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

The 7th U.S. Circuit Court of Appeals has ruled that a nursing home’s policy of complying with patients’ wishes to be treated only by white health care workers can form the basis of a racially hostile work environment for non-white employees. Chaney v. Plainfield, 7th Cir., No. 09-3661, 7/20/10.

Brenda Chaney was employed as certified nursing assistant (CAN) by Plainfield Healthcare Center, a nursing home that housed a resident who did not want assistance from black CNAs. Plainfield complied with the resident’s wishes by distributing, on a daily basis, a written schedule for all employees that included a reference that “no black” assistants should enter the resident’s room or provide any care to her. Plainfield admits that the directive “banned” Chaney from providing care to that resident.

In addition to working under this ban, Chaney was subject to racially insensitive and unprofessional remarks from her co-workers, including one comment questioning why Plainfield “keep[s] on hiring” blacks, and adding a particularly unpleasant racial epithet. After Chaney complained about these comments, the epithets stopped, but the racial preference policy remained in place. Instead of epithets, Chaney began to get constant reminders about the policy from her co-workers, mentioning that certain patients were off limits because of her race.

After three months of employment, Chaney was fired after a nurse complained that Chaney used profanity in front of a patient. The complaint was that as Chaney was lifting the patient onto a bedside commode, she (Chaney) supposedly said “she’s shitting.” The complaint was investigated by the unit supervisor, who was skeptical of the allegation, having never before heard Chaney use any profanity. Further, the supervisor found that neither the resident’s roommate nor Chaney’s co-worker heard the alleged profanity. Although the supervisor relayed her findings and her skepticism to the Director of Nursing, Chaney was fired on the same day that the complaint was made.

Chaney ultimately filed suit, alleging racially hostile environment and discriminatory discharge. The lower court granted summary judgment in favor of Plainfield on Chaney’s claims, finding that Plainfield had responded promptly to Chaney’s complaints of her co-workers remarks. The lower court treated the racial preference policy as a separate hostile environment claim, concluding that Plainfield had a good faith belief that ignoring the patient’s wishes would have violated the state’s patient-rights laws. Finally, that court found that Chaney failed to prove that her termination was motivated by race.

The Seventh Circuit reversed the lower court’s decision on all issues. It pointed out that in order to impose liability for a racially hostile work environment, a minority plaintiff must show that the work environment was both objectively and subjectively hostile, and that the conduct was severe and pervasive. The Court stated that it had “no trouble in finding that a reasonable person would find Plainfield’s work environment hostile or abusive.” It pointed out that no single act can more quickly alter the conditions of employment than the use of an unambiguously racial epithet. The Court added that even after the most vulgar of the epithets stopped, Plainfield’s assignment sheet to all workers clearly – and on a daily basis – reminded Chaney and her co-workers that Chaney was restricted in the performance of her job because of her race. Further, the Court found that the circumstances of Chaney’s termination created factual issues that should be decided by a jury.

Courts have widely held that a company’s desire to cater to the perceived racial preferences of its customers is not a defense to a claim of racial discrimination under Title VII. However, Plainfield argued that as a health-care provider, it should be exempted from that prohibition. As support, Plainfield pointed to cases permitting sex discrimination in the health-care setting. In response, the Court pointed out that while gender may be a bona fide occupational qualification for accommodating a patient’s privacy interest, there is no such privacy interest associated with race. Of note to health-care providers is the fact that the Court specifically held that Title VII pre-empts the state regulations pointed to by Plainfield in its defense.

The Court’s summary of its decision provides a directive to health-care provider/employers: “Just as the law tolerates same-sex restrooms or same-sex dressing rooms, but not white-only rooms, to accommodate privacy needs, Title VII allows an employer to respect a preference for same-sex health providers, but not same-race providers.” According to the Court, Plainfield’s exclusion of Chaney from certain residents and work areas solely on account of her race created a racially-charged situation that “poisoned the work environment” and created “fodder” for co-workers’ racially derogatory remarks.
 

