Labor & Employment Insights
Winter/Spring 2002

Articles:

Who Cares About That Unemployment Case? You Should!
W. Jonathan Martin, II

Not every employer will be sued, have the Teamsters knocking at the front door, or be audited by the Department of Labor. But it’s safe to say that virtually every employer will have to terminate an employee, often resulting in a claim for unemployment benefits. Although unemployment claims may seem routine, they can have serious legal consequences. Let’s take a look:

How It Works
Although unemployment rules vary from state to state, there are certain universal concepts. Once an employee is terminated, he or she can file a claim for unemployment. Initially, an adjudicator makes a decision based on statements gathered from the employer and the ex-employee. This first stage does not normally involve a hearing.

Generally, to be eligible for benefits, the employee must have been terminated through no (or not very much) fault of his or her own. Thus, if you can prove that an employee voluntarily resigned, stole from you, or harassed or beat up a co-worker, you can usually win the unemployment case. If you terminated an employee through a layoff or reduction in force, you will surely lose. If you terminated an employee who performed poorly but tried, or who was absent with a decent excuse, you will probably lose.
The losing party has a right to appeal to an administrative hearing officer, who holds "court" on the matter – either by telephone or in person. This is the first and usually only opportunity for the parties to submit evidence (in the form of documents or testimony) regarding what happened. It is also usually the first and only opportunity for either side to cross-examine the other side. Because this stage involves the factual evidence, sworn testimony, and – even more importantly – recorded testimony, this is generally the most critical stage of the process.

The next stages vary from state to state, but normally the losing party can appeal to the state unemployment commission. The losing party at that stage can then appeal to the state courts. At both of these stages, normally no further factual evidence is accepted; instead, the parties must argue that the hearing officer or the agency committed a legal error.

In almost every state, if either party appeals too far "up the chain," the decision becomes binding for all future purposes—for example, if a hearing officer finds that you discriminated against your ex-employee and you appeal one too many times, the hearing officer’s finding could become legally binding in a subsequent lawsuit.

One final critical principle—if you choose not to fight an unemployment claim, it cannot be held against you later on. Using the discrimination example above, your failure to contest the unemployment claim cannot be used as evidence that you were guilty of discriminating against your ex-employee.

When To Step Off
Obviously, then, it is good to know when to fight and when to back off. If you fight too hard, you could be creating some bad legal precedent for yourself (fortunately, the same concept applies to the ex-employee who appeals too many times). Moreover, each step of the appeal process costs attorneys’ fees or lost productivity of the corporate representatives who have to attend. Because of these potential negatives, employers should pick their battles.

Think twice about contesting the following claims: Terminations for poor performance if you can’t prove that the employee willfully failed to perform; terminations due to reductions in force; terminations for excessive absenteeism where the employee was genuinely sick or had another legitimate excuse; terminations for any reason when you did not follow your own policies or procedures; terminations for any reason when you lack appropriate documentation.

Also, regardless of the reason for termination, consider stepping off when the other side is bringing a lawyer to the hearing and you don’t want to incur the expense of bringing your own (that’s right—it is better to stay home than to go to the hearing without a lawyer when the other side has one); when you don’t have a consistent or defensible practice regarding which unemployment claims you fight and which you don’t (thus creating the possibility that you could be sued for retaliation); when you think that fighting the claim will only alienate the ex-employee and make him or her more likely to sue you; or when your only reason for wanting to "fight" is to get a chance to "depose" the ex-employee (most hearing officers won’t let you get away with that any more).

When To Fight
Of course, some unemployment claims are worth fighting. Ex-employees who were dishonest, violent, harassing, or willfully bad in some other way do not deserve benefits, and you may want to send a statement to your workforce that such behavior will not be tolerated. There are also sometimes tactical reasons for sending the signal to the ex-employee that you are no pushover.

