Tuesday, July 30, 2013

Former Mercedes-Benz Employees Sue for Race Discrimination, Harassment and Retaliation

Two former employees of a Manhattan Mercedes-Benz dealership have filed lawsuits after receiving their Notice of Right to Sue letters from the Equal Employment Opportunity Commission (EEOC) alleging that they were subject to race harassment, discrimination and retaliation.

The Huffington Post has a good write-up of the lawsuit, which Mercedes-Benz claims is baseless:
Burnell Guyton and Andre Grammer say they found grafitti in the showroom’s bathroom featuring swastikas, an image of a stick figure hanging from a noose, and phrases like "Burnell is a dumb as [sic] n*****," according to a lawsuit filed earlier this week. The two claim they were ultimately fired for complaining about the discrimination, despite their successful work performance. ... 
Guyton, who had a 30-year career in the auto industry, including owning three dealerships before his time at Mercedes, said people were initially "resistent" when he was first hired as the only African-American manager in the showroom. He added that had heard racial discrimination being expressed verbally before the graffiti appeared. ... 
After Guyton and Grammer complained, the graffiti was painted over and the dealership's director of human resources asked the employees near the bathroom to refrain from putting racist remarks on the stalls, according to the lawsuit. But the suit claims she didn’t make an effort to investigate the source of the graffiti, make any indication that the behavior wasn’t permitted by a anti-harassment or anti-discrimination policy, or say that the behavior was unacceptable.
Mercedes-Benz claims one of the plaintiffs was terminated for cause and the other quit "without cause or provocation," which is a substantially different version from the plaintiffs who claim they were termination at nearly the exact same time.  

Monday, July 29, 2013

Florida Jury Finds Walgreens, Pharmacist Guilty of HIPAA Violations, Awards $1.44 Million

This past Friday, at the conclusion of a four-day trial, a Marion County, Florida jury awarded a woman $1.44 million after finding Walgreens and a pharmacist violated her privacy when the pharmacist looked up and shared the woman’s prescription history.  The lawsuit filed in Marion Superior Court spun out of a tangled relationship between the pharmacist, her husband and the man’s ex-girlfriend.  

From the linked-story on the verdict:
The lawsuit alleged Audra Peterson, a pharmacist at the Walgreens store at 6269 W. 38th St., improperly reviewed the prescription history of Abigail Hinchy, Crown Point, and divulged that confidential information. 
“As a provider of pharmaceutical service, defendant Walgreens Co. owes a non-delegable duty to its customers to protect their privacy and confidentiality of its customers’ pharmaceutical information and prescription histories,” Hinchy claimed in the lawsuit. 
Walgreens was negligent in training and supervising Peterson, the suit said, while Peterson breached her statutory and common law duties of confidentiality and privacy to Hinchy. 
The six-member jury found for Hinchy, ruling the pharmacist and Walgreens violated privacy rules when Peterson looked up records on Hinchy, her husband’s ex-girlfriend, according to attorney Neal F. Eggeson, who represented Hinchy. 
He said testimony indicated Peterson then shared that information with her husband, Davion Peterson, who has a child with Hinchy.

New Jersey Court Rules Casino Can Fire Waitresses That Gain Too Much Weight

The Borgata Hotel, Casino & Spa in New Jersey was sued by 22 former waitresses who believed it was unlawful for the casino to prohibit "Borgata Babes" from gaining more than 7 percent of their original body weight.  However, Atlantic County Superior Court Judge Nelson Johnson in New Jersey held that this policy is lawful in granting The Borgata's motion for summary judgment.  From the L.A. Times story on the ruling: 

New Jersey Superior Court Judge Nelson Johnson wrote last week in his ruling that the "Borgata Babe program has a sufficient level of trapping and adornments to render its participants akin to ‘sex objects’ to the Borgata’s patrons."
He said the women who sued "cannot shed the label babe" because they "embraced it when they went to work for Borgata."

