Delaware Employment Law Blog

Smokers’ Rights in the Employment Context

2011-10-12T14:09:19Z

Can employers refuse to hire a applicants for their tobacco use? In most states, the answer is “yes.” Unless the candidate is applying for a job in a State with a “smokers’-rights statute,” an employer can refuse to hire candidates who smoke.

According to the Texas Employment Law Update, that’s exactly what one of North Texas’ largest employers has announced it will do. Baylor Health Care Systems announced that it will not hire or consider for hire any candidate who uses any nicotine product. This is additional evidence of a continuing trend in health care.

Employer Quits Its Smoking-Penalty Policy

Delaware Employers & Smoking Employees--Part 1

Delaware Employers & Smoking Employees--Part 2

Delaware Employers & Smoking Employees--Part 3

Delaware Employers & Smoking Employees--Part 4

Sample Social-Media Policy

2011-10-06T17:50:48Z

Social-media issues faced by employers continue to change and develop. Your social-media policy (or guidelines, if you prefer), should do the same. An updated social-media policy is provided via the link below for your reference as a starting point for drafting your own workplace policy addressing employees’ social-media use. There are, of course, any number of variations that may be appropriate for your specific workplace. The sample is intended to be just that—a sample, to give you a running start when you’ve got your key stakeholders seated at the table ready to discuss the approach that is appropriate for your particular workforce. You should consult with qualified employment-law counsel before implementing any new policy to ensure legal compliance.

Sample Social-Media Policy

(PDF)

Reasons to Terminate: More Is Not Merrier

2011-10-05T04:14:49Z

When terminating an employee, employers need only one reason. Of course, there is rarely just a single reason for reaching the decision. But the existence of multiple reasons does not mandate that each reason be shared with the employee. In other words, when an employer makes the decision to terminate, there should be only one reason upon which the employer relies and which is shared with the employee—the “final straw.” When an employer changes its “final straw,” it raises doubts both with the employee and with the court and changing reasons are evidence of unlawful discrimination.

In Smizer v. Community Mennonite Early Learning Center, the employer told the employee that he was being fired due to a Facebook posting he’d made. But the employee didn’t buy it. He claimed that he really was fired because of his “tardiness and lack of cleanliness in his classroom.” He claimed that similarly situated female employees, who also were tardy and who kept equally messy classrooms, had not been fired.

If this claim were true, and there were late and messy female employees who had not been fired and the plaintiff was really fired for these reasons, it would support the plaintiff’s Title VII claim. So the plaintiff sought the court to compel his former employer to produce documents he claimed would show these failings of his female counterparts.

The employer responded that evidence relating to tardiness and messiness were not relevant to the suit because, as you may recall, it fired the plaintiff due to a “troubling” comment he’d made about coworkers on his Facebook page. Thus, the employer contended, the evidence that the plaintiff sought was irrelevant to his claim.

The court disagreed. In its opinion, it stated that the plaintiff had provided “ample documentation” tending to show that the Facebook posting may not have been the real reason for his termination. Instead, the documentation apparently showed that the employer had claimed at various other times that there were other reasons for terminating Smizer—including his tardiness and lack of cleanliness. In employment-discrimination claims, “a shifting justification for an employment action can itself be circumstantial evidence of an unlawful motive.” Because evidence of “shifting justifications” may be admissible at trial, the requested documents were discoverable and ordered the employer to produce them.

So what’s the big lesson employers can learn from this story? In short, pick a reason and stick to it. One reason to terminate an employee is all you need—and all you should have. Certainly, there may be (and usually is) a long history of performance issues with the employee. And all of these would be relevant to the employer’s decision to proceed to termination. But the “final straw” is not a “bail of hay.” Pick a reason, stick with it, and don’t muck it up by giving multiple reasons for the decision at the termination meeting or in a termination letter. If you’ve done what you’re supposed to do, you’ve addressed the other issues as they came up with the employee and he’s aware of those issues.

Smizer v. Community Mennonite Early Learning Ctr., No. 10 C 4304, 2011 U.S. Dist. LEXIS 102212 (N.D. Ill. Sept. 7, 2011).

