Marriage.jpgI’m a big fan of marriage; It has definitely been good to me.

But marriage does not always mean it is good for a company … at least when it comes to hiring, preemployment inquiries, or every day operations. 

Employers, however, that do not understand when they can or cannot make hiring and firing decisions based on marital status run the risk of paying out to the happy couple a money judgment or settlement for marital discrimination. 

Preemployment Inquiries about Marital Status.

Under federal law employers are generally not prohibited from asking questions regarding marital status (but such inquiries may constitute evidence of unlawful discrimination unless otherwise explained). Michigan law is different and employers are expressly prohibited from asking such preemployment inquiries, unless the employer can establish a bona fide occupational qualification for the inquiry. MCL 37.2206. Specifically, the Michigan Elliott-Larsen Civil Rights Act (ELCRA) (MCL 37.2101 et seq.) prohibits discrimination in hiring based on, among other criteria, marital status. 

Marital Status and Workplace Restrictions Against Hiring a Spouse.

Despite the above restrictions, under Michigan law employers may enforce anti-nepotism policies that prohibit hiring relatives – natural or through marriage – of a current employee. Such policies will not generally constitute discrimination on the basis of marital status in violation of the ELCRA.  

So what is the difference between unlawful discrimination based on marital status and lawful discrimination based on workplace restrictions against hiring a spouse? 

Essentially the Michigan Supreme Court has said that the difference is one of stereotypes: A “no-spouse” rule is not discrimination on the basis of marital status but rather “different treatment based on the fact that one’s spouse works in the same place as the applicant” and this is “not discrimination based on a stereotypical view of the characteristics of married or single persons.” Whirlpool Corp v Michigan Civil Rights Comm’n (1986).

Can an Employer’s Anti-Nepotism Policy Force Married Employees to Quit?

A situation may arise, however, where two employees marry after having been hired. In that situation a company’s anti-nepotism policy restricting spouses from working together may lawfully require one of the spouses to resign or transfer. But as explained below, the policy cannot have an adverse impact on males or females, i.e., it must be applied in a nondiscriminatory manner. 

The Take-away for Employers.

Under Michigan law employers are prohibited from discriminating in hiring based on marital status. But this prohibition will generally not extend to anti-nepotism policies that prevent spouses from working for the same employer. Accordingly, an employer can refuse to hire a spouse of a current employee and that anti-nepotism policy may also compel a spouse to resign or transfer.

To be valid, however, it is important for employers to apply such policies evenhandedly and to make sure the policy does not have an adverse impact on males or females. One way to meet this last criteria is to allow each couple to decide which one would transfer or terminate.

Fog & Uncertainty.jpgCompanies understandably find employment law to be simultaneously chaotic, complicated, and confusing. And this state of affair certainly applies to the Family Medical Leave Act, (FMLA). This is especially true when it comes to the two distinct type of claims that may be brought under the FMLA and the consequences each type of FMLA claim has on evidentiary issues for employees and employers.  

The Two Types of Claims that Can be Brought under the FMLA

FMLA violations can be broken down to essentially two categories:  First, under the FMLA it is unlawful for an employer “to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided [by the Act].” 29 U.S.C. § 2615(a)(1).

Second, it is also unlawful for an employer under the FMLA to “discharge or in any other manner discriminate against any individual for opposing any practice made unlawful by [the Act].” 29 U.S.C. § 2615(a)(2).

Accordingly, employers may not discriminate against employees on FMLA leave in the administration of their paid leave policies. See 29 C.F.R. § 825.207(a). Follow this link for more background about the FMLA. 

These two statutory provisions give rise to two distinct claims against employers in the Sixth Circuit (the federal jurisdiction applicable to Michigan employers). Specifically, the Sixth Circuit recognizes two discrete theories of recovery when it comes to FMLA lawsuits:

  1. The “interference” or “entitlement” theory arising from § 2615(a)(1); and 
  2. The “retaliation” or “discrimination” theory arising from § 2615(a)(2). 

