Quirky Questions

Real Life Employment Law

Refusal to Transfer an Employee as an Adverse Employment Action; or, How Life Imitates 1950s Movies

In the classic 1955 movie, Mister Roberts, Henry Fonda plays Doug Roberts, a frustrated Naval officer aboard a supply ship in a backwater area of the Pacific during World War II. Roberts desperately seeks a transfer to a combat ship more directly involved in the war, but he is continually – and maliciously – turned down by Captain Morton, portrayed by Jimmy Cagney:

Doug Roberts: “I’m asking for it! If I can’t get transferred, I’ll get court martialed off! I’m fed up!”

Capt. Morton: “No. You’re a smart boy, Roberts. But I know how to take care of smart boys. I hate your guts, you smart college guys! . . . now YOU can take it for a change! The worst thing I can do to you… is to keep you right here, Mister, and here is where you’re going to stay. Now, GET OUT!”

Although Roberts eventually gets his transfer to a combat ship, many employees share his frustration when their employer denies a transfer to another location or position. If the requested, but denied, transfer involves no additional money and is not a promotion, has the employee suffered the type of adverse employment action that will support a lawsuit? 

Many types of employment lawsuits require an adverse action by the employer. The classic example is firing the employee for an illegal reason, such as racial discrimination. Other examples include refusing to hire a qualified applicant, denying a promotion, or refusing to grant a raise. However, when there is no tangible benefit to the requested action, at least some precedent holds that the employee has no basis to sue, even if the denial of the requested action is based on race or another protected status. A recent decision from the Court of Appeals for the D.C. Circuit demonstrates that even an allegedly discriminatory action can fail to provide the basis for a lawsuit, if it involves only “subjective” injury to the employee.

In Samuel Ortiz-Diaz v. Dep’t of Housing and Urban Development, Mr. Ortiz-Diaz had worked as an investigator in Washington D.C. under a supervisor named McCarty. Ortiz-Diaz came to believe that McCarty had issues working with Hispanic males and sought a transfer to Albany, New York or Hartford, Connecticut. His request was denied. The transfer would not have been a promotion; indeed, some evidence suggested that it might require Ortiz-Diaz to take a pay cut or reduction in job grade. Ortiz-Diaz sued, alleging unlawful race and national origin discrimination. The district court granted the government employer summary judgment, on the grounds that a purely lateral transfer was not an “adverse employment action.”

On appeal, a divided D.C. Circuit court affirmed the dismissal. The majority ruled that the purely “subjective” injury of working for a supervisor who dislikes you is not a basis for a federal discrimination claim. The Court also rejected Ortiz-Diaz’s argument that a transfer would enhance his future opportunities for promotion, on the ground that that was mere speculation.

The case provoked two concurring opinions and a vigorous dissent. One concurrence specifically noted that the requirement of a tangible injury would not apply to harassment cases. A second stated that the result was based only on adherence to prior precedent, and expressed his “skepticism” about the wisdom of the ruling.

A third judge dissented, arguing that the evidence was disputed as to whether the transfer would actually enhance Ortiz-Diaz’s career prospects, so summary judgment was improper. The dissent also noted that other federal courts of appeal have looked more favorably on claims based on lateral transfers.

The case presents several important points for the employer to bear in mind:

  • At least in some circumstances, an employee’s claim of discrimination is not sufficient for a lawsuit, where the employer has not taken any actual (and harmful) action against the employee based on the alleged discrimination;
  • However, any actions in the workplace based on discriminatory motives present problems and risks for employers. Ortiz-Diaz’s claims might have fared better in a different federal court, and harassment claims do not require an adverse employment action;
  • The case also illustrates, for both employers and employees, the importance of presenting cogent, non-speculative evidence at the summary judgment stage. If Ortiz-Diaz had been able to present better evidence that the requested transfer would help his career prospects, he might well have prevailed.

So unlike Mister Roberts in the movie, Ortiz-Diaz did not get his transfer and remained stuck working for McCarty in D.C. On the other hand, Mister Roberts’ transfer did not produce the desired tangible benefits either; he is killed in a kamikaze attack aboard his new ship. Be careful what you wish for.

