For the week of February 25, 2008
Last month, the 2d U.S. Circuit Court of Appeals held that a hospital’s “quality assurance program” that led a physician into its peer review process may have created an employment relationship, allowing the physician to move forward with claims under Title VII. (Salamon v. Our Lady of Victory Hospital, et al., No. 06-1707-cv, January 31, 2008) Less than a month later, the Ninth Circuit has determined that a physician working under the terms of a professional service agreement with a hospital was in a position equivalent to that of an “employee” for purposes of an anti-discrimination statute, based upon the fact that the hospital controlled certain aspects of his work in the ER. In this case, that designation led to a dismissal of the doctor’s state law discrimination claims. Johnson v. Riverside Healthcare System, LP, 9th Cir., No. 06-55280, February 13, 2008.
Christopher Johnson worked as a physician and as a member of the medical staff under the terms of a professional agreement with Riverside Community Hospital. His responsibilities included performing plastic surgeries and providing trauma consultations in the hospital’s emergency room. While the professional agreement designated Johnson as a “contractor,” Riverside retained control over several of the material aspects of Johnson’s work at the hospital. For instance, the hospital determined which shifts Johnson would work, assigned the nurses who would work with him, designated specific credentials that Johnson had to display while inside the hospital, and required Johnson to remain a member in good standing on the Medical Staff at Riverside.
In February of 2002, Johnson’s medical staff privileges were revoked when he failed to pay membership dues that would have kept those privileges current. When Johnson applied for reinstatement, he was told that he would have to reapply to the Staff as a new applicant. That application included a hearing before the Medical Staff Credentialing Committee. At the hearing, numerous co-worker complaints were presented, all related to Johnson’s behavior. Based upon complaints, the Committee denied Johnson’s application for staff membership, and reported the comments to the California Medical Board.
Johnson, who designates himself as “African American and bisexual,” claimed that he had regularly been harassed because of his sexual orientation, that he had been the victim of at last one particularly serious incident of racial harassment, and that he had been denied continuing employment because of his race and sexual orientation. Johnson filed a lawsuit in federal court claiming racial discrimination in violation of 42 U.S.C. §1981, and under a California anti-discrimination statute (known as the “Unruh Civil Rights Act”), claiming racial and sexual orientation discrimination.
Johnson’s claims were dismissed by the district court, and he appealed that dismissal. On appeal, the Ninth Circuit first addressed Johnson’s §1981 claim. Section 1981 guarantees all persons the right to “the enjoyment of all benefits, privileges, terms, and conditions of [a] contractual relationship,” which has been interpreted by the courts to include a prohibition against racially hostile work environments. To prove a hostile work environment based upon racial harassment, an individual must show conduct sufficiently severe and pervasive to “create an abusive work environment.” Johnson alleged only one particularly serious incident of discrimination – an encounter with a fellow doctor who referred to Johnson by using a racial epithet. The Ninth Circuit upheld the claim’s dismissal on the basis that isolated incidents typically are insufficient to state a claim for hostile environment.
The Court then turned its attention to the state-law claims. The statute under which Johnson brought his claims, California Civil Code §51, codifies the Unruh Civil Rights Act, and provides that all persons within the State of California are entitled to “. . . full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind. . . .” However, California courts have held that employment discrimination claims are excluded from Section 51 protection, on the basis that other statutes exist to provide relief for such claims. While Johnson argued that Section 51 applied because he was not an employee of the hospital, the Court disagreed. Factors viewed by the Court as creating an employment relationship included the fact that Johnson was paid to be on call, was compensated for trauma patients treated (up to a monthly cap), and retained control over certain of the “material aspects” of Johnson’s work at the hospital. The Court specifically cited the facts that Riverside determined Johnson’s work shifts, and that it assigned nursing staff to work with him during those shifts, and enforced criteria for his continued good standing on the Medical Staff. Based on these factors, the Court held that Johnson’s Section 51 claims were “foreclosed by the fact that his relationship with Riverside was materially indistinguishable from that of an employee.”
This recent holding could be problematic, because the factors used by the Court to establish that Johnson’s status was more similar to an “employee’ than to a “contractor” for purposes of the state’s anti-discrimination statutes are factors present in nearly every relationship between a hospital and its staff physicians. While this case has limited geographic applicability (9th Circuit and California state law), and the holdings in both cases are specific to hospital/employers, the context is beginning to be applied more generally by various federal courts. Employers with contract or temporary employees should be aware of the criteria being used by courts to determine whether an individual is an "employee" for purposes of state and federal anti-discrimination statutes.
Tuesday, February 26, 2008
Thursday, February 21, 2008
“Reasonable” accommodation of religious beliefs does not have to eliminate every conflict between workplace rules and religious practices
For the week of February 18, 2008
Title VII makes it unlawful for an employer to discriminate against an employee because of that individual’s religion. An employer has a statutory obligation to make a "reasonable accommodation" for the religious observances of its employees, unless such accommodation would create an undue hardship for the company. The 4th U.S. Circuit Court of Appeals has held that an employer’s existing policies, combined with efforts to cooperate with an employee’s requests for leave constituted a "reasonable accommodation," even though those efforts did not provide the employee with his preferred accommodation. EEOC v. Firestone Fibers & Textiles Co., 4th Cir., No. 06-2203, Feb. 11, 2008.
David Wise was employed by Firestone Fibers & Textiles at two of its North Carolina facilities. In 2001, Wise became a member of the Living Church of God. As a member of that Church, Wise was prohibited from working on the weekly Sabbath – from sundown on Friday until sundown on Saturday – and on various religious holidays. During 2001, Wise’s religious holidays and weekly Sabbath did not interfere with his work attendance, as he typically worked from 7:00 a.m. until 3:00 p.m., Monday through Friday. However, in 2002, the company underwent restructuring as a result of a series of layoffs, and Wise was bumped from his 7-to-3 shift position by a more senior employee, as that shift was deemed to be more desirable. Wise was reassigned to work from 3:00 p.m. to 11:00 p.m., Monday through Fridays, and on Saturdays whenever his "unit" was operating.
Because his new shift would require him to be at work during Sabbath, Wise met with his supervisor and an HR manager (Jozwiakowski) to discuss the issue. Wise asked whether he could be accommodated in a way that would allow him to observe his Sabbath on a weekly basis. In considering the request, Jozwiakowski first determined that Wise could not be transferred into a 7-to-3 position without displacing a more senior employee, which would have contravened the collective bargaining agreement (CBA) in effect at the time. In addition, Wise lacked the seniority and/or skills to be placed into other jobs that might have accommodated his request.
Jozwiakowski also considered whether it would be possible to leave Wise’s shift uncovered during the hours of his Sabbath, but determined that it was not feasible from a work-process perspective. Also, allowing Wise to be excused from work for Sabbaths without having the absences count against him under the company’s attendance policy would require constant overtime on the part of Wise’s fellow workers, and therefore was not implemented. Wise then was told that the company was unable to change his shift, and that he would have to rely on existing policies related to attendance to cover his absences.
