There’s an old(?) Bonnie Raitt song that my parents used to listen to when I was in college called “Let’s Give Them Something to Talk About”.  It’s about a crush, but the intro could be just as applicable to a new court decision. The lyrics start: “People are talkin’, talkin’ ’bout people, I hear them whisper, you won’t believe it.”

The short lesson? Don’t give your employees something to talk about — namely when a lawsuit is filed, caution is strongly advised in distributing information about that lawsuit.  Interested in more? My colleague, Gary Starr, shares more:

A recent Connecticut district court decision (EEOC v. Day & Zimmerman NPS) is a cautionary tale for in-house lawyers and human resource managers who want to tell employees about an investigation into discrimination claim brought by a former employee, and that investigation may involve those employees.

Following a disability discrimination charge, the EEOC sought contact information about other employees as well as information about their employment.

Rather than simply advise the employees that the EEOC was being provided with their job title, dates of employment, home address, and phone number, the company also described the accommodation that was requested and information that the former employee’s doctor had indicated that without the accommodation, the employee could not perform the essential functions of the job.

The EEOC viewed this as retaliation against the former employee by disclosing the information and interference with the rights of the employees receiving the letter as the agency thought it would discourage others from making claims in the future out of concern that their personal information would be shared widely.

The Company’s efforts to justify the letter were rejected by the court, which decided that a jury will have to decide whether the letter was retaliation and/or interference.

In communicating with potential witnesses in an agency investigation or lawsuit, employers must be clear on why the notice is being sent.  And employers should exercise caution on deciding what information is being shared.  What the decision suggests is that employees do not need to know what the medical condition another employee may have, what accommodation has been requested by that employee, or what recommendation a doctor has made about the employee.

Letting employees know that their contact information has been given to the EEOC and that they may be contacted would likely have have been sufficient and not opened up the employer to criticism.  And the decision does suggest that offering them the choice of having a lawyer present should not interfere with their rights.

In this instance, less information is better than more.

In any case, in the unlikely event you do need to inform employees about a lawsuit, check with your counsel about the details you should (and should not) be sending.

Labor Day has come and gone. Summer is over.  Can we all stop listening to Despacito now. (Please?)

But it’s time to look at a decision that came out during the dog days of summer that might have been overlooked.  A recent federal district court case (Noffsinger v. SSN Niantic Operating Co. LLC, download here) has answered the question of whether Connecticut’s medical marijuana laws were preempted by federal law.

The decision held that Connecticut employees who have received approval from the state agency to use medical marijuana outside of work cannot be fired just because they test positive for marijuana during a drug screening.  In doing so, the court held that employees and job applicants can sue based on a termination or a rescinded job offer.

As my colleague wrote for my firm’s alert:

Unlike the laws of other states permitting residents to be prescribed medical marijuana, Connecticut’s statute expressly makes it unlawful to refuse to hire or to discharge an employee solely because of the individual’s status as a qualifying patient, or for testing positive in a drug screening as a result of using medical marijuana within the protections of the statute. However, Connecticut does not protect such individuals if they are found to be using or are under the influence of medical marijuana during working hours.

The court analyzed federal drug laws and determined that they do not address the issue of employment and do not make it unlawful to employ a medical marijuana user. As a result, even though federal law prohibits possession or use of marijuana, those restrictions do not apply to someone properly using medical marijuana under state law.

The decision follows one from Massachusetts that we previously recapped here.

In prior posts, I’ve talked about the difficulties for employers trying to navigate this still-developing area of law.  Employers should proceed carefully under such circumstances and ensure compliance with the state’s medical marijuana laws that prohibits firing employees solely because of the individual’s status as a qualifying medical marijuana patient.

If an employee is under the influence of marijuana during working hours, that may afford employers the opportunity to take decisive employment action but other circumstances may not be so clear.

Consulting with your legal counsel on this changing area of law is advisable for the foreseeable future while more court decisions define the parameters of acceptable action.

gavelIn an decision of first impression in Connecticut, a federal court on Friday ruled that a transgender discrimination claim based on a failure to hire can proceed under both Title VII and Connecticut’s counterpart, CFEPA.

While the groundbreaking decision in Fabian v. Hospital of Central Connecticut (download here)  is sure to be the subject of discussion, as the court notes, Connecticut has — in the interim — passed a state law explicitly prohibiting discrimination on the basis of gender identity. Thus, for a few years now, Connecticut has already explicitly prohibited transgender discrimination under state law. (The case was based on facts that occurred before passage of the state’s anti-discrimination law.)

