On November 9, the EEOC issued Final Regulations providing guidance on the Genetic Information Nondiscrimination Act (GINA). As you are probably aware, the provisions of GINA that apply to employers became effective last fall. These provisions prohibit the use of genetic information in making employment decisions, restrict an employer’s ability to obtain genetic information on its employees, and limit the disclosure of genetic information. The definition of “genetic information” is broad and does not simply cover your employee’s individual medical history. It also covers your employee’s family medical history. For instance, if you find out an employee’s family has a history of dementia, GINA means that you cannot discriminate against that employee based on a fear he or she may share that trait.

The Regulations provide guidance on how GINA will be implemented, and will become effective in January 2011, but for many employers, GINA adds a layer of protection in addition to protection already provided under state law. Thirty-two states, including Massachusetts and Connecticut, already prohibit discrimination based on genetic information. Much of the prohibitions in GINA parallel prohibitions under state laws. But the new Regulations highlight some important differences.

• Genetic Information. Under GINA, this term is very broadly defined and includes a listing that is both broader and more specific than the definition in either Connecticut or Massachusetts. Genetic Information under GINA includes information about: (1) an individual’s genetic tests; (2) the genetic test of that individual’s family members; (3) family medical history; (4) an individual’s request for, or receipt of, genetic services, or the participation in clinical research that includes genetic services by the individual or family member of the individual; or (5) genetic information of a fetus carried by an individual or by an pregnant woman who is a family member of the individual and the genetic information of any embryo legally held by the individual using an assisted reproductive technology. Under Massachusetts law, family medical histories were only considered genetic information if they included to the presence, absence, variation, alteration, or modification of a human gene or genes. Employers who routinely request family histories as part of wellness programs will need to incorporate the “safe harbor” language referenced below in their applications for such programs. In Massachusetts, the statute does not specifically protect genetic information of a fetus or embryo. The term “genetic test” is also defined in ch. 151B as any tests of human DNA, RNA, mitochondrial DNA, chromosomes, or proteins for the purpose of identifying genes or genetic abnormalities, or the presence or absence of inherited or acquired characteristics in genetic material.
• Family Member. This term is also broadly defined and in addition to including individuals who are related by blood, also includes people who are or who become related to an individual through marriage, birth, adoption or placement for adoption. The EEOC’s theory is that, even though the genetic information is not shared between individuals related by marriage or adoption, such information “could certainly result in the type of discrimination GINA was intended to prohibit.” Neither Massachusetts nor Connecticut law defines family member.
• Family Medical History. The Regulations define a family medical history as information about the manifestation of disease or disorder in family members of the individual. In their responses to the Proposed Regulations, many employers commented that this term should include only inheritable diseases and disorders, but the EEOC declined to change the definition in the Final Regulations.
• Employers May Not “Request” Genetic Information. The regulations clarify that a “request” includes the following: conducting an Internet search on an individual in a way that is likely to result in obtaining genetic information; actively listening to third party conversations, or searching an individual’s personal effects for the purpose of obtaining genetic information; and making requests for information about an individual’s current health status in a way that is likely to result in obtaining genetic information. This parallels Massachusetts and Connecticut law, which prohibit employers from requiring an employee to disclose genetic information or submit to testing and also prohibits inducing an employee to do so. However, GINA contains some key exceptions to this rule:
  • Water Cooler Problem. This references an employer’s inadvertent receipt of genetic information through casual conversation. The Regulations provide examples that make it clear that general questions about an employee’s health will not create liability under GINA. For example, if an employee provides genetic information in response to a casual general question such as “How are you?” “How is your son?” or “Did they catch it early?”, the employer will not be exposed to liability.
  • Lawful Requests for Medical Information. The acquisition of genetic information will be considered inadvertent if the employer has specifically directed the individual and/or health care provider from whom it requested medical information not to provide genetic information.
  • Publicly Available Information. GINA also includes an exception for the acquisition of genetic information from publicly available materials. The Regulations clarify that whether information is “publicly available” hinges on, whether access to the information requires permission of an individual or is limited to individuals in a particular group, regardless of whether the source is categorized as a social networking site, personal website, or blog. Nonetheless, employers must keep in mind that they may not perform an internet search in a manner that is likely to result in obtaining genetic information, even if the information is ultimately found on a publicly available site.
• Safe Harbor Language. The Regulations provide the following model language which should be incorporated into all human resources’ forms that could be interpreted to request genetic information, such as pre- and post-offer medical exam forms and fitness-for-duty exam forms. If an employer includes this language, the employer is not going to be held liable if it inadvertently receives any genetic information as a result of those inquiries:

The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. To comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information. ‘Genetic information’ as defined by GINA, includes an individual’s family medical history, the results of an individual’s or family member’s genetic tests, the fact that an individual or an individual’s family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual’s family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.”

