Tag Archives: favorite firing

Favorite Firing: Failure to Rescind a Resignation


flag-28567_640Every once in a while, a difficult employee resigns, and his or her managers breathe a sigh of relief. The employer might have wanted to be rid of this employee, but there weren’t grounds to discharge the individual. But what if the employee wants to rescind the resignation—does the employer have to take the employee back? In Featherstone v. Southern California Permanente Medical Group, B275225 (April 19, 2017), the California Court of Appeals said no—once the employee resigns, there is no requirement that the employer allow the person to return.

The Facts: Ruth Featherstone worked for the Southern California Permanente Medical Group. She had had prior health problems necessitating her absence from work. Despite her absences, there is no indication in the Court’s opinion that she had any performance difficulties.

In mid-December 2013, she returned to work after an absence for surgery and recuperation. About a week after her return, she allegedly suffered a temporary disability due to an adverse drug reaction to medication. She claimed that while she was under the influence of this drug, she first orally resigned and then several days later confirmed the resignation in an email. At the time, her supervisors did not suspect that she was behaving abnormally and processed the resignation promptly so that Ms. Featherstone could receive her final paycheck in a timely manner under California law.

Unbeknown to any of her managers, Ms. Featherstone’s family noticed that her behavior was unusual, and she was rehospitalized. She was hospitalized for several days. On the day she was released from the hospital, she confirmed her resignation to her employer. It wasn’t until about five days after she confirmed her resignation that she told her managers she had been under the influence of medication when she resigned. Only then did she ask to rescind her resignation.

Despite the sympathetic circumstances of Ms. Featherstone’s request to rescind her resignation, the medical group refused to rescind it, because they did not think they had done anything improper in accepting it. As mentioned above, there is no indication of any problems with the plaintiff’s performance, so this reader wonders why the employer was reluctant to rescind the resignation.

Ms. Featherstone later sued, claiming disability discrimination and retaliation under the California Fair Employment and Housing Act (FEHA). The trial court granted the medical group’s motion for summary judgment, and the Court of Appeals affirmed for two reasons: (1) First, the employer’s refusal to allow the plaintiff to rescind her resignation was not an adverse employment action under the FEHA, and (2) the plaintiff failed to show that the management employees who accepted and processed her resignation knew of her alleged temporary disability at the time.

The Moral: In this case, the employer’s good-faith action in accepting the resignation was upheld. As the California Court of Appeals said, for an employer’s action to be found to be a pretext for discrimination, the employee

“ ‘cannot simply show that the employer’s decision was wrong or mistaken, since the factual dispute at issue is whether discriminatory animus motivated the employer, not whether the employer is wise, shrewd, prudent or competent.’ ” (Hersant v. Department of Social Services (1997) 57 Cal.App.4th 997, 1005.) To meet his or her burden, the employee “ ‘must demonstrate such weaknesses, implausibilities, inconsistencies, incoherencies, or contradictions in the employer’s proffered legitimate reasons for its action that a reasonable factfinder could rationally find them “unworthy of credence,” ’ ” and hence infer “ ‘that the employer did not act for [the asserted] nondiscriminatory reasons.’ ” ’

The California Court of Appeals first found that

“refusing to allow a former employee to rescind a voluntary discharge—that is, a resignation free of employer coercion or misconduct—is not an adverse employment action.”

The Court of Appeals cited a California Supreme Court case, Yanowitz v. L’Oreal USA Inc. (2005) 36 Cal.4th 1028, for the proposition that only actions affecting a current employee are covered, not those affecting a former employee.

“[A]n adverse employment action is one that affects an employee, not a former employee, in the terms, conditions or privileges of his or her employment, not in the terms, conditions or privileges of his or her unemployment.”

The Court of Appeals also cited federal authorities under the Americans with Disabilities Act.

However, I am not sure the Court of Appeals’ reasoning is persuasive—another court might well find that former employees are covered for at least some purposes. If I were reviewing an employee’s request to rescind his or her resignation, I would probably analyze the situation more deeply.

At the very least, an employer should at least be sure there is no element of coercion in the resignation, no sign of constructive discharge. In addition, the employer should be sure there is no express or implied contract of employment and that the employee is truly an at-will employee. Both of these possibilities were examined by the Court of Appeals in Featherstone.

