Sometimes court decisions read like blues songs.  Such is the case with Dolan v. McQuaid. 

Effie Dolan and Christopher McQuaid met in 1997 and fell in love.  Eventually they were engaged to be wed.  It is unclear whether Chris bought Effie a diamond ring.  They did, however, acquire a Diamond Car Wash and Effie worked with Chris to build this business venture for three long years.  Effie wrote a business plan, drew up contracts, devised a logo; she even created a website.  She was sure she would be the future Mrs. McQuaid and benefit from the fruits of this Diamond. 

Well, being a blues song, you know what happened.  Effie’s man done her wrong.  Chris did not follow through on the wedding plan or the business venture.  He refused to share the profits of Diamond Car Wash with Effie or to compensate her for her efforts.  She sued, claiming that Chris made an enforceable promise to her (for the benefits of the car wash, not the marriage). The trial judge ruled against Effie and threw out her case. She appealed. 

The Court of Appeals ruled that Effie had no enforceable contract – oral or written.  Effie worked for an indefinite thing called love – the terms of the business plan at Diamond were not clear and defined.  She bargained for marriage not dollars.  And a contract must be a clear, bargained-for exchange. The Court also ruled promissory estoppel – the legal theory that can provide a recovery in the absence of a contract based on a definite promise – was equally unavailable to Effie.  Again, there was no definite promise in Diamond Car (and the definite promise – marriage – was unenforceable).

But, “not so fast” said the Court.  The tort of unjust enrichment permits a party to recover for the value of a benefit that was conferred upon another, retained, and by right should be repaid.   Unjust enrichment arises from actions, and the measure of recovery is to disgorge the defendant from the value of the benefit that was conferred upon him which should, says the law, leave him no better or worse off than he otherwise should be.  So the case was remanded.  Effie may now argue to a jury her value to Diamond Car Wash – and Chris.

So, how would this blues song go?   I’ll call it “The Tale of Diamond Car Wash (or Don’t Mess With a Smart Gal)”

Chris McQuaid, Chris McQuaid, he done his Effie Wrong.

Chris McQuiad, Chris McQuaid, he done his Effie Wrong.

Bought a Diamond Car Wash. Made Effie work all day long.

 

Effie Dolan was a smart gal, she made that Diamond Shine.

Wrote a bunch of contracts. She raised the bottom line.

But book smarts don’t mean nothing, when you been two timed.

 

Effie sued for justice; she sued to make Chris pay.

Trial judge said “no contract.”  Told Effie, “go away.”

Effie wouldn’t take it. She had to have her day.

 

High Court rescued Effie, Told Chris, “She has a case”

“What you took from Effie, she asks that you replace.”

Diamond ring may be the answer, to make this go away.

 

The moral of the story: don’t mess with a smart gal.

She’ll chase you ‘til she gets you; you may end up in jail.

So watch out what you promise, ‘cause Effie will not fail.

 

 

 

 

Given all the emphasis on employees’ rights under various laws, employers are sometimes confused about their own rights.  The Americans with Disabilities Act (ADA) is a perfect example.  Under the ADA, employers are required to provide reasonable accommodations to employees with disabilities in order to enable them to perform the essential functions of their jobs.  When an employee asks for a reasonable accommodation, the employer is supposed to engage in an interactive discussion with the employee about their work-related limitations and needs. 

This can be a confusing process and a challenging one, particularly if an employee is insisting on a particular accommodation. The good news for employers is that the employee is not always entitled to get what he wants – you actually get to choose the reasonable accommodation and it doesn’t have to be the best accommodation available, as long as it’s effective for the employee.  This point was recently reiterated by the Equal Employment Opportunity Commission (EEOC) in an informal discussion letter addressing reasonable accommodations for hearing-impaired individuals.

In the letter, the EEOC addressed the issue of an employer’s rights when faced with multiple possible accommodations.  The EEOC emphasized the importance of the interactive process in discussing possible accommodations with the employee or applicant, both for the initial selection of an accommodation and in re-assessing the situation if a change in accommodation is later requested by the employee.  Where there is more than one available accommodation, the EEOC stated that, while the preferred accommodation of the employee or applicant “should be given primary consideration,” the employer may choose an easier or less expensive accommodation as long as it is effective.  According to the EEOC, effectiveness, and not the employee’s personal preference, is the relevant consideration in selecting a reasonable accommodation.      

So, the bottom line for employers is that, while you have to provide a reasonable accommodation, you don’t have to agree to the employee’s choice of accommodation if there is another one that is cheaper, easier to provide, and better suits your business needs.  But, of course, if the cost and ease of the accommodation choices are the same, you should defer to the employee’s preference.