Different Evidentiary Issues Arise Depending upon the FMLA Claim

For employers, it is important to understand which category of FMLA violation is in play. One reason for making this determination is because the applicable evidentiary proofs are different for interference and retaliation claims; The primary distinction being that an employer’s intent is not considered in an interference claim.

The reason for the different evidentiary standards because an interference claim is based on an employer’s interference with the FMLA-created right to medical leave or to reinstatement following the leave. Thus, a violation has occurred regardless of the intent of the employer.

In contrast, the central issue raised by FMLA retaliation claims is whether the employer took the adverse action because of a prohibited reason or for  a legitimate nondiscriminatory reason. Thus, an employer’s motive is always relevant because retaliation claims impose liability on employers that act against employees specifically because those employees invoked their FMLA rights.

Take-aways for Employers

Even if employers don’t always know the answers to FMLA or other employment law questions, it is important for employers to understand – at a minimum – enough to ask the right questions (and then follow up to make sure to get the right answer). For the FMLA, the starting point for this understanding is determining which claim is being made – a retaliation claim or interference claim. For more information about complying with the Family Medical Leave Act, contact Jason Shinn. 

 

Head in Sand.jpgI recently gave a presentation about controlling e-discovery costs in employment litigation. The topic is especially relevant to employers because e-discovery costs and risks are often inherently one-sided. And there is nothing more frustrating for a company to settle a claim with little to no merit, simply because the cost of litigation – magnified by e-discovery costs – drives the decision-making process. But I digress.

As to the presentation, it was presented in collaboration with i-Sight (a leader in providing web-based case management software for corporate investigations) and, specifically Joe Gerard, Dawn Lomar, and Lindsay Khan. For any professionals that get the opportunity to work with Joe and his team, I highly recommend it: They are very easy to work with and do an exceptional job of making the presenter look good. But I digress yet again.

As to the seminar, it appeared to be well received based on the number of people who signed up and actually stayed on for the entire presentation.

During the seminar questions were asked of the attendees about the efforts of their organizations towards e-discovery planning and procedures. Two of those questions and corresponding responses are as follows: 

  • Does your organization have a e-discovery retention plan?

Disappointingly, only 24% of attendees responded that their organizations had an e-discovery retention plan. 76% of respondents. 

  • How confident are you that your company’s retention plan would survive judicial scrutiny?

The responses to this question should be very concerning for employers. Specifically, the majority of the responses fell in the range of “Not at all confident” to “Somewhat Confident.” Only five attendees responded “Extremely Confident.” It is, however, worth noting that no one responded “Who do I write the check to” (an actual choice).  

The Take Away for Employers

The results of the above informal survey illustrate the two biggest contributors to e-discovery mistakes and sanctions arising out of those mistakes.

First, the key to avoiding mistakes in responding to e-discovery litigation challenges begins with actively creating sound e-discovery procedures before a lawsuit arises. Taking the results of the above survey at face value, such proactive planning is woefully deficient. In fact, employers you would expect to be on top of e-discovery issues are not (See The Importance of Timely Preserving Email in Employment Discrimination: Part I, discussing e-discovery missteps by a major law firm that actually advertised its “expertise” in advising clients on e-discovery).

Second, procedures do little good if a company is not ensuring that all personnel are aware of the importance of diligently following the procedures. But borrowing a concept from Colin Powell, part of this diligence means instilling in an organization’s employees the concept of “never walking past a mistake.” In other words, those responsible for carrying out an e-discovery litigation plan should be encouraged to share their views for improving the process.

Hiring Military VeteransMichigan has seen a significant emphasis on hiring military veterans. The most recent example takes place at the National Veteran Small Business Conference and Expo on June 26-29, 2012 in Detroit at the Cobo Center and hosted put on by the Department of Veterans Affairs. 

Employing Military Personnel – An overview of the the legal issues

Most employers have some understanding that those men and women who serve in the military are entitled to certain protections under both state and federal law when it comes to employment. Generally speaking, these protections are intended to provide not only equal treatment but also a measure of preferential treatment for U.S. veterans.

