By Linda Schoonmaker and John P. Phillips

Seyfarth Synopsis: In a recent decision, the Eleventh Circuit Court of Appeals held that the use of the N-Word in the workplace one time is sufficient to trigger a hostile work environment. Additionally, the Eleventh Circuit held that an employer may be held liable for workplace harassment when the plaintiff admitted that she did not complain of harassment until her final day of employment (and when the employer alleged that the plaintiff never complained of harassment). In light of this decision, and in light of the increased focus on workplace harassment over the past year, employers should use this case as an opportunity to review their No Harassment Policies and update their employment law training—to proactively ensure that harassing conduct does not occur in their workplaces.

When faced with allegations of a hostile work environment, employers often rely on two defenses: First, in order to be actionable, a hostile work environment must be both “subjectively” and “objectively” hostile. In other words, the plaintiff must subjectively perceive the harassment to be abusive, and the work environment must be one “that a reasonable person would find hostile or abusive.” Over the years, courts have typically required multiple instances of inappropriate or harassing behavior, in order to meet this standard. Second, if the harassing behavior was committed by co-workers, the plaintiff must have complained of the harassment. In other words, the employer must have knowledge of the harassing conduct (either actual or implied—companies cannot hide their heads in the sand) before it can be held liable.

In a recent decision, however, the Eleventh Circuit Court of Appeals held that use of the N-Word on one occasion could create a hostile work environment, and the Court held that the employer could be held liable even though the plaintiff admitted that she never complained about alleged harassment until (allegedly) right before her termination. (In fact, the company denied that she ever complained at all.)

Given the increased media focus on workplace harassment, this case provides a good opportunity for employers to review their anti-harassment policies and procedures, in order to proactively ensure that harassment-related issues do not proliferate in the workplace.

Background on the Case

In Smelter v. Southern Home Care Services, Inc., the plaintiff had been hired by Southern Home Care Services in July 2013 as a customer service supervisor. As part of her job, the plaintiff was responsible for coordinating with caregivers and clients, scheduling in-home visits, and accurately recording all caregivers’ work time. There was no dispute that the plaintiff required extra training and committed many mistakes during her employment. In September 2013, she was terminated for poor performance, after a final incident in which she got in a heated argument with and yelled at a co-worker. Following her termination, the plaintiff asserted the following allegations:

  • She had endured racist remarks from her co-workers nearly every day during her employment.
  • During the argument with her co-worker on the last day of her employment, her co-worker had called her a “dumb black [N-Word].”
  • Her co-workers had made derogatory comments about black men, black women, President Obama, and compared the plaintiff with a monkey from the movie Planet of the Apes.
  • Her supervisor thought the racist comments were funny.

Although the plaintiff admitted that she had never complained about any of the comments prior to the final incident, the plaintiff alleged that she had told her supervisor about the harassment before she was terminated. Her supervisor claimed that she never complained about any race-related comments, and the plaintiff’s exit interview paperwork—which both the plaintiff and her supervisor signed—had no mention of any harassment-related complaints.

Ultimately, the district court granted summary judgment for the company, finding that the harassment the plaintiff allegedly experienced was not sufficiently severe or pervasive enough to constitute a hostile work environment, as a matter of law, and that the company had no knowledge of the alleged harassment. The plaintiff appealed to the Eleventh Circuit.

The Eleventh Circuit’s Opinion

On appeal, the Eleventh Circuit reversed the district court’s dismissal of the plaintiff’s hostile work environment claim. In doing so, the Eleventh Circuit made two significant holdings:

First, the Court held that even standing alone, the single use of the N-Word was sufficient to constitute severe harassment. The Court explained:

Southern Home argues that [the co-worker]’s “one-time use” of [the N-Word] was insufficient to establish severity as a matter of law. We strongly disagree. This Court has observed that the use of this word is particularly egregious when directed toward a person in an offensive or humiliating manner.

The Court also held that the other comments alleged by the plaintiffs were similarly sufficiently severe to create a hostile work environment, and consequently, the plaintiff had alleged a legally actionable hostile work environment claim.

Second, the Court disagreed with the district court that the employer did not have knowledge of the alleged harassment. Although it was undisputed that the plaintiff failed to report any harassment until the final day of her employment (and the company disputed whether she had even reported it then), the plaintiff had alleged that the racist slurs were “funny to everybody that worked in the . . . office,” including her supervisor. The Court found that this was sufficient evidence to hold that the supervisor had knowledge of the comments, since she could not have found the comments funny if she did not hear them.

Thus, the Court found that the plaintiff had alleged an actionable hostile work environment claim, and it remanded the case to the district court for trial.

Takeaways

In light of this decision and the increased awareness of improper workplace conduct stemming from the #MeToo movement, there are a number of proactive steps that employers can take to help ensure that their companies have the proper culture to avoid harassment complaints and allegations:

  • Review and revise, if necessary, the No Harassment Policy. Most companies have No Harassment Policies (and if your company doesn’t, it should). However, often those policies have not been updated in a number of years. Now is a good time to pull out the policy, review it, and make any necessary updates, including ensuring that there are clear, and multiple, avenues for employees to report harassment.
  • Train your managers and supervisors. Your supervisors are your most effective buffer against employment law-related allegations and lawsuits, and they serve as a conduit between the company and its employees. Managers and supervisors should get regular anti-harassment and other employment-law based training, in order to ensure that they will know when harassment is occurring and will know what to do if they spot inappropriate conduct.
  • Focus on proper documentation. In conjunction with training your supervisors and managers, documentation issues should be covered. To defend any lawsuit, you must have good documentation. Your supervisors should be trained on correctly documenting all employment actions.
  • Promptly investigate and correct any complaints of harassment. Once the company is aware of any improper harassment-related conduct, whether from a direct complaint or an observation in the workplace, the company must take prompt and appropriate action. In doing so, it is important to take all allegations and complaints of harassment in the workplace seriously, immediately perform a thorough and complete investigation of any harassment complaints, and implement swift, appropriate, and proportional remedial action, if necessary, including possible termination or suspension.

Over the past year, workplace harassment issues have increasingly grabbed headlines. While all employers can agree that use of the N-Word is especially egregious, employers must take steps to ensure that such conduct does not occur. More importantly, employers must ensure that they have the policies and procedures in place to prove that such conduct did not occur. This means having an up-to-date No Harassment Policy, and supervisors and managers who are well-trained on anti-harassment and proper investigation methods. By proactively addressing any workplace harassment issues head-on, employers can put themselves in the best possible position to defend any subsequent lawsuit.

