March 2024 Employment Law Update
EMPLOYMENT LAW UPDATE
March, 2024
by Bob Gregg
rgregg@boardmanclark.com
Boardman & Clark LLP
Wisconsin SHRM Legislative Sponsor
www.boardmanclark.com
TRENDS
Witness to Firing – Lots of Witnesses. Supervisors are often advised to have another management witness present during terminations to verify what occurred. A New Trend is for employees to have a witness – but without the knowledge of the managers. Employees are recording or taping their own discharge sessions or layoff meetings and then, angrily or proudly, posting it on social media – to hundreds of other people. When a termination or layoff is virtual, employees have even announced the “see me get fired event”, and have others tuned in to watch live. These sometimes go viral when the supervisor, HR manager or CEO said something particularly problematic, insensitive, flip, or just dumb, and get thousands of hits. They have even tanked the public image of some organizations. These statements also come back as evidence in employment cases. With more and more sophisticated technology, it is easier to do such recordings, and it is difficult to prevent them. So, employers should perhaps presume that discipline, discharge or layoff meetings are being recorded and act accordingly. Make sure all conversations are professional and appropriate. Script before the meeting to ensure that the message does not include problematic content. Stick to the script. Perhaps review the script with Human Resources prior to the meeting.
LITIGATION
Strangest Case of the Month
Nurse Came for New Employee Orientation - Got Strip Searched. A nurse was hired to work at a County Regional Jail Center. She showed up for her first day of work wearing medical scrubs and asked directions to New Employee-Nursing Orientation. She was directed to an entry which also served for inmates returning from work-release or other off-premises purposes. The nurse stated that she was there for New Employee Orientation and was directed to take a seat in a waiting area. Returning inmates are supposed to first be verified and have their files checked and then be strip searched as part of the return procedure. No such verification was done. An officer came into the waiting area, told the nurse to follow into another room, and proceeded to conduct a pat down and strip search. The nurse objected, stating that she was “here as a nurse”. The officer responded that it did not matter what she did for a living, “All kinds of people end up in jail,” and proceeded with the strip search. The error was then discovered before the nurse was actually locked up. The nurse filed suit against the county and the officers involved for violation of her Fourth Amendment Constitutional unreasonable search and seizure rights. The officers claimed “qualified immunity” from suit, because the incident was a mistake rather than an intentional violation. This immunity concept applies to public employees who commit errors but “could reasonably believe their actions were lawful.” The court denied the qualified immunity defense, ruling that the search was “objectively unreasonable,” there were such skipped procedures, and failures in the process to have departed from the scope of “reasonableness”. Amisi v. Brooks, et al (4th Cir., 2024)
U.S. Supreme Court
Whistleblower Standard. In Murray v. UBS Securities (2/8/2024), the U.S. Supreme Court clarified the burden of proof for whistleblower retaliation cases under the Sarbanes-Oxley Act (SOX). Mr. Murray’s position was to independently certify the accuracy of financial reports. However, he alleges, he was told to falsify his reports to be more positive for the companies, which the USB stock trading advisors wished to favor. This could constitute fraud upon the stockholders/investors. When he reported this to his supervisors and declined to alter the reports, Mr. Murray was removed from his position and then terminated, despite having just received an excellent performance evaluation. He filed a SOX Whistleblower case. The issue before the Supreme Court was whether he had to prove the company intentionally fired him for his actions – i.e., produce direct evidence that managers actually discussed his reports of SOX violations and expressed these as the reasons for deciding the discharge. OR, could a Whistleblower case require the company to have to refute the general allegations of retaliation by presenting valid non-retaliatory reasons for the discharge. thus, placing a greater burden of proof upon the company and a lesser one on the plaintiff? If the plaintiff can then cast suspicion upon the company’s version (such as showing an excellent performance evaluation just before his discharge), then he can win without having any actual direct evidence; a smoking gun, of intent. The Supreme Court ruled that a plaintiff does not have to show direct evidence of intent. Therefore, the employer now has a greater burden of proof to back up discharge decisions with valid evidence.
Personal Liability
Managers Receive Prison Sentence for Accident Cover-Up. A Wisconsin Federal Court sentenced a Vice President of Operations, Food Safety Manager and the Environmental Manager of Dideon Milling, Inc. to two years each in prison plus additional supervision afterward for their role in a multiple fatality plant explosion and cover-up. Three additional shift supervisors were convicted of felonies for falsifying safety logs prior to the explosion and sentenced to probation and fined. A fourth supervisor awaits sentencing. Last year the company pled guilty to falsifying safety documents and paid $10.25 million in restitution and another $1 million fine (see Employment Law Update December 2023).
