NEWSLETTER

Topics Employment Law

Management Update

Share to LinkedIn Share to Twitter Share to Facebook

  • Sixth Circuit Differentiates Discriminatory and Retaliatory “Materially Adverse Employment Actions”

    A recent decision by the Sixth Circuit Court of Appeals illustrates the practical impact of the U.S. Supreme Court’s decision in White v. Burlington Northern & Santa Fe Ry. Co., which established a more lenient standard for demonstrating an adverse employment action in retaliation claims than in discrimination claims. See Michael v. Caterpillar Financial Services (6th Cir. 2007). In Michael, the court applied the Burlington Northern standard and held that conduct that was not sufficient to establish a materially adverse employment action in the employee’s discrimination claim was sufficient to establish such an action in her retaliation claim.

    In this case, Michael, an African-American female, was placed on administrative leave for four days because of complaints made about her by her subordinates and because she engaged in an angry confrontation with her manager. Subsequently, the employer gave her a choice between going on a 90-day performance plan or accepting a lateral move without loss of pay or benefits. Michael chose the 90-day performance plan. The plan identified seven areas in which Michael needed to improve over the following 90 days, including notifying management if she would not be in the office, improving her timely attendance at business meetings, refraining from treating her staff as personal assistants, and refraining from contacting her staff outside of normal business hours. Michael successfully completed the performance plan and subsequently transferred to another location where she received pay increases and promotions.

    The day after she was placed on administrative leave, Michael filed a complaint with the Equal Employment Opportunity Commission (EEOC), claiming a hostile work environment existed at Caterpillar for black employees, and that she was treated less favorably than white managers who had complaints lodged against them by subordinates. The EEOC issued Michael a Notice of Determination and a “right-to-sue” letter.

    Michael then sued the employer in federal court, alleging that Caterpillar discriminated against her because of her race, retaliated against her because of the complaints that she had filed, and created a hostile work environment for black employees, all in violation of Title VII and the state civil rights law. The lower court ruled in favor of Caterpillar on all of Michael’s claims, and she appealed. The Sixth Circuit affirmed the lower court’s decision.

    In addressing Michael’s race discrimination claim, the court noted that Michael had to show that: she (1) is a member of a protected group, (2) suffered an adverse employment action, (3) was qualified for the position, and (4) was treated differently from similarly situated members of the unprotected class. The Sixth Circuit held that, in the context of a Title VII discrimination claim, most of Caterpillar’s alleged actions against Michael, including the performance plan, did not constitute a materially adverse employment action.

    Under relevant Sixth Circuit case law, a materially adverse employment action in a discrimination claim might be demonstrated by “a termination of employment, a demotion evidenced by a decrease in wage or salary, a less distinguished title, a material loss in benefits, [or] significantly diminished material responsibilities.” Here the court noted that the performance plan mostly called for Michael to refrain from her own unreasonable practices. The plan did not otherwise significantly alter Michael’s responsibilities, pay, or work hours, although it did entail monitoring her compliance. Thus, the court found it doubtful that Michael could establish all the elements of a prima facie case of racial discrimination.

    However, even if the performance plan was a materially adverse employment action, the court found that Michael failed to show that Caterpillar’s proffered legitimate reasons for the various disciplinary actions taken against her were a pretext to mask either unlawful discrimination or retaliation.

    With regard to Michael’s retaliation claim, the Sixth Circuit noted that in Burlington Northern, the U.S. Supreme Court held that a plaintiff’s burden of establishing a materially adverse employment action is less onerous in the retaliation context than in the discrimination context. A materially adverse employment action in the retaliation context consists of any action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Michael court noted that the more liberal definition permits actions that were not materially adverse for purposes of a discrimination claim to qualify as such for a retaliation claim. Thus, according to the court, the retaliatory actions Michael alleged, including her brief placement on paid administrative leave and the 90-day performance plan, appeared to meet the lower bar set by Burlington Northern.

    However, the court concluded that while Michael established a prima facie case of retaliation, she failed to rebut Caterpillar’s legitimate, nonretaliatory reasons for its actions (as was the case with her discrimination claim). Therefore, the Sixth Circuit affirmed judgment in favor of the employer on Michael’s retaliation claim.

    The court also affirmed judgment in favor of the employer on Michael’s racial harassment claim.

