KEY CASES

3rdCir: Inability to understand English insufficient to render arbitration clause unenforceable

A Spanish-speaking welder, who did not speak or understand English, was bound by the terms of a mandatory arbitration clause in the employment agreement he signed, held a divided Third Circuit, compelling arbitration of his wrongful discharge claim. After the welder passed a written exam in English, he was hired and required to attend a company orientation conducted entirely in English, where he signed the employment agreement. The company explained the arbitration provision to the welder, but only in English. The welder never asked what he was signing. The district court declined to enforce the agreement, finding that the welder did not assent to it because he did not understand it. However, the Third Circuit reversed, holding that under the "objective theory" of contract formation, absent a showing of fraud, "the fact that an offeree cannot read, write, speak, or understand the English language [was] immaterial to whether an English-language agreement the offeree executed [was] enforceable." The welder was not claiming fraud, nor was he alleging any misrepresentation in the agreement. "It was [the welder's] obligation to ensure he understood the [a]greement before signing," wrote the circuit court, noting that he never questioned its explanation or translation (Morales v Sun Constructors, Inc, August 28, 2008).

4thCir: Court erred in restricting evidence showing retaliatory animus

An African-American employee was entitled to a new trial because a district court erred in restricting the evidence that she could present to show her employer's retaliatory animus, ruled the Fourth Circuit. The employee filed suit alleging that she had been removed from the "short list" for a promotion due to race and sex bias and for her participation in a 1977 class action lawsuit (the "Segar" litigation) brought on behalf of all African-American special agents currently serving with the Drug Enforcement Administration. The district court granted judgment as a matter of law to the government on her reprisal claim and a jury found in favor of the government on her remaining claims. Vacating and remanding her case, the Fourth Circuit held that the district court "misunderstood" why the employee sought to admit the Segar litigation evidence. She intended to utilize the evidence to show a retaliatory animus (court's emphasis), as she was required to do to prevail on her reprisal claim. The employee intended to show that the Segar litigation "weighed heavily on the minds" of the decisionmakers who ultimately decided not to promote her. By prohibiting her from introducing the Segar litigation evidence "in all by the most sanitized terms," the employee was prevented from showing why her participation in that litigation "so rankled" the relevant decisionmakers that they were provoked to retaliate against her, found the circuit court (Buckley v Mukasey, August 20, 2008).

7thCir: Secret tape-recording of superiors in jailer's harassment suit not protected activity

A female jailer who surreptitiously tape-recorded a closed door meeting with two of her superiors in connection with a sexual harassment investigation she filed against the city of Alton, Illinois, triggering both her arrest under the state's felony eavesdropping statute and her discharge, did not engage in protected activity under Title VII's anti-retaliation provision, held the Seventh Circuit. While the jailer alleged that she engaged in protected activity under Title VII because she only sought to obtain evidence for her harassment suit, the Seventh Circuit held that her argument rested "upon a transparently overbroad view of the scope of the statute's protection." Although Title VII protects employees who complain about discrimination, "the statute does not grant the aggrieved employee a license to engage in dubious self-help tactics or workplace espionage in order to gather evidence of discrimination," wrote the court. The jailer also failed to show that she was performing her job satisfactorily and could not show that she was treated less favorably than similarly situated employees who engaged in similar misconduct. Moreover, the city discharged the jailer largely due to her behavior in the eavesdropping incident, which was not pretextual (Argyropoulos v City of Alton, August 26, 2008).

In our last issue, WorkWeek reported on Vaughn v Epworth Villa, in which the Tenth Circuit affirmed summary judgment to the employer, holding that even though a nurse's aid engaged in protected activity under Title VII's anti-retaliation provision when she sent copies of a patient's unredacted, private medical records to the EEOC in order to substantiate her disparate treatment claims, the aid violated her employer's policy regarding confidentiality, and possibly HIPAA, when she provided those records to the federal agency. In both cases, the Seventh and Tenth Circuits held that an employer could discharge an employee for engaging in such misconduct.