By Mark A. Lies, II,  Brent I. Clark, Adam R. Young, and Craig B. Simonsen

Seyfarth Synopsis: OSHA has just issued a Standard Interpretation clarifying the Obama-era guidance that prohibited incentive programs and circumscribed post-incident drug testing; “Clarification of OSHA’s Position on Workplace Safety Incentive Programs and Post-Incident Drug Testing Under 29 C.F.R. §1904.35(b)(1)(iv).”

We previously blogged about OSHA’s 2016 retaliation regulation and associated guidance, which had explained examples of post-accident drug-testing and safety incentive as instances of unlawful retaliation.  OSHA’s 2016 retaliation rule left employers uncertain about what programs were permissible and whether they would face citations for long-standing safety programs aimed at encouraging safe behaviors and reducing injury rates.

  1. OSHA’s Revised Perspective is Apparent in the New Standard Interpretation

OSHA’s new Standard Interpretation intends to “to clarify the Department’s position that [the rule] does not prohibit workplace safety incentive programs or post-incident drug testing. The Department believes that many employers who implement safety incentive programs and/or conduct post-incident drug testing do so to promote workplace safety and health.” The Interpretation explains that “evidence that the employer consistently enforces legitimate work rules (whether or not an injury or illness is reported) would demonstrate that the employer is serious about creating a culture of safety, not just the appearance of reducing rates.”

Post-incident drug testing policies and safety incentive programs will be considered retaliatory and unlawful only where they seek “to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.” Properly formulated and lawful post-incident drug testing policies and safety incentive programs will be permitted and will not result in OSHA citations.

  1. OSHA Permits Consistent Post-Incident Drug Testing Policies

For years, OSHA’s position on post-incident drug testing confounded employers, and employers faced complicated questions in the hours following workplace safety incidents. The Standard Interpretation clarifies that “most instances of workplace drug testing are permissible,” including:

  • “Random drug testing”;
  • “Drug testing unrelated to the reporting of a work-related injury or illness”;
  • “Drug testing under a state workers’ compensation law”;
  • “Drug testing under other federal law, such as a U.S. Department of Transportation rule”; and
  • “Drug testing to evaluate the root cause of a workplace incident that harmed or could have harmed employees.  If the employer chooses to use drug testing to investigate the incident, the employer should test all employees whose conduct could have contributed to the incident, not just employees who reported injuries.”

Accordingly, employers may lawfully implement, random drug testing programs, DOT drug testing programs, drug testing programs under a Collective Bargaining Agreement, and post-incident (also “post-accident”) drug-testing programs. Post-incident drug testing should be conducted consistently on any employee whose conduct may have contributed to the accident, and not merely the employee who was injured in an accident. For example, if a forklift operator collides with a pedestrian and injures the pedestrian, both the operator and pedestrian should be drug tested. OSHA reiterates that employers may not use a post-injury drug testing program, which the Agency views as retaliatory and also exposes employers to worker’s compensation retaliation tort claims.

3.         OSHA Permits Safety Incentive Programs

The Standard Interpretation reverses course on the 2016 retaliation regulation’s prohibition of safety programs. With limited adjustments, OSHA now permits employers to bring back reporting-based safety programs, which the Standard Interpretation lauds as an “important tool to promote workplace safety and health.” The Standard Interpretation permits a program which offers a prize or bonus at the end of an injury-free month. OSHA’s new position thus permits employers to bring back cash bonuses or the much-maligned monthly pizza party. The Standard Interpretation also permits programs that evaluate managers based on their work unit’s lack of injuries.

However, to lawfully implement such a safety program, the employer must implement “adequate precautions” to ensure that employees feel free to report an injury or illness and are not discouraged from reporting. According to OSHA, a mere statement that employees are encouraged to report and will not face retaliation is insufficient. Employers need to undertake their choice of additional “adequate precautions,” such as:

  • “An incentive program that rewards employees for identifying unsafe conditions in the workplace;”
  • “A training program for all employees to reinforce reporting rights and responsibilities and emphasizes the employer’s non-retaliation policy;” or
  • “A mechanism for accurately evaluating employees’ willingness to report injuries and illnesses.”

The Standard Interpretation thus permits and encourages safety incentive programs that reward employees for identifying unsafe conditions in the workplace. A second precaution, a brief training on reporting illnesses and injuries, would be simple for employers to conduct and add to onboarding for new hires. The “mechanism for accurately evaluating employees willingness to report” could be a regularly scheduled, random questionnaire on employee willingness to report injuries and illnesses. Accordingly, if employers adopt these low-burden precautionary measures, they may bring back or now adopt safety programs that are popular and effective at reducing workplace injury rates.

For related information on drug testing requirements, we had blogged on the recent Department of Transportation (DOT) final rule amending its drug testing program for DOT-regulated employers.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the OSHA Compliance, Enforcement & Litigation Team, Labor & Employment, or the Workplace Policies and Handbooks Teams.

 

By Andrew S. Boutros, John R. Schleppenbach, and Craig B. Simonsen

Seyfarth Synopsis:  Among the latest news reports in the cross-border public corruption space that has legally-minded sports fans talking is that a federal grand jury is investigating Major League Baseball’s international player development system for potential Foreign Corrupt Practices Act (FCPA) violations.  See for instance Report: A Federal Grand Jury is Investigating MLB’s International Player Development System, Major League Baseball Signings Focus of Grand Jury Probe, Reports Say, and OT MLB under investigation by US Federal Grand Jury.

The news reports claim that the FBI and federal prosecutors with the FCPA Unit out of the U.S. Department of Justice are investigating whether MLB clubs and those acting on their behalf are “bribing clerks or immigration officials to change dates of birth on identification documents, or to fabricate false identity documents,” when recruiting top baseball prospects coming out of international markets.  Specifically, the well-sourced FCPA Professor blog, in quoting a former baseball operations executive for an MLB club, explained that, “MLB scouting staff or other club employees may interact at various times with these [international] officials to obtain identification documents for prospects, such as birth certificates and passports. . . .  The reason why these points of contact create risk for clubs is that prospects, through their agents or handlers, commit rampant age and identity fraud in order to appear younger and thus increase their market value.”

