Tag Archives: discrimination

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.

June 7, 2012

Last-Chance Agreements — Employer beware!

The EEOC, in its recent press release (http://www.eeoc.gov/eeoc/newsroom/release/5-29-12.cfm) of May 29, 2012, announces a rare victory on summary judgment in what could be a bad trend for employers. In the underlying case of EEOC v. Cognis Corporation, a foreign multinational corporation, the federal judge ruled that the company retaliated against an employee for refusing to waive his rights to file a discrimination charge, both for past conduct and prospective conduct.

The employee, as a condition of continued employment, was asked to sign a last-chance agreement that prohibited him from filing a discrimination charge. According to the EEOC, Cognis conditioned the employment on the execution of the last chance agreement and when the employee refused to be bound by that agreement he was fired. As the Court noted in its opinion, it is not often that an employee is granted summary judgment on a Title VII retaliation claim.

The outcome here is problematic for two reasons. First, in most cases there is often a fact issue over the stated motivation for the adverse action taken by the employer because the motivation for the underlying decision is almost always in dispute; thus, there is a necessary question of fact that would defeat a summary judgment. Second, the Court’s willingness to discount the fact that had the employee not executed the last-chance agreement in the first instance he would have been terminated for a legitimate and non-discriminatory reason – poor performance – is worrisome. In rejecting Cognis’s argument on this point, the Court reasoned that even if it credited Cognis’s argument; it was the employee’s revocation of the last-chance agreement that constituted an adverse action, an act that might dissuade a reasonable worker from making or supporting a charge of discrimination. (See Opinion). This reasoning, of course, doesn’t adequately address the fact that the worker essentially was given consideration to remain employed under the last-change agreement.

What is clear from the Court holding in Cognis is the fact that the last-chance agreement is said to have threatened termination for undertaking future protected activity, which the Court says satisfies one element of the prima facie case of retaliation – a preemptive retaliatory act. Now, all that remains for the Court is a determination of damages. If the Cognis last-chance agreement had not included this prospective provision, I wonder how the case would have turned.

This holding is sure to motivate the EEOC to seek out similar cases of this kind. The EEOC concludes its release by indicating that “[f]iling EEOC charges is a fundamental right of American employees, and this agency always stands ready to protect that right.” EEOC’s Chicago District Director John Rowe further states, “This court’s opinion should cause employers to remember that seeking to dissuade employees from exercising that right is not only bad policy, it’s a violation of federal law which can give rise to very substantial liability.”

Despite the Court’s finding and the threats by the EEOC, this author maintains that narrowly crafted last-chance agreements are often useful to employers, both to ensure employees understand that future satisfactory performance is demanded and to give the employee fair opportunity to improve his/her conduct.

For more information contact Steven M. Gutierrez.

April 6, 2012

Defense of Discrimination Claims Will Continue to Rise

By Steven M. Gutierrez

via www.coloradoemploymentlawblog.com

Employers continue to face increases in the number of discrimination charges and lawsuits. The EEOC continues to make enforcement in this area a high agency priority. The costs to employers are significant, given the use of wide-ranging subpoenas and discovery requests by the EEOC. Steven Gutierrez discussed the important issue yesterday in a post that is available by visiting www.coloradoemploymentlawblog.com.

April 2, 2012

EEOC Issues Final Rule On Disparate Impact

By Mark Wiletsky

Last week, the Equal Employment Opportunity Commission (EEOC) issued its final rule governing disparate impact claims arising under the Age Discrimination in Employment Act of 1967 (ADEA). A disparate impact occurs when a policy or practice that is facially neutral has a disparate, or significantly greater, impact on older workers than younger ones. The EEOC's final age bias rule addresses the “reasonable factors other than age” defense, or RFOA, under the statute. According to the EEOC, the rule “makes the existing regulation consistent with the Supreme Court’s holding that the defense to an ADEA disparate impact claim is RFOA [reasonable factors other than age], and not business necessity[.]” For more information, see the post by my colleague, Scott Randolph.

July 21, 2011

Rehab and One Month of Sobriety Not Enough to be Considered Safe

By Jude Biggs

We all know all too well that illegal drug use and alcoholism cause terrific problems in the workplace, for the addict employee, co-employees and the business. We know that addiction is a medical problem that can sometimes be treated with success. Balancing the needs of the business and hope for the employee’s recovery can be tricky to say the least.

A recent case from the Tenth Circuit, which interprets the ADA for Colorado employers, illustrates the difficult balancing that occurs under the law. The ADA does not protect current illegal drug users, but it provides a safe harbor for those who have successfully completed a drug rehabilitation program (or otherwise rehabilitated successfully) and are “currently” or no longer engaging in the use of illegal drugs. But what does it mean to be “currently” free of illegal drugs? Read on to understand how to deal with employees who have used illegal drugs in the recent past.

Background

Peter Mauerhan worked as a sales representative for Wagner Corporation from 1994 until June 2005. In 2004, Mr. Mauerhan voluntarily entered an outpatient drug rehabilitation program, which met evenings and did not affect his work schedule. Wagner knew he was in the program.

On June 20, 2005, Wagner asked Mr. Mauerhan to take a drug test; he admitted he would test positive (for cocaine and THC/marijuana) but submitted to the test anyway. After testing positive, he was fired for violating Wagner’s drug policy, but was told he could return to Wagner if he could get clean. On July 6, 2005 he entered an inpatient program, which he completed on August 4, 2005. His rehabilitation counselor reported his prognosis at discharge as “guarded.”