7thCir: Motor carrier did not retaliate against over-the-road driver

A freight transportation services company transferred an over-the-road truck driver from the dedicated fleet to the lesser-regarded national fleet because of his poor planning skills and history of late deliveries, rather than for his refusal to violate Department of Transportation hour restrictions in violation of the Surface Transportation Assistance Act, held the Seventh Circuit, affirming rulings by both an administration law judge and the Department of Labor's Administrative Review Board. The driver's contention on appeal—that it was impossible for him to complete his planned dispatches without violating DOT's hours requirement—was insufficient to create a triable issue of fact, the Seventh Circuit ruled. Denying the driver's petition, the circuit court held that he failed to carry his burden to produce evidence rebutting his company's proferred non-retaliatory justification. Accordingly, the ALJ and the Board properly granted summary judgment to the company (Bettner v ARB, August 21, 2008).

7thCir: BFOQ defense fails as sex-based assignment not reasonably necessary to meet goals

Reversing, the Seventh Circuit rejected a county's bona fide occupational qualification (BFOQ) defense and held that two female juvenile corrections officers prevailed on their claim that a sex-based assignment policy denied them more lucrative third shift assignments because of their sex. A new policy at a juvenile detention center required assignment of at least one staff member of the same sex as juveniles assigned to single-sex "pods" as part of a role model/mentoring program. Since there were many more male than female juveniles, the policy had an adverse effect on women, particularly on the third shift, when only one officer was assigned to each pod. In order to satisfy Title VII's antidiscrimination structures, the county was required to show that the challenged sex classifications were reasonably necessary to achieve its goals. The county had the burden of demonstrating "it could not rearrange job responsibilities to eliminate or minimize the conflict between the inmates' privacy, security and rehabilitation interests and the employees' rights under Title VII," the circuit court wrote. While the number of opposite-sex staff may help to promote security, efficient risk management and privacy, the county failed to show its policy was reasonably necessary for these goals, emphasized the court. Thus, its BFOQ defense failed (Henry v Milwaukee County, August 20, 2008).

8thCir: Employee who refused to enter inpatient alcohol treatment center not regarded as disabled

A county veterans service officer in Nebraska, who refused his employer's requirement to enter an inpatient treatment program after being arrested for wielding various firearms and killing and wounding some of his family's farm animals while intoxicated, failed to show that his employer regarded him as an alcoholic under the ADA by requiring him to complete the treatment program as a condition of keeping his job, held the Eighth Circuit. Nor did his employer discharge him because he had post traumatic stress disorder (PTSD) based on the time he served in Vietnam War. The employer's insistence that the officer complete the program was not "based upon misconceptions, myths or stereotypes about his possible drinking problem," wrote the court, "[r]ather, it was based upon, first, a very serious incident which resulted in criminal charges against [him], and then most importantly, a licensed mental health therapist's recommendation that [he] complete inpatient alcohol treatment." The officer's discharge claim failed because there was no evidence presented that his employer even knew he had PTSD (Kozisek v County of Seward, August 27, 2008).

9thCir: For a second time, court rejects NLRB's application of unilateral change doctrine

A union did not "clearly and unmistakably" waive its claim to protection from an employer's unilateral termination of dues collection following contract expiration, ruled the Ninth Circuit. In a case that had already once been before the Ninth Circuit, the court again rejected the NLRB's reasoning in finding that the employer did not violate the NLRA. In 2007, a 3-2 Board concluded that contract language specifically stated that the check-off duty would be in effect "for the duration of the agreement" and that deductions would occur "during the term of the agreement." The circuit court, however, found that the language did not show a clear and unmistakable waiver of the unions' right to bargain over ending the practice. On remand, once again, the question "squarely in front of the NLRB [was] whether dues-checkoff in right-to-work…is subject to unilateral change, or whether, dues-checkoff is a mandatory subject of bargaining." The Ninth Circuit again rejected the NLRB's application of the dues-checkoff provision, holding that the provision does not state that checkoff will terminate on expiration of an agreement (Local Joint Executive Bd of Las Vegas v NLRB, August 27, 2008).