Of course, those familiar with the FCPA know that the statute makes it illegal for certain persons and business entities (certainly anyone resident or acting in the United States) to corruptly offer or give anything of value (whether money, gifts, or other benefits) to foreign officials, foreign political parties, or public international organizations, with the intent to obtain or retain business.  And, of course, major league baseball and its prized recruiting systems are big business in the sports world, both in the United States and abroad.  If true, this criminal probe may well shine a spotlight on a foreseeable dark side of MLB recruiting practices in the same way that a different federal grand jury investigation brought attention to illegal steroid use by some of the league’s best and most popular players several years ago.

This latest reported FCPA investigation also demonstrates (once again) that U.S. government enforcers are applying the versatile statute to fact patterns outside traditional corporate paradigms such as improper payments for lucrative contracts.  Indeed, just a few years ago, we wrote about another “non-traditional” FCPA fact pattern, that one involving the DOJ and SEC scrutinizing whether a for-profit higher-education institution (and “issuer”) may have made an improper payment while operating its overseas campus in Turkey.  See “Higher Education Institutions are Beginning to Get an Education in the FCPA,” Management Alert, Seyfarth Shaw LLP (December 22, 2016).  As we noted then, “[l]ong gone are the days where the FCPA was viewed as practically applying only to large multinational companies with significant overseas business activity.”  We went on to observe that as “U.S. higher education institutions have opened foreign campuses (either directly or through affiliates) in places such as China, India, and the Middle East,” the foreign government approval process has required “colleges and universities to interface with foreign government officials, which in turn increases the risk that higher education institutions will fold to pressures of commission or kickback requests, or hidden payments for expediency.”

The lesson in all of these out-the-box investigations is that the FCPA really cannot be limited to a so-called “box” anymore.  Whenever U.S. entities, persons, or others interface with foreign government officials, then regardless of the industry—whether sports, film, music, education, art, or traditional business—the opportunity and temptation for improper payments will be present.  And, under such circumstances, criminal activity will necessarily abound, at least to some degree.  When that happens, we should not be all that surprised to see our enforcers step up and take a crack at the conduct with their rather mighty enforcement bats.

Seyfarth Shaw is a full-service firm with leading FCPA, white collar, international, and higher education practitioners.  Those with questions about any of these issues or topics are encouraged to reach out to the authors, your Seyfarth attorney, or any member of the Seyfarth Shaw’s White Collar, Internal Investigations, and False Claims Team or International Employment Law Team.

By Ilana R. Morady and Jaclyn A. Gross

Seyfarth Synopsis: The Sixth Circuit recently upheld an administrative decision in favor of a miner’s whistleblower complaint, further underscoring the need for mine operators to implement strong anti-retaliation policies and keep detailed supporting records of internal investigations and employment-related decisions.

The Federal Mine Safety and Health Act (Mine Act) was originally enacted in 1977 to promote safe mining operations. Pursuant to Section 105(c) of the Mine Act, miners who believe they were terminated as a result of voicing their health or safety concerns can file a discrimination complaint with the Secretary of Labor. Recently, the Sixth Circuit ruled in Con-Ag, Inc. v. Sec’y of Labor, et al., to uphold a decision stating that Con-Ag violated Section 105(c) when it terminated one of its employees. The Federal Mine Safety and Health Review Commission declined to review the case, making the decision of the Administrative Law Judge (ALJ) the final decision of the Commission. The ALJ found that the employee was discharged in retaliation for reporting health and safety concerns to the Mine Safety and Health Administration (MSHA), the body that enforces the safety and health standards of mining operations.

A miner can establish a case of discrimination by showing that (1) he or she engaged in protected activity and (2) was subject to an adverse employment action that was at least partially motivated by that protected activity. “Protected activity” is defined broadly and includes filing complaints of alleged unsafe conditions to supervisors or the MSHA, refusing to work in unsafe conditions, requesting specific equipment or training, and participating in proceedings related to the Mine Act. Discriminatory behavior encompasses termination and demotion, but can also refer to being transferred to a less desirable position or to a reduction in pay or benefits. As discriminatory motive is difficult to prove using direct evidence, four factors are generally considered when determining whether the adverse employment action was connected to the protected activity: (1) the mine operator’s knowledge of the protected activity, (2) the operator’s hostility towards that activity, (3) the timing of the adverse action in relation to that activity, and (4) the operator’s disparate treatment of the miner.

Con-Ag conceded that the employee engaged in a protected activity when he spoke with MSHA investigators about working conditions in the mine, however it claimed that he was fired for threatening the company’s owner/manager during a conversation with a co-worker. Despite lack of direct evidence of hostility towards the employee, the ALJ found the elements of knowledge and timing to be persuasive, thus supporting her broader conclusion that “discrimination was at least one of the causes of [the employee’s] discharge.”

In response to Mine Act claims, mine operators can establish an affirmative defense by showing either that the adverse employment action was not related to the protected activity or that the action was related, but the company would have taken the same action even if the miner had not engaged in protected activity. The ALJ rejected Con-Ag’s defense as implausible and found that its asserted reason for the termination was pretextual, in large part due to the cursory nature of Con-Ag’s investigation prior to the employee’s discharge. The company never interviewed the employee and there was nothing in the record showing a history of violence, threatening behavior, or discipline whatsoever. The ALJ found that these oversights undermined Con-Ag’s argument that it would have fired the employee despite his involvement in protected activity.

In addition to upholding the ALJ’s findings, the Circuit Court denied Con-Ag’s request for review regarding back pay calculations and the order to reinstate the employee to his prior position. Con-Ag did not submit evidence pertaining to the calculations to the ALJ, but instead first raised its objection to the amount upon appeal, which the Circuit Court ruled unacceptable. With regard to reinstatement, Con-Ag claimed it was unable to comply due to the fact that it no longer owned the mine and that the employee did not wish to be reinstated. The Circuit Court held that Con-Ag failed to present sufficient proof that it no longer owned the mine and that the employee is free to decline the position.

Key Take Aways

In short, this case demonstrates the importance for mine operators to ensure that members of management are familiar with Section 105(c) and to have anti-retaliation policies in place. More specifically, those in management positions should recognize protected activity and be trained to respond appropriately when it arises. Moreover, mine operators should keep complete records of safety-related incidents and complaints in the event an MSHA investigation occurs.

