Nolo’s Employment Law Blog

The U.S. Supreme Court has denied a request by global shipping giant FedEx to review a $100,000 punitive damages award against it for failing to provide a reasonable accommodation to a deaf package handler. Ronald Lockhart worked for FedEx at the company's Baltimore Ramp at the Baltimore-Washington International Airport. Lockhart repeatedly asked his supervisor for a sign language interpreter or written notes from daily, weekly, and monthly meetings and training sessions. Despite these repeated requests, for the first two years of his employment FedEx made no attempts to accommodate Lockhart. After Lockhart complained to the EEOC, FedEx did provide some accommodations, but sporadically. (For instance, a translator was present at some meetings but not others.)

In contesting the jury's finding of a punitive damages award, FedEx claimed that its adoption of an ADA compliance policy, as well as its internal grievance policy for handling employee complaints, established it had acted in good faith to comply with the ADA. But the court recognized, "an employer maintaining such a compliance policy must also take affirmative steps to ensure its implementation." Equal Employment Opportunity Commission v. Federal Express, 513 F.3d 360, 374 (4^th Cir. 2008) (PDF file). There was evidence to support the jury's finding that FedEx had failed in this regard, including evidence that at least 3 higher-ups, in addition to Lockhart's supervisor, knew of his request for accommodation.

The Supreme Court's decision not to hear the case means employers who fail to provide reasonable accommodations when requested may be subject to punitive damage awards. The existence of a policy, on its own, won't be adequate evidence of an employer's good faith. Policies must be implemented if they are to offer protection.

The Equal Employment Opportunity Commission (EEOC) recently issued a new section of its Compliance Manual on religious discrimination, along with a fact sheet of questions and answers and a best practices guide. These documents were issued partly in response to a rise in charges of religious discrimination, which have doubled in the last 15 years (although they still make up a small fraction of the total charges the EEOC receives -- 3.5%, according to the agency).

Religion is unique among the characteristics protected from discrimination. Religion isn't really a characteristic, like race or gender; it's a belief system. And unlike other protected traits, which are sometimes protected precisely because they are "immutable," religious belief is deeply personal and can change over time. A person might become more religious, convert from one religion to another, or abandon faith entirely. A person might strongly feel him- or herself to be part of a religion, yet not share all of its beliefs or follow all of its teachings. Also, unlike other protected traits, religion sometimes requires particular behavior while adherents are at work, such as prayer; observing certain holidays; wearing specified items, types of clothing, or hair styles; or professing one's faith to others.

All this adds up to potential workplace conflict, especially when you consider that atheism is also considered a "religion" for purposes of anti-discrimination law. What if an employee's religious beliefs require him or her to "spread the good news" to customers and coworkers -- who complain about it? What if an employee's religious garb creates a potential safety hazard or simply violates the company's uniform rule? What if an employee requests an accommodation for a claimed religious belief that you've never heard of, refuses to provide a Social Security number because it constitutes "the mark of the beast," or asks to be excused from a management training course featuring a New Age speaker?

The EEOC's Manual attempts to clarify some of these issues. Among other things, the new Manual provides guidance on:

What constitutes a religious belief. Once an employee goes beyond recognized religious affiliations, it can be hard for an employer to determine whether the employee's belief is actually religious. Vegetarianism, particular styles of dress or hair length, and views on appropriate gender roles, for example, could each be part of a system of religious practices or could simply be a matter of personal opinion or preference. As the Manual points out, personal beliefs are not protected by Title VII; that privilege is reserved for religious beliefs, defined as those that are sincere, meaningful, occupy a place for the believer "parallel to that filled by...God," and concern "'ultimate ideas' about 'life, purpose, and death.'"

Discrimination based on third party bias. The Manual makes clear that employment decisions based on customer preference or prejudice -- for example, against employees who are perceived as Muslim -- are discriminatory. Oddly, the Manual also says that it would be okay for employers to require Muslim applicants to undergo more extensive security or background checks if required by federal law or Executive Order, but then goes on to say that no such law or Order exists, as far as it knows.

