The Employment Practices Alert covers significant employment law trends & developments in a summary format. Links to additional information on the Internet are included in the topic headings along with the contact information of Hinshaw & Culbertson employment law attorneys who will answer any questions you may have. If you wish to be added to or removed from our list of subscribers who receive complimentary copies of the Employment Practices Alert via email, or if you have any comments or suggestions, please contact the editors, at (312-704-3220) or at (312-704-3578).
In This Issue:
Call Center's Hiring Policy For Voicephone Positions Gives Rise To ADA Claim By Deaf Applicant
In Davidson v. America Online, Inc., a deaf man alleged that AOL failed to consider him for employment in a non-voicephone position at an AOL call-center because of his disability. In fact, the AOL call center had instituted a policy of only hiring external applicants to fill voicephone positions, which deaf applicants could not perform. Non-voicephone positions were filled internally. Thus, while deaf applicants could perform non-voicephone positions, the AOL hiring policy effectively prevented deaf applicants from being considered for employment with the call center. The Tenth Circuit Court of Appeals found that the plaintiff had stated a legally sufficient claim under the ADA. Employers with strong "promote from within" policies should take note of this ruling. If an employer's entry level positions require that applicants possess certain physical abilities (i.e., lifting, walking, etc.), the employer may inadvertently discriminate against individuals with disabilities who may be able to perform other job duties.
Contact for more information: Paul J. Cherner
Employee Involved In Alleged Illegal Conduct Allowed To Proceed On Whistleblower Claim
In Himmel v. Ford Motor Co., the United States District Court for the Southern District of Ohio concluded that an employee's own involvement in the alleged illegal conduct of his employer did not bar his right to bring a whistleblower claim arising out of that same conduct. The employee at issue, Stephen Himmel, claimed that Ford Motor Company had engaged in improper dealings with the United Auto Workers' Union, including giving priority in hiring and promoting decisions for certain union affiliated individuals. Himmel, who had served as a labor relations specialist for the company, was allegedly involved in some of those dealings. Himmel complained to company officials that he had been forced to follow orders that violated company policy and federal labor laws. Ford investigated his complaints and determined that Himmel had violated company policy and exposed the company to potential criminal and/or civil liability. Himmel sued Ford for wrongful termination, claiming that Ford had fired him for blowing the whistle on illegal conduct. Ford argued that Himmel was fired for his own illegal conduct and that his involvement in that conduct should bar him from being able to assert a whistle blower claim. The Court disagreed with Ford's argument and found that Himmel could recover as a whistle blower if he could establish at trial that his termination was due to his whistle blowing as opposed to his own illegal conduct.
Contact for more information: William J. Holloway
Employers Slashed Jobs in August
U.S. employers cut jobs in August at the highest rate since March, according to a recent government report. The number of workers on U.S. payrolls outside the farm sector slid 93,000 in August, the seventh consecutive month of declines, after dropping 49,000 in July. This number was in dramatic contrast to the increase of 12,000 expected by economists. Additionally, the average work week remained unchanged at 33.6 hours in August, when analysts were expecting the work week to rise to 33.7 hours. This lack of growth is viewed as a discouraging sign, mainly because when companies prepare to hire new employees they often increase the hours of their current staff first.
Female Police Officer Could Not Establish Prima Facie Case For Gender Discrimination
In Durkin v. Chicago, the plaintiff sued the City of Chicago for events arising out of her training with the Chicago Police Department. The plaintiff claimed she was harassed and discriminated against based on gender and retaliated against for reporting the discrimination. The Seventh Circuit Court of Appeals held the plaintiff could not prevail because she did not establish a prima facie case of discrimination. Specifically, she could not provide evidence that a similarly situated male employee was treated more favorably than she. Accordingly, the district court's grant of summary judgment for the City was affirmed.
