Kasten v. Saint-Gobain - Is the United States Supreme Court Becoming Pro-Employee?

There is a lot of talk about the Supreme Court’s pro-business bent during the current Chief Justice’s tenure. For example, see “Justices Offer Receptive Ear to Business Interests,” The New York Times, December 18, 2010 (http://www.nytimes.com/2010/12/19/us/19roberts.html). A leading Supreme Court advocate for business interests, Carter G. Phillips, who represents the Chamber of Commerce and argues more Supreme Court cases than any active lawyer in private practice, is said to have boasted recently: “I know from personal experience that the chamber’s support carries significant weight with the justices….Except for the solicitor general representing the United States, no single entity has more influence on what cases the Supreme Court decides and how it decides them….” (Republished in http://www.dailykos.com/story/2011/03/14/956322/-The-SCOTUS,-the-Chamber-of-Commerce,-and-a-Code-of-Conduct). The low point for those concerned with corporate excesses infecting the Supreme Court was the January 10, 2010, Citizens United v. Federal Elections Commission decision (http://www.law.cornell.edu/supct/html/08-205.ZS.html), holding that election laws cannot restrict independent campaign expenditures by corporations, construing such as an improper restriction on free speech precluded by the First Amendment. The Citizens United case was essentially grounded in the notion that corporations are entitled to protection of their individual liberties, like human beings.

But, notwithstanding the early returns, so to speak, we should be careful not to judge the Roberts court too soon. People change…maybe. In any event, in Kasten v. Saint-Gobain Performance Plastics Corp., No. 09-834 (March 22, 2011) (http://www.supremecourt.gov/opinions/10pdf/09-834.pdf), the Supreme Court got one right, when they very easily could have gotten it wrong, if the Court was indeed inherently skewed to corporations. While I would like to see the result as a product of brilliant advocacy by my former firm, Nichols Kaster (www.nka.com), who represented the Petitioner – which, no doubt, it was – I would like even more to see the result as evidence of fairness toward America’s workers that will manifest itself in important upcoming decisions. Time will tell.

In Kasten, the employee brought an anti-retaliation suit against his former employer, Saint-Gobain, under the Fair Labor Standards Act of 1938 (FLSA), which provides minimum wage, maximum hour, and overtime pay rules; and which forbids employers “to discharge . . . any employee because such employee has filed any complaint” alleging a violation of the FLSA, 29 U. S. C. §215(a)(3). (Saint-Gobain had violated the FLSA by placing timeclocks in a location that prevented workers from receiving credit for the time they spent donning and doffing work-related protective gear.)

The employee said he was discharged because he orally complained to company officials about the timeclocks. The District Court and Seventh Circuit rejected the employee’s claims, concluding that the FLSA’s anti-retaliation provision did not cover oral complaints – i.e., that orally complaining is not “fil[ing] a complaint” which engenders the statute’s protection. The Supreme Court vacated the summary judgment against the employee, and remanded to the Seventh Circuit, with not only Justice Kennedy, but Justices Roberts and Alito in the majority, along with Justices Ginsburg, Sotomayor, and Breyer. (Kagan sat out.) Only Justices Scalia and Thomas voted to affirm the Seventh Circuit’s narrow – but not insane – construction of the FLSA, i.e., that the protection from retaliation against a worker who has “filed any complaint” only relates to written complaints.

The Supreme Court found that there was at least one dictionary definition which allowed the possibility that the term “file” a complaint encompassed an oral complaint, stating, “This possibility is significant because it means that dictionary meanings, even if considered alone, do not necessarily limit the scope of the statutory phrase to written complaints.” This was so, even though “[f]ilings may more often be made in writing.” In other words, the Supreme Court grabbed hold of any possibility that the statute could be construed in a way to benefit employees, and chose to construe it in this most protective manner.

Likewise, the Court acknowledged that to “file any complaint” was not language as broad as other language in statutes, which expressly encompassed oral complaints, but admitted a different possibility – “that Congress did not believe the different phraseology made a significant difference in this respect.” The Court concluded, “The bottom line is that the text, taken alone, cannot provide a conclusive answer to our interpretive question. The phrase ‘filed any complaint’ might, or might not, encompass oral complaints.” Again, the Supreme Court gave the employee, Kasten – and all employees – the benefit of the doubt.

In law school, we learn that on summary judgment, the non-moving party is supposed to receive this sort of benefit of all presumptions, and that our system of justice favors the right of parties to be fully and fairly heard. In practice, however, employees’ advocates have wondered if the Supreme Court might be moving toward summary dispositions more often against our clients. In Kasten, though it was not a case about the summary judgment standard, the High Court also reinvigorated the idea of giving plaintiffs a chance to be heard.

Most importantly, the Court rested its holding on the underlying purpose of the FLSA, asking rhetorically, “Why would Congress want to limit the enforcement scheme’s effectiveness by inhibiting use of the Act’s complaint procedure by those who would find it difficult to reduce their complaints to writing, particularly illiterate, less educated, or overworked workers?” The Court suggested that “broad rather than narrow protection to the employee” was intended under the FLSA. While holding that employers need to be given “fair notice” of wage complaints to serve as a condition precedent for a retaliation complaint, the Court held that the standard can be met by oral complaints, as well as by written ones.

