Supervisor’s Comment About Employee Was Not Evidence Of Age Discrimination

An IBM employee with a spotty performance record claimed his firing was the result of age discrimination.  As evidence, he produced a text message between two HR managers at IBM in which one asked about the employee’s “shelf life.”  The fired employee also claimed that an employee retention program at IBM called “Project Blue” was an allusion to blue rinses used by older people.  After being sued, IBM denied the allegations of age discrimination and claimed the employee’s firing was the result of his poor performance record.

A federal appeals court in Oklahoma recently found in favor of IBM and dismissed the employee’s age discrimination case.  The appeals court acknowledged that the “shelf life” comment could be interpreted as an age bias statement, but there was a more innocent explanation for why the HR manager used that phrase relating to the employee’s pending billable workload that the court found more plausible.  And the court outright rejected any age bias associated with the name “Project Blue,” given that IBM is sometimes referred to as “Big Blue.”

While IBM ultimately prevailed, this case is a good example of how managers who handle employment matters need to be extra careful about what they put in writing and be sensitive about how phrasing that is intended as innocuous could be interpreted as being discriminatory.

Declan Leonard is a managing partner at DC regional business law firm, Berenzweig Leonard, LLP. Declan can be reached at dleonard@berenzweiglaw.com.

EEOC’s Policy On Employee Criminal Records Scrutinized

The Equal Employment Opportunity Commission (EEOC) announced last year a new enforcement guidance under Title VII of the Civil Rights Act of 1964 to employers regarding the use of arrest and convictionrecords in employment decisions. Though there is no federal law prohibiting an employer from asking about arrest and/or conviction records, this recent guidance informed employers that even a neutral and uniformly applied “policy (e.g., excluding applicants from employment based on certain criminal conduct) may disproportionately impact some minority groups protected under Title VII, and may violate the law if not job related and consistent with business necessity.” If a background check is in fact necessary, the EEOC recommended that the policy at least consider “the nature of the crime, the time elapsed, and the nature of the job, and then provide an opportunity for an individualized assessment for people excluded.”

This guidance left employers in quite a dilemma, as on one hand if employers continued to uniformly use neutral background checks on all employees, they may run the risk of being subject to a disparate impact lawsuit. On the other hand, refusing to conduct background checks may be problematic as they have played a vital role in enabling employers to comprehend employees’ criminal history in an effort to avoid liability for criminal or fraudulent acts committed by employees and/or avoiding claims of negligent retention.

Faced with this predicament, a recent federal court in Baltimore cast serious doubt on the EEOC’s background check guidance. In the case, the EEOC filed a lawsuit against a corporate events provider that had a uniformly applied policy of running background checks on all prospective employees prior to commencing employment. The EEOC challenged this policy claiming that it had a disproportionate effect on minorities due to the higher statistical incarceration rates for minorities. The court dismissed the case on summary judgment in favor of the company due to the unreliability of the EEOC’s witnesses; however, the judge went out of his way to state his strong disdain for the EEOC’s guidance. Specifically, the judge noted that the EEOC’s guidance places employers in an unworkable position due to the inherent risks that can come from ignoring criminal history checks and employers should not have to second guess their decision to obtain fundamental information on their potential workers.

Although this opinion casts doubt on the EEOC’s enforcement of background checks, this opinion does not affect the guidance itself and best practices suggested by the EEOC. Unfortunately, there is no bright line rule governing background checks and companies should be sure to consult with an attorney before implementing a background check policy that could include criminal history or credit checks.

Nick Johnson is an associate attorney with Berenzweig Leonard, LLP, a DC regional business law firm. He can be reached at njohnson@BerenzweigLaw.com.

Intern or Employee? Don’t Find Out the Hard Way

Unpaid internships have become a prevailing part of the corporate landscape.  They serve as a means for students and recent graduates to gain experience in their chosen fields and give businesses the opportunity to develop relationships with new talent.  What many do not realize, though, is that the intern-business relationship is governed by a network of state and federal laws that, if ignored, can lead to very expensive consequences.

