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Disability discrimination by association

April 9th, 2015  |  Kathy Kapusta  |  3 Comments

In addition to protecting qualified applicants and employees with disabilities from employment discrimination, the ADA also prohibits “association discrimination:” discrimination based on an applicant’s or employee’s relationship or association with an individual with a disability. As the EEOC explains in a 2005 guidance entitled “Questions and Answers About the Association Provision of the Americans with Disabilities Act,” the purpose of the ADA’s association provision is to prevent employers from taking adverse actions based on unfounded stereotypes and assumptions about individuals who associate with people who have disabilities.

Several recent court rulings addressing this issue serve as a reminder to employers that making adverse employment decisions based on association bias can be costly. In a March 2015 decision, a federal magistrate judge in Ohio ruled that a municipal employee who was discharged just two days after the city received a $20,000 medical bill for her husband’s cancer surgery can proceed to trial on her ADA claim under the “expense theory” of association discrimination. Citing to the Sixth Circuit’s 2011 decision in Stansberry v. Air Wisconsin Airlines Corp., the magistrate explained that this theory of associational discrimination “covers situations where an employee suffers an adverse employment action because of his or her association with a disabled individual covered under the employer’s health plan, which is costly to the employer.”

Budget breaker. In this case, 12 days after the employee’s long-term partner was diagnosed with colon cancer, the couple married and she swiftly added him to the medical insurance she received through the city. About a month later, her supervisor allegedly stated that her husband’s illness was going to affect the city’s budget. Over the next few months, the employee took time off to care for her husband. She was ultimately fired two days after the city received the husband’s medical bill. On that same day, the couple’s medical benefits were also terminated.

While the court found the supervisor’s budget statement may not have been direct evidence of bias, it could raise a reasonable inference that the husband’s disability was a determining factor in the termination decision. In addition, evidence that just two weeks before her discharge, she argued with her supervisor over leave for her husband’s chemotherapy, that the city was self-insured and that her supervisor expressed concerns that treating her husband’s illness would adversely impact the budget, and that she was terminated just two days after the hospital bill from her husband’s surgery was received for processing, cast doubt on the city’s assertion that she was fired for, among other things, insubordination. Because a reasonable jury could conclude that the supervisor would not have terminated the employee but for concerns regarding the costs of chemotherapy and other treatments, summary judgment as to her ADA claim was denied.

    Cancer treatment. Also in March 2015, a federal district court in Tennessee found evidence an employer knew that the expense of treating an employee’s wife’s cancer was high, that continued treatment would raise the cost of providing health benefits to its employees, that her medical expenses might be a problem in renewing the health insurance plan, and that the employee was discharged around the time of the plan renewal was sufficient to support the employee’s claim that the cost of insuring his wife was a motivating factor behind the decision to fire him. Accordingly, it denied summary judgment on his ADA association discrimination claim.

      Wellness remarks. However, a city employer’s remarks on the importance of a wellness program, absent other evidence that it was tracking the health expenses of an employee’s bipolar daughter or that such costs had increased, were not enough to suggest that the employee was fired due to association discrimination, a federal district court in Colorado ruled. Although the employee claimed her supervisor discriminated against her because her daughter was covered by her health insurance, she admitted that she had no idea how much her daughter’s medical expenses cost the city nor how those expenses compared to other employees and their family members. Instead of offering evidence that the city tracked her daughter’s health care costs or that it was unusually expensive, she merely stated that in “all” city meetings with HR managers and her supervisor present, statements were made on the importance of the city’s wellness program in lowering insurance premiums. This was simply not enough to raise an inference that the city took actions against her due to the expense of her daughter’s illness.

      Your job or your daughter. In yet another case decided in March 2015, a federal district court in New York found that a supervisor’s remarks to an employee stating that he was “letting her go” because he needed someone without children to work at the front desk and asking her how she could “guarantee me that [] two weeks from now your daughter is not going to be sick again … So, what is it, your job or your daughter?” could easily be viewed as a smoking gun admission that he believed her daughter was disabled and would be frequently ill and that her termination was directly motivated by his hostility toward her association with her child.