This lawsuit is apparently not the first of its kind as in 2006, former Borgata Babes Renee Gaud and Trisha Hart brought a $70 million lawsuit against the casino over the same policy. Their case ended quietly with a confidential settlement two years later.  The Press of Atlantic City has a more in-depth write-up of the story and adds further information from Judge Nelson's ruling: 

Johnson said nothing bans an employer from asking employees to remain attractive, especially when they were hired in part because of their appearance. Courts have held that employers are allowed to rely upon stereotypical notions of how men and women should appear, but they cannot impose professional disadvantages based on a person’s gender.
Borgata’s practices were applied to both male and female Borgata Babes, although there are substantially fewer men employed in the positions, Johnson said. Between February 2005 and December 2010, there were 646 women and 46 men employed as Borgata Babes. Weight accommodations were made for 48 servers — all female — during that time frame.
Still, Johnson acknowledged that while Borgata’s policies are legal, they can prove problematic.
“From the court’s perspective, the term ‘babe’ is at best undignified and at worst degrading,” Johnson wrote. “Regardless, there are people in our society who view ‘babe’ as playful flattery ... To the chagrin of those in our society hoping to leave sexual stereotypes behind, some of those people are female. And some of those people may be among the plaintiffs.”

The case was part sex discrimination because the plaintiffs argued their male counterparts were treated more favorably but weight discrimination was also alleged even though Michigan is the only state that explicitly prohibits weight (and height) discrimination in statute.  Madison, Wisconsin has a local statute that forbids the same and some say there is no momentum to protect it at the federal level or in other states.  

Saturday, July 27, 2013

Wisconsin Veteran Set to Challenge the FBI in Disability Discrimination Claim

On Monday in Alexandria, Virginia, a trial will begin in a case filed by Justin Slaby, an Oak Creek, Wisconsin native against the Federal Bureau of Investigation (FBI) who he claims discriminated against him on the basis of his disability (amputation) when he was turned down for a job as an FBI agent because the FBI claims Slaby cannot safely perform several tasks required of an agent.  The Milwaukee Journal Sentinel has a nicely-written article on the case which has several huge potential implications for disabled workers in the outcome.  Definitely a case to watch.

Wednesday, July 24, 2013

Obesity to Become a "Disability" Under the Americans with Disabilities Act?

With the American Medical Association (AMA) voting last month to classify obesity as a 'disease,' many lawyers believe this means obesity will soon qualify as a "disability" for purposes of the Americans with Disabilities Act (ADA).  From Michele Bowman's lawyers.com article on the topic:

“[T]he AMA [has] adopted policy that recognizes obesity as a disease requiring a range of medical interventions to advance obesity treatment and prevention,” according to a news release about the AMA’s annual meeting, where the vote took place." ...  “Recognizing obesity as a disease will help change the way the medical community tackles this complex issue that affects approximately one in three Americans,” said AMA board member Patrice Harris, M.D."

The Americans with Disabilities Act Amendments Act (ADAAA) was enacted in 2009 to expand the definition of "disability" in light of many court decisions where plaintiffs failed on this prong but recent studies and statistics show the ADAAA hasn't quite had that effect.  Perhaps the AMA could be persuasive in qualifying obesity as a disability.

The EEOC has already been treating “severe obesity” – defined as having a BMI of 40 or above, or a BMI of 35 in addition to an underlying condition like diabetes – as covered under the ADA

EEOC Files First GINA Lawsuits Attacking Post-Offer Medical Exams

The Equal Employment Opportunity Commission (EEOC) filed two lawsuits against employers for their use of post-offer medical exams this past May alleging violations of the Genetic Information Nondiscrimination Act (GINA) and the Americans with Disabilities Act (ADA).  These are amongst the first ever GINA lawsuits filed by the EEOC and one of the suits settled almost immediately for $50,000.

