Reversal of Jury Verdict in Religious Discrimination Lawsuit – Divine Intervention or Judicial Mistake?

Rosary BeadsA nursing home activities aide who was fired for refusing to pray the Rosary with a resident failed to prove job bias because she didn’t present sufficient evidence that her employer, Woodland Village Nursing Center Inc., knew before it decided to discharge her that plaintiff’s refusal to pray the rosary was based on her religious beliefs (Nobach v Woodland (2015)). As a result, a $69,584 jury verdict in favor of the plaintiff under Title VII of the 1964 Civil Rights Act was reversed by the Fifth Circuit Court of Appeals.

Employee Refuses to Read the Rosary Because it Conflicts with Her Religion

The plaintiff former employee had worked for Woodland just over a year before being told that she was fired for refusing to read the Rosary to a resident. This incident arose after a resident complained to Woodland management when no one prayed the rosary with her that day. Following an investigation, management decided to fire plaintiff.

Plaintiff filed her religious discrimination claim under Title VII. This federal employment statute makes it unlawful, among other areas, for an employer to discharge an individual “because of such individual’s . . . religion.” 42 U.S.C. § 2000e-2(a)(1). In obtaining the jury verdict, the plaintiff pointed to the following to support her claim:

  • When asked to read the Rosary, plaintiff told a co-worker, who didn’t have any supervisory authority over plaintiff, “I’m not Catholic, and it’s against my religion.”
  • She was fired for not praying the Rosary with a resident;
  • Her supervisor said in regard to the Rosary incident, “I don’t care if it’s your fifth write-up or not. I would have fired you for this instance alone. I don’t care if it is against your religion or not. If you don’t do it, it’s insubordination.”

Procedural Background

On Appeal, the Court held the jury was mistaken in awarding the verdict as there was no evidence that Woodland was motivated by plaintiff’s religious beliefs before it discharged her.

The plaintiff then petitioned and was granted a rare ruling from the Supreme Court, which vacated and remanded the case for reconsideration in light of the U.S. Supreme Court’s ruling in EEOC v. Abercrombie & Fitch Stores Inc., (2015). In that case, the Supreme Court Justices held that actual knowledge by an employer of a conflict between a worker’s religious practice and job requirements isn’t required to prove a failure to accommodate under Title VII’s religious discrimination provision.

But in applying the Abercrombie decision, the Court of Appeals still reached the same result favoring the employer as its earlier decision. In doing so, it reasoned that under the Abercrombie decision:

When evaluating causation in a Title VII case, the question is not what the employer knew about the employee’s religious beliefs. Nor is the question whether the employer knew that there would be a conflict between the employee’s religious belief and some job duty. Instead, the critical question is what motivated the employer’s employment decision … We simply cannot find evidence that, before her discharge, [Plaimtiff] ever advised anyone involved in her discharge that praying the Rosary was against her religion.

(internal citations omitted).

Applying this spin, the Court of Appeals, found that unlike the Muslim employee in Abercrombie who was denied an offer after wearing a religious head scarf to her job interview, the plaintiff aid worker couldn’t show any Woodland decision maker came to know of or suspect her religious objection to praying the rosary before she was told she was fired.

The Take-Away

This decision did not sit well with me for a number of reasons. First, this was a jury trial; Whether you agree or disagree with a jury verdict, its determination must generally be given great deference, especially when it comes to evaluating evidence and witness credibility. But the Court of Appeals, concluded that “no reasonable jury” could have reached this decision and, therefore, it set aside that decision.

Second the employer in this case all but admitted that plaintiff’s failure to perform the Rosary was the reason – if not a factor – that precipitated her discharge. Returning to the Abercrombie case, the Justices held that actual knowledge was not required to prove a violation under Title VII’s religious discrimination noting:

… an applicant need show only that his need for an accommodation was a motivating factor in the employer’s decision, not that the employer had knowledge of his need …Thus, rather than imposing a knowledge standard [Title VII] prohibits certain motives, regardless of the state of the actor’s knowledge: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions. Title VII contains no knowledge requirement.

Yet, the Court of Appeal concluded that there was “no evidence” that the plaintiff advised anyone involved in her discharge that praying the Rosary was against her religion. In reaching this decision, however, the Court completely ignores the Abercrombie case and the fact that the Rosary is a quintessential and inherent religious observance of the Catholic Church.

Third and building on the preceding point, the Court of Appeals noted that the evidence showed the employer conducted an “investigation” into the incident prior to terminating plaintiff. The scope of that investigation, however, appears to be extremely superficial; There is no mention that plaintiff or her co-worker were interviewed. In fact, it is not even clear plaintiff knew she was being investigated.  With this in mind, the Court of Appeals seems to give the green light to employers to conduct a superficial and limited investigation designed to avoid learning fundamental facts in order to insulate an adverse employment decision from becoming unlawful discrimination. Conversely, the Court sends the message that employees who refuse to practice/observe a core religious function at work to expressly make a declaration to management that the refusal is based on one’s religious beliefs in order to be protected under Title VII.

