New Jersey Court Finds Emphatic Response to Discriminatory Remark Can Be Legally Protected

New Jersey’s Appellate Division recently upheld a jury verdict which found Avaya, Inc. liable for retaliation in violation of the New Jersey Law Against Discrimination. The case is LaFranco v. Avaya, Inc. It involves an employee, Mark LaFranco, who responded to his supervisor’s anti-Semitic statement by emphatically indicating that he is Jewish. In an unpublished opinion, the appellate court found the tone and context of Mr. LaFranco’s response indicated he was offended by the statement. In addition, Mr. LaFranco reasonably believed the comment was religious discrimination. Accordingly, his response was a legally protected objection to unlawful discrimination.

Mr. LaFranco worked as a salesperson for Avaya, a telecommunications company, for more than 12 years. He frequently exceeded his sales quotas and received large commissions. Prior to 2002, all of his performance reviews were positive.

In August 2001, Mr. LaFranco reported to his boss, Patrick Iraca, that he had been improperly denied $10,000 in commissions. Mr. LaFranco subsequently reminded Mr. Iraca of the issue, and suggested that Mr. Iraca should discuss it with his boss. In response, Mr. Iraca asked, in a disgusted voice, “What are you, a Jew?”

Mr. LaFranco, who is half Jewish, was shocked and insulted by the question. He turned and looked at Mr. Iraca before he responded, “Yeah, I am.” He then stared at Mr. Iraca for several seconds before Mr. Iraca turned and stormed out of the room. Mr. Iraca did not speak to Mr. LaFranco for the rest of the evening.

From that point on, Mr. Iraca’s attitude toward Mr. LaFranco was hostile and malicious. Among other things, he undermined Mr. LaFranco’s sales efforts, subjected him to unnecessary criticism and scrutiny, failed to give him credit for many of his sales, disproportionately increased his sales quota, decreased his sales territory, excluded him when he redistributed a former salesperson’s territory, and berated him in front of his peers. Mr. Iraca also included unwarranted criticism in Mr. LaFranco 2002 performance review, such as falsely accusing him of insubordination. He then placed Mr. LaFranco on a performance development plan, because it was a necessary step before he could fire him. Shortly thereafter, Avaya fired Mr. LaFranco.

The New Jersey Law Against Discrimination prohibits employers from retaliating against an employee because he opposes a practice he reasonably believes violates the Law Against Discrimination. For example, it is unlawful to retaliate against an employee who makes a good faith objection to discrimination or harassment due to age, race, gender, or religion.

In LaFanco, the jury found that Mr. LaFranco proved Avaya retaliated against him because he had opposed an act he reasonably believed was discriminatory. The Appellate Court upheld the jury’s verdict. It found Mr. LaFranco reasonably believed Mr. Iraca’s question, “What are you, a Jew?,” was an act of religious discrimination. It also concluded that under the circumstances, including Mr. LaFranco’s tone and demeanor, his response “Yeah, I am” clearly opposed Mr. Iraca’s discriminatory practice.

The Appellate Division affirmed Mr. LaFranco’s jury verdict of $158,310 in lost wages, $1,000 in emotional distress damages, more than $10,000 in prejudgment interest, and over y$365,000 in attorney’s fees. The jury also awarded Mr. LaFranco $45,000 for failing to pay him commissions in breach of his employment contract.

Subsidy To Health Benefits Extended

On December 22, 2009, President Obama signed into law the Fiscal Year 2010 Defense Appropriations Act. This new employment law extends the period during which certain employees who are laid off or otherwise lose their jobs through no fault of their own can receive a federal subsidy of their health care costs.

More specifically, this new law extends the period of the subsidy under the American Recovery and Reinvestment Act, commonly called the 2009 Economic Stimulus package. Specifically, for a limited period the United States government will pay 65% of the health insurance premiums for qualified employees, for up to nine months after an employee is involuntarily fired or laid off. Under the Stimulus package, that subsidy applies to qualified employees who lose their jobs between September 1, 2008 and December 31, 2009. The 2010 Defense Appropriations Act extends that period through February 28, 2010.

