Category Archives: Employment Counseling

July 29, 2013

The Battle Over Background Checks Continues — State AGs Accuse EEOC of “Gross Federal Overreach”

By Mark Wiletsky 

Is it discriminatory if an employer does not hire anyone with a particular criminal conviction, regardless of that person’s race, gender, religion, or other protected characteristic?  According to the EEOC’s April 2012 Enforcement Guidance, it might be.  But in a July 24, 2013 letter sent to EEOC Commissioner Jacqueline Berrien and the four EEOC Board Members, nine state Attorneys’ General (AGs) disagree.  The AGs chastise the EEOC for filing recent lawsuits against BMW Manufacturing Co., LLC and Dolgencorp (Dollar General), in which the EEOC alleges that these employers violated Title VII’s disparate impact prohibition by using a bright-line screening policy that rejected all individuals with past convictions in certain categories of crimes, such as murder, assault, reckless driving and possession of drug paraphernalia.   

The letter then criticizes the EEOC’s April 2012 Enforcement Guidance on Arrest and Conviction Records, stating that the EEOC’s policy guidance incorrectly applies the law and constitutes an unlawful expansion of Title VII.  The AGs argue that if Congress wishes to protect former criminals from employment discrimination, it can amend the law, but it is not the EEOC’s role to expand the protections of Title VII under the guise of preventing racial discrimination. 

The Republican state AGs from Colorado, Montana, Utah, Kansas, Nebraska, West Virginia, Alabama, South Carolina and Georgia joined in this missive to say “enough is enough” on the EEOC’s background check lawsuits.  Citing the burden on businesses to undertake more individualized assessments of an applicant’s criminal history, the AGs urge the EEOC to rescind its April 2012 Enforcement Guidance and dismiss the lawsuits against Dollar General and BMW.  Not likely, but it may get the attention of federal lawmakers who may try to rein in the EEOC’s position on this issue.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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June 21, 2013

Arbitration Agreement Waiving Class Claims Upheld – What it Means for Employers

By Jeffrey T. Johnson 

Supreme court bldgArbitration is a matter of contract between the parties and courts are not permitted to invalidate an agreed-upon provision that prohibits claims from being arbitrated on a class action basis, the U.S. Supreme Court ruled in its June 20, 2013 opinion in American Express Co. v. Italian Colors Restaurant.  Employers can benefit from this ruling by crafting arbitration agreements that limit an employee’s right to pursue employment claims on behalf of a class of employees.   

Cost to Pursue Individual Arbitration Not a Factor 

At issue in the American Express case was an arbitration agreement between American Express and merchants who accept its charge cards that required the parties to arbitrate all disputes.  The agreement further stated that “there shall be no right or authority for any Claims to be arbitrated on a class action basis.”  

When numerous merchants filed a class action lawsuit against American Express alleging violations of federal antitrust laws due to American Express’ alleged high card fees, American Express moved to dismiss the lawsuit and instead force each merchant to arbitrate its claim individually, as required by the arbitration agreement.  The District Court agreed with American Express and dismissed the class action lawsuit.  The merchants appealed the dismissal to the Second Circuit Court of Appeals, arguing that the cost to prove the antitrust claims by each individual merchant would far exceed the amount they could recover as an individual plaintiff.  The merchants submitted a declaration from an economist who estimated that the cost of expert analysis on the antitrust claims would be “at least several hundred thousand dollars, and might exceed $1 million.”  The maximum amount of damages that each individual plaintiff could expect to recover was $38,549 as treble damages.  The Second Circuit reversed the dismissal, ruling that because the cost for each merchant to arbitrate their claim individually was prohibitive, the class-action waiver in the arbitration agreement was unenforceable and arbitration could not proceed.  American Express sought review by the Supreme Court. 