For more information about complying with Title VII’s anti-religious discrimination provisions, as well as accommodating an employee’s religious beliefs, contact Michigan employment attorney, Jason Shinn.

Is a Single Incident Enough for a Sexual Harassment Lawsuit?

One_CountdownWhile one may the loneliest number, it is also a number that can be quite costly for employers when it comes to defending a sexual harassment lawsuit under a recent ruling from the Sixth Circuit Court of Appeals.

Specifically, on July 24, 2015, a trial court’s decision was reversed, which allowed a female dining services employee at Oberlin College in Ohio to proceed to trial with her state law sexual harassment claim. This claim arose out of a single incident – albeit an offensive incident – in which a male co-worker allegedly placed his pelvic area against her backside (Ault v. Oberlin College 7/24/15).

In reversing the trial court, the Sixth Circuit found that a reasonable jury could conclude that the alleged physical invasion of the plaintiff’s personal space was sufficiently severe by itself to create a sexually hostile work environment under Ohio law.

Also, the appeals court concluded that the jury will also be required to determine whether Oberlin exercised reasonable care to prevent the alleged harassment. In this regard, plaintiff had complained about the alleged harasser in 2011, but the college didn’t attempt to remove him from campus until five months later, when it heard from plaintiff’s lawyer, the court said. Further, the jury will also be required to determine whether the plaintiff unreasonably failed to take advantage of the college’s anti-harassment procedures.

One Incident Enough for Jury Trial to Determine Harassment

For Michigan employers, it is important to note that this decision arose under Ohio law. But it is also important to realize that the Court noted Ohio law is similar to the federal anti-discrimination law, Title VII of the 1964 Civil Rights Act. And under that law – which applies to Michigan employers – an employee can use a single incident to prove sufficiently severe or pervasive harassment in order to maintain a hostile work environment claim.

In other words, one “extremely serious” but isolated incident may be enough to get a sexual harassment claim past a motion for summary judgment and in front of a jury. For this reason, it is critical for an employer to meaningfully address every single incident of alleged harassment and pursuant to your company’s anti-harassment policies and procedures. Such policies should make it clear:

  • The company is committed to providing a work environment that does not tolerate harassment;
  • Instances of harassment will be promptly investigated and the company will address all reported allegations of harassment;
  • The company will take appropriate disciplinary action; and
  • The Company will not permit retaliation against an employee for filing a complaint of harassment or cooperating in a harassment investigation.

Also, it is important to remind employees, especially in your company’s HR policies and manuals, that they should not assume the company and its managers are aware of harassment issues. Instead, it is the responsibility of each individual to bring an issue or concern about harassment to the appropriate person so that it can be properly investigated and resolved.

For more information about responding to and investigating workplace allegations of sexual harassment, contact Michigan employment attorney Jason Shinn.

Making a Federal Case out of Recording Conversations Involving Employment Discrimination

Voice RecorderHere is something you don’t see happen everyday – an instance of “butt dialing” becoming a federal case.

Specifically, an inadvertently dialed cell phone call purportedly involving discussions about unlawful employment discrimination resulted in a federal lawsuit for intentionally intercepting private conversations in violation of Title III of the Omnibus Crime Control and Safe Street Act of 1968 (18 USC 2510 et seq.).

The fact pattern for this case (Huff v Spaw, 7/21/2015) is somewhat convoluted, but it provides an important reminder to employers and employees about the importance of understanding when workplace conversations, including between managers and employees, may lawfully be recorded.

How an inadvertent cell phone call become an unlawful interception

James Huff accidentally dialed his coworker, Carol Spaw, while he was talking face-to-face with Huff’s colleague, Larry Savage. Spaw initially said “hello” a number of times, however, no one answered. Rather than hanging up, she continued to listen – for 91 minutes – to the conversations between Huff and Savage. Spaw believed the men were discussing unlawful discrimination involving Spaw’s CEO (Candace McGraw). At some point during the 91 minute call, James Huff’s wife, Bertha Huff, was also recorded after she joined a conversation with her husband. Spaw transcribed what she heard and used an iPhone to record a portion of the conversation between James and Bertha Huff (the Huffs). The Huffs brought suit against Spaw for intentionally intercepting their private conversations, in violation of the above federal statute (18 USC 2510 et seq.).

Procedurally, the district court granted summary judgment in favor of Spaw on the ground that, because James Huff placed the pocket-dialed call, both of the Huffs lacked a reasonable expectation that their conversations would not be intercepted, which is a prerequisite for protection under Title III. The Court of Appeals partially reversed the District Court’s decision in that it left in place the dismissal in favor of Spaw against the James Huff, but reversed as to his wife, Bertha Huff. Savage was not a party to the suit.