For example, under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301 et seq., an employer can’t deny any person initial employment, reemployment, retention in employment, promotion, or any other benefit of employment because of that person’s “membership, application for membership, performance of service, application for service, or obligation” to perform service in the uniformed services. 38 U.S.C. 4311(a).

Michigan law also imposes similar requirements. Specifically, no employer may discriminate against any officer or enlisted person of the military or naval forces of Michigan or the United States because of that person’s membership within such force. MCL 32.271.

Additionally, Michigan employers cannot discharge “any person from employment because of being or performing his [or her] duty as an officer or enlisted man [or woman] of the military or naval forces of this state,” from hindering or preventing such person “from performing any military service or from attending any military encampment or place of drill or instruction, [that person] may be called upon to perform or attend by proper authority,” or from dissuading “any person from enlistment or accepting a commission in the national guard or naval militia by threat of injury to [that person] in respect to his [or her] employment, trade, or business in case of his [or her] enlistment or acceptance of a commission.” MCL 32.272.

Employing Military Personnel – The Practical Benefits to Employers

Going beyond the above legal issues, employing military veterans often makes a lot of sense for employers. For starters, there are the job skills that many veterans have acquired through their service and training that may immediately transfer to the workplace. 

But also consider the nature of most military work: risky, high pressure, and fast changing. Further, many veterans have been responsible for or part of extremely complex, technically precise operations. And a significant number of these veterans have been tested in extreme conditions – Afghanistan or Iraq – that essentially serve as a proving ground for management skills. Taken together, this experience and these assets often transfer seamlessly to business operations.

Research supports this conclusion. Consider a 2005 analysis by Korn/Ferry, which found: 

  1. Chief executives who served in the military make up over 8% of all CEOs in the S&P 500. This number is significantly higher than the average percentage of the entire U.S. male population who served in the military (3%).
  2. CEOs with military experience had longer tenures as CEO than those without. 
  3. The study found that companies led by military veterans as CEOs delivered higher average returns than the S&P 500 index over one, three, five, and ten-year horizons.

The executive summary of the Korn/Ferry Military/CEO Report (PDF) is available here. 

Conclusion

We all have ties – directly or indirectly – with someone who has or continues to serve this country. For me, my Grandfather, Dad, uncles, and other family and friends have served in the military, including in wars and conflicts (as if there is a difference). While employers must comply with certain legal obligations when it comes to employing military personnel, those obligations are often minor compared to the sacrifice military men and women have made. And those obligations are often overshadowed by the skills and experience that those serving in the military bring to the workplace. 

Follow this link for more information about the National Veteran Small Business Conference and Expo. And contact Jason Shinn for additional information about employment issues involving veterans or setting up or growing a veteran-owned business or a service disabled veteran business.  

Security Padlock.jpgThe California based law firm Littler Mendelson’s Unfair Competition and Trade Secrets Practice Group discussed a recent dismissal of a Computer Fraud and Abuse Act claim brought by a company against its former employee.

The case, Ajuba International, L.L.C. v. Saharia (PDF), involved the U.S. federal court for the Eastern District of Michigan rejecting a broad interpretation of the Computer Fraud and Abuse Act (the “CFAA”).

Littler’s blog post provides a thorough discussion of the facts and procedural background of this case along with further analysis of the reasons that the court used to justify its decision, which I won’t duplicate.

Instead, I’d like to point out that this case highlights three important issues that employers should consider with respect to using the CFAA for protecting trade secrets and other company confidential information.

Overview of Claims under the Computer Fraud and Abuse Act

The CFAA prohibits seven types of “unauthorized access” of computers (See 18 U.S.C. § 1030(a)(1)-(7). Ajuba involved the subsection of this statute that prohibits conduct that often arises in the context of the employment relationship:

  1. A violation for accessing a protected computer “without authorization;” and
  2. A violation for “exceeding authorized access.”

Follow this link for additional background on the CFAA and how it has been applied against former employees.