Predictably, Justices Scalia and Thomas provided a lengthy dissent giving employers the way out – going so far as to argue that “complaints” only cover an “official grievance filed with a court or an agency, not oral complaints.” Their interpretation ignores the purpose of the FLSA and the realities of the workplace – where most workers subject to wage violations are unsophisticated, and can suffer reprisal long before they make it to a court or government entity with their concerns.

But, the importance of Kasten is not that two justices on the farthest right margin of the Court did not side with employees – but rather, that all of the other justices did the right thing. In the coming months, the Court will decide important cases for employees – the AT&T Mobility v. Concepcion and the Wal-Mart v. Dukes matters, which will resolve, for all practical purposes, to what extent class actions are available to employees (and others) whose rights have been violated. Will employees have the opportunity to level the litigation playing field with employers possessing far superior resources, preventing employers from dividing and conquering, and limiting the windfall employers receive because so few employees have the resources and courage to step forward alone? Indeed, the Court heard oral argument in the Wal-Mart v. Dukes case last week, and Justice Scalia again was transparent in his disdain for the employees’ case. Let us hope that, once again, in deciding these cases, as in Kasten, Justices Scalia and presumably Thomas will be in the dissent, and the rest of the Supreme Court again will consider, first and foremost, how workers in America will be affected every day by the decisions they render.

Federal Government Applicants: Watch Out for the “Optional Form 306” (OF-306) Trap

To be hired into the Government, you will need to complete a lot of paperwork, including probably an “Optional Form 306” (OF-306) which asks you a host of background questions about whether you have any criminal history, etc. You should tell the truth on this form! If there is an error on this form, you could be fired during your probationary period.

In your probationary period, you are, however, entitled to notice in writing and an opportunity to respond before you can be fired for a pre-employment reason, like a false or erroneous answer on the OF-306. See 5 C.F.R. §315.805. HOWEVER, Government agencies are trying a clever new tactic to get around this important requirement which allows you to explain yourself – making you re-sign the OF-306 during Entry-on-Duty (“EOD”). By re-signing the document on your first day at work, the Government argues, it is no longer a pre-appointment issue, and therefore, you are not entitled to the notice/opportunity to respond provided by §315.805. Do not let an Agency get away with this strategy, which goes against decades of history reinforcing your right to be heard before being fired for something you did before you started working for the Government.

In the nearly 50 years since the implementation of the regulation requiring procedural safeguards in terminations of probationary employees for pre-employment reasons, never has any precedent allowed an Agency to avoid the requirements of 5 C.F.R. §315.805 simply because an employee attested to the veracity of his pre-employment submissions during Entry-On-Duty.

Though procedural safeguards for terminations of federal employees were not incorporated specifically into the original rule creating a Civil Service Commission (the Pendleton Act, 22 STAT. 403, ch. 27, (1883)), they were implemented nearly 100 years ago - in the Lloyd-LaFollette Act of 1912, 37 Stat. 555; 5 U.S.C. §652. See Bush v. Lucas, 462 U.S. 367, 381-384, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983). Section 6 of the Act of August 24, 1912 provides, inter alia: “That no person in the classified civil service of the United States shall he removed therefrom except for such cause as will promote the efficiency of said service and for reasons given in writing and the person whose removal is sought shall have notice of the same and of any charges preferred against him, and be furnished with a copy thereof, and also be allowed a reasonable time for personally answering the same in writing….”

Leading up to World War II, Title 5 of the Code of Federal Regulations of 1938, Sections 7.1(c), 12.1, and 12.101 specifically provided for notice in writing with a “full statement of reasons” to a probationary employee, but did not enumerate that termination of a probationary employee for pre-appointment reasons required additional procedures. 5 CFR from 1938, secs 7.1 and 12.1, 12.101. Indeed, the Civil Service Commission’s powers in 1938 were quite limited, even for employees who had completed their probationary periods. See, e.g., 5 CFR from 1938, at 12.4.

The number of federal employees exploded with World War II, and various Executive Orders and revisions to the 1912 Act were implemented to allow exploration of federal employees’ backgrounds – and, in particular, their loyalty to the United States, in light of the War and the surge of McCarthyism (searching for associations with Communists) during the Cold War thereafter. See, e.g., Cole v. Young, 351 U.S. 536, 76 S.Ct. 861, 100 L.Ed. 1396 (1956) (discussing history of loyalty oaths and dismissal of employees with pre-employment history of Communist associations); Exec. Order No. 10,450, 18 Fed. Reg. 2489, 1953 WL 5976 (Pres.Exec.Order) (Pres. Eisenhower-era Executive Order authorizing agencies to conduct loyalty review for inter alia Communist associations and mandating the Civil Service Commission to track loyalty investigation information); Welcker v. U.S., 752 F.2d 1577, 1578-1579 (Fed. Cir. 1985) (discussing history of loyalty oaths).

