The $51.6 Million Verdict – Putting the Fear of God in Age Discrimination

If you are having a hard time getting decision-makers to focus on a single-plaintiff employment case, you might want to make copies of the verdict sheet in Braden v. Lockheed Martin Corp., decided earlier this year in federal court in Camden, N.J.

In that age discrimination lawsuit, involving a reduction in force that impacted Robert Braden, five of 110 employees with his title were terminated, and all of them were over 50. Braden, 66, had worked at Lockheed since 1995 and was not given any reason for his selection.

The jury awarded him $520,000 in lost earnings, $520,000 in emotional distress, $520,000 in liquidated damages under the Age Discrimination in Employment Act, and – hold your hat — $50,000,000 in punitive damages, after four days of trial and four hours of deliberation.  Guess who’s going to Disneyland?

Yes, the decision is under appeal, but that is no reason not to use it to get everyone’s attention – this is serious business, and potentially very expensive.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department atFlaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

‘Apprentisaurus’ Age Claim Is Now Extinct

A court decision out of Illinois involved a slew of age-discriminatory comments from co-workers.

Several co-workers called Jeffrey Kawczynski the “apprentisaurus” and one wrote the epithet on his work helmet, Kawczynski said.  Others referred to him as “old man” and “old Jeff,” and even used crude, demeaning comments like “dog nuts” and “pig pen.” And one supervisor asked him his age.

Kawczynski claimed to be tortured to the point of depression by this treatment, and stopped work as a result.  But the comments were not enough for him to survive summary judgment on his age discrimination and hostile work environment claim against F.E. Moran, Inc., his employer.

Why not?  Let us be good students and count the ways, which help explain why every unpleasant work experience does not rise to the level of a viable lawsuit.

First, most of the comments were by co-workers and not supervisors, and stopped years before his employment ended.

Second, he never reported the comments to his union representatives or company human resources, and admits that the comments did not affect his work and eventually stopped.

Third, the supervisor who asked about his age was not a decision-maker at the time his termination ended.

Fourth, Kawczynski admittedly chose not to return to work in 2013 – he was not fired, even if he anticipated termination coming at some point in the future.  As such, he did not suffer an adverse employment action.

Fifth, and finally, many of the hostile comments did not suggest animus against him based on age – “pig pen” and “dog nuts” certainly are not desirable nicknames, but they also are not ageist.

So . . . before panicking about the next claim of outrageous language at work, think about the lessons from “Apprentisaurus,” break down the details alleged, and don’t go “dog nuts.”

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department atFlaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Yes, Kate Lynn, Gender Dysphoria Can Be a Disability

The popular press has touted as “unprecedented” a decision in May by a federal judge in Pennsylvania that a transgender employee could move forward with her suit for discrimination under the Americans with Disabilities Act (ADA).

But the reality of Blatt v. Cabela’s Retail, Inc., is not quite as novel as the press would suggest.  Rather than recognize being transgendered as a disability per se, the court simply acknowledged that Kate Lynn Blatt’s claim of “Gender Dysphoria, also known as Gender Identity Disorder,” which caused her severe physical and psychological distress, could qualify as a disability under the ADA.

Judge Joseph F. Leeson, Jr. rendered the decision carefully, to avoid ruling on Blatt’s constitutional challenge to the statutory language of the ADA, which expressly excludes from the definition of covered disabilities “homosexuality and bisexuality,” “gender identity disorders not resulting from physical impairments,” and “sexual behavior disorders,” among other conditions.

Rather than determine whether such exclusions deny equal protection to individuals because of their sex, in violation of the Constitution and following the Supreme Court’s gay-marriage decision in Obergefell v. Hodges (2015), Judge Leeson focused on the specific allegations in the complaint.  He noted that Blatt did not merely allege that she was disabled because she has gender dysphoria.  Instead, she specifically pled how the condition caused her clinically significant stress and other impairments that substantially limited her major life activities, including “interacting with others, reproducing and social and occupational functioning.”