This case also turned on the fact that the medical group had no knowledge of Ms. Featherstone’s adverse reaction to the drug when it processed her resignation. Had her managers had some inkling of this possibility, they might have had a duty to inquire and to accommodate her situation by permitting her to rescind her resignation made under the influence of the medication—the Court in this case did not have to address that situation.

While this case will be helpful to employers who want to stand by an employee’s initial decision to resign, it will still be important for employers to investigate the circumstances surrounding both the resignation and the request to rescind it. Ultimately, this case may be more helpful when good employees resign than when problem employees resign in a pique and later want to return—and those are the employees the employer might most want to lose.

Have you had to deal with an employee’s request to rescind a resignation? What did you do?

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Favorite Firing: Not All Objections to an Employer’s Practices Are “Protected Activity”


 

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Photograph by Honza Soukup on Flickr

Today’s favorite firing case comes from California, which labor and employment attorneys know is a pro-plaintiff venue. But in Dinslage v. City and County of San Francisco, et al, the employer won a lawsuit because the plaintiff could not proof a prima facie case of retaliation. The case involved the distinction between retaliation for opposing discriminatory employment practices and for opposing other allegedly discriminatory practices of the employer (in this case, practices directed at the public).

 

The Facts: David Dinslage worked for the Recreation and Parks Department in San Francisco for over thirty years until he was laid off during a reduction in force. His duties included overseeing programs for adults and children with disabilities. His group in the Department organized special events for people with disabilities.

During the last few years that Dinslage worked at the Department, his managers made changes to the programs he handled. The primary change was to shift the focus from providing separate, segregated programs to people with disabilities to ensuring all programs were accessible, so that the programs were more inclusive, which the Department believed was the current “best practice” in providing services to the disabled. Therefore, many of the segregated special events Dinslage had organized were eliminated.

In 2009-2010, the Department was reorganized to focus more on inclusion, and also to meet budget reductions and eliminate some staff. Dinslage disagreed with the program changes and ultimately refused to accept and implement the changes his superiors envisioned, resulting in him receiving a lower performance rating.

When his position was eliminated, Dinslage applied for a new position in the Department, but he was not selected. After his forced retirement, he and other employees sued San Francisco.

Dinslage claimed age discrimination, retaliation, and harassment in violation of the FEHA (Cal. Gov. Code §12940, subds. (a), (h), and (j)). He alleged his termination and other adverse actions were based on his age. He also claimed retaliation and harassment based on his age and in retaliation for his objections to the Department’s changes in programs for people with disabilities.

The Moral: The Department and the City won their motion for summary judgment in the Superior Court, and Dinslage appealed. The California Court of Appeals upheld the summary judgment for defendants on both the age discrimination and the retaliation claims. On the retaliation claim, the Court of Appeals held that plaintiff failed to make out a prima facie case, because his opposition to the changes in how the Department offered programs for the disabled was not directed at an unlawful employment practice, and therefore could not support a claim of retaliation.

As quoted in the Court of Appeals opinion, the Superior Court found:

“Defendants have met their burden to show that Plaintiff did not engage in protected activity under the FEHA,” because the “evidence shows that Plaintiff did not speak out against the Defendants for engaging in discriminatory conduct directed at Defendants’ employees.” The court found Dinslage’s evidence “only shows that [he] spoke in public forums regarding his concern that the . . . Department’s reorganization would cause layoffs and the potential negative effects the reorganization would have on members of the public who have disabilities.”

Thus, the trial court found Dinslage had failed to establish the first element of his retaliation claim, because he had not shown he had engaged in protected activity under the FEHA.

The Court of Appeals agreed with the lower court that Dinslage had not stated a prima facie case of retaliation. The appellate court stated:

“For protection under the ‘opposition clause,’ an employee must have opposed an employment practice made unlawful by the statute.”

The employee can state a claim for retaliation

“not only when the employee opposes conduct that ultimately is determined to be unlawfully discriminatory under the FEHA, but also when the employee opposes conduct that the employee reasonably and in good faith believes to be discriminatory, whether or not the challenged conduct is ultimately found to violate the FEHA.”

The employee’s belief must be both subjectively and objectively reasonable.

But the Court of Appeals found that Dinslage’s objections to what he considered to be unwise and/or improper actions by the Department were insufficient to allege that he had opposed activity protected under FEHA. The Court of Appeals cited cases involving plaintiffs who had complained about police conduct against the general public and about their employer’s environmental practices. Because these were not employment practices, objections to such practices could not state a claim under FEHA.

