Michigan Employment Law Advisor - Leading Insight & Analysis of Employment Law Matters

In a rare decision favorable to Michigan whistlblower plaintiffs, the Court of Appeals reversed a trial court's decision to dismiss a whistleblower case against an employer. But the real lesson that employers and their HR professionals should take from the decision is that timely decision making in the termination process is critical, as well as accurately documenting deficiencies during the employment relationship.

In short, if a decision to terminate an employee is made, make sure that decision is supported by facts and then follow through as soon as possible. And if your company's HR policy is an impediment to swift action, it needs to be revised to avoid situations like that discussed below.

The Factual Time Line Leading up to the Whistleblower Claim 

The case, Furhr v Trinity Health Corp., (2013), involved a plaintiff who was hired by the hospital, a subsidiary of Trinity Health, in 2007. He was promoted to a newly-created position that was to address problems with inconsistent accounting of the hospital's inventory. His job duties included responsibility for controlling the hospital's surgical inventory and for supervising a staff of subordinates.

Plaintiff's tenure with the Hospital was not without issues: On numerous occasions between the time he was hired and April, 2010, plaintiff's subordinates complained about plaintiff to his supervisor. The hospital responded by hiring a "coach" to work with plaintiff in December, 2009 on the interpersonal issues these subordinates had complained about. During the same time period, the hospital's inventory continued to fluctuate.

In contrast, Plaintiff's two annual performance reviews were positive and there was no mention of the fluctuating inventory issues in the reviews.

Fast forward to the beginning of April, 2010 where the process and decision to terminate plaintiff was underway: (i) The employer's CFO approached another employee in the hospital's finance department, and asked if she would be interested in assuming plaintiff's job "if there was a change in staffing.;" (ii) That same employee also testified that the Hospital's Director of Finance and Budget, told her that a decision had been made to fire plaintiff; (iii) On April 8, 2010, the Hospital's CEO sent an email to the hospital's vice president that stated in relevant part: "that [plaintiff] . . . is on the way out and that Amy Moored from finance will be assigned to get the OR inventory corrected.;" and (iv) Consistent with the preceding, the Vice President testified that the decision to terminate plaintiff was made in the first week of April, 2010.

But as of May guess who is still employed? And in between April and May, coincidentally or otherwise, plaintiff testified that he "became aware" of potential significant wrongdoing by one of the hospital's vendors relative to the inventory and billing for restocking. And prior to plaintiff being terminated on May 10, 2010, he had reported the overbilling issue to the U.S. Attorney's office.

The Whistleblower Lawsuit

Although the employer had, by all accounts, made the decision to terminate the plaintiff in April, the preceding time line gave plaintiff the factual and legal framework to build a lawsuit alleging that his termination violated Michigan's Whistleblower Protection Act.

Under the WPA, an employer may not discharge or otherwise discriminate against an employee "because the employee . . . reports or is about to report . . . a violation or a suspected violation of a law or regulation or rule . . . to a public body." MCL 15.362.

In response to the lawsuit, the employer and its affiliates filed a motion for summary disposition arguing that substantial evidence existed showing that the decision to terminate plaintiff preceded his call to the U.S. Attorney, and therefore plaintiff could not establish that he was terminated because of his whistle blowing activities.

The Court agreed. But the Court of Appeals, almost begrudgingly, took a different view and reversed the dismissal of the plaintiff's whistleblower protection claim because certain fact issues existed that should be resolved by a jury:

[I]t is possible, perhaps even probable, that  a jury would not find plaintiff's testimony credible in light of the conflicting evidence ... Nonetheless ... [i]t is the jury's role to determine issues of credibility ... not the trial court on a motion for summary disposition ... credibility issues are for the jury.

The Take-Away

It is important to note that the employer, by its own admission, made the decision to terminate the employee sometime in the beginning of April. Yet, that termination did not take place until approximately a month later and after the plaintiff contacted the U.S. Attorney's office.

It is easy to criticize the employer's apparent glacial-like process for terminating employees. But in my experience as an employment law attorney, such a process is very common. Unfortunately, equally common is the danger that what had been clear, unlawful reasons for terminating an employee are called into question by intervening events - legitimate or otherwise.

