When Harassment Investigations Go Bad

By Kathleen Jennings (kjj@wimlaw.com)

A recent example of how not to conduct an investigation of a complaint of sexual harassment comes to us from Massachusetts. This week, Massachusetts’ highest court reinstated a $540,000 jury verdict for a Lexus dealer finance manager who alleged sexual harassment by her supervisor, finding the dealership inadequately investigated when she reported the conduct (Gyulakian v. Lexus of Watertown, Inc., Mass., No. SJC-11959, 8/24/16).

What did the Lexus dealership do wrong in its investigation?

  • The finance manager complained to the general manager, who testified at trial that he “honestly didn’t believe” her. In other words, the investigation was carried out by a member of management who admitted to carrying a bias against the plaintiff.
  • The manager did not interview the finance manager’s finance department colleagues because he didn’t want to undermine the supervisor. This failure to interview co-workers “who would have been most likely to witness the alleged conduct” was sufficient for the jury to conclude the company conducted an inadequate investigation. The investigation “was marred from the beginning, as it was carried out,” the judge said.

In addition, the Court found that Lexus was on notice when members of senior management became aware of specific incidents. The general sales manager saw the supervisor attempt to throw coins down the finance manager’s blouse. An office manager overheard the supervisor discuss anal sex with the finance manager. In response, the general sales manager circulated a memo to the staff that a conversation like this wasn’t appropriate for the workplace. In both of these situations, however, the members of management should have done more to stop the inappropriate actions of the supervisor and they should have taken further steps to ensure that such behavior did not happen again.

Thus, the Court concluded that punitive damages in the amount of $500,000 were justified because the dealership failed to take adequate remedial measures.

Kathleen Jennings, Principal is a partner in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She can be contacted at kjj@wimlaw.com.

©2016 Wimberly Lawson

An OSHA Inspector Walks into a Poultry Plant…. And Must Walk Back Out Because She Does Not Have A Valid Warrant

In a decision published August 5, 2016, a U.S. District Court magistrate has recommended that a warrant OSHA sought to conduct a comprehensive inspection of a North Georgia poultry plant be quashed (invalidated).  The inspector had arrived at the plant in response to a reported employee injury. Then things got interesting: rather than simply investigate the accident that resulted in the employee’s injury, the Area Director decided to field an entire team of inspectors, equipped to examine every aspect of the plant’s operations, including but not limited to ergonomics, process safety management, and even hexavalent chromium exposure, to conduct a comprehensive inspection of the plant even though the injury incident concerned a relatively isolated part of the plant.  The Area Director sought, and was granted, a warrant authorizing the expanded search. However, upon learning the warrant had been issued, Wimberly & Lawson senior principal Larry Stine, on behalf of the employer, filed an emergency motion to quash the warrant, and following a hearing before the U.S. Magistrate Judge, that motion was granted.

This is the second time that Wimberly Lawson has successfully prevented OSHA from unlawfully expanding an inspection of a poultry plant. Apparently, OSHA needs to be reminded that it is subject to the Fourth Amendment’s limits on search and seizure.  The Fourth Amendment states that no warrant shall issue except on “probable cause:” for OSHA, this means that they must have a reasonable belief not just that hazards exist in the workplace – there are hazards in all workplaces – but that they have reason to believe that OSHA standards have been violated.  In this case, the Magistrate found, OSHA had probable cause to believe that there might be violations of standards relating to the possible causes of the employee’s injury, but not for an expanded inspection of the entire plant. The Magistrate Judge also found that the OSHA 300 logs, which list recordable injuries that occur in the workplace, also did not, without more, supply probable cause to believe that violations had occurred. 

This is a significant decision because the recommendation invalidates OSHA’s Regional Emphasis Program (REP) for Poultry Processing Facilities, announced last October, as the basis for expanding an unprogrammed, incident-related inspection to a comprehensive, or “wall-to-wall,” inspection covering the entire plant.

As an example of what might happen if OSHA is allowed to expand an inspection triggered by an employee injury, Tyson Foods was recently cited by OSHA for $263,498 in proposed fines after OSHA inspectors found multiple safety violations in an inspection triggered by the amputation of any employee’s finger.