      During the six months that the employee worked for the employer, she took time off on several occasions to care for her infant daughter who was hospitalized on more than one occasion with breathing difficulties and diagnosed with reactive airway disease. Observing that the employee’s direct supervisor told her on the day of her return to work following an absence to care for her daughter that he was letting her go because he needed “someone who does not have kids who can be at the front desk at all times,” the court found that comment, together with his other statements such as “So what is it, your job or your daughter?” at the very least created a “thick cloud of smoke” sufficient to require the employer to “convince the factfinder that, despite the smoke, there is no fire.”

      Further, found the court, a jury could infer the employee’s supervisor knew her daughter was disabled as she was hospitalized on several occasions for days at a time due to difficulty breathing. In addition, she told her supervisor that her daughter was wheezing and, if an adult, would be considered asthmatic. Rejecting the employer’s contention that it believed the child was suffering from a number of temporary, isolated medical ailments, the court found that a reasonable factfinder could conclude her progression of illness and the employee’s statement that she had reactive airway disease provided the employer with knowledge that her daughter was disabled.

      Distracted. A federal district court in Tennessee ruled that an employee who took intermittent leave after her daughter was diagnosed with a mental impairment requiring “lifelong” care could proceed to trial on her ADA association discrimination claim. In this case, the employee began taking FMLA leave to care for her 21-year old daughter who, after suffering a “psychotic break,” was hospitalized and diagnosed with schizophrenia and depression. In this case, the employee claimed that her direct supervisor remarked that she was not focused and was missing too much work due to her daughter. She was ultimately fired, purportedly for performance issues.

      Denying the employer’s summary judgment motion, the court noted that the Sixth Circuit recognizes three theories of association discrimination: expense, disability by association, and distraction. Here, the “distraction” theory was at issue. Under this theory, an employee is inattentive at work because her child has a disability that requires her attention, but not so inattentive that to do her job to her employer’s satisfaction she would require an accommodation, such as shorter hours. In this case, the question was whether the employer acted out of unfounded fears that the employee’s association with her daughter would cause her to be distracted at work.

      In the court’s view, a jury could conclude that a determining factor in the termination decision was the employee’s association with her mentally impaired daughter. Among other evidence, the court noted that her supervisor allegedly said the employee should consider hiring a caretaker or babysitter because she was missing too much work; told her that she should consider long-term or permanent disability; and remarked that the employee was too distracted at work because of her daughter. Further, the record showed these comments were ongoing and persistent. Consequently, a jury could conclude the employee was fired because the employer knew she would continue to need FMLA leave for her daughter’s lifelong disability.

      Reverse association disability discrimination? Stating that the ADA does not provide for a reverse-association disability cause of action, a federal district court in Michigan found that a nurse supervisor’s allegations that her employer showed preferential treatment to a coworker because she had mentally challenged children failed as a matter of law. While the employee contended that she engaged in protected activity by reporting her supervisor’s favoritism of the coworker, the court, in granting summary judgment to the employer on her retaliation claim, observed that “favoring a person, associated or not associated with a disabled person, is not a violation of the ADA.”

      Employer takeaway. How can an employer reduce the risk of having to defend against an association discrimination claim? Regularly review your policies to ensure they prohibit all forms of discrimination, and that managers and supervisors are trained to understand this issue. They should also be trained to understand that the ADA does not require a family relationship for an individual to be protected by the association provision and that employment decisions should not be based on unfounded stereotypes and assumptions about individuals who associate with people who have disabilities.