• Personnel Files. Under GINA, employers are required to treat genetic information in their possession the same way they treat medical information: the information must be kept confidential and, if the information is in writing, must keep it apart from other personnel information in separate medical files. Although the Final Regulations state that genetic information placed in personnel files prior to November 2009 does not need to be removed, Massachusetts law has prohibited the inclusion of genetic information of any kind in an employee’s personnel file since 2007, so this is a moot point at least for Massachusetts employers.
• Wellness Programs. The GINA regulations clarify how the statute applies to voluntary wellness programs and the health risk assessments (HRA) that normally accompany such programs. Under GINA, employers are prohibited from offering financial inducements to encourage employees to provide genetic information. However, an employer may offer a financial incentive to encourage an employee to join a wellness program, even if that wellness program requires a HRA, if the following criteria are met:
  • The HRA specifically identifies which questions request genetic information.
  • The employer makes it clear, in language that is likely to be understood by those completing the HRA, that the questions are optional and that the financial reward will be provided to employees whether or not they complete that part of the assessment.
• Coverage. GINA applies to employers of 15 or more employees; Massachusetts’ statute applies to employers of six or more, and Connecticut’s statute applies to employers of three or more employees.

Article courtesy of Worklaw Network firm Skoler, Abbott & Presser, P.C (www.skoler-abbott.com).

The Department of Health has issued a new fact sheet on Grandfathered Health Plans: http://www.hhs.gov/ociio/regulations/grandfather/factsheet.html.

A California appellate court just granted a class action opportunity against 99 Cents Only Stores which I believe will invite a number of copycat claims. It boils down to this: If 99 Cents Only Stores didn’t provide its employees with seats they can sit on when nobody needs help or nothing needs to get done (when, I ask, is that?) then they have violated the Labor Code and can be assessed a penalty of $100-$200 per pay period. Figure 25 pay periods per year and for every employee you are looking at roughly $5,000 in penalties per year for up to 3 years! Even if each store has only 5 employees/day subject to the suit my math says the award can be as high as $75,000 per store…not including the inevitable attorney fees! Again, unless my math is way off, the total penalty can be as high as $15,000,000. For not supplying employees at a retail establishment with seats. According to their website they have over 200 stores in California. Now you can see why an attorney may be interested in what seems like a trivial matter.

Here’s what the Wage Order states:

Wage Order No. 7, subdivision 14 provides: “(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats. [¶] (B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.”

Here’s what the Labor Code penalty provision states:

Section 2699, subdivision (f), which was added in 2003, provides in pertinent part: “For all provisions of this code except those for which a civil penalty is specifically provided, there is established a civil penalty for a violation of these provisions, as follows: … (2) If, at the time of the alleged violation, the person employs one or more employees, the civil penalty is one hundred dollars ($100) for each aggrieved employee per pay period for the initial violation and two hundred dollars ($200) for each aggrieved employee per pay period for each subsequent violation.”

But of course…

The trial court has discretion to award less than the maximum amount of the civil penalty if “to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory” in the circumstance of the particular case. (§ 2699, subd. (e)(2).) Let’s hope they use that discretion in this case.

So, my question is: Did 99 Cents Only really say, “Sorry, you can’t have seats?” I can’t believe it was because of the cost. They can probably get them from China, like everything else they sell, for 10 bucks each. Did they do that so employees worked on something instead of sitting down? Or did they say “no” for no good reason? Was it really a corporate-wide policy that somebody thought about in advance? How many people complained and what was the response like? So many questions!