For more information on this topic, please contact the authors, your Seyfarth attorney, or a member of the Firm’s Workplace Safety and Health (OSHA/MSHA) Team, Workplace Counseling & Solutions Team, or the Workplace Policies and Handbooks Team.

 

 

By Anne R. Dana, Nila Merola, and Robert S. Whitman

Seyfarth Synopsis: In compliance with legislation passed earlier this year, New York State has released the final model sexual harassment policy and complaint form, the model training materials, and FAQs, which provide further guidance regarding the legislation. Two significant clarifications to the draft guidance issued several weeks ago are (1) the deadline for completion of employee anti-harassment training is October 2019, not January 2019, and (2) new employees must receive training “as soon as possible,” rather than within 30 days of hire.

Earlier this year, New York State enacted comprehensive legislation targeting workplace sexual harassment. Our previous Management Alerts outlining the various requirements under the law are linked here and here. On August 23, 2018, Governor Andrew Cuomo released a draft model policy and draft model internal complaint form, a draft training script, and draft FAQs. All of those draft documents were subject to public comment. On October 1, 2018, the State issued the final documents. This Alert highlights the key differences between the drafts and the final versions and consolidates the new requirements under the State law in one place.

As background, the law requires the Department of Labor and Division of Human Rights to create a model sexual harassment prevention policy and a model sexual harassment prevention training program. Those agencies have now done so: the model policy and the model training program is available here. Employers must either adopt the model policy and training program, or establish a policy and training program that equals or exceeds the minimum standards provided by the models. The sexual harassment policy must also include a complaint form for employees to report internally alleged incidents of sexual harassment (the model is available here). Below are further details about these requirements.

Policy and Complaint Form

Beginning on October 9, 2018, all employers must distribute to all New York State employees a sexual harassment prevention policy and a complaint form that employees can use to report inappropriate conduct.

For employers that opt to create their own policies, the policy must: (1) prohibit sexual harassment consistent with guidance issued by New York State; (2) provide examples of conduct that constitutes sexual harassment; (3) clearly state that sexual harassment is considered a form of employee misconduct and that disciplinary action will be taken against individuals engaging in sexual harassment and against supervisors or managers who knowingly allow such behavior to continue; (4) clearly state that retaliation against individuals who complain of sexual harassment or who testify or assist in any investigation or proceeding involving sexual harassment is unlawful; (5) include an internal complaint form that employees can use to report conduct that they believe is sexual harassment; (6) explain that complaints of sexual harassment will be investigated promptly and that the investigations will be as confidential as possible and that the rights and interests of all parties will be protected; (7) include information concerning the federal and state laws that prohibit sexual harassment, remedies available to victims of sexual harassment, and a statement that there may be applicable local laws; and (8) inform employees of their right to file a complaint with the New York State Division of Human Rights, the Equal Employment Opportunity Commission, federal or state court, or a local police department.

The final FAQs (available here) offer additional guidance for employers. Specifically,

  • Distribution: The policy must be provided to employees in writing or electronically. If the policy is made available on a work computer, employees must be able to print a copy.
  • Contractors & Non-Employees: The policy does not have to be distributed to contractors and other non-employees. However, because the State Human Rights Law has been extended to cover non-employees who bring sexual harassment claims, employers are “encouraged” to provide the policy to non-employees and anyone providing services in the workplace.
  • Complaint Form: The complaint form does not need to be included in full in the policy, but the policy should be clear about where the form may be found (g., on an internal website).
  • Investigation Procedure: The policy must describe the employer’s internal investigation procedure. The investigation procedure does not, however, have to be identical to the investigation procedure set forth in the State’s model policy.
  • Acknowledgment of Receipt: Employers are not required to obtain or keep a signed acknowledgment that an employee has read the policy, but are encouraged to do so.
  • Languages: The policy must be provided to employees “in the language spoken by their employees.” The State will publish additional model policy and complaint forms in Spanish, Chinese, Korean, Bengali, Russian, Italian, Polish and Haitian-Creole. When a model is not available in an employee’s language, employers may provide that employee with an English version.
  • New Employees: New employees should receive a copy of the policy prior to commencing work.
  • Optional Poster: The State also issued an optional Sexual Harassment Prevention Policy Notice, which is a poster that employers may display in the workplace. The poster simply directs employees and non-employees to the employer’s sexual harassment prevention policy. Posting the State’s Notice is optional. A Microsoft Word version is available here.

Training

The New York State law also requires employers to provide all employees with annual, interactive sexual harassment prevention training. In a key difference between the draft and the final FAQs, the deadline for complying with the training requirement has been extended to October 9, 2019 (previously, it was January 1, 2019). Moreover, employers are no longer required to train new employees within 30 days of hire, but rather are encouraged to provide training “as soon as possible.” The practical effect of these changes is that many employers will likely want to wait to conduct sexual harassment training until after the New York City law goes into effect on April 1, 2019. Our prior Alerts on the New York City law are available here and here.

For employers that choose to create their own training rather than adopt the State’s model, the training must be interactive and include all of the following: (1) an explanation of sexual harassment consistent with State guidance; (2) examples of conduct that is considered unlawful sexual harassment; (3) information about federal and state laws covering sexual harassment and available remedies; (4) information regarding the employer’s procedure for the timely and confidential investigation of complaints, including the specific name(s) of appropriate personnel and location to submit complaints; (5) information addressing supervisor conduct and additional responsibilities of supervisors; (6) an explanation of how to raise sexual harassment complaints with government agencies and courts; and (7) prohibitions on retaliation with examples.