In a 5-3 ruling, the Supreme Court held that the Federal Arbitration Act (FAA) does not allow courts to invalidate a contractual waiver of class actions on the ground that the plaintiffs’ cost to arbitrate a federal statutory claim individually exceeds the potential recovery.  Justice Antonin Scalia, writing for the majority, rejected the merchants’ argument that cost vs. recovery should factor into the enforceability of an arbitration agreement.  He wrote that “the antitrust laws do not guarantee an affordable procedural path to the vindication of every claim.”  The Court drew a distinction between contract provisions that prohibit an individual from asserting their statutory rights at all (e.g., a waiver of certain claims) and prohibiting class claims.  Relying on earlier precedent, the Court reiterated that it may invalidate arbitration agreements that operate as a prospective waiver of a party’s right to pursue statutory remedies, but will not invalidate an agreement because it is not worth the expense involved in a party proving a statutory remedy.  The Court also refused to create preliminary hurdles before a plaintiff could be held to contractually-agreed arbitration, such as requiring a court to evaluate the cost to prove claims as well as the damages that could be recovered if the plaintiff is successful.  Justice Scalia wrote that “such a judicially created superstructure” would “undoubtedly destroy the prospect of speedy resolution that arbitration in general and bilateral arbitration in particular was meant to secure.” 

Dissent:  Majority’s Response to Merchants Was “Too Darn Bad” 

Justice Elena Kagen, joined by Justices Ruth Bader Ginsburg and Steven Breyer (Justice Sotomayor did not take part in the decision), wrote a stinging dissent in which she characterized the case as small business owners who were forced to accept a form contract by a monopolizing credit card company that violated antitrust laws.  The dissent states that if the arbitration clause is enforceable, American Express has insulated itself from antitrust liability because it used its monopoly power to insist on a contract that “effectively deprives its victims of all legal recourse.”  Justice Kagen wrote: the “nutshell version of today’s opinion, admirably flaunted rather than camouflaged:  Too darn bad.”  The three dissenting justices believe that the FAA was never meant to produce the outcome arrived at by the majority, and that the majority decision blocks the vindication of meritorious federal claims and insulates wrongdoers from liability.  The dissent instead would rely on the “effective vindication” rule, namely that an arbitration clause will not be enforced if it prevents the effective vindication of federal statutory rights, however it achieves that result, to invalidate the bar on class arbitration in the American Express agreement. 

Employment Arbitration Agreements 

Recent Supreme Court decisions upholding arbitration agreements, such as the American Express opinion, may bolster efforts to use arbitration agreements in the employment context.  Although there are pros and cons to utilizing arbitration agreements with employees, a significant advantage is the ability to prohibit class actions by requiring employees to arbitrate their employment disputes on an individual basis.  In addition, arbitration can be less costly than litigating in court, and more confidential as most arbitration filings are not public records.  Perhaps most significantly, arbitration allows employment cases to be heard by arbitrators, not juries, thereby reducing the risk of runaway verdicts.  Employers should consult with employment counsel to determine if arbitration agreements are warranted with their workforce and if so, what provisions will best protect the company’s interests.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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June 19, 2013

Wyoming Employers – Time to Pay More Attention to those Unemployment Claims

320px-Flag_of_Wyoming_svgBy Brad Cave 

July 1 creates some new incentives for Wyoming employers to participate in the unemployment claims system.  Currently, UI benefits are paid to the employee beginning immediately when a deputy clerk of the Wyoming Department of Workforce Services determines that the employee is entitled to benefits.  If the employer appeals that determination, and a hearing officer reverses the deputy’s decision, the employer’s account is not charged for the benefits paid under the deputy’s erroneous decision.  The same is true if the employer obtains reversal of a decision granting benefits through an appeal to the Unemployment Insurance Commission or the district court. 

Effective July 1, this general rule has an exception that all employers should keep in mind.  Bowing to federal pressure, the Wyoming Legislature amended the Wyoming Employment Security Law (ironic name for the unemployment benefit statute, isn’t it) to require employers to respond to requests for information from the Department.  See, http://legisweb.state.wy.us/2013/Enroll/SF0073.pdf  Employers will no longer escape the monetary consequences of erroneous payments if the Department determines that, (1) an erroneous payment of benefits was made because the employer was at fault for failing to respond adequately or on time to a written request for information; and, (2) the employer has established a pattern of failing to respond adequately or on time to such requests.  The employer’s responses must be received within fifteen (15) days after the Department sends the request, whether by regular mail or email.   What constitutes a pattern of failing to respond remains to be seen – the Legislature said only that the phrase means a “repeated documented failure” to respond to written requests for information, “taking into consideration the number of instances of failure in relation to the total volume of requests by the Department” to the employer. 