The Michigan Federal Court Limits An Employer’s Use of the CFAA

Returning to Ajuba International, the Court dismissed the CFAA claim against the employer’s former employee because the court reasoned that a violation for “without authorization” only occurs where an employee was never permitted access and a violation for “exceeding authorized access” only occurs if the employer initially permitted access to certain information, but the access of other information is not permitted.

In contrast, the employer initially granted the employee in question “unrestricted access” to its computers that stored information that the defendant former employee later misappropriated.

Take Aways for Employers

In essence, the Court concluded that essentially if a disloyal employee was provided unlimited authority to access the employer’s computer system at the time of the misappropriation, there is no CFAA claim. This is a narrow interpretation of the CFAA, which obviously does not favor employers. But there are steps that employers may take to increase their opportunity for effectively bringing a CFAA claim.

First, company information should be segregated so that employees have access only to data relevant to their jobs. For example, there is no reason a company’s corporate strategy and related strategic plans should be available to anyone who may be employed by the company. This segregation should be routinely audited to confirm data remains accessible only by those who have a business-related need for access.

Second, it is essential to properly draft employment policies to trigger the Computer Fraud and Abuse Act. This is because the Ajuba Court perfectly explains the disagreement as to how critical issues such as “unauthorized access” or “exceeding authorized access under the Computer Fraud and Abuse Act should be applied in the context of the employment relationship. Strategic and careful drafting can greatly increase the chance of having a viable Computer Fraud and Abuse Act claim if an employee compromises or steals corporate data.

Third, if an employer believes it may have a CFAA claim against a former employee for misappropriating company information it is absolutely critical to properly secure and preserve computer-related evidence. Otherwise, companies run a significant risk of compromising or outright destroying computer evidence, which may result in its exclusion at trial.

Golf - Approach Shot.jpg

Recently a drunken day of debauchery at an Atlanta golf club resulted in a letter to the club president (PDF) recounting a lowbrow version of Caddyshack-like antics (apologies to Caddyshack aficionados).

But these antics are also a stark reminder about concerns every employer should have when it comes to preventing hostile work environment claims arising out of harassment involving customers and clients.

“To alcohol! The cause of, and solution to, all of life’s problems.” Homer Simpson

According to the letter, the Piedmont Driving Club in Atlanta Georgia hosted a drunk-fest that at times involved golf – or some reasonable approximation. Some of the highlights low-lights reported include:

  • A golfer playing the 14th hole “completely naked;”
  • A golfer demonstrating his “skills” picking up golf balls with his “naked butt cheeks” (one misstep could make for a painful hole in one);  
  • A member passed out in the “men’s grill,” which prompted another member to reach into his pants, pulling out a certain club, and repeatedly slapping the passed out member over the head (an appalling abuse of Mr. Mulligan … and the passed golfer too);
  • “One or more” of the members “deliberately” exposing themselves to a female caddie while urinating on the greens; and
  • To cap off the day, several members “mooned” the attendees at a wedding rehearsal dinner that was taking place at this fine establishment.    

Can an Employer be Held Liable for a Hostile Work Environment Created by Non-Employees?

Admittedly I chuckled at this retelling of a “fine” day of “golfing.” But unfortunately employers must take such antics like those described seriously because employers can and have been liable for harassment by non-employees, including customers. 

Generally speaking, for an employer to be liable for such harassment, a plaintiff must show that the employer failed to remedy or prevent a hostile or offensive work environment of which management-level employees knew, or in the exercise of reasonable care should have known.  

This sort of claim was recently litigated by the employee of a Michigan hospital. See Rawls v. Garden City Hosp., (E.D. Mich. Feb. 16, 2012). In this case, the employee claimed that patients and visitors created a hostile work environment by using racial slurs. The case, however, was dismissed in favor of the employer and in reaching this decision, the court specifically discussed the reasonable and immediate corrective action taken by the employer.   

The EEOC and the Basics of Non-Employee Harassment

The Equal Employment Opportunity Commission’s offers the following administrative guidance on the issue of non-employee sexual harassment:

An employer may also be responsible for the acts of non-employees, with respect to sexual harassment of employees in the workplace, where the employer, or its agent or supervisory employees, knows or should have known of the conduct and fails to take immediate and appropriate corrective action.

