Ignorance of Interplay between FMLA and ADA Can Be Costly To Employers

One mistake often made by employers is assuming that after an employee has exhausted his or her 12 weeks of protected Family Medical Leave Act (FMLA) leave, the employer’s obligation is fulfilled. While this may satisfy the employer’s medical leave obligations, the employer also must account for any potential duties under the Americans with Disabilities Act (ADA). The ADA requires employers to “reasonably accommodate” employees with disabilities and such accommodation can include granting additional leave.

A California case highlights this point. A California jury, finding that her former employer had violated the ADA, awarded a former drug addiction counselor more than $4.5 million in damages. Hill v. Asian American Drug Abuse Program, Inc., No. BC582516 (Cal. Sup. Ct. Jan. 19, 2018). Della Hill, while out on protected medical leave after breaking her arm, was diagnosed with major depressive disorder. Her medical leave was set to expire on March 23, 2015, but prior to its expiration, she submitted additional medical information to her employer on her diagnosis and requested additional leave. Instead of granting the request, her employer, the Asian American Drug Abuse Program (AADAP), terminated her on March 31, 2015, for failing to return from medical leave.

After determining that AADAP had failed to reasonably accommodate her disability, the jury awarded Hill $1.9 million in damages (approximately $550,000 in economic damages, and $1,350,000 in non-economic damages). The jury also determined that AADAP had acted with malice, oppression, and/or fraud, which allowed the jury to award another $2.6 million in punitive damages.

Hill’s attorney noted that AADAP did not provide “a single example of any effort … to accommodate Hill,” and claimed that AADAP had attempted to “cover up” its violation with pretextual reasons for Hill’s termination. Indeed, if the jury perceived AADAP’s proffered reasons as pretextual, it may have been key in determining AADAP had acted with “malice, oppression, and/or fraud,” triggering the additional punitive damages.

Key takeaways from this case include:

  • Don’t assume that adverse employment actions are permitted simply because an employee has not returned to work after exhausting FMLA leave. Consider whether additional leave is available under the ADA. If uncertain, consult with qualified employment attorney prior to taking action.
  • The broad definition of “disability” can include mental afflictions such as depression and anxiety. Further, an employee need not mention the ADA or ask for a “reasonable accommodation” to put the employer on notice of a possible need for accommodation.
  • Diligently document all interactions, especially on reasonable accommodation. Employers must be able to show that they engaged in a good faith interactive dialogue about potential accommodations.
  • Consider the situation objectively, and be aware of potential pretextual reasons for an adverse employment action. A jury may determine that pretext constitutes “malice, oppression, and/or fraud,” which opens up the possibility of punitive damages.

 

 

Wisconsin Jury Rejects Fired Jail Officer’s Claims of Discrimination and Retaliation

A case involving a former jail officer shows how keeping detailed, contemporaneous records of complaints of discrimination and unfair treatment can help defend against employee claims.

A federal jury in Wisconsin rejected a former jail officer’s claim that her termination was the result of sex discrimination and retaliation. The jury apparently found the plaintiff’s allegations of discrimination and retaliation, made only after her termination, lacked credibility and did not account for, or excuse, her failure to adequately perform her job.

In Waite v. Wood County, Wisconsin, 3:16-cv-00643 (W.D. Wis. 2018), Janis Waite alleged that, despite performing her work tasks in the same manner as her male colleagues, she received a negative performance review that stated she must show “some improvement to meet requirements” regarding job knowledge, dependability, and organizational ability. Waite further alleged that she had been singled out for unfair punishment when, unlike her male colleagues who engaged in the same behavior, she was suspended for personal use of a jail fax machine in one instance, and issued a written warning for using profanity over a jail speakerphone while a civilian was present in another instance. Finally, Waite claimed her employer’s reason for terminating her employment (disposal of a daily list of razors distributed to inmates before those razors were collected/returned) was mere pretext because she was not assigned to razor duties on that day.

Wood County disputed Waite’s contentions and presented evidence showing that:

  • Waite had been progressively disciplined because of ongoing performance issues;
  • Waite’s employment was terminated after repeated conduct violations and her refusal to fix her mistakes or modify her behavior; and
  • Waite never complained to human resources or her managers about alleged unfair or differential treatment until after she was fired.

Ultimately, the jury believed the County, rejected Waite’s claims, and rendered a verdict for the County.

