January 2004 Quick Clips

Request To Work At Home Not A Reasonable Accommodation, January 19, 2004

The U.S. Court of Appeals for the Tenth Circuit recently ruled that an employee's request to work at home is not a reasonable accommodation under the ADA where the employee's physical presence in the workplace is an essential function of her job. Mason v. Avaya Communications Inc., No. 03-6035 (10th Cir. Jan. 13, 2004). In this case, the employee, a former U.S. postal worker, suffered from post traumatic stress disorder resulting from her involvement in a 1986 workplace shooting known as the "Edmond Post Office massacre." She was employed by Avaya as a service coordinator in Avaya's service center for two years without problems until she learned in 2000 about another employee at her worksite who had allegedly pulled out a knife and threatened to "go postal" during an altercation at work. When the plaintiff heard that particular individual was returning to work after a suspension, she went out sick due to her post traumatic stress disorder and ultimately went on disability.

The plaintiff claimed at that point that she could no longer work in the same building as the threatening employee and requested that Avaya accommodate her condition by either transferring the other employee, transferring her to another Avaya worksite in the same area, or allowing her to work from home. Avaya determined that the other employee was not a threat and allowed him to return to the worksite, and the only service coordinator positions available were located at the same location. Avaya also rejected the plaintiff's request to work from home, stating that her physical presence was required at the worksite because her job required supervision and teamwork.

Both the lower court and the Tenth Circuit agreed with Avaya. The appellate court ruled that even though attendance, supervision and teamwork were not included in the plaintiff's job description, it did not mean that those functions were not essential to the service coordinator position. As a matter of common sense, the court found that Avaya need not have included the requirement that the employees "were actually required to show up at the workplace and work with co-employees under supervision." Id. The court held that physical attendance at the workplace is an essential function of the plaintiff's job.

The court also ruled that because physical attendance was an essential function of her job, the employees' request to work at home was an unreasonable accommodation. In its rulings, the court joined the decisions of several other circuits finding that where physical attendance is an essential function of an employee's job, the request to work at home is not a reasonable accommodation under the ADA.

Refusal To Pay Overtime Is Not A Rico Violation, January 19, 2004

by Kelly C. Hoelzer

An employee's claim that his employer's refusal to pay him overtime was a violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO") was recently rejected by the Ninth Circuit Court of Appeals. Miller v. Yokohama Tire Corp., No. 02-56722 (9th Cir. Jan. 12, 2004). The employee asserted that his managers made misrepresentations to him and other employees regarding their status as salaried employees exempt from overtime requirements. He claimed that from 1990 until his termination in 2001, he was required to work overtime hours without compensation. He argued that his employer's failure to pay him overtime was a fraudulent scheme to deny him overtime in violation of RICO.

The court found no evidence of a fraudulent scheme or of any "racketeering activity" as required to state a claim under RICO. The court rejected the employee's claim that each paycheck or W-2 form he received through the mail constituted mail or wire fraud, creating a pattern of "racketeering activity." The employee was also unable to show that his employer used the mail system to further any scheme to defraud with the intent to deceive or defraud the employee about his eligibility to receive overtime compensation. The employer merely made a statement to the employee about its understanding of the wage and hour laws, which is not considered fraudulent, even if the employer is wrong.

Employee Wins Discrimination Claim Despite Violent Behavior, January 14, 2004

by Eric Paltell

A federal appeals court recently ruled that a former United Parcel Service business manager was illegally fired because he had filed a discrimination claim, even though he had made also violent threats against co-workers. The court upheld a $202,000.00 jury verdict in the employee's favor.

In the case, Pineda v. United Parcel Service, the employee returned from a 10 month medical leave of absence for diabetes and was transferred to a new facility. Shortly after the transfer, the employee was accused of threatening violence against three co-workers. UPS suspended him, investigated the claims, and ultimately fired Mr. Pineda.

Mr. Pineda filed a lawsuit alleging he was fired because he has made a disability discrimination claim against UPS alleging that the Company had illegally delayed his return to work. The appeals court ruled in Mr. Pineda's favor because there was evidence that other employees had "regularly yelled at each other using profanity," and that similar incidents of verbally abusive behavior were not investigated. Therefore, the court found evidence of "disparate treatment" which would support the jury's verdict in favor of Mr. Pineda.

This case illustrates the importance of treating similarly situated employees consistently to protect the company from claims of discrimination and retaliation. Moreover, it is important that employers keep good records of discipline imposed against employees so that the company can ensure that the penalty given an offender is consistent with those given to others in the past.

N.Y. Prevailing Wage Law Affects Private Projects, January 13, 2004

New York's prevailing wage law requires that employers pay out a certain level of health and welfare supplements to employees who work on public projects. But the law doesn't stop there. In calculating the employer's credit, the employer's contributions are divided by the hours worked on both public and private projects. This is called "annualization."

Example: An employee works 1,000 hours on public projects and 1,000 hours on private. The prevailing wage law requires $2.00 per hour in supplements, so the employer pays $2,000 into the pension plan ($2.00 per hour for each of the 1,000 hours worked on public projects). But wait: that's not enough. The employer must contribute another $2,000 to the pension fund, so that the average contribution (on public and private jobs) will equal $2.00 hourly.

Rondout Electric Co. challenged this system as a transparent attempt to benefit unions by imposing additional costs on non-union employers working private projects. The company argued that the prevailing wage law was pre-empted by the National Labor Relations Act. That argument was recently rejected by the federal courts. So, New York contractors must go on paying prevailing wage supplements on both public and private jobs.

Rondout Electric, Inc. v. New York State Dep't of Labor, U.S. No. 03-560, cert. denied Jan. 12, 2004).