The EEOC guidance further notes that the Commission will consider the extent of the employer’s control and any other legal responsibility that the employer may have with respect to the conduct of such non-employees when evaluating sexual harassment by non-employees.

Conclusion

While hopefully not to the degree involved in the above golf club example, everyone can probably recall an incident – whether it was at a golf course, an after hours reception, a customer appreciation outing, etc. – where an employee was put in the unfortunate position of experiencing less than respectable conduct. 

And while employers almost always understand to some extent their potential liability for discriminating against their employees “because of” sex, including hostile work environment claims, employers may not appreciate they could be responsible for a hostile environment created by non-employees, such as customers.

In such cases, the key focus will often be on the extent the employer can take steps to control or minimize the harassment of its employees by customers and to what extent it took such steps.

Interview in Process.jpgDavid K. Williams and Mary Michelle Scott are CEO and President, respectively, of Fishbowl. They recently offered the unique interview approach their company uses to hire job applicants, Seven “Non-Negotiables” to Prevent a Bad Hire.

The Non-Negotiables for New Hires

Mr. Williams and Ms. Scott explain that their company screens candidates using a list of personal characteristics that they dub the “Non-Negotiables.”

These characteristics are: Respect; Belief; Loyalty; Commitment; Trust; Courage; and Gratitude.

According to Mr. Williams and Ms. Scott, Fishbowl’s “non-negotiables” for job applicants, “have become the primary criteria for hiring decisions — things we value even more than skills and background … these criteria are non-negotiable.” Fishbowl notes that adherence to these characteristics have resulted in “unusual hires.” But having close to a zero turnover rate, it is difficult to fault the company’s approach.

But most HR professionals and employers will immediately recognize the potential difficulty involved in screening job applicants on characteristics like those above as opposed to concrete skills and job experience. In fact, Fishbowl readily admits this difficulty:  

Granted, it is more difficult to identify and assess character traits than concrete skills — however, the strategy we are using thus far seems to be meeting success. We ask potential candidates to tell us about situations where they have exemplified each of the non-negotiable traits. Because each candidate is interviewed by multiple leaders, we compare assessments on each of the traits. Later on, we may also move to an actual scoring system as well.

Additionally, basing hiring decisions on subjective “character traits” is not without risks. While most employers would agree that turning a new hire into a successful employee involves finding the right skills and the right attitude, these same employers may inadvertently open the door for a discrimination claim where subjective traits trump skill assessments, which tend to be more objective and provable, i.e., Jane Doe was hired because she had a degree in “X” and 5 years of on-point experience versus John Doe was hired because he presented as more trustworthy and respectful. 

Additional Recommendations for Interviewing Job Applicants

The preceding point is not a criticism against Fishbowl. To the contrary, employers should follow a strategy for hiring the best qualified people for the position and company. But it is also important for employers to have policies and procedures in place to not only maximize the effectiveness of the interview process for finding the right skills and attitude, but also to minimize the risks of inadvertently creating a situation for bringing an employment discrimination claim. In this regard, a couple points to consider in developing or improving your interview procedure: 

  1. Create an interview checklist to use for all applicants and stick to the checklist throughout the interview process. This will give you a consistent set of criteria to measure the candidate against. 
  2. While character traits like the seven used by Fishbowl are certainly important, don’t forget to focus on the critical traits or skills necessary for the position, which should also be fleshed out in your company’s job description. By identifying the skills and traits relevant to the job position, you are also more likely to generate questions that require description and information to assess an applicant’s ability to deliver those traits or skills.
  3. Know and understand what interview questions are illegal. Employers and job applicants will have some level of knowledge that there are questions that can’t be asked in a job interview. Examples that (should) immediately come to mind include a person’s age, pregnancy status, and religion. But, other questions may appear to be neutral, yet have a disparate impact on applicants, or later be used to argue a failure to hire was based on an impermissible discriminatory motive. For example, Pepsi agreed to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination in its hiring process that was brought by the Equal Employment Opportunity Commission (EEOC). 