The CBA in effect allowed Wise 15 vacation days and three floating holidays, and employees could take up to 60 hours of unpaid leave for any reason. Further, if an employee had taken less than 36 hours of unpaid leave, he could use up to three vacation days in half-day increments (for six, half-day absences). Also, under Firestone’s policies, employees could swap shifts twice each quarter (eight times per year) with a willing co-worker.
From February to September 2002, Wise used vacation days, floating holidays, and unpaid leave time to avoid working on Sabbath or on religious holidays, but did not utilize the shift-swapping option. In September, after Wise had exhausted his allotted vacation/floating holidays, and was close to having used his 60-hours of unpaid leave, Wise requested an unpaid leave of absence of 11 days to cover two religious holidays. His request was denied, as such leaves typically were granted only for "one-time" non-recurring events. When Wise subsequently failed to report to work for those days, he exceeded his 60-hour leave allotment, and his employment was terminated.
The EEOC filed a complaint in federal court on behalf of Wise, claiming religious discrimination based on Firestone’s alleged failure to reasonably accommodate Wise. The district court granted summary judgment in Firestone’s favor, holding that the company had provided reasonable accommodation, and in the alternative that "to the extent that Firestone did not accommodate [Wise}, its failure was legally excused by the [undue] burden" that such accommodation would inevitably have caused for Firestone.
On appeal, the Fourth Circuit upheld the judgment in favor of Firestone, but premised its decision solely upon the fact that reasonable accommodation had been offered to Wise by Firestone. The Court specifically held that "any reasonable accommodation" is sufficient to meet the company’s obligation under Title VII, even if that proposed accommodation is not the employee’s preferred resolution of the issue. According to the Court, the duty of "reasonableness" cannot be interpreted to mean that a proposed accommodation must "eliminate the conflict between workplace rules and religious practices." The Court pointed out that Firestone sought to assist Wise through a number of mechanisms, including the company’s existing policies (60 days of unpaid leave, voluntary swaps, shift swapping), avenues provided by the CBA, and in the supervisor’s attempts to work around Wise’s schedule when possible.
Title VII does not require an employer to violate the terms of the CBA or to adversely affect the working conditions of an individual’s co-workers in its quest for a "reasonable accommodation." The employer in this case was successful because it actively attempted to accommodate Wise’s religious beliefs, using available avenues while considering the impact its actions would have on its seniority-based scheduling system and on its other employees. According to the Fourth Circuit, that is the effort required by the law.
Title VII makes it unlawful for an employer to discriminate against an employee because of that individual’s religion. An employer has a statutory obligation to make a "reasonable accommodation" for the religious observances of its employees, unless such accommodation would create an undue hardship for the company. The 4th U.S. Circuit Court of Appeals has held that an employer’s existing policies, combined with efforts to cooperate with an employee’s requests for leave constituted a "reasonable accommodation," even though those efforts did not provide the employee with his preferred accommodation. EEOC v. Firestone Fibers & Textiles Co., 4th Cir., No. 06-2203, Feb. 11, 2008.
David Wise was employed by Firestone Fibers & Textiles at two of its North Carolina facilities. In 2001, Wise became a member of the Living Church of God. As a member of that Church, Wise was prohibited from working on the weekly Sabbath – from sundown on Friday until sundown on Saturday – and on various religious holidays. During 2001, Wise’s religious holidays and weekly Sabbath did not interfere with his work attendance, as he typically worked from 7:00 a.m. until 3:00 p.m., Monday through Friday. However, in 2002, the company underwent restructuring as a result of a series of layoffs, and Wise was bumped from his 7-to-3 shift position by a more senior employee, as that shift was deemed to be more desirable. Wise was reassigned to work from 3:00 p.m. to 11:00 p.m., Monday through Fridays, and on Saturdays whenever his "unit" was operating.
Because his new shift would require him to be at work during Sabbath, Wise met with his supervisor and an HR manager (Jozwiakowski) to discuss the issue. Wise asked whether he could be accommodated in a way that would allow him to observe his Sabbath on a weekly basis. In considering the request, Jozwiakowski first determined that Wise could not be transferred into a 7-to-3 position without displacing a more senior employee, which would have contravened the collective bargaining agreement (CBA) in effect at the time. In addition, Wise lacked the seniority and/or skills to be placed into other jobs that might have accommodated his request.
Jozwiakowski also considered whether it would be possible to leave Wise’s shift uncovered during the hours of his Sabbath, but determined that it was not feasible from a work-process perspective. Also, allowing Wise to be excused from work for Sabbaths without having the absences count against him under the company’s attendance policy would require constant overtime on the part of Wise’s fellow workers, and therefore was not implemented. Wise then was told that the company was unable to change his shift, and that he would have to rely on existing policies related to attendance to cover his absences.
The CBA in effect allowed Wise 15 vacation days and three floating holidays, and employees could take up to 60 hours of unpaid leave for any reason. Further, if an employee had taken less than 36 hours of unpaid leave, he could use up to three vacation days in half-day increments (for six, half-day absences). Also, under Firestone’s policies, employees could swap shifts twice each quarter (eight times per year) with a willing co-worker.
From February to September 2002, Wise used vacation days, floating holidays, and unpaid leave time to avoid working on Sabbath or on religious holidays, but did not utilize the shift-swapping option. In September, after Wise had exhausted his allotted vacation/floating holidays, and was close to having used his 60-hours of unpaid leave, Wise requested an unpaid leave of absence of 11 days to cover two religious holidays. His request was denied, as such leaves typically were granted only for "one-time" non-recurring events. When Wise subsequently failed to report to work for those days, he exceeded his 60-hour leave allotment, and his employment was terminated.
The EEOC filed a complaint in federal court on behalf of Wise, claiming religious discrimination based on Firestone’s alleged failure to reasonably accommodate Wise. The district court granted summary judgment in Firestone’s favor, holding that the company had provided reasonable accommodation, and in the alternative that "to the extent that Firestone did not accommodate [Wise}, its failure was legally excused by the [undue] burden" that such accommodation would inevitably have caused for Firestone.
On appeal, the Fourth Circuit upheld the judgment in favor of Firestone, but premised its decision solely upon the fact that reasonable accommodation had been offered to Wise by Firestone. The Court specifically held that "any reasonable accommodation" is sufficient to meet the company’s obligation under Title VII, even if that proposed accommodation is not the employee’s preferred resolution of the issue. According to the Court, the duty of "reasonableness" cannot be interpreted to mean that a proposed accommodation must "eliminate the conflict between workplace rules and religious practices." The Court pointed out that Firestone sought to assist Wise through a number of mechanisms, including the company’s existing policies (60 days of unpaid leave, voluntary swaps, shift swapping), avenues provided by the CBA, and in the supervisor’s attempts to work around Wise’s schedule when possible.
Title VII does not require an employer to violate the terms of the CBA or to adversely affect the working conditions of an individual’s co-workers in its quest for a "reasonable accommodation." The employer in this case was successful because it actively attempted to accommodate Wise’s religious beliefs, using available avenues while considering the impact its actions would have on its seniority-based scheduling system and on its other employees. According to the Fourth Circuit, that is the effort required by the law.
