Saturday, February 28, 2015

Don't Sue: The Legality of Requiring Employees to Waive Legal Claims

           Your company is reorganizing, and in order to keep your job, you have to waive any legal claims you might have against your employer. You've kept your job, but lost the ability to remedy discrimination. Something about this doesn't seem fair.  Nevertheless, in a recent case, the Third Circuit Court of Appeals upheld a waiver requirement and found that, because the employees received the benefit of continued employment, waiver was valid.          

          In 1999, Allstate Insurance Company announced its plan to convert to a sales program based on independent contracting. As part of this reorganization, employees were given four options: (1) conversion to independent contractor status; (2) $5,000 and interest in accounts; (3) one year’s severance pay; or (4) 13 week severance. Employees who chose one of the first three options were required to sign a release of all legal claims against Allstate related to their employment or termination, including discrimination claims under Title VII, the ADA, and the ADEA. In order to remain employed as independent contractors, employees were required to sign a waiver, waiving their ability to sue Allstate for discrimination under Title VII, the ADA or the ADEA. Importantly, the employees were not required to waive any future claims against Allstate.

            The Equal Employment Opportunity Commission brought a lawsuit alleging that Allstate’s waiver requirement constituted retaliation against its employees because continued employment was contingent upon waiving legal claims. As a threshold matter, the EEOC argued the waivers were invalid due to lack of consideration. Because the waiver was not in exchange for severance benefits, the Commission argued that employees received nothing of value.
            In determining the validity of the waivers, the Third Circuit Court of Appeals focused on whether the employees benefited from waiving legal claims. In doing so, the Court focused on alternative means of consideration.  Prior to the reorganization, agents were not entitled to continued employment; instead, they were all at-will employees.  By signing the waivers of legal claims, the agents benefitted.  Not only did the agents receive continued employment, but the conversion option also provided the following benefits: (1) guaranteed conversion to independent contractor status (previously discretionary); (2) monetary bonus;  \(3) excused repayment of outstanding expense advancements, and (4) transferable interest in his business after 2 years (previously 5 year requirement). In essence, employees received the benefit of a new business arrangement.

            After finding adequate consideration, the Court then considered whether the waiver requirement constituted illegal retaliation. Because continued employment was contingent upon the release of claims, the EEOC argued impermissible retaliation. By failing to provide alternative means of continued employment, the EEOC argued that Allstate committed an adverse action against employees by forcing a waiver of rights in order to maintain employment. Once again, the Court rejected EEOC’s argument, finding that employees do not have a protected right to refuse a waiver, and denial of conversion to independent contractor status does not qualify as an adverse employment action.

            This case serves as a reminder that employers can exchange consideration for releases of employment law claims, and this exchange is not limited to the offer of severance pay.  For example, an employer can offer the employee other things of value in exchange for releases of claims (ie new business relationship/new position; bonus, other perks). The key is that the consideration must offer the employee something that they were not otherwise entitled to receive.  In this case, because the Allstate employees were previously employed “at-will”, the conversion program offered a benefit with its guarantee of continued employment.

            Although a waiver may be upheld based upon the receipt of an unconventional benefit, employers and employees alike must remember that releases may be declared invalid for other reasons. Even if there is adequate consideration for the waiver, if the employee was required to waive future claims or if the employee signed the agreement involuntarily or without adequate knowledge, it may be deemed invalid. When crafting a waiver agreement, remember to consult with an attorney to ensure its validity and maximize its effectiveness.

Thursday, November 20, 2014

"When You Know, You Know"--- Notice under Title VII in Religious Accommodation Cases

Samantha Elauf applied for a position at the Abercrombie Kids store in Woodland Hills Mall. Samantha wore a hijab to the interview.  During the interview, the manager informed Samantha of Abercrombie’s “Look Policy” requiring employees to dress and look a certain way (unsurprisingly, the policy has been litigated several times). At the interview, Samantha never mentioned her hijab, never mentioned religion, and did not ask any questions about the store policy regarding head coverings. Supposedly, because the headscarf was not allowed under the “Look Policy,” Samantha was not hired.

The EEOC brought suit against Abercrombie & Fitch for failure to provide religious accommodations under Title VII. The district court granted summary judgment for the EEOC, and Abercrombie appealed.  On appeal, the Tenth Circuit focused on the undisputed fact that the candidate for employment never informed Abercrombie that she felt obligated to wear a headscarf for religious reasons. Her religion was not even mentioned during the interview. Due to Abercrombie’s lack of actual knowledge of a need for religious accommodation, the Tenth Circuit reversed and granted summary judgment for Abercrombie.  Under the Tenth Court’s holding, in order for an employer to be held liable for failure to accommodate religious practices under Title VII, the employee desiring an accommodation must provide actual notice to the employer of the need for religious accommodation.