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      Keeping up with the deluge

      April 2nd, 2015  |  Lisa Milam-Perez  |  Add a Comment

      You know how when you’re a teenager, your Mom is an idiot who doesn’t know anything? Well in my kid’s case, it’s true: my son has surpassed my knowledge at this point of international affairs, Greek mythology, mole conversions (that’s chemistry, for you humanities nerds), Ray Bradbury, all manner of non-human animal life and, well, I’m just too damn humiliated to go on. As I write, he just walked in here to report that a million people died during the North Korean famine in the 1990s–as many people as were killed in the Rwandan genocide. (I knew that; of course I knew that. I can’t believe you think I didn’t know that…)

      I suppose I’ve still got him beat on labor and employment law, though. And lately, increasingly, it seems there is so very much to know. Executive actions and agency regulations (and lawsuits challenging regulations, and courts putting the kibosh on said regulations, and Congress holding hearings on regulations, and disapproving regulations, and the President disapproving that disapproval, and the imminent release of still more regulations). Supreme Court rulings on whether to defer to the agencies’ take on those regulations (yes, as to the DOL on loan officers’ exempt status; no, to the EEOC’s pregnancy accommodation guidance). Now we have to watch the SEC too, as the agency comes down on employee confidentiality agreements. As for the NLRB—well, don’t get me started on the NLRB. This blog post was supposed to be about the NLRB, but there was simply too darn much to narrow it down.

      Folks are Fighting For $15, and winning $10 (thanks, McDonalds!), while labor fights and loses on right-to-work in Midwestern strongholds. The Indiana heartland is in the hot-seat for “religious freedom” and Arkansas may unwisely follow suit (although Walmart Almighty seems to have put its foot down there). We’ve got wage suits aplenty (interns and Uber drivers and independent contractors) and joint employers and—wait, what?—Fair Credit Reporting Act class actions. And that doesn’t begin to scratch the surface of the legally compelling, truly fascinating human interest stories that unfold in the court cases we cover each day.

      All of this is to say: We love what we do. Thank you for reading our blog. Thank you for reading Employment Law Daily. And, do you follow us on Twitter? You should follow us on Twitter.

      There’s much to keep up with. We’ll help you keep up—and perhaps even outsmart your teenager.

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      New state ‘religious freedom’ laws—and the states that are pushing back

      March 31st, 2015  |  Joy Waltemath  |  Add a Comment

      By Pamela Wolf, J.D. and Joy P. Waltemath, J.D.

      In light of Indiana’s new law that purports to guarantee religious freedom in the state but nonetheless would permit discrimination based on sexual orientation and gender identity absent a law saying otherwise, Connecticut Governor Dannel P. Malloy has registered his disapproval in the form of state action.

      On Monday, March 30, only four days after the Indiana measure was signed, Malloy signed an executive order banning state-funded travel to states that have enacted legislation to protect religious freedom but yet “do not prohibit discrimination for classes of citizens.” The governor asserted that Connecticut has been a national leader in protecting against discrimination based on sexual orientation and gender identity.

      Push-back against Indiana law. An outpouring of nationwide protest erupted immediately after Indiana Governor Mike Pence signed legislation adding a chapter to the Indiana Code entitled, “Religious Freedom Restoration.” Some businesses, including Google and Angie’s List, cancelled plans for expansion in the state, according to media reports. At least one proponent of the bill has openly stated that the measure would permit Indiana businesses to refuse to provide wedding cake and photography services to same-sex couples, CNN reported.

      When asked by a CNN talk show host on Sunday whether this is true, Pence repeatedly sidestepped the question. One problem frequently cited by opponents of the broad measure is that there is no antidiscrimination law in Indiana that would protect LGBT individuals from discrimination based on their sexual orientation or gender identity. When the same CNN talk show host asked Pence whether he would support such a law, Pence said that he would not. However, CNN reported today that Pence has pledged that Indiana will fix the law to clarify that it does not condone discrimination against gays and lesbians.

      Pence news conference. In a news conference held Tuesday, March 31, Pence repeatedly stressed that the law did not give a license to discriminate; that he abhorred discrimination; that the law did not give businesses the right to refuse service to anyone; and that he did not believe that members of the state legislature who voted for the law intended to allow discrimination or the denial of services to anyone. The Washington Post, however, has reported that during debate over the Indiana bill, “lawmakers voted down amendments to make clear that the law was not intended to foster discrimination.”