Reasonable accommodation and undue hardship. Employers are legally required to accommodate an employee's religious belief, practice, or expression. The Manual gives extensive guidance on accommodations that might be reasonable for an employee who requests a scheduling change (to observe religious rituals or a Sabbath), an exception from usual dress or grooming requirements, or breaks at work to pray. The Manual indicates that employers would be well-advised to follow the "interactive process" required by the ADA in working with employees to come up with a suitable accommodation. Although the Manual notes that any expense beyond administrative costs is considered an undue hardship under Title VII, it also states that an employer might be expected to pay premium wages (for example, overtime pay to another employee) as a temporary accommodation for an employee who needs time off for religious reasons.

Religious expression. The Manual cites a survey indicating that 19% of employees proselytize to coworkers. It also discusses other forms of religious expression in the workplace, from an employee who wears a button with an anti-abortion message and graphic photograph of a fetus or a patch saying "Jesus is Lord," to employees who wish to greet customers with "Have a Blessed Day," "Praise the Lord," or "in the name of Jesus of Nazareth."

The Manual doesn't do much to resolve the current legal bind of employers here: These are considered forms of religious expression entitled to accommodation. On the other hand, other employees may find these statements harassing -- and the employer itself might legitimately feel that such statements give the public the wrong idea about the company's own values and mission. There are no bright lines: Unlike racist or sexist comments, which an employer can and should stop whether or not they've reached the level of legal harassment, religious comments are not considered legally inappropriate. In fact, they are legally protected to some extent, and an employer who prohibits them absent complaints or other evidence of trouble could face a successful legal challenge.

The 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.

Lisa Guerin

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

There are plenty of stories about employers firing employees for criticizing the workplace on their personal blogs. Then there are the tales of employee blogs getting companies into hot water by revealing confidential company information, or criticizing third parties. But a recent blog saga has an interesting twist: a Burger King executive used his middle school-aged daughter's online identity to attack a farmworkers' advocacy group that was trying to increase pay and improve conditions for tomato pickers. (In another dramatic turn, Burger King also allegedly hired a private investigator who tried to infiltrate the organization.) Though Burger King declined to name the employee, other reports claim that it was Vice President Steven Grover (who, according to a company telephone operator, no longer works at Burger King).

Dealing with employee blogs is a delicate thing. On the one hand, you don't want to overstep legal limits on regulating off-duty conduct; on the other, you do want to keep company secrets. Companies like Dell, IBM, and Cisco require their blogging employees to disclose their identities and company affiliation when blogging about company-related issues. And many companies require bloggers to make clear that their views are their own, not those of the company.

I doubt Burger King had such a policy, but in this case, you'd also doubt that the employee would have followed it anyway. After all, any company executive who will assume his pre-teen's identity (did he really expect to go undetected?) to make disparaging remarks has questionable business acumen. The law related to blogs may be complicated, but it's not that complicated.

Of course, that's my view, not necessarily that of my employer.

Alayna Schroeder

Today, the Familes and Work Institute released its "National Study of Employers," a survey of the programs, policies, and benefits U.S. employers provide to address work-life issues such as job flexibility, time off, and health and retirement benefits. One purpose of the study was to identify trends over the last ten years. (The Institute released a similar study in 1998, and another in 2005.)

Its findings? Things haven't changed much, overall. For most of the more than 80 policy options the study surveyed, roughly the same percentage of employers offer them today as did ten years ago. The biggest change is who pays -- the study shows that costs are shifting to employees for these benefits:

• Maternity disability leave. 16% of employers provide leave with full pay for the period of time when a female employee is unable to work due to pregnancy and childbirth, compared to 27% of employers ten years ago.


• Family health insurance benefits. Only 4% of employers pay the full cost of covering family members, compared to 13% ten years ago.