After the Tenth Circuit ruled in favor of Abercrombie, the EEOC issued new official guidance and announced, “[i]n some instances, even absent a request [by the employee], it will be obvious that the practice is religious and conflicts with a work policy, and therefore that accommodation is needed.” Religious Garb and Grooming in the Workplace: Rights and Responsibilities, §7. The new guidelines follow the EEOC’s argument that an employer may have a duty to accommodate religion absent actual knowledge.

The type of notice necessary to trigger a duty to accommodate is at issue.  Due to the varying interpretation of the notice requirement, this case has been appealed to the Supreme Court. The EEOC argues that Title VII does not require “direct explicit notice from the applicant” but instead only requires that the employer have knowledge of enough facts to understand that an accommodation is needed.  In other words, “constructive knowledge”  - a knew-or-should-have-known standard. Accordingly, a conflict exists between actual and constructive knowledge.

At the next stage, it is likely that the EEOC will argue that, by wearing the hijab to the interview, Samantha implicitly notified the employer of her religious beliefs and Abercrombie should have considered an accommodation. The Supreme Court will likely consider whether the act of wearing a hijab was sufficient notification, and the standard for notice under the Title VII requirement of religious accommodation will likely be clarified and/or amended.

            Absent a requirement of actual, particularized notice of a need for a religious accommodation,the application of Title VII protections will be unnecessarily muddied.  If an employer is faced with the obligation of stereotyping employees/labeling candidates without any input from the individual, the Act will seemingly encourage discrimination.  Additionally, where is the line drawn? I certainly have known those who wear cross necklaces for no other reason than fashion statements; is an accommodation necessary in that case?

Friday, October 17, 2014

Social Media Update: Oklahoma Supreme Court Rejects Service by Facebook Message

Earlier this week, in In re Adoption of K.P.M.A., the Oklahoma Supreme Court considered the validity of service by Facebook message.

In re Adoption of K.P.M.A. involved a custody battle between a biological father and adoptive parents.  In this case, a child was born out of wedlock. Under Oklahoma law, the father is entitled to be notified of the existence of a child.  In this case, the biological mother, in a Facebook message, notified the father that she was pregnant and planned to give the child up for adoption.  Although the date the message was sent is clear, when the father actually read the message is unknown; at trial, the father testified that he first found out about the child’s existence 7 days after its birth.

The Oklahoma Adoption Code governs who may consent to the adoption of a minor child and provides that a child may be adopted when both parents have consented to the adoption or if one parent consents and the other is dead or has no parental rights.[1] See 10 O.S. § 7503-2.1.

Significantly, Oklahoma law provides:

Consent to adoption is not required from a father or putative father of a minor born out of wedlock if:

1. The minor is placed for adoption within ninety (90) days of birth, and the father or putative father fails to show he has exercised parental rights or duties towards the minor, including, but not limited to, failure to contribute to the support of the mother of the child to the extent of his financial ability during her term of pregnancy; or

2. The minor is placed for adoption within fourteen (14) months of birth, and the father or putative father fails to show that he has exercised parental rights or duties towards the minor, including, but not limited to, failure to contribute to the support of the minor to the extent of his financial ability, which may include consideration of his failure to contribute to the support of the mother of the child to the extent of his financial ability during her term of pregnancy. Failure to contribute to the support of the mother during her term of pregnancy shall not in and of itself be grounds for finding the minor eligible for adoption without such father's consent.

10 O.S. § 7505-4.2(C)(1-2).

Importantly, a natural father of a child born out of wedlock is entitled to notice of the existence of a child and this right is protected under the Due Process Clause of the United States and Oklahoma Constitutions. Due Process, simplified, requires notice and the opportunity to be heard. So, before parental rights can be terminated, notice to the father must be effectuated.

As I mentioned in this post, service by electronic means, including email and social media, has emerged as a viable alternative to traditional service methods in certain, albeit severely limited, circumstances.

Here, the father was provided notice of the child’s existence through Facebook message.

In a 6-3 vote, the Oklahoma Supreme Court held that service by Facebook alone does not satisfy the due process requirements of the Oklahoma and United States Constitutions.

Writing for the majority, Justice Combs held:

Instead of contacting Father directly, Mother left him a message on Facebook, which is an unreliable method of communication if the accountholder does not check it reuglarly or have it configured in such a way as to provide notification of unread messages by some other means. This Court is unwilling to declare notice via Facebook alone sufficient to meet the requirements of the due process clauses of the United States and Oklahoma Constitutions because it is not reasonably certain to inform those affected.
Importantly, in this case, the mother provided no evidence of difficulty of service by traditional means.  To the contrary, the mother actually visited the father of the child at his workplace during the early stages of her pregnancy. She declined to notify him in-person, or even by certified mail, and instead chose Facebook.

