One of the interesting strains to come out of the new round of publicity surrounding sexual harassment is a renewed focus on mandatory arbitration provisions.

And it comes from an unexpected source: former Fox News anchor Gretchen Carlson.

Indeed, Carlson recently gave an interview with former ESPN producer and self-titled “Commander-in-She” Valerie Gordon that may have slipped under radar in which she talks about such provisions.

She notes that mandatory or “forced” arbitration provisions enable sexual harassment to exist under the radar.

I’m doing some advocacy work on Capitol Hill, working on gathering bipartisan support to take the secrecy out of arbitration.  You know the forced arbitration in employment contracts makes these things secret.  We have to stop the silence around it.

In another recent interview, Carlson suggested that these arbitration provisions are often “in the fine print” and not focused on when people start a new job.  She’s talked about it during Senate press conferences this year as well.

I’ll be interested in reading more about Carlson’s perspective in her new book being released today.

Carlson’s message should be well taken by employers; if employers are using these arbitration provisions merely as a means to allow a system of harassment to continue, then shame on them.

But here’s the issue: As with most things employment law related, it’s far more nuanced.

There are times when arbitration makes sense for BOTH the employer and employee. Litigation is expensive — very expensive, some of my clients would say — and is filled with uncertainty and time-consuming drama.  I talked more about this in a 2014 post.

Arbitration can be less expensive and can allow both sides to be heard by a neutral third party much more quickly and effectively than a court system.

And yes, it avoids some publicity but again, that can benefit employees too.

By filing in arbitration, rather than court, an employee’s claims won’t be public and won’t seen by future employers as a potential lawsuit waiting to happen.

The U.S. Supreme Court is set to review this once more in a trio of consolidated cases, including whether employers can force employees to sign away rights to pursue a class actions.

And we shall see if the Connecticut General Assembly revisits the issue in the upcoming session in January 2018.  Until then, employers should continue to monitor developments in this area and figure out if mandatory arbitration provisions are right for your business.

 

pottYou might think that smoking pot on the job as a state employee would be justifiable grounds to get you fired.

A no-brainer, right?

(Let’s save a discussion for eating brownies and swearing at your cat for another blog post.)

After all, even the Connecticut Supreme Court is stating that the “statutory, regulatory and decisional law of Connecticut evinces an explicit and well-defined public policy against the recreational use of marijuana, particularly in the workplace.”

So why is the result of today’s Connecticut Supreme Court decision (in State of Connecticut v. Connecticut Employees Union Independent) that a pot-smoking employee gets his job back?

Well, the answer is based on a few facts that I think tipped the decision of the court and that are important to understand about the case.  (And for more background, the CT Mirror released a post today too.)

First off, the court was not reviewing the underlying decision to fire the employee. Rather, it was reviewing an arbitration decision that had reinstated the employee but with a number of sanctions and conditions, including imposing an unpaid suspension, a last-chance status, and random drug testing.  As I’ve noted before, Connecticut courts will review public policy and a number of factors including whether the employee is “incorrigible”.

Put more simply, courts do not like reversing arbitration decisions, even if those decisions are flawed. (See Brady, Tom.)

And that leads to the next factor: here there was a 15 year, relatively low-level employee with a clean record.  His union argued that he was “dealing with serious personal struggles” and believed that “smoking marijuana helped to alleviate stress and anxiety”.   The court thought that the employee’s past history was worth consideration.  And, it should be noted, the court’s decision was unanimous.

Third, I think the court was reviewing whether an employee who smoked pot COULD be terminated versus MUST be terminated. And on that issue —  namely whether public policy dictated an employee be fired for smoking pot — the court said public policy wasn’t definitive.  Rather, the court found that an array of responses may be appropriate.

So, what does this case mean? First off, it does NOT mean that private employers can’t fire an at-will employee for smoking pot. In fact, the above-language from the court suggests that such terminations are going to be upheld by the courts in most instances.

And, for public employers, it also does not mean that all terminations of drug-using employees are going to be invalid either.  An arbitrator could find the employee’s termination justified in other instances based on the circumstances or the type of position that the employee held (such as a teacher or bus driver, one could imagine).

