Can You Be Held Personally Liable In An Employment Lawsuit?

In “Alice in Wonderland,” the Queen of Hearts once proclaimed, “Why, sometimes I’ve believed as many as six impossible things before breakfast.” This appears to be the rallying cry of many plaintiffs across the country when they file administrative charges and lawsuits. They continue to name individual supervisors and human resources directors as individual defendants despite case law that generally holds individuals cannot be found liable under some of the most common federal employment discrimination laws: Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA).

Unfortunately, the clear language in case law supporting the dismissal of individuals has not prevented plaintiffs from bringing claims under these statutes. A federal court judge in Oregon recently outlined this costly and questionable practice in his dismissal opinion in a case involving Starbucks, stating:

[Plaintiff’s] attorneys regularly file suit in state court for violations of these [discrimination] statutes against individual employees, knowing that they likely will be defended and indemnified by the employer, for the ostensible purpose of educating and deterring them from unlawful behavior. This court fails to see any need to file a lawsuit to deter such unlawful behavior. Even if employees are not sued individually, their employer surely will take appropriate action to deter any future behavior. [Plaintiff’s] attorneys also admitted that as a matter of course they sue employees prior to engaging in discovery and obtaining any evidence as to how complicit the employees may have been in the alleged discrimination or retaliation. Instead, they appear to presume that any employee who questions the plaintiff’s work performance should be sued.

Being named in a lawsuit puts individuals in a terrible position of having to personally defend themselves. Even if they are able to eventually get dismissed from the complaint, they do not come out unscathed—they often get stuck paying defense costs and are usually subjected to the invasive discovery process.

This shotgun approach to employment litigation establishes that plaintiff take the Cheshire Cat’s words to heart, in pursuit of money: “If you don’t know where you are going, any road can take you there.”

Federal And State Laws That Permit Individual Liability

The frightening aspect of this trend is that those roads do sometimes lead plaintiffs to a place where they can recover from supervisors, managers, and HR directors. At the state level, New Jersey, New York, Massachusetts, Connecticut, Ohio, Oregon, Pennsylvania, and Washington are among the states that allow plaintiffs to bring claims against individuals under the theory that they “aided and abetted” discrimination or harassment. And California allows plaintiffs to bring claims against individuals for harassment. Likewise, many states allow plaintiffs to bring claims against individuals who “retaliate” against them for engaging in protected activity. These types of laws will continue to sweep across the country as the states that have enacted them are generally at the forefront of employee rights.

At the federal level, individuals are regularly found personally liable for violations of the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA), Section 1981 of the Civil Rights Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Employee Retirement Income Security Act (ERISA), and the Immigration Reform and Control Act (IRCA).

For instance, a 2017 case out of the Eastern District of Pennsylvania recently held that an HR director may be individually liable for FMLA and wage violations. In Edelman v. Source Healthcare Analytics, LLC, the court determined that there is individual liability under the statute because it defines an “employer” to include “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” The court next found the HR director acted in the interest of the employer when she terminated plaintiff.

The court reasoned that the HR director is subject to personal liability under the FMLA because she exerted control over plaintiff’s specific leave and because she terminated her. Using this same reasoning, it appears that the court would have likely reached this same conclusion if it was a manager, or perhaps even a general counsel, who advised the plaintiff of her FMLA rights and subsequently terminated the plaintiff’s employment.

An even more recent case out of the Eastern District of Pennsylvania denied a defendant’s request to have a race discrimination claim against the individual supervisor dismissed. In a 2018 case against a trucking company, the plaintiff made four different attempts to sue a former supervisor. The fourth time was the charm, as the court recently concluded that the plaintiff pled the bare minimum for his race discrimination claim to survive against the supervisor under § 1981.

Interestingly, the only allegation relating to possible race-based discrimination was plaintiff’s allegation that the supervisor ordered him “to go home early” and “leave work until his next scheduled shift.” The supervisor allegedly made this demand upon learning about plaintiff’s report to another employee of disparate treatment between Caucasian and African-American employees.

This case should serve as a cautionary tale to all HR directors, managers, and supervisors as there were no other allegations of race-based discrimination against the individual supervisor. In fact, there were no allegations that the supervisor had any involvement in the decision to terminate the plaintiff. Further, there were no allegations that the supervisor played a role in the union’s investigation and hearing. The court simply concluded the supervisor’s decision to send the plaintiff home was enough to survive a motion to dismiss.

