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Learning from the Mistakes of Others: Advice for Employers Gleaned from Federal Appellate Court Decisions in 2001

December 31, 2001
Mistake No. 1:
Failing to retain relevant records and to provide accurate facts in the course of an administrative agency's investigation

Byrnie v. Town of Cromwell, Bd. of Educ., 243 F.3d 92 (2d Cir. 2001)

Plaintiff, Byrnie, applied unsuccessfully for a teaching position in the Cromwell School District (the "District"). He subsequently filed a complaint with the Connecticut Commission on Human Rights and Opportunities ("CCHRO"), alleging that he had been denied the position because of his sex and age. In its position statement to the CCHRO, the District claimed it had a non-discriminatory reason for not hiring Byrnie: he was not familiar with certain teaching methods set forth in the Connecticut Competency Instrument ("CCI"), an assessment tool developed by the State Department of Education. Upon the conclusion of the CCHRO investigation, Byrnie sued the District in federal court alleging sex and age discrimination.

In the course of discovery, the District admitted that Byrnie's lack of familiarity with the CCI's teaching methods was not actually one of the factors used to differentiate between candidates for the position in question. Rather, the District argued that its position statement to the CCHRO really meant that Byrnie generally lacked familiarity with basic competencies of effective teaching. Apparently accepting this explanation, the trial court granted the District's motion for summary judgment, concluding that the District had a non-discriminatory reason for not hiring Byrnie.

On appeal, the Second Circuit reversed the District Court and revived Byrnie's claims. The Court ruled that the combination of the District's apparently shifting explanation of its reason for not hiring Byrnie, and its spoliation, or destruction, of certain evidence, entitled Byrnie to a trial.

As to the latter issue, it was established in discovery that the District failed to maintain certain documents that could have provided evidence of discrimination. Specifically, the District destroyed (1) notes created by the principal which were used by the District's attorneys in preparing the District's position statement to the CCHRO; (2) notes made by certain individuals regarding their interviews of Byrnie; and (3) written ballots completed by the search committee that were used to rank the candidates following the initial round of interviews. Even though the District established that it was "routine" to discard such documents (and thus, there was no evidence that the District deliberately destroyed documents in an effort to interfere with the lawsuit), the Court concluded that an adverse inference could be drawn from the spoliation of evidence, particularly because employers are required by law to maintain for a certain period of time records relating to employment decisions.

Lessons to be learned from this decision:

(1) Any position statement an employer submits to a federal, state or local agency (e.g., the EEOC) must be factually accurate. Because any misstatements of fact contained in the position statement will likely come back to haunt the employer, it is imperative that a position statement be carefully reviewed before it is submitted to the agency.

(2) Employer records related to an employment decision such as hiring, firing, discipline, or performance must be preserved for the statutorily-mandated period and/or during pending litigation.

Mistake No. 2:
Failing to consider alternative means of accommodating disabled employees

Humphrey v. Memorial Hospitals Association, 239 F.3d 1128 (9th Cir. 2001)

An employee who had ongoing tardiness problems was eventually diagnosed with Obsessive-Compulsive Disorder, or OCD. The employee's treating physician wrote that this medical condition "is directly contributing to her problem with lateness." As a reasonable accommodation, the employer offered the employee a flexible work schedule under which she could report to work at any time within a 24 hour period on the days she was scheduled to work. The employee accepted that offer, but over the next three months, she continued to be absent and late to work. She then requested a new accommodation: permission to work from home.

While the employer did permit some employees in comparable jobs to work from home, departmental policy prohibited employees who had been subject to disciplinary action from telecommuting. Because the plaintiff had a prior history of lateness and absences, the employer denied her request. She did not request a medical leave of absence, nor did her employer offer such a leave to her. After she was absent on two more occasions in the next month, she was discharged. She then filed a lawsuit alleging violations of state law and the Americans with Disabilities Act ("ADA"). The District Court granted the employer's motion for summary judgment on the theory that it had satisfied its duty to reasonably accommodate the employee's disability.

The Ninth Circuit disagreed, ruling that the employer violated the ADA by failing to consider alternative forms of accommodation when the first one failed: "As a matter of law, [the employer] had an affirmative duty under the ADA to explore further methods of accommodation before terminating [the employee]."

