Author Archives: Holland & Hart

April 24, 2012

Good Documentation Dooms FMLA Claim

A recent case issued by the Tenth Circuit (which covers Colorado) provides a good reminder about the importance of good documentation, and following your employment policies. In Peterson v. Exide Technologies, the Tenth Circuit affirmed summary judgment in favor of Exide Technologies, dismissing Peterson's Family and Medical Leave Act (FMLA) and wrongful discharge claims as a matter of law. Peterson was involved in a forklift accident, in which he was injured. After the accident, he was placed on FMLA leave for 10 days. After investigating the accident, the employer determined that Peterson had violated its safety policies. Therefore, Exide terminated Peterson four days after the accident, while Peterson was on FMLA leave.

Peterson then sued, claiming his discharge violated his rights under the FMLA, and gave rise to a common law claim for wrongful discharge in violation of public policy. The district court and the Tenth Circuit disagreed. Peterson had a history of documented safety violations, and he had no evidence that the stated reason for his discharge–yet another safety violation–was a mere cover-up (or pretext) for an unlawful motive. Importantly, the court rejected Peterson's argument that Exide had failed to follow its own progressive discipline policy. The court noted that Exide's progressive discipline policy was discretionary rather than mandatory, and it did not prevent Exide from considering past disciplinary actions, even if they were dated.

Peterson also claimed the incident giving rise to his termination was minor, and that he was not at fault for the accident. Again, however, the court rejected his arguments, reasoning that Exide could legitimately rely on the final accident given Peterson's record of unsafe work performance. Thus, even though Peterson was terminated while on FMLA leave, his claims were dismissed. There are several important lessons from this case, including:

1. Document performance and behavior issues as they occur.

2. Review your employment policies to ensure they do not create mandatory language with respect to progressive discipline, or any other language that might limit your right to terminate an employee.

3. It is possible to discharge employees while on FMLA leave, but be cautious when doing so. Such a decision has a heightened possibility of leading to litigation. Even if, as in this case, you can successfully defend the case, consider whether there is another approach that might allow you to avoid litigation altogether.

April 17, 2012

NLRB Notice-Posting Requirement Indefinitely Postponed

Brian M. Mumaugh and Bradford J. Williams have been following the recent developments regarding the rule by the National Labor Relations Board, which required most employers to post a statement of rights under the National Labor Relations Act. Today the D.C. Circuit granted an emergency motion for relief, which had the effect of enjoining enforcement of the rule. More information about the D.C. Circuit's ruling and its effect on employers is available by visiting the Colorado Employment Law Blog or clicking here.

April 16, 2012

Court Strikes Down NLRB Notice-Posting Requirement, Leaves Employers Hanging

By Brian M. Mumaugh and Bradford J. Williams

The U.S. District Court for the District of South Carolina just became the second federal district court to weigh in on the legality of a National Labor Relations Board (NLRB) rule requiring most private employers to post a notice informing employees of their rights under the National Labor Relations Act (NLRA). In his April 13, 2012, decision, Judge David C. Norton held that the notice-posting rule exceeded the NLRB’s authority in violation of administrative law. The decision leaves employers hanging regarding their obligations in advance of the April 30, 2012, notice-posting deadline.

In August 2011, the NLRB issued a final administrative rule requiring all private employers covered by the Act to post 11-by-17 inch posters “in conspicuous places” advising employees of their rights under the NLRA. These rights include the right to form, join, or assist unions; to negotiate with employers through unions; to bargain collectively through representatives of employees’ own choosing; and to strike and picket. The rule was stridently opposed by business groups which felt that it violated employers’ First Amendment rights, and mandated the posting of an excessively pro-union message. The final rule required employers who customarily communicate with employees regarding personnel matters using an intranet or internet site to post the notice prominently on that site.

To ensure compliance, the rule provided that failure to post the required notice would be deemed an unfair labor practice (ULP) under Section 8(a)(1) of the Act. The Board could automatically toll (or stay) the six-month statute of limitations for all ULP actions—not just those arising out of a failure to post—where employers failed to post the notice. In addition, the knowing and willful refusal to post the notice could be used “as evidence of unlawful motive” in ULP cases in which motivation was at issue.