I can see many employers being exposed to this exact same claim. Hopefully you are not one of them! You can read the case by going to http://www.courtinfo.ca.gov/opinions/documents/B220016.PDF.

On November 2nd the NLRB issued a press release which stated the following:

Complaint alleges Connecticut company illegally fired employee over Facebook comments
Employee posted remarks about supervisor following work-related incident

A complaint issued by the NLRB’s Hartford regional office on October 27 alleges that an ambulance service illegally terminated an employee who posted negative remarks about her supervisor on her personal Facebook page. The complaint also alleges that the company, American Medical Response of Connecticut, Inc., illegally denied union representation to the employee during an investigatory interview, and maintained and enforced an overly broad blogging and internet posting policy.

When asked by her supervisor to prepare an investigative report concerning a customer complaint about her work, the employee requested and was denied representation from her union, Teamsters Local 443. Later that day from her home computer, the employee posted a negative remark about the supervisor on her personal Facebook page, which drew supportive responses from her co-workers, and led to further negative comments about the supervisor from the employee. The employee was suspended and later terminated for her Facebook postings and because such postings violated the company’s internet policies.

An NLRB investigation found that the employee’s Facebook postings constituted protected concerted activity, and that the company’s blogging and internet posting policy contained unlawful provisions, including one that prohibited employees from making disparaging remarks when discussing the company or supervisors and another that prohibited employees from depicting the company in any way over the internet without company permission. Such provisions constitute interference with employees in the exercise of their right to engage in protected concerted activity. A hearing on the case is scheduled for January 25, 2011.

Fact is, social media creates an entirely new world of employer risks. If you haven’t watched our training video on Social Media Risks, now would be a good time to do so!

“It is not enough to do your best; you must know what to do – and then do your best.” – W. Edwards Deming, Management Consultant and Educator

This issue discusses:

• Editor’s Column: High Touch
• Sprinkles v. Associated Indemnity Corp.
• So You Have a Great Idea…
• Employment Discrimination: The California Experience
• Take Note!
• Green HR
• Small Workplaces
• You Can Discriminate — But Only If You Have a BFOQ (Bona Fide Occupational Qualification)
• Abercrombie & Fitch Settles I-9 Paperwork Violations for More Than $1 Million
• Employment Law: Jury Awards, Trends, and Statistics
• Unwanted Transfer of Pregnant Employee Might Violate Title VII
• Acceding to Patient Racial Preferences Violates Title VII and ADA

We have also provided you with the Form of the Month.

Please click here to view the newsletter in PDF.

Editor’s Column: High Touch

I read some interesting research in Scientific American on how touch affects how people feel. It turns out that “everything we think is somehow tied to the physical experiences we have.” These experiences fall into these categories: Weight, texture, and hardness. For example, weight itself implies that something is more important. People who simply held a heavier clipboard rated job candidates as better and more serious about a job. Similarly, people who handle rough textures before observing a social scene rated it as more harsh; and even sitting on a hard chair made people less likely to veer from an original offer in negotiating with a car dealer. Across the board, there was about a 25% difference in how people behaved when given something heavy, rough, or hard.

The researchers concluded that understanding these tactile effects presumably would give you the upper hand. So, can you use this understanding in management or sales? To begin with, if I wanted to have a prospect take something seriously, I would provide them with something heavy to hold on to or think about. I would have them sit in comfortable surroundings in a soft chair. Not all of this should come as a surprise. For example, I can remember shopping for a bed for the guest room. The salesman asked me if I wanted the guest to stay for two days, two weeks, or two months. He would sell me a bed with the right texture to assist in that outcome. So, think to yourself, “How can I make this heavier or lighter, rougher or smoother, harder or softer, depending on what I need under the circumstances?” If I’m trying to train a Marine, it’s going to be heavy, rough, and hard. If I’m coddling a baby, it’s going to be light, smooth, and soft.

We can create metaphors that will affect the way that people think about things. For example, if in your discussion, you say something like, “What kind of criteria do you use when you make a serious decision such as buying a car?” The prospect will take the situation more seriously. Other times you might want to talk about a smooth transition or a soft landing. Finally, studying neuro-linguistic programming (NLP) you learn that people are primarily auditory, visual, or kinesthetic. So, you might say something like, “Can you see the heaviness of the situation?” “Can you feel the weight of the situation?” or “Can you hear the gravity of the situation?” (Depending on which modality the person favors). Remember this: How we use language has a significant impact on how we are perceived and how we influence others.