See also:

Bad Reason #29 to Fire an Employee

Don’t Hate Me Because I’m Brilliant: One Employee’s Tale

3d Cir.: No Protection for an Employee Who Lies

3d Cir.: Disparate Impact of Newark, NJ’s Residency Requirement

2011-10-04T00:47:19Z

In Meditz v. City of Newark (PDF), the Third Circuit concluded that the City of Newark, New Jersey’s residency requirement may have unlawful disparate impact on non-Hispanic white applicants. The case was brought Gregory Meditz, an attorney acting pro se. Meditz alleged that the City’s residency requirement disparately impacted white, non-Hispanics and, as a result, white, non-Hispanics were under-represented in the City’s workforce.

Meditz, a white male, applied for a job as an Analyst with the City of Newark, New Jersey. He was rejected for the job because he lived in Rutherford, New Jersey and a City ordinance required that non-uniformed employees live within City limits. Meditz filed suit, alleging that the City’s residency requirement negatively impacted the hiring of white, non-Hispanics.

In support of his suit, Meditz provided statistical information that he’d gathered from publicly available sources. Newark argued that the disparity reflected by the statistics were not sufficiently substantial. The federal district court agreed with the City and found that the statistical evidence Meditz presented did not “constitute sufficient evidence of a significantly discriminatory hiring pattern.” The Third Circuit Court of Appeals did not agree and reversed.

The Third Circuit found, instead, that the statistics showed that the percentage of white, non-Hispanics in Newark’s non-uniformed workforce was lower than the percentage that would be expected based on Newark’s general population. The case was remanded for the District Court to analyze the evidence in accordance with the correct standard, as described in the Third Circuit’s decision.

Meditz v. City of Newark, No. 10-2442 (3d Cir. Sept. 28, 2011) (PDF).

For more on disparate impact, see also:

9th Cir. on ADA and Drug Addiction

Overview of the Risks of Employment Testing

The Link Between Race and Obesity—Disparate Impact Waiting to Happen?

EEOC’s Proposed Regs for Age Discrimination Disparate-Impact Claims

The Love-Hate Relationship of Labor Unions and Social Media

2011-10-03T13:17:54Z

Have labor unions outlived their usefulness? Yes, said nearly half of the Americans polled, according to a recent Rasmussen survey. With only 48% of U.S. workers believing that unions still serve a worthwhile purpose, there is plenty of reasons for the labor movement to market their message. And social media has been a useful tool for doing so. For example, see this post about the 14 Ways Unions Are Using Twitter and this AFL-CIO post from 2009 for examples of Social Media Use by Unions for some insight about labor’s efforts in the online space.

But there may be downsides to social media for unions, too. In this Huffington Post article, Tom Hayes asks, Will Facebook Replace Labor Unions? Hayes’ basic premise is that, with the rise of online social networking sites, like Facebook, workers don’t need a union to organize. Instead, employees can communicate outside of the workplace, even if they work different facilities, to discuss the problems they face inside the workplace.

And that, of course, is where the National Labor Relations Act comes into play. Employees who engage in concerted activity are protected by the NLRA against retaliation and discrimination by their employers in response to their conduct. As the NLRB has made very clear, these protections apply online just as they do in the workplace. So, while unions may have reason to worry about their perceived usefulness, employers should be worried, as well, if they are not familiar with how the NLRA limits the ways they can respond to an employee’s Facebook post.

To learn more about the interplay between the NLRA and social-media

Employees’ Posts Were Protected Activity, Says ALJ

NLRB and Facebook Firings: Employer's Worst-Case Scenario

The NLRB Approves Facebook Firings

Another Day, Another NLRB Complaint Over Facebook Firing

NLRB OKs Employee Termination for Twitter Posts

Nov. 1–2: 11th Annual Delaware SHRM State Conference

2011-10-02T21:35:13Z

DE SHRM’s annual conference is just around the corner. For Delaware HR professionals, this is an event not to be missed. Young Conaway is proud to be the Platinum Sponsor again this year. Bill Bowser, Scott Holt, and Adria Martinelli will present the annual update, the always popular, The Good, the Bad, the Ugly: Employment Law Update, on Tuesday, November 1 from 4:30 – 6:15 p.m. And Mike Stafford and I will be presenting a session on Off-Duty Conduct, including medical marijuana use, social media, smoking and tobacco, and wellness, on Wednesday, November 2, from 10 – 11:15 a.m.

Registration is available on the DE SHRM website. We hope to see you there!

