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Tuesday, April 2, 2019

How Not to Terminate




March 1, 2019: The Supreme Court of Alabama affirmed a $1.26 million retaliatory discharge verdict consisting of $314,862.88 in compensatory damages and $944,588.64 in punitive damages in Rice v. Merchants FoodService. Denny Rice was one of eight drivers delivering food to the Mobile County School System when he suffered an on-the-job injury that forced him out of work for almost six months. Upon returning to work from workers’ compensation leave, Rice was immediately terminated and told his position had been filled while he was on leave, so no work was available.
Image result for workers comp

Rice testified at trial that he was devastated by the termination and feared and anguished over how he would be able to cope financially without a job. He testified that he postponed a planned wedding, withdrew $20,000 from his 401(k) and applied for and took a commercial driving test in order to enhance his commercial drivers’ license. He eventually found a position with a trucking company where his annual salary slightly exceeded his former salary, but only because he was forced to work over 900 hours more per year. At trial Rice requested damages for mental anguish and emotional distress and for his lost wages between his termination and locating his new job. He also requested “front pay” damages, which is his lost future earnings until he turned 65, based on the difference in pay between his old job and new job. At trial, Merchants FoodService argued that such front pay damages were not recoverable since he made more money at his new job than he did at his old job. The Mobile County trial judge allowed the claim to proceed to the jury as a fact question, however, because his new job paid more on annual basis only because Rice was forced to work over 900 more hours per year.

On appeal, Merchants FoodService actually conceded liability on the retaliatory discharge claim and contested only the amount of compensatory and punitive damages awarded. The termination clearly violated its personnel manual which required the company to attempt to find another position for the employee returning from workers’ comp leave. In addition, there was evidence the employer was in the midst of an operational expansion at the time and a job opening for a similar position was posted only 11 days after the termination. During trial, Rice presented evidence from another employee who was also terminated on the day he returned from workers’ comp leave as well as an internal company email that acknowledged that the termination of Plaintiff was improper (“this one will probably come back to bite us, so stay tuned”).

Common Sense Counsel: This case appears to be an outlier of “how not to terminate” an employee who has taken work comp leave. It should also serve as a strong reminder to Alabama employers to take great care in understanding and complying with its own employment manual and established company policies when an injured employee returns from a workplace injury. Prior to terminating an employee who has recently returned from work comp leave it is advisable that employers review their personnel manuals and contact trusted legal counsel before terminating the employee.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and can be contacted at teden@constangy.com or 334-246-2901. 

Monday, March 25, 2019

Don’t Trust Anyone in IT- Check it Out First

Elizabeth Frankhouser was the Executive Director of the Clearfield County Career & Technical Center. Frankhouser had a personal Dropbox account, which she used sometimes for business and sometimes for pleasure.  What happens on Dropbox stays on Dropbox . . . unless your IT guy hates you and has your password. According to Frankhouser, she never accessed the "personal" material in her Dropbox account from the Career Center and never downloaded it to her work computer. While she was at work and on the Center's systems, she used Dropbox strictly for business.

Shortly after she was hired in 2015, Frankhouser's supervisor allegedly began sexually harassing her. Frankhouser refused his advances and complained to his boss.  He then began making things difficult for Frankhouser at work, as she alleged in her federal court lawsuit.

At some point in 2016 or 2017, Frankhouser's computer started malfunctioning, and the IT administrator removed and replaced her old hard drive. Among other things, Frankhouser had all of her passwords stored on an Excel spreadsheet on her Career Center computer. After changing out her hard drives, the IT administrator allegedly took the old hard drive home and Frankhouser's "password" spreadsheet, allegedly logged into her Dropbox account using her log-in information, and found two "explicit" pictures of Frankhouser's boyfriend and some compromising pictures of Frankhouser at a party. The IT guy allegedly printed hard copies of the pictures and gave them to others at the Center and spread vicious untrue rumors about what else he found on her hard drive. Frankhouser was then terminated by the Center for allegedly having dirty pictures on her Career Center computer. 

