New FMLA Regulations? Not Quite, But A Start

In tomorrow's federal register the Department of Labor will be requesting input on a variety of topics on the FMLA, preliminary one supposes to providing a draft of proposed regulations. Included among the requests are a way to better define serious health condition:

• Section 825.114(c) states "[o]rdinarily, unless complications arise, the common cold, the flu, earaches, upset stomach, minor ulcers, headaches other than migraine, routine dental or orthodontia problems, periodontal disease, etc., are examples of conditions that do not meet the definition of a serious health condition and do not qualify for FMLA leave." Have these limitations in section 825.114(c) been rendered inoperative by the regulatory tests set forth in section 825.114(a)? • Is there a way to maintain the substantive standards of section 825.114(a) while still giving meaning to section 825.114(c) and congressional intent that minor illnesses like colds, earaches, etc., not be covered by the FMLA?

You can find a copy of the complete request for information here.

Unless my memory fails, this is a different path than the DOL took with its proposed changes to the white collar exemptions. There the department issued a proposed rule, was soon eneveloped in a huge political firestorm and changed (watered down some would say) the final rule substantially.

Perhaps seeking to avoid going down that path again, the Department has chosen to post a number of topics that it is seeking input on — without a suggested rule. The initial public comment period will end February 2nd. Although it is not uncommon for public comment periods to be extended, if the Bush administration wants to make changes on its watch, there is not going to be a lot of time, so I would plan on getting any comments in sooner rather than later.

One source for information is the National Coalition to Protect Family Leave. You can check their website for background information on the sort of changes that they would suggest.

Here's a list of the 12 substantive areas that the DOL is seeking input on:

• Eligible Employee
• Definition of "Serious Health Condition"
• Definition of a "Day"
• Substitution of Paid Leave
• Attendance Policies
• Different Types of FMLA Leave
• Light Duty
• Essential Functions
• Waiver of Rights
• Communication Between Employers and Their Employees
• FMLA Leave Determinations / Medical Certifications
• Employee Turnover and Retention

D.C.Cir. Ducks A Constitutional Bullet

It was not just the 6th Circuit which was happy to avoid a tough constitutional call, see the discussion of the first amendment status of a USN tattoo here, but the same was also true in today's decision in Veitch v. England (D.C. Cir. 11/28/06) [pdf]. The issue in Veitch arises out of a well documented fight within the military chaplain corps between evanagelical chaplains and those from more traditional faiths. See the Washington Post story from last year, Military Wrestles With Disharmony Among Chaplains.

The Court explained it this way:

Veitch would have us confront a rather troubling constitutional question: whether chaplains in the armed services can be required to endorse “pluralism” in their religious practices. The services are understandably concerned about unit morale. And those of us old enough to remember World War II movies will recall scenes of chaplains at the front line performing services for soldiers of different religions. On the other hand, Veitch’s argument that a chaplain cannot be obliged to preach counter to his or her religious beliefs consistent with the First Amendment is hardly a frivolous claim. Fortunately for us—and unfortunately for Veitch—we need not decide this difficult question. We agree with the district court that Veitch may not raise this issue because his resignation was voluntary and because the Navy did not act unreasonably in refusing to permit Veitch to withdraw his resignation.

Although ducking the constitutional question, the Court does spend the rest of its opinion, including a concurrence, dispatching the resigned chaplain's argument that he was constructively discharged because of religious harassment. This is certainly not the last word on this issue.

"Untucked Shirts" Not A Constitutional Right

At least according to the 6th Circuit. Roberts v. Ward (6th Cir. 11/27/06) [pdf]. The question got posed after the Kentucky parks department decided to clean up their image by implementing a new dress code which included:

hair length for men above the collar, no visible body piercings with exception of in the ear lobes for women only, no visible tattoos (long sleeves, pants, bandages, or wrist bands are approved ways to cover), and the proper wearing of the prescribed uniform in each department, which in most cases includes tucking in shirts and blouses.

Surprisingly it was the tucked-in rule that seemed to cause the most controversy.

When four workers pushed the issue to the point of losing their jobs, they sued claiming their constitutional rights had been violated.

The tucked-in plaintiffs did not fare well. The Court found that the policy:

• did not violate their first amendment right of freedom of speech since it was not about a subject of public interest;
• was not a violation of due process — they argued it had been arbitrarily implemented — since they could identify no property or liberty interest that would entitle them to due process protection;
• did not violate any equal protection right — they claimed the policy had a much more onerous impact on manual laborers who worked outside in the summer than it did on office workers. The Court noted such claims required a showing that the impacted group had "historically been the victim of discrimination or otherwise reflects invidious discrimination," and that plaintiffs had advanced no argument to support such claim.