The employer argued that its discharge of the employee was lawful because "regular and predictable attendance is an essential function of the position." The Ninth Circuit concluded, however, that attendance was not an essential function of the plaintiff's job. In this regard, the Court noted that (a) other employees holding a similar position were permitted to work from home; and (b) a medical leave of absence – an option afforded by the employer to other employees, but which had not been requested by the plaintiff – might have enabled the plaintiff to recover sufficiently to improve her attendance and punctuality.

Lessons to be learned from this decision:

(1) When one form of reasonable accommodation does not suffice to enable a disabled employee to perform the essential functions of his or her job, consider and explore alternative accommodations prior to making a decision to terminate the employee.

(2) In considering whether a particular accommodation is appropriate, be sure to evaluate how the employer's policies have been applied with respect to other, non-disabled employees.

Mistake No. 3:
Failing to require employee involvement in the interactive process of determining a reasonable accommodation under the ADA

Haulbrook v. Michelin North America, 252 F.3d 696 (4th Cir. 2001)

Haulbrook was a chemical engineer who developed respiratory problems as a result of exposure to chemicals in the plant. His doctor said he could return to work if he was not exposed to any dust, chemicals or other irritants. Michelin repeatedly asked Haulbrook to contact his superiors to arrange for a meeting with the company doctor and to determine his new job assignment. In response, Haulbrook sent faxes to the company in the middle of the night saying he had to consult with his attorney.

Michelin discharged Haulbrook for failing to fulfill his work responsibilities, and for failing to respond to the company's requests for information and a meeting. Haulbrook sued under the ADA, contending that Michelin unlawfully discharged him because it regarded him as disabled. The district court granted Michelin's motion for summary judgment.

The Fourth Circuit affirmed, noting that Michelin's efforts to find a position for Haulbrook demonstrated that the company did not regard him as disabled. The Court further found that Michelin had amply fulfilled its duties under the ADA, while Haulbrook had unjustifiably failed to respond to his employer's reasonable requests for information and cooperation.

Lessons to be learned from this decision:

Both the employer and an employee seeking a transfer or other accommodation of a medical condition must cooperate in the interactive process of identifying a suitable accommodation. Employees who decline to cooperate with the employer's reasonable efforts to gather necessary information as part of this process do so at their peril. Hence, employers should always seek to include the employee in the interactive process and, if the employee refuses to cooperate, create a clear record of any such refusal. See Templeton v. Neodata Servs., 162 F.3d 617 (10th Cir. 1998) (an employee's refusal to provide updated medical information to her employer defeated a claim of failure to provide reasonable accommodation under the ADA, since the employer needed the information to fashion an accommodation).

Mistake No. 4:
Making employment decisions on the basis of an employee's disability or other protected characteristic

Hoffman v. Caterpillar, Inc., 256 F.3d 568 (7th Cir. 2001)

Plaintiff, who was born without a left arm below the elbow, alleged that her employer violated the ADA by refusing to provide her with training on a high speed scanning machine. Plaintiff's supervisor admitted that he had refused her requests for high-speed scanner training because of her disability. However, the employer argued that Plaintiff's lack of training on the high-speed scanner had no effect on her compensation, benefits, work hours, job title, or ability to advance within her department. Plaintiff disagreed, contending that the training would make her a more attractive candidate for promotion. In addition, she argued that she should be trained, regardless of whether it affected her ability to advance, because every other employee who expressed an interest in operating the high-speed scanner received the necessary training to do so.

The District Court granted summary judgment to the employer. The court reasoned that because Plaintiff had not been able to demonstrate that the lack of training constituted an adverse employment action, she could not make out a prima facie case of discrimination under the well-known McDonnell Douglas burden-shifting approach.

Plaintiff appealed. On review, the Court of Appeals agreed with her that, because the ADA specifically prohibits discrimination in regard to "job training," and she had direct evidence of discriminatory intent, she did not need to show that the denial of training adversely affected her terms and conditions of employment. Therefore, the Court of Appeals reversed the lower court's decision and reinstated Plaintiff's case.

