FMLA Preemptive Strike, Quirky Question # 83
Quirky Question # 83:
We have an employee who has only been with our firm for about 11 months. He recently requested FMLA leave. Although we generally like the guy and think he does good work, we have had problems in the past once employees start exercising their rights under the FMLA. Frankly, they just are not as dependable. Especially in the current economy, where all of our employees need to pull their weight, an unreliable employee presents a serious problem.
We checked into the employee’s status. Given that he has not been with us for one year, we were pleased to discover that he is not eligible for FMLA coverage. Therefore, we plan to fire him before he becomes eligible and passes that 12-month threshold. This may seem a bit cold but with the unemployment rate rising quickly, it’s an employer’s market with respect to hiring. We’re confident we can find a comparably qualified employee reasonably quickly. Any reason not to proceed as I just outlined?
Roy’s Analysis:
Your question is very timely, as this issue has recently received attention from a number of courts. Moreover, these decisions demonstrate that your plan to terminate your employee just before he qualifies for the benefits of the Family and Medical Leave Act (FMLA) is ill advised.
As you know, the FMLA provides eligible employees with the right to take 12 weeks of unpaid leave under certain circumstances. The principal eligibility requirements are that the employee has worked 1250 hours during the preceding 12-month period and has been employed with your firm for at least 12 months. (I previously have written about the fact that the 12 months of employment do not have to be consecutive, and, indeed, can be separated by multi-year gaps. For those earlier analyses, go to the “View By Topic” bar to the left and click on ‘Family and Medical Leave Act.’ That will enable you to access the earlier analyses.)
With respect to your inquiry, I will assume that the employee in question has worked more than 1250 hours during the 11 months he has been employed with your company. (Forty hours per week times 48 weeks would put him well above the 1250 minimum.) I also will assume that this employee had never worked with your company previously, so he had no prior period of employment to combine with the 11 months he has just worked. Consequently, as you have concluded, it would appear that your employee is one month shy of FMLA eligibility.
This leads me to a question not revealed by your inquiry. Is the employee seeking FMLA leave immediately? Your question states, “He recently requested FMLA leave.” If you are suggesting that he sought FMLA leave, to start right away, your conclusion would be correct – the employee would not eligible for FMLA leave. Moreover, in this context, it would be difficult for the employee to make an argument that he was retaliated against for asserting a right for which he was otherwise not eligible.
If, however, your employee was complying with the notification requirements imposed on employees (“the employee shall provide the employer with not less than 30 days’ notice, before the date of the leave is to begin, of the employee’s intention to take leave . . .”, 29 U.S.C. § 2612(e)(1)), a different outcome is likely. In this context, the employee is fulfilling his statutory obligation to his employer by providing the notice required by the statute. Moreover, at the time the leave would commence, he will have worked for your firm for more than 12 months, making him FMLA eligible. When this factual context has been examined by the courts, the employee has been found to qualify for FMLA leave.
For example, in the recent case of Reynolds vs. Inter-Industry Conference on Auto Collision Repair (a/k/a I-CAR), No. 08-CV 2115 (N.D. Ill. January 22, 2009), the employee, Reynolds, had worked for his employer just nine days shy of one full year. Due to serious health problems of Reynolds’ finance and their unborn child, Reynolds requested and was given eight days off. Reynolds’ son was born prematurely and the doctors advised Reynolds and his finance that the child would need to remain in neonatal intensive care for three months. Consequently, Reynolds requested FMLA leave to take care of his son after he came out of intensive care, at which he would have been employed with I-CAR for approximately 15 months.
I-CAR responded by terminating Reynolds’ employment in the nine-day window before he reached his first anniversary date. Reynolds sued I-CAR for violating the FMLA and other claims. In response, I-CAR moved to dismiss Reynolds’ FMLA claim in a Rule 12(b)(6) Motion, arguing that because he had not worked for the company one full year, his FMLA claim should be dismissed.
The federal court rejected the employer’s effort to dismiss Reynolds’ FMLA claim. The court’s analysis started with the FMLA’s statutory purpose – to provide eligible employees with 12 weeks of leave in connection with the birth or adoption of a child; to care for a child, spouse, or parent with a serious health condition; or because of a serious health condition that makes the employee unable to perform the functions of the employee’s position. Clearly, Reynolds’ request for time off to care for his newborn fell squarely within the defined purposes of the statute.
Next, the court looked at the notification obligations that are imposed on the employee. Since employees are, in most circumstances, expected to notify their employers 30 days in advance of the desired leave, the court found that “it would be illogical to interpret the notice requirement in a way that requires employees to disclose requests for leave which would, in turn, expose them to retaliation, or interference, for which they have no remedy.”
The federal court also found support for its analysis in the Department of Labor regulations. As provided in the pertinent regulations, “[t]he determination of whether an employee has worked for the employer for at least 1250 hours in the past 12 months and has been employed by the employer for a total of at least 12 months must be made as of the date the FMLA leave is to start.” 29 C.F.R. § 825.110(d) (emphasis in original).
