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Employment Disputes Archives

$7.9 M lawsuit award worth employers' attention

There's a common saying that, in business, if you're not growing, you're dying. Some dispute the truth of the saying. Other's stand as hard and fast believers. Wherever you happen to fall, there is one thing that most everyone likely can agree upon - that success doesn't happen without dedicated employees.

We think most would also agree that dedication is not a one-way street. Employers have a stake in pursuing practices that encourage employees to deliver their best. If employers wonder what practices to follow, a good place to start is to understand human resource regulation compliance. The law, as complicated as it can be, serves as a good benchmark.

Cautionary tale

What prompts these observations is a story making headlines. It didn't happen in Pennsylvania, but considering that the company involved has outlets all over the country, including in and around Pittsburgh, it is worth taking notice.

At issue was a claim of wrongful termination by a former manager of a Chipotle Mexican Grill restaurant. According to reports on her case, she was noted for being loyal and hardworking when in 2015, she was fired for allegedly stealing $626 from the store's safe. She denied the accusation, but attorneys for the company said they had video evidence as proof.

Here's where things go sideways. In the course of challenging the accusations, the former manager asked to see the video evidence, only to be told that it had been destroyed. During her wrongful termination suit, her attorney presented evidence to support his argument that his client was making $70,000 a year and was on track for promotion to a position paying $100,000, suggesting she had no motive.

Additional evidence included that the woman's firing came about a month after she had filed a workers' compensation claim for an injured wrist. Her attorney said she continued to work for weeks more and was fired after she took medical leave.

A jury returned a verdict against Chipotle and ordered the company to pay the woman more than $7.9 million in damages. And, facing the prospect of possible punitive damages of up to $71 million, Chipotle and the woman's attorney reached a confidential settlement.

The woman's attorney says the message of the case to businesses is, "That you need to treat your employees fairly and honestly."

What can get an EPLI policy claim denied?

The spotlight is on claims of sexual harassment in the workplace these days. Many point to the allegations by women against film producer Harvey Weinstein as the snowball that grew into the so-called #MeToo movement. A sidebar is that business owners in Pennsylvania and across the country are assessing if they're prepared to manage the risks of employment-related legal disputes.

As part of the process, company leaders might be reviewing their insurance portfolios to see if they have employment practices liability insurance (EPLI). If they don't, they may be thinking about getting a policy. In either case, employers need to understand conditions under which an insurer might deny a claim.

The Value of EPLI

The argument in favor of having EPLI coverage is straightforward. An active policy can minimize financial risk from claims that might arise under federal employee protection law and similar state laws. Typical coverage includes:

  • Legal costs
  • Payment of settlements or judgments

Potential Insurer Loopholes

The benefits under such policies can be jeapordized in a number of ways. Bad timing is one. EPLI policies are often structured on a "claims made and reported" basis. That requires that for a claim to be valid, it must be brought during the time when the policy is in force. It must also be reported to the insurer within the effective policy period. As an example of how this could become an issue, consider the following.

A complaint alleging harassment or discrimination is filed seeking a right to sue. As the employer, you might not see that as cause to file a claim, but your insurer might. In the time between the initial complaint and the suit, your policy period could expire, giving the insurer grounds to deny coverage.

Also, most if not all EPLI policies, stipulate that coverage doesn't begin without the insurer's written consent. What this means is that any costs, legal or otherwise, incurred by your company before a claim is reported won't be covered.

One last thing to note is that claims not filed exactly according to policy requirement can result in a denial.

With all the costs that can result from an employment-related dispute, proper risk management is obvious, and that is best done by enlisting the experience of the Kisner Law Firm to decide if an EPLI policy is right for your business. 

Terminating an Employee on FMLA

The  Family and Medical Leave Act provides 12 weeks of unpaid leave to eligible employees who work for a company that employs 50 or more people. The Act also provides certain protections for eligible employees who avail themselves of the leave. What happens though if the employee taking leave appears to be abusing the protections?  How does an employer protect the business against benefit exploitation?

The importance of transparency

There are limits to the protections that a worker on FMLA can count on, at least according to one Texas court. 

An employee who acknowledged she was not meeting her performance metrics was put on a performance improvement plan. Within days of that action, she reported by email to her boss that she had been to a doctor and would be filing for short-term disability and FMLA.

A few weeks later the woman's boss caught wind that the employee on leave had been spotted at a music concert, in the company's skybox seats. Puzzled, the employer followed up with a voice message to the woman asking for a meeting about the incident.