When To Regroup
If you have a question about whether or how vigorously to contest an unemployment claim, DO consult with labor and employment counsel. Let me count the reasons: (1) there will be a permanent record of the testimony and other evidence presented at the hearing that usually can be used in a subsequent employment lawsuit; (2) sometimes it is possible to negotiate settlement of all potential claims in exchange for staying away from the hearing (often a thrifty "win-win" solution); (3) your lawyer will know the stage in the process at which a decision becomes binding precedent in your state; (4) your lawyer often will know which hearing officers are hopelessly anti-employer, saving you the time, expense, and frustration of attending a hearing where you don’t have a chance; and (5) your lawyer will be able to advise you as to whether your practice of fighting or not fighting unemployment claims leaves you vulnerable to a retaliation lawsuit.

The decision to contest an unemployment claim is fraught with legal significance. Don’t make it lightly.

Jonathan Martin (Macon, GA) practices in the areas of employment litigation prevention and defense, employment law training, and traditional labor.

BEST AND WORST OF ‘01

Like most people, I am glad that the Year 2001 is over. The year was dominated by bad news: September 11, the subsequent anthrax attacks, and an economy that was in serious danger (already faltering before the attacks, we are probably lucky it didn’t collapse completely afterward). However, there were rays of sunshine: the economy did not in fact collapse, the anthrax scare seems to have run its course, and our military is cleaning out the terrorist rat’s nests around the world. In the more mundane world of labor and employment law, 2001 was far from a total loss. So that we can end on a positive note, let’s start with the worst:

THE WORST

September 11. This mass murder obviously overshadows any other news. At last count, approximately 3,000 people are believed dead as a result of these heinous attacks. Most of the victims were at work, making it in all likelihood the worst act of workplace violence in American history.

Flowering of the "living wage" movement. This began before 2001, but it gained significant steam in the past year, especially with enactment of the Santa Monica, CA, living wage ordinance, which covers private employers and provides a "back door" to organizing by exempting union employers.

EEOC rule on age waivers. Apparently not believing that people 40 and older are capable of looking out for themselves, the EEOC takes the position that agreements that require employees to waive their rights under the federal age discrimination act are void.

California runs amok. California amends its Fair Housing and Employment Act to provide "disability" protection to employees who do not have "substantial limitations" and without regard to mitigating measures; it also requires employers to provide physical space (not a restroom stall) where nursing mothers can express milk. (See "Lactation Accommodation," page 3.)

THE BEST

Support for arbitration. The U.S. Supreme Court held that agreements to arbitrate employment disputes are generally enforceable.

Agency appointments. President Bush’s appointments have demonstrated empathy for the employer viewpoint, such as Elaine Chao (Secretary of Labor); Charles James (OFCCP); Peter Hurtgen (Chairman of NLRB) and John Higgins (Acting General Counsel of NLRB); and Cari Dominguez (EEOC).

Repeal of OSHA ergonomics rule. The Clinton Administration had promulgated an ergonomics standard that was repealed once Bush took office.

Attendance an "essential function." The U.S. Court of Appeals for the Seventh Circuit (Illinois, Indiana, Wisconsin) has held that regular attendance is an essential function of most jobs and thus even ADA-disabled employees can be required to show up for work.

More money for retirement. Congress enacts the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), which allows employees to save more pre-tax money for retirement effective in 2002.

Year 2001 was then; this is now. The U.S. Supreme Court is deciding a number of employment-related cases in 2002, including 12 that involve disability-rights issues. The decisions are beginning to trickle in as we go to press. For up-to-the-minute summaries of the decisions as they are issued, and analysis of their practical significance for employers, please visit our website at www.constangy.com.

Robin E. Shea, Editor
Winston-Salem, NC

The States "Lactation Accommodation," Gay Rights, and Stiffer Penalties For All

Here’s the latest in new state legislation . . .

California now requires that employers make it easier for nursing mothers to express milk during the work day. Employers must allow reasonable break time and a private location (not a toilet stall) near the work area for this purpose. Employers who fail to comply can be liable for $100 per violation. . . .

Maryland’s anti-discrimination statute now protects sexual orientation. The new law applies to employment, as well as housing and public accommodations. . . .