Additional guidance as set forth in the final FAQs regarding sexual harassment training is as follows:

  • Annual: Employees must receive training annually, which can be based either on the calendar year, anniversary date of each employee’s start date, or any other date the employer chooses.
  • Who must be trained: All workers, regardless of immigration status, including exempt and non-exempt employees, part-time workers, seasonal workers, and temporary workers, must be trained. Non-employees, such as third-party vendors, contractors, volunteers, or consultants do not need to be trained. Employers may deem the training requirement satisfied for new employees who received compliant training from a prior employer in the past year if the new employee can verify completion through a previous employer or a temporary help firm.
  • Interactive: The FAQs offer the following examples of trainings that would meet the “interactive” requirement: (i) if the training is web-based, it has questions at the end of a section and the employee must select the right answer; (ii) if the training is web-based, the employees have an option to submit a question online and receive an answer immediately or in a timely manner; (iii) for in-person training, if the presenter asks the employees questions or gives them time throughout the presentation to ask questions; and (iv) the training provides a Feedback Survey for employees to turn in after they have completed the training. An training in which the individual only watches a video or reads a document, with no feedback mechanism or interaction, is not considered interactive.
  • Languages: Employers must provide training to employees “in the language spoken by their employees.” The State will publish model training materials in Spanish, Chinese, Korean, Bengali, Russian, Italian, Polish and Haitian-Creole. When a model is not available in an employee’s language, employers may provide that employee with training in English.
  • Records: Employers are not required to maintain copies of training records, but are encouraged to do so.
  • Duration: There is no specific time requirement for the length of the training.
  • Time and Payment for Training: Any training time must be counted as regular work hours.

Non-Disclosure Agreements Involving Claims of Sexual Harassment

As of July 11, 2018, New York employers have been prohibited from including an NDA in any settlement of a claim involving sexual harassment that would prevent the person who complained from disclosing the underlying facts and circumstances of the harassment, unless the complainant requests confidentiality.

The final FAQs clarify that the law will not operate like the analogous provisions of the Older Workers Benefit Protection Act. Specifically, waivers cannot be included in settlement agreements that can be presented and executed on the spot in a single document. Rather, if the complainant requests confidentiality, the terms must first be provided to all parties; the complainant must have 21 days to consider the provision; and, after 21 days, if confidentiality is still the complainant’s preference, the provision must be memorialized in a separate agreement signed by all parties. The complainant then has 7 days to revoke the agreement, which shall not be effective or enforceable until the revocation period expires. The 21-day review period is not waivable, so it cannot be shortened, even if the complainant so desires. The FAQs also clarify that there must be two agreements: (1) an agreement that memorializes the preference of the person who complained, and (2) the settlement agreement itself.

As always, Seyfarth Shaw attorneys are available to assist with any questions or concerns you have regarding the New York State Sexual Harassment Laws.

By John P. Phillips and Linda Schoonmaker

Seyfarth Synopsis:  In a recent decision, the U.S. Court of Appeals for the Sixth Circuit ruled that former employees need not return severance pay before filing a lawsuit against an employer, when the employee alleges the severance agreement should be rescinded and is bringing discrimination claims under Title VII or the Equal Pay Act.  This decision means that notwithstanding the fact that the employee signed a severance agreement and accepted severance pay upon leaving the company, the employee may still be able to sue and keep the severance money—if the employee claims she was coerced into signing the agreement.  Given this, it is important for employers to review their severance practices, in order to ensure the process is fair, help protect against claims of coercion, and safeguard the company during the process.

When employers enter into severance agreements with departing employees, they do so with the expectation that the agreement will resolve all legal claims between the two parties.  In exchange for additional compensation, the employee promises not to sue the company, and the two parties part ways.  Most of the time this works, and the severance agreement is the end of it.

However, sometimes employees have second thoughts after signing a severance agreement.  In such circumstances, employees argue that the severance agreement should be set aside, often alleging that they were coerced into signing, did not know what was contained in the agreement, and did not “knowingly and voluntarily” execute the contract.  And if the employee can assert persuasive enough facts surrounding the presentation and execution of the agreement, sometimes employees can actually rescind severance agreements.

Notwithstanding this, at common law there was a legal doctrine that helped to preclude such attempts—the common law tender-back doctrine.  That doctrine held that before someone can rescind a contract and sue, that person must “tender-back” (i.e., return) the money they received under the contract.  In other words, if an employee claimed that she was coerced into signing a severance agreement, she would be required to return the severance payment before she could sue her former employer.  Recently, however, the Sixth Circuit held that the tender-back doctrine does not apply to claims brought under Title VII or the Equal Pay Act, and the Court held that a former employee need not return her severance pay before filing suit.

Background on the Case

In McClellan v. Midwest Machining, Inc., the plaintiff brought a pregnancy discrimination claim under Title VII and alleged that the employer maintained a “sex-segregated workplace.”  In addition, the plaintiff claimed that the company paid men substantially more than their female counterparts, asserting a claim under the Equal Pay Act.

Faced with this lawsuit, the employer informed the plaintiff’s attorney that she had signed a severance agreement when she was terminated, which released “any and all past, current and future claims” she had against the company in exchange for payment of $4,000.  Rather than concede that the severance agreement applied, the plaintiff claimed that she had entered into the agreement under duress and without knowledge that she was releasing her discrimination claim, alleging that the company’s president pressured her into signing, rushed her through the agreement, and used a “raised” tone of voice during the meeting.  The plaintiff then attempted to return the $4,000 to the company, but the employer refused the check, stating that “[t]here is no legal basis for rescinding the severance agreement.”

Ultimately, the district court allowed limited discovery on whether the plaintiff had “knowingly and voluntarily executed the agreement,” and the court asked for briefing on application of the tender-back doctrine.  The employer subsequently moved for summary judgment, alleging the severance agreement precluded the plaintiff’s lawsuit and that the plaintiff could not proceed with the case because she did not tender back the consideration prior to filing suit.

The district court held that there were fact issues as to whether the plaintiff had “knowingly” and “voluntarily” executed the severance agreement.  However, the court agreed with the employer that the tender-back doctrine precluded the plaintiff’s claims, and it dismissed the case.  The plaintiff appealed to the Sixth Circuit.

The Sixth Circuit’s Decision

A divided panel of the Sixth Circuit held that the common law tender-back doctrine does not apply to claims brought under Title VII or the Equal Pay Act.  The Sixth Circuit expressed concern that the tender-back doctrine would limit Title VII and Equal Pay Act claims and would frustrate the “remedial” nature of both statutes.  The Court stated:

Similarly, we worry that requiring recently-discharged employees to return their severance before they can bring claims under Title VII and the EPA would serve only to protect malfeasant employers at the expense of employees’ statutory protections at the very time that those employees are most economically vulnerable.  We therefore hold that the tender-back doctrine does not apply to claims brought under Title VII and the EPA.