Thus, the Court of Appeals said,

“Neither the ‘unlawful practice’ nor the ‘good faith belief’ requirement is satisfied where the practice complained of was not directed at employees but, instead, was directed to individuals who are not in an employment relationship with the defendant.” (citing Taneus v. Brookhaven Memorial Hosp. Medical Center (E.D.N.Y. 2000)).

The Court held that Dinslage could not

“reasonably have believed his actions constituted protected activity, because there is no dispute his opposition was not directed at the Department’s employment practices.”

This case is good news for employers. It clarifies both that the only activities that can support a claim for retaliation under FEHA are objections to employment-related practices, that the plaintiff must reasonably believe that he or she is opposing a discriminatory practice under FEHA, and that the plaintiff’s belief must be both subjectively and objectively reasonable.

Have you ever dealt with a retaliation claim where the Dinslage holding might be helpful?

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Favorite Firing: When a Supervisor’s Actions Make a Termination Difficult to Defend


4th cirI am typically suspicious of lawsuits in which a plaintiff employee alleges every possible form of discrimination against his or her employer. It seems unlikely that an employer is motivated by many different forms of bias when deciding on a disciplinary action or termination—race and gender and age and pregnancy can’t all be the basis for the decision, can they?

And yet, when an employer and its supervisors screws up a case so badly with multiple derogatory statements over a lengthy period of time, and when they then fire the employee shortly after she complains about the harassing conduct, the case is likely to get heard on the merits and will cost the company a lot of money to defend.

Such a case, Guessous v. Fairview Property Investments, LLC, No. 15-1055 (4th Cir. July 6, 2016), recently came before the Fourth Circuit Court of Appeals. The Fourth Circuit reversed the lower court’s grant of summary judgment to the defendant, and now the employer must gear up for a trial.

The Facts: In Guessous v. Fairview Property Investments, LLC, Monica Guessous, a female Muslim-American bookkeeping assistant of Moroccan descent, sued her employer, a property management firm, after she was discharged. Her complaint contained multiple claims, including discrimination based on religion, national origin, and pregnancy, hostile work environment, and retaliation.

Shortly after she was hired by Fairview, Ms. Guessous began reporting to a new supervisor, Greg Washenko. She alleged that Mr. Washenko began making offensive remarks when they were first introduced, when he said he had previously worked with a “bunch of Middle Easterners and they are a bunch of crooks who will stop at nothing to screw you.”

As their work relationship continued, Mr. Washenko allegedly discussed Moroccans, Muslims, and Middle Easterners repeatedly in disparaging and offensive ways, and asked Ms. Guessous questions about Middle Easterners, about suicide bombers and other terrorist acts, and about Islam. When Ms. Guessous told Mr. Washenko that Muslims were not terrorists, Mr. Washenko responded, “Yeah, sure. Like my buddy says . . . not all Muslims are terrorists, but most are.”

The Fourth Circuit opinion goes on for pages about Mr. Washenko’s comments. According to the Fourth Circuit, Washenko consistently conflated Ms. Guessous’s identity as a Moroccan Muslim with other Middle Eastern identities, so that the court had difficulty determining whether his remarks related to race, ethnicity, national origin, or religion.

When Ms. Guessous became pregnant, Mr. Washenko didn’t want to grant her a three-month maternity leave, and she had to tell him she was legally entitled to a 12-week leave. When she returned from maternity leave, her work duties had been assigned to other staff. Two months later, she asked Mr. Washenko for her old duties back and complained about his past behavior. Just 75 minutes after this meeting, the company president asked Fairview affiliates if they had openings for Ms. Guessous, because Fairview did not have enough work for her.

Then Ms. Guessous was terminated in March 2013. She was told the company did not have work for her. Her responsibilities were transferred to an outside accountant and to Mr. Washenko.

The Moral: This case demonstrates several problems for employers.

First, of course, is the alleged behavior by Mr. Washenko. In summary judgment rulings, the facts must be considered in the light most favorable to the plaintiff—in this case, Ms. Guessous. It is possible that a judge or jury after a trial will find that Fairview did not discriminate against Ms. Guessous. But with the allegations described in the Fourth Circuit opinion, Fairview is facing an uphill battle on liability.