In late 2011, the NLRB’s final administrative rule was challenged in lawsuits filed in the U.S. District Court for the District of Columbia, and the U.S. District Court for the District of South Carolina. Due in part to this pending litigation, the rule’s effective date was postponed to January 31, 2012, and then to April 30, 2012.

On March 2, 2012, Judge Amy Jackson of the U.S. District Court for the District of Columbia issued a ruling in the first of the two lawsuits, National Association of Manufacturers v. NLRB, No.11-1629 (ABJ) (D.D.C. Mar. 2, 2012). Judge Jackson broadly upheld the NLRB’s right to issue the notice-posting rule, but struck down automatic sanctions for failure to post the required notice. She held that failure to post might constitute an ULP, and might toll the statute of limitations, but found that the Board would have to make specific findings in each ULP case to impose such sanctions. Judge Jackson’s decision is currently on appeal to the U.S. Court of Appeals for the District of Columbia Circuit, and the appellate court has not yet ruled on a motion that would enjoin the rule’s enforcement pending the court’s decision.

Last Friday, Judge Norton stepped into this fray by issuing a diametrically opposed decision in the second of the two lawsuits, Chamber of Commerce v. NLRB, No. 11-cv-2516 (DCN) (D.S.C. Apr. 13, 2012). Judge Norton found that the Board had exceeded its authority under Section 6 of the Act by issuing the notice-posting rule. Noting that Section 6 gives the Board the power to make “such rules and regulations as may be necessary to carry out the provisions of the [NLRA],” the judge found that the notice-posting rule was not “necessary” to any of the Act’s provisions. On the contrary, the NLRA empowers the Board to prevent and resolve ULP charges and to conduct representative elections. Judge Norton noted that these duties are inherently “reactive,” and found that nothing in the Act requires employers to “proactively” post notices of employee rights. As Judge Norton concluded: “Neither Section 6 nor any other section of the NLRA even mentions the issue of notice posting.”

Judge Norton further rejected the argument that the Board had acted appropriately by filling a statutory “gap” in the NLRA. He observed that Congress had inserted at least eight explicit notice requirements into federal labor statutes since 1934, while the NLRA had “remained silent.” He concluded that Congress “clearly knows how to include a notice-posting requirement in a federal labor statute when it so desires,” but found that there is “not a single trace of statutory text that indicates Congress intended for the Board to proactively regulate employers in this manner.”

Interestingly, Judge Norton did not discredit the Board’s factual finding that there is an increased need for employees to learn of their NLRA rights, and he did not dispute Judge Jackson’s conclusion that the Board had articulated a rational connection between this finding, and the Board’s decision to promulgate the notice-posting rule. Nonetheless, he implicitly found that any such connection was irrelevant in light of the plain language and structure of the Act, which he said compelled his conclusion that the Board lacked the authority to promulgate the rule.

Judge Norton’s decision is extremely favorable for employers, but is it unfortunately only likely controlling in the District of South Carolina. Conversely, Judge Jackson’s decision is broadly disappointing for employers, but is only likely controlling in the District of Columbia. Courts in other jurisdictions—including in the Tenth Circuit—have yet to weigh in on the issue. If Judge Norton’s decision is eventually appealed (as is likely), and the U.S. Court of Appeals for the Fourth Circuit reaches a different decision than the U.S. Court of Appeals for the District of Columbia, the notice-posting issue could end up before the U.S. Supreme Court.

A spokesman for the NLRB announced last Friday that the Board was studying Judge Norton’s decision, and would be deciding on an appropriate course of action. As it has done before, the Board might postpone enforcement of the rule pending further court action. Alternatively, the Board might take the position that the rule is only unenforceable in the District of South Carolina, but is enforceable elsewhere. The U.S. District Court for the District of South Carolina, or the U.S. Court of Appeals for the District of Columbia Circuit (or even the U.S. Court of Appeals for the Fourth Circuit, if Judge Norton’s ruling is appealed), could separately enjoin enforcement of the rule given the current split in legal opinion.

