HIGHLIGHTS FOR THE MONTH OF JULY 2009

By: Melissa C. Hammock

RECENT DEVELOPMENTS

Employer’s Obligation to Remediate a Hostile Work Environment Requires Concrete and Consequential Actions.

The Court of Appeals for the Fourth Circuit (covering Maryland, Virginia, North Carolina, South Carolina, and West Virginia) in a hostile work environment case, described the steps than an employer should take that would be “reasonably calculated to end the harassment.”

Facts of the Case: In EEOC v. Central Wholesalers, Inc., an African-American female employee alleged she had been subjected to a hostile work environment based upon her race and gender, forcing her to quit (i.e., a constructive discharge). Specifically, she alleged that her male co-workers used racial and sexual slurs daily; displayed sexually explicit screensavers, calendars and other materials in their work areas; watched pornographic movies; and hung a mop-headed doll from a noose. The employer had a policy against harassment, which encouraged employees to either report the behavior to a supervisor or confront the harasser directly. The policy further required an immediate investigation and disciplinary action.

The employee discussed her concerns with her male co-workers; however, her complaints only resulted in an escalation of the harassing behavior. She also complained several times to management. The company conducted an investigation into her complaints; however, no disciplinary action was ever taken against any of the male employees. Instead, the company responded by holding meetings; touring the work area to look for sexually explicit material; reminding the male employees about the company’s zero tolerance policy; and blocking internet access of the employee who was allegedly watching pornography. After a verbal confrontation with a male co-worker, when he allegedly berated the employee with racial and sexual epithets, she quit and filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”), which ultimately filed suit on the employee’s behalf. The trial court granted summary judgment in favor of the employer finding that the sexually harassing conduct about which she complained was not sufficiently severe or pervasive so as to create a sexually hostile work environment. With regard to her race claims, the trial court found that the company conducted a reasonable investigation.

The Court’s Ruling: In reversing the trial court, the Court of Appeals held that “when an employer has notice of harassment, it must take steps reasonably calculated to end the harassment.” The Court found that the employer’s efforts to remediate the harassment were completely ineffective. Though explicitly stating that the list was not exhaustive, the Court gave several examples of actions the employer could have taken to attempt to end the harassing behavior: demotion, suspension, reduction in pay, or written reprimands. The Court held that the employer’s response was wholly inadequate and a jury could find that it was not reasonably calculated to end the harassing behavior.

Lessons Learned: To impute liability to an employer, a plaintiff must show that the company was aware of the harassing behavior, but did not respond with action reasonably calculated to end the harassment. This case serves as a reminder that prompt, swift action is necessary when an employee complains of harassment. Simply having a harassment policy is not sufficient to show that an employer has taken reasonable steps to end harassing behavior. An employer must promptly investigate all charges of harassment and take action when necessary. That action taken must work directly to stop the harassment which may often require punitive measures against the individuals responsible for the harassment.

Unwritten Internal Complaints Are Not a Protected Activity Under the FLSA.

The Court of Appeals for the Seventh Circuit recently held that the retaliation provision of the Fair Labor Standards Act (“FLSA”) does not protect an employee who makes a purely verbal complaint.

Facts of the Case: In Kasten v. Saint-Gobain Performance Plastics Corp., the plaintiff was reprimanded on several occasions for failing to clock in and out on the employer’s time clock. Plaintiff alleges that he told human resources personnel and his supervisors on several occasions, including during a meeting regarding his suspension, that he believed the location of the employer’s time clocks illegally prevented employees from being paid for time spent donning and doffing their required protective gear. The employer denied that plaintiff ever complained about the legality of the time clocks to any supervisor or any member of human resources. After his termination, plaintiff filed suit alleging he was terminated in retaliation for complaining about the location of the time clocks in violation of the FLSA. The trial court granted summary judgment in favor of the employer, finding that the plaintiff did not engage in protected activity because he had not “filed any complaint” with his employer about the location of the time clocks, as required by the FLSA’s retaliation provision.

The Court’s Ruling: In affirming the trial court’s decision, the Court of Appeals looked to the plain language of the FLSA. Specifically, under the FLSA, it is illegal for an employer “to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under” the FLSA. Plaintiff argued that his verbal complaints to the employer regarding the time clocks meant that he had “filed any complaint,” and his activity was thus protected by the FLSA. The Court held that, while internal complaints are a protected activity under the FLSA (i.e., the employee does not need to complain to an outside agency for the activity to be protected), the complaints must be in writing to receive protection. The Court held that purely verbal complaints are not protected activity under the FLSA.

Lessons Learned: The Seventh Circuit joins the Second and Fourth Circuits in finding that a verbal complaint is not a protected activity under the FLSA. Some other Circuit Courts of Appeal have ruled otherwise, that the FLSA protects verbal complaints. An employee who has complained to his employer, verbally or in writing, about working conditions may be suspicious about the reasons for any future disciplinary action. Employers should be sensitive to that concern, and accurately document the reasons for the disciplinary action.