A closer question according to the Court was that of one of the plaintiffs who in addition to not wanting to tuck his shirt in, also claimed a constitutional right to show his tattoo — USN —which he said showed his “support, loyalty and affection for the U.S. Navy.” Though closer, still not a winner.

First, with respect to the question of qualified immunity of the Park Commissioner, the Court held that it was not a sufficiently clear right to defeat the claim of qualified immunity. But the district court had also granted summary judgment for the state on substantive grounds, including no first amendment right to show the tattoo. On appeal, the 6th Circuit found the tattooed plaintiff's refusal "to comply with the dress code provided an independent basis for his dismissal, " sparing the Court the need to address the closer question of the First Amendment protection of his tattoo.

Dueling Dictionaries, Defamation and a Do-Over in the 5th Circuit

That sums up some, but not all of last week's decision by the 5th Circuit in Fiber Systems International, Inc. v. Roehrs (5th Cir. 11/22/06)[pdf]. Based on this decision, my guess is that there was not a harmonious gathering of the Roehrs family clan over Thanksgiving.

Instead, brothers Michael and Daniel who ended up on opposite sides of a corporate breakup and subsequent lawsuit were probably trying to sort out the various meanings of the court's 40 page decision. Basically, the short hand version seems to be that there was a dispute over ownership of a company (Fiber Systems)which was resolved by an agreement where one of the brothers and a number of other former owners left the employ of the company. But as with many employee partings, all was not over.

Instead, Fiber Systems accused the departing employees of violating the Computer Fraud and Abuse Act (which according to the 5th Circuit's decision they did) and accused them of being thieves which according to the 5th Circuit's decision was defamatory.

The defamation aspect of the case involved a "battle of dictionary definitions" as those accused of calling the others thieves relied on the definitions of that term in the Oxford Dictionary as a “kind of wild bee said to rob hives” and an “excrescence in the snuff of a candle” to show that the words were not per se defamatory. Unfortunately, those "arcane, nondefamatory definitions," were not what the words meant taken in the context that they were said, so the Court upheld the jury verdict that the departing individuals had been defamed.

It also upheld the jury's finding that the same employees had violated the CFAA. The underlying allegation was that they had:

“knowingly and intentionally accessed, deleted, downloaded, copied, took, and stole FSI’s confidential business and proprietary information and trade secrets, without authorization, from FSI’s computers,” misappropriated and stole FSI’s computer equipment, and used and disseminated the wrongfully obtained information through the new companies that they formed."

FSI sued for the cost of data recovery and for the use of their trade secrets. The jury awarded $36,000, finding a violation of § 1030(4) — "knowingly and with intent to defraud, access[ing] a protected computer without authorization, or exceed[ing] authorized access, and by means of such conduct further[ing] the intended fraud and obtain[ing] anything of value." However, the district court refused to enter judgment, finding that there was not a private cause of action under § 1030(4), only of § 1030(5). The 5th Circuit, joining every other circuit to consider the question, disagreed, not only finding a cause of action but that the jury instruction though perhaps flawed did not constitute fundamental error.

The do-over was a reversal of the lower court's dismissal of defamation claims against the corporate entitites, based on statements that the Court found were "almost identical to the defamatory statements that the district court ultimately submitted to the jury [on the individuals' defamation claims]." Those claims:

Exhibit 61, sent by FSI’s attorneys to the DSCC, stated that AOS “misappropriated and stole FSI’s trade secrets,” and that FSI’s trade secrets were “unlawfully distributed” .... Further, Exhibit 74, an e-mail from Michael Roehrs to the DSCC, accused AOS and OCS of “provid[ing] stolen proprietary information” to the DSCC, and stated that these acts were done to “launder [FSI’s] proprietary information and trade secrets.” Texas law criminalizes the knowing and unconsented “communication] or transmi[ssion of] a trade secret,” TEX. PEN. CODE ANN. § 31.05(b), and despite the district court’s belief that the e-mail was merely intended to update the DSCC as to the litigation at issue here, the statements alleging transmission of stolen trade secrets went beyond such a purpose.

were enough to justify a trial, although the 5th Circuit did note that the trial court had raised the possibility that the statements were privileged, an issue on which it expresses no opinion.

It is not all that unusual in a competitive environment for departing and then competing employees to result in hard feelings. It is also not unusual for litigation to follow. It is much less frequent to have that litigation played out in full, through a jury trial and the ensuing appellate process. That makes the Fiber Systems opinion somewhat rare, but also a good lesson on how actions taken and words spoken in the heat of battle can have real world and long term consequences.

