What the Trump Transition Teaches About Social Media Legal Issues Facing Companies

Social Media and Employment LawCompanies focus on maximizing social media strategies to promote the business. This week’s transition between the Obama and Trump administration highlighted numerous social media issues that employers need to pay close attention to concerning business and employee social media issues.

Social Media Use – Two Presidential Approaches

President Barack Obama was the first President to use the @POTUS Twitter account. He also set aside using his personal Twitter account in favor of using the @POTUS account. In other words, President Obama made a clear distinction for promoting the administration’s message as compared to his personal messages.

In contrast, Mr. Trump stated he would continue to use his personal Twitter account and delegate the responsibility of the @POTUS account to his White House staff (for more information on this transition, click here) (here is a great resource for reviewing Mr. Trump’s statements, including his Twitter posts).

Social Media Recommendations for Employers

Similar to the issues playing out on the Presidential transition stage, businesses must consider how their business and employee social media accounts and promotion should be handled. Here are just a few points to consider:

  • Social Media Ownership: If the responsibility for managing a social media account is delegated to an employee other than the business owner, document this responsibility. The social media policy should specifically identify the names of the responsible employees as the only employees authorized to post on behalf of the company-owned social media platform.
  • Social Media Guidelines: Since company-owned social media accounts are a direct reflection of the company, it is pertinent that each business provides its delegated employees with a list of employer expectations to guide their use of the platform. Topics for consideration include addressing the role the social media site will play for the business, how frequently posts should be made, areas or topics that are “off limits” or require approval, desired content of the posts, and acceptability of sharing/retweeting posts. Also, a separate focus should be on non-company social media guidance. Employee use of social media may interfere with your company’s mission or business interests or the interest of your customers.
  • Employee Social Media Use: Just as posts made by an employee on the company-owned social media account reflect the company, some people may believe that business posts made by employees on their personal accounts reflect the company as well. Consider for example a recent Tweet from (then) President-Elect Trump advertising for L.L. Bean. Trump Ethics TweetThe Washington Post (by Danielle Paquette) reported this Tweet broke long-standing policies against the President from endorsing products and was largely frowned upon by ethics experts. The concern being using the power of the Nation’s highest office to advertise. Similarly, you may not want your company to be associated with a cause or group based on an employee’s social media post. So be specific when addressing your company’s social media expectations on posting business related content on a personal page.
  • Social Media and Noncompete Agreements. Parties may enter into noncompete agreements, which designate certain information is defined to be confidential or trade secret. But such agreements are not dispositive, especially with the proliferation of information available through social media tools such as LinkedIn and Twitter, which have further complicated the status of information as confidential or constituting an employer’s trade secrets.
  • Transitions and Exit Interviews: A business should have a social media transition. Whether an employee leaves the company or takes another position within your company, a game-plan should be in place for transferring social media responsibility. Minimally speaking, this should include addressing the turnover of all access credentials to any company owned/sponsored social media accounts. You’ll also want to update the social media passwords each time responsibility is transferred to a new employee.

Social media has become an inextricable component of the HR and employment law landscape. And as the presidential transition makes evident, having clear social media standards and regulations is critical for efficient use and transition.

For additional information on how best to manage your company’s social media accounts, contact attorney Jason Shinn. Mr. Shinn routinely works with companies and HR professionals to address employment law issues at the intersection of technology and the workplace, including social media law best practices.

Overtime Rules Halted Before December 1 Deadline

TRO, preliminary injunction, temporary restraining orderA Texas federal judge has stopped the U.S. Department of Labor’s new overtime rules from taking effect as scheduled for December 1, 2016. Significantly, the court issued a nationwide injunction. The decision to enjoin the Department’s overtime rules was issued earlier today, and a copy of the Order is available here (Nevada v U.S. Department of Labor – Injunction Order).

The district court judge concluded that the applicable statute (29 U.S.C. § 213(a)(1)) does not grant the Department the authority to use a salary-level test or an automatic updating mechanism under its revised overtime rule.