Practice Tip: If an OSHA Inspector shows up at an establishment, the company has the right to get counsel involved, and it should contact experienced counsel immediately. The failure to do so may prove to be very expensive.

©2016 Wimberly Lawson

Worker Misclassification Results in Liability for Unpaid Overtime

By Kathleen Jennings (kjj@wimlaw.com)

A Louisiana plastering company learned an expensive lesson in worker classification for overtime purposes when it agreed to pay 147 workers $365,000 in back wages for unpaid overtime. This administrative settlement resolved a complaint from the U.S. Labor Department that the company had misclassified employees as independent contractors.

Brownlow Plastering LLC used a “labor broker” to recruit and hire workers it classified as “independent contractors.” Brownlow paid those workers a fixed hourly rate for hours beyond 40 in a week. The DOL’s Wage and Hour Division, however, concluded that the broker was a direct employee, as were the painters and drywall installers recruited by the broker. As direct employees, the workers would be subject to the Fair Labor Standards Act and owed time-and-a-half their normal hourly wage for time exceeding 40 hours in a week.

In support of its conclusion that the workers were employees, the DOL noted that the workers did not provide services to other businesses and received all of their supplies from Brownlow.

This case is an example of how using an outside contractor to supply workers does not automatically mean that a company does not have to pay those workers overtime. There are several factors that go into the determination of whether a worker is an “employee” or an “independent contractor” under the federal wage and hour laws. It is wise for a company to consult with competent counsel to make sure that its workers are properly classified and paid.

Note also that the DOL’s Wage and Hour division considers misclassification of employees as independent contractors to be a top enforcement priority, so it is likely that there will be other cases like this.

Kathleen Jennings, Principal is a partner in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She can be contacted at kjj@wimlaw.com.

©2016 Wimberly Lawson

Lawyers, Guns and At-Will Employment

By Kathleen Jennings (kjj@wimlaw.com)

An interesting federal court decision out of Mississippi illustrates the tension between individual rights and employer policies against guns in the workplace. In this case, the individual rights won. The U.S. Court of Appeals for the Fifth Circuit ruled that Mississippi’s gun law created a public policy exception to Mississippi’s employment at will statute. As a result, an aircraft production employee fired for keeping a gun in his locked car at work may sue for wrongful discharge under Mississippi law. (Swindol v. Aurora Flight Scis. Corp., 5th Cir., No. 14-60779, 8/8/16).

Aurora Flight Sciences Corp. fired Robert Swindol in 2013 for violating a company policy prohibiting guns on its property. Swindol argued that the termination infringed on a Mississippi statute that allows workers to store their firearms in a locked vehicle on company grounds. Although the lower court dismissed Swindol’s case, the Fifth Circuit Court of Appeals reversed, finding that the Mississippi firearms statute created a public policy exception to employment at will.

Prior to making its decision, the Fifth Circuit asked the Mississippi Supreme Court to answer a certified question about the effect of Mississippi Code Section 45-9-55 on the traditional doctrine that employees without contracts serve at will and may be fired for any reason. The state supreme court replied that the Mississippi statute can make an employer liable for wrongful discharge if it fires an employee for having a firearm in a locked car at work. The state court indicated that Section 45-9-55 is “express legislative action” that makes terminating an employer for having a firearm inside his locked vehicle on company property “legally impermissible.”

Could this type of decision occur in other jurisdictions, such as Georgia? Georgia has enacted statutes that address legal firearms possession, including the so-called “guns everywhere” law. (For more information, see “It’s Time to Prepare for ‘Guns Everywhere,'” by Kathleen Jennings, Daily Report, June 26, 2014). However, while Mississippi recognized certain public policy exceptions to at will employment back on 1993, Georgia courts have been more reluctant to recognize judicial exceptions to at-will employment. Nevertheless, the Mississippi decision may empower a Georgia employee who is terminated for lawfully possessing a firearm in violation of an employer’s policy prohibiting all firearms on its property to seek a similar public policy exception to at-will employment in Georgia.

Kathleen Jennings, Principal is a partner in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She can be contacted at kjj@wimlaw.com.