Social-Media Policies: Ethical Issues for Court Employees

2011-09-27T21:56:53Z

Social-media policies are the hot topic in the world of employment law. Questions about the advisability of social-media policies and the legal limits on what these policies may and may not regulate continue to abound. Employers who may be considering whether they need or want a social-media policy usually appreciate helpful resources on the subject. One particularly excellent resource on social-media policies is the Resource Packet for Developing Guidelines on Use of Social Media by Judicial Employees, published last year by the Judicial Conference Committee on Codes of Conduct.

The Packet includes a brief but substantive overview of some of the ethical issues arising from the use of social media by court employees, as well as a primer for those who looking for a fundamental understanding of the tools before moving to regulate those tools.

The Packet also includes sample language for use when drafting a social-media policy for judicial employees, as well as where to find such policies already in place.

Like the rules of professional conduct, which apply to lawyers' online activities, the Code of Conduct for Judicial Employees applies to all online activities, including social medial. As explained in the Resource:

The advent of social media does not broaden ethical restrictions; rather, the existing Code extends to the use of social media.

Although directed to judicial employees, the Resource contains valuable lessons for all legal professionals, as well as for employers generally.

Social Media Policies for Judicial Employees

This is an edited version of a post originally posted on the Going Paperless Blog, where I write about technology issues affecting legal professionals. I'm reposting it here because it contains information many employers may find valuable.

See also
Our three-part series on the legal limits imposed by the First Amendment in the context of social-media policies in the public-employment context. In Part 1, we discussed the general application of the First Amendment to workplace policies and rules. In Part 2, we focused on the 3-part analysis applicable to limits on speech imposed on public employees. And in Part 3, we discussed some of the cases upholding discipline based on employees' off-duty speech, similar to the speech social-media policies attempt to address.

Social Media & Hiring: Fewer Employers, More Politicians, New Users

2011-09-27T01:33:44Z

Vetting job candidates online, particularly with social-networking sites like Facebook, continues to be the hot topic in the world of employment law. I recently wrote about a new SHRM survey, which reports that fewer employers are checking Facebook before hiring employees. And now it seems that Congress is concerned about the potential effects of social-media background checks, reports Kashmir Hill at Forbes. Jon Hyman’s comments about this news from our Nation’s Capital mirror my own, so I’ll point you towards his blog instead of saying the same thing twice.

Instead, what I will point out as something new is Nielsen’s Social Media Report, recently released for Q3 2011. The report is full of interesting statistics regarding our use of social media. Here are just a few:

Americans spend more time on Facebook than on any other U.S. website.
Nearly 4 in 5 active Internet users visit social networks and blogs
Close to 40% of social-media users access social-media content from their mobile phone.

What I also found particularly interesting was the information about who is using social media. According to the survey, females and visit more often than males. The highest concentration of visitors are those in the 18-34-years-old range. Asian/Pacific Islander was the Race/Ethnicity with the most users.

I will be interested to see whether these statistics have any effect on those who argue that social-media hiring efforts do or may have a discriminatory impact on candidates.

Government Employers Can (and Should) Have a Social-Media Policy: Part 3

2011-09-23T12:35:17Z

Delaware's capital, the City of Dover, recently rejected a proposed social-media policy for its employees. Apparently, Dover's City Council was influenced by a letter from the ACLU of Delaware. The ACLU Delaware's Legal Director also spoke at the Council's meeting and, according the Wilmington News Journal, called the proposed rules a "clear violation" of First Amendment rights and "told the committee that public employees are not subject to any special restrictions on their speech because of the nature of their positions."

With all due respect to the ACLU's Legal Director (who I happen to know and think very highly of), I must, respectfully, disagree. In my humble opinion, the policy as proposed did not violate the First Amendment in any way--and certainly did not constitute a "clear violation" of any law. And, contrary to the Director's claim that public employees "are not subject to any special restrictions on theirs speech" by virtue of their employment with the government, although public employees do not leave their First Amendment rights at the workplace door,

it is plain that those rights are somewhat diminished in public employment.

Melzer v. Bd. of Educ. of the City Sch. Dist. of the City of N.Y., 336 F.3d 185, 192 (2d Cir. 2003).

Because social media is a "new" technology, there are only a few cases that address whether a public employee may be disciplined or terminated as a result of online conduct that occurs while the employee is off duty. But those cases "clearly" provide legal support for the adoption of Dover's proposed policy.