• Retirement benefits. Although most employers contribute to employee retirement plans, the number has declined from 91% to 81%. And far fewer employers offer defined benefit pension plans (which pay out a set monthly benefit upon retirement).

Some programs have become more popular in the last ten years. Employers are now much more likely to provide health insurance coverage for their employees' unmarried partners, for example. They are also more likely to offer employee assistance programs (EAPs), information about elder care resources and services, and flexible hours, allowing at least some employees to change their starting and quitting times.

One of the more interesting findings of the survey is that racial and ethnic diversity at the top predicts a more work-life friendly workplace. The survey looked at four categories of work-life benefits: flexibility, caregiving leaves, child and elder care assistance, and health and economic security (primarily medical, disability, and retirement benefits). In every category, companies with more racial and ethnic minorities in senior positions were more likely to offer benefits.

Lisa Guerin

No doubt in response to a sluggish economy, a recent CNN article advises employees facing layoff on how to protect themselves. I appreciate the need for employees to take these steps, but I also think it's an opportunity for HR and other company representatives to show that your interests aren't always so different, either. So here's a summary of advice given by the article, as well as some advice to the employer:

1. Get organized. Employees are advised to print and take home personal files, review project files and update resumes, and think about what to do next and who to use as a reference.

Employer advice: Give employees adequate time to go through their desks, files, and projects to put everything in order, but remind them of their obligation to return and not improperly use company property. Make sure everyone knows company policy on referrals, if there is a policy.

2. Get what's coming to you. Get dental and medical checkups; make sure you get any vacation or holiday pay you're owed.

Employer advice: Know and comply with your state's rules about paying vacation or personal time. Many states require employers to pay for time already accrued. Also follow any company policy that states these will be paid. Finally, make sure you comply with requirements to notify employees of entitlement to continuing insurance coverage.

3. Get connected. Network. Talk to friends, former coworkers, and clients; attend professional association meetings; and talk to recruiters.

Employer advice: Provide information and access to job search resources (resume writing workshops, career fairs and centers, etc.) in the area. Remind employees of any legally valid non-solicitation or non-compete agreements.

4. Get searching. Visit online professional organizations or companies where you'd like to work; look at online job postings.

Employer advice: Compile a list of possible job-hunting websites or online resources to help employees jump start their search.

5. Get an exit strategy. Review company policy on severance; review agreements with legal and financial advisors.

Employer advice: Prepare to deal with confused, frustrated, or saddened employees. Honor any promises of severance pay or other benefits. Show departing employees compassion, respond promptly to inquiries about what will happen next, and take any requests for flexibility or negotiation seriously. Allow employees adequate time to review any proposed arrangements or to meet with professionals.

6. Get fired up. Stay positive.

Employer advice: Where appropriate, be sure to express your gratitude for an employee's past good work. Wish the employee well in future endeavors.

Alayna Schroeder

I went to a great event last week called "Putting Transgender People to Work," cohosted by Out & Equal and the Transgender Economic Empowerment Initiative. The speakers made the business case for hiring and retaining transgender employees and offered strategies for making companies friendlier for transgender employees and customers. One of the featured speakers, Susan Friedman of Macy's West, talked about creating a nondiscrimination program, complete with policy language, training, and written guides for managers and employees, for Macy's and Bloomingdale's stores.

A big part of the business case is the tremendous untapped human resource of transgender employees -- employees whose identification or expression of their gender is different from the gender they were born into or the stereotypes associated with it. According to the "Good Jobs Now!" survey cited by the speakers, transgender people are disproportionately unemployed or underemployed, and more highly educated, than the general population of California. That's the carrot: The stick is that discrimination on the basis of gender identity -- which includes discrimination against transgender employees and applicants -- is illegal in a handful of states (including California) and a much larger number of cities and counties.

