October 2007 Archives

October 25, 2007

Employment Cases Before the Supreme Court: Part II

In early November, the Supreme Court will hear arguments in a case that will decide what constitutes "filing a charge" of age discrimination with the Equal Employment Opportunity Commission (EEOC).

Like other federal antidiscrimination laws, the Age Discrimination in Employment Act (ADEA) requires employees to file a charge of discrimination with the EEOC before suing their employer directly in court. In the case before the Court, Federal Express v. Holowecki, a group of employees claimed that Federal Express had adopted a number of policies and practices that discriminated against older workers. However, there was a dispute as to whether the employees properly filed EEOC charges before proceeding with their lawsuit.

The question the Supreme Court will decide is whether filing an intake questionnaire with the EEOC, along with a four-page affidavit detailing the allegedly discriminatory actions, counts as filing a "charge." (You can find links to the lower court's decision and the briefs of all the parties and other interested groups here.) Federal Express argues that it shouldn't, because the EEOC uses a separate form for charge-filing purposes, which the employee didn't complete. As a result, the EEOC didn't treat the questionnaire and affidavit as a charge, which means Federal Express never had notice of the charge or an opportunity to try to resolve the problem through the EEOC's conciliation efforts. As this is the purpose of requiring employees to file a charge in the first place, Federal Express argues that it isn't fair to allow the lawsuit to go forward.

The employees - and the federal government, which is weighing in on the employees' side - argue that the employee who filed the questionnaire and affidavit (Patricia Kennedy) gave the EEOC all of the information necessary to file a charge. The employee wasn't represented by a lawyer, and her documents give every indication that she wanted the EEOC to act. In the employees' view (and that of the federal Court of Appeals that found in their favor), the EEOC made a mistake by failing to treat the documents as a charge, and the employees should not have to pay for that mistake.

And the EEOC agrees - in fact, the agency has already taken the blame for this one. In a memorandum to local EEOC offices, the EEOC's General Counsel and Director of the Office of Field Programs have said that notice should have been sent to Federal Express in this case, and all but admit the questionnaire was a charge. The EEOC's own Compliance Manual states that an intake questionnaire should be treated as a charge of discrimination if it includes all of the relevant information, which the employee's documents in this case seem to have done. Because the EEOC agrees that the employee's documents meet its definition of a charge, the Supreme Court would have to invalidate the EEOC's internal rules to find against the employees in this case. This wouldn't be unheard of, but it would be a bit of a slap in the face to the agency formerly run by Justice Clarence Thomas.

Lisa Guerin

October 16, 2007

54 Is the New "Old Fuddy-Duddy": Google Age Discrimination Trial to Go Forward

A California court of appeal reinstated a fired manager's age discrimination lawsuit against the search-engine giant Google, finding that the trial court shouldn't have thrown the case out before a jury heard the facts. Brian Reid, who was fired at the age of 54, claimed that he was demoted into a dead-end position and later fired because of his age. Google claimed that his position was eliminated. The court of appeal's decision will give Reid his day in court.

Here are a few noteworthy lessons from this case:

Respect your elders. At the grand old age of 54, Reid was referred to as an "old man," an "old guy," and an "old fuddy-duddy," told he was "slow," "fuzzy," "sluggish," and "lethargic," and told that his ideas were "obsolete" and "too old to matter." He was also told that he should replace the CD jewel case that served as his office placard with an LP. Apparently, when only 2% of a company's workforce has celebrated a 41st birthday, those in their 50s start looking like visitors from the Stone Age.

Don't plan the firing by email. Part of the evidence Reid presented were email messages suggesting that Google's managers were trying to get their stories straight. One message said that the company's decision to give Reid no bonus might not be "consistent with all similarly situated performers"; if that wasn't clear enough, the message also suggested giving Reid a bonus and severance package "to avoid a judge concluding we acted harshly." A company vice president asked for guidance on what to say if Reid asked for a position in another department, asking that the HR Director "make sure I am completely prepped" and "get me clear on this" before she had to talk to Reid. After much back and forth, the HR Director concluded, "We'll all agree on the job elimination angle." Even if there was a legitimate reason to fire Reid, this type of evidence sure makes it look otherwise.