Maximum administrative penalties for violations of the New Jersey Law Against Discrimination have been increased to $10,000 if the employer has committed no other violations in the past five years, $25,000 if there has been one other violation within the past five years, and $50,000 for employers who have had two or more violations in the previous seven years. The New Jersey statute prohibits discrimination on the bases of race, creed, color, national origin, nationality, ancestry, age, sex, marital status, sexual orientation, atypical hereditary cellular or blood trait, genetic information, liability for militatry service, or mental or physical disability. . .

New Head of OFCCP Really MAY Be Here To Help You.
A Breath of Fresh Air?

Maureen Knight

Charles James, the new head of the Office of Federal Contract Compliance Programs (OFCCP), the agency responsible for enforcing affirmative action and equal employment opportunity requirements of federal contractors, is giving every indication that the agency may begin to show some empathy for employers who make good-faith efforts to comply with the law. Before he entered the public sector in 1994, James spent nearly ten years as the manager of EEO and affirmative action for Bell Atlantic (now Verizon). "I know what it’s like to be a contractor," he says. Employers can only hope that this empathy will equate to an OFCCP that will feel their pain.

Employers who have federal contracts of $50,000 or more and 50 or more employees are subject to various requirements regarding tracking and analyzing the racial and gender make-up of their applicants and workforce. The agency became ultra-aggressive during the Clinton Adminis-tration, imposing more requirements on employers, stepping up compliance reviews with increased focus on equal pay and adverse impact (i.e., big money) issues, and instituting the EO survey.

But James is showing signs that he will usher in a new era of reason in at least two key areas: the definition of "applicant," and EO surveys.

"Applicants"
Federal contractors are required to monitor the races and genders of their applicants compared with their hires for affirmative action purposes. Although this sounds relatively straightforward, significant controversy has arisen regarding the definition of an "applicant." Employers have long argued, without much success, that "applicants" should include only those individuals who meet the minimum qualifications for the applicable job. OFCCP, on the other hand, has taken the position that "applicant" includes everyone who expresses interest in being hired, regardless of whether they are even remotely qualified for the positions available. Because "walk-in" applicant populations typically contain large numbers of unqualified individuals, this overly broad definition of "applicant" has often resulted in severe adverse impact for facilities in areas with predominantly minority populations. It has also resulted in recordkeeping nightmares for facilities who use the Internet or other widely available means to advertise job openings.

James, bless him, has suspended pursuit of audits where the only issue was a dispute regarding the definition of "applicant." He has also indicated that he believes the proper definition should be something less than "everyone who expresses interest in the position," which is an encouraging start. The OFCCP and the EEOC were originally to issue a common definition of "applicant" by December 31, 2001. That deadline has now been extended to March 31, 2002.

EO Surveys
Slightly more than half of all federal contractors have become familiar with the EO survey, which requests information, broken down by gender and race, about a contractor’s workforce, personnel activity (such as hires and terminations), and compensation. Before James took his position, OFCCP had said that the other half of federal contractors would receive surveys in early 2002.

James, however, has said that he questions the utility of the EO survey in its current format, including its effectiveness in identifying contractors who are supposedly "out of compliance." At this point, he predicts that the surveys will be sent in 2002 but later in the year and in a different format. He also has said that the surveys may not be used to select employers for audits.

It is still too early to completely predict which way James will take the OFCCP. However, the agency is showing welcome signs of striking a balance between its compliance objectives, on the one hand, and avoiding unnecessary burdens for the business community, on the other.

 Maureen Knight (Arlington, VA) practices in the areas of affirmative action, employment litigation prevention and defense, and wage-hour.


Bush Scuttles "Blacklisting" of Contractors

The Bush Administration has rescinded rules issued during the eleventh hour of the Clinton Administration that would have prevented "non-compliant" employers from receiving federal contracts.

Under the rules, which the Bush administration suspended earlier this year, contractors would have had to establish that, for the past three years, they had had a "satisfactory record" of integrity and business ethics, and "satisfactory compliance" with federal laws. The Clinton Administration had justified the rules on the ground that "repeat offenders" should not be allowed the benefit of government contracts.

However, business groups objected that the rules were too vague and would have given the federal government discretion to "pick and choose" which companies would receive federal contracts.