In the first lawsuit, EEOC v. Fabricut, Inc., an applicant was sent to an employer's medical examiner for a post-offer medical examination where the examiner's standard questionnaire asked the applicant to identify and disclose disorders in her family history, including heart disease, diabetes, and arthritis. The examiner concluded that the applicant had carpal tunnel syndrome and the employer withdrew its offer of employment.  The EEOC sued the employer, alleging the employer violated GINA by requesting the family medical history on the questionnaire and violated the ADA by incorrectly "regarding" the applicant as having a disability.  This case has settled for $50,000.

In the other lawsuit, EEOC v. Founders Pavilion, Inc., a claim of pattern or practice was alleged against a New York nursing and rehab center claiming it violated GINA by requesting family medical history in its post-offer medical exams. The EEOC also alleges that the employer violated the ADA by withdrawing offers of employment based on the results of its post-offer medical exams.

GINA prohibits employers from requesting, requiring, or purchasing genetic information from applicants or employees, including family medical history. 

Staffing Agency Settles ADA Claim with EEOC for $100,000

The Equal Employment Opportunity Commission (EEOC) has announced it has settled with a staffing company, Staffmark, in a federal lawsuit it filed on behalf of Dorothy Shanks in the amount of $100,000 for their role in discriminating against her on the basis of her prosthetic leg when she was removed from her job and reassigned “because they did not want anyone bumping into her.” No reassignment was made by Staffmark and she was fired.  The EEOC also sued SONY but they continue to battle the lawsuit.

An EEOC lawyer stated that the woman “was fired because of unjustified fears about her having a prosthetic leg. Firing employees because of baseless fears and stereotypes about their disabilities is illegal, and the EEOC will defend the victims of such unlawful conduct.”  This is the latest in the EEOC's fight against staffing agencies who can not justify their actions as following an employer-client’s orders.  It is important to note that employers cannot avoid liability by saying the victim was "really employed" by the staffing agency.

The case is  EEOC v. Staffmark Investment LLC and Sony Electronics, Inc, N.D. Ill. No. 12-cv-9628.

Wednesday, July 17, 2013

July Edition of the Employment Law Blog Carnival is Up!

Attorney Robin E. Shea over at Employment & Labor Insider has hosted this month's installment of the Employment Law Blog Carnival titled, "1950's Summer Road Trip Edition," and it is quite good and fun!  Enjoy!

Wednesday, July 10, 2013

Tipped Employees and the Minimum Wage

Earlier this evening I came across a 'picture' discussing servers and the minimum wage with a goal of making patrons feel guilty if they are bad tippers--if they tip at all--but the picture was rather misleading.  A very commonly-misunderstood area of wage & hour law is tipped employees (i.e., those who customarily and regularly receive more than $30 per month in tips) and how they are paid since they are not paid like regular, hourly employees.  The Department of Labor (DOL) has an excellent break down of tipped employees and the minimum wage available here.

It is fairly well-known that tipped employees--e.g., servers and bartenders, are only paid $2.13 per hour with the rest of their income typically made up of tips from customers.  A huge misconception is that employers only have to pay $2.13 per hour and if the tipped employee receives no tips, that's all they earn.  FALSE!  The Fair Labor Standards Act (FLSA) requires tipped employees to be paid at least the minimum wage ($7.25), made up by the employer.  That is, if a waiter/waitress or bartender receive no tips in a given shift, it is the duty of the employer, under the law, to make up the difference so that employee receives at least the minimum wage.