The Revised Overtime Regulations

The revised rules were scheduled to become effective December 1, 2016. It would have increased the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually). This means that workers who earn an annual salary of less than $47,476.00 would automatically be eligible for overtime pay. The Department’s revised overtime rule also establishes an automatic updating mechanism that adjusts the minimum salary level every three years. The first automatic increase will occur on January 1, 2020.

Background of the Federal Litigation

As we previously noted, in September 2016 two lawsuits were filed in the Texas court challenging the Department’s authority to revise the overtime rules. The revisions would have more than doubled the exempt salary threshold to $47,476 and other changes. Twenty-one states filed one lawsuit, including Michigan. The other was filed by the U.S. Chamber of Commerce and similar business groups.

The cases were later consolidated in October, and the combined plaintiffs moved to issue a preliminary injunction that would halt the new regulations on an expedited basis, which was heard on November 16.

The Order Enjoining the Overtime Regulations

The plaintiffs sought a preliminary injunction to enjoin the Department from implementing its revised rule on December 1, 2016. In granting the injunction, the district court judge issued a lengthy opinion. But the key determinations for employers and employees are:

  1. The Department’s revised rule exceeded its delegated authority to interpret the type of employees exempt from overtime and the considerations to evaluate such employees.
  2. The Department lacked the authority to implement the automatic updating mechanism.
  3. The district court issued a nationwide injunction – not just for the states that sued.

In reaching these conclusions, the court reasoned:

Directly in conflict with Congress’s intent, the Final Rule states that ‘[w]hite collar employees subject to the salary level test earning less than $913 per week will not qualify for the [] exemption, and therefore will be eligible for overtime, irrespective of their job duties and responsibilities.’ With the Final Rule, the Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.

In other words, Congress defined the exemption regarding duties, which includes no minimum salary level.

What Does This Mean

The Department estimated 4.2 million workers are ineligible for overtime but would have automatically become eligible under its revised overtime rule with no change to their duties. The Department estimated that the new rule would have boosted wages by $12 billion over the next 10 years.

But this is now all in jeopardy. This is because the injunction gives time for the Trump administration to direct the Department to withdraw the rule altogether. While withdrawing the rule would require time for notice and comment, which takes many months, the injunction may set the stage for this to now happen. And even if the Trump administration did nothing, the court’s opinion would not bode well for the Department in regard to ultimately prevailing in the suit.

Another interesting question is what businesses will do who already revamped their payroll and workforce in anticipation of the rule going into effect on December 1, 2016. Even with the unexpected Trump victory, many businesses continued to prepare for the revised rule. Such preparation included raising workers’ salaries above the new threshold to avoid overtime requirements. Do those companies now go back to their old compensation plans?  That would do wonders for employee retention.

Contact employment attorney Jason Shinn for more information about federal overtime laws and this significant overtime ruling. We will continue to monitor this decision and assess what it means for businesses and employees.

Pitfalls in Contracting with Employee Staffing Companies

Business PitfallsBusiness owners are increasingly considering the use of outside vendors to meet workforce needs. This is especially true for temporary employees or flexible staffing solutions. But companies must carefully review any contractual terms apply to such workforce situations.

Employee Leasing Companies

We recently represented a company involved in a lawsuit against a staffing company called True Blue Inc. True Blue, through its subsidiary Labor Ready, solicited our client’s business to supply temporary employees. A benefit stressed by True Blue/Labor Ready’s local office was their expertise in screening and background investigation of individuals.

After a contract was entered reflecting these negotiations, True Blue provided leased several individuals for temporary staffing. That contract included a provision for criminal background and drug testing checks and something True Blue/Labor Ready described as a 20-point pre-employment screening.

Despite these screening programs, two employees leased to our client were involved in two separate criminal thefts. In one instance video surveillance recorded the True Blue/Labor Ready employee stealing a laptop. During the police investigation, it was discovered that the individuals’ backgrounds had been misrepresented with respect to criminal history and identity; one applicant presented false employment documentation for employment verification purposes, i.e., identity theft that True Blue failed to discover.

