Alabama Employment Law

Race Discrimination Claim for Failure to Promote Limited to Two Years

Robert C. Lockwood
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Statute of LImitations

On March 31, 2016, United States District Court Judge Karen Bowdre enforced a two-year statute of limitations in a failure to promote claim asserted under 42 U.S.C. Section 1981.  See Barclay v. First National Bank of Talladega, No. 1:14-cv-01573-KOB, 2016 WL 1270519 (N.D. Ala. Mar. 31, 2016).  Section 1981 prohibits race discrimination in the making, enforcement performance, modification, and termination of contracts.

Statute of limitations issues in Section 1981 claims can be complex.  Until 1991, the statute of limitations was unquestionably two years.  But, in 1991 Congress amended Section 1981 to make new discrimination claims available under that statute.  And, Congress required that any new claims under Section 1981 must receive a four-year statute of limitations.

Prior to 1991, an employee could only sue for failure to promote under Section 1981 if “the nature of the change in position was such that it involved the opportunity to enter into a new contract with the employer.”  Patterson v. McLean Credit Union, 491 U.S. 164, 185 (1989)(emphasis added).  As a result, there is a lot of litigation on the issue of whether a promotion creates a “new and distinct relationship” between the employer and employee.

If a “new and distinct relationship” would be created by the promotion at issue, the historical two-year statute of limitations applies.  If the promotion only involves “routine increases in salary or responsibility,” the four-year statute of limitations applies.

In Barclay, the plaintiff was employed as an Assistant Manager of Data Processing, and claimed that she was denied a promotion to the position of Bookkeeping Supervisor.  Judge Bowdre imposed the two-year statute of limitations because that promotion would have created a new and distinct relationship between the plaintiff and her employer.  In particular, Judge Bowdre relied upon the fact that the plaintiff would receive additional supervisory duties and would have been elevated from a non-management to a management position.  Barclay filed her law suit more than two years after the failure to promote.  Therefore, Judge Bowdre dismissed the claim as untimely.

Best Served Cold: 12 Years Between Protected Conduct and Retaliation

Robert C. Lockwood
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Anger

On April 6, 2016, Chief United States District Court Judge Keith Watkins sent a Title VII retaliation claim to a jury trial — even though more than 12 years expired between the protected conduct and the retaliatory action.  See Pace v. Alfa Mutual Ins. Co., No. 2:13-CV-697-WKW, 2016 WL 1370029 (M.D. Ala. Apr. 6, 2016).

Title VII of the Civil Rights Act of 1964 provides protection to employees who participate in proceedings involving claims of discrimination made by other employees.  In Pace, Mr. Pace provided interviews and deposition testimony in September 2000 in connection with a sexual harassment claim made by a co-worker against Alfa Insurance Company and his direct supervisor, Alvin H. Dees, Jr.  After the interviews and deposition, Dees resigned from employment with Alfa in October 2000.  Mr. Pace continued to work with Alfa.

In the fall of 2012, the executive leadership at Alfa changed, and Dees was rehired as Mr. Pace’s supervisor effective February 1, 2013.  On January 31, 2013, Mr. Pace and Dees engaged in a telephone conversation in which Dees said:  “[B]oy, I bet you thought you’d never have to mess with me again now, didn’t you?” Thereafter, Dees was hostile towards Mr. Pace, and Mr. Pace received a demotion on April 30, 2013.  Mr. Pace sued claiming that his demotion was in retaliation for his protected interviews and deposition in 2000.

As part of a retaliation claim, a plaintiff like Mr. Pace must prove that his demotion was caused by his protected conduct (the depositions and interview).  The Eleventh Circuit Court of Appeals has generally held that causation is proven by a close period of time between the protected conduct and the adverse job action.  But, the Eleventh Circuit has held that a three to four month period of time is too long to prove causation.  See Thomas v. Cooper Lighting, Inc., 506 F.3d 1361, 1364 (11th Cir. 2007).

