Florida Employment Law Blog : Florida Employment Lawyer & Attorney : Epstein Becker Green Law Firm : Immigration, Discrimination, Labor, FLSA : Serving Miami, Fort Lauderdale, Florida

Florida employers that that are considering offering severance agreements and releases in connection with a reduction in force may be interested in the following client alert, written by EBG attorneys Frank C. Morris, Jr. and Brian W. Steinbach.  It discusses the EEOC's memorandum Understanding Waivers of Discrimination Claims in Employee Severance Agreements.  The EEOC's memorandum does not make new law.  Still, the Q&A format makes for easy reading, and serves as a good refresher for employers and employees alike on the law governing the release of claims under the ADEA, Title VII, the ADA, and the EPA.

As has been reported routinely for many months, the extraordinary economic downturn has caused an unfortunate and still on-going stream of shutdowns, furloughs, and reductions-in-force ("RIFs"). To minimize potential legal exposure, from RIFs, many employers offer exiting employees severance compensation or benefits in exchange for waivers releasing the employers from any potential discrimination claims under state, local, and federal employment laws, including the Age Discrimination in Employment Act ("ADEA"), Title VII of the Civil Rights Act, the Americans with Disabilities Act ("ADA"), and the Equal Pay Act ("EPA"), as well as common law claims. Recognizing this, the Equal Employment Opportunity Commission ("EEOC") recently published guidance, titled Understanding Waivers of Discrimination Claims in Employee Severance Agreements, which attempts to summarize, in plain language, the statutory requirements for valid individual and group waivers under the ADEA, Title VII, the ADA, and the EPA. Although organized in a Q&A format targeted to employees, the guidance is also a valuable compliance tool for employers and their Human Resource departments. Below are highlights from this new guidance.

The guidance first discusses generally the nature of severance agreements with a release of claims and the general elements necessary for valid and enforceable waivers, particularly the requirement that a wavier be made knowingly and voluntarily. It then focuses on the unique requirements for release of ADEA claims under the Older Workers Benefits Protection Act ("OWBPA"). It also emphasizes that a waiver cannot prevent an employee from filing a discrimination charge with the EEOC or from testifying or participating in an agency investigation. The guidance explains that if an employee files an EEOC charge after signing a waiver, the employer cannot require the employee to return the severance pay he or she received. Similarly, after signing a waiver, an employee is not required to return severance pay before filing an age discrimination lawsuit (the courts are split on this issue under Title VII, the ADA or the EPA). However, if an employee successfully challenges a waiver, the court should reduce any monetary award by the amount of consideration the employee received for signing the waiver.

The guidance next addresses in detail the specific minimum requirements established by the OWBPA for a wavier of ADEA age discrimination claims to be considered "knowingly and voluntarily" According to these factors, the waiver must (1) be written in plain language easily understood by the employee eligible for termination; (2) specifically refer to rights or claims arising under the ADEA; (3) advise the employee, in writing, to consult an attorney before accepting the agreement; (4) provide the employee with at least 21 days (45 days for a program offered to a group or class of employees) to consider the offer; (5) provide the employee seven days to revoke his or her signature; (6) provide additional consideration beyond what the employee is already entitled; and (7) not waive future rights and claims. Furthermore, the guidance takes the position that employers "cannot attempt to ‘cure' a defective waiver by issuing a subsequent letter containing OWBPA-required information that was omitted from the original agreement." Material changes in the offer restart the 21-day or 45-day period for consideration.

The guidance then highlights the additional information employers must provide employees for "programs" offered in connection with group layoffs. Specifically, employees are entitled to information on: (1) the decisional units (portion of the company from which the employer selected the employees to terminate); (2) the eligibility factors for the program; (3) the time limits applicable to the program; and (4) the job titles and ages of all the employees who are eligible or were selected for the program and the ages of all individuals in the same job classification or organization unit who are not eligible or were not selected for the program. The EEOC describes this information as needed to allow employees to determine, before signing the waiver, whether age discrimination motivated the termination selections.

