Author: Jon Hyman

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Federal Judge Dismisses EEOC Severance Agreement Lawsuit Against CVS

The Chicago Tribune reported that U.S. District Judge John Darrah has granted CVS Pharmacy’s motion to dismiss a lawsuit filed by the Equal Employment Opportunity Commission, which challenged the company’s severance agreements as overly broad and retaliatory. 

Recall that the lawsuit challenged several garden-variety terms in standard employee severance agreements, including non-disparagement, confidentiality, and a covenant not to sue (which expressly disclaimed EEOC charges).
 
When the EEOC filed this lawsuit earlier this year, I exclaimed that a ruling for the agency could be ruinous for employers. Kudos to this judge for recognizing the folly of the EEOC’s position.
 
The Tribune reports that the court granted CVS’s motion at a hearing, and said that a written opinion would follow. I’ll have full coverage of this significant rebuking of the EEOC’s extreme position as soon as the opinion publishes.
 
In the meantime, this is not the end of this issue. It is possible, if not probable, that the EEOC will appeal this dismissal to the 7th Circuit. Also, the EEOC has filed a similar case in at least one other court. There is always a chance that another judge will see this issue the EEOC’s way, creating a split, and a headache for employers.
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The ADA and Employer Inquiries About Prescription Drugs

Employers with employees working in safety-sensitive positions have an obligation to ensure that their employees are not impaired while engaged in their jobs. For example, earlier this week I discussed Blazek v. City of Lakewood, in which the 6th Circuit concluded that the Americans with Disabilities Act does not protect a drunk snowplow driver. We also know that the ADA does not protect employees under the influence of illegal drugs.

What about legally prescribed drugs? As an employer, can you test employees for prescription medications packaged with warnings about operating heavy equipment. And, if an employee tests positive, can you require those employees to disclose those medications to the third-party company hired to administer the tests. Surprisingly, the ADA is silent on these issues.

In Bates v. Dura Automotive Sys. (8/26/14) [pdf], the 6th Circuit attempted to give us some answers.

1. Does the ADA permit an employer to test for prescription medications?

Whether the ADA permits an employer to test employees for prescription medications will hinge on whether the test is a “medical examination.” If the test is a “medical examination,” then the ADA only permits it during employment if the test is “job-related and consistent with business necessity.” According to the Court, whether the prescription-drug screen is a “medical examination” will hinge on whether the test “is designed to reveal an impairment or physical or mental health,” which examines both the employer’s reasons in using the test and the test’s typical uses and purposes.

The Court concluded that this issue presented a close enough call for a jury to decide:

Dura denies using its drug-testing protocol to reveal impairments or health conditions…. Far from a “free peek into a[n] … employee’s medical history,” … the evidence shows that Dura abstained from asking plaintiffs about their medical conditions…. The urine test itself revealed only the presence of chemicals — amphetamines, barbiturates, benzodiazepines, cocaine, ecstasy, marijuana, methadone, methamphetamine, opiates, oxycodone, phencyclidine, and propoxyphene. No one suggests that the consumption of prescription medications containing these chemicals constitutes protected medical information (or even an “impairment”) under the EEOC definition of medical examination….

Although some prescription medications may reveal more than meets the eye because of brand-name recognition and ubiquitous marketing campaigns, an employer might struggle to discern medical conditions from the prescription drugs discovered here, which included a number of prescription pain relievers. Arguably, this attenuated testing protocol — with a narrow focus on substances containing machine-operation restrictions, as opposed to all prescription drugs — reflects Dura’s effort to avoid obtaining information about employees’ medical conditions and to avoid discriminating against all employees who take prescription drugs.

Still, much depends on Dura’s credibility. Inconsistencies between Dura’s written and actual drug-testing policies and its disparate treatment of individual employees may evince a pernicious motive. For instance, one plaintiff (Bates) claims that Dura asked her directly about her prescription medications and fired her for reporting them, and Dura allowed another plaintiff (Long) to return to work despite testing positive. If credited, a jury could reject Dura’s explanation as a pretext for screening out potentially disabled employees. Moreover, plaintiffs-appellees may present evidence that the disclosure of machine-restricted medications typically reveals confidential health information, such that the jury could determine that the test targets information about an employee’s physical or mental health, regardless of Dura’s intent.

2. Does the ADA permit an employer to require employees, after a positive test, to disclose medications to a third-party administrator?

The 6th Circuit concluded that there exists a huge difference between a general requirement that employees disclose a list of all prescription medications taken (possibly illegal), versus a policy that only requires the disclosure of machine-restricted medications after a positive test. Given the fact-based nature of this inquiry, the court concluded that a jury should decide this question, too.