True Blue was immediately advised of these issues initially by my client’s president and general manager and then through legal counsel. But True Blue’s response included ignoring the situation, denying it had any obligation to conduct pre-employment screening or background checks, or blaming its client for improperly supervising the employees. True Blue/Labor Ready, however, did find time to continue to bill the client for the subject employees.

After no resolution could be reached, True Blue and its Labor Ready subsidiaries were sued in Oakland County Circuit Court. Incredibly, True Blue/Labor Ready counterclaimed for contractual indemnification. The story that True Blue/Labor Ready manufactured for their counterclaim was that after the parties entered the contract, a document captioned “work ticket” was provided contemporaneously or after the leased employees worked for the plaintiff. This, work ticket, the story goes, included an indemnification provision that insulated True Blue from its negligence, wrongdoing, or other liability arising out of leasing its employees.

This lawsuit was eventually submitted to mediation, where it eventually settled with the plaintiff receiving a cash payment.

Considerations for Using Temporary Staffing Companies

Temporary staffing agencies and more permanent employee leasing firms are increasingly being considered to augment existing staff. But the above example illustrates a few pitfalls that may arise in such relationships. Here are a few takeaways if your business is considering using a temporary staffing company:

  1. Carefully review the contract to make certain it reflects the parties’ agreement. Importantly, the contract should expressly address what is important for your business to be successful. Also, carefully consider how any subsequent terms or conditions buried in a “work ticket” or any other documentation may affect or alter the initial contract. On this point, be especially critical of any indemnification provision that may be found in the “fine print.” If the terms are inconsistent with a prior contract or are unacceptable, immediately document the problem and rejection of those terms.
  2. Employers must comply with a patchwork of laws and regulations concerning prescreening and background checks (See Addressing Legal Issues in the Hiring Process and Your Job Search). And any background investigation of job applicants will have limitations. In that regard, Defendants in the above-referenced lawsuit produced (just days before the mediation) documents showing that some measure of prescreening did take place. Defendants did not discover the identity theft situation and none of the prescreening results were shared with our client.
  3. Consider conducting due diligence about the business and litigation history of a staffing company or other vendor. At the mediation, True Blue’s assistant in-house counsel in addressing the enforceability of the indemnification provision referenced his company’s success at enforcing it in various courts throughout the country. That piece of information sheds potential light on the business practices and how issues are resolved.

For more information about using outside employee staffing companies, and complying with federal and Michigan employment laws, contact attorney Jason Shinn. Mr. Shinn frequently works with companies to address employment law issues involving leased employees and temporary staffing with an eye towards eliminating or minimizing legal risks.

Labor Department Seeks Information From Employers and Employees About FMLA

Survey and opinionOn October 28, 2016, the Department of Labor (DOL) gave notice that it is seeking comments from employers and employees about the Family and Medical Leave Act (FMLA). The notice is available here Federal Register.

The comments will be used to develop and administer two surveys in 2017 and 2018. According to the DOL, these survey results will be used as follows:

… to collect information about the need for and the experience with family and medical leave from employees’ and employers’ respective perspectives. This effort will build on previous information collection efforts, as the new surveys will update and expand on the evidence about FMLA use and leave.

In this regard, the employer survey will focus on employees’ use of leave and employers’ experience managing the FMLA. And the employee survey will address their use of and need for leave and their experiences with FMLA-eligible leave. Comments must be provided to the DOL by Dec. 27, either by email or mail:

Email: ChiefEvaluationOffice@dol.gov; Mail or Courier: Christina Yancey, Chief Evaluation Office, OASP, U.S. Department of Labor, Room S–2312, 200 Constitution Avenue NW., Washington, DC 20210.

For more information about the FMLA or other federal and Michigan employment law, contact attorney Jason Shinn.