Although the Oklahoma Supreme Court has rejected service by social media, this holding is narrow; the Court rejected service by Facebook message alone.  This case does not expressly prevent service through social media in addition to service by traditional methods.

Moral of the story? Check your Facebook! ..............and Twitter, Insta, SnapChat........

You just never know. 

[1] This blog post only discusses the surface of adoption law. The Oklahoma Adoption Code is outside my area of expertise and extremely complicated. If you are considering adoption, contact an attorney who specializes in family law.

Tuesday, October 7, 2014

Accommodations Under the Pregnancy Discrimination Act

Peggy Young worked for UPS as a part-time early-morning air driver. As an air driver, Young was responsible for meeting a shuttle from the airport, picking up packages, and delivering packages for immediate delivery.  Although most air delivery packages weighed less than 20 pounds, the ability to lift 70 pounds was listed as an essential job function of an air driver.

Young took a leave of absence to undergo in vitro fertilization; the round was successful and Young became pregnant.  During the pregnancy, her midwife recommended that she not lift more than 20 pounds.  Young gave her supervisor and UPS’s occupational health manager a note from her midwife stating the same, and expressed a desire to return to work in her regular capacity or on light-duty.

UPS denied Young’s request for an accommodation. Under UPS policy, accommodations are limited to instances where (1) an employee is injured on-the-job, (2) an employee has a permanent impairment cognizable under the ADA or (3) a driver loses Department of Transportation (“DOT”) eligibility due to any number of reasons, including vision impairments, sleep apnea, and high blood pressure.

Due to her inability to lift more than 20 pounds, UPS concluded that Young was unable to perform the essential functions of an air driver.  As a result, Young was forced to go on an extended, unpaid leave of absence, during which she lost of medical coverage.

Under the Pregnancy Discrimination Act (“PDA”), an employer cannot discriminate against an employee based on her pregnancy, childbirth, or related medical condition.[1]  Young sued UPS in the United States District Court for the District of Maryland, alleging that UPS violated the PDA by limiting accommodations to three categories and failing to provide pregnant employees the same accommodations as nonpregnant employees similar in their ability/ inability to work.

The PDA amended Title VII, clarifying the prohibition of discrimination because of sex; the PDA provides:

1)    The terms ‘because of sex’ or ‘on the basis of sex’ include ‘because of pregnancy, childbirth or related medical conditions, and
2)    Women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purpsoes….as other persons not so affected but similar in their ability and inability to work.

42 U.S.C. § 2000e(k).

The District Court granted summary judgment for UPS, concluding that the UPS accommodation policy turned on “gender-neutral” criteria and did not constitute discrimination.  Young appealed, and the Fourth Circuit affirmed the grant of summary judgment to the employer. The Fourth Circuit concluded that Young failed to establish a prima facie case of pregnancy discrimination due to her lack of a better-treated “similarly situated” employee.  In affirming summary judgment, the Fourth Circuit distinguished Young’s circumstances from those warranting accommodations under UPS policy.  Because she was not injured on the job, did not lose DOT certification, and was not considered permanently disabled, the Fourth Circuit distinguished Young’s physical impediment to those warranting accommodations under the employer’s policy.

The Supreme Court has granted certiorari to consider whether, and in what circumstances, an employer that provides work accommodations to nonpregnant employees with work limitations must provide work accommodations to pregnant employees who are “similar in their ability or inability to work.”

Under the courts’ reasoning, as long as accommodation policies are gender-neutral, an employer is insulated from PDA liability.  In affirming the denial of workplace accommodations to a pregnant employee, the District Court and Fourth Circuit disregarded the clear text of 42 U.S.C. § 2000e(k). Under UPS policy, if Young had been limited to lifting 20 pounds due to an on-the-job injury, she would have been entitled to an accommodation. Because the policy treats a pregnant woman with a lifting restriction differently than a nonpregnant employee with a lifting restriction, an argument can be made that UPS policy violates the PDA.

Currently, appellate circuits are split regarding application of the PDA to accommodation policies.  The Tenth Circuit, for example, explicitly stated that, in making a case of PDA discrimination, evidence that pregnant women were treated differently from other temporarily-disabled employees is sufficient at the prima facie stage. 

On December 3rd, the Supreme Court will hear arguments regarding application of the PDA.

[1] Although the EEOC issued guidance regarding the PDA on July 14, 2014, the Supreme Court’s ruling in Young v. UPS may render the EEOC guidance moot.

Wednesday, September 24, 2014

Your Next Facebook Message Could Contain Notice of a Lawsuit

 Facebook. Google +. LinkedIn. SnapChat. Instagram. Twitter.

