Is This Really Expertise?

The use of experts in employment cases is a difficult and touchy subject. Typically, experts are used to testify about things like future earnings potential, financial damages, statistical analyses, and selection results, especially in regard to mass layoff or hiring cases where a class action or pattern and practice of discrimination is alleged.  Expert testimony and opinion are generally accepted as useful in these situations because the experts are engaging in a relatively settled and quantifiable type of  analysis that can be readily reviewed by a jury or appellate court for accuracy.

Occasionally, however, you will see an attempt to put forth expert testimony on such fundamental questions such as whether the person making the decision was actually discriminating, or whether the factors considered by an employer in making a hiring decision were the correct ones. This type of testimony is particularly dangerous because it intrudes into areas where there is virtually no quantifiable analysis taking place, and because the courts will not, in any event, act as a super-personnel agency, reviewing dumb, but non-discriminatory, employment decisions by companies.

That’s why this recent federal case is so troubling. The plaintiff claimed that a school district refused to hire him because of his age. As part of its defense, the school district put forward an “expert” in, of all things, school superintendent selection. The expert was a professor and chair of the Department of Educational Leadership at the University of Kentucky, and had a Ph.D. in educational administration. He had also written extensively on job requirements for school superintendents, their career paths, recruitment, training, and professional development, and the overall scope of the modern school superintendent job. Interestingly enough, the expert had not participated in a single superintendent search as a member of a school board, nor had he been consulted on a school superintendent search at any level.

But his lack of search experience was not the problem, at least here. The problem was that the expert wanted to talk about things that ought to terrify defense lawyers because of the implication with respect to experts that a plaintiff might ultimately try to put in front of a jury. For example, the expert opined that the district conducted its search in a “fair and equitable” manner and that the district board members properly vetted the various factors that go into the making of a successful school superintendent, that the plaintiff did not have enough “modern” experience as a superintendent to qualify under criteria selected by the defendant school board, that the Illinois Association of School Boards properly provided the local school board with a list of candidates that were currently superintendents, and that the selection was based on proper and effective criteria.

Plaintiff quite properly objected to these opinions, but the trial court overruled the objections and indicated that the expert would be allowed to testify about them. The problem, of course, is that the expert’s opinions aren't based on any kind of scientific method, or even a reputable study, but simply his own opinion which just happens to coincide with that of the people who hired him. No surprise there, of course.

Moreover, the opinion that the expert is providing relates to specific things that courts have long said they don’t care about, namely whether the employer is smart in its employment decisions. In any employment discrimination case like this one, the key is not whether the employer is establishing or using a proper standard, but whether it is consistently applying the standards it has identified as being important. Allowing an expert to step in and testify that the employer was using the correct standards is simply irrelevant. It is also extremely dangerous, because a jury hearing somebody testifying under the mantle of  being an expert is likely to lose track of the fact that the employer standards themselves are usually not the issue.  The real issue for the jury is whether the employer was consistently using the standards that it selected, or whether it was making up those standards as an excuse for illegal discrimination,  in this case, ageism.

The danger from this opinion is that tables can be flipped easily and that in a way it would be tremendously damaging to employers. If a plaintiff could put on testimony from a so-called hiring expert or job performance expert saying that the criteria the employer used were not the best, or that it incorrectly judged the value of a particular performance attribute when it decided to fire a plaintiff, the courts would rapidly find themselves adjudicating whether the employer made a good business judgment. The short answer is that most employers will not win that battle in front of a jury when someone's job hangs in the balance.

I’m going to hope this case remains an isolated example, but practitioners in the Seventh Circuit now have authority for this kind of expert opinion in federal court.

A Joint Employer But Not a Cat's Paw

A recent federal case out of the Northern District of Illinois has some important points for employers that place their employees in another company's facilities, and for the companies that receive and monitor those workers. The decision sets several important standards for so-called "joint employers", and is worth a look.

