Perhaps the most common form of employment "litigation" is a claim for unemployment compensation. Such claims are so common that only a few employers even consider this as "litigation," although such cases often involve a hearing before a state administrative officer or "judge." Similarly, a record can be established, often by a recording that can later be transcribed. Such a transcript can be useful to an employer, or to a plaintiff, in any subsequent litigation of a more serious nature, such as a discrimination lawsuit.
Further, the mere fact that an unemployment claim is challenged by an employer may cause a former employee to seek the advice of an attorney. The claimant's attorney may suggest a stronger course of action for the employee than a simple unemployment claim, such as an EEOC charge or discrimination lawsuit. In either event, a simple unemployment claim suddenly becomes a more serious matter.
The authors have experienced numerous "horror stories" of having a personnel clerk show up at an unemployment hearing, only to be confronted not only by the claimant, but also by the claimant's attorney, who demands important documents and asks some particularly penetrating questions. The clerk or company representative may or may not be prepared to answer such questions, but in any event the result is that the plaintiff is able to establish a potentially favorable record for a subsequent more serious claim. The company is often not prepared for this possibility.
In spite of these considerations, most employers choose to "fight" an unemployment claim if the employee has been discharged. An employee who has been laid off or who resigns for a good reason can normally draw unemployment benefits, while an employee discharged for a good reason normally cannot draw unemployment benefits. The key is whether the discharge was for a good reason, which under the laws of most states requires willful misconduct. Consider the example of an employee discharged for low productivity. If an employee seeks unemployment compensation and testifies that he or she tried to do their best, they can normally draw unemployment benefits, because they have not committed willful misconduct. On the other hand, if an employee's low productivity is due to failure to follow company instructions, the failure to follow instructions can often constitute willful misconduct, resulting in a denial of unemployment benefits.
Grounds for an employer to defend an unemployment claim furnish "textbook" training for any type of disciplinary action. It is desirable for there to be a written set of company rules, and the employer should show that the employee violated those rules. It also helps if there were one or more prior written warnings prior to the discharge decision.
In order to facilitate the processing of unemployment claims, many states require an employer to provide a written notice of termination on a designated form for terminating an employee. Rarely is there a penalty for failure to provide such a form, however. Similarly, usually there is no penalty against an employer for failing to respond to an unemployment claim that has been filed, other than the fact that the claim is more likely to be granted if the employer does not oppose it.
Why do employers oppose unemployment claims of former employees? Some employers oppose such claims as a matter of principle, finding it totally inappropriate when an employee is discharged for willful misconduct who will then be able to benefit from his termination. A series of multiple recoveries of unemployment benefits on the part of former employees may cause the employers "experience rating" to go up, meaning an increase in the proportion of wages that has to be paid as unemployment taxes to the state.
Some employers agree to not oppose the former employee's unemployment claim as part of a negotiated severance or settlement. If the former employee has waived any rights against the former employer, some employers consider their agreement not to oppose an unemployment claim as a small price to pay for such a settlement.
A 43-year-old head of sales was hired by a start-up internet technology company, and was employed only three months before being terminated for failing to meet sales quotas. At only 43, he was the oldest employee in the company, as most employees in the start-up company were in their 30's. The Defendant employer's chief executive made a remark to Plaintiff that he needed "to get in shape to keep up with us young guys," and later referred to Plaintiff's hernia as an "old man injury" and said, "Look what happens when you try to keep up with the thirty-year-olds."
While normally a 43-year-old would not seem to be a good candidate for an age-discrimination case, particularly when hired at the same age just three months earlier, in this case the discriminatory remarks were made very close to the date the decision was made to terminate the Plaintiff, and the court found that a reasonable juror would find that the employer viewed Plaintiff as falling into a different age category than other employees and believed this inhibited his ability to perform in a fast-paced start-up environment. Consequently, the court denied the employer's motion for summary judgment and found that, while the comments were said to have been intended as jokes, whether they demonstrated discriminatory animus was for a jury to decide.