Sprinkles v. Associated Indemnity Corp.

This is an important case for Workers’ Comp insurance brokers to understand. To make a long story short, the plaintiffs sued after Bibinz, an uninsured and undocumented worker with a lengthy criminal record, drove his vehicle negligently while under the influence of drugs, causing the death of a driver in another vehicle. The plaintiff alleged that Bibinz was acting as an agent of his employer, the Sinco property management company, because he was using his vehicle to drive to work, which required him to visit various properties managed by the company.

At the time of the accident, Sinco carried a Commercial Auto policy issued by General Insurance with a million-dollar limit, an Umbrella and Excess policy from Fireman’s Fund with a million-dollar limit, and a CGL policy issued by Fireman’s with a million-dollar limit. Plaintiffs partially settled the Sinco action, with General paying its million-dollar primary limit and Fireman’s Fund paying its excess million-dollar limit. However, the insurer denied coverage under the CGL policy.

The arbitrator awarded $27 million, finding that at the time of the accident, Bibinz was acting within the course and scope of his employment under the “required vehicle” exception under the “going and coming rule” and that Sinco had been negligent in hiring and retaining him. This case focused on Fireman’s Fund under the CGL policy for bad faith in failing to defend the suit or indemnify against it. The definition of insured under the CGL policy included employees, “but only for acts within the scope of their employment while performing duties related to the conduct of your business.” Unfortunately for the plaintiffs, the court did not buy the theoretical possibility that the actions of an employee might be within the actions of the course and scope of employment, but “not related” to the conduct of the business. It ruled that Bibinz’s use of his own vehicle required by Sinco was within the scope and course of the business, and that driving that vehicle to work was at least performing a duty “related” to the conduct of the business. Thus, he was an insured under the policy – as a result, the automobile exception applied.

So You Have a Great Idea…

You just might be lucky enough to hire or manage employees that want to help improve the company. How you handle their ideas greatly impacts the future of your relationship. Mishandle this conversation, and you’ll pay the price. Here are some approaches that won’t burn bridges:

• Sounds interesting; keep talking so I understand this better.
• Where did this idea take root? Anyone else involved? What got you to this point?
• How will this help the company meet its vision, mission, or goals?
• What assumptions are you making and how do they factor into your idea?
• Why are you so excited about it?
• If it worked the way you envision, what would it look like?
• If we were to pursue this idea further, what would be the next step?
• What needs to change if this is going to work?
• What impact can it have on the bottom line?
• I like it. How would you like to fill out this Great Idea Form so we can study the idea further?

Employment Discrimination: The California Experience

The DFEH has released a summary of the cases filed in 2008-2009. The breakout of claims is similar to those filed nationwide. As you can see, disability and retaliation claims are the two biggest areas of concern. The second tier of exposures includes age, race, and sexual harassment claims. Here’s the question: No matter where you are, are you using HR That Works proactively to help avoid these claims?

Take Note!

Medical Examinations. Requiring an employee to undergo a fitness for duty examination (FFDE) does not violate the Americans with Disabilities Act, if the employer has an objective, legitimate basis to doubt the employee’s ability to perform his or her duties. Under the ADA, an employer may require an employee to undergo medical testing only where the testing is job related and consistent with business necessity. In Brownfield v. City of Yakima, a police officer argued that the City violated the ADA by requiring an FFDE, after he had engaged in a number of emotional outbursts, without showing that his job performance had actually suffered due to any health problems. The Court disagreed, finding that requiring a “preemptive” medical examination may be permissible under the ADA. It cautioned, however, that the standard for establishing the validity of such a requirement is quite high – the employee’s behavior cannot be “merely annoying or inefficient to justify an examination; rather, there must be genuine reason to doubt whether that employee can perform job-related functions.” 