The Take-away for Employers and Employees

Spaw believed that she was recording conversation involving unlawful discrimination in the workplace – a frequent belief that often motivates employees to begin recording conversations with managers. And taking that belief at face value, recording a conversation may seem to be a noble undertaking. However, that does not mean it is a lawful undertaking.

For this reason, both employers and employees need to understand that unlawfully recording conversations is not a situation where you can get away with asking for forgiveness later rather than first getting permission.

Consider that the federal statute involved in the case provides for civil damages, which includes actual damages, any profits made by the violator or statutory damages, and the recovery of attorney fees, in addition to possible criminal liability. Similarly, a violation of Michigan’s eavesdropping statute (MCL 750.539a et seq.) may result in civil liability (including punitive damages), or criminal penalties.

And while there are exceptions and nuances to the applicability of both the federal and Michigan’s eavesdropping statute, none depend upon having a noble cause, those exceptions are often narrowly construed, and the nuances need to be thoroughly understood to avoid inadvertently violating the applicable statutes.

Contact Michigan employment attorney Jason Shinn for more information about investigating workplace misconduct or instances of possible discrimination and harassment.

Job Descriptions are Critical for Successfully Defending Against Workplace Disability & Accommodation Claims

Employee HandbookOnly the most die-hard HR professional considers job descriptions as exciting and management outside of HR often ignore them altogether. But job descriptions are a critical first step in guarding against employer liability when it comes to federal and Michigan disability-related employment discrimination claims.

Take for example a recent Michigan employment decision arising under the Michigan’s Persons with Disabilities Civil Rights Act (Michigan’s Disabilities Civil Rights Act) (Williams v Michigan Department of Corrections 7/21/2015). In this case, Plaintiff began working for the Michigan Department of Corrections (MDOC) in September 2003, as a corrections officer. However, during her employment, she had a kidney transplant and other health issues that forced her to stop working for defendant in 2004. She returned to the MDOC in 2005 also as a corrections officer. But her medical problems continued and plaintiff took additional medical leave.

She again returned in 2008 with no work restrictions. Upon returning, she also applied to and was transferred to a different prison facility. This position, however, was a very physically demanding assignment with almost no light-duty activities for guards; The guards at this facility were especially active and involved in the boot-camp style physical activities. After this transfer, Plaintiff later underwent additional medical treatment that required her to be off approximately eight weeks. Upon returning, Plaintiff requested to be placed on light duty assignments or to be transferred again and supported this request with a doctor’s note directing her to abstain from “strenuous exercise & stressful situations.”

However, Plaintiff had exhausted her entitlement for leave under the family and medical leave act (FMLA) and she was told there were no light duty assignments available to her. Accordingly, Plaintiff was given a choice of providing a release from her doctor allowing her to return to regular work duties or requesting a waived rights leave of absence. Instead, Plaintiff submitted a second doctor’s note exempting her from “prolonged regular calisthenics.” Defendant responded by terminating her employment in August 2010.

Employee Disabilities, Employment Accommodations, and Job Duties

The Michigan’s Disabilities Civil Rights Act, which is similar to the federal American’s with d Disabilities Act (ADA) provides that an employer shall not “[d]ischarge or otherwise discriminate against an individual with respect to compensation or the terms, conditions, or privileges of employment, because of a disability or genetic information that is unrelated to the individual’s ability to perform the duties of a particular job or position.” MCL 37.1202(1)(b). The Defendant employer and former employee agreed that plaintiff was disabled for purposes of the statue. They disagreed, however, as to whether Plaintiff’s disability prevented her “from performing the essential functions of her job, and whether plaintiff’s disability was unrelated to her ability to perform her job duties.

This disagreement was essentially the “ball-game” because under Michigan employment law, a plaintiff alleging a violation of the Michigan’s Disabilities Civil Rights Act  must show that she is able, with or without accommodation, to perform those functions; otherwise, the employee cannot proceed on a Michigan’s Disabilities Civil Rights Act  claim.

To answer this question and the reason job descriptions should be priority number one for any employer, the Court turned to the issue of what were the essential functions of the applicable job.

… the customary responsibilities of the employer in defining the scope of job positions are unaffected by the [Michigan’s Disabilities Civil Rights Act] and . . . the judgment of the employer in terms of such scope is entitled to substantial deference by the courts under the [Act] … and [it] is not a statute designed to regulate, or to set governmental standards for, particular employment positions . . . . Nor is it a statute designed to enable judges to second-guess, or to improve upon, the business judgments of employers. Thus, the judgment of the employer regarding the duties of a given job position is entitled to substantial deference.