      “Problem of perception.” Pence clarified in the news conference that he nonetheless supported legislative action “in the law itself” that would “allay the concerns and correct the misperception” that the law could foster discrimination. He continually referred to the negative public response to the bill as a “problem of perception,” comparing the bill to other similar state laws and the federal Religious Freedom Restoration Act and suggesting that the standard under the Indiana bill had been “applied for decades.”

      As noted last week, however, Jeffrey I. Pasek, the immediate past chair of the Cozen O’Connor’s Labor & Employment Group, commented to Employment Law Daily that “This bill goes far beyond the federal RFRA in two ways. First, it allows individuals to claim exemptions from neutral government mandates even in cases in which the government is not involved.” Second, the new law also applies to a very broadly defined category of “person,” a definition more expansive than the Supreme Court’s Hobby Lobby decision, which Pence has also cited, had involved.

      Connecticut response. Specifically, the executive order issued by Connecticut Governor Malloy directs that all agencies, departments, boards and commissions, the University of Connecticut, and the Board of Regents immediately review all requests for state-funded or state-sponsored travel to states that create the grounds for such discrimination and to bar any such publicly funded travel unless necessary for the enforcement of state law, to meet contractual obligations, or for the protection of public health, welfare, and safety. The EO is effective immediately.

      “We cannot sit idly by and do nothing while laws are enacted that will turn back the clock,” Malloy said. “We need to keep moving forward and stand up against forces that seek to roll back progress. I’m sending a clear message with this executive order: Discrimination can’t and won’t be tolerated by the State of Connecticut. Nearly two decades ago, Connecticut was among the first states that passed a comprehensive anti-discrimination law concerning sexual orientation, and three years ago I enthusiastically signed a law adding gender identity and expression to those statutes. We need to do what we can to stand up and act against laws that allow—as a matter of public policy—individuals to be discriminated against. It’s unacceptable, and today, Connecticut has acted.”

      Arkansas moves forward. As we go to press tonight, the Arkansas legislature has passed a bill, H.B. 1288, that is similar in some respects to the Indiana legislation in that it expressly allows for a private individual (or, at least in the Arkansas law, an “association, partnership, corporation, church, religious institution, estate, trust, foundation, or other legal entity”) to file a claim under RFRA even when the government is not a party to the claim.

      D.C., N.Y. weigh in. Meanwhile, D.C. Mayor Muriel Bowser has reportedly issued an executive order to ban city-funded travel to Indiana until the state repeals its ‘religious freedom’ law. And in a statement issued today as well, N.Y. Governor Andrew M. Cuomo banned non-essential state travel to Indiana, noting that “New York State has been, and will continue to be, a leader in ensuring that all LGBT persons enjoy full and equal civil rights. With this action, we stand by our LGBT family members, friends and colleagues to ensure that their rights are respected.”

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      Supervisor’s email defining compensable ‘work’ after service technicians filed wage suit was improper

      March 31st, 2015  |  Ron Miller  |  Add a Comment

      Appliance service technicians employed by General Electric brought a collective action under the FLSA to recover allegedly unpaid overtime compensation. According to their complaint, the service technicians alleged that they routinely, and with the GE’s knowledge, performed work “off the clock” in order to satisfy daily revenue requirements. As one of their principal claims, the technicians asserted that they must log into their computers each morning to obtain their first customer calls and prepare for the day, but that GE has not compensated them for such work.

      After the court granted the technician’s motion for conditional certification of an FLSA collective action, and following court-facilitated notice to putative class members, a customer service manager in Southern California sent an email to his technicians regarding permissible computer activities prior to the start of the work day. In response, the technicians sought an order requiring a curative notice. They argued that the email constituted an “improper and coercive” communication meant to deter participation in the lawsuit.