Accordingly, here are two important considerations every employer should include in the HR strategies:  

1. Termination decisions rarely happen in a vacuum, i.e., given enough lead time, the individual to be terminated will often have some knowledge that the ax is about to fall. And employers should be very concerned about limiting that lead time in order to limit the risks that the individual can set the stage for events prior to the termination actually taking place. Examples include stealing contact, pricing, or trade secret information, sabotage, or suddenly discovering a good conscious or reason to make a report to law enforcement. 
2. Additionally, before making the decision to terminate an employee, make sure the basis for the termination is not unlawful and your company should have two or three reasons to support this decision. Yes under Michigan law, like most states, employment is presumed to be at-will, which means an employer does not actually need a reason to terminate an individual. But from a "best practices" and practical stand-point, not having a reason and not being able to document a reason is a recipe for operational and legal disaster.

For more more information about employment law compliance or Michigan's Whistleblower Protection Act, contact Jason M. Shinn whose legal practice focuses on Michigan employment law compliance and litigation including unlawful discrimination, sexual harassment, and investigating employee misconduct. Also, feel free to connect with Jason on Twitter.

One of the most frustrating aspects for any employer defending a claim of employment discrimination is that you're stuck with the cards dealt to you. That is to say, you employers and their lawyers can't pick the facts. And sometimes no matter what legal defenses you think your company has when it comes to defending a discrimination claim, those facts will intervene, often stubbornly so.

Take for example, a 2012 pregnancy discrimination claim (Chapter 7 Trustee v Gate Gormet, Inc. (PDF)) where the employer was dealt the equivalent of a royal flush of bad facts in terms of defending the pregnancy discrimination claim.

In terms of a pregnancy discrimination claim, as amended by the Pregnancy Discrimination Act, Title VII prohibits employers from discriminating against employees because of pregnancy. 42 U.S.C. § 2000e-2(a)(1)-(2) (prohibiting discrimination "because of . . . sex"); id. § 2000e(k) ("The terms 'because of sex' or 'on the basis of sex' include, but are not limited to, because of or on the basis of pregnancy . . . .").

Against the backdrop of this statute, consider the following undisputed facts that were presented in the pregnancy discrimination claim against the employer:  

• First, the human resource director testified in her deposition that pregnancy was a "substantial or motivating factor" in a manager's decision to fire the plaintiff.
• Second, the manager who terminated the pregnant employee was reprimanded for violating the employer's anti-discrimination policy. 
• Third, and if there was any doubt about the two preceding points, the employer noted in writing in the manager's reprimand that by telling the plaintiff she was fired because of her pregnancy-related medical restrictions the manager not only violated the anti-discrimination policy but he had also acted in a way that constituted discrimination in violation of Title VII.

It is not noted in the court record, but based on common courtesy and good manners I hope the plaintiff's employment attorney sent a thank you card to the company for the testimonial gifts.  

What can employers take away from cases like this?

First, supervisor training must be an ongoing process and not a one time event. While the facts are not clear in the above case as to whether the particular supervisor training underwent any sort of discrimination training, it is clear that the supervisor did not follow the employer's policy as it relates to discrimination. But for this failure, the employer would have likely been able to avoid a costly legal defense and subsequent damages. 

Second, a company's managers and supervisors need to assume that everything will end up on the front page of their local paper. While this may be an overused cliche, it is accurate to assume that anything that makes an employer look bad in relation to a discrimination claim will make the top of a plaintiff's exhibit list to be used at trial. For this reason, employers and management will often benefit from having a second set of eyes that belong to an attorney looking at any correspondence, reprimands, file memorandum, etc. that relate to an employment decision that may relate to prospective litigation. 

Third, one of the most critical and valuable services employers should expect from their legal counsel is a thorough, even brutally honest, assessment of the good, the bad, and the ugly when it comes to the facts and claims involved in discrimination lawsuit. Such an assessment should drive the defense strategy, which may need to shift to conserving legal costs in what is shaping up to be a lost cause and turn to settlement strategy.

