Suttons Bay Law

Statistics from the Equal Employment Opportunity Commission (”EEOC”) confirm what many of us lawyers defending businesses already knew: the number of discrimination charges filed against employers continues to grow each year. In the current economic climate, employers are more vulnerable than ever as terminated employees look for any recourse that might soften the economic blow of losing a job.

Before pursuing a lawsuit under state or federal anti-discrimination laws, employees must first pursue administrative relief with the State Department of Civil Rights or the EEOC. Once a claim or “charge” is filed, the employer will be notified and given the opportunity to file a written response. An investigation then ensues, which results in a written determination on whether discrimination occurred.

Many employers fail to appreciate the potential implications of a poorly handled EEOC investigation. They tend to process the initial request for information and response in the same way they might handle an application for unemployment or worker’s compensation benefits. Consequently, the response is often relegated to, and drafted by, a bookkeeper or office manager who lacks training in this area. Not infrequently, the same manager who mishandled the termination process in the first place is assigned the job of addressing the EEOC charge.

This lack of attention can needlessly extend what should be a straightforward investigation. Worse, it may generate a paper trail of careless, potentially harmful statements that will be attributed to the employer if the employee ultimately files a lawsuit. Worse still, a poorly handled investigation may convince the EEOC that discrimination did occur and that the EEOC should step in itself to bring a lawsuit against the employer on the employee’s behalf. What started as an irritating bit of “paperwork” has become a two-headed monster well beyond the employer’s ability to control.

Now more than ever, it is imperative that employers be cautious, informed and proactive when dealing with employee discipline and termination. Seek counsel before you act. And if you do receive notice that a charge of discrimination has been filed, give it undivided and immediate attention. If you fail to do so, it most certainly will demand that much more time and attention in the days and weeks to come.

Dan A. Penning

Tags: Employment Law, Know it Now by Dan Penning
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Two recent decisions from the 6th Circuit Court of Appeals in Cincinnati show how careful employers must be to avoid discrimination claims and violations of the Family and Medical Leave Act (FMLA). In the first case, Sanford v. Main Street Baptist Church Manor, Inc., the Court found that the employer had not taken sufficient steps to protect against sexual harassment in the workplace. In the second, Hunter v. Valley View Local Schools, the federal appeals court ruled that an employee may bring a claim under the FMLA so long as she can show that her use of FMLA leave was at least a “factor” in the employer’s decision to take adverse action against her.

In Sanford, the Plaintiff-employee sued the employer for an alleged sexually hostile work environment. As a defense, the employer argued that it had exercised reasonable care to prevent and correct any sexual harassment that the employee might have suffered. Normally, if supervisors and superiors take appropriate action, the employer will not be held liable based on inappropriate remarks or comments “on the floor” that might be offensive to other co-workers. But the decision in Sanford makes clear that employers cannot escape liability if they have not taken actual steps to weed out and discourage intimidating or harassing behavior. Specifically, the judges from the 6th Circuit were concerned that the employer’s handbook did not force supervisors to report harassing conduct. Nor did it offer a process for informal or verbal complaints. Nor did it give the employee the option to bring a complaint to someone else in management where the supervisor was the alleged harasser. Finally, the Court took note of the fact that the employer had not conducted any sexual harassment training in the workplace. For all of these reasons, the Court determined that the employer had not shown “reasonable care” to prevent sexual harassment in the workplace.

In Hunter, the Plaintiff-employee had returned to work with certain medical restrictions after being out on FMLA leave. The employer forced her to take an unpaid medical leave for up to one year. She sued, arguing that the forced leave was unlawful retaliation for her exercising her right to leave under the FMLA. The employer argued that, even if her FMLA leave had been one reason for forcing her to take unpaid medical leave, it was not the only reason. Because the medical restrictions limited her ability to perform, the employer claimed it had a legitimate reason to require the medical leave.

In a significant ruling, the 6th Circuit determined that a plaintiff may bring a claim for retaliation under the FMLA if his use of FMLA leave was one of the factors that caused the employer to take an adverse employment action – even if the other factors were lawful. Thus, in “mixed motive” cases under the FMLA, employers will not be able to defeat claims simply by showing they had a legitimate basis for their decision where improper bases also entered the decision-making process.

In difficult economic times, employees are more likely than ever to pursue any plausible basis for economic recovery. Employers should review their employee handbook and their employment practices very carefully to minimize the risk of unwanted and unintended employment claims.