      Curative order. In Maddy v. General Electric Co., a federal district court granted the service technicians’ request for an order requiring a curative notice because an email (1) took a legal position on the definition of compensable “work” and (2) threatened discipline, up to and including termination, for the activity to which GE’s service technicians would necessarily admit by joining the collective action. However, the court limited the curative notice to Southern California service technicians, and declined to prohibit the employer from communicating with putative class members for the duration of the opt-in period

      Here, the manager’s email categorically defined the kind of activity for which the technicians sought compensation in this litigation as noncompensable. A lay reader would interpret the email’s language regarding discipline for “off the clock” work, though framed in the future tense (“failure to abide by these instructions will be considered insubordination”), as applying to past “off the clock” work as well. For these reasons, service technicians who received this email would reasonably believe that opting into the litigation was pointless based on the definition of “work,” or, worse, that they would risk their jobs by admitting to that kind of activity, a necessary consequence of opting-in.

      First Amendment concerns. Further, the court observed that GE failed to explain why the manager sent the similar 2014 email in May, but the 2015 email three months earlier. Moreover, the court expressed its concern that GE had been emphasizing timekeeping policies, and the harsh consequences for not following them, more frequently during the opt-in window without any other stated intervening cause. As a result, in order to correct any potential confusion as to the viability of the claims in this litigation and the consequences of opting-in, the court granted the technicians’ request for an order requiring GE to send a curative notice. However, the notice was limited to the Southern California Region technicians who received the email. In addition, the court extended the opt-in period for those technicians for 30 days.

      Importantly, recognizing First Amendment concerns raised in limiting an employer’s ability to communicate with its employees, the court declined to hold that GE was could not communicate with its employees about timekeeping and tailored its remedy so as to avoid placing a prior restraint on GE’s speech. Thus, GE was merely required to account for particularly problematic email and create a monitoring system for a remainder of the opt-in period.

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      Indiana’s ‘religious freedom restoration’ law is far broader than RFRA

      March 26th, 2015  |  Joy Waltemath  |  1 Comment

      By Joy P. Waltemath, J.D.

      Today, Indiana Governor Mike Pence signed a “religious freedom” bill in a private ceremony. Senate Bill 101 is modeled on the Religious Freedom Restoration Act, a federal law passed in 1993 but inapplicable to the states due to a U.S. Supreme Court decision in 1997. Consequently, a number of states have passed their own “RFRA”-type laws to apply to state and local governments; Indiana is the 20th state to have enacted legislation.

      Modeled on federal law? Specifically, the new state law bars a governmental entity from substantially burdening a person’s exercise of religion, even when the burden results from a rule of general applicability, unless the governmental entity demonstrates that the burden as applied to the person is:

      • in furtherance of a compelling governmental interest; and
      • the least restrictive means of furthering that compelling governmental interest.

      Indiana’s newly enacted law will apply to all governmental entity statutes, ordinances, resolutions, executive or administrative orders, regulations, customs, and usages, including their implementation or application—regardless of whether they were enacted, adopted, or initiated before, on, or after the law’s effective date of July 1, 2015.

      The governor’s view. In a statement released by the Indiana governor’s office, Pence noted that he signed the bill “because I support the freedom of religion for every Hoosier of every faith. The Constitution of the United States and the Indiana Constitution both provide strong recognition of the freedom of religion but today, many people of faith feel their religious liberty is under attack by government action.”

      Pence referenced the federal law in his statement, noting that the Religious Freedom Restoration Act limited “government action that would infringe upon religion to only those that did not substantially burden free exercise of religion absent a compelling state interest and in the least restrictive means.”

      “Last year the Supreme Court of the United States upheld religious liberty in the Hobby Lobby case based on the federal Religious Freedom Restoration Act,” Pence said, “but that act does not apply to individual states or local government action. At present, nineteen states—including our neighbors in Illinois and Kentucky—have adopted Religious Freedom Restoration statutes. Indiana joined that group “in order to ensure that religious liberty is fully protected under Indiana law,” he continued.

      Pence’s statement says that “This bill is not about discrimination, and if I thought it legalized discrimination in any way in Indiana, I would have vetoed it. In fact, it does not even apply to disputes between private parties unless government action is involved. For more than twenty years, the federal Religious Freedom Restoration Act has never undermined our nation’s anti-discrimination laws, and it will not in Indiana.”

