Distinction Between Supervisor/Nonsupervisor Makes $70,000 Difference in Religious Discrimination Case

The status of an employee as a supervisor or nonsupervisor can have a significant impact on the outcome of a discrimination, harassment or retaliation case. For example, if an employee who commits a hostile work environment is a supervisor, the employer could be deprived of valuable legal defenses like the Faragher/Ellerth affirmative defense. A recent case from the Fifth Circuit highlights the importance this distinction can make.

In Nobach v. Woodland Village Nursing Home Center, Inc, a religious discrimination case, a nursing home activities aide, sued her employer because she was terminated from her position for refusing to pray the Rosary with a patient. Kelsey Nobach was asked by a nonsupervisory co-worker to transport a patient from the dining room to the patient’s room. The co-worker informed Nobach that the resident had requested that the Rosary be read to her. Nobach told the co-worker that she could not read the Rosary to the patient because it was against her religion but invited the co-worker to do so if she wanted to. The co-worker did not respond and Nobach did not think anything more of the conversation.

When no employee read her Rosary, the patient complained to management. Management decided to terminate Nobach’s employment as a result of her refusal to read the Rosary to the patient. After being informed of the decision, Nobach, for the first time, informed management that performing the Rosary was against her religion. There being no dispute that Nobach was terminated for refusing to read the Rosary to the patient, a jury found in favor of the plaintiff on her Title VII religious discrimination claim and awarded her nearly $70,000.

On appeal, the employer challenged whether there was any evidence that the employer knew of Nobach’s religious beliefs before it discharged her. The only person Nobach ever told that praying the Rosary was against her religion was her nonsupervisory co-worker. Being unable to point to any evidence that the employer, its supervisors or management, knew at the time the discharge decision was made, that praying the Rosary was against Nobach’s religion, the Court of Appeal reversed the judgment. As noted by the Court, had Nobach told a supervisor of her beliefs before the decision was made, or if the co-worker she did advise about the conflict between her religious beliefs and her job was a supervisor, the judgment would have been affirmed.  Here the status of the employee Nobach told of her religious beliefs ended up being outcome determinative.

You can download a complete copy of Nobach v. Woodland Village Nursing Center, Inc. here [pdf].

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Delivery of FMLA Notices by First Class Mail Does Not Rule Out Disputes Over Receipt of Notice

The DOL regulations require FMLA-covered employers to provide various notices to employees.  The regulations do not dictate how all of the notices must be delivered.  Most employers utilize hand-delivery or regular U.S. mail for most pre-leave notices (eligibility and pre-leave designations) and use U.S. mail almost exclusively for post-leave notices (i.e., when the employee is already out on leave).  A federal court of appeals opinion earlier this month from the Third Circuit should cause employers to analyze how they deliver important notices to employees to ensure that disputes do not arise about whether the notices were sent to and received by employees.   

In Lupyan v. Corinthian College, a dispute arose over whether the employer properly notified the employee that her leave of absence was designated as FMLA leave.  Lupyan was an instructor at the Corinthian College (CCI).  When her supervisor noticed that Lupyan seemed depressed, he suggested she take a personal leave of absence.  After Lupyan requested a personal leave of absence, the supervisor then suggested she apply for short-term disability instead. She began a "personal" leave in December 2007.  Lupyan met with her physician and had him complete a DOL "Certification of Health Provider" form.  Based on the submission of the health provider certification, human resources determined that Lupyan's leave qualified for FMLA leave. 

Human resources met with Lupyan and instructed her to initial her leave request as "Family and Medical Leave".  Lupyan's FMLA leave rights, including the requirement that she return within twelve weeks, were otherwise not discussed at the meeting.  Later that afternoon, the human resources representative mailed Lupyan an FMLA Designation Notice designating her leave as FMLA leave and advising her of her rights under the Act.  The letter was mailed first class U.S. mail.  Lupyan denies she received the letter and denies that she was told she had to return within twelve weeks.   

On April 1, 2008, (five weeks after her twelve weeks of FMLA leave exhausted), Lupyan announced she was ready to return to work.  CCI refused to reinstate her citing low student enrollment and because she had not returned within her twelve weeks allotted for FMLA.  Lupyan brought suit alleging that the college interfered with her rights under the FMLA by failing to give notice that her leave fell under that law and retaliated against her for taking FMLA leave.  The trial granted CCI's motion for summary judgment concluding that CCI had advised Lupyan of her FMLA rights; specifically the obligation that she return within twelve weeks.  The court reached this conclusion relying on the "mailbox rule" evidentiary presumption that a letter properly addressed, mailed and with sufficient postage is deemed received by the recipient. 