Plaintiff, a black female, worked for a janitorial service, which assigned her to clean offices of a specific customer company in a building in Chicago. Although her employer was the janitorial service, her cleaning performance was monitored on a day-to-day basis by a management employee of the customer. The customer manager had significant control over the working conditions of the plaintiff, to the extent that he was able to request that she be assigned to a specific position, as well as directing her to perform additional tasks, and monitoring complaints about the plaintiff's performance from other customer employees. Ultimately, complaints about the plaintiff sleeping in a conference room reached the point that the customer manager sent a message to the janitorial service, saying that the plaintiff was no longer allowed to work in the building.

The janitorial service attempted to reassign the plaintiff, but it did not have a permanent position for her and assigned her to a position that caused her to lose her union seniority, and employee benefits. The plaintiff ultimately resigned, and sued both the janitorial service and the customer for race discrimination.

Both the janitorial service and the customer filed for summary judgment, seeking to get the case dismissed before trial. The janitorial service argued that there was insufficient evidence to show that it was motivated by race in its employment decisions; the customer argued that it could not be liable because it was not the plaintiff's employer.

The judge initially ruled that the customer could be found liable as an employer, because it was responsible for demonstrating to the plaintiff how she was to clean its offices, because the customer directed her to perform additional tasks and because the customer had the power to stop the janitorial service employees for working for it and to request the services of specific employees. Although the customer did not provide pay and benefits, and did not have the responsibility for costs of the operation, the degree of its control over the day-to-day workings of the plaintiff and her coworkers was significant enough that the court determined that the issue should go to a jury. The court also determined that the differences between the way the customer allegedly treated the plaintiff, and the way other non-African-American employees were treated raised issues of fact that required the discrimination claim to go forward.

But there was a different result for the janitorial service, which, remember, was actually paying the plaintiff and carried her on its rolls as an employee. The evidence here showed that the janitorial service was simply told that the plaintiff was not allowed in the customer's offices anymore. It reacted appropriately, placing her in the only available position that it had. The court specifically stated that the fact that the janitorial service did not conduct an investigation before it demoted her (and therefore might have made an incorrect demotion decision) was irrelevant because, "Title  VII sanctions employers who discriminate, not those who are simply inept or incompetent."

What about the argument that the janitorial service was simply channeling the alleged discriminatory animus of this customer? It's pretty well settled law that a company's desire to cater to the perceived racial preferences of its customers is not a defense under Title VII. But here, the court noted that the janitorial service had no idea that the plaintiff's race was a factor; all it knew was that the plaintiff was no longer allowed in the customer's offices. Thus, there was no intent to carry forward the alleged racial bias of the customer, and therefore, no liability.

Finally, the court stated that there was no cat's paw liability here (see the post in Simians and Feline Appendages, below, for a detailed discussion of this theory of liability), because the cat's paw circumstance doesn't apply when the discriminatory animus is coming from another company under circumstances that effectively removes discretion from the alleged cat's paw employer. Here, the janitorial service had no other option but to demote the plaintiff when she was no longer allowed to work at the customer's offices.

This is a noteworthy decision for several reasons, but the case mainly stands for the proposition that employers that have outside contractors in their workspace need to monitor what is actually going on in terms of their supervisors' oversight of contractor workers assigned within their facilities.  It's far too easy under these circumstances to become an employer of the contractor personnel, whether a company means to or not.

Simians and Feline Appendages

One of the pleasures of living in Chicago (and just for the record, the pleasures generally more than offset the disadvantages of the weather and political culture) is being under aegis of the federal Seventh Circuit Court of Appeals, which regularly issues highly useful and entertaining opinions.

The Court, via one of its most thoughtful members, Judge Richard Posner, recently issued one such useful and entertaining opinion with respect to an employment case out of southern Illinois. The Court’s discussion is noteworthy because it casts lots of light, in a highly readable way, on so called “cat’s paw” discrimination recently discussed by the Supreme Court .