The exclusions of the ADA are to be construed narrowly, Judge Leeson ruled, while conversely, the coverage of the ADA “must be broadly construed” to effect its purpose of “eliminate[ing] discrimination against the disabled in all facets of society.”  As such, her claim of a disability of gender identity disorder was allowed to proceed, despite the statute’s express exclusion of “gender identity disorders.”

No doubt that this is a victory for the transgendered community, because some claims of gender identity disorder may now proceed, despite the exclusion.  But at its heart, the ruling simply reaffirms an ADA basic: an employee claiming disability discrimination must identify how he or she is substantially limited in a major life activity.  Merely putting a label on the condition – such as “gender dysphoria” or “diabetic” — will not be dispositive for or against the claim.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department atFlaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Can You ‘Lead the Company from a Wheelchair?’ 

How would you cope personally, if you were suddenly injured and lost the use of your legs?  How would your company cope as a business, if a top executive suffered a debilitating accident, putting her out on disability leave for months and permanently restricting her to a wheelchair?

For United Process Controls (UPC), a furnace equipment manufacturer with plants in Ohio, Wisconsin and China, the situation became more than hypothetical in September of 2015, when Vice President of Operations Eric Boltz suffered a bicycling accident that left him a paraplegic. His physician certified him “currently unable to work at all,” but opined that he could return to office/management work in four-to-six months.

UPC initially provided Boltz with a paid leave of absence and disability benefits, but just seven weeks after the injury UPC President Paul Oleszkiewicz met with Boltz at his home and admittedly asked him “how he could lead the company from a wheelchair.”  The President – apparently unrestrained by any legal or human resources advice — further admitted saying to Boltz that he thought it would be “difficult” for him to return because “a leader has to do sales and be the face of the company.”  Boltz responded that his leadership “came from his brain, not from legs,” and that he could do the job from home and then eventually return to the office.

A series of rather unfriendly communications followed, including UPC terminating Boltz’s wife (a company vice president), and UPC refusing to allow Boltz to work from home, rejecting a November 24 partial release from Boltz’s doctor. The President – often an employer’s worst witness in employment cases – wrote Boltz that “the Company [did] not believe it [was] appropriate, or healthy” for Boltz to try to return to work, and later insisted that he must be released to work “in the office” and “full-time” in order to resume his duties.

Boltz resigned December 30, 2015, claiming he would have faced a “toxic environment” if he tried to return to work, and that due to his “life-changing injury . . . I do not believe my physical and mental health could withstand working under these conditions.”  He claimed to be constructively discharged, and filed suit for disability discrimination and retaliation.

In denying UPC’s motion for summary judgment on Boltz’s claims, a federal judge in Ohio rejected the company’s contention that it had established regular, in-office attendance as an essential function of the job. She noted that Boltz frequently worked from home before the injury, and that federal regulations specifically identify part-time or modified work schedules as potential reasonable accommodations.  As for Boltz’s constructive discharge claim, the court noted that where “the handwriting was on the wall and the axe was about to fall,” an employee who resigns before being fired can claim a constructive discharge.  She also found “most troubling” the President’s questioning of Boltz about whether he could lead from his wheelchair.

So what have we learned?

Rule 1:  Do not allow C-suite executives to have return-to-work communications with disabled colleagues without legal or human resources guidance. What may have seemed “common sense” to the powerful President (asking how Boltz could lead from his wheelchair) turned out to be the “most troubling” evidence of unlawful discrimination.

Rule 2:  The duty to accommodate disabled employees extends to high-level executives.  Although it may seem an undue hardship to permit such an executive to be out on disability leave for months, the law views such temporary leaves and part-time schedules as reasonable accommodations.  Therefore, an individualized analysis is required.

