COURT DECLINES TO ENFORCE NON-COMPETE AGREEMENT AGAINST AN ENTRY-LEVEL EMPLOYEE

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By Karen L. Piper

Many courts are reluctant to enforce non-compete agreements against entry-level employees, as was the result in the recent Goldfish Swim School v Aqua Tots decision. Steven Ogg worked part-time for Goldfish Swim School as a swim instructor earning $10 per hour and later as a deck supervisor earning $12.50. When hired, he signed an Employee Confidentiality, Non-Disclosure and Non-Compete Agreement. The agreement precluded Ogg from working for a competitor within a 20-mile radius of any Goldfish location for one year after ending his employment and from soliciting any Goldfish employees or customers for an 18-month period after separation. After Goldfish terminated his employment, Ogg began working for Aqua Tots, a direct competitor of Goldfish, in breach of his non-compete agreement.

Upon learning of his employment with Aqua Tots, Goldfish sued Ogg for breach of contract and sued Ogg and Aqua Tots for tortious interference with a contract and unjust enrichment. After some initial discovery and a hearing, the circuit court denied Goldfish’s motion for a preliminary injunction and dismissed the lawsuit. The Michigan Court of Appeals affirmed the circuit court’s decision. 

With respect to the denial of the injunction, the Court of Appeals agreed that Goldfish had failed to prove it would suffer irreparable harm if a preliminary injunction did not enter. The court relied on the fact that Goldfish had no evidence that Ogg had shared Goldfish’s curriculum with Aqua Tots, or taken any client contact information, or solicited any Goldfish clients, or caused Goldfish any financial harm.

With respect to dismissal of the lawsuit, the Court of Appeals determined that Goldfish’s agreement with Ogg did not protect a “reasonable competitive business interest.’” Under Michigan law, in order to be enforceable, a restrictive covenant must: protect an employer’s “reasonable competitive business interests;” and be reasonable as to its duration, geographical area, and type of employment or line of business. The court rejected Goldfish’s argument that the non-compete agreement was necessary to maintain the confidentiality of its swim instruction method, which it characterized as a trade secret. As the court noted, a trade secret is subject to efforts to maintain its secrecy. In this case, Goldfish taught its instructional method to children in front of hundreds of people every day.

Unlike its conclusion that the non-compete provision was unreasonable, the Court of Appeals concluded that the provision barring solicitation of Goldfish clients was reasonable. The court nevertheless affirmed the dismissal of Goldfish’s breach of contract claim because Goldfish had no evidence that Ogg had solicited any Goldfish clients in breach of the non-solicitation provision.

The court also affirmed dismissal of Goldfish’s claims against Aqua Tots for tortious interference and unjust enrichment. Goldfish did not present facts to show that Aqua Tots was even aware of Ogg’s non-compete agreement or that Aqua Tots, in any way, benefitted from Ogg’s prior employment with Goldfish. Aqua Tots had its own method of teaching children how to swim that was quite different than Goldfish’s method. 

This case is a timely reminder that courts look closely at non-compete agreements. Employers should review with counsel whether the non-compete provision protects a reasonable competitive interest and whether, in some cases, a non-solicitation of customers agreement may suffice. Also, to prevent employees from using or disclosing their trade secrets, employers should require all employees to sign a confidentiality and assignment of inventions agreement. BHB Investment Holdings, LLC v Ogg (unpublished, Michigan Court of Appeals No. 330045, Feb. 21, 2017).

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law. Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com. For further information, go to: http://www.bodmanlaw.com/attorneys/karen-l-piper.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article. March 2017.

DOL’S FIDUCIARY DUTY RULE MAY TAKE EFFECT APRIL 10 … OR NOT

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By: Claudia D. Orr

The US Department of Labor (“DOL”) not only manages the federal wage and hour law (Fair Labor Standards Act), it has administrative oversight of, and enforcement responsibility for, a host of other laws including the Employee Retirement Income Security Act. Commonly referred to as “ERISA”, the act regulates the pension and welfare (group health insurance) benefit plans sponsored by employers.  The DOL has published a final rule requiring anyone who provides investment advice to retirement plans (such as a 401(k) or an IRA) to comply with the fiduciary standard. Let’s look at why this matters to your plan and employees.