For Any Lawful Reason: Firing an at-will employee under dubious circumstances need not lead to liability if the reason for the firing was not illegal

A recent decision from the Sixth Circuit Court of Appeals highlights the distinction between firing an employee for personal or politically expedient reasons (which may be entirely legal) and firing an employee because of his or her protected status or for exercising protected rights (which is typically illegal). The decisive question answered in this case was can an employer terminate an employee currently on medical leave if the motivation for the firing is distasteful but unrelated to the leave?

In Mullendore v. City of Belding, Mich., the city council may have acted less than courageously by quickly firing a controversial city manager while she was out of the office for medical reasons and therefore not around to defend herself. But there was no real evidence that her medical condition actually motivated the firing (as opposed to permitting the council to fire her without having to face her), so there was no violation of the Family Medical Leave Act (“FMLA”).

Margaret Mullendore was the city manager of Belding, Michigan, working for a city council whose operations “are fairly described as being somewhat fraught with political drama.” Mullendore herself was a somewhat controversial figure, having fired a city police officer who was later reinstated, generating vocal criticism of Mullendore’s original decision.

Mullendore was also an at-will employee who could be terminated at any time by a vote of the city council.

In November 2014, one of Mullendore’s supporters on the city council lost a recall election to a candidate who had already openly criticized Mullendore and urged a change in the city’s administration. The new representative quickly sent the rest of the council an email advocating Mullendore’s termination.

Approximately a month later, Mullendore was forced to take time off from work due to an ankle injury that required surgery. Mullendore informed the city of her need for time off, although it was a point of dispute in the case whether she had actually invoked her legal rights under the FMLA. The city was aware of her plans to take medical leave and raised no objections, even purchasing a laptop for her to make it easier to work from home during her absence.

However, at a city council meeting shortly after Mullendore’s leave began, the new council member moved to terminate her employment immediately, even though there was no agenda item regarding her employment for the meeting, and Mullendore herself was not present to defend her record. The motion passed, although at least one council member was clearly reluctant to proceed in that manner.

Mullendore claimed violations of the FMLA, contending that she was fired for exercising her rights under that statute. This raised two key legal questions:

(1) Whether Mullendore had in fact invoked her FMLA rights or whether she was simply taking a more informal medical leave; and

(2) Whether the actual reason for her termination was her FMLA-protected leave.

The district court, granting summary judgment to the city, found both that Mullendore had failed to properly invoke FMLA rights when announcing her leave and that there was no evidence of illegal motive on the city’s part, i.e., that Mullendore was not fired because of her alleged exercise of FMLA rights.

On appeal, the Sixth Circuit affirmed summary judgment in the city’s favor, but only on the grounds that there was no evidence of illegal motive. The Court of Appeals found that there was a factual dispute as to whether Mullendore’s actions properly invoked the FMLA, but it did not matter, since there was simply no proof that taking FMLA leave was the actual reason for Mullendore’s firing.

This is often the central issue in discrimination, retaliation and other statutory employment claims: Was the protected conduct or protected status of the employee the actual reason for the adverse employment action? Mullendore tried to rely on the fact that the action occurred while she was on medical leave, but timing, while important, is not everything. This was particularly true because the new council member who spearheaded Mullendore’s firing had announced his intention to do so even before her medical condition arose. The council may have found it expedient to get rid of Mullendore while she was not present at the meeting to defend herself, but that also does not prove illegal motivation:

“At best, the evidence demonstrates that the members of the City Council terminated her when she was not at their meeting because it was personally or politically expedient to do so behind her back.”

That was simply not enough.

The case illustrates several key features of employment claims that require proof of motive:

  • A credible bad reason for firing someone is not a violation of the law. The court’s description of the evidence places the city council in a somewhat poor light. They appear as obsessed with political “drama,” and terminating Mullendore “behind her back” is not a particularly courageous action. But the evidence strongly – indeed, decisively – demonstrated that political drama was the basis for Mullendore’s termination and that the timing arose from the desire not to confront Mullendore rather than from any animus towards the exercise of FMLA rights. The council does not look good in this case, but it did not act illegally.
  • Suspicious timing is often not enough. Mullendore’s strongest point was probably that the firing occurred precisely while she was on a medical leave. She argued that this at least strongly suggested that the medical leave was the (illegal) motivation for her firing. But the city council was able to point to evidence that the termination was under consideration before the medical situation arose. This made the city’s version of events (a desire to terminate Mullendore behind her back) credible and merely suspicious timing was not enough to defeat summary judgment.
  • Two grounds for summary judgment are often better than one. In the trial court, the city won the case for two separate reasons, both the failure to formally invoke FMLA rights and the lack of evidence of illegal motive. The Sixth Circuit did not agree with the first reason, finding that there was a dispute as to whether Mullendore had properly invoked the FMLA. But the second reason stood up to appellate review, and that one reason, the lack of motive, was sufficient to preserve the city’s victory in the case.

