HAHN AGENCY, INC.HAHN AGENCY, INC.
Employment
Practices Liability.
Legal Basis for Employment Claims
Claims concerning employees
account for the majority of lawsuits facing a non-profit organization and its directors
and officers.
Employment claims just did not appear out of thin air. The current frenzied
litigation over the rights of employees has evolved due to basic common law and
statutory changes in the legal system. In order to control these types of
losses, you have to know where they come from. The common law and main statutory
basis for employment practices claims are as follows:toplist
The Employment-at-Will Doctrine top
Many claims are brought because organizations are not aware of the many Federal, state and local laws governing the employment relationship. Learning the legal bases for employment claims is the first step in planning loss prevention strategies.
Traditionally, in the absence of a contract for a specific duration, both employers and employees were free to terminate the employment relationship at any time. Employers did not need cause to terminate employees, and employees did not need cause to quit.
Employer can fire and employee can quit without explanation.
Over the years, legislatures and courts developed numerous exceptions to the
employment-at-will doctrine. Employees today have more claims against their
employers primarily because there are more avenues for pursuing remedies to
perceived unfair treatment. This is true not only in discharge situations, but
also with respect to hiring, promotion, discipline and other employment-related
decisions.
Even employees covered by union contracts, while not working
"at-will," can take advantage of federal, state and local employment
legislation and many state common law, (nonstatutory), claims unrelated to their
collectively bargained agreements. The following discussion focuses on the
various exceptions to the employment-at-will doctrine and other claims common in
employment litigation.
Contract-Based Exceptions to the Employment at will doctrine.
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Breach of Contract
If an employer expressly agrees, orally or in writing, to hire an employee
for a specific period of time, to discharge only for just cause, or to abide by
progressive disciplinary procedures, that agreement will usually be enforceable.
Employers may be liable for breach of contract based on informal writings,
employee handbooks, or even on oral statements made to employees or prospective
employees.
Promissory Estoppel
The doctrine of promissory estoppel is a vehicle used, in certain jurisdictions, to enforce promises in the absence of a contract. Promissory estoppel claims are often brought in the same lawsuit with breach of contract allegations, as an alternative theory of liability.
To recover on a promissory estoppel claim, an employee must prove that the employer made an unambiguous promise, that the employer reasonably expected the employee to rely on the promise, and that the employee in fact relied. The employee must also prove that the reliance was detrimental, and that an injustice can be avoided only by enforcement of the promise.
The classic promissory estoppel situation arises when an employee or
prospective employee quits another job, relocates, or declines another
employment opportunity in return for the employer's promise, usually a promise
of job security. The doctrine has been applied so broadly, however, that
employers may be bound by a wide variety of communications to employees,
including policy statements, employee handbooks, or statements made by company
representatives during job interviews.
Break a promise to an employee to Their detriment.
Covenant of Good Faith and Fair Dealing
Some states have adopted an "implied covenant" of good faith and fair dealing in the employment relationship. This covenant, first recognized in certain commercial transactions, has been used by some courts to impose an obligation on employers not to discharge unfairly. Depending upon the jurisdiction, claims for breach of the covenant of good faith and fair dealing may be brought in contract, or as claims for personal injury (tort claims), or both.
Tort Claims Arising from the Employment Relationship top
Tort claims, (for personal injury to the employee), are common in workplace litigation. They are often brought along with contract claims, since they may permit employees to seek compensatory damages for physical and emotional harm not available in contract actions, as well as punitive damages.
Public Policy
Most states now recognize a claim for discharge in violation of public policy. These claims can give rise to contract or tort damages, depending on the jurisdiction. They frequently arise when employees are terminated for exercising their statutory rights, performing statutory duties, or engaging in an activity that public policy dictates should be protected.
Getting Fired for "whistleblowing" on Organization.
Although 'public policy" cannot be precisely defined, examples of recognized public policy violations include cases where employees are fired for refusing to commit a crime for the employer, refusing to commit perjury to protect the employer, or for "whistleblowing" to law enforcement or regulatory authorities. Courts have also recognized public policy claims based upon termination for serving jury duty or pursuing workers' compensation claims.
Invasion of Privacy
There are four different categories of invasion of privacy. They are: (1) unreasonable intrusion upon the seclusion of another; (2) appropriation of another's name or likeness; (3) unreasonable publicity given to another's private life; and (4) publicity that unreasonably places another in a false light before the public.
In the employment context, invasion of privacy claims most often involve the "unreasonable intrusion" category. To prove this type of invasion of privacy, employees must show that the employer intentionally intruded upon their solitude, seclusion, or private affairs or concerns, and that the intrusion would be highly offensive to a reasonable person. Employer drug testing programs, searches of employees' belongings or vehicles, eavesdropping, monitoring of electronic communications, wiretapping, surveillance and similar activities are often the subject of invasion of privacy claims.