Wednesday, February 20, 2008
Former employee may file retaliation claim under the FLSA for action taken after termination of employment
For the week of February 11, 2008
To establish a claim of retaliation under the Fair Labor Standards Act, an individual must be able to show that he took an action protected by that Act; that he suffered an adverse employment action; and that a “causal link” existed between those two. A federal district court’s decision to dismiss such a claim by a former employee of a telecommunications company was recently reversed by the 4th U.S. Circuit Court of Appeals. The lower court held that the former employee could not demonstrate that a company had taken an “adverse employment action” after employment had ended. The Fourth Circuit reversed, holding that the company’s state court lawsuit against a former employee filed two weeks after that individual filed a federal court action under the FLSA constituted an adverse action sufficient to support a claim of retaliation under that Act. Darveau v. Detecon, Inc., 4th Cir., No. 06-2092, Jan. 31, 2008.
Larry Darveau held the position of Director of Sales for Detecon, Inc., a telecommunications consulting company. In December of 2004, Detecon informed Darveau that it was terminating his employment, effective January 31, 2005. On August 31, 2005, Darveau filed a complaint in federal court, alleging that Detecon had failed to pay overtime owed to Darveau under the FLSA. Two weeks later, Detecon filed a state court action against Darveau alleging fraud and fraudulent concealment arising out of a sales contract in which Darveau had been involved. Darveau then amended his federal court case to add a claim of retaliation under the FLSA. The lower court granted a motion to dismiss the retaliation claim, and Darveau appealed. The Fourth Circuit reversed the dismissal, allowing the retaliation claim to go forward.
The FLSA’s anti-retaliation provision makes it unlawful to discharge or discriminate against “any employee because such employee has filed any complaint or instituted . . . any proceeding under or related to this chapter.” While the lower court focused on the term “employee,” the Fourth Circuit analyzed the elements of a prima facie case of retaliation, and found that Darveau had set forth the required factors. First, the Court found that Darveau had an “objectively reasonable belief” that Detecon had violated the FLSA, and that he had therefore engaged in a protected activity when he filed his federal claim against the company. The crux of Darveau’s argument on appeal – and the factor upon which the lower court actually dismissed the case – was whether Darveau had suffered an adverse employment action sufficient to support his retaliation claim.
In dismissing the case, the lower court relied on older cases cited to the court by Detecon. Those cases held that in order to establish retaliation, Darveau had to show an adverse action involving an “ultimate employment decision” like hiring, firing, or failure to promote. The lower court reasoned that because Darveau’s employment had been terminated six months before he filed his federal court action (his “protected act”), he could not have suffered an adverse employment action from Detecon.
However, the Fourth Circuit cited the Supreme Court’s 2006 opinion in Burlington v. White (126 S.Ct. 2405), where the Court held that it is not necessary to show a per se “adverse employment action” in order to prove retaliation. A plaintiff simply must show that a reasonable person would have found the act “materially adverse,” and that it may have “dissuaded a reasonable worker from making or supporting a charge of discrimination.” According to the Fourth Circuit, Detecon’s lawsuit, coming only 15 days after Darveau’s FLSA claim, was a materially adverse action, because it could well dissuade a reasonable worker from pursuing a claim against Detecon under the FLSA. On that basis, the Court reversed the dismissal of the retaliation claim, remanding it for further proceedings.
The Fourth Circuit’s decision is consistent with a number of other federal appellate courts – notably the Tenth, Sixth, and Fifth Circuits – all of which have held that the FLSA protects former employees against retaliation. Although Darveau’s case turned largely on the short period of time between the protected act and the alleged retaliation, it should not be interpreted to exclude longer time periods, or other types of adverse actions. The message here is that under the FLSA, companies cannot take any action that may dissuade an employee – or, as in this case, a former employee – from acting to protect his or her rights under that Act.
To establish a claim of retaliation under the Fair Labor Standards Act, an individual must be able to show that he took an action protected by that Act; that he suffered an adverse employment action; and that a “causal link” existed between those two. A federal district court’s decision to dismiss such a claim by a former employee of a telecommunications company was recently reversed by the 4th U.S. Circuit Court of Appeals. The lower court held that the former employee could not demonstrate that a company had taken an “adverse employment action” after employment had ended. The Fourth Circuit reversed, holding that the company’s state court lawsuit against a former employee filed two weeks after that individual filed a federal court action under the FLSA constituted an adverse action sufficient to support a claim of retaliation under that Act. Darveau v. Detecon, Inc., 4th Cir., No. 06-2092, Jan. 31, 2008.
Larry Darveau held the position of Director of Sales for Detecon, Inc., a telecommunications consulting company. In December of 2004, Detecon informed Darveau that it was terminating his employment, effective January 31, 2005. On August 31, 2005, Darveau filed a complaint in federal court, alleging that Detecon had failed to pay overtime owed to Darveau under the FLSA. Two weeks later, Detecon filed a state court action against Darveau alleging fraud and fraudulent concealment arising out of a sales contract in which Darveau had been involved. Darveau then amended his federal court case to add a claim of retaliation under the FLSA. The lower court granted a motion to dismiss the retaliation claim, and Darveau appealed. The Fourth Circuit reversed the dismissal, allowing the retaliation claim to go forward.
The FLSA’s anti-retaliation provision makes it unlawful to discharge or discriminate against “any employee because such employee has filed any complaint or instituted . . . any proceeding under or related to this chapter.” While the lower court focused on the term “employee,” the Fourth Circuit analyzed the elements of a prima facie case of retaliation, and found that Darveau had set forth the required factors. First, the Court found that Darveau had an “objectively reasonable belief” that Detecon had violated the FLSA, and that he had therefore engaged in a protected activity when he filed his federal claim against the company. The crux of Darveau’s argument on appeal – and the factor upon which the lower court actually dismissed the case – was whether Darveau had suffered an adverse employment action sufficient to support his retaliation claim.
In dismissing the case, the lower court relied on older cases cited to the court by Detecon. Those cases held that in order to establish retaliation, Darveau had to show an adverse action involving an “ultimate employment decision” like hiring, firing, or failure to promote. The lower court reasoned that because Darveau’s employment had been terminated six months before he filed his federal court action (his “protected act”), he could not have suffered an adverse employment action from Detecon.
However, the Fourth Circuit cited the Supreme Court’s 2006 opinion in Burlington v. White (126 S.Ct. 2405), where the Court held that it is not necessary to show a per se “adverse employment action” in order to prove retaliation. A plaintiff simply must show that a reasonable person would have found the act “materially adverse,” and that it may have “dissuaded a reasonable worker from making or supporting a charge of discrimination.” According to the Fourth Circuit, Detecon’s lawsuit, coming only 15 days after Darveau’s FLSA claim, was a materially adverse action, because it could well dissuade a reasonable worker from pursuing a claim against Detecon under the FLSA. On that basis, the Court reversed the dismissal of the retaliation claim, remanding it for further proceedings.
