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Shawe & Rosenthal E-Update- October 2012

Submitted By Firm: Shawe & Rosenthal, LLP

Contact(s): Elizabeth Torphy-Donzella, Gary L. Simpler


Darryl G. McCallum

Date Published: 10/31/2012

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Discharge of Employee Who Failed Alcohol Test After Voluntarily Disclosing Alcoholism Constitutes Disability Discrimination

A New Jersey appellate court recently found that an employer’s decision to subject an employee to random alcohol testing after she voluntarily disclosed her alcoholism and then to discharge her for failing an alcohol test constituted handicap discrimination under the New Jersey Law Against Discrimination.

Facts of the case: In A.D.P. v. ExxonMobil Research and Engineering Company, the employer’s drug and alcohol policy stated, in pertinent part, as follows: “The Corporation recognizes alcohol or drug dependency as a treatable condition. Employees who suspect they have an alcohol or drug dependency are encouraged to seek advice and to follow appropriate treatment promptly before it results in job performance problems ….Any employee returning from rehabilitation will be required to participate in a company-approved aftercare program.” Pursuant to this policy, the plaintiff voluntarily disclosed to a company nurse that she suffered from alcoholism and depression and that she intended to check herself into a rehabilitation program. The employee attended an inpatient and outpatient treatment program and eventually returned to work. Upon her return, and as required by the employer’s policy, she signed an “after care contract” requiring her to abstain from alcohol and to submit to random breathalyzer tests. After the employee failed a breathalyzer test, she was discharged. The employee sued, claiming disability discrimination pursuant to the New Jersey LAD. The trial court granted summary judgment to the employer and the employee appealed.

The Court's Ruling: The New Jersey Appellate Division reversed and held that requiring the employee to sign the after care agreement was facially discriminatory because it was unrelated to any performance concerns but was solely based on the fact that the employee identified herself as an alcoholic. Thus, the employer exhibited “hostility toward members of the employee’s class.” The appellate court noted with approval the EEOC’s policy guidance, which provides that in the absence of a last chance agreement which has been imposed as a result of an employee’s alcohol-related performance or conduct violations, an employer can subject an employee returning from alcohol rehabilitation to random alcohol testing “only if the employer has a reasonable belief, based on objective evidence, that the employee will pose a direct threat in the absence of periodic testing. Such a reasonable belief requires an individualized assessment of the employee and his/her position and cannot be based on generalized assumptions ….” Here, the court noted, the employer had made no such individualized assessment. In fact, the employer admitted that it uniformly imposed the requirement of randomized alcohol testing as a matter of policy upon any person identified as an alcoholic. The court held that this fact “merely confirms the facially discriminatory nature of the Policy rather than establishing any affirmative defense ….”

Practical Impact: In this case, the employer’s failure to make an individualized assessment of the risk posed by the employee as a result of her alcohol use made its policy unlawful. The result in this case would have been different if the employer had, for example, imposed random testing pursuant to a “last chance agreement” imposed in order to address a specific performance concern. Even in the absence of a last chance agreement, the result would have been different had the employer presented objective evidence of a substantial business concern, including risk of injury to the plaintiff or other employees, if it did not impose random testing.

Excessive Unscheduled Absences Not Related to FMLA Doom Employee’s FMLA Interference Claim

In Gates v. United States Postal Service, the United States Court of Appeals for the Sixth Circuit held that an employee’s FMLA interference claim failed where the evidence showed that he would have been terminated for his excessive absenteeism even if he had not taken FMLA leave.

Facts of the Case: The employee, a Transportation Network Specialist for the U.S. Postal Service, was granted intermittent leave by his employer due to his suffering from gout. Prior to his request for intermittent FMLA leave, the employee had a history of attendance issues involving unscheduled absences. After being approved for FMLA leave, the employee continued to have unscheduled absences, some of which were related to his medical condition, but some were not. In addition, for those absences that were related to his medical condition, the employee often failed to follow the employer’s designated call-in procedure for such absences. The employee was disciplined and ultimately terminated due to his unscheduled absences. He later sued, claiming FMLA interference and retaliation. The trial court granted summary judgment to the employer because the undisputed evidence demonstrated that the employee would have been terminated due to his unscheduled absences unrelated to his FLMA even if he had not exercised his right under that law. The employee appealed.

The Court’s Ruling: The Court of Appeals affirmed. The court noted that the evidence showed that the employee had a history of unscheduled absences before receiving FMLA leave, and he had requested FMLA leave for only three of his sixteen unscheduled absences that formed the basis for his termination. Thus, the Court concluded, the employee failed to show that his termination was not justified based on excessive absences or that it was a pretext for FMLA interference.

Practical Impact: This case demonstrates that employees who take leave under the FMLA may be held to the same standards as other employees with respect to non-FMLA related absences. Where an employee is on intermittent FMLA leave, however, management should be careful to track which absences are related to the employee’s medical condition and which are not.