Notably, although both the EEOC's regulations and a sample waiver and release attached to the guidance indicate that the requirement to disclose "eligibility factors" runs to the general determination of who is and is not eligible for a particular program, in the guidance the EEOC notes without further comment that some courts have interpreted this to mean the actual criteria, such as job performance, experience or seniority, relied upon in making the final termination decision. Compare, e.g., Pagliolo v. Guidant Corp., 483 F. Supp. 2d 847 (D. Minn. 2007) (holding a release violated OWBPA by, among other things, failing to identify the general criteria by which employees were selected for termination) with Rupert v. PPG Industries, Inc., No. 07cv005, 2009 WL 596014, *49-*57 (W.D. Pa. Feb. 26, 2009) (reviewing decisions and rejecting any requirement to provide the criteria relevant to specific termination decisions, noting, inter alia, the absence of such factor in the EEOC's sample disclosure form). Thus, the EEOC fails to resolve or offer direction on this potentially vexing issue affecting the practical administration of severance programs.

Finally, the guidance includes an employee checklist on what to do when offered a severance agreement. As employees and their attorneys are likely to follow this closely, employers also should review this checklist in preparing and offering a severance agreement.
 

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The following is a client alert authored by EBG attorney Barry Guryan on the Supreme Court's recent decision in Gross v. FBL Financial Services, which I reported on last week.   

On June 18, 2009, the Supreme Court of the United States ruled fohe first time that in order to prevail in a disparate treatment case brought under the Age Discrimination in Employment Act (ADEA), the plaintiff must prove that "but for" the alleged discrimination, the employer would not have taken the "adverse employment action." Unlike a Title VII case, the burden of persuasion does not shift to the employer when the employee shows that age was one of the factors in a mixed-motive case.

In a 5-4 decision written by Justice Thomas, the majority held that it would not extend the "mixed motive" analysis applicable to Title VII cases to ADEA cases. In Title VII cases, which prohibit discrimination based on race, sex or national origin, where an employer is motivated by both a permissible factor and an impermissible factor, (i.e. a mixed motive), the Court, historically, has applied the well-known burden-shifting analysis. Thus, if the plaintiff meets his or her initial burden of persuasion by demonstrating that the employer considered an impermissible factor, such as race, in taking an adverse action against the plaintiff, the burden then switches to the employer to prove that it would have taken the same adverse action in any event.  Gross v. FBL Financial Services, Inc., No. 08-441.

The case was brought by Petitioner Jack Gross (Gross), who claimed that his employer, FBL Financial Group, Inc. (FBL), demoted him because of his age. At the time of his demotion he was 54. His duties were transferred to a woman who, at the time, was in her early forties. At trial, Gross presented evidence that age played a role in FBL's decision. The jury returned a verdict for Gross at the trial court level, after the trial judge, over FBL's objection, instructed the jury that it must return a verdict for Gross if he proved, by a preponderance of the evidence, that age was a "motivating factor" when FBL demoted him. The trial court also instructed the jury that it must find for FBL if it found that FBL would have demoted Gross regardless of his age.

On appeal, the majority held that the burden-shifting analysis does not even apply in a mixed-motive case brought under the ADEA. In reaching this conclusion, the majority noted that after the Price Waterhouse decision of 1989, which discussed the proper allocation of the burdens of persuasion in mixed-motive cases brought under Title VII, Congress explicitly amended Title VII, in 1991, by authorizing discrimination claims in which an improper consideration was a "motivating factor" for an adverse employment decision, even though other factors also motivated the adverse action. Since Congress limited its amendment to Title VII claims, the majority refused to apply the language of the amendment to the ADEA.

The Court concluded by interpreting the plain language of the ADEA, which prohibits various types of discrimination in employment "because of" age. The majority interpreted the phrase "because of" to mean that age was "the reason" that the employer decided to act. The majority concluded: "Thus, to establish a disparate treatment claim under the plain language of the ADEA, therefore, a plaintiff must prove that age was the ‘but-for' cause of the employer's adverse action." The plaintiff, therefore, retains the burden of persuasion throughout the case.