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It is generally understood that employees can bring claims for hostile environment, wrongful termination, or even “constructive discharge” – where an employee claims that an employer made working conditions so intolerable that a reasonable employee would feel compelled to resign. What is less clearly understood is the extent of the economic damages for which a hospital or health care system may be liable in an employment-related lawsuit. Because a successful litigant in an employment case often is entitled to compensatory damages, lost wages and, in some instances, front pay, a lawsuit by a physician-employee can create the potential for large monetary damage awards. In a clear example of this fact, a Texas jury recently awarded more than $3.6 Million to an Egyptian-born physician who claimed that he was forced to resign after race-based comments from another employed physician. Nassar v. Univ. of Texas Southwestern Medical Center at Dallas, N.D. Tex., No. 08-1337, jury verdict, 5/26/10.

Naiel Nassar, a U.S. citizen since 1990, was born in Egypt and attended medical school there. He then did a medical residency and a fellowship in infectious diseases at the University of California, Davis. In 2001, Nassar was hired by the University of Texas Southwestern Medical Center (UTSW) as an Assistant Professor of infectious disease medicine. Part of Nassar’s duties required that he provide patient care at the Amelia Court clinic, an outpatient HIV/AIDS clinic affiliated with UTSW.

In 2004, UTSW hired Dr. Beth Levine as the chief of its infectious disease program. In that role, Levine directed that Nassar begin billing for the services he provided to the HIV clinic. Nassar objected to the directive, arguing that his salary for clinical services was fully funded by a federal grant, and stating that billing the patients therefore would be “double dipping.” Nassar claimed that Levine also began to “harass” him, making derogatory statement about his race and his Muslim religion, including one comment that “middle easterners were lazy.” His allegations were supported by a clinical supervisor, whose affidavit described a “disconnect between Dr. Levine’s statements and the reality of Dr. Nassar’s work.” Based on his concerns about Levine, Nassar ultimately applied for employment at Parkland Health & Hospital System in 2006. Parkland made preparations to hire Nassar, even drafting a job offer letter, but never formally hired Nassar. Nassar contended that UTSW retaliated against him by blocking the offer from Parkland. Nassar ultimately filed a lawsuit in federal court alleging discrimination and retaliation. Levine strongly disputed Nassar’s allegations, as did UTSW.

At trial, the jury was presented with only two questions: (1) Whether Nassar was constructively discharged because of his race, national origin, or religious preference; and (2) Whether UTSW retaliated against Nassar by blocking or objecting to his employment by Parkland after Nassar complained about his treatment at UTSW. After one hour of deliberations, the jury answered “Yes” to both questions. Two days after the May 24, 2010 verdict, the same jury awarded $3.2 Million in compensatory damages and $438,000 in lost back pay to Nassar. The court now will determine whether Nassar’s claim for lost front pay – which could range from $200,000 to $4 Million – should be paid as part of the award. In addition, Nassar has made a claim for attorney fees, which also will be heard by the court. UTSW has already stated that it will be appealing the verdict and the resulting judgment.

Hospital and healthcare entities that are contemplating direct hiring of physicians should take the time to read the jury instructions and verdict sheet on which the decision in the jury’s decision was based. (Find a copy on my blog at www.employmentlawmatters.net.) Most notable is the court’s instruction in which it defines “constructive discharge” as a resignation from working conditions “so intolerable that a reasonable employee would feel compelled to resign.” The court goes on to point out that to prove constructive discharge, Nassar “need not show that his race, national origin, or religions preference was the sole or even the primary motivation for [UTSW’s] conduct.” He simply had to prove that his protected characteristics “played a motivating part in [UTSW’s] conduct, even though other factors may also have motivated [UTSW].

Employers, including health care entities, should ensure that supervisors and managers are trained to recognize and remedy discriminatory conduct, to assure that such conduct does not become viewed as a “motivating part” of any adverse employment action taken by the employer.
 

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A medical intern who misdiagnosed patients (including mistakenly identifying a patient as deceased), prescribed inappropriate medications or incorrect dosages, and who was “extremely argumentative” with his supervisors and co-workers was unable to perform the essential functions of his job and therefore, according to the 4th U.S. Circuit Court of Appeals, was not a qualified individual with a disability for purposes of the Americans with Disabilities Act. Shin v. Univ. of Maryland Medical System Corporation, 4th Circ., No. 09-1126, March 11, 2010.