Action items for Wyoming employers: 

1.  Maintain documentation of your responses to the Department on unemployment claims.  We don’t believe that certified mail is necessary for most employers, but we do suggest keeping copies of all the documentation you return in response to a request.  Also, the amendment requires the Department to acknowledge receipt of the requested information within fifteen (15) days if the employer requests such acknowledgement. 

2.  Some employers use a third-party agent or centralized offices in remote states to respond to unemployment claims.  Be sure to notify those who process your UI claims, as the amendment clearly holds the employer responsible for delays or inadequate information from an employer’s agent.  Likewise, if you have drug your feet getting back to your UI agent with the necessary information, now is the time to improve your response time so the agent does not blame you for a “pattern of failing to respond.” 

3.  As always, be very careful about what you (or your agent) say or submit in response to a request for information.  A determination for or against an employee regarding unemployment benefits is not “binding, conclusive or admissible” in any subsequent litigation between the employer and employee.  But the employer can be bound by what it says were the reasons for termination and the documents it submits to support the termination.  Any discrepancy in the employer’s reasons can weaken your objection to the UI claim and be used in other legal proceedings to challenge the legitimacy of your reasons for the termination.

Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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May 7, 2013

Small Colorado Employers Face Higher Damages for Discrimination Claims

By Mark Wiletsky and Steve Gutierrez

Small businesses beware: your employees now have more incentive to sue you.  As of January 1, 2015, employees can recover compensatory and punitive damages for employment discrimination claims against businesses that employ between one to fourteen people under Colorado’s Job Protection and Civil Rights Enforcement Act of 2013, signed into law by Governor John Hickenlooper on Monday, May 6, 2013.  But don’t despair.  By taking some proactive steps now, businesses can minimize their exposure to potential claims. 

Increased Exposure for Small Employers 

Colorado’s new anti-discrimination law changes the landscape for small employers by allowing compensatory and punitive damages against Colorado’s small businesses (with 1-14 employees), along with attorneys’ fees and costs to the employee if he or she prevails, back pay, front pay, interest, and other potential relief.  Thankfully, the new Colorado law contains some safeguards against outrageous damage awards that would likely put small employers out of business.  For businesses with 1-4 employees, compensatory and punitive damages are capped at $10,000.  For businesses with 5-15 employees, such damages are capped at $25,000.  Businesses with greater than 15 employees are subject to the existing damages caps found in the federal anti-discrimination laws. 

The availability of these damages to employees of businesses with fewer than 15 employees will likely result in more discrimination cases filed in Colorado against small businesses, significantly raising the potential exposure for small business owners.  That is especially true given that such claims may be filed in state court, which is often viewed by attorneys representing employees as a more favorable forum for such claims. 

Age Discrimination No Longer Cut Off at Age 70 

The Job Protection and Civil Rights Enforcement Act of 2013 also eliminates the age 70 cutoff for age discrimination claims brought under Colorado law.  This brings the state law into line with the federal Age Discrimination in Employment Act which does not have an upper age limit.  Consequently, employees age 40 and older are protected from employment discrimination under both state and federal law. 

Good Faith Efforts May Avoid Punitive Damages 

Under the new Colorado law, employers will not be subject to punitive damages if they can demonstrate good-faith efforts to prevent discriminatory and unfair employment practices in the workplace.  In addition, no punitive damages are available in a lawsuit involving a claim of failure to make a reasonable accommodation for a disability if the employer can demonstrate good-faith efforts to identify and make a reasonable accommodation that would provide the disabled employee with an equally effective opportunity and would not cause an undue hardship on the employer’s operation.  Small businesses should begin those good-faith efforts now so that policies and procedures to prevent and respond to discrimination are in place when the law goes into effect. 