In 1954, President Dwight Eisenhower expanded the power of the Civil Service Commission generally to encompass greater investigative authority. See Exec. Order No. 10,577, 19 Fed. Reg. 7521, 1954 WL 6021 (Pres.Exec.Order). Under Sec. 5.4(c) of EO10577, the Commission was empowered to overturn adverse actions and reinstate employees where procedures were not followed in effecting such, or where adverse actions were “taken for political reasons except as may be required by law, or resulted from discrimination because of marital status.”

By the final months of John F. Kennedy’s presidency, on the brink of the civil rights era, still reeling from the abuses of McCarthyism, new regulations were implemented largely reflecting the same procedural safeguards for probationary employees related to terminations on pre-employment grounds that are in place today. Published September 14, 1963, to go into effect just days before Kennedy’s assassination (November 17, 1963), the Federal Register, beginning at 22 Fed.Reg. 10022, contains 5 C.F.R. § 315.805 regarding termination of probationers for conditions arising before appointment.

The 1963 regulation states:

When an agency proposes to terminate an employee serving a probationary or trial period for reasons based in whole or in part on conditions arising before his appointment, the employee is entitled to the following:

(a) Notice of proposed adverse action. The employee is entitled to an advance written notice stating the reasons, specifically and in detail, for the proposed action.

(b) Employee's answer. The employee is entitled to a reasonable time for filing a written answer to the notice of proposed adverse action and for furnishing affidavits in support of his answer. If the employee answers, the agency shall consider the answer in reaching its decision.

(c) Notice of adverse decision. The employee is entitled to be notified of the agency's decision at the earliest practicable date. The agency shall deliver the decision to the employee at or before the time the action will be made effective. The notice shall be in writing, inform the employee of the reasons for the action, inform the employee of his right of appeal to the appropriate office of the commission, and inform him of the time limit within which the appeal must be submitted as provided in § 315.806(d).

As such, by 1963, the regulation we have today was largely in its final form, and gave probationary employees important procedural protections as to adverse actions premised on matters which arose pre-employment, which, earlier (recall the 1938 regulations) had only been available after probation. See also Christian v. New York State Department of Labor, Division of Employment, 414 U.S. 614, 618 n. 4, 94 S.Ct. 747, 39 L.Ed.2d 38 (1974) (citing 5 C.F.R. §315.805 with essentially the same requirements as today).

Though the Civil Service Reform Act of 1978 (CSRA) is considered the most comprehensive legislation expanding Federal employees’ rights since the Pendleton Act of 1883 (see N.L.R.B. v. Ohio New and Rebuilt Parts, Inc., 760 F.2d 1443, 1446 (6th Cir. 1985) (citing S.Rep. No. 969, 95th Cong., 2d Sess. 45, S.Rep. No. 95-969 (1978), the CSRA did not shift the strong regulatory, procedural protections already in place to protect probationary employees relating to terminations for pre-employment reasons. The CSRA did implement strong language intending to ensure that Federal employees be terminated “for the right reasons” – and not arbitrarily or capriciously – and the Merit Systems Protection Board was created to replace the Civil Service Commission with that paramount objective. The framers of the CSRA explained, “The Merit Systems Protection Board will assume principal responsibility for safeguarding merit principles and employee rights…,” noting, “There is little doubt that a vigorous protector of the merit system is needed.”

One of the cardinal values underpinning the creation of the Board was to protect applicants and probationary employees, as well as longer-term employees, “against inquiries into, and actions based upon, non-job-related conduct.” “The privacy and constitutional rights of applicants and employees are to be protected.” See also the Senate Report, stating: “Employees are to be retained on the basis of their performance….”; “Employees are to be protected against arbitrary action….” The legislative history regarding performance-based actions (under Section 43 of the CSRA) notes that “it is inappropriate to restrict an agency's authority to separate an employee who does not perform acceptably during [the probationary] period,” but there is no similar language regarding conduct-based actions under Chapter 75, and certainly no such language relating to pre-employment reasons for termination. In sum, probationary employees had been and remained procedurally-protected after the CSRA’s passage. Indeed, the Senate Report discussing the rationale for the CSRA’s provisions on conduct-based adverse actions focused largely on how extensively the procedural protections for employees were increased and codified by the statute.

Until the administration of Bill Clinton eliminated the Federal Personnel Manual in 1994 during its “reinventing government” campaign, the latter gave detailed instructions on how Federal agencies were to comply with §315.805. Though the Manual is no longer extant, it remains illustrative of the sort of things agencies can do to ensure compliance with the largely-unchanged §315.805:

Termination for pre-appointment reasons. When the termination action is initiated for reasons based in whole or in part on something that occurred before entrance on duty (such as the intentional falsification of application forms or other pre- appointment documents), the probationer is entitled to advance notice which:
-- states the reasons in sufficient detail for the employee to be able to understand and reply to them;
-- informs the employee that he or she may reply in writing with supporting affidavits;
-- identifies the individual or office to receive the reply; and
-- sets a reasonable time for its preparation and return of the reply.
(This gives the probationer essentially the same consideration he or she would have received from OPM had the derogatory information come to light before appointment.)