Dan A. Penning

Tags: Employment Law by Dan Penning
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If your company has a federal contract, you should take notice of the federal government’s requirement that all federal contractors use E-Verify to check the employment eligibility of newly hired workers. A coalition lead by the U.S. Chamber of Commerce and the Society for Human Resource Management (SHRM) has filed an emergency request seeking to delay the rule’s implementation. Unless they obtain a last minute reprieve, the requirement will take effect today. For more information on how E-Verify will work and what it will mean for your business, go to The United States Citizenship and Immigration Services’ (USCIS) website, or join the webcast hosted by SHRM this Thursday at 2:00 p.m. eastern time by visiting http://www.shrm.org/multimedia/webcasts/Pages/legislativewebcast.aspx.

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In response to concerns that people are declining to take medically valuable tests for fear they will face discrimination or invasions of their personal privacy, the federal government has passed the Genetic Information Nondiscrimination Act (”GINA”). GINA’s purpose is to prohibit discrimination on the basis of genetic information with respect to health insurance and employment. Title II of GINA, which takes effect November 21, 2009, relates specifically to employer practices, and prohibits employers from using genetic information for hiring, firing, promoting, or otherwise discriminating against an employee based on the employee’s genetic information.

GINA does not apply to employers with 15 employees or less, but state laws may impose additional conditions beyond GINA. As with many other federal laws, GINA establishes baseline regulations for employers nationwide, but individual states are permitted to impose stricter regulations above and beyond that provided by federal law.

Genetic information includes the individual’s genetic tests, genetic tests of family members, genetic tests of a fetus or embryo of the individual or family members, manifestation of a disease or disorder in family members, and the request for, or receipt of, genetic services or participation in clinical research. While there are exceptions to the information an employer can request or require, employers should now take greater caution when dealing with employee’s genetic information, and should consult an employment attorney to ensure compliance with both GINA and applicable states laws.

Dan A. Penning

Tags: Employment Law, Know it Now by Dan Penning
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The Equal Employment Opportunity Commission (EEOC) enforces most employment related civil rights laws including Title VII, the Americans with Disabilities Act (ADA) and the Age Discrimination and Employment Act (ADEA). Given the ailing economy and increased job cutbacks, the EEOC expects discrimination claims to rise.

On July 15, 2009, the EEOC issued a written guidance intended to help both employers and employees understand what it looks for when deciding whether to challenge the validity of waivers and releases of claims by former employees. The EEOC guidance points out key issues to watch.

First, regardless of the type of discrimination claim, the guidance reminds employers and employees that a waiver will not be enforced if it was not knowingly and voluntarily given. Thus, it is crucial that employees understand that they have the right to refuse to sign the waiver. For this reason, it is equally important that employees be receiving some tangible, additional benefit (typically severance pay) when signing the waiver that is over and above what they would otherwise receive at termination. The release document must make it clear that the release is part of what is being given by the employee in return for severance pay.

Second, because the waiver must be knowing and voluntary, the EEOC will look much more carefully at situations where employees were not encouraged to consult with an attorney. Employers should never engage in “strong-arm” tactics such as insisting that a release be signed immediately.

Third, employers need to understand that – while an employee may be asked to surrender the right to sue and the right to recover damages – a release will not be effective if it tries to prohibit a discharged employee from filing an age discrimination charge with the EEOC. In our practice, we recommend releases that state expressly that the employee retains the right to file an administrative charge but also make clear that the employee cannot expect to profit personally by doing so.

Whether discharging a single employee or administering a group layoff, employers should always look for opportunities to obtain knowing and voluntary waivers of claims by the terminated employees. Given the benefits a valid release provides and the liability risks if the release is not enforceable, employers should always take the time to ensure that each release is tailored to meet the needs of the particular circumstances presented.

Tags: Employment Law, Know it Now by Dan Penning
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“In response to this increased risk, Wright Penning and Beamer has developed a comprehensive MIOSHA manual that addresses the areas most cited by MIOSHA inspectors.”

With the current economic climate, many businesses are having to re-evaluate their workforce and reduce the number of employees based on economic constraints. This can result in terminated employees filing complaints with various agencies regarding alleged labor violations, including MIOSHA violations. Inspections by governmental agents under MIOSHA can be very costly both in time and money to a business. In response to this increased risk, Wright Penning and Beamer has developed a comprehensive MIOSHA manual that addresses the areas most cited by MIOSHA inspectors. It should be noted that MIOSHA inspections do not only occur in manufacturing businesses but can occur in all types of businesses.