Financial advisors are compensated primarily in two ways: by an hourly fee or by commissions.  Those financial advisors who are paid by the hour are typically registered through the Financial Industry Regulatory Authority (“FINRA”) and, if so, are already bound by fiduciary standards. That means the advisor is required to provide advice and make recommendations that are in their clients’ best interests and not their own.

It is often mistakenly assumed that all financial advisors make investment recommendations that are in their clients’ best interests, but that is not necessarily true.  An advisor who is paid by commissions has an inherent conflict of interest because some of the financial “products” s/he offers to sell a client (such as annuities, etc.) yield higher commission payments to the advisor than others.  This incentivizes the advisor to recommend those products that will provide the advisor with higher commissions. 

Because of the inherent conflict of interest resulting from commission payments, some unethical advisors engage in “churning” client accounts. Churning is excessive trading largely to generate the commissions made with each purchase. Thus, the unethical advisor may suggest selling one annuity product and the purchase of another annuity product, repeatedly, when there is little or no financial advantage to the client and, in fact, may result in penalties for the early surrender.

To protect plans subject to ERISA (which are the only investment accounts that the DOL has jurisdiction over) and the savings of the plans’ participants, the new DOL rule requires all investment advisors providing recommendations concerning investment policies or strategies, portfolio composition, rollovers, transfers, etc. (with some limited exceptions) to abide by the fiduciary duty standard.

Some of the nation’s brokerage, advisory and insurance firms that sell financial products for commissions have lobbied hard to defeat the new rule, claiming it will be harmful to their industry. Some have predicted that certain financial products may all but disappear since an advisor may not be able to recommend the purchase of certain products that are seldom in the clients’ best interests. 

The rule was to take effect April 10, 2017. However, on February 3, 2017, President Trump issued a memorandum to the Secretary of Labor requiring the DOL to take a second look at the proposed rule.  In it, President Trump states, in relevant part:

           Department of Labor Review of Fiduciary Duty Rule.

(a) You are directed to examine the Fiduciary Duty Rule to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice. As part of this examination, you shall prepare an updated economic and legal analysis concerning the likely impact of the Fiduciary Duty Rule, which shall consider, among other things, the following:

            (i) Whether the anticipated applicability of the Fiduciary Duty Rule has harmed or is likely to harm investors due to a reduction of Americans’ access to certain retirement savings offerings, retirement product structures, retirement savings information, or related financial advice;

            (ii) Whether the anticipated applicability of the Fiduciary Duty Rule has resulted in dislocations or disruptions within the retirement services industry that may adversely affect investors or retirees; and

            (iii) Whether the Fiduciary Duty Rule is likely to cause an increase in litigation, and an increase in the prices that investors and retirees must pay to gain access to retirement services.

(b) If you make an affirmative determination as to any of the considerations identified in subsection (a)-or if you conclude for any other reason after appropriate review that the Fiduciary Duty Rule is inconsistent with the priority identified earlier in this memorandum-then you shall publish for notice and comment a proposed rule rescinding or revising the Rule, as appropriate and as consistent with law.

While the President’s memorandum to the Secretary of Labor does not provide for a delay in the rule’s implementation, it may have that effect or it could result in the revising or rescinding of the rule.  The DOL has issued a proposed rule that would delay the effective date of the fiduciary rule for 60 days (or until mid April) and requested public comment on the proposed delay and on the February 3rd directive by the Whitehouse.

At the time President Trump issued his memorandum, his nominee was Andrew Puzder who, according to the New York Times, came from the business sector (former CEO of the company that franchises Hardee’s and Carl’s Jr. restaurants) and has been an outspoken critic of many worker protections enacted under the Obama administration including an increase to the federal minimum wage.  However, amid growing resistance, Puzder withdrew from consideration.  President Trump has since nominated Alexander Acosta for Secretary of Labor, who is viewed as more friendly to labor than the original nominee.  While this rule has been years in the making, there is now a cliff hanger.  Stay tuned!

Incidentally, plan sponsors (employers) have been coming under attack for not providing appropriate investment options for employees. Often the issue is the high fees attributable to the mutual funds being offered.  In January, for example, Schwab was sued in a California federal district court by its own employees who complained that their employer (Schwab) breached its fiduciary duties by providing them with expensive and poorly performing investment choices. You guessed it…the funds offered were Schwab funds. 

The lesson today is that employers need to be careful who they receive advice from and carefully evaluate the mix of funds being offered to their employees.  For example, many employers now include among the investment choices some exchange traded funds (ETFs) which on average have significantly lower administrative fees than mutual funds.  Obtaining sound advice from an advisor having a fiduciary responsibility is the key.

