Issues in Employment Law

April 2001

Employers should report every workplace injury, even when an employee violates an employer's safety rule and is injured, since he may still be entitled to worker's compensation benefits, according to the Nebraska Supreme Court.

In Guico v. Excel Corp., No. S-99-1406, (Neb. Sup. Ct. November 17, 2000.), a worker at a meatpacking plant failed to wear steel mesh gloves, as required by the employer, and was injured. The employer argued that the employee's failure to follow its safety rules made him ineligible for workers' compensation benefits. The Nebraska Supreme Court disagreed and held that an employee must demonstrate a reckless disregard for safety, and a willingness to take a chance, which was not present here, where the employee merely "didn't think about that."

What this may mean to employers, is that merely having safety rules in place may not be enough to protect them from workers' compensation claims. Instead, employers may wish to be more proactive in enforcing these rules and policies. This way, the injuries may actually be avoided, but if not, an employee who disregards not only a published policy, but also the direction of his supervisor, could be shown to be acting recklessly. Additionally, and most importantly, employers need to report all workplace injuries to their Workers' Compensation Carrier, even if the employer believes that the employee is ineligible for benefits because of his "misconduct." It is better to leave that decision to the Carrier.

If an employer knows of an employee's disability, the employer must seek to make accommodations, even if the employee fails to request any accommodation, says a Federal Court of Appeals.

The Ninth Circuit Court of Appeals, which decides Federal law in Alaska, Arizona, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, and California, recently held that even when an employee makes no request for accommodation, the employer is bound to seek one, under the state law of Washington. In Downey v. Crowley Marine Services, Inc., No. 99-35439, (9th Cir. January 3, 2001.), an employee suffering from Multiple Sclerosis was forced to resign from his employment after his condition made him unable to perform his duties. He had not asked for accommodation, but had previously informed his employer of his disability. The Court held that the employer's duty to seek accommodations is triggered, not by a request for one, but upon notice of the presence of a disability. Thus, in this case, the Court ruled that the employer should have actively sought to identify other jobs he could perform, and to assist him in applying for them, instead of simply allowing him to become unable to work. The Court also pointed out that its interpretation of the Federal Americans with Disabilities Act still requires that the employee make a request for accommodations before an employer has any duty to accommodate.

Employers need to be aware the best practice is to not wait until an employee with a disability requests accommodation. Once an employer is aware of a disability, a court may find that the employer should have been more active in accommodating the employee, even absent a request.

The Virginia law, at Va. Code 1950 §51.5-41(C), states that "[a]n employer shall make reasonable accommodation to the known physical and mental impairments of an otherwise qualified person with a disability, if necessary to assist such person in performing a particular job" which suggests that the employers' duties begin upon notice of the impairments.

The Maryland Statute, MD Code 1957, Art. 49B, §16(a)(a) has been read to include a requirement of reasonable accommodation, but it is not clear what would trigger an employer's duty.

The DC Law, DC Code 1981 §1-2512 has also been read to require an employer to provide reasonable accommodation, but the case law suggests that such an obligation is only triggered when requested or proposed by the employee.

Employers need to be cautious about changing the working conditions or job functions of a pregnant employee, in light of a decision by a Federal Judge in DC who recently found that requiring a pregnant employee to travel may be an adverse employment action, permitting a sex discrimination claim.

In a suit against the US National Indian Gaming Commission for sex discrimination, a Judge recently denied the Defendant's attempt to have the case dismissed. In Nason v. Johnson, No. 98-2028, (D.D.C. Jan. 2001), the Court found that requiring a female employee in her third trimester of pregnancy to travel, given that she had not been required much at all in the previous year was sufficient to be considered an adverse employment action.

What this means for employers is that a Court can and will consider factors such as pregnancy when analyzing whether an employer's action affects the terms and conditions of employment. Thus, employers need to be aware of all aspects of an employee's job experience when making employment decisions and should be cautious about making changes in a pregnant employee's work requirements.

When fashioning a sexual harassment policy, employers need to provide a specific mechanism and person to whom to report claims, and further should investigate all reported claims of employee mistreatment, whether or not the employee uses the words "sexual harassment" in her claim, says a Federal Court of Appeals.

Federal Case law permits an employer to avoid liability for the sexual harassment of its employees if, among other things, it has in place a sexual harassment policy which provides a mechanism for reporting claims, and that the employee failed to use this mechanism. In this case, Gentry v. Export Packaging Co., No. 00-2367 (7th Cir. Jan. 25, 2001) (affirmed), the employer has a sexual harassment policy, but failed to identify a particular individual to whom an employee could reports any claims. The Employer attempted to defend by saying that she never informed them of the problem. The Court found that she had informed a sufficient number of coworkers and immediate supervisors to provide adequate notice to the employer, and to prevent the employer's use of the affirmative defense. Further, even though the employee didn't use the words "sexual harassment" when informing management about her treatment, her description of her treatment was such that the defendant should have known the conduct constituted sexual harassment.