Lastly, the court looked at the public policies underlying the FMLA, the balancing of the demands of the workplace with the needs of the families and the effort to provide employees the opportunity to take reasonable leave for medical reasons. As the court stressed, “An employer has no legitimate interest in being able to terminate an eleventh month employee for simply requesting foreseeable leave for which he is eligible, when that employer would be clearly prohibited from making that same decision a month later – or, in Plaintiff’s case, a mere nine days later. If the protections of the FMLA are to serve the Act’s purpose, they must be read to cover scenarios such as Plaintiff’s.”
Apparently sensitive to potential criticisms of its analysis, the court concluded, “[t]he Court’s decision today simply means that under the FMLA, an employer may not terminate an employee who has worked less than twelve months for requesting foreseeable future leave that the employee will be eligible for and entitled to at the time the leave is to begin.” The court also cited to a number of decisions from other federal courts that had reached the same conclusion.
In sum, your tentative plan to make a preemptive decision to terminate your employee of 11 months because he has requested FMLA leave could lead to litigation that will be difficult for your company to win. If your employee would otherwise be eligible for the FMLA leave at the time such leave would begin, your employee likely would be covered by the FMLA.
The Reynolds decision does not address the more problematic scenarios that seemingly would be encompassed by the logic of the court’s analysis. For example, what if, instead of 9 days before Reynolds reached his first year employment anniversary, he announced his need for FMLA leave 9 months before the end of his first year of employment. Would that advance “notification” preclude adverse action by the employer based on the employee’s desire for FMLA leave? Would the same analysis apply to the 1250 hours requirement (i.e., an employee requests FMLA leave at a point when he only has had 1000 hours)? It will take some time before these other issues reach, and are resolved by, the courts.
Finally, as I’ve expressed in other Blog analyses, there are legal issues for you to consider and there are other, practical, employee relations issues for you to consider. I’m not sure I buy two of the premises of your question. First, you state that the employee who has requested the leave is someone liked by your Company who does quality work. Nevertheless, you suggest that you are willing to jetison him because you believe he could be replaced relatively easily. I’m not convinced. If you have an employee who is exceeding your performance expectations, are you really ready to end the employment relationship with him? Keep in mind that this is an employee who presumably understands your company, understands his job responsibilities and gets along well with his co-workers. Any new employee will have to be trained (at some cost to your firm), plus you have no guarantee that this individual will perform as satisfactorily as the employee you are planning to fire.
Second, you suggest that employees who request FMLA leave are not as “dependable” as other employees. Again, I’m not convinced. Moreover, I think you are underestimating the loyalty you can inspire by supporting your employees’ requests for leave. This is true not only for the specific recipient of the accommodated schedule but for other employees who will observe how this employee is being treated. Consider the converse as well – how would your other employees feel if you terminated a well liked colleague simply because he requested FMLA leave for which he was not quite eligible? I doubt this approach will endear your Company to your workforce. In my view, both for legal and practical reasons, you should provide your employee the leave he is seeking.
Sexual Harassment, Ancient Info, Quirky Question # 82
Quirky Question # 82:
I am the HR director for a mid-sized company. A number of years ago, one of our employees complained about sexual harassment from a senior executive in the Company. We investigated and found corroboration for a number of her allegations. The investigation also revealed that other employees had been mistreated by the executive.
We addressed the situation at that time, though we did not terminate the executive. Nevertheless, I thought the issues were behind us. Now, the same employee has filed a new complaint against the same executive. She’s dragging in all of the issues that arose more than five years ago. Can she do that? I’m not a lawyer but I thought referencing these kinds of ancient problems was barred by the statute of limitations? The complaining employee also has stated somewhat vaguely that she also may assert “common law claims.’ (Sounds to me like she has lawyered up.) What might these claims be? Your guidance is appreciated.
Roy’s Analysis:
Your question implicates a number of different issues. You are correct that the statutes of limitation for statutory discrimination claims are relatively short. The federal statute of limitation under Title VII, for example, is 300 days (approximately 10 months). In the few states without a parallel state agency, the statute of limitations is even shorter (180 days, or approximately 6 months). In Minnesota, where my practice is based, the statute of limitations under the Minnesota Human Rights Act is one year. So, your initial instinct that employees should not be able to bring lawsuits based on conduct that occurred long ago has some legitimacy.
In the legal arena, however, as you undoubtedly know, you have to dig a bit deeper to test your first impressions. Although you would have a strong statute of limitations defense if the conduct complained of had occurred five years ago and there had been no problems since, when wrongful conduct (assuming there was some) has occurred within the statutorily protected time period, the statute of limitations defense may not be available to you. In this context, the question of whether the complaining employee may introduce evidence of the prior problems (even those that occurred five years ago) implicates both statute of limitations issues and evidentiary issues. Each are addressed below.