Second, the Fourth Circuit indicated that the fact that Fairview didn’t have work for Ms. Guessous was not sufficient rationale to defeat her claims of discrimination. The Fourth Circuit said that the lower court had granted summary judgment for Fairview solely because the company did not replace her after she was fired.

“The court offered no elaboration in its opinion, but its logic appears to have been that, because the work was absorbed by Fairview’s other employees, Guessous cannot show that there was enough work to justify keeping her on staff and she therefore cannot prevail. If that is, indeed, the court’s reasoning it is a fallacy: because Fairview has shown it could operate without Guessous does not mean that it would have done so absent the protected activity.”

Thus, once an employer or its supervisors have engaged in discriminatory or harassing behavior, a restructuring of duties to get rid of an employee is also discriminatory. It seems unlikely that an employer can show any evidence to defend itself in such a situation.

In this case, the facts were particularly egregious. As the Fourth Circuit said,

“A reasonable jury could easily conclude, however, that the termination decision was made only seventy-five minutes after Guessous’ complained to Washenko about past comments and treatment, and that it was therefore motivated by the complaint itself.”

Thus, the Fourth Circuit said that a reasonable jury could find that Fairview’s argument that it lacked work for Ms. Guessous was a pretext for discrimination.

The morals to this case, then, are that (1) employers, including all supervisors, should refrain from disparaging comments about employees’ national origin, religion, and other protected categories; (2) employers should provide employees with all mandated leaves and other benefits without question; and (3) employers should not respond to employee complaints by immediately doing away with the employee’s job.

More broadly, the moral of this case is that employers need to be sure that discussions in the workplace about political and newsworthy events remain civil and that no racial, ethnic, or other protected group is mentioned in disparaging ways. A good moral for us all to take to heart in the middle of this political season.

When have you encountered managers who behaved inappropriately?

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Favorite Firing: Terminated for Lying About Leave


police-officer-clipart-black-and-white-nTXoX7MTBYears ago, I used to discuss employment cases I worked on with my kids at the dinner table. I didn’t use names, but I did describe the circumstances. “Don’t ever lie to your employer. You can get fired for lying,” I told them.

A recent court case from Ohio proves I’m still right. In Mattessich v. Weatherfield Township (Ohio Ct. App. Feb. 8, 2016), a police officer who had taken leave for depression was later terminated for lying about his medical leave. This is yet another “favorite firing” case involving law enforcement personnel.

The Facts: After Richard Mattessich, a police officer with the Weathersfield Township Police Department in Ohio, applied for a promotion to sergeant, he alleged that another applicant had been late to work. A video proved that Officer Mattessich’s allegations were false. The Chief of Police considered terminating Officer Mattessich at that time, but gave him a second chance. The Chief did require Officer Mattessich to undergo a psychiatric evaluation. A health care provider concluded that Mattessich needed sick leave, and he was off work for nine months.

Officer Mattessich passed a fitness-for-duty exam and returned to work. Nevertheless, others on the police force thought he lacked confidence and even seemed “dazed” and “out of it.” Officer Mattessich said he was fine and denied having any mental health counseling while on leave.

A few weeks later, his superiors learned that Officer Mattessich had in fact been treated for depression with counseling and medication. He admitted he had lied earlier about not receiving any treatment. Shortly thereafter, his employment was terminated for lying. The Chief of Police indicated that he could not trust a dishonest employee, because honesty and integrity were essential parts of the job for police officers.

Mattessich filed a disability discrimination lawsuit alleging that he had been discharged because of his mental health condition. The trial court granted summary judgment to the employer and dismissed the case, ruling that dishonesty—not disability—was the motivation behind the termination.

On February 8, 2016, the Ohio Court of Appeals upheld the termination. Although Mattessich’s “depression” was mentioned during the termination discussions, it was only mentioned because it was related to the plaintiff’s deception. There was no evidence that his mental health status was the cause of his terminaiton. Just because the employer knew about some mental health condition did not mean that any subsequent adverse decision was the result of discrimination.

The Court of Appeals found that the police department had provided a legitimate, nondiscriminatory reason for Officer Mattessich’s termination. It therefore became the plaintiff’s responsibility to prove that the reason was pretextual. The Court stated:

To establish pretext for a claim under the Civil Rights Act, “a plaintiff must demonstrate that the proffered reason (1) has no basis in fact, (2) did not actually motivate the employer’s challenged conduct, or (3) was insufficient to warrant the challenged conduct.”