On appeal, the Third Circuit Court of Appeals reversed the trial court's decision finding that Lupyan's denial that she received the letter created a factual dispute that could not be resolved by the trial court on summary judgment and should be resolved by a jury.  This holding is significant in that the majority of employers provide required FMLA disclosures and notices by first class U.S. mail.  First class U.S. mail provides no record that the mail was actually delivered to  or received by the employee.  In the rare case, like Lupyan, where there is a dispute about whether the employer sent or employee received required FMLA disclosures sent by first class U.S. mail, the dispute will likely need to be determined by a jury.

Lessons for Employers.

The ideal method to deliver FMLA required notices (and any other important notices the employer wants to prove the employee received) is in a manner that the employee cannot credibly dispute that the notice was received.  This is most commonly achieved by having the employee sign some form of acknowledgment of receipt.  This may be done using hand-delivery; express mail delivery; certified U.S. mail return receipt requested; or electronic delivery.

Hand-delivery alone, from an evidentiary, is not much better than delivery by U.S. mail because proof of delivery will require testimony from the employer representative delivering the notice and is as easily controverted by the plaintiff-employee as is delivery by U.S. Mail (i.e., the employee denies that she received the notice).  If hand-delivery is used, the better method is to have the employee sign an acknowledgment of receipt when the notice is handed the notice.

First class U.S. mail, return receipt requested also provide good evidence of receipt.  The green card signed by the recipient to whom the notice was delivered can be used by the employer to show that the notice was delivered and by whom it was received.

FedEx, UPS and other express delivery service is ideal so long as it requires the employee to sign a document acknowledgment of receipt.  When using express delivery services the employer will want to ensure that delivery service actually obtains a signature from the employee evidencing delivery and does not merely leave the package at the employee's address.

Electronic delivery of documents through e-mail, text message, or other digital transmission is also a good indicator of receipt so long as there is a "read receipt", "successful fax transmission certificate" or a response from the employee indicating receipt (e.g., "I got it" or "Received").

Employers should consider whether their method of delivering important or required notices to employees is done in such a manner as to reduce the likelihood that disputes will arise over whether the notices were sent and/or received.   

You can download the full opinion in Lupyan v. Corinthian College here.

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Texas Employers Can Pay Employees in Bitcoin, But Why Would You?

According to a recent article by DLA Piper, more employees are requesting to be paid in Bitcoin. Bitcoin is a virtual or digital currency usually used for online payments. Although Bitcoin has only been around for five or six years and I doubt it will ever be used for the widespread payment of wages, Texas law currently allows for this form of payment. 

Texas law requires that employees be paid in U.S. currency, written instrument issued by the employer that is negotiable on demand at full face value for United States currency; or by the electronic transfer of funds.  However, Texas law allows for flexibility in the payment of wages and employers and employees may agree in writing to receive part or all of the wages in kind or in another form, including Bitcoin or even Euros.   

When a Texas employer pays an employee in any form other than U.S. currency, it takes a risk that any interruption in that payment can result in the potential liability for unpaid wages.  For example, if payment is refused for any reason, the payment attributable to the employer does not constitute the payment of wages.  Given the novelty of Bitcoin payments and the potential for security breaches involving Bitcoin payments and accounts, an employer takes unnecessary risks in making payments in anything other than U.S. currency or more traditional negotiable instruments (e.g., checks).

While there does not appear to be a significant demand for payment of wages by Bitcoin, at least one payroll processing company is experimenting with processing payroll using Bitcoin.

To the extent that employees are increasingly requesting payment by Bitcoin, I speculate that the reason for those requests stem from a belief that those payments may be tax exempt or less likely to be reported to the IRS.  The IRS has clearly stated that Bitcoin payments are taxable as wages, just as more traditional payments, and must be reported by employers on Form W-2 and employees on their annual return.

Until Bitcoin has a longer track record of success and is used on a more widespread basis by employers, most Texas employers would probably be better served compensating their employees using more traditional forms of payment.

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EEOC Issues New Enforcement Guidance on Reasonable Accommodation of Pregnant Employees

Several weeks ago, I wrote that the Supreme Court's decision to grant certiorari in Young v. UPS (the case about an employer's reasonable accommodation obligation to pregnant employees under the PDA) might end up signaling the end of light duty policies that limited  light duty availability to employees with worker's compensation injuries or illnesses.  (post here). 

Today, the EEOC issued new enforcement guidance on employer's reasonable accommodation obligations to pregnant employees that specifically addresses light duty policies.  According to the new guidance, the EEOC states that:

[A]n employer cannot lawfully deny or restrict light duty based on the source of a pregnant employee's limitation. Thus, for example, an employer must provide light duty for pregnant workers on the same terms that light duty is offered to employees injured on the job who are similar to the pregnant worker in their ability or inability to work.