Statute of Limitations
In an interesting, and some respects unusual, case from the Washington Court of Appeals, Jane Doe III v. State of Washington, et al., No. 35130-7-II, (Wash. Ct. App., April 8, 2008) (unpublished), the court examined some of the issues you have raised. The plaintiff in that lawsuit, Jackie Delgado, brought a 7-count complaint based on statutory and common law claims, including hostile work environment sexual harassment and sex discrimination. The trial court dismissed the plaintiff’s lawsuit on statute of limitations grounds, noting that plaintiff’s lawsuit, filed in 2005, was based on conduct occurring 8 years earlier. The court reached this conclusion despite the fact that some of the interaction between Delgado and Green (the alleged harasser) had occurred in 2003. The Washington Court of Appeals reversed the grant of summary judgment on several of Delgado’s claims, including her statutory claims for sexual harassment and sex discrimination.
The appellate court began its analysis by noting that the Washington Law Against Discrimination (WLAD) did not have a statute of limitations. Therefore, under Washington’s general statute of limitations for personal injury claims, a plaintiff must assert discrimination claims within three years. (This highlights a practice pointer I have emphasized in prior Blog analyses – since so much of employment law is state-dependent, it is critical for you to evaluate the laws of the states where the dispute arises. Washington’s 3-year statute of limitations for discrimination claims is atypical.)
The intermediate appellate court then noted that for discrete acts of discrimination (termination, failure to promote, denial of transfer, refusal to hire, etc.), the statute of limitations begins to run “from the date of the alleged wrongful act.” The court noted that “if the statute of limitations period has run, a lawsuit for that discrete act is barred, even if that act relates to others timely alleged in the charges filed.”
Critically, however, the court stressed that hostile work environment claims are “different in kind from discrete acts.” The court observed that a hostile environment claim is composed of a series of separate acts that collectively constitute one unlawful employment practice. Therefore, the court found it did not matter that some of the alleged acts fell outside the statute of limitations period, because hostile environment claims are based on “the cumulative effect of individual acts.”
Defendants, however, argued that the 8-year gap between 1994 (when some of the most outrageous conduct ended) and 2002 (when other conduct occurred), demonstrated that the sexual harassment was not part of the same hostile work environment. The appellate court rejected this argument. The court noted that Delgado had been harassed by Green from 1989 through 1994, that Green had threatened to kill her on two occasions between 1989 and 2002, and that she had been harassed in 2002. Interestingly, the court also focused on the impact the sexual harassment had had on Delgado – she had cut her hair, intentionally gained a great deal of weight, dressed poorly, all with intention of making herself unattractive to Green, and avoided large portions of the hospital grounds where she might encounter Green. During the period where she made herself physically unattractive, she was not subjected to sexual harassment.
Finding that Delgado’s claims were not time time-barred, the court noted that the harassment involved the same victim, the same relationship, and the same type of harassment. Moreover, even though the harassment ceased for a lengthy period, the court found that Green continued to “control” Delgado, affecting her physical appearance and her movement at her place of employment. The court observed, “In other words, there is a genuine issue of material fact as to whether Delgado continued to bear the burden of Green’s harassment between 1994 and 1999. There is a genuine issue of material fact as to whether Green’s acts from 1989 to 2002 are part of the same actionable hostile work environment practice.”
What makes this case unusual in my opinion is that the court looked at the impact or effect on the victim in evaluating whether her claims were time-barred. Because she clearly was affected in the period following the cessation of the harassment (cessation attributable to the actions she took to make herself less attractive), the court considered the interim period in determining the ongoing nature of the hostile environment claim. As noted, the court observed, whether Delgado continued to bear the burden affected the limitations calculus. The principle articulated by the court in the Washington case has the potential for significantly altering the way in which limitations periods are determined in hostile environment cases, at least in Washington. If limitations periods are extended to encompass the period in which an employee continues to “bear the burden” of prior harassment, the limitations period could be open-ended. The unanswered question from the case is whether the same decision would have been reached if there had been no subsequent similar acts in 2002. Conceivably, an employee could continue to “bear the burden” of prior harassment look after the harassment ended, regardless of whether the harassment resumed at some point in the future.
A cynical view of the appellate court’s decision is simply the old axiom – bad facts make bad law. There certainly were some terrible facts in the case and it could be that the court was unwilling to leave this particular plaintiff without a remedy. Whether the same analysis will be applied to less egregious contexts remains to be seen.
Evidentiary Issues:
Even if a court did not reach the conclusion that the statute of limitations should reach back eight years, the harasser’s earlier conduct still could become part of any subsequent litigation your employee may institute, based simply on evidentiary considerations.
There are two related questions you should consider when evaluating the evidentiary issue. First, will the evidence be “discoverable” – in other words, will the plaintiff’s lawyer be permitted to explore these past events in interrogatories (written questions the company will have to respond to under oath), document requests, or depositions (under oath question and answer inquiries). The standard for the “discovery” of information in these mechanisms is very broad: is the information directly relevant or “reasonably calculated to lead to the discovery of admissible evidence.” Courts generally are unreceptive to objections to inquiries during the discovery phase of litigation based on an argument of relevancy. Thus, unless you could establish that the plaintiff was seeking the information simply to harass or embarrass your executive (a tough legal hurdle to clear), most of the information pertaining to the past events will be fair game during discovery.