Frankhouser then sued for violation of her rights under the Fourth Amendment to the U.S. Constitution (the Career Center is a public-sector employer) and for invasion of privacy under the common law of Pennsylvania. The Career Center and the individual defendants filed a motion to dismiss the "cyber-claims." This week the federal judge allowed some of the claims in the lawsuit, including the "cyber-claims," to go forward. This is what the judge said about the cyber-claims in a nutshell: the Center policy against improper use of Center computers did apply to an employee's private cloud account or material that had never been accessed through the employer's system. Based on the allegations in the lawsuit, Frankhouser absolutely did have a reasonable expectation of privacy with respect to her personal Dropbox material. It was her own private account, it was password-protected, and Frankhouser had never accessed the pictures while on the Career Center system or downloaded them. The fact that she sometimes used Dropbox for work did not mean that she lost the right to keep her personal Dropbox stuff private.

Common Sense Counsel: Employers Don't Overreach. If you have a good internet usage policy, you should have the right to monitor employees' emails in your system, as well as their online activities while on your system. But that doesn't mean you have the right to go "fishing" in employees' private accounts. Make sure you really know the facts before you make an adverse employment decision you'll regret in cyber technologies.


Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and can be contacted at teden@constangy.com or 334-246-2901. He thanks Robin Shea for her Constangy Blog Post on the subject. Link to case at www.alabamaatwork.com

Friday, March 8, 2019

Proposed Salary Threshold Overtime Regulations are Here!

On Thursday, the U.S. Department of Labor released its long-awaited proposed regulations on the executive, administrative, and professional exemptions to the overtime rule under the Fair Labor Standards Act. Read the DOL’s official news release here.

Under the proposal, the salary threshold would increase from the current $455 per week to $679 per week ($35,308 per year). The threshold would also be subject to review and possible adjustment through new rulemaking every four years. Under regulations issued by the Obama Administration but blocked by a court, the threshold would have jumped to $913 per week, or $47,476 per year, and tied to costs of living thereafter.
The DOL has stated that proposed regulations would not change the "duties tests." Public comments will be accepted for 60 days after the proposed rule is published in the Federal Register, presumably early next week. The Final Regulation will become effective January 1, 2020

Common Sense Counsel: Constangy, Brooks, Smith & Prophete, LLP, will hold webinars on the new Final Rule and will issue follow-up bulletins as we continue to analyze the Rule. The key decision for Human Resources departments and management is whether to raise the salaries of currently exempt employees to $679 per week ($35,308), or to reclassify those employees to non-exempt status. If you are going to reclassify, you will need to determine the regular rate of pay for these employees in order to determine the proper overtime rate. This will require careful planning and consideration of a number of issues, not the least of which is how many hours of overtime are expected to be worked each week by the involved employee.

The East Alabama Society of Human Resources (EASHRM) will hold a briefing workshop soon.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com with Links to regulations on Blog. Send an email to eandrews@constangy.com if you wish to be placed on the free Constangy newsletter and webinar list.

Thursday, February 21, 2019

Positive Marijuana Test in Arizona Does Not Mean Impairment

Carole Whitmire, a store cashier at a Wal-Mart in Slow Low, Arizona who was also the holder of a State of Arizona medical marijuana card, hurt her wrist at work and was drug tested as part of her post accident medical examination. She tested positive for marijuana metabolites.

Walmart's policy provided for termination of employees who tested positive for illegal drugs. Ms. Whitmire was first suspended without pay and then terminated based on her positive test result. She sued Walmart in Federal District Court under the Arizona Medical Marijuana Act, which generally prohibits discrimination against employees who use medical marijuana, but allows employers to take action against employees, even if they're medical marijuana users, if they're "under the influence" while at work.

However, the Arizona Medical Marijuana Act says that "a registered qualifying patient shall not be considered to be under the influence of marijuana solely because of the presence of metabolites or components of marijuana that appear in insufficient concentration to cause impairment."

In other words, an employer in Arizona can't terminate the holder of a medical marijuana card based solely on a drug test, unless the result indicates that the employee was impaired at work. The Act has two defenses for employers. It's legal for an employer to take action against the employee (1) if the test result indicates that the employer had a good-faith basis for believing the employee was actually impaired while at work, or (2) if the employer is subject to other legal requirements, such as U.S. Department of Transportation regulations.

Walmart claimed that it should win the lawsuit because, among other reasons, it believed in good faith that Ms. Whitmire was impaired while at work on the day of her drug test. According to a declaration (a sworn statement similar to an affidavit) provided by a company personnel coordinator, Ms. Whitmire's level of marijuana metabolites was in the highest range that the test registers, and the personnel coordinator said under oath that she believed an employee with that level would be impaired while at work, according to the Judge’s Order.

