Articles Posted in Employment Law

On April 6, 2020, the Supreme Court of the United States answered the question as to whether 29 U.S.C. § 633a(a) of the Age Discrimination in Employment Act of 1967 imposes liability only when age is a “but-for cause” of the personnel action at issue. Babb v. Wilkie, 106 L. Ed. 2d 432, 438 (2020). 29 U.S.C. § 633a(a), in essence, provides that individuals aged 40 and older “shall not be subjected to personnel actions based on age discrimination,” with a few exceptions. In Babb, the plaintiff, who was born in 1960, is a clinical pharmacist at the U.S. Department of Veterans Affairs Medical Center in Bay Pines, Florida. Id. at 439. The plaintiff brought a suit in 2014 against the Secretary of Veterans Affairs (“VA”), alleging she had been subjected to age discrimination. Id. There were three personnel actions made by the VA that the plaintiff centers around her claim. The VA took away her “advanced scope” designation, which had made her eligible for promotion, was denied training opportunities and passed over for positions in the hospital’s anticoagulation clinic, and lastly, was placed in a new position but her holiday pay was decreased. Id. The plaintiff alleged that throughout this time period supervisors made several “age-related comments” to her as well. Id.

The Supreme Court granted certiorari in this case due to the Circuit split over the interpretation of § 633a(a). The Court’s analysis starts off with looking at the plain meaning of the provision, which leads to the conclusion that “age need not be a but-for cause of an employment decision in order for there to be a violation.” Id. at 440. To support the Court’s conclusion, the language of “free from” found within the provision is examined closely, and the Court concludes that the language coupled with “any” means there cannot be any discrimination whatsoever based on age. Id. at 440-441. Reading the rest of the provision together, the Court determines that “age must be a but-for cause of discrimination, but it does not necessarily have to be a but-for cause of a personnel action itself.” Id. at 441. As a result, the Court concludes that the statute “does not require proof that an employment decision would have turned out differently if age had not been taken into account.” Id.

The Government attempts to make an argument that compares the text of 29 U.S.C. § 633a(a) with other statutes interpreted in prior cases, one of which is the private-sector provision of the ADEA. 29 U.S.C. § 623(a)(1). This provision makes “it unlawful for an employer . . . to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.” Id. The Court discusses the critical difference between § 623(a)(1) and § 633a(a), which is § 633a(a) “prohibits any age discrimination in the ‘making’ of a personnel decision, not just with the respect to end results.” Babb at 444. After noting this difference between the two provisions, the Court recognizes that federal employers are held to a stricter standard. However, the Court then addresses how Congress could have added the federal government to the definition of “employer” in the ADEA’s private sector provision but chose not to. Id. at 445.

The Indiana Supreme Court recently provided important guidance for employers looking to hold employees accountable for breaching non-solicitation clauses in employment agreements by providing for liquidated damages. In its December 18, 2019, majority opinion in American Consulting, Inc. d/b/a American Structurepoint, Inc. v. Hannum Wagle & Cline Engineering, Inc. d/b/a HWC Engineering, Inc. et al. (“ASI”),[1] the Court found that the liquidated damages provisions in employees’ employment agreements were facially unreasonable and unenforceable and were not correlated to the employer’s actual loss.[2]

In ASI, the relevant contract provisions for one former employee provided as follows:

• For two years after employment, the employee will not sell, provide, try to sell or provide or assist any person or entity in the sale or provision of any competing products or services to the employer’s customers with whom the employee had any business contact on behalf of the employer during the two years prior to his separation from employment. A breach of this provision that results in the termination, withdrawal or reduction of a client’s business with the employer will result in liquidated damages equal to 45% of all fees and other amounts that the employer billed to the customer during the 12 months prior to the breach.

Employers often express concern about obese employees in physically demanding jobs or jobs that involve driving a motor vehicle. Obesity causes increased risk of numerous conditions that can cause sudden incapacitation, such as heart attack or stroke.[1]  It is also linked with sleep apnea, which can cause exhaustion.[2]  As a result, employers often fear that an employee’s obesity creates a safety risk for the employee, fellow employees, and, in some cases, the public. However, employers are skittish about benching these employees for fear of potential liability under the Americans with Disabilities Act (“ADA”).