Because the rules included pending complaints as well as ones where actual violations had been established, employers with no violations could be unfairly barred from receiving federal contracts, business groups said. They also argued that unions and other organizations could gain leverage against employers by filing or threatening to file unfounded complaints that would jeopardize employers’ federal contractor status.

Predictably, unions were outraged by the Bush Administration decision, while business groups applauded it.

Maureen Knight

Regional Labor and Employment Law Workshop 2002: A Brave New World

The axiom that labor and employment law is constantly changing has never been more true than during the past year. Employers are now being required to deal with increased concerns about safety and security, balanced against employees’ privacy rights. All of this comes at a time when employers are already facing challenges presented by the economic downturn and the need for belt-tightening. These forces, combined with ever-increasing employee awareness of rights and ever-increasing employment litigation, present special challenges for employers during a special time in the American workplace.

To help employers meet the challenge, the lawyers of Constangy, Brooks & Smith, LLC, will present one-day, interactive, Labor and Employment Law Workshops in five cities this Spring. The Workshops, intended for human resource professionals, in-house counsel, managers, and supervisors, will help employers manage employees in the brave new world in which we must now compete.

Included in each Workshop will be a comprehensive manual, continental breakfast, lunch, and a chance to learn about the most recent developments in labor and employment law in the company of a group of dedicated and highly motivated labor and employment attorneys.

Registration fees are $150 per person. Complete details of all sessions to be presented at the regional Workshops are posted on the Constangy, Brooks & Smith website at www.constangy.com. We hope to see you at one of the following programs!

Jacksonville, Florida
Thursday, April 11, 2002
Ponte Vedra Inn & Club
Ponte Vedra Beach, Florida
Information and Registration:
Bonnie Darnofall (904) 356-8900

Tampa, Florida
Thursday, April 25, 2002
Marriott Waterside Hotel
Tampa, Florida
Information and Registration:
Doris Key (813) 223-7166

North Carolina
Co-Sponsored by The Employers Association
Friday, May 3, 2002
Employers Association Conference Center
Charlotte, North Carolina
Information and Registration:
Amy Stemper (336) 721-1001

Tennessee
Thursday, May 9, 2002
Renaissance Nashville Hotel
Nashville, Tennessee
Information and Registration:
Vernice Syers (615) 320-5200

Georgia
Co-Sponsored by
The Georgia Employers’ Association
Thursday, May 16, 2002
Eagle’s Landing Country Club
Stockbridge, Georgia (30 minutes south of Atlanta; 45 minutes north of Macon)
Information and Registration:
Marsha Teel (404) 525-8622

Need an Immigration Lawyer? Call Us!

Constangy now has a full-service immigration practice with the addition of Dan White, who joined the firm on January 10. Dan was a partner with the firm of Smith Gambrell & Russell, LLP, practicing in the area of client immigration matters. His services include business and professional visas, labor certifications, immigration visas, consular representation, and citizenship for foreign executives, managers and professionals.

Dan’s bachelor’s and law degrees are from Vanderbilt University. Dan is based in Constangy’s office in Atlanta, GA. Other Constangy attorneys with immigration practices are Townsell Marshall (Atlanta) and Minda Campbell (Birmingham, AL).

Getting To Know Us

AL ROLNICK (Atlanta, GA, employment liability prevention, and labor and employment strategy) has been with our firm for 30 years. He received his bachelor’s degree in political science from Bucknell University and his law degree from Emory University. Al has served as Chairman of both the Human Resources Committee and the Associate Member Congress of the American Apparel Manufacturers Association (now the American Apparel & Footwear Association), and was granted the association’s highest award to a supplier member to industry. When Al is not practicing law he enjoys tennis and travel, and he is a wine afficionado. He and his wife, Jackie, have two children.

BILL CLIFTON (Macon, GA, discrimination and ERISA litigation) received his bachelor’s degree in philosophy from Oglethorpe University, his master’s in philosophy from Georgia State University, and his law degree from Columbia University. Before he attended law school, Bill was a Nuclear Engineering Lab Technician for the United States Navy, a Computer Operator and a Technical Writer. Bill also remained quite busy after graduating from law school: he has served as a law clerk for the U.S. District Court, a summer intern for the Georgia Supreme Court, and has even clerked for Bobby Lee Cook (on whom TV’s Matlock is based). Bill enjoys gardening and camping with his wife, Martha.