Second, courts have to assess whether information legitimately explored and elicited during the discovery phase of a lawsuit is “admissible” during the judicial proceeding. Here, courts examine whether the information elicited is relevant and whether, even if so, the information’s relevancy is outweighed by the risk of unfair prejudice. This balance is set forth in Rule 403 of the Federal Rules of Evidence, which states: “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.”
Applying this construct to your situation would lead to the following types of inquiries. What conduct occurred five years ago and is it the same as, similar to, or different from the conduct that recently occurred? What were the executive’s motivations then, and what were his motivations now? Did the executive deny engaging in the conduct which the complaining employee brought to the company’s attention? Did the executive deny engaging in the conduct revealed by your investigation that implicated his interaction with other employees? Has he denied the conduct the employee complained of recently? Did the executive’s response (then and now) implicate issues regarding his veracity?
Depending on how these and other questions are resolved, the information pertaining to his conduct many years ago may or may not be admissible. If the behavior was the same, if his motivations appeared to be the same, if he lied about his conduct then and/or now, a court may find that this evidence should be admitted. If, in contrast, the conduct complained of five years ago was radically different and the executive fully acknowledged the conduct (thereby removing issues regarding his truthfulness from the equation), a court might reach the opposite result.
Another way in which these issues could play out in your lawsuit relates to the adequacy of your company’s response. In your question, you note that “other employees had been mistreated by the executive” but that your company did not fire him. You do not identify the ramifications (if any) for the executive. Did the company discipline him? Suspend him? Demote him? Freeze or reduce his compensation? Your company’s response to the prior problem also could influence the court’s decision on the admissibility of the evidence of these earlier problems, depending in part on the non-statutory claims asserted by the complaining employee. For example, if she alleged that the company was negligent in retaining this executive, or negligent in supervising his conduct since these earlier problems arose (common law claims recognized in many states), the relevancy of the prior conduct becomes more direct.
Common Law Claims:
You also asked about the types of common law claims your employee may assert. As you may know, many common law claims have longer statutes of limitations than do the statutory claims. Depending on the state and the nature of the claim involved, the statutes of limitations may range from two years (for intentional torts) to six years for negligence theories. In a harassment case, the common law claims could include assault, battery, negligent hiring, retention or supervision, and intentional or negligent infliction of emotional distress. Depending on the nature of the conduct in which your executive employee may have engaged, some or all of these claims, and possibly others, may be asserted. Plaintiffs assert these kinds of claims for different reasons, including, among others, the differences in the damages schemes. That is the subject for another day.
Accommodating Two Employees With Similar Disabilities, Quirky Question # 81
Quirky Question # 81:
I am in charge of staffing at a medium-sized company that runs several centers in the metro area offering emergency day-care services on a daily fee basis for children from 6 months to 6 years of age. Because we do not know the mix of children who will be brought to our centers on any particular day, we expect every child-care provider we hire to be able to push strollers, lift and carry the smaller children, and play games with the older ones. Therefore, as part of the job description, we require that all employees be able to lift at least 30 pounds.
About 9 months ago, one of our employees was in a car accident and suffered a serious injury to her shoulder. She came back to work with a doctor’s note imposing a temporary lifting restriction of 10 pounds. She’s great with kids and well-liked by her co-workers, so we didn’t want to let her go just because she got injured. Both we and the employee also thought that she would quickly recover, so we made arrangements to keep her around. It wasn’t easy, but we arranged it with the other child-care providers in her center so that she wouldn’t have to work with the youngest children. Her interactions with the older ones were limited to comply with the lifting restriction, too.
After about 12 weeks with this arrangement, the employee brought in another doctor’s note indicating that the shoulder had not responded to physical therapy and that the lifting restriction was indefinite. The employee further confided to me that the only other option was surgery, but she was afraid to have the surgery, there was no guarantee it would work, and she didn’t think she could afford the extra medical expenses. Because the job duty arrangement, while not ideal, seemed to be working, we have continued to employ this employee with her lifting restriction for another 6 months.
Just after New Year’s, another one of our child-care providers at the same center suffered a shoulder injury, falling off a ladder while taking down Christmas lights. He took last month off, and then stopped by the office this week with a doctor’s note that detailed an identical 10-pound lifting restriction. At this point, the doctor is not sure if the injury is permanent.
Our staff is already stretched thin. Scheduling is tight. Changing yet another employee’s job description would force us to hire other employees to work with the small children that the work-restricted employees can no longer supervise. There is simply no possible way we can afford to have two employees who are unable to work with the small children. Yet this second employee obviously knows of the arrangements we made for the first, and I’m sure he is going to ask us to do the same for him.
I know the ADA requires us to make reasonable accommodations for our otherwise-qualified employees. My question is this: by accommodating the first employee, did we acknowledge that the accommodation was reasonable? Can we be held to that standard for this newly-disabled employee? Do we face discrimination lawsuits if we don’t accommodate both of them in the same way? We absolutely can’t do that, so are we better off just letting them both go at this point?