Employers in Indiana can take some comfort in that the Seventh Circuit Court of Appeals issued several opinions in 2019 that have narrowed the scope of employees who are protected under the Americans with Disabilities Act (“ADA”) due to obesity. While this is encouraging for employers, the current state of the law challenges common sense and makes an employer’s evaluation more—not less—complex.

First, the Seventh Circuit held that obesity alone is not a physical impairment under the ADA unless there is evidence that obesity is caused by an underlying physiological disorder or condition.[3]  While Richardson is positive for employers because it forecloses carte blanch ADA protection for every obese person, it adds complexity for employers who must now consider whether an employee’s obesity is caused by an underlying physiological disorder or condition before making employment decisions. Furthermore, what specific policy goal does the Richardson rule promote? If obesity is not an “impairment” that qualifies under the ADA, why should obesity be protected when it is the manifestation of an underlying physiological disorder? Surely the employer is not making its decision to remove an obese employee from a safety sensitive job on the basis of the employee’s thyroid disorder that caused or contributed to the obesity. Unfortunately, that policy question is one for congress—not the Seventh Circuit—and congress isn’t solving many problems these days.

The Seventh Circuit recently reaffirmed the standard required to hold an employer liable for retaliation under Title VII. In Mollet v. City of Greenfield, the court held that “Title VII claims require proof that the desire to retaliate was the but-for cause of the challenged employment action.”[1] This ruling establishes the requirement for an employee to bring a successful retaliation claim and helps protect an employer if it can demonstrate it terminated the employee for a lawful reason.

In August 2016, James Mollet filed a Title VII claim against the City of Greenfield, Wisconsin. Mollet’s complaint alleged that he was constructively discharged from the city’s fire department as retaliation for reporting a racist incident in the firehouse. The incident occurred in February 2012, and Mollet’s report led to the fire department management disciplining four individuals. However, in the year following the incident, Mollet’s superiors became increasingly critical of his performance. Facing demotion or reassignment, Mollet resigned and found new employment in March 2013.

Title VII of the Civil Rights Act of 1964 prevents retaliation against employees for complaining about discrimination in the workplace.[2] A successful claim under Title VII requires an employee to show: “(1) he engaged in a statutorily protected activity, (2) his employer took a materially adverse action against him, and (3) there is a causal link between the protected activity and the adverse action.”[3]

For the first time, the 7th Circuit has directly addressed the question of whether obesity is a “physical impairment” that qualifies as a disability under the ADA. Consistent with the Second, Sixth, and Eighth circuit courts’ holdings, the 7th Circuit held in Richardson v. Chicago Transit Authority that “obesity is an ADA impairment only if it is the result of an underlying physiological disorder or condition.”[1] Although this ruling clarifies that not every obese person is being protected under the ADA, it does leave the waters muddy for employers who must consider whether an employee’s obesity is caused by an underlying physiological disorder or condition before making employment decisions.

Mark Richardson worked as a full-time bus driver for Chicago Transit Authority (“CTA”) from August 1999 until February 2012. In February 2010, Richardson was absent from work due to the flu. Upon his return, CTA’s third-party medical provider documented that Richardson suffered from a variety of conditions, in addition to weighing more than the CTA bus seat limit of 400 pounds.[2] In April, CTA transferred Richardson to its Temporary Medical Disability-Area 605 (“605”), an area described as a budgetary assignment for employees found medically unfit for their job classification due to illness or injury. Although Richardson was given two years in 605 to prove his ability to operate the busses and to comply with the seat’s weight accommodation, he failed to do both. CTA offered to extend his time in 605 if Richardson submitted medical documentation. When he did not, CTA terminated his employment.

Richardson filed a lawsuit against CTA, alleging that it violated the Americans with Disabilities Act (“ADA”) by firing him for being too obese to operate a bus. The district court granted summary judgment for CTA, agreeing with its argument that Richardson had failed to show his obesity qualified as a protected physical impairment under the ADA. Richardson appealed the decision to the United States Court of Appeals for the Seventh Circuit.[3]

Under a new Department of Justice (“DOJ”) and Department of Labor (“DOL”) initiative, more criminal cases will be pursued under the Occupational Safety and Health Administration Act (“OSHA”). The initiative seeks to protect workers’ health and safety by addressing related OSHA violations.