Rather, the decision means that arbitrators will have some breathing room in reviewing the facts of a situation and fashioning a solution that may be less than a termination in some instances.

For lawyers, the concurrence by Justice Espinosa is worth reviewing; she would have the court revisit its decision that set forth the standards for the court to review in such instances.

roadcircleIf you like getting lost on roads with your head spinning on which way to go, this is your post.  (Everyone else, well, try to keep up.) I recap a case for companies with unions to pay attention to.

Let’s start with this example:

Employee X is required by law to report suspected abuse in her job. She fails to do so for a few days, but ultimately does.  After investigation, employer terminates employee for her failure to report the suspected abuse and notes that she had been on “final” warning for previous misconduct. Employee and her union appeal.  After a hearing, an arbitrator reinstates the employee while similarly stating that she should be subject to a one month unpaid suspension. Employer appeals saying the arbitration decision violates the important public policy of reporting suspected abuse.

That’s the ground work for a new Connecticut Supreme Court decision (Burr Road Operating Company II, LLC v. New England Health Care Employees Union, District 1199) that will be officially released next week.

The court said that it was not readily disputed that Connecticut has a clear, well-defined public policy of protecting nursing home residents from abuse.  Thus, the sole issue for the court was whether the arbitration decision violates that important public policy.

In doing so, the court emphasized that a party seeking to vacate an award reinstating a terminated employee “bears the burden of proving that illegality or conflict with public policy is clearly demonstrated. ”  But the court was quick to note that a consensus on how to handle such claims was “elusive” from its prior decisions.

Thus, the court said it was using this case to “take this opportunity to clarify the factors a reviewing court should consider when evaluating such a claim.”

When a court speaks like this, it’s probably worth listening to.  And what are those factors? This is where it gets complicated with factors upon factors. First:

Specifically, in determining whether termination of employment was necessary to vindicate the public policies at issue, both the majority and the dissenting opinions of this court have, either expressly or implicitly, focused on four principal factors: (1) any guidance offered by the relevant statutes, regulations, and other embodiments of the public policy at issue; (2) whether the employment at issue implicates public safety or the public trust; (3) the relative egregiousness of the grievant’s conduct; and (4) whether the grievant is incorrigible.

Of course, each of these factors have their own set of considerations as well. For example, on the relative “egregiousness” factor, the court said it encompasses “myriad considerations” including, but not limited to:

(1) the severity of the harms imposed and risks created by the grievant’s conduct; (2) whether that conduct strikes at the core or falls on the periphery of the relevant public policy; (3) the intent of the grievant with respect to the offending conduct and the public policy at issue; (4) whether reinstating the grievant would send an unacceptable message to the public or to other employees regarding the conduct in question; (5) the potential impact of the grievant’s conduct on customers/clients and other nonparties to the employment contract; (6) whether the misconduct occurred during the performance of official duties; and (7) whether the award reinstating the employee is founded on the arbitrator’s determination that mitigating circumstances, or other policy considerations, counterbalance the public policy at issue.

And what does it mean to be “incorrigible”? Well again, the court sets forth various considerations:

Here, relevant considerations include whether, on the one hand, the grievant has committed similar offenses in the past and has disregarded an employer’s prior warnings or clear policy statements; or, on the other hand, whether the grievant: (1) has generally performed his work in a competent and professional manner; (2) has demonstrated a willingness to change and an amenability to discipline; (3) has exhibited remorse and attempted to make restitution for past offenses; and (4) is likely to benefit from additional training and guidance.

But that’s not all.  “We also consider whether the penalty imposed by the arbitrator is severe enough to deter future infractions by the grievant or others.”

So if you’re keeping track at home, that’s over a dozen considerations for the court (and the parties) to address. 

Ultimately, the court in this case upheld the arbitrator’s original decision reinstating the employee applying all of the factors set forth above.

For employers, this case provides a roadmap on challenges to an arbitrator’s decision reinstating a terminated employee.  But beware: This map shows a lot of different paths for courts to follow.  Many of those several ways lead to the same conclusion: Challenging an arbitrator’s final decision remains an uphill battle at best.

