California Public Agency Labor and Employment Blog - Useful Information for Navigating Legal Challenges

This guest post was authored by Timothy Owen

When Johnny comes marching home again,

Hurrah! Hurrah!

We'll give him a hearty welcome then

Hurrah! Hurrah!

This is part 1 of a 2-part series.  Part 1 discusses basic aspects of military leave law.  Part 2 focuses on the “escalator principle” and selecting the right position for a returning veteran.

Federal, state, and even local laws guarantee returning veterans job reinstatement and other employment rights and benefits.  In most instances, the law spells out the position to which a qualifying veteran should be reinstated, making the employer’s decision relatively easy.  There are job classifications, though, that do not lend themselves to an easy determination regarding reinstatement, typically classifications where advancement is discretionary and depends on a formal evaluation of job performance, such as law enforcement.

The public policy behind military leave law seeks to ensure that a veteran returning from military duty is not disadvantaged in the civilian workplace as a result of taking military leave.  This is accomplished by guaranteeing reemployment for the veteran.  The law covers persons who perform duty, voluntarily or involuntarily, in the "uniformed services," which include the Army, Navy, Marine Corps, Air Force, Coast Guard, and Public Health Service commissioned corps, as well as the reserve components of each of these services.  

The federal military leave statute, USERRA, covers nearly all employees, including part-time and probationary employees, and applies to virtually all U.S. employers, regardless of size.  An employer must reinstate service members returning from service in the uniformed services who meet five criteria:

1. The person was absent because of military service;
2. The person gave advance notice of taking military leave;
3. The person took no more than 5 years of military service leave, cumulatively, while employed by the employer;
4. The person was honorably released from military service; and
5. The person reported back to the civilian job in a timely manner.  

Seniority, Rights, and Benefits:  Generally, reemployed service members are entitled to the seniority, and all rights and benefits based on seniority, that they would have attained with reasonable certainty had they remained continuously employed. Service members must be treated as if they are on a leave of absence, and are entitled to rights and benefits not based on seniority that are available to employees on nonmilitary leaves of absence. 

Salary:  Under California’s Military & Veterans Code, public employees employed for a period of “not less than one year” are entitled to pay for the first 30 days of military leave.  A National Guard member on active duty is entitled to receive his or her salary for the first 30 days regardless of his or her length of service with the public employer.  Private employees are entitled to a temporary leave of absence not to exceed 17 days, without pay, for military training.

Pension Rights:  A returning veteran is treated as not having incurred a break in service with the employer maintaining a pension plan.  The employer is liable for funding plan contributions.

Health Coverage:  An employee on military leave for less than 31 days may not be required to pay more than the employee’s share, if any, for health insurance coverage.  For longer periods, the employer is not required to provide health insurance benefits, but must give the employee the option to continue coverage.

Sick Leave and Vacation Accrual: Subject to an employer’s own policies, public employees on active duty are not entitled to sick leave or vacation accrual.  Under certain conditions, employees on temporary military leave continue to accrue the same vacation, sick leave, and holiday privileges for up to a maximum period of 180 days.  There are special rules for National Guard members.

The next installment in this series will address reinstatement of a returning veteran.

On June 20, 2011, the United States Supreme Court issued its opinion in the Wal-Mart Stores, Inc. v. Dukes.  The decision makes it much more difficult for very large groups of employees to join to sue an employer for alleged discrimination -- at least in federal court.  

Betty Dukes, a greeter at a Wal-Mart in Pittsburg, California alleged that Wal-Mart violated Title VII of the Civil Rights Act of 1964 by engaging in gender discrimination in both pay and promotions on a national basis.  In the lawsuit, Dukes sought to certify a class action consisting of approximately 1.5 million female employees who worked for Wal-Mart after December 26, 1998.  The issue before the Supreme Court was whether the plaintiffs satisfied the requirements for certifying a class action under Federal Rule of Civil Procedure 23 so as to proceed with one national gender discrimination case against Wal-Mart.  The Court did not address the merits of the case, i.e., whether Wal-Mart engaged in gender discrimination.

Despite the fact that Wal-Mart’s official written policy prohibited discrimination of any kind, Dukes alleged that Wal-Mart’s (1) corporate culture of stereotyping women, and (2) its policy allowing mid-level managers to make pay and promotion decisions (rather than having them made at a higher level) resulted in discrimination against women for many years.  Dukes alleged that these policies constituted discrimination under both disparate impact and disparate treatment theories. 

The district court made several findings justifying its decision to certify the employees as a class.  It found significant evidence of company-wide practices and policies that resulted in gender discrimination, including gender stereotyping, excessive subjectivity in personnel decisions and the maintenance of a strong corporate culture. The court also found statistical evidence that discrimination caused gender disparities and anecdotal evidence of bias.  The Ninth Circuit Court of Appeals upheld the district court’s decision to certify the employees as a class.