©2016 Wimberly Lawson

Pregnant Employees are a Protected Class, Not an Inconvenience

By Kathleen Jennings (kjj@wimlaw.com)

A federal jury in Washington, D.C. found that Chipotle Mexican Grill Inc. discriminated against a pregnant worker when it restricted her bathroom breaks, reacted negatively when she left work for a doctor’s appointment and ultimately fired her. (Garcia Hernandez v. Chipotle Mexican Grill, Inc., D.D.C., No. 1:14-cv-00297, jury verdict 8/4/16).

Doris Garcia Hernandez sued Chipotle under Title VII of the 1964 Civil Rights Act, as amended by the Pregnancy Discrimination Act, and the District of Columbia Human Rights Act. After a four-day trial in the U.S. District Court for the District of Columbia, the jury sided with Garcia, awarding $50,000 in compensatory damages and $500,000 in punitive damages. It is possible that the Judge may also award equitable damages, such as back pay, attorneys’ fees and litigation costs. Needless the say, this case has also resulted in a lot of negative publicity for Chipotle.

At trial, the jury had to decide who to believe—the plaintiff or the supervisor. The Plaintiff claimed that the supervisor began scrutinizing her more closely after she told him she was pregnant. She testified that he implemented a policy requiring workers to verbally announce to every employee in the store when they needed to step away from their work stations to use the bathroom or have a drink of water. Because she was pregnant, however, the Plaintiff had to do this more frequently than other employees, which the Plaintiff characterized as “humiliating.” In addition, the Plaintiff testified that her supervisor wouldn’t let her leave work early for a prenatal doctor’s appointment she had told him about several days earlier. She testified that she repeatedly asked her supervisor for permission to leave for the appointment, but he ignored her, and she left anyway for the appointment. The next day, the supervisor fired her in front of the other employees in the main area of the restaurant. The Plaintiff contended that she had been allowed to leave work early for doctor’s appointments on short notice before she informed her supervisor she was pregnant.

The supervisor denied adopting the policy or treating the Plaintiff harshly. The jury chose to believe the Plaintiff.

It would appear from the facts that the supervisor in this case may have felt “inconvenienced” by the pregnant employee’s need for more bathroom breaks or doctor’s appointments, and he treated her adversely as a result. Certainly the jury thought so. This is an example of a situation in which a supervisor cannot hide behind the argument that he was “treating all employees the same” and therefore, was not discriminating against any particular employee. When a policy or practice adversely impacts a protected group, such as pregnant women in this case, that adverse impact can also be considered discrimination.

Bottom line: it does not look good from a legal or public relations perspective to fire a pregnant employee for going to the doctor for a prenatal visit. This is the kind of supervisory decision that warranted review by a trained human resources professional.

Kathleen Jennings, Principal is a partner in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She can be contacted at kjj@wimlaw.com.

©2016 Wimberly Lawson

When Personal Opinions Become Actionable Harassment

By Kathleen Jennings (kjj@wimlaw.com)

It’s an election year, so most employees will be talking about politics at some point. In addition, recent world events have placed a focus on deadly attacks by terror groups. Sometimes, however, an employee’s expression of his or her “views” on the news and certain groups of people can cross over into actionable harassment. A recent example comes to us from the Fourth Circuit Court of Appeals, Guessous v. Fairview Property Investments, LLC, — F.3d —- (4th Cir. 2016), 129 Fair Empl.Prac.Cas. (BNA) 475. In that case, the Fourth Circuit Court of Appeals reversed the District Court and found, among other things, that a supervisor’s treatment of a female employee could be considered harassment based on race, allowing the case to proceed to a jury trial. Among the comments by the supervisor to the plaintiff, who was an Arab-American Muslim woman from Morocco, were the following:

  • “Yeah, sure. Like my buddy says … not all Muslims are terrorists, but most are.”
  • “Middle Easterners are a bunch of crooks, who will stop at nothing to screw you.”
  • Muslims and Christians do not worship “the same God.”
  • The supervisor consistently conflated the plaintiff’s identity as a Moroccan Muslim with other Middle Eastern identities, blurring the lines between race, ethnicity, national origin, and religion. For example, the plaintiff was called to act as a translator for a person who was a Farsi-speaking Persian Iranian. When the plaintiff told her supervisor that she did not speak Farsi, he replied, ” ‘So you don’t speak Iranian? Shouldn’t there be some secret [ ] language that you all understand?’ “
  • The plaintiff wished her supervisor a happy birthday, which happens to fall on September 11th. The supervisor responded to his sole Muslim Arab employee’s well wishes by saying that each year on his birthday he was “reminded of the terrorist attacks by the Muslims” and then walking out of his office.