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. March 2017.

A Well Drafted Job Description/Attendance Policy proved to be Critical in Defending a Disability Discrimination Claim

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By:
JAMES M. REID

In Williams v. AT&T Mobility (6th Cir 2017), the United States Court of Appeals for the Sixth Circuit ruled that the employer’s termination of the employee was not a violation of the Americans With Disabilities Act because regular attendance was an essential function of the job and the employee could not perform that function.  The court relied in part on EEOC v Ford Motor Co. (6th Cir 2015), which reasoned that “[r]egular, in person attendance is an essential function . . . of most jobs, especially the interactive ones.” In addition, this employer listed regular attendance as an essential job function and prepared a strict attendance policy in advance of any attendance issues with this employee.

In this case, the employee suffered from depression and anxiety that caused her to miss work.  During her approximately 8 years of employment with the employer, her job duties included answering incoming calls and assisting customers while being logged in to her work computer. Although the employee had attendance issues throughout her employment, she missed approximately 7 months straight due to depression and anxiety attacks.  Thereafter, she had sporadic attendance and remained on short term disability leave for several additional months.  When the employee returned, she was warned that she would be terminated if she continued to have unexcused absences pursuant to the employer’s attendance policy.  While the employer was evaluating whether her additional absences were excused, medical evidence revealed that “she could not function at work in a call center environment” and “could not focus mentally due to mental illness.”  As a result of being incapable of having regular attendance, her employment was terminated. 

The employee sued the employer for: (1) failing to accommodate her disability; (2) failing to engage in the interactive process; (3) disparate treatment; and (4) retaliation.  As to the first claim, the employee “failed to propose any reasonable accommodation that would have allowed her to perform the essential functions of the job” since she “could not work at all for significant periods of time”.  Since the employee could not prove she was qualified to perform the job with or without a reasonable accommodation, the court did not have to address her interactive process and disparate treatment claims.  Regarding her retaliation claim, the employee was unable to show any “causal connection” between her accommodation requests and employment termination.  The court acknowledged that “there are some jobs that a person with disabilities is simply unable to perform.”

 This case gives helpful guidelines to allow employers to plan in advance and proceed with termination if the employee is unable to perform the essential job functions with or without a reasonable accommodation.  However, these accommodation cases are very fact specific.  By way of example, this case may have been decided differently if the employee was: (1) able to have regular attendance with flexible scheduling, modified break times, and/or additional leave; or (2) in a position that did not require regular attendance at the worksite as an essential function of the job.  Employers are encouraged to plan in advance by seeking the advice of counsel when creating job descriptions, drafting handbook policies, or responding to employee requests for accommodations.

This article was written by JAMES M. REID, a member of the Legal Affairs Committee of Detroit SHRM, a Resource Partner and Director of MISHRM, and a shareholder of the law firm of Maddin Hauser Roth & Heller PC located in Southfield, Michigan. He can be reached at (248) 351-7060 or jreid@maddinhauser.com. Detroit SHRM encourages members to share these articles within their organizations; however, members should refrain from forwarding them outside their organizations or printing for mass distribution without written permission of the Detroit SHRM Executive Committee March 1, 2017.

Further Evidence Concerning Importance Of Well Drafted Employment Applications

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By:  Claudia D. Orr

One of my recent articles entitled “One Fibber and Two Dismissals” emphasized just how important it is to have your employment application reviewed by a competent, experienced employment attorney. That article showed how an employer obtained dismissal of a sexual harassment claim because of a “resume fraud” defense built into its employment application. Now, in Sams v Common Ground, the Michigan Court of Appeals affirms dismissal of a disability discrimination case because of another defense built into the employment application. 

We know very little about the facts of the case because, other than timing of events, they simply aren’t relevant to a dismissal based on a limitations period. On August 15, 2011, the plaintiff applied for work at Common Ground.  The application required the applicant to agree to a one year contractual limitations period, meaning any lawsuit against the employer had to be brought within one year of the accrual of the claim, or it was time barred.  Plaintiff was hired as a crisis interventionist, but was reassigned to the position of a recovery coach within a year. That position lowered plaintiff’s wage rate and affected his fringe benefits.  A few weeks later, plaintiff tendered his resignation, resigning effective September 30, 2012. 