I have discussed the “cat’s paw” model before; here is a quick refresher. The odd moniker arises out of a 17th century fable about a monkey who wants some chestnuts that are roasting in a fire (perhaps this is the genesis of the Christmas carol). The monkey persuades an “intellectually challenged” cat to retrieve the chestnuts from the fire.  In doing so, of course, the cat burns its paw while the monkey gobbles up the chestnuts. Judge Posner commented that this is a fable offensive to cats and cat lovers, although I am not clear how cats would know about it. In any event, a cat’s paw case is one in which a supervisor without any discriminatory animus is motivated to take an adverse employment action against an employee by a subordinate or other person who does have discriminatory animus against the employee.

In this case, there was plenty of confusion surrounding the roles of pretty much everyone. A security company was responsible for providing security for  a shopping mall in southern Illinois. The plaintiff (we can call her a “chestnut”), worked as a security supervisor. She reported to a man (let's call him the monkey) whom she alleged made sexually offensive comments to other women in her presence, and frequently noted that he wanted an all male/monkey staff around him. When the chestnut began telling the monkey that she wasn’t fond of his activities, he began to give her negative evaluations and accused her of stealing and other misconduct in communications to his superiors.

The monkey's supervisor (lets call him the intellectually challenged cat) told the chestnut that he was abolishing her chestnut job at the shopping mall and transferring her to another nearby town. As a result of the transfer, she was also moved out of her chestnut supervisor position . When the chestnut asked the cat if she was being fired, the cat said “no.” When the chestnut returned to work, the monkey saw her in uniform and told her to clean out her locker, and return her office keys. At this point, the chestnut decided that she was being fired and left. The chestnut never accepted the transfer or tried to reclaim her job. She filed a charge of discrimination, and then sued.

As frequently happens in these types of cases, once things got to trial, the jury became completely confused with respect to chestnuts, cats, and monkeys. Chestnut claimed that she was fired because of her gender and in retaliation for her complaints. The company, which was seeking to explain the acts of the monkey and the cat, indicated that the chestnut was not fired. The jury got confused about the roles of monkey and the cat, and although it found that the plaintiff had been fired, determined that there was no liability for the company because it did not believe the monkey was the sole decision maker.

Judge Posner noted that the jury’s confusion, augmented by a bad instruction from the trial judge, required the case be returned to the district court for a new trial. Judge Posner first described the plaintiff’s theory of the case- that the monkey was no one’s cat’s paw, that he was the monkey and that he wanted to get rid of her and did so with his own paws, rather than enlisting some hapless cat to do so. This would be a valid discrimination claim. Judge Posner also wrote that the company could have defended against this claim by showing that the cat made the decision to terminate the Plaintiff, or at least demote her, on his own without having been monkeyed with. Because the company did not produce any evidence of this at all (and instead insisted that it did not fire the plaintiff), there was complete confusion as part of the jury who was liable. Thus, the new trial.

One moral of the story – cats and monkeys are difficult creatures to control in management and litigation. You are better off being able to show nonbestial reasons for your employment decisions.  The more important lesson is that the company should never have allowed the situation with the employee to remain confused--it should have followed up with her to ascertain for certain whether she actually resigned, and why.  Ambiguity almost always favors a plaintiff employee.

NFL Rulings make Strange Bedfellows

I am talking about the Cowboys and Indians, er, Redskins, and the latest NFL management decision, which actually demonstrates the kind of illegal, price fixing collusion that the NFL, in its court filings, swore up and down that it didn't engage in.