Defamation
Employees are suing their employers or former employers with increasing frequency for defamation, alleging that the employers made derogatory statements about them to coworkers, third parties, or to prospective employers in response to reference requests.
To prevail on a claim of defamation, the employee must establish: (1) that the employer intentionally made a false and defamatory statement of fact about him; (2) that the statement was made to a third party by the employer; (3) that the recipient understood the defamatory meaning; and (4) that either the statement caused him injury or was of a type for which the law requires no proof of injury. When the defamatory publication is made orally, it is considered to be slander. If the publication is in writing, the claim is one for libel.
An employer is generally not liable when an employee repeats a defamatory statement made by the employer only to the employee. Some courts, however, have held that the employer is responsible if there is reason to believe that the employee will, at some point, be compelled to repeat the defamatory statement. This doctrine of compelled self-publication has been applied when a job applicant is forced to reveal that he or she was discharged by a prior organization for theft, embezzlement or other wrongful conduct.
Intentional and Negligent Infliction of Emotional Distress
To establish a claim for intentional infliction of emotional distress, the employer must intentionally engage in "extreme and outrageous conduct." The most widely accepted definition of extreme and outrageous conduct is that it be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Given this definition, most courts have found that termination alone does not establish this tort.
In addition to proving outrageous conduct, employees seeking to recover for intentional infliction of emotional distress must suffer distress that is reasonable and serious.
Like intentional infliction of emotional distress claims, negligent
infliction claims require employees to sustain severe emotional injury. In
addition, some states require that the employees be placed in some physical
peril of which they were aware before this claim can be brought. Other states do
not recognize this claim at all in the employment context.
Selected Statutory Basis for Employment Litigation.
Employment Discrimination Laws
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Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 ("Title VII") prohibits discrimination by employers because of race, color, religion, sex (including pregnancy), or national origin. Title VII is probably the best-known anti-discrimination statute and is a frequent source of claims. It applies to employers with 5 or more employees.
Most claims under Title VII are established through the use of two major theories. The first theory, known as "disparate treatment," makes it unlawful for employers to treat certain individuals differently from others based on their protected status or traits.
The second theory, known as "disparate impact," applies when employment practices that appear neutral on their face operate more harshly on one protected group than another and cannot be justified by business necessity. Disparate impact cases often are used to challenge education requirements and other neutral hiring criteria. The disparate impact analysis has also been used to challenge excessively subjective promotion practices. Employees can raise claims under either or both theories.
As a result of amendments to Title VII made by the Civil Rights Act of 1991, victims of unlawful discrimination may recover not only the "make whole" relief formerly available, such as back pay, front pay, lost benefits, reinstatement and reasonable attorney's fees, but may, under certain circumstances, also recover both compensatory and punitive damages.
The total amount of certain types of compensatory and punitive damages available to victims of sex, disability, religious, and national origin discrimination is limited based upon the size of the organization being sued. A jury trial is also made available for disparate treatment claims. Before Title VII lawsuits are filed, however, employees complaining of unlawful discrimination must lodge a charge of discrimination with either the Equal Employment Opportunity Commission ("EEOC") or an equivalent state agency if one exists.
Sexual harassment is a form of sex discrimination prohibited by Title VII.
The Courts have recognized two basic types of sexual harassment: (1) harassment
that creates an offensive or hostile working environment, and (2) harassment in
which a supervisor demands sexual favors as a condition of employment or in
return for certain benefits. Employers must have a policy prohibiting sexual
harassment and a procedure so that complaints of harassment can be raised and
investigated. Title VII requires employers to take prompt and effective action
to end sexual harassment when it is found to have occurred.
The Americans With Disabilities Act ("ADA")
The Americans With Disabilities Act ("ADA") prohibits employers from discriminating against otherwise qualified individuals with disabilities because of their disabilities. Individuals who have a history of disability, who are regarded as being disabled, or who associate with disabled individuals, are also covered.
Employees protected from discrimination are those who, with or without reasonable accommodation, are able to perform the essential functions of a given job. The law covers employers with 15 or more employees.
The ADA requires employers to make "reasonable accommodations" to individuals with disabilities of which they are aware, unless an accommodation would pose an "undue hardship" to the employer's business. Undue hardship is generally defined as an action requiring significant difficulty or expense, taking into account the employer's size and resources.
The disparate treatment theory and a modified disparate impact theory are applicable to the ADA. The remedies available under the ADA are the same as those under Title VII. The requirement that individuals file an administrative charge with the EEOC or an equivalent state agency before filing a lawsuit also applies.
The Age Discrimination in Employment Act ("ADEA")
The Age Discrimination in Employment Act ("ADEA") prohibits employers with 20 or more employees from discriminating against persons age 40 or older because of their age. Most ADEA claims are brought under the disparate treatment theory. Few courts have accepted the disparate impact theory for age claims.
