; that is, all class members must receive their accrued benefits under Part A, in the form in which those benefits were available under Part A, and in addition their accrued benefits under Part B [the new formula], in whatever form those benefits are available under Part B.

While I have not been following the case closely, the Court rejected various claims made by the Plaintiffs and declined to impose even harsher penalties on CIGNA.  But the Court declined to let CIGNA off completely either, indicating that some sort of financial burden must be imposed on CIGNA for misrepresentations the court found in its earlier decision 

Under A+B, an employee would receive all of her Part A benefits in the form those benefits were previously offered under Part A, plus all the benefits she accrued under Part B, in whatever form those benefits are offered. Because there is no attempt to transition Part A benefits into the Part B accrual formula, there is no need for an opening account balance and thus no question of whether early retirement benefits are a part of that. ...   
The Court recognizes that a return to Part A would result in a larger recovery for Plaintiffs.
That fact alone, however, is insufficient to render A+B inadequate, especially in light of [expert] testimony regarding the substantial effect on class members' benefits as a result of wear away and the lack of any evidence in the trial record to support Plaintiffs' current complaints. For all of these reasons, then, the Court rejects both parties' objections to the A+B remedy, which the Court believes is a meaningful, substantial, and appropriate remedy.

The decision is a technical one and frankly, incredibly complex.  For employers looking for guidance on this issue, they should tread very carefully.   As the Court notes time and again, the issues involved are far from settled and that an employer who takes action in the area, will do so with substantial risks for the foreseeable future.

For members of the Amara class, the decision means many more months of waiting for a resolution of the issue. Because of the complexity, I would be surprised to get a decision from the Second Circuit before the end of the year.  Class members can keep up with the lawsuit at a website created by the Plaintiffs' attorneys. 

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Ed: Updated to reflect newer posts and correct style

There are many employment lawyers who subscribe to the belief that "No Good Deed Goes Unpunished".  A case out of Connecticut and the Second Circuit this month certainly won't change that perception.  Indeed, although the case may have political undertones, it sets up a classic factual case of an employer who apparently tries to do the right thing and STILL gets sued for their actions.  Ultimately, the Second Circuit has affirmed that the employer did not violate the law but the issue still remains far from settled. 

Here's the basic facts and background of Ricci v. DeStefano:

In March 2004, New Haven, Connecticut Fire Department held two promotional exams for the positions of Lieutenant and Captain.  However, the New Haven Civil Service Board (“CSB”) refused to certify the results of those exams because statistically, the test results showed that the test may have had a disparate impact on African-Americans. 

A group of seventeen white candidates and one Hispanic candidates who took the promotional exams sued.  These candidates fared fared very well on the test but did not receive a promotion because without the CSB’s certification of the test results, the promotional process could not proceed.

The Plaintiffs asserted that the refusal to certify the examination results violated their rights under Title VII and the Equal Protection Clause. In 2006, the District Court of Connecticut granted New Haven's motion for summary judgment (decision here) -- effectively dismissing  the case. 

CSB officials said, in their papers, that the reason they refused to certify the results is their desire to comply with the letter and the spirit of Title VII. The District Court noted that "Plaintiffs deride this 'feigned desire to ‘comply’ with Title VII,' arguing that defendants in fact violated that statute, and their actions were a mere pretext for promoting the interests of African-American firefighters and political supporters of the mayor. "

What is noteworthy, as the lower court pointed out, is that the case presents "the opposite
scenario of the usual challenge to an employment or promotional examination, as plaintiffs attack not the use of allegedly racially discriminatory exam results, but defendants’ reason for
their refusal to use the results.  

Ultimately, the District Court said that Plaintiffs' contention that "diversity" is a code word for reverse discrimination did not have merit.  The employer here was trying to do right by not using a test that had a disparate impact and the Court was unwilling to suggest that the employer's decision was incorrect.  The factual circumstances, as I've said before, are much more complex than that and I encourage readers to review the entire decision.

Of course, the Plaintiffs appealed. The Second Circuit last week affirmed the decision in a brief per curiam decision (available here).  The Court noted that the CSB "found itself in the unfortunate position of having no good alternatives."  

And while the court said it was "unsympathetic to the plaintiffs’ expression of frustration", the Court said that CSB was "simply trying to fulfill its obligations under Title VII when confronted with test results that had a disproportionate racial impact".   As such, its actions were protected. 

End of story, right?

Well, not quite.  Later in the week, the Second Circuit considered, but ultimately rejected a rehearing "in banc" (meaning a decision in front of all of the Second Circuit judges, not just a three judge panel).  The Wait a Second Blog explains the procedural mess in further detail in a post here.  What is unusual is that the decisions either concurring or dissenting in the decision to rehear the case in banc are lengthy and reveal a deeply divided Second Circuit. 

