Documenting Employee Performance Issues and Teeth Cleaning – Not Fun, But Necessary

Employment Law Due DiligenceFor many employers, investigating and documenting poor employee performance issues is about as fun as going to the dentist. But a recent Michigan Court of Appeals decision illustrates the importance of both because it often becomes a critical defense against claims that the employee was disciplined or terminated for unlawful or discriminatory reasons.

Worker’s Compensation and Retaliation

In Larue v Gary P. Mulnex DDS, PLLC, the plaintiff was employed as a dental hygienist. She worked at this practice for 26 years before the defendant, Mulnix, purchased the practice. About a month after Gary Mulnix bought the practice, plaintiff was injured after she tripped on equipment at work. Co-workers assisted her in getting back on her feet and took her to a an urgent care facility. A workers’ compensation claim was filed and a month later, plaintiff was terminated.

At trial, the plaintiff relied on circumstantial evidence to show retaliation, which included that she was terminated from employment by a letter dated 12/13/10, which was soon after her 11/17/10 injury and subsequent workers’ compensation claim.

The trial judge disagreed and found that the plaintiff could not demonstrate a “causal link” between filing for workers’ compensation and her termination from employment. The judge reasoned that a “correlation between the time of the protected activity and time of the adverse employment action does not demonstrate a causal relationship.” The trial judge also concluded that the defendant employer met its burden of demonstrating a legitimate business reason for terminating plaintiff’s employment.

On this point, the employer offered evidence that plaintiff was terminated for job performance issues observed between the time the new owner purchased the practice and plaintiff’s injury. Such performance issues included on more than one occasion finding poor tarter cleaning and failure to timely provide x-rays. Bolstering the employer’s position, the dentist reviewed about 10 patient records for patients treated by plaintiff between 10/22/10 and 12/3/10, which showed “plaintiff’s poor job performance, including poor calculus cleaning and failure to timely provide x-rays.” Adding to this, another hygienist who worked for the defendant employer stated in an affidavit that she had also noticed tarter accumulation that was never treated on a number of plaintiff’s patients.

On appeal, the Court found the trial court did not make a mistake in determining that the defendant employer established a legitimate business reason for the plaintiff’s discharge, and that it was not a pretext. Accordingly, the court affirmed the trial court’s order granting the defendant employer’s summary disposition motion.

The Take-Away for Employers

This case illustrates two important points for employers. First, terminations are, unfortunately, a part of the employment relationship. And ideally if it becomes necessary to terminate and employee, your company will have documented the nondiscriminatory and legitimate reasons for that termination. It is this documentation that will become invaluable if the terminated employee later claims that determination was unlawful for any number of reasons, including retaliation or discrimination under federal or Michigan employment laws. In sum, sloppy documentation, like sloppy teeth cleaning, can cause significant problems.

Second and not as obvious, when it comes to purchasing a business, one of the most important areas of due diligence should focus on employee and HR issues. This is often where problems tend to fester and this is especially true where the the value of the business being purchased is derived from the quality of services provided or good will.

Returning to the purchase of the dental practice, in supporting the employer’s position that it terminated the plaintiff for legitimate reasons, the employer went back and examined prior patient records relative to cleanings performed by the plaintiff to find proof of subpar performance. Certainly that information was available prior to the purchase, but the purchaser had not examined it. Otherwise, the purchaser could have made an informed decision to not continue the hygienist’s employment or used the discovered deficiencies in patient care to negotiate a lower purchase price from the seller.

From our law firm’s experience in representing both sellers and buyers, deficiencies in employee matters or anticipated employment litigation can significantly lower the purchase price in negotiations or make it completely unattractive.

For more information about federal and Michigan employment law or conducting employment related due diligence when buying a business, contact attorney Jason Shinn. Since 2001, Jason has represented employers in complying with federal and Michigan employment laws. He also routinely collaborates with purchasers and their legal and financial teams as an employment law specialist when it comes to evaluating human resource and employeee issues involved in the purchase of a business or making HR related improvements to a seller’s business to increase its value.