Remedies available under the ADEA consist primarily of back pay, lost
benefits, reasonable attorney's fees, reinstatement or, under limited
circumstances, front pay. A jury trial is available. If the employer's violation
was "willful," victims may also recover liquidated (double) damages. A
violation is willful if the employer knew that its conduct violated the ADEA, or
showed reckless disregard for whether its conduct was prohibited. Administrative
filing requirements also apply to ADEA claims.
The Civil Rights Act of 1866, Section 1981
The Civil Rights Act of 1866, Section 1981 provides that, "all persons
within the jurisdiction of the United States shall have the same right. . . to
make and enforce contracts . . as is enjoyed by white citizens." The right
to make and enforce contracts includes the right to enter into and enforce
employment contracts and to be free from discriminatory employment practices in
recruiting, hiring, compensation, assignment, promotion, layoff and discharge.
Section 1981, however, applies only to decisions based on race and color. There
is a right to unlimited compensatory and punitive damages and a jury trial.
There is no requirement that a charge of discrimination be filed with the EEOC
before a suit is brought.
Certain federal laws and executive orders apply to employers who have
contracts or subcontracts with or receive financial assistance from the Federal
government.
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Title VI of the Civil Rights Act of 1964
Title VI of the Civil Rights Act of 1964 prohibits discrimination on the
basis of race, color, or national origin in programs or activities receiving
Federal financial assistance.
Executive Order 11246
Executive Order 11246 prohibits discrimination by Federal contractors and
subcontractors because of race, color, religion, sex or national origin and
requires affirmative action to ensure equal opportunity in employment.
The Rehabilitation Act of 1973
The Rehabilitation Act of 1973 prohibits employers with Federal contracts and
programs receiving Federal financial assistance from discriminating against
disabled individuals and requires affirmative action to advance qualified
individuals with disabilities.
Title IX of the Education Amendments of 1972
Title IX of the Education Amendments of 1972 prohibits employment
discrimination on the basis of sex in educational programs or activities that
receive Federal assistance.
The Vietnam Era Readjustment Assistance Act of 1974
The Vietnam Era Readjustment Assistance Act of 1974 prohibits job discrimination and requires affirmative action to employ and advance Vietnam era veterans and qualified special disabled veterans.
Most states, and many local governments, have laws prohibiting discrimination in employment on many of the same grounds as the Federal statutes. The remedies available to alleged victims may differ from those provided under Federal law, and employees frequently bring claims premised on both state and Federal laws. Moreover, small employers with too few employees to be subject to Federal anti-discrimination laws may be covered by state statutes. Some state and local governments also protect individuals from discrimination on additional bases, such as marital status, sexual orientation, political beliefs or personal appearance.
State and Federal Whistleblower Protection Legislation top
State and Federal Whistleblower Protection Legislation generally protects
employees to whom these laws apply from discipline, termination or retaliation
for reporting the illegal conduct of their employers to appropriate enforcement
or regulatory authorities, or for testifying in enforcement proceedings.
Whistleblower protections typically are afforded only to employees who report
employer violations that pose significant health or safety hazards to other
individuals, property or the environment.
Other Statutory Protections
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The Older Workers' Benefit Protection Act ("OWBPA")
The Older Workers' Benefit Protection Act ("OWBPA") in part
restricts an employer's ability to settle actual or threatened age
discrimination claims or to secure releases under the ADEA. Most significantly,
if an employee has not filed a charge of discrimination or a lawsuit under the
ADEA, a waiver of ADEA rights or claims will not be effective unless the
employee is given at least 21 days to consider it and the ability to revoke the
agreement for seven days after execution. When exit incentive programs are
offered to a group or class of employees, this consideration period is extended
to 45 days, and other requirements apply. All waivers of ADEA claims must be in
writing, specifically refer to the ADEA and be supported by consideration.
Employees must also be advised in writing to consult with an attorney before
signing any release agreement.
The Family and Medical Leave Act ("FMLA") top
The Family and Medical Leave Act ("FMLA") requires covered
employers to provide up to 12 weeks of unpaid, job-protected leave to eligible
employees for certain medical and family reasons. Employees are eligible for
FMLA leave if they have worked for a covered employer for at least 12 months and
have worked for the employer at least 1250 hours in the 12 months immediately
preceding the leave. Finally, the employees must be located at a U.S. worksite
which, when combined with all of the employer's other worksites within 75 miles,
has 50 or more employees. Some state and local governments have their own family
and medical leave requirements.
Of course, these are just some of the current laws regarding employee rights and employer responsibilities. These laws are constantly being expanded and rewritten by the courts. Please consult a attorney for the impact of these laws on YOUR organization.
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