Editor's Note: This case demonstrates how discriminatory comments can come back to "bite" an employer, even where the comments may be intended as jokes. The judge even quoted Shakespeare's King Lear, in which we read: "Jesters do oft prove prophets." While courts often find such comments to only be "stray remarks," sometimes they are considered as evidence of discriminatory motivation. The case is Brown v. Crowdtwist, 122 F.E.P. Cases 846 (S.D.N.Y. 2014).
A plaintiff recently sued an employer alleging that its dress code prohibiting dreadlocks constituted an unlawful employment practice that discriminates on the basis of race. While she was given an offer of employment, it was on the condition that she cut off her dreadlocks, and the offer was withdrawn when she refused to do so. The employer's policy stated:
"All personnel are expected to be dressed and groomed in a manner that project a professional and businesslike image while adhering to company and industry standards and/or guidelines. . . hairstyles should reflect a business/professional image. No excessive hairstyles or unusual colors are acceptable."
The court granted the employer's motion to dismiss the complaint, finding that the facts alleged in the complaint did not support a plausible claim for discrimination. The court stated that employers' grooming policies are outside the purview of Title VII, citing an earlier Fifth Circuit ruling where the court held:
"Equal employment opportunity may be secured only when employers are barred from discriminating against employees on the basis of immutable characteristics, such as race, and national origin . . . [A] hiring policy that distinguishes on some. . . ground [other than sex], such as grooming codes or length of hair, is related more closely to the employer's choice of how to run his business than to equality of employment opportunity. . . . Hair length is not immutable and in the situation of employer vis a vis employee enjoys no constitutional protection. If the employee objects to the grooming code he has the right to reject it by looking elsewhere for employment, or alternatively he may choose to subordinate his preference by accepting the code along with the job."
Editor's Note: While this case correctly summarizes the majority of the federal court rulings, such dress code issues are contentious and sometimes lead to litigation. This is demonstrated by the fact that the EEOC brought the claim against the defendant employer, trying to convince the court that such claims should be allowed. EEOC v. Catastrophe Management Solutions, 122 F.E.P. Cases 758 (S.D. Ala. 2014)
Some employers feel they can assign a certain name or description to an employee termination, and that courts will say it is ok. Terms such as "don't need you anymore," or "the job has been eliminated," "poor attitude," and "not a team player" are often used. Unfortunately, the use of such terms by an employer does not always guarantee an employer's success when a terminated employee sues for discrimination.
In a recent case, a chief executive testified that the primary reason he terminated the Plaintiff was based on her on-going failure to work as a team player, an issue which culminated in a series of combative emails sent by Plaintiff to the chief executive and other members of management. The Plaintiff contended that such reasons for her termination were a pretext, because several male executives also expressed dissatisfaction with management but were not terminated. The court ruled that the Plaintiff might establish discriminatory disparate treatment in this situation, and a reasonably jury could conclude her expressions of concern were similar to those of two male executives who voiced similar concerns but were not terminated.
In addition, while the chief executive testified that he counseled the Plaintiff multiple times over eighteen (18) months about not being a team player, the Plaintiff denied there were such counseling sessions. Further, the chief executive's credibility was undermined since he testified in his deposition that he took contemporaneous notes of the meetings, and the Plaintiff later proved through the use of an expert that the notes were not originals. Confronted with this information, the chief executive had to admit he had copied the notes from originals in his possession, and then destroyed the originals. He explained this was his routine note-taking habit and that he considered the rewritten notes to be the originals. The court found that this misrepresentation of the nature of his notes undermined his credibility in his stated reason in firing the Plaintiff, and raised a factual issue of pretext for the jury to determine. Potter v. Synerlink Corp., 122 F.E.P. Cases 810 (C.A. 10, 2014).
An on-going study of the Occupational Safety and Health Administration (OSHA) has explained the obvious of why government agencies like to issue press releases and big fines. According to the preliminary results of the study, when a press release highlighting the fines from an inspection is issued, there is about a fifty percent (50%) reduction in the number of violations found at subsequent inspections or similar businesses in the area. It has long been known that federal agencies like to bring "big" cases and publicize the results so that compliance is encouraged. OSHA currently has a policy of sending out a press release if the proposed fine is at least $40,000. This OSHA report has not yet been issued, but a working paper explaining the research is available at http://op.bna.com/env.nsf/r?Open=rdae-9khtm6.