With all the talk about the state’s implementation of medical marijuana laws, it’s easy to wonder what impact those laws will have on terminating employees who use marijuana on the job.

One recent Superior Court decision gave a pretty clear answer for state employees: None.  In other words, for employers: Fire Away.

That, of course, simplifies the decision and the result — employers should still exercise caution when disciplining employees for drug use to understand the facts and circumstances — but the court’s decision is yet another affirmation that the statestillhas a strong public policy against the use of marijuana, at least for its employees.

The case, State of Connecticut v. Connecticut Employees Union Independent, arises from the State’s challenge to an arbitration award reinstating an employee who was terminated for using marijuana while on the job.  The State contended that the award should be vacated on public policy grounds.

The Superior Court agreed with the State because it violates the state’s well established public policy on illegal drug use while on state duty.

The union argued that the award must be confirmed because the State is “currently implementing the legalization of medical marijuana.”  The court rejected that argument pretty simply by stating that even if that’s the case, there is “nothing in the records [to] indicate that grievant was prescribed marijuana.

Regardless, as I said back in 2012:

  • Employers MAY continue to prohibit the use of intoxicating substances, including marijuana, at work.
  • Employers MAY continue to discipline employees for being under the influence of intoxicating substances at work.

It remains to be seen whether other lower courts will follow this path and whether the appellate courts in Connecticut will confirm this logic. But for now, this decision from the Superior Court ought to make employers breathe just a little easier on that point.

 

James “Larry” Foy passed away earlier this week.  (His memorial service is scheduled for tomorrow in Southwick, Massachusetts.)

For those of us in Connecticut that were blessed with having had a case with him as an arbitrator or mediator — and there were many — his death will leave a substantial void.

Indeed, Larry was a labor arbitrator and mediator for so long that it’s hard to realize there was a time he wasn’t a fixture in Connecticut.

Here’s the telling statistic from his obituary:

Since 1979 Larry has privately arbitrated over 2,000 grievance arbitrations in the public and private sectors throughout New England. He has arbitrated over 400 municipal, teacher and state employee interest arbitration disputes. Larry has mediated over 1,000 collective bargaining contract negotiations between boards of education and bargaining units of certified teachers and/or administrators. – See more at:

So what happened in the year prior to 1979? Well, one of my partners kept documentation that.  And so, with the permission of Brian Clemow, we thought we’d relay a letter that Brian wrote about Larry way back in 1978.

Back then — when gas was just 63 cents a gallon and the Bee Gees were over the airwaves — Brian wrote a recommendation letter to the American Arbitration Association on behalf of Larry.  While he noted that as a representative of management, “Larry does not always view things in the same light as I view them”,  he suspected that union representatives would say the same thing.

Brian suggested that Larry would have a “high level of acceptability as an arbitrator in the eyes of both labor & management.”

Decades later, that prediction came to fruition time and again.  Larry became one of the area’s most well-regarded arbitrators.  I have no doubt that I speak for my colleagues and those around the state in saying that Larry will be sorely sorely missed.

It’s hard to read the Connecticut Law Tribune’s Editorial this week on “The Problem of Workplace Arbitration Clauses” with a straight face. It is dripping with sarcasm, filled with sweeping generalities, and reserves its greatest enmity for employers and the lawyers that represent them.

If the editorial is to be believed, employers and their lawyers apparently routinely use “deceptive” arbitration clauses — often pushed by a “third assistant personnel clerk” — that are hidden until “defense counsel raises the jury waiver or arbitration agreement from its dusty grave in the company’s personnel files.”

But perhaps I’m overreacting. So let’s review the editorial more closely and try to separate fact from fiction.  The editorial, in its full unedited version, is in italics. 

Over the last decade, employers have more and more often incorporated jury waiver or mandatory arbitration clauses into their employment arrangements to avoid the perceived horror of facing jury review of the way they treat their employees. These clauses are often presented in circumstances that many argue are deceptive, if not downright coercive.

