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Not surprisingly, the Family and Medical Leave Act (“FMLA”) often creates frustrating situations for employers.  Perhaps one of the most frustrating is when an employer discovers an employee’s misconduct just before or while the employee is on a FMLA leave.  These situations leave employers perplexed about how to proceed—will taking appropriate disciplinary action appear to be interference with or retaliation for the employee’s FMLA leave?

The Sixth Circuit Court of Appeals recently provided some legal--and practical—guidance for employers in Donald v. Sybra, Inc., Case No. 10-2153 (6th Cir. January 17, 2012).

What happened?

Plaintiff Gwendolyn Donald worked for the Defendant Employer, Sybra, an Arby’s restaurant franchise.  In mid-February 2008, Donald’s supervisor, Kyle Plum, discovered discrepancies in her drive-in window receipts. Plum believed that Donald was receiving payment at full price, then modifying the receipts to show a discount—and pocketing the difference.  Plum notified his supervisors and then investigated by observing Donald take drive-in window orders for several days.  After confirming his suspicions, Plum notified his supervisor, who decided to confront Donald.

Before that meeting could occur, however, Donald notified Plum on February 26^th that she would be off work until February 29^th because of pain from kidney stones.

On Donald’s first day back to work on February 29^th, Plum and his supervisors confronted her regarding the shortages and the investigation. When Donald denied any wrongdoing and refused to concede the theft, the Employer terminated her employment.

What happened next?

Donald sued the Employer alleging, among other claims, that her termination interfered with and was in retaliation for taking FMLA leave. The district court for the Eastern District of Michigan applied the McDonnell Douglas framework—typically used in Title VII discrimination and retaliation cases--to analyze Donald’s FMLA claims.  Courts have been split over whether use of that standard is appropriate in FMLA cases.

Applying the McDonnell Douglas framework, the district court assumed Donald could establish a prima facie case of FMLA interference and retaliation. The Employer met its burden of showing a legitimate, nondiscriminatory reason for terminating Donald by providing her cash register receipts and order irregularities.  The last step in the analysis required Donald to show that the Employer’s explanation was not the true reason for the termination, but rather a pretext for its unlawful interference and retaliation.  To show pretext, Donald pointed to the timing of the termination—which occurred on the day that she returned from a medical-related absence.

In dismissing the case, the district court concluded that Donald could not establish pretext based on the timing alone.

Donald appealed.

What happened on appeal? 

The Sixth Circuit Court of Appeals agreed that the McDonnell Douglas standard was appropriate for analyzing both FMLA interference and retaliation claims. The Circuit Court further agreed that the timing of the termination did not establish that the Employer’s explanation was a pretext.  Although the Circuit Court conceded that the timing did give it “pause,” the court noted that February 29^th was Donald’s first day back at work after the investigation concluded.  Affirming the dismissal, the court concluded that temporal proximity cannot be the only basis for finding pretext.

Guidance for employers

This case provides some important legal--and practical--FMLA guidance for employers.

First, from the legal perspective, the case clarifies that in the Sixth Circuit (Michigan, Ohio, and Kentucky) the well-known McDonnell Douglas standard is the appropriate framework for analyzing FMLA interference and retaliation claims.

Second, from a practical perspective, this case demonstrates that employers must be aware that taking disciplinary action after a medical-related absence or leave can be risky—even when a legitimate reason exists.  Employers that discipline or terminate in such circumstances should have solid evidence, like the employer in Donald v. Sybra, that its actions were related to the employee’s conduct and not the medical condition or leave of absence.  Timely documentation of misconduct and investigations is one way for an employer to establish the legitimate, non-discriminatory reasons for its actions. 

When we talk with employers, we tell them again and again that one of the best defenses to discrimination claims is to treat similarly situated employees the same.  But what does that mean?  When are employees similarly situated?  A recent discrimination case provides a good illustration of the concept.

In Hodczak v. Latrobe Specialty Steel Co., four employees in their late 50s and early 60s sued their employer for age discrimination after their employment was terminated.  According to the employer, it terminated the employees’ employment because they regularly exchanged emails containing sexually explicit photographs – i.e., porn – in violation of the company’s Electronic Communications Policy.  The employer discovered the porn exchange while it was investigating a sexual harassment complaint against one of the terminated employees.

The employees argued that their ages must have been the reason for their termination because other, younger employees had not been terminated despite similar behavior.  The court, however, rejected that argument.  As to one of the allegedly similarly situated younger employees, the court found that although he accessed pornographic websites on his work computer, he was not a supervisor and did not send the porn to anyone else.  As to another, the court found that he was not similarly situated to the older employees because there was no evidence that he actually sent any sexually explicit emails.  And, as to the third allegedly similarly situated individual, the court found that he sent only one email and did so from his personal computer.  In contrast, the older employees traded sexually explicit emails on a nearly daily basis from their work computers.