For more information about creating or improving your company’s hiring process to maximize finding the right job candidate and minimize employment law violations, please contact Jason M. Shinn. 

Wheel chair.jpgIt finally happened; This blog noted back in August 2011 that the Sixth Circuit would likely make significant changes in favor of employees bringing claims under the Americans with Disabilities Act (ADA). 

On May 25, 2012, the Sixth Circuit Court of Appeals made it official in holding that plaintiff employees bringing claims under the ADA are no longer required to show that the plaintiff’s disability was the “sole reason” for an adverse employment action. Instead, a plaintiff must now show that the disability was a “but-for’ cause of the employer’s adverse decision.”

Specifically, in Lewis v Humboldt Acquisition Corp. (PDF), Susan Lewis lost her ADA claim at the trial level. She appealed this decision and argued that the trial court should have instructed the jury that her disability need only be a “motivating factor” for her termination rather than the “sole factor” for the adverse employment action.

But this “motivating factor” standard was not the law in the Sixth Circuit. Instead, for the past 17 years a plaintiff bringing a claim under the ADA was required to prove that the plaintiff’s disability was the “sole reason” for the adverse employment action.

In overturning the previous “sole reason” standard, the Sixth Circuit Court panel noted: 

The longer we have stood by this standard, the more out of touch it has become with the standards used by our sister circuits. At this point, no other circuit imports the “solely” test into the ADA … Our interpretation of the ADA not only is out of sync with the other circuits, but it also is wrong. 

Accordingly, Lewis was granted a new trial to prove her former employer violated the ADA for firing her because she had a medical condition. That condition made it difficult for her to walk and occasionally required her to use a wheelchair. The employer, however, argued that Lewis was fired for an outburst at work, in which she allegedly yelled, used profanity and criticized her supervisors.

What is the standard that will now apply for bringing an ADA claim? 

Employers did not completely lose out after the reversal of the “sole reason” ADA standard. This is because Lewis had actually argued that an ADA plaintiff should only be required to show that the claimant’s disability “was a motivating factor in the adverse employment decision” in order to establish a violation under the ADA.  

The Court, however, ultimately rejected this lower standard and, instead ruled that the ADA prohibits discrimination “because of” an employee’s age or disability, meaning that the ADA prohibits discrimination that is a “but-for’ cause of the employer’s adverse decision.”

Seven judges disagreed with the majority’s interpretation in three separate partial dissents. Judge Eric Clay, summarized these sentiments by noting that the majority failed to accomplish the court’s original goal of lining up with the prevailing legal opinion across the country who have accepted the “motivating factor” jury instruction for proving ADA claims.

This distinction is significant for employers, as noted by Judge Clay’s dissenting opinion: 

Imagine that a disabled plaintiff seeks remedy under the ADA following the termination of her employment, which she believes was on the basis of her disability. The plaintiff admits evidence that the employer wished to terminate her because the employer believed her disability was troublesome to its business; but the employer admits other evidence that the plaintiff’s work was less than exemplary. Under a motivating-factor standard, the plaintiff could easily satisfy her causation burden by presenting evidence that her disability provided one of the reasons for her termination. However, under the but-for standard, the plaintiff is obligated to prove that without the disability, her allegedly poor performance would not have been enough to motivate her employer to terminate her. In practice, a plaintiff will rarely discover objective evidence of her employer’s state of mind or internal motivations that would satisfy this extremely heavy burden.

* * * 

Employing a but-for causation standard for ADA claims imposes a burden upon individuals in seeking to vindicate disability-based discrimination that is greater than the burden intended by Congress.

Take-aways for Employers

Certainly reversing the “sole reason” standard was a blow to employers when it comes to defending against claims under the ADA. But it remains to be seen whether the dissenting judges’ fears will prove the “but for” standard makes it materially more difficult for employees to establish a claim under the ADA.

The best advice for employers, however, was perfectly articulated in Jon Hyman’s blog post; employers “are infinitely better off making reasonable accommodations and avoiding disability discrimination claims …” Can’t argue with that conclusion.  