Two and a half years later, plaintiff filed a lawsuit claiming Common Ground violated Michigan’s Persons with Disabilities Civil Rights Act and that he had been constructively discharged (meaning his employer’s actions left him with no choice but to resign).  Normally, claims brought under Michigan’s civil rights statutes are subject to a three year statutory limitations period.

However, based on the contractual limitations period found in the employment application, the circuit court dismissed plaintiff’s lawsuit and the appellate court affirmed. Plaintiff challenged the contractual limitations period on numerous grounds (including unconscionability) all of which were rejected because the clause had been properly drafted.

As I often say, a well drafted employment application is an employer’s first line of defense.  The contractual limitations period that I draft requires claims to be brought within 180 days. However, for this to be enforceable as to federal discrimination claims it must be drafted in a manner that considers the filing of charges filed with the Equal Employment Opportunity Commission.  While the Commission takes the position that any shortened limitations period is unlawful as to federal discrimination claims, there is ample case law to suggest otherwise.  If you have not had your company’s employment application reviewed recently by experienced employment attorney, such as the author, it is advisable to do so sooner rather than later since the next employment claim could be right around the corner.

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. February 2017.

Courts Labor Over Two Labor Issues: Mandatory Subjects Of Bargaining And Right To Work

By:  Claudia D. Orr

Two cases last week addressed issues faced by employers having unionized workers: when an employer has to bargain with the union and a lengthy union security clause.  Both cases have an interesting twist, so don’t tune out just because you do not have a union in your workplace.

In Ohio Edison Co v National Labor Relations Board (“NLRB”), the federal Court of Appeals for the Sixth Circuit (which hears appeals arising in Michigan, Ohio, Kentucky and Tennessee) refused to enforce an NLRB order finding it was not supported by substantial evidence.  Apparently, back in the early 1970s, the employer had established an employee-recognition program awarding gifts to employees when they reached the first and fifth year of employment.  Right now my clients are all whispering to themselves (as I have trained them to say…) “no good deed goes unpunished.”  Initially the gifts were charm bracelets and tie tacks, but later employees were permitted to choose items such as clocks and fishing rods from a catalog with a value of up to $75 for a fifteen year anniversary. During the nearly 40 years this program existed, the union and employer never bargained over the benefit.

When stock prices fell in 2012, the company decided to implement several cost cutting measures including reducing the cap for the 401(k) company match, lowering the retiree life insurance benefit, and implementing a cap on education reimbursement.  And, you guessed it; the company announced that employees would only receive awards every 10 years, instead of every five, in the employee recognition program.

The Director of Labor Relations called 23 union locals, reading from a script to inform them of the changes. When the president of Local 272, International Brotherhood of Electrical Workers, was informed of the changes he responded “Oh no you don’t!” and that now he would have to file a charge with the NLRB and pay a visit to the company’s headquarters in Akron.

The union filed an unfair labor practice six weeks later (without first going to Akron) claiming the company violated its duty to bargain in good faith with the union. For an undisclosed reason, the case became only about the service awards.  The Administrative Law Judge found that the statements by the union president amounted to a request to bargain and found that the service awards program was a mandatory subject of bargaining.  A divided NLRB affirmed and sought enforcement of the award in the Sixth Circuit. The company filed a cross appeal.

The Sixth Circuit recognized that a request to bargain does not have to use any specific words or be in any specific form as long as an employer would clearly understand that a demand has been made. The union must do more than protest the proposed change, it must request bargaining. A protest only voices disapproval whereas a request to bargain seeks “change by signaling a willingness to offer something in return.”

Considering all the circumstances, the appellate court found it clear that the union expressed its disapproval, but any request to bargain was, at best, ambiguous. Even the threat to come to Akron was no more than a protest, possibly a complaint to someone higher in the company. Given the insignificant amount of money at stake with the awards and the fact that the parties had never bargained over the program in nearly 40 years it is doubtful that the union’s statements clearly conveyed the desire to negotiate over the awards program in particular. Finally, the filing of an unfair labor practice charge is not a substitute for a request to bargain.  A charge is simply another protest. Therefore, the court declined to enforce the NLRB’s order.  Think about the attorneys’ fees that could have been saved if the employer never initiated the awards program.