Naturally, Alfa asked Judge Watkins to dismiss the retaliation claim:  if three to four months is too long, then 12 years must be far too long.  Judge Watkins disagreed and relied heavily upon Dees’s telephone call with Mr. Pace:  “The evidence reflects that, on January 31, 2013, the day before officially returning to Alfa, Plaintiff and Dees engaged in a telephone conversation in which Dees said, ‘[B]oy, I bet you thought you’d never have to mess with me again now, didn’t you?’ … Thus, despite the fact that years had passed since the time of Plaintiff’s participation in the Wilson matter, the Plaintiff’s testimony indicates that Dees had not forgotten the circumstances surrounding why he left his employment with Alfa in 2000.”  Pace, 2016 WL 1370029 at *9.  That finding was sufficient to support causation.

The Pace case is probably an outlier in terms of retaliation claims.  Nevertheless, if revenge is a dish best served cold, don’t brag when you are about to retaliate for old protected conduct.

Judge Kallon Confirms That Merely Labeling Employees As “Subcontractors” Does Not Avoid FLSA Liability.

Robert C. Lockwood
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Contractor
Close up on a file tab with the word contractors, focus on the main word and blur effect. Concept image for illustration of contractors or subcontractors company database.

Yesterday, I wrote about Judge Abdul Kallon’s decision in Ingram v. Passmore, No. 2:14-cv-00004-AKK (Mar. 29, 2016):  Judge Kallon Finds That Ignorance Of The Law Is No Excuse For Failing To Pay Overtime

Ingram is the gift that keeps on giving, because it also demonstrates the danger of attempting to avoid overtime requirements by labeling employees as “subcontractors.”  I previously wrote about that danger here:  How “Independent” Are Your Independent Contractors?

In Ingram, Passmore Towing & Recovery called its tow truck drivers “subcontractors” and hoped that it would not be required to pay those drivers overtime.  But, Judge Kallon found that Passmore offered no evidence to refute the drivers’ assertion that they were actually employees.  As required by the FLSA, Judge Kallon analyzed six factors to determine that the drivers were employees — the first factor being “control.”  He found:  “Passmore hired the drivers, set their commission, disciplined the drivers, paid their wages, and hired managers to supervise their work.  Additionally, Passmore had the opportunity to unilaterally change the conditions of employment,which it did on multiple occasions.”

Ingram provides a cautionary tale for employers.  Ignoring the law and attempting to use the label of “subcontractor” are a recipe for disaster.

Judge Kallon Finds That Ignorance Of The Law Is No Excuse For Failing To Pay Overtime

Robert C. Lockwood
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Ignorance

On March 29, 2016, United States District Court Judge Abdul Kallon entered an order finding that ignorance of the law could not excuse an Alabama employer’s failure to pay overtime to its employees.  See Ingram v. Passmore, No. 2:14-cv-00004-AKK, 2016 WL 1212570 (Mar. 29, 2016).

In Ingram, Passmore admitted that he failed to pay overtime to office workers.  Based on that admission, the Fair Labor Standards Act would generally require that the employees receive compensatory damages equal to the unpaid overtime, plus “an additional equal amount in liquidated damages.”   But, the FLSA also gives courts discretion to deny liquidated damages if an employer establishes that it failed to pay overtime based upon a good faith belief that its conduct complied with the FLSA.

So, Passmore asked Judge Kallon to exercise his discretion and deny liquidated damages to the office workers.  Passmore asked “the court to excuse his failure due to his purported lack of knowledge and his belief that the FLSA did not apply to him.”  Judge Kallon flatly rejected that argument, finding that Passmore would be liable if he “had the opportunity to acquire the knowledge through reasonable diligence.”  In Judge Kallon’s words:  “In ascertaining an employer’s good faith, ignorance of the law is insufficient to establish the employer’s reasonableness.”

Ingram demonstrates the importance of conducting a regular inventory and review of your employees to ensure that all eligible employees are receiving overtime.  Courts will not be lenient on employers who could have paid overtime, but failed to do so.

11th Circuit Holds That ADA Does Not Require Employers to Create Light Duty Position

Robert C. Lockwood
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disability

On April 7, 2016, the Eleventh Circuit Court of Appeals confirmed that an employer is not required to create a permanent light-duty position for an employee as part of the Americans With Disabilities Act’s “reasonable accommodation” requirement.  See Frazier-White v. Gee, No. 15-12119, 2016 WL 1376448 (11th Cir. Apr. 7, 2016).