It ain’t Over ’til it’s Over (and Even Then, it Might not Be Over): How long can the EEOC Continue Investigating – after Issuing a Right-to-Sue Letter?

EEOC charges are a fact of life for employers.  Even with comprehensive equal employment policies, top-notch human resources personnel, and a great workplace culture, many employers will at some point encounter a charge of discrimination or retaliation.  While any charge is an unwelcome event, the stakes increase even further if the EEOC decides to take the employer to court.  The prospect of litigating against the EEOC can be daunting.  So employers tend to breathe a sigh of relief when they learn that the EEOC has issued a right-to-sue letter in response to a pending charge, because this typically signals the end of the EEOC’s investigation (and involvement in the matter).  Although the charging party may still sue, after the EEOC issues a right-to-sue letter, is it safe for employers to assume the EEOC is safely in the rear view mirror?

On August 15, 2017, the United States Court of Appeals for the Seventh Circuit decided EEOC v. Union Pacific Railroad Company, adding to current uncertainty about when the EEOC’s authority to act comes to an end.  Prior court of appeals decisions had split over the question of whether the EEOC can continue investigating after issuing a right-to-sue letter.  The Seventh Circuit sided with the Ninth Circuit in holding that the EEOC can continue to investigate, and go on to file its own enforcement action, even after issuing a right-to-sue letter.  This conflicts with an older decision from the Fifth Circuit—which held that such action exceeded the agency’s authority.  As with any circuit split, there is a chance the Supreme Court might weigh in.

The underlying facts are straightforward, but the procedural history is not.  In 2011, two African-American men began entry-level jobs with Union Pacific.  They unsuccessfully applied for promotions and were eventually terminated in October 2011, when their positions were eliminated.  Both men filed EEOC charges alleging discrimination and retaliation (they had filed earlier charges after being denied the promotions).  Union Pacific grudgingly responded to the charges and to the EEOC’s first request for information, requiring an EEOC subpoena and enforcement action.  The EEOC eventually issued a right-to-sue letter pursuant to 42 U.S.C. § 2000e-(5)(f)(1), which requires the agency to issue notice of a charging party’s right to sue within 180 days after receiving a charge.  The charging parties sued in federal court.  But they ultimately lost on summary judgment, and the Seventh Circuit affirmed.  Case closed, right?

Not so fast.  While the lawsuit was pending in the district court, the EEOC issued a second request for information.  When Union Pacific refused to respond, the EEOC filed suit to enforce its subpoena.  Union Pacific moved to dismiss, arguing that the EEOC lacked authority to continue investigating given that it had already issued a right-to-sue letter.  The district court denied the motion, and Union Pacific appealed.

The Court of Appeals framed the legal question as “whether the EEOC is authorized by statute to continue investigating an employer by seeking enforcement of its subpoena after issuing a notice of right-to-sue to the charging individuals and the dismissal of the individuals’ subsequent civil lawsuit on the merits.”  The answer, at least in the Seventh Circuit, is “yes.”

The court noted that the EEOC’s governing statutes give it the authority to request information or records only in the context of investigating a charge.  In other words, the EEOC cannot simply call up employers and ask to sift through their personnel files.  Although the EEOC must issue a right-to-sue letter within 180 days of receiving a charge, the governing statutes are silent as to what effect such a letter has on the agency’s investigative powers.

With no clear-cut statutory answer, the Seventh Circuit looked to analogous cases, including the Supreme Court’s decision in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002).  In Waffle House, the Supreme Court held that a charging party’s agreement to arbitrate the claims giving rise to a charge did not prevent the EEOC from pursuing victim-specific judicial relief on behalf of the charging party.  In other words, the EEOC could go to court even though the employee could only go to arbitration.  Following Waffle House, the Seventh Circuit itself addressed a similar issue, holding that even when a charging party withdraws a charge, the EEOC can continue its investigation.  See Watkins Motor Lines, Inc. 553 F.3d 593 (7th Cir. 2009).  These decisions, buttressed by the EEOC’s own regulations, see 29 C.F.R. § 1601.28(a)(3), led the Seventh Circuit to conclude that the agency can continue investigating employers and subpoenaing their records even after issuing a right-to-sue letter.