(internal citations omitted). Upon framing the issue from this perspective, the Court had no difficulty in reversing the trial court’s decision, deciding the case in favor of the employer, and dismissing Plaintiff’s claim. In sum, because the employment position required significant physical activity, including running and training prisoners, the Plaintiff could not perform these job duties. Thus, her condition rendered Plaintiff unqualified to perform this particular job because she could not perform the essential functions of the job.

Conclusion

Employers frequently face concerns when it comes to disciplining employees for poor performance or violating company policies when those employees may have raised issues that are covered by federal or Michigan anti-discrimination laws or disability-related employment laws. Such discipline, including terminations, can turn legitimate disciplinary action into a high-risk endeavor. See a recent post, “Oy Vey! No Religious Discrimination in Jewish Nurse’s Termination” where an employee tried to turn a 3 month old incident into the discrimination lawsuit). But the above case shows why companies and their HR professionals can substantially reduce this risk and even eliminate by giving proper attention to drafting meaningful job descriptions, including the essential functions of that particular job.

For more information about responding to an employee’s request for workplace accommodations, as well as complying with Michigan’s Disabilities Civil Rights Act or the ADA, contact Michigan employment attorney Jason Shinn. Since 2001, he has worked with employers when it comes to complying with employment laws, including those involving workplace accommodations.

Non-Solicitation Restrictions – A Valuable Tool for Protecting Your Company’s Customer Relationships

ToolboxWhen it comes to post employment restrictions, non-compete agreements often get all the attention. In fact, such restrictions are a frequent subject of discussion on our law firm’s blog (Noncompete Restrictions: The First Line of Defense for Protecting the Company from Unfair Competition).

However, as explained below, a carefully drafted non-solicitation provision should be in every employer’s toolbox when it comes to protecting relationships and customers critical for business success.

How Non-Solicitation Restrictions Protect a Business

Take for example a recent case involving the enforcement of a non-solicitation provision in an insurance agent agreement (American Family Mutual Insurance Company v. Graham 7/5/2015). Specifically, the individual defendant, Stephen Graham, sold insurance for American Family Mutual Insurance Company for over 20 years. However, in January 2011, American Family terminated Mr. Graham’s agency agreement.

That agency agreement contained a non-solicitation provision which prohibited Mr. Graham from “directly or indirectly” inducing or attempting to induce any policyholder of American Family to cancel his or her policy with American Family.

Not to be deterred by this restriction, Mr. Graham formed an independent insurance agency and came up with a creative “work around,” to the non-solicitation restrictions, which included the following:

  • In February 2011 he sent approximately a letter to 1,500 of his former American Family customers letting them know he no longer represented American Family Insurance Company.
  • He further noted in this letter that he could not solicit or induce any of his former customers to leave American Family, except he could offer policies for insurance needs that were not covered by an existing American Family policy.
  • Email communications revealed discussions such as, “[w]hen you get some time, just complete and return [the waiver form] and I can run some quotes which I really think will make you smile” or “[j]ust wondering if you got the form you requested. I would love to work some quotes up for you if it works to send [the waiver] back.”
  • He further described how he could offer his former clients “more choices, expanded coverage, an excellent rates” that were “better suited for your needs.”
  • And if a former American Family customer contacted Mr. Graham, the customer was asked to sign a “non-inducement form,” which provided that Mr. Graham had not solicited or induced that customer to “replace, lapse or cancel any American Family Insurance policies.”

American Family, not impressed or amused by Mr. Graham’s creative efforts, sued him in 2012 for violating the agent agreement with the above actions. The company further claimed his actions amounted to inducing or attempting to induce those customers to cancel their American Family insurance policies.

In October 2013, a jury agreed with American Family and found in its favor on all claims. Mr. Graham was ordered to pay $523,153.70 plus interest and he appealed this decision, but he did not fare any better on appeal, which upheld the jury verdict.

The Take-Away for Employers and Employees

Well-drafted non-compete restrictions offer significant protections for employers. But, as we previously discussed here, such restrictions are not always a silver bullet defense to competition by former employees. For this reasons, we recommend that employers consider non-compete restrictions and non-solicitation provisions as a valuable 1-2 punch when it comes to protecting your company’s competitive interests. Having both in place offers employers with alternative theories of recovery – restricting unfair competition by enforcement of the non-compete restriction and protecting customer valuable relationships through non-solicitation provisions.

For employees, Mr. Graham’s efforts bring to mind the saying that ‘pigs get fat, hogs get slaughtered.’ Specifically, Mr. Graham could have simply notified his former customers that he left American Family to start his own agency and left it at that, which could may have avoided the lawsuit and judgment. At least this is the conclusion to be drawn from the Court of Appeals decision. That decision noted that while Mr. Graham’s letter specifically informed customers about his restrictions and intent to “honor that agreement,” it also informed customers that the agreement did not restrict him from offering a “broader range of insurance products” through “other companies that may be better suited for your needs.”