In Stengle v. Office of Dispute Resolution, 631 F. Supp. 2d 564 (M.D. Pa. 2009), a hearing officer employed by the State of Pennsylvania maintained a blog, the description of which stated that its intended purpose was to

share information about inclusion and the implementation of the Gaskin Settlement agreement from the perspective of a parent of a class member and to provide a means to share information with other class members.

The "Gaskin Settlement Agreement" was a very hot topic in Stengle's local community. It was also the settlement of a matter over which she was presiding in her capacity as a hearing officer. When her contract was not renewed after she declined to recuse herself from the matter. Stengle sued, alleging that the non-renewal of her contract constituted an unlawful violation of her First Amendment rights.

The district court disagreed. It first looked to whether she wrote her blog in her official capacity as a hearing officer. You'll recall from Post 2 in this series that this first step was explained by the Supreme Court in its Garcetti decision. If an employee is speaking in his or her official capacity, First Amendment protections do not apply. Here, the court concluded that the blog's explanation of its intended purpose was sufficient to show that blog was written in Stengle's capacity as a citizen, as opposed to a hearing officer.

The court skipped the second step because the defendants conceded that the blog posts discussed matters of "public concern." Speech made by an employee on matters of public concern, as you may recall, receives constitutional protection. Therefore, the court proceeded to the third step.

At this stage, the court asks whether the public employee's interest in her speech outweighs her employer's interest in promoting workplace efficiency and avoiding workplace disruption. The court noted that this analysis recognizes a pubic employer's "need to have wide discretion in running an efficient operation."

The court easily concluded that the hearing officer's blog posts did not deserve constitutional protection. The court explained that the employer need show only that the employer's speech had "some potential" to affect the workplace. The employer need not wait until the bad things actually happen because of an employee's speech before taking action. The court then reviewed the several problems that the defendant-employer had offered as ways that its operations could be disrupted, finding that these potential disruptions were sufficient to justify its decision not to renew Stengler's contract.

A blogging case decided by a court on the opposite coast reached the same result. In Richerson v. Beckon, No. 07-5590-KJA (W.D. Wash. Mar. 27, 2008), aff'd, 337 Fed. App'x 637 (9th Cir. 2009), a school-district employee's job duties were reassigned when district officials learned of her blog, where she'd written posts criticizing coworkers and others. The posts were personal attacks of the individuals she worked with and were "racist, sexist, and bordered on vulgar. " One post also disclosed confidential information acquired in the course of her employment with the school district.

The court concluded that, although the underlying topic of the posts--the operation and management of public schools--could be considered a matter of public concern, the personal attacks and stereotyping "far exceeded normal standards of decency." The nature of the posts, the court found, disqualified the posts for the protections afforded to speech on a matter of public concern. Thus, the speech was not constitutionally protected and the claim was dismissed.

On appeal, the Ninth Circuit assumed without deciding that the speech was a matter of public concern but affirmed the dismissal under the balancing test. The court found that the employee's blog posts had caused co-workers, students, and members of the community to lose faith in her as a confident and otherwise impaired her ability to secure the trust that was essential to her position. Therefore, the court concluded, the school district was reacting to actual disruptions caused by the employee to the workplace and had not acted unlawfully.

There are other cases that do not involve social media but do involve off-duty conduct and are, therefore, similarly applicable to those discussed above. I will save my discussion of those cases for another post but, for now, the two decisions addressed above demonstrate, in my opinion, that there is no "clear violation of First Amendment rights" arising from a social-media policy that merely clarifies that an employer's anti-discrimination, anti-harassment, and other, similar workplace policies, apply to employee's off-duty and/or online activity.

See the earlier posts in this series, Government Employers Can (and Should) Have a Social-Media Policy, Part 1 and Part 2.

Are Fewer Employers Checking Facebook Before Hiring?

2011-09-21T14:38:04Z

The Society of Human Resources (SHRM), released the results of a recent survey about employers’ use of social-media in the hiring process. The findings may surprise some. According to SHRM’s survey, there are fewer employers using social-media sites to screen job applicants than there were in 2008. The employers who participated in the survey responded that three primary concerns were serious enough to deter them from looking online for information about a candidate prior to making an offer. Specifically, they identified: (1) “legal risks,” including potentially discovering “information about protected characteristics;” (2) lack of verifiable data; and (3) lack of job relatedness.