There were strong dissents written by Justice Stevens with whom Justices Souter, Ginsburg and Breyer joined. They stated that the "but for" standard was rejected in Price Waterhouse and that it should be rejected in cases alleging violations of the ADEA as well, since both statutes use identical language in prohibiting discrimination (i.e., both statutes prohibit adverse employment actions "because of" the impermissible factor). Moreover, there is precedent that Title VII analysis has historically been applied to the ADEA.

One of the most interesting questions that the Gross case raises is whether the Court's holding will extend to other discrimination statutes. Most notably is the Americans With Disabilities Act (ADA), which prohibits discrimination "because of" a disability. Even though the ADA, like the ADEA and Title VII, prohibits discrimination "because of" the protected category, the Supreme Court, if faced with the right facts, could apply the "but for" test to ADA claims, since, like the ADEA, discussed in Gross, Congress did not amend the ADA when it amended Title VII in 1991.

We will continue to follow these developments.
 

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Employment litigation has boomed in the last 15 years. Statutes such as the ADA and the FMLA have created new rights for employees. Decades-old laws such as Title VII (which prohibits many forms of discrimination) and the Fair Labor Standards Act (which sets the minimum wage and regulates overtime pay) remain popular among plaintiffs’ lawyers and their clients. In fact, the number of Title VII charges is on the rise, and the Southern District of Florida leads the nation in FLSA lawsuits. The cost of litigation has increased as well. Employers can spend $50,000 in attorney’s fees defending even a baseless case. Naturally, you may be skittish about criticizing, much less terminating, your poorly performing employees. And you may be reluctant to ask your employees to sign agreements designed to protect your customer lists and other confidential business information.

Don’t be. In today’s ultra-competitive business environment, you cannot afford to retain poor performers. Nor can you afford to let employees take advantage of your hard work and intellectual property. Sure, employees have many legal rights. But as an employer, you too have rights. Here are just a few:

▪ You have the right to demand hard work. The law does not prohibit you from taking action against employees who are lazy or unproductive. Moreover, you can require employees to work overtime, even weekends and holidays, provided that you pay your non-exempt employees the appropriate overtime wages. (Employees who qualify for the professional, executive, administrative and outside sales exemptions are not entitled to overtime pay.) Weed out your lazy employees, and reward your hard workers with overtime pay if necessary.

▪ You have the right to demand high-quality work and appropriate workplace conduct. Sloppy work product, poor customer service, and arguments with co-workers and supervisors are not legally protected workplace behaviors. Put an end to them through a system of progressive discipline.

▪ You have the right to demand loyalty. Employees do not have a right to solicit business for their own benefit or to set up a competing business while you employ them. You can and should terminate employees who put their own interests ahead of your business.

▪ You have the right to be wrong. Suppose you have reason to believe that an employee is stealing or otherwise not acting in the company’s best interests, but you don’t have conclusive proof. Fortunately the law does not require an employer to act like a prosecutor and obtain proof beyond a reasonable doubt.  So long as you act in good faith and without discrimination, you can lawfully act on your best available information, even if it turns out to be wrong.

▪ You have the right to protect your trade secrets and confidential business information. The Florida Uniform Trade Secrets Act protects against an employee’s misappropriation of trade secrets. But courts often construe the term “trade secrets” narrowly. You should require employees who have access to customer lists, strategic plans, pricing information, financial data, and other confidential business information to sign confidentiality agreements that restrict their use of such information during their employment, and after. Florida law (section 542.335, Florida Statutes) also allows you to require employees to sign agreements not to compete with your business or to solicit your customers for a period of time after their employment ends, provided the agreements are supported by legitimate business interests and are reasonable in time, geographic scope and line of business. 

You may already know what the law prohibits you from doing as an employer. But knowing what the law permits you to do – and doing it – will improve the productivity of your workforce and give you an advantage over your competition. 

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This evening the Miami Herald reported that twenty possible swine flu cases have been identified in Miami-Dade County. While these cases are not confirmed, the Herald's report should alert Florida employers to the employment law issues raised by this potential pandemic. The following client alert, authored by EBG attorneys Maxine Neuhauser and Frederick Warren Strasser, addresses these issues.