Politics and the Workplace – A Legal and Practical Nightmare for Companies

A recent press conference by Donald Trump offers an example of why employers need to be careful about discussing or promoting politics in the workplace.

Specifically, on October 25, 2016, Donald Trump was giving a press conference at his Doral National Golf Club in Florida (to be honest, I’m not sure if he was promoting his presidency or the club). The backdrop for this event consisted of club employees standing behind Mr. Trump. The point he was trying to make was that he is a jobs creator and will do the same as President.

At one point during the event, Mr. Trump – in what he described as and unrehearsed move – asked his employees to step forward to talk about working for him (about the 2:30-minute mark), “Anybody would like to say a few words about working for Trump? Come on up.”

After several requests, an employee finally came forward. In response, Mr. Trump said, “Better say good, or I’ll say you’re fired.” While Mr. Trump’s “you’re fired” schtick worked well for him on his reality TV show, it is problematic when used in the context of politics and employment.

Political Coercion of Workers

Consider for example that under Michigan law, Mr. Trump’s statement could give rise to a misdemeanor. Under MCL 168.931, a person cannot “either directly or indirectly, discharge or threaten to discharge an employee of the person for the purpose of influencing the employee’s vote at an election.” While not in the employment context, it is worth noting that this statute has been applied to convict a defendant who paid $5 to get people to vote in a recall election. People v. Pinkney (Mich. Ct. App. July 14, 2009).

Further, employers may come under the scrutiny of the Federal Election Commission if political proselytizing becomes employee coercion with respect to political activity and campaign contributions. In this regard, a complaint was filed against a coal company for the actions of its executive concerning violations of the Federal Election Campaign Act of 1971. That complaint alleged as follows:

Robert Murray personally threatened employees by letter and in company meetings with termination if the employees failed to contribute to the company’s political action committee. Murray Energy employees have stated that they felt under constant pressure to make contributions and that their jobs were at stake if they did not make the contributions Robert Murray expected them to.

And even if not a criminal violation, interjecting politics into the workplace often creates conflict among co-workers. Consider the Wall Street Journal, by Rachel Feintzeig and John Simons, recently reported on the rise of workplace problems involving political polarization:

There was no mincing words. ‘You either let her go, or I go,’ a senior executive at FrescoData told the company’s human-resources manager earlier this month. The executive supports Republican Donald Trump for president. The co-worker he says he can no longer work with has made no secret of her plan to vote for Democrat Hillary Clinton.

* * *

The divisiveness of this year’s presidential campaign has seeped into American workplaces, raising tensions among co-workers and forcing bosses to mediate disputes.

Hopefully, as we move farther away from November 8, the distraction created by this year’s politics will subside. Until then, there is a reason politics is considered one of three workplace taboos that shouldn’t be discussed. But if politics are going to be discussed, a great attorney and better friend, Ellisen Turner, put it this way, “I have many friends, with at least as many views. I enjoy knowing you because of our differences, not despite them.” A great piece of advice for anyone.

For more information about complying with federal or Michigan employment laws, as well as investigating employee misconduct, contact employment attorney Jason Shinn.

Addressing Legal Issues in the Hiring Process and Your Job Search

Hiring and Legal Compliance According to the US Labor Department, employers added 156,000 jobs last month. Additionally, the participation rate increased to 62.9%. And the average hourly earnings moved 0.2 percentage points. These figures indicate a steadily increasing U.S. economy. But the Labor Department also found that the unemployment rate last month increased from 4.9% to 5%.

A rising unemployment rate means more eligible workers are seeking employment. With increased hiring, there are a few important things that both employers and employees need to take into consideration when it comes to seeking new employment.

State and Federal Laws Affect the Hiring Process

Companies, especially those without a dedicated HR staff, need to have a working knowledge of state and federal employment laws. While there are too many of these regulations to be discussed here, a few critical areas employers need to be concerned about when it comes to new hires include physical examinations,  background checks, and non-compete restrictions.

