Federal Court Over Wisconsin Rejects Claim that Employee Had To Quit Because of Discrimination Because Workplace Was Not Unbearable

Posted by on September 4, 2010 Comments Off

The Seventh Circuit Court of Appeals, a Federal court, threw out a jury verdict in favor of an employee on a discrimination claim because the court found that the workplace conduct was not so unbearable or intolerable that a reasonable person would be forced to quit. Chapin quit his job after the employer threatened to fire him if he did not withdraw a complaint of discrimination that the had pending against a former employer (related to his current employer). Chapin said he quit because of the threat. Subsequently, other representatives of the employer contacted the employee to say he could still have his job and that he would not be fired. The employee decided not to go back to the job because of the threat. The employee claimed that his resignation was really a “constructive termination,” meaning that he quit due to the employer’s conduct—the threat. “Constructive discharge” is is a recognized theory of recovery under the law, and it occurs when the employee shows that he or she was forced to resign because his or her working conditions, from the standpoint of the reasonable employee, had become unbearable. The Seventh Circuit threw out the jury’s finding because it said that the threat, which was essentially withdrawn, did not satisfy either of the two tests for a claim of constructive discharge.

Under the first test for constructive discharge, an employee must have resigned due to discriminatory harassment that rises to some degree above that which is required to have a hostile work environment. It must essentially be extra hostile, so to speak (my words, not the court’s). This is meant to encourage employers to fix the problem without making it liable for a constructive discharge before it has the opportunity to fix it.

The second test for constructive discharge is when an employer acts in a manner so as to have communicated to a reasonable employee that he or she will be terminated. Here, the employee is simply quitting before the axe falls. The court still requires the employee to show that the working conditions were intolerable at the time for reasons other than the looming termination.

In both tests, the court is looking for a hostile environment based on a protected characteristic like age, race, religion, gender, etc., or conduct in retaliation for having opposed discrimination or participated in some procedure of enforcing the non-discrimination laws. This is the key connection to the discrimination laws that makes the conduct actionable in the first place.

In Chapin’s case, the Seventh Circuit found that Chapin did not show that the workplace was so intolerable that a reasonable person would not continue working there. The Court found significant that the threat was withdrawn, the employer did not indicate that the threat would be carried out imminently, and that the employee then chose not to return to work when the threat no longer existed.

Questions to Ask When An Employer Fires or Terminates an Employee or Rejects an Applicant based on a Background Check

Posted by on September 1, 2010 Comments Off

Here is what I typically look for in Background Investigation – Employment cases where an employer terminates an employee or refuses to consider or hire an applicant for employment based on a background check or credit report. The Fair Credit Reporting Act, a Federal law, has certain requirements that an employer and consumer reporting agency must satisfy if a consumer report of any type is used in the employment setting to take any type of adverse action against an employee or applicant.

  • Did the employer provide a disclosure of its intent to get a background/consumer/credit report prior to doing so?
  • Did the disclosure document consist only of the disclosure, with the exception of also providing for the signature on an authorization by the client (no releases, drug test waivers, indemnity provisions, etc., included with the disclosure/authorization)?
  • Did the employer get the client’s written authorization to obtain a background/consumer/credit report?
  • Did the employer obtain a report from a source that charged a fee or for other compensation of some form?
  • If the employer took an adverse action based in whole or in part on the report, did it provide advance notice of at least 5 days of its intent to take an adverse action and, with the advance notice, provide the client with a copy of the report and FTC summary of rights under the FCRA?
  • If the report included public record information, did the reporting agency send the client a letter with a copy of the report, summary of rights and the name and date of the employer to whom it sent the report?
  • What damages are proximately caused by any of the above requirements?
  • Whether a consumer report was used may require separate analysis depending on the circumstances. The definition of a consumer report is pretty broad though.

The standards of liability are negligence or willful. Willful includes reckless disregard of someone’s rights.

The act permits recovery of actual damages which includes any economic loss and emotional distress according to the standard in your jurisdiction. If there are no actual damages, the act still provides for a court to award statutory damages between $100-$1000 if the violation was willful. If a willful violation exists, punitive damages are also available. If you prove either a negligent or a willful violation, the act provides for recovery of attorney’s fees and litigation expenses.