Accordingly, at least in the Sixth Circuit, employees who have previously signed a severance agreement need not return their severance pay before filing Title VII or Equal Pay Act claims.  Instead, the Sixth Circuit stated that any severance pay previously paid to the employee could be deducted from any ultimate award in the lawsuit.

Takeaways

The Sixth Circuit’s decision is unwelcome news to employers because it removes a deterrent to suits by former employees who previously signed severance agreements.  However, it is important to remember that the Sixth Circuit’s decision only relates to whether employees must return severance pay; it does not address whether employees can disclaim and void the actual severance agreement itself.  Whether former employees can successfully do so depends on the circumstances under which the severance agreement was presented and executed.

Accordingly, now is a good time for employers to review their severance agreements and practices, to help avoid allegations similar to those brought in this lawsuit—that the employee was pressured into signing the agreement, rushed through the process, and not given an opportunity to fully understand its terms.  Following are some best practices to consider:

  • Give the employee time to review any severance agreement, even for younger employees. For employees over 40 years of age, employers must provide a 21-day period to review the agreement and allow the employee to revoke the agreement within 7 days.  This is not a requirement for younger employees, but providing the employee with a reasonable time to review (anywhere from a few days to a week) insulates the employer from claims that the employee was coerced into signing.
  • Allow the employee to take the severance agreement home with her. This allows the employee ample time to consider the proposal, and talk it over with her family.  And an employee will be hard pressed to claim she did not voluntarily enter into the agreement when she took it home, executed it, and then returned it to the company.
  • Inform the employee that she may consult an attorney, if she wishes. Although not necessary in every circumstance, encouraging that the employee consult an attorney will help protect the employer against claims of coercion.
  • Consider having two managers or supervisors present the severance offer to the departing employee. This provides the company with an additional witness in the event the employee raises issues about the meeting down the road, and it avoids any “he said, she said” scenarios.
  • Instruct the manager or supervisor relaying the severance offer to take notes, even if nothing of substance occurred during the meeting. This way, the company will have a record that the meeting occurred and knowledge as to whether any issues were raised during the meeting.  If issues were raised, the company can proactively resolve them.

Above all, the goal of any severance offer is to treat the employee fairly and professionally, while at the same time protecting the company and ensuring closure for all sides.  In order to accomplish this, it is important to protect the company during the severance process—including when presenting the severance offer to the employee—to limit after-the-fact allegations.  And while the Sixth Circuit’s McClellan v. Midwest Machining decision injects more uncertainty into severance agreements, with a little proactive planning employers can still ensure that severance agreements accomplish their goals.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Labor & Employment Team.

By Gerald L. Maatman, Jr., Michael L. DeMarino, and Rebecca S. Bjork

Seyfarth Synopsis: Although back pay has been awarded in Age Discrimination in Employment Act (ADEA) cases for quite some time, few courts have specifically addressed whether these damages are discretionary or mandatory.  In EEOC v. Baltimore County., No. 16-2216, 2018 WL 4472062, at *1 (4th Cir. Sept. 19, 2018), the Fourth Circuit answered this straightforward question and held that retroactive monetary awards, such as back pay, are mandatory legal remedies under the ADEA. Because the ADEA incorporates the provisions of the Fair Labor Standards Act (FLSA) that make back pay mandatory, the Fourth Circuit concluded that district courts lack discretion to deny back pay once ADEA liability is established. The key takeaway from this decision is that now more than ever, employers should take steps to minimize exposure to ADEA violations and, if ADEA liability is established, to explore available set offs to back pay awards.

Background

In EEOC v. Baltimore County, the EEOC brought a lawsuit on behalf of two retired corrections officers and a group of similarly-situated employees at least 40 years of age. The EEOC alleged that the County’s pension plan, known as the Employee Retirement System (“ERS”), required older employees to pay more toward their retirement than younger employees, for the same retirement benefits.

The district court granted summary judgment in favor of the EEOC, finding that because the different contribution rates charged to different employees is explained by age rather than pension status, age is the “but-for” cause of the disparate treatment, and the ERS violated the ADEA. On appeal, the Fourth Circuit affirmed and remanded the case to the district court for consideration of damages. We previously blogged about the district court’s decision here and the Fourth Circuit’s decision here.

On remand, the district court considered the EEOC’s claims for retroactive monetary relief –  which was in the form of back pay. Ultimately, the district court rejected the EEOC’s bid for these damages, concluding that it had the discretion under the enforcement provision of the ADEA, 29 U.S.C. § 626(b), to wholly deny back pay. Thereafter, the EEOC appealed.

The Fourth Circuit’s  Decision

On appeal, the County argued that the district court properly exercised its discretion under the ADEA, 28 U.S.C. § 626(b), to deny the EEOC an award of back pay. The Fourth Circuit rejected this contention. Instead, the Fourth Circuit agreed with the EEOC that because back pay is a mandatory legal remedy under the FLSA, and because the ADEA incorporates the FLSA’s liability provisions, the district court lacked the discretion to decline to award back pay.

Specifically, the Fourth Circuit reasoned that “[b]ecause Congress adopted the enforcement procedures and remedies of the FLSA into the ADEA, we construe the ADEA consistent with the cited statutory language in and judicial interpretations of the FLSA.” Id. at *3.  “Back pay,” the Fourth Circuit continued, “is, and was at the time Congress passed the ADEA, a mandatory legal remedy under the FLSA.” Id. The Fourth Circuit reinforced this conclusion, noting that the ADEA’s “legislative history further suggests that Congress consciously chose to incorporate the powers, remedies, and procedures of the FLSA into the ADEA.” Id.

Implication For Employers:

This long-running case demonstrates the complexities and potential pitfalls employers face while trying to navigate the ADEA. Employers should take care to review and consider their justifications for retirement plans that have variable contribution rates for employees based on age.  More broadly, this decision demonstrates that damages for ADEA violations can quickly add up if back pay awards are permanently on the table.

By Brent I. Clark, Kristin G. McGurn, and Craig B. Simonsen

Seyfarth Synopsis: The U.S. Department of Health and Human Services (HHS), Office of the Surgeon General, has just released a Report on “Facing Addiction in America: The Surgeon General’s Spotlight on Opioids,” (Washington, DC: HHS, September 2018).