[Readers: This question was posed to my colleague, Mike Iwan, so I have provided his analysis below. Mike is a 1992 graduate of Stanford University and a 1998 graduate from the University of Minnesota Law School. Mike can be reached at 612.340.5613 or by email at Iwan.Michael@dorsey.com. If you have any questions or comments about Mike's analysis, don't hesitate to contact him. Regards, Roy]
Mike’s Analysis:
That is certainly an unenviable position. The choice between losing two valued employees, or retaining just one of them and defending your favoritism in court is extremely difficult. This situation also raises countless issues about ADA coverage, the definition of a disability, and what it means for an accommodation to be reasonable. The matter is further complicated by the recently enacted amendments to the ADA, which promote a much broader definition of “covered disability.” I believe, however, that there is a way to resolve this situation that meets your business needs while still giving you a defensible position in any subsequent litigation.
I note in passing that, at least with the second employee, you need to be aware of possible FMLA issues. It doesn’t sound as if the employee is asking for any sort of leave or reduced schedule in connection with his injury, and it is also unclear whether this shoulder injury would qualify as a serious health condition under the FMLA. But any time you are confronted with an employee illness or injury affecting job performance, it is wise to first rule out any FMLA obligations.
The next question to ask in such situation is whether the ADA (or a similar state law) is implicated. Usually this means first asking whether the employee has a “disability.” Not all physical impairments, of course, qualify for protection under the ADA. To be a “disability,” an impairment must substantially limit one or more major life activities. A temporary impairment does not count as a disability. If the injury to this employee’s shoulder heals or is likely to heal, he is due no protection under the ADA. Even if his lifting restriction is permanent, he still faces a long line of unfriendly precedent. While the ADA specifically includes “lifting” as an example of a major life activity, courts have been reluctant to equate lifting restrictions with disability status. Brunko v. Mercy Hospital, 260 F.3d 939, 941 (8th Cir. 2001) (40-pound lifting restriction was not a disability); Gutridge v. Clure, 153 F.3d 898, 901(8th Cir. 1998) (45-pound restriction was not a disability); Snow v. Ridgeview Med. Ctr., 128 F.3d 1201, 1207 (8th Cir. 1997) (25-pound restriction was not a disability). In all of those cases, an employee was restricted from performing some jobs, but able to perform a wide variety of other ones.
The situation here is potentially different; however, given the severity of the lifting restriction. While most daily activities do not require the lifting of 40 or 45 pounds, 10 pounds is so low that the employee has a better argument that, if thought to be a long-term condition, he is disabled. Still, one could think of any number of office, retail, or other customer service positions in which the employee could work even with his lifting restriction, even if he can no longer work for a company that provides emergency day care to children of all ages. An impairment that renders a person unable to perform one specific job is not a disability. Aucutt v. Six Flags Over Mid-America, 85 F.3d 1311, 1319 (8th Cir. 1996). Without proof of more serious limitations to his daily life or ability to find employment, he will likely have a hard time proving that he is disabled.
Admittedly, however, there is some uncertainty here. Last September, Congress amended the ADA to loosen the definition of disability. The amendment specifically repudiated the cases imposing a strict standard on the definition of disability. According to Congress, the new focus of ADA cases is supposed to be on whether employers have complied with their accommodation obligations. The definition of disability, however, remains unchanged. Even in light of this new directive, it is not clear that a court would find a 10-pound lifting restriction on one arm to be a substantial limitation of any major life activity.
Even if a court decided that this employee is disabled, it is unlikely that he would be able to demonstrate that his requested accommodation would be effective. If each employee could care for only a segment of the children, your business model would not work. On days when the mix of ages was distributed evenly, there would be no problems. But on those days when the range in ages skews old or young, some of the employees would be responsible for every child, and some employees would do no work at all. This would be neither safe nor efficient.
The fact that you have a written job description emphasizing the need to be able to care for children of all ages and to lift 30 pounds makes your case even stronger. When a function is this important, and when removing the function would fundamentally alter the nature of the position, the function is essential to the job. 29 C.F.R. §1630.2(n)(3).
Unfortunately, this employee can no longer lift more than ten pounds. The only suggested way to accommodate his lifting restriction in his current child care position is to allow him to abstain from working with some portion of the children. But by only being available to care for some of the children, he is no longer performing the central, essential function of the job. Employers are not required to alter an existing position by removing or changing the job’s essential functions.
But what about the fact that you have offered such an “accommodation” to the first employee? Have you conceded that the accommodation is reasonable? (Again using the term “accommodation” assumes that the first employee has a disability – it very well may be that neither have a covered disability under the ADA). The answer is no, for two overlapping reasons. First, the ADA requires that courts consider every disability claim on a case-by-case basis. Albertson’s, Inc. v. Kirkingburg, 527 U.S. 555, 566 (1999). Even if one accommodation is reasonable, a new set of circumstances (including, presumably, the existence of the first accommodation) could still make another, similar accommodation unreasonable.
