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In the Fifth Circuit, Attendance May be an Essential Function of Most Jobs and Telecommuting is Not Necessarily a Reasonable Accommodation

With the advent of an increasingly interconnected economy and advancement in technology permitting employees to, in many cases, work seamlessly from home, employers are increasingly facing requests from allegedly disabled employees to permit long-term and/or permanent telecommuting as a reasonable accommodation for their alleged disabilities. Under the ADA, of course, employers must generally engage in an interactive or collaborative process with the employee claiming to be disabled to accommodate the known limitations of an employee’s disability, if possible; assuming the employee can perform the essential functions of the job.

But in light of existing technology, is open-ended telecommuting a reasonable accommodation?

Probably not, at least in the Fifth Circuit.

In Credeur v. State of Louisiana, the Fifth Circuit recently concluded that in most cases employers are not obligated to permit telecommuting as a reasonable accommodation. And, importantly, the Court reaffirmed the proposition that it is, in the first instance, within employers’ sound discretion to identify the “essential functions” of their jobs, which may include attendance. Those “essential functions” are critical to the analysis because to be “qualified” under the ADA, the employee must be able to perform the essential functions of the job with or without reasonable accommodation.

The Court’s determination arose in the context of a lawsuit brought by a litigation attorney in the State of Louisiana’s Office of the Attorney General who sued when her request for indefinite telecommuting was rejected. She argued that working in the office was not an essential function of the job and, following complications from a kidney transplant, working from home was necessary. The Fifth Circuit, however, noted that “regular work-site attendance is an essential function of most jobs” and particularly where the job is interactive and involves a significant degree of collaboration or teamwork. Further, the Court noted that it must give the greatest weight to the employer’s judgment as to the job’s essential functions. The employee’s subjective judgment does not create a genuine dispute of material fact sufficient to withstand the employer’s motion for summary judgment.

That is, it is not enough for the employee to merely proffer her opinion that it isn’t necessary to be in the office or that a particular employer requirement is unnecessary. Instead, the Court does not allow employees to define their jobs’ essential functions based solely on their own personal opinions, viewpoints, and experience.

“Construing the ADA to require employers to offer the option of unlimited telecommuting to a disabled employee would have a chilling effect. Rather than offer such benefits, companies would tighten their telecommuting policies to avoid liability. The ADA does not require an employer to ‘reallocate essential functions’ to accommodate an employee with a disability.”

Notwithstanding the favorable Fifth Circuit assessment of the issue, employers should approach such situations cautiously. In all likelihood, a court’s assessment will be a case-by-case determination predicated upon the specific job at issue, the tasks involved, and prior analysis of the issue by the employer. To that end, employers would be well advised to revisit their job descriptions and their policies with respect to telecommuting employees.

Credeur v. State of Louisiana, No. 16-30658 (5th Cir., June 23, 2017)

Sixth Circuit Determines Employer Cannot Be Held Liable Under Title VII for Sexual Harassment By Manager Who Lacked Actual Authority to Take Tangible Employment Action

In a sexual harassment lawsuit brought by the EEOC, the Sixth Circuit last week affirmed the lower court’s summary judgment for the employer, concluding that “[b]ecause [the manager] did not take any tangible employment action against his co-workers and indeed had no authority to do so, the manager was not a supervisor under Title VII and thus [the employer] cannot be liable for the conduct alleged.” EEOC v. AutoZone, Inc., No. 16-6387 (6th Cir. June 9, 2017).

The EEOC filed suit against AutoZone based on allegations that a store manager had sexually harassed several store employees. Importantly, neither the district court nor the court of appeals relied on the accused harasser’s job title – store manager – to impose vicarious liability on the company. Instead, the courts were persuaded by the store manager’s actual job duties and responsibilities, which did not include the authority to fire, demote, promote, transfer or otherwise impose adverse employment action against employees.

Whether the store manager was a supervisor is critical to an employer’s vicarious liability under Title VII. As the Sixth Circuit explained, employers are vicariously liable for a supervisor’s sexual harassment without any showing of employer negligence if the agency relationship (e.g., status as supervisor) aided the harassment. If the alleged harasser is not a supervisor, however, the employer may be held liable if it was negligent in controlling working conditions (i.e., knew or should have known of the harassment but failed to take prompt and appropriate corrective action). And the Court noted that an employee is a “supervisor” for purposes of vicarious liability under Title VII if he or she is empowered by the employer to take tangible employment actions against the victim.