A probationer is not entitled to a hearing. If after giving bona fide consideration to the employee's response, the agency decides to proceed with the termination, it must notify the employee at or before the time the action will be made effective. The notice must state the reasons for the action and clearly identify which of the charges in the advance notice are being relied upon, the effective date, and the right to appeal to the Merit Systems Protection Board under the limited circumstances in section 8-7 of this subchapter. (The probationer may appeal only the procedures, not the merits of the action.) The procedures discussed in this paragraph do not apply when OPM directs the termination.

Federal Personnel Manual: 8-6.d, “Taking Action against Probationers.”

Though 5 C.F.R. §315.805 has been amended since it took roughly its present form in the early 1960’s, it has never been amended to permit terminations of probationary employees relating to their responses on pre-employment or EOD forms without providing such individuals their procedural rights. See, e.g., 55 Fed. Reg. 29339-01, 1990 WL 335863 (F.R. July 19, 1990) (amendment expanding scope of protections of §315.805). Most recently, in 2008, the Office of Personnel Management (OPM), now charged (along with the President) with issuing regulations governing appointments and the probationary period (5 U.S.C. §1302; 5 U.S.C. §3321), only expanded the rights accorded regarding terminations during probationary periods, conforming to several precedential Federal Circuit and Merit Systems Protection Board cases. See 72 Fed. Reg. 23772-01, 2007 WL 1243729 (F.R. May 1, 2007) (notice of proposed rulemaking outlining intent of regulatory changes to adopt into regulations the interpretations provided in significant decisions of this Court and the Board, regarding manner of crediting time toward completion of probationary period); 73 Fed. Reg. 7187-01, 2008 WL 319999 (F.R. February 7, 2008) (final rule embracing this rationale and adopting the current language of §315.805, with the introduction to the regulation still (as in 1963) containing the procedural entitlements where terminations are proposed “based in whole or in part on conditions arising before his appointment”).

In this most recent revision to §315.805, OPM did not adopt a standard to reform the regulations in the manner the Government is now seeking to implement - i.e., that pre-appointment matters subject to the employee’s attestation during EOD become post-appointment matters, eliminating the Board’s jurisdiction to hear procedural challenges.

If you have a case involving termination from the Federal Government during your probationary period for pre-employment matters, contact Bryan Schwartz Law today.

Quick Takes: Employment Discrimination

Many interesting stories about workplace discrimination have made the news recently and we decided to try a slightly different format this month. Instead of focusing on one topic, we will briefly discuss a few of them.

Discrimination in the Workplace—Amplified by the Recession?

Discrimination claims with the federal Equal Employment Opportunity Commission have risen to an all-time high—nearly 100,000 complaints were filed over the last year, according to Catherine Rampell in her article entitled, “More Workers Complain of Bias on the Job, a Trend Linked to Widespread Layoffs,” New York Times, Jan. 11, 2011. This increase is possibly a result of the high number of private sector layoffs. Id.

The highly competitive job market may also be used as an excuse to discriminate. Terry K. Nance, a 76 year old from Charlottesville, VA, who has been unable to find retail work for the last year and a half, told the New York Times: “I think there’s age discrimination from these companies because they don’t want an old body and an old face fronting for them . . . . When I go back in and I show up [at] these same places I’ve applied to and never heard back from, I see younger faces in there all the time. It’s a revolving door of young people.” Id.

If you have not been hired for a position you applied for and you have reason to believe that it was because of your race, national origin, sex, sexual orientation, religion, or disability, contact an attorney at Bryan Schwartz Law right away.

The Glass Ceiling—Still Intact in California

Discrimination persists at the highest levels of business leadership in California. A recent study of California’s 400 largest public companies conducted by the UC Davis Graduate School of Management found that women hold only 9.5% of the state’s highest-paid management and board positions. See “UC Davis Study Finds Women Scarce at the Top of Corporate California,” available at www.gsm.ucdavis.edu/census. Moreover, more than a third (141) of these 400 companies have no women whatsoever on their boards of directors or as top executives. Id. Only 4% of these top California companies have a woman CEO. Id.

If you have been passed over for a promotion because of your gender, contact an attorney at Bryan Schwartz Law right away.

Employers Must Prove that They Took Immediate and Appropriate Corrective Action to Correct Hostile Work Environment Harassment—Even in Circumstances when Customers/Clients are the Harassers

Joyce Turman worked for a halfway house as a resident monitor in Salinas, CA from 1999 to 2004. The halfway house served to transition federal and state prisoners into society prior to their full release. In her job, Ms. Turman alleged that the residents regularly propositioned her for sex, subjected her to crude sexual gestures, and called her “whore” and other even more explicit slurs. When Ms. Turman complained to her supervisor about this conduct, she was told that the residents “don't really mean it,” and that that she should “try and be nicer to ‘em.” He also told Ms. Turman not to write the residents up for disciplinary violations as often as she did. Ms. Turman claimed that this abuse made her feel degraded and sick. In 2004, Ms. Turman was terminated based on a rule against women working alone at night in the facilities and a reduction in staffing numbers.