Employers utilizing light duty policies in their workplaces should have their policies reviewed by their labor counsel.  You can access the full EEOC Guidance here and the FAQ issued by the Commission here.  

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Employers Should Dot Their I's and Cross Their T's When Using Consumer Reporting Information

According to Law360, Home Depot has been sued in a Georgia federal court in a putative class action alleging violations of the Fair Credit Reporting Act (FCRA) for improperly using consumer reports and background checks. Law360 reports (subscription required) that the suit alleges that the retailer uses consumer reporting information to make employment decisions on applicants and employees without properly disclosing that it will obtain consumer reporting information and without providing copies of the reports before taking adverse action against the applicants and employees in violation of the FCRA.

As I wrote almost five years ago, employers should strictly comply with the provisions of the FCRA when using consumer reporting information to make employment decisions.  Those provisions can be generally summarized as:

  • Disclose, in writing, your intent to obtain consumer reporting information before requesting the information;
  • Obtain written authorization to obtain the consumer reporting information before requesting the report;
  • Prior to taking an adverse employment action, provide the applicant/employee with pre-adverse action notification containing a copy of the report and a summary of rights under the consumer reporting act;
  • After taking the adverse employment action, provide the applicant/employee with post-adverse action notification that contains the name and contact information of the consumer reporting agency (CRA) that prepared the report; a statement that the CRA did not make the decision and advising the individual of his or her right to dispute the information in the report with the CRA within 60 days.

Failure to follow these basic steps can result in suits by individual appliants and employees, or as desmonstrated by the suit against Home Depot, even class actions.

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Breaking News: U.S. Supreme Court Agrees to Hear Important Case on Reasonable Accomodation for Pregnant Employees

The U.S. Supreme Court just concluded its 2013-14 term and is already creating a buzz over the cases it will hear when it convenes again this October.  Today, the Court agreed to hear a case involving whether and to what extent pregnant employees are entitled to reasonable accommodations for conditions related to their pregnancy.  The case is Young v. UPS

Since the passage of the ADA Amendments Act in 2008, there have been an increasing number of pregnancy discrimination cases filed under the ADA.  However, Young's claim accrued prior to the passage of the ADAAA and therefore should only implicate the Pregnancy Discrimination Act.  

The Young case deals with the accommodations and light duty UPS makes available for employees suffering from on-the-job injuries, ADA disabilities or drivers who are no longer qualified under DOT regulations to operate a federal motor carrier because of an impairment (or otherwise required by a Collective Bargaining Agreement).  According to Young's allegations, UPS did not make reasonable accommodations for her lifting restrictions caused by her pregnancy that she claims were similar to the lifting restrictions imposed on non-pregnant employees who suffered on-the-job injuries thereby treating her differently than similarly situated non-pregnant employees.  The Solicitor General recommended that the Court pass on hearing this particular case.  Nonetheless, at least four justices voted to hear the case next session.

I expect that the outcome of this case will have substantial effect on a number of employer policies including, but not limited to, employer light duty policies that limit light duty availability to employees who have suffered a workplace injury.

The Supreme Court of the United States blog has a lot of useful information on this case here.

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What's the Difference Between "I Don't Recall" and "That Never Happened"?

Recent video clips posted at Page One Kentucky of the deposition of Kentucky State Rep. Will Coursey in a sexual harassment suit emphasize the difference between “I don’t recall” and “That never happened/I never said that.”  First, the clip. 

As this clip demonstrates, there is a difference between “I don’t recall” whether something happened and “That never happened” or "I never said that."  Testifying that one doesn’t recall demonstrates a “failure of memory” or “an inability to remember.” It does not foreclose the possibility that the act or event actually occurred and the witness is now unable to remember it.  Ensuring that witnesses know the difference between “I don’t recall” and “that never happened” is important in giving clear deposition testimony.

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DOL Proposes Rule to Extend FMLA Benefits to Same-Sex Spouses in Texas

Last week the U.S. Department of Labor published a proposed rule to extend FMLA benefits to same-sex spouses on the same terms as spouses of other legally recognized marriages.   This will confirm, if passed, that FMLA benefits must be provided to all eligible employees to: care for their legally married spouses who have a serious health condition; take military exigency leave for spousal military service; take military caregiver leave to care for their same-sex spouse servicemember. This is significant in that Texas is a state that does not recognize same-sex marriages.

