Wednesday, June 27, 2018

Some Quick Thoughts on Janus

As an escaped Illinois resident, I have followed the Janus case fairly closely. Public employee unions in Illinois wield a tremendous amount of power, by virtue of their ability to direct huge amounts of money to sympathetic politicians (specifically, Democrat politicians) and through their ability to mobilize large groups of voters who are essentially in lockstep with the union's opinions. So I welcome the Supreme Court's decision in Janus, although I think there should be some way to deal with the free rider problem identified by the dissent.

What I think Janus will do, however, is sharpen and clarify the unhealthy relationships between public employee unions and their political managers, whom they elect and sponsor through campaign contributions. Specifically, I think a fairly straightforward and obvious way around the Janus ruling is for state and local governments to pay unions directly for their representation services, and reduce their employees' compensation by an offsetting amount. I don't believe this would be illegal, and it would greatly facilitate the identification and influence of unions on local political operations.

Imagine, for example, the political capital that would have to be spent to support a bill that reduced state employee wages in order to make a direct payment to a union for collective bargaining. Also imagine the impact on the union, which would, theoretically at least, have to account for its spending of that money as a government contractor providing services to a local polity.

Better minds than mine have looked at this issue and thought it through, although I think I'm the first to raise the government contractor disclosure issue. In any event, Janus will not be a panacea for those opposed to public unions, but it might well give people more insight into the corrupting influence of their political contributions.

UPDATE:  Nice analysis here, and here.

Tuesday, June 26, 2018

Work Ghosting

Apparently social media practices, and in particular social media practices that relate to dating, are starting to spill over into the workplace. As a labor shortage becomes more pronounced and there are presumably multiple job offers for available employees, it's becoming increasingly common for hiring managers to experience the practice of "ghosting".

Ghosting occurs when the person with whom you have been holding regular and frequent communications simply drops off the air. The person doesn't respond to emails, texts, social media messaging, IMs, posts, anything. It's like they've vanished from the world, or at least the digital world.

This is a very real thing among people who are dating, or even in serious relationships. One of the most entertaining Ask a Manager vignettes I've ever read involved a guy who simply walked out on his live-in girlfriend of two years when she was on vacation and never returned or made contact with her. What made the story particularly interesting is that he was working a job several years later, only to discover that his ghosted ex was about to come back into his life as his new boss. You can read about it here, and the follow-up here.

In any event, there's not much an employer can do when someone that you were pursuing simply decides you aren't worth the effort. It's bad form, and burns bridges that people shouldn't be burning, but these are typically immature workers, after all. To expect them to look down the road past their next job might be too much at this point. But it would be nice if someone would sit down with these people and explain to them that it really is a small world, and the ghost they just created might come back to be the ghost in their machine in some future role.

Leaning Out-- The Impact of Motherhood and Choice on Women Graduates of Elite Institutions

A number of interesting studies are starting to surface with respect to how men and women enter, stay and leave the workforce. For example, it seems that the more economic freedom women have within a culture, the more likely they are to gravitate to fields that are less STEM-related. A number of studies also show the dramatic impact that childbirth and childrearing have on women's careers and career choices.

A very recent paper published here discusses the difference between women who graduate from elite academic institutions and those who do not in terms of employment choices. The data reflected in this study shows that women with an elite academic background remain employed at approximately the same rates as their counterparts from less esteemed institutions until they have children. "… The presence of children is associated with far lower labor market activity among married elite graduates." This is true even though elite graduates are much more likely to earn advanced degrees, marry at later ages, and have higher expected earnings. Interestingly enough, the largest gap in labor market activity is between elite and less selective female graduates with MBAs--married mothers who are graduates of elite institutions are 30 percentage points less likely to be employed full-time than graduates of less selective institutions.

The Limits of #MeToo-ism

I'm always interested in the intersection and overlap between military law and civilian statutes. So much of military jurisprudence involves what are normal employment decisions in the civilian sector. As the #MeToo wave sweeps across our culture, its impact on the military raises some interesting constitutional issues, as well as demonstrating the limits of the application of civilian legal concepts to military organizations.

Such is the case of Jane Doe v. Lieut. General Franklin Hagenbeck and Brig. Gen. William Rapp. The generals were, respectively, the Superintendent and Commandant of the United States Military Academy at West Point. The Jane Doe (and I am curious as to why a civil plaintiff is allowed to proceed under a pseudonym, even in this type of case) is a former cadet at USMA who alleges she was sexually assaulted there.