Pig of a Businessman.jpg

Any employee who has spent a fair amount of time in the workplace knows you will find people that are – politely speaking – simply jerks. That reality, however, becomes a nightmare if that jerk is your manager.  

But fortunately for companies, an employee’s nightmare does not always create a cause of action for a hostile work environment claim. A recent case from the Michigan Court of Appeals highlights this fact. 

Background of the Dismissal of Hostile Work Environment Claim based on Sexual Harassment. 

In Kalich v. AT&T Mobility, LLC (PDF), the plaintiff sued his former employer under Michigan’s Elliott-Larsen Civil Rights Act (ELCRA) alleging that his supervisor created a hostile work environment by subjecting him to comments that constituted sexual harassment. The trial court granted the defendant employer’s motion for summary judgment because plaintiff failed to produce sufficient evidence of each element of his sexual harassment hostile work environment claim.

The Court of Appeals Affirms the Dismissal of the Plaintiff’s Hostile Work Environment Claim.

The Court of Appeals agreed with the trial court’s dismissal. In reaching this decision, the Court dissected the plaintiff’s claim as follows. 

First, the court found that plaintiff failed to show the harassment was gender-based. In fact, plaintiff acknowledged in his deposition that he believed his supervisor made the at-issue derogatory comments because the male supervisor knew or suspected that plaintiff was gay. But under Michigan law, similar to Title VII, sexual orientation is not a protected classification.

Second, the court noted that plaintiff failed to show that he was subjected to unwelcome sexual conduct or communication. Instead, the Court characterized “the vast majority of the comments” relied upon by the plaintiff could not be construed as sexual in nature.

Examples include the supervisor referring to him by various female names, or remarking about his “cute” dog, or remarks about the fit of plaintiff’s clothes, his sewing abilities, or that he was “wasting away” and “looked like a girl.” In other words, the Court concluded such comments did not inherently pertain to sex. The trial court described the conduct as “crude,” “bullying,” and “despicable.” The Court of appeals tempered its assesment by noting that these comments were “unprofessional and perhaps subjectively hurtful, embarrassing, or offensive.” But, regardless of the characterization, both courts reached the same decision – these comments were not actionable under ELCRA.

Third, the Court also dispensed with a single remark by the supervisor that was sexual in nature; the supervisor referred to the plaintiff as a necrophiliac. The court noted that except “in the case of extreme incidents such as rape or sexual assault, a single, isolated event is typically insufficient to create a hostile work environment.” Accordingly, the court concluded that a “reasonable person” would not perceive the supervisor’s “necrophiliac” remark as being so severe and extreme as to create an objectively hostile work environment. 

Fourth, the Court found that plaintiff did not show that the defendant employer failed to adequately rectify the problem upon receiving notice; Upon the initiation of the investigation, the employer:

  • Instructed the supervisor to have no further contact with the plaintiff; and 
  • Ultimately and permanently reassigned the supervisor to a different region. 

The court concluded that taken together this resolution was designed to prevent future harassment of the plaintiff, and thus defendant took adequate remedial measures and there was no basis upon which to impose liability against the employer for the actions of the supervisor.

Take-aways for Employers – A Plan for Prompt and Appropriate Remedial Action

If only eliminating hostile work environments in place of creating a positive and productive workplace environment was as simple as implementing a “No A*sshole Rule.” But it is not. 

The next best option for employers – and an option that is critical for avoiding drawn out litigation – is having a meaningful policy for investigating and promptly taking appropriate remedial action in response to workplace discrimination.

This is because, as the above case illustrates, under Michigan and federal law, an employer may avoid liability if it adequately investigated and took prompt and appropriate remedial action upon notice of the alleged hostile work environment. Although for a recent case and great write up of when this defense may not be available to an employer, see Daniel Schwartz’s Second Circuit = The Avengers? Judges Create Alter Ego Liability, which discusses how a superivor could be a “proxy” for the employer, or its alter ego, and therefore eliminating the employer’s ability to use this affirmative defense.