Officer Mattessich failed to provide evidence to support pretext under any of these three categories.

One of the three judges on the Court of Appeals did dissent. She argued that the employer regarded Officer Mattessich as disabled and that there were questions of fact about the officer’s dishonesty that should have survived summary judgment.

The Moral: What I told my children is still good practice at work—do not lie to your employer.

This case involved law enforcement, where honesty is critical for the success of the police department’s work with the public and in courts. But honesty is critical in every employment relationship. Every employee owes his or her employer a duty of loyalty, which encompasses veracity. Every employer should have a policy prohibiting employees from lying to their supervisors.

And every employer should investigate allegations that an employee has lied—not only when the lies involve things as critical to the employment relationship as fitness for duty and leaves of absence.

Of course, communicating employment policies and consistency in applying those policies are critical. In this case, the Court of Appeals found that the Weathersfield Township Police Department had disciplined other officers caught committing acts of deception. So consistent application of the policy was important.

As noted above, there was a dissent in this case. These situations can go either way for the employer. The more the employer can distance the termination from the finding that the employee is disabled, and the more similar situations involving employees not in the same protected class as the discharged employee, the better the case is likely to go for the employer.

Involving Human Resources professionals and employment attorneys in these situations prior to discharging the employee is always a best practice.

But in this case, the biggest issue is that it took five years to get an appellate ruling that the employee could legitimately be discharged for dishonesty.

When have you had to deal with dishonesty in the workplace?

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Favorite Firing: Too Soon and Too Late—Two Examples of Potential Retaliation


MP900302921Retaliation charges now make up the most common type of discrimination charges filed with the Equal Employment Opportunity Commission, and the number of retaliation charges grew at 5% in fiscal year 2015. The situation is no better with complaints filed with civil rights agencies at the state and local levels.

Two recent cases illustrate the problems employers face managing employees who might file a retaliation claim. Adverse actions against an employee at any time after the charge is filed—whether too soon or too late—can both land an employer in hot water.

Baker v. KCI Technologies, Inc., (S.D. Ind., January 27, 2016):

The Facts: In the first case I’m profiling, a female employee, Alaina Baker, worked as an Environmental Scientist for KCI Technologies. After she complained internally about compensation, recognition, and promotional issues, Ms. Baker filed a charge of sex discrimination with the Indiana Civil Rights Commission. The company then investigated whether her concerns could be resolved to enable her to work as an effective manager. During the investigation, Ms. Baker told the Vice-President of Human Resources that she was not comfortable in her current situation and did not want to remain with KCI Technologies if nothing was going to change.

The company offered Ms. Baker the choice of a mentor or a severance package. Ms. Baker indicated that she didn’t think a mentor would help. Her employer then offered her another severance package, but she rejected that offer as well. KCI Technologies fired Ms. Baker, even though she had no record of job performance or disciplinary issues, because the company decided her antagonistic relationship with her supervisor would probably harm the business’s relationships with its customers. Ms. Baker then filed a claim for retaliatory discharge.

The employer filed a motion for summary judgment, which the District Court denied. The Court found that “a causal connection might very well exist between the filing of Ms. Baker’s discrimination complaint and her termination a mere three months later.” It should be noted that this decision was not a determination on the merits, and it is possible the employer will ultimately prevail, but the facts were sufficient to withstand a motion for summary judgment.

The Moral: It appears that KCI Technologies acted too soon. The company might have been better served to see how Ms. Baker performed over time. She might have caused problems with customers (their fear), but she might not have. By acting as precipitously as it did, the employer opened itself up to increased risk in the litigation.

Of course, every employer will have to weigh for itself whether acting to avoid harm in the workplace is more or less costly than the cost of litigation.

Johnson v. Lemonds, (M.D.N.C., February 4, 2016):

The Facts: In the second case, Paula Johnson had filed claims of age, disability, and genetic information discrimination against her former employer, Earth Angels, which was owned by Sandra Lemonds. Ms. Johnson had worked as a home health worker for Earth Angels.

Many months later, but while these claims of discrimination were still pending, Ms. Lemonds contacted Ms. Johnson’s subsequent employer, Kesler Home Care Services. She also visited the home of the new client for whom Ms. Johnson provided care. Ms. Johnson alleged that Ms. Lemonds’s contacts were retaliatory in nature, and that they caused the client to fire her—which led Kesler to fire her, and Kesler also fired her fiance and daughter who also worked for Kesler.