Frank Shin, M.D., began a medical internship with the University of Maryland Medical System Corporation (UMMSC) in June of 2006. He initially performed his duties in a satisfactory manner, scoring 8 out of 10 for overall competence. However, after the first month, Dr. Shin’s scores began to fall, and by August, his overall rating was 3 out of 10. Further, at that point, Shin had to be “shadowed heavily” by resident doctors, in order to prevent medical errors. Shin’s workload subsequently was decreased to three patients, but support of other residents was still necessary.

Shin’s falling performance ratings prompted a face-to-face meeting with his supervisor to address the issues. At that meeting, an action plan was developed, further reducing Shin’s patient load to two, and requiring him to interact frequently with others who supported him. When after two weeks, Shin’s performance deteriorated further, he was urged to contact the Employee Assistance Program. On September 1, 2006, Shin was put on probation, and was required to meet certain criteria to remain in the internship program. Shin’s overall competence scores failed to improve during probation, with one of his supervising doctors noting that Shin was “should no longer be allowed to continue in a direct patient care role.”

UMMSC made assistance available to Shin by allowing him to see fewer patients with less complex medical issues, by asking residents to help with Shin’s workload, and by excusing Shin from participating in certain internship program requirements. Despite this assistance, Shin continued to have problems and ultimately was diagnosed with ADD with “significant impairment in visual-spatial reasoning and visual memory.” Although Shin sought expert help, in March 2007, his own doctor determined that Shin had reached maximum medical improvement, but was unfit to return to work as an intern. UMMSC then terminated Shin’s employment. That termination was upheld after an internal appeal procedure held in June 2007.

Dr. Shin ultimately filed a lawsuit against UMMSC and Dr. Wolfsthal under the ADA, alleging discriminatory discharge, and failure to provide a reasonable accommodation. The district court granted summary judgment in favor of the defendants. That decision was upheld by the Fourth Circuit. (Note that the Fourth Circuit reviewed the case under the “old” ADA, because the ADA Amendments Act, which took effect on January 1, 2009, was not applied retroactively.)

For both wrongful termination and failure to accommodate claims, a plaintiff must establish that he or she was a “qualified individual with a disability” in order to be eligible for the protections offered under the ADA. That Act defines a “qualified” individual as someone with a disability who, “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” Therefore, in order to survive a motion for summary judgment, Shin had to show not only that he was disabled, but that he qualified for the protections of the ADA.

To prove that he was qualified, Shin had to show that he was able to fulfil the essential functions of his job. Those essential functions, in essence, were “to provide competent medical care to patients with efficiency and reasonable autonomy.” The available evidence and testimony clearly indicated various problems and concerns related to Shin’s performance of those functions. The Court held that Shin was unable to perform the essential functions of his job and, therefore, that he was not qualified to bring a lawsuit under the ADA. The Court went a step further, and addressed Shin’s claim that he would have been “qualified” had UMMSC provided certain requested accommodation, including a permanent reduction in the number of patients for whom Shin was responsible. According to the Court, the ADA does not require an employer to assign an employee to “permanent light duty” or to reallocate job duties in order to change the essential functions of a job. On that basis, the Court held that no reasonable jury could conclude that a reduced work load was a reasonable accommodation under these facts.

According to the Fourth Circuit, Dr. Shin was not a qualified individual with a disability for purposes of the ADA - because he was not able to perform the essential function of his job - and his requested accommodations were unreasonable under the circumstances. Therefore, Shin was unable to support his claims under the ADA. With many hospital systems moving to an “employment” model for physicians, it is critically important that hospital administrators and managers understand the employment-law implications of actions involving individuals in protected categories, and understand that ADA claims typically must be reviewed on a case-by-case basis.
 

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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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If so, you've done the following things:

 Created a pandemic flu plan and educated your employees on that plan;
 Have become aware of current CDC recommendations, and will stay alert for upgrades;
 Reviewed and (if necessary) revised attendance policies;
 Educated yourself on confidentiality issues and concerns;
 Checked with HR or legal on questions of federal employment laws (including OSHA, privacy questions, wage & hour issues, FMLA policies, and ADA accommodation issues).