Based on this decision and others that have interpreted the concept of similarly situated employees, the following factors can often provide a legitimate basis for treating employees differently:

• Supervisory employees versus non-supervisory employees
• Employees subject to just-cause provisions in a collective bargaining agreement versus at-will employees
• Employees who engage in a single instance of misconduct versus employees who are repeat offenders
• Employees who hold positions that require interaction with the public versus employees who do not interact with the public
• Employees who express regret and contrition versus employees who lie or blame others
• Employees who use company property to perpetrate a wrong versus those who use their own property to do so

Determining whether employees are similarly situated for legal purposes is highly fact and context dependent.  If you have questions or are unsure, consult your legal counsel for advice.

The dark comedy “Horrible Bosses” opens nationwide this weekend.  The film’s trailer highlights Colin Farrell’s character directing a subordinate to “trim the fat” by firing all “the fat people.”  The other two bosses – played by Jennifer Aniston and Kevin Spacey – are equally despicable.

This may make for good cinema, but employment defense attorneys rarely see such blatant expressions of bad intent.  Most supervisors are well aware that it is illegal to discriminate against employees based on protected characteristics (which in some states include weight).  Nonetheless, communication problems that occur every day make employment defense attorneys cringe.

Any action taken against an employee, along with supporting documentation may ultimately face review by a jury.  Two sides of the communication coin often plague employers defending termination decisions: over-communication and under-communication.  A skilled plaintiff’s attorney can paint these just as distastefully as can the writers of “Horrible Bosses.”

Of the two, over-communication is more obvious, but also harder to avoid.  When supervisors make snide, sarcastic or disparaging remarks about an employee, they risk angering a jury.  It is far too easy to e-mail comments one would never say in person, let alone want to explain under oath.  When you consider that plaintiffs’ attorneys can also obtain personal e-mail, text messages, and social media content, it is easy to see how the less one says about a problem employee, particularly in the heat of the moment, the better.

But over-communication is not always a knee-jerk reaction.  It also occurs in reasoned deliberations of employment decisions and can happen, for instance, with employees’ medical conditions.  It is unlawful to terminate an individual based on an inaccurate perception that the individual has a medical condition that renders him or her unable to perform the job.  When management or human resources personnel speculate as to what an individual may or may not be able to do now and in the future, they create evidence that may be used to demonstrate improper motive in a disability discrimination case.

Under-communication is a problem, too.  No adverse decision should ever come as a surprise to an employee.  While most employees are terminable at will, a jury will be persuaded by whether a decision seems fair.  As a result, it’s important to have a clear written record of the basis for any adverse decision – as well as a record that the concerns were shared with the employee to give him or her a chance to correct the problem.  (Obviously, there are exceptions to this guideline such as when an employee engages in behavior that warrants immediate termination.)

Under-communication often becomes a problem during a reduction in force.  Supervisors select for termination individuals who are poor performers.  When asked to explain the selection, supervisors cite abysmal performance, but written performance evaluations paint a far different picture.  In litigation, a jury will decide whether poor performance was really just a pretext to hide some unlawful motive.  Far better that a jury making that decision have before it several instances of documented poor performance.  The same is true in retaliation cases, where a central issue is often whether the issues that led to the employee’s termination existed before the employee’s protected activity.

In “Horrible Bosses,” subordinates plot to murder their bosses.  (Workplace violence is another topic altogether!)  While taking the stand at trial is a far less dramatic prospect, it is doubtless one few supervisors relish.  Avoiding over- and under- communication may minimize the potential for litigation and will certainly make the experience less uncomfortable should litigation become unavoidable.

The Ohio Court of Appeals for the Eighth District (Cuyahoga County) dramatically reduced a $43.1 million punitive damages award to $7 million in the case of Luri v. Republic Services, Inc., Case No. 94908, 2011-Ohio-2389 (May 19, 2011) . At trial, the Luri jury imposed a $46.6 million verdict, including $43.1 million in punitive damages for Luri’s claim of retaliation pursuant to Ohio’s civil rights statute, R.C. Chapter 4112. The appellate court held, however, that a statutory limit on punitive damages applied to Luri’s employment claim. The limitation on punitive damages, a provision of R.C. §2315.21, was enacted in 2005 as part of a comprehensive tort reform bill. There has been much speculation as to whether and to what extent various tort reform provisions will apply in employment cases. While the Ohio Supreme Court has yet to weigh in and many questions remain unanswered, the Luri decision is a welcome victory for Ohio employers. For a more detailed discussion of Luri and what it means, please read our Alert, The sky may not be the limit for an employee-plaintiff.