 

An Uber Example of Getting Caught with Your Hand In Your Employer’s Cookie Jar

Trade Secret MisappropriationUber and Lyft are both internet and mobile application based technology companies offering a peer-to-peer ridesharing platform. Or for less tech-speak, they are involved in what is generally described as the “sharing economy.” However, a recent lawsuit makes clear that sharing has its limits.

Specifically, Lyft is suing a former executive (Lyft v Uber (PDF)), Travis VanderZanden, for breaching his confidentiality agreement and fiduciary duty and after he jumped ship to join Lyft’s chief rival, Uber. According to the complaint filed in the lawsuit, the former executive copied vast amounts of confidential information on his way out the door. Uber has denied that Mr. VanderZanden has “shared” any of this information with Uber. 

These claims and allegations are by no means extraordinary. But they do provide a perfect roadmap for both employers and employees to follow when it comes ending one employment relationship in order to join a competitor. But instead of taking an all-out road trip to address all of those issues, two points stand-out.

How to Get Guarantee Your Former Employer Will Sue You

As to the firs issue, a little background for what not to do if you are an employee about to join a competitor: Lyft’s lawsuit alleges that VanderZanden informed the company’s founders of his plans to resign on August 12 and agreed to meet with the founders on August 15. But VanderZanden cancelled that meeting and suggested they speak after the weekend.

According to the complaint, it was a busy weekend for Mr. VanderZanden. Lyft alleges that he backed up a number of emails and confidential documents to his personal home computer and mobile phone before handing his company computer back. These actions were discovered after Lyft conducted a forensics analysis of VanderZanden’s company-issued laptop. The analysis further revealed that months prior to the departure, Mr. VanderZanden synchronized his personal Dropbox account with his Lyft laptop, copying a “significant number of Lyft’s most sensitive documents” in the process.

So the first issue for both employers and employees is really two sides of the same coin. From an employee’s perspective, assume your digital fingerprints will point to every piece of digital information you touched, e.g., every file, every email, every document, etc. And if those fingerprints suggest you took you former employer’s information to your new employer, be prepared to be sued.

And because these digital fingerprints provide valuable insight, employers need to have a plan in place to preserve this likely treasure trove of digital evidence. This is because the absence of such evidence may eliminate an expensive Don Quixote-like endeavor against the former employee. There is nothing worse than spending A+ resources on a C- employee or situation.

Conversely, the presence of such evidence will be needed to convince a judge that injunctive relief is appropriate and to otherwise support claims against the former employee. As part of your company’s plan, you’ll need to address how to preserve, analyze, and use the digital evidence.

Play a Strong Hand; Bluffing in Litigation Can Be Costly Continue Reading

Michigan Legislative Landscape for LGBT Discrimination

LGBT DiscriminationLast year, some Michigan politicians introduced proposed legislation to amend Michigan’s main employment civil rights statute, the Elliot-Larsen Civil Rights Act (ELCRA), to protect employees who are gay from discrimination. That legislation, however, didn’t go anywhere. And going into the elections this November the future of that legislation is, at best, uncertain and, more likely, not going anywhere for the foreseeable future.

Current LGBT Legislation Landscape

Specifically, as Michigan Public Radio noted, Frank Foster, a Michigan Republican Representative, was a sponsor to legislation to add LGBT protections to Michigan’s ELCRA. But he lost in this past August primary to Tea Party challenger Lee Chatfield.

It is far from certain that Mr. Foster’s backing for LGBT protections was the political nail in his coffin: Michigan Public Radio noted that Foster was identified as “one of Lansing’s most lobbyist-wined and dined. It’s never good when an incumbent is targeted as having ‘gone native’ in Lansing or D.C.” But LGBT rights were certainly an issue. Making it further unlikely that prohibitions against LGBT employment protections will not go anywhere is the fact that Gary Glenn, co-author of Michigan’s constitutional amendment banning same-sex marriage, also one his primary.

This Republican hostility towards LGBT equality is in stark contrast to Gov. Rick Snyder, a Republican, who has previously said that he would like to see Michigan lawmakers amend the state’s Elliott-Larsen Civil Rights Act to include language about sexual orientation and gender identity before the end of the year. However, Governor Snyder has, to date, not shown the political backbone to carry this issue within his Republican party.

