Thursday, February 22, 2024

IDF Pictures and Free Speech in Illinois

One of the first issues I ever dealt with as an employment lawyer involved a personal photograph in a private office. A manager had a picture of his wife in a very skimpy bathing suit displayed on his desk. My recollection is that this was an 8 by 10 photo, large enough for the details to be obvious to anyone who stuck their head in the door. There were the usual complaints from several women in the office who objected to having to look at a mostly uncovered female form every time they had business with this manager. 

We dealt with the problem by telling the manager that the company really didn't want pictures of scantily clad women prominently displayed in the office as a matter of professionalism. That seemed to quell the issue. 

The latest round in the office photo wars is taking place in Illinois, where a female public defender prominently displayed a picture of herself holding an M16 in front of the Israeli flag, taken when she was serving as a volunteer reservist in the Israeli army. 




Apparently, the picture had been in her personal office for some time but after the events of October 7, 2023, she moved the photo to a public area where people in the office displayed personal photos and awards. This drew an immediate and ignorant response from office management who were offended by the Israeli flag as much as they were by the semi-automatic rifle. They initially ordered her to remove the photo from the public display, and then without permission entered her office and removed the photo from there. All of this was done under the guise of some kind of anti-violence policy because the photo could be perceived as “threatening.” Or perhaps it was the Star of David. As is typical with these decisions, the actual rationale gets murkier when people are asked to explain it. 

Because this involves a public employee, the 1st Amendment is implicated, and the lawsuit the former soldier filed reflects this. But for private sector employers, there are additional issues immediately apparent, starting with the potential religious discrimination issue, as well as potential claims involving political discrimination under Illinois law.  I also suspect that there were lots of other potentially objectionable photos on display in that office that were not singled out for attention and didn't happen to involve Jewish artifacts.  

This is a lousy situation for an office that likely has some exposure.  Based on the allegations in the Complaint, I'm hoping that the case doesn't go away and that all of the biases get revealed over the course of discovery.

Wednesday, February 21, 2024

The Song Remains the Same-SCOTUS Decision Reminds Employers to Keep Better Records

 

A fundamental piece of advice that I give to my clients is to, “keep sufficient documentary records of an employment decision so that we can recreate the analysis that led to the decision several years later.”  In virtually every employment case that ends up in some kind of agency or court setting, the key to prevailing is the ability to convincingly show what transpired between employer and employee that led to the decision at issue. 

This is always crucial in discrimination cases where an employer is usually aware of the employee's protected factor (you can't credibly testify that you didn't know you were dealing with a black female, or a Hispanic male, for example) and is asked to demonstrate that the protected factor did not play a role in the ultimate decision. 

This type of analysis is also crucial in retaliation claims, where the employer has to argue, for example,  that it wasn't the fact that the employee was a gadfly/whistleblower but rather it was her poor performance that caused the company to fire her. Again, an employer must keep solid records of its thought process and the basis for termination, because while most jurors might have difficulty believing that race was a factor in an employment decision, very few of them will have difficulty believing that the company was motivated to strike back at an employee who was causing significant cost and or embarrassment by outing some problematic business practice. 

The Sarbanes-Oxley Act was designed to provide significant whistleblower protections for employees of publicly traded companies to report corporate fraud or securities violations. The SCOTUS recently handed down a decision that should provide plenty of incentive for employers terminating whistleblowers to make sure that they can demonstrate that they are cleaner than Caesar's wife's hound's tooth. 

Sorry for the mixed metaphor but you get the picture. 




The SCOTUS reversed a Second Circuit finding that the SOX Act required an employee to show so-called “retaliatory intent” on the part of an employer to sustain a SOX violation. Instead, SCOTUS unanimously held that all a whistleblower has to show is that the protected activity- in this case, a claim that supervisors at UBS Securities were attempting to pressure an employee to alter his independent reporting- was a contributing factor to the employer's adverse personnel action. In essence, SCOTUS stated that if the employer was aware of the whistleblowing activity, it would have to produce convincing evidence that it would have made the same decision absent its knowledge that the affected employee was a rat, er, whistleblower, to escape liability. 

As noted above, this is a very high bar for the employer. To overcome the perfectly understandable inference that an aggrieved employer would act by retaliating against a problematic employee, a company is going to have to provide substantial evidence that either the aggrieved employee was already almost out the door because of her conduct and that the decision was effectively made before the company became aware of the whistleblowing, or that the conduct for which the employee was terminated was so egregious that his whistleblowing was not even a blip on the employer's radar when it made the call. 