But what about the fact that the charging parties’ underlying case had been decided on the merits?  Union Pacific argued that this resolution terminated the EEOC’s authority to investigate.  Once again, the Seventh Circuit disagreed.  According to the court, the EEOC’s authority does not derive from a charging party’s claims; a valid charge irrevocably triggers the agency’s investigative and enforcement powers.  Tethering the EEOC to the private interests of the parties would undermine the agency’s mission to serve the public interest.  In short, the court held that the EEOC gets to decide when it is done investigating, not the parties.

This decision has at least two important implications for employers.  First, EEOC charges are serious matters with potentially significant consequences.  Whether employers respond to charges themselves or engage outside counsel, they should ensure that their submissions to the agency are comprehensive and persuasive.  The same goes for responses to requests for information.  In 2016, the EEOC issued its first-ever nationwide procedures on how to effectively respond to charges, outlining the elements that the agency considers most important.  See U. S.  Equal Empt. Opportunity Comm’n, Effective Position Statements.  Employers are well advised to familiarize themselves with these expectations to achieve the best possible result at the agency level.

Second, employers should consider pursuing a “no probable cause” finding, even after the EEOC issues a right-to-sue letter.  The agency rarely pursues an investigation after issuing a right-to-sue letter, but Union Pacific proves that—at least for now—it can still happen.  Employers and their outside counsel may want to request findings of no probable cause as a matter of course for every EEOC charge, even after the agency issues a notice of right-to-sue.

Given the disparate views among the circuit courts regarding the scope of the EEOC’s authority, employers should stay tuned for future developments in this key area.  Employers should also be aware of how courts view this issue in their jurisdictions to ensure they understand the potential consequences after a right-to-sue notice issues.  Finally, employers should consider seeking legal guidance when responding to any agency charge—given the high stakes involved.

If a Whistleblower is Just Playing the Same Old Tune, Does the Law Protect Him?

Some of the trickiest employment decisions can involve employees who have made accusatory complaints against the company they work for. Many state and federal laws protect “whistleblowers” who try to bring to light illegal behavior by their employers. But in many instances employers legitimately wonder whether the complaint was made in “good faith,” or just to stir up trouble, or even to give a soon-to-be-fired employee who was about to be fired for some other reason, an excuse to bring a lawsuit.

So, is the employee’s complaint of employer wrongdoing really whistleblowing if the company already knows about the alleged wrongdoing?  How can the employee really “blow the whistle” if someone else has blown it already?

An opinion issued by the Minnesota Supreme Court on August 9, 2017, answers this question favorably to the employee, expands the type of complaints that will be regarded as good faith whistleblowing, and may become the basis for more lawsuits by employees accusing employers of retaliating against them for reporting alleged wrongdoing.

Previously, under Minnesota’s Whistleblower Act, Minn. Stat. §§ 181.931-.935 (2016), an employee terminated for making a complaint of illegal conduct had to demonstrate that his complaint had been made in good faith, which meant not only that the employee believed in the report he was making, but also that his purpose was to “expose an illegality.” Since the you can’t “expose” something which is already known, Minnesota law did not protect employees who complained of illegal (or allegedly illegal) conduct that the employer already knew about.

But in 2013, the Minnesota Legislature amended the statute to provide a specific definition of “good faith,” which focused on the employee’s belief that his report was true, but said nothing about intending to expose an illegality. In Friedlander v. Edwards Lifesciences, LLC, et al., A16-1916 (Minn. Aug. 9, 2017) (“Friedlander”), the Minnesota Supreme Court held that the Legislature intended to get rid of the requirement of exposing an illegality, and that whistleblowing activity is protected even if it is just the same old tune that the employer had heard before.

