What Every Employer Better Know About the Law
(or, how to keep your employees from getting rich
at your expense)

SECTION I

THE ROCK AND THE HARD PLACE:  COMMON SENSE IS NOT ENOUGH AND IGNORANCE OF THE LAW IS NO EXCUSE

1. Your bookkeeper suffers an injury which impairs his vision. He could still do his job if you buy him a special computer screen that costs $500. What do you do? Suppose it costs $5,000? $50,000?

2. You believe in minority hiring and you hire a minority (i.e., racial minority, woman, religious minority) to work in your warehouse.

   1. Some of your other workers are not so tolerant. They refuse to work along side the minority. You can't afford to lose them all. What do you do?

   2. Your workers insist on calling the minority by a derogatory name. They put up anti-minority posters and slogans on their lockers. The minority employee complains. You tell the minority employee that you will protect his/her job and that you will ask the other employees to knock it off, but they have a right to their opinion and you can't control their free speech. Have you done anything wrong?

3. One of your employees tells you he is a homosexual; or a compulsive gambler; or a kleptomaniac; or a former drug addict; or an alcoholic who drinks at home every night; or an AIDS patient. You have certain moral beliefs. You prefer not to work with people who have these conditions. You tell the employee that you would prefer he find another job. Any problem?

   1. Another employee announces at a staff meeting that he objects to your discrimination. He suggests that all employees ought to take action to stop you from being so small-minded. You need to establish control. You fire the employee. Any problem?

4. You are tired of absenteeism and workers compensation claims.

   1. You require each applicant for a job to take a physical so you can make sure you are hiring reliable people. Any problem?

   2. You are interviewing candidates for a job that requires physical exertion. Two applicants apply. One is 22, the other is 60. You figure, correctly, that the odds of the 22 year old getting hurt are much less than the 60 year old. You also figure that the 60 year old will retire in a few years, and you want a long term employee. You hire the 22 year old. Any problem?

   3. One of your employees claims to have suffered an on-the-job back injury, and she files for workers compensation. Her job requires lifting and she claims she can't work. You think she just wants to stay home and watch the soaps. To smoke her out, you write to her and tell her that you have a "light duty" job for her that requires no lifting. She says she's not feeling well, and requests medical leave.

      1. You know the Americans with Disabilities Act requires you to afford "reasonable accommodation". Do you have to accommodate this employee?

      2. You want to replace her with someone who wants to work for a living. Any problem?

      3. You think she's faking and you want to prove it. You ask to see her medical records. Can you require that she provide them?

5. Your employee's spouse develops a kidney disease.

   1. He tells you that he has to drive her for dialysis every morning. He asks if he can work on a schedule in which he comes in an hour later, and stays an hour later. You are afraid that everyone will want accommodations for their own personal problems and preferences. The employee is just an average worker and easily replaceable. What do you do?

   2. You turn down the request. So he asks for an unpaid leave of absence for six months. He also asks that you continue to pay for his medical insurance during the leave, and that you rehire him when the leave is over. You try to be fair. You tell him you won't drop him from the group health plan, but he's got to pay the premiums. You also tell him that you will do your best to rehire him in six months, but can't guaranty that you'll have a job open. Any problems?

6. You hire a helper. He messes up on his first job. You give him another chance. The helper notices that one of your trucks does not have a back up alarm. He insists that the truck be taken out of service until the alarm is installed. If you do that, you won't be able to finish on time. You tell the helper to stay away from the truck, stop making such a fuss, and you'll have the alarm installed next week. During a break, the helper heads for a pay phone, comes back, and tells you he called OSHA and the inspectors are on their way. You have enough problems. You fire the helper for not following instructions and disloyalty. Any problems?

7. You advertise for a secretary. The job is clerical -- typing and filing. Once or twice a month, however, you'd like the secretary to pick up and deliver some items. An applicant comes in for an interview. She has a handicap that prevents her from driving. In all other respects she is qualified and can do the job. You have other applicants who are just as qualified and can drive. You tell her you're not hiring her because you would rather have someone who can drive. Did you do anything wrong?

   1. Change the facts slightly. The job requires one half day per month, on a Saturday. The applicant's religious beliefs preclude her from working on Saturdays. Can you refuse to hire her on that basis?

8. For twenty years you have employed a loyal office administrator. He knows all aspects of your business -- who your customers are, your pricing, all your dealings with your vendors, who among your employees is especially valuable, and all the "tricks of the trade" that took you 20 years to develop and make you successful. A new competitor opens up across the street. They immediately make your administrator an offer he can't refuse. He tells you he's leaving, he confesses he never liked you, and states that he's going to do everything he can to help the competitor put you out of business. What can you do about it, except plead?