Ms. Turman filed a sex discrimination and harassment lawsuit challenging her termination and the hostile work environment created by the residents. The halfway house argued that “harassment by prisoners is inherently part of the job,” as a method to excuse their failure to take corrective action. The Court of Appeal (Sixth District) ruled otherwise and clarified that the halfway house was still under an obligation under the California Fair Employment and Housing Act to take immediate and appropriate action to correct the situation, reasoning that “[w]hile it may be true that male residents who are living under restricted conditions are more likely to harass or mistreat their female supervisor, it does not absolve [the halfway house’s] legal responsibility . . . .” Turman v. Turning Point of Central California, 191 Cal.App.4th 53 (2010).

Workplace harassment frequently comes from clients, customers, and co-workers, as well as supervisors. Employees have a right to be free from workplace harassment based on sex or other protected characteristics, and employers have an affirmative obligation, once they are aware of the harassment, to take immediate and appropriate corrective action to remedy the situation.

 If you have been passed harassed at work, contact an attorney at Bryan Schwartz Law right away.

Washington Post Story Regarding Disability Class Action Against U.S. State Department Brought by Bryan Schwartz Law

To read a Washington Post article regarding an impactful case being litigated by Bryan Schwartz Law, click on this link:

http://www.washingtonpost.com/wp-dyn/content/article/2010/10/19/AR2010101907821.html

Historic Lawsuit Aims to Open State Department to Disabled Foreign Service Officers

Class Agent was a qualified candidate who passed rigorous exams and was denied employment solely on the basis of her medical condition.

The United States Equal Employment Opportunity Commission (EEOC) has certified a class action brought on behalf of all disabled Foreign Service applicants against the U.S. State Department by San Francisco Bay Area attorney Bryan Schwartz. The Class Agent in the matter, Doering Meyer, is a woman with multiple sclerosis (MS) who qualified for a Foreign Service Officer position after a rigorous screening process – only to be denied employment because her multiple sclerosis automatically disqualified her, under the State Department guidelines challenged in the suit.

“I feel great today knowing we will be making a difference for others with disabilities. I am as happy today as I was angry when I was denied the career of my dreams without being evaluated as an individual, as required by the law,” said Doering Meyer upon hearing the news of the class certification decision. After being denied for years, Meyer ultimately joined the Foreign Service after a “waiver” process, with the help of Schwartz, her attorney. “I’ve always been inspired by leaders like Secretary Hillary Clinton who believes rights for the disabled were fundamental civil rights. I am hopeful she will now change this misguided policy,” Meyer added.

The September 30th decision, by Administrative Judge Mary Elizabeth Palmer of the EEOC’s Baltimore office, found that the Foreign Service’s “worldwide availability” hiring requirement is properly the subject of a class action. Under the “worldwide availability” requirement, a Foreign Service Officer candidate must be able to serve at any of the State Department’s approximately 270 foreign posts, without the need for any ongoing medical treatment. Even if a disabled worker can serve at 80% of the Foreign Service posts around the world without any treatment, or at 100% of the Foreign Service posts with reasonable accommodations for her disabilities, she is not eligible to be hired into the Foreign Service under the challenged policy, Judge Palmer’s decision found. For decades, thousands of disabled Americans have been denied entry into the Foreign Service and discouraged from even applying for such positions based on the way the “worldwide availability” rule has been enforced, according to Schwartz.

The ruling particularly questioned the State Department’s blanket assessment approach toward disabled applicants. The EEOC stated:

“No individualized assessment was done of [Meyer’s] impairment or how it would limit her ability to do the duties of the position(s) she sought in particular countries around the world. Rather, when the [State Department’s] Office of Medical Services determined (or perceived) that she had a permanent or long-lasting medical condition or record of such a condition, she was denied medical clearance. ”

The Rehabilitation Act (Rehab. Act), which is like the Americans with Disabilities Act and applies to all Federal employees and applicants for employment, requires that government agencies consider each person with a disability on his or her own merits and based on his or her own limitations (or lack thereof). The Rehab. Act requires the government to provide reasonable accommodations to people with disabilities, where such accommodations could enable the applicants to perform the duties of a position without imposing an undue hardship on the government agency.

Indeed, the Rehab. Act calls upon the Federal government to be a model employer of disabled workers. Yet, in Meyer’s case, and those of dozens like her across the United States, the State Department simply disregarded these requirements, and categorically decided that, because Meyer was once diagnosed with MS, she could not be in the Foreign Service.

Prior to being denied from the Foreign Service, Doering Meyer, recently of St. Paul, Minnesota – whose MS had long been in remission – went through a two and a half year screening process, in which she passed challenging oral and written exams and was provided a conditional offer of appointment extended to less than 5% of those who apply. The offer was contingent on passing the security, suitability, and medical clearances – and, although Meyer also passed the security and suitability tests, she was denied a medical clearance based on her MS.

Amazingly, the State Department decided that because people with MS may be susceptible to complications in humid climates – though there was no evidence of such in Meyer’s own history – Meyer could not be posted anywhere worldwide. Eventually, after her attorney, Bryan Schwartz, intervened, Meyer was granted an exceptional waiver to be hired to the Foreign Service despite her medical history - the only person who received such a waiver that year. After nearly two years of additional delay, she was finally placed in a Foreign Service position.