In the wake of Judge Norton’s decision, employers are advised to monitor further developments in both the District of South Carolina case, and in the District of Columbia case. Employers may also want to monitor the NLRB’s website. As the April 30th notice-posting deadline approaches, employers may wish to consult with legal counsel about the potential costs of posting an arguably pro-union poster, and the likelihood that the notice-posting rule may eventually be invalidated in their jurisdiction.

For more information or advice on compliance, please contact Brian M. Mumaugh or Bradford J. Williams of Holland & Hart’s Labor & Employment Practice Group.

April 6, 2012

Defense of Discrimination Claims Will Continue to Rise

By Steven M. Gutierrez

via www.coloradoemploymentlawblog.com

Employers continue to face increases in the number of discrimination charges and lawsuits. The EEOC continues to make enforcement in this area a high agency priority. The costs to employers are significant, given the use of wide-ranging subpoenas and discovery requests by the EEOC. Steven Gutierrez discussed the important issue yesterday in a post that is available by visiting www.coloradoemploymentlawblog.com.

April 2, 2012

EEOC Issues Final Rule On Disparate Impact

By Mark Wiletsky

Last week, the Equal Employment Opportunity Commission (EEOC) issued its final rule governing disparate impact claims arising under the Age Discrimination in Employment Act of 1967 (ADEA). A disparate impact occurs when a policy or practice that is facially neutral has a disparate, or significantly greater, impact on older workers than younger ones. The EEOC's final age bias rule addresses the “reasonable factors other than age” defense, or RFOA, under the statute. According to the EEOC, the rule “makes the existing regulation consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA [reasonable factors other than age], and not business necessity[.]” For more information, see the post by my colleague, Scott Randolph.

March 29, 2012

Discharge Checklist

By Mark Wiletsky

Here's a great checklist from Nicole Snyder in our Boise office for things to think about before discharging an employee; you can also get to the checklist from this link: http://www.idahoemploymentlawblog.com/2012/03/a-checklist-to-use-before-discharging-an-employee.html. It's a great list of items to consider before you discharge an employee, regardless of whether your employees are in Idaho or another state. As with any checklist, this is not meant to be all-encompassing; you may be in state with special rules, or in an industry subject to regulations that impact a discharge decision. Still, this is a great resource.

March 28, 2012

A Checklist to Use before Discharging an Employee

By Nicole C. Snyder

Clients often ask us to help assess the legal risk and proper procedures for discharging employees. The following list is not exhaustive, but it provides a helpful starting point for considering almost any termination of employment:

1. Do I fully understand the facts surrounding this employee? Have I done a full investigation of why this employee is being selected for termination?

2. Have I assembled this person’s records? Is the personnel file in order?

3. Have I read any company policies/employee handbook provisions that are relevant to the situation to be sure we are complying with them?

4. Is my decision to discharge this person (or the supervisor’s decision) based on facts, not suspicion or emotion?

5. Is the employee subject to a collective bargaining agreement that must be followed? If so, are we following it?

6. Has the employee received at least one warning of possible dismissal or at least some prior notice of significant performance issues? Do we have documentation of these warnings or instances? Has the employee had some reasonable time and opportunity to correct the performance problems?

7. Does this employee have an employment agreement or any other kind of agreement concerning the term of his or her employment? If so, is the employee an at-will employee, or can he or she only be terminated in certain situations and pursuant to procedures set forth in the agreement?

8. Has this employee signed a noncompete or confidentiality agreement? If so, have I consulted with legal counsel to determine whether the noncompete agreement is enforceable and determined what type of communication to use during the termination meeting concerning these post-employment restrictions?

9. Have I checked the company policies/employee handbook to be sure that I am complying with any warning systems?

10. Does this employee have any kind of equity interest in the company, such as stock, membership units, or options? If so, have I worked with the corporate department or legal counsel to be sure we are addressing those interests correctly?

11. Have personal difficulties or special circumstances been taken into account, such as family or medical conditions?

12. Is dismissal in this case consistent with past practices?

13. Would the company be able to justify the decision if he/she claims discrimination or unjust dismissal?

14. Has this decision been discussed and approved by higher management or any other person in the company that needs to approve it?

