June 2008 Archives

June 19, 2008

Supreme Court Decides Two Age Discrimination Cases

court_front_med.jpgThe Supreme Court is busy these days, issuing its final decisions before beginning its summer recess at the end of this month. Today, the Court announced several employment law cases, including two age discrimination decisions. (The Court also invalidated a California law that prohibited employers who receive state funds from using that money to promote or discourage union organization; I'll write about that case, Chamber of Commerce v. Brown, in a future post). One of the age discrimination cases, Meacham v. Knolls Atomic Power Laboratory, involved a reduction in force at a government contractor that designs naval nuclear reactors. Managers were asked to score employees for performance, flexibility, and critical skills, and those scores were used to determine which employees lost their jobs. All but one of the 31 employees who were let go were at least 40 years old, and most of them sued for age discrimination. Among other things, the employees claimed that the scoring system had a disparate impact: Even though it didn't explicitly discriminate on the basis of age, the employees argued that it disproportionately screened out older workers. Knolls countered that its selection criteria for the RIF were "reasonable factors other than age" (RFOA), one of the exceptions to the Age Discrimination in Employment Act, and so were legal. The argument in this case was over which party -- employer or employee -- ultimately has to prove the RFOA. The Court found that the RFOA is an affirmative defense, which means that the burden is on the employer to prove that its criteria were reasonable. As the Court admits, this case will make it more difficult for employers to defend against disparate impact claims in ADEA lawsuits. In Kentucky Retirement Systems v. Equal Employment Opportunity Commission, a rare combination of five Justices (Breyer, Roberts, Stevens, Souter, and Thomas) decided that Kentucky's retirement system for employees in hazardous positions (such as firefighters and law enforcement officers) didn't violate the ADEA. This decision is tough to parse, not least because the facts of the case are a bit complicated (and there's math). Here are those facts in a nutshell: Kentucky's system makes employees eligible to retire when (1) they have 20 years of service, or (2) they have five years of service and are at least 55 years old. Employees who suffer a disability are eligible for immediate retirement. If they haven't met one of the two criteria that usually apply, they are credited with enough additional years of service to qualify them for retirement, up to the number of years they have actually served. Retired employees were paid based on a formula that multiplies their years of service (whether actual or credited after a disability) by a factor of their annual pay when they retired. The EEOC sued, claiming that the system discriminated against older workers because it allowed younger employees to receive higher payments than older employees with the same length of service. Because employees who were at least 55 only needed five years of service to retire, some younger employees who became disabled had to be credited with more years of service to be eligible for retirement -- which translates into more money. For example, an employee who suffered a disability at the age of 35 after ten years of service would receive credit for an additional ten years of service; an employee who suffered a disability at the age of 50 after ten years of service would receive credit for only an additional five years of service; and an employee who suffered a disability at the age of 55 after ten years of service would be credited with no extra years. The Court decided in favor of Kentucky and upheld the system. The Court found that Kentucky wasn't motivated by age discrimination, but by a desire to allow those disabled on the job to receive compensation. Because the state's rules were based on pension eligibility rather than on age, the Court found that they should be upheld. The dissent seems to have the better side of the argument on this one. They point out that the state's pension calculations are explicitly based on age. The state may be able to justify its rules using the equal cost defense, which allows employers to reduce certain benefits to older workers as long as it spends an equal amount on benefits for older and younger workers. But to say, as the majority opinion here does, that the state's system is not age-based seems incorrect. And even if the state has good intentions, as appears to be the case, it doesn't have to disadvantage older workers to achieve its goal of compensating employees who suffer disabilities.

For a comprehensive guide to the ADEA and other federal laws prohibiting discrimination, see The Essential Guide to Federal Employment Laws, by Lisa Guerin and Amy DelPo (Nolo).