More than ever, our social and professional lives are exposed on the internet. Logging on to check your Facebook after work, notice of a lawsuit is the last thing you would expect.

Not anymore.  In some, albeit rare, instances, service via social media has been approved. 

Ordinarily, upon the filing of a lawsuit, a plaintiff must serve the defendant and give him notice of the case against him.  Normally, the defendant is served via personal service or by mail.  If those methods fail, the third option entails service by publication.

Now, service by Facebook message might be an option.

Just last week a judge in New York ruled that a man could provide notice of his intent to stop paying child support (due to the child reaching the age of 18) by Facebook message.  After his ex-wife moved and left no forwarding address, she was seemingly unreachable by traditional methods. Although her physical location was concealed, the ex-wife’s internet presence was evident.  After noticing Facebook activity on the ex-wife’s page, the plaintiff’s attorney asked the judge for permission to serve by Facebook message. In an unprecedented move, permission to serve via social media was granted.

A few months ago, a judge in Virginia federal court allowed service by social media was allowed in the case of Whoshere, Inc. v. Gokhan Orun.  In a trademark infringement case, a Turkish defendant was particularly difficult to serve.  Prior to the filing of the lawsuit, plaintiff Whoshere, Inc. emailed the defendant, Gokhan Orun, notifying him of the possible legal issues.  Orun responded, thus confirming the validity of his e-mail address, and provided his usernames on other social media sites, such as LinkedIn and Facebook.

When Orun proved especially difficult to serve by traditional methods,  the plaintiff asked the court to grant permission for alternative means of service.

Because the defendant himself provided his e-mail address and social media information, the judge ruled that notice by social media networking sites and e-mail was permissible because it was reasonably calculated to provide notice of the lawsuit.

Due to the defendant’s foreign residence, electronic notice in this case is less alarming.

So What Does This Mean For You?

In most cases, it is highly unlikely that service will be allowed via social media networking sites.  Although a case may be made for e-mail service, that seems unlikely at this juncture.

Nevertheless, when the defendant’s physical presence simply cannot be ascertained, a court has the power to allow alternative methods of service, as long as those methods are “reasonably calculated” to provide the defendant with notice of the lawsuit.

Can Oklahomans be Served Notice of a State Court Lawsuit via Social Media or Email?  

Probably not.

Oklahoma law under Title 12 § 2004(C)  authorizes service on an individual through (1) personal service, (2) mailing, or (3) publication.

In order to provide notice by publication, the Court must first grant the plaintiff permission.  The plaintiff must show the court that, after diligent attempts to serve the defendant through regular means (personal service/mail), the plaintiff has been unable to locate the defendant. This normally requires an affidavit by the plaintiff’s attorney and the process server, outlining the failed attempts at service.

If granted permission, service by publication is accomplished by publishing a notice in an authorized newspaper in the county where the petition was filed one (1) day a week for three (3) consecutive weeks. If the defendant lived in another county, or failed to read the legal notice section of the newspaper, s/he could easily miss notice of the lawsuit.

Failure to receive notice of a lawsuit results in a failure to file a response, which can have devastating consequences to a defendant.  For instance, if no response is filed within a certain amount of time, the plaintiff may move for a default judgment—this renders judgment in the plaintiff’s favor solely because no timely response was filed.

Although at first glance, notice through social media sites seems outrageous, this nontraditional method has some redeeming qualities.  For instance, notice by publication is expressly allowed, but who actually reads the legal notice section of a newspaper? Who even knows what newspaper publishes legal notices?

Can you imagine your new Sunday morning routine? Here, honey- pass the maple syrup--- let’s check the legal notice section! ---- said no one ever.

An argument can be made that service via social media actually benefits a defendant, because although s/he may have a harder time dodging service, his/her due process rights are served because s/he is much more likely to check e-mail or Facebook than a small section in a local newspaper. So, the defendant could actually be prepared to defend a lawsuit against him, instead of blind ignorance leading to default judgments.  Additionally, in cases where default judgments are granted because of failure to answer or otherwise respond, executing the judgment presents another hurdle; service by electronic means may very well promote judicial economy.

Of course, on the other hand, the thought of checking your Twitter feed to find out that you’ve been served (in 140 characters) seems simply preposterous.  Notice by electronic means is not an easy answer.  How do you verify that the defendant actually maintains that particular social media account? What if the e-mail goes in the spam folder? What happens when a defendant responds to that electronic notice in the same manner--- is his Facebook response considered a responsive pleading or acknowledgement?

Who knows where technology will take us.   All I know is that if I ever get served via electronic means, I hope the notice includes emojis.

and here

For a more in-depth analysis of the Whoshere, Inc. case, check this out: