A new lawsuit filed last Thursday in Connecticut state court by an employer alleges that the employer’s due process rights are being violated by “inherently conflicted and irreparably unfair proceedings” at the Commission on Human Rights and Opportunities (CHRO) — the state agency responsible for investigating and enforcing the state’s anti-discrimination laws. 

In the lawsuit, NERAC v. Krich, a copy of which can be downloaded here, the employer alleges (among other things) that that the administrative law judge (a human rights referee) is a client of the presenting attorney (Commission Counsel) in a federal court lawsuit that has similiar issues to the ones that the employer is facing. 

Because of that attorney-client relationship and other due process violations, the employer alleges that the five cases it has before the ALJ must be dismissed.

There are lots of details to this lawsuit that can’t be neatly summarized in one short blog post, but several allegations jump out upon a quick review:

  • First, for those employers, that think the CHRO hearing process is quick and cheap, the lawsuit shows that the employer in this case has been dealing with allegations for over five years and many weeks’ worth of hearings in five consolidated cases.
  • Moreover, the employer sought to recuse the human rights referee (Michele Mount) on the grounds that she had applied for an associate position at the employer’s lawfirm (Jackson Lewis LLP) and was denied a position from the employer’s specific counsel (Victoria Woodin Chavey) in January 2012.   Ms. Mount denied the recusal motion, the lawsuit alleges, on the ground that “‘administrative adjudicators”‘are not required to meet the same standards of impartiality as judges.”  
  • On the date that the motion for recusal was denied, the lawsuit also alleges that Ms. Mount “had reviewed the LinkedIn profile of a senior officer of [the employer] whose alleged remarks had been the subject of a motion in limine” that had been denied.  When the employer sought to preclude reliance on information outside the evidence admitted at the hearing, the referee also denied that motion as well.
  • The lawsuit alleges that the CHRO is also pursuing an agenda of allowing attorney’s fees or emotional distress damages despite “no statutory authority to award such damages pursuant to Conn. Gen. Stat. Sec. 46a-58(a).”  It cites to the City of Shelton lawsuit that I covered back in August 2012.

The employer sought an ex-parte injunction, which was denied, but the court did schedule a hearing on the motion shortly.  The CHRO — through the attorney general’s office — has not yet filed a response and just filed an appearance in the matter on Friday.

For employers, the lawsuit should be carefully watched.  Some employers have been suspicious of whether they are able to get a “fair shake” at the CHRO and this lawsuit will certainly bolster those suspicions.  Whether a court will ultimately intervene, however, is an entirely different question that is simply impossible to answer at this early stage. 

Regardless, if employers have any hearings at the CHRO where the agency is seeking emotional distress damages on behalf of a complainant, they should continue to monitor this case and the Shelton case previously mentioned.

(Disclosure: I previously worked with the employer’s counsel, Ms. Chavey, at our former firm, Day, Berry & Howard up to 2005 or so.  I have no involvement, however, in the above proceeding.)

NERAC v. CHRO

In a decision to be officially released tomorrow, the Connecticut Appellate Court has affirmed a dismissal of a breach of contract claim that alleged that the company failed to follow procedures that were outlined in a management training seminar. 

The case, Brule v. Nerac (download here), is important because it sets some limits to a theory that had been making the rounds the last few years that statements made during the course of employment could somehow change the at-will status of employees. 

So what was the case about? The court provides a brief summary:

The gravamen of these claims is that in 2003 Nerac provided a management training course, entitled ‘‘Managing Within the Law,’’ which was attended by certain Nerac managers…. The plaintiffs alleged that the training materials used in the course directed Nerac’s managers to provide progressive discipline, open communication and an opportunity for improvement prior to terminating their subordinates’ employment. By virtue of teaching the attendees the contents of this training course, the plaintiffs claimed, Nerac formed contractually binding obligations not to terminate its managing employees absent such discipline. …

Additionally, each plaintiff alleged that the individual defendants had committed negligence by terminating their employment. They claimed that the contracts of employment included a duty on the part of the individual defendants not to terminate their subordinates without affording progressive discipline and an opportunity to improve, and that the individual defendants had breached this duty by not providing these procedures prior to the plaintiffs’ terminations.

The employer had originally moved to strike the complaint on the grounds that the statements were too indefinite to form a contract and that there was no legal duty owed to the plaintiffs (and therefore, no negligence claim). The Superior Court had agreed. Upon appeal, the Appellate Court affirmed.

The court said the materials merely provided that progressive discipline was an option:

Our review of the course text reveals that the language at issue could not reasonably be construed as mandatory directives but instead was meant to inform the attendees on suggested managing practices. For example, in the section of the training materials entitled ‘‘At-will vs. Progressive Discipline,’’ the text allegedly stated: ‘‘[A]t- will employment . . . means that you do not have to
follow any specific procedures or processes before you terminate someone. You do not need to follow a specific ‘progressive discipline program.’ ’’ (Emphasis added.)

The materials went on to instruct the attendees that this language did not prohibit them from using progressive discipline as part of their management strategy; instead, it simply meant that they were ‘‘not bound by any formal rules or discipline.’’ This section is followed by a series of suggested principles that the managers should observe, including terminating employees without prior warning or discipline only when their conduct resulted in egregious company violations. The materials are devoid, however, of any language that demonstrates an intention to contractually bind the parties by way of directing the attendees to follow specified management procedures in a mandatory fashion.

What’s the takeaway for employers here? First, always have disclaimers that protect the at-will status of employers. Second, even in training program, words matter. Make sure that things cannot be taken out of context in a Powerpoint slide. And lastly, reconsider a progressive discipline policy — or at least the wording of it. 

I’ve previously talked about the issues with progressive discipline policies here.  If you still have them, it’s time to review them to ensure compliance with recent caselaw.