Thursday, May 28, 2015

EEOC Will Now Process and Investigate Sexual Orientation, Transgender, and Gender Identity Claims

The Equal Employment Opportunity Commission ("EEOC") issued an internal memorandum whereby field offices were instructed to handle LGBT charges as follows:

1) Complaints of discrimination on the basis of transgender status or gender identity-related discrimination should be accepted under Title VII and investigated as claims of sex discrimination in light of Commission precedent; and
2)  Individuals who believe they have been discriminated against because of their sexual orientation should be counseled that they have a right to file a charge with the EEOC, and their charges should be accepted under Title VII and investigated as claims of sex discrimination in light of Commission precedent.

The memorandum then sets forth several items of precedent both in private sector litigation and Commission actions.  Essentially, the EEOC is taking the position that discrimination based on sexual orientation may be grounded in sex-based stereotypes (e.g., that men should be sexually attracted to women and that women should be sexually attracted to men) and thus violate Title VII's prohibition on sex discrimination.  The EEOC also takes the position that complaints of sexual orientation discrimination can constitute "protected activity" for purposes of a retaliation claim under Title VII.

Currently, some federal circuits have held that Title VII does not prohibit sexual orientation discrimination, while other courts have expanded Title VII to allow such claims.  The 7th Circuit in Muhammad v. Caterpillar, Inc., (7th Cir. 12-1723) stated categorically that Title VII does not prohibit sexual orientation discrimination or related retaliation.  The EEOC approved participation as amicus curiae in support of panel rehearing the case.

Given the Employment Nondiscrimination Act ("ENDA") may never be passed given attitudes in both parties about LGBT rights, the EEOC's best hope (thought also unlikely) is for the Supreme Court to hold that Title VII does cover these types of claims so ENDA's passage does not become as necessary.

Luckily for Wisconsin employees, the Wisconsin Fair Employment Act ("WFEA") does prohibit discrimination on the basis of sexual orientation, though arguments similar to the EEOC's argument under Title VII could be applied to the WFEA for gender identity and transgender discrimination.

Wednesday, May 27, 2015

Wisconsin Court of Appeals Holds Promise of Continued Employment Constitutes Consideration in Restrictive Covenant

In a landmark case out of the Wisconsin Court of Appeals, the Court finally addressed the issue of whether an employer's forebearance of its right to terminate an existing at-will employee in exchange for the employee agreeing to a restrictive covenant constitutes lawful consideration.  The Court held that it does constitute lawful consideration for signing a restrictive covenant and further held, in addressing the circuit court's opinion that the employer's promise not to fire the employee immediately if he signed the restrictive covenant was an illusory promise and did not constitute consideration, that an employee would be protected by other contract formation principles such as fraudulent inducement or good faith and fair dealing.

The plaintiff in the case, David Friedlen, had been an employee of Runzheimer International Limited since 1993, as an at-will employee, but in 2009, Runzheimer required all its employees to sign restrictive covenants, preventing them from working for competitors for two years after employment with Runzheimer ended  (the Court of Appeals discussed the difference between covenants signed by current employees and covenants presented to new hires).  Friedlen signed the agreement, but was fired two years later.  Friedlen then consulted with an attorney on the enforceability of the restrictive covenant and was advised that it was unenforceable for lack of consideration and so Friedlen took a job with a competitor of Runzheimer which prompted them to file suit against both Friedlen and his new employer.  A Milwaukee County Circuit Court Judge held that the restrictive covenant's promise of continued employment was not lawful consideration and held the restrictive covenant as unenforceable.  Runzheimer then appealed.

In arriving at this conclusion, the Court noted that jurisdictions throughout the country are split o whether forebearance of the right to terminate an at-will employee is lawful consideration for an employee's promise to forego certain rights and that the jurisdictions that hold that a promise not to fire is not lawful consideration for a covenant not to compete represent the "distinct minority."  The Court also noted that the American Law Institute supports their holding.

The case was remanded back to circuit court because the record and arguments before the Court of Appeals was undeveloped on the issue of reasonableness of the covenant's terms.  Justice Shirley Abrahamson wrote a concurring opinion where she points out that the majority's holding is "ambiguous and troublesome."  After all, the Court held a promise of continued employment constitutes consideration but completely fails to address exactly how much continued employment is reasonable.  That is, what if an employee is fired one month later?  6 months later?  1 year later?  When might the principles of fraudulent inducement or good faith and fair dealing arise? 

Wednesday, May 20, 2015

May Edition of Employment Law Blog Carnival is Live! #ELBC

Attorney Jon Hyman of the Ohio Employer's Law Blog hosted this month's edition of the Employment Law Blog Carnival and it is available to read here.  Thanks, Jon! 