The second case was just approved for publication, a rare act these days by the Michigan Court of Appeals so it is wise to pay attention.  At issue in Taylor School District and Taylor Federation of Teachers v Rhatigan, was a ten year union security clause that would remain in effect until July 1, 2023, while the remainder of the collective bargaining agreement (“CBA”) would expire in 2017.  Why was the union security clause negotiated for a ten year term?  Because Michigan law was amended in 2012 to give employees the right to refrain from joining or assisting unions or paying any dues to a union and making it unlawful for employers and unions to interfere with those rights (often referred to as right-to-work law, MCL 423.14 and MCL 423.209). The amendments became effective March 28, 2013.

So, recognizing that it would soon be an employee’s right to opt out of the union, the union pushed for a union security clause that would require all of the employees holding union positions to either join the union or pay a service fee “in an amount determined by the union” for the next 10 years!  While agreeing that the union security clause and the CBA did not have to be of the same duration, the Michigan Employment Relations Commission found the 10 year term excessive and unreasonable.  The union security clause would deprive employees of their rights and “nullify a state law for the next ten years.”

The appellate court agreed.  It found that the school district caused the employees to suffer an adverse employment action in regards to their wages as a result of being forced to pay union dues.  It also found the union to have violated its duty of fair representation by negotiating this term to sustain itself financially while, at nearly the same time, agreeing to a 10% reduction in wages and benefits of the teachers.  So much for a union putting its members first!

While these two cases only involve employers having employees represented by unions, some of the rights granted under labor laws apply equally in non-union settings (for example “concerted activity” rights affect confidentiality and social media policies).  Do not assume that because you are union free you can totally ignore labor laws.  When a question arises concerning your workforce, contact an experienced employment/labor attorney such as the author. 

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. February 2017.

Whistleblower’s Claim Revived for the Second Time in Three Years

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By:  Karen L. Piper

Whistleblower Protection Act (WPA) cases can be challenging, as demonstrated by the ups and downs of Flint police officer Kevin Smith’s case.

The WPA protects employees against adverse employment actions in retaliation for reporting a violation or suspected violation of law, regulation or rule to a public body.  To establish a WPA claim, an employee must show:

            (1)        S/he was engaged in protected whistleblowing activity;

            (2)        The employer took an adverse employment action against the employee; and

            (3)        A causal connection between the protected activity and adverse action.

Smith was employed as a police officer in the Flint Police Department.  He was assigned to act as the Union President from February 2011 until after he publicly criticized how funds from a voter‑approved millage were being used.  As Union President, Smith worked 8:00 a.m. to 4:00 p.m. handling work‑related grievances.  The Union President position was eliminated by Flint’s Emergency Manager in April 2012, but Smith continued to function as Union President through 2012.

In November 2012, Flint voters approved a millage for public safety.  Smith subsequently complained publicly that the money was not being spent on hiring as many police officers as possible.  In March 2013, Smith was reassigned to undesirable hours (i.e., the night shift) at an undesirable location (i.e., road patrol in the northern end – the most dangerous area of the city).  Smith claimed he was the only police officer that was not allowed to work in the southern, less dangerous area of the city.  He also claimed that the night shift hours interfered with his work handling grievances.

Smith filed a whistleblower claim over his new assignment asserting he was reassigned in retaliation for his public complaints about how the millage funds were being spent.  The trial court dismissed this claim ruling that his reassignment was not an adverse employment action.  The Court of Appeals declined his appeal.  The Michigan Supreme Court directed the Court of Appeals to review the dismissal.  In a 2 to 1 split decision, the Court of Appeals agreed that the reassignment was not an adverse employment action.  The appeals court also ruled that Smith had not engaged in protected whistleblowing activity.

On January 17, 2017, the Michigan Supreme Court reversed the Court of Appeals’ decision.  It agreed with the dissenting judge that Smith had presented sufficient facts to support his claim that his reassignment was an adverse employment action.

To establish an adverse action under the WPA, an employee must show he was “discharged, threatened, or otherwise discriminated against such that his compensation, terms, conditions, location, or privileges of employment were affected.” Emphasis in original.  The dissenting Court of Appeals judge determined that Smith had met his burden of alleging facts to support adverse action: the change in assignment affected both his hours and location and the change was more than an inconvenience; it involved a material change in his responsibilities.  This case will be sent back to the Court of Appeals for further action, presumably a return to the trial court to decide whether Smith’s public criticism of how millage funds were being spent was protected whistleblowing activity, or trial.

This case has been pending for three-plus years.  It has been to the Michigan Supreme Court twice.  It is unknown whether the Emergency Manager consulted experienced employment counsel, such as the author, before reassigning Officer Smith.  If not, he should have.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law.  Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article. February 2017.