Rule 3:  On-site attendance is not a per se requirement of every job, even at the executive level.  Before the injury, Boltz often worked from home.  His job description did not expressly require in-office attendance.  And he put on evidence that his job mostly entailed managing operations and people remotely by phone and email.  If a company believes on-site attendance is essential, it needs to put that in the job description, be able to justify the requirement if challenged, and not allow the employee to frequently work from home when healthy. But beware that recent court decisions are holding employers to a higher standard in justifying the need to work from the office, as technological advances have increased mobile productivity.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Mandatory Waiver of Employee Class Actions Up for Supreme Court Review

Employers will soon have much more clarity on how far they can go to require employees to sign binding arbitration agreements that prohibit employees from participating in class action lawsuits against their employers.

Earlier this month, the U.S. Supreme Court agreed to review a set of appellate court decisions that have split on the issue of whether class action (and collective action) waivers in employment agreement arbitration clauses violate the National Labor Relations Act (“NLRA”). The cases are captioned National Labor Relations Board v. Murphy Oil USA, Epic Systems Corp. v. Lewis, and Ernst & Young LLP v. Morris.

Most courts over the past decade have ruled that the Federal Arbitration Act, and supporting decisions by the Supreme Court, gave employers great leeway to mandate that employees agree to arbitrate all disputes as a way of avoiding the expense and uncertainty of court litigation.  The Federal Arbitration Act provides that written contracts to arbitrate a dispute generally shall be “valid, irrevocable, and enforceable,” except when there are grounds “at law or in equity” to revoke such an agreement.

Following the Federal Arbitration Act’s support of arbitration of employment disputes, many employers expanded their employees’ binding arbitration clauses to include provisions that prohibit participation in any class or collective action lawsuits.  This has been an effective tool for employers to fight back against the recent boom in class action overtime and discrimination litigation, which, in some cases, has mushroomed into lawsuits involving thousands of employees and tens of millions of dollars in damages and settlement payments.  Encouraged by the success of such provisions, many employers expanded the prohibitions even further, to preclude any type of “collective” action in employment disputes, requiring instead that employees must arbitrate their disputes on an individual basis only.

Such class action and collective action waivers have been approved by the Supreme Court in non-employment contexts, such as consumer goods and services contracts, in which the purchasers of goods or services agree not to participate in class or collective actions against the seller, but, instead, agree to arbitrate their individual claims.

The employment agreements, however, will be reviewed by the Supreme Court against a more complicated legal backdrop: the NLRA has provided since 1935 that employees have the right to form unions, bargain collectively, and, importantly here, “to engage in other concerted activities for the purpose of . . . mutual aid or protection.”  These “Section 7 rights” of  employees to engage in “concerted activities” have long been interpreted by the Supreme Court to nullify contracts that require employees to renounce such rights.

So, the basic question before the Supreme Court now is whether binding arbitration clauses that include a waiver of the right to bring a class action or collective action violate the NLRA’s mandate that employees be free to engage in “concerted activities” with other employees.  In the Epic Systems decision, the Seventh Circuit Court of Appeals held that the provision did impermissibly violate the NLRA, noting that the Supreme Court has previously ruled that the use of administrative and judicial forums is a protected concerted activity, and that other courts have held that  participation in a collective or class action lawsuit is a protected concerted activity.  The Ninth Circuit Court of Appeals agreed with this argument in the Ernst & Young case.  The Fifth Circuit disagreed in the Murphy Oil USA decision, and an earlier D.R. Horton, Inc. v. NLRB ruling.

From our review, there certainly is no question that an employer can require its employees to arbitrate their disputes, pursuant to the Federal Arbitration Act and prior Supreme Court rulings.  At issue now is the second part of the contract clauses at issue, which requires that employees only arbitrate their claims individually, and not through any collective or class action process.

It is difficult and dangerous to predict what the Supreme Court will do with these cases, especially with the likelihood that the ninth Justice to decide the matter soon will be appointed by newly elected President Trump, who is undeniably pro-business.

As a result, employers that have such mandatory arbitration/class action waiver clauses in their employment agreements must understand that those provisions may soon be nullified or limited, requiring new agreements in the future.  In addition, employers contemplating imposing such restrictions on employees in the next few months should consider whether they want to take the risk that the Supreme Court will uphold the clauses under the Federal Arbitration Act, or consider more limited provisions that do not run afoul of the NLRA.