For more information about implementing or improving your company’s protection of competitive advantages and other intellectual property or for a thorough assessment of your obligations under non-compete/non-solicitation restrictions, contact attorney Jason Shinn. Since 2001, he has worked with companies and individuals to address legal issues and enforcement of post-employment obligations under non-compete and non-solicitation agreements.

Oy Vey! No Religious Discrimination in Jewish Nurse’s Termination

CoExistA recent religious discrimination claim dismissed in favor of an employer offers a number important take-aways for both employers and employees. Specifically, on 7/16/2015 the Eighth Circuit Court of Appeals affirmed the dismissal of a religious discrimination claim brought by a Jewish nurse who had worked for a Missouri medical center. See Shirrell v. St. Francis Med. Ctr., 7/16/15).

The trial court had granted summary judgment in favor of the employer, which was affirmed on appeal. In reaching this decision, the court concluded the plaintiff, Rebecca Shirrell did not present evidence giving rise to an inference of religious bias, as required by Title VII of the 1964 Civil Rights Act, as well as dismissing her state law employment discrimination claims for similar reasons.

An Overview of a Religious Discrimination Claim

For background purposes, to properly bring a religious discrimination claim under Title VII, a plaintiff must show either direct evidence of discrimination or create an inference of discrimination or retaliation under what is referred to as the McDonnell Douglas burden-shifting framework. If there is no direct evidence and a plaintiff meets her evidentiary standard under the McDonnell Douglas framework, an employer then has the burden of showing a legitimate, non-discriminatory reason for the challenged action. If the defendant offers such a reason, the burden shifts back to the plaintiff to show the defendant’s proffered reason is a pretext.

The court found that the nurse failed to meet her obligations under this framework. Specifically, she failed to show that she was unlawfully fired because of her religion or because she complained about a co-worker who said she would try to “Jew down” the price of a camper she intended to purchase. Additionally, the court held that Shirrell failed to demonstrate a causal connection between her complaint about her co-worker’s single derogatory remark and her termination three months later for accumulating too many disciplinary points within a 12-month period.

In terms of the failings of this religious discrimination claim, the following deficiencies were highlighted by the court:

  • Shirrell didn’t identify any similarly situated, non-Jewish employees who received more favorable treatment.
  • She offered no evidence that the ultimate decision-maker for her termination had any bias toward her because of religion.
  • Shirrell’s history of disciplinary issues plus her reliance on “one overheard, offhand remark” about religion that wasn’t directed at her were fatal to her lawsuit.

Additionally, Ms. Shirrell’s Title VII retaliation claim failed because the evidence showed that the employer terminated Shirrell pursuant to hospital policy for disciplinary reasons, rather than in response to Shirrell’s complaints about the co-worker’s derogatory statement.

Religious Discrimination Take-Aways 

Our law firm recently obtained a summary judgment award in a religious discrimination claim on substantially identical reasons discussed in the Shirrell v. St. Francis Med. Ctr. case. In both cases, a critical factor for the employer’s success was having well-documenting employment policies in place and documenting instances of poor job performance on the part of the employee or violating the employer’s policies. Such evidence will often be an insurmountable obstacle to showing that the employer’s adverse employment action was pretext for religious discrimination.

For employees, it is not enough to simply point to a derogatory statement as evidence of discrimination and expect to be successful in a discrimination claim. This is especially true where the adverse employment action occurs months after the statement was made.

For more information about complying with Title TII’s requirements for providing reasonable religious accommodations or complying with its anti-discriminatory requirements, contact Michigan employment attorney Jason Shinn. Mr. Shinn has been focused on employment law matters since 2001.

Sexual Orientation Discrimination is Unlawful under Federal Law … For Now?

same-sex coupleOn July 16, 2015, the Equal Employment Opportunity Commission (EEOC) issued a decision confirming that workplace discrimination based on sexual orientation violates title VII of the Civil Rights Act of 1964 (Title VII)

Title VII is the primary federal statute that prohibits a range of discrimination against employees. This decision marks the first time the EEOC has formerly ruled Title VII prohibits discrimination based on sexual orientation.

In concluding that sexual orientation discrimination is also sex discrimination, the EEOC offered essentially three separate reasons in support of its decision in Complainant v. Foxx, E.E.O.C., Appeal No. 0120133080, 7/16/15-2015).

First, the EEOC concluded that sexual orientation is inherently a sex-based consideration in that it treats an employee less favorably because of that employee’s sex.

Indeed, we conclude that sexual orientation is inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII … Discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms. ‘Sexual orientation’ as a concept cannot be defined or understood without reference to sex … Sexual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.

Second, the EEOC explained that:

Sexual orientation discrimination is also sex discrimination because it is associational discrimination on the basis of sex. That is, an employee alleging discrimination on the basis of sexual orientation is alleging that his or her employer took his or her sex into account by treating him or her differently for associating with a person of the same sex.