On the first premise — that employers are using arbitration agreements more — the editorial doesn’t provide numbers. But I’ll tend to agree with the notion that the use of arbitration agreements are increasing. However, most employers are not concerned with “jury review.”  Just a handful of cases ever see a court room. Only 2.9 percent of federal employment cases even reach trial! The reasons for their use are complicated but part of it is that the cost of defending cases has skyrocketed. Indeed, from 2010 to 2013, the median time from filing to trial of a civil case in federal court in Connecticut has risen from 27.9 months to 35.7 months (nearly three years!).  Arbitration is much quicker and more cost effective for both sides.

As to the second premise — that the clauses are presented in circumstances that are “coercive” — I suppose that is up for debate. But it depends on your definition of “coercion”.  The legal definition of coercion typically means through “force” or “duress”.  The classic law school example of being forced to sign a contract at gunpoint is clearly “coercion.”  But an employee who wants a job and signs an agreement if he wants the job? In my view (and many courts), that is not “coercion.”

But let’s agree to disagree on this point and move on.

Despite the significance of an employee signing away a legal right that lies at the very base of our civil justice system, there is almost never any effort to explain to the employee what the waiver or arbitration agreement means or even that they are giving up any right at all. In fact, quite the reverse is the rule.

“Almost never”?  That statement barely deserves any credence.  There is no evidence to support this statement.  And additionally, what does it mean to “explain to the employee what the waiver” means? Typically, the provisions state that any claim out of an employee’s employment must be submitted to arbitration instead of the courts. Isn’t that enough? (Yes, say the courts.)

Regardless, employers have been advised to make sure that arbitration agreements are highlighted and not merely stuck in page 32 of a handbook.

And the editorial seems to ignore the positive attributes that alternative dispute resolution can bring to the employee as well.  Arbitration has a place in our “civil justice system” too.  (Indeed, in a 2012 editorial, the Law Tribune voiced its support for passage of the Uniform Arbitration Act. The drafters of that act noted that “the enforceability of arbitration agreements cannot be treated any differently from the enforcement of contracts generally under state contract law” and avoided specific references to employment agreements.)

Continue Reading Law Tribune’s Editorial on “Downright Coercive” Employment Arbitration Clauses Is Off-Base

As I’ve done in the past when I’ve been tied up with a trial or arbitration, today will bring a “Blast from the Past” — a post that you might have missed the first time around. Indeed, because this post is from July 2008, odds are that even if you saw it, it’ll still be fresh today.  The topic? Well, to keep with the arbitration theme, it’s on defining the issue for an arbitrator. 

Suppose you, as an employer, have union-backed employees. The union files a grievance on behalf of three employees alleging that they did not receive “premium” pay on three holidays. Because the dipsute cannot be resolved, the matter is sent to arbitration.

For some employers, defining the issue to be sent to arbitration may not seem that important; after all, the arbitrator will just hear evidence relating to the supposed issue and issue a decision consistent with that issue.

The Court Decision

But a recent case released by the Connecticut Supreme Court demonstrates the importance of crafting language that specifies what the exact issue is and what remedies the arbitrator will have available to it.

In Office of Labor Relations v. New England Health Care Employees Union, District 1199 (download here), the parties submitted the above factual scenario to an arbitrator with the following issues listed:

Did the [s]tate violate [a]rticle [twenty-one] of the [agreement] in the [s]tate’s application of holiday designation and payment of holiday pay to the [g]rievants? If so, what shall be the appropriate remedy, consistent with the [agreement]?

The arbtirator rendered an award in favor of the union finding that the state did indeed violate the portion of the collective bargaining agreement. In doing so, the arbtrator issued an decision that ordered that the employer had to change its holiday policy to give premium pay to all employees under the collective bargaining agreement on a going forward basis.

The state appealed, first to the trial court, and then ultimately to the Connecticut Supreme Court, on the grounds that the arbtirator exceeded his authority when issuing the “remedy” because the arbitrator’s decision applied to all employees, not the three employees on whose behalf the issue was grieved.

The Connecticut Supreme Court agreed with the state, finding that the question presented should be interpreted like any contract:

As we have stated previously herein, it is well settled that we read contracts of this nature in a way that will give effect to every provision and apply a common sense construction of the words used. Thus, the language of the submission and its internal structure indicate that the question of relief was intended to address the harm to the three individual grievants named in the first question.

