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The 3d U.S. Circuit Court of Appeals has held that 15 minutes was a sufficient amount of time for the plaintiff, a public school teacher, to review a separation agreement and release negotiated in connection with her resignation. Gregory v. Derry Twp. Sch. Dist., 2011 WL 944424 (3d Cir., March 21, 2011)

Rhauni Gregory, a public school teacher, sued her former employer and a number of individuals for race discrimination under 42 U.S.C. §1981. Although prior to her resignation from employment, Gregory signed a separation agreement that included a release, she subsequently claimed that the agreement was invalid and that it did not preclude her from suing the School District. Her argument was based largely on the fact that when she was asked to sign the agreement, Gregory was provided only about 15 minutes to deliberate whether to sign. However, the agreement had been reviewed and negotiated by a representative of the teachers’ union of which Gregory was a member, who assured that the agreement included continued health benefits and a positive letter of recommendation, both of which Gregory had indicated were critical to her. In addition, Gregory claimed that she signed the agreement under duress, because the school principal sat next to her as she reviewed the document. However, she was unable to point to any actual restriction on her ability to think or consider in that circumstance, or to show any specific instance of “duress.” The lower court granted the school District’s motion for summary judgment, finding that Gregory had waived her right to sue when she signed the release agreement.

The Third Circuit affirmed on appeal. Examining the facts under the applicable “totality of the circumstances” test, the Court rejected Gregory’s attempt to avoid the agreement, finding that she had sufficient time to review the agreement, and that she did not sign under coercion or duress. The Court reviewed the seven factors to be considered: 1) the clarity and specificity of the release language; 2) the plaintiff's education and business experience; 3) the amount of time the plaintiff had to deliberate about the release before signing it; 4) whether the plaintiff knew or should have known her rights upon execution of the release; 5) whether the plaintiff was encouraged to seek, or in fact received benefit of counsel; 6) whether there was an opportunity for negotiation of the terms of the agreement; and 7) whether the consideration given in exchange for the waiver and accepted by the plaintiff exceeded the benefits to which she was already entitled by contract or law.

It is important to this decision that Gregory’s representative already had approved the agreement before Gregory reviewed it, and that Gregory had negotiated certain specific benefits in exchange for resigning.  Based on those background facts, employers cannot interpret this case as providing permission to rush an employee into signing a release, and in most cases still should provide sufficient time for the employee to review an agreement and confer with an attorney or other representative.  In addition, it is important to note that releases of claims under the federal Age Discrimination in Employment Act (ADEA) must comply with the minimum review period and other specific requirements of the Older Workers Benefit Protection Act.
 

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The Americans with Disabilities Act specifically includes a “safe harbor” provision for individuals no longer abusing drugs and alcohol, specifically including individuals who have successfully completed a supervised rehabilitation program and are “no longer engaged in the illegal use of drugs.” While the Courts have declined to adopt a bright-line rule as to the number of days of sobriety required to remove an individual from being viewed as currently engaged in the use of drugs or alcohol, the 10th U.S. Circuit Court of Appeals has ruled that an individual who had completed a 28-day rehabilitation program would not necessarily be viewed as drug-free for purposes of the ADA. Mauerhan v. Wagner Corp., 10th Cir., Nos 09-4179 and 4185, April 19, 2011.

Peter Karl Mauerhan began his employment with Wagner Corporation from 1994. On June 20, 2005, Mauerhan tested positive for drugs at work, and was fired for violating the company’s drug policy. He was told that if could return to the company if he “got clean.” Between July 6 and August 4, 2005, Mauerhan was in an inpatient drug rehabilitation program. Upon his completion of the program, a counselor described Mauerhan’s recovery prognosis as “guarded.”

The day after completing the program, Mauerhan attempted to return to work. He was told that Wagner would re-employ him, but that he would not receive the same level of compensation as he had earned previously, and would not be servicing the same client accounts as before. Mauerhan refused to accept these terms and subsequently filed a lawsuit against Wagner, claiming a violation of the ADA based upon his status as a recovering addict. Wagner responded to the lawsuit by arguing that Mauerhan was a “current user” within the meaning of the ADA when he asked to be rehired and, therefore, was not a qualified individual with a disability for purposes of the Act. The district court agreed, and granted summary judgment in favor of the company. That decision was upheld by the Tenth Circuit on appeal.