I agree completely with the third reason cited. Before surfing the web for information about an applicant, employers should make an internal assessment of whether such a search is appropriate and necessary for that particular position. If it’s not necessary, the employer should make an official decision that online searches should not be performed—by anyone in the organization. If, however, there is a reason that an online search or social-media search may be appropriate, the employer should make an official decision reflecting this and then implement a policy about who will be authorized to perform the search and under what conditions.

Of course, regular readers will know that I wholly disagree with reason #1. So long as the employer adopts, implements, and enforces a clear policy about who will (and, perhaps, more important, who will not), have access to the information obtained during the search, online searches can be performed effectively and lawfully.

Regular readers also will know that I disagree with reason #3, above. As part of any defensible plan to incorporate social-media searches into a background-check program, employers absolutely should provide any negative information about a candidate. Not only is this the right thing to do as a simple matter of fairness but it also is critical to ensure that the information is accurate. Unfortunately, according to the survey, only 27% of employers who do use information obtained online in hiring decisions actually give the candidate an opportunity to explain the information that is found.

One more thought on the results of this survey—I have to question the validity of the survey results. I teach a lot of seminars to employers about social-media in the workplace. I also teach social-media seminars to graduate and professional students—who soon will become employees. In every seminar that I teach, I ask attendees whether they are using social media for hiring or, in the case of students, whether they believe they’re being Googled by their potential employers. The answer in both cases is a resounding “yes.” So, the results of the SHRM survey seem difficult to align with ,my experience. One possible explanation to the discrepancy? Perhaps there’s a hesitancy by employers to admit that they’re using social media to screen job applicants.

Government Employers Can (and Should) Have a Social-Media Policy: Part 2

2011-09-20T13:57:58Z

Yesterday, I promised to discuss the analysis that a court applies to determine whether a government employer has unlawfully retaliated against an employee in violation of the employee's right to free speech. As promised, the analysis is discussed below. In the next post in this series, I'll discuss the cases that have been applied to employee's off-duty, online, and social-media speech.

The Analysis
In order to establish a claim under the First Amendment, an employee must first show that the speech in question meets three requirements. First, the employee must demonstrate that his or her speech was made as a “citizen” in accordance with the U.S. Supreme Court’s decision, Garcetti v. Ceballos, 547 U.S. 410, 419 (2006). Second, the employee must show that the speech addressed a matter of “public concern. Third, the employee must show that his interest in the speech outweighs the employer’s countervailing interest in “promoting workplace efficiency and avoiding workplace disruption.”

If the employee successfully establishes each of these three elements, he must then prove that the speech was a “substantial or motivating factor” in the action taken against him by the employer. If he meets this burden, the burden then shifts to the employer to prove that the adverse action would have been taken absent the protected speech.

Because we are talking only about social-media policies, i.e., no employee is claiming that he has been disciplined for his speech, our analysis is limited to the first three steps, discussed above, which establish the test to determine whether speech is protected. If the speech that is restricted or prohibited in a policy is not protected speech, then the policy can be implemented without implicating the First Amendment. If the speech is protected, then the policy should be revised.

Step 1: Did the Employee Speak as a Citizen or as an Employee?
Speech made by an employee about matters relating to his employment is not protected by the Constitution. Thus, a government employer may discipline an employee who speaks (online or otherwise), about his or her job without triggering the protections of the First Amendment. So, the first question is whether the speech can be said to relate to the employee’s job.

Speech that is most easily classified as “employee speech” is speech that relates to the employee’s job responsibilities. For example, a teacher who posts complaints about the required curriculum is said to be speaking as an employee and receives no constitutional protection. On the other hand, a teacher who complains about increases in property taxes would be speaking as a citizen because taxes are unrelated to his job duties and he is, therefore, speaking as a citizen.

Step 2: Did the Speech Address a Matter of Public Concern?
If the employee can show that his speech was made in his capacity as a citizen and did not relate to his job duties or responsibilities as a government employee, then he proceeds to the second step of the analysis. Here, the employee must show that his speech addressed a matter of public concern.

In the hypothetical described above, taxes easily qualifies as a subject for public concern. On the other hand, it would be difficult to conclude that a matter for public concern is involved where a teacher who posts about the poor lunch selection offered in the teacher's lounge. Just for purposes of contrast, though, if the teacher's comments were about the poor nutritional content of lunches provided to the student body, a public concern may be at issue.