Lisa Guerin
June 10, 2008

Vacations Have Health Benefits

It turns out that taking time off work isn't just a luxury -- it improves our health, the quality and quantity of our sleep, and our reaction times. According to an article by Alina Tugend in the New York Times, "Vacations Are Good for You, Medically Speaking," a study has shown that women who took a vacation only once every six or more years were eight times more likely to develop coronary heart disease or have a heart attack than women who took at least two vacations a year. Another study showed that men who didn't take annual vacations had a 21% higher risk of death from all cases, and were 32% more likely to die of a heart attack. The article also cites interesting research on how vacations affect our sleep. After a few days on vacation, participants were averaging an hour more of good quality sleep, and registered an 80% improvement in their reaction times as measured by vigilance testing. The benefits continued, though less markedly, after vacationers returned home. The sleep survey involved vacationers who were flying from the West Coast of the United States to New Zealand for at least a week of vacation. But will more modest vacationing - occasioned by this year's flagging economy and high gas prices -- offer the same rewards? According to an AOL Travel/Zogby survey, more than half of the respondents felt that they had less money to spend on summer vacations this year than last year. Perhaps as a result, a third of respondents were planning to stay with family and friends rather than in a hotel. And, campgrounds around the country are reporting high numbers of reservations. It remains to be seen whether we'll get an extra hour of quality sleep on the ground or the hide-a-bed. Lisa Guerin
June 4, 2008

High Gas Prices Should Drive Employees to Telecommuting

gas.jpgWith gas prices hovering around $4 per gallon, a survey by placement firm Challenger, Gray & Christmas reveals that 57% of polled employers are offering alternatives to help employees cope, according to CNN. Strategies include a compressed work week -- four 10-hour days (23%) -- employee carpools (20%), subsidizing the cost of public transportation (18%), and allowing employees to telecommute at least one day a week (14%). Personally, I'm surprised telecommuting is so far down the list. All the other options are good ones, but telecommuting has some distinct advantages for employers as well as employees. (Full disclosure: I'm writing this from home, as a telecommuting employee.) Here are just a few of the benefits:
  • Recruiting and retaining the best employees. According to the survey, 34% of employers have had a qualified candidate turn down a job because of a long commute, while 40% of jobs could be done telecommuting. Allowing employees to telecommute is an attractive job benefit that will help you attract the best candidates, even if far away. Another study shows telecommuting employees are more satisfied with their jobs, and less likely to leave.
  • Decreased costs. Telecommuting may decrease your costs -- for example, if it allows employees to share work space and office equipment.
  • Increased efficiency. Employees working at home are free of the distractions of a ringing phone, interruptions by co-workers, and the like. Particularly if working on focused projects, this allows employees to work more efficiently.
  • Positive environmental impact. One 2005 study found Americans drive an average of 16 miles each way to work. In addition to reducing commuting times and costs, allowing telecommuting has a positive environmental impact as fewer workers drive to the office.

To learn how to create a work-at-home arrangement that will suit both employee and boss, see The Work From Home Handbook, by Diana Fitzpatrick and Stephen Fishman (Nolo).

Alayna Schroeder
June 2, 2008

Pregnancy Discrimination Includes Abortion, says Federal Court of Appeals

Firing an employee for having an abortion is a form of pregnancy discrimination, the Third Circuit Court of Appeal found in Doe v. C.A.R.S. Protection Plus, Inc. The facts of this case are particularly sad: Doe (a pseudonym) learned there might be problems with her pregnancy in August 2000, several months after she found out she was pregnant and told her employer. After tests showed severe deformities, Doe had an abortion, on her doctor's recommendation. On the day of the funeral ceremony, Doe was fired. Her employer argued that she was fired for failing to comply with the company's procedures for being absent from work. However, Doe presented evidence that her husband had called in to arrange the time off, and that other employees were not required to follow the same rules. Another employee also stated that Doe's supervisor (who fired her) stated that Doe "didn't want to take responsibility," possibly in reference to her abortion. And, Doe was fired only three working days after the abortion. Taken together, the Court found that this evidence was enough to defeat the employer's motion for summary judgment. At least one other federal Court of Appeals (the Sixth) has found that employers may not discriminate against employees who have had abortions, the same position the EEOC has taken. This precise issue hasn't come up much in court decisions, perhaps because many women keep quiet about having an abortion. Doe's employer knew about her abortion precisely because of the sad facts of the case: that it was a medically recommended termination of an apparently wanted pregnancy. The term "abortion" does come up with some frequency in pregnancy discrimination cases, but not because the employee alleging discrimination had or even considered one. Instead, the employee sometimes claims that her manager brought up the possibility of an abortion (as in, "why don't you have one"), one piece of evidence that the manager was hostile toward the employee's pregnancy.

Thanks to the Law Memo's Employment Law Blog for alerting me to the case.

Lisa Guerin