In this case, the Sixth Circuit reviewed the evidence of the store manager’s authority and found that he was not a supervisor for purposes of Title VII liability. He did not have authority to take tangible employment action against the victims. AutoZone did not, for example, empower the store manager to fire, demote, promote, or transfer any employees. Although the store manager could initiate the disciplinary process and recommend demotion or promotion, his recommendations were not binding, and his ability to influence the district manager did not suffice to turn him into his victims’ supervisor. Nor did his ability to direct the victims’ work at the store or his title as “store manager” make him the victims’ supervisor for purposes of Title VII.

An important takeaway from this opinion for employers is the prospect of focusing courts on the actual authority of management-level personnel, or, more precisely, the lack of such authority, as a legal defense to vicarious liability under Title VII. Whether, regardless of job title, the accused harasser has actual authority to take tangible employment action against his victims may be critical to the employer’s legal defense.

Non-Disclosure Agreement Collateral Concerns

As with non-compete agreements, employers are increasingly relying on non-disclosure agreements (“NDAs”) to protect their valuable, confidential information. Because of the importance of the underlying issues at stake in attempting to enforce NDAs (e.g., trade secrets and other competitively valuable information), it is important for employers to evaluate enforceability up front and appropriately invest time and money in proactively considering collateral issues that often arise in the NDA context. Some of those collateral issues include the following:

  • Definition of confidential information. Rather than relying exclusively on general or nebulous terminology in the NDA, employers should, to the extent possible, attempt to set forth the type and/or categories of information subject to the NDA with some measure of particularity. Obviously it is best not to include what purports to be a comprehensive list, but some effort toward specificity in the type of information subject to the NDA will go a long way towards improving the chances of enforceability.
  • Scope of confidential information. Employers should craft their NDAs to only encompass legitimately confidential or trade secret information. Overly broad NDAs that expansively encompass public or non-confidential information are less likely to be judicially enforced should litigation arise.
  • Preserve confidentiality of the information. In addition to defining the information as confidential in the NDA, the employer must separately take steps to safeguard the confidentiality of that information. If the employer does not, it becomes increasingly likely that a court may conclude that the information is not really confidential or competitively sensitive and is not entitled to protection under the NDA.
  • Protect trade secrets. Oftentimes, the definition of “confidential information” subject to a valid, enforceable NDA will differ in some respects from the scope of “trade secrets” protected by state and/or federal law. Employers should consider those differences, if any, in drafting their NDAs and in considering whether additional agreements are necessary to ensure legal protection of their trade secrets.
  • Varying levels of protection may be necessary. Depending on the industry and type of information at issue, the NDA may need to be more specifically tailored to account for heightened levels of protection required for certain types of confidential information (g., health records, consumer date, personal identifying information). In such cases, the NDA should address the heightened protection and include contingencies for return and/or destruction of all data at the conclusion of employment, as well as data security and breach notification.
  • Social media implications. Employers and employees alike should be aware of the impact of NDAs on social media accounts. In one recent case, for example, a former employee of a global recruiting and staffing firm was required to remove thousands of her LinkedIn contacts based on her former employer’s argument that those contacts actually belonged to the employer and not to the employee individually.

In preparing their NDAs, employers should consider these issues to ensure that the resulting agreement adequately addresses their concerns and does so in a manner most likely to be enforceable should litigation arise.

 

Precepts for Workplace Investigations

Harassment and discrimination complaints in the workplace have become increasingly common in recent years. As such, most employers will face such a complaint by one of their employee at some point during the operation of their business. How the employer responds may be critical to the potential imposition of liability (and to the employer’s legal defense).

Almost invariably, the employer will be best served by taking the complaint seriously and conducting an objective, thorough investigation into the allegations. Although the specific allegations at issue will dictate the precise nature of the ensuing investigation, employers would be well served following some general guidance for workplace investigations:

  • Respond promptly. Rather than allowing the complaint to languish or delaying the response, employers should initiate an investigation promptly after receiving the complaint, and inform the complainant that it is doing so. A timely response suggests the employer takes the complaint seriously and keeping the complainant informed of the process may build better good will or minimize animosity toward the company itself.
  • Confidentiality. To the extent possible, the employer should keep the allegations and the investigation confidential. Undoubtedly, word will spread that something is going on, but the employer should do its best to keep a lid on the investigation, its subject matter, and material learned.
  • Objectivity. The employer should conduct an objective, unbiased investigation. To that end, consideration should be given to retaining a neutral third-party like a lawyer or HR consultant to conduct the investigation rather than another employee. Otherwise, the employer may face criticism that the investigation was a sham with a desired outcome already in mind or that it was necessarily unfair because of the investigator’s connection to the company and/or employees involved.
  • No-Conflicts Authority. The investigator should have the authority to fully investigate the complaint and report accordingly on his/her findings and be free from conflicts of interest with respect to the complainant and/or others involved in the complaint. The employer should not, for example, have an investigator investigating claims against his/her supervisor or someone in his/her direct line of supervision.
  • Competence. The employer should ensure that the investigation is conducted by a competent investigator. Whether the person has been formally trained in workplace investigations or HR practices, the investigator should be experienced in the field and have the skills and ability to conduct a meaningful, informed investigation.
  • Thorough. The investigation should be thorough in exploring the validity (or lack thereof) of the complaint. This means, at a minimum, interviewing key people (complainant, alleged harasser, witnesses) and reviewing relevant documentation. In many instances, for example, it is not enough to simply interview the complainant and alleged harasser, and leave it at that. The employer must ensure that a real investigation is conducted that actually attempts to determine the merit, if any, to the complaint.
  • Follow Policy. Oftentimes, employers have written policies with respect to discrimination, harassment, complaints, and appropriate responses. In conducting the investigation, the employer should ensure that the investigator follows and applies company policy.

Although a diligent, prompt investigation may not absolutely prevent the filing of a formal charge of discrimination or lawsuit, it may ultimately provide an affirmative defense curtailing liability.

Employment Applications: Some Considerations for Employers

Oftentimes, it is to employers’ benefit to implement a robust documentation policy with respect to their employees. Whether an employee requests FMLA time, mentions a disability that makes her job more difficult or raises the specter of discrimination or harassment after adverse employment action, documentation may be the key to limiting or avoiding legal liability.

But employers need not wait until employees are actually on the payroll. Indeed, employers can take several steps at the preliminary stage of employment – the employment application – to try to head off problems down the road. Some things employers should consider:

  • At-will Disclaimer. Employers should consider including a statement in the application advising applicants that the application is not intended to and does not create a contract or offer of employment, and that any ensuing employment will be on and at-will basis that may be terminate at the will of either party. Such language may be useful in defending a claim of breach of contract or assertions that there was an offer of guaranteed employment.
  • Non-Discrimination Statement. Employers should include language informing applicants that the employer is an equal opportunity employer that does not discriminate in hiring based on federally-protected (and state-protected) classifications.
  • Exclude background check acknowledgement. Because the Fair Credit Reporting Act requires the disclosure of an employer’s intent to obtain a background check be in a stand-alone document, employers should exclude any such acknowledgement or notification from the application itself and prepare a separate, stand-alone document.
  • Exclude disability and medical questions. In the application, employers would be wise to avoid questions asking about applicants’ disabilities and/or medical conditions. Not only would such inquiries run afoul of EEOC guidance, and potentially the ADA and similar state laws, including such questions in the application may later be offered as evidence that the information was used as a factor in hiring.
  • Caution regarding criminal history. Exploring prior arrests and convictions is a thorny area fraught with peril for employers. A number of states and localities have passed so-called “ban the box” laws prohibiting employers from asking about applicants’ criminal history on employment applications. Likewise, the EEOC suggests not asking about convictions on job applications, but, if employers do, to limit the inquiry to convictions for which exclusion would be “job related for the position in question and consistent with business necessity.” And asking about arrests becomes even more problematic because an arrest alone does not demonstrate the applicant actually engaged in criminal conduct. Employers should carefully consider how to navigate existing federal, state, and local law with respect to seeking criminal history information, if at all, from job applicants.
  • Avoid age-related inquiries. Although an applicant’s experience may be relevant to a job qualification, employers should be careful about asking for graduation dates or other information that reveals the applicant’s age. Problematically, such inquiries that enable the hiring manager to guess or estimate the applicant’s age, when unrelated to job qualifications for the position, may lead to assertions of discriminatory intent on the basis of age under the ADEA.
  • Avoid marital and familial status inquiries. Asking questions about an applicant’s marital status, number/age of kids, or provisions for childcare may give rise to assertions of discrimination on the basis of sex. Also, marital or familial status may be a protected class under state law.
  • Avoid citizenship inquiries. Federal law prohibits discrimination against an applicant because he or she is not a US citizen. Rather than asking about citizenship and giving rise to the possibility of a discrimination claim, in the employment application, employers should consider limiting their inquiries to asking whether the applicant is legally qualified to work in the US.

Employment applications are, typically, of critical importance in the hiring process and constitute employers’ first – and maybe only – contact with applicants. For the many applicants who are not hired, employers should best position themselves proactively for the prospect of potential legal liability arising from the decision not to hire. Carefully constructing the employment application may go a long way in preventing claims or, at a minimum, better positioning the employer to defend any such claims that arise.