But the decision obviously goes further than that and takes up the logic advanced by the EEOC and others of late — namely that Title VII’s prohibition of discrimination “because of…sex” should be read to include transgender discrimination.  The court’s opinion should be mandatory reading not only in the state, but for practitioners nationwide faced with similar claims.

The decision addresses the notion of gender-stereotyping discrimination noting that such discrimination is sex discrimination “per se”.  In the court’s view, the Supreme Court’s decision years ago in Price Waterhouse has led to a “significant shift in the direction of decisions examining alleged discrimination on the basis of transgender identity”.

In doing so, the court notes the split in the circuits that has been developing, even though the Second Circuit hasn’t truly spoken yet on the issue:

In sum, discrimination on the basis of transgender identity is now recognized as discrimination “because of sex” in the Ninth Circuit (as Schwenk recognized the abrogation of Holloway), the Sixth Circuit (as recognized in Smith), and in the Eleventh Circuit (as recognized in Glenn); and the E.E.O.C. (in Macy) and has agreed with that authority.  Discrimination on the basis of transgender identity is regarded as not constituting discrimination “because of sex” in the Tenth Circuit (under Etsitty). The continued vitality the pre–Price Waterhouse decisions in the Seventh and Eighth Circuits (Ulane II & Sommers, respectively)  is unclear.

Judge Underhill, who penned the decision, then goes on to discuss the language of “because of…sex” found in the statute itself.  He notes that:

discrimination on the basis of gender stereotypes, or on the basis of being transgender, or intersex, or sexually indeterminate, constitutes  discrimination on the basis of the properties or characteristics typically manifested in sum as male and female — and that discrimination is literally discrimination “because of sex.”

On the basis of the plain language of the statute, and especially in light of the interpretation of that language evident in Price Waterhouse’s acknowledgement that gender-stereotyping discrimination is discrimination “because of sex,” I conclude that discrimination on the basis of transgender identity is cognizable under Title VII.

For employers in Connecticut, this decision is likely to be closely followed by other federal courts in Connecticut. Judge Underhill is well-regarded and until this decision gets reviewed by the Second Circuit, it’s hard to see how other judges in Connecticut will decline to follow it.

In other words, employers in Connecticut should be alert that a plaintiff may make a gender identity claim under Title VII in Connecticut.

But, as I noted at the top, this decision’s impact in Connecticut may be more muted because Connecticut has now explicitly protected gender identity in the state’s anti-discrimination statutes.

Nevertheless, the decision is an important one to read in the field of gender identity claims.

I’ve talked many times before about the importance of a well-drafted disclaimer in your employee handbook (here and here, for example).

This is not a new thing and in Connecticut dates back to an important case back in 1995 .

Without such disclaimers, employers can be subject to a breach of contract claim by your employees.

Yesterday, a federal judge in Connecticut was the latest to reinforce this message by allowing a breach of contract claim to proceed based on the employer allegedly failing to comply with its own anti-harassment policy, even though the federal legal claim of harassment was time-barred.

You can download the decision denying the employer’s motion for summary judgment on this issue in Mariani v. Costco Wholesale Corp. here.

One important note at the outset. This decision does not mean Costco is liable for a breach of contract; all the court decided is that the employee’s claim can proceed to a trial.  (In doing so, the court threw out many other claims of the employee.)

The facts on this issue seem straightforward. Costco seemingly has an employee handbook that it titles “Employee Agreement”.  It requires the employees to acknowledge receipt.  Costco conceded to the court that this “Agreement” could create a contractual obligation to its employees.

But, according to the court, Costco’s anti-harassment policy created an additional contractual responsibility that it did not disclaim. In other words,  the court said that while the employer was under no obligation to have tougher anti-harassment policies than state or federal law — having said it would abide by stronger language, it must follow that or face a breach of contract claim.

The court’s “money” quote is this:

The Employment Agreement does not contain any disclaimer language to the effect that its “super” anti-harassment provisions do not create legally enforceable protections beyond the protections of background law. Today’s corporate employers compete not only on grounds of their raw ability to make, deliver, and sell goods and services at a low or reasonable cost but also on grounds of their corporate self-image as “good” corporate citizens. They likewise compete on grounds of their ability to attract employees by means of promises of innovative management practices that foster dynamic workplaces that are comfortable and safe. This is not to fault the fact that Costco has adopted progressive anti-harassment policies but only to make clear that these policies, as framed without disclaimer, may give rise to legally independent and enforceable obligations for the benefit of employees that rely on them

How can Connecticut employers avoid this same result?

This case should be yet another reminder of the importance of a disclaimer in any company handbook that these policies.  Remind employees that no provision of the handbook creates an employment contract or any other obligation in regard to employment.  And consider using this language in the acknowledgment of receipt.