The Fourth Circuit’s decision is consistent with a number of other federal appellate courts – notably the Tenth, Sixth, and Fifth Circuits – all of which have held that the FLSA protects former employees against retaliation. Although Darveau’s case turned largely on the short period of time between the protected act and the alleged retaliation, it should not be interpreted to exclude longer time periods, or other types of adverse actions. The message here is that under the FLSA, companies cannot take any action that may dissuade an employee – or, as in this case, a former employee – from acting to protect his or her rights under that Act.
Hospital’s peer review process may create unintended employment relationship
For the week of January 28, 2008
The anti-discrimination provisions of Title VII apply only to employees. The determination of whether an individual is an “employee” for purposes of that Act depends largely on whether a putative employer exercised control over the “manner and means” by which the individual performed a job. While a number of courts of appeal specifically have held that hospital peer review programs do not constitute such control, the 2d U.S. Court of Appeals recently determined that a hospital’s “quality assurance program” that led a physician into its peer review process may have created an employment relationship, allowing the physician to move forward with claims under Title VII. Salamon v. Our Lady of Victory Hospital, et al., 2d Circ., No. 06-1707-cv, January 31, 2008.
Dr. Barbara Salamon, a board certified gastroenterologist and internist with medical staff privileges at Our Lady of Victory Hospital (OLV) in New York State, sued the hospital and four of its administrator/doctors, claiming that she had been discriminated against on the basis of her gender. According to Salamon, one of the individual defendants (Moore) sexually harassed her and made unwanted advances. When Salamon complained, Moore allegedly gave her “undeserved negative performance reviews.” Salamon also claimed that the remaining defendants were complicit with Moore when they used the hospital’s peer review process to punish her for reporting the harassment.
OLV did not pay a salary or other monetary compensation to Salamon; she billed patients and insurers directly for her services. Salamon’s clinical privileges extended to the use of the hospital’s facilities and equipment in OLV’s GI lab, which was vital to her practice. She also was required to use the services of OLV nursing and support staff in her treatment of patients, although she generally determined which patients to see and treat, and whether or not to admit them to OLV. However, Salamon was required to submit to the hospital’s “Staff Rules and Regulations” and to comply with hospital by-laws. One significant piece of hospital supervision over Salamon was a “quality assurance” process under which hospital practitioners, on a rotating basis, would review procedures conducted by various physicians at OLV. Cases flagged as “problematic” under the process would be discussed further; doctors whose cases were flagged would be subject to a peer review and, if appropriate, reported to the National Practitioners Data Bank (NPDB).
Salamon alleges that her relationships with OLV changed and the level of review of her practice changed significantly after she complained of the unwanted sexual attention by Moore. Her cases began to be reviewed regularly and criticized to an extent substantially greater than other doctors’ cases. As a result of these reviews, Salamon was ordered to undergo a three-month “re-education” and mentoring program, and to perform consistently with certain OLV practices. Salamon was warned that her failure to complete the program would lead to a report to the NPDB. OLV subsequently merged with another area hospital, and the re-education and mentoring program therefore expired without further action.
Salamon filed claims in federal court, including a Title VII claim and claims under related state laws. The district court dismissed those claims on the basis that the staff physician/hospital relationship did not meet the common law criteria for an employer/employee relationship. On appeal, the Second Circuit reversed the decision, allowing the Title VII claims to go forward, along with the related state law claims.
The Second Circuit’s decision was based on its determination that Salamon’s relationship with OLV could, in fact, meet the common law definition of employment. Whether an individual is an employee depends upon a fact-specific analysis of certain factors, including the source of the tools and instrumentalities used, the duration of the relationship, the method of payment, and – most importantly – the hiring party’s right to control the manner and means by which the work is done. This factor includes more than the right to dictate the outcome of the work; conversely, the mere exercise of professional judgment of the worker is not dispositive of the “manner and means” test.
In this case, the Second Circuit found that OLV exercised “substantial control” over the treatment outcomes of Dr. Salamon’s practice, and over the details and methods of her work. The evidence showed that a number of the quality management standards were based not on standards of medical care, but on the maximization of hospital profits, including the alteration of treatment choices and the prescription of generic medications, even when it could mean a difference in the medication’s effectiveness.
While hospital policies that merely reflect professional and governmental regulatory standards may not create the level of control that establishes an employment relationship for purposes of Title VII, the policies imposed upon Dr. Salamon, and the imposition of the peer review process on her cases to such a large degree, may have been motivated by OLV’s goal of maximizing revenue, and/or in reaction to Salamon’s complaints of harassment. Because a reasonable fact finder could conclude that the hospital’s quality assurance standards extended beyond health and safety concerns or Salamon’s specific medical qualifications, and because Salamon was subject to possible negative peer review for violation of those standards, Salamon was able to demonstrate a genuine factual conflict regarding the extent of control exercised by OLV. Therefore, the lower court’s decision was reversed, and the Title VII and related state claims can go forward to a jury.
While summary judgment may be appropriate in some circumstances in which “independent” staff physicians sue a hospital, these cases are fact specific. Hospitals should be aware of this case, as it outlined in some detail the court’s analysis of the hospital’s peer review process. Further, all employers should recognize that the degree of control exercised over individuals can re-categorize an independent contractor into an employee, creating potential exposure to Title VII liability.
The anti-discrimination provisions of Title VII apply only to employees. The determination of whether an individual is an “employee” for purposes of that Act depends largely on whether a putative employer exercised control over the “manner and means” by which the individual performed a job. While a number of courts of appeal specifically have held that hospital peer review programs do not constitute such control, the 2d U.S. Court of Appeals recently determined that a hospital’s “quality assurance program” that led a physician into its peer review process may have created an employment relationship, allowing the physician to move forward with claims under Title VII. Salamon v. Our Lady of Victory Hospital, et al., 2d Circ., No. 06-1707-cv, January 31, 2008.
Dr. Barbara Salamon, a board certified gastroenterologist and internist with medical staff privileges at Our Lady of Victory Hospital (OLV) in New York State, sued the hospital and four of its administrator/doctors, claiming that she had been discriminated against on the basis of her gender. According to Salamon, one of the individual defendants (Moore) sexually harassed her and made unwanted advances. When Salamon complained, Moore allegedly gave her “undeserved negative performance reviews.” Salamon also claimed that the remaining defendants were complicit with Moore when they used the hospital’s peer review process to punish her for reporting the harassment.
OLV did not pay a salary or other monetary compensation to Salamon; she billed patients and insurers directly for her services. Salamon’s clinical privileges extended to the use of the hospital’s facilities and equipment in OLV’s GI lab, which was vital to her practice. She also was required to use the services of OLV nursing and support staff in her treatment of patients, although she generally determined which patients to see and treat, and whether or not to admit them to OLV. However, Salamon was required to submit to the hospital’s “Staff Rules and Regulations” and to comply with hospital by-laws. One significant piece of hospital supervision over Salamon was a “quality assurance” process under which hospital practitioners, on a rotating basis, would review procedures conducted by various physicians at OLV. Cases flagged as “problematic” under the process would be discussed further; doctors whose cases were flagged would be subject to a peer review and, if appropriate, reported to the National Practitioners Data Bank (NPDB).
Salamon alleges that her relationships with OLV changed and the level of review of her practice changed significantly after she complained of the unwanted sexual attention by Moore. Her cases began to be reviewed regularly and criticized to an extent substantially greater than other doctors’ cases. As a result of these reviews, Salamon was ordered to undergo a three-month “re-education” and mentoring program, and to perform consistently with certain OLV practices. Salamon was warned that her failure to complete the program would lead to a report to the NPDB. OLV subsequently merged with another area hospital, and the re-education and mentoring program therefore expired without further action.
Salamon filed claims in federal court, including a Title VII claim and claims under related state laws. The district court dismissed those claims on the basis that the staff physician/hospital relationship did not meet the common law criteria for an employer/employee relationship. On appeal, the Second Circuit reversed the decision, allowing the Title VII claims to go forward, along with the related state law claims.
The Second Circuit’s decision was based on its determination that Salamon’s relationship with OLV could, in fact, meet the common law definition of employment. Whether an individual is an employee depends upon a fact-specific analysis of certain factors, including the source of the tools and instrumentalities used, the duration of the relationship, the method of payment, and – most importantly – the hiring party’s right to control the manner and means by which the work is done. This factor includes more than the right to dictate the outcome of the work; conversely, the mere exercise of professional judgment of the worker is not dispositive of the “manner and means” test.
In this case, the Second Circuit found that OLV exercised “substantial control” over the treatment outcomes of Dr. Salamon’s practice, and over the details and methods of her work. The evidence showed that a number of the quality management standards were based not on standards of medical care, but on the maximization of hospital profits, including the alteration of treatment choices and the prescription of generic medications, even when it could mean a difference in the medication’s effectiveness.
While hospital policies that merely reflect professional and governmental regulatory standards may not create the level of control that establishes an employment relationship for purposes of Title VII, the policies imposed upon Dr. Salamon, and the imposition of the peer review process on her cases to such a large degree, may have been motivated by OLV’s goal of maximizing revenue, and/or in reaction to Salamon’s complaints of harassment. Because a reasonable fact finder could conclude that the hospital’s quality assurance standards extended beyond health and safety concerns or Salamon’s specific medical qualifications, and because Salamon was subject to possible negative peer review for violation of those standards, Salamon was able to demonstrate a genuine factual conflict regarding the extent of control exercised by OLV. Therefore, the lower court’s decision was reversed, and the Title VII and related state claims can go forward to a jury.
While summary judgment may be appropriate in some circumstances in which “independent” staff physicians sue a hospital, these cases are fact specific. Hospitals should be aware of this case, as it outlined in some detail the court’s analysis of the hospital’s peer review process. Further, all employers should recognize that the degree of control exercised over individuals can re-categorize an independent contractor into an employee, creating potential exposure to Title VII liability.
Refusal to sign arbitration agreement that covered pre-existing claim constituted “protected activity” under Title VII
For the week of January 21, 2008
Against the historical backdrop of Dr. Martin Luther King’s remark that eliminating segregation in Birmingham was the key to eliminating segregation in the South, the 11th U.S. Circuit Court of Appeals has affirmed a jury award in favor of an individual African-American employee in the Northern District of Alabama. The individual, Greg Goldsmith, claimed that his firing was in retaliation for his refusal to sign an agreement to arbitrate that would have impeded his pursuit of a previously-filed EEOC charge of hostile environment. Goldsmith v. Bagby Elevator, 11th Circ., No. 06-14440, Jan. 17, 2008.
Goldsmith was hired by Bagby in 1998 to work in its Birmingham shop as an elevator fabricator. During his employment, Goldsmith reported racial slurs made by his supervisor, Ron Farley, in his presence and in the presence of others, but no action was taken to end those remarks. In fact, Goldsmith was told “that’s just the way Ron [Farley] is. You are just going to have to accept it.” In addition to racial slurs, Goldsmith experienced threats of violence at work, including an instance when Farley’s nephew – a co-worker of Goldsmith’s – said that he planned to make Goldsmith’s son an orphan. Although Goldsmith reported the remark, no action was taken to reprimand or move the offending co-worker. In October 2001, Goldsmith filed an EEOC charge, claiming that his work environment was racially hostile, and that the company had failed to promote him on the basis of race.
On June 6, 2002, Goldsmith was given a document entitled “Dispute Resolution Agreement” which included an agreement to arbitrate all “past, present, and future” claims against Bagby Elevator; he was instructed to sign and return the document by the following day. When Goldsmith and a white co-worker both refused to sign the agreement, they were told they would be fired unless they signed. As the two men packed their belongings to leave the building, the white co-worker was approached by a supervisor and was asked to reconsider his stance. That co-worker subsequently signed the agreement and continued his employment. Goldsmith was not asked to reconsider his decision, even though he suggested that he would sign the document if it was limited to future complaints. The company rejected the suggestion and ultimately fired Goldsmith.
On June 7, Goldsmith filed a second EEOC charge, claiming both wrongful termination and retaliation. The EEOC issued a “for cause” determination in September 2002, finding retaliation, discrimination with respect to promotion, and a hostile work environment. Goldsmith filed a federal court lawsuit in May 2003, and the case was tried in June of 2006. The jury returned a verdict in Goldsmith’s favor on the wrongful termination and retaliation claims, awarding him over $50,000 in back pay and damages and $500,000 in punitive damages, in addition to more than $150,000 in attorney fees.
Bagby appealed the verdict and argued that Goldsmith had failed to prove his claims. On appeal, the 11th Circuit found that Goldsmith established retaliation. It specifically found that Goldsmith was able to establish a causal relationship between his first EEOC charge and his firing, and that Bagby did not have a legitimate non-discriminatory reason for Goldsmith’s termination. Goldsmith was terminated immediately after refusing to sign an agreement that applied to his pending EEOC charge; he attempted to limit the agreement to future charges, but Bagby insisted that the agreement must apply to pending claims. Goldsmith was the only employee with a pending EEOC charge at the time, and the company was aware of that charge. Further, while a white employee was asked to reconsider his unwillingness to sign the agreement, Goldsmith was not. These facts, taken together, were sufficient for the jury to find a relationship between Goldsmith’s EEOC charge and his firing, and established unlawful retaliation.
Further, because of the Bagby’s failure to enforce its non-discrimination policy, the Court upheld the jury’s punitive damage award against the company. It found that there was evidence that Bagby was “recklessly indifferent” to Goldsmith’s federally protected rights, that the company’s policy was ineffective, and that the actions of the company – for instance, telling Goldsmith that he would have to accept Farley’s actions because “that’s just the way Ron is” – proved that the company was apathetic to Goldsmith’s rights.
In upholding the jury award of over $550,000 in Goldsmith’s favor, the Court reminds us that in spite of existing forward momentum, we must continue working to remedy racism and discrimination in the workplace. It is also a wake-up call to employers that not only are employees’ substantive civil rights important, but methods for pursuing those rights must be respected, without artificial barriers being erected to impede their progress.
Against the historical backdrop of Dr. Martin Luther King’s remark that eliminating segregation in Birmingham was the key to eliminating segregation in the South, the 11th U.S. Circuit Court of Appeals has affirmed a jury award in favor of an individual African-American employee in the Northern District of Alabama. The individual, Greg Goldsmith, claimed that his firing was in retaliation for his refusal to sign an agreement to arbitrate that would have impeded his pursuit of a previously-filed EEOC charge of hostile environment. Goldsmith v. Bagby Elevator, 11th Circ., No. 06-14440, Jan. 17, 2008.
Goldsmith was hired by Bagby in 1998 to work in its Birmingham shop as an elevator fabricator. During his employment, Goldsmith reported racial slurs made by his supervisor, Ron Farley, in his presence and in the presence of others, but no action was taken to end those remarks. In fact, Goldsmith was told “that’s just the way Ron [Farley] is. You are just going to have to accept it.” In addition to racial slurs, Goldsmith experienced threats of violence at work, including an instance when Farley’s nephew – a co-worker of Goldsmith’s – said that he planned to make Goldsmith’s son an orphan. Although Goldsmith reported the remark, no action was taken to reprimand or move the offending co-worker. In October 2001, Goldsmith filed an EEOC charge, claiming that his work environment was racially hostile, and that the company had failed to promote him on the basis of race.
On June 6, 2002, Goldsmith was given a document entitled “Dispute Resolution Agreement” which included an agreement to arbitrate all “past, present, and future” claims against Bagby Elevator; he was instructed to sign and return the document by the following day. When Goldsmith and a white co-worker both refused to sign the agreement, they were told they would be fired unless they signed. As the two men packed their belongings to leave the building, the white co-worker was approached by a supervisor and was asked to reconsider his stance. That co-worker subsequently signed the agreement and continued his employment. Goldsmith was not asked to reconsider his decision, even though he suggested that he would sign the document if it was limited to future complaints. The company rejected the suggestion and ultimately fired Goldsmith.
On June 7, Goldsmith filed a second EEOC charge, claiming both wrongful termination and retaliation. The EEOC issued a “for cause” determination in September 2002, finding retaliation, discrimination with respect to promotion, and a hostile work environment. Goldsmith filed a federal court lawsuit in May 2003, and the case was tried in June of 2006. The jury returned a verdict in Goldsmith’s favor on the wrongful termination and retaliation claims, awarding him over $50,000 in back pay and damages and $500,000 in punitive damages, in addition to more than $150,000 in attorney fees.
Bagby appealed the verdict and argued that Goldsmith had failed to prove his claims. On appeal, the 11th Circuit found that Goldsmith established retaliation. It specifically found that Goldsmith was able to establish a causal relationship between his first EEOC charge and his firing, and that Bagby did not have a legitimate non-discriminatory reason for Goldsmith’s termination. Goldsmith was terminated immediately after refusing to sign an agreement that applied to his pending EEOC charge; he attempted to limit the agreement to future charges, but Bagby insisted that the agreement must apply to pending claims. Goldsmith was the only employee with a pending EEOC charge at the time, and the company was aware of that charge. Further, while a white employee was asked to reconsider his unwillingness to sign the agreement, Goldsmith was not. These facts, taken together, were sufficient for the jury to find a relationship between Goldsmith’s EEOC charge and his firing, and established unlawful retaliation.
Further, because of the Bagby’s failure to enforce its non-discrimination policy, the Court upheld the jury’s punitive damage award against the company. It found that there was evidence that Bagby was “recklessly indifferent” to Goldsmith’s federally protected rights, that the company’s policy was ineffective, and that the actions of the company – for instance, telling Goldsmith that he would have to accept Farley’s actions because “that’s just the way Ron is” – proved that the company was apathetic to Goldsmith’s rights.
In upholding the jury award of over $550,000 in Goldsmith’s favor, the Court reminds us that in spite of existing forward momentum, we must continue working to remedy racism and discrimination in the workplace. It is also a wake-up call to employers that not only are employees’ substantive civil rights important, but methods for pursuing those rights must be respected, without artificial barriers being erected to impede their progress.
While substance abuse treatment may qualify for FMLA leave, absence based on employee’s substance abuse does not
For the week of January 14, 2008
Under the Family and Medical Leave Act (FMLA), an eligible employee is entitled to up to 12 weeks of unpaid leave for – among other things – a “serious health condition” that keeps the employee from performing the functions of his or her job. When an individual alleges that his rights under the FMLA have been violated, that person must first establish some entitlement to the disputed leave. The 7th U.S. Circuit Court of Appeals recently upheld the dismissal of a case in which an employee alleged that he was improperly denied FMLA leave for substance abuse treatment. The Court based its decision on the fact that the employee was not entitled to leave for the specific dates in question, since he had not yet started his actual treatment on those dates. Darst v. Interstate Brands Corp., et al., 7th Cir., No. 04-2460, Jan. 11, 2008.
Krzysztof Chalimoniuk’s former employer, Interstate Brands Corporation (IBC), has a points-based system for tracking absenteeism. Employees are disciplined for absences based upon the number of points accumulated. Points are assigned to occurrences depending upon various circumstances, including whether the employee called in advance of the absence, whether the absence was a partial day or full day, or whether it simply involved a tardy or a failure to complete a shift. On July 29, 2000, Chalimoniuk had accumulated 23 points. His discharge trigger was 32 points. Under IBC’s policy, no points are assigned for absences under the FMLA. An accumulation of points leads to progressive discipline, up to and including discharge.
On Friday, July 28, 2000, Chalimoniuk, who had been struggling with alcoholism for some time, drank a quantity of alcohol sufficient to lead him to lose his memory for two or three days. On July 29, his wife called a local hospital to inquire about substance abuse treatment for her husband. During the following days, the hospital communicated with Chalimoniuk and his insurance company, and finally admitted Chalimoniuk on August 4. He remained there until August 10, when he completed his treatment.
At some point, Chalimoniuk requested FMLA paperwork from IBC, and returned the completed forms on August 11. The hospital physician who treated Chalimoniuk indicated that the duration of the incapacity was “7/29 – 8/11.” However, the insurance form submitted by Chalimoniuk indicated the disability dates as “7.29.00 to 8.10.00.” Because of the discrepancy, IBC checked with the hospital to clarify the actual admission dates, and found that Chalimoniuk had not been admitted until August 4. Under the Department of Labor regulations related to the FMLA, “leave may only be taken for treatment of substance abuse by a health care provider. . . . [A]bsence because of the employee’s use of the substance, rather than for treatment, does not qualify for FMLA leave.” Because Chalimoniuk had been assigned to work for three of the days between July 29 and August 4, and because he was absent but not yet in treatment on those days, he accrued an additional 10 points under IBC’s system, which resulted in his discharge from employment.
Chalimoniuk sued IBC, claiming violation of the FMLA. The lower court dismissed the claim, finding that Chalimoniuk’s absences between July 29 and August 4, combined with his prior absences, put him over the point limit under IBC’s policy. The Seventh Circuit affirmed, and agreed that under the regulations, Chalimoniuk lacked evidence that established his entitled to FMLA leave. This case turned on the question of whether Chalimoniuk was being “treated” during the period prior to his hospitalization. While the hospital physician submitted an affidavit stating that treatment for alcoholism begins when the first step toward assistance is taken, the Court found that the calls made by Chalimoniuk and his wife to the hospital and the insurance company were insufficient to fall within the FMLA’s definition of “treatment.” Therefore, Chalimoniuk’s absences were unexcused.
However, employers should carefully review requests for FMLA leave made for substance abuse treatment in order to determine whether the individual met with a health care provider or received any other actual medical treatment prior to formally entering a recovery program. If such “treatment” occurred, that period may be included as FMLA leave.
Under the Family and Medical Leave Act (FMLA), an eligible employee is entitled to up to 12 weeks of unpaid leave for – among other things – a “serious health condition” that keeps the employee from performing the functions of his or her job. When an individual alleges that his rights under the FMLA have been violated, that person must first establish some entitlement to the disputed leave. The 7th U.S. Circuit Court of Appeals recently upheld the dismissal of a case in which an employee alleged that he was improperly denied FMLA leave for substance abuse treatment. The Court based its decision on the fact that the employee was not entitled to leave for the specific dates in question, since he had not yet started his actual treatment on those dates. Darst v. Interstate Brands Corp., et al., 7th Cir., No. 04-2460, Jan. 11, 2008.
Krzysztof Chalimoniuk’s former employer, Interstate Brands Corporation (IBC), has a points-based system for tracking absenteeism. Employees are disciplined for absences based upon the number of points accumulated. Points are assigned to occurrences depending upon various circumstances, including whether the employee called in advance of the absence, whether the absence was a partial day or full day, or whether it simply involved a tardy or a failure to complete a shift. On July 29, 2000, Chalimoniuk had accumulated 23 points. His discharge trigger was 32 points. Under IBC’s policy, no points are assigned for absences under the FMLA. An accumulation of points leads to progressive discipline, up to and including discharge.
On Friday, July 28, 2000, Chalimoniuk, who had been struggling with alcoholism for some time, drank a quantity of alcohol sufficient to lead him to lose his memory for two or three days. On July 29, his wife called a local hospital to inquire about substance abuse treatment for her husband. During the following days, the hospital communicated with Chalimoniuk and his insurance company, and finally admitted Chalimoniuk on August 4. He remained there until August 10, when he completed his treatment.
At some point, Chalimoniuk requested FMLA paperwork from IBC, and returned the completed forms on August 11. The hospital physician who treated Chalimoniuk indicated that the duration of the incapacity was “7/29 – 8/11.” However, the insurance form submitted by Chalimoniuk indicated the disability dates as “7.29.00 to 8.10.00.” Because of the discrepancy, IBC checked with the hospital to clarify the actual admission dates, and found that Chalimoniuk had not been admitted until August 4. Under the Department of Labor regulations related to the FMLA, “leave may only be taken for treatment of substance abuse by a health care provider. . . . [A]bsence because of the employee’s use of the substance, rather than for treatment, does not qualify for FMLA leave.” Because Chalimoniuk had been assigned to work for three of the days between July 29 and August 4, and because he was absent but not yet in treatment on those days, he accrued an additional 10 points under IBC’s system, which resulted in his discharge from employment.
Chalimoniuk sued IBC, claiming violation of the FMLA. The lower court dismissed the claim, finding that Chalimoniuk’s absences between July 29 and August 4, combined with his prior absences, put him over the point limit under IBC’s policy. The Seventh Circuit affirmed, and agreed that under the regulations, Chalimoniuk lacked evidence that established his entitled to FMLA leave. This case turned on the question of whether Chalimoniuk was being “treated” during the period prior to his hospitalization. While the hospital physician submitted an affidavit stating that treatment for alcoholism begins when the first step toward assistance is taken, the Court found that the calls made by Chalimoniuk and his wife to the hospital and the insurance company were insufficient to fall within the FMLA’s definition of “treatment.” Therefore, Chalimoniuk’s absences were unexcused.
However, employers should carefully review requests for FMLA leave made for substance abuse treatment in order to determine whether the individual met with a health care provider or received any other actual medical treatment prior to formally entering a recovery program. If such “treatment” occurred, that period may be included as FMLA leave.
Mere proof of an incidental loss of benefits resulting from an employee’s termination of employment does not constitute an ERISA violation
For the week of January 7, 2008
Under the Employee Retirement Income Security Act of 1974 (ERISA), it is unlawful to discriminate against a benefit-plan participant for the purpose of “interfering with the attainment of any right to which such participant may become entitled under the plan.” One federal district court recently dismissed the claim filed by a group of employees who had been terminated for irregularities in reporting expenses for reimbursement, even though the employees argued that the terminations were actually a “downsizing” move motivated by the company’s desire to avoid paying bonuses and other benefits. Kevin Balmat, et al v. Certainteed Corporation, E.D. Pa., No. 04-2505, Dec. 28, 2007.
CertainTeed Corporation is regularly monitored by its parent company, Saint Gobain, for compliance with expense reporting policies. During one of its audits, Saint Gobain alerted CertainTeed to a number of “red flagged” employee files which required additional investigation and documentation. Robert Wilk, Saint Gobain’s Director of Corporate Security, met with CertainTeed management from two CertainTeed business units in an attempt to find legitimate explanations for the noted irregularities. As a result of these meetings, a number of individuals from each of the two units were terminated. Six of those employees subsequently filed a lawsuit against CertainTeed which included a claim of violation of ERISA. The company filed a motion for summary judgment, which was granted by the court.
The court analyzed the case under the protocol typically referred to as the McDonnell Douglas burden-shifting analysis. In order to prevail, the plaintiffs had to establish a prima facie case by showing prohibited conduct by the employer, taken for the purpose of interfering with the attainment of a right to which the employees were entitled under ERISA. The court found that because the audit information was “blind to all benefits-related information,” including age, length of employment, or health condition, and because the plaintiffs showed no competent evidence that the company specifically intended to avoid payment of ERISA-protected benefits, the plaintiffs failed to establish a prima facie case.
However, the court went on to state that assuming that the plaintiffs had been able to establish the required prima-facie case, their lawsuit would have failed at the later stage of the analysis, since CertainTeed proffered a legitimate business reason for the terminations – violation of the well-established expense-reporting procedures. The court analyzed the facts related to each of the six plaintiffs, and found that none of the individual employees had a legitimate explanation for violating the company policy. Therefore, the plaintiffs were unable to carry their burden of showing that the legitimate reason proffered by CertainTeed was simply a pretext for an ERISA violation.
To show that the company’s “legitimate business reason” for the terminations was a pretext, plaintiffs would have had to show “weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions” within that reason. Here, the plaintiff could not do so, because the company had followed its established policy, and had documented the ensuing investigations thoroughly. Once again, the three-step process of consistently applying a business-related policy, objectively investigating perceived violation of the policy, and thoroughly documenting the investigation proved to be the touchstone of a successful defense against legal liability.
Under the Employee Retirement Income Security Act of 1974 (ERISA), it is unlawful to discriminate against a benefit-plan participant for the purpose of “interfering with the attainment of any right to which such participant may become entitled under the plan.” One federal district court recently dismissed the claim filed by a group of employees who had been terminated for irregularities in reporting expenses for reimbursement, even though the employees argued that the terminations were actually a “downsizing” move motivated by the company’s desire to avoid paying bonuses and other benefits. Kevin Balmat, et al v. Certainteed Corporation, E.D. Pa., No. 04-2505, Dec. 28, 2007.
CertainTeed Corporation is regularly monitored by its parent company, Saint Gobain, for compliance with expense reporting policies. During one of its audits, Saint Gobain alerted CertainTeed to a number of “red flagged” employee files which required additional investigation and documentation. Robert Wilk, Saint Gobain’s Director of Corporate Security, met with CertainTeed management from two CertainTeed business units in an attempt to find legitimate explanations for the noted irregularities. As a result of these meetings, a number of individuals from each of the two units were terminated. Six of those employees subsequently filed a lawsuit against CertainTeed which included a claim of violation of ERISA. The company filed a motion for summary judgment, which was granted by the court.
The court analyzed the case under the protocol typically referred to as the McDonnell Douglas burden-shifting analysis. In order to prevail, the plaintiffs had to establish a prima facie case by showing prohibited conduct by the employer, taken for the purpose of interfering with the attainment of a right to which the employees were entitled under ERISA. The court found that because the audit information was “blind to all benefits-related information,” including age, length of employment, or health condition, and because the plaintiffs showed no competent evidence that the company specifically intended to avoid payment of ERISA-protected benefits, the plaintiffs failed to establish a prima facie case.
However, the court went on to state that assuming that the plaintiffs had been able to establish the required prima-facie case, their lawsuit would have failed at the later stage of the analysis, since CertainTeed proffered a legitimate business reason for the terminations – violation of the well-established expense-reporting procedures. The court analyzed the facts related to each of the six plaintiffs, and found that none of the individual employees had a legitimate explanation for violating the company policy. Therefore, the plaintiffs were unable to carry their burden of showing that the legitimate reason proffered by CertainTeed was simply a pretext for an ERISA violation.
To show that the company’s “legitimate business reason” for the terminations was a pretext, plaintiffs would have had to show “weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions” within that reason. Here, the plaintiff could not do so, because the company had followed its established policy, and had documented the ensuing investigations thoroughly. Once again, the three-step process of consistently applying a business-related policy, objectively investigating perceived violation of the policy, and thoroughly documenting the investigation proved to be the touchstone of a successful defense against legal liability.
The National Defense Authorization Act amends the FMLA to expand leave time for military family members
The Family and Medical Leave Act (FMLA) was enacted in 1993 to provide employees with family and temporary medical leave under certain circumstances. Under the Act’s original provisions, eligible employees were permitted to take up to 12 weeks of unpaid leave for the birth and care of a newborn child of the employee, placement with the employee of a son or daughter for adoption or foster care, care for an immediate family member (spouse, child, or parent) with a serious health condition, or medical leave when the employee is unable to work because of a serious health condition.
On January 28, 2008, President Bush signed into law H.R. 4986, the National Defense Authorization Act for Fiscal Year 2008 (NDAA). The NDAA effectively amends the FMLA to expand available leave time for families of military service members.
The amendment to the FMLA provides two types of leave to eligible employees: (1) leave for care for an injured service member; and (2) leave due to active duty of a family member. These types of leaves are available to employees during a single twelve month period and run concurrently with any FMLA leave for which the employee is eligible. The amendments give the "spouse, son, daughter, parent, or next of kin" of a member of the Armed Forces up to 26 weeks of leave to care for the service member "who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." A "serious injury or illness" is "an injury or illness incurred by the member in line of duty on active duty in the Armed Forces that may render the member medically unfit to perform the duties of the member’s office, grade, rank, or rating."
The NDAA also permits an employee to take a 12-week FMLA leave for "any qualifying exigency (as the Secretary of Labor will define by regulation) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation."
The applicable test for employee eligibility remains as it has been for FMLA leave. To be eligible, the employee must have been employed by the employer for at least twelve months and have worked at least 1,250 hours during the immediate previous 12 months. Also, the employer must employ at least 50 employees within a 75 mile radius of the worksite.
The Department of Labor is working "expeditiously" to prepare final guidelines regarding the responsibilities of employers with regard to the NDAA; proposed regulations will be published in the Federal Register on February 11, 2008. However, until the regulations are finalized, employers should act in good faith in providing leave under the new legislation.
Employers should become familiar with the new legislation, and with the added obligations required under the Act. Accordingly, employers should review their FMLA policies and revise the provisions as necessary to include leave as provided in the NDAA amendments.
On January 28, 2008, President Bush signed into law H.R. 4986, the National Defense Authorization Act for Fiscal Year 2008 (NDAA). The NDAA effectively amends the FMLA to expand available leave time for families of military service members.
The amendment to the FMLA provides two types of leave to eligible employees: (1) leave for care for an injured service member; and (2) leave due to active duty of a family member. These types of leaves are available to employees during a single twelve month period and run concurrently with any FMLA leave for which the employee is eligible. The amendments give the "spouse, son, daughter, parent, or next of kin" of a member of the Armed Forces up to 26 weeks of leave to care for the service member "who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." A "serious injury or illness" is "an injury or illness incurred by the member in line of duty on active duty in the Armed Forces that may render the member medically unfit to perform the duties of the member’s office, grade, rank, or rating."
The NDAA also permits an employee to take a 12-week FMLA leave for "any qualifying exigency (as the Secretary of Labor will define by regulation) arising out of the fact that the spouse, or a son, daughter, or parent of the employee is on active duty (or has been notified of an impending call or order to active duty) in the Armed Forces in support of a contingency operation."
The applicable test for employee eligibility remains as it has been for FMLA leave. To be eligible, the employee must have been employed by the employer for at least twelve months and have worked at least 1,250 hours during the immediate previous 12 months. Also, the employer must employ at least 50 employees within a 75 mile radius of the worksite.
The Department of Labor is working "expeditiously" to prepare final guidelines regarding the responsibilities of employers with regard to the NDAA; proposed regulations will be published in the Federal Register on February 11, 2008. However, until the regulations are finalized, employers should act in good faith in providing leave under the new legislation.
Employers should become familiar with the new legislation, and with the added obligations required under the Act. Accordingly, employers should review their FMLA policies and revise the provisions as necessary to include leave as provided in the NDAA amendments.
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