The court ruled that The City of Yakima had a legitimate basis to doubt the plaintiff’s ability to perform the duties of a police officer. In coming to its conclusion, it used these words, which everyone should remember:

“We agree … that prophylactic psychological examinations can sometimes satisfy the business necessity standard, particularly when the employee is engaged in dangerous work. However, we must be keen to guard against the potential for employer abuse of such exams … Employers are prohibited from using medical exams as a pretext to harass employees or to fish for non-work-related issues and the attendant ‘unwanted exposure of the employee’s disability’ and the stigma it may carry … An employee’s behavior cannot be merely annoying or ineffective to justify an examination; rather, there must be genuine reason to doubt whether that employee can perform job-related functions.”

This case reassures employers that sending an employee for a fitness for duty examination will not violate the ADA if the employer has a reasonable belief that the employee is not capable of performing his job. Of course, the ADA’s requirement that a medical examination be consistent with business necessity is an objective one and the employer bears the burden of demonstrating this business necessity.

Religious Accommodation. The U.S. Court of Appeals for the Third Circuit held that a prison that prohibited female Muslim employees from wearing religious head coverings called khimars did not violate Title VII’s religious accommodation obligations. Under Title VII, an employer must provide accommodation for an employee’s religious beliefs and needs unless the accommodation would pose an undue burden to the employer. In EEOC v. The GEO Group, Inc., the Court credited the employer’s identified safety and security risks associated with the wearing of head coverings in prison: Smuggling of contraband, interference with identification of the wearer, and the potential use of the head covering as a strangulation weapon. This case demonstrates that an employer’s position in refusing a religious accommodation is stronger where significant safety concerns exist.

NLRB Decisions. The Supreme Court ruled that the National Labor Relations Board was not authorized to issue decisions during the more than two years that three of its five seats were vacant. The NLRB has compiled a list of the 595 decisions issued by the two-member Board. Most of the cases were already closed under the Board processes or are at some point in compliance proceedings; the remaining open cases were returned to the Board for reconsideration by at least three members. The Board has just begun to issue rulings on those cases.

Article courtesy of Worklaw® Network firm Shawe Rosenthal (www.shawe.com).

Green HR

I’m an environmentalist. I’ve even hugged a few trees, but I don’t claim that they’ve talked back to me. I’ve also sat on environmental non-profit boards and ran a non-profit environmental agency. That was the three-year environmental phase of my career. Then I had to start making money again. But during this period I learned that companies can have a significant impact on the environment — and that HR and a volunteer team can spearhead this effort. Here are some basic guidelines that you can consider:

• Consider telecommuting – Do employees really have to spend the time, energy, and money to drive to work every day or can they be more effective working from home or from remote offices?
• Go paperless – I’m impressed by how many insurance agencies I work with have gone paperless.
• Encourage carpooling and public transportation – You might even help pay for some of the gas.
• Recycle – Paper, glass, and plastic should all be recycled. Take one good look at a local shoreline and you’ll understand why.
• Beware of indoor air pollution – For many people, the building they work in has more air pollution than any other environment. Indoor air inspections can help prevent sick days and attendant non-productivity.
• Turn off the lights and computers – I’m amazed at how many buildings keep the lights on at night, and you know the cleaning crew isn’t there any longer. Turn off your lights and turn off your computers.
• Think in terms of sustainability – Although this is a broader objective, focus on how you can manufacture things or deliver services in a way that produces less of an environmental impact. For example, I can do a webinar rather than flying across the country to speak.
• Finally, encourage employees to offer green suggestions – Perhaps it’s a rooftop garden, organic lunches, or supporting a local environmental cause.

Going green is important to all of us. Our current ways are unsustainable. Fact is, HR can make a green difference.

Small Workplaces

The June 2010 issue of INC Magazine featured an excellent article entitled “Learning from the Best,” by Lee Buchanan, which discusses strategies from the Top Small Company Workplaces winners and finalists. Here’s a brief summary of the article’s recommendations:

