Government Contracts: OFCCP Compensation Audits Might Change

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The OFCCP might make compensation audits more fair for government contractors.

Recent discussions inside the Office of Federal Contractor Compliance Programs (“OFCCP”) indicate that compensation audits of federal contractors might become more fair for employers.  On April 19, 2018, Bloomberg News released an article indicating that OFCCP was contemplating significant changes to its audit rules.  Here’s a link to the Bloomberg article: Bloomberg OFCCP Article.  The OFCCP conducts audits of government contracts and federal contractors to ensure that employers are complying with federal laws and regulations prohibiting pay discrimination.  Under the Obama Administration, the OFCCP issued Directive 307, which allows auditors to compare compensation of employees even if they perform different work.  For example, auditors might find discrimination by comparing the compensation of two “managers,” even though one manager works in accounting and the other in human resources.

Comparisons of dissimilar employees are generally not permitted in discrimination cases arising under Title VII of the Civil Rights Act of 1964.  Instead, an employee suing for pay discrimination must usually compare themselves to another employee doing the same work, in the same location, with the same supervisors.  Because of the discrepancies between OFCCP’s enforcement efforts and traditional employment law, the U.S. Chamber of Commerce released a report in late 2017 critical of the OFCCP.  It’s report, “OFCCP, Right Mission, Wrong Tactics” can be found here.

The Bloomberg article indicates that the OFCCP is about to scrap or significantly change Directive 307.  That’s good news for federal contractors, who need consistency in the law to succeed in business.  Unfortunately, the Bloomberg article caused some concern among civil rights groups, and an article from the Society for Human Resource Management (which can be found here) indicates the OFCCP’s plans may be delayed.  Even with the delays, the information coming from OFCCP is good news for government contractors, because it indicates a willingness by OFCCP to address employer concerns.

ADA: Disabled Employees Must Meet Productivity Standards

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Disabled employees must meet the same productivity standards as other employees.

The Americans with Disabilities Act (“ADA”) is intended to ensure that individuals with disabilities do not suffer discrimination in the workplace.  Even so, the ADA does not grant special status to individuals with disabilities, so that they are treated more favorably than other employees.  One of the key requirements of any workplace is productivity.  Disabled employees must meet the same productivity standards as other employees.

This concept is acknowledged even by the EEOC:  “An employee with a disability must meet the same production standards, whether quantitative or qualitative, as a non-disabled employee in the same job.”  The EEOC’s entire discussion of performance standards can be found here:  Applying Performance And Conduct Standards To Employees With Disabilities.  As you probably know, the ADA requires that “reasonable accommodations” must be made for disabled employees.  But, the EEOC also acknowledges that an employer is not required to decrease productivity standards as an “accommodation”:  “Lowering or changing a production standard because an employee cannot meet it due to a disability is not considered a reasonable accommodation.”

The Eleventh Circuit Court of Appeals recently upheld productivity requirements in Singleton v. The Public Health Trust of Miami-Dade County, No. 17-12282, 2018 WL 679389 (11th Cir. Feb. 2, 2018).  In Singleton, a physician was required to treat a minimum number of patients each day.  Yet, it was undisputed that he was unable to meet those productivity requirements.  As a result, even though the physician may have been “disabled,” he was not a “qualified” individual with a disability.  A “qualified” individual must be able to perform the essential functions of the job.  Because productivity was an essential function, and the physician could not perform that function, he could be terminated without violating the ADA.

Employers should always proceed cautiously when contemplating the termination of a disabled employee.  In fact, the EEOC suggests that an employer might have a duty to eliminate “marginal” functions of a job in order to assist an employee in meeting productivity requirements.  Therefore, I strongly encourage Alabama employers to conduct a thorough analysis  before terminating a disabled employee.

ADA: Comprehensive Job Descriptions Are Vital

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Job descriptions are an important piece of evidence in defending ADA claims.