Fourth and building on the preceding point, bad facts do not always mean a defense of an employment discrimination claim should be abandoned. As an attorney, I've had absolutely horrendous facts in defending a claim, but was able to prevail on the legal-side of the equation. However, by recognizing this and getting the client to agree, we were able to save the client legal fees by foregoing "scorched earth" litigation related activity (i.e., discovery and depositions) that were not likely to produce information to overcome the bad facts involved in the case.       

For more information about pregnancy discrimination or employment discrimination in general, contact Jason Shinn, who focuses on Michigan employment law and federal employment legal issues. This focus includes collaborating with employers in preventative counseling and investigating employee misconduct.  

For many, sharing on Facebook, Twitter, Linked In, and other social media-related websites is a daily routine. But what happens to that routine when a person becomes involved in litigation? This is a question that almost always has to be answered in the context of employment discrimination lawsuits.  

The answer to this question, however, will often depend on the circumstances. This point recently played out in a lawsuit filed by a former employee based upon her race as well as a hostile work environment and retaliation (Potts v. Dollar Tree Stores, Inc., Mar. 20, 2013 under under Title VII of the Civil Rights Act of 1964 (as amended, 42 U.S.C. § 2000e et seq.) and the Equal Pay Act (29 U.S.C. § 206). 

This lawsuit is still ongoing, but an interesting issue on the issue of social media was recently decided by the trial judge in the litigation phase called "discovery." Discovery in litigation refers to the phase where parties are permitted to obtain - through written questions, requests to produce information such as documents or digital information, or through deposing a person.

Discovery is intended to be broad and allows a party to obtain "discovery regarding any nonprivileged matter that is relevant to any party's claim or defense" or that is "reasonably calculated to lead to the discovery of admissible evidence." 

Relying on the broad scope for discovery, the defendant employer sought access to a number of areas and filed a motion to compel Plaintiff to produce the following:

• Any relevant documents maintained on any computer in Plaintiff's possession or control including those documents and/or emails stored in any online email account, such as Plaintiff's Yahoo! or AOL accounts;
• Any computers or digital storage devices used by either Plaintiff during and after her employment with Defendant;
• Emails that pertain in way to this lawsuit;
• Documents, photographs, or other information concerning Dollar Tree stores or Plaintiff's claims;
• Any non-privileged communications or documents exchanged between Plaintiff and Trowery;
• Facebook and/or other social media data;
• Plaintiff's complete tax returns and all attachments thereto from 2007 to the present; and
• Plaintiff's application and other materials submitted to the Social Security Administration in connection with her claim for disability benefits.

While Plaintiff produced some information, she contended that her former employer was not entitled to full access to Plaintiff's Facebook pages. In deciding the issue in favor of the plaintiff, the trial judge first noted that the Sixth Circuit (the jurisdiction that Michigan is in) had to to rule on the scope of discovery of private Facebook pages, but other courts have concluded:

[M]aterial posted on a private Facebook page, that is accessible to a selected group of recipients but not available for viewing by the general public, is generally not privileged, nor is it protected by common law or civil law notions of privacy.  Nevertheless, the Defendant does not have a generalized right to rummage at will through information that Plaintiff has limited from public view. Rather ... there must be a threshold showing that the requested information is reasonably calculated to lead to the discovery of admissible evidence. Otherwise, the Defendant would be allowed to engaged in the proverbial fishing expedition, in the hope that there might be something of relevance in Plaintiff's Facebook account.

Production of plaintiff's computer was a different story. Specifically, the Court concluded that information stored on the computer could lead reasonably lead to the discovery of admissible evidence and, therefore, would be produced. But that production would take place with court restrictions that included using a third-party neutral to conduct the computer search, which would based on agreed upon key words to assess whether Plaintiff's computer contains relevant information.

The Take Away

The Potts case is not a binding decision for Michigan employers and employees. But it is a good reminder for both that it is not going to be a good day in court if your judge believes your employment discrimination strategy involves a "fishing expedition" to "rummage" through the opposing party's digital drawers. 