Other helpful information regarding tips to know include:

Retention of Tips: A tip is the sole property of the tipped employee regardless of whether the employer takes a tip credit. The FLSA prohibits any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. For example, even where a tipped employee receives at least $7.25 per hour in wages directly from the employer, the employee may not be required to turn over his or her tips to the employer.
Tip Pooling: As noted above, the requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips. The FLSA does not impose a maximum contribution amount or percentage on valid mandatory tip pools. The employer, however, must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for the amount of tips each tipped employee ultimately receives, and may not retain any of the employees' tips for any other purpose.
Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA. However, this charge on the tip may not reduce the employee's wage below the required minimum wage. The amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.
The DOL's website also has a list of "typical problems" associated with tipped employees that are the basis of a lot of lawsuits:
  • Where an employee does not receive sufficient tips to make up the difference between the direct (or cash) wage payment (which must be at least $2.13 per hour) and the minimum wage, the employer must make up the difference.
  • Where an employee receives tips only and is paid no cash wage, the full minimum wage is owed.
  • Where deductions for walk-outs, breakage, or cash register shortages reduce the employee’s wages below the minimum wage, such deductions are illegal. Where a tipped employee is paid $2.13 per hour in direct (or cash) wages and the employer claims the maximum tip credit of $5.12 per hour, no such deductions can be made without reducing the employee below the minimum wage (even where the employee receives more than $5.12 per hour in tips).
  • Where a tipped employee is required to contribute to a tip pool that includes employees who do not customarily and regularly receive tips, the employee is owed all tips he or she contributed to the pool and the full $7.25 minimum wage.
Overtime Problems:
  • Where the employer takes the tip credit, overtime is calculated on the full minimum wage, not the lower direct (or cash) wage payment. The employer may not take a larger tip credit for an overtime hour than for a straight time hour (i.e., $4.00 tip credit per hour for the nonovertime hours and $5.12 tip credit per hour for overtime hours).
  • Where overtime is not paid based on the regular rate including all service charges, commissions, bonuses, and other remuneration.

Tuesday, July 9, 2013

Cleveland Area Temp Agency Pays $650,000 to Settle EEOC Suit Alleging Profiling of Applicants

Back in January 2011 I wrote an article discussing how staffing agencies and employers were using codewords as a way to covertly violate anti-discrimination laws when an employer-client did not want to hire certain types of applicants and the difficulty the Equal Employment Opportunity Commission (EEOC) was having catching these types of violations unless a whistleblower came forward.  I recently came across a settlement the EEOC obtained from a northeast Ohio temp agency back in 2010 where this exact profiling occurred that affected approximately 11,000 applicants nationwide.  The facts are quite disturbing:


Monday, July 8, 2013

Iowa Supreme Court Withdrawing and Reissuing Decision in Controversial "Irresistible Attraction" Sex Discrimination Case

Late last month the Iowa Supreme Court announced that it was agreeing to withdraw its December 2012 decision in Nelson v. James H. Knight DDS, P.C. and reconsider the case.  Nelson received widespread national attention because of the facts of the case:  the plaintiff, Melissa Nelson, was terminated by her employer for being irresistibly too attractive.  The blog, "On Brief," reported the story and provides more facts surrounding the "extraordinary move" by the Iowa Supreme Court.  Chief Justice Cady issued an order withdrawing the December opinion and stating that the court would resubmit the case, without oral argument, with no indication when the opinion and decision would be re-issued.

Wisconsin's New Budget Bill Presents Substantial Changes to Unemployment Insurance Law

Back when Wisconsin Governor Scott Walker signed the 2013-2015 biennial budget bill (Assembly Bill 40), enacted as 2013 Wisconsin Act 20, into law, along with it came changes to the State's unemployment insurance laws.  The changes will only affect unemployment insurance benefit determinations that are issued or appealed on or after Jan. 5, 2014.

Act 20 modifies or eliminates several key eligibility and misconduct provisions and eliminates a number of "voluntary quit" exceptions, thus making it harder for a lot of individuals to collect unemployment benefits--the intended purpose of the changes.

The changes to eligibility are:

1)  An insurance claimant must conduct at least four (4) actions that constitute a reasonable search for suitable work instead of only two actions required under current law. Additionally, the department may increase an individual’s minimum number beyond four actions in any week – so long as it is a uniform change for similar types of claimants.
2)  If a claimant has made a claim against a temp agency, the claimant must contact the temp agency weekly about available assignments to maintain eligibility. The contact will constitute one reasonable search for suitable work action for the overall four action minimum.