Conversely, on the Democratic side of the aisle, pro-gay rights candidates won a number of primaries and – for the first time in Michigan political history – two openly gay candidates won their primaries for open House seats. Additionally, the cities of East Lansing and Jackson passed resolutions calling on the Michigan Legislature to add protections based on sexual orientation and gender identity without further delay. Also, Ann Arbor, Kalamazoo and Sterling Heights have recently passed resolutions in support of statewide nondiscrimination protections for gay and transgender people.

The Future for LGBT Legislative Action?

If there is a takeaway, it is being pro-gay rights is a liability on the Republican side of the fence, being gay is not a barrier to winning a Democratic seat, and a growing number of communities support prohibitions against discriminating against members in the LGBT community. For more information about restricting LGBT discrimination see Sexual Orientation Discrimination and Michigan Law – Is it a Time for a Change?

Drilling Home the Difference Between an Independent Contractor and Employee

Independent Contractor versus EmployeeA common question that business owners raise involves the use of employees versus independent contractors. The use and classification of an individual as an employee or independent contractor is one of the more complicated employment law issues that business owners will deal with and resolving such issues will depend upon circumstances.

Consider one test, the economic reality test, is used for determining employment status when it comes to social legislation such as worker’s disability compensation. However, another test, the “control test,” is used when it comes to tort actions. And both of these tests have multi-faceted factors that need to be considered under the specific circumstances).

But a recent Michigan Court of Appeals decision (Cole v. The Bada Bing Club, 2014) involving an employee/independent contractor issue drills home the point (quite literally) one of the significant differences between the two statuses and why it matters to employers.

The Beating at the Bada Bing Club

Specifically, Dennis Cole was severely beaten in the basement of the Bada Bing Club by the club’s manager, Henry Ramirez and three other individuals. The following is taken directly from the Court of Appeals opinion:

Plaintiff was taped to a chair, beaten with a gun, punched and kicked, and drilled through the hand with an electric drill. The men were all convicted of criminal charges for their involvement.

Plaintiff sued the Bada Bing Club and Atlantis Lounge Inc. Atlantis Lounge was the sole Owner of the Bada Bing Club, which was an assumed name filed by Atlantis. Atlantis Lounge, however, verbally contracted with Henry Ramirez (the guy involved in beating Plaintiff) who solely managed and operated the Bada Bing Club.

Lawsuit Turns on Employee or Independent Contractor Status

A central issue on appeal was whether Ramirez was an employee or an independent contractor. If Ramirez was an employee of Atlantis Lounge, then Atlantis could be held directly liable for negligently hiring, training, or supervising Ramirez. In contrast, under Michigan law there is no comparable cause of action for the negligent hiring or retention of an independent contractor. In other words, if Ramirez was an independent contractor then Atlantis Lounge was off the hook.

Normally a court will look to the employment/independent contractor agreement as a starting point for determining the true status of the individual. However in this case, there was an unsigned agreement that Ramirez denied having any knowledge about. Thus, Atlantis was left with arguing that there was a verbal agreement that made Ramirez an independent contractor. Fortunately for Atlantis Lounge, it was able to present additional evidence supporting showing that Ramirez essentially paid for the opportunity to operate the Club as an independent contractor without interference from Atlantis Lounge, Inc. as to the day-to-day operations.

For this reason, the Court concluded that Ramirez was an independent contractor and not an employee. And this conclusion meant that Atlantis could not be liable for the actions of Ramirez.

The Take-Away

Whether an individual is an “employee” or an “independent contractor” is critical when it comes to many employment law issues. For example and in addition to the above example, an important distinction between an “employee” and in “independent contractor
” is that under Michigan law and the Elliott Larsen Civil Rights Act and the Michigan Whistleblower Protection Act do not apply to independent contractors.

However, significant legal problems can and often arise when employers incorrectly label an individual’s employment status as “independent contractor” when they are in fact “employees” under the applicable law. The first step in avoiding this problem, starts with a solid understanding about the distinction between employees and independent contractors and then having in place a defensible independent contractor agreement that accurately reflects the relationship between the individual and business.