      Far broader than federal law? However, Jeffrey I. Pasek, the immediate past chair of the Cozen O’Connor’s Labor & Employment Group, whose avocation involves the role of religion in public life, commented to Employment Law Daily that “This bill goes far beyond the federal RFRA in two ways. First, it allows individuals to claim exemptions from neutral government mandates even in cases in which the government is not involved.”

      S.B. 101 provides that a person whose exercise of religion has been substantially burdened, or is likely to be substantially burdened through a violation of the new law, may assert that violation or impending violation as a claim or defense in a judicial or administrative proceeding—even where the state or any other governmental entity is not a party to the proceeding. However, where a relevant governmental entity is not a party to the proceeding, it nonetheless would have an unconditional right to intervene in order to respond to the person’s invocation of the new law.

      “It would fall to the individual who is being discriminated against to attempt to justify an otherwise neutral law by asserting that the government has a compelling interest in enforcing the law, but nothing in this bill says the government has to get involved in those cases,” explained Pasek. “At least if someone outright challenges a governmental requirement against government enforcement, we can expect the government to make a reasoned decision about whether to support its requirement and to apply that rationale on an even-handed basis. That is totally lacking here.”

      Further, Pasek noted that “Without support of the government, how can any individual job applicant, wedding cake purchaser, or would-be apartment renter be able to uphold the government’s interest? How will such a person be able to compile and present evidence of an actual government interest and not just a theoretical interest? Also, how can a would-be plaintiff in one of these cases establish a less burdensome alternative when the government is the one that would have to choose that alternative and has not been asked for its opinion? In short, this bill goes way beyond the RFRA because it leaves religious objectors in a position where they are much less likely to be challenged and much more likely to prevail.”

      Broader than Hobby Lobby. Likely in response to the U.S. Supreme Court’s decision last year in Burwell v. Hobby Lobby, referenced by Governor Pence in his statement, the new law also applies to a very broadly defined category of “person,” which includes: (1) an individual; (2) an organization, a religious society, a church, a body of communicants, or a group organized and operated primarily for religious purposes; and (3) a partnership, a limited liability company, a corporation, a company, a firm, a society, a joint-stock company, an unincorporated association, or another entity that may sue and be sued, and exercises practices that are compelled or limited by a system of religious belief held by an individual or the individuals who have control and substantial ownership of the entity, regardless of whether the entity is organized and operated for profit or nonprofit purposes.

      Hobby Lobby involved a privately held company where there were no dissenting shareholders,” noted Pasek. “What do we do if a large public company like Wal-Mart wants to invoke religion to avoid a state imposed mandate that health insurance policies cover blood transfusions? Do the officers decide the religious views of the company, or must the board of directors or shareholders vote on it? Nothing like this exists under federal law because the Supreme Court has not extended Hobby Lobby to such a situation. The opinion suggests the Hobby Lobby decision would not extend that far, but this is only dictum, and we don’t know where the line will eventually be drawn.”

      Impact on religious minorities. “The Indiana bill jumps right into the fire on this issue by giving every company religious rights regardless of its size. But,” Pasek asked, “how about protecting the religious rights of the minority shareholders? They have religious rights as shareholders, and this bill says that majority rules. What is the compelling government interest for not protecting them? Won’t there be many cases in which some less restrictive means exists beside straight-out majority vote by which the religious rights of the corporation can be protected? Individuals can change their religious views at any time. Presumably companies can too. Do we get a new vote on religious beliefs every time there are new shareholders?

      Pasek predicted, for these reasons, that the Indiana legislation could “lead to significant litigation, expose government to substantial costs and force government officials to become dragged in to numerous disputes that they would rather avoid.”

      He also added a note of caution concerning the law: “It will also curtail the civil liberties, employment rights, and contract rights of individuals whose only sin is that they do not follow the same religious views as their employer, their landlord, their baker, or some other third party.”

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