Ohio House Bill 286 follows Arizona's lead as to employment of unauthorized aliens

Posted by Lori A. Clary on July 15, 2011

On May 26, 2011, the United States Supreme Court upheld an Arizona statute regarding the employment of unauthorized aliens.  The Arizona law requires employers within the state to use the federal government’s E-Verify program to check the work authorization status of employees and imposes licensing sanctions against employers that “knowingly or intentionally” employ unauthorized aliens.  In upholding the Arizona law, the Court determined that states were free to act in this area under the terms of the federal Immigration Reform and Control Act (IRCA).

On June 29, 2011, in the wake of the Supreme Court’s decision, House Bill 286 was introduced in the Ohio House of Representatives.  The bill, which was sponsored by 14 lawmakers, seeks to amend Ohio law to include provisions similar to those included in the Arizona statute.

Highlights of the bill include:

  • A prohibition against knowingly or purposefully employing unauthorized aliens;
  • A good-faith affirmative defense for employers;
  • A requirement that employers use the federal government’s E-Verify program to check employee work authorization status;
  • A complaint investigation procedure administered by the Attorney General of Ohio;
  • Exclusive reliance on the federal government’s determination of an alien’s immigration status; and
  • Penalties that can include termination of all unauthorized aliens and probationary periods for employers. 

If passed, this bill could require employers to change their employment verification processes significantly.  We will keep you posted.

Supreme Court's Game Changer: No class certification in Wal-Mart sex discrimination case

Posted by Miriam L. Rosen on June 20, 2011

In an eagerly anticipated opinion, the U.S. Supreme Court issued its decision in Wal-Mart v. Dukes today. The Court held that insufficient proof existed to allow certification of a class of more than one million women in a sex discrimination suit against Wal-Mart. The Court ruled only on the procedural issue of whether a class should be certified and not on the merits of the plaintiffs’ discrimination claims.

In Wal-Mart, the plaintiffs sought certification of a class of over one million women claiming that Wal-Mart had a companywide policy of discriminating against women in pay and promotion. The plaintiffs initially sought to include women who were not even employed by Wal-Mart when the lawsuit was filed in 2001. The Court of Appeals for the Ninth Circuit allowed certification of a narrowed class of women who worked at the company at the time of the 2001 suit. Wal-Mart appealed that decision arguing that the plaintiffs could not show that the claims of the over one million women were sufficiently similar to support certification as a class.

A majority of the Court agreed with Wal-Mart’s argument holding that the plaintiffs provided “no convincing proof of a companywide discriminatory pay and promotion policy.” The Court found that without “some glue holding” the claims together, it would be impossible to say that the claims arose out of a common employment policy.

For the first time in over a decade, the Court’s opinion provides guidance on the types of claims that can be certified as a class. To pursue a class claim, the individuals must have a truly common legal basis for their claims. For employers being hammered with class action claims, the Supreme Court’s Wal-Mart decision is expected to have broad implications for future class discrimination claims. We will continue to analyze the implications of this case and provide further updates.

United States Supreme Court enforces class action waiver in arbitration agreement

Posted by Lori A. Clary on April 27, 2011

In a move that could have a significant impact for employers, the United States Supreme Court recently upheld a so-called class action waiver provision in an agreement to arbitrate.  Although the decision occurred in the context of a consumer contract, the implications are likely to be far more wide-ranging.  In particular, employers that require employees to agree to otherwise enforceable arbitration clauses are likely to have those clauses upheld and enforced even if they include a bar to classwide arbitration.

In AT&T Mobility, LLC v. Concepcion, AT&T offered a free phone to anyone who signed up for itsThumbnail image for Cellphone-CourtesyOf_www.adigitaldreamer.com.jpg cell phone service.  The contract between AT&T and cell phone service purchasers included a mandatory arbitration clause that barred classwide arbitrations.  Dissatisfied with the fact that AT&T charged sales tax on the “free” phone, cell phone service purchaser Vincent Concepcion joined a purported class action law suit in a California Federal District Court.  AT&T moved to compel one-on-one arbitration under the sales contract.  Both the District Court and the Ninth Circuit Court of Appeals refused to do so.  The lower courts relied on a California state court decision that held that class arbitration waivers in consumer contracts were unconscionable and, therefore, rendered the arbitration clause unenforceable.