Step 3: Is the Employee’s Interest Outweighed by the Employer’s Interest in an Effective and Productive Workplace?
Speech that relates to a matter of public concern is next subject to what is known as the Pickering balancing test whereby the employee's interest in her speech is compared to the employer's interest in promoting wrokplace efficiency and avoiding workplace disruption. Pickering v. Board of Education, 391 U.S. 563, 568 (1968).

The application of this balancing test is not a precise science. In some cases, this balancing test gives the employer a tremendous amount of leeway when considering whether it can discipline an employee for his or her speech. Some of the factors considered at this step is whether the speech impairs disciplien or control by supervisors; whether it disrupts co-worker relations or erods close working relationships based on personal loyalty or confidentiality; interferes with the speaker's performance of his or her job duties; or obstructs routine office operations.

It's this last step that gives employers the most protection--particularly in the context of a negative comment made by an employee on his or her Facebook profile. But for more about that, you'll have to tune in for the next post in the series. Stay tuned!!

Government Employers Can (and Should) Have a Social-Media Policy

2011-09-19T17:28:05Z

Delaware's public employers seem to face a great deal of opposition when they propose to implement a social-media policy. In May, Kent County Levy Court tabled a proposed socia-media policy after critics raised somewhat confusing objections to it. And, last week, the Dover City Council rejected a proposed social-media policy after receiving a letter from the ACLU of Delaware. The ACLU’s letter concluded that the policy would encroach on employees’ free-speech rights. An ACLU representative spoke at the Council meeting, claiming that the policy would violate the First Amendment.

When the Kent County policy was first proposed, I wrote about some of the many reasons that employers do need social-media policies. In this series, I’ll address the constitutional issues that government employers face and explain that social-media policies, when properly drafted, do not violate the First Amendment. In the next post, I’ll explain the three-step test an employee must meet before he will be afforded constitutional protection for his speech. Then, in the third and final post, I’ll offer some examples of how the constitutional analysis has been applied by courts to employees’ off-duty speech, including online speech, and how those cases make clear that government employers, indeed, can restrict employees’ social-media activities in the interest of operating an effective and productive workplace. For now, what follows is a short summary of free-speech law as applied to social media:

The First Amendment to the U.S. Constitution provides, in relevant part, that “Congress shall make no law . . . abridging the freedom of speech.” But this restriction is not without limitation. The government may place certain restrictions its citizens’ speech. And when the government is acting as an employer, the limits it may impose on its employees’ speech are far broader. The U.S. Supreme Court has interpreted the First Amendment as providing government employers the ability to restrict speech to manage the workplace.

Thus, speech on a matter of “public concern,” i.e., that relates to the political, social, or other community concerns, will receive a higher level of protection. On the contrary, speech that is not on a matter of public concern, i.e., purely personal in nature, receives far less protection. In the context of social media, as discussed in the upcoming posts in this series, the same rules apply—government employers may restrict (through policies or discipline), employees’ speech.

Stay tuned for Parts 2 and 3 later this week.

FINRA Explains Social-Media Use for Brokers

2011-09-19T15:14:53Z

FINRA, the Financial Industry Regulatory Authority, is the watchdog agency for the financial brokerage industry. In January 2010, FINRA issued Regulatory Notice 10-36 cautioning brokerages about broker-dealers' use of social media. FINRA released additional guidance last month, expanding upon the notice issued last year.

In short, the FINRA guidance explains that the supervisory and recordkeeping obligations that apply to any business-related communications apply equally when those communications are sent via social media. Companies also must oversee and track all customer interactions sent through personal mobile devices.

Brokers do not need preapprovals for "unscripted" interactions (i.e., unplanned communications), but they must alert their supervisors after the fact.

Also, a broker must be get advance approval from his or her employer before mentioning the firm on any social networking site, such as LinkedIn.

To explain the Guidance, FINRA is publishing a three-part podcast, the first segment of which is available now.