Dura denies asking employees about their general prescription-drug usage. Viewing the evidence in its favor, Dura’s third-party-administered test revealing only machine-restricted medications differs from directly asking employees about prescription-drug usage or monitoring the same…. A drug test that requires positive-testing employees to disclose medications to a third party, who then relays only machine-restricted medications to the employer, need not reveal information about a disability….

A jury could reasonably conclude that Dura implemented a drug-testing policy in a manner designed to avoid gathering information about employees’ disabilities.

How can an employer make sense of this discussion? These are difficult issues that balance an employer’s right to maintain a safe workplace against an employee’s right to medical privacy. What is an employer to do?

  1. Limit testing for the use of prescription drugs to safety-sensitive positions and only those medications that could pose a safety risk.

  2. Be consistent in your treatment of employees who test positive.

  3. Only disclose the results to those who need to know.

  4. Do not ask employees to disclose the underlying medical condition for which they are taking the medication.

These steps will help limit your risk in the event an employee challenges your testing or the use of the results.

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When Retaliation Stands the Test of Time

Often when we consider the issue of temporal proximity in a retaliation case, we examine it from the standpoint of whether temporal proximity is sufficient to infer retaliatory intent when the adverse action happens right on the heels of the protected activity. What happens, however, if the converse is true — if a long period of time elapses between the protected activity and the adverse action. Can an employer save itself from a retaliation claim simply by waiting it out? This was the question the court faced in Malin v. Hospira, Inc. (7th Cir. 8/7/14).

Deborah Malin worked in the IT department of the Abbott Laboratories’s hospital product division (spun off to a new company, Hospira, in 2006). In July 2003, she informed her direct boss, Bob Balogh, that she was going to complain to HR about sexual harassment by her indirect supervisor, Satish Shah, who reported to Mike Carlin. Before she could complain to HR, Balogh told her that Carlin told him to do everything in his power to stop Malin from going to HR. Malin ignored the stop sign and lodged her harassment complaint with HR.

Between the 2003 complaint and the 2006 Hospira reorganization, Malin applied for several promotions but received none of them. On June 14, 2006, the management team (including Carlin, then the CIO) met to discuss new roles for current IT employees. Five days later, Malin took emergency Family and Medical Leave Act leave. Several weeks later, the IT department announced its reorganization, which again resulted in Malin being passed over for a promotion.

Among other claims, Malin claimed that when Hospira executed its 2006 reorganization, it retaliated against her for the 2003 harassment complaint. The court concluded that the intervening three-year gap between the harassment complaint and the decision not to promote Malin was insufficient to defeat her retaliation claim:

[A] long time interval between protected activity and adverse employment action may weaken but does not conclusively bar an inference of retaliation…. Rather, if the time interval standing alone is long enough to weaken an inference of retaliation, the plaintiff is entitled to rely on other circumstantial evidence to support her claim….

The evidence in this case permits an inference that Carlin had a long memory and repeatedly retaliated against Malin between 2003 and 2006. Malin was denied promotions numerous times between 2003 and 2006. During that time, Carlin was the final decision-maker on all promotions in the IT department, both at Abbott and after the spin-off at Hospira. Malin’s immediate supervisors repeatedly told her that she would be an excellent fit for newly-available positions at higher salary grades and that they would recommend that she be promoted into them. Nevertheless, Malin did not receive any promotions at Hospira between 2003 and 2006…. These incidents are circumstantial evidence that Carlin remembered Malin’s complaint about Shah and acted to prevent her from being promoted at Hospira long after the complaint was made.

This case serves as a solid reminder that an employer cannot hold a grudge against an employee who engaged in protected activity, with the hope that the passage of time will permit later retaliation. If an employee can connect the dots between the protected activity and the adverse action, the employer faces risk, no matter how much time has passed.

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Customer Preference and Race Discrimination: When the Customer Isn’t Right

The Equal Employment Opportunity Commission has sued a Chicago auto parts retailer for race discrimination after it fired an African-American store manager. The store, an AutoZone, was located in a heavily Hispanic Chicago neighborhood. The company decided to eliminate or limit the number of non-Hispanic employees working at the store, believing that its Hispanic customers preferred to interact with Hispanic employees. When the manager refused to report to another store, the EEOC claims he was fired.

John Hendrickson, the EEOC’s regional attorney in Chicago, explains in a news release why the agency filed suit.