For more information about employment and independent contractor agreements, or compliance with federal or Michigan employment laws, contact employment attorney Jason Shinn.

Michigan Court Cuts Down Non-Compete Agreement

noncompete agreementAbraham Lincoln once noted that if he had six hours to chop down a tree, he would spend the first four sharpening the axe. For employers, that sort of up-front attention to details is especially important when it comes to non-compete agreements. Otherwise, as a recent Michigan Court of Appeals illustrates, the only thing likely to be cut down is the employer’s noncompete agreement and any chance of enforcing it against a former employee.

Specifically, in Huron Technology Corp. v Sparling (9/11/2014) the Plaintiff (the former employer) sued Defendant (the former sales employee) for allegedly breaching a noncompete agreement. The plaintiff sought to enforce the non-compete agreement after the Defendant resigned from Plaintiff and went to work for another company in the same industry.

The trial court found that the non-compete agreement, although reasonable in duration and geographic scope, was unenforceable as a matter of law because it did not protect plaintiff’s reasonable competitive business interests and was an unreasonably broad prohibition on field of employment. The former employer appealed this decision.

The Court of Appeals agreed with the trial court’s decision. The Court acknowledged that while Michigan courts have upheld similar language as reasonably prohibiting employment with another business that provides the same product or services as a former employer, the current case was different enough in that the post-employment restriction was actually broader than previously enforced noncompete agreements.

By way of example, the Court cherry-picked the case of Coates v Bastian Bros, Inc, (2007). In that case the noncompete agreement was enforced. But the Court distinguished Coates because the non-compete restriction only prohibited a former employee from working for “any enterprise in competition with the Company” meaning a business that, considered in its entirety, was in competition with the former employer.

In contrast, the Court took the position that the restriction in Huron Technology’s noncompete agreement encompassed a significantly broader range of businesses in that the Defendant was prohibited from working for a business that offers a single product or service that is “competitive” with any product or service offered by the Plaintiff, regardless of whether the business is an actual competition with the former employer. In other words, the Court made the call that this restriction meant that the Defendant in Huron Technology was prohibited from working for any business that was in “remote competition with” Plaintiff and that was unreasonably restrictive. Clear as mud, right?

The Take-Away for Employers and Employees

Going back to President Lincoln, this decision should be a wake-up call for employers to sharpen their employment agreements, i.e., carefully review and (probably) update their noncompete agreements. In this regard, it is a mistake for employers to assume they can simply recite the general rule that under Michigan law a noncompete agreement is enforceable if it is within an area code of protecting the employer’s reasonable competitive business interest, and it is reasonable in duration; geographical scope; and line of business. With this in mind, a few points are worth remembering:

  • First, an employer’s reasonable competitive business interest does not include protecting against the employee’s general knowledge and skill acquired during the employment.
  • Second, Courts are often exceptionally critical when it comes to enforcing a noncompete restriction. And it is not uncommon for courts to go out of their way to not enforce a non-compete restriction. For example, in reaching its decision, at one point in the Huron Technology decision the Michigan State Court of Appeals cited to a Michigan Federal District Court case, which in turn cited to Iowa law in support of a legal conclusion as to why Huron Technology’s non-compete restriction was not enforceable. For this reason, if a non-compete restriction is important to the success of your business then make the investment to have it properly drafted.
  • Third, and building on the preceding point, the Huron Technology case illustrates that a non-compete restriction is not a “one-size fits all” situation. Instead, noncompete restrictions need to be carefully drafted for your particular business situation in terms of the industry and employee position. What may be enforceable in one industry or for one position may not be in another situation.

Contact attorney Jason Shinn for more information about Michigan non-compete law, including drafting and enforcing noncompete restrictions.

Should My Business Use an Arbitration Agreement for Employment Disputes?

Employment Dispute ArbitrationA frequent question that employers have when it comes to employment contracts and policies is whether the company should use an arbitration procedure for resolving disputes.