  • Physical Examinations

The Americans with Disabilities Act (ADA) and similar states’ laws, restricts when employers can conduct medical related physical examinations. An employer cannot request or require a medical examination before a prospective employee is given a conditional job offer. Employers can inquire about one’s ability to perform specific job functions before offering the job, but not about a disability. Or as the EEOC puts it:

It [the employer] cannot make any pre-employment inquiry about a disability or the nature or severity of a disability. An employer may, however, ask questions about the ability to perform specific job functions and may, with certain limitations, ask an individual with a disability to describe or demonstrate how s/he would perform these functions.

The EEOC provides a number of responses to commonly asked questions about complying with the ADA. Those responses are available here.

  • Background Checks

Employers are allowed to conduct background checks on prospective employees, but they are still legally required to follow applicable laws about discrimination throughout the hiring process. One limitation is that employers cannot use information within a background check to discriminate against a potential employee based on age, race, genetic information, age, etc.

It is also prudent to make sure that your company’s background checks are consistently applied. On this point, the EEOC warns that, “[i]t’s illegal to check the background of applicants and employees when that decision is based on a person’s race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older).” For additional information on the ADA’s restrictions on background checks, click here.

  • Non-compete Obligations

Another important consideration for both employers and employees to consider are non-compete obligations. Consider the following:

  1. Employees Seeking New Employment – Be sure to determine what, if any, non-compete restrictions you may have entered into. We often represent individuals who are threatened with litigation for breaching a non-compete agreement that they signed five, six, or even ten years ago but honestly forgot about entering into the post-employment restriction. Even so, it is important to carefully consider any non-compete restrictions before quitting your current position. Additionally, if you are switching jobs, it’s critical that you return all employer owned documentation, emails, etc. Never download or forward any company information to a personal account because, that too, could lead you to legal trouble during you job transition.
  2. Employers and New Hires – For employers, it is important to screen prospective hires for any post-employment obligations. If a potential employee has a non-compete obligation, it may interfere or restrict the candidate’s ability to perform in his or her new position. This issue should be discussed and documented in the hiring process before making an offer.

There are many other restrictions and guidelines for the hiring process, but these are a few important ones to keep in mind. For more information about complying with federal or Michigan employment laws, contact Michigan employment attorney Jason Shinn. Since 2001, he has represented businesses and individuals in non-compete disputes and claims arising under federal and Michigan employment laws.

Detroit Casino Sued for Violating Americans with Disabilities Act

Employers must have well written employee manualsDetroit’s Greektown casino was sued on October 3, 2016, by the U.S. Equal Employment Opportunity Commission (EEOC) for allegedly violating the Americans with Disabilities Act (ADA) by denying a reasonable accommodation to and then firing an employee because of his disability.

The former employee, Michael Lepine, was a pit manager for Greektown Casino. The lawsuit alleges that in February 2012 Lepine collapsed at work and was hospitalized for his stress/anxiety disorder. Lepine had previously exhausted his Family And Medical Leave Act (FMLA) time due to a previous stress-anxiety related leave in 2011.

He then requested additional medical leave to return to work and submitted leave paperwork, including a doctor’s note, indicating that he would need leave through April 30, 2012. Greektown allegedly responded by requiring Lepine to return to work without restriction by April 2, 2012, or request nonmedical leave. When this did not happen, Greektown terminated Lepine’s employment on April 3, 2012.

A copy of the complaint is available here (EEOC v Greektown Casino (10-3-2016). According to an EEOC statement, it was filed a voluntary pre-litigation settlement through its conciliation process failed to resolve the claim. The EEOC’s seeks to recover monetary compensation for the former employee in the form of back pay and compensatory damages for emotional distress, as well as punitive damages.

This case is very early in the litigation phase. However, there a few points employers should note and understand.

Leave Obligations under FMLA and ADA

First, employers are often faced with overlapping and sometimes conflicting obligations when it comes to the FMLA and ADA. The FMLA offers benefits to employees with certain medical conditions. And those health conditions may entitle the individual to protection under the ADA.