It's not really news here in Chicago because it affects teams outside the NFC North, but the League’s action in penalizing two clubs for providing huge payouts to players in the 2010 football season should raise some red flags. The 2010 season was unique – it was a so-called “uncapped year”, during which clubs can theoretically pay players as much (or as little) as they wanted without being in violation of the collective bargaining agreement. In case you are asking why clubs would ever agree to allow such a situation to exist (uncapped player compensation means that large market, cash-rich teams like, say, Dallas, or even Chicago – if it wasn’t run by such cheap bast, uh executives – could outspend other clubs and bring in talent that would rapidly destabilize the competitive balance), the system was designed to provide a significant disincentive for owners to allow the collective bargaining agreement to lapse.

Of course, a lapse is exactly what happened. The owners voted in 2007 to terminate the collective bargaining agreement, and then their negotiating intransigence allowed the uncapped year to occur. Washington and Dallas took full advantage of it, rewriting several existing contracts and dumping more than $50 million into player compensation that did not affect their ability to sign players in the future years.  All perfectly legal, in fact the League approved the contracts in question when they arrived at League headquarters.

But apparently the NFL put out some “guidance” that clubs should not do this, even though it was perfectly proper to do so. In other words, the NFL told its owners that they should engage in price fixing and collude on player compensation, even though there was no contract in place that required them to do so. And this “guidance” was issued at the same time the NFL was denying that it engaged in exactly this kind of conduct as it defended itself against anti-trust charges from the union.

Even more interesting is the fact that clubs that did not spend up to the minimum salary floor (yes, Virginia there is a salary cap for clubs but there is also a salary floor, to prevent some teams from putting virtually no money into their player development and compensation) were not penalized.

By penalizing the Cowboys and Redskins, the NFL sends a direct message to the other clubs-- when it provides “guidance” on an issue, it expects everyone to follow suit, or else. This clear evidence of compensation collusion is likely to go unchallenged, at least by the union. That’s because the penalty against the Redskins and Cowboys translates into increased salary cap space for everyone else in the NFL, meaning more money for the players. So the union gets bought off here by having its membership get more money, while it turns a blind eye to the NFL’s deliberately and illegally restricting compensation.

I imagine people at the NFL offices on Park Avenue in New York are lighting cigars and saying “I love it when a plan comes together.”

UPDATE:  No real news, other than the two teams will appeal the salary cap hits via the NFL's mandatory arbitration process.  Good luck with that.

When 40 hours A Week Is Enough

A recent case out of the Fourth Circuit Court of Appeals provides a useful analysis for assessing disability claims and what an employer has to do to accommodate them.

The case involves an employee who suffered a string of health problems, culminating in an extended absence from work. When the employee returned, his doctor precluded him from working more than eight hours a day, and 40 hours per week. Because the employer was using a rotating 12 hour shift system, it determined that it could not reemploy the employee, but also maintained that because he was able to work a normal week, the limitation on overtime did not qualify him as "disabled" under the Americans with Disabilities Act.  Thus, no accommodation was required.  Ultimately, the employee's physician certified him to work up to 10 hours a day, four days a week.

Eventually, the company (working with the employee's union) fashioned a position that was described in the opinion as being an eight hour a day job, plus overtime. But the employee sued under the ADA, claiming disability discrimination for the period during which the company refused to employ him.  Note to employers--just because you go out of your way and bend over backwards to help one of your workers doesn't mean he still won't be an ungrateful wretch and sue you anyway.

Fortunately, justice prevailed.  In affirming the dismissal of the employee's case, the Fourth Circuit initially determined that it would consider the act of working to be a major life activity for purposes of its analysis. That assumption does an important thing-it makes this opinion applicable to the 2008 amendments to the ADA, which categorically state that working is a major life activity. The court then decided that an inability to work overtime is not a substantial limitation on an individual's ability to work, and therefore does not qualify as a disability. Note that this is true even though the employee's inability to work overtime absolutely precluded him from working the specific job that he wanted with his employer.

This decision, which reinforces the holdings in a number of other federal circuit courts, is noteworthy because it helps shape the analysis employers have to use when determining whether there is a need to accommodate a claimed disability, and how far they have to go to do so. It represents a straight forward, common sense application of the statute.