Changes to "misconduct" and the new disqualification provision:

Act 20 adds specific situations upon which a claimant will be deemed to have engaged in "misconduct" to disqualify them from benefits:

  • Violation of an employer’s reasonable substance abuse policy concerning the use of alcohol beverages, use of a controlled substance or use of a controlled substance analog if the employee: 1) had knowledge of the alcohol beverage or controlled substance policy; and 2) admitted to the use of alcohol beverages, a controlled substance, or controlled substance analog, refused to take a test or tested positive for the use of such substances in a test used by the employer in accordance with a DWD-approved testing methodology;
  • Theft of an employer’s property, services, money (of any value), felonious conduct connected with an employee’s employment with his or her employer, or intentional or negligent conduct by an employee that causes substantial damage to the employer’s property;
  • Conviction of a crime or other offense, while on or off duty, involving a civil forfeiture that precludes the employee from working for the employer;
  • One or more threats or acts of harassment, assault, or other physical violence instigated by an employee at the employer’s workplace;
  • Absenteeism on more than two (2) occasions within the 120 days before the date of termination, unless permitted by the employer’s employment manual of which the employee acknowledged receipt, or excessive tardiness in violation of the employer’s policy, if the employee does not provide notice and one or more valid reasons for the absenteeism or tardiness (note: this provision replaces the existing absenteeism/tardiness misconduct provision at Wis. Stat. § 108.04(5g));
  • Falsifying the employer’s business records, unless directed by the employer; and,
  • A willful and deliberate violation of a written and uniformly applied standard or regulation of the federal, state, or tribal government, an agency of which licenses the employer, which standard has been communicated by the employer to the employee and which violation would cause the employer to be sanctioned or to have its license or certification suspended by the agency, again, unless directed by the employer.
Act 20 also introduces the "substantial fault" misconduct-like disqualification provision which is defined to include those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employer but does not include the following:
  • One or more minor infractions of rules unless an infraction is repeated after the employer warns the employee about the infraction;
  • One or more inadvertent errors made by the employee; or,
  • Any failure by the employee to perform work because of insufficient skill, ability or equipment.

Changes to "voluntary quit" exceptions:

Perhaps the most dramatic change Act 20 makes is reducing the number of "voluntary quit" exceptions from eighteen (18) to eight (8).  Essentially, Act 20 simply repealed a number of the exceptions,
codified under Wis. Stat. sections 108.04(7)(d), (g), (j), (k), (m), (n), (o), (p) and (r).  Those statutes can be found on Wisconsin's Legislative Reference Bureau's website.

Act 20 amends other "voluntary quit" exceptions:
  • An employee that accepts work which the employee could have failed to accept with “good cause” under Wis. Stat. §108.04(7)(b) and terminated such work with the same good cause may only terminate such work within 30 days after starting the work in order to be entitled to UI benefits, instead of the ten (10) weeks period formerly provided for in this section;
  • An employee who quits work to accept certain types of employment or other work covered by UI laws of any state or the federal government will no longer be required to have earned wages in the subsequent work, repealing the former 4-week earning requirement;
  • An employee who quits work because his or her spouse changes their place of employment such that a commute is impractical and the employee quit to follow the spouse would only be permitted to collect UI benefits where the employee’s spouse is a member of the U.S. armed forces on active duty, the employee’s spouse was required by the U.S. armed forces to relocate to a place to which it is impractical for the employee to commute, and the employee terminated his or her work to accompany the spouse to that place.

These are substantial changes that all employers, employees, business owners, labor & employment attorneys, human resource departments, etc should become acquainted with as they affect how we all think about separation of employment as unemployment insurance is always a consideration.