Do you have job descriptions for your employees?  Do your job descriptions list the “essential functions” for each job?  If not, your chances of violating the Americans With Disabilities Act (“ADA”) are greater than they need to be.

To prevail on a claim of disability discrimination, an employee must prove that they were “disabled” and that they were a “qualified” individual with a disability.  A “qualified” individual can perform the essential functions of their job, with or without reasonable accommodation.   Job descriptions are vital because they help a court to determine the essential functions of a job.

Whether a job function is “essential” is determined on a case-by-case basis.  Even so, one of the factors that a court considers is the employer’s judgment of whether a particular function is essential.  And, a comprehensive job description will tell a judge exactly which functions the employer considers to be essential.

But, a job description can be a double-edged sword.  If your job description fails to list a function as “essential,” it will be difficult to convince a court otherwise.  One employer learned that lesson in Lewis v. City of Union City, 877 F.3d 1000 (11th Cir. 2017).  In Lewis, a police department claimed that officer must be trained on, and suffer a shock from, taser guns.  Lewis refused because of a heart condition, and the department terminated her employment.  The department then tried to argue that taking a shock from a taser was an “essential function” of the job, but the job description for police officer made no reference to the taser shock.  The Eleventh Circuit then found that there were genuine issues on whether the taser shock was an essential function of the job.

The lack of reference to taser shock in the job description also defeated the department’s “direct threat” defense.  The department argued that the officer was a direct threat to herself, because her presence near tasers in the workplace posed a significant risk of harm to her health.  The Eleventh Circuit rejected that argument, however, because a “direct threat” can only be determined by examining “essential functions.”  And, again, the taser shock was missing from the “essential functions.”

In short, job descriptions are vital part of any defense to an ADA claim.  As always, proceed carefully if you are going to take any action based upon the health of any employee.

Title VII: Being a Jerk Is Not Discrimination

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Title VII does not protect employees from bosses or co-workers who are jerks

Employees frequently think that they should be able to sue under Title VII of the Civil Rights Act of 1964 because their boss, or a co-worker, is mean to them.  I frequently hear the complaint:  “I’m being harassed, and that’s illegal!”  In the employment law context, however, there is nothing illegal about being a jerk.  In fact, there is nothing illegal about harassing employees — unless that harassment is bad-enough and based upon a protected characteristic like race, sex or age.  Being a jerk generally does not violate any  employment laws.

At the outset, let’s be clear.  Sexual harassment, racial harassment or harassment based upon any other protected characteristic will get you sued.  But, even that harassment must be so severe and pervasive that it alters an employee’s terms and conditions of employment.  There is abundant case law holding that Title VII is not a general civility code.  It is not designed to make sure that people “get along” in the workplace.  Instead, Title VII is supposed to prevent discrimination at work.  Sometimes, there’s a fine line between behavior that’s boorish and behavior that will violate the law.  Some obvious examples of conduct that will get you sued, however, are repeated use of the “N” word toward African-American employees, and touching a female employee in a sensitive location.

An employee must suffer an “adverse employment action” to possess a claim under Title VII.  Such an action must have a tangible adverse effect on the plaintiff’s employment.  As a result, giving discriminatory job assignments, in many cases, won’t be illegal.  Similarly, just being mean to an employee, even if based on a protected characteristic, does not violate Title VII.  For example, last year, the Eleventh Circuit affirmed dismissal of a Title VII action filed against the Post Master General.  See Coles v. Post Master General, 711 Fed. Ap’x 890 (11th Cir. 2017).  In that case, a postal employee claimed she was subjected to age and race discrimination because:  her vehicle was searched at work; an investigation was conducted into her work absences; and, she was assigned “culling belt work” (an unfavorable assignment).  The Eleventh Circuit found that treatment was not an “adverse employment action” under Title VII.

The foregoing observations on the state of the law are not intended to encourage employers to be jerks to their employees.  Indeed, positive morale is a vital component of any workplace.  Moreover, sometimes a court will allow an employee to sue for “constructive discharge.”  A constructive discharge occurs when an employer makes an employee’s working conditions so intolerable that an employee is compelled to resign.  In short, if an employer is too much of a jerk, and the employer’s conduct is aimed at a protected characteristic, an employee may be able to sue — even if they resign.