1. Engage in open-book management. No surprise there. I’ve been preaching this ever since Jack Stack published his Great Game of Business. We had an excellent Webinar on open-book management presented by Coach George from the Great Game of Business. According to the article, 83% of these companies practice open-book management. We do here at HR That Works. Everybody knows every number, including what everybody gets paid. When I do my Vistage presentations and ask CEOs using open-book management about their experience during the depth of the recession, they said they were first concerned that it would scare the employees and some would run off; however, just the opposite happened and employees were very glad to have open-book management. If you don’t have it, what are you waiting for?
2. Be flexible. 95% of companies offer flexible work arrangements.
3. Keep learning. In some of the companies, employees provide courses, usually in the evenings, to other employees. For example, the employees at Snag-a-Job teach Finance Fundamentals 101, HTML Basics, Peer Coaching, Texas Hold ‘Em, Goal Setting, and Women’s Self-Defense. If you’re an HR That Works member, there are more than 70 separate training videos that your regular members or management can watch at any time. Never stop learning.
4. Develop “Level 5” leaders. This term, coined by Jim Collins, talks about Level 5 leaders in terms of humility and inclusion.
5. Focus on orientation. See the Orientation Checklist on HR That Works. Make your orientation process more exciting, motivating, and presented in such a way that instantly builds rapport with new employees, as opposed to the opposite. I also encourage you to use the 60-Day New Employee Survey on HR That Works.
6. Add a little bit of sunshine. Companies help to lessen employees’ stress by allowing them to telecommute, and assist their parents or loved ones even if they’re not obligated to do so by the Family and Medical Leave Act.
7. Think inside out. The top companies focus on building a great culture which, in turn, can deliver great products and services – Southwest Airlines comes to mind. What are your company values? How do you define and celebrate them? How happy are your employees? In our Webinar on Happiness in the Workplace, the presenter offered a free analysis of your happiness level. Go to www.iopener.com/report to see how happy you are at work. I couldn’t be happier to say that my employees and I all scored very high on this index.
8. Help maintain employee health. Many small companies are entrepreneur driven. In my experience, if the CEO is a health nut, then so is the rest of the workplace. Savvy companies bring in ergonomics and wellness to help employees. Whether it’s concierge services, healthy lunches, or a wellness day off, there’s no substitute for a healthy workforce.
9. Finally, you can change a toxic workplace. In his book How to Turn Around a Toxic Workplace, Jeffrey Pfeiffer states that you can turn around a toxic workplace in four ways: 1) Let people make decisions, 2) Share the economic results either through profit-sharing or gain-sharing, 3) Share information, and 4) Invest in people. Sounds like a great summary of the article!

You Can Discriminate — But Only If You Have a BFOQ (Bona Fide Occupational Qualification)

Employers often believe that they need a certain type of person to do a certain job because of physical requirements, client demands, privacy reasons, and tradition. Understand this: Any such discrimination will come under judicial scrutiny unless there’s a high level of correlation between gender, race, or nationality and the ability to perform job functions. For example, a 9th Circuit opinion held that a women’s correctional facility could not limit its correctional employees to females in an effort to reduce sexual abuse in the environment. On the other hand, it’s hard to argue that an employer doesn’t have the right to hire whom they want to as their next bikini model.

Bottom Line:Be prepared to prove your BFOQ, as well as any efforts you’ve made to mitigate the situation. For example, if employees have to lift a 200-pound box once a day, and this imposes a disparate impact on women, a reasonable alternative would be to not have anybody without the ability to lift those boxes. Our members continue to be plagued with questions such as, “Can I only hire Chinese waiters for my Chinese restaurant?” (Answer: No. As another article in this newsletter stated, customer preference cannot override discrimination laws.) “Can I hire only English-speaking employees at my hotel, even if they have limited customer interaction?” (Answer: Probably not.)

If you’re not sure, contact the HR That Works Hotline.

Abercrombie & Fitch Settles I-9 Paperwork Violations for More Than $1 Million

At the end of September 2010 – and with little fanfare – the Department of Homeland Security and Immigration and Customs Enforcement (ICE) announced settlement of an enforcement action against Abercrombie & Fitch, the nationwide clothing retailer. This settlement is remarkable for several reasons.

The settlement amount is $1,047,110, which is an enormous monetary penalty in today’s economy. More shocking is the fact that this penalty is for paperwork violations only. There are no allegations that Abercrombie & Fitch employed illegal workers or otherwise violated immigration law. Instead, this penalty is solely for improper completion of I-9 forms.

The settlement results from a compliance audit initiated in November 2008. It’s common for ICE to take two years or more to conclude an I-9 paperwork audit.