Defendant Lemonds filed a motion to dismiss based on insufficiency of the facts stated in the complaint. The federal magistrate overruled the motion. Based on what Ms. Johnson had alleged, the magistrate found that she had adequately stated a possibility that the underlying complaints of discrimination had caused the calls and visits to Ms. Johnson’s new employer and her later termination by Kesler.

Although a long delay between protected activity and adverse action tends to negate the inference of discrimination, the Court did not find that to be true in this case. The fact that seven months had passed since Ms. Johnson had filed her original complaints did not preclude a finding of retaliation. In fact, Ms. Johnson alleged that Ms. Lemonds took the earliest opportunity she could to retaliate.

Once again, the defendant has not lost everything, because this ruling was on a motion to dismiss, not on the merits. But the defendant faces a lengthy lawsuit.

The Moral: In this case, the defendant’s delay in acting for several months post-filing of the discrimination complaint was insufficient to rebut a retaliation claim. Waiting lengthy periods may negate an inference of discrimination, but it will not overcome it as a matter of law.

Putting it all together:

Defendants face a tricky situation in managing an employee once a claim of discrimination is filed. Any subsequent adverse action—regardless of the timing—increases the risk of a retaliation claim.

An employer is best served by demonstrating extreme patience in documenting an employee’s performance issues, by insuring that there are comparable employees treated the same as the plaintiff, and by providing the employee with multiple opportunities to improve (unless the situation poses a danger to the employee or others).

How have you managed your way through possible retaliation claims?

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Favorite Firing: Always Assume an Employee Can State A Claim Against an Employer


This “favorite firing” story isn’t about some salacious or quirky set of facts. It involves whistleblowing under the Dodd-Frank Act—hardly a sexy topic. But the situation serves as a good reminder that there is always some reason that an employee can sue his or her employer. Thus, employers need to have good reasons for taking action against employees, and they need to stand ready to justify what they have done.

whistle-clip-art-176817The Facts: Daniel Berman was fired from his position as finance director of Neo@Ogilvy LLC (“Neo”) in April 2013, after working there for two-and-a-half years. He was responsible for Neo’s financial reporting and compliance functions. He claimed that he discovered various fraudulent accounting practices and that he had reported these violations to others within the company. He alleged that a senior officer got angry at his reports and that as a result he was fired. After his termination Mr. Berman reported his allegations to the parent company’s Audit Committee, and later provided information to the SEC, but prior to the termination he had only reported the potential fraud internally.

A few months later, Berman sued Neo, alleging that he had been discharged in violation of the whistleblower protection provisions of section 21F of Dodd–Frank and in breach of his employment contract. See Berman v. Neo@Olgivy LLC, et al (2d Cir. Sept. 10, 2015).

The legal question in the case became whether Mr. Berman was a whistleblower and could therefore state a cause of action against Neo and its parent company. Under Section 21F(h) of the Exchange Act, which was added in the Dodd–Frank Act, employers are prohibited from retaliating against employees for reporting violations of the Exchange Act. Subsection 21F(a)(6) defines “whistleblower” to mean “any individual who provides “information relating to a violation of the securities laws to the [SEC].”

However, subdivision (iii) of subsection 21F(h)(1)(A)(iii) does not limit protection to those who report wrongdoing to the SEC. This subdivision (iii) expands the protections of Dodd–Frank to include the whistleblower protection provisions of Sarbanes–Oxley, and those provisions, which contemplate an employee reporting violations internally, do not require reporting violations to the SEC.

Since Mr. Berman did not report any potential violations to the SEC until after his discharge, the court had to decide whether his internal reports could give rise to a cause of action against Neo.

Neo and its parent company filed a motion to dismiss, and the District Court granted that motion, dismissing the Dodd-Frank claims, because Mr. Berman had not reported any potential violations to the SEC until after his discharge. (His breach of contract claim was also dismissed.)

Mr. Berman appealed the dismissal of the Dodd-Frank claims. After an extensive analysis of the tension between the two sub-sections of the Exchange Act created in the Dodd-Frank Act, the Second Circuit reversed and reinstated these claims.

