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Some good deeds go unpunished

October 13th, 2011  |  Lisa Milam-Perez

It’s always gratifying to see conscientious employers take prompt corrective action when they uncover discrimination, harassment, or similar misconduct at the hands of rogue managers or employees. Can there be anything more maddening for employers than to be rewarded for their vigilance with a lawsuit?

By all appearances, the employers below did everything right. Given the cost of defending such claims, it may be a bit of stretch to say they evaded punishment for their good deeds. But at least the employers were vindicated in court, fending off claims filed by the wrongdoers they discharged.

A class action waiting to happen. The labor and employment attorneys in the general counsel’s office at Speedway were no doubt apoplectic when they got the call from Human Resources. Wage-hour collective actions are perhaps the greatest liability threat to employers these days, and the company discovers that one of their convenience store managers had been overriding reported work hours and reducing the “punch out” times of her hourly employees.

When questioned by district management, the store manager said that her employees had told her to alter their time cards. Not surprisingly, the employees denied this notion. Next, she claimed that the employees’ time cards reflected hours they were not working, and she merely made the changes in order to reflect their actual hours worked. However, the store videotape, recorded during the time periods for which the manager made the overrides, revealed that the employees were still on the job past the time shown on the revised time cards. Her final contention: she only made time card overrides when she “observed [employees] not working for a period of time” or she “was told by another employee someone else was not working.” According to her termination paperwork, the company had uncovered at least 20 instances in which the manager had shorted employees on time and pay in just the three months prior to her discharge.

The manager filed a state-law claim of age discrimination. Although a federal court, in Roshek v Speedway SuperAmerica, found the manager made out a prima facie case, Speedway demonstrated that it had a legitimate, nondiscriminatory reason for her discharge. The company’s Wage and Hour Compliance policy expressly prohibits managers “from overriding employee punches for hours worked without prior express approval from HR,” and provides that they will be terminated for any such unauthorized changes. While she insisted that Speedway did not formally communicate this policy to her, as a store manager, she was expected to know the company’s policies, the court reasoned.

She also pointed to a younger manager who had altered employee work hours but was merely issued a warning. (We’ll leave it for another day to speculate whether the company had been putting undue pressure on store managers to reduce their payrolls.) However, Speedway said it discharged the manager not only because she violated the wage and hour compliance policy but also because she was dishonest about her actions when asked about the violation. Her dishonesty set her conduct apart from her comparator, and justified Speedway’s decision to discipline her differently, the court found. Also justifying the discharge, of course, was the fact that she was ripping off her employees—and inviting a potential FLSA action against the company as well.

The case of the obscene (and technologically inept) caller. The internal investigation in this case must have been relatively easy: just press “play.” In Robeson v U.S. Steel Corp, the company had fired an employee who launched into a racist, sexist, profanity-laced tirade against a manager that, unbeknownst to him, was recorded on her voice mail. After an appeal of his discharge grievance was abandoned, the employee filed a hybrid LMRA action against both the company his union. But with the court concluding that the union did not breach its duty of fair representation, the company was in the clear on the employee’s breach of contract claim as well.

When U.S. Steel took over as a successor employer, it issued several new company policies, including a harassment policy. Two members of management gave a PowerPoint presentation on the policy, which strictly forbade any use of derogatory terms, epithets, or slurs relating to race and gender and cautioned that use of such phrases could be punished by discipline up to and including discharge. The very next day, the employee left a message on the voicemail of one of the presenters. He had called to complain about his foreman, but the presenter was not at her desk. Believing he had hung up the phone, the employee then began to spew derogatory comments about the presenter, purely for the entertainment of the coworkers who were with him in the lunchroom. He referred to her as “big tits” and as “a chick that likes to f*&ck black guys.” Because he failed to disconnect from voice mail before beginning his rant, the manager heard the entire recorded message.

U.S. Steel issued a series of five-day suspensions. During a preliminary hearing, the union told the company that the employee was remorseful, pointing out too that he had 29 years of seniority and a good work record, but U.S. Steel terminated him anyway. Although the union stayed with him through another two rounds of the dispute resolution procedure, it dropped the appeal that would have taken the discharge to arbitration.

A federal court in Michigan found the union did not act arbitrarily in dropping its appeal, noting that the union only did so after learning the full extent of the employer’s harassment policy and its zero-tolerance provision. The union also discovered that the employee made his comments only one day after attending a presentation on the harassment policy. Faced with this information, the union’s decision to drop the appeal was not arbitrary; the union did not breach its duty of fair representation. As a result, the employee also struck out on his suit against the company.

Nor did U.S. Steel err in refusing to keep the employee on the job pending his initial hearing, the court found. The company argued convincingly that the employee’s comments, specifically the race-based comments, could have created a dangerous situation, and that it acted within its rights to terminate the employee in order to defuse it. The employer did a good deed in removing this harasser from its ranks, one which the court declined to punish.