Fox Williams & Sink Indianapolis Employment Attorneys Sat, 18 Jan 2020 16:28:47 +0000 en hourly 1 Fox Williams & Sink 32 32 Seventh Circuit Opines on Adverse Employment Actions Mon, 21 Mar 2016 10:00:23 +0000 In Boss v. Julian Castro, (7th Cir. March 18, 2016), the Seventh Circuit affirmed summary judgment for the employer because, among other reasons, the employee had not suffered an adverse employment action.  An adverse employment action requires “a significant change in employment status . . . [s]uch changes can involve the employee’s current wealth, his career prospects, or changes to work conditions that include humiliating, degrading, unsafe, unhealthy, or otherwise significant negative alteration in the workplace.”  Traditionally, adverse employment actions encompass terminations, demotions, suspensions without pay, and lost promotions.  In the retaliation context, adverse employment actions can be a little broader because the standard changes to whether the action “might have dissuaded a reasonable worker from making or supporting a charge of discrimination.”

In Boss, the employee argued that being placed on a Performance Improvement Plan (PIP) was an adverse employment action, as well as being charged AWOL and losing a telework day.  The Seventh Circuit rejected these arguments and held that all of these actions were not “adverse employment actions” under federal law.  “As to his placement on a PIP, this Court has held that implementing such a plan is simply not materially adverse in the discrimination context . . . [n]or does requiring an employee to substantiate his time off . . . [a]nd asserting that a lost telework day constitutes an adverse employment action borders on the frivolous.”  Even under the broader retaliation context, the Seventh Circuit still held that these actions would not dissuade a reasonable employee from engaging in future protected activity.

However, it should be noted that whether an action constitutes an adverse employment action is a fact-sensitive inquiry and things could have turned the other way in Boss if the PIP led to tangible job consequences, such as the loss of a bonus or the reduction in pay.

Indiana Court of Appeals Reaffirms Employment Handbook Not a Contract Mon, 04 Jan 2016 10:00:43 +0000 On New Year’s Eve, December 31, 2015, Indiana’s Court of Appeals, in the matter of Harris v. Orange County Highway Department, et al, reaffirmed the precedent that employment handbooks generally do not create enforceable employment contracts.  Daniel Harris argued that the employment handbook at issue in his case was unique and created a burden on the county to show just cause before it could terminate his employment.  Indiana’s Court of Appeals rejected this argument and affirmed summary judgment.

In reaching its conclusion on Harris’s contract argument, Indiana’s Court of Appeals focused on whether the handbook made a clear promise of employment security.  The Court of Appeals noted that a case in Illinois, Duldalao v. Saint Mary of Nazareth Hosp. Ctr., 505 N.E.2d 314 (Ill. 1987), laid out the elements in Illinois (not Indiana) on when an employment handbook may be considered an employment contract.  The first element requires that the “handbook contains a promise clear enough that an employee would reasonably believe that an offer had been made[.]”  The Court of Appeals then addressed Indiana’s precedent on this issue, which has again and again failed to find that handbooks constitute enforceable contracts.  For example, the handbook in Orr was not a contract because, among other reasons, it contained a disclaimer that clearly stated that the handbook was not a contract.  The handbook in McCalment was not a contract because internally contradictory provisions failed to show a clear promise of employment security.  The handbook in Wynkoop was not a contract because the language was not specific enough to provide employment security and because other provisions emphasized the at-will status of employees.

Harris’s contract argument shared the same fate as Orr, McCalment, and Wynkoop because the handbook in Harris’s case contained contradictory provisions and the handbook contained provisions that hlighlighted the at-will status of employees.  Hence, it did not contain a clear promise of employment security.  Per the Court of Appeals, “we decline Harris’s invitation to adopt Duldulao because, even if we were to adopt Duldulao, the Handbook would not constitute a valid unilateral contract as it does not contain a clear promise of secure employment.”

The lesson here is that the vast, vast majority of handbooks in Indiana will not transform an at-will employee into a contract employee.  The handbook must be read as a whole, keeping in mind the Court’s preference to find at-will status, and the handbook must contain an unequivocal promise of employment security (just cause for adverse actions and a duration of employment).  Anything less will result an inability for a terminated employee to bring a breach of contract action.