In essence, the Supreme Court stated that it was common sense that the remedy could only address the three employees at issue; otherwise, the parties would have structured the request differently.

The Takeaway

So what’s the takeaway from this case from an employer perspective (and indeed from a union perspective)? Take time to craft the issues for arbitration in as specific a fashion as possible. While the Connecticut Supreme Court upheld the langauge that was used in this situation, the question presented to the arbitrator could have been more specific and the issue could have been avoided entirely.

Last week, a story caught my eye and the attention of some of my colleagues.  As reported first by Bloomberg BNA, IBM has stopped providing the comparison information that is typically required in separation agreements for older workers under the Older Workers Benefit Protection Act.

You may be wondering how that is possible.  Robin Shea, of Employment & Labor Insider beat me to the punch with a very good recap that I don’t think I can improve upon.  So I’ll cite two paragraphs below:

As you know, when an employer has a “group termination” — usually, a reduction in force, but a “group” can be as few as two people – it is required to disclose the job titles and ages of the individuals in the “decisional unit,” which means the working unit from which the decisions were made. If the employer doesn’t make the disclosures (and get ‘em right), then it can’t get a valid waiver of age discrimination claims under the federal Age Discrimination in Employment Act although the waiver may be valid in other respects …..

But how can IBM do this?  They aren’t requiring employees to give up their age discrimination claims, that’s how. They’re just requiring them to use arbitration instead of the court system. Which I think is legal, based on Gilmer v. Interstate/Johnson Lane, a Supreme Court decision from the 1990′s.

In essence, IBM is using a separation agreement with two sets of rules: For all claims except age discrimination, employees must release IBM. For age discrimination claims, IBM has said that employees do not have to release IBM but must take any such claims to arbitration.

Will it work? That remains to be seen. It has yet to be challenged in court or the EEOC.

But most employers are not IBM and do not have the resources to take this strategy.

So I suspect that many employers will simply follow the path of least resistance and provide the comparison information under the OWBPA.  If done right, then employers will get the benefit of an additional release without the hassle of arbitration or the added cost.   It’s worked for many employers for over 20 years and, IBM’s strategy notwithstanding, it’s probably not worth changing gears now.

There are many good free resources for additional background on this topic. One that I would suggest was produced by the ABA in 2008 and is still highly relevant today.

We’re just a few weeks away from my firm’s Public Sector legal update.  (If you haven’t signed up yet, do so now because it’s getting close to capacity!)

So it seems appropriate to bring up a sore point for some: Arbitration Decisions That Leave You Scratching Your Head.

Today, I’ve asked my colleagues Saranne Murray and Jarad Lucan to tackle a new decision that we can add to that category.

When finding cases to talk about, we like to pick ones that will have an impact on employers.

But truth be told, it’s kind of tough to say that about an arbitration decision.

Why? Because Connecticut courts have held that one arbitration award doesn’t have to be followed by other arbitrators.  (In legal terms, an award isn’t “precedent”.)

But we cannot resist sharing a case that has been making headlines for a while in Connecticut.

Remember the awful story of the young boy in Windsor Locks who was killed while he was riding his bicycle and was hit by the car of an off-duty police officer?

Well, in what some considered “guilt by association” and others thought was a molestation of process, the Windsor Locks Police Commission fired the officer’s father (Robert Koistinen), who was a Sergeant in the Department and the first one to arrive at the scene of the accident.

The Commission gave a bunch of reasons for Sergeant Koistinen’s firing including that he failed to exercise any control over the crime scene to avoid the destruction of evidence, and that he left the scene twice with his son in the back seat of his SUV.

Ultimately, the issue of the termination was decided through the arbitration process last week.

The Town faced a number of obstacles in the arbitration.

First, the firm hired by the Town to do an independent investigation after the accident found that Sergeant Koistinen’s actions “did not appear to produce any negative impact on the overall investigation.”  The report went on to state that “we also do not take issue with the action taken of putting Michael Koistinen, the operator, in his SUV vehicle.”

Second, Sergeant Koistinen had 34 years of unblemished service with the Town.