The ADA prevents employers from discriminating against a “qualified individual” on the basis of a disability. For purposes of the ADA, an employee is not a qualified individual if he or she is engaging in the illegal use of drugs. However, the ADA specifically exempts from this group individuals who are participating in or who have successfully completed a supervised rehab program and are no longer currently engaging in such use (“the safe harbor provision”). While the courts have not fully defined the scope of the “currently engaging” exception, in this case, the Tenth Circuit specifically held that one drug-free month was insufficient to trigger the safe harbor provision for Mauerhan. It based that holding on its view that Mauerhan’s most recent active drug use (30 days prior to his application for reemployment) was sufficiently recent to justify Wagner’s concern that the drug use may remain an ongoing problem.

The Court further held that mere participation in a rehabilitation program is not enough to trigger the protections of the ADA. While such participation can bring an individual closer to qualification for the ADA’s safe harbor provision, that individual’s period of non-use of drugs must be sufficient to indicate that the drug use is no longer an ongoing problem.

In this case, Wagner presented evidence that Mauerhan’s prognosis for recovery from his addiction was “guarded” at the time that he requested to be re-hired, and they provided testimony from an addiction specialist that approximately three months of treatment would have been necessary for an addict like Mauerhan to reach a “threshold of significant improvement” in his addiction. Maurenhan failed to rebut this information, relying solely upon his participation and successful completion of the 28-day program. The Court found that because Mauerhan failed to rebut Wagner’s factual assertions, the Company was entitled to summary judgment

This case – like similar cases decided by other appellate courts – fails to provide a bright line test for when an individual falls within the safe harbor provision. However, the Tenth Circuit has indicated that an individual’s eligibility for the safe harbor must be determined on a case-by-case basis, and should take into account the circumstances of the individual’s drug use and recovery, and whether those circumstances justify a reasonable belief by the company that the person’s drug use is no longer a problem.

The Court provided some factors to be reviewed in such a determination, including the severity of the addiction, the relapse rates for the drug(s) being used, the level of responsibility entrusted to the employee, the employer’s performance requirements, and the employee’s past performance record. Before making any decision related to an individual in rehab, an employer should review these factors, in order to assure compliance with the ADA.
 

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The 8th U.S. Circuit Court of Appeals has upheld summary judgment against a bank teller who claimed that she was constructively discharged when she left her job on the last day of her pregnancy-related medical leave. Trierweiler v. Wells Fargo bank, 8th Cir., No. 10-1343, April 8, 2011.

An individual can support a claim of constructive discharge by demonstrating that a reasonable person would have found the employment conditions intolerable, and that the employer either intended to force that person to quit, or could reasonable have foreseen that she would do so. Kimberli Trierweiler began working for Wells Fargo Bank in October 2006 as a teller in the bank’s Watertown, South Dakota branch. The handbook that Trierweiler received at the outset of her employment indicated a “regular and dependable attendance” was an essential function of her job, and that excessive absences from work would lead to discipline, up to and including termination. The handbook also provided methods for reporting employment issues, including concerns related to accommodations for medical issues.

Bank employees received 160 hours (20 days) of paid time off (PTO) each year, and could exercise that time off after 30 days of employment. Between her start date and the end of 2006, Trierwetler used her pro rata allotment of PTO, along with four and a half unpaid additional days of absence.

In December 2006, Trierweiler informed her supervisors that she was pregnant. Although she was not eligible for Family and Medical Leave (not having worked for the Bank for the requisite one year), she would have been entitled to maternity leave under a short-term disability plan, which had a 5-day “waiting period” during which Trierweiler would have had to use PTO days or unpaid leave.

By mid-April 2007, Trierweiler had used eleven and a half days of PTO, with three additional days scheduled before the end of April, amounting to 120 hours of her available 160 hours of PTO for 2007. None of that time was related to her pregnancy. During a meeting with her supervisor at that point, Trierweier was warned about her frequent absences.