An Administrative Law Judge will convene a hearing on June 14, 2011 in the highly politicized labor dispute between the Boeing Company (Boeing) and the Association of Machinists and Aerospace Workers (Machinists). In April, the Acting General Counsel for the National Labor Relations Board filed a Complaint against Boeing, alleging that the plane maker’s decision to assemble its 787 Dreamliner aircraft at a new (non-union) facility in North Charleston, South Carolina rather than an existing (unionized) facility in Everett, Washington was in retaliation for a history of strikes by the Machinists at the Washington facility and therefore violative of the National Labor Relations Act. Boeing maintains that the decision to place a second assembly line in South Carolina was based upon the Company’s legitimate interest in seeking out a favorable business environment for new production.

The dispute has received wide coverage as a flashpoint between right-to-work advocates, organized labor, and the political actors that represent both constituencies. Management-side advocates have loudly decried the NLRB’s Complaint as “the first time a federal agency has intervened to tell an American company where it can and cannot operate a plant.” The NLRB’s Office of the Acting General Counsel issued a fact sheet countering that Boeing executives have made what the Acting General Counsel views as a series of statements indicating that Boeing was drawing a straight line between the decision to place the assembly line in South Carolina and frequent strike activity at the Washington facility. Machinist members at the Everett, Washington facility have engaged in strike activity regularly and with greater frequency in recent years, including in 2005 and 2008, causing costly delays in production.

Politics aside, the current dispute highlights the importance of message discipline as employers deal with unionized workforces. Neither the NLRB’s Acting General Counsel nor the Machinists have taken the position that Boeing does not have the general right to maintain a production line in South Carolina and, as a practical matter, Boeing will eventually produce Dreamliners in South Carolina. At issue is Boeing’s motivation in assembling Dreamliners in South Carolina. Statements by Boeing management noting the need for production stability due to, at least in part, frequent strike activity by the Machinists have landed Boeing in the NLRB’s crosshairs.

Employers with unionized workforces have broad rights (and, in fact, an obligation) under the law to make business decisions in a company’s best interests. As the Boeing dispute illustrates, compliance with labor laws will often turn on the clarity with which those decisions are communicated to incumbent unions.

A federal district court has ruled that the EEOC can proceed to trial on the anticipatory retaliation claims on behalf of two Wisconsin employees even though those employees suffered no lost time, were not disciplined, and lost no benefits.  This case serves as a reminder that retaliation claims often pose a bigger risk than the allegations of discrimination that form their basis.  And, it can take far less than a termination or demotion to support a retaliation claim.

In EEOC v. Chrysler Group, LLC, two female employees remarked during one of their shifts that they believed their shift manager had engaged in sex discrimination in one of his job-assignment decisions.  Later during the shift, the safety labor relations human resources supervisor called the employees to his office separately, questioned them about their complaints, and advised the employees that they were on notice of termination for disrupting the workforce.  Although the employees claim that the supervisor yelled, threw things, and pounded his fists during these meetings, the supervisor contends that he spoke to the employees in a “normal tone of voice.”

The employees filed charges with the EEOC claiming that the supervisor retaliated against them by threatening their employment for complaining of sex-based discrimination.  The EEOC filed a complaint in federal court on the employees’ behalf.

The employer argued in its summary judgment motion that the retaliation claim should fail as a matter of law because neither employee suffered any adverse employment action – e.g., neither employee was fired, disciplined, demoted, etc.  The district court rejected this argument, holding that a materially adverse employment action need only dissuade a reasonable worker from making or supporting a charge of discrimination.  It need not rise to the level of a tangible employment action – i.e., a significant change in employment status that results in loss of pay, benefits, etc.  The court then found that it would be up to a jury to decide whether the supervisor’s actions toward the employees – as proved at trial – would operate to dissuade a reasonable employee from making a discrimination charge and, therefore, would amount to anticipatory retaliation.

To best protect your company from costly retaliation claims, keep the following guidelines in mind:

• Treat all remarks regarding possible discrimination seriously and with an open mind until an appropriate investigation has been conducted.
• Treat employees who suggest they may engage in protected activity, such as filing a charge with the EEOC, as you would treat employees who have already engaged in protected activity.
• Refrain from expressing an opinion as to the merits of the remarks until after you have more facts.
• Be sure that any changes to employees’ terms and conditions of employment – no matter how insignificant you might consider the changes to be – are supported by well-documented legitimate, non-discriminatory, non-retaliatory reasons.
• Consider whether your treatment of such employees is consistent with your treatment of similarly situated employees who have not engaged in protected activity or indicated that they may do so.
• Recognize that any action taken after an employee engages in protected activity may prompt a retaliation claim if the employee is unhappy with the change and manage your risks accordingly.