Both of these scenarios require very credible testimony, backed up by credible documentation to show that the whistleblowing was not a factor. 

So, if you find yourself in a situation where you have identified a whistleblower in a SOX environment, your notes, memoranda, and testimony had better be recorded and validated. Otherwise, your next documentation is likely to take the form of a check to the plaintiff.  

Thursday, February 15, 2024

Back to the future--Are college athletes employees? Of What, and When?

I wrote about this story back in 2014 when the NLRB first tried to shoehorn college athletes into employee status with a poorly reasoned regional attorney memo out of Chicago. The issue has arisen once again, this time at Dartmouth where an NLRB office director now claims that men's college basketball players are employees of the university

I won't reiterate all the arguments I made eight years ago, but the short answer is this is an idiotic characterization and completely misses the unique status that collegiate athletes have with respect to their coaches and their schools. Specifically, college coaches exercise far more control over athletes than any employer does or would ever want to. Coaches dictate what players eat, where they live, when they go to bed, when they get up, and when they do any number of activities that extend beyond basic practice time and game time. A better characterization of a coach's status then that of an employer is one of a parent. 


If the NLRB ruling survives the inevitable court challenge, it will result in massive confusion and unintended consequences in the form of things like wage and hour claims for film study, training room time, weight training, study time, and the like. A determination that these kids are actually employees would technically expand their workday to 24/7, with all the associated liability, because that's when they are under the control of their coaches and the athletic staffs. 

This determination makes no more sense now than it did eight years ago. I hope the courts will reject this director's characterization. 

Saturday, February 3, 2024

Service Academy Admissions and Race: The Next Affirmative Action Challenge



In its landmark decision essentially voiding race-based affirmative action admission programs at colleges, the Supreme Court in a footnote made a notable distinction for America's service academies. The court held that its affirmative action ruling did not apply to those unique academic institutions, implying that race considerations weigh differently because of the issues involved in the construction of an effective fighting force. 

Within several months of the court's ruling, a challenge to the use of race in admissions at the United States Military Academy (West Point) emerged (the Naval Academy, USNA, is also being sued). The plaintiffs, white applicants to USMA, are alleging through their counsel that West Point's use of race as a determining factor in admissions is unconstitutional, particularly in light of the SCOTUS holding regarding Harvard and the University of North Carolina. 

The usual legal skirmishing over a preliminary injunction demand from the plaintiffs reveals at least the outlines of the arguments to be raised by USMA and the other service academies.  Fundamentally, the service academies claim that it's essential to have an officer corps that racially mirrors the overall racial percentages of the force because that makes for a more motivated and therefore more effective military. The academies claim that this claim is unassailable because US courts traditionally defer to something called "military judgment" about the management of the Armed Forces in the context of national defense. USMA also claims that race is a minimal factor in its admissions determinations, something that I think is completely incompatible with its professed goal of establishing a perfectly race-harmonized officer corps. 

There's lots more data and argument to be developed on this topic, but as a service academy graduate myself, I raise the following objections to USMA's position: 1 ) there is very little credible evidence supporting a claim that people need to be commanded by people who look like them to be effective in combat. If anything, the primary attribute service members worry about in their commanders is job competence. There's absolutely no comfort in the thought that you are going to get killed as a result of the orders from someone who shares your genetic heritage. 2 ) the service academies provide approximately 20% of the officer cadre in the military. Given that 80% of the officer candidates are coming from civilian universities through the ROTC program, you would think the “we need a racially diverse officer corps for effective command” argument would have resonated much more significantly in the SCOTUS FFFA opinion. The argument was raised but apparently found unconvincing. Why would it be more convincing for a school that provides much fewer officer candidates? 3 ) There's a very strong argument for making the service academies the producers of the top officer candidates in all services.  The government invests hundreds of thousands of dollars in USMA, USNA, and USAFA graduates, training them not just in academic specialties but military culture and warfighting skills. The goal is to produce career officers capable of performing at the very highest level in the most serious undertaking a government performs- the defense of the country. Why would you not want the very best people in these programs, regardless of their genetic propensities? 

In fact, much of the argument in favor of affirmative action for the service academies seems to be motivated by the same credential-seeking mentality present in the affirmative action movements at elite colleges, namely, that the credential somehow guarantees upward mobility into the elite classes. However, this has not been the case for the military because of its relatively ruthless performance requirements. And in any event, discounting merit in support of questionable social engineering seems a guaranteed way to degrade the value of the certificate across the board. 

This case will likely be the subject of other blog entries but, at the outset, I think USMA and the others are going to be facing an uphill push. 