DON BENSON (Atlanta, GA, wage and hour, and employment and labor litigation) has a bachelor’s degree in philosophy from Davidson College and a master’s in philosophy from the University of Georgia. Don received his law degree from the University of Utah, where he was a member of the Law Review and a University Fellow. Before he began practicing law, Don was a philosophy and religion graduate student, a teaching assistant, and a doctoral candidate. He has been published in several legal and human resources publications, including HRATLANTA, Georgia Bar Journal, and Practical Litigator. Don and his wife, Dana, have two children. Don’s hobbies include playing tennis and coaching his children’s various sports teams.

MIKE MALFITANO (Tampa, FL, employment liability prevention, traditional labor law) is the head of our Tampa office. He received his bachelor’s degree from the School of Industrial and Labor Relations at Cornell University and his law degree from Boston College, where he was a member of the Editorial Board of the Law Review. Mike has been Chairman of the Labor and Employment Section of the Florida Bar and is listed in The Best Lawyers in America and Leading Florida Attorneys. He is also very active in community service, serving as member of the Board of Trustees for both the Tampa Museum of Art and the Drug Abuse Comprehensive Coordinating Office. Mike’s writings have appeared in several legal publications.

COLLEEN GROGAN (Atlanta, GA, employment litigation prevention and defense) received her bachelor’s degree cum laude, with honors in sociology, from Oglethorpe University and her law degree from the University of Notre Dame. She has traveled in South America, Ireland, and Western Europe, and plans to continue until she has circled the globe. Her next trip will be to China. When Colleen is not traveling or practicing law, she enjoys reading, running, and hiking.

Reason Prevails… And Reason Flails…

Plaintiffs from Mars . . . and Venus. Among the frivolous plaintiffs who’ve been busted since our last edition are these: Child care worker with I.Q. of 64 who allegedly failed to watch the children, used her cell phone during class, called the kids names and refused them drinks (she’d sued for learning disability discrimination). . . Forklift driver with 12 accidents in three years, fired for unsafe behavior (he’d sued for disability discrimination – post-traumatic stress disorder). . . .

Big, hairy, deep-voiced person with XY chromosome doesn’t have right to use women’s restroom, notwithstanding cute dress. The Minnesota Supreme Court says it is OK for employers to restrict ladies’ room use to "biological females," reversing a lower court’s ruling in favor of a transgendered individual.

Lying, agile faker has no ADA case. Our friends in the Seventh Circuit (Illinois, Indiana, Wisconsin) affirmed dismissal of an ADA lawsuit brought by a guy who was allowed to work part-time for full-time pay after he injured his back. He lost his sweet deal after the employer caught him on videotape twisting, bending, and climbing.

"No more Napster or porn? What do you expect us to do? Administer justice, or something?" To its credit and over strenuous objections by some members of the bench, the Judicial Conference of the United States has banned the workplace viewing or transmission by federal court employees of sexually explicit material, or materials related to illegal gambling, illegal weapons, terrorist activity, or other illegal activity.

Squeaky wheel gets the gate. The Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota) held it was not an unfair labor practice for a hospital to terminate a pro-union nurse who said on TV that her employer was "jeopardizing the health of mothers and babies."

Shrewishness found not a gender-based characteristic. In other obstetric/employment law news, the First Circuit (Maine, Massachusetts, New Hampshire, Rhode Island, Puerto Rico) affirmed dismissal of a sex discrimination lawsuit brought by a doctor who was fired for being so adamant about maternity-care issues that she alienated the nurses and nursing management with whom she worked.

Flash! Expecting your employees to behave is legal, court finds!!! The D.C. Circuit slammed the National Labor Relations Board for taking the position that a ban on abusive or threatening language was an unfair labor practice. The Board had actually said that union representatives "must" often use sexual, racial and other derogatory epithets in doing their work. The court panel unanimously called the Board’s position "preposterous," "a stunning misreading of applicable precedent," and "absurd."

