4th Circuit Rejects Unsupervised Waivers of FMLA Rights, July 27, 2005
Creating a split among federal appellate courts, the Fourth Circuit recently held that an employees cannot agree to waive their FMLA rights unless the agreement is supervised by the U.S. Department of Labor in the same way wage and hour rights under the FLSA may be waived. Taylor v. Progress Energy Inc., No. 04-1525 (4th Cir. July 20, 2005). The court followed the language of the DOL regulation on the subject – 29 C.F.R. § 825.220(d) – a regulation that has been criticized by other courts as exceeding DOL’s authority under the FMLA. The decision conflicts with the Fifth Circuit’s decision in Faris v. Williams WPCI Inc., 332 F.3d 316 (5th Cir. 2003), which held retrospective unsupervised waivers were permissible.
"Violate the Agreement, Pay us Back" Clause Works, July 27, 2005
When entering into a severance agreement or the settlement and general release of claims, employers often include a provision that "a judicially determined breach of this agreement will entitle the employer to recover all monies paid to the employee." Such a clause was recently found to be enforceable by the Maryland Court of Special Appeals. Smelkinson, SYSCO v. Harrell, 875 A.2d 188; 2005 Md. App. LEXIS 60; 22 I.E.R. Cas. (BNA) 1796 (2005). Harrell had filed a bunch of EEOC charges and lawsuits against Smelkinson. To resolve these claims, Smelkinson agreed to pay Harrell $185,000. In return for this boat load of money, Harrell agreed not to disparage Smelkinson or to assist others in suing Smelkinson. Soon after cashing the check, however, he did just that. Smelkinson sued Harrell to recover the $185,000, invoking the stipulated damage provision of the agreement that provided Harrell would have to return the money if he violated the agreement. The trial court rejected Smelkinson's claim, finding that there was no reasonable connection between the recovery of the full amount and the actual damage to Smelkinson. The clause, said the trial judge, "smacks directly of a penalty for breaching the agreement." A liquidated damages clause of this nature is not enforceable. The appellate court reversed, holding that the parties had agreed to the damages clause, which meant that it was reasonable to them, and which was designed to prevent precisely what happened in this case - Harrell's failure to abide by the terms of the agreement. The court awarded Smelkinson the $185,000 back.
NLRB Finds Confidentiality Rule In Employee Handbook Unlawful, July 26, 2005
If your company has an employee handbook or circulates or posts company policies, you may be interested in a recent decision of the National Labor Relations Board (NLRB). In the case of Cintas Corporation, the NLRB reenforced its strict adherence to the general notion that all employees (non-supervisors) have the unfettered right to discuss their terms and conditions of employment with co-workers and/or labor unions.
At issue in Cintas were several provisions found in its employee handbook. They were as follows:
- Our business is highly competitive. Fortunately, we have an advantage over our competition. That advantage is our people - "partners," as we call ourselves.
- We honor confidentiality. We recognize and protect the confidentiality of any information concerning the company, its business plans, its partners, new business efforts, customers, accounting and financial matters.
- Examples of behavior that can result in disciplinary action are violating a confidence or unauthorized release of confidential information.
When a union sought to organize employees at several facilities operated by Cintas, it filed unfair labor practice charges against the company including an allegation that the provisions in the employee handbook violated employees' rights under the National Labor Relations Act. The union contended that language referred to above, taken as a whole, could "chill" the rights of employees to discuss their terms and conditions of employment (wages, benefits, etc.) with each other and/or the union.
The NLRB agreed and found the policies to be unlawful. It held that the prohibition on the release of "any information" regarding employees (the "partners") could reasonably be construed by employees to restrict discussions about wages and other terms and conditions of employment. As a result, the NLRB ordered the company to rescind the language noted above, furnish employees with inserts reflecting those deletions, and post notices at all of its facilities to notify employees that the language in the employee handbook had been rescinded.
If you have language in an employee handbook similar to what Cintas did in its, you may want to consider modifying the language to comport with the NLRB's rather expansive view on what may chill employees' rights to discuss their terms and conditions of employment. Even more important, be especially mindful if you decide to take disciplinary action against an employee for violating a policy that prohibits employees from having such discussions.
Phone calls not considered "caring for" a family member warranting FMLA leave, July 19, 2005
by Kevin J. Allis
Under FMLA, an eligible employee is entitled to up to 12-weeks of leave during a 12- month period "to care for" a family member with a serious health condition. 29 U.S.C. § 2612(a)(1)©). The phrase "to care for" encompasses both physical and psychological care. However, caring for a family member with a serious health condition involves some level of participation and ongoing treatment of that condition.
H. Charles Tellis was employed by Alaska Airlines in Seattle as a maintenance mechanic. His wife was having difficulties with her pregnancy. When advising to his supervisor that he needed some time off, it was suggested that he utilize FMLA leave. Tellis was instructed to contact the Health Benefits office for the appropriate forms and procedure for using FMLA leave.