Doe alleges that she was raped in the spring of 2010. After she reported the assault to a psychiatrist, she was referred to USMA's sexual assault response counselor. Under the bizarre rules for service academy sexual assault reporting, she elected to file a restricted report, which preserved her identity as well as that of her attacker.

As an aside, this option is problematic. Officers have an obligation, legally and ethically, to report criminal conduct as they become aware of it. Doe should not have been allowed to shield the identity of her attacker, who presumably posed a threat to other women in the Corps of Cadets.  Moreover, her unwillingness to allow a criminal investigation against her attacker, at least in my opinion, significantly undercuts the viability of the civil case that she filed three years later.

Instead of suing the cadet who assaulted her, Doe pressed forward with a suit against the Commandant and Superintendent on the theory that they had allowed some type of atmosphere promoting sexual assault (dare I say "rape culture"?) to pervade the Academy. The actual grounds for the lawsuit were a violation of her constitutional rights for due process and equal protection under the well-known Bivens standard, as well as a claim of for breach of the covenant of good faith and fair dealing against the United States and a federal tort claims act claim alleging negligent supervision, training, and several other counts.

I'll dispense with the District Court ruling and move directly to how the Second Circuit handled this. It is a fundamental principle of American jurisprudence that the courts keep their hands off the military with respect to military discipline and command structure. In cases where, as the Second Circuit noted, a plaintiff seeks to hold her superiors personally liable for money damages in connection with their decisions regarding the training, supervision, discipline, education, and command of service personnel at West Point, a court should avoid hearing the matter absent a clear Congressional authorization.  Although the dissent here tried to characterize West Point as an educational institution rather than a military base--an argument that was as silly as it was factually unsupported--the Court dismissed Doe's claims.

Sexual assault in the military has gained a high profile in the last 25 years or so. But there is a separate system of military courts and process to deal with these issues that factors in necessary and uniquely military considerations. Notwithstanding the cultural avalanche embodied in the #MeToo
movement, its application to the military is and should be extremely limited. Based on this decision, and a host of others, courts will not prove receptive to claims alleging a culture of depravity that facilitates sexual assault in a military unit.

Friday, June 15, 2018

Employment Application Hell

Imagine that you are a talented musician who applies for and wins an extremely competitive scholarship to study with the music teacher of your dreams. At the end of your course of study, you are virtually guaranteed a well-paid and secure position in the music industry. The scholarship is the payoff for years of practice, effort, planning, and sacrifice.

Except that you don't know that you actually won the scholarship. You don't know because your significant other girlfriend has been monitoring your email, and, because she does not want you to move away, deletes the scholarship award email, creates a phony email from the scholarship committee to you indicating you did not get the scholarship, and then sends another phony email back to the scholarship committee telling them that you are rejecting its offer.

You don't find out until you run into the music teacher much later.

And that's what happened here.  Unbelievable and horrible.  And worth $350K in a court judgment.

Email security is a thing, people.  Even with people you "trust."

Thursday, June 14, 2018

Tough Standards for Equal Pay Act Cases

Here's another Equal Pay Act case, this time on the East Coast. These decisions are noteworthy for a couple of reasons. They provide an extremely problematic avenue for employers dealing with differential compensation claims based on gender because intent is not a factor. Moreover, they are rarely covered by employment practices liability insurance.

Once an EPA plaintiff establishes a prima facie case of discrimination by demonstrating that an employer paid different wages to a woman for comparable work on jobs requiring equal skill, effort and responsibility, which are performed under similar working conditions, then discrimination is presumed. To defend a prima facie case, an employer must show one of four applicable affirmative defenses. Those defenses are a seniority system, a merit system, a pay system based on quantity or quality of output, or disparity based on any factor other than gender.

In this case, EEOC v. Maryland Insurance Administration, the defendant was a state agency. Like most states, Maryland provides its employees with a complete and comprehensive merit pay and seniority system in place to set starting pay rates, in particular with regard to employees who already have time working for the Maryland state government.

It would be hard to imagine a system with more protections in it for employees.

Nevertheless, the EEOC sued under the Equal Pay Act, alleging that three female employees were paid less than their male comparators and that there was no valid basis to do so. The district court awarded summary judgment to the state, but the Fourth Circuit Court of Appeals reversed.

Here are the crucial takeaways. The Fourth Circuit agreed with the Third and Tenth Circuits that the language of the EPA requires an employer to submit evidence from which a reasonable factfinder could conclude not simply that the employer's reasons likely could explain the wage disparity, but that the offered reasons actually explained the wage disparity.