Third, the EEOC further supported its position by noting that “Sexual orientation discrimination is also sex discrimination because it necessarily involves discrimination based on gender stereotypes.”

Title VII and what is Says About Sexual Orientation

Title VII doesn’t mention sexual orientation and courts historically have reached inconsistent rulings as to whether the statute’s ban on sex discrimination covers sexual orientation discrimination.

Ironically, an opinion authored by Justice Scalia (yes, the guy who had a judicial meltdown in response to his fellow justices ruling in favor of marriage equality for same-sex couples) has become a cornerstone for one of the reasons the EEOC interpreted Title VII to prohibit sexual orientation discrimination. See the Slate article by Mark Joseph Stern, Thank Scalia for the Revolutionary EEOC Workplace Discrimination Decision, discussing Justice Scalia’s opinion in a case called Oncale v. Sundowner.

Closing Thoughts

After the U.S. Supreme Court’s ruling in the Obergefell v. Hodges same-sex marriage case we explained here that employers need to, at a  minimum, carefully evaluate taking adverse employment actions against homosexual employees who were to marry. This caution was necessary because Michigan’s anti-discrimination statute ((Elliott-Larsen Civil Rights Act or “ELCRA”) protects against discrimination based on marital status.

However, with the EEOC’s opinion discussed above, employers need to carefully evaluate all adverse employment decisions taken against employees based on their sexual orientation in order to avoid liability under Title VII for unlawful employment discrimination.

Also, while the EEOC’s ruling is limited to Title VII, it is important for Michigan employers and employees to understand that when applying Michigan’s anti-discrimination statute (ELCRA), Michigan courts are “guided” by federal interpretations of Title VII when interpreting provisions of the ELCRA. Normally, this means that EEOC rulings like the discussed above are “afforded substantial consideration” by Michigan’s courts. Whether this happens remains to be seen.

And this brings up one of the more interesting issues presented by the EEOC’s ruling: How many courts will follow the EEOC’s conclusion that Title VII protects against sexual orientation discrimination. In this regard, the EEOC’s interpretations on the scope of Title VII are considered persuasive but not binding authority on the courts.

Building on this point, there are courts who have concluded that sexual orientation is not among the list of prohibited bases for discrimination under Title VII. In support of this position, these courts have noted that Congress has repeatedly refused to add “sexual orientation” to employment protections and, therefore, Congress did not intend to eliminate anti-gay discrimination when it enacted Title VII.

For more information about complying with this new ruling from the Equal Employment Opportunity Commission or responding to sexual orientation discrimination issues, contact Michigan employment attorney Jason Shinn.

The Supreme Court’s Same-Sex Marriage Ruling and What it Means for Employers

On June 26, Same-sex_couple2015, the Supreme Court decided in a 5-4 decision that same-sex couples nationwide have a constitutional right to marry.

The full case opinion (Obergefell v. Hodges) is available here, however, the majority opinion was best summed up by Justice Kennedy as follows:

The right to marry is a fundamental right inherent in the liberty of the person. Couples of the same sex may not be deprived of that right and that liberty.

These words wipe out Michigan’s 2004 law that limited marriage to heterosexual couples, as well as other gay marriage restrictions in force in a dozen other states. This also means all 50 states must recognize same-sex marriages. For an insightful summary of the opinion, see Lyle Denniston, Opinion analysis: Marriage now open to same-sex couples, which appears at SCOTUSblog (Jun. 26, 2015).

The Impact of the same-sex marriage ruling on employers. 

Setting aside your particular view of this decision, this decision will require the immediate attention of employers, as well as an understanding by employees as to what protections they have and may not have in the workplace.

First, Michigan law does not generally provide workplace protections against discrimination based on sexual preference. In fact, approximately 28 states don’t have laws prohibiting discrimination against lesbian, gay, bisexual and transgender people. This means individuals in those states who are fired because of sexual orientation generally don’t have any recourse – a fact largely unchanged by the Obergefell v. Hodges decision.

However, Michigan recognizes marital status as a protected classification under its primary employment discrimination law, Michigan’s Elliott-Larsen Civil Rights Act (ELCRA). Specifically, this law prohibits discrimination based on an individual’s marital status. Conversely, the federal counterpart to Michigan’s ELCRA, Title VII, has no parallel provision.

Accordingly, employers need to carefully evaluate adverse employment actions against employees in a same sex-marriages to ensure such action does not violate the ELCRA.

Also, Michigan’s ELCRA may be applied to workplace discrimination claims involving same-sex married couples remain to be seen. For instance, in past cases, Michigan courts have made the distinction in applying ELCRA’s prohibitions against marital discrimination based on policies that differentiate on whether a person is married. In other words, the focus in a marital status discrimination claim under the ELCRA is whether discrimination occurred based on if one is married, rather than to whom one is married. Could an employer argue an adverse employment decision against an employee in a same-sex marriage was independent of marital status and, instead, was based only on the employer’s beliefs concerning homosexuality – whether in a same-sex marriage or not?