Steps Small Businesses Should Take to Minimize Risk 

Unfortunately for small businesses, the mere threat of a lawsuit, however meritless, may stretch tight resources to the breaking point.  That is why it is so important to take proactive measures now, which will help minimize the risk of such lawsuits.  Among other things, small businesses should:  

1)  Adopt and distribute policies that prohibit discrimination, harassment, and retaliation in the workplace.  Require new and existing employees to acknowledge their receipt of these policies, preferably on an annual basis. 

2)  Train supervisors, managers and employees.  Everyone in the workplace should be trained on your anti-discrimination policies and procedures with specialized training provided to supervisors and managers who must recognize harassment and discrimination and know what to do when they observe it or receive a complaint.  In small workplaces, dealing with complaints of discrimination or retaliation can be difficult.  Still, if you address it promptly and appropriately, you will be in a better position to avoid or defend against a claim. 

3)  Document performance issues.  We often see meritless lawsuits filed because legitimate performance concerns were not shared with the employee or appropriately documented.  If an employee has performance issues, be sure to get it in writing.  Focus on the problem, give concrete examples, and warn the employee that a failure to achieve immediate and sustained improvement may result in termination. 

4) Arbitration agreements. Consider whether it would be appropriate to have employees sign an arbitration agreement.  Such agreements take discrimination claims out of the civil court system, and generally allow for a more streamlined resolution.  However, arbitration is not necessarily cheaper than a court proceeding; in fact, in some cases it might cost more.  Be sure to consider all the benefits and burdens of arbitration before relying on such agreements.  And if you prefer arbitration, make sure your agreement complies with all applicable legal requirements.   

Essentially, small employers need the same policies and procedures to deal with discrimination as larger employers do, even though many smaller employers simply do not have the same resources.  Take the next 18 months before the law becomes effective to educate yourself, your supervisors and your employees on discrimination issues and take the steps that will help minimize your risk to the damages that will be available soon to aggrieved employees. 

April 25, 2013

BUZZ KILL: Employee Legally Fired For Off-Duty Marijuana Use

By Emily Hobbs-Wright & Brad Williams

The Colorado Court of Appeals issued a precedent-setting decision today upholding an employee’s firing for off-duty marijuana use.  Citing federal law, the court held that using pot during non-working hours is not “lawful activity” under the state’s lawful off-duty activity statute.  The decision provides the first direct guidance on terminating workers for off-duty marijuana use since Amendment 64 legalized the drug’s use and possession last November.

The case involved a quadriplegic employee licensed to use pot under the state’s medical marijuana amendment.  The company terminated his employment after he tested positive for drugs in violation of company policy.  The terminated worker claimed that he used the drug within the limits of his license, had never smoked on his employer’s premises, and had never been under the drug’s influence at work. 

In the lawsuit, the terminated worker claimed that the company’s actions violated Colorado’s lawful off-duty activity statute, which prohibits termination for any “lawful activity” conducted off an employer’s premises during nonworking hours.  Before today, Colorado courts had never squarely addressed whether the statute prohibits termination for off-duty marijuana use, when it is permitted under Colorado law. 

Invoking a dictionary definition of the term “lawful,” the Court of Appeals held that “for an activity to be ‘lawful’ in Colorado, it must be permitted by, and not contrary to, both state and federal law.”  Because marijuana use remains illegal under federal law, termination for off-duty pot-smoking does not violate the statute.  The court also noted that its interpretation maintained the “balance between employer and employee rights” reflected elsewhere in Colorado law.

The decision is hugely important for Colorado employers.  Amendment 64, like the medical marijuana amendment before it, did not require employers to “permit or accommodate” pot use, and expressly permitted policies restricting such use.  But before today, courts had never previously decided whether state or federal law defines “lawful activity” under the statute.

The decision may not be the final word.  Further appeal to the Colorado Supreme Court is possible, and other legal theories based on disability and similar laws remain untested.  But for now, the decision provides the best guidance yet on terminating marijuana users, suggesting that courts will protect employers’ rights to enforce drug policies notwithstanding Colorado’s legalization of marijuana.  It further reinforces the importance of employers defining illegal drugs as those prohibited under both state and federal law in drug policies.

This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.