Contact for more information: Aimee Delaney
Diabetic Employee May Have Protected Disability Under ADA
In Fraser v. Goodale, et al., the plaintiff sued her former employer, contending the employer discriminated against her and terminated her because of her diabetes. The Ninth Circuit Court of Appeals held the plaintiff presented a genuine issue of material fact as to whether her diabetes significantly limited her major life activity of eating because she had to so closely monitor her blood sugar levels. Accordingly, the Court reversed the district court's summary judgment as to this major life activity, but affirmed the district court's summary judgment as to the major life activities of caring for herself, thinking, and communicating.
Hotel Employee's Abrasive Behavior Protected By The National Labor Relations Act
In JCR Hotel, Inc. v. National Labor Relations Board, a hotel employee was fired allegedly because she was unable to work with people due to her negative attitude. However, the employee claims she was fired because she made a statement about the need for a walk-out to occur on a "full house day" in order for certain staff members to get their complaints heard. Affirming an administrative law judge, the Eighth Circuit Court of Appeals held the walk-out statement was protected concerted activity, and that the hotel failed to establish that the employee would have been discharged regardless of the protected concerted activity. This reasoning follows from the fact that the hotel had tolerated the employee's negative and abrasive behavior for a long period of time with no recourse, yet fired the employee within a matter of days after the walk-out comment.
Contact for more information: Tom H. Luetkemeyer
Investment Banker Ordered to Forfeit Compensation Because Of Disloyalty To Employer
A federal appeals court in New York has ordered a former investment banker to forfeit all of his compensation because of a pattern of disloyal act. The decision reversed a U.S. District Court decision that awarded 4.4 million dollars to Rohit Phamsalkar, an ex-partner at Anderson Weinroth & Company. The private equity firm had sued Phamsalkar for failing to disclose certain fees and stock options he had received as a director on company boards.
Contact for more information: Jodi L. Johnson
Employers Seek To Delay Proposed Changes To EEO Reporting Forms
A number of employer organizations have stepped forward to raise concerns about the proposed changes to the EEO-1 Form. The EEO-1 Form is used by up to 45,000 private employers annually to report the racial, ethnic and gender composition of the private work force. The United States Equal Employment Opportunity Commission (EEOC) has proposed changing and adding racial/ethic and job classifications. Employers are concerned that the new racial/ethnic and job categories proposed by the EEOC would create logistical problems. For example, new classifications proposed for the EEO-1 Form would differ from the classifications used for purposes of preparing affirmative action plans. Thus, employers would be required to maintain two sets of data for the same basic information. The Society for Human Resource Management (SHRM) has cautioned that these new categories on the EEO-1 would require "significant financial and human resources with insignificant improvement to the utility of the form." SHRM has further cautioned that the proposed changes would "only result in confusion and misrepresentation of data and an inaccurate picture of the employer's demographics that will provide little utility for the government." The EEOC has not yet decided whether it will delay the implementation of the proposed changes.
Contact for more information: Linda K. Horras
Hinshaw Announces Industry Specific Breakfast Briefing Series: Hinshaw Workplace Solutions
The labor and employment lawyers of Hinshaw & Culbertson's Employment Practices Law Group will sponsor a series of breakfast briefings tailored to the needs of specific industries. This approach recognizes that employers face different legal issues based on the nature of their business and workplace setting. Initial breakfast briefings will cover labor and employment law issues of particular interest to the following industries: (1) Healthcare and Social Assistance; (2) Finance & Insurance; and (3) Hospitality, Retail & Restaurants. Subsequent briefings will cover topics of interest to employers in: (1) Government & Public Service; (2) Professional & Technical Services (3) Construction; and (4) Manufacturing & Industry. Each breakfast briefing will focus on developing and maintaining strategies for minimizing potential employment liabilities and creating a healthy and productive workplace. Further details will follow.
Contact for more information: Andrew B. Cripe
New Jersey Employers May Face Liability for Insisting on Non-Compete Agreements
In a ruling with possible ramifications for employers, a New Jersey appeals court recently ruled that public policy prevents an employer from terminating an employee based solely on that employee's refusal to sign a non-compete agreement. Thus, New Jersey employers who insist that employees execute such a non-compete agreement as a term of continued employment may face potential liability for wrongful discharge. It is unclear whether other states will choose to follow this holding.