Although the statute was amended in 2013, until Friedlander it was not clear whether the “expose an illegality” requirement remained part of the law, as that mandate did not appear in the text of the 2013 Whistleblower Act. In Friedlander, an employee sued his former employer in the federal court under the Minnesota Whistleblower Act, claiming that his superiors had been engaged in legal violations, which the employee had reported directly to the superiors prior to his termination. The employer moved to dismiss the lawsuit, arguing that because the employer reported the allegedly wrongful conduct to people who already knew about the conduct, he had not “exposed” the allegedly illegal conduct to anyone. The success of the employer’s motion therefore turned on whether the 2013 amendments eliminated the Whistleblower Act’s “expose an illegality” requirement. Because no court had yet addressed that issue, the Minnesota District Court referred the question to the Minnesota Supreme Court, which ruled unanimously in favor of the employee. In Friedlander, the Minnesota Supreme Court concluded that the 2013 amendments eliminated the “expose an illegality” requirement. Following Friedlander, a whistleblower’s report is made in “good faith” if the report is “not knowingly false or made with reckless disregard of the truth.”

Friedlander therefore simplifies what an employee has to prove in order to sue under the Whistleblower Act. It serves as a reminder to employers that firing an employee who has complained about possibly illegal activities at the company must be addressed with care. It remains perfectly legal to fire such employees for other, legitimate reasons, but not because their whistleblowing. Employers should therefore take care to ensure that any termination, demotion, pay cut, or other personnel action being considered for an employee who has reported actual or suspected illegal conduct is taken for legitimate business reasons, not because of the employee’s report.

Biometric Attendance Scanner or “Mark of the Beast”?: How an Employee’s Unusual Religious Belief Cost the Employer $600,000.

A recent case from the Fourth Circuit illustrates the risks for employers posed by the obligation to reasonably accommodate religious objections to workplace rules and practices under Title VII.  How should an employer handle accommodation requests based on religious beliefs that the employer views as misguided or even crazy?  A sincere religious belief, even if non-traditional or highly idiosyncratic, must often be reasonably accommodated by the employer, as recently demonstrated in EEOC v. Consol Energy, Inc., Case No. 16-1406, a case decided by the Fourth Circuit on June 12, 2017.

“The Mark of the Beast”

The case arose out of what defendant Consol Energy surely regarded as a non-controversial upgrade of its attendance monitoring system.  The coal mining company began using a biometric hand-scanner to record attendance, believing the system would be more reliable and accurate than an old-fashioned time clock or a requirement to report to a supervisor.

However, one of its miners, Beverly Butcher, who had worked at Consol for 37 years without incident, was a life-long evangelical Christian (and ordained minister) who believed that the biometric scanner would place the “Mark of the Beast” on his hand.  The Mark of the Beast (sometimes called the Number of the Beast) is a concept from the Book of Revelation that has been the subject of widely varying interpretations.  Mr. Butcher apparently regarded it as a brand possessed by followers of the Antichrist which allows the Antichrist to manipulate them.  He maintained that using the biometric scanning system would place the Mark of the Beast on him, even though the system leaves no actual “mark” of any kind.  He also insisted that this problem would persist even if he was allowed to use his left hand for scanning purposes (the Bible speaks of the Mark of the Beast only on the right hand).  Mr. Butcher’s beliefs were certainly idiosyncratic; his own pastor declined to fully endorse them when asked by the company.  But they were also sincere beliefs; no one questioned that Mr. Butcher actually believed that the biometric scanner would imperil his salvation.

Butcher sought permission to record his attendance in other ways.  After considerable discussion back and forth between Butcher and Consol, Consol simply insisted that he use the scanner or be subject to discipline, which would eventually include termination.  Butcher retired instead, even though he would have preferred to continue working.

Subsequently, however, Butcher learned that Consol was willing to allow two other employees to avoid using the scanner.  Two employees with hand injuries could not use the scanner, so they were allowed to enter their employee number on a key pad, an accommodation which imposed no cost or inconvenience.  Butcher complained of religious discrimination (since accommodations to the scanner were readily available for non-religious reasons).  The EEOC brought suit on his behalf, claiming failure to accommodate sincerely held religious beliefs, a violation of Title VII.

Sincere Belief and Reasonable Accommodation

Butcher prevailed at trial and was awarded $600,000 in compensatory damages and lost wages.  His claim for punitive damages was denied, however, on the grounds that Consol’s behavior was not egregious enough to warrant that relief.  The Fourth Circuit affirmed the verdict on appeal.  The court noted that the elements of a religious accommodation claim are (1) the employee holds sincere religious beliefs; (2) the employee informs the employer of the beliefs; and (3) the employer nevertheless takes adverse action against the employee based on the religious beliefs.