The Moral: The specifics of the Second Circuit’s analysis are less interesting than the end result—this employee’s cause of action against his employer survived. Of course, the facts in the case remain to be proven. Neo will have an opportunity to show that he was not fired because he raised the possibility of fraudulent accounting practices to others within the company. But in the meantime, Neo will have to devote significant legal expenses and management time to defending a lawsuit.

I would hope that Neo had not relied on competing definitions of “whistleblower” in making the decision to discharge Mr. Berman. I would hope there is more to the story than what was revealed in the parties’ briefs on a motion to dismiss. The moral is that employee lawsuits can usually survive a motion to dismiss, and employers need to have solid facts to support their termination of employees. And the case is a reminder that retaliation claims are difficult to overcome.

When have you been surprised by a claim that an employee brought against his or her employer?

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Favorite Firing: “I’ve Hired a Murderer!”


asglassOne morning about twenty-five years ago I sat in my law office. I took a call from an HR manager who was a regular client of mine.

“Sara, I think I’ve hired a murderer!” she said with panic in her voice.

“OK, Roxie, tell me what happened,” I replied, trying to keep my voice lawyer-calm.

Roxie explained that an employee had come to see her about another employee, a shipping employee who worked on the loading dock at her company. According to the report, the shipping employee had been convicted of murder and served time in a state prison. Roxie hadn’t talked to the dockworker yet, but she had pulled his personnel file.

His application had left the space blank where it asked “Have you ever been convicted of a crime?” The hiring staff had either not noticed or had not asked about the missing information. At the time, this company didn’t do background checks beyond reference checking. But company policy stated that they didn’t hire any ex-felons.

“You’ll have to talk to him,” I said. “Ask whether the information is true. Then let’s talk again.”

“You want me to talk to a murderer?”

“Has he shown any sign of violence at work?” I asked.

“No. He’s been a decent employee.”

“Just have Security standing by,” I suggested.

Apply_HandThe Facts: Roxie talked to the employee, who admitted he had been convicted of murder. He hadn’t wanted to tell the company about his felonious past, so he deliberately left that part of the application blank. He had been a little surprised that no one asked him about the missing answer, but he was glad to have received the job.

Roxie and I discussed the situation, and she deliberated with other company managers. They decided to terminate the man’s employment. I told her there was some risk, as the man was African-American, and could file a claim of race discrimination. But at the time, the law was pretty clear that if a company had a blanket rule that no felons of any race could be employed, they had a strong defense. Although I told her they needed to check their applications more carefully and raise issues before making their hiring decisions.

The Moral: There are several morals to this story. Some applied twenty-five years ago, and some have developed in the time since this incident occurred.

1. Get hiring data before the person is hired

If you have certain rules that can disqualify applicants, be sure to ask about these issues before hiring someone. Ask about the qualifications of each and every applicant. Blanks in employment applications about qualifications are not acceptable, and the burden will be on the employer to show that the rule is justified, if you don’t even ensure that the forms are filled out correctly.

2. Apply the same qualifications to all applicants

If you have employment qualifications, they should apply to everyone. Don’t let some applicants slip through with lower qualifications than what you have said are required. And certainly don’t vary the qualifications based on an applicant’s race, sex, or other protected classification.

3. Address discrepancies immediately

If you find a discrepancy in an employee’s application, whether before the person is hired or after, address it as soon as you can. Provide an opportunity for the applicant or employee to provide the missing information, if it can be fixed.

If the person has already been hired and the discrepancy can’t be remedied—such as this employee’s prior conviction—you have a difficult decision to make, particularly if the employee has performed adequately. How can you show the missing qualification is job-related, if the employee has performed well? However, if you don’t fire the person, then you risk the validity of your qualifications.

4. Stay on top of federal, state, and local hiring regulations.

Although criminal convictions were an acceptable reason to weed out applicants twenty-five years ago, the EEOC now takes the position that employers cannot have a blanket rule against hiring felons, because minorities have higher conviction rates than whites. The criminal conviction must be related to the job for it to disqualify an applicant. A conviction of fraud would probably disqualify a bookkeeper, but probably would not disqualify the dockworker.

Thus, the risk today of firing the murderer is much greater than it was twenty years ago. Some employers would take the position that any violent crime is a disqualification for any position. Whether the EEOC and your local agencies would accept such a policy is uncertain. Know how judges in the state and federal courts where your business is located have ruled.

Have you ever been surprised by information missing from an applicant’s records?

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