Tellis's vehicle broke down on July 6, 2000. Since he owned a second vehicle located in Atlanta, Georgia, Tellis decided to fly to Atlanta and drive the vehicle back to Seattle to give his wife piece of mind regarding transportation in the case of an emergency. Although Tellis requested vacation leave for July 5, 6, and 7, he made no arrangements for any leave beyond the 7th . Tellis was absent, without having obtained the required approval, for his next scheduled shift after July 7th. Attempting to contact Tellis without success, Alaska Airlines terminated his employment on July, 18, 2000. His union grieved, and in response Alaska Airlines offered to reinstate Tellis if he would accept the placement of a disciplinary letter in his employment file. Tellis refused this offer, and after arbitration he filed a lawsuit.
The court concluded that Tellis's activities could not be considered "caring for" his wife. Instead of participating in ongoing treatment by staying with her, Tellis left her for nearly a week. Although the notion of having a working vehicle, and his phone calls may have psychologically reassured her, it was clear that he did not travel to Atlanta to participate in his wife's medical care. Neither Tellis's reasons for going to Atlanta, nor his phone calls made on his return trip, constituted participation in the ongoing care and treatment for a family member. Therefore, his absence from employment was not protected by FMLA. Tellis v. Alaska Airlines, 2005 WL 1620311 (9th Cir. Wash.).
Call Center Workers Get Million Dollar Overtime Settlement, July 15, 2005
by Eric Paltell
On July 12, 2005, the United States Department of Labor announced a one million dollar settlement of overtime claims brought by call center workers employed by Humana, Inc., a nationwide provider of health benefits. This settlement was based on claims that approximately 2,500 customer service and claims specialists working in call centers were not paid for time that they were required to be on the job.
The case arose after call center representatives complained that they were only paid for time that they were receiving phone calls. However, Humana's employees were required to report to work prior to receiving calls so that could turn on the computers, log on to the network, and load programs required for their work.
The Department of Labor settlement is consistent with the FLSA requirement that employees be compensated whenever they are "suffered or permitted" to work. The Department of Labor has long taken the position that work done outside of regular working hours which is done for the employers benefit is compensable, unless it involves such an insignificant amount of time that it is "deminimis." Therefore, activities such as loading equipment on the trucks, turning on equipment, and unpacking supplies needed for a job are treated as compensable time.
The Department of Labor settlement is part of a recent effort targeting call center employees. Over the last few years, the Department of Labor has settled multimillion dollar claims against Singular Wireless and T Mobile as well. Any employer who has a substantia group of employees doing call center type work should be especially vigilant in their FLSA compliance efforts.
College Liable For Failure To Notify Employee Of Fmla Rights, July 15, 2005
by Eric Paltell
One of the most vexing issues for Human Resources professionals is the Family and Medical Leave Act ("FMLA"). The difficulties in complying with this law were recently highlighted be a court decision from Philadelphia, where a federal court ruled that a Pennsylvania community college violated the FMLA by failing to tell an employee that she was eligible for FMLA leave. When the employee returned from maternity leave and was placed in a position with lesser responsibilities, the College violated her rights under federal law. Reid-Falcone v. Luzerne County Community College.
The case arose when Linda Reid-Falcone, the Associate Dean of Business and Industry Development at the Luzerne County Community College, requested maternity leave. The College's Human Resources Associate who she spoke to told her that maternity leave was not covered by the FMLA, and that the College's policy was different from the federal statute. Reid-Falcone took eight months of maternity leave, and, upon her return, was placed in a position with lesser responsibilities. However, the College did keep her title and salary the same.
The FMLA regulations provided that an employee on leave prtected by the FMLA is entitled to return to a position with the "same or substantially similar duties and responsibilities." When Reid-Falcone realized that she could have taken twelve weeks of leave and been guaranteed restoration to her former job duties, she brought a claim under the FMLA. The court ruled in her favor, finding that the College's failure to notify her that her leave was protected by the FMLA interfered with her federal rights. The court reasoned that, had Reid-Falcone known that the law protected up to twelve weeks of leave, she may have decided to come back to work earlier.
This case illustrates the importance of having Human Resources staff who understand what type of leave is and is not protected by the FMLA. Seemingly innocent mistakes like this one, where the employee received an eight month leave of absence and did not suffer any loss of pay, can result in FMLA liability if the wrong information is communicated.
Federal District Court in Utah Holds Transsexual Bus Driver Not Protected Under Title VII, July 7, 2005
by Sarah C. Chernish
Recently, the U.S. District Court for the District of Utah dismissed a fired bus operator's sex discrimination and equal protection claims because she is a transsexual. Etsitty v. Utah Transit Auth., 2005 WL 1505610 (D. Utah).
The Plaintiff, Krystal Sandoval Etsitty, formerly Michael Etsitty, is a transsexual diagnosed with gender identity disorder. She takes female hormones, which change her outward appearance and she has changed her name and driver's license designation from male to female but she is pre-operative and still has male genitalia. Etsitty was hired by the Utah Transit Authority in 2001. Etsitty dressed as a man and used the men's restroom when she applied for the position, and throughout her probationary period. However, after this period ended, she informed the UTA she was a transsexual and would begin dressing as a woman and using the women's restroom at work.