While there is not a “right or wrong” answer to this question, I tend to recommend employers reconsider using arbitration for resolving employment disputes. Two important factors for recommending against employer required arbitration resolutions programs are as follows:

Initial Cost of Arbitration vs. Court Proceedings

When an employer is sued in state or federal court there is no court fee imposed on the employer at the outset.

In contrast, employers relying on arbitration often rely upon the American Arbitration Association (AAA) for administering the procedure. Under AAA’s Employment Arbitration Rules and Mediation Procedures, employers are looking at fees that range from $1,350 to $1,800 for responding to an employee’s claim and $1,550 to $2,000 for initiating a claim against an employee.

In judicial proceedings, neither side pays for a judge’s time. That is not true for arbitration. Again, under the AAA’s Employment Arbitration Rules and Mediation Procedures, hearing day fees are charged as follows:

  • For each day of hearing held before a single arbitrator, an administrative fee of $350 is payable by the employer.
  • For each day of hearing held before a multi-arbitrator panel, an administrative fee of $500 is payable by the employer.

In the big picture, these costs may make sense. But these are costs, nonetheless, that need to be factored into an employer-required employment arbitration program.

Arbitrators vs. (Run-away) Juries

One of the most common reasons to choose arbitration over judicial proceedings is to avoid a jury trial. Or more specifically, the avoidance of a potentially plaintiff-friendly, and overly-generous jury.

In contrast, arbitrations are usually heard by a single arbitrator or three-arbitrator panel who often have substantial knowledge and experience in the area of employment law. Certainly not a guarantee an employer will receive a favorable decision, but the belief that arbitrators tend to be both more predictable in decision-making and reasonable in awarding damages than juries can provide a warm and fuzzy feeling to employers.

But this concern overlooks reality; very few civil cases are actually tried before a jury. For example Hon. Denny Chin noted that in the twelve-month period ending September 30, 2011, only 1.1% of civil cases—all civil cases in the country—reached trial, both jury and nonjury. See Summary Judgment in Employment Discrimination Cases: A Judge’s Perspective (2013). Summary judgment – a motion filed to dispose of all or part of a case – has become one of the most common ways to resolve employment discrimination cases, which eliminates a jury from deciding the matter. 

In sum, analysis of federal case law shows that employees who sue over discrimination lose at a higher rate in federal court than other types of plaintiffs and they judges are more likely to dismiss their cases.

Conclusion

Considering whether to implement a system requiring the arbitration of employment disputes will depend upon your company’s particular circumstances, goals, and historical HR risk-management issues. In weighing the advantages and disadvantages of employment arbitration, the two considerations discussed above are among the many that employers will need to consider. 

For more information about investigating and responding to employment disputes, including drafting employment disputes policies and procedures, contact attorney Jason Shinn. Mr. Shinn is a Michigan employment attorney who has collaborated with a range of employers since 2001 to address employment law compliance issues, as well as defending those clients in state and federal courts. 

Proposed Changes Affecting Employment at Michigan Home Help Care Agencies

Regulations and Red Tape When it comes to establishing basic terms and conditions of employment, such as hiring someone as an independent contractor or as a W-2 employee, business owners generally enjoy significant leeway. But this could change for certain Michigan businesses providing home help care services under proposed changes by the Michigan Department of Community Health (MDCH). This is because the MDCH is proposing to radically intrude into a company’s employment operations by prohibiting the hiring of independent contractors and restricting the hiring of certain family members.

Specifically, the MDCH in a notice of proposed policy changes bulletin advised that the following restrictions will be implemented beginning October 2, 2014:

  • No Independent Contractors – The use of contract employees (1099 subcontractors) will no longer be allowed in the Home Help program. Thirty days prior to this deadline, MDCH will notify the beneficiaries served by the agency, the beneficiaries’ DHS Adult Services Specialists and the provider agencies so that beneficiaries can make alternative arrangements, if necessary.
  • Restricted Use of Family Members - Members of a beneficiary’s immediate family (parents, adult children or siblings) will not be able to provide Home Help services to the beneficiary as an employee of an agency. A beneficiary’s family members (excluding legally responsible adults) can provide services to that beneficiary as individual Home Help workers.

