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Oh, Baby, Pregnancy Problems at Work -- Plus News on College Sexual Assault, Accommodating Marijuana, Arbitration and Lying

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September 2017 | Employment Law Update
Michael D. Homans

Pregnant Pause -- Bosses’ Blasé Response Helps Discrimination Claim Survive

When Jennifer Martin emailed her boss at Tall Brown Dog, LLC, in 2015 to tell him that she was pregnant and needed to take a sick day, his response was less than congratulatory.

 “OK,” he said without further comment, and then shifted directly into a discussion about his plan for her to increase her sales call activity.

Soon thereafter, she told the CEO of the company about her pregnancy, and he also responded as if channeling Spock.  He noted that “people have been pregnant here before,” and then “got very stoic, you know, and walked away,” according to Martin.

Such cold responses might be seen by some as simply the hyper-business-minded focus of small company managers or the social ineptitude of workaholics, but a federal judge in Michigan found that such non-supportive reactions could be interpreted by a jury as evidence of pregnancy discrimination against Martin, who was fired from her job days later.

Her bosses’ “reaction to Martin’s telling him that she was pregnant again (not congratulating her or acknowledging it in his response, and then moving on to discuss performance issues) could be viewed as suspect,” Judge Sean Cox wrote in his opinion in Martin v. Tall Brown Dog, LLC, denying summary judgment.

The case illustrates two basic truths:

Campus Sexual Harassment and Assault Guidelines Change Again

Federal guidelines for colleges and universities handling allegations of sexual misconduct on campus have changed again, with the Trump administration last week rescinding Title IX guidance issued under the Obama administration.

Notably, Education Secretary Betsy DeVos issued a seven-page set of questions and answers that allow schools to use a higher standard of proof in some cases, up from the “preponderance of the evidence” standard advocated by the Obama administration.  The guidance also encourages equal treatment, notice and access for the accused, which has not always occurred in the past.

This has been a hot area of dispute and litigation in recent years, and the roll-out of new guidelines is likely to stir the pot even further.  Colleges, universities and student affinity groups can be expected to each push for review and reform as a result.   Although this is not employment law, the issues involved – including the need for prompt and fair investigations – are similar in the workplace.

Head Spinning from Marijuana Laws?

If you are experiencing a “Purple Haze” from the variety of state marijuana laws – at least 29 states and counting -- and trying to determine whether your employer must accommodate medical marijuana use, then we can help.

One of our best resources for evolving labor and employment laws, Wolters Kluwer, has just published a concise overview of the law in this area:  “Smoky Lines: Whether to accommodate employees’ use of medicinal marijuana may now depend on state law.”

It notes important, safety-sensitive jobs in which accommodation is not required under federal law, covering employers in the trucking, aviation, maritime, railroad, transit and pipeline industries.  In addition, federal contractors subject to the Drug-Free Workplace Act must provide a drug-free workplace. 

The rules get hazier at the state level, with only one state (Nevada) expressly requiring accommodation of medical marijuana.  In contrast, 16 states (including Pennsylvania and New Jersey) specifically provide that employers are not required to “accommodate” the use of medical marijuana during work hours or on work premises. Courts in some states, including Massachusetts, have held recently that employers do indeed have a duty to accommodate medical marijuana use, even if the statute is not clear on the point.

Suffice it to say that the law continues to evolve.  If you would like the full Wolters Kluwer report, please respond to me. 

Class Action Waiver and Arbitration Clauses in Limbo

Mandatory arbitration clauses and class action waivers have not yet ripened into the panacea that employers had hoped.  While they can sometimes eliminate or reduce the expense and exposure of legal claims and even eliminate class actions, they also can spawn their own litigation as to enforceability, as three recent decisions illustrate.

First, federal Judge Joseph F. Leeson Jr. in Allentown, Pa., last week issued a stay of a Fair Labor Standards Act lawsuit for overtime pay against U-Haul International and its subsidiaries, pending the outcome of three cases on arbitrability and class action waivers now pending before the U.S. Supreme Court.  That will delay the U-Haul case for months, as the Supreme Court won’t hear oral argument on its cases until October 2, with decisions to follow later this year or next.

Second, a state court in New Jersey rejected a mandatory arbitration clause that was sent to employees electronically, requiring them to click on a box acknowledging that they had read and understood the policy.  Held the court in Dugan v. Best Buy Co. Inc., “Plaintiff’s mouse-click on the acknowledgment box did not manifest his assent to the policy, only that he read and understood the policy.”  Instead, the mouse-click should have said something like, “I agree.” 

And third, the U.S. Court of Appeals for the Third Circuit (over federal courts in Pennsylvania, New Jersey, Delaware and the U.S. Virgin Islands) ruled last month that under New Jersey law, in order for an arbitration clause to be enforceable as to statutory claims (such as employment discrimination or wage payment violations), the clause must (1) make clear that the employee is agreeing to arbitrate statutory claims, (2) make reference to the types of claims being waived, such as “workplace discrimination claims,” and (3) explain the difference between arbitration and litigation, including the waiver of the right to a jury trial.  Because the clause in Moon v. Breathless Inc. did not meet all three of these standards, the appellate court ruled it unenforceable.  And so the parties, after a year of litigation over arbitrability, can advance to litigation on the merits.  Fun.