And, without stating the obvious, consider calling your employee handbook, well, a handbook instead of an “agreement”.  If you call it an agreement, a court isn’t going to disagree with you.

With the year coming to a close, this is the perfect time to have your handbook reviewed by an attorney.  Otherwise, you could be facing an employment law claim that you created yourself.

 

Costco Contract Claim

My colleague, Jarad Lucan, returns today with a primer on what it takes to establish a “prima facie” case of discrimination — the bare minimum to get the case to be considered by a court.  Today, we focus on the third element — the “adverse employment action”. What is that, you ask? Read on.

If an employee hopes to have any chance of succeeding on a discrimination claim, she must first be able to establish a prima facie case.

Generally, this means that an employee must establish that (1) she belongs to a protected class; (2) she was qualified for the position; (3) she was subjected to an adverse employment action; and (4) the adverse action took place under circumstances permitting an inference of discrimination.

Given that there are so many protected classes recognized by state and federal law (including race, gender, religion, gender identity, disability, sexual orientation, and veterans status), establishing the first prong is not particularly difficult.

In fact, in many cases (except for disability cases) an employer may concede an employee’s protected status.

Likewise, an employee can usually establish the second prong with ease. After all, employers generally do not hire individuals who are not qualified for the position.

Where an employee is likely to run into difficulty is with the fourth prong. Unless an employer chooses to openly flout the anti-discrimination laws, there is rarely obvious proof of a discriminatory action.

Now, for those of you keeping tally, you may notice that I skipped over the third prong. This was not accidental. When an employee is terminated, suspended or not promotes, there is no question that she suffered an adverse employment action.

But what about when the employee suffers some other action short of the foregoing examples? Are there certain actions an employer can take that do not amount to an adverse action as the term is understood in employment discrimination parlance?

Two recent cases, one from a Superior Court and one from the Connecticut District Court, answer that question in the affirmative.

In Powell v. Connecticut Department of Mental Health and Addiction Services, a registered nurse who was terminated after she failed to take sufficient disciplinary action against a staff member who had violated a work rule by sleeping on the job. On the day she was terminated, the nurse’s supervisor sent an e-mail to the staff notifying them of her termination. The nurse grieved her termination under the collective bargaining agreement and was reinstated.

The nurse also filed a discrimination claim not based on her termination, but based on the e-mail sent announcing her termination. According to the nurse, the employer had never announced a termination in such a manner and typically did so at a staff meeting.

In granting DMHAS’ motion for summary judgment the Superior Court indicated that the e-mail announcement as opposed to an announcement at a staff meeting was not an adverse employment action. Such an action is not a significant change in employment status.

In Avino v. Stop & Shop Supermarket Co., LLC, an employee was suspended without pay after he contacted several managers, despite instructions not to do so, having called one of them a “puppet” and another a “liar.” The employee, however, never served the suspension, instead taking advantage of vacation and sick days and an extended leave of absence before voluntarily retiring.

According to the District Court, a suspension that is never served is not an adverse employment action.  For support, the court also relied on a 2005 case out of Illinois that came to a similar conclusion.

For employers, defense of discrimination claims isn’t a one-size-fits-all proposition. Be sure to consult with your counsel about the best way to defend yourself even before a claim may be filed.

 

 

Management-side lawyers like myself like to joke that a former employee can sometimes sue any employer for any reason at any time.

It’s not true, of course, but at times it feels like there is no limit to the creativity of lawyers filing claims against employers.

One such tactic was recently rejected by the federal court in Connecticut.

In the complaint, the employee alleges that the employer failed to pay mandatory prevailing wages on public works projects and failed to pay him overtime.  While he alleged a violation of the Fair Labor Standards Act, he also alleged a violation of the Connecticut Unfair Trade Practices Act (CUTPA).

CUTPA, as noted by the federal court, is a remedial statute that states that no person shall engage in “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”

The court in Matysiak v. Spectrum Services Co. (download here) rejected the CUTPA claim here saying that the claims arise from the employer-employee relationship and thus fall outside the scope of the statute.

In the case at bar, allegations that Defendants”repeatedly certif[ied] that prevailing wages were being paid to all employees on public works projects [while they] instead retain[ed] the prevailing wage premiums as profit” could certainly suggest damages to competitors through undercutting, as well as to taxpayers and other individuals, and could conceivably be found to fall within the above-enumerated requirements of the Cigarette Rule. However, Defendants’ alleged practice of misreporting wages in bids for public works projects, which the Court takes as true for the purposes of adjudicating this Partial Motion to Dismiss, did not injure or cause damage to Plaintiff. Rather, Plaintiff’s alleged injury and damages stem from what Plaintiff describes as a lack of proper wage and salary payments, a strictly employment-related matter which underlay any wage misreporting in public works projects bids rather than resulted therefrom. Simply put, then, Defendants’ fraud and misrepresentation as described in the Complaint did not cause or result in Plaintiff’s damages.

