Best Practice Derailed by the Details 2018-08-30T10:31:05-07:00

Posted on August 30, 2018

The EEOC has suggested that a manager’s performance evaluation should include the manager’s compliance with Equal Employment Opportunity (EEO) laws. More information. Keep in mind that such a grading system must be applied in a way that does not itself discriminate against employees based on their protected characteristics. In a recent District Court case, an employer withheld a manager’s discretionary bonus because he had fired an employee on medical leave, without receiving approval from labor relations. The discretionary bonus program rewarded full-time managers on a number of factors including compliance with the employer’s policies. Terminating the employee without consulting Labor Relations violated policy, but the employer explained the withheld bonus to the manager as caused by the Caucasian manager firing an African American employee.

The manager sued the employer, alleging discrimination, and the case will have to proceed to trial; all because of the employer’s injudicious explanation of the manager’s violation of policy. Even when employers follow suggested best practices – by, e.g., rating managers on policy compliance – in implementing the practice, the details matter. In this case, a little better explanation of the purpose of checking with labor relations before terminating an employee would have gone a long way.

The Case is Trost v. UPS Ground Freight, Inc., No. 17-C-4415 (N.D. Ill. Aug. 27, 2018).

Settling Employer Cries “Foul” at DOJ’s Press Release 2018-08-28T16:57:11-07:00

Posted on August 28, 2018

By: Lindsay Hesketh

In a 2-1 decision, the 8th Circuit recently ruled the government’s press release announcing it “found” violations of law against an employer, although false, did not materially breach its settlement agreement with the employer. The Immigrant and Employee Rights Section of the Department of Justice (IER) investigated allegations that the employer discriminated against immigrant workers. Rather than litigate, the parties settled. The settlement agreement included recitals stating that the IER had “reasonable cause to believe” the employer had engaged in unlawful practices, but that the employer denied liability.

After settling, the IER published a press release about the settlement. The release stated its investigation “found” that the company had engaged in the alleged unlawful practices. The employer notified the IER that its press release was a breach of their agreement, and it refused to pay out as it had promised. The IER then sued to enforce the agreement.

The 8^th Circuit Court found the IER’s litigation and public relations conduct “troubling” and “suspect.” But the agreement did not expressly limit what the government could publish, and therefore the press release was not a material breach of the agreement. Judge Beam dissented, stating that the IER was under an obligation to describe the agreement accurately, which should have prevented the IER from publishing that it had “found” any violations of the law.

Take away? The government agencies care about their press releases. If you expect specific language in a government release, negotiate for it.

United States v. Nebraska Beef, Ltd., No. 17-1344 (8th Cir. Aug. 27, 2018).

Employees on Leave? Maybe It’s Time to Check-In. 2018-08-20T14:45:16-07:00

Posted on August 20, 2018

By: Mercedes Pineda

The Eighth Circuit recently served a reminder about the importance of maintaining direct contact with your employees. The employer hired a sergeant in the National Guard. The employee was deployed to Afghanistan and coordinated his military leave through the employer’s third-party leave administrator. Unfortunately, the employee was wounded in action, and was on leave longer than expected. The employee tried to coordinate his reemployment several times. In one call with the third-party leave administrator, he reported that he hadn’t had a response from the employer, and wondered whether he should give two weeks’ notice. The third-party leave administrator believed the employee had resigned, and confirmed the resignation for the employer. The employer changed his employment status to terminated. Still, the employee actually wanted to come back and even applied online for a position.

In May 2016, the employee filed suit under the Uniformed Services Employment and Reemployments Rights Act (“USERRA”). The case hinged on whether the employee had “clearly and unequivocally” resigned and whether he applied for reemployment as required by USERRA. The Eighth Circuit reversed summary judgment for the employer because the employee had presented evidence that he had not “clearly and unequivocally” resigned. Specifically, he asked “if he needed to put in his two weeks’ notice,” and he had reapplied. The employer protested that the employee had not contacted the third-party leave administrator to coordinate his return, but the court ruled his re-application was sufficient under USERRA.

Delegating employment decisions to a third party has risks. Employers should maintain direct contact with employees on any form of leave. This will help avoid communication missteps and ensure a smooth transition back into the workplace.