    While the employer ultimately prevailed on all the claims, this case illustrates the significant challenge to employers created by the U.S. Supreme Court in Burlington Northern when it expanded the definition of a “materially adverse employment action” for retaliation claims. At present, the same employment action that may not be “materially adverse” in a discrimination context may be “adverse” in a retaliation context. Employers should proceed cautiously when taking any action against employees who have filed a discrimination claim, or made an internal complaint about discrimination. Documentation of the reasons for an employment action taken against an employee, made at the time of such actions, will be key when defending the action against charges of discrimination or retaliation.

    If you have any questions regarding this decision or other labor or employment related issues, please contact the Ford & Harrison attorney with whom you usually work or the author of this article, Bill Singleton, an attorney in our Memphis office, at bsingleton@fordharrison.com or
    901-291-1520.

     

  • DOL Issues Report on FMLA Comments

    The Department of Labor (DOL) has issued a report on the comments it received in response to its December 2006 Request for Information (RFI) on the impact of the Family and Medical Leave Act (FMLA), but has not proposed new regulations interpreting the FMLA.

    According to the DOL’s report,
    There is broad consensus that family and medical leave is good for workers and their families, is in the public interest, and is good workplace policy. There are differing views on whether every provision of the law is being administered in accordance with the statute and with congressional intent. It is also evident from the comments that the FMLA has produced some unanticipated consequences in the workplace for both employees and employers.

    The DOL acknowledged that a report of this kind is a “unique step,” because commentary obtained in response to an RFI usually is provided in the comments to a proposed regulation. However, at this time the DOL has not published any proposals for regulatory changes and it is not clear when, or if, it will do so.

    The FMLA requires covered employers to provide up to twelve weeks of unpaid leave during a twelve month period to eligible employees for the birth or placement of a child for adoption or foster care; when the employee cannot work because of his or her own serious health condition; or to care for a family member’s serious health condition.

    According to the report, most commentators believe the FMLA is working well, at least with regard to leave related to the birth or adoption of a child or for indisputably “serious” health conditions. However, the report stated that a “central defining theme” in the comments from employers involved difficulties with the use of unscheduled intermittent leave by employees with chronic serious health conditions, especially in businesses with time-sensitive operations.

    Another area that generated significant comments is the medical certification procedure. Employees are concerned about the time and cost of visits to health care providers to obtain medical certifications and the potential for invasion of their privacy. Employers, especially when it comes to intermittent leave use, seek predictability in attendance and are frustrated with medical certifications that do not provide meaningful guidance. Health care providers complain they cannot predict how many times a flare-up of a particular condition will occur.

    Other areas about which the agency received comments include the determination of when an illness qualifies as a serious health condition; the interplay between the FMLA and the Americans with Disabilities Act; transfer to an alternative position; substitution of paid leave for unpaid FMLA leave; and FMLA leave in the joint employer context involving a Professional Employer Organization (PEO). With regard to this last issue, the report noted that all of the comments received supported the view that the primary “employer” in these cases should be the client company that actually hires and uses the employees who are provided benefit services by the PEO, and not the PEO.

    The DOL stated that it “hopes this Report will further the discussion of these important issues.” The full report can be accessed at: http://www.dol.gov/esa/whd/FMLA2007Report/2007FinalReport.pdf.

     

  • DHS Issues Regulations Addressing "No Match" Letters from SSA

    The Department of Homeland Security (DHS) has issued new regulations providing guidance to employers who receive a "no match" letter from the Social Security Administration (SSA) indicating that the employer has submitted a W-2 form in which the combination of name and social security number does not match SSA records. The regulations also address the situation in which the employer receives a letter from DHS called a "Notice of Suspect Documents," indicating that DHS has been unable to confirm that an immigration status document or employment authorization document used by an employee in completing an I-9 form was assigned to that person.

    The regulations acknowledge that there can be many reasons the employer’s information and the government’s records do not match, including clerical error and name changes. However, one reason may be that the employee submitting the information to the employer is not authorized to work in the United States and is using a false Social Security number (SSN) or a SSN assigned to someone else.

    Most employers are aware that federal law prohibits an employer from continuing to employ an individual knowing that person is not authorized to work in the United States. The term "knowing" includes both actual and constructive knowledge. Constructive knowledge is "knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition." The new regulations add two examples of situations that would put an employer on notice that an employee could be an unauthorized alien: 1) receipt of a "no match" letter from the Social Security Administration; and 2) receipt of a Notice of Suspect Documents from the Department of Homeland Security.