In the Report, Alex M. Azar, II, Secretary of the HHS, notes that “the opioid misuse and overdose crisis touches everyone in the United States.  In 2016, we lost more than 115 Americans to opioid overdose deaths each day, devastating families and communities across the country. Preliminary numbers in 2017 show that this number continues to increase with more than 131 opioid overdose deaths each day.  The effects of the opioid crisis are cumulative and costly for our society—an estimated $504 billion a year in 2015—placing burdens on families, workplaces, the health care system, states, and communities.”

The “evidence-based public health approach” described in the Report offers a way forward.  Its goal is to reduce the impact of the opioid crisis by addressing factors that contribute to opioid misuse and its consequences.  The Report offers that by adopting this approach—which seeks to improve the health, safety, and well-being of the entire population—the nation will have an opportunity to take effective steps to prevent and treat opioid misuse and opioid use disorder and reduce opioid overdose.  The evidence-based public health approach to the opioid crisis complements the broader healthcare ecosystem’s focus on social determinants of health and consumers’ behavioral conditions, which are widely viewed as critical to improving individual and national health outcomes over the long term.

Specifically, the Report offers suggestions for various key stakeholders, including, the healthcare profession and other employers generally:

Health Care Professionals and Professional Associations – As Employer and Provider:

  • Address substance use-related health issues with the same sensitivity and care as any other chronic health condition.
  • Support high-quality care for substance use disorders.
  • Follow the gold standard for opioid addiction treatment.
  • Follow the CDC Guideline for Prescribing Opioids for Chronic Pain.
  • When opioids are prescribed, assess for behavioral health risk factors to help inform treatment decisions, and collaborate with mental health providers.
  • Check the PDMP before prescribing opioids.
  • Refer patients to opioid treatment providers when necessary.
  • Become qualified to prescribe buprenorphine for the treatment of opioid use disorder.

Industry and Commerce:

  • Support youth substance use prevention.
  • Continue to collaborate with the federal initiative to reduce prescription opioid-and heroin-related overdose, death, and dependence.
  • Reduce work-related injury risks and other working conditions that may increase the risk for substance misuse.
  • Offer education, support and treatment benefits for workers affected by the opioid crisis.

As a resource for employers, the HHS also offers the Surgeon General Postcard “What Can You Do To Prevent Opioid Misuse?”  The card encourages employers to open up to conversations about the impact of addiction, to learn how to read the signs of struggle within the workforce, to ensure safe workplaces designed to minimize the need for pain prescriptions, and to be prepared to deal with a crisis.  Specifically, HHS counsels:

TALK ABOUT IT:  Opioids can be addictive and dangerous. We all should have a conversation about preventing drug misuse and overdose.

BE SAFE:  Only take opioid medications as prescribed. Always store in a secure place. Dispose of unused medication properly.

UNDERSTAND PAIN:  Treatments other than opioids are effective in managing pain and may have less risk for harm.  Talk with your healthcare provider about an individualized plan that is right for your pain.

KNOW ADDICTION:  Addiction is a chronic disease that changes the brain and alters decision-making. With the right treatment and supports, people do recover. There is hope.

BE PREPARED: Many opioid overdose deaths occur at home. Having naloxone, an opioid overdose reversing drug, could mean saving a life. Know where to get it and how to use it.

HHS also provides help resources and information and a hotline (1-800-662-HELP (4357).

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Health Law Group, Workplace Safety and Health (OSHA/MSHA) Team, Workplace Counseling & Solutions Team, or the Workplace Policies and Handbooks Team.

By Honore Hishamunda and Alex S. Drummond

Seyfarth Synopsis: Employers face a tough challenge in trying to balance their obligations under the ADA with efforts to enforce workplace rules. A recent decision out of the United States Court of Appeals for the Sixth Circuit, however, highlighted how employers can get that balance right.

The Americans with Disabilities Act (ADA), among other things, requires employers to provide reasonable accommodations to employees qualified to perform the essential functions of their jobs and prohibits employers from retaliating against employees for exercising their rights under the ADA. But what if, in the midst of attempting to comply with these obligations, employers have to enforce workplace rules against someone requesting a reasonable accommodation? A recent Sixth Circuit Court of Appeals decision – McDonald v. UAW-GM Center for Human Resources – highlighted how, with care, employers can balance these seemingly competing goals.

The plaintiff in the case was a receptionist, a union member, and suffered from a genetic disorder which, with the employer’s permission, she took time off from work to treat. During plaintiff’s time with the employer, the operative CBA required employees to take lunch breaks no earlier than 11:00 a.m., and to, once a year, select either a half-hour lunchbreak with separate additional 15-minute breaks or an hour long lunch break. Plaintiff, despite these policies and despite choosing a half hour break, began leaving for the gym at 10:30 a.m. and tacking on her 15-minute breaks to essentially take an hour long break. In addition, plaintiff was accused of sexually harassing another co-worker.

In the midst of the employer’s sexual harassment investigation, plaintiff asked if she could either switch to an hour long break or tack on breaks in order to continue to work out as it helped with the pain from her previous surgeries. Her supervisor rejected this request citing the CBA’s rules, and offered plaintiff the option of arriving early in the mornings to work out. In addition plaintiff’s supervisor warned plaintiff that continued violation of the early or extend lunch break policy could result in disciplinary action.

Plaintiff rejected her supervisor’s compromise, and contacted the company’s personnel manager regarding her requests, this time providing a doctor’s note stating that plaintiff needed to exercise daily for 30 to 60 minutes. The personnel manager stated that the request would need approval from other members of management. However, while plaintiff’s request was being processed and on the same day she received an update regarding the same, plaintiff left early to go to the gym without authorization. Plaintiff was caught and eventually suspended for violating workplace rules. Plaintiff never returned to work and instead took personal leave before submitting her voluntary resignation. The time between her initial accommodation request and her resignation was less than 2 months.

Plaintiff sued claiming a failure to accommodate. Further, plaintiff alleged that her employer suspended her in retaliation for requesting a reasonable accommodation, or, alternatively, that she was constructively discharged. The Sixth Circuit, affirming the District Court, granted employer’s motion for summary judgment on each of plaintiff’s claims.

The Sixth Circuit held that the employer met its obligations to reasonably accommodate plaintiff. Specifically, the court found that the employer listened to plaintiff’s initial request for an accommodation, provided alternatives, again listened to plaintiff’s second request for an accommodation, and was unable to process the request because plaintiff resigned. In doing so, the court noted that, in the ADA context, (i) an employer’s minimal delay due to internal processing or events outside of its control does not an ADA violation; (ii) an employer is not required to provide a specific accommodation if it identify other reasonable accommodations; and (iii) when an employee quits before their accommodation request is resolved, the employee, and not the employer, is typically at fault for the interactive process breaking down.

