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A recent court ruling highlights the danger of employers claiming an employee was “laid off” when, in fact, the employee was terminated for another reason.

Historically, many employers have made the mistake of claiming that they were merely “laying off” a troublesome employee. However, with today’s prevalence of lawsuits for wrongful termination, that tactic can backfire.

In a recent case before the 8^th Circuit Court of Appeals, a rental car company branch manager, Terri Wallace, was laid off 15 days after she complained that her supervisor was sexually harassing her.

Wallace dropped the sexual harassment suit before it reached the jury.  

However, under Title VII of the Civil Rights Act of 1964, it is illegal to retaliate against an employee who files a sexual harassment complaint in good faith. In this case, “good faith” means without the intention of fraud.

The employer, DTG Operations, Inc., initially claimed that Wallace was part of a company-wide lay off due to economic reasons. (more…)

Employers implementing layoffs and staff reductions need to be especially cautious that they do not commit age discrimination.

According to a recent report, state and federal age discrimination claims were up 29% in 2008. This is almost double the increase in overall discrimination complaints, up 15%. And that number is not just complaints filed by workers – it is actual lawsuits filed by the EEOC or state agencies.

The federal ADEA or Age Discrimination in Employment Act, prohibits employers from discriminating against workers between the ages of 40 and 70 in any employment decision, including hiring, firing, promotions, salary, benefits, training, etc.

According to the EEOC, age should not be a factor in determining which employees are laid off. It is fairly common for an employer to thin, “Joe is eligible for retirement in a few years anyway, we’ll lay him off.” However, it is illegal discrimination based on age. Some employers take such actions because they think older employees will be impacted less by a layoff. Others do it to save potential pension and medical expenses. Either way, it is illegal.

According to a recent article in the AARP magazine, age discrimination claims may be even higher this year than in 2008, due to the many layoffs.

The AARP, of course, is the international association of people over the age of 50.

 “The wave is still building,” says Gerald L. Maatman, Jr. of Seyfarth Shaw,  a Chicago law firm that analyzes both state and federal discrimination suits against employers. It is expected to peak in the 3^rd quarter of 2009.

Employers should always base decisions on which employees to lay off on objective criteria that do not include age. Acceptable criteria include job performance, seniority, diverse skills or a combination of those factors. Employers should justify that decision in writing, and keep careful written records of the basis for the decision.

It is also illegal for an employer to discriminate against one older worker in favor of another older worker. A recent trend has been for employers to lay off workers in their 50s, in favor of workers in their 40s, based partly on age. Although both workers are covered by the ADEA, this is still age discrimination.

In a rare ruling in support of employers, the 7th Circuit Court of Appeals recently found that employers can discipline and even terminate an employee based on problems discovered while the employee is on unpaid leave under FMLA, the federal Family and Medical Leave Act.  

The U.S. Department of Labor has long held that an employee on FMLA leave must be returned to his or her job, when the leave ends. However, the department has also repeatedly ruled that an employer can take any action against an employee, that the employer would have taken anyway, had the employee not be on FMLA leave. For example, the employer can terminate an employee for gross misconduct even if the employee happens to be on FMLA leave at the time the investigation is concluded.

In short, the employer cannot take any negative job action against an employee solely because the employee uses FMLA leave. However, simply taking FMLA leave does not make the employee immune from lay offs, or from being fired for just cause. This is true, even if the employer discovers the misconduct because the employee is on FMLA.

That decision was upheld in the case of Cracco v. Vitran Express, Inc. In this case, Kevin Cracco was a service center manager for Vitran Express, (more…)

Employers may need to implement new payroll procedures due to a recent 8^th U.S. Circuit Court of Appeals ruling on overtime.

In a Nebraska lawsuit against Famous Dave’s restaurant chain, the appeal court upheld the lower court ruling that the employer should have known that employees were working a more than one Famous Dave’s location.

The restaurant chain is based in Minnesota and has both franchise and company-owened locations throughout the Midwest.

The court found that most Omaha restaurants had policies prohibiting employees from working at more than one location. When an employee had permission to work at several locations, the employer had a system in place to combine the employees hours to calculate overtime.

However, Famous Dave’s  had no policy prohibiting employees from working at more than one location. A number of employees did work at two or more locations. Their hours were not combined to calculate overtime, (more…)

With gas prices increasing, revenue declining and profit margins dwindling, many employers are taking a hard look at 2009 staffing. This may include combining positions, reducing staff by attrition, or laying workers off.

According to Sozeen Mondlin, associate general counsel with MITRE Corp, HR managers and employers should give careful consideration to choosing which employees to lay off.

“Given today’s economic climate, we all have to expect more activity in this area,” she said at the Association of Corporate Counsel annual conference in Seattle on October 19 to 21, 2008.

Mondlin said that employers are often sued by workers who (more…)