Do the math. As a company that's perhaps best known for an algorithm, Google needs to have an answer for the claims of Reid's expert witness, a statistician who reported a statistically significant negative correlation between age and performance rating, as well as age and bonus amount, at Google. For every ten-year increase in age, the statistician found a corresponding decrease in performance rating and a 29% decrease in bonus. Google challenged this evidence on a variety of grounds, but the court of appeal found that those kinds of arguments have to be decided by a jury, not by a judge before trial.

To learn more about age discrimination and the laws that prevent it, check out Nolo's article Avoiding Age Discrimination.

Lisa Guerin

October 11, 2007

Beyond the Collar: Misclassifying Nonexempt Employees

In a recent article entitled "Wage Wars," BusinessWeek magazine highlighted something many employers already know -- failing to pay employees for every hour worked can be expensive. According to the article, lawyers estimate that over the past few years, companies including Starbucks, IBM, and Merrill Lynch have collectively paid more than $1 billion dollars to settle wage and hour claims. The suits are as varied as the employers: workers not being paid for time spent sending work-related emails from home, arriving to the worksite a few minutes early to boot up a computer, or working extra hours to perform the same day-to-day tasks as the employees they supervise.

While the danger of violating the FLSA and state wage and hour laws may seem obvious, the assumptions we make about who is nonexempt may not be. The article highlighted this important and more subtle point--not everyone who wears a white collar is exempt from being paid overtime. Plaintiffs in these cases have included mortgage brokers, pharmaceutical reps, and stockbrokers--people who may never have even considered making such claims because they see themselves as "white collar" professionals. But as Mark Thierman, a prominent attorney representing plaintiffs in these cases, points out, it's not a matter of job title, income, or academic degree, it's a matter of job function.

So don't let your assumptions guide you. Make sure the job description matches the job's actual functions. To determine whether an employee is exempt, always compare the job's functions to the applicable FLSA exemption or your state's exemption requirements. To limit off-the-clock working time or uncontrolled overtime expenses, make sure nonexempt employees--especially those working in office environments or closely with exempt employees--understand your company's rules for working remotely, on weekends or evenings, and the like.

(And, to learn more about job descriptions and hiring, check out The Job Description Handbook, by Margie Mader-Clark (Nolo).

October 11, 2007

The "No-Match" Letter Is Not in the Mail: Federal Judge Suspends New Regulations

ssalogo.gifAs we previously posted here, there's a lawsuit underway in San Francisco, challenging the Department of Homeland Security's new regulations telling employers how to handle "no-match" letters. A coalition of labor, immigrants' rights, and business groups filed the lawsuit, asking the court to stop the new regulations from going into effect. And that's exactly what the court did on October 10, 2007, for at least the next few months.

The court issued a preliminary injunction: a court order that prevents the rules from going into effect while the lawsuit is pending. The court's decision found that serious questions had been raised as to whether the government followed required procedures, such as analyzing the effect the new regulations would have on small businesses. Because of these questions, and because allowing the regulations to go into effect would cause significant harm to both employers and employees, the judge put them on hold.

What happens next? The lawsuit continues, and the Social Security Administration finds a place to store the 141,000 no-match letters it planned to mail out. And here's an interesting twist: Judge Charles Breyer issued this decision. If that name sounds familiar, it's because his brother -- Justice Stephen Breyer -- sits on the U.S. Supreme Court, which could well decide this issue once and for all.

Lisa Guerin

UPDATE: In December 2007, there were a couple of new developments in this case. First, the Department of Homeland Security filed an appeal, asking the Ninth Circuit Court of Appeals to lift the temporary injunction and allow the new rules to go into effect. And second, Judge Breyer (the district court judge) agreed to put off his decision on whether to issue a permanent injunction until March of 2008, to give the government a chance to address the concerns that led Judge Breyer to issue the preliminary injunction.