It is, therefore, important to carefully consider what information you will ask a plaintiff or defendant to provide. This consideration needs to further drill down to the rational basis for asking for such information and being able to articulate a reasonable explanation for why a particular social media repository is likely to be a legitimate source of production relative to the litigation.      

But as the Potts case illustrates, it is mistake to assume that just because discovery is supposed to be "broad" (which often is one of the laziest cliché in all of law) that you'll be able to get away with pursuing a digital fishing expedition. 

And even if you could, casting a wide discovery net in litigation can be costly. Consider that even a single laptop, an email account, and one or two social media accounts will often yield gigabytes of information that will require attorney time to review and process it. On top of this, you'll often end up paying all or some of the cost for a computer forensic specialist to conduct the review. This means that if discovery is not intelligently planned you'll end up with a very expensive fishing expedition with no guaranteed substance to show for it.  

I'm not afraid to admit that I'm a comic book geek. And while Spider Man was not my favorite superhero, a favorite quote of mine is associated with him: "With great power comes great responsibility." 

While making the leap from superhero to lawyer probably requires some superhuman power, no extraordinary effort is needed in making the case for applying this quote to attorneys and the lawsuits they file on behalf of their clients. 

The impetus for this diatribe comes from a recent lawsuit between two co-workers - Plaintiff Farhoud and Defendant Rosario - who worked in a large Michigan hospital. Defendant Rosario had allegedly overheard Aiman ask a fellow co-worker, "Can you pull this sheath for me before I have to go shoot somebody?" 

Was this just an off-color remark or a warning sign for something more sinister? Certainly in light of the steady stream of actual and planned violence that is a tragic reality, one could accept that Rosario believed that this comment was "unsettling" and inappropriate, and understand why she reported it to her direct supervisor.

And one could certainly understand that in response to this report, why the hospital's security would confront Aiman who would later testify that he had no recollection of making the comment, but if he did make it, the comment was only made in jest. No disciplinary action was ever taken against Aiman as a result of Rosario's report.

Lawyers Able to Make Huge Factual Leaps in a Single Lawsuit

And at this point in our story is where a lawyer could have saved the day (or at least salvaged some respect for the profession) by exercising responsibility in using the power to file a lawsuit. 

Instead, however, Plaintiff Aiman and his wife found a lawyer who sued the co-worker, alleging that as a result of the accusation concerning the comment that Aiman suffered "substantial damages" including "embarrassment, humiliation, depression, anxiety, and missed time from work." Aiman's wife alleged she suffered emotional distress from the incident and the stress resulted in a heart attack.

But as so often happens in employment related lawsuits, plaintiffs and their attorneys go to considerable lengths to paint a picture of liability only to have the facts intervene and often stubbornly so.

In this regard, Aiman at his deposition conceded that he may have made a comment, that it could have been perceived by his co-worker to be inappropriate, and there was no evidence that the co-worker made a false report. Accordingly, the trial court dismissed the claim reasoning that plaintiffs' claims "did not rise to the level of extreme and outrageous conduct ..." and the Michigan Court of Appeals agreed.

The Take-Away

Perhaps I'm being overly critical and the above case is - at worst - just a "close call" as to being a lawsuit that passes the smell test. That test is the short name for the court rules that require a lawsuit to be factually and legally warranted under existing law or offers a "good faith argument for the extension, modification, or reversal of existing law."

But the guidelines set forth in this court rule often seem to be nothing more than an elastic Rorschach test that often becomes kryptonite to reason and only serves to shield clients and their lawyers against having to to take a step back from a particular situation and meaningfully recognize that having the power to file a lawsuit also requires using that power responsibly.

I am now stepping down from my soapbox to return to preparing a motion to dismiss and request for sanctions for having to respond to a shockingly legally and factually deficient lawsuit against a client who is frustrated beyond belief (and justifiably so) at how the legal system can be used for evil. Ok, maybe this last comment is a bit of hyperbole, but somedays getting bit by a radioactive anything seems like it would be better than the day job.

Excelsior true believers (a little tribute to Stan Lee)!