In Frazier-White, the Hillsborough County Sheriff’s Office implemented a policy that limited light-duty work to 270 days within a two-year period.  The employee was terminated after a due process hearing during which it was demonstrated that she was on light duty for 299 days with no definite expectation of returning to full-duty.  As part of the termination proceedings, the employee asked for “an extension to continue to receive care” so that she could “get better and return to full duty 100%.”  The Eleventh Circuit found that a request for an indefinite extension of light-duty work is unreasonable as a matter of law.  The Court further found that the Sheriff’s Office was not required to create a permanent light-duty position.

The issue of light-duty positions for injured employees is a complex one, which I previously discussed here:  AM I REQUIRED TO CREATE A LIGHT DUTY POSITION FOR AN EMPLOYEE INJURED ON THE JOB?

While Frazier-White provides assistance to employers faced with light-duty issues, you should proceed carefully and consult with your attorney before taking any action relating to employees on light-duty.

3 EXAMPLES OF CUTTING PAY FOR SALARIED EMPLOYEES WITHOUT VIOLATING THE FLSA.

Robert C. Lockwood
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Salary Cut

Most employers know that salaried employees are not entitled to overtime, and, as a result cannot generally have their salary reduced based upon missed work hours.  If an employer regularly cuts the pay of a “salaried” employee based upon missed work hours, courts may find that the employee is actually an hourly employee entitled to overtime under the Fair Labor Standards Act.  Nevertheless, there are always exceptions to every general rule.  In certain circumstances, the pay of exempt employees can be reduced.  Here are a few examples:

  1. If an employer has a policy that provides compensation for loss of salary caused by illness or childbirth, salary can be reduced if the employee exhausts his/her leave bank.
  2. In appropriate circumstances, salary can be cut based upon violations of work rules.
  3. If the employee fails to perform any work in a work week, the employer is not required to pay salary.

These exceptions and others depend upon the facts of each case.  Consult with your attorney before docking the pay of an exempt employee.

MY ACHING “JOINTS” – JOINT EMPLOYEES UNDER THE FLSA

Robert C. Lockwood
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3d people - men, person and a question mark. Businessman.
3d people – men, person and a question mark. Businessman.

On January 20, 2016, the United States Department of Labor issued an administrative interpretation concerning “joint employees” and the Fair Labor Standards Act.  The purpose of that interpretation is to discuss situations where employers attempt to avoid their obligations to pay overtime.  It can be found here:  Joint Employment

First, the Department of Labor discussed “horizontal” employment relationships.  Those relationships occur when an employee works for two (or more) separate, but related, companies.  For example, an employee may work for Joe’s House of Burgers for five hours, and then walk next door to Joe’s House of Chicken to work an additional five hours.  If  Joe owns and operates both companies, Joe might try to argue that his employee only accrues 25 hours per week at each business — thus avoiding overtime.  The Department of Labor’s interpretation will look more carefully at the relationship to see if Joe is actually employing individuals for 50 hours per week.

The Department of Labor also discussed “vertical” relationships.  This scenario involves situations where one company’s employee works in a location owned by a second company.  For example, the Department of Labor noted that employees of temporary staffing agencies may also be employees of the businesses where they are employed.  While the Department of labor noted many factors for resolving this issue, the key element will be control of the employee – an issue which I also discussed here:  How “Independent” Are Your Independent Contractors?

If you are looking for ways to avoid paying overtime, proceed cautiously and talk with your attorney.

Alabama Supreme Court Dismisses Tort Claims Asserted by Employee Injured in Explosion.

Robert C. Lockwood
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Explosion

 On March 18, 2016, the Alabama Supreme Court dismissed tort claims filed by an employee who was injured in an on-the-job explosion.  Rock Wool Mfg. Co. v. Miller, No. 1141252, 2016 WL 1077268 (Ala. Mar. 18, 2016).  The employee claimed that his employer, Rock Wool, intentionally removed safety equipment called “explosion doors” prior to the accident.  Because of that alleged intentional conduct, the employee argued that his claims should not be limited to the remedies provided by the Alabama Workers’ Compensation Act.  Instead, he wanted to sue for damages under tort law.  Nevertheless, the Supreme Court found that claims against an employer, even for intentional acts, are barred by the Workers’ Compensation Act, so long as those claims arise within the bounds of the working relationship.  As a result, the Supreme Court issued an order dismissing the tort claims.

