Source: https://shermanhoward.com/2013/11/
Timestamp: 2019-04-23 15:04:57+00:00

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A federal appeals court recently upheld a $750,000 award to an employer for the attorneys’ fees and expert witness fees it expended defending a frivolous class action brought by the EEOC. EEOC v. Peoplemark, Inc. The EEOC sued staffing agency Peoplemark, Inc. based on what the EEOC claimed to be a company-wide policy of refusing to hire/place convicted felons. The EEOC maintained that this company-wide policy adversely impacted minorities, who tend to experience much higher rates of criminal convictions. The EEOC eventually identified 286 class members. Notably, the EEOC confirmed the existence of Peoplemark’s company-wide policy through the company’s own Vice-President and General Counsel, who admitted that such a company-wide policy existed. However, in the middle of the litigation, Peoplemark presented the EEOC with compelling and irrefutable evidence that Peoplemark did not have any company-wide policy of the sort, and that its senior executive misspoke previously. The EEOC continued to litigate the case in the face of this irrefutable evidence, and it was this continued pursuit of the case that resulted in the $750,000 award.
We post on these fee awards against the EEOC . . . well . . . because we can, and because such awards are unfortunately the exception to the rule. Hopefully, as more courts point a more discerning eye toward the EEOC’s own litigation tactics, employers will come closer to a level playing field when litigating EEOC class actions. The case is also a cautionary tale for employers to use outside counsel when responding to EEOC inquiries and charges to avoid the types of inadvertent admissions made by the senior executive in this case. For more uplifting news, consult our previous blog posts on this topic: EEOC Benchslapped on Way to Furlough; What Part of “Conciliate” Does the EEOC Not Understand?; and EEOC Silent on Sanctions.
In a case likely to affect employer-employee arbitration agreements, one court has ruled that a court, and not an arbitrator, must determine whether ambiguous arbitration agreements cover class claims. Reed Elsevier, Inc. v. Crockett, No. 12-3574 (6th Cir. 2013). The case involves a LexisNexis customer disgruntled over a billing dispute. The issue taken to the court was whether the arbitration agreement between the parties allowed the customer to bundle his claim with others’ into a class arbitration. The court ruled that, because “whether the parties [agreed to] arbitrate one claim or 1,000 in a single proceeding” is “no mere detail,” it is a “gateway” question to be determined by a court rather than a “subsidiary” question to be determined by an arbitrator. Thus, unless the parties specifically express that an arbitrator should decide whether class claims can be arbitrated, those issues will be decided by the court. Here, the arbitration agreement was silent as to whether class claims would be subject to arbitration. Silence, the court concluded, was “not enough to wrest [the] decision from the courts,” nor, in this case, did silence make class claims arbitrable.
To avoid litigating over whether arbitration agreements cover class claims, employers should include specific language in the arbitration agreements. Silence might bar class arbitration in the Sixth Circuit, but specific language is more certain. Here, without class arbitration, the individual’s claim was “economically unfeasible,” so the court threw in some free advice—switch to Westlaw.
Stalking the string of “cat’s paw” cases after the Supreme Court’s 2011 decision in Staub v. Proctor Hosp., a former employee recently asserted that his manager’s bias against Hispanics caused the employer to terminate his employment – not because the manager made the decision to discharge the employee, but because the actual decision-maker relied on information from the manager. The former employee’s attempt to scratch the employer failed, because although the manager brought some of the employee’s misconduct to light – including lying on his resume and a supposedly false expense report – the employer and its Human Resources staff independently investigated the allegations. According to this court, an employer is NOT liable for discrimination, even if a biased report from a supervisor is part of the chain-of-events, so long as the employer independently determines that, apart from the report, the discharge is entirely justified. A computer search and an HR investigation may be all it takes to justify a termination. Of course, it helps, as in this case, if the former employee admits both that he “technically” lied in his interview and on his expense report. Lobato v. New Mexico, No. 12-2128 (10th Cir. November 5, 2013).