We will update readers once the Supreme Court renders a decision – expected later this year – but, in the meantime, we offer these options to consider:

  • Instead of barring any type of collective action, employers should consider clauses that require all collective actions to be brought in arbitration.  This would avoid conflicts with the NLRA and, in our experience, greatly reduce the risk and liability of large class actions or collective actions by employees, as most plaintiffs’ lawyers disfavor arbitration.
  • Require that each employee participating in an arbitration, individually or collectively, must voluntarily “opt in” to such a dispute with a written certification, and that state and federal procedural rules as to class and collective actions and notice shall not apply.  This is a procedural restriction, not a substantive one, and thus has a much greater chance of surviving court scrutiny, even under the Epic Systems analysis. Such a clause will protect an employer against state and federal class action rules and written notice and disclosure requirements, which often add significant expense to class action cases and spawn extensive expansion of a single employee’s litigation to hundreds or thousands of employees who otherwise would not voluntarily participate.
  • Provide a savings clause in employment agreements stating that if any portion of the restriction is deemed unlawful, then the remainder of the agreement shall remain enforceable.
  • Instruct your employment counsel to schedule a review of such clauses in your employment agreements once the Supreme Court has issued its decision.  If you don’t have such clauses, that will be the perfect time to add them, with Supreme Court guidance hot off the presses.  If you do have them, that will also be the perfect time to decide whether revision is needed.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Worshiping both God and the Almighty Dollar

Last month we told you about corporations being able to sue if they were victims of race discrimination.  This month, we learned of a case out of Michigan holding that corporations can claim “sincere religious beliefs” that justify discriminating against transgender employees.

In EEOC v. R.G. & G.R. Harris Funeral Home, a federal judge ruled that the Religious Freedom Restoration Act (RFRA) empowers a for-profit corporation to terminate an employee for transitioning from a man into a woman. According to the court, the employer demonstrated that its religious belief that gender is “an immutable God-given gift” would be “substantially burden[ed],” if the funeral home were required to employ a transgender worker. The district court’s ruling extended the reasoning of the U.S. Supreme Court’s decision, Burwell v. Hobby Lobby Stores, Inc. (2014), holding that a privately held corporation can be a protected “person” under RFRA.

The Michigan decision is unprecedented and raises difficult questions as to whose civil rights are more important — those of the employee protected from discrimination based on sexual stereotypes, or those of the employer, claiming religious beliefs.  What if a corporation claims a “sincerely held religious belief” that disfavors disabled persons, older workers, or racial minorities?  Would the court then allow discrimination against employees in those categories?

We shall see. In any event, privately held companies with religiously active owners can be expected to assert more RFRA rights and religious defenses in the future.  For a related discussion of state religious freedom laws at work, please see the attached American Bar Association paper that I co-presented at the Employment Rights and Responsibilities Committee meeting this spring.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Caught on Camera – Zippers, Buttons and an Invasion of Restroom Privacy

While the Update rarely has the opportunity to stoop to the level of bathroom humor, a New Jersey case is flush with facts that beg for a good airing out.

The Kushner Companies hired High Tech Installations to put surveillance cameras in two women’s rooms and two men’s rooms in their building in Fair Lawn, N.J., to deter vandalism.  Later, when employees found out that they were being secretly recorded (monitors were set up in a closet), 36 of them raised a stink – suing for invasion of privacy.

Company management claimed the cameras did not violate employee privacy because they filmed “common areas” in the bathrooms, and not employees inside the toilet stalls.  The employees countered that the captured images showed them zipping zippers, buttoning up, and adjusting garments as they emerged from toilet stalls.

Apparently the New Jersey Superior Court (Appellate Division) agreed that the company had been caught with its pants down. The court reversed an earlier dismissal, and the parties subsequently settled for $1,000,000. We understand that the paperwork is finished on this case.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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