Practice Tip:

Although employees may hear anti-Muslim or anti-Middle Eastern rhetoric voiced by politicians or media figures, that does not make those types of statements acceptable in the workplace. To the contrary, as a general rule, any comments that unfairly stereotype races, genders, or ethnicities or other protected groups should not be tolerated in the workplace, especially when they are made by supervisors. Such comments can be used as evidence of discriminatory animus against the company. Unfortunately, employees may hear or see these types of comments in the media or on social media and repeat what they have heard. Therefore, especially during this contentious election season, employers need to be especially vigilant about comments that may violate their policy against harassment in the workplace and take action when necessary.

Kathleen Jennings, Principal is a partner in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She can be contacted at kjj@wimlaw.com.

©2016 Wimberly Lawson

Earning a Salary Doesn’t Make You Exempt from Overtime.

By Christopher Adams (cda@wimlaw.com)

One of the greatest employment-law urban myths is that being paid a salary makes you exempt from overtime. That simply isn’t true. Under the Fair Labor Standards Act (FLSA), an employee may be exempt if he or she meets certain job duties, is paid on a salary basis, and is paid more than the required threshold salary. On December 1 2016, new Department of Labor regulations will dramatically increase the salary threshold for executive, administrative and professional employees – the EAP exemption – from $455/week ($23,660/year) to $913/week ($47,476/year). Thus, under federal law (some states have different requirements), no employee who earns less than the new threshold salary ($913/week) can even be considered for the EAP exemption.

How will your company deal with currently exempt salaried employees who earn less than $913/week without busting the budget? We have followed this issue closely because we believe it will have a major impact on our clients, and indeed may be one of the most far-reaching changes to the FLSA in several decades. Employers do have options. One, they can increase an employee’s salary to $913/week or more, preserving the exemption. Second, they can switch employees to an hourly rate and pay overtime at one-and-a-half times the employee’s hourly rate.

There is however a third option. (This is not available in some states, e.g., California.) An employer can pay its non-exempt employees who work overtime a salary less than the $913/week threshold and pay overtime at one-half rate (rather than one-and-one-half rate). In short, the salary is deemed to cover an employee’s base wages for all hours worked, including hours over 40 per week. The employer then owes the employee overtime wages equal to ½ his regular rate, rather than the usual 1 ½ times.

Thus, an employer can continue to pay these affected employees the same weekly amount; but, instead of the employee’s compensation being pure salary, he or she will get paid a smaller base salary plus the overtime differential.

We have developed an Excel spreadsheet that any employer can use to quickly calculate the correct amount of non-exempt salary-plus-overtime that is equivalent to the formerly exempt employee’s weekly salary, based on the number of hours customarily worked each week. Here are some examples:

  • A currently exempt employee is being paid $30,000/year ($576/week), and works 50 hours/week. If he is switched to salaried, non-exempt, his new base salary will be $524/week plus overtime pay of $52 per week, for a total of $576/week ($30,000/year).
  • A currently exempt employee is being paid $35,000/year ($673/week), and works 45 hours/week. If he is switched to salaried, non-exempt, his new base salary will be $638/week plus overtime pay of $35 per week, for a total of $673/week ($35,000/year).
  • A currently exempt employee is being paid $40,000/year ($769/week), and works 60 hours/week. If he is switched to salaried, non-exempt, his new base salary will be $659/week plus overtime pay of $110 per week, for a total of $769/week ($40,000/year).

If the employees in these examples continue to work approximately the same number of hours each week, the new salary plus overtime will keep his or her overall compensation constant.

This tool will not only help you calculate new salaries for your employees, but also help you explain that you’re making every effort to ensure that this mandatory conversion does not result in less money in their pocket each week.

Christopher Adams is a paralegal and a member of the Wage and Hour practice team at Wimberly, Lawson, Steckel, Schneider & Stine, P.C. He can be reached at (404) 365-0900 or cda@wimlaw.com.

©2016 Wimberly Lawson