The CDC Guidance (www.cdc.gov/h1n1flu/business/guidance/) Provides a Basic Outline of Issues about which employers should be concerned. That Guidance:

1. Includes preparedness and response recommendations:
 Monitor personnel for unusual increases in absenteeism;
 Work with state/local public health partners;
 Be prepared to act if schools/daycare close.

2. Suggests components of an Influenza Pandemic Plan:
 Review HR policies to assure consistency with existing laws;
 Explore flexible work hours/work sites;
 Establish lines of communication with employees;
 Identify essential business functions to assure coverage.

3. Recommends “action steps” regarding symptomatic employees:
 Sick employees should stay home (24 hrs after fever);
 Ensure that sick leave policies are flexible;
 Sick employees at work should be asked to leave.

4. Addresses issues related to vaccination of employees.
 Encourage employees to get seasonal flu vaccination;
 Encourage H1N1 vaccination when available;
 View http://www.cdc.gov/h1n1flu/vaccination/acip.htm;
 Offer worksite opportunities for vaccination.

5. Provides action plan in the event of increased severity of H1N1 during the upcoming flu season:
 Consider actively screening employees for H1N1;
 Create opportunities for alternative work environments;
 Consider increasing social distancing where possible.

6. Includes a list of additional guidance documents developed by the federal government to assist employers in planning efforts.
 

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Drawing a distinction between picketing and striking, the 2d U.S. Circuit Court of Appeals has held that a New York health clinic unlawfully fired five employees for joining a picket line, even though the picketing itself was an unfair labor practice by the union. Civil Serv. Employees Assn. Local 1000 v. NLRB, 2d Circ., No. 07-5041, June 19, 2009.

The American Federation of State, County and Municipal Employees (AFSCME) represents correctional officers at a state facility in Albany where Correctional Medical Services (CMS) operated a health clinic. Local 1000 of that union attempted to organize the employees of the clinic, asking CMS to recognize the union as a bargaining agent for all of the clinic’s employees other than physicians, supervisors, and clerical workers. When CMS refused that request, the union established a picket line in which 20 individuals peacefully picketed in front of the clinic’s main entrance for less than an hour, without blocking access to the facility. Those 20 individual include five off-duty, non-union CMS employees.

Section 8(g) of the National Labor Relations Act (NLRA) includes a provision that requires a labor organization to provide at least 10 days advance notice before engaging in “any strike, picketing, or other concerted refusal to work” at a healthcare entity. In this case, no such notice was given, and the five CMS employees received a letter on the following day informing them that the picketing had occurred without the required 10-day notice and, therefore, was illegal. Shortly after receiving those letters, the five employees were fired, based upon CMS’ reading of the NLRA.

CMS filed a charge against the union under Section 8(g); acting on that charge, the NLRB director issued a Section 8(g) complaint against the union. Local 1000 settled the complaint against it, but filed a charge against CMS, alleging that the employees’ firings were illegal. In May 2007, the NLRB ruled that the clinic’s discharge of employees did not violate the NLRA. Local 1000 petitioned for review of that decision. On appeal, the Second Circuit ruled that the NLRB improperly construed Section 8 of the NLRA related to healthcare workers.

Under Section 8(a) of the NLRA, an employer commits an unfair labor practice if it interferes with an employee’s right to organize. Picketing is generally considered to be a protected activity under the Act. However, in the 1974 amendments to the NLRA, Congress modified Section 8 of the Act, adding a restriction - Section 8(g), mentioned above - related to picketing or striking against a healthcare entity, and requiring a 10-day notice of such activity by “labor organizations.” That particular sub-section does not state that an individual employee who participates in such activity commits a violation. Under modified Section 8(d), however, an employee who engages in “any strike” at the healthcare entity without the required notice is no longer an “employee” under the NLRA, losing all protection under the Act. This is the language cited by CMS to support its discharge of the five picketers.