Employment Discrimination Case – Cat’s Paw Theory Mon, 19 Oct 2015 10:00:14 +0000 Employment Discrimination Case – Cat’s Paw TheoryEmployment attorneys are constantly on the hunt for decision-makers behind adverse employment actions.  They are always looking to make sure that the decision-makers are also the bad actors, i.e. the individuals who harbor discriminatory intent.  Sometimes, the decision-maker is a separate individual from the bad actor who holds discriminatory intent, and this can pose a serious hurdle in prosecuting an employment discrimination case.  However, when in this situation, plaintiffs may utilize what is known as the Cat’s Paw theory.

Employment Discrimination Case – Cat’s Paw Theory

In 2011, in the matter of Staub v. Proctor Hospital, the United States Supreme Court adopted this theory of causation in employment discrimination cases.  As the Supreme Court noted, the Cat’s Paw theory comes from one of Aesop’s Fables where a monkey induces a cat, by flattery, to extract roasting chestnuts from the fire.  The cat gets burnt, while the monkey gets the chestnuts.  In the employment discrimination setting, this means that the bad actor/discriminator dupes the final decision-maker into taking adverse action against the victim.  In Woods v. City of Berwyn (7th Cir. Oct. 15, 2015), the Seventh Circuit described the Cat’s Paw theory as when “a biased subordinate who lacks decision-making power uses the formal decision-maker as a dupe in a deliberate scheme to trigger a discriminatory employment action.”

In Woods, the plaintiff attempted to use the Cat’s Paw theory, but ultimate failed because the final decision-makers relied upon information outside of the bad actor/discriminator.  The plaintiff in Woods had an evidentiary termination hearing with the Public Safety Board prior to his termination.  The plaintiff contended that the Chief, who recommended the termination, was the monkey in the fable, and the Board was the cat.  The Seventh Circuit repeatedly stated that the mere act of holding an evidentiary termination hearing does not preclude the ability to use the cat’s paw theory.  “[A] formal adversarial procedure does not automatically break the chain of causation.”  However, in Woods, the Board relied upon information outside of the Chief/bad actor/discriminator, and in so doing, broke the chain of causation needed to support a Cat’s Paw theory of liability.

Private Email Access and the Stored Communications Act Tue, 29 Sep 2015 10:00:37 +0000 Employees often ask whether their employer can access their private email messages that were used on the employer’s computer.  Generally, the answer to this inquiry is no, employers cannot intentionally access private email communication without your authorization.  This may likely constitute a violation of the Stored Communications Act.  Employees have no expectation of privacy with their work email accounts, but private accounts such as gmail, yahoo, and hotmail are generally protected.

Private Email Access and the Stored Communications Act

In 1986, Congress amended the Electronic Communications Privacy Act to include the Electronic Communications Storage Act, simply known as the Stored Communications Act.  Congress passed the Stored Communications Act to protect the privacy interests of individuals in their personal and proprietary information.  The Stored Communications Act prohibits anyone who “intentionally accesses without authorization a facility through which an electronic communication service is provided . . . and thereby obtains, alters, or prevents authorized access to a wire or electronic communication while it is in electronic storage in such system.”  18 U.S.C. 2701(a).  “Electronic storage” is defined as “any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof; and any storage of such communication by an electronic communication service for purposes of backup protection of such communication.”  18 U.S.C. 2510(17).

The Stored Communications Act has teeth.  The Stored Communications Act provides a private cause of action and permits actual damages, punitive damages, and attorneys’ fees and costs. 18 U.S.C. 2707.  Although the Stored Communications Act has been around for years, this is a new developing area of the law.  For example, it is unclear whether modern technology such as cell phones, Ipads, and google glasses would be covered under the Stored Communications Act.   This is a typical example of the law not being able to keep up with technology.

The Indianapolis employment law firm of Fox Williams & Sink serves clients throughout the state of Indiana with a wide range of employment issues including: Non-compete issues, Discrimination, Employment Litigation and Arbitration, Wrongful Termination, Fair Labor Standards Act, Overtime Compensation, Wage Claims, Racial Harassment, Sexual Harassment, Constitutional Law, Government Employees, Employment Contract Negotiations, and Unemployment issues.