15. Have I scheduled the dismissal/exit interview to minimize the employee’s personal contact with other employees before he/she leaves the premises?

16. Have I arranged for two people to be present at the dismissal/exit interview?

17. Have I arranged for the final paycheck and am I prepared to explain the amount?

18. Do I know what group insurance the employee has and am I able to explain what will happen to it after dismissal?

19. Have I decided what restricted statements will be made to other employees concerning this person’s discharge?

20. If the employee is being offered any form of severance pay, have we considered a severance agreement so we can obtain a release of claims from this employee?

21. Would a jury conclude that our treatment of this employee was fair?

22. Are there any special circumstances that should be fully evaluated with legal counsel prior to the termination? For example, does this termination fall within the legal “caution zone”?

Employee has a medical condition or has recently been on any type of leave
Employee is in a suspect class protected by discrimination laws (for example, the employee is female or over 40 or disabled or a member of a certain religious group or a racial minority)
Employee has complained recently about being harassed or working in a hostile environment
Employee has brought important problems to the company’s attention recently (for example, has notified management that the company is potentially doing something illegal)
Similar employees have not been discharged for the same behavior this employee is being discharged for
More than one employee is being discharged at or about the same time

March 27, 2012

Furor Over Facebook Continues

By Mark Wiletsky

Following up on my post last week, the flap over employers asking applicants to turn over their passwords to social media accounts, such as Facebook, rages on. Two senators–Sens. Richard Blumenthal (D-Conn.) and Charles Schumer (D-N.Y.)–on March 25 asked the Department of Justice and the EEOC to investigate this practice (http://blumenthal.senate.gov/newsroom/press/release/blumenthal-schumer-employer-demands-for-facebook-and-email-passwords-as-precondition-for-job-interviews-may-be-a-violation-of-federal-law-senators-ask-feds-to-investigate). Facebook joined the fray by warning employers about this practice, and of course the ACLU has raised concerns as well (http://www.cnn.com/2012/03/23/tech/social-media/facebook-employers/index.html?hpt=hp_t3). Is this issue being overblown? Other than media reports about a couple of public entities, it is unclear how many employers are demanding applicants turn over passwords to social media accounts as a condition of employment (or consideration for employment). Still, the heightened media attention is a good reminder for employers to review their hiring practices and their social media policies. If you have not yet read the NLRB's January 25, 2012 Operations Management Memo (http://www.nlrb.gov/news/acting-general-counsel-issues-second-social-media-report), I recommend doing so. Even though I disagree with certain aspects of the Memo, it provides some good examples of things to avoid in both social media policies and discipline/termination situations involving social media–for Union and non-Union work environments.

March 23, 2012

Hiring and Social Media: Beware

By Mark Wiletsky

Should you require prospective employees to provide you with access to their Facebook page and other social media accounts, as a condition of being considered for the job? Some public agencies apparently are doing so. But Richard Blumenthal, a Democratic senator from Connecticut, is writing a bill to prohibit the practice. (Not surprisingly, you can find more information about his proposed bill by visiting his Facebook page: http://www.facebook.com/dickblumenthal). Relying on social media for hiring decisions can be risky, but it happens. People Google a candidate’s name, check LinkedIn profiles, browse a Facebook page, or surf the web to see if they can learn some information about the candidate. It’s so easy to do, and there is so much information about people on the web that it is hard to resist. The problem is that the information on the Internet may or may not be relevant to the job. The information also might disclose protected characteristics that you would not otherwise know from simply reviewing a job application (e.g., a person’s race, a disability, etc.). My own thought is that for most private employers, it is not a good idea to require candidates to turn over passwords to their social media accounts. Regardless of whether the candidate agrees to do so, it is clearly not a voluntary decision, and it raises a host of potential problems for private employers, beyond even the typical problem of not hiring someone due to a protected characteristic, e.g., what happens if someone at the company loses the password, abuses it, or protects it but is later accused of being responsible for hacking into the account? The law in this area continues to evolve, but I would avoid becoming a “test case” for having gone too far.