Employment Law Matters : Employment Lawyer & Attorney : Ogletree Deakins Law Firm : Labor Law, Human Resources

In an unpublished opinion, the 3d U.S. Circuit Court of Appeals has reminded employers of the importance of acting consistently with written policies, and of documenting that action. Coleman v. Blockbuster, Inc., 3d Circ., No. 08-4056, November 17, 2009. In that case, the Court upheld summary judgment in favor of an employer on the basis of the company’s ability to support its proffered “legitimate business reason” for the termination of a company manager for closing a store early and leaving the premises for a family emergency.

Tyra Coleman, an African American female, was hired by Blockbuster in September 2003 and was promoted to the position of store manager a few months later. However, after a series of disciplinary actions, Coleman was fired on June 22, 2004. In April 2004, Coleman had received two written “Corrective Action Reports” (CARs) for her store’s poor operational performance. On June 11, she received a third CAR when she missed a mandatory team meeting, and brought her two-year-old grandson to work with her. The third CAR was treated as a last chance agreement and read, in part, “Failure to improve will result in termination of employment.” On June 15, 2004, Coleman closed the store early and left the premises, ostensibly because of a medical emergency involving her minor son. Her employment was terminated the following week.

Coleman ultimately filed a lawsuit, claiming that the actual reason for her termination was race discrimination. The district court granted summary judgment in favor of Blockbuster; that decision was upheld on appeal.

Employment discrimination claims typically are analyzed under a “burden shifting” framework which requires an employer to offer a legitimate business reason for its action. In this case, Blockbuster argued that it acted pursuant to its written policy of progressive discipline. Coleman countered that the company acted “too harshly” when it fired her for her son’s emergency, and asserted that such harshness was an indication that the firing was racially motivated.

The Third Circuit pointed to the fact that whether or not Coleman believed her termination to have been “harsh,” she was unable to demonstrate that Blockbuster treated her less favorably than other, non-minority employees. To the contrary, the Court found that “Blockbuster came forward with solid evidence to demonstrate that the reason for Coleman’s termination was her dereliction of duty.” The Court pointed out that the company’s operating procedures allow the company certain discretion in its disciplinary measures, including the application of “more stringent penalties” for an employee – like Coleman - who already is in the progressive disciplinary system at the time of an additional infraction. While Coleman disputed certain factual evidence, she was unable to show any evidence that even suggested that her termination was motivated by her race, and not by her “dereliction of duty,” as stated by the company.

There is no doubt that Blockbuster’s documentation of its disciplinary actions, and its compliance with its progressive disciplinary policy (which gave it broad discretion to accelerate disciplinary measures when deemed appropriate) were the keys to its success against Coleman’s claims of discrimination in this case.
 

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With little fanfare and even less reaction from employers, the Genetic Information Nondiscrimination Act (GINA) took effect on November 21, 2009. GINA generally prohibits employers, employment agencies, and unions from collecting genetic information – which specifically includes family medical history - related to employees or applicants. The law also precludes any type of genetic testing of employees or applicants.

The procedures and remedies associated with GINA parallel those of Title VII, the federal non-discrimination law, and prohibit discrimination in hiring, training, and placement of individuals because of their genetic information. GINA’s provisions related to the treatment and non-disclosure of genetic information are taken from the Americans with Disabilities Act’s procedures regarding the confidentiality of medical information. GINA generally precludes employers from obtaining and sharing medical information that falls within the definition of genetic information.

While GINA is now in effect, the EEOC’s final rule, which will provide direction regarding enforcement, has not yet been issued. The proposed regulations are in the final stages of review, but there has been no word as to when the White House Office of Management and Budget (OMB) will approve those regs. Once approved, the regulations will face a final vote by the EEOC commissioners, and a subsequent final publication in the federal register.

Employers’ preparation for that final approval should include updating workplace posters (the EEOC already has issued a revised version of its anti-discrimination poster that includes reference to GINA), revising handbook and policy manuals, and generally informing and training supervisors and managers that genetic bias is now prohibited. That training should include the warning that companies may be held liable for retaliation under GINA is they take adverse action against an employee or applicant whose genetic information has been disclosed to the company, even if that disclosure was made through informal communication. Therefore, companies should be sensitive to the day-to-day conversations among employees, and should take action to prevent or stop discussions related to an individual’s family medical history, in order to prevent such information from becoming the actual or perceived basis for subsequent adverse employment actions, either of which could form the basis of a claim of discrimination under GINA.
 

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The Rehabilitation Act of 1973 was the first major federal statute to focus on the rights of individuals with medical impairments. Section 504 of the Act creates a private right of action for individuals claiming to have been discriminated against in any “program or activity” receiving federal financial assistance. Courts have included federally funded employment as one such “program.”