Indeed, the dissent noted that the Second Circuit has done a disservice by not publishing a full opinion on the subject and instead hiding behind a short "per curiam" opinion.  Ultimately, the dissent views the issue as one of "great importance" and believes that full consideration by the Second Circuit -- or at least a more detailed decision -- is warranted.  Certainly, the next time this issue is before the Second Circuit, we can expect more fireworks depending on the panel makeup.

The Plaintiffs here have petitioned the Supreme Court to grant certiorari in this case. It certainly merits further watching.   I would expect a ruling from the Supreme Court on whether to grant certiorari in fall of 2008. 

For employers, this case demonstrates the problem that companies face all the time. Typically, a decision affecting one employee, will leave another unhappy.  And even when the employer is trying to do the "right" thing by complying with Title VII (even if there is political overtones) they still could face a lawsuit by a group of employees unhappy with the decision.  Strict compliance with the law and getting sound legal advice is the best strategy for avoiding the minefields that continue to exist in this area.

UPDATE: Point of Law was kind enough to pick up on the post and credit should be given to their initial post on the subject late last week (which I was just tipped off to).  There are also other blog posts on the subject here,  here and here as well. 

FURTHER UPDATE 6/17: Wait a Second has an update this afternoon about another dissenting opinion released today by Second Circuit Chief Judge Dennis Jacobs.  From a legal procedural perspective, it's interesting to see the "catfight" going on at the Court of Appeals. But from employment law perspective, it doesn't really affect the underlying decision.

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Just time enough for some short updates on various posts from the last few weeks.

• You may recall a few weeks ago that the Governor vetoed a bill which would have increased the minimum wage in Connecticut to $8/hour in January 2009.  While there has been talk of a possible override session, it's difficult to get the numbers to believe that the legislature has the votes to override the veto. Nevertheless, it appears that June 23, 2008 is a possible date for a veto override vote.    As I've mentioned before, this is most decidedly not a political blog, so if you've like to see what some of them have to say, check out the My Left Nutmeg blog post here.
  
• You may recall a few weeks ago the post about the attorney who allegedly submitted an anonymous letter purporting to be a janitor.  The Courant reported over the weekend that the attorney is now the subject of an investigation by the Statewide Grievance Committee.  No public comment has been given on the subject to it is unknown the extent of the Committee's investigation. 
  
• Last week, I reported on a $225M employment lawsuit filed against NASCAR.  Since my last update, two supervisors who were mentioned in the complaint were suspended and NASCAR defended itself from the allegations, in a report here. Unless particularly noteworthy, I'm not going to post any further updates on this case since it's outside Connecticut, but suffice to say that the employment law world and sports world create interesting enough cases that I wouldn't be surprised to see this one make a few more headlines before it's done.
  
• Lastly, following up on my post about the OWBPA and separation agreements, the Ohio Employer's Law Blog has done a good followup article on deciding the proper "decisional unit" for reductions in force.  As I've said before, with "disparate impact" claims and class action possibilities inherent in a reduction in force, getting solid legal advice on how to handle this subject matter is crucial to reducing exposure to lawsuits later on. 

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It was ironic for me that at a bar association meeting on labor & employment law yesterday, that I learned that Ruth Pulda, a partner at Livington, Adler, Pulda, Meiklejohn & Kelly, passed away at the much-too-early age of 53.  For me, she was one of the central figures in employment law in Connecticut representing employees.  For many years now, she had courageously battled cancer and her tenacity in doing so was emblematic of the way she lived her life.   She had a passion about the law and her presence will be missed by attorneys on both sides of the "fence".  A profile of her is still available at her firm's website.

The full obituary can also be found in the Hartford Courant but this portion about her law practice stuck out for me:

Leader, educator, mentor and advocate to a generation of Connecticut lawyers and on behalf of women's rights, civil rights and social justice. Ruth's law career spanned twenty-five years as a named partner in the "plucky little law firm" of Livingston, Adler, Pulda, Meiklejohn and Kelly. She loved a good fight and won more than she lost. She has been recognized by the Connecticut Bar as one of the top lawyers in Connecticut and received two awards very important to her life's work: The Elizabeth Blackwell Award from Connecticut N.O.W. in 2003 for her "tenacious commitment for health care for women" and the 2006 One Woman Making a Difference award from CWEALF (CT's Womens' Education and Legal Fund).

Ruth previously served as legal counsel to CWEALF, as chair of the State Permanent Commission on the Status of Women, and co-founded and taught the Women's Rights Clinic at the University of Connecticut School of Law. Devoted friend and confidant to too many to mention she will be missed every day, but her impact on so many people and on so many issues will long endure.

One of my first trials many years ago was against Ruth and her firm.  I'll remember the zeal and enthusiasm she showed for the law and her dedication to doing things correctly and professionally.  In the ensuing years, I learned further of her reputation in the field and I recall referring several individuals to her for representation without reservation. 