Release Does Not Have To Be Generous To Be Binding, January 13, 2004

by Eric Paltell

One of the most effective ways for an employer to protect itself from litigation is to require a departing employees to sign a release of claims in exchange for severance pay or other separation benefits. A recent New York case demonstrates that the separation benefits do not have to be very generous to protect the employer from liability.

In Knoll v. Equinox Fitness Clubs, the employer, Equinox, terminated Monica Knoll on October 1, 2001. A few days later, Equinox sent Knoll a letter offering her six months of employer-paid COBRA health benefits. The letter stated that to receive the COBRA coverage, Knoll had to sign a release of claims waiving her right to bring any lawsuits against Equinox. Ms. Knoll signed the release on November 1, 2001.

In 2002, Knoll brought a lawsuit against Equinox, alleging violations of the Americans with Disabilities Act, Family & Medical Leave Act, ERISA, and New York state employment laws. Equinox argued that the suit should be dismissed because she had signed a release in exchange for six months of COBRA benefits. The United States District Court for the Southern District of New York agreed, holding that the release may have not been "the best deal" for Knoll, but nevertheless was binding and enforceable.

No Application, No Violation, January 12, 2004

The 11th Circuit recently upheld the grant of summary judgment to an employer because it had no duty to consider the former employee for open positions as she had never expressed interest in nor submitted an application for any of the positions. Smith v. J. Smith Lanier & Co., 2003 WL 22928660 (11th Cir.).

Jeanne Smith's job was eliminated as part of a reduction in force (RIF). On the day of her termination, she told the VP of HR that she would be willing to accept any position in the company and that she was able to relocate. He told her that there were no jobs available at that time. The company maintained a formal system for posting any vacant position including notices on its website or in local papers and requires that an application be filed for the position.

Prior to her termination date, Smith learned of several open positions through the company's website but never expressed any interest in them nor did she submit a formal application for any other position at the company. The company therefore never considered her for any open position and did not rehire her; Smith claims that this was a violation of the Age Discrimination in Employment Act (ADEA).

The court held that the Smith's expression of general interest in another position without submitting an application was not enough to establish a prima facie case of age discrimination. Smith herself knew of the open positions, but she chose not to apply for them. She did not show that the company dissuaded or prevented her from applying for any position.

It is worth noting that this result is based on the company's having a formal system of posting its open jobs. Had the company spread notice by word of mouth or informal review systems, the former employee would not have been required to submit an application for a position because she would have had no way of knowing about its availability. See Charmichael v. Birmingham Saw Works, 738 F.2d 1126, 1133 (11th Cri. 1984). In other words, since Smith's former employer made jobs available through a specific, open, public process, Smith was obligated to engage in that process before she could claim discriminatory treatment.

Without Renewal Clause, Employment Contract Expires, January 12, 2004

Employment contracts must be carefully drafted to ensure that the parties get the rights they seek. In a recent case, a cardiology practice group thought it had an enforceable non-competition agreement with a doctor who jumped ship. But when the case came to court, the trial judge determined that the contract had a one-year term with no renewal clause. Because the contract had therefore expired sixteen days before suit was filed, the departing doctor walked away without restrictions on his competition.

Lesson: Always make sure the non-competition agreement expressly survives termination of the contract.

HeartSouth, PLLC v. Boyd, 20 IER Cases 1167 (Miss. 2003).

EEOC Agenda For 2004, January 12, 2004

by Darrell R. VanDeusen

As we enter 2004, the Equal Employment Opportunity Commission (EEOC) begins operating with a full complement of commissioners and a general counsel for the first time in seven years. EEOC Chair Cari Dominguez, now in her third year, has outlined the Commission's plans:

1. A National Call Center: Last November, the Commissioners agreed to establish a national call center where individuals can obtain information on filing discrimination charges. A task force is in the process of developing the specifics of this proposal. Given recurrent funding issues, there is concern among some critics of the call center concept that there will be a reduction in the number of EEOC field offices.

2. A Definition of "Applicant": For decades * but particularly with the increasing number of resumes that employers receive over the Internet * the issue of what constitutes an applicant for employment has plagued both the EEOC and the OFCCP. According to Ms. Dominguez, a federal task force proposal that will redefine the term "job applicant" for recordkeeping and reporting requirements is nearly complete.

3. A Continued Focus on Mediation: In the past four years, the Commission's national mediation program has conducted over 44,000 mediations and resolved about 70% of those charges in this way. The average processing time is approximately three months. Dominguez is a strong advocate of mediation, and she has pioneered two voluntary mediation programs for the Commission. First, there are universal mediation agreements, where a company agrees, in advance, to mediate all future discrimination charges where the charging party agrees. Either party can opt out of mediation on a case by case basis. Today, over 400 employers have entered into these agreements. Second, a pilot program in the Philadelphia area gives employers the opportunity to resolve charges before they are formally filed with the Commission. Under this "referral back" program, if a charging party agrees, the Commission will hold a charge in abeyance for up to 60 days to give the parties an opportunity to resolve the dispute using an employer's existing dispute resolution program. To qualify this program, an employer must have an established ADR program that is free to employees and that meets other EEOC requirements.

4. Charge Processing: The bulk of the EEOC's work is still the processing of charges of discrimination. The Commission gets about 80,000 charges a year. In the last fiscal year, race claims were the most common -- raised in 35 percent of all filings. Sex claims were raised in a little over 30 percent of charges; age claims in almost 24 percent of the charges; disability claims in 19 percent of the charges; and national origin claims in about 10 percent of the charges.

5. Retiree Benefits: In the coming months, the Commission is expected to issue final regulations that permit employers to reduce or end benefits when a retiree becomes eligible for Medicare or similar state retiree health benefits without violating the ADEA.

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