Gambling Takes Another NFL Player Down

 The institutional and cultural conflicts inherent in the professional sports leagues and NCAA with respect to gambling continue to take a toll on the people who generate the income from these activities—the players themselves. It seems that virtually all major sports activities in the US, collegiate and professional, are now reaping significant money from sports gambling. Every NFL game is loaded with sports book advertisements. As for the “amateur” NCAA, swing by Vegas on the first weekend of the NCAA basketball tournament to get a picture of how big gambling is on collegiate athletics.

Yet all professional sports leagues and the NCAA prohibit betting in one form or another by the athletes themselves. And enforcement of these prohibitions regularly results in the suspensions of players taking advantage of an activity that their leagues actively promote.

And sometimes, worse than suspensions. Case in point--Kayshon Boutte, formerly of the LSU Tigers and currently an NFL wide receiver with the Patriots. But, as so many coaches have said, NFL stands for “not for long”, and that is likely the situation with Mr. Boutte, who was arrested for making bets while a collegiate athlete, in some cases on games involving his own team. The details are in the story, but it's clear from the allegations that Mr. Boutte has a gambling problem, one that the NFL security people are likely aware of. Someone with this type of issue represents a clear threat not only to the integrity of the game but to potentially billions of dollars in advertising and betting revenue. All of that gambling revenue, as well as a significant portion of fan interest, would melt away in the face of demonstrated allegations that players were betting on each other and themselves, with the obvious impact on scores and performance.

I suspect this conundrum of needing the revenue from sports betting while at the same time limiting its reach into the player ranks will continue indefinitely. There is simply too much money in gambling and its potential taxation for the people who would normally regulate this kind of thing--the states and the leagues themselves--to close up the Pandora's box that's been opened.


Sunday, January 28, 2024

The Exciting Times of Family-Owned Businesses

The intertwined, emotion-bound relationships within a family business are often a source of employment law lessons if not downright entertainment. I suspect the entertainment value arises from the fact that we all presume a certain amount of affection exists within these family businesses that precludes the kind of cold-blooded opportunism permeating normal corporate structures. 

So it's a surprise when relatives go after each other like the lieutenants of Genghis Khan. A case in point- the top-level shenanigans at Adroit Medical Systems, a family heating pad manufacturing business. 

Apparently, the minority shareholder son of the owner was unhappy that his father's 80% ownership was passing to his wife, the son's stepmother.  What to do? Well, just have your father declared incompetent by a probate court, establish a conservancy for the estate naming yourself as conservator, and then proceed to take over the company, firing stepmother, other relatives, and changing the locks on the company doors. 

Oh, and before you kick this off, also make a surreptitious report to the IRS that your family members are engaged in tax fraud and embezzlement. You do that to give yourself some top cover just in case your coup attempt doesn't work. Specifically, the IRS complaint technically makes you a whistleblower. 




The whole Snidely Whiplash (that's him, above) plan fell apart in a matter of days once the probate court realized the old man was not incapacitated. The re-established company leadership promptly fired the son, who then leveraged his whistleblower status to sue his parents for retaliatory discharge. 

The Tennessee federal court, and ultimately the 6th Circuit, was having none of this silliness. The 6th Circuit panel noted that the bona fide reason for the termination- a phony claim of mental incapacity directed at the principal shareholder, followed by a complete takeover of the company and removal of its officers- was more than supported by the evidence. As one judge said, “ Who wouldn't think he would be fired?"

Entitlement and Layoffs--A Case Study

 

The Brittany Peach (her real surname is Pietsch)  viral video contains a couple of lessons for companies and employees, or soon-to-be-former employees (for the terminally unhip, Ms. Peach videoed her participation in a Zoom call terminating her employment from Cloudfare, an internet security company).  

Much of this has been discussed in various HR forums, so I will keep this brief. 

For employers: 1. Usually, but especially for entry-level positions like this one, a supervisor should provide the termination notice directly. Hiding behind human resources representatives, as Cloudfare did here, is classless and pointlessly humiliating for the employee. 2. Employers should also be prepared to provide some specifics to the employee as a basis for the termination decision-another reason to have the supervisor involved-so that even if there is not agreement as to the decision, there might be understanding. Even in at-will circumstances such as this one, an employee is entitled to know what they did wrong, which may allow them to remedy the problem with their next employer.  3. In any type of meeting like this you should expect to be recorded. 

For employees: Unless you have a firm expectation of financial solvency for the next 20 or 30 years of your life, don't do this. Ever.