EEOC Issues Resource Document on Workplace Rights of Individuals with Mental Health Conditions

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By:  Karen L. Piper

On December 12, 2016, the EEOC issued a two-page “resource document” to explain to individuals with mental health conditions their rights as an applicant or employee under the Americans with Disabilities Act (ADA).  The document is titled “Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights.” The document is available at https://www.eeoc.gov/eeoc/publications/mental_health.cfm

The document is comprised of eight questions and answers, such as, “Is my employer allowed to fire me because I have a mental health condition?”  Spoiler alert: The answer is “No.”  An employer cannot refuse to hire or terminate an individual because of a mental health condition.  The answer explains further that employers do not have to hire or retain persons who cannot perform the job or who pose a significant risk of substantial harm to themselves or others.

The document addresses the issue of confidentiality.  Individuals can keep their mental health condition private, except that employers can ask medical questions in four situations:

1. When the employee asks or a reasonable accommodation.

2. After an employer has made a job offer, but before employment begins, as long as everyone entering the same job category is asked the same questions.

3. When an employer is engaging in affirmative action for persons with disabilities (such as an employer tracking the disability status of its applicant pool in order to assess its recruitment and hiring efforts for its affirmative action program, or a public sector employer considering whether special hiring rules may apply), in which case a response by the applicant is optional.

4. On the job, when there is objective evidence that the employee may be unable to do his/her job or that s/he may pose a safety risk because of his/her condition.

In other words, when an individual seeks the ADA’s protections, the individual must provide information about his/her health status sufficient to allow the employer to verify disability status and provide reasonable accommodation. 

The document lists examples of possible accommodations the EEOC considers reasonable, such as schedules changes, quiet office space or devices that create a quiet work environment, changes in supervisory methods (e.g., written instructions), specific shift assignments, and in some cases, telecommuting.

This resource document contains a link to a companion document for the individual’s health care provider: “The Mental Health Provider’s Role in a Client’s Request for a Reasonable Accommodation at Work.”  This document explains that “reasonable accommodation may be obtained for any condition that would, if left untreated, ‘substantially limit’ one or more major life activities, which include brain/neurological functions and activities such as communicating, concentrating, eating, sleeping, regulating thoughts or emotions, caring for oneself, and interacting with others.”  This document states the EEOC’s position that the “condition does not have to result in a high degree of functional limitation to be ‘substantially limiting.’” Emphasis in original. A condition may qualify by “making activities more difficult, uncomfortable, or time-consuming to perform compared to the way that most people perform them.”

Though written for individuals, employers should check out these and other recently published EEOC resource documents targeted at individuals, i.e., one for those who are pregnant and one for those who have HIV infection.  These documents provide a user-friendly summary of the EEOC’s position on these issues.  An employer who complies with the guidance in these documents should be in full compliance with the ADA.  Keep in mind, however, that the EEOC’s position on these issues may be more employee-friendly than courts require.  If you have questions about accommodating an individual’s disability, consult experienced employment counsel such as the author.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law.  Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article.  February 2017.

Employer Pays for Precipitous Discharge of Employee Needing FMLA Leave to Care for Her Autistic Child

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By:  Karen L. Piper

Plaintiff worked as a clerical employee of Miller Compressing from 1999 to 2012.  She was experienced and highly valued.  In July 2011, plaintiff requested and was granted intermittent FMLA leave to take her autistic two-year old son to medical appointments and therapy.  In February 2012, plaintiff’s son, who attended two days a week, was expelled from day care because of his aggressive behavior, which was a product of his autism.  Plaintiff then asked if she could work from home those two days a week and use FMLA leave as needed to care for her son.  She submitted an FMLA certification from her son’s health care provider, which said he had autism and was a danger to himself and others.  Plaintiff’s request was granted.  Plaintiff was allowed to work from home two days each week.  The time she spent caring for her son while at home was counted as FMLA leave.

In summer 2012, plaintiff’s employer was experiencing serious financial problems.  The employer canceled all telecommuting arrangements.  Plaintiff was called in by Human Resources on a Friday afternoon and told that, beginning on Monday, she would have to work in the office eight hours a day, five days a week.  Human Resources told plaintiff that she could not use FMLA to care for her son outside of doctor’s appointments and therapy. 