9. You hire a minority salesman. Your biggest customer is a racist and objects to doing business with the salesman. He threatens to terminate his business relationship with you unless you send a different salesman over. Your marketing department is insisting that something be done immediately. What do you do?

10. One of your employees is not performing well. You plan on firing him by the end of the year, but don't tell him yet since you want to get through this fiscal period. In September he tells you he has AIDS, and he requests a one month leave of absence. You figure that will solve the problem. In December, however, he tells you he now has things under control and wants to come back. You tell him that he is terminated for lack of performance. He files a claim with the EEOC, alleging that you fired him because of AIDS, and the accusations of poor performance are just a ruse. How do you prove your case?

SECTION II

THE RULES OF THE GAME

Title VII

Title VII prohibits employers from discriminating against employees or applicants for jobs on the basis of race, color, nationality, religion, sex or pregnancy. In most instances, an employer will be held liable for its own discriminatory actions and for the discriminatory actions of its managers and supervisors. Depending on how an employer reacts to their activities, an employer can also be liable for what lower-level employees do. Generally, an employer must employ 15 people at the same time for twenty weeks during a year in order to be held liable for federal employment discrimination claims. A successful claimant can recover significant damages, punitive damages and attorneys fees.

Title VII discrimination claims usually take the following forms:

• harassment, in the form of abuse which is perpetrated or allowed by an employer, pertaining to a person's race, color, nationality, religion, sex or pregnant condition;
• sexual harassment, which includes not only unwelcome sexual advances or contact but also conduct such as staring, sexual comments, etc.;
• religious discrimination, including not only discrimination on religious bases, but also an employer's failure to reasonably accommodate employees' religious beliefs to some extent; and
• retaliation, which occurs when an employer takes unfavorable actions against an employee who opposed the employer's discriminatory practices.

The Americans with Disabilities Act

What does the ADA require of an employer? Despite the common impression, the most significant part of this law does not have to do with barrier removal and architectural accessibility. The Americans with Disabilities Act (ADA) prohibits employers from discriminating against "qualified individuals" because they are disabled, so long as those individuals can perform "the essential functions" of the job with or without "a reasonable accommodation". The ADA applies to job application procedures, hiring, firing, compensation, advancement, training and all other aspects of the employer-employee relationship. The ADA applies to all employers that employ at least 15 employees. A successful claimant can recover significant damages, punitive damages and attorneys fees.

What are the "essential functions" of a job? Look for what's central to the job, and not the tangential duties. Courts will look to written job descriptions, or the text of advertisements.

What is a "reasonable accommodation"? A reasonable accommodation is, essentially, an accommodation that does not cause the employer an "undue hardship". Consequently, different types of accommodations will be required of different employers, largely depending on how big they are and how much money they can afford to spend on special equipment, etc. A reasonable accommodation might also entail non-monetary considerations -- changes in work time or duties, for instance.

Who is "disabled"? Generally, a "disability", as the term is used in the ADA, is a mental or physical condition that substantially limits a person's ability to perform one or more major life activities or functions. What the government considers to be a "disability", however, does not always square with conventional notions of "the disabled". For instance, the following can be disabilities: cosmetic disfigurements, AIDS, alcoholism, speech impediments, emotional illnesses, and the stigma which might attach to a former drug user. The following are not disabilities: old age (as opposed to certain conditions that come from old age), homosexuality, compulsive gambling, height, poverty. New regulations and decisions are issued from time to time which change the definition.

The Age Discrimination in Employment Act

The Age Discrimination in Employment Act (ADEA) protects older workers from being discriminated against in the workplace. A person has to be at least forty years of age in order to be protected by the ADEA. To prevail, such a person must be able to prove that he/she was treated adversely because of his/her age, as opposed to, for example, incompetence, or some "age-neutral" reason. Generally, an employer must employ 20 people at the same time for twenty weeks during the year in question in order to be held liable. A successful claimant can recover significant damages, punitive damages and attorneys fees.