This benefit applies to former employees who are covered by the Consolidated Omnibus Budget Reconciliation Act (COBRA) who involuntarily lose their jobs between September 1, 2008 and December 31, 2009. COBRA applies to people who are eligible to receive health insurance benefits from a company with at least 20 employees. The government subsidy also applies to former employees who work in states that have “comparable continuation coverage” that apply to smaller companies (often called mini-COBRA laws). That includes employees who work for smaller companies in both New York and New Jersey.

The government stipend is reduced for people who make more than $125,000 per year, and married couples who file joint tax returns and earn more than $250,000 combined. The benefits phase out completely for individuals who make more than $145,000 and for couples filing joint tax returns who earn more than $290,000 combined.

Extended Medical Leave Can Be Reasonable Accommodation Under New York Law

New York’s Appellate Division recently recognized that a disabled employee working in New York may be entitled to take extended medical leave under the New York State and New York City Human Rights Law.

The case involved Deborah Phillips, a civil service employee for New York City’s Department of Homeless Services (DHS). After Ms. Phillips had worked for DHS for 18 years, she took a 3 month medical leave for a serious medical condition, stage III breast cancer. Ms. Phillips asked her employer to extend her medical leave for a full year. DHS denied her request because she had exceeded her entitlement to 12 weeks of leave under the Family and Medical Leave Act (FMLA), and was ineligible for additional unpaid medical leave under the Department’s policy. DHS told her that if she did not return to work by October 30, 2006, the date on which she originally agreed to return to work, she would be subject to disciplinary action, or fired.

Ms. Phillips then asked DHS if she could take any additional medical leave. The City denied her request, again telling her that if she did not to return to work by October 30, she would be fired and would lose her medical benefits. Ms. Phillips did not return to work, and DHS eventually fired her.

Ms. Phillips sued, claiming New York City denied her reasonable accommodations for her disability and fired her because of her disability, in violation of the New York State Human Rights Law and the New York City Human Rights Law. She sought to be reinstated to her job with DHS, damages for her lost salary and benefits, and punitive damages.

The trial court dismissed Ms. Phillips’ case, ruling that her cancer was not a “disability” under either the New York State or New York City Human Rights Law, but even if she was disabled she could not prove her claim because she admitted she could not perform the essential functions of her job, even with a reasonable accommodation. In particular, the court found Ms. Phillips had asked DHS to hold her job open “indefinitely,” which was not a reasonable accommodation under either the New York State or the NYC Human Rights Law.

But New York’s Appellate Division disagreed. On July 28, 2009, it reversed the trial court’s decision dismissing Ms. Phillips’ case, finding she had set forth valid claims of disability discrimination and failure to accommodate disability under New York State’s and New York City’s anti-discrimination laws.

Under the New York State Human Rights Law, a reasonable accommodation is an action that allows an employee to perform the essential functions of her job. Reasonable accommodations can include providing an accessible work site, acquiring or modifying equipment, providing support services for a person with impaired hearing or vision, restructuring a job, or providing a modified work schedule, as long as doing so would not impose an undue hardship on the business.

The appellate court found it was improper for DHS to deny Ms. Phillips’ request for an extended medical leave based on its policy, without engaging in an individualized “interactive process.” Specifically, DHS should have talked to Ms. Phillips to clarify her needs, and to consider its own business needs, in an effort to find an appropriate reasonable accommodation.

The Appellate Division ruled that, under both the State and City Human Rights Law, a company’s failure to engage in the interactive process, by itself, is a violation of law. This is different from the federal anti-disability discrimination law, the Americans with Disabilities Act (ADA), and many state laws, including the New Jersey Law Against Discrimination (LAD). Under the ADA and the LAD, in order to prove a claim based on their employer failing to engage in the interactive process, employees must identify a reasonable accommodation that would have permitted her to perform the essential functions of her job.

New York’s Appellate Division also disagreed with the lower court’s conclusion that Ms. Phillips had requested an “open-ended” medical leave, since she later asked for any additional medical leave. But it ruled that if Ms. Phillips had needed a one-year extension to her leave, DHS might have been required to grant her that much time off to recover from surgery for her breast cancer. It noted that, in many circumstances, a request for a one-year medical leave would not be reasonable. However, it refused to conclude that a request for one year off for a disability can never be a reasonable accommodation. Rather, the determination whether an accommodation is ”reasonable” must be made on an individual case-by-case basis to decide whether the accommodation will be effective, and whether it would cause an undue hardship to the employer.

The Court interpreted the right to accommodations for disabilities under the New York City law even more broadly. It indicated that the New York City Human Rights Law requires employers to provide employees accommodations, rather than reasonable accommodations. As a result, the Court concluded that under New York City law employers must provide accommodations to disabled employees even if the accommodation will not allow the employee to perform the essential functions of their jobs. Rather, employers  must provide any accommodation unless the employer can prove the accommodation it would cause it an undue hardship.

Accordingly, the Appellate Division sent Ms. Phillips’ case back to the trial court to give her an opportunity to prove her disability discrimination and failure to accommodate claims.

New York Requires Employers to Provide Written Notice of Overtime Rate

Starting on October 26, 2009, employers in New York State must give newly hired employees written notice of their regular hourly pay rate. For employees who are entitled to receive overtime pay, employers also must state their overtime  rate.  Employers also need to obtain written confirmation from new employees, confirming they received the required information.

These new requirements are an amendment to New York Labor Law Section 195(1).  Their purpose is to “allow workers to determine whether their paychecks properly reflect the hourly wage rates their employers agreed to at the time of hiring, including the overtime rate.”  They are a response to the fact that many employees are only told their annual or weekly salary when they are hired, which makes it difficult to determine their hourly and overtime pay rates.  The new law also should help minimize any confusion about whether employees are entitled to receive overtime pay, by requiring employers to address the issue up front.

More information regarding this new law is available here from the New York Department of Labor.  The required form employers must provide to newly hired employees is available here.

If you work in New York or New Jersey and believe your employer violated your right to receive overtime pay, or another one of your rights as an employee, you should consider contacting an experienced employment lawyer .

When Do Employers Violate the ADA By Discriminating Against Employees With Disabled Relatives?

In two previous articles, I discussed important rulings the Third Circuit Court of Appeals made in Erdman v. Nationwide Insurance Company regarding the Family & Medical Leave Act (FMLA). Specifically, that case rules that an employee’s time worked from home counts toward the FMLA’s 1,250 hour eligibility requirement if the employer knew or should have known the employee was working off-site, and that an employee who requests an FMLA leave is legally protected even if he never actually takes a leave. But Erdman also makes an important ruling regarding another employment law, the Americans with Disabilities Act (ADA).

The ADA is a federal law that prohibits employers from discriminating against employees on the basis of a disability. It includes a provision prohibiting employers from discriminating against individuals because they have a relationship or association with someone who has a disability. For example, it prohibits employers from discriminating against an employee who has a disabled child.

As Erdman notes, although the ADA requires employers to make reasonable accommodations to allow employees to perform the essential functions of their jobs, it does not require employers to accommodate employees who have a disabled relative. As a result, employers can refuse to provide an employee time off to care for a disabled relative without violating the ADA. Of course, doing so could violate the FMLA or a state law such as the New Jersey Family Leave Act.

However, the Third Circuit’s decision recognizes that an employer would violate the ADA if it makes an employment decision because an employee has a disabled relative, rather than because the employee needs to take time off from work. As a result, an employee whose employer denies him the right to take time off for a disabled relative can establish a claim under the ADA if he can prove that his employer would not have fired him if he had requested the same time off for another reason.

The Court further recognizes that it is unlawful for an employer to fire an employee based on the belief that the employee might miss work to care for disabled relative at some point in the future. Erdman explains that such a decision would be based on “unfounded stereotypes or assumptions about the need to care for a disabled person.” It is therefore a form of prohibited associational disability discrimination.

The decision notes other circumstances in which an employer would violate the ADA based on an unlawful assumption about an employee’s disabled relative. For example, an employer would violate the ADA if it fires or otherwise discriminates against an employee (1) because of its assumptions regarding the relative’s health care costs to the company; (2) because of its fear that the employee will contract or spread a relative’s disease; or (3) because the employee is somewhat distracted by his relative’s disability, but not so distracted that he cannot satisfactorily perform his job.

Employees Who Request FMLA Leave Are Legally Protected Before They Take Any Leave

Last week, I discussed the Third Circuit’s recent decision regarding when time worked from home counts toward the Family & Medical Leave Act (FMLA)’s 1,250 hour eligibility requirement. The same case, Erdman v. Nationwide Insurance Company, also addresses whether an employee who requests but does not receive an FMLA leave is protected by the FMLA.

The FMLA has two separate provisions, one that prohibits employers from interfering with an employee’s FMLA rights, and another that prohibits employers from retaliating against employees. The FMLA’s interference with rights provisions prohibit employers from (1) interfering with, restraining, or denying the exercise of or attempt to exercise, any right provided by the FMLA; and (2) discharging or in any other manner discriminating against any individual for opposing any practice made unlawful by the FMLA. In contrast, to establish a retaliation claim under the FMLA, an employee must prove that (1) he is protected under the FMLA; (2) he suffered an adverse employment action, such as being fired, demoted, or suspended, and (3) the adverse employment action was caused by the employee’s exercise of his FMLA rights.

The Third Circuit noted that “it would be patently absurd if an employer who wished to punish an employee for taking FMLA leave could avoid liability simply by firing the employee before the leave begins.” In other words, the Court has no doubt that employees are protected by the FMLA when they request FMLA leaves, even if they never actually take an FMLA leave. The court concluded that, depending on the circumstances, firing an employee for making a valid request for FMLA leave can constitute either an interference with the employee’s FLMA rights, unlawful retaliation, or both.

This interpretation of the FMLA is important because it protects employees who suffer adverse consequences because they requested FMLA leave, even if those consequences occur before their leave begins. It also appears to protect some employees who request an FMLA leave, mistakenly believing they are entitled to one, such as employees who fall just short of the 1,250 hour eligibility requirement, or who do not meet the FMLA’s definition of a serious health condition. Hopefully, future cases will clarify just how far the Court will extend this rule.

Time Worked From Home Counts Toward FMLA’s Minimum Hour Eligibility Requirement If Employer Knew or Had Reason to Know Employee Worked From Home

On September 23, 2009, in Erdman v. Nationwide Insurance Company, the United States Court of Appeals for the Third Circuit discussed when an employee’s time working from home counts toward the 1,250 minimum hours required for an employee to be covered by the Family & Medical Leave Act (FMLA). The Third Circuit is the federal appellate court that includes New Jersey. The FMLA is a federal employment law that permits qualified employees to take time off from work to care for their own serious medical conditions, the serious medical conditions of members of their immediate family, for pregnancy, childbirth, adoption, or foster care, or to care for a new child.

The employee in that case, Brenda Erdman, has a daughter with Downs Syndrome. In 1998, Ms. Erdman’s employer, Nationwide Insurance Company, permitted her to work part time so she could care for her daughter. Ms. Erdman worked part time for four years, when she switched to a four day work week.

Ms. Erdman worked nearly 1,300 hours for Nationwide Insurance during the year at issue, including more than 100 hours that she worked from home. She had previously worked from home for Nationwide for many years. Nationwide consistently either paid her for working those hours, or allowed her to use the time as “comp” time.

In 2002, Ms. Erdman’s supervisor instructed her to “put in the hours that . . . you’re supposed to put in and nothing more than that.” Although Ms. Erdman asked if she was still permitted to work extra hours to accrue comp time, her supervisor did not respond.

The lower court concluded that Nationwide did not have sufficient notice that Ms. Erdman continued to work from home after her supervisor told her she could only put in the hours she was supposed to work. As a result, it dismissed her case. However, the Third Circuit disagreed.

The Third Circuit recognized that hours worked off-site can count toward the FMLA’s minimum hour requirement only if the employer “knows or has reason to believe” the employee is working those hours. As a result, the relevant question is whether a jury reasonably can conclude that Nationwide knew or should have know that Ms. Erdman continued to work from home after her supervisor’s instruction.

The Third Circuit ruled that a jury can conclude that Nationwide had sufficient notice that Ms. Erdman was continuing to work from home. Specifically, a jury can believe her supervisor’s statement merely meant that she could no longer be paid for working extra hours at home, without prohibiting her from continuing to work from home to accrue comp time. In other words, her supervisor’s comment could mean the company wanted to eliminate overtime pay, or wanted to ensure uniform salaries, without prohibiting Ms. Erdman from working at home to make up for time she missed. Accordingly, the Court reinstated Ms. Erdman’s case and sent it back to the District Court so it can proceed to a trial.

NYC Human Rights Law Broader Than State and Federal Anti-Discrimination Laws

New York City’s Broad Definition of Harassment

Earlier this year, the New York Supreme Court’s Appellate Division interpreted the New York City Human Rights Law (NYC HRL) much more broadly than courts have interpreted New York State and federal employment laws prohibiting discrimination, harassment and retaliation. Under state and federal anti-discrimination laws, an employee must prove that harassment was “severe or pervasive.” That means harassment does not violate New York State or federal law unless it is sufficiently harmful or frequent that it significantly impacts the terms and conditions of employment. However, the Appellate Division ruled that harassment does not need to be severe or pervasive to violate the NYC HRL.

New York City’s Human Rights Law applies not only to employees who work in New York City, but also applies if the discrimination, harassment, or retaliation originated in New York City.

According to that case, Williams v. The New York City Housing Authority, the primary issue in harassment cases under the NYC HRL is whether the employee can prove that the employer treated him or her worse than other employees because he or she is a member of a legally protected category. The legally protected categories for employees under the New York City law are race, color, national origin, creed, age, disability, gender, gender identity, sexual orientation, marital status, partnership status, alienage, citizenship status, arrest or conviction record, and status as a victim of domestic violence, stalking or sex offense.

In applying this broad interpretation of New York City’s anti-discrimination law, the appellate court relied on the New York City Restoration Act of 2005, which amended the NYC HRL to require that it “shall be construed liberally for the accomplishment of the uniquely broad and remedial purposes thereof, regardless of whether federal or New York State civil and human rights laws . . . have been so construed.” The Court also noted that the New York City Council has directed courts that “discrimination should not play a role in decisions made by employers.”

New York City’s Broad Definition of Retaliation

The appellate court also interpreted the anti-retaliation provision of the New York City Human Rights Law very broadly. It did so because the Law was amended in 1991 to prohibit retaliation “in any manner.” As a result, the Court ruled that retaliation does not have an adverse impact on the terms and conditions of employment to be prohibited by the NYC HRL. This is in contrast to New York State and federal law, both of which require retaliation to materially impact of the terms and conditions of employment for it to be actionable. In other words, as the appellate court put it, retaliation is prohibited by the NYC HRL “regardless of the degree or quality of harm to the particular complainant” because “retaliation harms the public interest by deterring others from filing a charge” of discrimination.

However, the Court did not interpret retaliation without limitations. Rather, it ruled that retaliatory or discriminatory acts “must be reasonably likely to deter a person from engaging in protected activity” to be protected by the New York City NYC HRL.

Conclusion

Williams recognizes that the NYC Human Rights Law is an extraordinarily broad employment law. However, it is not without limits. For example, it states that it does not intend to interpret the Law as a “general civility code.” Accordingly, it recognized that employers can avoid liability for discrimination, harassment, or retaliation if they can prove the alleged conduct toward was “nothing more than what a reasonable victim of discrimination would consider “petty slights and trivial inconveniences.’”

New York Human Rights Law Amended to Prohibit Discrimination Against Victims of Domestic Violence

Earlier this year, New York State Gov. David Paterson signed a law that amends the New York Human Rights Law to prohibit employers from discriminating on the basis of an individual’s status as a victim of domestic violence. As a result, it is now unlawful for employers in New York State to fire, refuse to hire, harass, or otherwise discriminate against employees with respect to the terms, conditions, or privileges of employment, because they have been the victim of an act of domestic violence, including stalking.

The sponsor of the statute in the New York State Assembly, Westchester County Assemblywoman Amy Paulin, noted that “financial security is one of the most import factors in whether a victim of domestic violence will be able to separate from an abusive partner.” Paulson also indicated that this new law “will help victims [of domestic violence] maintain their jobs without fear of unfair termination.”

In addition to now prohibiting employers from discriminating on the basis of status as a victim of domestic violence, the New York Human Rights Law also prohibits discrimination based on an individual’s age, race, creed, color, national origin, sexual orientation, military status, sex, disability, predisposing genetic characteristics, or marital status.