Takeaways

Managers, HR directors, and supervisors should heed the Queen of Hearts’ recommendations when considering what steps to take to protect themselves and their company: “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

To better protect yourself and the company, you should ensure your employee handbook accurately reflects the ever-changing laws related to protected classes and all forms of harassment. Second, you should schedule annual harassment and discrimination trainings with managers and non-managers. These trainings will act as a defense in the event of a discrimination or harassment lawsuit. Also, the trainings will put employees on notice that they may be personally liable for violations of both state and federal employment statutes.

Finally, there must be an emphasis, from the top down, to take responsibility for the company’s workplace culture. Remaining complacent exposes both companies and individuals to a disgruntled employee exclaiming “off with their heads!”

Article Courtesy of Fisher & Phillips

5 Employee Handbook Updates to Watch in 2018

When was the last time the company handbook was reviewed? It’s a worthy priority for the new year—or anytime, really. Handbooks are living documents that should be reviewed regularly, especially considering the federal government’s focus on deregulation and ever-changing updates from state legislatures and municipalities. Here are five key issues that may trigger updates:

1. Workplace conduct and social media

Under former President Barack Obama, the National Labor Relations Board (NLRB) scrutinized social media policies and other workplace conduct standards that may limit workers’ rights. For example, in many cases the board considered employee social media posts that are critical of employers a form of protected concerted activity and thus not necessarily grounds for disciplinary action. 

With the Trump administration, the pendulum may swing the opposite way, giving employers more leeway to develop workplace conduct rules, said Bruce Sarchet, an attorney with Littler in Sacramento.

Already, the board overruled its previous standard that struck down policies if they could be “reasonably construed” to curb employee discussions about wages and working conditions—even if the policies weren’t intended to do so. “With [the] signal of a sea change in NLRB policy, employers need to pay close attention to the board’s new ‘policies on policies’ as they develop,” said Bonnie Martin, an attorney with Ogletree Deakins in Indianapolis. In the meantime, make sure your handbook’s conduct guidelines are specific and clear. 

2. Sexual harassment 

DOL Issues New FMLA Poster and Publishes Guide to Help Employers Administer FMLA

In late April, the Department of Labor (DOL) announced that it soon will issue a new general FMLA Notice that can be used interchangeably with their current FMLA posting.  In issuing this new directive, they also unveiled a new guide to help employers navigate and administer the FMLA.

Here’s the scoop:

New DOL Poster

Under the FMLA, an FMLA-covered employer must post a copy of the General FMLA Notice in each location where it has any employees (even if there are no FMLA-eligible employees at that location). According to the FMLA rules, the notice must be posted “prominently where it can be readily seen by employees and applicants for employment.”

The DOL has announced that it will release a new General FMLA Notice for employers to post in their workplaces.  According to the DOL, the new poster won’t necessarily include a whole bunch of new information.  Rather, the information in the notice will be reorganized so that it’s more reader friendly.

The DOL’s Branch Chief for FMLA, Helen Applewhaite, confirmed that employers would be allowed to post either the current poster or the new version.  In other words, employers will not be required to change the current poster. 

New Employer FMLA Guide

In 2012, the DOL issued a guide to employees to help them navigate their rights under the FMLA. Several years later, DOL now has issued a companion guide for employers.  According to the DOL, the Employer’s Guide to the Family and Medical Leave Act (pdf) is designed to “provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.”

The new guide was unveiled by the DOL at an annual FMLA/ADA Compliance conference sponsored by the Disability Management Employer Coalition (DMEC). Generally speaking, the new guide covers FMLA administration from beginning to end, and it follows a typical leave process — from leave request through medical certification and return to work.

While the guide helps explain the FMLA regulations in a user-friendly manner, the guide primarily is meant to answer common questions about the FMLA, so it leaves unanswered leave issues that continue to frustrate employers in their administration of the FMLA.  However, the guide is likely to have some benefit to employers when administering the FMLA.  For instance, the guide:

1. Follows the FMLA regulations and the course of a typical leave request in a relative orderly manner.
2. Contains easy to follow flowcharts so that employers can better understand the typical FMLA process, including a “Road Map to the FMLA” that provides an overview of the FMLA process.  
3. Includes “Did You Know?” sections to give employers a heads-up on some of the lesser-known provisions and nuances of the FMLA regulations.
4. Highlights user-friendly charts and explanation of the medical certification process, including what information is required in certifications.
5. Provides a helpful overview of military family leave, which often can be a bit overwhelming to employers attempting to navigate this portion of the FMLA.

New Guidance On Wellness Programs

The U.S. Equal Employment Opportunity Commission (EEOC) recently issued proposed new rules  clarifying its stance on the interplay between the Americans with Disabilities Act (ADA) and employer wellness programs. Officially called a “notice of proposed rulemaking” or NPRM, the new rules propose changes to the text of the EEOC’s ADA regulations and to the interpretive guidance explaining them. 