Many businesses do not have a full understanding of their rights when a MIOSHA inspector walks in the door unexpectedly to conduct an inspection. For example, employers are entitled to a pre-inspection conference, they may appoint a representative to walk with the inspector during the inspection, and many more rights are available to protect an employer. At the very least, each business should have a plan in place before an inspection occurs. A designated employer representative should prepare a MIOSHA inspection plan, with names and telephone numbers of top management and counsel to contact immediately. Also, a prepared and updated list of trade secrets to be protected should be readily available due to the fact that citation information is available via the Freedom of Information Act, and to protect trade secrets, an employer must, at the beginning of the inspection, identify the trade secrets that should be protected. Other management personnel should be trained not to consent to an inspection without proper procedures being followed. The more people involved in an inspection usually results in more inconsistent statements to the inspector and thus more scrutiny.

If you are interested in discussing this matter further, please contact me and I would be happy to provide you with more information regarding how you may want to proceed to protect your company with respect to possible MIOSHA inspections and other labor related types of claims.

Dan A. Penning

Tags: Employment Law, Know Your Business by Dan Penning
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On July 24, 2009, the federal minimum wage increased to $7.25 per hour. This increase is unlikely to affect most residents and employers in Michigan, since Michigan law requires most employers to pay the higher minimum wage, whether it is federal or state. In Michigan, the minimum wage has been $7.40 since July 1, 2008. Therefore, Michigan employers are still required to pay their employees at least $7.40 per hour, regardless of the federal minimum wage increase.

The federal increase may, however, affect employers with employees under age 18. In Michigan, it is permissible to pay underage employees 85% of the state minimum wage, only if that amount is equal to or greater than the federal minimum wage. 85% of $7.40 per hour does not meet or exceed the federal minimum wage, so employees under age 18 will be entitled to $7.25 per hour starting July 24, 2009. This does not impact employers’ ability to pay newly hired employees under 20 years of age a training wage of $4.25 per hour for the first 90 days of employment, under both state and federal law.

Tags: Employment Law, Know it Now by Dan Penning
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LinkedIn, the business networking website, is becoming wildly popular. Anyone can create a personal “page” that includes, if the person wishes, both a personal and professional profile. Job seekers are now flocking to create individual LinkedIn pages, and employers are turning to LinkedIn to research job candidates.

One feature offered on the site is the opportunity to post a professional recommendation on someone’s page. If you are an employer, you may be asked at some point to post such a recommendation for an exiting employee.

Should you receive such a request, we recommend that you stick with basic information, such as employment dates and positions held, and not say much more. Resist the temptation to give a glowing recommendation unless the reasons for termination had nothing to do with performance. If you rave about your former employee’s performance and yet you let that person go for not doing their job, then the employee could use the LinkedIn recommendation to claim that the termination was the result of discrimination or harassment.

You will also want to absolutely avoid posting any negative information about a former employee.

Finally, if you research a job candidate’s background online, be careful not to use any information that you find – negative or positive – in a discriminatory manner.

Tags: Employment Law, Know it Now by Dan Penning
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Last week, the Supreme Court issued a somewhat surprising, employer friendly decision concerning age discrimination. The Court concluded that, to prevail under the federal Age Discrimination in Employment Act (ADEA), a plaintiff must prove that age discrimination was the deciding factor in the employer’s decision making. This makes the ADEA different from Title VII, which governs most other forms of discrimination and which permits a plaintiff to prove only that discrimination was one of the motivating factors. Keep in mind, however, that state laws protecting against age discrimination could be applied differently. More over, experts suggest that the current Congress will act quickly to amend the ADEA in order to counteract the Supreme Court’s decision.

To read the summary of the decision provided by the Society for Human Resource Management, click here.

Tags: Employment Law, Know it Now by Dan Penning
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Many employers hire students as interns during the summer months and are perhaps questioning how those interns should be paid to ensure the employer’s compliance with the Fair Labor Standards Act (FLSA). If your interns are “employees,” FLSA applies, and the interns must be paid at least minimum wage. If the interns can be categorized as a “trainee,” however, they may be exempt from FLSA.

For an intern to qualify as a trainee, the intern’s position must meet the following criteria:

1) The training, even though it includes actual operations at the facilities of the employer, is similar to that which would be given in a vocational school;
2) The training is for the benefit of the trainee;
3) The trainee does not displace regular employees and works under close observation;
4) The employer providing the training derives no immediate advantage from the activities of the trainee, and, on occasion, the employer’s operations may actually be impeded;
5) The trainee is not necessary entitled to a job at the completion of the training period; and
6) The employer and the trainee understand that the trainee is not entitled to wages for the time spent in training.

If interns fail to meet any of the above criteria, they should be paid as employees, with at least minimum wage and overtime compensation when earned. Note that class credit is not considered wages and should not be substituted for wages.

Tags: Employment Law by Dan Penning
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