No Backpay For Hostile Environment Alone

Today's decision in Spencer v. Wal-Mart Stores, Inc. (11/22/06)[pdf], makes one of those simple points that it is easy to overlook. Plaintiff made two ADA arguments — failure to accommodate and hostile environment. She did not claim constructive discharge. The jury found against her on the accommodation claim, but for her on hostile environment. It awarded $12,000 for emotional damages and $15,000 for backpay.

Wal-mart successfully argued that back pay is an equitable remedy, only for the court's determination and should not have been submitted to a jury. Since there was no claim of constructive discharge, there should have been no award of backpay. Both the district court and now the 3rd Circuit agreed, throwing out the $15,000 award.

And to make matters worse, although the trial court ultimately decided that plaintiff had been the prevailing party because of her win on the hostile environment issue, it also decided that her requested attorneys fees of just over $150,000 should be reduced by 75%. Given that the trial court had compared her success to what she had claimed to have suffered, over $500,000 in damages, and that she did not benefit in any way other than the $12,000 damage award since she had resigned, the appellate court did not find the trial court's reduction an abuse of discretion.

Disparate Impact, Part Deux - When It Works

After writing less than 12 hours ago about how disparate impact cases are both difficult and "not every day fare," I am of course shown up by a decision affirming such a finding of disparate impact from another circuit court.

In EEOC v. Dial Corp. (8th Cir. 11/17/06) [pdf] the Court affirmed not only a finding of pattern and practice intentional discrimination, but also a disparate impact finding based on a weight lifting test for employees whose duties involved carrying and stacking boxes of sausage all day long. The test was found to be discriminatory to women, who went from holding almost half the jobs pre-test, to less than 8% of female applicants being hired in the last year the test was in use. In terms of magnitude, it was almost 10 standard deviations, far surpassing the two to three which is the key for establishing a disparate impact.

The test had been put in place to cut a high injury rate and it seemed to have had that effect. Still, the Court affirmed the lower court's finding that Dial Corp. had failed in showing a business necessity for the test. As often happens this boiled down to a battle of the experts:

Dial's physiology expert testified that the WTS was highly representative of the actions required by the job, and Dial claims that his testimony was not rebutted by EEOC which had no physiology witness. The district court was persuaded by EEOC's expert in industrial organization and his testimony "that a crucial aspect of the WTS is more difficult than the sausage making jobs themselves" and that the average applicant had to perform four times as many lifts as current employees and had no rest breaks. There was also evidence that in a testing environment where hiring is contingent upon test performance, applicants tend to work as fast as possible during the test in order to outperform the competition.

The 8th Circuit also upheld the district court's finding that in addition to back pay, the employer was liable for the amount of premiums paid for healthcare insurance the applicants would have been entitled to if they had been hired. The employer had argued that it should only be liable for actual medical expenses.

The Court upheld back pay for the entire period from application to the time of trial, notwithstanding the employer's evidence that based on the high rate of turnover it was unlikley that the applicants would have been employed for the entire period.

And even the one small victory for the employer, denial of back pay to an employee who had a felony conviction, was sent back for further factual finding.

Disparate Impact - Not An Easy Path

That may be the lesson learned from yesterday's decision in yet another battle over police promotions in Chicago. Adams v. City of Chicago (7th Cir. 11/16/06) [pdf]. The specific fight was over a 1994 examination for promotion to sergeant that was used for promotions in February, 1997. Although all parties conceded that the test did have a disparate impact on minorities, plaintiffs were unsuccessful in finding the use discriminatory, at least according to the 2-1 decision.

The McDonnell Douglas equivalent test for a disparate impact case requires a finding of disparate impact which shifts the burden to the defendant to show that the practice was job related and consistent with business necessity. Just as Chicago conceded there was disparate impact, the officers challenging the practice conceded use of the test was job related and consistent with business necessity.

The success of the case depended on the officers' ability to meet their final burden, that "there was another available method of evaluation which was equally valid and less discriminatory that the employer refused to use.” Although finding that the lower court improperly rejected evidence of Chicago's practices after it stopped use of the test, the majority still felt even with that evidence, the plaintiffs' fell short -- failing to prove Chicago was presented with an equivalent method that it failed to implement.

Fully understanding the decision requires more study of the Chicago police promotion issue than I care to do, although the history of litigation involving at least 9 reported federal decisions over Chicago police department promotions (not counting Adams), certainly would provide some easily available materials. Nevertheless, for those involved in disparate impact case, which frankly are not your every day fare, this case warrants a close reading.