If adopted, the NPRM will provide employers guidance on how they can use financial incentives or penalties to encourage employees to participate in wellness programs without violating the ADA, even if the programs include disability-related inquiries or medical examinations.  This should be welcome news for employers, having spent nearly the past six years in limbo as a result of the EEOC’s virtual radio silence on this question.

A Brief History: How Did We Get Here?
In 1990, the ADA was enacted to protect individuals with ADA-qualifying disabilities from discrimination in the workplace.  Under the ADA, employers may conduct medical examinations and obtain medical histories as part of their wellness programs so long as employee participation in them is voluntary.  The EEOC confirmed in 2000 that it considers a wellness program voluntary, and therefore legal, where employees are neither required to participate in it nor penalized for non-participation.

Then, in 2006, regulations were issued that exempted wellness programs from the nondiscrimination requirements of the Health Insurance Portability and Accountability Act (HIPAA) so long as they met certain requirements.  These regulations also authorized employers for the first time to offer financial incentives of up to 20% of the cost of coverage to employees to encourage them to participate in wellness programs. 

But between 2006 and 2009 the EEOC waffled on the legality of these financial incentives, stating that “the HIPAA rule is appropriate because the ADA lacks specific standards on financial incentives” in one instance, and that the EEOC was “continuing to examine what level, if any, of financial inducement to participate in a wellness program would be permissible under the ADA” in another.

Shortly thereafter, the 2010 enactment of President Obama’s Patient Protection and Affordable Care Act (ACA), which regulates corporate wellness programs, appeared to put this debate to rest.  The ACA authorized employers to offer certain types of financial incentives to employees so long as the incentives did not exceed 30% of the cost of coverage to employees.

But in the years following the ACA’s enactment, the EEOC restated that it had not in fact taken any position on the legality of financial incentives.  In the wake of this pronouncement, employers were left understandably confused and uncertain.  To alleviate these sentiments, several federal agencies banded together and jointly issued regulations that authorized employers to reward employees for participating in wellness programs, including programs that involved medical examinations or questionnaires.  These regulations also confirmed the previously set 30%–of-coverage ceiling and even provided for incentives of up to 50%of coverage for programs related to preventing or reducing the use of tobacco products. 

After remaining silent about employer wellness programs for nearly five years, in August 2014, the EEOC awoke from its slumber and filed its very first lawsuit targeting wellness programs, EEOC v. Orion Energy Systems, alleging that they violate the ADA.  In the following months, it filed similar suits against Flambeau, Inc., and Honeywell International, Inc.  In EEOC v. Honeywell International, Inc., the EEOC took probably its most alarming position on the subject to date, asserting that a wellness program violates the ADA even if it fully complies with the ACA.

What’s In The NPRM?
According to EEOC Chair Jenny Yang, the purpose of the EEOC’s NPRM is to reconcile HIPAA’s authorization of financial incentives to encourage participation in wellness programs with the ADA’s requirement that medical examinations and inquiries that are part of them be voluntary.  To that end, the NPRM explains:

• what an employee wellness program is;

• what it means for an employee  wellness program to be voluntary;

• what incentives employers may offer as part of a voluntary employee wellness program; and

• what requirements apply concerning notice and confidentiality of medical information obtained as  part of voluntary employee wellness programs.

Each of these parts of the NPRM is briefly discussed below.

What is an employee wellness program?
In general, the term “wellness program” refers to a program or activity offered by an employer to encourage its employees to improve their health and to reduce overall health care costs.  For instance, one program might encourage employees to engage in healthier lifestyles, such as exercising daily, making healthier diet choices, or quitting smoking.  Another might obtain medical information from them by asking them to complete health risk assessments or undergo a screening for risk factors. 

The NPRM defines wellness programs as programs that are reasonably designed to promote health or prevent disease.  To meet this standard, programs must have a reasonable chance of improving the health of, or preventing disease in, its participating employees.  The programs also must not be overly burdensome, a pretext for violating anti-discrimination laws, or highly suspect in the method chosen to promote health or prevent disease.

How is voluntary defined?
The NPRM contains several requirements that must be met in order for participation in wellness programs to be voluntary.  Specifically, employers may not:

• require employees to participate in a wellness program;

• deny or limit coverage or particular benefits for non-participation in a wellness program; or

• take any adverse action against employees for non-participation in a wellness program or failure to achieve certain health outcomes. 