Union’s Duty of Fair Representation in Wisconsin

Posted by on August 31, 2010 Comments Off

The Wisconsin Court of Appeals, one step below the highest level appellate court in Wisconsin, clarified a Union’s liability for claims of violations of its duty of fair representation on August 24, 2010. In the case of Service Employees International Union Local No. 150 v. Wisconsin Employment Relations Commission, Appeal No. 2009AP1524, the appellate court reversed the findings below that SEI violated its duty of fair representation of Karen Bishop, a Milwaukee Public Schools employee and member of the bargaining unit. The Court states that a union violates its duty of fair representation “only when a union’s conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith.” SEIU Local No. 150 at para. 20, citing Vaca, 386 U.S. at 190. Merely rejecting a meritorious claim is not enough. The union’s action must be arbitrary or taken in bad faith. SEIU Local No. 150, at para. 20, citing Mahnke, 66 Wis. 2d at 531.

The issue in SEIU Local 150 related to the “arbitrary” prong of the duty of fair representation when the union did not tell Bishop that it was not going to pursue an arbitration of her grievance when she was considering a settlement offer which she subsequently rejected. Whether something is “arbitrary” is tested under an objective standard (not the actual state of mind of the union actors); while “bad faith” is tested under a subjective standard (the state of mind of the union’s actors). SEIU Local No. 150, at para. 21. In this case, it was an omission-failing to do something-that Bishop claimed violated her rights. The test for arbitrariness in omissions is that the failure to act must be “so egregious, so far short of minimum standards of fairness to the employee and so unrelated to legitimate union interests as to be arbitrary.” SEIU Local No. 150, para. 21.

Ultimately, the Wisconsin Court of Appeals overturned Bishop’s win below, finding that although SEIU failed in certain respects with regard to its duties to Bishop and these failures caused delays in the process, none of these deficiencies actually prejudiced Bishop. SEIU Local No. 150, para. 48. In other words, SEIU made mistakes, but they did not cause the harm that Bishop sought to remedy—not taking a particular offer.

The Court also rejected a “totality of the circumstances” legal standard that WERC used to find a violation. WERC found that none of the deficiencies were alone enough to find arbitrary conduct under the law, but that taken together, the arbitrary standard was satisfied. The Court said this standard must be rejected because it provides no guidance to unions in evaluating their duties of fair representation because on one hand, WERC says a particular act or omission is not arbitrary, but then if combined with other non-arbitrary acts, these may be arbitrary at some point. SEIU Local No. 150, para. 54-55.

Claims for Vacation Pay On Resignation Induced by Employer’s Promise

Posted by on July 17, 2010 Comments Off

If you accrued vacation pay during your employment and were otherwise entitled to use or get paid your vacation benefit, an employer may be obligated to pay that vacation benefit to you upon termination. An employer’s policies may affect this analysis. If the employer refuses to pay the vacation benefit upon termination, then it may be in breach of its work agreement with you. If you resign your position based on an employer’s promise that it will pay your vacation benefit if you agree to resign, and the employer then refuses to pay the vacation benefit, the employer may be in breach of that promise to you. Either way, if you have a reasonable expectation of getting paid the vacation benefit on termination because of a policy or express promise from the employer, and the employer does not pay the benefit, you may have claims that you can bring as wage claims under Wisconsin law. The Wage and Hour Bureau of the Equal Rights Division for the Wisconsin Department of Workforce Development should take a complaint on this basis. A private attorney can also enforce your rights.

Wisconsin Court Permits Employer to Fire Employee for Not Paying Back Overpaid Wages

Posted by on June 8, 2010 Comments Off

The Wisconsin Court of Appeals, District II, issues an opinion on June 10, 2010, affirming a decision of a trial court that permitted an employer to terminate or fire an employee for not agreeing to pay it back for amounts that the employer overpaid her. Faraday-Sultze v. Aurora Medical Center of Oshkosh, Inc., __ Wis.2d __, 2009AP2429 (Wis. App. 6/2/2010). Wisconsin law prohibits wage deductions from the wages due or earned by any employee for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction or unless the employer and a representative designated by the employee determine that the theft is due to the employee’s negligence, carelessness, or willful and intentional conduct, or unless the employee is found guilty or held liable in a court of competent jurisdiction. Wis. Stat. 103.455. Furthermore, an employer may not terminate or fire an employee for refusing to agree to such a deduction. Wandry v. Bull’s Eye Credit Union, 129 Wis. 2d 37, 384 N.W.2d 325 (1986). The court said that the public policy of the statute is to “prevent the employer from arbitrarily deducting hard earned wages at its prerogative.” The court in the Faraday-Sultze matter, however, found that since the employee did not earn the amounts the employer overpaid her, the law does not protect her.