In its appeal to the United States Supreme Court, Wal-Mart challenged the certification of the case as a class action on the grounds that the claims of the putative class members were not common (i.e., a requirement to certify a group of individuals as a class).  To support its argument, Wal-Mart argued that its official policy strictly prohibited discrimination and that the plaintiffs’ evidence of an alleged pattern of disparate pay and promotions was too insignificant to establish a company-wide practice of gender discrimination.  Instead, Wal-Mart argued that since thousands of different supervisors and managers were delegated with authority to make decisions about pay and promotion, and since the plaintiffs’ own expert witnesses could not say what percentage of those decisions were “infected” by the alleged corporate culture of stereotyping women, plaintiffs’ evidence was insufficient to support class certification under Federal Rule of Civil Procedure 23. 

Justice Scalia, writing for the majority, agreed with Wal-Mart and ruled that the plaintiffs failed to satisfy Rule 23(a)’s commonality requirement.  Both the majority and the minority decisions also held that the district court and the Ninth Circuit improperly certified the class under Rule 23(b)(2) because the plaintiffs’ claim for back pay was not “incidental” to their request for injunctive and declaratory relief.

With respect to the commonality requirement, the majority held that there must be a common answer to a common question of law or fact -- not simply a common question of law or fact in the first instance.  In the employment law context, this means that a class action plaintiff must show that there is a common reason for the employment decisions at issue.  For example, if one person were responsible for making the thousands of pay or promotion decisions that the Dukes plaintiffs sought to certify, then there would be a common link to the adverse employment decisions – an alleged discriminatory decision maker.  But, where those decisions are made by thousands of different supervisors or managers considering a host of different variables, the majority held that the plaintiffs’ statistical evidence of disparate impact was too insignificant to create an inference of discrimination on a national, company-wide basis. 

Another significant aspect of the majority’s opinion is that class actions seeking monetary relief (as opposed to injunctive or declaratory relief) in all likelihood must proceed under Rule 23(b)(3), which has more procedural safeguards (e.g., a court must find that common questions of law or fact predominate, that a class action is superior to individual actions, mandatory notice and the right of a plaintiff to opt-out, etc.) than class actions certified under Rule 23(b)(2).  Justice Scalia, writing for the majority, also believed it was unacceptable to allow discrimination lawsuits to proceed as large class actions when monetary awards to plaintiffs would be based on a broad formula using something akin to representative sampling.  The majority held that an employer is entitled to individualized determinations of each employee’s eligibility for back pay, and Wal-Mart would be deprived of that right if the Ninth Circuit’s “Trial by Formula” plan were to be sanctioned. 

The bottom line is that this decision will be helpful to employers who are sued in federal court class action lawsuits for alleged discriminatory employment practices so long as the employer’s personnel decision makers are de-centralized.  Whether this decision will impact class actions brought in state court, however, remains an open question. 

We get questions…

An employer called with this inquiry: “one of our employees has been on leave under The Family & Medical Leave Act (FMLA) for a serious health condition and the 12 weeks have expired.  The employee has not come back to work and the most recent medical note states that the employee will not be able to return for another two months.  Can we fire this employee?”

If all we had to worry about was FMLA then the answer may be yes.  However the answer is quite likely no for one or more reasons unrelated to FMLA.  First, if the serious health condition was at all work-related or work-aggravated then a termination may constitute discrimination for having had a worker’s compensation covered injury or illness.  Generally, however, terminating the employee automatically after expiration of FMLA leave might create a violation of the Americans with Disabilities Act (ADA). 

Issues of ADA and leaves of absence as reasonable accommodation were discussed at a meeting of the U.S. Equal Employment Opportunity Commission (EEOC) this June 8 in Washington D.C.  It is well known that under ADA, as well as under state laws like California’s Fair Employment and Housing Act (FEHA), an employer must provide a reasonable accommodation to a disabled employee if the accommodation will allow the employee to perform the essential functions of the job.  As the EEOC discussed earlier this month, that accommodation may frequently be additional leave of absence.  As the Chair of the EEOC stated,

“a period of leave - whether for medical treatment, recovery, or training to use adaptive equipment - is often the reasonable accommodation that permits a person with a disability to remain gainfully employed.”

Thus, the law may require an additional leave of absence beyond the 12 weeks permitted by FMLA if the employee’s condition constitutes a disability, a term which is defined in California so broadly that it covers almost any health condition that interferes with the performance of the job.  It has also been made clear that the leave of absence need only be “reasonable,” it need not be indefinite.  However, the burden would be on the employer to establish a business necessity why it could not provide the more lengthy leave of absence.