The Family and Medical Leave Act of 1993

The Family and Medical Leave Act of 1993 (the "Leave Act") requires all private employers with 50 or more employees to provide up to 12 weeks of unpaid leave per year to eligible employees who want the leave because of the birth of a child or placement of an adopted or foster care child, to take care of a child, spouse, or parent who has a "serious health condition," or for the employee's own serious illness. Failure to abide by the Leave Act can result in an award of significant damages, punitive damages and attorneys fees. Some key points:

• Although the leave is unpaid, while on leave employees are entitled to continued health benefits.
• Employers may require employees to take any paid vacation as part of the 12-week leave provided in the law.
• Following leave, employers must restore returning employees to the positions they held when leave commenced or to an "equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment." However, highly compensated (top 10%) employees can be denied reinstatement, if necessary, "to prevent substantial and grievous economic injury to the operations of the employer."
• Under certain circumstances, employees may take medical leave intermittently or on a reduced leave schedule "when medically necessary" without obtaining the permission of the employer.
• Certain jurisdictions have similar leave laws which apply to smaller employers (e.g., California provides for reasonable pregnancy and disability leave for employers of 5 or more employees; Maine covers employers with 25 or more employees; Minnesota covers employers with 21 or more employees; Oregon provides for childbirth or adoption leave for 25 or more employees; Puerto Rico provides for 8 weeks paid pregnancy leave at half salary for all employees; Vermont provides for leave for childbirth or adoption for employers with 10 or more employees and serious health care leave for employers with 15 or more employees).

Equal Pay Act

The Equal Pay Act prohibits an employer from paying members of one sex differently from members of the opposite sex for equal work on jobs which require equal skill, effort, responsibility and working conditions. Any employee who is paid a different wage than another employee based on sex discrimination can bring an action under the Equal Pay Act. The Equal Pay Act applies to just about every employer who sells a product or performs a service.

The Employment-At-Will Doctrine

Many states have statutes that regulate the right of an employer to fire an employee without cause. Most states, however, continue to subscribe to the traditional "employee-at-will" doctrine -- so long as there is no employment contract to the contrary, the employer can terminate the employee for any reason, good or bad. The flip side is that the employee has the right to quit anytime he or she wants.

As is typical in the law, however, there are exceptions to the at-will employment rule and, in some instances, the exceptions threaten to swallow the rule. For instance, an employer's right to terminate an at-will employee can be restricted by at least the following:

• All of the federal anti-discrimination statutes detailed above;
• Different states have their own anti-discrimination statutes;
• Most states have formulated "public policy" exceptions to the at-will rule. For instance, some state courts have ruled that it would be against public policy to allow an employer to terminate a "whistle blower", or to allow an employer to terminate an employee just because the employee took advantage of a right, like workers compensation, or to allow a termination because of jury duty;
• Employees frequently contend that there was an agreement that they could only be terminated for cause. Sometimes they find the basis for this argument in employee manuals or memos, or past practice, or they claim that they had conversations at the onset of their employment in which some protected status was granted to them.

SECTION III

THE $64,000 (AND OFTEN A LOT MORE) QUESTION...

When a job applicant accuses you of not hiring the applicant because of unlawful discrimination, and you really did not hire the applicant because you thought the applicant was unqualified, how will you prove it? When your employee claims he was passed over for a promotion, or terminated, because of age, race, sex, disability or otherwise, and that really had nothing to do with it, how will you get a judge or jury to believe you?

People With Swords Do Not Attack People With Guns

Nobody wants to spend money fighting a battle they are going to lose. When the EEOC and/or your employee's lawyer sees that you've got a gun and they've got a sword, disputes become compromises. You win the fight before it begins. How do you set that up?

In the Battle of Recollections, Documents are the Ultimate Weapon

What did you say, and when did you say it? What did the applicant or employee do? What was the reason for your actions or decisions? What were the terms of the deal that was made? These are the types of issues that ultimately become a "my word against your word" battle of recollections, and in that battle documents are the ultimate weapon.

• Example: Confirming letters

  -- State what was said

  -- Establish reliance on what was said

  -- Invite a response

  -- Be able to prove they got it

  -- Standardize; make it company procedure

• Example: File notes

  -- Do it as it happens

  -- Do it in the ordinary course of business

  -- Don't sanitize

  -- Standardize; make it company procedure

• Example: Letter agreements

  -- Cover why, what, when, how much

  -- Include a "merger clause"

  -- Prepare form language for usual situations

  -- Use your lawyer behind the scenes

• Example: Creating Slam Dunks

  -- "You never even gave me a warning about my performance."

  -- "You never told me that I was supposed to do that."

  -- "My qualifications were as good as any other applicants'."

  -- "You must have fired me because of my race; there's no other explanation."

  -- "I told you what kind of accommodation I needed and you refused to give it to me."

  -- "I never agreed to that."

And now, the fine print...

This summary is for your general information only. It is not meant to be complete in all respects. Instead, it focuses on certain topics thought to be of particular importance or interest. It is not a substitute for individualized legal advice or analysis. © 1996 Michael G. Trachtman. All rights reserved.