Off-Duty Behavior
Off-Duty Volunteer Social Committee Role Can Warrant Discharge. A Southwest Airline customer service agent decided to volunteer to be on an independent social committee to organize off-duty social events for other employees. The events were funded by employees’ voluntary contributions. She became committee treasurer and was thereafter found to have spent committee funds for personal purposes and kept the expense records in a way which obscured this personal spending. The company then fired her. The employee challenged this under state law, claiming her volunteer off-duty activities were separate from her paid CSA job, and anything relating to her job. The funds were from co-workers, not Southwest, so it could not be considered as any sort of a job-related violation. The court disagreed. The funds were contributed to the committee by co-workers because it was organized and promoted under the company’s auspices, for the benefit of Southwest workers, and often on Southwest facilities. Thus, the company had an interest in ensuring the funds were managed and spent appropriately. So, the committee role was sufficiently connected to the employment to warrant the discharge. Wright v. Southwest Airlines, Inc. (Neb. S. Ct., 2024)
Discrimination
Age
Operating With Rusty Medical Instruments. A city run clinic fired a doctor of podiatry when it discovered she was using rusty medical instruments on patients. She was discharged for “conduct unbecoming a public employee.” The podiatrist filed an age discrimination case against the city, and a state law claim against the Medical Director, personally, alleging her actions did not warrant discharge, and were a pretext for age discrimination. However, she could not produce any direct evidence of age bias or unequal treatment. The court found that use of rusty medical implements on patients was a legitimate non-discriminatory reason for a discharge, and the podiatrist could not show that it was pretext. Bennett v. City of Newark (D. NJ, 2024)
Nickname Was Not Enough to Show Age Discrimination. A bank Vice President alleged that she was discharged due to age. She was the company’s second oldest Chicago Branch employee. She sued under the Age Discrimination in Employment Act (ADEA). Among her allegations was that her younger Branch Manager frequently referred to her as “Jiejie”, which the employee claimed meant “older sister” in Chinese. She alleged this helped create a hostile environment “permeated with discriminating intimidation ridicule and insult”. The VP also alleged unequal work assignments and unequal standards were applied to her. The court did not find age discrimination. The evidence did not support the allegation of unequal standards or assignments. The nickname was not severe or overtly hostile in nature, nor was it sufficient to create the hostile or “permeated” environment which was alleged. Zhang v. Bank of China (N.D. IL, 2024). Be Aware that nicknames can create valid harassment cases. This case of a non-overt, non-“severe” nickname, can be distinguished from another recent case in which Hispanic workers called a Black co-worker “Memin”, because he did not understand that its meaning was a racial insult. A court ruled that nickname was overt, “severely offensive,” pervasive and established a clear case of harassment. Batiste v. City of Richmond (N.D. Cal. 2023). Employers would be wise to quickly stop the use of any nicknames which can have a sexual, racial, ethnic, religious, age, etc. related connotation. Even if not “severe or pervasive” they routinely come back to haunt you later as allegations of having allowed a discriminatory environment. Also, even if the comment or nickname is intended to be a term of “respect,” (“older sister”) it may later be reinterpreted in a case; and one person’s or culture’s version of respectfulness or “humor” is often seen as disrespectful or rude by another. [For more information on this area, request the article, “It Was Just a Joke” by Boardman Clark LLP or the webinar “Is It Humor or Harassment?”]
Religion
Beard Policy Costs $70,000. Blackwell Security Services paid $70,000 to settle a religious discrimination charge. A Muslim employee was ordered to shave his beard because the company had adopted a Clean Shaven Policy. He stated that the beard was a religious requirement for him and requested accommodation. This was denied. He filed a Title VII complaint and the EEOC filed suit on his behalf claiming the company had shown no evidence of any undue hardship in allowing the beard: no cost, no safety reason, no client complaints, no effect on performance, nothing. Thus, the company illegally denied the accommodation. The company elected to settle the case. EEOC v. Blackwell Security Services (N.D. IL, 2024). Be aware that the standard on undue hardship to deny a religious accommodation has been greatly increased since the U.S. Supreme Court Groff v. DeJoy decision in June 2023. Also, a number of states have adopted special hairstyle and beard anti-discrimination laws, giving additional protections to employees.