Generally, a jury is less likely to find discrimination where an employee fails to raise complaints in a timely manner, when the employer was in a position to address those concerns. Furthermore, if the employee cannot show that she lodged complaints, or otherwise engaged in protected behavior, prior to termination, the chance of bringing a credible retaliation claim will be low. For these and many other reasons, human resources personnel, and managers in general, should keep detailed, contemporaneous records of any complaints of discrimination and unfair treatment.

OSHA Says Lawsuits Constitute Adverse Action Too

Not only is the Occupational Safety and Health Administration (OSHA) continuing to crack down on employers suspected of retaliating against employees who blow the whistle and will not hesitate to pursue litigation on behalf of employees, OSHA considers lawsuits against whistleblowers to constitute adverse action for purposes of finding unlawful retaliation.

In a case brought by OSHA on behalf of a whistleblower who reported improper asbestos removal practices at a school worksite and was fired for reporting these practices, the jury awarded the whistleblower approximately $174,000 ($103,000 in back wages, $20,000 in compensatory damages, and $50,000 in punitive damages).

The complaint alleged Champagne Demolition, LLC fired the whistleblower one day after he blew the whistle. The employee claimed he was subjected to verbal threats and legal action. In fact, a few weeks after Champagne Demolition fired the whistleblower, the company sued him for defamation. OSHA claimed that both the termination of the whistleblower’s employment and the filing of the defamation suit were retaliatory acts against the employee in violation of Section 11(c) of the Occupational Safety and Health Act.

A footnote in OSHA’s motion for summary judgment is telling of the Administration’s position on lawsuits against whistleblowers:

Lawsuits filed with the intent to punish or dissuade employees from exercising their statutory rights are a well-established form of adverse action. See BE & K Constr. Co. v. NLRB, 536 U.S. 516, 531 (2002) (Finding that a lawsuit that was both objectively baseless and subjectively motivated by an unlawful purpose could violate the National Labor Relations Act’s prohibition on retaliation); Torres v. Gristede’s Operating Corp., 628 F. Supp. 2d 447, 472 (S.D.N.Y. 2008) (“Courts have held that baseless claims or lawsuits designed to deter claimants from seeking legal redress constitute impermissibly adverse retaliatory actions.”); Spencer v. Int’l Shoppes, Inc., 902 F. Supp. 2d 287, 299 (E.D.N.Y. 2012) (Under Title VII, the filing of a lawsuit with a retaliatory motive constitutes adverse action).

While OSHA’s position initially may appear at odds with how courts typically define an adverse action, OSHA focused on the fact that there was no merit to the company’s defamation suit, because the whistleblower spoke the truth when he accused it of illegal asbestos removal. Generally, courts have concluded that frivolous employer revenge suits are retaliatory.

Employers should exercise caution in pursuing litigation against a whistleblower if there is any doubt as to the merit of the suit, especially when OSHA is involved. Please contact Jackson Lewis with any questions.

2018 New Year’s Resolutions For Lowering the Risk of Employment Litigation

When Jackson Lewis litigation attorneys looked back at cases, trials, and verdicts from the past year, we observed how companies can make themselves less of a target for claims.  Below are some New Year’s resolutions that can help lower the risk of employment litigation:

  • Train managers. Train employees. Keep a record of the training, including who attended. Review EEO laws and company policies. Use up-to-date and accurate materials you can show a government agency, plaintiff’s attorney, or jury.
  • Evaluate whether to contest unemployment benefits on a case-by-case basis. When an unemployment decision is appealed – by the company or former employee – have an attorney represent the company in the appeal. For many plaintiff’s attorneys, an appeal is an opportunity to cross-examine witnesses under oath and build a case on an unprepared, and unrepresented, company witness.
  • Engage in the interactive process. Do not automatically discharge an employee if he or she cannot return to work after FMLA leave expires. Do not automatically terminate the employee if he or she is unable to perform the essential functions of the job. Engage in a discussion with the employee. Document that discussion. Even if the result will be the same – discharge – the discussion and documentation may be all that is needed to avoid or win a claim.
  • Use offer letters. Set out prerequisites to employment such as background check, drug test, signing of non-compete, pre-employment physical, and so on. Do not guarantee terms of employment. Ensure the offer letter informs the employee that he or she is “at will.”
  • Have a handbook. Employees expect it. Government agencies ask for it. Ensure the handbook has appropriate legal updates. Confirm that it reflects company practices. Lay out the ground rules for your company and follow them.
  • Review all non-compete agreements used by your company for enforceability in the state in which they are being used.