Additionally, for wellness programs that are part of a group health plan, employers must provide a notice to employees clearly explaining what medical information will be obtained, how it will be used, who will receive it, restrictions on its disclosure, and the protections in place to prevent its improper disclosure.

What incentives may you offer?
The NPRM clarifies that the offer of limited incentives is permitted and will not render wellness programs involuntary.  Under the NPRM, the maximum allowable incentive employers can offer employees for participation in a wellness program or for achieving certain health results is 30% of the total cost of coverage to employees who participate in it.  The total cost of coverage is the amount that the employer and the employee pay, not just the employee’s share of the cost.  The maximum allowable penalty employers may impose on employees who do not participate in the wellness program is the same. 

What about confidentiality?
The NPRM does not change any of the exceptions to the confidentiality provisions in the EEOC’s existing ADA regulations.  It does, however, add a new subsection that explains that employers may only receive information collected by wellness programs in aggregate form that does not disclose, and is not likely to disclose, the identity of the employees participating in it, except as may be necessary to administer the plan. 

Additionally, for a wellness program that is part of a group health plan, the health information that identifies an individual is “protected health information” and therefore subject to HIPAA.  HIPAA mandates that employers maintain certain safeguards to protect the privacy of such personal health information and limits the uses and disclosure of it.

Keep in mind that the NPRM revisions discussed above only clarify the EEOC’s stance regarding how employers can use financial incentives to encourage their employees to participate in employer wellness programs without violating the ADA.  It does not relieve employers of their obligation to ensure that their wellness programs comply with other anti-discrimination laws as well.

Is This The Law?
The NPRM is just a notice that alerts the public that the EEOC intends to revise its ADA regulations and interpretive guidance as they relate to employer wellness programs.  It is also an open invitation for comments regarding the proposed revisions.  Anyone who would like to comment on the NPRM must do so by June 19, 2015.  After that, the EEOC will evaluate all of the comments that it receives and may make revisions to the NPRM in response to them.  The EEOC then votes on a final rule, and once it is approved, it will be published in the Federal Register.

Since the NPRM is just a proposed rule, you do not have to comply with it just yet.  But our advice is that you bring your wellness program into compliance with the NPRM for a few reasons.  For one, it is very unlikely that the EEOC, or a court, would fault you for complying with the NPRM until the final rule is published.  Additionally, many of the requirements that are set forth in the NPRM are already required under currently existing law.  Thus, while waiting for the EEOC to issue its final rule, in the very least, you should make sure that you do not:

• require employees to participate in wellness programs;

• deny health insurance coverage to employees for non-participation in wellness programs; or

• take adverse employment action against employees for non-participation in wellness programs or for failure  to achieve certain health outcomes.

In addition you should provide reasonable accommodations to employees with disabilities to enable them to participate in wellness programs and obtain any incentives offered (e.g., if an employer has a deaf employee and attending a diet and exercise class is part of its wellness program, then the employer should provide a sign language interpreter to enable the deaf employee to participate in the class); and ensure that any medical information is maintained in a confidential manner.

Getting to Know GINA

Does your company currently use forms created more than three years ago that asks for information about an applicant or an employee’s family medical history?

 

Do your supervisors and managers know that if they are “friended” by an employee on a social media site and they see medical information relating to the individual or the individual’s family member, they have violated a federal law and subjected the company to liability?

 

Has your company failed to update Family Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), workers’ compensation, no-harassment, and other policies and procedures to comply with the Genetic Information Nondiscrimination Act (GINA)? 

 

If you answered yes to any of these questions,  you should review the impact of GINA so your company does not become the next GINA “headline.”

 

What Is GINA?

 

The Genetic Information Nondiscrimination Act (GINA) has been an active federal law for five years now. However, many employers still know little about the law. Enacted in 2008, GINA generally prohibits employers from engaging in three types of conduct:

 

• Prohibits employers with 15 or more employees from discriminating against an employee on the basis of the employee’s genetic information. “Genetic information” is rather broadly defined and includes information from genetic tests, the genetic tests of family members, and family medical history, but it does not include an individual’s race and ethnicity.

 

• Prohibits employers from requesting an employee’s genetic information, subject to certain exceptions.

 

• Prohibits employers from retaliating against an employee who has opposed a practice made unlawful by GINA.

 

Most attribute GINA’s enactment and requirements as a response to a trend in which employers sought to rely on genetic information in an attempt to screen out potentially unhealthy employees to help control their surging health care costs. 

 

Inadvertent Collection Of Genetic Information

Many employers today pay little attention to GINA on the mistaken assumption that they do not collect genetic information. But there are three very common situations in which an employer can unknowingly collect genetic information.
 