Second, the fact that an employer offered a particular accommodation once is not conclusive proof of the accommodation’s reasonableness. See Myers v. Hose, 50 F.3d 278, 285 (4th Cir. 1995) (holding that an employer did not violate ADA by refusing to extend accommodations to the plaintiff even though those accommodations were offered to other employees). To adopt such a rigid standard, in fact, would create a disincentive for employers to offer the fullest possible accommodation to an employee, for fear that its efforts may actually be “used against it” with regard to a later employee. Id.
In Smith v. Ameritech, for example, the Sixth Circuit rejected a claim by a plaintiff that his employer failed to accommodate his chronic back pain by reassigning him to a different position and allowing him to work from home. The court concluded that although the employer had made similar arrangements for another employee with multiple sclerosis, it would be inappropriate to “ratchet up liability” on employers who offer accommodations “as a matter of good faith” even though no particular set of accommodations is required by the ADA.. 129 F.3d 857, 866-68 (6th Cir. 1997).
In light of the foregoing, the most important step for you to take at this point is to make sure you have engaged in a dialogue with this second employee. The EEOC calls this the “interactive process.” When an employee tells an employer about a disability, the employer must undertake reasonable efforts to find an accommodation that is appropriate with regard to both the essential functions of the position and the individual limitations of the employee. Fjellestad v. Pizza Hut of Am., Inc., 188 F.3d 944, 951-54 (8th Cir. 1999). One final option to consider is whether there are any open positions in your organization that do not require lifting of more than 10 pounds, for which your second employee would be otherwise qualified. If there really are no accommodations available that do not result in the elimination of an essential job function, the creation of an entirely new position, or significant pressure being placed on either the company’s financial health or the responsibilities of other employees, then you have no reasonable accommodation to offer and you have fulfilled your obligations under the ADA.
Background Checks, Quirky Question # 80
Quirky Question # 80:
We are a bank in Washington and would like to run background checks which include credit checks on all of our applicants. Are there any problems with this across-the-board policy?
[Readers: The question below was posed to my Seattle colleague, Sarah Jung Evans. Sarah has written several of our analysis of the West Coast Quirky Questions. Sarah, who is licensed to practice both in California and Washington, is a 2000 graduate of Northwestern University and a 2003 graduate of UCLA Law School. Sarah's direct line is: 206.903.2396; her email is evans.sarah@dorsey.com. Don't hesitate to contact her if you have any questions about the issue below. Regards, Roy]
Sarah’s Analysis:
You ask whether your Washington bank can adopt an across-the-board policy requiring background checks for all of your applicants. Such an approach would expose your bank to potential liability under the state and federal statutory schemes. Let’s start with Washington.
In 2007, Washington Governor Christine Gregoire signed into law S.B. 5827. That bill states that “a person may not procure a consumer report for employment purposes where any information contained in the report bears on the consumer’s credit worthiness, credit standing, or credit capacity, unless the information is either: (i) substantially job related and the employer’s reasons for the use of such information are disclosed to the consumer in writing; or (ii) required by law.
With the passage of this statute, Washington joined four other states with similar restrictions on the use of credit reports – Hawaii, Pennsylvania, New York and Wisconsin.
The question for your evaluation is whether your across-the-board policy would violate the Washington statute. Assuming you also comply with your notification obligations under the Fair Credit Reporting Act (FRCA), you should assess how the Washington law impacts your liability with regard to obtaining the information you seek.
First, you must consider whether the credit worthiness, credit standing or credit capacity is information which is required to be gathered by law. This would not generally be the case for most positions. Given that, the next question to consider is whether the applicant’s credit information is “substantially job related.” The exact meaning of this phrase has not yet been interpreted by Washington courts. However, in a bank setting, it is generally agreed that employees such as tellers who directly handle monetary funds, are in the type of position where credit information is substantially job related. A person whose job entails purely administrative functions (with little or no discretion or handling of monetary funds) is, on the other hand, less likely to qualify.
Until the Washington courts interpret the meaning of “substantially job related,” we recommend you act conservatively and only obtain consumer reports containing credit information for those applicants whose job functions directly involve money or finances or have significant discretion with such sensitive information. Note too that the Washington law maintains an exception, making such limitations inapplicable to situations where the employer “has reasonable cause to believe” the employee has “engaged in specific activity that constitutes a violation of law.” This mimics the FCRA’s exception where employees suspected of misconduct are not entitled to the same notification procedures.
This law obviously applies to employers whose principal place of business is Washington, but may also apply to Washington residents who apply to out-of-state corporations.