The United States Supreme Court reversed the lower courts and held that the arbitration clause should be enforced notwithstanding the class action waiver provision.  The decision affirmed the supremacy of the Federal Arbitration Act (FAA) over state laws that attempt to condition the enforceability of arbitration agreements on the availability of classwide arbitration.  In reaching this outcome, the Court noted that the “principal purpose of the FAA is to ensure that private arbitration agreements are enforced according to their terms.”

The Court further explained that “requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.”  First, class arbitration sacrifices the informality of arbitration and makes the process slower and more expensive.  Second, even if greater informality were possible in class arbitration, procedural formality would still be required to ensure the due process rights of absent class members.  Finally, requiring class arbitration would greatly increase the risks to defendants.  As the Court explained, to reap the benefits of arbitration, defendants necessarily give up the right to review and correction of all but a few strictly construed categories of errors.  If classwide arbitration is required, defendants could be left with damages liability to tens of thousands of potential claimants and no effective means of redress for even egregious errors in an arbitrator’s decision.  The Court therefore refused to require classwide arbitration when the arbitration clause itself expressly prohibited it.

Justices Breyer, Ginsburg, Sotomayor, and Kagan dissented, with Justice Thomas concurring in the judgment of the majority.

For employers who have arbitration procedures, the holding in this case should prompt review of the policy to evaluate whether adding a class action waiver is appropriate and can provide an extra level of protection from potential class claims.

Supreme Court makes it easier for employees to prove "Cat's Paw" discrimination cases

Posted by Lori A. Clary on March 09, 2011

The United States Supreme Court recently held that unlawful bias on the part of non-decisionmakers can taint employment actions taken by those who harbor no such bias.  These so-called “cat’s paw” liability cases – named for one of Aesop’s fables in which a monkey convinces a cat to retrieve roasting chestnuts from a fire, causing the cat to burn its paws and the monkey to abscond with the chestnuts – may represent the next wave of employment litigation.

In Staub v. Proctor Hospital.pdf, Staub worked as an angiography technician for the Hospital.  Staub was also a member of the United States Army Reserve.  Staub’s supervisors, Korenchuk and Mulally, remarked that Staub’s military duty strained the department; scheduled Staub for additional shifts so that he could “pay back” the department for accommodating his Reserve schedule; and characterized Staub’s military obligations as a “bunch of smoking and joking and a waste of taxpayers’ money.”

In January 2004, Staub’s supervisor issued him a Corrective Action for violating a company rule that required him to stay in his work area when he was not with a patient.  In April 2004, one of Staub’s co-workers complained to Linda Buck, the Hospital’s vice president of human resources, and Garrett McGowan, the Hospital’s chief operating officer, that Staub was abrupt and frequently unavailable.  McGowan directed Buck to address the issue.  Before she could do so, however, one of Staub’s supervisors informed Buck that Staub had violated the January Corrective Action.  Relying on this report and after reviewing Staub’s personnel file, Buck terminated Staub’s employment.  There is no evidence that Buck harbored any anti-military animus.

A jury ruled in Staub’s favor on his claim under the Uniformed Services Employment and Reemployment Rights Act (USERRA).  The Seventh Circuit reversed and ruled in favor of the Hospital, reasoning that because Buck did not blindly rely on information from Korenchuk and Mulally – the biased supervisors – Staub was unable to prove that his military status was a motivating factor in his termination.

The Supreme Court reversed again and held that, “if a supervisor performs an act motivated by antimilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA.”  The Court rejected the idea that a non-biased decisionmaker could “cleanse” discriminatory intent from the adverse employment action simply by relying on factors other than actions taken by a biased supervisor.

Although this case arose under USERRA, we have no doubt that plaintiffs’ attorneys will rely on it in other types of cases as well.  To put your company in the best position to guard against cat’s paw claims, consider the following steps:

  • Encourage employees to report concerns regarding discrimination.  This will provide you with one way to uncover and address employees who exhibit discriminatory intent.
  • Investigate all major disciplinary actions and discharges and effectively document those steps.  Besides being good practice, this may help you to refute later misrepresentations about what – or who – did or did not impact the ultimate decision.
  • If a supervisor has been accused of discriminatory actions, conduct an independent investigation of proposed adverse employment actions against employees working for that supervisor that does not include any information obtained from the suspect supervisor.
  • Ask the employee being disciplined if there are additional facts he or she would like to include in the investigation that may bear on the appropriateness of the adverse employment action.  This may help you to later refute any claims by the employee that the discipline or discharge was unfair because the supervisor hated minorities, women, or older workers, etc.