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

Employment termination during an employee’s leave under the Family and Medical Leave Act (FMLA) may constitute “interference” with that leave. However, an employer typically does not violate the FMLA if it terminates an employee for failing to comply with the company’s policies regarding absences, even if those absences occur during a protected FMLA leave. A recent decision by the 3d U.S. Circuit Court of Appeals reminds us that the FMLA is not a law that can remedy an employee’s failure to follow a company’s sick leave policies. Pellegrino v. Communications Workers of America, AFL-CIO, CLC, 3d Cir., No.11-2639, April 19, 2012.

Denise Pellegrino began her employment with the Communications Workers of America (CWA) in 2005. In 2006, the CWA revised its Sickness & Absenteeism Policy to require employees on paid sick leave to “remain in the immediate vicinity of their home during the period of such a leave,” unless permission was obtained in writing prior to such travel. Under the 2006 CWA policies, FMLA leave ran concurrently with any available paid sick leave.

In August 2008, Pellegrino requested FMLA leave for surgery. Paperwork was provided to Pellegrino, informing her of her rights and obligations under the FMLA. She also was provided with two separate medical certification forms – one for FMLA and the other for paid sick leave – and was notified that she was “required to substitute paid leave under CWA’s sick leave policies” for the period of time during which she qualified for sick leave benefits. Pellegrino submitted both certificates, and was granted four weeks of FMLA leave, which was to run concurrently with four weeks of available paid sick leave. Pellegrino began her leave on October 2, 2008, the date of her surgery; she received full pay and benefits under the CWA sick leave policy.

About two weeks after the surgery, and without prior notice to CWA, Pellegrino traveled to Cancun, Mexico with three other individuals, and spent a week there. When she returned, Pellegrino was asked to meet with the administrative director of her CWA office, who asked about the trip. After Pellegrino admitted to having taken the trip, her employment was terminated, based upon violation of CWA’s sick leave policy.

Pellegrino sued CWA in January 2010, alleging interference with her rights under the FMLA. The district court found that because Pellegrino had been on both FMLA leave and paid sick leave, a combination allowed by law, she remained bound by CWA’s sick leave policy. Because that sick leave policy was not inconsistent with the FMLA, CWA did not interfere with Pellegrino’s FMLA rights. On appeal, the Third Circuit agreed with that rationale. Although Pellegrino protected that she had not received sufficient notice of her obligation under the sick leave policy, the CWA submitted evidence that it had: (1) provided a DOL-approved form to Pellegrino regarding FMLA; and (2) e-mailed the sick leave policy to Pellegrino in the past. While it took the opportunity to call Pellegrino’s termination “harsh,” and even viewing the facts in the light most favorable to Pellegrino, the Third Circuit agreed with the district court that CWA did not interfere with Pellegrino’s rights under the FMLA.

The message to employers is clear: if a written sick and absence policy is disseminated to employees, and if that dissemination is fully documented, employers have a legitimate expectation that discipline imposed for violation of that policy will be upheld, even if the absences were taken pursuant to leave under the FMLA, so long as the absence policy is not inconsistent with the terms and purpose of the FMLA.
 

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On September 26, 2011, the 9th U.S. Circuit Court of Appeals overturned summary judgment allowing a 59 year old employee’s claim of age discrimination to go to a jury, based largely on evidence that younger employees – even those over 40 years old – had been disciplined differently than she was. Christine Earl v. Nielsen Media Research, Inc., 9th Cir., No. 09-17477, Sept. 26, 2011. (You can listen to a recording of the Ninth Circuit argument on this case if you have the appropriate media player.)

For over twelve years, Christine Earl worked as a “recruiter” for Nielsen Media Research, recruiting households within specific demographics to participate in research regarding their television viewing habits. In 2005, when Earl was 57 years old, she received a verbal warning for violating the company’s gift policy, which prohibited recruiters from leaving gifts at unoccupied households. On early 2006, Earl again violated that policy, along with another that required recruiters to keep a company map with them while visiting targeted households. In February 2006, Earl was placed on a Developmental Improvement Plan (“DIP”). A DIP is an informal non-disciplinary tool used by Nielsen to inform an employee that his or her performance has fallen below company standards. A DIP differs from a performance Improvement Plan (“PIP”), a part of Nielsen’s disciplinary process during which an employee is informed that additional performance problems may result in further disciplinary action, up to and including termination. Earl had never received a PIP during her employment with Nielsen.