Fifty years after the adoption of the Civil Rights Act, a major employer transferring an employee simply because of his race and then firing him for not going along is unacceptable. When the employer is a major national brand and a leader in its industry, it’s even worse. Everyone must understand that supposed customer preference is no excuse for discrimination—it’s still illegal, and the EEOC will step in to challenge it.

Hendrickson is correct. As one federal court explains, “It is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.” Avoid the trap of acting on a mistaken belief that customers will only deal with like-skinned employees. Simply, the customer can never choose the race of the person working for you. The customer might be right about a lot things, but discrimination is not one of them.

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Executive Order Bans LGBT Discrimination by the Federal Contractors and Government

Yesterday, President Obama amended two prior Executive Orders, adding new protections against sexual orientation and gender identity discrimination. Executive Order 11246, which extends anti-discrimination obligations to federal contractors, now also includes prohibitions against sexual orientation and gender identity discrimination. Executive Order 11478, which already banned sexual orientation discrimination by the federal government, now also includes a prohibition against gender identity discrimination. The provisions affecting federal employees takes effect immediately; those impacting federal contractors will take effect within 90 days, after the Secretary of Labor implements regulations.

Currently, only 18 states prohibit employment discrimination based on sexual orientation and gender identity. These amendments will extend these protections to 28 million federal employees and employees of federal contractors. Thus, if you are a company with federal contracts operating in one of the 32 states without these protections, this executive order will apply to you.
 
It is time for employers to stop invidious discrimination against Lesbian, Gay, Bisexual and Transgender employees. According to the White House, 91% of Fortune 500 already prohibit discrimination based on sexual orientation, and 61% already prohibit discrimination based on gender identity. Yet, according to President Obama, “In too many states and in too many workplaces, simply being gay, lesbian, bisexual or transgender can still be a fireable offense..… I firmly believe that it’s time to address this injustice for every American.” 
 
I agree. It’s incomprehensible and unjustifiable for an employer to discriminate on the basis of sexual orientation and gender identity. It’s antithetical to what this country stands for — government of the people, by the people, for the people, and justice for all (no matter with whom they happen to go to bed at night). Eventually, Congress will act, pass the Employment Non-Discrimination Act, and make LGBT discrimination a thing of the past. Until then, do right by your employees. Enact policies prohibiting this type of discrimination in your workplace. Send a message that you are an employer of inclusion, and not exclusion.
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What the ADA Says About Employee Medical Information and Social Media

The Americans with Disabilities Act protects, as confidential, employee medical information obtained by an employer.

Last year, I asked the following questions about the impact of social media on this confidentiality obligation:

What happens, however, when an employee suffers an on-the-job injury and a supervisor shares information about the injury on a Facebook wall or Twitter page? Or, what about when a supervisor posts about a co-workers illness? It can be as innocuous as, “I hope John Smith has a quick recovery from cancer,” or spiteful, like, “I can’t believe John Smith has cancer and I have his workload while he’s out on medical leave.”

At the time, my questions were hypothetical, as no court had yet to address the issue. A few weeks ago, however, an Indiana federal court — in Shoun v. Best Formed Plastics — began sketching an answer. 
 
George Shoun took a few weeks off from work to recover from a workplace injury, Jane Stewart, a co-worker, knew about his injury because she was responsible for processing his work-comp claim. Stewart went on her personal Facebook page and posted the following about Shoun: “Isn’t [it] amazing how Jimmy experienced a 5 way heart bypass just one month ago and is back to work, especially when you consider George Shoun’s shoulder injury kept him away from work for 11 months and now he is trying to sue us.” 

Shoun sued his employer, claiming that Stewart’s Facebook post violated the ADA’s confidentiality requirements by “deliberate[ly] disclos[ing] [his] medical condition to another person.”

 
The court denied the company’s motion to dismiss Shoun’s lawsuit. The company claimed that its employee had not violated the ADA because Shoun had voluntarily disclosed his medical condition by filing an earlier iteration of his ADA lawsuit before Stewart made her Facebook post. The court disagreed, concluding that Shoun had not voluntarily disclosed his medical condition to Stewart or anyone else at the company; he only disclosed it via a court filing.
 
All is not lost for employers, however. The court made a clear distinction between unprotected medical information that an employee volunteers to co-workers and protected medical information that an employer learns via an employer-sponsored medical examination or program.
 
Despite this glimmer of hope, employees need to be very careful when discussing a co-worker’s health on social media. And, employers need to train their employees about the ADA’s confidentiality rules and the extension of these rules to the 24/7 world of social media. Employees must understand that confidential medical information — workers’ compensation claims, Family and Medical Leave Act claims, reasonable accommodation requests, and other medical information related to the performance of the job — is off-limits for discussion. 