    The new regulations also contain a "safe harbor" provision that sets out procedures an employer can follow after receiving a no match letter or Notice of Suspect Documents to ensure that DHS will not use such a letter as a basis to conclude that the employer had constructive knowledge that the employee was not authorized to work in the United States.

    The new safe harbor provision provides a clear method for employers to exercise reasonable care in addressing no match letters. Employers who respond to the receipt of the specified SSA or DHS letters by following the steps outlined below will be effectively immunized from a DHS finding that the employer had constructive knowledge based on those documents.

    The new regulations are similar to the proposed rule, which also provided for a safe harbor provision. However, the new regulations give the employer a longer period of time to determine whether the no match is a result of a typographical or clerical error (30 days instead of 14) and to resolve the no match (90 days instead of 60).  

    Safe Harbor Provision 

    The new regulations provide that an employer will not be deemed to have had constructive knowledge of an individual’s unauthorized status if the employer follows the steps below in response to a no match letter or Notice of Suspect Documents.  

    Within 30 Days of Receiving a No Match Letter From the SSA:  

    The employer must check its records to determine whether the discrepancy is due to a typographical or clerical error. If so, the employer must: correct the information and inform the SSA of the correct information; and verify with the SSA that the employee’s name and SSN, as corrected, match the agency’s records.

    Additionally the employer should make a record of the date, time and manner of this verification and store this information with the employee’s I-9 form. The employer should not perform new I-9 verification, although it may update the employee’s I-9 form or complete a new I-9 form with the corrected information.

    If the employer determines that the discrepancy is not due to a typographical or clerical error in its own records, it must promptly request that the employee confirm that the name and SSN in the employer’s records are correct. If the employee states that the employer’s records are incorrect, the employer must correct, inform, verify and make a record, as set forth above.

    If the employee states that the employer’s records are correct, the employer must promptly request that the employee resolve the discrepancy with the SSA. The discrepancy must be resolved within 90 days of the date the employer received the written notice from the SSA.  

    Within 90 Days of Receiving a No Match Letter: 

    If the employer is unable to verify the employee’s name and SSN within 90 days of receiving written notice from the SSA, the employer has three days in which to re-verify the employee’s employment authorization.

    To re-verify the employee’s employment authorization, the employer must complete a new I-9 form for the employee using the same procedures as if the employee were newly hired.

    However, the employer cannot accept any document referenced in the no match letter or any document that contains a disputed SSN or alien number or a receipt for an application for replacement of such a document to establish work authorization or identity. The employee must present a document that contains a photograph to establish identity or both identity and work authorization. The employer must retain the new I-9 form with the prior I-9 forms in accordance with federal laws and regulations.

    The regulations provide for similar procedures for a safe harbor after receiving a Notice of Suspect Document from DHS.

    Employers who receive a Social Security no match letter and who follow the safe harbor procedures set forth in these regulations will be immunized from a finding of constructive knowledge based on the receipt of a no match letter if the individual is ultimately found to be unauthorized. However, following the safe harbor provision would not preclude DHS from finding that an employer had actual knowledge that an employee is not authorized to work in the U.S. It also does not preclude DHS from finding that the employer had constructive knowledge of an employee’s unauthorized status based on other factors. However, the comments to the new regulations note that such a determination is unlikely.

    The new regulations go into effect September 14, 2007.

    The new regulations provide much needed guidance for employers who receive no match letters or a Notice of Suspect Documents. While employers are not required to follow the procedures in the regulations, it would be wise to do so since the procedures provide a clear method for exercising reasonable care in response to a no match letter.

    Additionally, employers should make sure they have documented any action taken to ensure an individual is authorized to work in the United States, such as using the SSA’s Social Security Number Verification System, available at http://www.ssa.gov/employer/ssnv.htm, USCIS’ Systemic Alien Verification for Entitlements (SAVE) Program and EEV, http://www.vis-dhs.com/EmployerRegistration, or ICE’s IMAGE program, http://www.ice.gov/partners/opaimage/index.htm. DHS will consider such action in determining whether the employer has exercised reasonable care to ensure it is not employing unauthorized aliens, even if the employer has not followed the safe harbor provisions.

    If you have any questions regarding the new regulations or any other employment related immigration issue, please contact Geetha Nadiminti, 404-888-3940, gnadiminti@fordharrison.com or any member of Ford & Harrison’s Business Immigration practice group.