Federal Regulatory Law Trumps State Law Wrongful Termination Claims

As the federal regulatory scheme expands in covering various industries, it's important to remember that these regulatory systems frequently act to preempt state coverage of employment law issues, particularly in the area of retaliation.  The federal government maintains anti-retaliatory legal regimes in aviation, energy, securities, banking, and a host of other areas.  Frequently it is to the advantage of the employer to be able to move a case from state court and to either a federal court or federal administrative law forum.

That’s what happened in a federal Ninth Circuit Court of Appeals case involving a flight engineer (pilot) and his employer, Japan Airlines.  The plaintiff alleged that a fellow pilot was not medically qualified or fit to operate an aircraft.  This is a classic safety of flight complaint, and an employee who raises such an issue is protected under FAA law and regulations as a whistleblower.  The plaintiff alleged that following his complaint, JAL in retaliation required him to undergo psychiatric evaluation and prevented him from working as a flight engineer.  The flight engineer sued claiming a violation of the California state law whistleblower statute, along with a wrongful termination in violation of public policy count (another state claim), and a violation of AIR21, a federal statute which deals with retaliation protection for whistleblowers under the federal aviation law.

The Ninth Circuit determined that the FAA whistleblower law and its retaliation provisions preempted any state law claims because of the nature of the plaintiff’s allegations.  Specifically, by complaining about pilot qualification and medical standards, two areas where the federal regulatory framework is so pervasive and federal interest so dominant that states are presumed to have no interest, the plaintiff pleaded himself out of state court.  The court noted that there was no such federal preemption with respect to employment law or related aviation claims such as race or gender discrimination, but that safety of flight issues were solely a federal matter.  Just something to keep in mind if you work in a highly regulated federal arena.

The New York Times Will Need to Start Using Its Online Thesaurus

To find similes for the word "hypocritical". Really, the irony here is just too rich-the Gray Lady, ostensible supporter of equal rights, slayer of the patriarchy, champion of political correctness everywhere, can't handle a single request by its executive editor for equal pay.

Seriously, you can't make this stuff up.

The NFL Hits Just Keep On Coming

Tortious interference with a contract, anyone?  I can understand why South Florida University suspended its strength coach after he made comments that probably reflect some deep frustration with the former player.  But his knock on the 49ers' draft pick expose him and his employer to a potential lawsuit for interfering with this kid's livelihood.

Just another bad Twitter outburst--seriously, teams should start getting policies in place on this stuff.

Employers Increasingly Turn to Social Media for Unfiltered Information About Their Workforces

Companies that are not using Facebook and other social media to screen hiring candidates will soon be in the minority. The very thoughtful discussion in this article contains survey data indicating that almost 40% of employers are using social media as an aid in hiring. More importantly, almost half of those screening with social media found something on a candidate's site that disqualified her from the position she sought.

50% is a pretty big number. And it's more than twice the number of employers that discovered something that caused them to want to hire a candidate.

Moreover, given the firestorm that is breaking over what several professional football players tweeted about the NFL's first openly homosexual player, many companies view their employees' social media posts as a ticking time bomb of liability. The article notes that healthcare professionals, for example, discussed private patient information on their social websites, sales employees e-mailed or posted customer credit card and account information to sites outside the company firewall, and any Google search will show dozens of examples of inappropriate comments about jobs, bosses, coworkers, company leadership, etc. leading to unwanted publicity and legal exposure.

So the short answer for employers is to have a social media policy that doesn't excite the folks over at the NLRB, but delineates employee responsibilities and company standards. At the same time, the company should have an operations policy that describes for managers how the company social media policy will be monitored and enforced.

Once again, it's good to be an employment lawyer.

Leaked Johnny Football Scouting Report Raises Some EEO Concerns

Call me hypersensitive, but if I had a client that was using prehire reports like the allegedly legitimate scouting report on Texas A&M star quarterback Johnny Manziel, I'd be on the phone to them with some advice. Starting with, "Set aside some money for employment litigation expenses."

The overall tenor of this thing is troubling, and some of the language is outright problematic. I'm thinking specifically of the comment that Manziel has "outlaw bloodlines", which clearly implies that some of his reckless behavior is attributable to a genetic quality on his father's side. This is, as we say in the business, "a smoking gun" for genetic discrimination, which violates the federal Genetic Information Nondiscrimination Act.