In the end, the arbitration panel (download the decision here) found that there was not “just cause” for the discharge.  Instead it reduced the termination to a one-year suspension.

While this may seem like a reasonable outcome to some, it is the kind of arbitration award that drives management lawyers and employers crazy.  It’s fair to ask:  “If what the person did was bad enough for a full year’s suspension, why wasn’t it enough to fire him?  And who are these arbitrators to decide what is best for our workplace?”

But these types of arbitration decisions are difficult to challenge.  Why? Because when the issue presented to the arbitrators is whether there was just cause for discharge of the employee, that is a so-called “unrestricted” issue meaning the judgment of the arbitrators is also “unrestricted”.

In other words, give the arbitrator a broad issue and the arbitrator will end up having broad discretion to decide it.

That doesn’t mean it’s not worth trying. It remains to be seen whether Windsor Locks will try to overcome these odds and ask a court to vacate the award.  Stay tuned, since they have to make that decision within 30 days.

Readers of this blog will no doubt notice (in posts here, here, here and here, for example) that my passion for employment law is matched only by my love of the New York Yankees.  (I leave to others to debate whether that is a character flaw; Red Sox fans need not chime in, however.)

The story over the weekend regarding the suspension of Alex Rodriguez from the New York Yankees after an arbitration decision hits both of those subjects.

(The arbitrator banned Rodriguez for the 2014 baseball season. On Monday, Rodriguez applied to a federal court for a stay of the decision and to have the decision overturned.)

Baseball arbitrations are typically viewed as a model of how an arbitration proceeding is supposed to work.  It is viewed overall as fair and equitable.

And, regardless of what you think about A-Rod, it is that arbitration process and procedure that will assuredly lead to his suspension being upheld.

Lester Munson – ESPN’s legal analyst — nails the analysis in my view:

Rodriguez has zero chance of ultimate success. He and his team of lawyers and public relations specialists will make dramatic claims that the arbitration hearing was unfair and that the evidence against him was deeply flawed. But after they have concluded their fulminations, Rodriguez and his team will end up facing the fact that the decision will not be reconsidered. …

Federal courts are reluctant to review and to second-guess arbitration awards. The rationale for arbitration is that it is a fast and accurate method for resolving disputes and avoids the delays and the expense of conventional litigation. The players and the owners agreed to arbitration for disputes decades ago — in the Marvin Miller era — and the arbitration process has produced significant victories for the players over the years. When the owners attempted to set aside adverse arbitration decisions on free agency, the courts refused to reconsider arbitration rulings. Like all others in all businesses that agree in contracts to submit disputes to arbitration, Rodriguez will learn that federal judges have no interest in reconsidering rulings by arbitrators.

In other words, the rules that apply to ordinary employment arbitrations will apply here.  And arbitrations decisions are rarely overturned nowadays.

Under the Federal Arbitration Act, arbitrations can typically be overturned only if:

(1) the award “was procured by corruption, fraud, or undue means”; (2) “there was evident partiality or corruption in the arbitrators”; (3) the arbitrators engaged in misbehavior by refusing to consider material evidence, refusing without cause to postpone a hearing, or other acts that prejudiced one of the litigants; or (4) the arbitrators “exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.”

(Of course, I’m simplifying this a bit for a blog post; there are other legal theories such as “manifest disregard” that have been used to overturn arbitration awards.)

In A-Rod’s case, it’s hard to see that the arbitrator made such a big mistakes in such a heavily arbitrated matter.   (The punishment is harsh, but not so harsh that it is viewed as a “shock” to others.) The arbitrator is well versed in procedures and substance.  Even if there are errors in the decision, it will still be upheld by the courts.

So, ignore the bluster from A-Rod’s attorneys about the strength of their case; whatever they may argue publicly, the appeal of his suspension is a very long shot — longer than the longest of A-Rod’s home runs.

For employers, the case should be a reminder that if you go down the arbitration route for your employees and their employment-related disputes, don’t expect the courts to get involved.  (Jon Hyman, of the Ohio Employer’s Law Blog, is not a big fan of mandatory arbitration provisions.)

For more on arbitration provisions in the employment context, you can find some of my earlier posts here, here and here.