The FMLA allows eligible employees to take job-protected leave for specified family and medical reasons –including leave to care for a spouse with a serious health condition. In determining who is a “spouse” under the FMLA, the regulations currently provide a “state of residence” test whereby the employee is eligible to take FMLA leave for the serious health condition of a same-sex spouse if the employee resides in a state recognizing same-sex marriage. The continuing viability of this regulation and a Texas employer’s obligation to extend FMLA leave to employees to care for same-sex spouses has been in doubt since the U.S. Supreme Court struck down similar U.S. Treasury guidance defining spouse in such a way as to exclude same-sex spouses in the 2012 case U.S. v. Windsor –the Defense of Marriage Act case

Under the proposed rule, a “state of celebration” test will be used where the marriage is recognized for FMLA purposes if it was performed in a state that legally recognizes same-sex marriages. Assuming that this regulation becomes final (and it most certainly will after a public comment period and publication in the Federal Register as a final rule), it will confirm that Texas employers must recognize all legal marriages (including same-sex marriages) for FMLA purposes.

You can download a copy of the proposed rule here

Access to the DOL’s FAQ page is available here.

Download the DOL Fact Sheet on the Proposed Rule here.

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Fifth Circuit Holds, in Issue of First Impression, that But-For Causation Applies to Claims Arising Under the Jury System Improvement Act

Both federal and Texas law prohibit discrimination against employees for participating in various types of jury service. Imagine an employer defending itself from the accusation that it terminated an employee because of her jury service and then looking across the courtroom to see the individuals who will most likely decide the merits of its case –a jury of citizens who, if employed, are away from their jobs due to jury service. An employer based in the Fifth Circuit was almost in this situation.

In a case of first impression in the Fifth Circuit, the Court of Appeals held that a “But-for” causation standard applied to claims arising under the federal Jury System Improvement Act –the federal law that prohibits discrimination against employees for participating in the jury service for any U.S. court. Texas has a similar provision that prohibits discrimination against employees for participating in state court jury service.

In Rogers v. Bromac Title Services, LLC, Wanda Rogers was a closing officer for Bromac. She was summoned and eventually selected to serve as a grand juror. Her grand jury service ran from to August 19, 2011, through February 19, 2012. That service was ultimately extended to August 19, 2012.

Rogers was terminated on April 20, 2012. The stated reason for Roger’s termination was two comments she made to a group of co-workers deemed inappropriate by the employer –the second of which was made two days before the termination. Rogers sued and the employer moved for summary judgment. The trial court, utilizing the McDonnell-Douglas burden shifting analysis applied a but-for causation standard and dismissed Rogers’ claims because she could not create a fact issue on whether she would have been terminated but-for her jury service and also concluded that she created no factual issue on the veracity of Bromac’s legitimate non-discriminatory reason for its decision.

On appeal, the Fifth Circuit Court of Appeals affirmed the trial court’s ruling. The appellate court held that in evaluating claims arising under the JSIA, the plaintiff must prove that she would not have been subjected to the adverse employment action but-for her federal jury service. The Court also agreed with the trial court that Rogers’ evidence was insufficient to create a genuine issue of material fact that Bromac’s stated reasons were false or pretextual.

You can download a copy of Rogers v. Bromac Title Services, LLC here.

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Two Recent "Yawn" Employment Cases from the Texas Supreme Court

There have been two employment cases decided by the Texas Supreme Court in the last several months. However, because I expect them to have little impact on Texas jurisprudence, I have not been compelled to write about them before today. However, in the interest of keeping the blog up-to-date with each of the employment cases from the Supreme Court of Texas, I will briefly cover them.

In City of Houston v. Proler, the Court held that a firefighter who had the inability to overcome his fear of running into a burning building was not disabled. Because of the unique set of facts and that the case involved the pre-2007 version of the Texas Commission on Human Rights Act and pre-amendment Americans with Disabilities Act, I do not think this case will get much use in Texas employment law disputes.

Similarly, in Sawyer v. E. I. du Pont de Nemours & Co., the Court held that a plaintiff-employee cannot make out a fraud claim when the misrepresentation on which the fraud claim was based was the promise of continued at-will employment. The Court reasoned that since no employee has any right to continued at-will employment, no employee could justifiably rely on a representation or promise of continued at-will employment and therefore could have no viable fraud claim arising from such misrepresentation. The Court also held that employees covered by a collective bargaining agreement that contains exclusive remedies for wrongful termination were limited to those exclusive remedies and could not bring common law claims for fraud. Most Texas employees are not covered by collective bargaining agreement and of those that are, I doubt most of their CBA contain exclusive remedies for wrongful termination claims. For that reason, I expect this case to have little impact on Texas law.

You can access each of these opinions here:

City of Houston v. Proler

Sawyer v. E. I. du Pont de Nemours & Co.

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