Lessons to be learned from this decision:

A guiding principle informing nearly all anti-discrimination legislation is the avoidance of stereotyping. Employers should be extremely wary of making personnel decisions on the basis of any legally protected personal characteristic such as disability. With disabled employees, in particular, an individualized assessment of the employee's present ability to safely perform the essential functions of the job, based on medical or other objective evidence, is typically required.

Mistake No. 5:
Not considering the impact of punitive damages and attorney's fees when valuing a case

Cush-Crawford v. Adchem Corp., 2001 U.S. App. LEXIS 24806 (2d Cir. Nov. 16, 2001)

Compensatory damages, as the name suggests, are intended to compensate a plaintiff for actual loss or injury, such as lost wages. Punitive damages, on the other hand, are awarded to punish and deter illegal conduct, typically where the jury determines that the defendant acted with reckless indifference or malice. Some federal courts require that the jury first award compensatory damages to the plaintiff before the court will permit an award of punitive damages.

In Cush-Crawford, however, the U.S. Court of Appeals for the Second Circuit in New York disagreed. The Second Circuit ruled that employees suing for employment discrimination under federal civil rights laws may receive punitive damages even without an award of compensatory damages.

The plaintiff in Cush-Crawford testified that her supervisor made repeated unwanted sexual advances towards her. She further testified that despite her complaints, the company took no corrective measures. The jury found that the plaintiff had been sexually harassed but awarded her no compensatory damages. Nevertheless, the jury awarded her $100,000 in punitive damages (the maximum amount allowable under Title VII for a company this size). The employer appealed, arguing that a plaintiff suing under Title VII may not receive punitive damages in the absence of an award of compensatory damages.

The Second Circuit ruled that an award of compensatory damages is not a prerequisite for an award of punitive damages in Title VII cases. The Court then reviewed the evidence presented at trial and concluded that the employer was recklessly indifferent to the plaintiff's right to a harassment-free workplace, and it let stand the $100,000 punitive damage award. The judge also granted Cush-Crawford $54,052 in attorney's fees.

Lessons to be learned from this decision:

Employers should be aware that punitive damages are available under Title VII (as well as the ADA), and should take this fact into account when valuing a case. While other federal appeals courts disagree, an employee suing under Title VII in the courts within the Second Circuit (New York, Connecticut or Vermont) no longer has to prove any loss or injury in order to receive damages; even in the absence of any proven damages, the jury can award punitive damages to punish the employer if it finds the employer engaged in the discriminatory practice with malice or recklessness.

Mistake No. 6:
Not understanding what constitutes a "disability" under the ADA

Chenoweth v. Hillsborough County, 250 F.3d 1328 (11th Cir. 2001)

Plaintiff Charlotte Chenoweth, a nurse, was responsible for reviewing the files of hospital patients for whom her county employer was financially responsible. In 1997, Chenoweth suffered a seizure and was diagnosed with focal onset epilepsy. Her condition did not affect her ability to perform her job, but she was not allowed to use a stove, bathe unattended, or drive until six months had passed without a seizure. In 1998, she was permitted to resume driving.

Before her seizure, Chenoweth drove to work and also drove to different sites during the course of her workday to review files. After her seizure, she proposed to telecommute two days a week, and she asked the county to modify her office schedule to accommodate her transportation needs. The county agreed to eliminate her driving between different work sites, but refused to let her work from home.

Chenoweth sued under the ADA and the Rehabilitation Act. The District Court granted summary judgment to the employer, finding that Chenoweth was not "disabled" under those statutes. Under the ADA, a "disability" is "a physical or mental impairment that substantially limits one or more … major life activities." Major life activities include caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working.

The U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal of the case, ruling that the ability to drive to work does not qualify as an impairment substantially limiting a major life activity under the ADA. The Court noted that "[i]t would at the least be an oddity that a major life activity should require a license from the state, revocable for a variety of reasons including failure to insure."

Lessons to be learned from this decision:

Before granting or denying an employee's request for accommodation of a medical condition, it is important to review with counsel whether or not that condition substantially impairs a major life activity. Under the ADA, the employer's duty to accommodate applies only where the condition substantially limits a major life activity.