As the Fourth Circuit viewed the case, the central problem was that Consol simply disagreed with the substance of Butcher’s religious beliefs.  The company did not think that its scanner placed the Mark of the Beast on Butcher.  Consol relied on the fact that the hand scanner system did not make any physical mark on the employee and therefore could not actually brand him with the Mark of the Beast.  But that was not what Butcher sincerely believed.  Similarly, even though the Bible discusses the Mark of the Beast as something found on the right hand, Butcher sincerely believed that scanning his left hand would cause the same problem.  Consol believed he was wrong in his beliefs, but that is not the test.  He was sincere.

The court also noted that Consol was perfectly willing to accommodate non-religious inability to use the scanner system; the other two employees with injury issues were allowed to enter their employee numbers on a key pad; and this caused no problems and imposed no costs, as the company itself admitted.  Therefore, Butcher had a sincere religious objection, and an easy, effective accommodation was available.  The company’s refusal to extend this accommodation to the employee based on his religious objections violated Title VII.

Compensatory Damages, Lost Wages, and Punitive Damages

The case also illustrates how Title VII claims can produce substantial damage awards.  Butcher found replacement employment after some time and also began drawing his pension from Consol, since he had technically retired from the company.   Consol claimed that the pension should be an offset to his lost wage claim.  The court disagreed, finding that the pension was a “collateral” source of income and did not reduce the lost wages portion of the employee’s recovery.  Butcher also recovered $150,000 in “compensatory” damages, which are independent of the direct economic impact of the violation.

However, Consol did prevail on the question of punitive damages.  The court found that even though the company violated Title VII by failing to Butcher, it took his concerns seriously, engaging in lengthy discussions in an attempt to find a mutually acceptable accommodation.

Lessons Learned

The case illustrates the following key points:

  • The duty of religious accommodation does not depend on the employer’s opinion of the merits of the employee’s religious belief. The test is the employee’s sincerity in his or her beliefs.
  • In virtually any discrimination case, the employer’s inconsistency is likely to be fatal to its defense. Here, Consol readily accommodated employees who had non-religious issues with the scanner.  The court thus had no difficulty in concluding that the only reason for the refusal to accommodate Butcher was his religious beliefs.
  • When a requested accommodation is extremely simple and inexpensive, courts tend to have little sympathy for an employer unwilling to apply it. Here, the keypad system was already in place for the two other employees and imposed no cost or inconvenience.  There was no issue of “undue hardship.”
  • Title VII damages can be substantial and can greatly exceed the pure economic loss suffered by the employee. Butcher recovered $150,000 in “compensatory” damages and was able to recover lost wages even though he was also drawing his company pension for the same time period.

Second Circuit Holds Pro-Union Sentiment Outweighs Impropriety of Profanity-Laden Rant Against Supervisor, His Mother, and “His Entire ****ing Family”

Use of profanity by employees, whether in the workplace, outside the workplace, or on social media, presents difficult legal issues for the employer, as highlighted by a recent Second Circuit Court of Appeals decision overturning the firing of an employee who engaged in a highly profane Facebook rant against a supervisor. Although an employer has a justifiable interest in keeping profanity out of the workplace, its interest does not overshadow an employee’s Section 7 protected rights to engage in concerted activity under the National Labor Relations Act (“NLRA”).

In yet another NLRA-social media decision (see here and here), the court considered whether the vulgar and offensive language – directed at a supervisor – in an employee’s statement advocating for unionization is protected activity under the NLRA. See NLRB v. Pier Sixty, 855 F.3d 115 (2d Cir. 2017).  The court held that language was protected and overturned the company’s termination of the employee in question.

Two days before a union election, an employee posted the following statement on Facebook:

Bob is such a NASTY MOTHER F***ER don’t know how to talk to people!!!!!! F*** his mother and his entire f***ing family!!!! What a LOSER!!!! Vote YES for the UNION!!!!!!!

The post was visible to the public for three days before the employee took it down. Company management saw the post before it was removed and terminated the employee. An unfair labor practice charge followed shortly afterward, alleging a violation of section 8(a)(1) of the NLRA.