These and other actions involve little or no cost, take little time to implement, and can help set a company’s agenda for 2018. These are lessons other companies learned the hard way over the past year (taught by plaintiff’s attorneys, government agencies, and industry competitors).

 

$1 Jury Verdict Yields $300,000 in Attorneys Fees to Plaintiff’s Counsel

In a case alleging sexual harassment by a researcher against a research assistant, the trial court ordered more than $300,000 in attorneys’ fees after the jury awarded a mere $1 in damages to the plaintiff. Jenkins v. The University of Minnesota et al., No. 13-CV-1548 (D. Minn. Oct. 13, 2017). The court awarded attorneys’ fees because it found that nonmonetary considerations significantly affected the case.

The plaintiff, Stephanie Jenkins alleged that the researcher, Ted Swem, sexually harassed her over the course of two 17-day field research trips in a remote area of Alaska, during the period between the research trips, and while working together at the University of Minnesota. She claimed that Swem photographed her buttocks when she was not looking, proposed they bring only one tent for the research trip, suggested she bathe in the river with him, and described what he imagined kissing her would be like.

As originally pled, the complaint contained nine counts against the University and various individual defendants. By the time of trial, only four causes of action remained: hostile work environment against the University, hostile work environment against Swem, intentional infliction of emotional distress against Swem, and assault against Swem. At the conclusion of trial, the court dismissed the assault claim and the jury rejected all but one claim. The jury found Swem liable for hostile work environment and awarded $1 in damages to the plaintiff. (The Special Verdict Form instructed the jury to write in $1 if they found the plaintiff’s damages had no monetary value.)

Against this backdrop, Swem argued that the plaintiff’s victory was merely “technical” and awarding attorneys’ fees would be unreasonable.

The court, summarizing case law, stated, “When a plaintiff recovers only nominal damages because of his failure to prove an essential element of his claim for monetary relief, the only reasonable fee is usually no fee at all.” However, the court noted that “[p]reventing sexual harassment to enable broad participation of all genders in the workforce is an important public goal.” It also noted that case law states, “Regardless of the form of relief he [or she] actually obtains, a successful civil rights plaintiff often secures important social benefits that are not reflected in nominal or relatively small damages awards.” Essentially, the court suggested that regardless of nominal damages, the plaintiff advanced a social goal in establishing Swem’s conduct was impermissible. Thus, attorneys’ fees were warranted, the court concluded, and awarded approximately $305,000 in attorneys’ fees to the plaintiff.

This case highlights the importance of attorneys’ fees when assessing risk in a case. Although the $1 damages verdict suggests the defendants had a relatively strong case, the court gave great weight to other nonmonetary considerations that significantly affected the overall result.

 

 

$6.8 Million Award for Theft of Company Trade Secrets

A dental technology company has obtained a $6.8 million judgment against a former employee accused of stealing the company’s designs. The federal district court in Central California entered the judgment after finding the defendant, Jian Lu, liable for stealing trade secrets. Sirona Dental Systems Inc., et al. v. Jian Lu, No. 2:15-cv-08777 (C.D. Cal. Oct. 19, 2017). This case highlights the importance of non-disclosure agreements, paying close attention to developments in your industry, as well as vigorously protecting your rights in court.

Sirona Dental Systems is one of the world’s largest manufacturers of dental technology, employing more than 3,300 people worldwide, and marketing its products in more than 135 countries. It develops, manufactures, and markets a complete line of dental products. One product in particular, the Apollo DI, combines highly confidential software and hardware to create an optical imaging equipment/system designed to provide dentists low-cost 3-D images of their patient’s teeth. At all times, Sirona treated the Apollo DI technology and designs as extremely confidential business secrets and proprietary information. Sirona took significant steps to protect the technology and information and keep them secret.

In 2011, Sirona acquired Arges Imaging, Inc., a company that focused on 3-D imaging technology. Defendant Jian Lu was Arges’ Senior Technical Director at the time. Lu had entered into a Non-Disclosure Agreement (NDA) with Arges’ in 2009. Lu became a senior engineer at Sirona beginning in approximately May 2011. While at Sirona, Lu worked on the Apollo DI technology and designs.

