HIGHLIGHTS FOR THE MONTH OF OCTOBER 2008

By: Darryl G. McCallum

RECENT DEVELOPMENTS

HIV-Positive Job Applicant Unable To Maintain An ADA Claim When She Could Not Meet Job's Lifting Requirements

The U.S. Court of Appeals for the Seventh Circuit recently confirmed that a job applicant who was HIV positive was unable to proceed with her claim under the Americans with Disabilities Act (ADA) because the applicant could not prove that it was her alleged disability, rather than her inability to meet the job’s lifting requirements, that was the reason she was not hired.

Facts of the Case: In EEOC v. Lee's Log Cabin, Inc., the plaintiff applied to be a waitress. The job description stated that applicants must be able to lift between 25 and 35 pounds multiple times during a shift. In her job application, the plaintiff indicated a 10-pound lifting restriction and further advised that there was no accommodation that would permit the plaintiff to perform all of the required job duties. One month after submitting her application, the plaintiff returned to the restaurant, asking to revise her application. Upon doing so, she noticed an "HIV+" notation had been written on her application. The plaintiff learned that the manager made the notation after reading a newspaper article about a lawsuit the plaintiff had previously filed against a prior employer who she alleged fired her because she was HIV positive. Plaintiff was ultimately not hired because she could not meet the lifting requirements of the job. The EEOC filed suit on the plaintiff's behalf, arguing that the employer violated the ADA by not hiring the plaintiff because she was HIV positive. The employer won on summary judgment and the EEOC appealed.

Court’s Ruling: In ruling in favor of the employer, the Seventh Circuit Court of Appeals focused on the 10-pound lifting restriction which plaintiff had identified on her job application. The Court noted that the employer required its wait-staff employees to lift, transport and carry objects weighing 25 to 30 pounds up to 20 times or more per shift. In arguing that her 10-pound restriction could have been accommodated, the plaintiff pointed to one other waitress who she alleged could not lift 25 to 30 pounds. Unlike the plaintiff, however, this person could lift the required weight, but simply could not lift it above her head. The restaurant was able to accommodate the no overhead lifting restriction. The plaintiff, however, had not identified any reasonable accommodation for her inability to lift over 10 pounds. Thus, because the plaintiff could not meet the lifting requirement of the job, she was not a qualified individual with a disability.

Lessons Learned: The recent amendments to the ADA, discussed in detail in an earlier E-lert, have expanded the definition of "disability," making it easier for individuals to bring claims under the ADA. One thing that has not changed, however, is the requirement that in order to be considered a qualified individual with a disability, a person must be able to meet the essential requirements of the job, with or without a reasonable accommodation. An employer is not required to eliminate an essential function of the job in order to accommodate an employee. Employers should review their job descriptions to make sure that they clearly and accurately spell out the essential job requirements so that the employer can properly identify those essential functions that an employee must be able to meet. Another important lesson learned is that employers must be careful during the interview process not to record or elicit information that could indicate that an unlawful consideration was part of the hiring decision. In this case, had the restaurant not made the "HIV+" notation on the employment application, the EEOC would likely not have initiated the litigation .

Employer's Open Door Policy Document Is Valid And Enforceable Arbitration Agreement

The Court of Appeals for the Eleventh Circuit recently held that an employer’s Open Door Policy document was an enforceable agreement to arbitrate all employment-related disputes, including a termination dispute, despite the language in the policy suggesting that the employee first consult with a company facilitator to determine whether the dispute is arbitrable.

After being terminated for allegedly threatening a supervisor, the plaintiff brought an action in court, raising Title VII discrimination claims. The employer moved to compel arbitration based on the Open Door policy, but the district court denied the motion on two grounds. First, the court concluded that by having a company facilitator advise an employee as to whether his claim was arbitrable, the employer had reserved unbridled discretion to grant or deny employees the right to arbitrate, thereby rendering the Open Door policy non-mutual. Second, the lower court found that the plaintiff’s discrimination claims regarding his termination were not ongoing workplace disputes amenable to resolution through the Open Door Policy.

The Court’s Ruling: In reversing the district court’s decision, the Court of Appeals held that the Open Door Policy was a contract binding both the company and the employee, notwithstanding the language stating that employees should consult a company facilitator to determine if their dispute was arbitrable. Such language did not make the company facilitator the “gatekeeper” with the ultimate authority to allow or deny arbitration. Rather, the Court reasoned, the language stating that the employee “should” contact the facilitator was not mandatory, and employees need not involve a facilitator if they wish to proceed without one. With respect to the plaintiff’s claim that the arbitration agreement applies only to those disputes arising during employment and not to termination disputes, the Court found that the language of the policy was all-inclusive, stating: “Open Door … [is] the exclusive means for resolving all workplace disputes including legally protected rights, such as sexual harassment or discrimination based on age, sex or race.” Noting the federal policy favoring arbitration, the Eleventh Circuit stated that arbitration would be enforced unless the parties clearly expressed their intent to exclude certain claims from the arbitration agreement. Because termination disputes were not clearly excluded, the agreement was enforceable as to the plaintiff’s claims.

Lessons Learned. Arbitration agreements must be carefully drafted to ensure that they will be enforced. In this case, the employer was able to enforce the agreement, and successfully established mutuality, because of the language permitting the employee to initiate arbitration on his or her own, without first going through a company facilitator. Moreover, even though the Open Door policy did not refer specifically to termination disputes, it was written broadly enough to cover all employment-related suits. Certainly, a better option would have been to specifically state that any disputes relating to termination are covered by the arbitration agreement.