Think about that. As an employer in an EPA case, you have to put on evidence at the summary judgment stage that convinces the court that what you are saying is not just likely true, but actually true. Or in the court's words, "Once the plaintiff establishes a prima facie case the employer will not prevail at the summary judgment stage unless the employer proves its affirmative defense so convincingly that a rational jury could not have reached a contrary conclusion."

The fact that other male employees performed substantially identical work but made less money than the plaintiffs did not affect the outcome. An EPA plaintiff is not required to demonstrate that men as a class are paid higher than women as a class but only that there is discrimination in pay against one employee with respect to compensation of another employee of the opposite sex.

Moreover, it appears from the decision that the EEOC was not required to put on any evidence disputing unequal application or inconsistent application of the state's pay system. The fact that the employer exercised slight discretion each time it assigned a new hire to a specific step in the salary range, based on its review of the hire's qualifications and experience, means that a jury could believe that the assignment was based at least in part on gender. Again, there was no evidence of this in the record; this was just the court saying such a scenario was possible.

So how does an employer defeat this kind of standard? The court noted the absence of contemporaneous evidence showing that the decisions to award the plaintiffs their respective starting salaries were in fact made pursuant to their qualifications. Although there was some contemporaneous evidence regarding one individual hiring it was not sufficient to eliminate the mere possibility that some other factor could be in place. Specifically, an official recommended that one of the comparators be hired at a higher starting salary than the typical employee because of his prior experience, but that was not evidence showing that the decision setting the salary was actually made on that basis.

What does this mean? If you don't have contemporaneous evidence in the form of written records or very credible witness testimony that the employment decision at issue was actually made based on the factors you say it was, you cannot carry your burden on summary judgment. It reinforces dramatically the requirement for accurate and credible record-keeping with respect to employment decisions concerning compensation. It adds a further burden to employers on hiring and promotion decisions and opens the door to wage challenges that will be expensive to defend and to settle.

I will keep an ear to the ground to see if any more of these kinds of cases surface, but this kind of a standard creates potential problems for all employers.

Monday, May 21, 2018

Get Your Story Straight

Jeremy Schrag, a partner in our Wichita office, sent me the following synopsis of a 10th Circuit decision that reminds us that termination reasons should be legitimate, nondiscriminatory, easily explainable, and unchanging.  In Fassbender v. Correct Care Sols., LLC, the  Court sent a case back for a jury trial because the employer’s reasons for termination kept changing.

The plaintiff worked as a medication aide for a company that provided medical services at prisons throughout the country.  After learning that she was pregnant, her supervisor reportedly made statements such as “are you kidding me? . . . I don’t know how I’m going to be able to handle all of these people being pregnant at once.  I have too many pregnant workers.  I don’t know what I am going to do with them all.”

Important Practice Tip: while it's understandable that a supervisor faced with significant long-term attendance issues in his female staff because of pregnancy might be frustrated, expressing it in such a manner is not advisable.

During one of her prison visits, the plaintiff received a note from an inmate indicating he knew personal information about her and wanted a sexual liaison with her. She took the note home and waited more than 24 hours before telling her supervisor about the incident, in violation of company policy that such activities be immediately reported. The following day another inmate left a note on her cart; she immediately reported this event.

The next day the company terminated her employment. And then the fun, or, depending on your point of view, the obfuscation, started. The plaintiff was initially told she was terminated because she violated the company's fraternization policy. Then someone told her it was because of the "severity" of her offense. Confused, she went to human resources which told her she was fired because she failed to report the first note immediately. An internal memorandum indicated she was fired because she failed to timely report the note, and took the note home. After the plaintiff filed an EEOC charge, the company said she was terminated because she failed to report the inmate's note to her supervisor, she did not report the incident the same day, and she discussed personal matters either with the inmate or within earshot of him. Finally, in a summary judgment motion, the company indicated that it fired the plaintiff solely because she took the inmate note home with her in violation of the fraternization policy.

One of the easiest ways to lose an employment case is to have multiple reasons for an adverse employment action, expressed at various points in the termination/litigation process. The fact that the company could not get its story straight meant that there was an issue of fact as to why it actually fired the plaintiff. Multiple, inconsistent reasons for termination are frequently seen by the courts, and juries, as a smokescreen to hide the real reason for firing, in this case, pregnancy.  Which is exactly how the Tenth Circuit saw things. It reversed summary judgment for the company and sent the case back to trial.

The Fassbender opinion is a reminder to employers to stay consistent and to not nitpick the reasons for termination. Termination reasons should be easily explainable.  If you cannot explain why the employee deserves to be terminated in two to three sentences, you may need to reconsider your decision. While a poorly explained termination reason may get an employer into trouble down the road, a changing termination reason will almost always result in a jury trial.