Issues In Employment Law – February 2001

Posted on February 1, 2001
Employers may wish to consider formalizing promotion and vacancy announcement processes in response to a recent Federal Appeals Court decision which increases an employer’s exposure to claims of discriminatory failure to promote.

A Federal Appeals Court recently ruled that an Employee need not seek promotion in order to sustain a discrimination claim of failure to promote. (Dews v. A.B. Dick Co.), 84 Fair Empl. Prac. Cas. (BNA) 408, 2000 WL 167657 (C.A. 6 (Ohio), 2000). Employer in this case had no formal methods for vacancy announcements or application procedures. Part of the reasoning was that, under such a scheme, an employee would not have an opportunity to exercise his options for promotion. Additionally, if an employee were required to show that he was rejected for promotion for vacancies that were unannounced, employers would be able to discriminate by always using informal methods and backdoor procedures-the employee would never have the opportunity to be rejected, so he would unable to bring a claim. The rule as established in this case provides that if an employer uses informal promotion methods, the employer must consider all employees for any vacancies, whether the employee has applied for, or expressed interest in any such vacancy. Therefore, we caution any employer that currently has no formal vacancy announcement or promotion application processes to either formalize their current procedures, or be prepared to demonstrate that each and every eligible employee was considered for every vacancy in making your promotion decisions.

Employers using employment contracts with Arbitration Clauses CAN include, as part of the Arbitration Clause, requirement that the employee pay for part of the arbitration fees and costs, under some circumstances, a Federal Court recently said.

The Court of Appeals responsible for the Federal Law in Virginia, Maryland, West Virginia, North Carolina, and South Carolina (the 4th Circuit) recently decided that a provision of an employment contract requiring the Employee and Employer to share evenly the costs of mandatory arbitration does NOT necessarily render the arbitration provision unenforceable. (Bradford v. Rockwell SemiConductor Systems, Inc.), No. 99-2201, slip op. (4th Cir. Jan. 22, 2001) Under a prior case, which is still the law in the District of Columbia, (Cole v. Burns International Security Services, et. al.), 105 Fed.3rd 1456, 323 U.S.App.D.C. 133, (1997) the requirement that the employee share in the costs of the arbitration was an unfair limitation on the employee’s exercise of his rights, in that he would have to have some measure of financial ability to pursue a discrimination claim, which is not the case if he were able to pursue her claims in a judicial forum. Other decisions in the US District Court for the Eastern District of Pennsylvania (Goodman v. ESPE America, Inc.), No. 00-CV-862, slip op. (E.D. Pa. January 2001), Zumpano v. Omnipoint Communications, et al., 2001 WL 43781 (E.D. Pa. 2001), have backed off of this absolute requirement, and appear to require a demonstration that the particular employee is unable to pursue his claims due to financial inability before the arbitration provision would be declared unenforceable as to him. This appears to be a trend away from the DC “absolute prohibition” rule.

These decisions also point out some other considerations of arbitration clauses that may make them more or less enforceable. To make these clauses more likely to be enforced, 1) they must be symmetrical–that both the employee and employer have same requirement to arbitrate claims, that the employer does not reserve the right to litigate while requiring the employee to arbitrate, 2) they must not act to substantially deter an employee from seeking redress–financial hardship, (N.B. In one of the cases, in dicta, the court mentions that even if the fee provision of the arbitration clause would be held to be unfair and unenforceable, it would be “unnecessarily radical” to abrogate the entire arbitration clause.), 3) they must not limit damages that would be available in court–such as a waiver of equitable or punitive damages.

After an employee has sought the protection of any Employment Law, including the exercise of Family and Medical Leave, Employers need to be very cautious about making employment decisions concerning that employee, especially considering several recent Federal court decisions.