Second, with respect to federal law, another area of concern relating to background checks has been noted by the EEOC. The EEOC has concluded that an employer’s requirement of a good credit record for job applicants has a forseeably disproportionate adverse impact upon minorities . However, an employer may avoid Title VII liability if the requirement is justified by business necessity. And, the EEOC has found that a bank’s practice of performing a credit check on successful job applicants did not unlawfully discriminate against minority applicants where the checks were done in a facially neutral manner and served a legitimate, job-related purpose, particularly in the employment of tellers. EEOC v. American Nat’l Bank, 21 Fair Empl. Prac. Cas. (BNA) 1595 (E.D. Va. 1979), aff’d in part and rev’d in part on other grounds, 652 F.2d 1176 (4th Cir. 1981). Thus, under either Washington or federal law, any background check for which credit is pulled should be justified by business necessity.
Finally, another important consideration is what you do with the information you receive from the background check agency? Make sure you dispose of it properly! As of June 1, 2005, it became critical for employers to properly dispose of consumer information or face liability for statutory fines and civil penalties as well as actual damages if an employee’s identity is stolen as a result of the employer’s failure to protect the information. The disposal obligations, found at 16 C.F.R. 682, were a part of the Fair and Accurate Credit Transaction Act of 2003 (FACTA) which amended the Fair Credit Reporting Act.
Employers are subject to the FTC’s jurisdiction under the FRCA when they obtain a consumer report as a part of background check. Every such employer is required to take “reasonable measures” to protect against unauthorized access to or use of the consumer information in connection with its disposal.
The standard for disposal is a flexible one, allowing entities to determine what is a “reasonable” measure. Factors to determine what is “reasonable” include: the sensitivity of the consumer information; the nature and size of the entity’s operations; the costs and benefits of different disposal methods; and relevant technological changes. The disposal rule provides several non-exclusive examples of methods of compliance, including : (a) implementing and monitoring policies and procedures that require the burning or shredding of papers containing consumer information so that the information cannot practicably be read or reconstructed; (b) implementing and monitoring compliance with policies and procedures that require the destruction or erasure of electronic media containing consumer information so that the information cannot practicably be read or reconstructed.
Failure to comply with the disposal rule can expose employers to the following liability:
- Civil fines – Fines up to $2,500 per violation can be assessed from the federal government.
- Civil liability – Employers are potentially liable up to $1,000 per employee in statutory damages.
- Actual damages – Employers are also liable for actual damages if employees’ identities are stolen as a result of the company’s failure to protect the information.
- Class action lawsuit – Employers could be subject to a class action lawsuit if multiple employees are affected.
In addition to the federal penalties associated with the disposal rule, employers can also face liability under state statutes and/or negligence claims.
Note that in December 2007, the FTC announced a settlement in its 15th case (and its first in 13 months) addressing the data security practices of companies handling sensitive consumer information. American United Mortgage Company agreed to pay a $50,000 penalty for failing to implement reasonable safeguards to protect customer information and failing to provide customers with privacy notices.
American United was the first FTC action taken pursuant to the Disposal Rule of the FACTA of 2003. The complaint filed in the Northern District of Illinois asserted that the Northbrook, Illinois-based mortgage company disposed of several dozen consumers’ personally identifying information by leaving intact hundreds of documents in a nearby unsecured dumpster, in some cases in open trash bags. Indeed, even after the FTC provided written notice to American United that disposal of documents containing consumers’ personal information in this manner created a risk of unauthorized access, “on at least two occasions, additional intact American United documents containing consumers’ personal information were found in and around the same dumpster adjacent to American United’s office.”
In addition to the fine, the stipulated judgment and order required American United to obtain an immediate third-party audit of its privacy safeguards and ongoing audits every two years for a decade. American United was also permanently enjoined from further violations of the FACTA Safeguards, Disposal, and Privacy rules. This case illustrates the potential consequences of disregarding a company’s obligations under FACTA.
Employee Relationships and Protective Orders, Quirky Question # 79
Like many companies, we periodically have situations where two of our employees get romantically involved. (We don’t have a non-fraternization policy and don’t attempt to limit these relationships in any other way.) Sometimes, the two involved employees have a great relationship and ultimately get married. Some times, the relationship ends, but the employees seem to work things out amicably and it doesn’t affect their interaction at work. Some times, it gets ugly.
I’m writing about one of the ugly situations. For reasons I don’t fully understand, but about which I can draw reasonable inferences, one of our female employees has obtained a Protective Order against her former paramour. I think they were living together, though our HR records show them as having two difference addresses. Our female employee provided me with a copy of the Protective Order and asked for my assistance in “keeping that asshole, XXXX, away from me at work.” She also advised me, in colorful language, that if I don’t keep him away from her, she intends to call the police and have XXXX removed from the worksite.
Frankly, my reaction is “life is too short” for me to have to deal with this nonsense. Both employees are at-will employees. My inclination is either to fire one of them or both of them. Do you seen any problems with either of these approaches?
Roy’s Analysis:
I do see potential problems with the alternative approaches you are advocating. First, if you were to fire just one of the two employees, you will need to determine the appropriate criteria for making this selection. Will you base your decision on seniority? Performance rankings? Importance to your organization? Other criteria? Understand that firing either of these employees increases the risk of discrimination claims, especially if you discharge your female employee. (I addressed some of these issues in a Blog analysis almost a year ago, which you can access by using the “View By Topic” tab on the upper-lefthand corner of this page. Simply scroll down to “Non-Fraternization Policies;” that will enable you to access Quirky Question # 30. I will not repeat the observations set forth in that prior analysis here.)
