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Another state enters the “guns at work” fray

October 2nd, 2009  |  Deborah Hammonds

>Michigan employers may soon have to add firearms ownership to their “do not ask” list of questions. A bill has been introduced by Michigan State Representative Paul Opsommer to prevent employers from asking potential employees questions about whether they own or know how to use guns. The Firearm Ownership Employee Protection Act (h.b. 5330) is designed to protect citizens exercising their Second Amendment rights, according to Opsommer.

“Unless firearm ownership is directly related to an established and bona fide occupational requirement for the job, there is no reason for an employer to ask questions about whether a potential employee owns or knows how to use a gun,” Opsommer said in a press statement. “We also need to ensure that employers cannot create over-reaching company policies that violate the Constitution and provide an excuse to terminate employees whose political views differ from those of management. People who lawfully own firearms and are following appropriate storage laws should not lose the ability to transport them in privately owned vehicles.”

“A person who legally owns a firearm needs to have a way to store it as they are going to and from work, home, hunting, or any other lawful purpose,” said Opsommer. “People shouldn’t have to feel that their cars are going to be searched just because they told their boss they are going hunting after work.”

If passed, Michigan’s Firearm Ownership Employee Protection Act will prohibit employers from asking certain questions during the hiring process and making employment decisions based on legal ownership or use of a firearm that is unrelated to employment. Employers will also be prohibited from requiring applicants or employees from waiving their rights under the Act, and deem that any agreement which an applicant or employee waives their rights under the Act as invalid and unenforceable. The bill provides for injunctive relief, damages, costs and attorney fees for prevailing plaintiffs. The bill has been referred to the Committee on Labor.

Michigan is just the latest state to take on the issue of employers with policies prohibiting firearms on their premises, including parking lots. Several other states, including Arizona, Florida, Georgia, Louisiana, and Oklahoma have passed similar “guns at work” laws in recent years. Part of the discussion surrounding the passage of these laws has been the newly created tension between an employee’s Second Amendment rights and an employer’s property rights. Do “guns at work” laws impede on employers’ property rights? Have employers been treating gun-owning employees so adversely or discriminatorily that more “guns at work” laws are needed?

Republic Windows & Doors redux: Can you spell k-a-r-m-a?

September 30th, 2009  |  Connie Eyer

>All’s well that ends well

December 5, 2008: It wasn’t supposed to work like this. Days after getting a $45 billion bailout from the U.S. government, Bank of America shut down a line of credit that kept Chicago’s Republic Windows & Doors factory operating. The bosses, who knew what was coming, had been sneaking machinery out in the middle of the night. They closed the factory and sent the workers home. Then something surprising happened: Republic’s workers occupied the factory and refused to leave.

The above quote was taken from Kari Lydersen’s new book, Revolt on Goose Island: The Chicago Factory Takeover, and What It Says About the Economic Crisis, which documents one of the nation’s largest labor sit-ins. At issue was Republic’s clear violation of the WARN Act, which requires companies to give employees at least 60 days’ notice before closing a plant or initiating mass layoffs.

After receiving widespread media attention, as well as support from the public, Chicago police, and state and national politicians, the six-day sit-in staged by 200 members of United Electrical Workers Local 1110 ended peacefully when Bank of America and JPMorgan Chase set up a fund to pay them what they were rightfully owed.

In February 2009, the company was purchased by Serious Materials, a California-based manufacturer of eco-friendly building products. Although a lot fewer workers than they had hoped by this point have been hired back, the company has a new contract with the union and has promised to respect past seniority.

But, wait—there’s more!

Money laundering, mail fraud and robbery, oh my…

If you caught the above reference to the bosses sneaking machinery out of the plant in the middle of the night, then you might have already surmised that the plot has since thickened. But, that may be an understatement because, on September 11, the other shoe dropped with a giant thud. As reported by the Chicago Tribune, prosecutors charged—in a detailed 56-page filing—that former CEO Richard Gillman and two other executives, anticipating the imminent results of Republic’s crushing debt, stole its assets, laundered the money through shell corporations, paid off luxury car leases for themselves and secretly trucked the equipment from the plant to a new, non-unionized operation in Red Oak, Iowa.

In a recent interview on democracynow.org, however, Lydersen, a Washington Post reporter, indicated that the media’s portrayal of the sit-in as a spontaneous event was not entirely accurate. The reality, she says, was much more significant. Machinery was disappearing and, since the workers sensed that something was up, they decided they needed a strategy. They were willing to do what it took, Lydersen said, noting that they had even some more radical ideas in their brainstorming sessions than the occupation. “It’s sort of a combination of the workers’ willingness to really go out there and then the UE’s kind of long-term strategy and meeting with the Canadian autoworkers, who had had some successful factory occupations just in recent years, in the past five years. So they were fully ready, you know, when this all went down.”

Here’s an interesting tidbit: unbeknownst to the workers at the time, barricaded in the executive offices with them was a PowerPoint presentation that laid out how the conspirators sought to “remove, conceal and convert collateralized manufacturing equipment without the consent of Republic’s creditors.” (Oops.)