EEOC Issues New Guidance to Employees Regarding Waivers of Discrimination Claims in Severance Agreements

On July 15, 2009, the United States Equal Employment Opportunity Commission (EEOC) issued guidance to employees who are offered severance agreements that include releases of employment law claims after they have been laid off or otherwise fired. More specifically, the EEOC’s guidance answers questions employees might have regarding severance agreements that require them to waive their rights under employment laws such as Title VII of the Civil Rights Act (Title VII), which prohibits gender discrimination, race discrimination, national origin discrimination, and religious discrimination; the Americans with Disabilities Act (ADA), which prohibits disability discrimination; and the Age Discrimination in Employment Act (ADEA),which prohibits age discrimination. While it is focused on federal claims, the guidance is also relevant to claims under state laws, such as the New Jersey Law Against Discrimination (LAD), the New Jersey Conscientious Employee Protection Act (CEPA), the New Jersey Civil Rights Act (NJCRA), and the New York Human Rights Law (NYHRL).

A significant portion of the EEOC’s guidance discusses what is required for a waiver in a severance agreement to be valid. Specifically, waivers (1) must be knowing and voluntary, (2) must offer the employee some consideration, meaning a benefit the employee would not otherwise receive, and (3) must comply with applicable state and federal laws.

The EEOC notes that, to determine whether an employee knowingly and voluntarily waived the right to sue for employment law claims like discrimination, retaliation, or harassment, courts generally consider factors such as:

1. Whether the severance agreement is clear and specific enough that the employee understands it, considering his or her level of education and experience;

2. Whether the severance agreement was the result of fraud, duress, undue influence, or other improper conduct by the employer;

3. Whether the employee had sufficient time to read and consider the severance offer;

4. Whether the employee consulted with an attorney, or the employer encouraged the employee to consult with an attorney, before accepting the severance offer; and

5. Whether the employee had input into negotiating the terms of the severance agreement.

The EEOC guidance also discusses the special minimum requirements for a release to waive age discrimination claims under the ADEA. Those requirements come from a 1990 amendment to the ADEA, called the Older Workers Benefit Protection Act (OWBPA). The OWBPA contains seven requirements for a valid waiver of federal age discrimination claims:

1. The waiver must be written clearly, so the employee can understand it;

2. The waiver must specifically refer to claims under the ADEA;

3. The waiver must advise the employee to consult a lawyer before accepting it;

4. The waiver must give the employee at least 21 days to consider the severance offer;

5. The waiver must provide the employee at least seven days to revoke the agreement after he or she signs it;

6. The employee must not be required to waive the right to pursue any violations of his or her future rights under the ADEA, meaning that the employee cannot waive any violations of the ADEA that occure after the effective date of the waiver; and

7. The employee must receive additional consideration, typically severance pay or benefits, that he or she would not be entitled to receive otherwise.

A waiver under the ADEA is also unenforceable if the employee signs it as the result of the employer’s fraud, undue influence, or other improper conduct, or if the employee signed the release because it contains a material mistake, omission, or misstatement.

The EEOC guidance discusses additional requirements of the OWBPA that apply to mass layoffs, reductions in force, early retirement incentive plans, and other employer exit incentive programs and termination programs. For example, employers must give employees at least 45 days, rather than 21 days, to consider a waiver of the right to sue for age discrimination under the ADEA if they are terminated as part of a mass layoff or reduction in force. Employers also must provide employees who are impacted by a mass layoff or reduction in force with a list of the job titles and the ages of all individuals in their “decisional unit” who were eligible for, selected for, and not selected for, inclusion in the mass layoff or reduction in force. Depending on the circumstances, the relevant decisional unit can be the entire company, a division, a department, the employees reporting to a particular manager, or the employees in a particular job classification.

The EEOC guidelines contain a checklist of things employees should do if they are offered a severance agreement, including that they should:

1. Make sure they understand the severance agreement;

2. Check for deadlines in the agreement, and act promptly;

3. Consider having an attorney review the severance offer; and

4. Make sure they understand what they are giving up in exchange for the severance benefits.

Although not specifically discussed by the EEOC, it is often possible for an employee who has been laid off to negotiate additional severance benefits, or to otherwise improve the terms of their severance offer. You should consider meeting with an experienced employment lawyer in your area if you have been laid off or otherwise fired and are hoping to enhance your severance package, or if you need help understanding the severance agreement and the important rights you may be giving up if you sign it.