In October 2005, Earl made an error during the process of obtaining the consent of a household to participate in Nielsen research. The error, which consisted of writing down an incorrect address for the household, was unnoticed by Earl and her customer. However, when the Nielsen technician who was to install the company’s monitoring device realized the error (the incorrect household refused the installation), he was able to correct it. When Nielsen learned of Earl’s mistake, it fired her.

Earl brought a lawsuit against Nielsen, including a claim of age discrimination under the relevant California law. California courts look to federal decisions under the ADEA when interpreting that law, and use the familiar McDonnell-Douglas 3-part analysis. Under that analysis, an employee first must set forth a prima facie case of discrimination, a fairly straight-forward burden. The employer then must proffer a “legitimate business reason” for its actions. The final step in the analysis – and a critical one to an employee’s successful lawsuit – is that the employee must raise a triable issue for the jury that the employer’s proffered reason is simply a pretext for unlawful discrimination.

In Earl’s case, Nielsen filed a motion for summary judgment, claiming that Earl could not prove that her termination was a pretext for discrimination. While the lower court held that Earl could not create a question of fact for the jury on that issue, the Ninth Circuit disagreed, finding that Earl had produced evidence of pretext. That evidence, according to the Court, was that while Nielsen did not have a formal written policy that required a PIP before firing an employee, the procedure of doing so was viewed by the company as an integral step in the disciplinary process. In fact, less than a year prior to Earl’s termination, the company’s HR manager objected to the termination of a 42 year-old employee without first implementing a PIP because such action “would not be consistent with our procedure.” While the company argued that its written policy included language that allowed it to accelerate the disciplinary process at its discretion, the Ninth Circuit held that the company’s general reliance on the issuance of a PIP prior to termination is essence created an internal policy that was violated in Earl’s case. It reversed the lower court’s decision and remanded the case back for a trial on the issues.

The message of this case is an important one: consistency is the key to avoiding the perception that the basis of differing disciplinary actions is an employee’s protected characteristic. Here, applying a more “forgiving” policy to a 42 year old than to 59 year old Earl raised a triable issue of fact, regardless of the company’s formal policy, and will allow Earl to argue that she was terminated without a PIP solely because of her age.
 

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In order to support a claim of employment discrimination, an individual typically must show that an “adverse employment action” was taken, and that such action was based upon a protected characteristic. To constitute an adverse employment action for purposes for federal anti-discrimination laws, such action must create a significant change in an employee’s status, and includes firing, failure to promote, reassignment with significantly changed job responsibilities, or a significant change in other employee benefits. In an unpublished opinion, the 3d U.S. Circuit Court of Appeals recently joined a number of other circuits to hold that an employee’s Performance Improvement Plan (PIP) is not an adverse employment action, absent some accompanying changes to pay, benefits, or employment status. Reynolds v. Dept. of the Army, 3d Cir., No. 10-3600, July 22, 2011.

In 2004, after working for the federal government for a number of years, Raymond Reynolds took an engineering position with the U.S. Army’s Communications-Electronics Research, Development, and Engineering Center, located in Fort Monmouth, NJ. Reynolds’ supervisor (Kornwebel) felt that he did not take his job seriously, that he improperly delegated responsibilities to others, and that he failed to comply with her directives. In response, Reynolds denied the allegations of poor performance, claiming that Kornwebel treated him “dismissively” and had not provided clear job objectives.

In August 2004, Kornwebel assessed Reynolds’ performance, and found that he had failed to meet certain job goals. On November 3, she met with Reynolds and presented a PIP that allowed 90 days within which to improve his performance or face the possibility of reassignment, demotion, or termination. The day after that meeting, Reynolds applied for two early retirement incentive programs. In the following month, he filed a charge of discrimination with the EEOC, alleging age discrimination.

In order to support his claim of age discrimination, Reynolds had to show that he was at least 40 years old (he was 51 at the time), that he suffered an adverse employment action, that he was qualified for his position, and that he was replaced by a person sufficiently younger to support an inference of discriminatory animus. The district court concluded that Reynolds could not show that he was the subject of an adverse employment action, and granted summary judgment in favor of the Army.