9thCir: Shopping malls infringed on free speech of rights of Carpenters and Joiners of America

Two California shopping malls impermissibly infringed upon the state constitutional free speech rights of the Carpenters and Joiners of America and violated the NLRA by enforcing mall rules that prohibited the union's picketing and handbilling actions against the use of nonunion contractors, held the Ninth Circuit. The circuit court held that a mall rule identifying the mall owner, manager and tenant by name and rule banning signs and written materials harming the mall's commercial purpose were content-based restrictions on expressive activity that violated the California Constitution. In addition, another mall rule that required the pre-submission of written materials (the application requirement) was unlawful when used to enforce other mall rules. The Ninth Circuit also reversed the NLRB and held that three content-neutral rules violated the California Constitution, and, therefore, could not be used by the mall against the union. Although the mall rules banning the carrying or wearing of signs, pertaining to the exclusion of exterior areas and prohibiting expressive activities during "peak traffic days" were "content neutral," they imposed unreasonable restrictions on the "time, place, and manner of expressive activities, held the Ninth Circuit (United Bd of Carpenters & Joiners of Am Local 848 v NLRB, August 25, 2008).

9thCir: Delay in reinstating employees reasonable given large list of unknowns

An employer's one-month delay in reinstating 24 formerly locked-out employees who had timely accepted its offer of reinstatement did not violate the NLRA, ruled the Ninth Circuit, affirming the NLRB. The employer made its reinstatement offer to 133 employees at a facility currently employing 90 replacement employees. Accordingly, there existed the potential to have more than 220 employees seeking 90 to 100 jobs. The employer was faced with an extensive list of unknowns in dealing with the reinstatement of employees following a 14-year lockout. It did not know how many employees would return, what their seniority levels would be, whether they had worked in the same industry during the lockout period, whether they would be familiar with their new procedures and how long it would take to train the returning employees. Given these extraordinary circumstances, the employer's decision was reasonable (Fresh Fruit & Vegetable Workers Local 1096 v NLRB, August 21, 2008).

9thCir: Cash balance plans are not age-discriminatory

Joining four other circuit courts of appeal, the Ninth Circuit ruled that cash balance plans are not inherently age-discriminatory in violation of ERISA. The class action plaintiffs were participants in a defined benefit plan, which was amended and converted into a cash balance plan. As a result of the amendment, the initial balance of each participant's retirement account was the actuarial equivalent of the participant's accrued benefit. Plaintiffs asserted that under ERISA, the amendment resulted in an unlawful reduction in the rate of benefit accruals because of the attainment of any age. Agreeing with the Seventh Circuit, the Ninth Circuit held that "nothing suggests that Congress set out to legislate against the fact that younger workers have (statistically) more time left before retirement and, thus, a greater opportunity to earn interest on each year's retirement savings." Based on the time value of money, a younger participant's total accrued benefit at retirement will be greater because the younger participant has more time before retirement in which interest will compound. "Because the plan does not reduce a participant's rate of benefit accrual due to the attainment of any age, the plan does not violate ERISA," ruled the court. The Ninth Circuit also held that plaintiffs' California state law claim was preempted by ERISA. The circuit court did hold that the failure to timely notify the employees of the switch to a cash balance plan violated a procedural provision of ERISA (Hurlic v Southern California Gas Co, August 20, 2008).

10thCir: Truck drivers' class action certification denied in FCRA case

A federal district court properly rejected claims by independent truck drivers disputing that reports produced by USIS Commercial Services were not consumer reports procured for employment, held the Tenth Circuit. Originally moving for class action certification, the drivers had charged that not only were the reports produced by USIS routinely inaccurate, but their failure to follow reasonable procedures to assure maximum possible accuracy was a violation of the Fair Credit Reporting Act. The drivers contended on appeal that the district court erred in its findings concerning: what is considered information in consumer reports; the evidentiary rulings on how employers use employment history reports; and its denial of certification as a class. Whether a report is accurate may involve an individualized inquiry, the Tenth Circuit found. Furthermore, the jury concluded the named drivers' claims were without merit, demonstrating the necessity of an individualized inquiry into each claim and denial of class certification, the circuit court concluded (Owner-Operator Indep Drivers Ass'n v USIS Commercial Servs Inc, August 19, 2008).