Disability
Employer Can Determine What Accommodation Is “Reasonable”. A delivery driver sued his employer under the ADA for failure to accommodate his Tourette Syndrome. The condition caused him to involuntarily utter racists terms and profanities. This led to ongoing customer complaints about the offensive language. The company required “excellent customer service,” and this was creating an offensive situation for customers. The driver was removed from his route and transferred to a non-customer interaction job in a warehouse. He quit, claiming the transfer constituted a constructive discharge. He claimed he should have instead been given another delivery route which did not require customer interaction. The court found that excellent customer service was an essential function for a delivery driver, and the Tourette Syndrome behavior rendered him unable to meet this requirement. The transfer to an alternate job is a form of reasonable accommodation. There were no non-customer interaction delivery routes, and an employer is not required to create a special position as an accommodation. The ADA permits the employer to select a reasonable alternative position, whether or not the employee finds it most desirable. The employee’s dislike of the warehouse job was not enough for a constructive discharge. He presented no evidence that the work was difficult or created any intolerable working conditions. The employer accommodation was adequate. Cooper v. Dolgencorp, LLC (6th Cir, 2024)
Sex
Equal Pay Act Does Not Require Intent. There are adverse employment practices which do not require an intent to discriminate to violate the law. A variety of hiring, testing, screening and evaluation practices have been found to have a totally unintentional effect of denying opportunities to large numbers of people, having an “adverse impact", under Title VII, the ADA or ADEA, or just be “per se” discrimination. A medical company recently found the Equal Pay Act is one such law. A hospital psychologist learned that she was paid significantly lower than the male psychologists for the same work. When the hospital did not address her concern about this, she brought an Equal Pay Act case. The hospital defended by claiming it did not intentionally set her pay lower, and it did not do so because of her gender. It quickly found this defense does not fly. EPA cases simply look at the pay inequality, and the intent is immaterial. Equal work deserves equal pay. A valid EPA defense to different pay can be a valid non-gender factor such as seniority, special skills, or differences in performance levels. A defense which is routinely rejected is “we paid them based on what they got in previous employment.” This does not change the basic fact of unequal pay for the same work, and in fact, may simply incorporate and perpetuate pay discrimination of the prior employers and have adverse impact on women or certain minority groups which are generally underpaid. In this case, the court found a violation of the law, awarded backpay and awarded triple damages due to the hospital’s failure to correct the disparity. Mundell v. Acadia Hospital Corp. (1st Cir., 2024)
Fair Labor Standards Act
A Lot of Little Things Add Up to $3.5 Million Payout. Sometimes just a couple of minutes can create a Fair Labor Standards Act issue. A couple of extra minutes logging in or checking out per day add up to hours over time, and thus overtime pay. Just requiring or allowing people to clock in a couple of minutes early for lunch can turn the whole meal break into paid time. In Vasquez, et al v. Leprino Foods Co. (E.D. Cal, 2024) workers alleged a variety of small on-call meal break, clocking in or out violations that impacted virtually all hourly workers. Even though each sort of issue did not affect all employees, almost all were subject to one or more. The company has settled the case and will pay $3.5 million to the impacted employees. For more information on cases in which little bits of time add-up to large liability and the Dept. of Labor’s growing focus on these issues, see the article De Minimis – No Small Matter by Boardman Clark LLP.
Patients/Clients May Be Employees Due Wages. A residential drug rehabilitation center required participants to engage in a work therapy program as part of their treatment. The rehab center had contracts with businesses where the patients were placed, doing standard factory or maintenance work. The business paid the rehab center, which used the funds to pay for the expenses of housing, feeding, and counseling the patients. The patients, however, felt they should receive pay for their work and filed a Fair Labor Standards Act case for wages. The court found sufficient grounds to allow the case to proceed as a class action. The patients did jobs for companies in interstate commerce; their work directly contributed to the commerce and profits of the companies. The jobs were not simply training or assisted-work therapy, they were of a standard job nature. The rehab center acted the same as a temporary staffing agency. In the trial, the rehab center will have the opportunity to show the work program was actually “treatment” and therapeutic and that the patients’ “therapeutic” value from the placements was more than just bringing money for the center and that the costs of housing, feeding and counseling the patients significantly outweighed the value of the funds received from placing them into work assignments. Under the FLSA standards this can be a difficult burden of proof. Klick et al v. Cenikor Foundation (5th Cir., 2024) This case is a word of caution for non-profit organizations which provide rehabilitation or development programs which include work skill components. These programs can pose a fine line between “client service” and the clients being entitled to wages for “work”.
OTHER RECENT ARTICLES
These additional, recent articles can be found at BoardmanClark.com in the Labor & Employment section:
Civil or Municipal Offenses Not Covered by WFEA Protections: https://www.boardmanclark.com/publications/hr-heads-up/civil-or-municipal-offenses-not-covered-by-wfea-protections
By Storm B. Larson, Douglas E. Witte, and Brian P. Goodman
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