The day after being discharged, Mr. Mauerhan asked to return to work at Wagner. He was told he could return, but not at the same level of compensation or with the same accounts he had served before. Mr. Mauerhan refused the changed terms. In later proceedings, Mr. Mauerhan asserted he remained drug free since completing the drug treatment program in July 2005.

In October 2005, he filed a charge of discrimination, asserting that he had been discriminated against on the basis of his status as a drug addict, and later filed a lawsuit asserting the same thing. Wagner asked the court to dismiss the case, arguing that Mr. Mauerhan was a current drug user within the meaning of the ADA at the time he had asked to be rehired. The Company also argued that even if Mr. Mauerhan had a protected disability at that time, the Company’s offer to reinstate him proved it had not discriminated against him. The district court dismissed the case, concluding that Mr. Mauerhan was not protected by the ADA as he was a “current” drug user at the time he reapplied for work.

How Long Must Someone Be Clean to be Considered a Former Drug User?

The Mauerhan case is an important one, as it is the first time the Tenth Circuit has provided guidance on how to determine the difference between a current or former drug user. Although the status of being an alcoholic or illegal drug user may merit ADA protection, the ADA and its implementing rules say that an employee or job applicant is not a “qualified individual with a disability” if he or she “is currently engaging in the illegal use of drugs” when the employer acts on the basis of such use. But the ADA also creates a safe harbor for those who are not currently engaging in the illegal use of drugs, by protecting employees who (1) have successfully completed a supervised drug rehabilitation program and are no longer engaging in the illegal use of drugs, or have otherwise been rehabilitated successfully and are no longer engaging in such use; (2) are participating in a supervised rehabilitation program and are no longer engaging in such use; or (3) are erroneously regarded as engaging in such use, but are not engaging in such use.

The Tenth Circuit admitted it was defining for the first time the scope of what “currently engaging” means. The district court had concluded Mr. Mauerhan failed to qualify for ADA protection when he reapplied for work, as he had abstained from illegal drugs for only one month; one month was, in the district court’s view, too short to be considered “not engaging in illegal drug use.”

The Tenth Circuit agreed with Mr. Mauerhan that one month of sobriety was not insufficient per se under the ADA, but agreed with Wagner that Mr. Mauerhan did not qualify for the safe harbor protections of the ADA. In so ruling, the Tenth Circuit acknowledged that no sister circuit courts used a bright-line rule for when an individual is no longer “currently” using drugs. Some courts require an employee to have refrained from drug use for a “significant” period of time. Others say the drug use must be sufficiently recent to justify the employer’s recent belief that the drug abuse remains an ongoing problem. Another circuit defines “currently” to mean a periodic or ongoing activity that has not permanently ended. The legislative history of the ADA also indicates a rule establishing a firm cutoff for protection is not appropriate.

As a result, the Tenth Circuit concluded that an employee is not protected under the ADA solely based on the number of days or weeks that have passed since the employee last illegally used drugs. Instead, it adopted the Fifth Circuit’s test that an individual is currently engaging in the illegal use of drugs if “the drug use was sufficiently recent to justify the employer’s reasonable belief that the drug abuse remained an ongoing problem.” Mere participation in a rehab program is not enough, although it helps bring the drug user closer to being protected. Rather, the individual must also be no longer engaging in drug use for a sufficient period of time that the drug use is no longer an ongoing problem. The court explained that, when an individual has not permanently ended his or her use of drugs, the drug use invariably is an ongoing problem. Certainly the longer employees refrain from drug use, the more likely they are to be protected under the ADA. Nonetheless, each case must be decided on its own basis, based on a variety of factors, such as the severity of the employee’s addiction, relapse rates for whatever drugs were used, the level of responsibility entrusted to the employee, the employer’s applicable job and performance requirements, the level of competence ordinarily required to adequately perform the job, and the employee’s past performance record. All of these factors assist the employer (and a court if a lawsuit develops) in determining whether it can reasonably conclude the employee’s substance abuse prohibits the employee from performing the essential job duties. As a result, the Tenth Circuit affirmed the district court’s dismissal of Mr. Maueghan’s claims. Mauerhan v. Wagner Corp., Nos. 09-4179 & 4185 (10th Cir. April 19, 2011).

Applying the Lessons of Maughan to Your Workplace

The Maueghan case gives employers some confidence that employees who have been recently released from a rehab program probably will not be considered former drug users entitled to the protections of the ADA. The more time that goes by, the more likely the employee will be thought of as a “former” user. However, don’t forget that other laws or approaches can come into play. For instance, although the Maueghan case did not involve a claim under the FMLA, remember the FMLA regards drug addiction as a serious medical condition for which an employer should allow medical leave and a right to return to work (under certain circumstances). In addition, remember that nothing in the ADA prevents an employer from disciplining or terminating an employee for drug-related misconduct. Given how complicated these situations can be, reach out to your attorney if in doubt, before making a move. It may save you a lot of headaches – and perhaps a hangover – in the long run.

For more information on this case or arbitration law in general, please contact Jude Biggs at jbiggs@hollandhart.com.

This article is posted with permission from Colorado Employment Law Letter, which is published by M. Lee Smith Publishers LLC. For more information, go to www.hrhero.com.