The Third Circuit agreed, citing prior decisions by the Seventh, Eighth, and Tenth Circuits in which a PIP was determined not to have been an adverse employment action. According to the Third Circuit, a PIP “differs significantly” from the types of actions typically viewed as adverse. In fact, far from changing the status of an employment position, a PIP usually conveys to the employee ways in which an individual can better perform the responsibilities that he or she already has. The Court pointed out that to allow a PIP to be viewed as an adverse action would simply create greater frustration for employers seeking to improve and employee’s performances by taking an action that, in effect, would insure a discrimination claim.

It is worth noting here at although this holding seems beneficial to employers, it comes with one caviat: the Court’s reference to sister courts specifically notes that these other court decisions have concluded that a PIP is not an adverse employment action absent accompanying changes to pay, benefits, or employment status. Therefore, an employer who imposes a PIP while at the same time downgrading the employee’s pay, responsibilities, or other benefits could find that its actions are viewed as “adverse,” thereby potentially supporting an employee’s claim for discrimination.

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The Age Discrimination in Employment Act (ADEA) prohibits employers from treating employees who are 40 or older adversely on the basis of their age. Recently, however, the 7th U.S. Circuit Court of Appeals held that an employee’s “obsolete skill set” which caused him to be of “declining value” to the company was sufficient basis to support an that individual’s termination during a reduction in force (RIF), and found that the termination did not constitute age discrimination. Martino v. MCI Communications Services, Inc., No. 08-2405, 7th Cir., July 28, 2009.

Guy Martino began his employment with MCI in 2005 at the age of 54 as a business solutions consultant (BSC). In that position, he provided support to sales teams, but did not spearhead actual sales. In addition to his salary, Martino received commissions on sales to which he was assigned to work. For instance, in October 2005, Martino was part of a team working on a deal that involved British Petroleum (BO), and which resulted in substantial revenue to MCI. Although his role in that deal was peripheral, Martino received credit that boosted his sales figures and resulted in a sizeable commission to him. In fact, the BP deal resulted in nearly 85% of all of the commissions earned by Martino during his entire tenure with MCI.

Following MCI’s merger with Verizon in 2006, Verizon undertook a “redundancy analysis” to identify duplicative positions, and to support a reduction in force. As part of that analysis, a distinction was made between individuals who sold “co-location” services – which involved a client’s purchase of space, power, and cooling for its servers in the company’s data centers, but retaining management of those servers – and “managed” services, in which MCI/Verizon actually managed those servers. Co-location services were more basic, and therefore less expensive. When Verizon took over those sales, it removed the BSC force from sales of co-location services and assigned responsibility to them for the sale of managed services. Martino had only limited experience with the sale of managed services, and therefore became a prime target for termination, along with five other BSCs, ranging in age from 33 to 45.

Martino filed a federal court action, claiming age discrimination. While he conceded that the actual termination decision-makers did not discriminate against him, he invoked the “cat’s paw” theory to contend that his immediate supervisor was biased in favor of younger employees, and that the decision-makers were influenced by that bias. The cat’s paw theory is used when an adverse action is taken by an un-biased decision-maker, but on the basis of “singular influence” by a biased supervisor or manager. In this case, Martino argued that his direct supervisor sometimes called him an “oldtimer” which, according to Martino, indicated a bias in favor of younger workers. After stating that the term “doesn’t strike us as inherently offensive,” the court found that the two individuals who actually made the RIF decisions did an independent analysis of Martino’s qualifications, and based their decisions on business-related issues and skill-based criteria. According to the Court, the cat’s paw theory requires a “blind reliance” on input from a biased individual. That type of influence was not present with respect to Martino’s termination.

Martino’s skill set was limited, and Verizon’s increased focus on managed services, rather than collocation services, meant that Martino’s importance to the company was waning. Here, the Court specifically stated that while choosing to terminate someone on the basis of old age is impermissible, choosing to let someone go because they have an “obsolete skill set” is not discriminatory. The Court also noted that the U.S. Supreme Court’s recent decision in Gross v. FBL Financial Services, Inc. made this case especially difficult for Martino. Under that decision, it’s not enough for a plaintiff to prove that age was one of the motivating factors of the adverse action – instead the plaintiff must prove that but for his age, the adverse action would not have occurred.

In this case, the basis of the company’s success was its independent evaluation of employees’ skills and value to the company. Employers should make sure that independent investigations and decisions are fully documented, and that analyses are based on the needs of the company, in order to avoid the “cat’s paw” theory attempted by Martino. Further, training and counseling of supervisors and secondary managers should be undertaken to avoid the appearance of impropriety that is raised by remarks that could be interpreted as discriminatory.
 

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