TAKE NOTE

Employees versus Independent Contractors. In Hopkins v. Cornerstone America, the United States Court of Appeals for the Fifth Circuit held that a person can be an employee for purposes of the Fair Labor Standards Act (FLSA) despite being an independent contractor under state and local antidiscrimination statutes. Fourteen former "sales leaders" sued their employer (an insurance company) claiming they had been denied overtime in violation of the FLSA. Each had signed an independent contractor agreement and worked on a commission-only basis. They possessed flexibility with regard to their hours and day-to-day affairs. The company determined their sales territories and prevented them from selling other insurance products or operating other businesses. Further, one of the sales leaders previously had successfully defended against a sexual harassment suit brought under state law on the basis that he was an independent contractor and not an employee. The district court ruled that these individuals were employees, and the Fifth Circuit agreed because the company controlled the meaningful economic aspects of the business, such that the sales leaders could not plausibly be considered separate economic entities. The Court also explained that the test for whether an individual is an "employee" under state and federal anti-discrimination statutes is narrower than under the FLSA.

FMLA. The Court of Appeals for the Eleventh Circuit recently determined that an employee whose contract was not extended by the employer upon his return from FMLA leave had valid claims for interference and retaliation under the FMLA. In Martin v. Brevard County Public Schools, the employee, a payroll supervisor, was placed on a performance improvement plan in April 2004, which allowed him until June 1, 2004 to "demonstrate significant progress" in his performance. Shortly thereafter, the employee requested and was granted a twelve-week period of FMLA leave in order to care for his granddaughter whose mother - a single parent - had been called to active military duty. Toward the end of his leave, the School District informed the employee that his annual employment contract, which ran through June 30, 2004, would not be renewed because he failed to complete his performance improvement plan. The district court held for the employer but the Court of Appeals reversed, holding there was a factual dispute as to whether the School District would have terminated the employee had he been allowed to complete the performance improvement plan after his FMLA leave expired. Where an employee has been placed on a final written warning or performance improvement plan and then takes FMLA leave, the employee should be given the appropriate time to meet his performance goals upon return.

OFCCP and Pay Practices. Federal contractors are subject to Office of Federal Contract Compliance Programs (OFCCP) audits to determine if their personnel practices comply with the anti-discrimination and affirmative action requirements of Executive Order 11246. The OFCCP has begun using a "tipping point" test to determine if there are discriminatory pay practices in place. OFCCP adopted the "tipping point" test as part of its internal procedure for determining the existence of a discriminatory pay practice. Upon receiving pay data from a contractor in response to an audit letter, the OFCCP will scrutinize the data to determine whether a discriminatory pay practice exists. The tipping point that would cause a more extensive OFCCP audit occurs when: (1) average pay differences between gender or race groups within the same pay division (i.e., job category or job grade) exceed 5 percent; (2) the number of females or minorities falling into the negatively affected pay divisions constitutes at least 10 percent of the entire number of individuals of the same gender or race in the employer's workforce; and (3) the percentage of females or minorities in the affected pay divisions is at least three times as large as the percentage of males or non-minorities in pay divisions where the males or nonminorities are affected negatively.

E-Verify for Federal Contractors. As explained in our June 2008 E-Update, earlier this year President Bush signed an Executive Order requiring employers with federal contracts to use the federal E-Verify system to confirm employment eligibility. The Executive Order, signed on June 9, 2008, requires federal contractors to use E-Verify to confirm the work eligibility status of employees working on federal contracts and those hired during the contract term, whether or not they work on the contract. On October 1, 2008, Congress voted to extend the E-Verify Program until March 6, 2009.

TOP TIP

The Risks of Employer Inquiries into an Employee's Medical Condition

Two recent lawsuits illustrate the risks employers face when asking about the specifics of an employee’s medical condition in order to properly categorize their absence from work. The EEOC recently commenced a lawsuit in California against Dillard Store Services, Inc., a department store chain (EEOC v. Dillard’s Inc., Case No. 08-CV-1780, S.D. Calif.), alleging that a store in California violated the ADA by requiring employees to reveal the specific nature of their illness in order to deem sick leave as an excused absence. In a similar lawsuit in New York, EEOC v. Delphi Corp., No. 07-CV-643OT (W.D.N.Y.), the EEOC alleges that Delphi Corp., an automotive parts supplier, illegally retaliated against an employee who refused to sign a release upon his return from sick leave that would have permitted the employer to access his medical records. The district courts have not yet issued decisions in these cases.

The EEOC’s Enforcement Guidance on Disability Related Inquiries under the ADA advises employers on whether their inquiries about an employee’s medical condition comply with the ADA. Employers are certainly entitled to know whether an employee’s absence or request for sick leave is due to legitimate medical reasons. Inquiry, however, needs to be made in such a way that does not violate the ADA (or other related laws, such as the FMLA). According to the EEOC Guidelines:

• An employer may ask an employee to justify his/her use of sick leave by providing a doctor’s note or other explanation, so long as it has a policy or practice of requiring all employees, with and without disabilities, to do so.
  
• If the employee’s request for leave did not specify an exact or fairly specific return date (e.g., November 13 or around the second week of November) or if the employee needs continued leave beyond what was originally granted, the employer may require the employee to provide periodic updates on his/her condition and a possible date of return. If the employee has not requested additional leave beyond that which was originally granted, however, employers may not require the employee to provide periodic updates.
  
• If an employer has a reasonable belief that an employee’s present ability to perform essential job functions will be impaired by a medical condition or that s/he will pose a direct threat due to a medical condition, the employer may make disability-related inquiries or require the employee to submit to a medical examination. Any inquiries or examination, however, must be limited in scope to what is needed to make an assessment of the employee's ability to work. For instance, if a data entry clerk breaks her leg , takes several weeks of sick leave and returns to work on crutches, the employer could not make a disability related inquiry absent objective evidence that the employee could not perform her essential job functions while on crutches
  

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