Amendments to the Rehabilitation Act have incorporated certain standards and remedies from other civil rights laws, and specifically have incorporated the standards of the Americans with Disabilities Act that determine whether employment discrimination has occurred. The 9th U.S. Circuit Court of Appeals recently addressed an issue on which appellate courts are divided, and has held that unlike the ADA, the Rehabilitation Act protects independent contractors as well as employees. Fleming v. Yuma Regional Medical Center, 9th Cir., No. 07-16427, 11/19/09.

Dr. Lester Fleming entered into a contract in May of 2005 to provide anesthesiology services to Yuma Regional Medical Center in Yuma, Arizona. Prior to beginning work in November of that year, Fleming was asked – and refused – to sign an addendum to his employment contract that would have precluded a schedule that accommodated Fleming’s sickle cell anemia. Based on that refusal, Fleming’s employment contract was cancelled. Fleming sued Yuma for breach of contract and for violation of Section 504 of the Rehabilitation Act. The district court granted summary judgment in favor of Yuma, ruling that Fleming was an independent contractor and, as such, was not protected from disability discrimination by the Rehabilitation Act. Fleming did not dispute his independent contractor status, but appealed the determination related to whether he was covered under the Act.

The Ninth Circuit reversed the dismissal, ruling consistently with a prior Tenth Circuit decision that Section 504 incorporates only the ADA’s standards for what conduct violates the Act, and not the definition of who is covered by the protections of the Act. The Court based its determination on the fact that the Rehab Act is broader than the ADA, covering any “otherwise qualified individual” who has been excluded from a program receiving federal funds, and not just employees. Further, the programs covered under Section 504 are all such operations, not just employment, whereas the ADA is limited to the employer-employee relationship. Because Congress did not use general language when it referred to the ADA in Section 504, and did not restrict the scope of the Act to employment, the Ninth Circuit was hesitant to “reduce the express scope of the Rehabilitation Act by wholesale adoption of definitions from another Act.”

The Ninth Circuit’s decision puts it in direct conflict with the Sixth and Eighth Circuits, each of which previously has held that Section 504 does incorporate the ADA’s employer-employee relationship requirement into the Rehabilitation Act. While the Ninth Circuit’s opinion spells out the rationale for its divergence from these decisions, there still exists a major split in the Circuits on the issue, creating an issue of concern for employers and their attorneys in the remaining circuits, and one which they will be following until the issue is addressed, if ever, by the U.S. Supreme Court. In the meantime, employers should be aware of this decision, and should take it into account when making decisions related to employees and independent contractors with medical impairments.

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The Family and Medical Leave Act prohibits employers from discriminating against employees who have taken leave under that Act. However, the 7th U.S. Circuit Court of Appeals has affirmed summary judgment in favor of an employer who terminated an individual for excessive absenteeism and performance issues that developed prior to that employee’s request for FMLA leave, even though her termination occurred during that protected leave. Long v. Teachers’ Retirement System of Illinois, 7th Cir., No. 08-3094, Oct. 23, 2009.

Julie Stephens Long was employed by the Teachers’ Retirement System of the State of Illinois (TRS) from 1985 until her termination in 2006. Starting in 2000, Long worked in TRS’ payroll department, where she had responsibilities that included enrolling members in an electronic fund transfer (EFT) program, entering information into a database, and verifying bank routing and account numbers. She reported directly to TRS’ Payroll Insurance Manager (Branham). While Long’s initial performance in Payroll was good, both her absences and her work errors increased over time. In June of 2005, Long missed 25% of her scheduled work days; this rose to 40% during the following month. In addition, Long failed to train employees from other departments on the EFT process, in spite of multiple directives from Branham to do so.

On July 26, 2005, Branham met with Long to inform her that because of her frequent absences, he planned to withdraw his nomination of her for a promotion. In September, Branham traced several errors in the EFT system to Long. He then met with Long to discuss her errors, her failure to conduct the requested training sessions, and the effect of her increased absences on co-worker morale. He summarized those issues in a memo dated September 20, 2005.

On September 26, Long applied for FMLA leave for medial epicondylitis (“tennis elbow”). After the leave was granted, Long informed TRS that her September absences were related to that condition. She then modified her leave request to ask for intermittent leave for treatment of ovarian cysts. She took six days off in October and eight days in November under that leave. However, she also was absent on nine days in December 2005 and five in January 2006 for non-FMLA reasons. Branham’s frustration with Long increased to the point where he met with TRS’ HR manager (Larkin) and a Deputy Director of its Benefits Department (Sherman) and recommended that Long be fired. Larkin then undertook a full review of Long’s performance evaluations, co-worker and TRS member complaints, and comments from both Branham and Sherman, and then recommended to TRS’ Executive Director (Bauman) that Long’s employment be terminated. Bauman had no knowledge of Long’s FMLA leave when he made the final decision to fire her.