Plaintiff was unable to find day care for her son over the weekend.  On Monday morning, plaintiff went into work to let them know.  Plaintiff was told that as soon as she missed work she would be terminated.  Plaintiff did not have child care for that day and left the office.  Human Resources processed her termination, retroactive to the previous Friday.  Plaintiff was not provided the employer’s standard three weeks’ notice or severance pay in lieu of notice until a month after her termination.  When she was offered severance pay, it was contingent on her signing a release. 

Plaintiff sued for FMLA retaliation.  The case was tried and a jury found plaintiff’s termination was in retaliation for her use of FMLA leave.  Plaintiff was awarded lost wages, liquidated damages and attorneys’ fees.  The employer appealed. 

The Seventh Circuit Court of Appeals (covering appeals from federal courts in Illinois, Indiana and Wisconsin) affirmed the jury’s verdict in plaintiff’s favor.  It ruled that autism is a serious health condition and plaintiff was entitled to reduced schedule FMLA leave to provide routine care for autistic son, not just intermittent FMLA leave for doctor appointments and therapy. Wink v. Miller Compressing Co., Case Nos. 16-2336, 16-2339 (7th Cir., January 9, 2017). 

The decision does not say why the employer acted so quickly.  If she had been given more time on her telecommuting schedule, plaintiff might have been able to find alternative care for her son or she might have been able to find another job that could accommodate her need for leave and left on her own.  If she had been granted FMLA leave for two days a week, she might have left on her own when her FMLA leave ran out in 30 weeks or less.  FMLA issues can be challenging.  That’s why it is helpful to consult with experienced employment counsel, such as the author, when dealing with challenging FMLA issues.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law.  Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article. February 2017.

One Fibber and Two Dismissals

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By: Claudia D. Orr

My dad used to joke that some people will tell you something 50 different ways before they would lie about it…  Well, the truth caught up with one fibber and she reaped her just rewards, twice.  Let’s see how justice prevailed in the January 26, 2017 opinion of the Michigan Court of Appeals in Davis v Ford Motor Company.

Nola Davis submitted an application for employment with Ford in February 2013. In it she claimed she had never been fired from a job or convicted of a crime. Davis was hired and, a few months later, she called the Ford hotline to complain of sexual harassment. Eventually she filed a lawsuit claiming sexual harassment.

During a deposition, Davis became flippant with defense counsel, refusing to say whether she had ever sued a prior employer, telling the attorney she could find it out for herself.  Being a defense attorney, I understand how this was a little like waving a red flag in front of a bull. The attorney discovered that Davis had been fired by three prior employers and had a misdemeanor conviction in 2008. The information was turned over to Ford’s Office of General Counsel and, in turn, to Human Resources.  By June 2014, Davis’ employment was terminated for providing false information in her employment application. Thereafter, Davis brought additional claims of intentional discrimination and retaliation, alleging she was fired for her prior complaint of sexual harassment.

Kevin Littlejohn, a former Human Resources Manager at Ford, testified that he had a general awareness of Davis’ call to the hotline, but he had no knowledge of the lawsuit that had followed.  He further testified that he had received the information from the Office of General Counsel and had thereafter determined that Davis had provided false information on her employment application. As a result, Littlejohn made the decision to terminate Davis’ employment.

The employment application gave notice that any misrepresentation would be grounds for discharge.  Littlejohn indicated in an affidavit that, in the past when he learned of false statements on the employment application, the employee was terminated or the job offer was withdrawn.

The trial court found that Davis had only showed that she was discharged after she had brought her sexual harassment claim, not because of it and dismissed her case.  The appellate court affirmed. While Davis attempted to explain away her misrepresentations, neither court bought her flimsy excuses. Davis was dismissed from her employment and her lawsuit was dismissed as well.

This case shows the value of a good employment application.  I always tell new clients that the acknowledgment on the last page is the first line of defense for employers and must be properly prepared. At a minimum, it needs to include a 180-day limitations period, the requisite notice of the need to request an accommodation in writing under Michigan’s Persons with Disabilities Civil Rights Act, the warning about misrepresentations, a release for giving and obtaining information to validate information provided by the applicant and, of course, notice of the at-will nature of employment. To ensure the acknowledgment is properly written, always consult with an experienced employment attorney, such as the author.  