Second, the threshold coverage for the ADA and FMLA are significantly different. For starters, the ADA is broader in its coverage and that it applies to any company that is “engaged in an industry affecting commerce” and that employs 15 or more employees for each working day in each of 20 or more calendar weeks in the current or previous calendar year.”

In contrast, the number of employees necessary for an employer to be covered by the FMLA is 50 or more employees within a 75-mile radius. The FMLA also imposes employment tenure, hours worked, and other requirements for employees to be eligible for leave. Thus, while the FMLA threshold requirements are more restrictive, the potential for overlapping application of the ADA and the FMLA routinely exists.

Third, the core purpose of the FMLA is to provide qualified employees with leave – a maximum of 12 weeks of leave in a 12-month period. However, the ADA does not expressly provide for leave. But many courts have held that a reasonable accommodation may involve a part-time schedule in a current position or intermittent leave.

Further, EEOC Policy Guidance on this subject provides that an employer may not apply a policy of automatically terminating employees “after they have been on leave … to an employee with a disability who needs leave beyond” a standardized period. In other words, the EEOC’s position is that an employee who exhausts his or her entitlement to 12 weeks of leave under the FMLA may still be entitled to some additional period of leave as a reasonable accommodation if that person meets the ADA’s definition of “disability.”

For more information about complying with the FMLA, ADA, or other federal and Michigan employment law statutes, contact Michigan attorney Jason Shinn. Mr. Shinn routinely works with employers with respect to understanding their obligations under these statutes. Also, since 2001, he has litigated these issues in federal and Michigan courts.


Michigan Joins Quest to Block New Overtime Rule

Uphill climb On September 20, 2016, Michigan joined 20 other states in filing a lawsuit against the U.S. Department of Labor (DOL) to block a new overtime rule that goes into effect on December 1, 2016. Here is a link to the complaint Nevada v. Labor Dept., (9/20/16).

The U.S. Chamber of Commerce and other business groups filed a similar lawsuit. Both suits were filed in the U.S. District Court in Eastern Texas. Both groups are also asking for a preliminary injunction to stop the rule from going into effect.

The states argue that the DOL exceeded its authority in rolling out the new rule. The lawsuit further argues that the DOL’s rule incorrectly focuses on the salary a worker makes instead of the duties performed, to determine overtime eligibility. They also challenge a provision that adjusts the salary threshold for inflation every three years.

DOL’s Rule Expands Eligibility for Overtime Pay

The DOL’s overtime rule would more than double the salary threshold, up to about $47,500, under which workers are automatically entitled to overtime pay. This rule focuses on shrinking what is referred to as the “white collar exemption,” which exempts employees who perform “executive, administrative or professional” duties from overtime and minimum wage requirements.

In 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA’s minimum wage and overtime standards. Consistent with this Memorandum, the DOL announced this past May that,

This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work.

It is estimated that under the DOL’s overtime rule, about 4 million workers will be newly eligible for time-and-a-half pay for all hours worked after 40 in a week. Further, the initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020.

Obviously, great care went into selecting where to file the lawsuits — they were filed in a federal district court division in which only one of the three serving judges were nominated by a Democratic president. As luck would have it, both cases were assigned to that judge, that judge, Hon. Amos Mazzant. Judge Mazzant also happened to be appointed by President Obama.

In a 9/20/2016 statement, Labor Secretary Perez responded to the lawsuit, in part, as follows:

We are confident in the legality of all aspects of our final overtime rule. It is the result of a comprehensive, inclusive rule-making process. Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics. Partisan lawsuits filed today by 21 states and the U.S. Chamber of Commerce seek to prevent the Obama administration from making sure a long day’s work is rewarded with fair pay.

Employers Cannot Wait to Comply with DOL Overtime Rule

We will continue to monitor this litigation. However, employers cannot put off planning for the DOL’s new overtime rule in the hope that this lawsuit is successful. First, the claims face an uphill battle – both legally and because of the judge assigned to hear the case is a President Obama appointee.