We advise our clients that it is unwise to have an inflexible leave policy that calls for automatic termination once the maximum amount of leave expires.  Every case must be treated on an individualized basis and the “interactive dialogue process” called for in the FEHA should be utilized to involve a discussion directly with the employee about these issues.  Further, the opinion of the employee’s physician must be taken into account. Employers should never “play doctor.”  Further, when deciding whether an employee is medically able to return to work, employers should never have a requirement that the employee must be able to return to work without restriction.  Both ADA and FEHA require reasonable accommodation to an employee’s restrictions if possible, unless this creates an undue hardship for the employer. This may require job restructuring, reassignment of duties or other measures as long as the employee still can perform the essential functions of the job. Establishing undue hardship is very difficult. Cost alone does not make a hardship “undue.”

Finally, and perhaps most importantly, the individuals at your agency or company assigned to engage in this analysis and make these decisions should be adequately trained in ADA concepts and procedures.  We have encountered a number of agencies who leave these decisions to worker’s compensation administrators who, while highly trained in that field, are lacking in ADA/FEHA knowledge. 

An industry has developed of attorneys keen to file lawsuits against employers alleging violation of ADA and FEHA alleging disability discrimination.  Your job is to be proactive to prevent situations from developing which could expose your agency or company to litigation and potential liability.

Does it ever feel like managing the workplace can be like keeping the peace between children fighting in the back seat of the family car?  This was the feeling in a recent out-of-state case where a Court held that an employer was not liable for the alleged hostile work environment created amongst bickering co-workers or for retaliation because the employer promptly investigated each and every complaint and responded appropriately.

Vance was a part-time catering assistant at a University.  She complained to administration that a co-worker had used a racial epithet to refer to her and/or African-American students and had boasted that her family had ties to the Ku Klux Klan. The University immediately investigated, corroborated the complaint, issued the co-worker a written warning, and had two supervisors counsel the co-worker.

From there, the story devolved into a series of complaints by Vance against her co-workers and vice versa that reminds one of children fighting. The complaints included:

• Co-worker blocked Vance’s exit from elevator
• Co-worker complained Vance said “you are an evil bitch”
• Co-workers were allegedly slamming pots and pans down in the kitchen
• Co-worker said the word “payback” to Vance
• Co-workers “glared” at Vance
• A supervisor “mean-mugged” Vance
• Vance was given diminished work duties and less overtime after her promotion
• Vance told co-worker “Just the beginning bitch-you better watch your house”
• Co-workers smiled at Vance and gave her “weird” looks
• Co-worker said to Vance “are you scared?”
• Co-worker splattered gravy on Vance

For each of these complaints, the University instigated an investigation.  In each investigation, the University found the alleged conduct had not occurred, or that it was a case of “he said – she said,” in which case the University counseled both employees. Even in instances where the alleged conduct could not be sustained, the University reminded Vance and her co-workers to treat each other with respect.

In the midst of all of this, Vance applied for and accepted a promotion to a full-time caterer position. Her duties remained somewhat the same, but also included other duties.  Vance was eligible for overtime, but because she took some FMLA leave, called into work sick on many occasions, and left work early, she often did not have enough regular hours to receive overtime.

Vance filed a lawsuit against the University for, among other things, hostile work environment based on race and retaliation, both in violation of Title VII of the Civil Rights Act. After summary judgment in favor of the University, Vance appealed and the Seventh Circuit Court of Appeals upheld the decision.

Other than the initial complaint about the co-worker’s use of a racial epithet, the Court struggled to find that any of the other complaints alleged conduct motivated by race.  Be that as it may, the Court found that there could not be any employer liability.  Where co-workers are the ones culpable for making a work environment hostile, liability only attaches under Title VII where the employer has been negligent either in discovering or remedying the harassment.

At every turn, the University investigated each complaint, involved the appropriate supervisory personnel, and took appropriate remedial action based on the facts and circumstances known to the University. 

“As we have said before, prompt investigation is the ‘hallmark of reasonable corrective action."

The Court concluded Vance’s claim that the University retaliated because of her complaints by promoting her, diminishing her work duties and denying her overtime, was similarly without merit.  The promotion was sought by Vance and was not an adverse employment action. Her duties changed to the extent of that promotion and were similar in nature to another employee in the same position.  Because of Vance’s frequent leaves, she worked fewer regular hours in order to even qualify for overtime. She failed to establish that she should have received the same overtime hours as her counterpart. 

It cannot be stressed enough that, when employers are put on notice of a potential complaint of hostile work environment, discrimination or retaliation, they must immediately investigate the complaint.  If the investigation reveals any wrongdoing, you must take appropriate remedial action.  Even if the investigation does not reveal wrongdoing, consider other reasonable steps, such as workplace harassment training for all employees in the affected department or division.  These few measures will insulate the employer from liability or arduous jury trials for conduct perpetrated amongst co-workers.

LCW offers a comprehensive guide for employers on conducting Disciplinary & Harassment Investigations, as well as training and materials on Preventing Workplace Discrimination, Harassment and Retaliation.