Despite the holding of Rock Wool, employers should remain cautious regarding claims of intentional injury.  While the employing entity itself is protected by the exclusive-remedy provisions of the Alabama Workers’ Compensation Act, individual employees are not entitled to the same protections.  For example, in the Rock Wool case, there is still a possibility that the individual employees who made the decision to remove the “explosion doors” could be liable for intentionally or recklessly injuring the employee.

Alabama Supreme Court Reverses $12.6 Million Verdict Against Company That Used Roofing Subcontractor.

Robert C. Lockwood
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Contractor
Close up on a file tab with the word contractors, focus on the main word and blur effect. Concept image for illustration of contractors or subcontractors company database.

Sometimes, using a subcontractor can protect you from liability.  In South Alabama Brick Co., Inc. v. Carwie, No. 1130345, 2016 WL 1077265 (Ala. Mar. 18, 2016), the Alabama Supreme Court reversed a $12.6 Million verdict entered against a company that used a roofing subcontractor to repair a leaking roof.  In that case, South Alabama Brick Company’s (“SAB”) leaking roof contained 12 skylights.  SAB hired Cooner Roofing to perform the repairs.  Cooner Roofing hired Rocael Perez and his “crew” to do the work.  In the course of performing repairs, a member of the “crew,” Benito Perez, fell through a skylight and suffered serious injury.  His conservator sued both Cooner Roofing and SAB.

In reversing the judgment against SAB, the Supreme Court relied on two factors.  First, the Court found that SAB had no duty to warn Benito Perez of the danger of skylights. In particular, the Court found that SAB’s contractor, Cooner Roofing, had knowledge equal or superior to that of SAB regarding the danger of skylights so that SAB possessed no additional duty to directly warn Cooner’s employees or subcontractors.  Second, the Supreme Court found SAB had no duty to ensure that Cooner Roofing was a “qualified contractor.”  In other words, the Court found that SAB had no duty to protect Benito Perez from the negligence of his own employer by not hiring that employer in the first place.

 

Alabama Court of Civil Appeals Denies Unemployment Benefits to Employee Who Refused Drug Test.

Robert C. Lockwood
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Drug Test

On March 18, 2016, the Alabama Court of Civil Appeals reversed a trial court’s decision to award unemployment compensation benefits to an employee who refused a drug test.  Austal, USA, LLC v. Alabama Dept. of Labor, No. 2141072, 2016 WL 1077243 (Ala. Civ. App. Mar. 18, 2016).  In Austal, the employee failed a random preliminary drug test.  He then refused to take a second, follow-up drug test.  Austal’s employee handbook contained a policy permitting employees to refuse a drug test, but notifying them that refusal would result in immediate termination.

The trial court found that Austal terminated the employee for failing the preliminary drug test, which was not DOT compliant or otherwise reliable.  Therefore, the trial court ordered that the employee receive unemployment compensation benefits.  The Court of Civil Appeals reversed, finding that the employee was terminated for refusing the second drug test.  Unemployment compensation benefits can be denied if the employee is terminated for “misconduct,” which is defined to include “the refusal to submit or cooperate with a blood or urine test after previous warning.”

Because the employee refused to cooperate with the second drug test, and because the handbook gave him previous warning of the consequences of failure to cooperate, the Court of Civil Appeals found that he engaged in “misconduct.”

Importantly, the Court of Civil Appeals sent the case back to the trial court for further review.  The court found that the drug test refused by the employee must meet DOT standards or be “otherwise reliable.”  In short, there are three conditions that will result in denial of unemployment compensation benefits:  (1) the employee must refuse a drug test; (2) the employee must be previously warned that refusal of the drug test will result in termination; and, (3) the drug test refused must comply with DOT standards or be “otherwise reliable.”