Arbitration Isn’t Always Good for Employers

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In employment cases, arbitrators frequently enter decisions that are not employer-friendly.

Business owners frequently think that arbitration agreements are good for business.  That belief is fostered by pro-business organizations like the U.S. Chamber of Commerce, which actually advocates for arbitration of employment disputes here:  Protect Employment Arbitration Agreements

Certainly, in some circumstances, arbitration agreements are good things.  They can offset difficult venues, or employee-friendly judges.  But, in life, there is a cost that comes with almost every benefit.  In my experience, employment law arbitrators tend to “split the baby” and enter decisions under which nobody obtains a complete “victory.”  For example, the arbitrator might reverse a termination decision and impose a ten-day suspension instead.   In some cases, the arbitrator doesn’t even compromise, and instead flat-out reverses an employer’s reasonable termination decision.

That’s what happened recently in Peco Foods, Inc. v. Retail Wholesale and Dep’t Store Union Mid-South Council, No. 17-13269, 2018 WL 1324860 (11th Cir. Mar. 15, 2018). In Peco Foods, a supervisor reminded employees during a safety meeting that throwing ice was prohibited during work hours.  In response, Larry Richardson said:  “I don’t throw ice, I throw lead.”  Richardson’s employer interpreted that statement as a threat of gun violence and terminated his employment.  Richardson’s union filed a grievance challenging the termination, and an arbitrator reversed the decision — finding that the statement was not a threat.

Richardson’s employer appealed the arbitration decision to federal court.  But, courts are extremely reluctant to overturn arbitration decision.  Nevertheless, the employer argued that threats of workplace violence are so serious that the courts should reinstate the termination as a matter of public policy.  The Eleventh Circuit Court of Appeals rejected that argument, primarily because there were factual disputes over whether Richardson’s statement was actually a threat.

Employers with unionized facilities frequently can’t avoid arbitration agreements.  But, other employers should think carefully and consult with counsel before embracing arbitration of employment-related disputes.


Age Discrimination: “When Are You Going to Retire?”

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Asking an employee about his retirement plans could be evidence of age discrimination.

Sometimes, business planning runs afoul of the law.  For example, it is perfectly reasonable for an employer to want to make plans regarding the future of its work force.  So, it might seem reasonable to ask an older employee when he or she plans to retire.  Yet, one Alabama employer is facing potential liability for age discrimination, in part because a supervisor asked an older employee if he had “plans to retire.”  See Henry v. Vencore Srvcs and Sols., Inc., No. 5:16-cv-01814-AKK, 2018 WL 1456636 (N.D. Ala. Mar. 23, 2018).

Keith Henry retired from a career in the aerospace engineering profession at age 57 in 1992.  But, after the 2008 financial crisis, he went back to work for Vencore in 2010 at age 74.  In early 2014, Vencore transferred Henry to work as a stress analysis engineer on  a contract related to Army CH-47 helicopters.  The supervisor for the CH-47 project, Cliff Meyers, soon asked Henry whether he had “plans to retire.”  Henry received positive evaluations while working on the CH-47 project, but Vencore terminated his employment two-and-a-half years later, when he was age 79.

Vencore claimed that Army budget cuts required termination of one of the CH-47 project’s five team members.  Henry was 17 to 28 years older than the other four team members.  Cliff Meyers initially testified that he selected Henry “purely on his own view of each employee’s ‘capability.'”  But, Meyers later modified that testimony to add his belief that Henry could not perform “finite element analysis.”

United States District Court Judge Abdul Kallon found sufficient evidence to require a jury trial on the issue of age discrimination.  Judge Kallon relied upon the following facts:  (1) Meyers, the primary decision maker, asked Henry about his retirement plans; (2) Henry was the only team member laid off, even though he had as much or more experience than the rest of the team; (3) he was substantially older than the rest of the team; and (4) although Vencore laid off a younger individual several months later for economic reasons, it subsequently rehired that employee for the same position Henry held.