The closer in time an adverse employment decision is made with regard to an employee who has recently exercised his or her rights under the Family and Medical Leave Act, or other Employment Law, the more likely the employee will be able to sustain a claim of mistreatment by retaliation. Federal Courts around the Country appear to warming to the idea that the temporal proximity between an employee’s exercise of protected leave and an employment decision regarding that employee, to include retention or discharge, work conditions, pay, promotion, etc., may be sufficient evidence for an employee-Plaintiff to withstand a Motion for Summary Judgment filed by the employer. (Dollar v. Shoney’s Inc.), 981 F.Supp. 1417, (N.D.Ala. 1997), Hite v. Biomet, Inc., 38 F.Supp.2d 720, (N.D.Ind. 1999), Henthorn v. Olsten Corp., 1999 WL 102764, (N.D.Ill. 1999), Enright v. CGH Med. Ctr., 1999 WL 24683, (N.D.Ill. 1999)) The Courts have reasoned that the nearness in time can provide enough evidence to presume that one caused the other, thus leading to a lengthy and expensive trial on the matter. To avoid this, and to provide a strong defense to such a claim, employers must have extensive documentation to support any employment decisions made concerning any employee, but more especially an employee who has recently used Family or Medical Leave.

Employee manuals may need to be reviewed as a result of the recent decision in a state supreme court which held that while an employee manual creates an implied contract between the employer and employee with regard to matters addressed in the manual, under the proper circumstances, an employer may not be bound by its own expressed policies.

In a decision of the Supreme Court of Wyoming, Burbank v. Wyodak Resources Development Corp., 11 P.3d 943, 16 IER Cases 1501, 2000 WL 1511201 (Wyo., 2000), the court discussed the application of an employee manual which contained rather extensive discipline procedures and listed examples of “causes for discipline” which would be treated within the scope of the employers discipline system. In the case, an employee reported for work under the influence of intoxicants, which was one of the listed “causes for discipline.” The Employer, instead, immediately terminated his employment, and he sued claiming that the employer had violated its own discipline policies. The Court noted that the policy manual included language which allowed the employer to accelerate the discipline process up to immediate discharge, should the severity of the offense or past work performance, warrant such a deviation. Also, in another section, specifically addressing drugs and alcohol, reporting to work under the influence of intoxicants leads to immediate suspension, which may culminate in termination. By reserving these options to itself in the employee manual, an employer will not be obligated to follow its discipline procedures, despite potentially opposing language which states that they will.

A landmark Supreme Court case stated that a “disability” may not be a “disability” for the purposes of the Americans with Disabilities Act, and made it more difficult for employees to demonstrate a “record of disability” in order to be covered.

A 1999 Supreme Court case, Sutton v. United Airlines, Inc., 199 S.Ct. 2139, 527 U.S. 471, 67 USLW 3681, 67 USLW 4537 (1999), made it more difficult for an employee to demonstrate a “disability” to be covered by the Americans with Disabilities Act, and further made proving a “record of disability” more stringent.

Under the Sutton decision, a person who is NOT “substantially limited in performing a major life activity” when using a mitigating measure does NOT meet the ADA’s definition of an actual “disability.” This means that, when analyzing whether a person suffers from an ADA disability, one must first determine if that person is substantially limited in a major life activity. “Major life activities” have been held to include thinking, eating, drinking, learning, sex, sleeping, lifting, breathing, bending, speaking, and the like, but does not generally include playing tennis, gardening, fishing, getting along with others, running, jumping, driving, exercise, or reproduction. It does not matter how important an activity is to a particular person.

We next must look at the condition of the person in a “mitigated state.” This means that if the person can correct or compensate for the limitation, then they will not be considered as “disabled.” For example, if a person has vision problems, which are correctable by glasses, the vision problem will NOT be considered a disability. Mental conditions which are controllable with medication will, likewise, NOT be a disability. However, some “mitigating measures” can create the limitations. For example, the medication to control bipolar disorder enhances, as a side effect, a sense of paranoia, and distorted moods, or a back brace may limit walking, though it alleviates back issues.

Further, in spite of any mitigation, the employee must be substantially limited by his or her disability in either a class of jobs or a broad range of jobs. This means that the employee must be unable to work, within his or her skills, at all, at almost ANY type of job.

Finally, employers must be careful not to regard an employee as disabled, unless they actually are, because any such treatment creates a status of actually being disabled, under the ADA.

Also, under Sutton, an employee must demonstrate a “record of disability” in order to claim the protections of the act. While the Court did not specify what evidence would be sufficient to do this, it is rather clear that it requires some actual notice to an employer (i.e. treating physician, hospital stay, history of previous accommodations by an employer, etc.), which informs the employer of the nature of the disability, and the limitations under which an employee can work. In large part, it will be based upon this “record” that any accommodation requests will be measured.