11thCir: Employer must respond to discovery requests in suit over employment of illegal aliens

Mohawk Industries must respond to a discovery request by a former employee who alleged that he was discharged for asserting that the company employed undocumented workers, held the Eleventh Circuit, letting a district court's order stand. The employee filed suit against Mohawk and several managers under Section 1985, alleging witness intimidation; the employee asserted that he was coerced into recanting his claim, which Mohawk knew would be damaging to its defense of a separate lawsuit alleging that the company conspired to place illegal aliens to work in violation of federal and state RICO laws. However, Mohawk claimed that it fired the employee because it discovered that he was committing immigration violations by harboring illegal aliens. The Eleventh Circuit held that the district court's order, which required Mohawk to comply with certain discovery requests by the employee because the company implicitly waived attorney-client privilege, was not appealable. Further, the circuit court held that Mohawk was not entitled to a writ of mandamus (Carpenter v Mohawk Industries, Inc, August 26, 2008).

DConn: Transsexual employee's harassment claim fails

Even though a federal district court in Connecticut held that discrimination based on gender identity is sex stereotyping (i.e., failure to comply with socially accepted gender roles) that can violate Title VII and Connecticut state law, the court found that the harassment alleged by the male-to-female transsexual employee was not sufficiently "severe or pervasive to alter the conditions of her employment and create an abusive work environment." The employee submitted evidence that her first supervisor regularly yelled at her and made offensive comments. But it was her second supervisor, after she was transferred, who made the gender specific comments: (1) telling her she had "a big p&^%y" on a day when she wore tight jeans to work; (2) asking her which of the men with whom the supervisor was standing was most attractive to her; (3) asking her if her ovaries hurt as she was holding her stomach while walking to the restroom; and (4) telling her that he would not "fool around" with her as a female but probably would have done so when she was a boy. However, the court dismissed her claim, holding that the comments were not connected to her gender identity. The court also found that the employee failed to offer any evidence that her discharge was based on her gender identity as opposed to the company's legitimate, nondiscriminatory reason for firing her—she committed numerous violations of the company's attendance policy. (Morales v ATP Health and Beauty Care, Inc, August 18, 2008).

A few weeks ago, a bench trial began in Schroer v Billington, DDC, No 05-1090, in which the Library of Congress rescinded a job offer after the applicant disclosed that she was under a doctor's treatment for gender dysphoria and would be transitioning to a female before beginning work with the agency. The district court refused to dismiss the case, holding that Title VII prohibits bias against employees, transsexual or not, for failing to act or appear sufficiently masculine or feminine enough for their employer. The Washington Post has an update on the recent court proceedings.

NDInd: Abuse of intermittent leave defeats FMLA interference claim

An employee working for Subaru who allegedly used leave granted under the FMLA to sell auto parts from his home had no interference claim under the Act when his employer designated him as "voluntarily resigned" for engaging in gainful employment while on non-occupational medical leave, held a federal district court in Indiana. While the employee was on medical leave to recover from left wrist tendonitis surgery, Subaru's HR department received two anonymous phone calls from individuals reporting that he was selling auto parts from his home. Subaru hired two private investigators who validated the anonymous calls. The standard for evaluating the employee's claim was whether the employer had an "honest suspicion" that he was abusing his leave. That the information gathered by the investigators could possibly be incorrect was not relevant, confirmed the court, even if those facts led to an honest suspicion. "All that is necessary to defeat an interference claim is an honest suspicion not an accurate determination and thus the accuracy of the [investigators'] reports is moot." The district court noted that the employee's case was analogous to the Seventh Circuit's July 21 holding in Vail v Raybestos in which the circuit court held that an employee on approved leave for migraines who was found assisting her husband with his lawn-mowing service did not take leave "for the intended purpose." (Davis v Subaru of Indiana Automotive, Inc, August 8, 2008).