“We hope through this suit that we will finally change this insidious State Department policy which for so long has closed the doors of opportunity to disabled Americans, so that the Foreign Service will truly be the face of all Americans around the globe,” said Attorney Bryan Schwartz. “The Obama Administration stands for the message that we should tell our children that they can be whatever they want to be when they grow up. Now, it is time for the State Department to help us to live up to that promise,” Schwartz added.

For more information about this case, Meyer, et al. v. Clinton (Department of State), please contact Bryan Schwartz.

JPMorgan Chase Sued By Misclassified Appraisers for Unpaid Wages

Appraisers at JPMorgan Chase filed a class and collective action suit this week seeking to recover millions of dollars in unpaid wages based on the financial services giant’s practice of misclassifying these employees as “exempt” from overtime pay, among other violations of California and federal law. Appraisers are responsible to check home valuations for home loans sold by JPMorgan Chase using certain well-defined criteria. The Appraisers allege that they are held to strict production standards and must follow detailed internal guidelines with every appraisal, placing them squarely outside of the so-called “white collar” exemptions to the Fair Labor Standards Act and California wage and hour protections.

“The company finally made us hourly employees this past summer,” said Mary Ann Adlao of San Ramon, California, one of the lead plaintiffs in the suit, “but they did not repay us for unpaid overtime and other owed wages for all the years we have worked for the company and its predecessors while we were misclassified.” “It’s just another example of a giant bank cutting corners at the expense of its employees,” Adlao continued.

The lawsuit, filed in the San Francisco-based U.S. District Court for the Northern District of California, alleges that Adlao and co-plaintiff Marian Williams have worked for Chase and a mortgage subsidiary, EMC Mortgage, and its predecessors in interest, Bear Stearns and Encore Credit Corporation, for well over forty hours per week and eight hours a day without overtime pay and meal and rest period premiums. The suit also alleges the employees, who worked in California and Arizona, were deprived of itemized wage statements and denied certain reimbursements, both required under California law.

“Given the recent court precedents emphasizing that production employees are non-exempt, and the company’s own implicit admission that the employees were misclassified – when Chase recently made them hourly – we are confident that these Appraisers are entitled to the back wages and other relief sought in the Complaint,” said Bryan Schwartz, whose firm, Bryan Schwartz Law (www.BryanSchwartzLaw.com) represents the plaintiffs. “We look forward to bringing Chase’s practices to light and recovering the wages that our clients and their co-workers earned but were not paid,” said Schwartz.

For more information about this case, Adlao, et al. v. JPMorgan Chase & Co., et al. (Case No. Civ-10-4508 EMC), please contact Bryan Schwartz Law.

Reasonable Accommodation With Time Off or Reduced Hours

An employee is undergoing chemotherapy. An employee suffers from an auto-immune disorder. An employee suffers from circulatory difficulties. Whatever the disability, the employee’s doctor has asked for time off for the employee. Or, perhaps the employee’s doctor has asked for a permanent limitation in the employee’s work hours, because of the employee’s condition. What is the extent of the employee’s entitlement to accommodation with time off or limited duty hours?

Of course, if an employee worked the requisite hours in the preceding year and otherwise qualifies for Family Medical Leave Act or California Family Rights Act leave, they will be entitled to some time off. However, what accommodations should/must an employer make when this statutorily-provided leave is expired?

First, the employer should be mindful of the fact that, under the ADA Amendments Act (ADAAA), the term “disability” is broadly construed and covers, e.g., cancer in remission and autoimmune disorders like rheumatoid arthritis, without regard for “mitigating measures” like chemotherapy. See, inter alia, ADAAA § 2(a); ADAAA § 4; 42 U.S.C. § 12102(4)(D), as amended. Though employers might formerly have defended an action by arguing that the purported disability only limits the employee in a particular job or narrow class of jobs (e.g., under Toyota Motor Mfg., Ky., Inc. v. Williams, 534 U.S. 184 (2002)), now, the employer can safely assume the employee requiring substantial time off or a limited work schedule will qualify under the definition of disability, and should move quickly to the reasonable accommodation inquiry.

Second, federal regulations define “reasonable accommodations” as “[m]odifications or adjustments to the work environment . . . that enable a qualified individual with a disability to perform the essential functions of that position.” 29 C.F.R. § 630.2(o)(1)(ii). Both the FEHA and ADA specifically list scheduling adjustments as examples of “reasonable accommodations” and use identical language. See Cal. Gov. Code § 12926(n)(2) (“Job restructuring, part-time or modified work schedules”) and 42 U.S.C. § 12111(9).

Numerous courts have endorsed these regulatory examples as well. See, e.g., Jensen v. Wells Fargo Bank, 85 Cal.App.4th 245, 263 n.6 (2000) (reasonable accommodation may include part-time or modified work schedules) (citing Cal. Admin. Code tit. 2, § 7293.9(a)(2)); Witchard v. Montefiore Medical Center, 2009 WL 602884, at *16 (S.D.N.Y. Mar 9, 2009) (“Examples of reasonable accommodations may include, but are not limited to . . . “part-time or modified work schedules”) (quoting 29 C.F.R. § 1630.2(o)(2)(i) and (ii)); Falor v. Livingston County Community Mental Health, 2003 WL 21684183, at *5 (W.D.Mich. May 30, 2003) (“Examples of “reasonable accommodation” include, without limitation . . . part-time or modified work schedules”) (quoting 42 U.S.C. § 12111(9)(B)); Valentine v. American Home Shield Corp., 939 F.Supp. 1376, 1399 (N.D.Iowa 1996) (“part-time employment is a possible reasonable accommodation”).