What type of prompt and appropriate action should an employer take in response to a hostile work environment allegation? This answer will depend upon a number of factors and employers should collaborate with an experienced employment lawyer to answer this question. That answer, however, should focus on implementing a response that is intended to reasonably prevent future harassment of an individual plaintiff. 

Risk, Reduce, Avoid.jpgI am presenting a Webinar titled E-discovery Tips for Winning Employment Cases, on May 31, 2012. One of the main problems the presentation addresses is reducing the difficulty employers experience when it comes to meeting their preservation obligations in response to employment litigation. However, with various regulations, record keeping requirements and creative lawyers, this is becoming easier said than done. 

A recent federal district court case, Grabenstein v Arrow Electronics, Inc. (PDF), highlights one aspect of this difficulty. In that case, the plaintiff claimed that the defendant former employer failed to accommodate her disability and that it discriminated against her because of that disability by terminating her employment. Plaintiff further argued in her motion for sanctions that the former employer’s obligation to preserve electronically stored information (emails) arose long before the employer had notice of the claim. 

More troubling for employers, the court agreed, finding essentially that the defendant’s obligation to preserve e-mails did in fact exist before the employer had notice of the eventual litigation, e.g., before Plaintiff was fired, before Plaintiff filed her Charge of Discrimination with the Equal Employment Opportunity Commission (EEOC), and before the defendant employer received notice of the Charge of Discrimination from the EEOC. 

Overview of Spoliation

Before getting into the Grabenstein, case, it is important to understand what spoliation of evidence refers to; Spoliation is generally defined as the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation. One requirement for a sanction order to be proper is that the party had a duty to preserve evidence because it knew, or should have known, that litigation was imminent.  

When is the Preservation Trigger Date

A central issue in a spoliation claim is when a party’s obligation to preserve evidence arose. In the Grabenstein case, as with most cases, plaintiffs seek to move back the date triggering the employer’s duty to preserve as early as possible in order to bring into play potential sanctions. Here, the plaintiff argued that the former employer was obligated to preserve the e-mails in question even before it had notice of impending litigation, pursuant to a record keeping requirement under 29 C.F.R. § 1602.14, and that failure to adhere to its obligation was grounds for a spoliation inference.

In sum, 29 C.F.R. § 1602.14 “requires an employer covered by [the ADA] to retain all personnel records for [one year] after they are created and, when a charge of discrimination has been filed against the employer, to retain all records relevant to the charge until the dispute is resolved.” 29 C.F.R. § 1602.14.

The Court agreed, noting that where a party has violated an EEOC record-retention regulation, a violation of that regulation can amount to a breach of the duty necessary to justify a spoliation inference in an employment discrimination action. Accordingly, the Court found that the Defendant violated its obligation to retain portions of Plaintiff’s “personnel or employment record(s)” pursuant to 29 C.F.R. § 1602.14 when it deleted e-mails relating to her entitlement to disability benefits.

Pulling the Trigger for Preservation – No Harm if the Plaintiff is Shooting Blanks  

The Court eventually decided that sanctions were unjustified for various reasons. The most important reason for employers, however, is that Plaintiff provided no evidence that the e-mails were destroyed in bad faith, in part, because there was no evidence to show that the e-mails were destroyed other than in the normal course of business pursuant to the defendant employer’s e-mail retention policy.

Advance Planning is Key to Meeting Preservation Obligations 

The E-discovery Tips for Winning Employment Cases webinar on May 31, 2012, will discuss in more detail steps employers should take to properly identify the trigger date for preserving employment related evidence, as well as what steps should be taken to minimize the risks if that trigger date is missed.

Briefly, however, it is absolutely critical for an employer to have in place an appropriate record retention policy, that is consistently followed, and includes a means for suspending the retention policy in response to actual or possible litigation. This is because such a policy and documented procedures for suspending that policy puts the employer in a position to demonstrate any emails or other evidence lost was not due to bad faith, which is generally required to impose an adverse inference or other sanctions.