Important Safety Tip: The "Bankruptcy Crash" Metaphor Is a Bad Choice For Airline Operations

I'm sure American Airlines is getting the word out following this little episode.

Bounty Hunting and Pro Football

The revelation last week that certain teams were paying their players additional amounts of money for hard contact on the field (a practice that goes back decades, notwithstanding the current hoopla) creates a series of problems for the NFL at a number of levels.

The aspect of a bounty system getting the most attention, of course, is that this type of conduct promotes injuries in a sport that has tried recently to sell itself as being concerned with the players' physical well-being by instituting rule changes to protect players, especially high-value players, from injury. In short, it's a public relations nightmare-the league looks hypocritical for saying it's trying to protect people when members of its management team are out there providing walking around money to players in exchange for knocking other people out for a game/season. For that reason alone I expect some fairly stiff penalties to come out of the NFL's New York headquarters, aimed at former Saints defensive coordinator Gregg Williams, Saints head coach Sean Payton, the Saints organization, and perhaps the Washington Redskins, where Williams used coach.

But there's a separate and legally more problematic point here. The NFL collective-bargaining agreement is quite specific with respect to payments to players. Clubs cannot make payments to players that are not factored in as part of the salary cap process. It's very clear from what's been described in the press so far that these bounty payments were "under the table", and off the books for purposes of tracking salaries and compensation. To that extent, the bounty payments are an unfair labor practice by the clubs, and could form the basis for charges by a player or by the union before the NLRB.

The union could simply raise the issue as a circumvention of the salary cap system and demand some kind of unspecified damages, either through arbitration or through the NLRB process. But it would be far more interesting if individual players brought unfair labor practice charges, because it might be possible to link specific player injuries to the bounty hunting practices of certain teams. To use a not unreasonable example, Peyton Manning, who suffered a vicious hit on his neck and head against the Williams-coached Redskins in 2006, conceivably could file an unfair labor practice charge against the NFL and claim lost wages as a result of his injury. Or he could simply file a claim for some type of intentional or grossly negligent malfeasance by the league in either tolerating or failing to monitor the bounty situation. Given Manning's annual compensation, we could be talking about some real money very quickly. And I can certainly see the NLRB taking on a case like this, for the notoriety, if nothing else.

If I can think of this type of approach, I'm guessing there are 10,000 other lawyers out there who can do the same.  True, the clubs would immediately argue that the injury claim was barred by workers compensation requirements. But in most places, an employee who is injured as a result of deliberate employer misconduct can sue the employer directly.  This could get very interesting, very quickly. Stay tuned.

UPDATE:  And the penalties handed down by the NFL were severe, as anticipated.  Now we will wait to see if the League goes after some of the players involved.  My bet is that it will, but with much more limited sanctions.

UPDATE #2:  The sanctions for the players are still up in the air, but I have a hard time thinking they will as severe as handed out to the coaches.  If they are handed out at all, that is.

Is He Going to Give Himself a Performance Improvement Period, Too?

Partly because of my military background, I tend to be sensitive to disputes between federal branches of government.  U.S. military officers are prohibited by law from criticizing the president and other senior elected officials, and for good reason.

So I was appalled at the judgement reflected by this federal judge in Montana in circulating an e-mail joke about the president that has clear racial overtones.  It apparently caused him to re-assess, too.  At least he's calling for an investigation of his own conduct.

This is laudable, and it got me thinking about the precedent it could set for other management types, in and out of federal service.  For example, what if managers who did dumb things started stepping up and admitting they screwed up, and then submitted themselves for disciplinary action?  What if their charges did the same thing? It could lead to an entirely new paradigm for management and business schools.  It would mean that we wouldn't need all the conflict resolution processes, and the people who service them.  It would mean  we wouldn't need nearly as many employment lawyers to....

Never mind.