"Mom, he’s looking at me! Make him pay me $30MM, plus attorneys’ fees!" The California Court of Appeal held that staring can form the basis for a viable sexual harassment claim.

"Age discrimination? Who, ME?" A federal court in Tennessee refused to throw out an age discrimination case, where the plaintiff’s evidence showed that his boss said the plaintiff was too old to learn computers, too old to be a team player, needed a hearing aid (because he was so old), and needed to go to bed early (because he was so old). Then the boss allegedly fired the plaintiff and told employees and customers that he had fired the plaintiff because he was too old.

Wacky wolverines. The Michigan Court of Appeals has held that workers’ compensation is available to a parole officer who claimed depression as a result of his employer’s failure to "support" him after four public defenders complained that he had sexually harassed them. Among other things, he had allegedly asked one, "Do you want to f***?" and told her (completely unsolcited) that she would have to be discreet and would have to lose 10 pounds if they had an affair.

Attorney #3 is very, very nervous. After getting less than he thought he ought in a race discrimination case, a plaintiff sued his original attorney for malpractice. The plaintiff’s second attorney settled the malpractice case for $765,000. Then the plaintiff sued the second attorney for malpractice, apparently believing that the hefty settlement was inadequate. The Seventh Circuit has now agreed that the suit against Attorney #2 should be dismissed.

Stress’d Practices. Guess the ending: Company’s harassment policy requires employees to report alleged harassment to their direct supervisors. Then supervisor allegedly harasses direct report. Then employee sues, and employer seeks to have suit dismissed on ground that employee did not report alleged harassment.

Quarterly Quiz

Julio is a Mexican immigrant who has been a full-time employee with your company for three years. Although he is a good employee and had perfect attendance his first two years, he used up all his vacation and missed several additional days of work during the past year because of a domestic dispute with his ex-wife. He is now one occurrence away from being terminated for absenteeism.

Julio comes to you and asks whether he can take two days off. He says that his father, who still lives in Mexico, is having cardiac surgery. Although Julio cannot afford to go to Mexico to be with his parents, he wants to stay by his telephone at his U.S. home to be available for them.

You would like to keep Julio, but you have to follow your attendance policy. Is there any way Julio can have the time off and be saved?

Quarterly Quiz Answer

Yes. Julio’s time off arguably qualifies as a legitimate absence covered under the Family and Medical Leave Act ("FMLA"). His father’s surgery qualifies as a "serious health condition" of a "spouse, parent or child." And leave is available if the employee is "needed to care for" the parent, including providing psychological comfort and reassurance. Julio’s availability by telephone is arguably a way of providing this to his father. Thus, if Julio can produce a medical certi-fication from his father’s doctor, you can excuse the absence without violating your attendance policy. (Another alternative would be to grant him a non-FMLA, no-penalty leave of absence if your policy allows you to do so under these circumstances.)

Kudos

Mike Blumenthal (Kansas City, MO) has been appointed Chairman of the Legislative Committee for the Human Resource Management Assn. of Johnson County, Kansas . . . AND Chairman of the Labor and Employment Law Committee of the Kansas City Metropolitan Bar Association (whew!) . . .

Mel Haas (Macon, GA) has been named to the Board of Directors for the Georgia Defense Lawyers Association . . .

Maureen Knight (Arlington, VA) former paralegal and now one of our new attorneys, received the Betty Southard Murphy Award in Labor Law for the 2000-01 academic year at George Mason University in Washington, D.C. . . .

John Dickinson (Jacksonville, FL) and Mike Malfitano (Tampa, FL) have become charter members of the Academy of Florida Management Attorneys, an organization of senior management labor and employment attorneys . . .

Congratulations to Mike B., Mel, Maureen, John, and Mike M.!

And, special congratulations to Constangy’s newest members Bill Clifton (Macon, GA), Jill Cox (Winston-Salem, NC), and Mandi Smith T (Birmingham, AL), and to our newest managing member, Ed Ennis (Macon, GA)