Second, even if the lawsuits are successful at the district court level, an injunction would need to be issued within about ten weeks to delay the regulation’s December 1 effective date. That is not a lot of time.

Third, if the lawsuit is not successful (highly likely) an appeal to the Fifth Circuit is almost guaranteed, but that would take time.

For more information about the DOL’s new overtime rule, the lawsuits filed challenging that rule or complying with Federal overtime requirements, contact our law firm.

Honesty is an Employer’s Best Policy – Honest Defense Rule in Employment Discrimination

Employee Investigation ReportA recent court decision shows that the “honest belief” rule continues to be a potent defense for employers responding to employment discrimination claims. And conversely, it continues to be a frustrating hurdle for employees to overcome in proving unlawful discrimination in the workplace.

Specifically, the honest belief of a Wal-Mart manager was found to protect the company from an age discrimination lawsuit brought under Michigan’s Elliott-Larsen Civil Rights Act (ELCRA). The full court opinion is available here Richardson v Wal-Mart (9/9/16).

The Honest Defense Belief

Under this rule, employers may avoid a finding that the claimed nondiscriminatory reason was pretextual if the employer can establish its reasonable reliance on the particularized facts that were before it at the time the decision was made.

Wal-Mart’s policy calls for an employee to be terminated after four disciplinary actions. Wal-Mart’s Store manager, Mark Darby, followed the company policy when he fired Richardson after she violated a workplace safety rule that resulted in a fourth disciplinary action.

Richardson, however, claimed that she learned from a colleague several weeks before she was fired that Darby and other the assistant managers wanted her fired and “they were looking for any excuse they could find to get [her] out of the store.” In this regard, Richardson appeared to have argued that some of the disciplinary actions should have been disregarded because they were the product of unlawful discrimination by her managers.

But, Wal-Mart won in District Court after the judge granted its motion for summary judgment. In doing so, the judge found that Richardson lacked direct evidence that her termination was based on her age and she failed to establish that Wal-Mart’s stated nondiscriminatory reason for her discharge was pretextual.

The Court of Appeals agreed with the dismissal. Turning to the Wal-Marts’ “honest belief,” the court concluded that Richardson failed to present evidence calling into question Wal-Mart’s stated reason for terminating her, namely, her accumulation of four disciplinary actions.

Further, the Court concluded that even if such evidence was produced, Wal-Mart was still entitled to summary judgment under the honest belief rule.

Darby reasonably relied on the fact that Richardson had three prior [disciplinary] coachings in her record. Darby reviewed each of those coachings, and he terminated her employment based on her coaching history and her violation of Wal-Mart safety standards. Even if Darby might have concluded upon closer review that one or more of Richardson’s coachings should have been removed from her record, ‘[a]n employer’s pre-termination investigation need not be perfect in order to pass muster under the rule.’

Responding to and Establishing the Honest Belief Defense

The honest belief rule is especially difficult to overcome for plaintiff employees. To overcome an employer’s assertion of the honest belief rule, there must be evidence that demonstrates the employer did not ‘honestly believe’ in the proffered non-discriminatory reason for its adverse employment action.” But the honest belief rule continues to apply even if the employer’s conclusion is later shown to be mistaken, foolish, trivial, or baseless.

But this doesn’t mean that invoking the honest belief is a free pass for employers; courts routinely refuse to apply the defense where the employer fails to take reasonable action relative to the pre-termination/discipline investigation. In our experience, the hallmark of such reasonableness comes down to whether management disregards a readily available and potentially critical piece of information concerning the employee. In other words, if the decisional process was not reasonably informed then the honest belief rule should not apply.

For more information about this article or federal or Michigan employment law, contact attorney Jason Shinn. Mr. Shinn has focused on employment law and litigation since 2001. He routinely represents companies in complying with employment laws and employees discriminated under those laws.