The deadline for submitting a response to these proposed changes is August 31, 2014. As noted above, if these changes are implemented, they would become effective October 2, 2014.

For background purposes, the Home Help program is administered by the MDCH in cooperation with the Michigan Department of Human Services (DHS). The Home Help program provides in-home personal care services to individuals who need hands-on assistance with Activities of Daily Living (ADLs) and assistance with Instrumental Activities of Daily Living (IADLs). MDCH is responsible for approving agency providers for participation in the program.

A number of our law firm clients would be affected by these proposed changes and we are currently evaluating the appropriate response and possible legal challenges if the regulations are actually implemented. If you are a home help care service provider with questions about this article or these proposed regulations, feel free to contact attorney Jason Shinn.

Common Mistakes that Derail Enforcement of a Noncompete Agreement

Common Mistakes that Derail Noncompete AgreementsOur law firm was recently hired to represent clients – former employees – being sued for allegedly violating a noncompete agreement, trade secret misappropriation, and other business related claims.

As is typical with these sorts of cases, the Plaintiff, the former employer, was seeking injunctive relief in the form of a temporary restraining order (TRO) to shut-down the former employees’ competing business. Our law firm filed an opposition to the Plaintiff’s motion for TRO and argued the motion before the judge.

After the legal dust settled, the judge agreed with our position that a TRO should not be issued and “strongly” encouraged Plaintiff to consider settling due to issues we raised about the noncompete agreement. While the case is far from over, winning this initial TRO “battle” goes a long way towards winning the noncompete war. 

Common Mistakes in Enforcing a Noncompete Agreement

Each noncompete and business dispute is certainly unique, but our law firm’s recent defense against the above noncompete violation relied upon common fact patterns in such disputes. And these issues should be a cautionary tale for employers and individuals.

  • First, noncompete agreements need to be consistent within the agreement itself and also in the larger context of other employment agreements and policies. This point is especially critical for employers who, under basic contract law, should expect to have any ambiguity construed against the employer. 
  • Second, noncompete agreements are going to be enforceable only to the extent they are reasonable. And what is reasonable in one business context is not necessarily reasonable in another.

In our experience, this is a point of frustration for both employers implementing a non-compete agreement or advising entrepreneurs looking to start a competing business; Both want a bright-line conclusion of whether the noncompete agreement is or is not enforceable.

Seldom will an attorney be able to give such a conclusion. Our response to this issue, however, is to provide a client with a range of potential outcomes, identify where the client is comfortable in terms of being on this range, and then working to understand  the clients business to maximize the factors for enforcing a noncompete agreement or distancing and/or distinguishing why the new business or former employee is not in violation of the noncompete agreement.

For more information about Michigan noncompete law, as well as drafting, enforcing, or defending against a noncompete violation, contact attorney Jason Shinn. Since 2001, his practice has focused on noncompete legal issues involving both employers and employees.

Michigan Experiments with Business Courts

Michigan Noncompete LawsuitsIt is not often that the legal system and innovation are used (positively) in the same sentence.

However, Michigan has implemented a statewide innovative “business court” system to handle legal disputes that fall into a number of categories associated with business matters.

I’m currently sitting in Wayne County Circuit Court’s Business Court for a breach of contract, non-compete, and related claims. This court includes Detroit and surrounding metro areas. The Michigan Supreme Court appointed Judge Daniel Ryan, Judge Susan Borman, and Judge Brian Sullivan as the designated Business Court Judges for Wayne County.

A few of the requirements for business court cases in general include:

  • All Business Court cases must be eFiled and will be assigned by blind draw to one of these judges.
  • If the case involves a business or commercial dispute as defined in the Business Court Act, MCL 600.8031, pursuant to MCR 2.112(O), parties must verify that the case is subject to being assigned to the Business Court. Breaches of noncompete and employment agreements fall into this category.
  • When filing a Business Court case, the party filing a complaint must give written notice with the initial pleading that the case qualifies for the Business Court. 
  • Parties are required to attach a Notice of Assignment to the Business Court form to the complaint (or responsive pleading if the case qualifies for the Business Court but was not noticed as such in the initial complaint, or if the counterclaim qualifies the case as a Business Court case.
  • Effective September 1, 2014, if a Business Court case is not identified as such using the Notice of Assignment or otherwise verified, and it is later identified as such, a sanction of up to $100 may be assessed after a hearing pursuant to MCR 2.114 as set forth in the Business Court Eligibility/Show Cause Order.