In 2013, Lu resigned from Sirona. In 2014, Sirona learned that two companies in China were placing orders with Sirona’s vendors for Apollo DI materials and were essentially creating a duplicate of the Apollo DI system and bringing it to market. When Sirona learned that these companies were owned by Lu, it filed suit for misappropriation of trade secrets and breach of the NDA agreement.

Although Lu and his companies answered Sirona’s complaint and initially participated in discovery, in July 2016, Lu’s attorneys withdrew from the case. Lu briefly represented himself, and then stopped participating in the case altogether. At that point, default judgment was entered against Lu’s companies and, in December 2016, the trial court granted summary against Lu. It held that Lu had stolen trade secrets. When Lu failed to participate in the subsequent damages proceedings, the court found Sirona was entitled to $6.66 million in damages for research and development that Lu allegedly saved by stealing information from Sirona, as well as $150,000 in penalties for intentional copyright infringement. Judgment was entered in October 2017.

While internal safeguards are important, when it comes to protecting trade secrets, companies also need to be vigilant and act quickly and decisively when it appears that a former employee is attempting to use the former employer’s secrets or copyrighted material to compete in the marketplace.

Iowa Waives Appeal of $2.2 million Verdict In Favor of Settlement

On August 24, 2017 we reported that former communications director for the Iowa Senate Republican Caucus, Kristen Anderson, was awarded $2.2 million in damages by a jury that found Anderson had been fired in retaliation for complaining about sexual harassment and a hostile work environment.

In late September, the parties reached a settlement, pursuant to which the State of Iowa will forego any appeal of the jury verdict, and will pay approximately $1,045,000 to Anderson, and approximately $705,000 for Anderson’s legal costs and fees.  On October 1, 2017, Iowa’s State Appeal Board approved this settlement.

 

Court Grants New Trial in Sexual Harassment Case Based on Evidence of Other Complaints Against Supervisor

Despite “substantial evidence” supporting a jury’s verdict, a judge may weigh the evidence and set aside the verdict if it is contrary to the clear weight of the evidence. Federal Judge Richard A. Jones did just that in EEOC v. Trans Ocean Seafoods, Inc., No. 15-cv-01563 (W.D. Wash. Sept. 8, 2017). He granted the plaintiffs’ motion for a new trial under FRCP 59(a). In doing so, the court set aside the jury’s verdict for the employer, holding that it knew or should have known of a supervisor’s inappropriate sexual comments based on the “clear weight of the evidence.”

The plaintiffs brought claims alleging sexual harassment under Title VII of the Civil Rights Act and the Washington Law Against Discrimination. They alleged that they were sexually harassed by their supervisor. At trial, the parties provided conflicting testimony about whether the plaintiffs complained to the employer’s operations manager at an off-site meeting about the supervisor’s harassment. The jury credited the operations manager’s testimony about the off-site meeting, which contradicted the plaintiffs’ testimony. However, it was undisputed that the employer was on notice of complaints about the supervisor’s conduct toward other employees and his prior inappropriate conduct. Indeed, the employer had issued him two prior warnings.

In granting the motion for a new trial, the court weighed the credibility of the witnesses and relied upon documents referencing complaints about the supervisor’s harassment of employees other than the plaintiffs, including the operations manager’s investigation notes and the disciplinary records. The court initially rejected the plaintiffs’ argument that the employer’s knowledge of a hostile work environment as to other victims should be imputed to the plaintiffs for purposes of establishing the employer’s liability absent corroborating evidence. However, the court found sufficient corroborating evidence and held that the weight of the evidence demonstrated that the employer was on notice of the supervisor’s improper conduct toward the plaintiffs for at least a year prior to their complaint to the Equal Employment Opportunity Commission.

This case demonstrates that a jury’s verdict is not necessarily the final word. Federal judges have broad authority to weigh evidence, including witness credibility, and may set aside a verdict if it is contrary to the weight of the evidence. It also highlights the importance of taking prompt remedial action when an employer has knowledge of inappropriate comments or conduct.

