Recipe for a Lawsuit

The 10th Circuit issued its opinion this week on a sexual harassment case coming out of Utah that provides the perfect example for businesses wanting to wind up in federal court defending a sexual harassment case.

In Harsco Corporation v. Renner, the employer-defendant did just about everything wrong. Renner had been working at Harsco for about two years as a final inspector for the metal products Harsco produces and everything seemed fine. In 2001, her co-workers began making far from kind remarks about her and making oinking and barking noises at her. In an attempt to avoid her harassers, she confined herself to her workstation. Unfortunately, the bold harassers followed her. Her harassers even made disparaging remarks to a male co-worker, insinuating that he was having a relationship of a sexual nature with her.

After suffering the insults for about three months, Ms. Renner approached the office manager to tell her about the harassment. Next she met with the office manager and the plant manager. Neither one ever told Renner the results of any investigation. Renner then talked to her direct supervisor about the harassment.

Despite her supervisor’s assurance that the perpetrator had been told not to enter Renner’s workspace and that the harassment was “taken care of,” the harassment continued within a week. On occassion, the harasser would walk directly past Renner’s supervisor as he entered her workspace. Even after her supervisor convened a meeting of Harsco’s employees to tell them that Harsco would not tolerate sexual harassment, the perpetrators continued.

The harassment escalated. Her supervisor counseled her to avoid her perpetrators, suggesting she take the “long way around” to the bathroom, which required her to go outside and enter through another part of the building. The harassers vandalized her car and stood in front of her car when she tried to leave after work.

The court’s decision includes pages of facts detailing all of the harassment Renner suffered. Despite that, there was no testimony that an investigation ever happened. There was no testimony that any discipline was ever imposed. After two years of this treatment, Renner quit her job and filed suit.

A jury awarded her $30,000 for pain and suffering, $30,000 for emotional distress, and $20,000 in punitive damages. The trial court vacated the punitive damages award, and the appeals court affirmed, remanding the case to determine reasonable attorney fees for Renner.

The appeals court set forth the elements of a Title VII discrimination suit a plaintiff must prove to establish that a sexually hostile work environment existed: (1) she is a member of a protected group; (2) she was subject to unwelcome harassment; (3) the harassment was based on sex; and (4) due to the harassment’s severity or pervasiveness, the harassment altered a term, condition, or privilege of the plaintiff’s employment and created an abusive working environment.

Renner had to further show that in proving that Harsco was negligent or reckless that Harsco had actual or constructive knowledge of the hostile work environment but did not adequately respond to the notice of the harassment.

The court reminds us that Title VII is “not a general civility code for the American workplace,” but that the harassment must be because of the plaintiff’s sex.

Despite Harsco’s argument that the harassing comments were gender-neutral and that Renner’s male co-workers were subjected to the same kinds of comments, the court found that Renner satisfied all five elements.

Bottom Line: Once again, apathy and complacency gets an employer into trouble. I think that sometimes employers let certain behavior slide. “Well, that’s just how Buford is. Heh heh heh. Just ignore him.” People hate confrontation. Despite my chosen profession, I’ll even admit to that. Employers should respond to each and every complaint seriously. They should develop policies and procedures for handling such a complaint and stick to them. Make sure complaint procedures are included in an employee handbook. Make sure a zero tolerance policy regarding harassment is in the handbook. Have an open door policy.

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Religious Discrimination in the Workplace on the Rise

The Columbian is reporting that the Washington state office of the Equal Employment Opportunity Commission is seeing a rise in the number of charges alleging religious discrimination. The charges arise over disagreements relating to when and where people pray, how they dress, and what hours they work.

The story attributes some of the increase to the war in Iraq and an increase in diversity in the workplace. Many complaints come from Muslims, but the number of Christians filing charges is increasing.

Employers should remember that under the Title VII of the Civil Rights Act of 1964, it is against the law to discriminate against employees on the basis of their religion in decisions relating to hiring, firing, or promotion. The law applies to employers with 15 or more employees, including state and local governments, as well as employment agencies, labor organizations, and the federal government.

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Sexual Orientation Discrimination

The Lawrence World-Journal is reporting that the Kansas legislature is contemplating a bill to ban discrimination on the basis of sexual orientation. The story reports that 27 states have provided some sort of protection from this kind of discrimination. Colorado isn’t one of them.

But Denver does. Denver Municipal Code Section 28-92 states:

It is the intent of the council in enacting this article to eliminate within the city discrimination by reason of race, color, religion, national origin, gender, age, sexual orientation, gender variance, marital status, military status or physical or mental disability. Discriminatory practices as defined in this article may be subject to investigation, conciliation, administrative hearings and orders or other enforcement procedures.