So a word to the wise – check your arbitration clauses closely to be sure they are enforceable under both state and federal law.  Legal review is definitely recommended.  And watch for the Supreme Court’s decision soon on its arbitration trio – NLRB v. Murphy Oil USA, Epic Systems v. Lewis, and Ernst & Young v. Morris.  That could be a game changer.           

New Jersey ‘Accommodation’ Loophole

Most readers of this Update know that one form of “reasonable accommodation” under the Americans with Disabilities Act (ADA) is to provide a temporary leave of absence for the disabled employee.

But in New Jersey, the state’s Law Against Discrimination (NJLAD) provides an exception to the employer’s duty to accommodate “where it can reasonably be determined that an applicant or employee, as a result of the individual’s disability, cannot presently perform the job even with a reasonable accommodation.”  The U.S. Court of Appeals for the Third Circuit has interpreted that exception to mean that the disabled employee must “be able to perform the essential functions of his job during the application of the reasonable accommodation – that is, at the same time that the reasonable accommodation is being implemented.” Conoshenti v. Pub. Serv. Elec. & Gas Co. (2004).

This month federal Judge Madeline Cox Arleo affirmed the continuing vitality of this exception to the duty to accommodate, granting summary judgment against the plaintiff in Thompson v. Kessler Institute for Rehabilitation, Inc. on his NJLAD claim.  The plaintiff, George Thompson, admittedly needed an extended medical leave due to burns on his fingers, and Judge Arleo noted that under the NJLAD such leave was not a reasonable accommodation, since he could not perform his job while out on leave.  It’s a surprising result, but one supported by the statutory language and court decisions.

Given that plaintiffs often bring both state and federal claims of disability discrimination, one might wonder why this exception matters, since the federal law, the ADA, does include medical leave as an accommodation.  Three reasons:

Lying about Reasons for Separation – Don’t Do It

It’s a common dilemma for employers – what do you say to your staff to explain the sudden departure of an employee terminated for poor performance?

Tell the truth about why the employee was fired, and it can be seen as defamation, an invasion of privacy, or simply mean-spirited.

Say nothing, and co-workers may assume the worst or lose trust in the company. 

So . . . what about saying it was the employee’s decision to leave, even if it wasn’t? 

Well, that last explanation would be a lie – and courts may interpret such lying as a pretextual cover-up for discrimination.  That seems to be the lesson of McMullin v. Evangelical Services for the Aging T/D/B/A Wesley Enhanced Living, decided this month by Judge Savage of the U.S. District Court in Philadelphia.  In that case, the former CFO of Wesley Enhanced Living, Edward McMullin, sued for age discrimination and disability discrimination after his termination of employment at age 64 – one year after his hire.

Wesley argued that it terminated McMullin due to poor performance, including errors in financial reports.  McMullin claimed instead that the termination was because of his age and because he was perceived as disabled.  He had disclosed a chronic heart condition to his boss, CEO Jeff Petty, and McMullin also claimed that Petty had made comments about “making employees feel unwelcome so that they were encouraged to leave” when the employees were perceived as presenting a risk of costly workers’ comp claims or health insurance claims.

For Judge Savage, the decisive factor in allowing the claim to go forward to trial was that Petty sent an email to staff after McMullin’s termination announcing that McMullin “has decided to leave WEL effectively [sic] immediately.”  Stated the court, “Petty’s public explanation at the time of McMullin’s departure did not square with the reason he gave in this litigation for McMullin’s leaving.  McMullin claims that Petty misrepresented his termination to Wesley employees to conceal that he was fired for a discriminatory reason. . . A jury could infer discrimination if it concludes that Wesley’s explanation for terminating McMullin is not credible.”

In other words, Petty telling the staff that McMullin left voluntarily contradicted Petty’s later claim that McMullin was fired for poor performance, and based on that contradiction, a jury could conclude that Petty was covering up for unlawful discrimination.  Of course, Petty and Wesley likely would contend they announced that McMullin’s departure was voluntary so that he could “save face” and not be publicly embarrassed by his for-cause termination, but such a rationale apparently did not make it into the record.

Whether you agree with this decision or not, the lesson is simple – be very careful about statements relating to the reason for separation of an employee.  In our experience, these communications often make the difference as to whether an employer is sued or not sued for a termination.  Better to be vague and treat it as a private personnel matter, than to be dishonest. A simple statement that XYZ will be leaving the company effective October 1  will often suffice.  And if the employee wishes to treat it as a resignation to save face, ensure the parties sign a written agreement to do so.

Michael Homans is a Labor & Employment attorney and Chair of the Litigation Department at Flaster Greenberg PC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

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