This determination may sometimes appear to be intuitive. See, e.g., Anderson v. North Dakota State Hosp., 232 F.3d 634 (8th Cir. 2001) (fear of snakes is not a disability under the ADA). Often, though, it is difficult to predict whether a court will conclude that a particular medical impairment rises to the level of a disability under the ADA. For example, in Dutcher v. Ingalls Shipbuilding, 53 F.3d 723, 726 (5th Cir. 1995), unlike Chenoweth, the court factored an individual's ability to drive into the larger question of whether that individual was substantially limited in her ability to care for herself. Thus, Chenoweth might have prevailed had she been able to persuade the judge that her inability to drive was only a portion of a larger disability, e.g., the inability to care for herself or the inability to work. Because the concept of what conditions constitute a "disability" under the ADA is a fluid one, personnel decisions affected by an employee's physical or mental impairments should be reviewed in advance by counsel.

Mistake No. 7:
Not understanding that whether or not a medical condition is "serious" is as much a question of law as it is of medicine

Miller v. AT&T Corp., 250 F.3d 820 (4th Cir. 2001)

For more than six years, Plaintiff Kimberly Miller worked as an account representative at an AT&T customer service center. She was warned repeatedly about her unsatisfactory record of attendance. While on final warning for attendance, she was absent from work for several consecutive days after being diagnosed with the flu, severe dehydration, and significantly low white blood cell and platelet counts. When she was diagnosed, she was given intravenous fluids and was told to take over-the-counter medication and to return to the doctor for a follow-up visit several days later.

Miller presented AT&T with a doctor's note indicating that she was incapacitated for at least three consecutive days and was treated two or more times. She requested Family and Medical Leave Act ("FMLA") leave for the period covering her absence due to flu. AT&T denied this request, on the theory that the flu was not among the medical conditions covered by the FMLA, and that Miller did not receive treatment from her doctor on two or more occasions (one of the prerequisites to a condition being considered a "serious medical condition" that gives rise to FMLA rights). In AT&T's view, Miller's second doctor's appointment did not constitute "treatment" because the doctor merely examined Miller and drew blood.

Miller was fired for excessive absenteeism shortly after AT&T denied her request for FMLA leave, and she sued, alleging that AT&T violated the FMLA by denying her request for leave. The District Court granted summary judgment to Miller, and awarded back pay and interest.

The Fourth Circuit Court of Appeals affirmed the lower court's finding that Miller's three-day absence because of flu was protected under the FMLA as a "serious health condition" requiring "continuing treatment."

Under the FMLA, a "serious health condition" involves a period of incapacity of more than three consecutive calendar days, and either treatment two or more times by a health care provider or treatment at least once that results in a regimen of continuing treatment.

The Fourth Circuit noted that regulations promulgated by the Department of Labor state that ordinary flu is not covered by the FMLA. What distinguished Miller's case was the fact that she was unable to work for several consecutive days and required continuing treatment by a doctor. Thus, while "ordinary" flu might not satisfy the definition of a "serious health condition," Miller's flu did.

Finally, the Court stated that Miller's second doctor's visit constituted "treatment" under the FMLA, consistent with FMLA regulations defining "treatment" to include "examinations to determine if a serious health condition exists and evaluation of the condition."

Lessons to be learned from this decision:

Even medical conditions that may not seem "serious" at first blush may nonetheless be covered by the FMLA. For this reason, employers would be wise to consult counsel before denying an employee's request for FMLA leave on the grounds that the medical condition at issue is not covered by the statute.

Mistake No. 8:
Assuming that illegal harassment is somehow limited to harassment based upon sex

Flowers v. Southern Regional Physician Services, 247 F.3d 229 (5th Cir. 2001)

Plaintiff Sandra Flowers was employed by Southern Regional Physician Services. She and her supervisor were close friends who socialized together - that is, until the supervisor learned that Flowers was HIV positive. Almost immediately thereafter, Flowers' supervisor stopped socializing with her, and began hovering around Flowers' desk, monitoring her conversations and intercepting her telephone calls. In addition, the president of Southern Regional stopped shaking Flowers' hand and began avoiding her once news of her HIV status was out. Also after her supervisor became aware of her HIV status, Flowers was subjected to four drug tests in one week, and she was written up for poor job performance for the first time in more than two years. She was twice placed on 90-day probation and was ultimately discharged.