 

Sometimes people think it’s ok to use a racially offensive term as long as they are a member of that race.  For example, many members of the predominantly Black hip-hop culture use the N-word to each other.  The problem is that other Blacks find that unacceptable.  And in the workplace, it can lead to liability, as one non-profit organization and its Black founder painfully discovered in the  recent case of Johnson v. STRIVE.

The employee sued STRIVE, an employment center in East Harlem, and its founder, who was also her supervisor.  She claimed that she was the victim of a hostile work environment based on her race and gender, which ultimately ended in her termination.  Part of her evidence was a 4-minute recording of her supervisor’s profanity-filled rant at her, which the employee secretly captured on her iPhone.  (Smoking gun…)  The supervisor called the employee the N-word eight times during his rant.  Part of his rant included the following: “And I’m not saying the term n—– as derogatory; sometimes it’s good to know when to act like a n—–, but y’all [the employee and another former employee] act like n—— all the time . . . both of you very bright, but both y’all act like n—— at inappropriate times.”

At trial, the supervisor tried to defend his use of the n-word as part of a “tough-love” culture, and said that he was only trying to help the employee (apparently to learn when to act like an N-word and when not to do so?).  The jury didn’t buy it.  Like the employee, the jury found his use of the word to be racially harassing – even if he is Black.  And it awarded the employee $280,000 in compensatory and punitive damages.

Lesson for employers – don’t assume that racial epithets are ok just because the person making them is of that race.  Really, racial epithets have no place in the workplace.  Period.

 

Some employees seem to think that if they take leave under the Family and Medical Leave Act (FMLA), they are protected from any and all discipline.  Some employers, confused by FMLA’s many requirements and restrictions, appear to agree.  But the reality is that FMLA doesn’t insulate an employee from the consequences of her bad behavior.  For example, let’s take a look at the recent case of Wallner v. JJB Hilliard, WL Lyons, LLC.

An employee with a pattern of tardiness and unscheduled absences, for which she had received a written warning, took FMLA leave for knee surgery in August.  She was also approved for Short Term Disability benefits through September 21, and told to provide additional medical documentation to further extend those benefits.  A Human Resources representative mistakenly thought that the employee’s FMLA leave would end on September 21 and called the employee to tell her that she needed to return to work by that date.  The employee, who was upset, told the HR rep that she couldn’t return until her doctor approved it and yelled at the HR rep, with her husband screaming obscenities in the background.

The employee’s STD coverage was subsequently extended to October 1, and the company sent her a letter telling her to keep the company informed about her return to work date.  Because she was traveling with her husband, the employee didn’t get the letter until October 5 and didn’t contact anyone at the company.  She was released to work on October 6.  When she reported to work the next day, she received a “final written warning” for her failure to communicate about her return to work date and her unprofessional conduct during the call with the HR rep.  The warning stated that she could be terminated for any future policy violations.  The employee was then late to work five out of her next seven workdays, and (to her great surprise) she was terminated.

The employee sued the company for violating her rights under FMLA.  The federal district court, however, found that the company had legitimate, documented reasons for firing her – her excessive tardiness, unscheduled absences, unprofessional conduct, and failure to communicate about her return to work date.  The fact that some of the misconduct (the phone call and the failure to communicate) took place in the context of her FMLA leave does not mean that the misconduct should be excused under the FMLA.  As the court stated, “simply because [the employee] happened to misbehave while on FMLA leave does not entitle her to immunity from termination based on such misbehavior.”

In other words, FMLA does not give the employee the license to misbehave, and employers can hold employees accountable for misconduct that takes place, even if it is connected to an employee’s FMLA leave.

For a labor law attorney like myself, today is Christmas morning at the Supreme Court.   In contrast to most labor law cases which reach the High Court and usually involve procedural and/or constitutional issues and labor law itself is only a side show (like Noel Canning later this term), the case at 1 First Street this morning is a meat and potatoes labor law matter with broad implications for my line of work – Mulhall v. UNITE-HERE.

 As my colleague Mike McGuire and I explain in Employment Law Daily today, the main issue in Mulhall is whether a neutrality agreement given by an employer to a Union to assist the Union in organizing its employees is a “thing of value” under Section 302 of the Labor Management Relations Act (LMRA) and thus against the law.   The case matters because labor unions do most of their organizing these days via neutrality agreements and card check—not traditional National Labor Relations Board (NLRB) secret ballot elections.   While it seems counter-intuitive that any employer would agree to a neutrality agreement, some, in fact, do, usually when they don’t have a choice about whether to be union or non-union because of political pressure, legislative fiat, etc.   In exchange for agreeing to neutrality, the employer can usually obtain a favorable “framework” for a future Collective Bargaining Agreement (CBA)—sometimes right on par with non-union competitors.