LinkedIn. A federal court in Pennsylvania recently held that an employer did not violate federal law when it took over a former executive’s LinkedIn account after it terminated her employment. In Eagle v. Morgan, the plaintiff, who co-founded a banking education company and served as its CEO, created a LinkedIn social networking account during her employment in order to promote the company’s services, foster her reputation as a businesswoman and build social and professional relationships. Several months following the purchase of the plaintiff’s company by another company, the plaintiff’s employment was terminated. After terminating the plaintiff, the employer changed her LinkedIn password so that she could not access her former LinkedIn account and changed her LinkedIn profile to display the name and photograph of the new CEO. The plaintiff sued, claiming that the employer improperly accessed and took over her LinkedIn account. Under the Computer Fraud and Abuse Act (the CFAA), a plaintiff may recover damages for losses related to the impairment or damage to a computer or computer system. Here, the Court found that the plaintiff’s CFAA claim failed because her alleged damages were not based on computer inoperability but rather on lost business opportunities resulting from her inability to access her LinkedIn account. Such damages, the court held, are not cognizable under the CFAA. In addition, the court held that the plaintiff could not maintain a claim under the Lanham Act, which imposes liability on a defendant whose actions create a likelihood of confusion with the goods or services of another. In this case, the court found that taking over the plaintiff’s LinkedIn profile created no such likelihood of confusion, as the employer did not attempt to pass off the new CEO as the plaintiff or suggest that the plaintiff remained affiliated with the employer. The court found that the employer’s actions “merely caused a diversion, not a likelihood of confusion.”

Sexual Harassment. As discussed in a Shawe Rosenthal Labor and Employment Report blog article earlier this month, a federal court in Colorado recently held that an employer’s failure to provide a Spanish speaking employee with a translation of the sexual harassment policy precluded summary judgment for the employer on the employee’s sexual harassment claim. In EEOC v. The Spud Seller, Inc., the EEOC brought suit on behalf of a group of Spanish speaking employees of a manufacturing plant who alleged they were exposed to a sexually hostile work environment. One employee alleged that her supervisor had harassed her by trying to kiss her against her will. The employer moved for summary judgment on this employee’s claim, presenting evidence that it adopted a policy designed to prevent and address sexual harassment, had played a Spanish language video to employees addressing workplace harassment, and had conduced periodic training regarding the policy. The employee saw the video and signed a statement acknowledging her receipt of the employee handbook containing the policy. The policy provided alternative avenues of complaint, such that an employee who did not feel comfortable complaining about the alleged harassment to her supervisor could complain to the office manager. Despite all this, the employee never complained. Accordingly, the employer argued, the company met all the elements necessary to establish an affirmative defense to the employee’s claim. The court rejected the employer’s argument and held that a jury must decide if the employer took reasonable care to prevent sexual harassment such that it should not be held liable. The court noted that while the video was presented in Spanish, it did not adequately or fully explain the sexual harassment policy. Moreover, there was no evidence that written translations of the sexual harassment policy contained in the handbook were supplied to Spanish speaking employees. Most significantly, the persons designated in the policy to receive complaints did not speak Spanish. Thus, a Spanish speaking employee would have to provide her own translator, and the only supervisory employee at the plant who interpreted for Spanish speaking employees was the alleged harasser.

Age Discrimination. A pension plan that required higher contribution rates for older employees was found to be unlawful by a federal district court in Maryland. In EEOC v. Baltimore County, the County maintained a defined benefit pension plan which required participation by all employees younger than 59 years of age. Employees were required to contribute to the plan at different rates based on the age at which they joined, and were permitted to retire at age 60. The older an employee was at the time they joined the plan, the higher their contribution rate. The plan was later amended to provide an early retirement option, allowing employees to retire with full benefits after 30 years of service, regardless of their age. The County argued that the different contribution rates based on age were justified by non age-related financial considerations. The Court disagreed, noting that the amendment of the plan to add an early retirement option decoupled an employee’s age from his or her years until retirement. The fact that there was no evidence to suggest that the County subjectively intended to treat older workers less favorably than younger workers did not change the fact that the policy was facially discriminatory. Thus, two employees with the same number of years until retirement would contribute to the plan at different rates, based on their age. As such, the court noted because age is the “but for cause” of the disparate treatment, the plan violates the ADEA.