Terminating both of the employees involved is certainly a gender-neutral decision but even this approach is not with risks. The primary concern I have is that even if both of your employees were fired, your female employee could initiate a claim for wrongful discharge in violation of public policy.
In April 2008, the federal District Court for the Northern District of Iowa confronted a similar situation. In Rayburn v. Wady Industries, Inc., et al., No. C07-1008 (April 10, 2008), the court addressed a situation where two employees of Wady Industries, who had been involved in an on-again/off-again relationship and who had lived together on two occasions, had what you have charitably described as an “ugly” break-up. Rayburn obtained a “No Contact Order” against her former boyfriend, Miller, whom she accused of domestic abuse, tied to alcohol abuse. Recognizing that the two employees worked for the same employer, however, the court issuing the Order specifically provided that Miller was allowed to continue working at Wady Industries and could have contact with Rayburn, “as necessitated by employment.” Rayburn provided the No Contact Order to Wady Industries, and the Company took some steps to minimize the contact between the two employees, including erecting a tarp between their two work stations (which were approximately 60 feet apart).
Despite the steps taken by the Company, Rayburn complained to the police that Miller was violating the No Contact Order, for work-related and non-work-related behaviors. This resulted in the police being called out to the Company on several occasions. Ultimately, the Company made the decision to terminate Rayburn for “disrupting the workplace.”
The federal court began its analysis by pointing out that the Iowa Supreme Court recognized two exceptions to the doctrine of at will employment: a) discharge in violation of public policy, and b) discharge in violation of an employee handbook which constitutes a unilateral contract. Based on Iowa precedent, the court enumerated four factors that had to be established to prove a claim for wrongful discharge on the basis of public policy: 1) the existence of a clearly defined public policy; 2) the clearly defined public policy would be undermined by the employee’s discharge; 3) the discharge resulted from the employee’s participation in the protected activity; and 4) other justifications for the discharge were lacking.
With this framework, the court then evaluated each element of the claim. The federal court first addressed whether there was a clearly defined public policy. Recognizing the clear guidance from the Iowa Supreme Court that public policy exceptions typically derive from the state Constitution and statutes, and that courts should be “careful to limit the tort action for wrongful discharge to cases involving only a well-recognized and clear public policy,” the federal court nevertheless found that a No Contact Order and the statute on which it is grounded set forth a clearly defined public policy to protect victims of domestic abuse. The Court stated, “the Court finds that although Chapter 664A does not specifically mandate protection for an employee who reports a violation of a no-contact order, the forceful language of the statute articulates a clearly defined public policy of Iowa from which such protections can be implied.” (The Court also relied on Iowa precedent providing similar protections to someone who reports suspected child abuse.)
Turning to the second element of the claim, the Court quickly found that allowing the employer to discharge an employee reporting violation of a No-Contact Order would undermine the public policy. The Court emphasized that this was true, “especially when the violation occurred at the workplace.”
The District Court then concluded that Rayburn’s discharge appeared to have resulted from her engaging in protected activity, i.e., the reporting of the violation of the No-Contact Order. This conclusion was based on the deposition testimony elicited by plaintiff’s counsel from those involved in the discharge decision, as well as other evidenced regarding Rayburn’s productivity, performance evaluations, and compensation. Given the evidence Rayburn adduced, this issue could not be resolved in the Company’s favor on summary judgment.
Finally, with respect to the issue of whether there were other justifications for Rayburn’s discharge, the Court found that Rayburn had presented sufficient evidence to survive summary judgment on this issue.
The Rayburn case illustrates the risks your Company confronts if it terminates your female employee because she asked for your assistance in enforcing the Protective Order and advised you that she intends to call the police if your response is ineffective. I recommend, therefore, that you continue employing your employee who obtained a Protective Order. If you want to continue employing the male employee as well, you should consider options that would minimize his contact with his former paramour at work. For example, could he be transferred to another facility? If you don’t have another facility, could he be moved to another part of the facility where they both work to reduce the likelihood of contact between them? If they are line or shift employees, could they be assigned to different lines or shifts?
In crafting the most workable solution, consider seeking input from your female employee. When you do so, however, do not promise that you will follow her recommendation. Rather, simply explain that you are seeking her input into finding a workable solution. If you do find a workable “solution,” monitor the situation carefully. Check in with your female employee frequently to ascertain whether the problem has been resolved. Document her responses carefully if she advises you that the matter has been resolved. If her opinion is the opposite, objectively evaluate whether the problem persists and, if so, try an alternative approach to solving it.
Of course, you may conclude (either with or without your employee’s input) that there is not an adequate solution involving the retention of these two employees. It simply may be too disruptive to continue employing both of them. In this context, the path least likely to lead to litigation is terminating the male employee.
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