Wednesday, May 6, 2015

6th Circuit Holds That Regular and Predictable On-Site Job Attendance is an Essential Function

An often very difficult analysis when it comes to disabled employees is the issue of reasonable accommodations.  A recent decision out of the Court of Appeals for the Sixth Circuit discusses the issue in-depth, but to the peril of the employee-plaintiff.


The plaintiff, Jane Harris, was a resale buyer (i.e., a resale buyer of steel who purchases raw steel from steel supplies and then resells the steel to parts manufacturers known as "stampers") who suffered from rather severe irritable bowel syndrome ("IBS").  Harris worked for Ford Motor Company for a little over 6 years and won a few awards, being recognized for her "strong commodity knowledge" and "diligent" work effort.  However, over time, Harris' performance began to sink, and her attendance became unreliable, with her IBS contributing to the situation.

When Harris' IBS became so severe that she couldn't even make the hour drive to work, Ford tried to help by adjusting her schedule to help her establish regular and predictable attendance.  Toward that end, Harris was allowed to telecommute on an ad hoc basis in an "Alternative Work Schedule."  However, this did not succeed as Harris was never able to ultimate establish regular and consistent work hours and "failed to perform the core objectives of the job."  Ford then tried its "Workplace Guidelines," which is a reporting tool specially designed to help employees with attendance issues tied to illnesses.  These also failed.  However, even though both of these attempts failed, Harris still requested leave to work up to 4 days per week from home.  After all, she had been allowed to do it before, Ford's policy also said her job was appropriate for it, and several of her coworkers telecommuted.  As the Court would show and discuss, after discussing Harris' job in-depth, this was held to not be a reasonable accommodation because the employer's judgment as to Harris' attendance as an essential job function--evidenced by their words, policies, and practices and taking into account all relevant factors--is "job-related, uniformly-enforced, and consistent with business necessity."

Harris believed telecommuting was a reasonable accommodation, and the Equal Employment Opportunity Commission ("EEOC") agreed and filed suit on her behalf, alleging Ford failed to reasonably accommodate Harris' disability and that it discharged her in retaliation for filing her charge, both in violation of the Americans with Disabilities Act ("ADA").  The district court granted Ford's motion for summary judgment concluding that "working from home up to 4 days per week is not a reasonable" accommodation under the ADA and that "the evidence did not cast doubt on Ford's stated reason for terminating Harris' employment: poor performance."  The EEOC appealed, and a divided panel of the 6th Circuit reversed on both claims.  Review was granted en banc, vacating the panel's decision.

Reasonable Accommodation

The 6th Circuit, like most court of appeal decisions begin, discussed the ADA and reasonable accommodations, at-length.  The Court noted that Ford had a duty to reasonably accommodate Harris, if she is "qualified."  To be "qualified" under the ADA, Harris must have been able to "perform the essential functions of [a resale buyer]" "with or without reasonable accommodation."  A "reasonable accommodation" may include "job restructuring and part-time modified work schedules,
 but it does not include removing an "essential function" from the position, for that is per se unreasonable.   Harris was ultimately held to not be a "qualified individual" because her excessive absences prevented her from performing the essential functions of a resale buyer, and also, in a broader context, held that regular and predictable on-site job attendance is an essential function (and a prerequisite to perform other essential functions) of Harris' resale-buyer job.

The 6th Circuit obviously did not make a bright line rule and stated, "Much ink has been spilled establishing a general rule that, with few exceptions, 'an employee who does not come to work cannot perform any of his job functions, essential or otherwise'"  (Emphasis added).  Further, the 6th Circuit wrote, "That general rule ... aligns with the text of the ADA.  Essential functions generally are those that the employer's 'judgment' and 'written job description' prior to litigation deem essential.  And in most jobs, especially those involving teamwork and a high level of interaction, the employer will require regular and predictable on-site attendance from all employees (as evidenced by its words, policies, and practices)."

The Court held that the EEOC could not show that regularly attending work was merely incidental to Harris' job because it was essential to her job and that the employee bears the burden of proposing an accommodation that will permit her to effectively perform the essential functions of her job.  However, Harris only proposed one accommodation and that accommodation sought to eliminate an essential functions from her job therefore making it unreasonable.  The Court then showed how Harris' previous attempt at telecommuting failed and how her coworkers seldom telecommuted.

Because the Court concluded Harris was unqualified for her position then made it unnecessary for them to consider whether Ford showed bad faith in the discussions to work out a reasonable accommodation while Harris was still employed, but they did anyway and discussed how Ford did attempt to work with Harris a couple of times to allow her to regularly and predictably attend work, to no avail. 

Retaliation Charge

Given Harris' slipping performance and her failure to improve under a performance plan, the Court held that no reasonable jury could have found that Harris' EEOC charge was the reason she was terminated (i.e., "but-for" her charge, she would not have been terminated).

The case is EEOC v. Ford Motor Co., No. 12-2482 (6th Cir., Apr. 10, 2015)