Section 7 of the NLRA guarantees employees the right to “self-organization, to form, join, or assist labor organizations . . . and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  29 U.S.C. § 157 (emphasis added).  Section 8(a)(1), in turn, protects these rights by prohibiting employers from interfering with, restraining, or coercing employees in the exercise of these rights.  29 U.S.C. § 158(a)(1).  Ordinarily, an employer is prohibited from discharging employees for participating in union-election activity, and the employee’s Facebook post did explicitly call for a pro-union vote in the upcoming election.  But the protections of the NLRA are not absolute.  The National Labor Relations Board (“NLRB” or “Board”) has long held that an employee engaged in “ostensibly protected activity may act in such an abusive manner that he loses the protection” of the NLRA. See NLRB v. City Disposal Sys., Inc., 465 U.S. 822, 837 (1984).

Here, the NLRB had ruled in favor of the employee. The Second Circuit upheld the Board, agreeing that the statement came close to, but did not cross, the line.  The Board and the court applied a “totality-of-the-circumstances” test.  Although the court gave considerable deference to the Administrative Law Judge’s factual findings (which were upheld by the Board), employers can find some comfort in the court’s note that the post seems “to sit at the outer-bounds of protected, union-related comments.”

The court provided several reasons for its decision:

  • First, although the post can be characterized as “dominated by vulgar attacks” on the supervisor, the message addresses the workplace concern of how management treats employees, qualifying the post as “concerted activity for the purpose of collective bargaining.”
  • Second, profanity among employees had been consistently tolerated by the employer, so it could reasonably be inferred that the employee was not fired for mere profanity, but for the protected, union-related content of the comment.
  • Third, the employer had engaged in other unlawful, anti-union conduct as the election approached, including threatening pro-union employees with the loss of their jobs or benefits, and by implementing a “no talk” rule prohibiting discussion of union issues.
  • Fourth, the court gave some weight to the fact that this post was made on Facebook—“a key medium of communication among coworkers and a tool for organization in the modern era,” and that the employee apparently (although erroneously) believed the post would not be publicly available. The court found that the Facebook posting was different from an outburst in the presence of customers.

Accordingly, there are a few takeaways for employers to keep in mind.

  • Implement a Clear, Written Policy. To effectively discipline employees for using offensive or vulgar language at the workplace, employers should have a clear written policy against profanity that informs employees of the rules regarding the use of profane or vulgar language in their interactions with colleagues and customers. The policy should specify the consequences for violations.
  • Enforce the Policy Consistently and Uniformly. Employers should be consistent in enforcing any policy against profanity in the workplace. Past failures to enforce or to impose appropriate sanctions may tie the employer’s hands in future situations where a sanctionable activity may arguably be clothed with NLRA-protection. (Consistency would necessarily include, for example, applying the policy to profanity by supervisors and managers as well as by line employees. The employer’s tolerance of profanity by supervisors was cited by the court as proof of inconsistent enforcement.) Consistent and uniform enforcement of the policy is key.
  • Be Careful Not to Limit Protected Activities. The enforcement of a policy against profanity or other inappropriate conduct must be balanced against an employee’s right to engage in protected activities under the NRLA. The employer’s other anti-union conduct in the Pier Sixty case was a factor in the decision. The Pier Sixty court has made clear that not all offensive language loses NLRA-protection. This decision confirms courts’ willingness to broadly construe the coverage of the NLRA, especially when considering employee activities on social media. Employers should carefully consider the context of potential profanity policy violations before taking disciplinary actions.

When faced with the question of whether to fire an employee who uses vulgar and offensive language in a Facebook post directed at a supervisor and her family, you should first determine whether the subject matter of the Facebook comment touches on any workplace concerns. If not, there may not be NLRA- protected conduct. But if the subject matter—notwithstanding the vulgarity—is arguably related to working terms and conditions, you should take extra caution to make sure that any discipline will not run afoul of the NLRA. Consider the company’s practice with regard to policing profanity at work. If the company has tolerated profanity use among its employees in the past, you may not be in a good position to sanction an employee for a statement that, although offensive, may be protected under the NLRA.

Court Halts DOL Rule Set To Extend Overtime To Millions on December 1

In an unexpected decision, on Tuesday, November 22nd, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against implementation of the Department of Labor’s (“DOL’s”) controversial final Rule expanding overtime eligibility for millions of workers, which was set to take effect on December 1st.