A Refresher: Texas Non-Competes 101

Amidst the hustle and bustle of daily business activities and the peripheral noise about non-compete agreements, the basics may get lost. Therefore, it is useful to periodically return to first principles.

With respect to non-compete agreements, the starting point, of course, is whether such agreements are even valid or enforceable. In Texas, they are. See Tex. Business & Commerce Code section 15.50.

Employers (and others) can enforce non-compete agreements and sue those who breach them in Texas courts. To sustain a claim under Texas law for breach of a non-compete agreement, the claimant must show: (1) the non-compete agreement is enforceable; (2) the defendant violated the non-compete; and (3) the defendant does not have an affirmative defense. In re Gomez, 520 B.R. 233, 237 (Bankr. S.D. Tex. 2014) (applying Texas law).

On that first prong, a non-compete agreement is enforceable in Texas if:

  • It is ancillary to or part of an otherwise enforceable agreement at the time it is made;
  • It contains a reasonable time limitation on its duration;
  • It contains a reasonable limitation as to the geographic area it covers; and
  • It contains a reasonable limitation on the scope of activity restrained that is not greater than necessary to protect the company’s goodwill or business interest.

Tex. Business & Commerce Code section 15.50.

Not surprisingly, there has been substantial litigation concerning each of these requirements. Confronted with allegations that they have breached a non-compete agreement, defendants frequently challenge their enforceability. As such, courts have been asked to clarify when a non-compete agreement is ancillary to an otherwise enforceable agreement and are routinely asked to determine whether specific limitations to time, geography, and/or scope of activity are reasonable. Such determinations are often driven by and sensitive to the specific facts and industry involved.

Employers attempting to enforce a non-compete agreement should expect the defendant to contest the reasonableness of the agreement’s limitations. Defendants regularly claim the agreement is overly broad, as such, and cannot be enforced. In response, the employer/company routinely asserts reasonableness of the limitations and articulates why the limitations are necessary and appropriate. Usefully, too, in Texas the proper remedy for overbreadth of a non-compete provision is reformation, not a declaration that it is unenforceable. See Tex. Business & Commerce Code section 15.51. This so-called blue penciling allows the employer/company to advocate for enforcement of the agreement with some reformation of the limitations rather than complete rejection of the agreement as unenforceable.

Employers With Unionized Workforces Should be Wary of Requiring Employee Noncompetes Without Union Negotiation

 

In various industries across the country, it has become increasingly common for employers to require employees to sign noncompete agreements that restrict their employees’ ability to compete against the employer and/or solicit the employer’s customers upon leaving the employer’s employ. And employers have become increasingly savvy in drafting noncompete agreements that are reasonable in time, geographic scope, and industry. Indeed, there has been substantial litigation over these issues in jurisdictions nationwide.

But what if the employer has a unionized workforce? Can the employer still individually require employees to execute noncompete agreements without negotiating with the union?

Perhaps not. On Friday, a three-judge panel of the U.S. Court of Appeals for the District of Columbia unanimously rejected an employer’s contention that it could unilaterally impose a noncompete and confidentiality agreement without negotiating with the union. Instead, the appellate court agreed with the National Labor Relations Board that doing so may violate federal law. See Minteq Int’l, Inc. v. NLRB, 2017 WL 1521553 (D.C. Cir. April 28, 2017).

In 2012, Minteq started requiring new employees to sign a Non-Compete and Confidentiality Agreement (NCCA). At that time, however, Minteq’s employees were represented by the International Union of Operating Engineers, Local 150, AFL-CIO and covered by a collective bargaining agreement (“CBA”). Nonetheless, despite its unionized workforce and governing CBA, Minteq didn’t give the union notice or an opportunity to bargain regarding requiring new employees to sign the NCCA. Therefore, in 2014, the Union filed an unfair labor practice charge against Minteq for its failure to bargain with the Union over the NCCA. After proceedings before an ALJ and an appeal by Minteq, in 2016, the Board held that the NCCA was a mandatory subject of bargaining not covered by the parties’ CBA. Therefore, it held that Minteq violated the Fair Labor Standards Act by implementing it without first bargaining with the Union. The NLRB concluded that Minteq violated section 8(a)(1) and (5) of the FLSA because Minteq failed to afford the employees’ union notice or an opportunity to bargain over its unilateral implementation of the requirement that employees sign the agreement.

The Court agreed, concluding that the NCCA was a mandatory subject of bargaining and that imposing the NCCA requirement on hiring was an unfair labor practice. “It was therefore unlawful for Minteq to unilaterally implement the entire NCCA.”