Long filed suit against TRS, claiming violation of the FMLA. While TRS did not dispute the fact that Long engaged in protected activity when she took the FMLA leave, it argued that its decision to fire her was based on a number of factors, and not on any retaliatory animus. The district court granted summary judgment in favor of TRS, and decision was upheld by the 7th Circuit on appeal.

Long’s lawsuit centered around the claim that Branham was angry about her absences, and that he unduly influenced the decision to fire her on that basis. However, the Court noted that Long had not applied for leave prior to the documented disciplinary meeting with Branham on September 20, and that Branham already had documented the fact that Long’s absences were negatively affecting the performance of her group prior to Long’s request for leave. Therefore, any comments by Branham regarding Long’s pre-FMLA leave absences could not be used as evidence of FMLA retaliation on Branham’s part. Further, the Court pointed to Larkin’s independent investigation, in which she reviewed not only Branham’s comments, but information from others as well. The decision to fire Long ultimately was made by Bauman, who relied on multiple sources of information, and was unaware of Long’s FMLA leave.

The critical issues in this matter are ones of which employers should be aware: (1) Branham’s documentation of his September meeting with Long showed that there were performance concerns prior to Long’s request for FMLA leave; (2) the multiple sources of information used in the termination investigation supported TRS’ argument that Branham’s concerns about Long were not the sole basis for TRS’ decision; and (3) the independent deliberation of the ultimate decision-maker was evidence that Branham was not the deciding factor in the adverse action against Long. Companies that follow this model of “documentation/multiple sources of information/independent decision-making” are far more likely to be successful in avoiding liability under the FMLA.
 

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On October 28, 2009, President Obama signed the National Defense Authorization Act (NDAA), which includes provisions that expand the military leave entitlements of the Family and Medical Leave Act (FMLA) by expanding both the “qualifying exigency” leave and military caregiver leave that became effective in January 2008.

Prior to these new amendments, an eligible employee whose spouse, son, daughter or parent was on active duty or called to active duty in support of a contingency operation as a member of the National Guard or Reserves was entitled to “qualifying exigency” leave. The new law extends qualifying exigency leave to an eligible employee whose spouse, son, daughter, or parent is a member of any branch of the military, including the National Guard or Reserves, and who was deployed or called to active duty in a foreign country. In addition to extending qualifying exigency leave to eligible family members of a member of any branch of the Armed Forces, the new law eliminates the requirement that the active duty be in support of a contingency operation.

The new law did not change the length of leave entitlement under the FMLA. A covered employer still must allow an eligible employee up to a total of 12 workweeks of unpaid leave during the normal 12-month period established by the employer for FMLA leave. The reasons for which an eligible employee can take qualifying exigency leave also are unchanged. Such leave still can be taken for short-notice deployment, military events, and related activities such as official ceremonies, financial and legal arrangements, counseling, rest and recuperation, post-deployment activities, and additional activities to address other events which arise out of the covered military member’s active duty or call to active duty status.

The new amendments expand military caregiver leave in two ways: First, the new law extends military caregiver leave to eligible family members of veterans who were members of any branch of the military at any time within five years of receiving the medical treatment that triggers the need for military caregiver leave. Therefore, employees who are family members of a current service member or veteran undergoing medical treatment, recuperation, or therapy for a serious injury or illness incurred in the line of duty may take up to six months of caregiver leave, so long as the veteran was a member of the military within five years of receiving such treatment. Employers do not have the option of using the typical FMLA calendar-year method for military caregiver leave – the 12-month period begins when the employee begins using caregiver leave.

Second, the new amendment expands the definition of a “serious injury or illness” for purposes of determining eligibility for military caregiver leave. It has been expanded to include the aggravation of existing or pre-existing injuries to an active duty service member in the Armed Forces. Thus, employees may now take military caregiver leave for a family member whose pre-existing injury or illness was aggravated while on active duty. For veterans, the definition allows the leave whether the injury or illness manifested itself before or after the Armed Forces member became a veteran.

The NDAA did not specify the date on which these amendments to the family military leave entitlements become effective. Thus, the presumption is that these changes took effect when President Obama signed the NDAA on October 28. It is anticipated that the U.S. Department of Labor will issue guidance to address the changes in the near future.
 

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