The court ruled that the opinion of a Human Resources professional on scientific matters such as these wasn't good enough. To have a good-faith belief based only on a drug test result, the court said in its Order, Walmart should have presented evidence from an expert with an appropriate scientific background -- perhaps an M.D., or a scientist with the drug testing laboratory. The personnel coordinator didn't provide any "foundation" apart from the test result to support her good-faith belief that the plaintiff was impaired while at work. This means Ms. Whitmire wins without even having to go to trial. The only issue left to be resolved is how much she is awarded.

Common Sense Counsel: Presumably, the court would accept testimony from a lay witness about reasonable suspicion observations -- for example, that an employee had dilated pupils, smelled like marijuana, and was stumbling around the workplace on the day in question. But, in this case, Walmart did not put Ms. Whitmire's workplace behavior at issue. Walmart had the burden of proof on the good-faith defense, and the court ruled that the sworn testimony of the personnel coordinator did not satisfy the burden. Accordingly, the court -- on its own, without a request from Ms. Whitmire -- granted summary judgment to Ms. Whitmire.

So, employers beware. If you operate in a state that has legal protections for medical marijuana users, and the number of such states is constantly growing, consult with your employment counsel before you take action against a medical marijuana card holder who tests positive for marijuana. In some states, you may even have a duty under state disability discrimination law to consider reasonable accommodations. Also, make sure your drug testing policy does not go up in smoke.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and West Point, GA can be contacted at teden@constangy.com or 334-246-2901. Link to case at www.alabamaatwork.com. Tommy’s Law Partner Robin Shea posted much of this on her Constangy blog last week.

Monday, February 18, 2019

It Takes a Village to Defeat a Union

Scabby the Rat is a familiar sight in certain parts of the country when a dispute breaks out between a union and an employer. He is notable both for his symbolic meaning and for his size—he is a giant, inflatable balloon, available in sizes up to 25 feet tall. Scabby made his appearance after Local 330 of the Construction and General Laborers’ Union learned that a masonry company working at Kolosso Toyota, in the Town of Grand Chute, Wisconsin was not paying area standard wages and benefits.

The Union decided to engage in informational picketing at the site and to set up Scabby in the median right of way directly across from the dealer, along the frontage road for on a major local thoroughfare. Union members installed a 12-foot version of Scabby by tethering the huge inflatable rat to stakes that had been pounded into the ground.

The protest went smoothly on the first day, but trouble began to brew when on the Town’s Code Enforcement Officer, went to the protest site and told the Local’s president that the Union would have to deflate Scabby because the rat violated the Town’s Sign Ordinance. When all was said and done, the Union was forced to remove Scabby from the scene and resort to other methods of protest. That was when the Union filed a legal action in Federal Court where it asserted that the Town’s 2014 Ordinance violated the First Amendment because it distinguished among signs on the basis of content. The Wisconsin federal judge denied its motion for a preliminary injunction and later entered summary judgment for the Town. The Union was seeking damages based on the fact that it had been forced to pay members to assist in the area-standards picketing and to draw greater resources from its organizing affiliate to staff and maintain the protest. 

Recently the 7th Circuit Court to Appeals heard the case and ruled, “We may uphold a law that restricts even protected speech in a public forum if the restriction is content neutral, narrowly tailored to serve a significant governmental interest, and leaves open ample alternative ways to communicate the desired message. There is no doubt that a union’s use of Scabby to protest employer practices is a form of expression protected by the First Amendment. We also noted, however, that a municipality is entitled to implement a nondiscriminatory ban of all private signs from the public roads and rights-of-way. Grand Chute said that it had done no more than that. We agreed with the Town that its 2014 Ordinance was “comprehensive and content-neutral.” But that is not the end of the story. We pointed out that even a neutral ordinance can violate the First Amendment if it is enforced selectively, permitting messages of which the Town approves while enforcing the ordinance against unions and other unpopular speakers.”  In the end the Court held hat the Town did not discriminate on the basis of content when it ordered Scabby deflated.