The case is Scudder v. Dolgencorp, LLC d/b/a Dollar General Store, No. 17-2941 (8th Cir. August 17, 2018).

Employer Narrows “Collective” Actions Thru Arbitration Agreement. 2018-08-17T10:27:31-07:00

Posted on August 17, 2018

By: Beth Ann Lennon

Last term, in Epic the Supreme Court ruled the National Labor Relations Act (“NLRA”) is not a “get out of arbitration free” card. Individual employees who sign an appropriate arbitration agreement can be compelled to arbitrate even their “concerted” claims.

Now, according to the Sixth Circuit, that ruling also tells us employees cannot avoid arbitration when they bring collective claims under the Fair Labor Standards Act (“FLSA”). While acknowledging that the FLSA “gives employees the option to bring their claims” as a “collective” action, the court explained, nothing in the FLSA requires collective action. Without a “clear and manifest” statement of congressional intent to the contrary, the Federal Arbitration Act (“FAA”) applies and an employee can sign away the right to proceed collectively. Indeed, the Sixth Circuit reiterated that, under Epic, the “fundamental attributes of arbitration” cannot be attacked, and it explained that one “fundamental attribute” is its “historically individualize nature.” Gaffers v. Kelly Services, Inc.

The takeaway? There is nothing illegal about an employee contracting away his or her “collective action” rights under the FLSA. “Employees who do not sign individual arbitration agreements are free to sue collectively [under the FLSA], and those who do sign individual arbitration agreements are not.”

Terminating Employees for “Bad Faith” Harassment Complaints Fraught With Peril 2018-08-14T09:46:08-07:00

Posted on August 14, 2018

By: Chance Hill

In EEOC v. HP Pelzer Auto. Sys., the U.S. District Court denied the employer’s motion for summary judgment on a retaliation claim. The employer received a complaint that its HR manager had made two offensive, sex-related, comments. The employer’s investigation turned up three witnesses who denied the manager had made the comments. Concluding that the complaint was false, the employer discharged the complainant for making a complaint that was not in “good faith.”

The EEOC contends that the employer unlawfully retaliated against the complainant because of her opposition to its discriminatory practices. The employer admits that it terminated the employee because of her complaint, but argues that she forfeited protection by bringing a false complaint. The EEOC argued that, even if the employer had a good faith belief that the complaint was unfounded, the employer still has to show that the complainant did not also act in reasonable good faith, as used in Title VII.

The Court denied summary judgment. In resolving an employer’s motion for summary judgment, the court assumes the employee’s version of the facts is true; consequently, the court assumed the employee had a basis for her complaint. The employer needs proof the complainant acted in such bad faith that she forfeited protection from retaliation. The Court also underscored that it could not ascertain the reasonableness of the employer’s belief without making credibility determinations—a determination appropriate for the jury, but not the Court.

This case – brought by the EEOC – highlights the risk of employer policies that threaten termination for bad faith internal complaints. It is one thing to disbelieve a complaining employee, based on reasonable evidence. It is another thing to determine for yourself that the complainant does not deserve protection from retaliation. The second judgment is one the EEOC might dispute.

EEOC v. HP Pelzer Auto. Sys, Inc., No. 1:17-cv-00031 (E.D. Tenn. Aug. 3, 2018) (order denying summary judgment).

NLRB GC Leashes Pavlov’s Dog 2018-08-03T10:58:47-07:00

Posted on August 3, 2018

By: Patrick Scully

NLRB General Counsel Peter Robb this week directed his staff not to object when an employee, who is trying to decertify a union, moves to intervene in a related unfair labor practice case. Typically, when employees try to decertify the union that represents them, the union’s Pavlovian response is to file a charge claiming the employer induced or assisted the decertification effort. Unions tend to argue it is inconceivable employees would be dissatisfied with their services without a nudge from the employer. In the past, the NLRB has typically prevented employees from intervening in inducement/assistance charges. Unfortunately, as a result, employees (and their advocates) rarely have the opportunity to speak for themselves and deny that the employer caused the decertification. The GC’s directive means employees are more likely to be heard in all aspects of the decertification process. GC Robb’s move is another example of his plan to bring better balance to the enforcement of the National Labor Relations Act.

The memo is available here.