Over the past few weeks, what started as a couple of hundred cases of swine flu localized in Mexico has spread to other parts of the world, including the United States. The Centers for Disease Control and Prevention ("CDC") is working closely with state and local officials to investigate the human cases of swine flu. Currently, forty confirmed cases have been reported in people in the United States. The CDC has determined that there is no human influenza pandemic at this time. In an effort to contain the further spread of the virus, the government of Mexico announced that as a precautionary measure all schools and school activities would be suspended until May 6, 2009. This concern has had a ripple effect throughout Mexico, essentially bringing all public activity nearly to a halt, as people wait to see how the situation unfolds. Across the globe, governments, public health organizations and employers have struggled to determine the best way to address the growing concern. This article address some of the issues facing U.S. employers when dealing with public health issues.

For most employers, consistent attendance is of particular concern in this challenging economic environment. Increased attendance and increased productivity are usually considered to go hand-in-hand. As a result, employers both directly and subtly encourage employees to come to work even if feeling unwell. Similarly, sick employees often need, or wish, to come to work. When contagious diseases are involved, however, the common reaction to absenteeism—encouraging employees to report to work—may prove counter-productive by encouraging behavior that could spread illness and increase absenteeism. In the event of a pandemic, the results could be devastating.

The first step in planning for pandemic is to consider two basic questions: (1) What must I do? and (2) What can I do?

There are a host of federal and state statutes that provide leave and benefit entitlements to ill employees with which employers should become familiar:

The Family and Medical Leave Act ("FMLA"): provides up to 12 weeks of job-protected leave to covered employees who meet eligibility requirements. The FMLA applies to any employer who employs 50 or more employees within a 75-mile radius. Time off may be continuous, intermittent or on a reduced leave schedule. Recent amendments to the act and its regulations have made substantial changes in employer and employee rights under the FMLA and have made this a good time for employers to review their policies and procedures to ensure they are up-to-date and compliant.

The Americans with Disabilities Act ("ADA"): prohibits discrimination based on disability and requires reasonable accommodation of disability. Reasonable accommodation may include job-protected time off. Recent amendments to the ADA enlarge the definition of disability by expanding the meaning of "major life activities" by adding a list of examples of activities that fall within the definition. The ADA's definition of "disability" now expressly includes impairments that are episodic or in remission if they would substantially limit major life activity when active and places substantially more employees under the umbrella of ADA protection. The amendments mandate liberal interpretation of "substantially limits" to the "maximum extent" permitted by the act.

In addition to federal statutes, employers must also be cognizant of the variety of state statutes that impact their employees' leave and benefit entitlements. For example, temporary disability and workers' compensation laws provide employees with partial income-replacement benefits, though not job-protected leave. Many states have their own family leave laws, laws mandating reasonable accommodation of disability (which might include time off) and, increasingly, laws providing paid family leave. Keeping an eye on developing state law and regulation should be part of an employer's compliance programs and contingency planning.

Collective bargaining agreement provisions: could also be involved as employers seek to implement changes necessary to meet demands of business continuity with a substantially reduced workforce. For unionized workplaces, employers should consider including union representatives in contingency planning; at the least, the collective bargaining agreement should be reviewed for provisions that could impede the employer's planning for and response to a public health crisis.

As a general rule, employers are well advised not to differentiate between injuries and disabilities. Employers that require medical documentation for medical leaves of absence should require certification for both occupational and non-occupational injuries and illnesses. If a worker is hired to "fill in" for an employee on job-protected leave, be sure the documentation shows the person has been hired on a temporary basis, not as a permanent replacement.

Employer provided paid time off (PTO) is the first line of response available to employees suffering from illness. Components of PTO often include sick leave, vacation, personal days and, for some employers, floating holidays. Many employers no longer distinguish between various categories of leave and grant undifferentiated PTO to their employees. And, in the case of a public health crisis, eliminating the differentiations between vacation and sick leave will undoubtedly make good sense.