The second surprise about this settlement is that the I-9 inspection involved the clothing retailer’s Michigan stores, and is apparently not the result of a nationwide compliance audit. The ICE press release states that the company “was fully cooperative during the investigation and no instances of the knowing hire of unauthorized aliens were discovered.” If that is the case, the agreed-upon penalty either reflects an enormous number of violations or very severe fines per violation.

Third, the violations uncovered during the inspection involved “numerous technology-related deficiencies in Abercrombie & Fitch’s electronic I-9 verification system.” This suggests that the company’s I-9 software vendor was negligent and failed to confirm that its software system achieved proper I-9 compliance or that the company was poorly trained in implementing and administering the electronic I-9 compliance program. In either case, this settlement serves as a wake-up call to all employers using electronic verification systems: Make certain the system ensures proper I-9 compliance and that you are using it correctly.

Even employers that don’t use electronic I-9 compliance systems should note the heavy fines imposed because of this investigation. The ICE press release confirms that the agency has implemented a new, comprehensive strategy to audit and investigate employers, and that this effort has resulted in a record number of civil and criminal penalties against employers. Now is the time to ensure that your compliance will survive an ICE investigation!

To obtain the free 14-step self-audit checklist, see this month’s Form of the Month.

Article courtesy of Worklaw® Network firm Elarbee Thompson (www.elarbeethompson.com).

Employment Law: Jury Awards, Trends, and Statistics

Every year, I read the Jury Award, Trends, and Statistics report on employment law published by Jury Verdict Research. I used this report during my litigation career to help position cases for settlement purposes.

Because it takes a long time to gather these statistics, the report doesn’t appear until October of the following year. The good news: JVR reported that the median compensatory award in employment practices cases dropped from $285,000 in 2008 to $253,000 in 2009 (the second highest level ever recorded). There has been an upward trend in EPL verdicts since 2003. Although the median award was $253,000, the mean award came in at $753,332. Here are some other statistics from the report:

• The highest average EPL award between 2003 and 2009 was for retaliation, coming in at $245,500. The second highest average verdict was for wrongful termination at $232,500.
• Approximately 37% of the cases result in a verdict between $100,000 and $500,000.
• In 2009, 24% of the cases had a jury verdict of $1 million or more.
• The highest average compensatory verdicts came against government entities, with manufacturing/industrial companies coming in second place. Transportation firms had the lowest average verdict.
• Between 2003 and 2009, the most common claims for discrimination involved sex (35%), race (25%), disability (15%), age (13%), and other (12%). Age and disability cases had the highest median awards, both more than $250,000. Sex and race cases averaged approximately $200,000.
• As has been the case every year, state court verdicts are dramatically higher than those in federal courts. This is one reason why plaintiffs’ attorneys prefer to try their cases in state court.
• When it comes to the recovery probability for employment practices liability, employers received a break: Employees won 58% of their cases, down from 60% in 2008.

You can order a copy of this report from Jury Verdict Research for approximately $40 by going to www.lrp.com or calling (800) 341-7874.

Unwanted Transfer of Pregnant Employee Might Violate Title VII and ADA

An employer who assumes that a pregnant employee cannot perform her usual job duties or work in her usual work environment may be liable for discrimination under the Pregnancy Discrimination Act (PDA), which is part of Title VII, and the Americans with Disabilities Act (ADA).

Facts of the Case: In Spees v. James Marine, Inc., a female welder, who had previously miscarried several times, reported to her manager that she was pregnant. He expressed concern about her being around chemicals and welding smoke, and about her climbing for certain projects. He required that she obtain a note from her doctor to determine what she could and could not do. In the meantime, her manager had already decided to move her to a light duty job. When the employee presented her doctor’s note, which had no physical limitations, the manager required her to obtain a revised note that limited her to light duty. She was then transferred to a less desirable tool room job and a nighttime shift, which the employee, a single mother, found problematic for child-care purposes. She was terminated when her doctor placed her on complete bed rest and she had no more leave available.

The employee sued, alleging that the transfer and termination violated both the PDA and the ADA. The trial court granted summary judgment for the employer and dismissed the employee’s claims, finding that the transfer at the same rate of pay and benefits was not an adverse employment action in violation of employment discrimination laws, and that the employer terminated her based on her inability to work due to doctor-ordered bed rest rather than any illegal motive.