However, the Second Circuit pointed out that while Section 8(d) provides that an employee who engages in a strike without proper notice “shall lose his status as an employee of the employer engaged in the particular labor dispute,” Section 8(d) does not include a comparable provision about employees who participate in picketing conducted by the union in violation of those notice requirements. Therefore, while a “labor organization” is subject to sanctions for either striking or picketing without observing the appropriate notice under Section 8, the Act specifically sanctions only those individuals who participate in a strike against a healthcare entity, and not in picketing of that same employer (unless those individuals are actually “agents” of the union under a separate Section of the NLRA).

This case is one of which healthcare entities must be aware, especially in light of current efforts toward unionization of healthcare employees. However, we may not have seen the last of this issue. The Second Circuit points out in its opinion that this circumstance involved only “peaceful picketing by off-duty employees that caused no disruption to the operation of the clinic,” but states that it could “conceive of certain circumstances where protected picketing could cause disruption in the ability of a health care facility to deliver health care.” While the Court states that its opinion in this case is based upon the clear wording of the statute, it suggests that “[i]f the balance is imperfect, the Board should petition Congress to fix it.”
 

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An employee alleging a violation of the Sarbanes-Oxley Act (SOX) must file a complaint within 90 days from the date of that alleged violation. That 90-day period begins to run from the date on which the complainant knows or reasonably should know that the complained-of act has occurred. In whistleblower cases under SOX, the 90-day statute of limitations runs from the date on which the employee receives “final, definitive, and unequivocal notice” of an adverse employment decision. As defined in SOX, the term “unequivocal” means that the notice is not ambiguous, and is free from misleading possibilities.

On April 30, 2009, a Department of Labor Administrative Review Board (ARB) determined that an employer’s notice to its employee was ambiguous and did not trigger the 90-day statute of limitations, because the letter included language that indicated that the company was willing to review and consider any evidence from the employee that could refute the termination decision. Snyder v. Wyeth Pharmaceuticals, DOL ARB, No. 09-008 (4/30/09, released 5/7/09). Based on that fact, the employee’s complaint to OSHA was timely, even though the complaint was filed more than six months after the employee received the letter which ostensibly indicated that the company had decided to terminate his employment.

Gregg Snyder was employed by Wyeth Pharmaceuticals as an Engineer IV, responsible for all Building System functions at the company’s Cambridge, Massachusetts facility. In September 2007, Wyeth’s HR director informed Snyder that he was being suspended with pay pending an investigation of allegations that he had improperly accessed confidential information. On October 1, while suspended, Snyder sent an e-mail to Wyeth, alleging certain Code of Conduct violations by Wyeth officials, and alleging that his suspension was part of a continuing course of retaliation by Wyeth. On October 17, Snyder received a letter from Wyeth’s HR Director (Lingen) which stated that prior to Snyder’s October 1 e-mail, the company already had made a decision to terminate Snyder’s employment. However, the letter also stated that “if you would to provide me with specific information in writing as to why you think your termination is not justified or specific details of the ‘harassment’ you feel you have received, I would be happy to review it.” Snyder responded on October 19 by again alleging retaliation and harassment.

On February 11, 2008, Wyeth sent a letter to Snyder stating that the company “has concluded that the decision to terminate your employment is appropriate,” and informed Snyder that the termination was effective as of that date.

On May 8, 2008, Snyder filed a SOX complaint with the Occupational Safety and Health Administration (OSHA). OSHA found that the complaint was untimely because it had not been filed within 90 days of October 17, when Snyder received Lingen’s letter regarding the pre-October decision to terminate him. Upon review, that decision was upheld by an Administrative Law Judge. However, the ARB subsequently reversed the decision, finding that the wording of Lingen’s letter offered to allow Snyder to provide information that might change the termination decision, injecting an element of ambiguity into the communication. Therefore, the letter did not constitute a final, definitive, and unequivocal notice of termination sufficient to commence the running of the statute of limitations.

This decision tells employers that threats of termination that include either an opportunity for performance improvement or a mechanism for avoiding the threatened firing do not actually constitute the “final, definitive, and unequivocal notice” necessary to start to 90-day statute of limitation running under SOX for a whistleblower claim. While this should not preclude employers from allowing individuals to avoid employment termination by improving performance, it does provide a warning that once a termination decision is made and appropriately substantiated, it should be implemented without delay, unless there is a legitimate business-related reason for that delay.

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