What this means for employers is that if you fail to designate a particular person to whom sexual harassment complaints are to be made, a Court could find that making a report to anyone in management, at any level, would constitute sufficient notice to the employer, subjecting the employer to liability, and invalidating the affirmative defense which is provided by law. Additionally, even if an employee doesn't state that they are making a "sexual harassment" complaint, an employer should investigate every such complaint fully as if the employee had made that specific charge.

A California Court recently held that terminating an employee for refusing to sign non-compete agreement was against public policy and illegal, reminding employers that non-compete agreements need to be carefully constructing to ensure their enforceability in a judicial climate that disfavors them.

It is a general proposition that courts dislike non-compete agreements, and are likely to seek reasons to find them unenforceable. As seen recently in the D'sa v. Playhut, Inc., No. B139673 (Cal. 1st App. Dist. Dec. 21, 2000) decision, an appellate court in California found that terminating an employee for refusing to sing a non-compete agreement was "against the public policy of California" and was therefore an improper termination. The Court reasoned that there were exceptions to the general rule that employees are hired at-will and can be terminated for any reason or no reason, and that the pressure to sign a non-compete agreement applied in this case was such an exception. The Court went on to say that public policy disfavors non-compete agreements especially in today's job markets where it is unlikely that an employee will remain with a single employer for his entire working life.

This is just another example of the court's attitude toward non-compete agreements, and reminds all employers to ensure that if it intends to use non-compete agreements, that it must be careful in drafting them to increase the likelihood that a court will uphold it, bearing in mind that courts may be looking for reasons not to.

Employers may not refuse to hire a person based upon the employer's concerns that the job may create a risk of harm to that person's health, according to a recent federal court of appeals decision.

The Americans with Disabilities Act permits an employer to refuse to hire a person who poses a direct threat to others. However, whether this provision of the Act applies to employees who may be posing a risk of harm to themselves is still uncertain. In Echazabal v. Chevron U.S.A., 226 F.3rd 1063 (9th Cir. 2000), a prospective employee was found, via a pre-employment physical, to have a condition whereby his liver might have been damaged by exposure to solvents and chemical in the refinery where he was applying to work, although his own physicians had stated that he could work there. Claiming that it had the right to refuse to hire a person who may pose a direct threat to himself, the employer refused to hire him. The Court reasoned that Employers cannot use "paternalistic" concerns about an employees health and safety as a decision making mechanism.

This decision is only effective as law in the 9th Circuit, which covers Alaska, Arizona, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, and California. So far, only one other Circuit, the 11th, based in Atlanta, has discussed this issue, and ruled the other way. This decision is likely to eventually be reviewed by the Supreme Court.

In the meantime, we recommend that employers review their policies with regard to hiring individuals to positions which may pose a threat to that individual (i.e. an individual with a prosthetics or reconstructed joints to position involving locomotion) for the appearance of "paternalism" versus actual fears of a significant risk to their health and safety.

Employers do not need to create positions, or to displace non-disabled employees in order to accommodate a disabled workers under the Americans with Disabilities Act, according to a recent Federal Court opinion.

In Lockhard v. General Motors Corporation, 2001 WL 58843, (N.D. Ohio 2001), a disabled employee who was limited by education and skills to only certain types of manual labor jobs was subsequently physically disabled from performing those types of jobs. She sought transfer to jobs which she was able to perform within her physical limitations, however, no such jobs were vacant and available. The employee claimed disability discrimination. The Court held that although an employer must reasonable accommodate disabled employees, the ADA does not require employers to create new jobs, move another employee, promote the disabled employee, or violate another employees rights.

This decision reasserts that employers need not create accommodations at the expense of others, and reminds employers that reasonable accommodations does not require an employer to treat the disabled employee differently than others when promoting, transferring, or otherwise evaluating job qualifications unrelated to the disability.

Employers should avoid acting outside of its stated policies when making employment decisions, as it may be more difficult to have discrimination cases against it dismissed instead of submitted to a jury, according to a federal appeals court.

If an employer violates its own policies, or otherwise acts contrary to its usual custom with regard to an employment decision, it my find it difficult to have a discrimination case against it dismissed. In Bass v. Bourd of County Commissioners, 2001 WL 169746 (11th Cir. 2001), the Court found that the fact that an employer violated its own policy and customary treatment, in itself was sufficient evidence of discriminatory intent as regards that employee to defeat the employer's effort to have the case dismissed.

Employers should be extremely cautious about making any employment decisions which would be exceptional to the normal process, as any such decision would force the employer to answer any discrimination claims in front of a jury.