Employers Have New Guidance for Avoiding Retaliation Claims

Employment Law GuidelinesOn August 25, 2016, the Equal Employment Opportunity Commission (EEOC) issued its Enforcement Guidance on Retaliation. As such, the newly published guidance should be a “must read” for HR professionals and companies (right, just want you needed going into the Labor Day Weekend). Next, HR should be prepared to follow up with a meaningful assessment of how the company’s current anti-retaliation policies concerning federal or Michigan anti-discrimination employment statutes compare to the EEOC Guidance.

Employment Retaliation Landscape – Changed and More Expansive

The EEOC notes that its new Enforcement Guidance on Retaliation was necessary because since its 1998 Retaliation Guidance the Supreme Court and the lower courts have issued numerous significant rulings regarding employment-related retaliation. Additionally, charges alleging retaliation has doubled since 1998. In fact, retaliation is now the most frequently alleged basis of discrimination in all sectors, including the federal government workforce.

The newly issues Guidance is needed in light of these changes, as well as because of how broadly the opposition clause of Title VII has been interpreted. The Supreme Court explained this definition as follows:

‘[w]hen an employee communicates to her employer a belief that the employer has engaged in . . . a form of employment discrimination, that communication’ virtually always ‘constitutes the employee’s opposition to the activity.’

Crawford v. Metropolitan Government of Nashville and Davidson County.

Recommended Best Practices

Again, HR professionals should read the Enforcement Guidance in full. It provides many helpful examples of what is prohibited, as well as discussions about non-obvious examples of employment scenarios that may give rise to retaliation violations. However, here are a few recommended best practices discussed in the Guidance for employers to reduce the risk of retaliation violations.

  1. Written Employer Policies – Employers should maintain a written, plain-language anti-retaliation policy, and provide practical guidance on the employer’s expectations with user-friendly examples of what to do and not do.
  2. Training – Employers should consider training that focus on: (i) training all managers, supervisors, and employees on the company’s written anti-retaliation policy; (ii) top management should set the tone by making it clear that retaliation is not tolerated, (iii) tailor training to address any specific deficits in employment compliance knowledge that have arisen in the workplace; and (iv) train management and human resources staff regarding how to be responsive and proactive when employees do raise concerns about potential EEO violations.
  3. Anti-Retaliation Advice and Support for Employees and Managers – In response to a complaint and investigation, employer’s should provide statements and information to all parties and witnesses regarding the company’s anti-retaliation policy, how to report alleged retaliation, and how to avoid engaging in it. Further, managers should be informed about
  4. Review Employment Actions – Before making any adverse employment decision against an employee who has filed a charge of discrimination with the EEOC or participated in an employment discrimination proceeding, companies should consult with experienced HR professionals or their employment law specialist. This caution is necessary to ensure the proposed employment action is based on legitimate non-discriminatory, non-retaliatory reasons, i.e., it will not expose the employer to further liability for retaliation. In this regard, it is critical to accurately identify the legitimate, nondiscriminatory reasons for taking any adverse employment action and ensuring to appropriately document those reasons.

There is no single best approach suitable for every workplace. And each circumstance of discrimination or retaliation will involve its own set of distinctive facts. As such, employers should first consult with experienced employment law attorneys before implementing these recommendations.

After Action Assessments

Further, employers should consider conducting an assessment after a discrimination complaint is resolved. We routinely meet with our employment law clients to share our assessments leading up to and the handling of the circumstances giving rise to the discrimination complaint. The purpose of our after action assessment is to provide the “good, the bad, and the ugly” in terms of feedback so as to prevent repeat mistakes and otherwise improve the client’s business.

For more information about complying with federal and Michigan employment laws, contact employment attorney Jason Shinn. Mr. Shinn routinely works with companies to investigate workplace issues, navigate the patchwork of state and federal antidiscrimination laws with respect to compliance, and, if necessary, litigates these issues in federal and Michigan courts.