Last week this blog reported about a recent lawsuit filed by an African-American nurse against her employer, Hurley Medical Center in Flint, Michigan. The lawsuit claimed the defendant hospital agreed to a man's request that no African-Americans care for his newborn baby and went so fare as to even post a sign to this effect.  

For any number of reasons these allegations - assuming them to be true - revealed the significant legal and evidentiary issues the hospital faced in responding to the employment discrimination lawsuit. And presumably that trouble contributed to a quick settlement of the case, which was announced on February 22, 2012 (See Dominic Adam's reporting on this settlement). A second lawsuit (PDF), however, was filed by another African-American nurse and this case is still pending.

Regardless of what happens with this second suit or the reasons the first settled, both provide a number of points that employers and employees should understand when it comes to discrimination based on customer preferences.

This lawsuit also revealed a significant amount of frustration and misunderstanding among people following this story. Consider the following comments posted on the Detroit Free Press website (all comments are provided verbatim): 

• this is rediculous !!! the racist is a horrible person. but so what. he is paying for a service.he can request anything he wants. how is the nurse at a loss for anything ?? THERE WAS NONE !! this is truely unbelievable !!!! B. Holtslander
• She was not allowed to care for a specific child. Did she lose hours? NO. Did she lose pay? NO While the father's request was dispicable, what was the real harm to this nurse? D. Markham
• As much as I disagree with the father's racist views on African-Americans, they are his views. In health care, we are taught to put aside our beliefs and respect other people's culture and views, and not to judge. In that sense, the Hospital did the right thing. They respected the beliefs and culture of the father, and followed his wishes. As weird as that sounds, it was the right thing to do. A nurse of 25 years should be insulted by the racist father, but she should also realize that part of the job is respecting the culture of others, as weird as that feels with regards to a racist. R. Burchett
• Being a racist aside, he probally does have the right to decide who cares for his child. No win situation. Get sued by a nurse who could have moved on and cared for another patient or get sued by the father. C. Cunningham
• Truth be told, female patients often request care from female nurses and aides, and are probably quietly accommodated. Shhhhh. R. Rustbelt

Misconceptions About Discriminatory Customer Preferences and Employers 

First, the Hurley Hospital Lawsuit illustrates the difficult situation employers are in when a customer makes a request that would constitute unlawful discrimination under Michigan or federal law. Specifically, businesses need to keep their customers happy. They also need to comply with state and federal anti-discrimination laws. Sometimes achieving both goals is a management challenge, because customers may not always have respectable beliefs or be model citizens.

And while the Hurley litigation involved race, customer preference issues can arise under other circumstances. For instance, imagine a company's major client representative is a man who likes to be entertained at clubs with "strip" in their title. It would be discriminatory to remove a female from this account under the belief that a “guy” would be more suited to take the male customer representative out to such clubs. 

The second point to realize is that employers cannot make discriminatory decisions motivated by considerations such as race, religion, or gender based upon a customer's preference under either Michigan or federal anti-discrimination laws. 

Third, while employers have obligations under the preceding laws, a person has the the right to their beliefs and opinions, even if those beliefs and opinions are widely considered to be racist, objectionable, or otherwise discriminatory. But going back to the preceding point, an employer subject to state or federal discrimination laws cannot facilitate the carrying out of those opinions that would unlawfully discriminate against individuals.  

Fourth, both Michigan and federal anti-discrimination laws recognize that in certain limited circumstances, an employer may have a legitimate reason to seek an employee of a particular gender or religion, even though such a preference would ordinarily be illegal. These are called bona fide occupational qualifications ("BFOQ"). A critical determination in assessing the appropriateness of a BFOQ is whether a customer preference involves fundamental rights such as privacy. 

Examples of such privacy issues and when an employer may legitimately make a BFOQ when it comes to customer preference issues include a patient objecting to being bathed by caregivers of the opposite sex, janitors assigned to clean restrooms that cannot be closed during cleaning, or security guards assigned to perform strip searches. 

But employers must understand that under both Michigan and federal anti-discrimination laws, racially motivated decisions are not going to be considered a BFOQ. 

 For more information about compliance with anti-discrimination statutes, as well as federal or Michigan employment discrimination issues, contact Jason Shinn.