Monday, 29 July 2002

Carswell redux?

Interesting to note that the NAACP is opposing the nomination of Naomi Churchill Earp, a career government worker, to the EEOC. (One small irony is that Earp is African American.) One of the complaints raised in an edition of the federal eeo advisor is that she has cost the government nearly half a million in settlements and awards of federal EEOC charges filed against her.

Borrowing from Senator Roman Hruska's famous endorsement of Supreme Court nominee, G. Harrold Carswell ("Even if he is mediocre there are a lot of mediocre judges and people and lawyers. They are entitled to a little representation, aren't they, and a little chance? We can't have all Brandeises, Cardozos, and Frankfurters, and stuff like that there."): Aren't those accused of discrimination entitled to a little representation on the Commission as well?

Friday, 26 July 2002

More than just for the financial types ... Sarbanes-Oxley of 2002

As soon as President Bush attaches his signature to it, Congress will have created a new cause of action for employees and thrown criminal penalties into the mix for employers considering terminations under certain circumstances. No doubt there will be a lot more talk about it in the future, but for a first look try checking out Employment Obligations -- How the New Corporate Accountability Law Will Impact Employment Law Practices.

Tuesday, 23 July 2002

Sign ... or else

Not sure that I would recommend this strategy, but it does provide an answer to the question that gets asked frequently of speakers at employment law programs: What do I do if an employee refuses to sign? From Ron Lehman, the employer's representative on the Texas Workforce Commission, comes the idea of making it a condition of employment. For the rationale and suggested wording see p. 10 of the Spring/Summer 2002 Texas Business Today.

Was it the kettle to the pot?

As Congress is on its high horse about corporate accounting shenanigans this interchange was amusing:

From Inside Politics, July 22, 2002:

Credibility gap

Rep. Tom DeLay, in an interview on CNN's "Saturday Edition," was asked by host Jonathan Karl if Congress doesn't have a "credibility problem" when it lectures corporate America, given its own track record "with its own books."

Mr. Karl offered the following examples of slick federal accounting and appropriations practices:

"Congress, in the last budget last year, classified $4.5 billion for the census as emergency spending. We've been doing a census since 1790. They also shifted a military payday from the first day of 2001 to the last day of 2000, creating savings of $2.3 billion that wasn't there. And they also shifted a corporate tax deadline from the end of 2000 to the beginning of 2001. That move created an extra $23 billion in mythical income for the federal government."

Mr. Karl said those practices are "almost exactly the kind of thing Enron and WorldCom are accused of, this kind of moving of numbers around to make one year look better than the other." Mr. DeLay did not disagree, and he readily acknowledged "those kinds of actions cause a credibility problem." "But we're trying to stop them. We fight every day against the big spenders in Congress to stop the cooking of the books, to stop playing games as you described. In most cases, we're able to stop them," said the Texas Republican, the House's third-in-command.

Are Whistleblowers Bad?

With the legislative correction to the evils of the corporate world barreling down the tracks like a runaway train, one thing that is almost certain to come out of it is more litigation caused by new causes of action for corporate whistle-blowing. While there is some irony (see post supra) in Congress rising to fix ethical issues in companies, it is difficult for the corporate world to seriously contest the need given the recent publicity. And while certainly there is a good case to be made for the dangers of creating new causes of action that will undoubtedly be misused and shortly even abused by some, we should not lose sight of the value that the value that those pointing out wrongdoing can provide. For a good look at the 'other side' of whistle-blowing' see a recent Workforce article.

Thursday, 18 July 2002

The self inflicted 'tangible employment action'

The Supreme Court's Faragher/Ellerth standard holds employers strictly liable for sexual harassment committed by their supervisory personnel, unless they can establish a two pronged affirmative defense: establishment of an effective plan to preclude sexual harassment, and the failure of the plaintiff to reasonably avail themselves of that plan. The purpose of the affirmative defense was to provide an incentive for employers to establish effective mechanisms to prevent sexual harassment and an incentive for employees to report sexual harassment, with the underlying assumption that once reported it would be corrected.

However there is an important proviso to the affirmative defense, it is unavailable if the plaintiff has suffered a 'tangible employment action'. The last four years have seen the courts struggle to define what is a 'tangible employment action.' Given the consequence, strict liability, it is not a small stakes fight. Much of the fighting has been over whether acts against those who remain employed, a lateral move, an unsatisfactory evaluation etc. are sufficient to meet the standard.

There is no question that termination is a tangible job action. However, allowing one particular form of termination, constructive discharge, to serve as a bar to the use of the affirmative defense seems contrary to the underlying incentive the Supreme Court was trying to create. Last week, the 8th Circuit with little discussion took that approach. It approved the trial court's conditioning instruction to the jury that it could not consider the affirmative defense if it found that the employee had been 'constructively discharged.' Jaros v. Lodgenet Entertainment.

Although the facts in the Jaros case do not really raise the issue since the plaintiff did in fact complain, this central question of whether or not constructive discharge will block use of the affirmative defense, seems to be a question worth considerable more scrutiny. It remains an open question in at least the 3rd Circuit, Cardenas v. Massey, 269 F.3d 251 (3d Cir. 2001) and the 7th Cir. Wolf v. Northwest Indiana Symphony Society, 250 F.3d 1136 (7th Cir. 2001).

If the 8th Circuit approach is followed, the net result is that an employee without filing a complaint, can quit, and if he or she can overcome the admittedly higher bar of showing constructive discharge, impose strict liability on an employer who had no notice of the misconduct. Perhaps the higher bar that must be met to show constructive discharge, or the underlying philosophy of the Supreme Court that strict liability is appropriate in the first place because employers are the one who control the selection and supervision of their managerial personnel, is sufficient to prevent abuse in this area. It would seem that an approach more designed to avoid 'game playing' and to bolster the incentive to report acts of harassment, would be to hold that constructive discharge, which by its definition is at least on the surface self initiated, is not a tangible employment action.

Wednesday, 17 July 2002

For lack of a green card .....

No, not the kind typically associated with immigration issues, but the kind that accompanies certified mail and is used to prove when an item is received. Some time ago, the EEOC (at least where I practice) quit sending right to sue letters by certified mail. Since the time for filing a lawsuit is tied not to the date of the right to sue letter, but the date of receipt, it is easy to see the kind of problems that were certain to arise. Rather than having government certified (or quasi-government, depending on your view of the U.S. Postal Service's status) proof that the right to sue letter was received on a date certain it is now open to speculation. The 5th Circuit Court of Appeals has added its voice to other courts to at least provide a partial answer. When the date of receipt is uncertain or disputed, the Court will use a statutory presumption that it was received between 3 to 7 days after its date. In this case the court didn't need to be more certain since the suit was untimely regardless of which standard the court applied. Taylor v. Books A Million decided 7/15/02.

The argument for the three days is the period applied in the Federal Rules of Civil Procedure for service of documents by mail. That would make sense, and hopefully will be the standard applied when the Court is forced to decide that issue.