Forced Arbitration Case Before U.S. Supreme Court

Posted by on May 7, 2010 Comments Off

On April 26, 2010, the U.S. Supreme Court heard argument in Rent-A-Center v. Jackson, a case that the employee’s trial lawyers say “poses significant questions about the scope and meaning of the Federal Arbitration Act (“FAA”), the relationship between courts and arbitration, and the basic ability of consumers and employees to gain access to courts.” This comes from Matt Wessler’s post in the blog entry of the Public Justice website, http://www.publicjustice.net/Resources/Backgrounds/Jackson-v-Rent-a-Center7.aspx. One of the most important decision the court will likely address is who gets to decide whether terms of an arbitration agreement that is forced on the employee (take it or no job) is unconscionable—a court of law or the arbitration panel.

From the perspective of the employee, one should keep in mind that the arbitration panel has a financial interest in keeping the arbitration before it because doing so generates fees for the arbitration entity and its arbitrators. If employees are faced with take-it-or-leave-it forced arbitration agreements in their jobs, and these unilaterally imposed agreements remove the issue of whether the terms can, in good conscious, be enforced from the public scrutiny that is found in our court system and relegates these decisions to the private, closed door, lack of public access decisions of private arbitration panels, employees will be forced to refuse employment on these terms or suffer yet another blow to their civil rights in employment.

Whistleblower Protections for Employees of Recipients of Stimulus Money

Posted by on May 3, 2010 Comments Off

The McCaskill Amendment to the economic stimulus bill passed by the Federal Congress on February 12, 2009, includes new whistleblower protections for employees of recipients of the stimulus money. The protections ensure that employees of private contractors and state and local governments and other non-Federal employers can blow the whistle on a covered employer that receives a contract, grant or other payment from the stimulus bill. The protection covers disclosures to a person with supervisory authority over the employee, a State or Federal regulatory or law enforcement agency, a member of Congress, a court or grand jury, the head of a Federal agency, or an inspector general. The disclosure must be something that the employee reasonably believes shows gross mismanagement; gross waste of stimulus funds; a substantial and specific danger to public or health or safety related to the implementation or use of stimulus funds; an abuse of authority related to the implementation or use of stimulus funds; or a violation of law, rule or regulation that governs an agency contract or grant related to stimulus funds.

New Whistleblower Protections for Healthcare Workers

Posted by on May 2, 2010 Comments Off

The Patient Protection and Affordable Care Act of 2009 created new whistleblower protections for health care workers. The act prohibits retaliation against an employee who provides or is about to provide to an employer, Federal Government or a state Attorney General, information that the employee reasonably believes to be a violation of Title I of the act. The act similarly protects someone that participates in an investigation or objects or refuses to participate in any activity that would violate Title I of the act. Title I of the act has a broad range of rules covering health insurance, policy and financial reporting and prohibits discrimination based on an individual’s receipt of health insurance subsidies.

Wisconsin Legislature Does Not Pass Credit Discrimination in Employment Law

Posted by on April 29, 2010 Comments Off

The 2009 Wisconsin legislature did not vote on AB-367, a bill that would have prohibited discrimination in employment based on credit history. The bill just did not get to the floor in time for a vote. It made it out of the Assembly, but not the Senate. This bill would have made Wisconsin one of a handful of states across the country that recognized the need for credit discrimination laws due to the recession we are in and the impact the recession has on many people that lost their jobs, and as a result, suffered severe financial losses and harm to their credit.

Wisconsin Conviction Record Bill Does Not Pass 2009 Legislative Session

Posted by on April 29, 2010 Comments Off

The bills proposed in both the Senate and the Assembly for the State legislature in Wisconsin to prohibit employers from asking about conviction records before selecting a person for interview did not make it to the floor for vote this 2009 legislative session. The bills failed due mostly to timing. Wisconsin law still prohibits discrimination in employment based on both arrest records and conviction records, but the law does not prohibit an employer from requiring disclosure of conviction records in an employment application.

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