Building on this point, the Wall Street Journal (by Tamara Audi and Jacob Gershman) reported:

Conservative groups have been bracing for the ruling for months—developing legal strategies to carve out religious exemptions and ramping up fundraising to pay for them. Those groups said they expect to continue to fight for religious exemptions from legal mandates to accept same-sex marriage in courts, at the federal level, and state by state.

Whether money and legal strategies translate into legislation that diminish workplace protections for same-sex married couples is uncertain even if the resolve to see it happens is not.

In contrast, Justin Nelson, Co-Founder and President of the National Gay and Lesbian Chamber of Commerce (NGLCC) noted:

While recognizing this as a victory, NGLCC and its 42 affiliate chambers across the country understand that the LGBT movement must harness this momentum to secure greater equality, especially nondiscrimination protections for LGBT Americans. It’s unacceptable that hardworking LGBT business owners still be discriminated against in corporate and government supply chains and that LGBT people can still be fired from their jobs in 28 states, evicted from their homes, or denied service in restaurants and shops simply for being who they are.

Second, employers will need to address benefit issues to make sure the policies comply with the same-sex marriage ruling. Case in point: Rick Pluta of NPR recently reported that a Kroger employee has filed a Michigan employment discrimination complaint against  it and the employee’s union because a jointly run health benefits fund refused to accept the employee’s same-sex spouse after the two were legally married last year. This marriage occurred during the brief window when it was legal in Michigan for same sex couples to marry.

Third, employers will need to review their employee manuals and make necessary modifications to their policies to ensure that they are in compliance with this ruling. For example, many employee handbooks treatment of “spouse” under such topics as medical leave, conflict of interest, and equal opportunity, anti-retaliation should be carefully reviewed.

Fourth, many companies prior to the Supreme Court ruling offered benefits to same-sex couples as domestic partners. However, with the Supreme Court ruling eliminating the barriers same-sex couples faced in getting married, employees should expect that domestic partnership benefits may be eliminated for unmarried same-sex couples.

For more information about Michigan employment law, as well as responding to changes created by this historical same-sex marriage ruling, contact attorney Jason Shinn. Since 2001, Mr. Shinn has worked with employers to respond to every day and significant employment law challenges facing their businesses.

Another Employee Handbook Provision Found to Violate Federal Labor Laws

Employee Manual Violates NLRAAnother employee handbook did not measure up to the National Labor Relations Board’s (NLRB) scrutiny after it ruled that an employee handbook provision prohibiting employees from having a “conflict of interest” with the employer was facially overbroad and unlawful on its face. See Remington Lodging & Hospitality, LLC, 2015 BL 194198, 362 N.L.R.B. No. 123 (6/18/15).

Specifically, on June 18, 2015, the Remington Lodging & Hospitality decision, the NLRB concluded that hotel employees would reasonably interpret the conflict of interest rule as limiting their exercise of rights under the National Labor Relations Act (NLRA). Accordingly, the employee handbook provision was overbroad and illegal on its face because it violated NLRA.

Two of the three members of the NLRB panel said the rule interfered with employee rights in violation of the NLRA because employees would reasonably believe it would apply to NLRA-protected activities, in part because of other violations of the NLRA by the employer:

Particularly when viewed in the context of the [Employer’s] other unlawfully overbroad rules employees would reasonably fear that the rule prohibits any conduct the Respondent may consider to be detrimental to its image or reputation or to present a ‘conflict’ with its interests, such as informational picketing, strikes, or other economic pressure.

Under applicable NLRB decisions, a rule is unlawful if it explicitly restricts Section 7 activity or if there is a showing that (1) employees would reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7 rights.

Employer Take-Aways

As we previously reported, the NLRB has aggressively pursued employer violations arising out of overbroad or even improperly drafted employee handbooks. See Employer Charged with Unfair Labor Practice Because Employee Manual and Agreements Were Unlawful and Employee Manuals Need Spring Cleaning Thanks to the NLRB. But this latest ruling is likely to be of significant concern to employers for a number of reasons. This is because employers have a legitimate interest in preventing employees from maintaining a conflict of interest, whether they compete directly against the employer, exploit sensitive employer information for personal gain, or have a fiduciary interest that runs counter to the employer’s enterprise. Accordingly, the sort of conflict of interest provision that was found to be unlawful in the Remington case is commonly found in many employment handbooks and agreements.

For this reason, it is critical for employers and human resource professionals to carefully review and update their existing employee manuals and policies to avoid a later finding that the employee policies inadvertently violate the NLRA. And this recommendation applies to both union and non-union employers as the applicable NLRA rights extend to employees in both situations. In other words, even if your employees are not in a union, those employees still enjoy rights under the NLRA.