Our firm was founded to bring together the legal expertise found in a large corporate firm, with the personal service and responsiveness that a boutique litigation firm can provide. Our ability to serve both employees and small business employers means we have a deep knowledge of both sides of all employment issues. This fair and balanced perspective within an agile firm allows for creative and practical solutions for our clients.

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Indiana’s Minimum Wage Law: No Overtime Claim for Law Enforcement Employee of Small Employer Thu, 17 Sep 2015 10:00:45 +0000 Sometimes, the law falls well short of reasonable expectations.  Sometimes, people suffer clear injuries, and the law simply fails to provide an adequate remedy.  This is clearly the case in what happened in the matter of Richardson v. Town of Worthington, (Ind. Ct. App. Sept. 17, 2015).  Richardson sought unpaid overtime wages under Indiana’s Minimum Wage law.  As will be explained, because of Richardson’s unique circumstances, he is not able to prosecute his wage claim under either Indiana’s Minimum Wage law or under the Fair Labor Standards Act, the federal counterpart.

Indiana’s Minimum Wage law applies to employers and governmental agencies with two (2) or more employees.  Ind. Code § 22-2-2-3.  However, Indiana’s Minimum Wage law does not apply to any employer that “is subject to the minimum wage provisions of the federal Fair Labor Standards Act.”  Id.  In other words, if Richardson’s employer was subject to the minimum wage portion of the Fair Labor Standards Act, then Richardson cannot prosecute a claim under Indiana’s Minimum Wage law.

Richardson worked for the Town of Worthington’s Marshal’s Department.  During Richardson’s employment, the Marshal’s Department had no more than three (3) employees.  Here is the twist – although the Marshal’s Department was subject to the minimum wage portion of the Fair Labor Standards Act, the Marshal’s Department was exempt from the overtime provision of the Fair Labor Standards Act because it was a law enforcement agency with less than five (5) employees.  29 U.S.C. § 213(b)(20).  This meant that Richardson could not bring a claim for unpaid overtime under the Fair Labor Standards Act to collect unpaid wages, but it was unclear whether Richardson could then bring a claim under Indiana’s Minimum Wage law.

The trial court said no, and the Court of Appeals affirmed.  Per the Court of Appeals’ rationale, “Worthington is subject to the FLSA’s minimum wage provisions.  Therefore, it is exempt from the MWL and its overtime pay requirements.”  This effectively leaves Richardson with an injury that has no cognizable legal cause of action in which to seek redress.  Richardson cannot sue under the Fair Labor Standards Act for unpaid overtime because the agency had less than five (5) employees.  Richardson cannot sue under Indiana’s Minimum Wage law because it exempts any employer subject to the minimum wage provisions of the Fair Labor Standards Act.  Even though the Marshal’s Department is not subject to the overtime provisions of the Fair Labor Standards Act, it was subject to the minimum wage provisions, unfortunately thereby making the entire Indiana Minimum Wage law unavailable to Richardson.

I would expect for an appeal to Indiana’s Supreme Court on this issue.  The Court of Appeals noted public policy considerations, but stated “we are bound by the intent of the legislature.”  Indiana’ s Supreme Court might see things differently.

Sham Investigations – Terminated in Retaliation? Wed, 26 Aug 2015 10:00:23 +0000 In Harden v. Marion County Sheriff’s Dept. (7th Cir. Aug. 25, 2015), the Seventh Circuit affirmed dismissal of a Title VII retaliation claim, and in doing so, explained in detail when “sham investigations” can be grounds for pretext.  The plaintiff in Harden claimed that he was terminated in retaliation for providing information during an internal investigation into issues of race discrimination with other personnel.  The Sheriff’s Department, in contrast, claimed that it terminated the plaintiff because Internal Affairs found that he perpetrated a theft of an inmate’s money.