Judge Kallon was also not persuaded by Vencore’s “finite element analysis” defense.  Myers admitted that stress analysis engineers like Henry did not need to perform finite element analysis; a job posting for the position did not mention finite element analysis; and Henry’s positive evaluations never mentioned the need to perform finite element analysis.

Anything you say to an employee can, and will, be used against you in a court of law.  Asking about an employee’s retirement plans, by itself, is not enough to impose liability for age discrimination.  But, such questions can be one important piece of evidence in building a larger case.

Potential Danger from Opt-Out Clauses in Arbitration Agreements

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Employers should give careful consideration and attention to whether they want to include an opt-out provision in their arbitration agreements.

As I discussed last week, arbitration agreements are popular with Alabama employers and the Alabama Supreme Court:  The Supreme Court Really Likes Arbitration.  While Alabama has become a favorable venue for arbitration, other jurisdictions, like California, remain hostile.  In particular, some judges find that employment arbitration agreements are unconscionable.  In other words, the employer possesses so much bargaining power in the employment relationship that the employee should not be bound by a “take it or leave it” arbitration policy.  In an effort to avoid such determinations, some employers have inserted opt-out provisions into their arbitration agreements.

In 2016, Brian Berkley wrote a great article discussing the benefit of opt-out provisions:  Can Opt-Out Provisions Save Arbitration Clauses? An opt-out provision gives the employee the opportunity to escape arbitration.  Typically, the provision is buried deep within an arbitration agreement and gives the employee the opportunity to avoid arbitration by providing written notice to the employer within 30 days of signing the agreement or receiving arbitration training.  By inserting an opt-out provision, employers are hoping to convince judges that arbitration is not unconscionable, because the employee had an opportunity to avoid it. The employer is gambling that the employee never discovers the opt-out language buried in the arbitration agreement.

Recently, however, CVS Drug Stores learned that an opt-out provision can create as many problems as it cures. See Hall v. CVS Health Corp., No. 2:17-cv-00289-KOB, 2018 WL 1182603 (N.D. Ala. Mar. 7, 2018).  In that case, Roy Hall sued CVS for, among other things, age and race discrimination.  But, Mr. Hall previously participated in a CVS-sponsored course called Arbitration of Workplace Legal Disputes, and he read and understood materials which informed him that he would be required to arbitrate all employment disputes unless he opted out.  Judge Karen Bowdre, however, found a factual dispute on whether Mr. Hall actually opted out of the arbitration agreement.

Mr. Hall testified that that he mailed a written letter to CVS within 30 days of training, and he opted-out of the arbitration agreement.  Yet, he did not send the letter by certified mail, and he could provide no proof, other than his testimony, that he actually sent the letter.  In contrast, CVS could not “prove a negative.”  It provided Judge Bowdre with affidavits from employees saying that they never received Mr. Hall’s alleged letter.  But, other unidentified employees could have possessed the letter and lost it.

Judge Bowdre decided to resolve the factual dispute by ordering a jury trial.  Under her ruling, a jury will decide whether Mr. Hall actually mailed the opt-out letter, and whether CVS actually received it.

Employers typically want arbitration because it helps to streamline the dispute process and it avoids many of the pitfalls associated with jury trials.  But, the opt-out clause in CVS’s arbitration agreement has caused the exact opposite outcome.  CVS will now have to face the uncertainties of a jury trial, and that trial will further delay the process.

Employers should think carefully before putting an opt-out provision in their arbitration agreement.  For nationwide employers like CVS, an opt-out provision might make sense, because it helps with enforcement in fickle jurisdictions like California.  But, in Alabama, where the courts have been zealously enforcing arbitration agreements, an opt-out provision might actually be counter-productive.