Arbitration. A recent decision by a federal court in North Carolina illustrates that a disclaimer contained in an employment handbook acknowledgment form may undermine an employer’s arbitration agreement with its employees. In Lin v. Brodhead, an employee alleging age discrimination and retaliation under Title VII and the ADEA filed suit in federal district court against his former employer, Duke University, and several individual defendants. The defendants moved to compel arbitration based on the University’s alternative dispute resolution procedure. The dispute resolution process was set forth in the employee handbook. The employee handbook at issue contained a standard disclaimer, stating that its provisions were not meant to constitute a contract. However, in this case there were two versions of the handbook. One version, which the employee claimed to have received, stated “The policies set forth in this handbook are not meant to constitute a contract, nor are they construed as creating contractual obligations of any kind ….” A later version of the handbook contained an exception for the dispute resolution procedure, stating: “Except as provided in the applicable grievance or dispute resolution procedures, the handbook was not to be construed as a contract." The court held that the former version of the handbook did not create a binding arbitration agreement, as the disclaimer showed that the parties did not agree to be bound by the terms of the dispute resolution procedure. On the other hand, the court noted, the second version of the handbook contained an exception to the disclaimer, indicating that the agreement to arbitrate was a term and condition of employment or continuing employment. Thus, a trial was necessary to determine which version of the handbook the employee received.

This case serves as an important reminder to employers that in order to have a binding arbitration agreement, it is essential that both the employer and the employee agree in writing to be bound by its terms. If the arbitration agreement is set forth in the employee handbook, as was the case here, there should be an exception from the standard disclaimer language indicating that the arbitration agreement is a binding agreement. The safest course of action, however, would be to have a clearly worded arbitration agreement that is separate and apart from the employee handbook, such that there is no question as to whether the agreement is binding.

FLSA. A federal appeals court recently held that an employer’s changing the designation of a work week so as to reduce the amount of overtime hours did not violate the FLSA. In Abshire v. Redland Energy Services, LLC, the employer, an operator of natural gas wells, originally calculated overtime based on a Tuesday to Monday work week. The affected employees worked twelve-hour shifts for seven consecutive days (from Tuesdays through Mondays), followed by seven days off. Eventually, the company redesignated the work week as Sunday to Saturday without changing the employees’ work schedules. The effect of the change was to reduce the number of overtime hours, as the work week was now split into two payroll periods. A group of employees filed suit, arguing that the FLSA prohibits an employer from changing an existing work week for the purpose of reducing employee overtime. The district court granted summary judgment for the employer and the U.S. Court of Appeals for the Eighth Circuit affirmed, holding that the FLSA allows an employer to change its designation of the work week even if the purpose of the change is to reduce the amount of overtime. The FLSA, the court noted, does not require that an employer’s work week begin on any given day. The Department of Labor’s regulations state that an employer may change the beginning of the work week “if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act.” The court held that a change in the designation of a work week in order to reduce payroll expenses did not constitute a change designed to evade the overtime provisions of the FLSA.


Social Media Policies and the NLRA

A recent Advice Memorandum from the National Labor Relations Board illustrates the proper way for employers to implement and enforce a social media policy. In Cox Communications, Inc., the NLRB Office of the General Counsel issued an Advice Memorandum to its Regional Office concerning whether an employer’s social media policy violated the NLRA. The employer, a broadband communications company, maintained a social media policy that stated, in pertinent part, “DO NOT make comments or otherwise communicate about customers, coworkers, supervisors, the Company, or Cox vendors or suppliers in a manner that is vulgar, obscene, threatening, intimidating, harassing, libelous or discriminatory …. Those communications are disrespectful and unprofessional and will not be tolerated by the Company.” The policy also had a “savings clause,” which provided: “Nothing in Cox’s policy is designed to interfere with, restrain, or prevent employee communications regarding wages, hours, or other terms and conditions of employment.” One of the Company’s technical support representatives listed his affiliation with Cox under his profile page in his Google+ account, which was publicly accessible. After a dispute with a customer, the employee used an expletive when referring to the customer on his Google+ account. A coworker reported him to management and he was terminated. In assessing the facts, the General Counsel decided that the employee’s complaint should be dismissed as the employer’s policy was not overly broad and the employee’s speech was not concerted activity within the meaning of Section 7 of the NLRA. The General Counsel noted “The Board will not find a violation simply because a rule could conceivably be read to restrict Section 7 activity.” Rules such as the one involved here, “that clarify and restrict their scope by including examples of clearly illegal or unprotected conduct so that they would not reasonably be read to cover protected activity are not unlawful.”

In contrast to the policy involved in Cox Communications, in Karl Knaux Motors, Inc., the NLRB found unlawful a policy promulgated by another employer that provided, in pertinent part, “Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the [employer].” The NLRB found that this rule was unlawfully broad because employees would reasonably construe its strong prohibition against “disrespectful” conduct and “language which injures the image or reputation of the [employer]” as encompassing Section 7 activity.

These two cases serve to emphasize the fact that employers must be careful in drafting social media policies so as to avoid a potential unfair labor practice charges under the NLRA. The Cox decision demonstrates that policies that contain a “laundry list” of objectionable and egregious conduct that restricts the application of the policy are likely to survive NLRB scrutiny. In addition, a “savings clause” such as the one involved in Cox further ensures that employees would not reasonably interpret the policy as restricting Section 7 activity. That said, given the exacting scrutiny that the NLRB is applying to social media policies, employers would be well advised to have legal counsel review any such policy before promulgating it to employees.

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