And ultimately, I pay tribute to Ruth with a compliment that many attorneys hope to emulate: She fought hard for her clients and did good work for them, she was respected by her opponents, and she left the area of employment law in Connecticut better off for her involvement. 

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The Connecticut Attorney General's Office quietly filed suit this week in Connecticut State Court(download here) against American Future Systems, which does business under the name of Progressive Business Publications (and also Progressive Business Compliance).   You won't find a press release about it on Attorney General Richard Blumenthal's website.  Back in March, I had reported that the AG's office started investigating the company due to its practices advertising its products. 

Those who have been reading this blog for a while know that I wrote a series of posts about an e-mail and website page that PBC had regarding a somewhat obscure workplace poster.  Ultimately, the company revised their website regarding this poster and I applauded the company for fixing the issue on their website. 

But the suit filed by the AG's office focuses not on the website, but on a facsimile that was allegedly sent out by the company in the winter with the heading "Connecticut Healthcare Advocate - Official Notice".  The notice also says that the poster "lists employee's rights to health insurance under Connecticut law" -- which is nearly identical to the language that was used on their website.

A copy of the notice can be found attached to the lawsuit.  The AG's office alleges that this facsimile solicitation was misleading to consumers and violated Connecticut's Unfair Trade Practices Act (called CUTPA). 

It should be noted, however, that the name of Progressive Business Compliance is also found on this facsimile as well and readers can make their own determination about whether the facsimile is, in fact, misleading when viewed as a whole.  (It should also go without saying that the lawsuit contains allegations, not proven facts.)

Interestingly, the lawsuit also alleges that PBC did not file the proper papers to transact business in Connecticut with the Secretary of the State's office (Conn. Gen. Stat. 33-920a).  In addition, the AG's office has claimed that the facsimile was an improper unsolicited advertisement under Conn. Gen. Stat. 52-570c(a). 

The Company has not filed an answer or appearance yet to the lawsuit.

In May, I did speak with an official from PBP and offered to post a statement from them. They declined the offer then and I suspect that they will keep their responses to court papers now that a lawsuit has been filed.

In the meantime, you can track the progress of the case via the court's docket available here.

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It's a common observation among employment lawyers that employers can be sued for lots of on-the-job actions that don't lead to termination.  Whether that employee, however, will prevail on the claim is an entirely different question. A case yesterday decided by the United States District Court of Connecticut highlights that distinction.

In Charles v. State of Connecticut, Judicial Branch (download here), an African-American probation officer claimed that she was denied a request to transfer because of her race.  She requested a transfer from the Milford, Connecticut office, where she performed  supervisory functions, to the New Haven office where she would  perform intake functions. It was undisputed that although her responsibilities would change after the transfer, there would be no change in her pay or benefits.  The position was ultimately filled with a white woman whose skills better matched the position description.

On a summary judgment motion by the employer, Senior Judge Dominic Squatrito  found that the employee did not establish a claim for race discrimination because, among other things, she did not suffer an "adverse employment action".

What is an adverse employment action? The Court looked to some other cases in the transfer context to find:

“If a transfer is truly lateral and involves no significant changes in an employee’s conditions of employment, the fact that the employee views the transfer either positively or negatively does not of itself render the denial or receipt of the transfer [an] adverse employment action.’” Nevertheless, “[a] lateral transfer that does not result in a reduction in pay or benefits may be an adverse employment action so long as the transfer alters the terms and conditions of the plaintiff’s employment in a materially negative way.”

Here, the employee admitted that her salary and benefits were unaffected, but argued only that her transfer hurt her chances to be promoted in the future.  The Court rejected that argument saying that there was no evidence that the transfer denial would affect her in the future. Indeed, because she already had experience in the "intake" function (a reason the employee claimed she needed the position), the Court saw no reason why this denial would hurt her in the future.  Ultimately, what was telling to the court is that:

her pay was never adversely affected; she was never demoted, disciplined, suspended or terminated; and her job title was never adversely changed. Indeed, [the employee] admits that not being transferred to the New Haven office did not adversely affect her, and that she has not  experienced any sort of adverse employment action as a result of her not obtaining the transfer.

In short, the Court seems to view this dispute as nothing more than a kerfuffle. Or much ado about nothing. 

So what's the takeaway for employers in other cases? Two things.

• First, this should confirm for employers that a very small number of employees may sue for anything -- no matter how trivial.  Good documentation and support for decisions (that are obviously non-discriminatory) are cruicial to getting these claims defeated.
• Second, a good human resources practice that recognizes employees desire to get ahead and that works with those employees to develop a career path, can help employees see more options than they might otherwise have.  HR should not simply be about discipline and discharge, but working with supervisors and employees to allow employees to work to their fullest potential.