When PTO and job-protected leave have been exhausted, unpaid time off and longer unpaid leaves of absence remain options that employers may wish to provide. Typically, reinstatement is not guaranteed and benefits are not continued for employees on unpaid leave of absence, but the leave of absence provides a tether between employee and employer which can improve stability, morale and, ultimately, enhance business continuity. In an emergency situation, where schools may be closed, public transportation halted, quarantines imposed, and other impediments to work arising that are outside the control of both employee and employer, excused time-off may offer the only option available to an employer, short of closing down entirely. Employees, who have not become ill or been affected by disaster, may ask to donate leave to co-workers who have exhausted their paid time off. Similarly, employees confronted with absence because of such issues may seek to have co-workers donate PTO to them. Donation of PTO from one employee to a co-worker, however, has tax potential implications to both individuals. In addition, it has the potential for misuse and abuse. Accordingly, PTO donation should be permitted only in accordance with company policy, which has been adopted only after the employer has considered and addressed the issues involved.

Usually, employees initiate time off by calling in sick or requesting leave. Employees who report to work "under the weather" are frequently permitted to stay. Employers concerned about contagious disease, however, are not obligated to permit a sick employee who has reported to work to remain. Before sending an employee home, the employer should consider whether the employee is able to perform his/her job duties and meet performance standards, or posing a health risk to others by his/her presence in the workplace.

Absent wage and hour or contractual provisions requiring payment, after PTO is exhausted, leave may be unpaid—even if an employee has been sent home by the employer. Further, employers may require a doctor's note to permit an employee to return to work.

It is worth remembering that the Occupational Health and Safety Act (OSHA) require employers to provide employees with a safe place to work. Thus, employees who reasonably believe they are being exposed to imminent danger, including contagious disease, may legally refuse to work. Employers need to be careful about taking adverse employment actions against employees who refuse to come to work because of safety concerns.

Additionally, employers will want to review their work related foreign travel policies and if appropriate may issue a travel ban for work purposes to those areas where a public health crises exists.

One of the initial steps in planning for pandemic should be to review and understand the organization's policies and legal obligations for ensuring that policies and procedures comport with legal requirements and meet current business needs. Simple communication with your workforce can go a long way to easing concern.

In the current climate, the CDC recommends that people take everyday preventative actions to help stop the spread of germs and prevent respiratory illnesses like the flu. These preventative actions include:

1. Avoid close contact with people who are sick. When you are sick, keep your distance from others to protect them from getting sick too.

2. Cover your mouth and nose with a tissue when coughing or sneezing. It may prevent those around you from getting sick.

3. Washing your hands often will help protect you from germs.

4. Avoid touching your eyes, nose or mouth. Germs are often spread when a person touches something that is contaminated with germs and then touches his or her eyes, nose, or mouth.

5. Practice other good health habits including getting plenty of sleep, being physically active, drinking plenty of fluids, and eating nutritious food.

A crisis is no time for playing catch-up. Training, well-drafted policies, notices and forms comprise the foundation for effective communication. Employers should be prepared to offer timely, accurate and consistent information about employee rights and obligations and employer requirements and benefits. Avoiding misunderstanding will be critical to avoiding chaos and liability, protecting public health and maintaining business continuity.

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 A client alert on the ADAAA was released today by my firm, Epstein Becker & Green.  The alert predicts that the ADAAA will:

expand the coverage of the ADA to many more individuals, even those whose impairments have little or no actual impact on their major life activities due to mitigating measures. It will also substantially ease the burden for ADA plaintiffs. A rise in the number of ADA lawsuits against employers is likely and defending such lawsuits will be more challenging. Employers will necessarily face the duty to engage in the interactive process far more frequently and be forced to assess whether various accommodations are reasonable or if they are undue hardships. This will be particularly true for impairments affecting mental processes including concentrating and thinking.

The alert offers a few points of sound advice to employers on how to comply with the ADAAA:

• To ensure that requests for accommodations are properly handled and to minimize litigation exposure, employers should carefully review their ADA policies and how they handle ADA issues.  Make sure that the company's policies are not inconsistent with the new legislation.
• Conduct supervisory training to alert the company's managers about the expanded scope of the ADA under the new legislation.
• Review job descriptions to ensure that they accurately identify all essential job functions. Given the expanded scope of the ADA and the increased number of employees who will be deemed disabled, accurate job descriptions are more critical than ever in evaluating requests for accommodations from disabled employees.

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