HR professionals slip into jargon and euphemisms, like everyone else. Also, like everyone else, HR professionals think their instant messages are too ephemeral to become evidence in a discrimination suit. Not so. The courts recently had to address whether an exchange of instant messages between HR professionals about a reduction in force provided direct evidence that the employer discharged an employee because of his age. The IM exchange referred to the employee’s “shelf life.” The HR professionals were actually talking “inartfully” about the employee’s remaining work, and they ultimately decided NOT to include the employee in the reduction in force. Months later the employer discharged the employee for performance-related reasons. Still the IMs found their way into the litigation, as evidence for the employee, and the employer had to fight the claim all the way to the court of appeals. Watch your thumbs! Roberts v. IBM, No. 12-5169 (10th Cir. November 5, 2013).
In Bailey v. Real Time Staffing Servs., Inc., No. 13-5221 (6th Cir. 2013), the employee tested positive for marijuana in a random test. He tried to explain – to the employer and to the medical review officer – that he had a “medical condition” and was “prescribed” a medication that might cause a false positive. He did not disclose that he had HIV. The employee was fired anyway.
In his disability discrimination suit, the employee argued that he was fired for “manifestation of a disability.” That’s the theory employees cite when they engage in misconduct because of a disability. For example, if an employee falls asleep at work because of a disability and the employer knows the sleeping was because of a disability, but fires the employee anyway, the employee still might have a claim for disability discrimination. Here, the Sixth Circuit ruled that testing positive for marijuana was not “manifesting-a-disability.” This employee had to prove his disability caused the termination, but he had no evidence to offer – he never told the employer he had HIV.
Medical marijuana often comes up in drug testing cases. The employees argue that firing them because they use marijuana as a medication for a disability is itself firing them for a disability. So far, this argument loses. We fire employees who come to work on controlled pain medication, even if they use it legally.
An employer rolled out a dispute resolution program that included arbitration. The employer mailed brochures, held a mandatory video screening during work hours, and electronically posted details about the program. Employees had two opportunities to opt-out of the arbitration provision and were told that failure to opt-out would result in their inability to bring their claims in court. It might be against the odds, but a court enforced the arbitration agreement against an employee.
In Tillman v. Macy’s, Inc., an employee objected to mandatory arbitration. The employee claimed she hadn’t received the mailings and didn’t read the materials she did receive. At any rate, she said, the employer did not order her to read them. The Sixth Circuit, applying Michigan law, compelled arbitration, ruling the employer provided sufficient notice of the opt-out terms through the video screening (a sign-in sheet showed the employee attended) and through the properly addressed and posted mailings. The employee’s continued employment was acceptance of the offer to arbitrate.
Employees use any excuse to escape arbitration. As seen here, a court is more likely to enforce an arbitration agreement when the employer bombards its employees with information. For now, at least in the Sixth Circuit, an employer may compel arbitration without holding its employees down and requiring them to read the arbitration provisions.
Relying on expert testimony, the court can tell whether showers are necessary for your workers’ health and safety. In DeKeyser v. Thyssenkrupp Waupaca, Inc., No. 12-3306 (7th Cir. Oct. 30, 2013), iron foundry employees brought suit against their employer. The workers argued they should be paid overtime for time spent showering and changing clothes at the end of their shifts because these activities were necessary to protect their health and safety due to chemical exposure on site. The district court wanted to rely on legal requirements. Because no OSHA standard required foundry employees to shower and/or change clothing on site, the district court ruled these activities were not necessary because of the nature of the employees’ work. Consequently the “overtime” was not compensable. The Seventh Circuit disagreed. The lack of an OSHA regulatory requirement was not enough. The workers and the employer disagreed over whether the work somehow made showers and clothes changing after foundry workers’ shifts necessary, and the court should be able to make this determination based on scientific and expert testimony.
Apparently, scientific testimony can show what employers must do for worker health and safety, and a court can decide when science has spoken determinatively on the issue. Employers might need to go back to school, or at least retain scientific experts in the effectiveness of Irish Spring and Mennen Speed Stick.

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