SDInd: Although FMLA leave was granted, employer interfered with FMLA rights

A federal district court in Indiana ruled that managers who discouraged employees from taking leave by denying overtime to any employee who took time off during the week, including time off for FMLA leave, interfered with the FMLA rights of an employee who needed to miss work two to three days per month due to chronic bronchitis and seasonal/environmental allergies, even though his employer ultimately granted the FMLA leave requested by the employee. "While [the employer] did not refuse to authorize FMLA leave for [the employer], nor successfully discourage him from taking that to which he was entitled, [the FMLA] does not suggest that the employer needs to be successful in its discouragement in order for the employer to be interfering," wrote the court. "The employer just needs to have discouraged the employee from taking the leave." Because the employee wanted to work overtime, and the managers restricted overtime from being given to employees missing workdays while on FMLA leave, the evidence sufficiently established that the employer discouraged the employee from taking FMLA leave (Jennings v Ford Motor Co, August 15, 2008).

LEGISLATION

Medical marijuana employment nondiscrimination bill passes California Senate

By a vote of 21-15, the California Senate passed a bill (A.B. 2279) that would prevent employers from discriminating against employees in hiring, termination, or any term of employment based on their status as a legal medical marijuana patient or based on a positive test result for medical marijuana use that occurs during non-working hours outside the workplace. The bill, which was introduced in February 2008 by Assemblyman Mark Leno (D-San Francisco), already passed the state assembly by a vote of 41-35. It now heads to Governor Arnold Schwarzenegger's desk for his signature.

Ohio governor opposes paid sick leave ballot initiative

On August 22, Ohio Governor Ted Strickland announced that he will oppose a mandate (proposed Issue 4 on the November ballot) that would require employers with 25 or more employees to provide not less than seven days of paid sick leave annually for full-time employees. The ballot initiative would also allow part-time employees a pro-rated number of days depending on the number of hours they worked. The initiative is supported by the Ohioans for Healthy Families, which is made up of religious, labor, healthcare and community groups. The governor had hoped to avoid the ballot initiative altogether and broker a compromise bill between the coalition and business organizations, trade associations and employers that have launched campaigns to fight the initiative.

AGENCY DEVELOPMENTS

EEOC publication promotes hiring of workers with disabilities in federal government

A new question-and-answer guide aimed at promoting the hiring and advancement of individuals with disabilities in federal government employment was issued by the US Equal Employment Opportunity Commission (EEOC) on August 26.

DOL proposes occupational health risk assessment protocol for OSHA, MSHA

Even though its earlier draft proposal drew the ire of Democratic members of Congress, the Department of Labor issued a proposed regulation on August 29 that would compile in one place all of its existing best practices related to measuring workers' exposure to toxic substances and hazardous chemicals for the Occupational Safety and Health Administration and the Mine Safety and Health Administration to follow in formulating risk assessment protocols and health standards.

DOJ revises charging guidelines for prosecuting corporate fraud

The Department of Justice has revised its guidelines for prosecuting corporate fraud by revising the Department's Principles of Federal Prosecution of Business Organizations, which govern how all federal prosecutors investigate, charge and prosecute corporate crimes. The revised guidelines state that credit for cooperation will not depend on the corporation's waiver of attorney-client privilege or work product protection, but rather on the disclosure of relevant facts. Corporations that disclose relevant facts may receive due credit for cooperation, regardless of whether they waive attorney-client privilege or work product protection in the process. The new guidelines also instruct prosecutors to avoid considering a corporation's advancement of attorneys' fees to employees when evaluating cooperativeness. In addition, the new guidance provides that prosecutors may not consider whether a corporation has sanctioned or retained culpable employees in evaluating whether to assign cooperation credit to the corporation. The revised guidelines are effective immediately.