For employers facing lawsuits, it is not enough to simply deny the allegations of a lawsuit. Rather, there may be legal reasons why the claims may fail.   Motions to dismiss like the one made in this case are still difficult to prevail on, but where there is legal justification for dismissing them, they still may be worthwhile.

A side note: Following the court’s ruling, the employer has since denied the remaining allegations overall and has filed a counterclaim against the employee. The employer’s claim? That it paid the employee $20,000 in “full and final settlement of his claims”.   The employer, however, alleges that this was merely an “oral contract.”    Employers should continue to get these types of agreements in writing.

At 47 pages, U.S. District Court Judge Hall’s decision last week in Costello v. Home Depot USA (download here) denying an employer’s motion for summary judgment in an overtime case, isn’t exactly a light read. 

More Saving, More Doing? Not so with litigation

She is, of course, not to blame. The case is complicated and has a “somewhat convoluted procedural history” because it was first filed in 2004 (!) and certified (and then decertified) as a collective action that alleged that Home Depot misclassified mechandising assistant store managers as exempt.

But after nine years of litigation, the Court was finally asked to decide whether Home Depot properly classified these two of these assistant store managers as exempt from overtime pay. 

The position of “assistant store managers” has been the source of lots of litigation over the last decade.  So it’s worth taking a look at what the court did.

Procedurally, it denied the motion for summary judgment saying that there were issues of material fact that precluded the granting of the motion. In other words, the case has to be decided by a fact-finder and jury, and not by the court itself on the papers.

Substantively, the crux of the case centers on whether the employee’s “primary duty” was “management of the enterprise”. 

As to one employee, the emplioyer argued that the employee:

(1) ensured his departments were properly staffed; (2) planned the work to be done in each department; (3) delegated work to his subordinates and followed up to make sure it was done in a timely and correct manner; (4) ensured his subordinates were trained, both for their current position and so they would be ready to advance to the next level; (5) ensured proper merchandise was ordered; (6) inspected his departments for safety violations; (7) resolved employee and customer complaints; (8) made recommendations regarding annual raises for his employees; (9) counseled associates on disciplinary issues; (10) recognized his subordinates for exceptional performance; and (11) devised strategies to improved department sales.

Sounds like it should be enough to win the case, right? The employee countered by saying that “while he performed many of these tasks, in many instances — particularly related to hiring, firing, and scheduling decisions — ultimate decision-making power and discretion lay elsewhere.”  The Court actually says that these facts do indeed lean in favor of the employer, not the employee.  

So why did the court still reject the employer’s motion?

Because taking other factors like whether the employee spent a substantial amount of time performing non-exempt work, and whether the exempt duties the employee performed were of relative importance to the job, led the court to the conclusion that there were genuine disputes as to what actually occurred.

No doubt the decision is frustrating to the employer (and other employers) who laid out a number of facts that even the court — at times — found persuasive.

But ultimately, the case is an important one for all employers to understand exactly what factors a court will look at in determining whether assistant store managers are exempt, and how important it is for employers to have its rationale locked in with supporting documents and affidavits.

These types of inquiries are very fact-specific. But even here, where the employer seemed to spell out lots of details to support its argument, sometimes, a lot of evidence isn’t good enough.

Costello v. Home Depot

Reading the headline, I’m sure a few of you rolled your eyes.  Dodd-Frank? Sarbanes-Oxley? Those statutes are seen as dull and tedious.  But a new federal court decision in Connecticut should start to change that, and it has implications for employers nationwide. 

The case is Kramer v. Trans-Lux, which you can download here. It addressed an employer’s motion to dismiss a claim of whistleblower retaliation under the Dodd-Frank Act. Ultimately, the court allowed the employee’s claim to proceed, noting that under the facts alleged, the employee has a viable claim.

What was the case about?  According to the applicable complaint (which the court assumed as true for purposes of deciding the motion), the plaintiff was a Vice-President of Human Resources with responsibility for ensuring that the company’s benefit plans were in compliance with applicable law.  He claimed that he expressed concern about the makeup and number of people on the pension plan committee and that he did not believe the company was adhering to its pension plan. 