Alabama Employers Need Effective Anti-Harassment Policies

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Many types of harassment are prohibited by Title VII. An effective policy prohibiting harassment can help employers avoid liability.

Almost 20 years ago, the United States Supreme Court provided employers with an important defense to harassment claims under Title VII of the Civil Rights Act of 1964.  Under that defense, even if impermissible conduct occurs in the workplace, an employer can avoid liability by maintaining an effective policy against harassment.  Even though two decades have passed, I still occasionally encounter an employer who has not adopted an anti-harassment policy.  A recent decision from a federal judge in Alabama demonstrates the wisdom of adopting such a policy.

In Garrett v. Tyco Fire Products, LP, No. 2:16-cv-00372-SGC, 2018 WL 1319060 (N.D. Ala. Mar. 14, 2018), Tyco was sued by six African-American employees for racial harassment.  Magistrate Judge Staci Cornelius conducted an extensive review of each employee’s claims, and found that three of them potentially were exposed to the types of severe and pervasive conduct that that are impermissible under Title VII, as well as another law, 42 U.S.C. § 1981.  They each heard, or were called, “boy” and the “n” word “constantly,” saw racial grafitti in Tyco’s bathroom and saw lightning bolts and other Nazi paraphernalia.

Nevertheless, Judge Cornelius found that Tyco was not liable, because of its effective anti-harassment policy.  Importantly, employers cannot just slap a policy on the books and expect to avoid liability.  Instead, the policy needs to be comprehensive, well-known to employees, vigorously enforced, and provide alternate avenues of complaint (so that an employee is not forced to complain to a harassing supervisor).  Tyco’s policy was effective because it did those things, and it was disseminated to all employees through orientation, training, publication in the employee handbook, and postings throughout Tyco’s facilities.  Despite that well-disseminated policy, none of the employees made a harassment complaint to Tyco.  And, because they failed to complain, their harassment claims were barred.

Judge Cornelius’s decision demonstrates that Alabama employers will benefit from adopting effective, well-disseminated anti-harassment policies.  Importantly, if an employee makes a complaint under such a policy, the employer is further required to diligently investigate any complaint and take “prompt remedial action” that is reasonably likely to prevent the misconduct from recurring.



Newsflash! The Alabama Supreme Court Really Likes Arbitration

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The Alabama Supreme Court recently compelled arbitration of an employment-related dispute, even though the employer was not a named party to the arbitration agreement.

When I was a young lawyer, the Alabama Supreme Court really disfavored arbitration.  They would find almost any excuse to give somebody their “day in court,” instead of enforcing contractual dispute resolution.  Times have certainly changed.   Binding decisions from the United States Supreme Court, and election of pro-business candidates to the Alabama Supreme Court have lead to a sea-change.  Now, the Alabama Supreme Court almost always enforces arbitration agreements.

This point recently hit home in Bridgestone Americas Tire Operations, LLC v. Adams, No. 1160877, 2018 WL 1355966 (Ala. Mar. 16, 2018).  Ottis Adams was hired by BFS Retail and Commercial Operations (“BFS”) in 2006.  When he was hired, Adams signed BFS’s Employee Dispute Resolution Plan which required arbitration of almost all employment disputes.  At some point, Adams changed employers from BFS to a sister company — Bridgestone Americas Tire Operations, LLC (“Bridgestone”).  Adams left Bridgestone in 2016 and began work for a competitor — McGriff Tire Company.  Bridgestone then sent a letter to McGriff stating that Adams’s employment violated a noncompetition and nonsolicitation agreement signed by Adams.  Bridgestone also suggested that Adams violated a duty of loyalty by selling tires for McGriff while still employed by Bridgestone.

McGriff terminated Adams’s employment, and Adams sued Bridgestone for interference with his business relationship with McGriff and for defamation.  Bridgestone moved to dismiss the lawsuit and compel arbitration.  Adams convinced the trial court that Bridgestone was not a named party to the the BFS agreement, and that court denied the motion.  So, Bridgestone appealed.