DOT postpones mandatory direct observation regulation for drug, alcohol testing until November 1

The Department of Transportation postponed until November 1, 2008, an amendment to its workplace drug and alcohol testing regulations that subjects transportation industry employees to mandatory direct observation during drug tests conducted when the worker returns to work after a positive drug test and during follow-up drug tests, according to an announcement in the August 26 Federal Register. However, DOT has not delayed implementation of a new provision of its regulations, which took effect August 25, mandating that under the mandatory direct observation method employees must "raise their shirts, blouses, or dresses/skirts above the waist, and lower their pants and underpants, to show the observer, by turning around, that they do not have a prosthetic device on their person."

LITIGATION TRENDS

Employers are getting innovative when it comes to family leave abuse

With FMLA leave abuse getting out of hand, employers are engaging in innovative tactics, like hiring private investigators to spy on their employees. While plaintiffs' attorneys view the "surveillance as harassment, intimidation and an interference with a worker's right to take FMLA leave," courts "appear to be siding with employers," reports law.com.

ABA issues ethics opinion about outsourcing legal/nonlegal support services

Lawyers may outsource legal or nonlegal support services provided they are the ones ultimately responsible for rendering competent legal services to their clients, according to American Bar Association Ethics Opinion. However, the outsourcing lawyer should be mindful of protecting his or her client's confidences and ensuring that the attorney-client relationship is protected. Accordingly, confidentiality agreements are strongly advisable in outsourcing relationships. Law.com has more on the debate over legal processing outsourcing companies, which are becoming the norm in our ever growing global economy.

IN OTHER NEWS

Pro-union Starbucks barista gets his job back at Mall of America location

A Starbucks barista who alleged that he was discharged from his job for union organizing has been given his job back, reports AP. The barista, who started back at work on August 31, alleged that he was discharged from his Mall of America Starbucks barista job for talking to his coworkers about joining the Industrial Workers of the World Union (IWW). Besides getting his job back, Starbucks is giving the barista $2,000 in back pay. The Mall of America Starbucks joined the IWW in late July.

595 arrested in joint ICE, DOJ worksite enforcement action

In what is being called the largest worksite enforcement operation in US history, US Immigration and Customs Enforcement special agents executed a federal criminal search warrant on August 25, at Howard Industries, Inc, an electric transformer manufacturing facility in Laurel, Mississippi, based on evidence relating to aggravated identity theft, fraudulent use of Social Security numbers and other crimes, as well as a civil search warrant for individuals illegally in the United States. Of the approximately 595 illegal aliens who were arrested by ICE special agents, eight criminal cases have already been accepted for prosecution. Howard Industries has used E-Verify, the federal government's voluntary web-based program allowing participating employers to electronically verify the employment eligibility of their newly hired employees, since 2007. Noting the "catch-22" of the program, the Washington Post reports that businesses failing to enroll in E-Verify risk being raided by ICE, but if they sign up for the program, they face added costs, employment discrimination suits and labor issues, and still might be subjected to an ICE raid.

LPGA issues English proficiency requirement

The Ladies Professional Golf Association, a US private membership organization for female professional golfers, has instituted an English proficiency requirement on its players, according to USA Today. All players who have been on tour for two years are required to pass an oral evaluation of their English skills. While the policy takes effect immediately, the measurement period starts at the end of 2009. Those players who fail to pass will be suspended from the tour. This gives new meaning to the concept of "discrimination by proxy," which historically understands English-only laws as a way of targeting and punishing national origin minorities and immigrants, writes Kevin R. Johnson of ImmigrationProf Blog, noting that South Koreans represent 45 of the 121 international players on the tour. Not all agree. Jon Hyman of Ohio Employer's Law Blog writes "the LPGA's rule is not a ban on the use of foreign languages, but…a requirement that its members are proficient in English. Thus, it is less onerous than a prohibition on the use of one's native language." The LPGA is not requiring its members only speak English, but that they are able to communicate in English when the need arises (such as in press conferences or pro-am events), said Hyman. In the end, regardless of their business justifications, the LPGA is exempt from Title VII, as it is a bona fide private membership club.

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