When the woman balked at that, the employer sent an email insisting she be in touch by a time later that day. When that deadline passed, the boss fired her citing poor performance, her attendance at the concert and her failure to respond when asked to meet. The woman sued, claiming violations of her FMLA status and retaliation.

The case didn't make it far. The judge dismissed the suit, saying that the employer's had a right to investigate the suspected abuse of benefits and that her refusal to respond to legitimate questions was reason enough for the employer to conclude the leave wasn't validly taken in the first place.

One expert's analysis

What employers can take away from this case, according to one observer, is the importance of communication and documentation. Employers have a right to ask workers on leave to respond to legitimate questions about their status and the right to let a worker go if he or she refuses to communicate. It is also important to note that the employer in this case properly documented performance problems before the employee requested FMLA leave and promptly noted its requests for communication and the employee's refusal to comply. 

Of course, each case is different and needs to be gauged on its individual merits. If you have concerns about an employee on FMLA leave or would like training on FMLA procedures to protect your business, contact Kisner Law Firm's experienced employment law attorneys. 

Source: SHRM.org, "Viewpoint: If an Employee Attends a Beyonce Concert While on FMLA Leave, Can She Be Terminated?," Jeff Nowak, Sept. 25, 2017

Justified employee policies to enjoy greater weight, says NLRB

We continue now with our series of deeper dives into a wave of recent decisions by the National Labor Relations Board. As we noted in one recent post, the NLRB reversed a number of rules, specifically targeted were policies that employer advocates felt tilted legal scales toward supporting worker unionizing efforts.

In this post, we intend to examine more closely a decision that overruled an earlier board action that put a crimp on employers' ability to establish certain employee policies - even ones for which an employer might have solid justification. Based on early reaction, it seems businesses feel the move will help avert employee disputes and restore balance to organizing processes protected by law.

The hazards of "reasonable"

In questionwere Section 7 rights granted to workers seeking to organize under the National Labor Relations Act. The standard at issue was that employers could not include policies in their employer handbooks that might be "reasonably construed" by workers as infringing on their rights to organize.

At issue was a policy of the Boeing Company against using any device to take pictures on company property. The policy did not prohibit employees from discussing employment conditions or engaging in NLRA-protected activities. The indications from case documents are that Boeing was concerned about company security. However, a judge ruled that the policy violated the act because it could be "reasonably construed" as an organizing infringement.

In reversing the policy on a 3-2 vote, the board reversed the judge's decision, saying that the "reasonably construe" standard failed to give weight to Boeing's legitimate concerns. It also said that going forward, its employer policy and handbook reviews would seek to strike more balance in cases where employer justification can be shown.

What does this mean for employers? While more latitude may be given, the key take away is that there must be 'justification' for handbook and other employer policies. Therefore, employers will want to carefully review rules and ensure they have good reasons for their policies that do not otherwise run afoul of NLRB or other agency rules. Kisner Law Firm's experienced employment law attorneys can assist in crafting specialized policiies and answer questions about these new rulings. 

Importance of local counsel for non-Pittsburgh litigants

The legal profession is notable for having a language all its own. Actually, it's not so much that it has its own language as that it continues to rely on a language (Latin) that is not in widespread use. There's even a little irony in this fact. Latin became the common legal language when the Roman Empire set the boundaries of what was then the known world. Today, the whole globe is the known world and Latin maintains its presence in the legal world.

While business and commerce takes place across myriad state and international borders, legal issues, including those that might be related to employment or transaction disputes, are dealt with at the local level. To be sure that these issues get handled in the most effective manner, it makes sense that you seek the help of someone who knows the local court system. The United States District Court for the Western District of Pennsylvania considers this so important that out of state attorneys hire local counsel who move the Court for their pro hac vice admission, which means, for this occasion.

To meet the pro hac vice admission standard:

  • The attorney must be admitted to practice in the district court of the state in which he or she is admitted and be a member in good standing of the bar.
  • The attorney must attest by affidavit to being in active practice in his or her home state and to reviewing the local rules of the court to which he or she seeks temporary practice privileges.

These are requirements for out of state attorneys with cases in the Western District of Pennsylvania in Allegheny County. Local counsel services may also be needed if you are dealing with an employee discrimination complaint before the Pennsylvania Human Relations Commission or the Pittsburgh Commission on Human Relations. Whether you are called before the Western District of Pennsylvania or a Pennsylvania administrative agency, the Kisner Law Firm has the skill and experience to assist litigants and their out of state counsel in appearances before the local courts and agencies. 

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