So, the employer should assume that the employee’s condition is a disability if he or she needs a reduced work schedule and/or extra time off, and should assume that such an accommodation is among those which might generally be considered a reasonable accommodation. However, the inquiry only begins there. Must an employer make a temporarily reduced work schedule a permanent accommodation, and how much time off must an employer allow an employee?

A. An Employer May Not Eliminate Reasonable Accommodations Simply by Designating them as “Temporary.”

As the Equal Employment Opportunity Commission's (EEOC's) interpretive guidance on the ADA makes clear, the duty to identify and provide a reasonable accommodation under the ADA is an ongoing duty to identify and provide accommodations that enable the employee to perform the essential functions of the job held or desired. 29 C.F.R. § 1630.9. This issue was analyzed in depth last year by a California Court of Appeal in A.M. v. Albertsons, 2009 WL 2986423 (Cal. App. 1 Dist., Sept. 18, 2009). The court stated, “Once a reasonable accommodation has been granted, then the employer has a duty to provide that reasonable accommodation.” Id. at *6. The A.M. v. Albertson’s court ultimately upheld a $200,000 jury verdict for the plaintiff based upon one instance in which the employer failed to provide her with the prior agreed-upon accommodation. Id. at *7. An employer should not assume that its obligation to provide accommodations is fleeting or can be addressed by calling certain accommodations “temporary.”

B. An Employer Should Consider Reassignment a Last Resort and Make Time Off and Reduced Hours Adjustments First.

Courts do not favor demoting an employee or sending him or her to a career “Siberia” as a result of limitations requiring reasonable accommodations. On the contrary, reassignment is considered an accommodation of “last resort” and adjustments to work schedules should be considered first. See, e.g., Spitzer v. The Good Guys, Inc. (2000) 80 Cal.App.4th 1376, 1389 (citing Aka v. Washington Hospital Center (D.C. Cir. 1998) 156 F.3d 1284, 1304, and acknowledging a duty to reassign a disabled employee "who cannot be otherwise accommodated"); Cravens v. Blue Cross and Blue Shield of Kansas City (8th Cir. 2000) 214 F.3d 1011, 1019 (relying on Aka, 156 F.3d at 1301, to conclude that "reassignment is an accommodation of last resort"). See also 29 C.F.R. App. § 1630.2(o) (EEOC's interpretive guidelines provide that “reassignment should be considered only when accommodation within the individual's current position would pose an undue hardship.”).

The California Court of Appeal upheld a jury verdict of $1,990,385 in compensatory damages, $1,200,000 in punitive damages against the defendant, and $7,000 in punitive damages against the defendant’s CEO in a case where an employer failed to reasonably accommodate an employee undergoing breast cancer treatment by allowing her to reduce her hours worked in the office. See McGee v. Tucoemas Federal Credit Union, 153 Cal. App. 4th 1351, 1355-1356 (2007), cert. denied 128 S.Ct. 1890 (2008). Following the refusal to reasonably accommodate her disability, McGee was demoted, lost her medical insurance, and received a pay cut that resulted in a 50% loss of income. Id. at 1356. The court reasoned that the punitive damages were not excessive in light of defendants’ pattern of behavior and failure to accommodate McGee’s disability before demoting her. Id. at 1362.

Among other themes, McGee drives home the point that if reassignment is necessary, then the employee should be reassigned to a comparable position, when possible. See also, e.g., Pattison v. Meijer, Inc., 897 F. Supp. 1002, 1007 (W.D. Mich. 1995) (“the employer may reassign the employee to a lower graded and paid position [only] if it is not possible to accommodate the employee in the current position and if no comparable positions are vacant or soon to be vacant.”).

C. An Employee May Be Able to Perform the Essential Functions of a Position Even if a Modified Work Schedules or Time Off Must Be Provided.

Employers may sometimes argue that “full-time work” or attendance without additional days off is an “essential function” and that, if an employee cannot do these, he/she is not a Qualified Individual with a Disability, as required for protection under the California and federal anti-discrimination laws. This approach may be unsuccessful for an employer, if it cannot show that it would suffer an undue hardship with the needed accommodations.

In Norris v. Allied-Sysco Food Services, Inc., 948 F. Supp. 1418 (N.D. Cal. 1996), Magistrate Judge Wayne Brazil let stand a jury verdict of $300,000 in favor of a plaintiff whose requests for the reasonable accommodation of either a part-time or work-from-home schedule were denied. Id. at 1421-1422. The court analyzed the “essential functions” of her job, which predominantly included the administrative and clerical tasks of record-keeping and communication with corporate officers and merchandisers, as well as occasional field sales. Id. at 1427. The court concluded that a reasonable jury could find that the essential functions of the job were administrative and clerical. Id. at 1431. Consequently, a reasonable jury could have also found that “Norris’ array of medical problems—back pain, chronic fatigue syndrome, neck pain, irritable bowel disease, urinary incontinence, and stress—would have made it difficult for her to put in full days of work or to adhere strictly to a regular work schedule” and that she would have been reasonably accommodated by being permitted to work part-time and from home. Id. at 1431.