In fact, prosecutors alleged Gillman and the others defrauded company creditors who were owed at least $10 million and stole more than $200,000 cash from the company. I’ll let the Tribune paint the picture of what happened next: “After a judge hit former company CEO Richard Gillman with a whopping $10 million bail, he was led away to Cook County Jail while wearing a pin-striped suit, white collared-shirt and a dazed expression on his face.”


Last week, though, Gillman’s bail was reduced to $5 million and he was released from jail with the condition that he be electronically monitored. But, what about the Red Oak, Iowa, window company? Gillman had taken it over at the beginning of 2009 with promises to continue the operation that had begun in 1985. Work soon slowed, however, and the company that had employed 120, including the mayor’s wife, closed only a month and a half later. Many of those employees had to leave Red Oak after the small town suffered this devastating loss and, the Tribune adds, one-fourth are still looking for work.

The Tipping Point?

September 28th, 2009  |  Matt Pavich

>The Fifth Circuit’s recent decision in Jones v Halliburton Co has attracted quite a bit of attention, as well it should, as the facts are heart-wrenching and the potential legal implications are fascinating.

Jamie Leigh Jones was a young woman working for Halliburton/KBR when, following an instance of sexual harassment, she was given the choice of either losing her job, or moving to Iraq. She chose Iraq and, prior to her departure, the company gave her a contract to sign, one in which she agreed to arbitrate any and all claims relating to her employment. Pretty standard agreement, but what happened next was anything but the standard expatriate employment agreement.

On her first day, Jones, who had allegedly been promised private quarters, found herself assigned to barracks with her male co-workers. On her third day, Jones complained of the sexually hostile situation in the barracks and asked again for a “safer” location. And, on her fourth day, after a party, Jones was allegedly drugged, beaten, and gang-raped in her own sleeping quarters. She went to Halliburton medical personnel, where her rape kit was mislaid, and was placed under armed guard, without means of communication to the outside world. Eventually, her supervisors gave her a choice of “get over it” or go home, but without a guaranteed job. Jones chose a third route, the court system, alleging a number of claims, including assault and battery, intentional infliction of emotional distress, negligent hiring and supervision and false imprisonment. Halliburton invoked the arbitration clause.

The Fifth Circuit slammed the brakes on Halliburton’s attempt to duck public scrutiny, finding that Jones could proceed to trial on the aforementioned claims. Simply put, none of the four claims were sufficiently “related to” Jones’ employment for the arbitration agreement to hold sway. Halliburton argued that the claims were related to her employment because she lived in employer-provided housing and because, in raping Jones, the perpetrators violated the same employment policies that governed Jones. But the Fifth Circuit ruled that the mere fact that the perpetrators acted in ways contrary to their employment did not mean that the plaintiff was acting in any way related to her employment. Furthermore, unlike in Jones’ workers’ compensation claim, in which she was allowed to recover because her employment created the “zone of special danger” that led to her injuries, her tort claims did not have a significant relationship to her employment.

Does this case represent the limits of arbitration agreements? One fervently hopes so, as Halliburton’s attempts to invoke the clause in connection to these claims is nothing short of shameless. Yet, other district courts, when faced with virtually the same fact pattern and the same defendant, ruled that tort claims arising from a rape were related to employment. The case law is decidedly unsettled on this point, but the hope here is that the unusually strong language employed by the Fifth Circuit represents a push back by the courts against attempts by corporations, like Halliburton, to deprive their employees of their day in court.

LGBT employees seek protection from workplace discrimination ASAP

September 25th, 2009  |  Lucas Otto

>There seems to be little that stokes the flames of passionate argument more than the terms “sexual orientation,” and when you add “workplace” and “rights” into the mix, it has the potential to stir up a hornet’s nest of controversy. Yet, Congress is dealing with these very workplace discrimination issues with the introduction of the Employment Non-Discrimination Act (ENDA), a bill (S. 1584) that would prohibit discrimination against employees on the basis of sexual orientation, gender identity, and disability—and specifically includes transgendered individuals—and would apply to civilian employers with over 15 employees (religious employers excepted).

For most employers, discriminatory practices are simply not tolerated, but sexual orientation discrimination, consisting mainly of discrimination against lesbian, gay, bisexual & transgender (LGBT) employees, continues to lie in the proverbial “gray area.” A recent study by the Williams Institute found that:

“Twenty-nine states do not have anti-discrimination statutes that prohibit sexual-orientation discrimination and 35 do not have statutes that prohibit gender identity-discrimination. Of the states that do have anti-discrimination statutes that prohibit discrimination on these bases:

  • Three do not prohibit discrimination on the basis of perceived sexual orientation;
  • Five either do not provide for compensatory damages or subject such damages to caps that are lower than ENDA’s; and
  • Five do not provide for attorneys’ fees, and another five only provide for them if the employee files a court action as opposed to an administrative action.”