An Important NLRA Decision From DC

A federal district court judge, in what is likely the opening round of a challenge that could go all the way to the Supreme Court, today significantly limited the NLRB's requirement that employers post a prounion notice, both physically in their workplaces and on websites used by their employees. The decision is important for all employers to review, because although the court did not preclude the NLRB from requiring the notice to be posted, it did limit the NLRB's ability to enforce a posting requirement via the unfair labor practice process.

A quick review of the circumstances: on August 30, 2011, the NLRB published a Final Rule, requiring all employers subject to the National Labor Relations Act (i.e., the majority of employers in the US) to post a notice, drafted by the Board, outlining employee collective bargaining rights under the National Labor Relations Act.  The required notice specifically listed the rights employees had to join a union, bargain collectively, organize a union, discuss wages, benefits and union organizing, take action with one or more coworkers to improve working conditions, strike and picket, or choose not to do any of these activities. Most employers who were paying attention reacted immediately to what, on its face, appeared to be a very prounion posting requirement coming out of a supposedly neutral government agency. The Final Rule went on to say that any failure to post this notice could be found to interfere with, restrain, or coerce employees in the exercise of their NLRA rights. Finally, the Board noted that it could toll the statutory six-month statute of limitations for any unfair labor practice charge if the employer failed to post a notice properly and that the Board would consider a knowing and willful refusal to comply with the requirement to post a notice as evidence of unlawful motive, where applicable.

In deciding the case, the judge made several key determinations. As an initial matter, she determined that the NLRB was authorized to promulgate a posting requirement, given that the Board was established to deal with labor management relations and the posting related directly to that purpose. No surprise here, and I'm wondering why the employer groups opposing the notice requirement even bothered to argue this. The judge also determined that the Board's action was not arbitrary or capricious under the appropriate standard. Again, no surprise at the result--the Board was within its area of expertise when it determined that many employees are unaware of their NLRA rights and that the notice posting rule was a reasonable means of promoting awareness.

Where things started to go off track for the Board, however, was in the judge's analysis of the Board's presumption that it could arbitrarily determine that a failure to post a notice was the same thing as actually interfering with an employee's exercise of her rights under the NLRA. The court determined that "to interfere" means to actively get in the way, i.e. doing something impeding or hampering an employee's exercise of rights guaranteed by the NLRA. "It [the NLRA] does not prohibit a mere failure to facilitate the exercise of those rights." Under this straightforward reading of the law, the judge found that the Board could not simply determine that a failure to post the notice, in and of itself, interfered with anything. Rather, the judge ruled that the if the Board wanted to prove an unfair labor practice charge for failure to post, it must make a specific finding in each individual case that an employer's action interfered with the exercise of a protected right.

This might sound like a fine distinction, but in actuality, it's crucial. Instead of being able to assume that a failure to post prevents employees from exercising their rights to organize, the Board must now produce specific evidence that someone, somehow was prevented from organizing, talking about wages, etc. as a result of the poster not being in the workplace. That's a significantly harder burden for the Board to carry at a hearing.

Moreover, the judge also determined that the Board could not freeze the statute of limitations and keep it from expiring in cases where there was no posting, without making a showing that the failure to post somehow actually delayed an employee's filing a charge under the NLRA. The Board' argument that it could unilaterally prevent the statue limitations from running, as the court noted, "turns the burden of proof on its head."

In the end, employers are left with this-you will still have to post the notice, and in the form that the Board requires. But before you can be penalized for not doing so, the Board is going to have to produce credible evidence that your workforce was prevented from engaging in protected activity by your failure to put the notice up.  And your failure to post a notice cannot automatically extend the timeframe in which employees can file valid charges with the Board, absent a showing that a delay actually happened. Both of these are good things.

If the government appeals, this will get interesting.  I expect that the DC Court of Appeals would uphold most, if not all of the lower court's findings, and might actually expand them.  So the government may not wish to push its luck any further.