She sued under the ADA, alleging (among other things) that she had been unlawfully harassed because of her HIV positive status. The jury found in her favor on her claim of unlawful harassment, and awarded damages.

The Fifth Circuit Court of Appeals affirmed the trial court's refusal to overturn the jury verdict in Flowers' favor on her claim of unlawful disability-based harassment. (However, the Fifth Circuit vacated the jury's award of damages because there was no evidence of actual damages stemming from the harassment itself).

The Court of Appeals analogized a claim of hostile environment disability harassment under the ADA to a hostile environment sexual harassment claim under Title VII. Since the latter type of harassment is cognizable under Title VII, the Court concluded that the former type is likewise cognizable under the ADA.

The Court stated that an employee must show each of the following to establish that she was unlawfully harassed on the basis of her disability: (1) she belonged to a protected class; (2) she was subjected to unwelcome harassment; (3) the harassment was based on her disability or disabilities; (4) the harassment affected a term, condition or privilege or employment; and (5) the employer knew or should have known of the harassment and failed to take prompt, remedial action. As in a sexual harassment case, to prevail, the employee must demonstrate that the harassment was sufficiently severe and pervasive to alter the conditions of employment and create an abusive working environment.

The Flowers decision represented the first time any federal appeals court ruled that claims of hostile work environment harassment based on disability are actionable under the ADA. (Shortly thereafter, the Fourth Circuit followed suit in Fox v. General Motors, 247 F.3d 169 (4th Cir. 2001)).

Lessons to be learned from this decision:

It is critical for all employers to be aware that sexual harassment is not the only form of harassment prohibited by law. Harassment on the basis of any other legally protected personal characteristic such as age, race or disability is likewise impermissible and illegal. Employers should make certain that their anti-harassment policies cover not only sexual harassment, but other forms of legally prohibited harassment, including harassment based on disability, age, race and religion.

Mistake No. 9:
Not maintaining and promulgating a written anti-harassment policy

Matvia v. Bald Head Island Management, 259 F.3d 261 (4th Cir. 2001)

Christina Matvia, a maintenance worker, received various forms of unwanted attention from her supervisor over a three month period. For example, he hugged her, suggested that he fantasized about her, told her he no longer had sex with his wife, placed a pornographic picture on her desk, told her she looked good enough to eat, frequently placed his arm around her and massaged her shoulder, and repeatedly told her he loved her and had a crush on her. Finally, he tried to kiss her, and on this occasion, he struggled with her until she was able to escape. The following day, the supervisor reported this incident to the employer. He was suspended without pay pending investigation and was discharged shortly thereafter.

Following the supervisor's discharge, Matvia was disciplined for falsifying her time sheet. She went out on a medical leave following the employer's discovery of the falsification, and she never returned to work. She subsequently sued, claiming (among other things) that she had been sexually harassed.

The District Court granted the employer's motion for summary judgment, finding no basis for holding the employer liable for the former supervisor's harassment. The Fourth Circuit affirmed, finding that the employer was entitled to rely on the affirmative defense announced by the U.S. Supreme Court in its Faragher and Ellerth decisions. This affirmative defense allows an employer to avoid liability for a supervisor's sexual harassment of an employee (in a case where no tangible employment action was taken against the employee) if the employer shows that it took reasonable care to avoid and promptly correct any harassment and the employee unreasonably failed to take advantage of the employer's internal remedies for unwanted harassment.

Matvia did not report the harassment she suffered despite having received the employer's policy against harassment, which explicitly encourages employees to report harassment. She argued that her failure to come forward was not unreasonable because she needed time to collect evidence against the supervisor so the employer would believe her. The Court rejected this argument: "Faragher and Ellerth command that a victim of sexual harassment report the misconduct, not investigate, gather evidence, and then approach company officials."

Matvia also argued that she had not reported the supervisor's conduct because she needed time to determine whether he was a "predator" or merely an "interested man" who could be politely rebuffed. Again, the Court disagreed, refusing to accept Matvia's distinction between predators and interested men. If the conduct was unwelcome, based on the employee's gender, and sufficiently severe or pervasive to alter the employee's conditions of employment, the behavior constituted harassment and should have been reported. Moreover, the frequency with which the harassment occurred, combined with the fact that Matvia made it clear to the supervisor that his actions were unwelcome, would have led any reasonable person to believe that he was a "predator" whose actions were to be reported without delay. Thus, Matvia's failure to report the supervisor's conduct was unreasonable, and the employer could not be held liable for that conduct.