 

First, employers regularly request medical documentation to support a potentially disabled employee’s request for a reasonable accommodation.
 

 

Second, employers regularly request medical documentation to support an employee’s request for leave under FMLA.
 

 

Third, many employers require a medical examination upon hire and, as a result, receive medical information in that context.

 

In each of these situations, the employer might acquire genetic information (without intentionally requesting it) and would violate GINA as a result of doing so. Fortunately, GINA provides a “safe harbor” that can protect an employer in such situations.  

 

How To Avoid Noncompliance

 

When an employer requests medical information, it must warn the provider not to provide genetic information. When the employer makes such a warning, the “safe harbor” provision provides that any receipt of genetic information in response to their request will be deemed unintentional and not in violation of GINA.
  

As a result, it is imperative that employers include this specific warning any time that they request health-related information from a health care provider or an employee.
  

Of course, an employer could also obtain genetic information in a less formal situation. For example, a supervisor could obtain genetic information about an employee during a casual conversation, through email, or through social media. As long as the supervisor does not ask follow-up questions and does not take any employment-related action based on the accidentally acquired info, this information would be deemed unintentional. However, the use or disclosure of the accidentally acquired information would still violate GINA.

 

Does Your Wellness Program Violate GINA?

 

The federal regulations also make clear that an employer does not violate GINA if the employer requests genetic information as part of a “voluntary wellness program.”

 

For such a program to be deemed voluntary, the employer must show that:

• The employer does not require employees to provide genetic information (or penalize them for not providing it)

 

• The employee provided knowing, voluntary, and written authorization stating that the employee understands the type of genetic information to be obtained and how it will be used. Individually identifiable genetic information may be provided only to the health care professionals involved in providing the services.

 

Another reason that employers may be less knowledgeable about GINA (as compared to other federal laws) is that relatively few lawsuits have be filed since the law was enacted. According to EEOC statistics, there were just 280 charges of GINA-related discrimination filed in 2012, or around 0.3% of the overall charge filings for that year. However, the number of filed, GINA-related charges has increased by nearly 40% since the first year an individual could file under the statute.

 

Moreover, recent activity by the EEOC suggests that it would be best if employers begin reviewing their procedures now and taking the necessary steps to ensure they are GINA compliant.

Unknowing or unintentional violations of GINA are perhaps the most worrisome type of violations since they are the most likely to occur. This is particularly true for employers that rely on dated, pre-GINA human resources documents (including employment applications) or employment policies.
  

Employers should update existing nondiscrimination and anti-harassment policies and handbooks so that discrimination/harassment on the basis of genetic information is clearly prohibited. Similarly, employers should also update their Family Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA) forms to include the requisite “safe harbor” language that warns employees and health care providers not to provide genetic information.
 

Employers also should ensure that an employee’s medical information is maintained separately from the employee’s personnel file, as required by the law.

 

For further information on GINA and its impact on your business or for assistance on insuring your company is GINA compliant, please do not hesitate to contact our office. 

March 2014 Monthly Topic- Record Retention

The topic this month highlights record retention and cover what employers should be keeping and for how long. 

 

Did you know that there are over 14,000 federal, state, and industry specific laws/standards/regulations that dictate how long employers are required to keep certain records? Non-compliance can result in fines against company employees personally as well as judgments against the company itself.

 

Some of the Federal Labor and Employment laws that require record retention include:

 

• ADEA
• Title VII
• ADA
• FLSA
• FMLA
• OSHA
• IRCA
• FUTA
• HIPAA
• ERISA

 

Please contact our office directly if you would like more information on this topic or if you would like more information regarding how to conduct an audit of your company record retention policies.

How to Weigh Obesity in Employment Decisions

Imagine you are the Hiring Manager for a distribution warehouse and you are interviewing applicants for a materials handler position. The first candidate enters the room, standing at a height of 5’4”, weighing more than 500 pounds. You continue the interview and learn that he has high qualifications, but you can’t help  considering how his weight may affect his work performance.

 

You anticipate that his obesity might put him at a greater risk of developing serious illnesses that may lead to absenteeism. You also consider that accommodations may be required for him to use the fork lift and other machinery, and you worry he may pose a safety threat if he were unable to move quickly enough to evacuate in the event of an emergency.

 

Based on these considerations, you decide not to hire this candidate. Was this proper or did you put too much emphasis on his obesity and risk liability? This is the question many business employers have had to face in light of the Americans with Disabilities Act (ADA). Recent cases brought by the EEOC may shed light on whether severe obesity is a protectable disability, but the question still remains: when is obesity “severe” enough to constitute an ADA-protected disability?