 It is hard to argue that a neutrality agreement has no value at all—indeed, in Mulhall, the employer agreed to neutrality and the Union campaigned for the employer in a ballot initiative, spending over $100,000 in the process.   The plain language of 302 would seem to suggest that such an agreement violates 302.   But the Unions have a strong argument that this type of “exchange” is no different than what happens at the bargaining table every day – the employer offering X, the Union offering Y.   Obviously, 302 did not intend to outlaw collective bargaining in general.   Rather its goal was to prevent employers from bribing union officials.   Is a neutrality agreement really the same thing as giving the Union bosses a trip to Vegas or cash in a bag?  That is the fundamental question the Court will have to answer.

 Another interesting wrinkle is that the case reaches the Supreme Court at only the Motion to Dismiss stage.   Labor unions, however, fear, that if Mulhall’s “theory” under 302 is even viable that neutrality agreements will be challenged everywhere.   Even if they eventually “win the war” on these cases, just having to fight the battle will drain valuable resources for a movement that has less and less money.

 Make no mistake about it – the outcome of Mulhall is critical to the future of labor organizing.  Stay tuned. 

In a ruling that will strike fear into the hearts of managers everywhere, the 6th Circuit Court of Appeals held that managers can be held individually liable for discrimination under Title VII.  Yes, that means if you’re a manager, you can be sued personally and potentially be on the hook – personally – for damages in a discrimination lawsuit brought by one of your angry subordinates.

But wait!  The 6th Circuit’s decision in Mengelkamp v. Lake Metropolitan Housing Authority is actually an outlier.  None of the other U.S. Courts of Appeals (D.C. and 1st through 11th) agree – in fact, they all have specifically held that there is no individual liability for supervisors or managers under Title VII.

In my opinion, the 6th Circuit’s decision is on pretty weak ground.  The 6th Circuit relies on a 20-year old case, the 1993 10th Circuit case, Sauers v. Salt Lake County, in support of its finding of individual liability.  The 10th Circuit, however, subsequently held in the 1996 case of Haynes v. Williams that there is no individual liability under Title VII.  In so doing, it interpreted its own prior case of Sauers to stand for the “no individual liability” proposition.  So the 6th Circuit’s interpretation of Sauers is completely at odds with the interpretation of the very court that decided Sauers.

At some point, the 6th Circuit may figure it out and join the rest of the Circuits on this issue.  In the meantime, managers in the 6th Circuit (which covers Michigan, Ohio, Kentucky and Tennessee) should continue to cower in fear, while managers everywhere else can relax – at least with regard to being sued individually under Title VII.

(Did I mention, however, that many courts have found that managers can be held individually liable under the Fair Labor Standards Act and the Family and Medical Leave Act?…)

 

It’s a classic case of damned if you do, damned if you don’t.  Employers have an obligation to protect their employees from discrimination or harassment by third parties, including patients, customers, clients, vendors, and contractors.  But in the case of Blackburn v. State of Washington Dept. of Social and Health Servs., the employer’s attempt to do so resulted in an employee lawsuit for staffing discrimination.

A state-run psychiatric hospital, which treats patients with serious, long-term mental illness, adopted a staffing directive that restricted Black and dark-skinned employees from working with a violent and racist patient.  (This patient had actually threatened to kill a Black employee.)  A group of employees sued the hospital for discrimination because the directive required race-based staffing assignments.  The federal court, however, came to the rather obvious conclusion that, “Not having to work with a violent, racist patient is not an adverse employment action.”  While the directive did distinguish between races, there was nothing that showed that the Hospital intended to treat minority employees less favorably than White employees.  The court also found that the hospital had offered a legitimate reason for the staffing decision – their concern about the safety of their Black and dark-skinned employees.

Frankly, if the hospital had continued to assign Black employees to the racist patient, it is all too likely that some of those employees would have claimed that the hospital failed to protect them from harassment.  Fortunately, the court recognized that not all race-based decisions constitute illegal discrimination as a matter of course.  While courts have held that it is illegal for employers to give in to customer-based racial preferences, race-based safety concerns are a different matter.  But employers should keep in mind that race- or gender-based staffing decisions that result in an employee being assigned to a less favorable shift or department, or one that affects the employee’s opportunity for advancement, might lead to viable claims of discrimination.  As always, it’s a balancing act.

So many of my clients are dealing with Family and Medical Leave Act (FMLA) abuse by various bad apple employees.  I really feel their frustration because, as many of you know, it is really challenging to address FMLA abuse effectively given the law’s broad protections for employees.  So it’s nice when, every once in a while, a lying employee gets her comeuppance – as happened in Williams-Grant v. Wisconsin Bell, Inc.