Lessons to be learned from this decision:

Every employer should periodically remind its employees of its anti-harassment policy, and should always encourage employees to report any conduct that may constitute a violation of that policy. Such proactive measures may well insulate the employer from liability for harassment that the victim fails to report. Conversely, failing to maintain and communicate such a policy can be costly. See Nuri v. PRC, Inc., 13 F. Supp.2d 1296 (M.D. Ala. 1998) (employer was not insulated from liability although it had adopted comprehensive anti-discrimination policy because policy was not well-known to employees).

Mistake No. 10:
Assuming that the NLRA is irrelevant to union-free employers

Epilepsy Foundation of Northeast Ohio v. NLRB, 268 F.3d 1095 (D.C. Cir. 2001) and NLRB v. Caval Tool Division, 262 F.3d 184 (2d Cir. 2001)

The Epilepsy Foundation of Northeast Ohio ("the Foundation") challenged a National Labor Relations Board ("NLRB" or "Board") decision finding that the Foundation committed unfair labor practices in violation of the National Labor Relations Act ("NLRA" or "Act") when it denied the requests of two employees who were not represented by a union to have a co-worker present at a meeting called to investigate their alleged misconduct. In reaching this result, the NLRB extended the rule of NLRB v. J. Weingarten, Inc., 420 U.S. 251 (1975), to nonunion workplaces. (In Weingarten, the Supreme Court ruled that employees in a unionized workplace may request the presence of a union representative at an investigatory interview which the employee reasonably believes might result in disciplinary action.)

In the years since the Supreme Court's decision in Weingarten, the Board has changed its position several times on the issue of the applicability of Weingarten rights in nonunion settings. In Materials Research Corp., 262 N.L.R.B. 1010 (1982), the Board explicitly extended the Weingarten rule to a nonunion workplace. Three years later, in Sears, Roebuck & Co., 274 N.L.R.B. 230 (1985), the NLRB reversed course completely, holding that the Act applies only to unionized employees. In 1988, in E.I. DuPont de Nemours, 289 N.L.R.B. 627 (1988), the Board once again modified its position, holding that the decision in Materials Research extending Weingarten to nonunion workers "represented a permissible construction of the Act, but not the only permissible construction." The Board decision in DuPont declined to adopt the broad but permissible interpretation, instead holding that Weingarten does not extend to a nonunionized workplace.

Finally, in Epilepsy Foundation, the NLRB overruled DuPont, because it is "inconsistent with the rationale articulated in the Supreme Court's Weingarten decision, and with the purposes of the Act." The U.S. Court of Appeals for the District of Columbia Circuit upheld this interpretation, noting that a non-union employee's request for a coworker's presence at an investigatory interview is "concerted activity for mutual aid and protection" and thus within the realm of employee rights protected by section 7 of the NLRA.

The Board's expansive interpretation of the NLRA in a nonunion setting was also affirmed in the decision of the Second Circuit Court of Appeals in New York in NLRB v. Caval Tool Division, 262 F.3d 184 (2d Cir. 2001). In that case, a non-union employee was disciplined because she aggressively challenged various policy changes implemented by her employer. The Court affirmed the decision of the NLRB finding the discipline unlawful. The Court noted the rule that the NLRA protects only "concerted activity for mutual aid and protection," and not purely individual conduct. The Court found, however, that the employee's actions were "concerted" – even thought she acted alone – because her comments were made "with the object of initiating or inducing . . . group action."

Lessons to be learned from these decisions:

All employers - whether unionized or not - should be mindful of the requirements of the NLRA. A non-union employee's demand that a coworker be present during an investigatory meeting must be evaluated in light of the requirements of Weingarten. And the Caval case teaches that the concept of protected concerted activity under the NLRA is broad indeed. Consequently, any employer – unionized or not – must proceed with caution when seeking to limit what appears to be even an individual protest over working conditions.