For information on making your company more welcoming to transgender employees and applicants, check out the extensive resources available at the Transgender Law Center's website. You'll find information on everything from revising your policies to include gender identity as a protected category to making bathrooms accessible to transgender employees, handling coworker concerns, and respecting transgender employees' privacy. TLC also does workplace trainings.

Lisa Guerin

The EEOC is getting a lot of press for a $1 million jury verdict in a harassment case against agri-giant Harris Farms that was recently upheld by the Ninth Circuit. The verdict included the maximum $300,000 for punitive damages allowed under federal law. I have to admit, the numbers alone piqued my interest. And I wondered--how serious does an employer's activity or inactivity have to be to justify that kind of punitive damages award?

So I found the lower court's unpublished opinion, explaining why it denied Harris Farms' request for judgment as a matter of law with respect to punitive damages. Essentially, this was a request that the jury verdict be overturned because there wasn't legally sufficient evidence that the defendant acted in "malice or reckless disregard" of the plaintiff's rights, the legal standard for punitive damages.

Here's a summary of the reasons the court determined the defendant's behavior could be "reckless disregard":

* The defendant's written sexual harassment policy was out of date, and didn't even include a retaliation provision. Company executives knew it was out of date and didn't do anything about it.

* When the plaintiff made her complaints, translations of reports or interviews were inaccurate.

* After complaining of a physical incident in which she was grabbed by the harasser, the plaintiff was sent to work in a field by his home. When he made the assignment, her direct supervisor said he didn't know she'd filed a complaint or that the two should be kept apart. When the plaintiff complained the harasser drove slowly back and forth by the field, the employer didn't take any formal action.

* Two days later, the plaintiff reported to human resources that the harasser had raped her. Though they'd called the police about the grabbing incident, they didn't report the rapes and they didn't interview the harasser about them until 6 weeks later.

* In the midst of all this, the plaintiff complained to human resources that co-workers were spreading sex-related rumors about her. She said she was scared, and requested not to work alone. The request was denied, and eventually the plaintiff was investigated and disciplined for participating in gossip and making sexually inappropriate comments.

I understand that limiting damages is a big concern for most employers. In fact, this fear has led to some great strides in the context of harassment--training, clear policies, understandable procedures. Given that, a verdict like this can be a scary one. Maybe. I thought this might be a test case--one that would give some very clear guidance and put pressure on employers to tread carefully. Though it's not without its lessons (and obviously doesn't set a standard in every case), it also affirms a lot of practices conscientious employers are already following. Have an up-to-date policy. Investigate immediately. Report incidents of physical sexual assault to local authorities. I don't know that we needed a $1 million jury verdict to tell us that.

Alayna Schroeder

There was an interesting article by Marcia Coyle in The National Law Journal last week, reporting on a study of court rulings on employment arbitration awards. The study found that federal courts upheld arbitration awards at roughly the same rate, whether the employee or the employer won the underlying arbitration. State courts were a different story, however: State appellate courts confirmed employee arbitration victories only 56.4% of the time, but confirmed 86.7% of employer victories.

Previous studies have looked at how employees fare in arbitration: how often they win, how the costs and fees compare to those paid in litigation, and how large the awards are. The National Workrights Institute has compiled some of this research here. The data they looked at partially contradict the anecdotal evidence -- and gut feeling -- of many lawyers that employees tend to do better in front of a jury than before an arbitrator or panel of arbitrators.

Although the figures in the research they looked at vary, they appear to indicate that employees may win more often in arbitration than in litigation, and that the median arbitration award is comparable to the median award in court. That isn't the whole story, however: The mean award to employees was much higher in litigation than in arbitration. (In case you missed that day, the median is the midpoint of a range of numbers, which means there are an equal number of awards above and below the median; the mean is the average award.) The higher mean for employees in litigation suggests that employees do better in court in the big money cases. However, the study also points out that, because litigation costs more than arbitration, employees who go to court may actually have better cases -- and that the ultimate amount the employee gets is often quite a bit less than the award.

Lisa Guerin