This article was written by Claudia D. Orr, who is Chair of the Legal Affairs Committee of Detroit SHRM, and an experienced labor/employment attorney at the Detroit office of Plunkett Cooney (a full service law firm and resource partner of Detroit SHRM).  She can be reached at corr@plunkettcooney.com or at (313) 983-4863. For further information go to: http://www.plunkettcooney.com/people-105.html.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. February 2017.

Sixth Circuit Clarifies What Constitutes Adverse Employment Action for Title VII Claims

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By:  Karen L. Piper

The Sixth Circuit issued an instructive opinion discussing various employer actions in terms of whether they constituted adverse employment action as required for a Title VII claim. Lee v Cleveland Clinic Foundation, Case No. 16-3091 (unpublished) (6th Cir. January 20, 2017).

Plaintiff, who was born in India, is of Chinese descent.  She worked as a registered nurse at the Cleveland Clinic for 38 years.  She resigned her employment at age 61 following an indefinite suspension for misconduct.  During the 18 months prior to her suspension, plaintiff had reported various actions as discriminatory.  For example, she reported that her supervisor had made three comments to her about retirement.  Younger nurses called her “oldbie” and “old bitch.”  Co-workers made slurs about her Chinese descent, such as, “You Chinese people eat anything that crawls and walks.”  The plaintiff’s reports were not properly investigated.  Plaintiff was told she was “overreacting” and being “sensitive.”

During this same 18-month time period, plaintiff was disciplined and placed on two performance improvement plans (PIP).  When she received the second PIP, plaintiff complained of discrimination and said she was going to get a lawyer.  Plaintiff was suspended later that day for telling her patient about the PIP.

Plaintiff was suspended on a Friday for “at least three days.”  She was told not to contact work until instructed to do so.  On Sunday morning, just after midnight, plaintiff resigned her employment by email.

Plaintiff sued for age, race and national origin discrimination and retaliation.  The court ruled the supervisor’s questions about retirement and her co-workers comments were not direct evidence of discrimination.  Without direct evidence, plaintiff was required to establish discrimination by showing that: 1) she belonged to a protected group, 2) she suffered an adverse employment action, 3) she was otherwise qualified for her job, and 4) she was replaced by an individual outside her protected groups.  Plaintiff met her burden on these elements (older Chinese woman replaced by a 29 year old Caucasian male), except for adverse employment action.  The district court ruled she had not suffered an adverse employment action. 

Plaintiff had claimed four forms of adverse employment action: increased surveillance, termination, constructive discharge, and indefinite suspension.  The appeals court analyzed each of these actions. 

Increased Surveillance. The court ruled, warranted or not, increased surveillance and discipline are not considered adverse employment action because they are not a significant change in status.

Termination. Termination ordinarily is an adverse employment action.  Here, plaintiff claimed that when she was suspended, her employer told her never to return to her place of work and that it would mail her personal belongings to her.  This was sufficient evidence of a possible termination to create a question of fact for the jury to decide.

Constructive Discharge. A constructive discharge ordinarily is an adverse employment action.  Constructive discharge occurs when an employee resigns her employment in response to an employer’s deliberate creation of intolerable working conditions, as perceived by the employee, with the intention of forcing the employee to quit.  Intolerable working conditions include: reduction in pay, badgering, harassment, or humiliation calculated to encourage the employee to resign.  The court ruled that plaintiff’s reports of derogatory racial slurs, and multiple inquiries from her supervisor about retirement, which actions were not adequately investigated, were sufficient evidence of harassment to create a jury question whether plaintiff was constructively discharged. 

Indefinite Suspension Without Pay. An indefinite suspension without pay is an adverse employment action, if the employee serves the suspension.  Here, plaintiff was suspended on a Friday for at least three days and told not to contact work until instructed to do so.  She resigned via email on Sunday before serving her suspension, so her suspension was not an adverse employment action. 

Having presented sufficient evidence of adverse employment action, the divided court ruled (2 to 1) that plaintiff had satisfied all of the elements needed to show possible discrimination.  The court sent the case back to the trial court for further proceedings. 

This was a close case as demonstrated by the fact that the trial court judge and one appeals court judge ruled that plaintiff had not presented sufficient evidence of adverse employment action and two appeals court judges ruled she had.  If the employer had more thoroughly investigated the plaintiff’s claims of harassment or worded her suspension differently, a different result may have obtained.  In close cases, it is prudent to consult experienced employment counsel, such as the author, before imposing disciplinary action, especially on long-term employees.

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law.  Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article.  February 2017.