Guidance on Blogs and Social Networking Sites, Full Text of Regulatory Notice 11-39 (PDF)

Top 25 Employment Law Blogs: An Embarrassment of Riches

2011-09-14T01:48:52Z

Young Conaway Employment Law Partner Bill Bowser is a fan of the phrase, embarrassment of riches, meaning an overabundance of a good thing. Just today, Adria Martinelli and I each had occasion to use the phrase today in separate conversations and laughed when we realized that the real embarrassment of riches was our frequent use of the phrase in conversation. Embarrassment of riches had, itself, become an embarrassment of riches. And it now seems that we have yet another chance to use the phrase today, as I’ve learned that the Delaware Employment Law Blog has been named by LexisNexis as one of the Top 25 Labor and Employment Law Blogs!

There are so many incredible labor-and-employment law blogs and bloggers online today that I can’t imagine how tough it was to select just 25 of them for this award. I can’t even limit my annual Top 100 Labor and Employment Law Blog list to 100 anymore. I am a fan of each of the blogs named to the list of Top 25 and I recommend that you pay a visit to any of the sites you may not yet know. Between the whole motley crew of us, you’re almost guaranteed to get all of the up-to-the-minute coverage of what’s happening in the area of workplace law.

Without playing favorites, I will point you in the direction of a handful of blogs written by long-time bloggers whose posts I consistently enjoy. For example, two gentlemen I’ve had the pleasure of getting to know over the past few years, Dan Schwartz of the Connecticut Employment Law Blog and Jon Hyman of the Ohio Employer's Law Blog, both post so often, they make my head spin! Dan, Jon, Phil Miles of Lawffice Space, Rob Radcliffe of Smooth Transitions, and I also collaborated on a recently published book, Think Before You Click, which is the first Human Resources publication dedicated to in-depth coverage of social-media related issues in the workplace.

I also would like to direct you to three blogs that I read religiously but whose authors I’m sorry to say I have not yet met. Michael Fox has been blogging at Jottings by an Employer's Lawyer since before most of the rest of us knew what a blog actually was! Timothy Eavenson of Current Employment hasn’t been blogging quite as long (but, really, who has?), but still longer than most and yet consistently produces great posts on cases and issues that matter. And I am always amazed by Brian Hall of The Employer Law Report and his ability to constantly collect and curate stories from just about every source—and has the content-rich posts to prove it.

Finally, I have to mention my friend Seth Borden of Labor Relations Today. Although Seth’s blog didn’t appear in the LexisNexis list, I’m absolutely certain that it was only due to an oversight because nobody, and I mean nobody writes a better labor blog than Seth.

Although I could go on and on about the great folks with whom I’m so lucky to share the blogosphere with, I’ll, instead, leave you with the rest of those honored by LexisNexis this year. There is apparently a “race to the top” with readers able to vote for their most favorite blog from the Top 25. If you’re inclined to vote for this or any other blog on the list, you can do so here. That's also the page where you can find the entire list of all 25 employment-law blogs. And, while you’re there, be sure to check out all of the resources offered in the LexisNexis Labor and Employment Law Community—many of the bloggers on the Top 25 list are contributors to this terrific resource.

But regardless of whether or for whom you vote, thanks for reading the Delaware Employment Law Blog and any of the other many high-quality employment law blogs that are published every day. This blogging stuff can be a lot of work! But for those of us who do it, it’s a labor of love and we do appreciate having you come along for the ride.

3d Cir. Agrees With “Terrible” FLSA Decision

2011-09-08T16:22:22Z

In Pitts v. Terrible Herbst, Inc., the 9th Circuit held that an offer of judgment made by an employer to an employee-plaintiff in an FLSA case will not moot the case where the Court has not yet ruled on certification. As a practical matter, what this ruling meant was that the plaintiff—who alleged that he was owed less than $100—could continue to litigate his collective-action claim, despite having rejected an offer of judgment in the amount of $9,000. In other words, employers who are sued for unpaid wages can do nothing to prevent being targeted by a class-action lawsuit.

The 9th Circuit’s decision in Terrible was a terrible one for employers. And, making it worse, the 3d Circuit is on the side of Terrible.

Background

In Symczyk v. Genesis Healthcare Corp., the defendant-employer made an offer of judgment in the full amount of the plaintiff’s claim plus reasonable attorney’s fees. Because the offer provided for all of the relief that the plaintiff could have received had she pursued the claim through trial, the offer constituted “full relief” of her claims. The employee did not accept the offer.