April 25, 2013

Tips for Complying with Utah’s Internet Employment Privacy Act

By Elizabeth Dunning

Effective May 14, 2013, Utah employers may not request employees or applicants to disclose information related to their personal Internet accounts.  The Internet Employment Privacy Act(IEPA), recently signed into law by Utah Governor Gary R. Herbert, prohibits employers from asking an employee or applicant to reveal a username or password that allows access to the individual’s personal Internet account.  In addition, employers may not penalize or discriminate against an employee or applicant for failing to disclose a username or password.  A similar restriction applies to higher educational institutions through passage of the Internet Postsecondary Institution Privacy Act. 

With enactment of the IEPA, Utah becomes the fifth state to pass legislation that limits an employer’s access to social media accounts, joining California, Illinois, Maryland and Michigan.  New Mexico passed a similar law shortly after Utah and New Jersey’s law passed the legislature and is awaiting the governor’s signature.  A bill introduced in February in the U.S. House of Representatives called the Social Networking Online Protection Act (H.R. 537) is stuck in committee. 

Public Online Accounts Are Fair Game under the IEPA 

The IEPA does not restrict or prohibit employers from viewing or using online information about employees and applicants that the employer can obtain without the employee’s username or password.  Any online information that is available to the public may be accessed and viewed by employers without violating the IEPA.  Consequently, individuals who set privacy settings on their online accounts to allow “public” access effectively opt themselves out of any protections offered by this new law. 

Utah Restriction Applies to Accounts Used Exclusively for Personal Communication 

In prohibiting employers from requiring disclosure of online usernames and passwords, the IEPA draws a distinction between personal Internet accounts and those used for business related communications.  The law only restricts employer access to personal online accounts that are used by an employee or applicant exclusively for personal communications unrelated to any business purpose of the employer.  It does not, however, restrict access to accounts created, maintained, used or accessed by an employee or applicant for business related communications or for a business purpose of the employer.  

In practice, the line between personal and business related accounts may be blurred as many employees use their personal online presence to network and communicate for business reasons.  Consider the sales person who uses his or her LinkedIn account to communicate with potential buyers within a particular industry, or the CPA who posts tax reminders on his or her Facebook page.  Are those accounts accessible under the IEPA since they are not used “exclusively” for personal communications?  A plain reading of the law suggests that may be the case, thereby watering down the potential protections offered by the IEPA to applicants and employees.   

Steps for Complying with the IEPA 

Utah employers should review their HR forms, policies and practices to ensure that they do not ask applicants and/or employees to provide a username or password to their personal Internet accounts.   Train supervisors and managers not to ask for this information as well.  In fact, take the opportunity to remind supervisors and managers not to “friend” subordinates on personal online platforms, such as Facebook.  In addition, reinforce that employees and applicants may not be penalized or treated adversely for failing to provide a username or password for personal online accounts.   

Remember, too, that even though the IEPA does not prohibit accessing an employee’s or applicant’s public social media accounts, viewing such information creates other risks.  Employers may view information regarding the individual’s religion, race, national origin, disability, age, or other protected group status that could give rise to a discrimination claim.  Furthermore, online information is unreliable and ever-changing, meaning that employers should not rely on what they see online when making employment decisions.  To stay out of trouble, consult with legal counsel before viewing or using social media in the employment context.

For more information about permissible actions and potential damages under the Utah Internet Employment Privacy Act, please see our Client Alert.

January 30, 2013

EEOC Fails to Prove Credit Checks have Discriminatory Impact

By Mark B. Wiletsky

Is checking an applicant’s credit history discriminatory?  According to the Equal Employment Opportunity Commission (EEOC), using credit checks to screen out applicants may be discriminatory if it has a disproportionately significant impact on a protected group.  Although a court recently dismissed an EEOC lawsuit against an organization concerning its use of credit checks, the case should serve as a reminder to review your own policies and procedures with respect to using background and credit checks in the hiring process, as this is likely not the last time the EEOC or the courts will address the issue. 