The DOL’s new Rule, issued on May 18, 2016, nearly doubled the salary threshold for the so-called “white collar exemptions” from the Fair Labor Standards Act’s (“FLSA’s”) minimum wage and overtime requirements. Under the old Rule, employers satisfied the minimum salary threshold if they paid exempt employees a salary of $23,660 annually (or $455/week). The new Rule increased this requirement to $47,476 annually (or $913/week). According to the DOL, this new threshold was set based on the salary level at the 40th percentile of earnings for full-time workers in the lowest-wage Census Region (which currently is the South). See DOL Factsheet, Final Rule to Update the Regulations Defining and Delimiting the Exemption for Executive, Administrative, and Professional Employees, available at https://www.dol.gov/whd/overtime/final2016/overtime-factsheet.htm.

Since the 1940s, the DOL’s regulations have required employers to satisfy both a “salary” and a “duties” test in order to classify employees as exempt executive, administrative, or professional employees. The DOL last updated the minimum salary requirement in 2004. When it issued the new minimum salary requirement in May 2016, the DOL stated that in focusing on the salary component in its new Rule, its intent was to “simplify the identification of overtime-protected employees, thus making the [executive / administrative / professional] exemption easier for employers and workers to understand and apply.” See DOL Factsheet, supra. The DOL observed that—absent an upward salary adjustment by their employers—the new Rule would expand the right to receive overtime pay to approximately 4.2 million workers currently classified as exempt. See id.

Despite this lengthy regulatory history, in deciding to issue a nationwide preliminary injunction, U.S. District Judge Amos Mazzant held that while Congress delegated significant authority to the DOL to define exempt duties, it did not authorize the DOL to limit application of the white collar exemptions based on salary level. The District Court noted: “While [Congress’s] explicit delegation would give the [DOL] significant leeway to establish the types of duties that might qualify an employee for the exemption, nothing in the [executive / administrative / professional] exemption indicates that Congress intended the [DOL] to define and delimit with respect to a minimum salary level.” As such, in promulgating the May 2016 final Rule, “the [DOL] exceed[ed] its delegated authority and ignore[d] Congress’s intent by raising the minimum salary level such that it supplants the duties test.”

Although the District Court stated that its decision applies only to the DOL’s May 2016 final Rule – and expressly disclaimed an intent to make a “general statement on the lawfulness of the salary-level test for the [executive / administrative / professional] exemption” – proponents of the DOL’s final Rule likely will continue to argue that the District Court’s decision runs counter to an established understanding of the state of the law and considerable judicial precedent across the country enforcing the DOL’s minimum salary requirement for decades. Indeed, despite the District Court’s attempt to limit its holding, the court’s rationale would appear to have considerably broader implications than an injunction only against the new minimum salary requirement.

Yesterday’s preliminary injunction is a welcome development for employers concerned about the DOL’s abrupt and significant increase in the minimum salary requirement for the white-collar exemptions. It is clear that the new minimum salary requirement will not go into effect for U.S. employers on December 1, 2016, as anticipated. However, employers should not assume that the DOL’s final Rule is dead. The District Court’s order only imposes a preliminary injunction, which the District Court could lift itself after further litigation, although that outcome seems relatively unlikely at present. The DOL also could appeal any final injunction to the United States Court of Appeals for the Fifth Circuit, a possibility that also is uncertain given the imminent change in presidential administrations. Further, future litigation will determine whether the Eastern District of Texas’s rationale could be adopted more broadly to have a more sweeping effect on the longstanding salary basis test.

While the future of the DOL’s new minimum salary requirement is now uncertain, employers should remember that the duties requirements for the FLSA’s white collar exemptions remain intact. Employers should remain diligent in ensuring that only those employees whose primary duties satisfy one or more of the applicable exempt duties tests are treated as exempt from overtime requirements.

Employers also should remain aware of exemption requirements under applicable state law, which are unaffected by developments at the federal level. For example, employers must remember that during the period the injunction is in effect, they still must comply with varying state-level minimum salary requirements that are higher than the existing federal minimum. For example, California requires that white-collar exempt employees be paid a monthly minimum salary of at least twice the state’s minimum wage. California’s minimum wage will increase starting January 1, 2017, with annual increases thereafter. As of January 1, 2017, the California salary minimum will be $43,680, lower than the $47,476 proposed requirement at issue but far above the current federal salary requirement.

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