The Supreme Court compelled arbitration for two reasons.  First, the BFS agreement required arbitration of “all disputes covered by that plan, not just disputes with BFS.”  Second, the agreement applied to all “sister companies,” “related companies,” and “affiliate companies” of BFS.  Even if Bridgestone was not a named party to the agreement, it fell within the definition of a “sister company,” “related company” or “affiliate company.”

Adams provides guidance to employers who want to avoid trial courts and jury trials.  By broadly wording an  agreement to cover all disputes related to employment, and by making the agreement applicable to any sister companies or affiliates, employers can avoid litigation and compel arbitration.



Religious Objections to Work Shifts and Reasonable Accommodations

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Religious accommodations can require employers to make difficult decisions.

The Eleventh Circuit Court of Appeals issued an opinion on March 9, 2018 which provides guidance to employers on their duty to accommodate the religious beliefs of employees.  See Patterson v. Walgreen Co., No. 16-16923, 2018 WL 1224391 (11th Cir. Mar. 9, 2018).  Darrell Patterson is a Seventh Day Adventist, and his beliefs prohibit him from working during his Sabbath — sundown on Friday to sundown on Saturday.  He was hired by Walgreens as a customer care representative, and Walgreens initially accommodated his beliefs.

Patterson was promoted a number of times and became a training instructor.  The training classes he taught were regularly scheduled between Sunday and Thursday, but sometimes emergency trainings were needed on Friday nights or Saturdays.  In those circumstances, Walgreens allowed Patterson to swap shifts with other available trainers.  But, when Patterson could not find a replacement, he was disciplined.  In 2011, Walgreens scheduled Patterson for an emergency training on Saturday.  Patterson asked another training instructor to cover for him, but that trainer was not available.  Patterson did not ask several other employees about their availability to cover for him.

Patterson met with Walgreen’s Human Resources representative the next week.  That representative suggested that he return to a prior position as a customer care representative or look for another job at Walgreens that had a large employee pool from which Patterson could find employees willing to switch shifts.    Patterson refused unless he received a guarantee that he would not have to work on his Sabbath.  Walgreens terminated his employment because of his refusal to work on the Sabbath and his refusal to look for another position with more likely availability.

The analysis of religious accommodation cases is similar to other discrimination cases under Title VII of the Civil Rights Act of 1964.  An employee establishes a prima facie case of discrimination by showing:  (1) he had a bona fide religious belief that conflicted with an employment requirement; (2) he informed his employer of that belief; and, (3) he was discharged for failing to comply with the conflicting employment requirement.  If the employee establishes a prima facie case, the burden shifts to the employer to demonstrate that it either offered the employee a reasonable accommodation or could not do so without undue hardship.

The Eleventh Circuit’s Patterson decision focused on the reasonable accommodation offered by Walgreens.  The court found that “[a]n employer may be able to satisfy its obligations involving an employee’s Sabbath observance by allowing the employee to swap shifts with other employees, or by encouraging the employee to obtain other employment within the company that will make it easier for the employee to swap shifts and offering to help him find another position.”  Patterson, 2017 WL 1224391 at *3.  Importantly, Walgreens was only required to make shift swapping available  — if Patterson could find another employee to swap.  Walgreens was not required to guarantee a shift swap.  “Walgreens was not required to ensure that Patterson was able to swap his shift, nor was it required to order another employee to work in his place.”  Id. at *4.

The Court further found that Walgreens’ offer to allow a transfer to a customer care representative position was also a reasonable accommodation, and that Patterson “had a duty to make a good faith attempt to accommodate his religious needs through the means offered by Walgreens.”  Id.

The Patterson decision is useful for Alabama employers.  It firmly establishes that the duty to accommodate an employee’s Sabbath observance is not unlimited.  In most circumstances, offering the employee the ability to swap shifts should suffice.  Nevertheless, every situation is unique and employers should proceed cautiously if they are contemplating taking an employment action based upon a Sabbath observance or other religious belief.