For more information about complying with federal or Michigan employment law, including implementing HR best practices and drafting employee manuals, contact employment attorney Jason Shinn. Since 2001, Mr. Shinn has provided comprehensive legal services in the area of employment law compliance. He routinely works with start-up and growing businesses to provide employment law and overall general counsel services for the company.

Enforcing a Noncompete Agreement Takes More Than Bluffing

iStock_000016245459XSmall.jpgWe recently wrote about the importance of having an enforceable noncompete in place in order to protect your business (Noncompete Restrictions: The First Line of Defense for Protecting the Company from Unfair Competition). But when it is necessary to obtain and injunction and to enforce that agreement, companies can’t expect to bluff their way to success.

Case in point, I was in Oakland County Circuit Court earlier this week defending against a motion for preliminary injunction that was filed by my client’s former employer. That employer was seeking to enforce a non-compete agreement and thereby restrict the client from working within a division of the new employer’s business. It had hired a well-established large law firm to make this case and despite significant efforts to reach a resolution prior to the hearing, the former employer insisted on going forward with the motion.

Noncompete Agreements and Preliminary Injunctions – A Matter of Briefings or Evidentiary Hearings

When it comes to preliminary injunction motions, at least in the Oakland County’ Court’s Business Courts, judges may decide the matter on the briefs or, more often than not, schedule an evidentiary hearing. An evidentiary hearing in this context is essentially a mini-trial with witness testimony and exhibits provided to the judge to determine if an injunction should be issued.

The judge in our case decided the issue on the briefs (the written submissions filed by the parties) and ruled in my client’s favor; The former employer’s motion for injunctive relief was denied, which means my client can continue to work for the new employer while the matter continues through the litigation process.

Noncompete Agreements and Preliminary Injunctions – You Can’t Just Show Up

In regard to defeating the motion for injunctive relief, it certainly helped to have a client who provided a text-book example of how to properly transition from one employer to another. On this point we were able to provide an affidavit accurately reflecting that the client had provided appropriate notice to the former employer, completely cooperated in any exit interviews, returned all employer provided equipment and resources, and, most importantly, did not take any company information after ending the employment relationship.

In contrast, the former employer offered numerous assertions based only upon “information and belief” that its former employer was violating the noncompete agreement and engaged in other alleged misconduct:

Upon information and belief Defendant … by way of repeated contact with Plaintiff[‘s] current customers … soliciting … current employees, and by using Confidential Information belonging to Plaintiff, has intentionally and tortiously interfered with Plaintiff[‘s] current and prospective economic advantage, business relationships and expectancies.

These strong accusations, however, lacked any factual support from the former employer – no affidavits were provided, no computer forensics, no witnesses were identified, not even the identity of any of the customers or employees were provided in the plaintiff’s complaint or motion. This lack of information allowed us to successfully argue that “information and belief” outside of legal circles is simply speculation and without admissible evidence the former employer failed to make the “particularized” showing of harm required for issuing an injunction.

And we further highlighted that the failure to make such a showing further undermined the motion because a number of assertions involved evidence that the former employer would have had access to, e.g., computer forensics supporting misappropriation claims, the identity of clients or employees claimed to have been wrongfully solicited, dates of solicitation, etc.

We also argued that injunction should not be issued because the plaintiff was not likely to be “successful on the merits” (an element required for injunctive relief). This argument relied, in part, upon the former employer’s own marketing materials and website, which identified a few distinct market segments it served. And those segments were not within an area code of the customers my client was now working with.

In short, even though it was the former employer’s burden to show injunctive relief was appropriate, we put a lot effort into attacking the assertions made by the former employer to show why they lacked merit. That effort paid off.

The Take-Away

Obtaining injunctive relief when a former employee leaves for a competitor and is believed to have violated a noncompete agreement is a fact-intensive battle. And in this particular example, we happened to have and make use of the right facts to win that battle. We were also fortunate enough to have a plaintiff who made a minimal showing in supporting the motion for preliminary injunction.

But this also highlights the importance from the perspective of company in the role of the former employer to have a clear understanding as to the strengths, weaknesses, and risks in going forward with seeking injunctive relief or any legal claim for that matter. Sometimes the risks and/or likelihood of success are too speculative to warrant the expenditure of time, money, and resources. This particular case is probably a good example of this point.

Alternatively, this case illustrates that having in place an enforceable noncompete agreement is only the ante necessary to get into the game. But without the cards to go the distance, it can be an expensive bluff when it comes to seeking preliminary injunctive relief.

For more information about noncompete agreements under Michigan law and enforcing those agreements, contact attorney Jason Shinn. Since 2001, he has represented individuals and companies when it comes to noncompete disputes.

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