Contact for more information: Adam L. Saper
IU Professor Gender Claims Rejected
In Williamson v. Indiana University, the plaintiff was a non-tenured history professor at Indiana University. She sued IU when her teaching contract expired and was not renewed, claiming she was not given tenure and was terminated because of her gender and without due process. The district court granted summary judgment for IU based primarily on the fact that plaintiff's EEOC charge was untimely, and she failed to join any individual defendants who allegedly participated in the decision to deny her tenure and terminate her employment. The Seventh Circuit Court of Appeals affirmed this decision.
Contact for more information: James R. Pirages
Same-Gender Harassment Not Covered Under Equal Protection Clause
In Snider, et al. v. Jefferson State Community College, security officers at Jefferson State Community College claimed they were victims of same-gender harassment committed by their supervisor. The district court granted the defendant's motion to dismiss based on the fact that it was not clearly established that same-gender harassment violated the Equal Protection Clause. The Eleventh Circuit Court of Appeals affirmed, declaring that a male supervisor harassing male employees is contemptible behavior, but not all contemptible behavior violates the Constitution. Furthermore, the Court stated the Equal Protection Clause and pre-existing case law available at the time of the harassment did not provide the defendant with fair and clear warning that this type of behavior would be a violation of the employees' constitutional rights.
Epileptic Employee Found To Not Have A Disability Under ADA
In Brunke v. Goodyear, the plaintiff brought a disability discrimination claim against his employer, alleging he was terminated based on his epilepsy and his substantially limiting emotional stability. The district court granted summary judgment for the employer, stating the plaintiff's epilepsy did not constitute a disability under the ADA because the disease did not limit any of his major life activities. Additionally, the plaintiff's emotional instability did not fall under the ADA definition of impairment because it was not a symptom of a mental or psychological disorder. Therefore, the plaintiff failed to establish a prima facie case. The Eighth Circuit Court of Appeals affirmed this holding.
Contact for more information: Clay M. Ullrick
Federal Court Dismisses Pizza Hut Wage & Hour Class Action
Class action wage and hour lawsuits have become an increasing threat and potential exposure to employers across the country, particularly to employers that employ large numbers of hourly workers. Skilled plaintiffs' lawyers have used such actions as a way of leveraging the small claims of individual employees who believe that they may have been denied wages into potentially massive recoveries. Realizing the magnitude of such potential recoveries, employers often feel compelled to settle even unmeritorious claims rather than risk the costs and uncertainties of litigation. A Pizza Hut franchise in Apache Junction, Arizona, however, has demonstrated that it is possible to defeat such claims on their merits while avoiding the uncertainties of trial. In Louy v. Pizza Hut of Apache Junction, two former pizza delivery drivers alleged that they and all similarly situated employees had been denied wages to which they were entitled. The plaintiffs sought to bring their claims in the United States District Court of Arizona as a class action lawsuit under both state and federal law. Pizza Hut first successfully moved to dismiss the state law claims as to the entire class action because the two named plaintiffs had failed to file their claims within the one year limitations period. Pizza Hut, represented by Hinshaw & Culbertson, then moved to have the entire case dismissed after the conclusion of discovery because: (1) the individual plaintiffs failed to present sufficient proof from which a jury could actually determine how much, if anything, the plaintiffs were owed; and (2) the plaintiffs failed to comply with the requisite procedures for obtaining certification of a federal wage and hour class action.
Contact for more information: Andrew B. Cripe
Illinois Department Of Labor Makes New Minimum Wage Poster & Other Posters Available
In response to the recently enacted amendment to the Illinois Minimum Wage Law, the Illinois Department of Labor has released a new poster, which all Illinois employers must post on or before January 1, 2004. The Department of Labor has also added additional posters for employers concerning recently enacted legislation such as the Victims' Economic Security Act. These posters are in addition to those posters required by federal law. Employers should undertake a review of their compliance with the various state and federal posting requirements within the next two months to ensure that they have posted all of the required notices for the coming year.
Contact for more information: Clare Connor Ranalli
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.
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