Recently, Fox Searchlight Pictures, P. Diddy’s Bad Boy Entertainment, The Hearst Corporation, Condé Nast, and other businesses have been forced to grapple with the effects of such laws.  Each of these companies has been sued by former unpaid interns who contend that they are entitled to back wages and benefits because of the nature of the work performed.  NBCUniversal is one of the most recent high-profile targets, and recently filed a response in a class action suit that may end up costing the company a tremendous amount of money.

In their suit, former NBC interns Jesse Moore and Monet Eliastam claim that NBC violated portions of the Fair Labor Standards Act and several state regulations in failing to pay wages for kinds of work that must be compensated under the law.  The Department of Labor has stated that interns may only work without pay in certain situations, and the NBC interns argue that because their work at the company does not fall within the protected categories, they are entitled to back pay.

The NBC suit and others like it have touched off a firestorm in the business community, with some calling out for better treatment and fair compensation for under-advantaged interns, while others argue that businesses should jettison their intern programs altogether to avoid potential liability.  One thing is certain: the issues raised in the intern lawsuits are not going away ‒ Fox lost during the first stage of its lawsuit and now has an appeal pending, other companies have settled, and the trend in intern lawsuit filings shows no signs of slowing.  In the end, these stories highlight how important it is for business owners to understand the laws that govern the business-intern relationship; when it comes to interns, it is definitely better to be safe than sorry.

Ryen Rasmus is an associate attorney for the Washington, DC regional business law firm Berenzweig Leonard, LLP.  He can be reached at RRasmus@BerenzweigLaw.com.

Is It Negligent for a Company to Hire Someone Who Turns Out to be a Thief?

An administrator for a Vienna law firm was accused of stealing over half a million dollars from a client.  The client had hired the law firm to pursue a specific type of immigration visa that entailed making a commercial investment of $500,000.  The employee directed the client to deposit this money in a bank account that he controlled, and the employee later absconded with the money instead of using it for the client’s visa process. The employee fled overseas and faces criminal prosecution.

The client sued the law firm over the stolen funds, alleging among other legal claims that the law firm was negligent in hiring the administrator in the first place.  The client claimed that if the law firm had done the appropriate background check on the employee prior to hiring him, it would have discovered that he and his family had several unsatisfied monetary judgments against them.  Therefore, the employee should not have been entrusted with a position that entailed handling large sums of client money and the law firm was negligent in bringing him on board.  The law firm countered that it had no reason to suspect that the employee would end up being a thief, and therefore, the firm was not negligent in hiring him.

A federal judge in Alexandria recently dismissed the client’s negligent hiring claim against the law firm.  The judge stated that, in Virginia, the test for negligent hiring is whether the employee has negligently placed an unfit person in an employment situation that could cause unreasonable risk of harm to others.  The judge concluded that even if the administrator had money troubles in his past, causing financial harm to others is not enough to raise a claim for negligent hiring.  There must be actual physical injuries inflicted by an employee before an employer can be held liable for negligent hiring.  It should be noted that the client made several other legal claims against the law firm related to the theft, and some of those claims are still pending.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.  

How do Courts Determine Enforcement of a Non-Compete?

The Virginia Supreme Court recently addressed this issue in an interesting non-compete case that arose in Fairfax County.  The non-compete agreement that an employee signed with a computer company prohibited him from engaging in certain competitive actions for “twelve (12) after the date of termination.”  Based on other language in the contract, it appears the employer intended it to run for 12 months after termination, but the word “months” was not included in the version the employee signed.

When the employee left the computer company to work for an alleged competitor, the company sued the employee in Virginia state court for violation of the non-compete.  Rather than answer the lawsuit on the merits, the former employee asked the state court to dismiss the case on the ground that the non-compete was unenforceable because, among other reasons, there was missing language regarding duration.   The company argued that it was premature to dismiss the case without  first giving the company a chance to present evidence against the employee for violating the non-compete.

Although the employee was successful in getting the case dismissed at the state trial court level, the Virginia Supreme Court recently reversed that decision and held that non-compete cases should not be dismissed early on in litigation based solely on the language of the provision at issue, without giving the employer an opportunity to present evidence on the alleged violation.  In one notable quote, the Virginia Supreme Court stated that “an employer may prove a seemingly overbroad restraint to be reasonable under the particular circumstances of the case.”