The Court’s Ruling: On appeal, the U.S. Court of Appeals for the 6th Circuit affirmed the District Court’s grant of summary judgment on the termination claims, but reversed the ruling on the transfer claims. The Court found that the transfer to the tool room job constituted an adverse employment action, because it involved a more inconvenient shift, in a position that required less training and skills and was less challenging for the employee. The Court further found that the employee’s pregnancy could certainly have been a factor in the transfer decision, in violation of the PDA, because the employer had decided to transfer the employee before receiving any information from her doctor, and then required the employee to obtain a revised note from the doctor to support the transfer.

In addition, the Court found that the transfer could have been a violation of the ADA. To bring a claim under the ADA, an employee must show that she has a disability (i.e. a substantial limitation on a major life activity), has a history of a disability, or is regarded as being disabled. The Court acknowledged that a normal pregnancy is not a disability under the ADA, but found that the employer regarded the employee as being impaired in the major life activity of working, due to her history of pregnancy problems. The Court noted that the EEOC’s interpretative guidelines state that “Complications resulting from pregnancy . . . are impairments.”

Lessons Learned: This case reminds employers to be careful of making judgments intended to be in the best interests of an employee’s health, especially where such judgments are either unwanted by the employee or unsupported by independent medical opinion. Moreover, the case serves as a warning to employers that, particularly in light of the expanded protections under the amended ADA, pregnancy-related conditions may be considered disabilities.

Acceding to Patient Racial Preferences Violates Title VII

A nursing home’s acquiescence to a patient’s refusal to receive treatment from black healthcare providers violated Title VII’s prohibition of race discrimination.

Facts of the Case: In Chaney v. Plainfield Healthcare Center, a nursing home resident did not want to be cared for by any black employees. In compliance with the resident’s request, the nursing home informed a black certified nursing assistant (CNA) in writing each day that “no black” assistants should enter the resident’s room or provide care for her. The CNA’s co-workers also used racial epithets towards her, although this eventually stopped after the CNA complained to her manager. The nursing home terminated the CNA after only three months of employment, allegedly for using profanity in front of a resident.

The CNA sued the nursing home for subjecting her to a hostile work environment and terminating her because of her race. The trial court granted summary judgment for the nursing home and dismissed her claims. The court found no hostile environment had existed because the nursing home had addressed her complaints about the racial epithets and because the nursing home’s policy of forbidding black CNAs from caring for certain patients was based on its good faith belief that state and federal patient rights laws permitted patients to choose their healthcare providers. The court further found that the CNA’s termination was unrelated to her race.

The Court’s Ruling: On appeal, the U.S. Court of Appeals for the Seventh Circuit reversed the trial court’s decision. The Court found that the nursing home “acted to foster and engender a racially-charged environment” through its race-specific patient preference policy, which reminded black employees on a daily basis of work restrictions that were expressly not shared by white employees. The Court rejected the nursing home’s argument that the policy was required to comply with federal and state law, finding that the laws, while requiring patient access to healthcare providers of their choice (e.g., a patient may hire a white aide at her own expense), do not require employers to institute race-based work practices. As the Court observed, “It is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.” The existence of the policy, along with the use of the racial epithets, constituted a racially hostile environment. The Court also determined that there was evidence to suggest that the stated reason for the CNA’s termination was a pretext for race discrimination.

Lessons Learned: Employers cannot accede to race-based preferences of their customers or clients. When faced with such preferences, as this Court suggested, an employer should inform customers and clients of its nondiscrimination policy, attempt to reform customer behavior, and assign staff based on race-neutral criteria that minimize the risk of conflict. For example, an employer could advise its employees that they can seek protection from racially harassing customers. By doing so, the employer “would not be imposing an unwanted, race-conscious work limitation on its black employees; rather it would be allowing all employees to work in a race-neutral, non-harassing work environment, as is commonly expected of employers.”

Articles courtesy of Shawe Rosenthal (www.shawe.com).

Form of the Month

Guidelines for Conducting an I-9 Audit (PDF) – Use this 14-point self-auditing checklist to make sure that you’re complying with I-9 employee immigration status verification system.

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