On the other hand, in Raine v. City of Burbank, 135 Cal. App. 4th 1215, 1218 (2006), the plaintiff was a law enforcement officer who injured his knee and subsequently had difficulty running, jumping, kneeling, and lifting. Id. Significantly, the plaintiff conceded that these activities were essential to his position as a school patrol officer. Id. He was temporarily given an entirely different job at the department’s front desk, but when he was unable to return to his position, the defendant refused to extend the temporary position to a permanent one, and the plaintiff was terminated. Id. Because there was no reasonable accommodation which would allow the plaintiff in Raine to perform the essential job duties of his police officer position, and his temporary reassignment was much more than a modification of his original position, the Raine case is distinguishable from a case in which an employee has requested a mere schedule change.

As such, in general, a restriction on work hours does not affect an “essential function” of the employee’s position to the point that accommodating the employee’s disability would create a “new” job. If the employee is capable of performing all requisite job tasks, and the restriction is merely a matter of schedule, then the employer should provide the requested accommodation unless there is a demonstrated undue hardship. Employees should argue that work in excess of 40 hours is not a job function at all, for example, but a matter of time on duty and workload, which can be redistributed to other employees without undue hardship. Even if the number of hours on duty is viewed as a function, schedule requirements for employees’ positions may be viewed by a court as “marginal” rather than “essential” functions of a position. See 29 C.F.R. § 1630.2(n)(2)(ii).

D. An Employer Must Prove that Significant Difficulty or Expense Prevents it From Making a Time Off or Scheduling Adjustment Accommodation.

To avoid its obligation to provide a reasonable accommodation for an employee’s disability, an employer must establish that it would be an undue hardship to do so. 42 U.S.C. 12112(b)(5)(A); Cal. Gov. Code § 12940(m). See also Spitzer, 80 Cal. App. 4th at 1389-1390 (describing employers’ high burden of proof in this regard); Stoll v. The Hartford, 2006 WL 3955826, at *9 (S.D.Cal. Nov. 6, 2006) (“responsibility squarely lies with defendant to establish . . . there simply was no vacant position within the employer’s organization for which the disabled employee was qualified and which the disabled employee was capable of performing with or without accommodation . . . .”) (internal citations omitted).

To prevail on an undue hardship argument, an employer must show that accommodating an employee’s disability would require significant difficulty or expense, when considered in light of factors including, among others: the nature and cost of the accommodation needed; the employer’s overall financial resources; the number of persons employed by the employer; the impact of such accommodation upon the operation of the employer’s facility; the number, type, and location of the employer’s facilities; and the employer’s types of operations, including the composition, structure, and functions of the employer’s workforce; the geographic separateness, administrative, or fiscal relationship of the facility or facilities in question to the employer. 42 U.S.C. § 12111(10)(B); see also Cal. Code Regs. § 7293.9.

Generally, based on these guidelines, a Fortune 500 corporation with thousands of employees and a wide variety of employment opportunities will struggle to make a colorable argument that accommodating an employee’s disability would require significant difficulty and expense. Furthermore, an employer which has already allowed an employee to perform the essential functions of his/her job with a reduced schedule on a “temporary” basis will have difficulty showing an undue hardship, and is likely barred from asserting an undue hardship defense regarding an accommodation it already provided, which it is obligated to continue. See A.M., 2009 WL 2986423 at *6. Consider how offensive this discriminatory tactic would be, when applied to other types of accommodations, e.g., providing a person with quadriplegia with adaptive computer hardware, but labeling it “temporary” and then removing such hardware.

Yet, as to a time off accommodation, courts have not required employers to keep an employee on the rolls indefinitely who is unable to work. See, e.g., Green v. State, 42 Cal. 4th 254, 258 (2007) ("the law allows the employer to discharge an employee with a physical disability when that employee is unable to perform the essential duties of the job even with reasonable accommodation."). See also Dudley v. California Dept. of Transp., 213 F.3d 641, at **2 (9th Cir. 2000) (unpublished) (citing Nowak v. Sf. Rita High School, 142 F.3d 999, 1004 (7th Cir.1998)) ("The ADA does not require an employer to accommodate an employee who suffers a prolonged illness by allowing him [or her] an indefinite leave of absence"); Norris, 948 F. Supp. at 1421 (argument that indefinite leave cannot be a reasonable accommodation is supported by case law); Hanson v. Lucky Stores, Inc., 74 Cal. App. 4th 215, 226-227, (1999) ("Reasonable accommodation does not require the employer to wait indefinitely for an employee's medical condition to be corrected.").

Employees should be specific in time off and reduced hours requests, to avoid the argument that the accommodation they seek would create an undue hardship, like an indefinite leave of absence.

If you are a disabled employee who has suffered an adverse employment action based on a request for time off or a modified work schedule, contact Bryan Schwartz today.

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