He claimed that he contacted the audit committee and, importantly, claimed that he sent a letter to the SEC regarding the company’s failure to submit a 2009 amendment to the board of directors.  He then claimed that he was reprimanded and the subject of an investigation. Shortly thereafter, he was stripped of his responsibilities and later terminated. Continue Reading A New Whistleblower Retaliation Statute Grows Up: Dodd-Frank is the new Sarbanes-Oxley.

United States District Court Judge Mark Kravitz passed away this week.  He had been fighting valiantly against ALS (or Lou Gehrig’s Disease). But for those of us familiar with the disease, it has no cure and death is, for most, only a matter of time.

The Connecticut Law Tribune posted an article last night remembering him, adding that Connecticut lawyers were “saddened” to hear of his passing.

Sad is certain the right adjective. Judge Kravitz was known for his brilliant mind and even-handed demeanor.   He epitomized the best qualities we seek in jurists: fair, bright, and respectful. 

In the employment law arena, he crafted numerous opinions that delved into topics such as whether the Pregnancy Discrimination Act covered employees who were no longer pregnant (yes), and whether a company’s failure to fill a posted position could constitute discrimination (no). 

His death leaves the federal court bench shorthanded

A sad day indeed.     

 

In prior posts, I’ve talked about the fluctuating work week and how it can be a useful tool for employers in limited circumstances. 

You might need a calculator

Yesterday, a federal court in Connecticut had a very interesting ruling that addressed whether an employer — when faced with a suit for overtime by a group of convenience store employees (“clerks”, say the plaintiffs; “managers”, say the employer) —  was allowed to use a fluctuating work week method if a jury found a violation of the FLSA. You can download the case, Hasan v. GPM Investments, LLC here.

For background, the court indicated that there were two questions that were typically presented in overtime cases like this (for those who like following the legal procedure, the court ruled on the issue in addressing a motion to preclude evidence from trial).

[First, s]ometimes employers classify employees as exempt, pay them salaries, and then later learn a particular role did not qualify as an exempt position and workers should have been paid an extra premium for overtime. Such employees, however, have never been paid an hourly wage, and courts are left to reconstruct what their ―regular rate of pay should have been.  Second, the [FLSA] allows employers to pay staff in any manner they wish – for example, by salary, piece rate, or commission. 29 C.F.R. § 778.109. Congress crafted this permissive rule in order to accommodate the ―almost infinite variety of employment situations in a free market economy…. But when employers and employees argue over pay, courts must find ways to convert a less common compensation scheme into a standard hourly rate.

To answer the first question, the employer argued that the employees were paid for a fluctuating work week and that they were paid a fixed salary no matter how much time they spent on the job.  It argued that this was merely an instance of converting an “unusual pay scheme into an hourly rate”.  The court explained the different consequences in simple and stark terms if a factfinder was allowed to use a fluctuating work week to calculate damages.

By way of example, suppose an employee makes a weekly salary of 1200 dollars. A court is faced with the task of putting her in the position she might have been in absent a violation. If court divides her salary by the legal limit of 40 hours, it gets a regular rate of 30 dollars per hour. In a week when the employee worked 60 hours, she would receive time and half, or 45 dollars per hour, for that additional 20 hours of overtime. Thus, her total compensation should have totaled 2100 dollars (1200 dollars in base salary plus 900 dollars in overtime).

But what if a court is faced with a fluctuating work week, not a standard overtime violation? In that same 60-hour week, the worker’s 1200 dollar salary only compensated her at a rate of 20 dollars an hour, not 30. And, for the additional 20 hours she only wins an overtime supplement of 10 dollars – she has already gotten the base rate of 20 dollars for every hour she worked, including the extra hours, and was only deprived of the slight bump of an unpaid half- time premium. For that week, then, she would only receive two-thirds of the standard calculation or 1400 dollars (1200 dollars in base salary plus 200 dollars in an unpaid overtime premium).

The court rejected the employer’s use of a “fluctuating work week” because “in a misclassification case, the parties never agreed to an essential term of a fluctuating work week arrangement — that overtime would be paid at different rates depending on the number of hours worked per week…  To assume otherwise, coverts every salaried position into a position compensated at a fluctuating rate.” 

The court noted that there were other deficiencies with the employer’s argument as well.  “For a fluctuating work week arrangement to make sense to both parties, employees should offset their relative loss from a grueling work week far above forty hours with the benefit of full pay for weeks that clock-in at less than forty hours.”  Here, the evidence was that the employees never had a short week; indeed the job description stated that store managers “were expected to work a minimum of 52 hours per week”. 

The case is another illustration of the perils of trying to rely on a fluctuating work week.  While it can provide some benefit for employers, it must be done properly and must not be raised after the fact.  Here, the court rejected an employer’s attempt to use it where it was seen as an after-the-fact justification for the failure to pay overtime.