In addition, the Sixth Circuit held that the employer did not retaliate against plaintiff for asserting her ADA rights. Specifically, the court found that plaintiff was not retaliated against because she was suspended for violating workplace rules, not for requesting reasonable accommodations. In doing so, the court noted that an employee must show that their protected activity was the “but-for” cause of any adverse action. Further, the court found that plaintiff, and other employees, cannot make such a showing where “an intervening legitimate reason to take an adverse employment action [like insubordination] dispels an inference of retaliation based on temporal proximity.”

The Sixth Circuit also held that the employer did not constructively discharge plaintiff. Specifically, the court found that plaintiff’s complained of treatment – the employer investigating her for alleged sexual harassment, declining her preferred accommodation, and suspending her for insubordination – did not support her constructive discharge claim. In doing so, the court noted that a constructive discharge claim “is hard to prove” and requires a showing that “working conditions were objectively intolerable and that [the] employer deliberately created those conditions in hopes that they would force [the employee] to quit.” Further, the court noted that, in the instant case, plaintiff’s suspension was related to her “deliberate insubordination” and her investigation was “management simply… responding to a workplace complaint” such that “no reasonable jury could find that [employer] hoped [plaintiff] would quit because of these preferred reasons.”

This decision highlights that, even when wrestling with their obligations under the ADA context, employers may and should enforce workplace rules.

If you have any questions regarding this area or need assistance evaluating whether to grant or deny long-term or indefinite leave requests, please contact the authors, your Seyfarth Attorney, or a member of the Firm’s Absence Management and Accommodations or Workplace Policies and Handbooks Teams.

By Jennifer L. Mora and Anthony S. Califano

Synopsis: On September 5, 2018, a federal district court in Connecticut granted summary judgment to a job applicant after an employer refused to hire her because she tested positive for marijuana in a pre-employment drug test. The decision, Noffsinger v. SSC Niantic Operating Co., LLC, d/b/a Bride Brook Nursing & Rehab. Ctr., should serve as a reminder to employers operating in states with medical marijuana laws to evaluate their policies and practices concerning employee use of marijuana outside the workplace.

Background

The plaintiff claimed that her doctors recommended she use medical marijuana (specifically, a synthetic form of marijuana, Marinol) for her post-traumatic stress disorder (PTSD).

The employer, which was a government contractor, extended to the plaintiff a job offer contingent on her passing a pre-employment drug test. The plaintiff notified the employer that she was a registered medical marijuana user who took Marinol, but only at night before bed so she would not be impaired at work. The employer withdrew the job offer after the plaintiff’s pre-employment drug test revealed a positive result for THC, a chemical component of marijuana.

The plaintiff sued, alleging the employer violated the Palliative Use of Marijuana Act (PUMA)’s anti-discrimination provision, which states:

[U]nless required by federal law or required to obtain funding: … No employer may refuse to hire a person or may discharge, penalize or threaten an employee solely on the basis of such person’s or employee’s status as a qualifying patient.

The District Court Rejects the Employer’s Preemption Arguments

In its first attempt to end the litigation, the employer moved to dismiss, primarily asserting plaintiff’s PUMA claim was preempted by three federal statutes: the Controlled Substances Act (CSA), the Americans with Disabilities Act (ADA), and the Food, Drug, and Cosmetic Act (FDCA).

On August 8, 2017, the federal district court denied the employer’s motion and held that these laws do not preempt PUMA. The court also held that PUMA has an implied right of action under its employment anti-discrimination provisions. This decision marked the third time in 2017 that a court ruled in favor of a medical marijuana user, with separate decisions in Rhode Island and Massachusetts. These decisions stand in contrast to rulings from other courts–including courts in California, Colorado, Montana, New Mexico, and Oregon–ruling in favor of employers in cases involving employee or applicant use of marijuana.

The parties then conducted discovery and filed cross motions for summary judgment.

The District Court Grants the Plaintiff’s Summary Judgment Motion

One year later, the court denied the employer’s second request to dismiss the case, and instead granted the plaintiff’s motion for summary judgment.

The employer argued, among other things, that as a federal contractor, it was allowed to make the employment decision because it is exempt from PUMA’s anti-discrimination provision. The employer relied on PUMA’s provision allowing employers to refuse to hire or employ state-qualified medical marijuana users if “required by federal law or required to obtain funding.” According to the employer, as a government contractor, it was required to comply with the federal Drug-Free Workplace Act (DFWA) which, the employer argued, makes it unlawful for an employer to allow employees to use illegal drugs. Marijuana remains a Schedule I drug under the CSA and, thus, its use violates federal law. The court disagreed, holding that the DFWA neither requires drug testing nor regulates an employee’s off-duty cannabis use, “much less an employee who uses medical marijuana outside the workplace in accordance with a program approved by state law.”

The court also rejected the employer’s argument that it did not “discriminate” against the plaintiff because it relied solely on her failed drug test rather than on her status as a medical marijuana user. To accept the employer’s argument, according to the court, “would render the statute’s protection against PUMA-based discrimination a nullity, because there would be no reason for a patient to seek PUMA status if not to use medical marijuana as permitted under PUMA.” The court also found it important that PUMA allows an employer to discipline employees for on-duty use of cannabis. The court said that this statutory provision, “by negative implication . . . makes clear that PUMA protects a qualifying patient for the use of medical marijuana outside working hours and in the absence of any influence during working hours.”

Notably, despite the ruling in favor of the plaintiff, the court held that she will not be entitled to her attorney’s fees or punitive damages on the basis that PUMA doesn’t expressly allow for this type of relief.

What the Decision Means for Employers

The decision is from one federal district court analyzing the medical marijuana law in Connecticut. Thus, it is not binding on other courts and the employer may appeal the decision. Regardless, this is a developing area of the law and, thus, employers should consider reviewing their drug-related policies. More states are enacting medical marijuana laws and courts have issued employee-friendly decisions addressing existing laws, which makes it particularly important for employers to stay ahead of this evolving area of the law.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Cannabis Law Practice or Workplace Policies and Handbooks Team.