This decision by the Virginia Supreme Court has garnered much attention. Up until this point, the generally accepted view was that courts would first look at the language of a non-compete provision to make sure that as written the provision was enforceable, and only then would the court delve into the underlying factual issues in the case.  But with this decision, the Virginia Supreme Court appears to be instructing that when determining enforceability, courts in Virginia should employ a more blended analysis that looks not only at the language of the non-compete, but also factual evidence offered by the employer in support of its case. Such cases are therefore less likely to be dismissed early.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.  

How Important Is It To Stay Awake At Work?

A manufacturing engineer employee for a Roanoke lighting company suffered from sleep deprivation caused by his fibromyalgia, and would periodically fall asleep while on the job.  In response to counseling by his employer that it would not tolerate his sleeping on the job, the engineer told his supervisor that he could ably perform his job if the company accommodated him by waking him up when he fell asleep.  The next day the engineer again fell asleep on the job, and the company fired him.

The engineer sued his former employer under the Americans with Disabilities Act (ADA) on the basis that the company failed to accommodate his disability by not waking him up when he fell asleep at work.  The lighting company responded that staying awake on the job was an essential function of the engineer’s position, and asked the court to dismiss the case.

But a Roanoke federal judge denied the lighting company’s motion to dismiss, and allowed the engineer to proceed with his ADA claim.  The court recognized that it previously found in another case that an employee who could not stay awake at work would likely not qualify for ADA protection.  Nonetheless, the court was not willing in this case to find at the initial phase of the litigation that the engineer was unqualified for the position, even if he could not promise to always stay awake at work.

This case highlights the changes that occurred just a few years ago to the Americans with Disabilities Act, in which Congress made it much easier to qualify as disabled under the ADA.  The focus of the ADA since those amendments has been on the issue of whether a requested accommodation was reasonable.  One way for an employer to reject an accommodation is if the employee’s conduct presents a safety issue to either himself or to others in the workplace.  Perhaps the company can later argue that falling asleep in a manufacturing environment could cause harm to the sleeping employee or his co-workers, and therefore, is not accepted behavior in the workplace.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com. http://www.BerenzweigLaw.com

Sexual Harassment of Female Employee Not Considered Severe Enough Under Title VII

A female employee of Staples in the Roanoke, Virginia area complained after a male co-worker on multiple occasions stripped down to his boxers and changed into his work uniform in front of her in the employee break room, rather than changing in the men’s bathroom.  Some of these changing incidents were witnessed by other Staples employees, both male and female. On the final occasion of witnessing the male employee changing, the female employee ran out of the break room crying while several male employees laughed at her reaction.

The female employee elevated her complaints to Staples human resources, and after the male employee was counseled, there were no further incidents of him changing in the employee break room.  But the female employee did experience some additional harassment following her complaint, including someone cutting up all of the family pictures on her desk, someone stealing her Bible and leaving only one page taped to her desk, and someone cutting the cord to the radio on which she was known to listen to Christian music.  The female employee strongly suspected that it was the male employee who committed these acts against her in retaliation for her complaints against him, but she was unable to prove it.

The female employee sought medical counseling for the stress and anxiety she experienced as a result of the workplace conditions at Staples, and was prescribed Prozac and other anti-anxiety medicine.  Eventually, she took disability leave and then resigned for what she described as her fear of the potential to experience more harassment while working at Staples.  She sued Staples for sexual harassment as well as religious discrimination, and after the close of written discovery and depositions, Staples asked the Court on summary judgment to rule in its favor as a matter of law and dismiss the female employee’s claims without going to trial.

A Roanoke federal judge ruled in favor of Staples and dismissed the female employee’s lawsuit on summary judgment prior to trial.  Without condoning what it called the male employee’s “immature” behavior, the judge noted that the male employee never got completely naked when changing, never made any sexual comments to the female employee when changing, and never physically touched her.  The Roanoke federal judge concluded that the changing incidents were not sufficiently severe and offensive to legally support the sexual harassment claim, such that in the Court’s mind no reasonable jury could conclude that the incidents were motivated by unlawful sexual harassment.  Likewise, the judge was not persuaded that the Bible stealing and radio cord-cutting incidents where pervasive enough to support a religious discrimination claim against Staples.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at DLeonard@BerenzweigLaw.com.