Ten days after the offer expired, the court held a scheduling conference. The offer was not addressed and the court provided for a 90-day period for discovery, after which the plaintiff could move for conditional certification of a class of putative plaintiffs. Thereafter, the employer moved to dismiss the lawsuit on the ground that the court lacked subject matter jurisdiction because the offer of judgment for full relief had mooted the plaintiff’s claim. In other words—there was nothing more that she could have recovered and, therefore, she no longer had a “legally cognizable interest in the outcome.”

Analysis

Standard of Law for Conditional Certification

Before addressing the mootness issue, the court first discusses the plaintiff’s burden at the conditional-certification stage. The court notes that there has been a split among district courts in the 3d Circuit, with some courts requiring the plaintiff’s pleadings to contain “substantial allegations,” with others requiring the plaintiff to make a “modest factual showing.” By no means is either test a difficult one to satisfy and, in all reality, the motion is likely to be granted. Nevertheless, the court did adopt the higher-burden test, which requires, the court explained, the plaintiff to produce some evidence “beyond pure speculation” of a factual nexus b/w how the employer’s policy affected her and how it affected other employees.

The Effect of an Offer of Full Relief on FLSA Collective Action

The court then turned to the main issue—whether an offer of full relief made pursuant to Rule 68 of the Federal Rules of Civil Procedure moots the claim of an FLSA plaintiff who has not yet moved for conditional certification. Like the 9th Circuit, the Third Circuit held that the answer is “no.”

The court acknowledged that an offer of complete relief will generally moot the plaintiff’s claim. But the court then went on to offer several policy-based reasons why this “general” rule limiting the jurisdiction of the federal courts should not be applied in the context of an FLSA collective action.

The court opined that, although Rule 68 was designed “to encourage settlement and avoid litigation,” the Rule can be manipulated in the class-action context to “frustrate rather than to serve those salutatory ends.” The court then states that, if the “general” rule were applied, the defendant would be able to “pick off” the claims of the named plaintiff and avoid certification of the class. This, in turn, would require “multiple plaintiffs to bring separate actions, which effectively could be picked off.” This application of the rule “obviously would frustrate the objective of class actions and waste judicial resources.”

Continue reading for my take on why this decision is so terrible for employers . . .

In My Humble Opinion

I respectfully disagree with the policy argument made by the court. Unfortunately, the court fails to understand the real-world application of the rules. In my very humble opinion, the court’s concerns are hypothetical only. If an employer makes an offer of full relief and the plaintiff accepts it, other potential plaintiffs are in no way discouraged from bringing their own claim. Instead, it becomes more likely that they will bring a claim, knowing that the employer offered to have judgment rendered against it.

In theory, this could mean that a flood of single plaintiffs file separate causes of action and overburden the court’s resources. But only in theory. In reality, the smart plaintiffs’ lawyer would make a demand to the employer before expending the cost to file a complaint. And, happy to prevent litigation, the employer is likely to pay the demand. Or, if no pre-suit demand is made, the employer is likely to make a similar offer of full relief to any plaintiffs who file subsequent complaints.

Another common reality is that the employer and employee settle the claim as a class action and provide for payment to all similarly situated class members. The only burden put on the court in that scenario is the review and approval of the settlement agreement.
It would not be in the employer’s interest to have each claim brought separately—remember, the employer would have to pay each plaintiff’s lawyer his reasonable fees, as well as the plaintiff’s alleged claim amount in order to constitute “full relief.”

The court’s holding leaves the employer-defendant with almost no way to avoid having to defend a class-action lawsuit. It cannot make an offer of judgment, even in the full amount of the plaintiff’s claim. Instead, it has no choice but to proceed with discovery and do its best to defend against the conditional-certification motion. Because the standard is so low at the conditional-certification stage, though, it’s more likely than not that the motion will be granted and a class will be conditionally certified.

At that time, the putative class members will receive notice of the lawsuit and the employer has to decide whether to risk the high cost to defend against a class action in the hope that the court denies the final certification motion. If it does not want to (or cannot afford to) expend the funds necessary to litigate a class-action lawsuit, then it is forced to settle and attempt to negotiate the best outcome possible.

In other words, the court’s holding means that employers who are faced with a collective-action lawsuit brought under the FLSA should be prepared to defend and/or settle with the entire class because there is no longer a way to avoid it.

Symczyk v. Genesis Healthcare Corp. (3d Cir. Aug. 31, 2011).