The employee had multiple FMLA-covered health conditions, which sometimes affected her ability to sit for long periods.  Because of her sedentary job, she was approved for intermittent FMLA to use when her pain flared up.  A supervisor became suspicious of the employee’s leave use when she noticed that the employee would stop calling in sick when her annual FMLA leave allotment was exhausted, and then start calling in again when it was replenished.  The supervisor began tracking the employee’s leave, and found that the employee had a pattern of calling out on Saturdays and on days immediately before or after her scheduled days off.  The supervisor also noticed that the employee never called in sick on days that she was scheduled to work a shift that paid a premium shift differential.

Based on this pattern, the company hired an investigator to follow the employee on the next two days that she used FMLA leave (each of which were consistent with the pattern of being connected to scheduled days off).  On the first day, the investigator observed her going to church (and her supervisor subsequently discovered a blog posting that the employee was taking Saturday classes at the church).  On the second day, the investigator observed her riding in a car for more than two hours and visiting someone’s home for more than four hours.

The employee was then interviewed about her activities on those two days.  She denied any affiliation with the church and did not disclose that she had been taking classes there.  She also claimed to have no recollection of her trip on the other day.  The company then called the church, and the pastor confirmed that the employee had been regularly attending a Saturday class.  A review of the employee’s FMLA leave showed that she had called out for FMLA on six straight Saturdays, coinciding with the class schedule.

As a result of all of this, the company terminated the employee.  The employee then sued for FMLA interference and retaliation (which was pretty darn cheeky of her, given the vast amount of evidence against her).  But the federal court found that the termination was legitimate because the company had an “honest suspicion” that she was misusing her leave.

This case gives hope to employers that you can, with the appropriate steps, address FMLA abuse.  The company in this case did all the right things – it tracked the employee’s leave, it hired an investigator who observed the employee engaging in activities inconsistent with her supposed limitations, it gave the employee the chance to explain, and it took additional steps to check the employee’s story.  Only after all of these steps did the company finally make the (reasonable) decision to terminate.  Kudos to the company!

Hugging and kissing are not typically considered professional conduct in the business world (unless you’re from France) – but is it harassment? A recent federal case, Lozosky v. Keystone Business Products, Inc., provides support for that most sophisticated of legal defenses, “It’s not harassment, your Honor. It’s European.”

Patricia Lozosky was employed by Keystone Business Products, Inc. for two decades. During that time she would often be greeted by the male owner of the company with hugs and kisses, sometimes on the cheek and sometimes on the mouth. It appears she never objected. In December 2011, she was instructed to meet him at his home. When she arrived, the owner greeted her with a hug and kiss, and then sat down next to Ms. Lozosky. He then explained that he was concerned that Ms. Lozosky was an alcoholic and wanted her to attend rehabilitation. Ms. Lozosky refused. She was immediately demoted and then fired on January 6, 2012.

Ms. Lozosky filed a lawsuit claiming, among other things, sexual harassment based on the hugging and kissing by her boss. Unfortunately for her, the federal court disagreed. In dismissing her sexual harassment claims, the court stated, “Viewing the allegations with a view towards social context, a hug and kiss in greeting are not outside the scope of socially acceptable and non-abusive actions people take upon greeting a longtime friend or acquaintance.” The judge further noted that, “plaintiff’s allegations fail to indicate the greeting was designed as some prelude to unwelcome sexual activity[.]”  According to the judge, Ms. Lozosky’s allegations just didn’t rise to the level of sexual harassment under Title VII.

Still, it’s better to refrain from hugging and kissing in the workplace.

I often say (only somewhat flippantly) that we are all disabled, but the newly released fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5) seems to really go out of its way to make that point.  The DSM-5, which is produced by the American Psychiatric Association, serves as the authoritative guide on the diagnosis of mental disorders.  This most recent edition includes more than 15 new disorders.  These include such humdingers as caffeine withdrawal, hoarding disorder, premenstrual dysphoric disorder, binge eating disorder, restless leg syndrome, and social (pragmatic) communication withdrawal. (?!!!  I am having an attack of caffeine withdrawal right now.)

Well, that just greatly expanded the number of people who can now claim psychiatric disorders, meaning that they may be disabled within the meaning of the Americans with Disabilities Act, as amended (ADAAA).  And if so, employers may see an increase in the number and types of accommodation requests.

It is important to keep in mind, however, that not every psychological disorder is considered a disability under the ADAAA.  The law specifically exempts some disorders – such as sexual behavior disorders, compulsive gambling, kleptomania and pyromania – from coverage.  Others may not qualify as disabilities because they do not affect a major bodily function or major life activity, or may be only temporary in nature.  And even if the condition does constitute a disability, it may not need to be accommodated.  Accommodations are only required to the extent that they enable the employee to perform his essential job functions, and such accommodations must be reasonable in any case (meaning that they do not impose an undue hardship for the employer).

I am now going to get some coffee.