Employers and employees alike need to remember that there are federal rules, state rules, and local rules that may affect their rights and responsibilities. And this is a big one. Denver employers and employees have more rights and responsibilities regarding discrimination than, say, someone in Ft. Collins. I won’t get into the doctrine of preemption, but you can take a look at this article for more.

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Do I Need an Employee Handbook?

Yesterday, I spoke to a group of small business owners at the Denver Metro Chamber of Commerce on the pros and cons of having an employee handbook. I thought I’d share some of the highlights. Highlights is probably a stretch. It was, after all, a talk about employee handbooks.

The first question employers need to ask themselves is whether or not they need a handbook. One of the primary purposes of a handbook is to standardize policies and procedures with which employees are expected to comply. The smaller an employer is, say under 15-20, the less likely the risk of disparate treatment of its employees. If an employer can consistently apply its policies, then a handbook probably isn’t needed.

But once the number of employees reaches a certain level and more managers are adminstering policies and procedures, the more likely people are going to be treated differently. Unless, of course, you have a written handbook that sets out what those policies are and they are consistently applied.

One of the biggest reasons employers shy away from using a handbook is because they’ve heard that employees can use it against them, enforcing it as a contract. In fact, that has happened. With poorly written handbooks. Here are some of the things that can keep employers out of trouble:

Disclaimer - at the outset, make sure the employees know that their employment is at-will and that both you and she can terminate their relationship at any time. Include that the handbook does not constitute a contract.
Termination procedure - establishing a procedure which has to be followed to terminate someone is a bad idea and counter to the employment at-will doctrine. Instead, reiterate that the employer may terminate the employee for any reason, without notice. (Remembering of course that you can’t fire someone for a discriminatory purpose, for anything against public policy, or if you have a contract which sets forth the terms of employment.)
Grievance procedure - let the employees know what to do if they are having a problem with someone, such as harassment. Establishing such a procedure - and then following it - will go a long way from fending off claims that an employer stood by after they knew, or should have known, that something wrong was happening.
Acknowledgment - the last page of the handbook should have a statement the employee signs showing that they have received and read the handbook. Reiterate that the handbook is not a contract and that their employment is at-will.

Of course, these are only some of the things to consider when putting together a handbook. Many free or cheap resources abound for helping an employer write a handbook. Having looked at some of these, my observation is that this is not an area where someone wants to take a one-size-fits-all approach. Differences in state law, statutory and case, will impact what should and should not go into the handbook.

Not surprisingly, I’m sure, my recommendation is that you hire an attorney to help you with this task. Yes, it will be more expensive. Consider it an investment. The more you spend now, the less you spend later. Attorneys will usually offer this service for a fixed fee, freeing you from the worry that he will rack up hours and hours of billable time.

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McGowan v. City of Eufala

The 10th Circuit Court of Appeals issued a couple of employment law rulings last week. Colorado is part of the 10th Circuit, so their rulings have a direct effect on Colorado employment laws in the federal context.

In McGowan v. City of Eufala, plaintiff Jean McGowan accused the defendant, the city of Eufala, Oklahoma of retaliating against her for her support the race discrimination allegations of a co-worker. As we’ll see, however, Ms. McGowan unfortunately failed to recognize her part in the suicide of a prisoner while on her watch as jailer.

Title VII is a federal law that, in part, makes it unlawful to retaliate against an employee for engaging in protected opposition to discrimination. In order to establish an argument in her favor, McGowan needed to prove that: (1) she engaged in protected opposition to discrimination; (2) a reasonable employee would have found the challenged action materially adverse; and (3) a causal connection exists between the protected activity and the materially adverse action.

McGowan established that she engaged in protected opposition to discrimination by supporting her co-workers discrimination claim. Where her own claim of retaliation falls apart is in parts 2 and 3 of her requirements. McGowan claimed that the defendants retaliated against her by: not fulfilling her request to move to the day shift; suspending her after a prisoner died while in her custody as jailer; and that the defendant sanctioned harassment by members of the police department.

The court found that the defendant’s refusal to move her to the day shift was not materially adverse action, given that the defendant presented evidence that McGowan did not have the administrative skills required to perform the job during the day and that McGowan’s reason for wanting to move to the day shift was for mere convenience. The court also found that McGowan did not meet her burden of showing that any harassment by defendant amounted to materially adverse action. Members of the defendant’s police force were harassing her son and his girlfriend, the court (rather hollowly) found.

Finally, the court agreed with the lower court that there was no causal link between the city’s suspension of McGowan and her supporting her co-worker’s discrimination claim, especially given that there were more than two years between the two events.

Bottom Line: Adverse employment action isn’t always discrimination. Nevertheless, employers have to be careful about these things. Suspending someone the day after they testify in a discrimination claim just sets up the employer for a suit like this. Think through employment decisions. Ask yourself what it would look like to someone outside the organization.

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Overtime Exemptions Under Colorado Employment Law

I got a call yesterday from someone with a wage question. He said he was working 50 hours a week but not getting premium pay for more than 40 hours and that his employer claimed they were exempt from the overtime rules under an “agricultural exemption.”

Colorado employment law does indeed exempt many employers or industries from the premium pay for overtime hours requirement. These employers or industries include:

The insurance industry;
Some residential camps;
Veterinary medicine;
Western Stock Show temporary employees who are not vendors, concessionaires, or contractors;
The airline industry;
Respite care workers;
Companion services;
Casual babysitters;
Developmental Disability Community Centered Boards and Service Agencies
Agricultural industry;
Construction industry;
Manufacturing industry;
Inmates in correctional facilities;
Administrative Employees
Executives or Supervisors
Professionals
Outside Salespersons
Elected Officials and Members of Their Staff
Domestic Employees
Property Managers
Interstate Drivers
Driver Helpers, Loaders, or Mechanics of Motor Carriers
Taxi Cab Drivers
Bona Fide Volunteers
Students Employed by Sororities or Fraternities
Students Employed by College Clubs or Dormitories
Students Employed in a Work Experience Study Program
Employees Working in Laundries of Charitable Institutions
Patient Workers in Institutional Laundries

More information can be found in the Colorado Division of Labor Advisory Bulletin and Resource Guide, specifically Advisory Bulletin #30(I).

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Colorado Department of Labor Help with Recovery of Wages

While the Colorado Department of Labor and Employment can’t force an employer to pay you wages that might be due, it does offer to help mediate such a dispute.

The agency can help mediate disputes over:

non-payment of wages for work performed
non-payment of overtime
non-payment of vacation earned in accordance with an employer’s policy
unauthorized deductions from paycheck
tip or gratuities
uniform policies
delayed or missing paydays
timekeeping or pay irregularities
dishonored (bounced) paychecks

A request for mediation can be found on the department’s immensely helpful website. Their equally helpful Resource Guide also has a form letter employees can use to make a written demand to their employer or former employer for wages. Under Colorado employment law, an employer has ten (10) days to respond to such requests or faces penalties.

The Colorado DOL also reminds residents that Colorado state employment law neither requires or prohibits:

severance pay
sick pay
paid holidays, vacation, or other fringe benefits
advance notice or reason for layoff, termination, or suspension
advance notice to resign or provide a “two week notice”
advance notice of work or duty schedule
mandatory overtime
release of information regarding reasons for selection or non-selection for employment
drug or alcohol testing
access to personnel records
character references, recommendations, or release of employment information to other employers
polygraph examinations as a condition of employment or continued employment
pay raises, promotions, or bonuses
premium pay for weekend, holiday, or night work
involuntary weekend, holdiday, or night work

Readers should be aware that federal law may dictate certain rules employers must follow. There are some federal prohibitions on the use of polygraph testing, for example.

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I Got Fired From My First Job

When I was 14 (yes, 14), I got my first non-paper route job at Burger King. I was in the 9th grade, if I recall correctly. I’m sure I was excited. I have always enjoyed working. Don’t get me wrong. I like not working, too. But feeling productive and earning money has always been satisfying.

I worked all over the restaurant. Front of the house and back of the house. I took orders, scooped fries, and tossed frozen meat discs onto the conveyor belt system BK uses to “flame broil” their burgers. I cleaned. I always felt like one of the managers had it in for me, though. He liked to have me clean the walk-ins, giant freezers and refrigerators that had to be completely emptied and then mopped out with hot water. It was simultaneously freezing and sweaty work.

My downfall was a car. My best friend down the street decided to take his mother’s old Chrysler for a joyride. Of course, wanting to share the joy, he recruited me. It was the summer after I got the job. I was 15 then. Of course, I was thrilled to spend the afternoon driving around.

The only problem was that I was also scheduled to work. The choice between sitting in front of a vat of fry grease and cruising in a 20 year old beater all afternoon was, of course, obvious. I called my boss and lied. I told him that I had a dentist’s appointment.

I have been never been so tortured in my life.

For the next two weeks, my boss hounded me for a note from the dentist. I compounded the lie. I told him I forgot it at home. My dog ate it, and I had to get another one. The thrill of the joyride quickly receded.

He was ruthless. One Friday night, he asked again for the dentist’s note. I could take no more. I broke down. I told him the truth.

I remember the moment vividly. He stopped counting out a register drawer at his station in the back of the restaurant long enough to look up at me and say, “you’re fired.”

It was that simple for him. It was probably the fifty-fifth time he had done it, and if I asked him about it today, he wouldn’t have any memory of it at all. For me, I have lived with that memory for 25 years. I deserved it, of course. It was years and years before I ever called in sick for anything other than being near death.

Happily, I got another job almost immediately just down the strip mall from BK at a pizza joint.

That was the second job I ever got fired from. And the last.

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Will New Minimum Wage Spark Litigation?

As most of you must know by now, Colorado employment law saw a bump in minimum wage on January 1st of this year. Colorado was joined about five other states in doing so. Tresa Baldas over at The National Law Journal speculates that the new laws may spark a wave of litigation as employers adjust.

According to Baldas, among some of scenarios that ignite such lawsuits are:

Employees who are labeled independent contractors and who then sue the employer, claiming that they were intentionally misclassified to avoid overtime and higher wages.

Hourly employees who are named assistant managers and who then sue over the new job title, claiming that they were misclassified just to be exempt from overtime and higher wages.

Employees who are asked to get a job done even if it means working off the clock, and who then sue for unpaid overtime — a scenario that’s already clogging the courts.

The easiest way to avoid these kinds of lawsuits, of course, is to make sure you’re complying with Colorado’s Wage Act and Minimum Wage Order. By the way, Colorado is currently operating under an “emergency” wage order due to the short turnaround between when the electorate voted in favor of such an increase and when it went into effect. I’ve been told by the Department of Labor and Employment’s Director of Research Peter Wingate that we can expect Minimum Wage Order 23 soon. I’ve many times encouraged my readers to visit their website. It is a great source of information.

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Supervising Supervisors - Workplace Harassment

Last week, I wrote about the questions I get from employees who are concerned with the treatment they get from their supervisors. As I wrote, it is always suprising, and disappointing, to hear how people are treating one another, particularly in the workplace. Unfortunately, not everything your boss says to you is something you can sue him for.

Last week, the 10th Circuit Court of Appeals issued a decision that highlights this issue. In Herrera v. Lufkin Industries, Inc., the plaintiff Lewis Herrera made several claims, inlcuding intentional infliction of emotional distress, breach of his employment contract, and a racially hostile work environment. He also appealed from the lower court’s order that he undergo psychological testing.

I want to focus on the intentional infliction of emotional distress claim, because, as I wrote, it is one of the issues I get so many questions from employees about. This decision stems from a lower federal court in Wyoming, and this particular issue is a state law issue. While a different result might occur if the court were applying Colorado employment law, it’s not likely. Nevertheless, this decision sheds light on, and will shape, Colorado employment law.

An intentional infliction of emotional distress (IIED) claim requires conduct that is “extreme and outrageous” or “recklessly causes severe emotional distress to another.” As the court explains such actions require conduct “which goes beyond all possible bounds of decency, is regarded as atrocious, and is utterly intolerable in a civilized community.”

Some of the evidence that Herrera presented at trial included his supervisor refusing to shake his hand when he met him the first time; directing Herrera to call on particular customers because the customer was Mexican or liked Mexicans; sending Herrera “Mexican peanut brittle” (Like you, I’m sure, I don’t know what that means or is.); and calling him “that f-ing Mexican.”

The court wrote that this evidence amounts to no more than “insults, indiginities,…annoyances, petty oppressions [and] trivialities” which are insufficient to support a claim of IIED.

I don’t want readers to go away thinking that this is the end of the discussion. While the court affirmed the trial court’s dismissal of this claim, it remanded Herrera’s claim of a racially hostile environment under Title VII. This is the court’s response to a very specific claim with very specific facts. It’s possible, had Herrera’s lawyers made other claims, he would have been successful. What I want to highlight, though, is that the occasional remark will probably not be enough to win a lawsuit.

And I also don’t want employers walking away thinking that they can get away without disciplining supervisors for their bad behavior. Employers seeing the kind of conduct demonstrated here would be advised to “nip it in the bud” right away. As soon as an employer implicitly approves of such conduct, it will find itself in hot water.

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