The study, which primarily showed that unconstitutional discrimination on the basis of sexual orientation occurred with the same high frequency in state and local governments as it did in the private sector, showed two disturbing workplace realities: (1) Job discrimination on the basis of sexual orientation or gender identity by employers appears to be legal in a majority of U.S. states; and (2) One in five LGBT public sector employees has experienced workplace discrimination on the basis of sexual orientation, and a significant wage gap exists between heterosexual and LGBT employees.

While the study dealt with state and local government employers, it no doubt illustrates the chilling effect this type of workplace discrimination can have on its recipients, even those working for private employers. The question most likely posed by many of these LGBT individuals is: Why—with race, gender, religious and national origin employment discrimination laws—are we, as a group, not also afforded protection by anti-discriminatory laws? The answer does not appear to be simple, and most employers, public and private, likely don’t want to venture into issues surrounding employees and their sexual orientation unless forced to do so.

Yet, with ENDA, these individuals would enjoy workplace discrimination protections. However, ENDA has been introduced in every Congress, except the 109th, since 1994, and has failed to pass. So what is the proper course of action an employer should take with respect to sexual orientation and gender-identity discrimination in the absence of ENDA? Well, when looking at dollars and cents, as every employer does, it only makes sense to preemptively address these issues, and educate company officials on not only current state employment laws regarding sexual orientation, but also on what changes are to be expected if ENDA does pass.

Because, however uncomfortable the discussion of sexual orientation discrimination in the workplace might be, the discussion is not going to go away, and it will cost an employer a lot more (e.g., litigation costs, lower worker productivity) if it simply turns a blind eye to the issue.

Take note of the latest outsourcing trend: Employer liability for contractors’ discriminatory acts

September 21st, 2009  |  Deborah Hammonds

>Most employers assume if they outsource their HR functions to independent contractors, so, too, will they not be held liable for their contractors’ discriminatory acts. That is simply not the case. As the Second Circuit’s recent decision in Halpert v. Manhattan Apartments, Inc., illustrates, just because you have hired an independent contractor to recruit and hire the staff for your company, it does not mean that you are off the hook for the contractor’s bad acts. Kinda scary when outsourcing HR is so commonplace in big business.

Just the facts. Michael Halpert interviewed for a position that required showing rental apartments for Manhattan Apartments, Inc. (MAI). The interview was conducted by the “apparent” hiring agent for MAI, Robert Brooks. During the interview, Brooks allegedly told Halpert that he was “too old” for the position. Not surprisingly, our applicant filed suit under the Age Discrimination in Employment Act (ADEA). The district court dismissed the case, finding that Brooks was an independent contractor, not an employee of MAI, and, the ADEA “does not apply to independent contractors.”

The Second Circuit reversed, holding that “an employer may be liable for discrimination by third parties, including independent contractors, that [it] authorizes to make hiring decisions on its behalf.” By its terms, explained the circuit court, employer liability under the ADEA is direct, not derivative: an employer may not “fail or refuse to hire… any individual…because of such individual’s age.” And, when liability for discrimination is “direct,” that prohibition applies to employers regardless of whether the employer “uses its employees to interview applicants for open positions, or whether it uses intermediaries such as independent contractors to fill that role,” explained the court. “If a company gives someone authority to interview applicants and make hiring decisions on behalf of the company, the company may be held liable if that contractor discriminates against an applicant because of the applicant’s age,” wrote the court.

Ultimately, MAI’s potential liability turned on whether Brooks was acting as the (apparent) hiring agent for the rental company when he interviewed Halpert for the position, or whether Brooks was simply hiring an employee on his own behalf. The Second Circuit observed that there were triable issues of fact precluding dismissal of the case on that issue: (1) MAI sponsored a training program for individuals hired to show the apartments and those chosen for the program would earn commissions from MAI; (2) MAI enlisted so-called “sales associates” like Brooks to interview candidates for the program; (3) the career counselor, who arranged the interview for Halpert, believed he would be interviewing for a position with the MAI, not Brooks; (4) the interview took place at the rental company’s offices; and (5) after the interview, both Brooks and another rental company associate told the counselor they were looking for someone younger.

There was also an agreement between MAI and Brooks, which set forth in great detail the rights and duties of both parties, especially with respect to Brooks’ jobs functions as a sales associate. While Brooks was to pay “his own expenses,” including “automobile, travel and entertainment expenses,” the agreement did not indicate that he was to compensate showers directly. MAI also presented affidavits from Brooks and an MAI representative asserting that Halpert, if hired, would have been compensated by Brooks, not MAI. But, MAI failed to corroborate the affidavits. In all, we are left with evidence cutting both ways.

What does all this mean? Every year we see an increase in HR outsourcing…the obvious reason being because it is “cost effective.” According to a recent survey from HR consultant Hewitt Associates, 94 percent of companies outsource at least one HR function or program. A case like Halpert serves as a warning to employers who want to outsource their recruitment and hiring functions. Employers will not be released from their obligations under federal anti-discrimination laws just because they have authorized independent contractors to make hiring decisions on their behalf. This should be taken into account when structuring any contract that outsources your HR functions. Perhaps a clause in the agreement requiring the independent contractor to buck up on its anti-discrimination training couldn’t hurt…for both parties.