October 4, 2007

Vetoed SCHIP Bill Included FMLA Changes

justabill.jpgYesterday, President Bush vetoed a bill to reauthorize and expand the State Children's Health Insurance Program (SCHIP), which gives funding to the states so they can provide health insurance for children who would not be covered otherwise. Now the fight moves back to Congress, where sponsors of the bill are trying to line up the necessary votes to override the President's veto.

The debate is extremely heated, with opponents of the bill claiming it would lead to socialized medicine and supporters claiming that anyone who votes against it doesn't care about poor children. Lost in the rhetoric are some of the other provisions tucked into the bill, including a couple that would expand the FMLA and create a new leave right for those caring for injured servicemembers.

Added via amendment by Senators (and presidential contenders) Dodd and Clinton, the Support for Injured Servicemenbers Act would allow family members to take up to six months off work to care for an injured servicemenber, with all of the benefits continuation and job reinstatement rights provided by the Family and Medical Leave Act (FMLA).

A second provision, the Military Family Job Protection Act, would prohibit discrimination against family members who take up to a year off to care for a recovering servicemember. Employers may not deny an employee who takes such leave retention, promotion, or any other job benefit based on the employee's absence from work. (You can read these provisions at the website of the Library of Congress. Search for the final version of House Resolution 976, the Children's Health Insurance Program Reauthorization Act of 2007; the leave provisions are in Sections 621 and 622.)

And these aren't the only proposed changes to the FMLA that are kicking around in Congress; for more information, check out my update for Nolo's The Essential Guide to Family and Medical Leave.

Lisa Guerin

October 1, 2007

Employment Cases Before the Supreme Court: Part 1

court_front_med.jpgIt's the first Monday in October, the day when the Supreme Court begins its new session. There are quite a few cases on controversial topics this year, including the legal status of detainees at Guantanamo Bay, the validity of a law that requires voters to present a photo ID, and the constitutionality of execution by lethal injection.

The Court will hear a handful of employment cases too, including several on discrimination and retaliation. I'll fill you in on the other cases in later posts, but I'm most interested in finding out how the Justices rule in Sprint/United Management Co. v. Mendelsohn. This is an age discrimination case in which the plaintiff, Ellen Mendelsohn, was laid off. At trial, Mendelsohn wanted to call five former employees as witnesses, to testify that they, too, had been laid off as a result of age discrimination. The trial judge didn't let them testify, because they weren't in Mendelsohn's department and weren't laid off by her supervisor. Sprint won at trial, and Mendelsohn appealed.

The federal Court of Appeals for the 10th Circuit ruled in Mendelsohn's favor, finding that the testimony was relevant and should have been presented at trial. The Court of Appeals stated that this testimony might help Mendelsohn prove that there was a company-wide policy of illegally considering age when deciding who should be laid off.

Sprint then appealed to the Supreme Court. The Court agreed to hear the case because the Circuit Courts are split on whether this type of testimony (called "me too" evidence) is admissible in a discrimination case.

One of the most basic evidentiary guidelines (codified as Federal Rule of Evidence 403) is that even relevant evidence may be kept out at trial if its "probative value" -- its weight or usefulness in proving something at trial -- is outweighed by the possibility that it will cause unfair prejudice, create confusion, mislead the jury, or generally waste everyone's time. Employer groups claim that "me too" testimony has little evidentiary value and a high likelihood of muddying the waters at trial. Employee advocates counter that this type of evidence is very probative because it helps reveal the motive behind employment decisions, which can be very difficult for plaintiffs to prove at trial unless a company decision-maker was walking around calling people names.

This is a big case because the issue comes up so often. One of the most significant pretrial battles in many employment lawsuits is whether to admit testimony from other employees -- and, if the testimony will be admitted, how much they'll be allowed to say. Both sides are willing to spend time and money fighting over this because it can determine who wins at trial. The Supreme Court's decision could well shape the outcome of federal discrimination lawsuits for years to come.

To learn about the Age Discrimination in Employment Act and other federal laws that affect employers, check out my & Attorney Amy DelPo's book The Essential Guide to Federal Employment Laws (Nolo).

Lisa Guerin