EEOC Sues Claiming Use of Credit Checks Has Disparate Impact on Black Applicants

In December 2010, the EEOC sued Kaplan Higher Learning Education Corporation (Kaplan), alleging that Kaplan’s practice of using credit history in making hiring decisions has a disparate impact on Black applicants in violation of Title VII.  In other words, the EEOC asserted that Kaplan’s use of credit histories—while not facially discriminatory—had a disproportionate impact in terms of screening out Black applicants.  Kaplan, however, defended its use of credit histories in the hiring process.  It claimed that it used credit reports to assess applicants for financial and operational positions after discovering system breaches that allowed business officers to misappropriate student funds.  Kaplan asserted that it reviewed an applicant’s credit history to determine whether the individual is under “financial stress or burdens” that might compromise his or her ethical obligations. 

In order to provide statistical analysis showing disparate impact on Black applicants, the EEOC relied on its expert, Dr. Kevin Murphy, to analyze the applicant pool and those rejected due to their credit report.  Because the race of each applicant was not known, the EEOC’s expert tried to use other means to make determinations about the applicant’s race, even when it was not known. 

Kaplan asked the Court to exclude Dr. Murphy’s testimony and report and ultimately, dismiss the EEOC’s case, arguing that Dr. Murphy’s method of determining race was scientifically unsound.  The Court agreed. In the absence of any reliable, scientifically sound evidence to link the use of credit reports to race, the Court granted summary judgment to Kaplan.

Use of Credit Reports Going Forward

In the last four or five years, the EEOC has made an issue out of employers’ use of credit reports and criminal history records in hiring decisions, resulting in the filing of a number of lawsuits.  The EEOC’s track record in these cases, however, is mixed.  In an earlier case alleging disparate impact related to the use of criminal history records, the EEOC finally agreed to dismiss the case after more than three years while the federal court ordered sanctions of over $750,000 against the EEOC for continuing to litigate when it knew of fatal flaws in proving disparate impact.  (See EEOC v. Peoplemark, Inc., No. 08-cv-907 (W.D. Mich. 2008)).  On the other hand, the EEOC was able to obtain a $3.1 million settlement and policy revisions from Pepsi when it challenged Pepsi’s use of background checks in 2011.

Despite the EEOC’s spotty results in proving disparate impact in these background check cases, employers need to be careful and deliberate in how they use credit reports for hiring purposes.  Credit reports should be used only where job-related, such as for applicants seeking positions involving financial responsibility, high level managerial decisions or as required by law.  Conduct credit checks only after making a conditional job offer so as not to weed out candidates prematurely on the basis of credit.  Finally, be aware that eight states currently have statutory restrictions on the use of credit history in employment decisions so if you are located or are hiring in California, Oregon, Washington, Illinois, Maryland, Connecticut, Hawaii or Vermont, you will need to comply with those restrictions.

May 10, 2012

Good Documentation — a recipe for success

By Mark Wiletsky

As a follow-up to a recent post, here is an article with tips for documenting employee performance issues.

Before terminating an employee, even in an at-will state such as Colorado, employers are well-advised to have good documentation in hand.  A solid “paper trail” documenting legitimate performance or behavioral issues is often your best weapon to prevent or quickly resolve opportunistic claims from poor performers and disgruntled employees.  Although documenting problems is not required by law, jurors expect to such evidence when faced with a claim that the employee was terminated for an unlawful reason.  There is no “one-size-fits-all” approach to documenting performance problems, but following a recipe will help to ensure that your documentation contains the key ingredients to ward off a claim. 

1.         Start with the facts.  When documenting performance or behavior problems, avoid ambiguous or subjective phrases and terms, such as saying the employee has a “bad attitude” or has behaved “inappropriately.”  Instead, be factual, specific, and give examples.  For example, rather than saying an employee has “repeatedly been late to work,” you could write: “John’s shift begins at 8:00 a.m.  However, on March 5, 21, and 28, 2012, John arrived at 8:10 a.m., 8:15 a.m. and 9:00 a.m., respectively.  John did not call his supervisor in advance to notify him that he would be late those days.  As a result of John’s tardiness, employees from the earlier shift had to stay late, causing the company to incur additional expenses, which it is trying to minimize.”  Also, replace labels (such as “bad attitude”) with a description of the actual conduct that is at issue, e.g., John has been inattentive during staff meetings, he failed to work with his teammates to complete deliverables on the X project, etc.  Lastly, avoid acronyms and highly technical jargon.  Make sure that a layperson could read the document and understand the problem.