Social media is informal and instantaneous. Employees often post before they think about the implications of what they are posting. ADA violations are likely the furthest from one’s mind when posting about a co-worker’s injury or medical issue. A policy statement — and, more importantly, training — on this issue could save you from a disability discrimination lawsuit down the road.

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Soliciting Is One Tough Cookie

Last year, a story went viral about a mom fired from her job for selling her daughter’s Girl Scout cookies at work.

As extreme as this seems, this reaction may not be as outrageous as you might think. In fact, there is a great legal reason to ban Girl Scout cookie sales and other similar solicitations in your workplace — it might prove to be one of your best weapons against a union organizing campaign. The catch is that you need both a sufficiently broad no-solicitation policy, and to enforce it in a nondiscriminatory manner.

A lawfully drafted and sufficiently broad no-solicitation policy prohibits anyone from soliciting during work time and in work areas. To the contrary, an overly restrictive policy would either ban union-related communications on its face or operate to treat union-related communications differently than similar nonunion solicitations.

The former is easy to spot. What does the latter look like?

Consider an employer with a strict no-solicitation policy that ignores Girl Scout cookie sales or March Madness college basketball brackets. If that employer disciplines an employee for engaging in union-related solicitations, has the company enforced its no-solicitation policy discriminatorily?

The answer depends on whether the exceptions are so common that they swallow the rule or are merely isolated incidents.

For example, in United Parcel Service v. NLRB, a federal court concluded that because employees “routinely distributed such materials as fishing contest forms, football pool material, and information about golf tournaments,” the employer could not enforce its no-solicitation rule against union-related distributions.

However, in Cleveland Real Estate Partners v. NLRB, the same court concluded permitting occasional and sporadic distributions did not demonstrate discriminatory enforcement of a no-solicitation rule.

In the meantime, word comes from the National Labor Relations Board that it is looking to rewrite workplace solicitation rules and turn this issue on its head. In the NLRB ruling in Register Guard, the National Labor Relations Board held that an employer’s solicitation or other communication policy can lawfully bar employees’ nonwork-related use of an employer-owned email system, unless, on its face, it discriminates against employees’ exercise of Section 7 rights. Thus, under Register Guard, a policy that prohibits employee use of an email system for “non-job-related solicitations” does not violate the National Labor Relations Act, even if the very nature of that ban includes union-related solicitations.

The NLRB decided Register Guard in 2007, near the tail-end of the Bush-era board. Now it’s 2014, and the Obama-era NLRB is taking a look at Register Guard.

In early May, the NLRB posted a notice asking advocates to submit position briefs on whether Register Guard should be overruled.

By all appearances, the NLRB appears to be looking for a reason to reverse Register Guard and issue a rule under which a facially neutral email policy is nevertheless illegal if one could reasonably read it restricts employees’ rights to engage in protected concerted activity. While this re-imagining of Register Guard would be consistent with the NLRB’s more recent positions in social media and other workplace communication cases, it is nevertheless concerning for employers.

As for me, I am immune to the charms of the Girl Scout cookie. While I love a Thin Mint as much as next person, my son has celiac disease, so I avoid bringing into my home treats with gluten that he can’t enjoy.

For the rest of you, however, consider whether permitting your employees to sell cookies or engage in other innocent solicitations is worth the risk that, if a union organization drive rears its head, you will be left powerless to engage one of your key weapons — the no-solicitation policy.

And keep a close eye on the NLRB for actions that will severely hamper your efforts to limit solicitations in your workplace.

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Supreme Court Holds NLRB Recess Appointments Invalid. Chaos Ensues?

This morning, in National Labor Relations Board v. Noel Canning, the U.S. Supreme Court held that President Obama exceeded his authority in making recess appointment to fill vacancies on the NLRB in 2012. 

 
If you read the early analysis around the Web, you will see people calling this opinion “narrow” and “limited.” Make no mistake. If you are an employer, this case is huge. It likely means that every case decided by the NLRB during the time of the recess appointments is void. That’s more than a year of NLRB decisions out the window, including some of its cutting edge, and controversial, decisions on issues such as social media and protected concerted activity. 
 