UTA considered Etsitty a good bus operator and had no complaints about her performance, but it was concerned about the potential liability that could result from allowing a person with male genitalia to use the women's restroom at the UTA facility and while on route in the community. The UTA's manager of operations, Betty Shirley, fired Etsitty, because of these concerns, but said that Etsitty was eligible for rehire after completion of sex reassignment surgery.
Etsitty filed suit in federal district court claiming sex discrimination under Title VII. She acknowledged that no one at UTA ever criticized her for being effeminate, teased, or otherwise treated disrespectfully during her time with UTA, but she argued that her termination violated the statue because UTA had engaged in "sexual stereotyping" and was liable based on the Supreme Court's decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989).
The court rejected this argument saying that a man dressing as a women or vice versa can not be characterized as a mere failure to conform to stereotypes, and that if "something as drastic as a man's attempt to dress and appear as a woman is simply a failure to conform to the male stereotype, and nothing more, then there is no social custom or practice associated with a particular sex that is not a stereotype."
Additionally, the court worried that if an employer cannot bar a transsexual male from dressing and appearing as a woman (because it would be sex stereotyping under Price Waterhouse), then a non-transsexual male must also be allowed to dress and appear as a woman*and if that is the case, then any male employee could dress as a woman, appear and act as a woman, and use the women's restrooms, showers and locker rooms, and any attempt by the employer to prohibit such behavior would constitute sex stereotyping in violation of Title VII. Price Waterhouse did not go that far.
Finally, the court held that even if Price Waterhouse's sex stereotyping theory afforded protection to transsexual employees, it was inapplicable in this case because the UTA had shown it acted out of concerns of privacy and liability and not because of animus towards Etsitty.
This decision is contrary to Smith v. Salem, Ohio, 378 F.3d 566, (6th Cir. 2004), in which the Sixth Circuit held that the allegations of a city fire department employee, who was a transsexual, that she was discriminated against based upon her gender non-conforming behavior and appearance, which city felt were inappropriate for a male, were actionable under Title VII.
Employer Strikes Back: Employee Must Pay Attorney's Fees Employer Spent Defending Against A Frivolous Claim Even If Other of the Employee's Claims are Not Frivolous, July 5, 2005
by Sarah C. Chernish
The U.S. Court of Appeals for the Eleventh Circuit has joined with the U.S. Court of Appeals for the First and Seventh Circuits in holding that an employer sued for employment discrimination under the federal law can recover attorney's fees for defending the claim if that claim was frivolous even if not all of the employee's claims have been found frivolous. Quintana v. Jenne, 2005 WL 1514476 (11th Cir. 2005).
In Quintana, the lower court had awarded the employer, the sheriff of Broward County Florida, with $73,890 in legal fees against the former employee, a deputy sheriff named Paul Quintana because it deemed his claims of employment discrimination and retaliation to be frivolous. The Eleventh Circuit reversed in part and remanded in part, finding that Quintana had made out a prima facie case of discrimination thus that claim could not be considered frivolous but holding his other claim for retaliation to be frivolous.
Quintana was a Hispanic who joined the county sheriff's office in 1991. In 1998 he sought promotion to sergeant and passed the required examination. He was placed on the sergeant's eligibility promotion list. When Quintana did not receive a promotion, he demanded the records of all the applicants from the Human Resources department. When his request was denied he sued the Sheriff in the U.S. District Court for the Southern District of Florida, claiming discrimination and retaliation under Title VII of the 1964 Civil Rights Act and the Civil Rights Act of 1866 (42 U.S.C. § 1981). He alleged that he was denied promotion to sergeant because of his race and retaliated against for complaining about that discrimination by again being denied promotion and being disciplined more harshly than comparable officers for similar misconduct.
In granting summary judgment in favor of the Sheriff's office, the district court dismissed Quintana allegations, pointing out the evidence that he was not promoted because his behavior. His record was replete with examples of unprofessionalism, including an incident with a female motorist in which he was found to have used racially derogatory statements, falsifying his daily log sheet; and recklessly displaying his weapon (a misdemeanor for which he was terminated).
The district court granted summary judgment to the Sheriff on all of Quintana's claims and granted the Sheriff's request for attorneys' fees under the "prevailing party" provisions of statutes. The district court determined both the retaliation and discrimination claims were frivolous and awarded the Sheriff attorney's fees totaling $73,890. Quintana appealed.
The Eleventh Circuit found that it was an abuse of the district court's discretion to award attorneys' fees to an employer in a Title VII case for claims for which the employee made a prima facie showing. However, the court held that an employer should be able to recover attorneys' fees for those claims an employee advances that are frivolous even if some of the employee's claims are not frivolous. The court stated that it would "undermine the intent of Congress to allow plaintiffs to prosecute frivolous claims without consequences merely because those claims were joined with unsuccessful claims that were not frivolous." Id at *6. Thus, the Eleventh Circuit reversed the granting of fees for the employment discrimination claim and remanded the case to the lower court to parse out the Sheriff's attorneys' fees for the retaliation case.
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