 

 

Discrimination Due To Breastfeeding: Jury Verdict Upheld in Favor of Police Officer

Affirming that breastfeeding is a medical condition related to pregnancy and that the police department’s conduct violated the Pregnancy Discrimination Act (PDA), a federal appeals court in Atlanta has upheld the jury’s verdict for a former Tuscaloosa, Alabama police officer. Hicks v. City of Tuscaloosa, Alabama, No. 16-13003 (11th Cir. Sept. 7, 2017).  Stephanie Hicks was awarded $374,000 in damages against the police department for pregnancy discrimination due to breastfeeding.

Trouble started for Hicks immediately after she returned from maternity leave. She was provided with only one option as a place to pump at work: an unsanitary and public locker room. She also felt she was constantly under scrutiny regarding her whereabouts during her pumping breaks. Even as she headed down to the locker room to pump, she would hear taunting, such as “wrap those boobs up” on her police radio.

Making matters worse, the police department began writing her up for what she believed were minor issues. Hicks was demoted to a patrol officer a week after her return from leave. This meant she would receive a pay decrease, be assigned to night and weekend shifts, and no longer have a vehicle. As a patrol officer, she also would have to wear a snug-fitting bullet proof vest on duty. Her obstetrician provided her with a doctor’s note explaining that the tight vest would reduce her milk supply and place her at risk for infections. In response, the police department told her she had no choice but to wear the vest or risk serious bodily injury. This was the last straw and she resigned.

Breastfeeding advocates and supporters attended the trial to support Hicks as a nursing mother. The jury also supported Hicks and found sufficient evidence of discrimination. The Eleventh Circuit affirmed. It also said that Congress intended the PDA to include physiological conditions post-pregnancy and that the PDA would be rendered a nullity if women were protected during a pregnancy, but could be readily terminated for breastfeeding.

The Affordable Care Act requires employers to provide nursing mothers with reasonable break times for expressing breast milk and with a private place to pump, other than a restroom. As a direct result of the verdict, Tuscaloosa’s police department and City Hall now have private rooms for nursing mothers; all employers should do the same. Employers are obligated to engage in the interactive process with breastfeeding employees who provide medical documentation to support the need for an accommodation. Finally, employers must have a zero-tolerance policy for harassment or retaliation of nursing employees.

The Significance of Expert Testimony

Expert testimony can play a significant role in shaping the outcome of cases that go to trial. For example, in a case lacking witnesses or evidence that could directly support or undercut the plaintiff’s accusations of severe sexual misconduct, what stood out most was the expert testimony.

On August 8, 2017, a two-week jury trial ended with a New Jersey mayor being cleared of any wrongdoing under the New Jersey Law Against Discrimination (LAD), while his accuser, who remains employed by the township he leads, must pay damages for defamation. Tamara Smith v. Township of Irvington and Anthony Vauss, in the Superior Court of New Jersey, Essex County.

According to her initial complaint, the plaintiff was hired by the Township in 2004, and, in mid-2005, became a Public Works Inspector with the Township’s Department of Public Works. Leading up to the Township’s mayoral election in May 2014, the plaintiff allegedly reported to the eventual winner of that election, Anthony Vauss.

As Smith alleged in the complaint, her work environment became “toxic” in August 2013, when Vauss allegedly propositioned her for a discrete sexual relationship (Smith and Vauss both had spouses who also worked for the Township). In return, Vauss allegedly promised that, as Mayor, he would get Smith promoted and would otherwise attend to the financial needs of Smith and her husband. When Smith rebuffed his advances, Vauss allegedly raped her.

Smith sued Vauss as well as the Township under LAD. LAD prohibits employers from discriminating against employees on the basis of sex, including by condoning sexual harassment. Moreover, alleged victims of prohibited discrimination can sue not just their employers, but also individual supervisors who are accused of aiding and abetting the alleged discrimination.

Faced with the prospect of going to trial with just Vauss’ word against Smith’s, Vauss’ legal team ultimately won the battle by using expert witnesses. First, a psychological evaluation revealed that Smith was battling depression and experiencing delusions. Second, a linguistics expert, by studying Smith’s speech patterns, was able to connect her to an anonymous letter received by the local newspaper attacking Vauss for completely unrelated, allegedly false reasons.

In cases with few witnesses to the alleged wrongdoing, defense teams can benefit from considering the value of expert witnesses to establish a critical element in their defense. This case demonstrates how that tactic was employed successfully to undermine the motives of the plaintiff.

 

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