Stay tuned for more analysis of this critical Supreme Court decision.
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A Black and Blue Lawsuit: Tiffany & Co. Sued for Race Discrimination

My dog’s name is Loula Mae. “Loula” is name of the dog on the kids cartoon Pocoyo, which my son was obsessed with when we got her. “Mae” just sounded right to pair with Loula, and gives her a bit of a gentile, southern charm. Little did we know, however, that the birth-name of Holly Golightly, the iconic lead played by Audrey Hepburn in Breakfast at Tiffany’s is also Lula Mae. Now we know why our dog is so damn classy.

I only tell this story because today’s post is about the famous jewelry store, Tiffany & Co., which has gotten itself into a little legal mess over the racial composition of its management team and its alleged treatment of its lone African-American manager.

The New York Times reports that Michael McClure, a group director at Tiffany since 1993, has sued the jeweler, claiming a “systemic, nationwide pattern and practice of racial discrimination.” According to McClure’s lawsuit, he is the only African-American to hold one of the more than 200 management positions at Tiffany. He further alleges that that despite consistently glowing reviews since his hire, the company gave him a “warning for termination” earlier this year. McClure claims that his new boss provided that warning after meeting McClure for the first time, and then telling a group of vice presidents that he was surprised “a black man is representing the Tiffany brand.”

A lawsuit is merely a collection of alleged, unproven facts. For its part, Tiffany says that the lawsuit is meritless, and that it “welcome[s] and value[s] diversity in all forms.”

An employer like Tiffany likely does not have any affirmative action requirements — that is, it does not have an obligation to hire a racially balanced workforce. Having said that, however, it does not look good when defending a race-discrimination lawsuit if only 0.5 percent of your managers are African American. Companies should hire the best employees and fire the worst. Yet, you also need to think about what your business looks like, if for no other reason than having an “almost-all-white” management team is not going to make it any easier to defend the race claim brought by your lone black manager.

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Employers Beware: EEOC Stepping Up Disability Discrimination Enforcement

Last month, the Equal Employment Opportunity Commission announced that it was seeking “public input on potential revisions to the regulations implementing Section 501 of the Rehabilitation Act of 1973.” That Act governs employment of individuals with disabilities by the federal government, and was the Americans with Disabilities Act’s precursor. Without explanation, the Rehabilitation Act’s regulations impose an obligation on federal agencies to be “model employers” of individuals with disabilities; the EEOC is seeking to revise those regulations to provide a detailed explanation of that “model employer” obligation.

On the heels of that news, 10 of the 22 lawsuits filed or settlements reached by the EEOC in May included allegations of disability discrimination. That’s a .455 batting average for the ADA, which is none too shabby in anyone’s book. Some of the issues addressed by the EEOC in the past month include:

  • A $72,500 settlement with an Akron, Ohio, medical transportation services company, which fired an EMT-paramedic with multiple sclerosis instead of providing additional leave as a reasonable accommodation.
  • A $110,000 settlement with Norfolk Southern Railway Company, which medically disqualified a track maintenance worker because of degenerative disc disease without doing an individualized assessment of whether he could perform the essential functions of his job.
  • A $90,000 settlement with a Tennessee nursing home facility, which terminated an HIV-positive nurse. 
  • An $18,000 settlement with an Alabama athletic apparel retailer, which fired a legally blind sales clerk (who lost his full use of his sight while serving in the Army) without any consideration of whether an accommodation, such as a magnifying glass or a new computer monitor, might be reasonable.
  • A lawsuit claiming a Wisconsin energy company fired an wheelchair-bound employee instead of providing his requested reasonable accommodation of an automatic door opener.
  • A lawsuit claiming a Tennessee steel company refused to hire an applicant for a maintenance position after learning through a pre-employment medical examination that the applicant took prescription medications for an anxiety disorder and high blood pressure.
  • A lawsuit claiming a Connecticut electrical contractor refused to hire a dyslexic carpenter, without first exploring any possible reasonable accommodations for his disability.
What do all of these cases have in common? They all involve employers that failed, in some way, to engage an employee or applicant in the interactive process to determine if he or she could perform the essential functions of the job with, or without, a reasonable accommodation. Instead, the employer appears to have made snap judgments based on the individual’s disability and related stereotypes.

Disability discrimination is very much on the EEOC’s radar. Is your business sufficiently protected? Answer these questions—
  • Do you have a reasonable accommodation policy? 
  • Do you have accurately written job descriptions? 
  • Do your managers and supervisors know what the interactive process is, and how to engage in it? 
  • Have you trained your employees on disability awareness and reasonable accommodations? 

Unless you have answered “yes” to each of these important questions, your business is exposed to potential disability-discrimination issues. Considering how closely the EEOC is looking at these issues, is this risk is one your business wants to take?