For more information on what criteria to use in determining whether a case qualifies as a business Court Case see this link – Notice of Business Court Implementation. For more on the Wayne County Circuit Court’s E-Filing Guidelines, please see Wayne County Circuit Court’s website.

Closing Thoughts on Michigan Business Courts

My law firm has represented clients in all three major Metro Detroit Business Courts: Wayne County, Oakland County, and Macomb County. These matters involved non-compete disputes, breach of contract claims, and related business disputes.

Based on this experience, the common focus businesses will find is on early settlement discussions and an expedited (comparatively speaking) litigation schedule. For example, in one noncompete dispute pending in Wayne County Circuit Court, the judge ordered dispositive motions presenting any questions of law to be filed prior to a settlement conference that was scheduled shortly after the complaint and answer being filed. While such an aggressive approach is not always successful, it was in this instance in that the case settled for something close to nuisance value and an amount well short of the cost of conducting discovery.

In another business court case in Oakland County, the parties were given a shortened discovery schedule and the case settled at mediation approximately 8 months later – a time frame equivalent to a competitive 100 yard dash time.

Litigants in business courts will also find that judges are more active in trying to resolve discovery disputes. In another matter, in Macomb County Circuit Court, our judge told the attorneys that before any motions could be filed, to first contact his office with the intent being to first try and resolve the matter without the need for preparing, filing, and appearing at a hearing on the motion.

Responding to Employee Absences Following Historic Metro Detroit Flood

Natural Disaster and Employment Leave of Absences

Flooded Metro Detroit Highway

This past week Metro Detroit was hit with a record rainstorm. After it was all said and done, many of the area freeways and streets were literally underwater and homes and basements were flooded with water and sewage.

It was also days before some of the affected roads were fully reopened. An understatement to say it was not a good day for the “D.”

What is also not good following a natural disaster like this is not understanding how employment laws may be implicated. For example, in Lane v. Pontiac Osteopathic Hosp., (2010), a case filed in the Eastern District of Michigan, an employee claimed it was medically necessary to clean the flooded basement because his mother had hepatitis and the stagnant water was a “breeding ground for the disease.” 

In response, the the employee took off eight days of work without prior employer approval. He conceded that four of the days were “probably” not covered by the applicable employment statute (the Family Medical and Leave Act). But the employee claimed three days should have been covered because he was working to clean up flooding at his mother’s home.

The court, however, disagreed and concluded that the absence was not medically necessary. In this regard, plaintiff had previously obtained medical certification showing that he needed to assist his mother with meals and to transport her to doctor’s appointments. But that certification did not extend to the clean up activities due to the flooding and, therefore, was not covered by his statement of medical necessity.

The court also believed that the plaintiff employee’s leave did not qualify for FMLA leave because there was no showing that his mother’s basement had to be immediately cleaned for her basic medical, hygienic, or safety needs and that he had to do it because she could not. Accordingly, the court granted summary judgment on the employee’s FMLA interference claim.

Closing Thoughts

Employers, especially small businesses, are often torn between two competing interests: Employers often want to help their employees to recover following a natural disaster. But this motivation can run up against the reality of running a business, e.g., business continuity and continued revenue. 

But by planning ahead and recognizing the responsibilities under the applicable employment laws following a natural disaster, employers can help employees to understand what options exist and do not exist. An important step for employers to take is making sure to provide employees with information on how to report to work following an emergency. It is equally important, however, for employees to make sure to communicate with their employers and understand their options. 

With this information, both employees and employers will be in a better position to respond when disaster strikes, while at the same time minimizing exposure to liability and helping employees to recover. 

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