As with any entertainment business, character issues are a crucial hiring factor in the NFL. But attributing character traits to some type of genetic anomaly (at least without an ironclad medical basis) is just idiotic. And it's especially idiotic to put your prejudices in writing, in a nonprivileged document that could readily be discovered in litigation.  I'm not sure that Mr. Manziel has a case personally, since he was taken earlier in the draft and New England did not have a chance to effectuate the bias contained in the report. But if this is the kind of information that is routinely placed in the scouting reports, NFL clubs are opening themselves up to potential litigation.

Know Your Evidence, Part 10

I really can't explain the results in this particular case from the Northern District of Illinois, except to say that somehow the company just didn't bother to look at its own internal timekeeping system, with the result that it failed to realize it wrongly terminated an employee for tardiness when, in fact, the record showed that she had been at work on time. The result was a reversal by the Seventh Circuit Court of Appeals of summary judgment, followed by this Title VII retaliation case making its way back to the trial court where it will be heard by a jury, unless it settled. Which is what I recommend for the employer.

The company kept saying that it terminated the plaintiff for a single reason-tardiness-sometime after she filed an EEOC complaint alleging she'd been discriminated against on the basis of race when she was denied a promotion. True to form, she then sued for retaliation, and also true to form, the original race discrimination claim was dismissed on summary judgment. But because the alleged basis for the company's decision--i.e. the fact that the plaintiff was late to work--was inconsistent with the company's own time punch records, the Court of Appeals found that there was a factual dispute, and sent the case back for trial.

This type of error should be picked up in the initial factual investigation when a company decides an employee should be terminated. As you read the court's opinion, the company (and to a certain extent its counsel) simply looks like it did not understand its own rationale for the termination.  The end result is predictable.

Federal Statute Creates New Burdens for Employers Filing Unemployment Claims

A little noticed federal statute – the Unemployment Insurance Integrity Act – has the potential to create some big problems for employers who deal with unemployment insurance claims.  The statue was passed in 2011 to little fanfare.  It was focused on trying to deal with unemployment insurance fraud, but seems to have focused on relatively minor employer fraud issues, rather than the much larger and pervasive employee fraud problem, and basic government mismanagement of the unemployment insurance programs at the state level.

The statute provides that states' unemployment compensation schemes must require employers and their agents to timely and adequately respond to a state unemployment agency's request for information.  This is true regardless of the state of the employee's claim, and includes the initial unemployment claim, something that is frequently ignored by employers who do not wish to contest unemployment claims by their terminated employees.  The statute requires that if an employer engages in a pattern of non-existent or inadequate responses, the state is to charge the employer's unemployment insurance account for all benefits claimed, even when the claimant is determined to be ineligible.  In other words, an employer can lose the right to challenge frivolous unemployment claims if it supplies bad information, or no information, in response to an initial unemployment charge.  States are also required to put civil and criminal penalties in place for these failures to respond.

So employers should pay attention to these new requirements, particularly since state unemployment insurance agencies only allow a limited period for filing responses.  The required state laws penalize an employer for willfully making a false statement or willfully failing to disclose a material fact related to termination of an employee with penalties that are imposed based on repeated instances this conduct.  Traditionally, states have not required an employer to respond to an unemployment notice under circumstances where eligibility for the unemployment insurance is not in dispute, such as in a layoff situation.  Under the new statute, a response is likely required, regardless of the circumstances.  For employers that have traditionally elected to simply not contest a claim for benefits (for whatever reason) the statute works a major change.  Simply put, employers should now never ignore a request for information from an unemployment insurance agency, even in situations where the employer is electing not to challenge the claim for benefits.  Depending on the state, the company could find that two failures to respond (or a failure to respond that is late by more than a day) could constitute a pattern of failure under the state statute, and subject the employer to the loss of its ability to challenge bogus claims in the future.

So, some quick advice: do not provide written separation agreements to terminating employers providing that an employer will not contest an unemployment insurance claim.  Regardless of whether the employer wants to, a response is now required, with accurate information.  Employers must consider that their payroll service or unemployment insurance contractor will be faced with accelerated requests for information and may lean heavily on the employer to provide this information quickly.  Accordingly, employers should review their state laws and train their staffs to recognize these claims and notices for unemployment insurance so that they can be flagged for quick follow-up action.  To facilitate processing, the employer should consider using a system similar to that for managing workplace absences (and if you don’t have such a system in place for workplace absences, you should get one) involving a single or limited point of contact for all unemployment insurance inquiries and responses.  Finally, employers should consider eliminating the offer of not contesting unemployment compensation from their severance plans.  This will require some thought with respect to severance terms and offers, given that unemployment compensation is frequently a significant economic benefit to a departing employee.