Since OHSA was enacted over 40 years ago, few criminal cases have been prosecuted under the Act. The cases prosecuted have primarily involved “cover-ups” by an employer of the initial crime and employers who have chronically violated worker safety laws. Few criminal cases have been pursued because it is difficult to prove a criminal violation and the consequences of these violations are less significant than other white-collar crimes.

Actions subject to criminal sanctions under OHSA include: willful violation of OSHA standards, rules, or orders; falsifying OHSA documents; providing advance notice of an OHSA inspection; committing perjury during OSHA proceedings; violating state criminal laws; and violating environmental statutes.

An employee handbook or employee policies that are not up-to-date with current laws may hurt an employer later. An employee handbook or policies are often the first place an employee and employer turn when seeking guidance. If it is not up-to-date, the resulting actions may not be in line with current law.

At a minimum, “[a] well-written handbook and policies set forth [an employer’s] expectation for [their] employees, and describes what they can expect from [the] company. It also should describe [the employer’s] legal obligations as an employer, and [the] employee’s rights.” Writing Employee Handbooks, U.S. Small Business Administration, https://www.sba.gov/content/employee-handbooks (last visited March 10, 2016).

Some recent changes in the law that may impact an organization’s employee handbook or policies include:

The U.S. Equal Employment Opportunity Commission (the “Commission”), the office which enforces Title VII of the Civil Rights Act of 1964 (“Title VII”), has released guidance this year on the consideration of arrest and conviction records in employment decisions.¹ Title VII, as most employers are aware, prohibits employment discrimination based upon race, color, religion, sex, or national origin.

In some instances, an employer’s use of an individual’s arrest record or criminal history in making employment decisions may constitute employment discrimination under Title VII. There are two main ways this can occur. First, if an employer treats criminal information differently for different applicants or employees based upon race, color, religion, sex, or national origin, discrimination may be found based upon disparate treatment. Second, even a neutral employer policy may violate Title VII if it disproportionately impacts individuals protected by Title VII and may be illegal if not related and consistent with a business necessity.
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A recent Indiana Court of Appeals decision held that both a contract between a landowner and a general contractor evinced an intent on the part of the general contractor to assume a duty of care for the safety of its employees and subcontractors on the work site and that such duty was non-delegable. In Capitol Const. Services, Inc., after a subcontract employee fell approximately fifteen feet from a ladder while on the jobsite and died, the general contractor (Capitol) appealed the trial court’s grant of summary judgment to Gray, arguing that it did not assume a duty of care for the safety of subcontract employees and that such a duty was delegable. Capitol Const. Services, Inc. v. Gray, 959 N.E.2d 294, 296-97 (Ind. Ct. App. 2011). Relying on Stumpf v. Hagerman Constr. Corp., 863 N.E.2d 871 (Ind. Ct. App. 2007) and Harris v. Kettelhut Constr., 468 N.E. 2d. 1069 (Ind. Ct. App. 1984), the court found that a contract which provides and requires the contractor to have specific safety precautions at the jobsite, including personal fall arrest systems, safety net systems, or guardrail systems, for employees or subcontractors performing construction work in excess of six feet above a lower level accords the contractor a duty of care for the safety of subcontract employees.
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The National Labor Relations Board (NLRB) announced in a final rule in August a new poster requirement for both union and non-union employers that communicates employees’ rights to organize. Although originally effective November 14, 2011, the NLRB has delayed the implementation of this requirement until January 31, 2012 due to outcry from employer organizations.

Only “covered employers” must display the posters. Certain employers are exempt, such as agricultural, railroad, or airline employers and certain very small employers and retailers. If you are unsure of your requirement to post, please consult legal counsel. Noncompliance can be treated as an unfair labor charge.

To obtain a copy of the new poster, you may visit: https://www.nlrb.gov/poster