TAKE NOTE

ICE’s Sweeping Audit Initiative. On July 1, 2009, the U.S. Immigration and Customs Enforcement (“ICE”) launched a new audit initiative and served inspection notices on 652 businesses – more notices than it issued in all of 2008. ICE is the agency responsible for ensuring that employers comply with workplace immigration regulations. The inspection notices require the employers to provide ICE with copies of all employee I-9 forms and supporting documentation. “ICE is committed to establishing a meaningful I-9 inspection program to promote compliance with the law. This nationwide effort is a first step in ICE’s long-term strategy to address and deter illegal employment,” said John Morton, Department of Homeland Security Assistant Secretary for ICE. Given ICE’s stepped up enforcement efforts, employers must make sure they keep up to date with revisions to the I-9 Form. Click here for the current English-version of the Revised I-9 Form, and click here for the Spanish-version of the Revised I-9 Form. As discussed in our June 2009 E-Update, this form continues to be valid pending the approval of the U.S. Citizenship and Immigration Service’s request to extend the expiration date.

Unlawful Termination of Non-Union Picketers. The Court of Appeals for the Second Circuit recently held that it was illegal for an employer to terminate non-union employees for picketing, even though the picketing itself was an unfair labor practice by the union. In Civil Service Employees Assoc. v. NLRB, a health clinic rejected a union’s request for recognition as the collective bargaining representative of the clinic’s employees. The union responded by holding a demonstration at the employer’s facility without giving the employer the proper ten day notice. Five clinic employees were among those who picketed for recognition of the union. None of the five employees were union members and none were on duty at the time of the picketing. The employer subsequently terminated the employees for an “illegal picket.” The union filed charges with the National Labor Relations Board (“NLRB”), which upheld the terminations because the union did not give proper notice of the picketing. In reversing the NLRB’s decision, the Second Circuit held that while the National Labor Relations Act (“NLRA”) provides for sanctions against labor organizations that either strike or picket without providing appropriate notice, it provides sanctions against employees only for striking but not for picketing (unless the employee is an agent of the union). Therefore, terminating non-union employees for picketing is unlawful under the NLRA.

Delaware Prohibits Sexual Orientation Discrimination. On July 2, 2009, Delaware amended its State anti-discrimination law to add sexual orientation as a class protected from employment discrimination. The new law defines sexual orientation as “heterosexuality, homosexuality, or bisexuality.” The law took effect immediately and applies to all employers with four or more employees within the State of Delaware. Delaware employers should revise and reissue current EEO and harassment policies to comply with the change in the law. Employers should also ensure their supervisors, managers and employees are properly trained to understand and abide by the new law.

TOP TIP

Employers May Not Be Entitled to Review Private Communications on Work Computers.

Many employers have electronic communications policies retaining the right to review all communications made on work computers. These policies are typically broad, stating that any communication on a work computer is made without any reasonable expectation of privacy. Employers have used these policies as justification for the retrieval of information from an employee’s computer. As one recent case confirms, however, an employer is not always entitled to view a private communication just because the employee used a work computer to transmit the information.

In Stengart v. Loving Care Agency, after the plaintiff sued her former employer alleging that she was subjected to a hostile work environment, the company created a forensic image of the plaintiff’s work-issued laptop computer. Upon review of the information from the hard drive, communications between plaintiff and her attorney were discovered and reviewed. While plaintiff used her work issued laptop to communicate with her attorney, the e-mails were sent via her personal, password protected e-mail account. The trial court rejected plaintiff’s argument that the e-mails were protected by the attorney-client privilege, finding that the company’s electronic communications policy put plaintiff on sufficient notice that her e-mails were company property.

On appeal, the New Jersey appellate court held that communications between an employee and his or her attorney through a personal e-mail account are protected by the attorney-client privilege, even if made using a work computer and server. The Court held that company ownership of the computer and server does not determine whether the communication is company property. The Court was critical of the company’s electronic communications policy, noting that there were several different versions, none of which was formally adopted, finalized, or even disseminated to employees. The Court further held that there is no legitimate business interest in a policy that transforms all private communications into company property simply because a work computer was the vehicle by which the communication was made.

This case emphasizes the need for clear, structured and defined policies regarding electronic communications, as well as a corporate understanding of what is reasonably covered under such policy. A simple policy that includes every conceivable communication may not be adequate or enforceable. While a business use only policy is difficult to consistently enforce, this case shows the potential pitfalls with permitting personal use of work computers.

EFCA UPDATE

If a Senate compromise is successful, “card check” may be sacrificed in an attempt to salvage the EFCA. Employers, however, should remain cautious. In addition to the unacceptable “mandatory arbitration” of first contract terms on which unions and employers cannot agree, the proposed alternative reportedly would require expedited union elections (perhaps in as few as five or ten days from the date the union files a petition). Unions make expansive promises (and often inaccurate ones) about what they can deliver when they are collecting employee signatures on authorization cards. Affording employers only five or ten days to “make their case” to employees before a union election is held is insufficient time for a meaningful exchange of information. The problem created by this compressed election period is worse for small companies. The card collection process in a small voting unit is often completed in a few days, well before the company has any notice that a union has targeted its workforce, and well before the company has the ability to formulate and articulate a considered response. While a shorter window between a petition and a union election may be appropriate, the compressed time reportedly being proposed does not strike the proper balance, especially for small employers.

For greater clarification of any of these issues, you may contact any Shawe Rosenthal attorney.