On May 9, Trierweiler took another PTO day to stay home with a sick child. Following that, Trierweiler was told that if she had another absence, she would receive a written warning. On May 14, Trierweiler left a phone message for her supervisor, stating that her doctor had prescribed a week of pregnancy-related medical leave. According to Trierweiler, her supervisor responded with a message that said that “This isn’t going to work, you taking time off.” Trierweiler did not have any further direct contact with her supervisor or any HR person on the issue, but testified in her subsequent lawsuit that she felt that the message meant that she no longer had a job.

While Trierweiler was on her medical leave, her supervisor sought advice from HR. It was decided that Trierweiler should receive a written warning for her previous absences (not including the current leave), but that a company program, called “WorkAbility” would be explored for temporary accommodations for the current and any future pregnancy-related leaves. Two days later, on the final day of her week-long leave, Trierweiler drove through the bank’s drive-through lane, handed her keys to the teller, and stated that she was “done.” She followed this with a phone message to her supervisor that she had done so, and asked for her personal office items.

Trierweiler brought a federal court action under Title VII’s Pregnancy Discrimination Act, claiming that she had been constructively discharged. The lower court granted summary judgment in favor of the Bank, and that decision was upheld by the Eighth Circuit. In spite of Trierweiler’s argument that an alleged statement by her supervisor - that she couldn’t miss additional work without being fired – was designed to force her to quit, the Eighth Circuit pointed to the company’s decision to seek assistance from WorkAbility to explore possible accommodations for the situation. According to the Court, this showed an intent to maintain an employment relationship with Trierweiler, not an attempt to force her to quit, or to create an intolerable condition that would make it impossible for her to continue to work there.

Trierweiler never spoke with HR, utilized any resources provided in the handbook for problem resolution, or asked for clarification of any of the phone messages left for her about her absences. As such, Trierweiler failed to provide an opportunity for the company to remedy the issues of which she was complaining. The lesson here is that Court’s are hesitant to find constructive discharge when an employee does not allow the employer a reasonable chance to work out the problem. Further, the Bank’s efforts to find a resolution to the problem, and its documentation of that effort, helped to successfully defend against this claim.
 

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In July 2008, the Department of Labor’s Wage and Hour Division (WHD) published proposed rules that would change several regulations issued under the Fair Labor Standards Act (FLSA) and the Portal-to-Portal Act, including tip credit, fluctuating workweek, compensatory time, commuting, and other provisions. The proposed rules were not finalized during the previous Administration; however, a final rule was published in the Federal Register on April 5, 2011, and will take effect in 30 days.

One of the primary changes is an update to the regulations regarding “tip credit” to reflect increases in the minimum wage. Tip credit means that an employer can pay to a tipped employee an hourly wage less than the legal minimum, so long as a combination of that less-than-minimum wage and the person’s tips equals at least the legal minimum wage. The final rule raised the maximum federal tip credit from $4.42 an hour to $5.12.

Other changes made include clarification of certain overtime exemptions for employees engaged in firefighting activities (allowing such employee to engage in a certain amount of non-exempt work), as well as an adoption of the youth opportunity wage provision, which allows an employer to pay a less-than-minimum wage to an employee under the age of 20 for the first 90 calendar days of employment.

While the DOL implemented some changes in the new rules, the Department’s unwillingness to make certain other expected changes is what seems to be getting the attention of employers and employees. Notably, the DOL declined to adopt changes on several existing regulations including those on compensatory time, fluctuating workweek, and meal credits. It also refused to exempt a service manager, service writer, service advisor or service salesman from overtime.

According to Al Robinson, formerly the acting Administrator of the Wage and Hour Division (WHD) of the DOL (prior to joining the Washington DC office of Ogletree Deakins), “to say that the final rule is ‘narrower’ than the rule proposed in July 2008 is an understatement because it is a missed opportunity to add some clarity, especially on the topic of the fluctuating workweek.” In the fluctuating workweek, a salaried non-exempt employee’s hours vary from week to week. The esoteric issue of concern was whether a bonus or other premium payment should invalidate the fluctuating workweek method by being included in the calculation of the employee’s “regular rate” of pay. While the proposed regulation would have provided that a bonus or premium payment does not invalidate the fluctuating workweek method of compensation, the final rule restores the current situation in which a fixed salary amount is paid as straight time for hours worked, and a bonus or premium payment is calculated and paid separately. Unfortunately, however, the final rule does nothing to illuminate generally or further explain the fluctuating workweek, a concept in dire need of explication.
 

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