Common Sense Counsel: When Unions are involved you can usually smell a rat. For Cities, look again at your sign ordinance in accordance with the guidance given by the Court in this case. There is no faster way for a city to watch its industrial life blood bleed out, than to allow unions to invade its industrial parks unhindered. For employers, conducting TIPS Training for your supervisors now is the best way to take preventive action. With regards to unions, under the National Labor Relations Act an employer can not Threaten, Interrogate, Promise or Spy (TIPS). Either way, its takes a village to defeat a union.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and West Point, GA can be contacted at teden@constangy.com or 334-246-2901. Link to case at www.alabamaatwork.com

Tuesday, February 12, 2019

Deadline for filing EEO-1 Workforce Data Extended through May


The Equal Employment Opportunity Commission has announced that employers will have a two-month extension of the deadline to submit their EEO-1 workforce data report for 2018.

The annual deadline is usually March 31, but in a press release on February 1, 2019, the EEOC stated, “Due to the partial lapse in appropriations, the opening of the EEO-1 has been postponed until early March 2019. The deadline to submit EEO-1 data will be extended until May 31, 2019.”
EEO-1 reports must be filed by: 

  • Employers with 100 or more employees;
  • Federal contractors or first-tier subcontractors with 50 or more employees and either
    • a federal contract, OR
    • a federal subcontract, OR
    • a federal purchase order of $50,000 or more.
EEO-1 reports include information about the race, ethnicity, and sex of employees, broken down by job category. The survey is intended to create workplace opportunities by enforcing federal anti-discrimination laws. To learn more about the EEO-1 survey, and the date the 2018 survey opens, visit the EEO-1 website.

Friday, February 1, 2019

Is "Medical Marijuana Accommodation" on the way in California?

The legalization of medical and recreational marijuana use in California has placed employers in a tough situation as they grapple with crafting and enforcing workplace drug policies that comply with an area of the law that is largely unsettled. Marijuana remains a Schedule I drug under federal law, and California employers may maintain and enforce policies prohibiting its use. 

But that may change soon. In February 2018, a bill known as AB-2069 was proposed, which would amend the California Fair Employment and Housing Act to make users of medical marijuana a legally protected class. This means they would be protected from employment discrimination and entitled to reasonable accommodation. AB-2069 is still working its way through the legislature. Meanwhile, here is an overview of the evolution of medical marijuana law in California.

1996 – California became the first state to legalize medical marijuana. Proposition 215 legalized the cultivation and use of medical marijuana for the treatment of illnesses “for which marijuana provides relief." As a result of Proposition 215 and SB 420, Californians were able to easily obtain medical marijuana prescriptions for seemingly any medically related reason.

2008 – The California Supreme Court ruled in Ross v. RagingWire Telecommunications, Inc., that California law does not prohibit an employer from refusing to employ, much less accommodate, a medical marijuana user, even if the marijuana use is permitted under California law. The growing acceptance of marijuana use culminated in 2016 with the passage of Proposition 64, which legalized the recreational use of marijuana in California. The sale of recreational marijuana became legal in California on January 1, 2018. 

Fifteen states currently have laws, or a constitutional amendment, protecting medical cannabis patients from employment discrimination: Arizona, Arkansas, Connecticut, Delaware, Illinois, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New York, Oklahoma, Pennsylvania, and Rhode Island, although the level of protection varies from state to state. If enacted, AB-2069 would undoubtedly create a host of issues for employers with operations in California.

The pending AB-2069 includes two critical limitations. First, it explicitly states that employers may discipline or terminate an employee who “is impaired” at work or during work hours due to the use of cannabis. Unlike alcohol, where Breathalyzer tests may show the exact level in a person’s blood, there are no available tests that show the current level of impairment for marijuana at a specific point in time. Drug tests show only that marijuana was consumed within the past 30 days or so. Thus, it will be difficult for employers to prove that an employee was under the influence of marijuana at work. Second, AB-2069 acknowledges that because marijuana remains illegal under federal law, California employers must be allowed to refuse to hire or may terminate a marijuana user if employing the person would “cause the employer to lose a monetary or licensing-related benefit under federal law or regulations.”

Common Sense Counsel: Employers with California operations, or in any of the 15 protective states listed, would be wise to plan ahead and consider policies for future implementation in the event that California joins the growing list of states protecting medical cannabis patients in the employment context.


Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL who develops employer drug testing policies nationwide and can be contacted at teden@constangy.com or 205-222-8030. Tommy wishes to thank Aaron Rutschman in the Los Angeles – San Francisco office for his excellent Constangy Blog Post. Blog at www.alabamaatwork.com with links.