2.         Add in the employee’s explanation.  After identifying the problem, recite the employee’s explanation for the problem, or confirm the employee admitted to the behavior.  For example: “When Michelle and I met with John on April 1 to discuss his tardiness, John admitted he had been late on the days noted above, but claimed that he had overslept or that road construction delayed him.”   Then state that those excuses are not legitimate and reiterate the expectation that the employee will adhere to the rule at issue.

3.         Throw in some history.  If the employee has had other problems recently, reference those issues.  Similarly, if you have had prior conversations with the employee about the conduct at issue, and that conduct is recurring, point out those past conversations: “This is not the first time John has had problems with tardiness.  We spoke about this issue on February 5, 2012, because he had arrived late to work two times in a two-week period, and I warned him that he needed to be sure to arrive on time and notify his supervisor if he was going to be late.”  But don’t go back too far into the past, and be sure that you are following any applicable collective bargaining agreement with respect to the time period during which past performance issues may be used against an employee.

4.         Lay out expectations.  Make sure the employee knows what you expect, and include a policy (or excerpt), if applicable.  A common sentence included in disciplinary memoranda is: “We expect immediate and sustained improvement.  If there are any further issues or problems, you will be subject to additional discipline, up to and including termination of employment.”

5.         Finish off with a signature.  Make sure the employee signs a document to confirm receipt.  Employees or their attorneys may claim that an unsigned document was created after the fact, or that the issue was never discussed with the employee.  If the employee refuses to sign the document, simply note the employee refused to sign, and consider sending a copy of the memo to the employee via e-mail with a note, such as: “John – here is a copy of the warning memo that we discussed a few minutes ago.”

Although there is no one “recipe” for successful documentation, following the steps outlined above should be a good start to ensure that you are appropriately documenting performance issues.

April 24, 2012

Good Documentation Dooms FMLA Claim

by Mark Wiletsky

A recent case issued by the Tenth Circuit (which covers Colorado) provides a good reminder about the importance of good documentation, and following your employment policies.  In Peterson v. Exide Technologies, the Tenth Circuit affirmed summary judgment in favor of Exide Technologies, dismissing Peterson's Family and Medical Leave Act (FMLA) and wrongful discharge claims as a matter of law.  Peterson was involved in a forklift accident, in which he was injured.  After the accident, he was placed on FMLA leave for 10 days.  After investigating the accident, the employer determined that Peterson had violated its safety policies.  Therefore, Exide terminated Peterson four days after the accident, while Peterson was on FMLA leave.

Peterson then sued, claiming his discharge violated his rights under the FMLA, and gave rise to a common law claim for wrongful discharge in violation of public policy.  The district court and the Tenth Circuit disagreed.  Peterson had a history of documented safety violations, and he had no evidence that the stated reason for his discharge–yet another safety violation–was a mere cover-up (or pretext) for an unlawful motive.  Importantly, the court rejected Peterson's argument that Exide had failed to follow its own progressive discipline policy.  The court noted that Exide's progressive discipline policy was discretionary rather than mandatory, and it did not prevent Exide from considering past disciplinary actions, even if they were dated.

Peterson also claimed the incident giving rise to his termination was minor, and that he was not at fault for the accident.  Again, however, the court rejected his arguments, reasoning that Exide could legitimately rely on the final accident given Peterson's record of unsafe work performance.  Thus, even though Peterson was terminated while on FMLA leave, his claims were dismissed.  There are several important lessons from this case, including:

1.     Document performance and behavior issues as they occur.

2.     Review your employment policies to ensure they do not create mandatory language with respect to progressive discipline, or any other language that might limit your right to terminate an employee.

3.     It is possible to discharge employees while on FMLA leave, but be cautious when doing so.  Such a decision has a heightened possibility of leading to litigation.  Even if, as in this case, you can successfully defend the case, consider whether there is another approach that might allow you to avoid litigation altogether.