Although the Court’s determination was driven in large part by the NCCA at issue and the CBA in effect at Minteq, employers with unionized workforces or otherwise applicable CBAs would be wise to closely scrutinize their agreements and governing law under the FLSA before instituting non-compete agreements. Proactive analysis and planning may permit employers to achieve their desired results without running afoul of the FLSA and engaging in unlawful labor practices.

Reminder: Texas Employers Owe Their Employees Numerous Duties

It is a testament to the diversified, generally pro-business Texas economy that the state has weathered recent national and international economic turmoil so well. Even with a volatile energy market and with oil prices significantly depressed, the Texas economy thrives, certainly relative to national trends. This explains, at least in part, why a number of companies have relocated to Texas in recent years.

Those companies relocating to Texas, as well as other employers operating here, should keep in mind that they owe their employees some basic, fundamental duties. This is more than the much-reported obligations not to discriminate, harass or retaliate. As the Texas Supreme Court explained forty years ago, Texas employers owe certain continuous, nondelegable duties to their employees. Farley v. M.M. Cattle Co., 529 S.W.2d 512 (Tex. 1975). Specifically, employers in Texas have, among other things, the duty to:

  • Furnish a reasonably safe place to work
  • Warn employees of hazards of their employment that are not commonly known or appreciated
  • Supervise employees’ activities
  • Hire competent co-employees
  • Furnish reasonably safe instrumentalities with which to work
  • Provide safety regulations
  • Train employees in the safe use and handling of products and equipment used in and around the employer’s premises

Central Ready Mix Concrete Co. v. Islas, 228 S.W.2d 649 (Tex. 2007). And employers must exercise ordinary care in carrying out these duties. Failure to do so can lead to time-consuming and costly litigation.

It is important for employers doing business in Texas to be aware of their duties to their employers (and others). A reasoned, proactive approach to satisfying these duties and managing risk exposure may ultimately save money, minimize liability, and better allow the company to achieve its business goals.

Despite State Law Permitting Medical Marijuana Use, Colorado Employers May Still Terminate Employees for Off-Duty Medical Marijuana Use

In Colorado, the state’s Lawful Activities Statute (C.R.S. 24-34-402.5) generally prohibits employers from firing an employee who engages in lawful outside-of-work activity. But what happens when state and federal law differ as to the lawfulness of the subject activity?

In Coats v. Dish Network, plaintiff was fired under the company’s zero-tolerance drug policy after failing a random drug test. A quadriplegic with a state-issued license to use medical marijuana to treat muscle spasms keeping him wheelchair-bound, failing the drug test was no surprise. This being Colorado with its liberal state marijuana laws, however, Coats argued the termination violated the Lawful Activities Statute.

The Colorado Supreme Court ruled that the termination did not violate the Lawful Activities Statute because the activities at issue must be “lawful” under both state and federal law, which is not the case with marijuana use (21 U.S.C. 844(a)). “Therefore, employees who engage in an activity such as medical marijuana use that is permitted by state law but unlawful under federal law are not protected by the statute.”

Although this decision is obviously specific to Colorado state law, it further emphasizes the importance to employers and employees alike of closely scrutinizing termination decisions.

Coats v. Dish Network, LLC, Case No. 13SC394 (June 15, 2015)

Despite State Law Permitting Medical Marijuana Use, Colorado Employers May Still Terminate Employees for Off-Duty Medical Marijuana Use

In Colorado, the state’s Lawful Activities Statute (C.R.S. 24-34-402.5) generally prohibits employers from firing an employee who engages in lawful outside-of-work activity. But what happens when state and federal law differ as to the lawfulness of the subject activity?

In Coats v. Dish Network, plaintiff was fired under the company’s zero-tolerance drug policy after failing a random drug test. A quadriplegic with a state-issued license to use medical marijuana to treat muscle spasms keeping him wheelchair-bound, failing the drug test was no surprise. This being Colorado with its liberal state marijuana laws, however, Coats argued the termination violated the Lawful Activities Statute.

The Colorado Supreme Court ruled that the termination did not violate the Lawful Activities Statute because the activities at issue must be “lawful” under both state and federal law, which is not the case with marijuana use (21 U.S.C. 844(a)). “Therefore, employees who engage in an activity such as medical marijuana use that is permitted by state law but unlawful under federal law are not protected by the statute.”

Although this decision is obviously specific to Colorado state law, it further emphasizes the importance to employers and employees alike of closely scrutinizing termination decisions.

Coats v. Dish Network, LLC, Case No. 13SC394 (June 15, 2015)