The plaintiff’s case largely hinged on demonstrating pretext behind the Internal Affairs investigation and finding.  In other words, the plaintiff had to prove that it was a “sham investigation.”  Per the Seventh Circuit, a sham investigation means “persons conducting the investigation fabricate, ignore, or misrepresent evidence, or the investigation is circumscribed so that it leads to the desired outcome (for instance, by deliberately failing to interview certain witnesses).”  A sham investigation also requires that the decision-makers also be the same individuals who harbor racial or retaliatory animus.  The Seventh Circuit further explained that faulty reasoning or mistaken judgment is not enough to prove a sham investigation.  Instead, plaintiffs need to provide evidence which would show that the decision-makers did not actually believe in the investigation or its findings; to do this, plaintiffs “must identify such weaknesses implausibilities, inconsistencies, or contradictions” so that a reasonable person could not find the investigation or its results worthy of credence.

In Harden, the plaintiff failed to meet this burden.  The record reflected a fair and thorough investigation, which found that plaintiff misappropriated funds from an inmate.  But the Seventh Circuit’s analysis of sham investigations should serve as a road map for employees and employers in the future.

EEOC Filing Deadlines – Remember the Deadlines! Mon, 27 Jul 2015 10:00:47 +0000 In Swanson v. Village of Flossmoor (7th Cir. July 24, 2015), the Seventh Circuit recently affirmed dismissal of a plaintiff’s race and national origin discrimination claims because he failed to timely file a complaint.  Claims of unlawful discrimination under Title VII of the Civil Rights Act of 1964 are required to be filed with the Equal Employment Opportunity Commission within 300 days of experiencing the adverse action.  In Swanson, the plaintiff missed his 300 day statute of limitations.

Swanson attempted to skirt the 300 day error by using the continuing violation doctrine.  Under the continuing violation doctrine, if a plaintiff alleges a hostile work environment/harassment as the adverse action, then some of the hostile acts, even if outside of the statute of limitations, may be considered as long as a complaint was timely filed from the last hostile act.  However, as explained by the Seventh Circuit in Swanson, the continuing violation doctrine does not apply to discrete adverse employment actions (such as demotions, suspensions without pay, and terminations).  The continuing violation doctrine only applies to claims of harassment/hostile work environment, and Swanson did not make such a claim in his case.

EEOC Filing Deadlines: Injured parties must remember the deadlines.  Failure to file a charge of discrimination with the EEOC within 300 days will forever bar one’s case under Title VII.

Americans with Disabilities Act – Essential Functions – Issue of Fact for Jury Thu, 16 Jul 2015 10:00:59 +0000 In Shell v. Smith (7th Cir. June 15, 2015), the Seventh Circuit reversed the District Court and held that issues of fact must be decided by a jury on whether driving a bus was an essential function for the plaintiff.  To be protected under the Americans with Disabilities Act, as amended (“ADAAA”), one must generally be a qualified individual with a disability (“QUID”).  To be a QUID, one must be able to perform the “essential functions” of their job with or without reasonable accommodations.  There are many components to a QUID, and disputes often arise on whether job duties are essential or marginal.

In Shell, the plaintiff worked as a Mechanic’s Helper for the City of Anderson Transit System.  Although the job description stated that he may occasionally drive buses, and although the job description also required a CDL, Shell worked for twelve (12) years without driving a bus and without a CDL.  When the City of Anderson hired a new general manager, he informed Shell that he would be terminated unless he obtained a CDL.  Shell did not obtain his CDL, and subsequently the City of Anderson terminated Shell’s employment.

The District Court held that driving the bus was an essential function, and because Shell could not drive the bus (no CDL), he was not a QUID because he could not perform an essential function with or without reasonable accommodations.  The Seventh Circuit reversed and found that a jury needed to decide the issue of whether driving the bus was an essential function.  According to the Seventh Circuit, an essential function is determined by considering a number of factors, such as the amount of time an employee “actually” spends doing the function and the consequences of not requiring the employee to perform the function.  The employer’s judgment as to what is essential is an important factor, but it is not controlling.  The Seventh Circuit noted that the plaintiff worked for twelve (12) years without driving, which provides evidence from which a jury may conclude that driving the bus was not an essential function.

Indiana Amends Wage Claims Act and Wage Payment Statute Mon, 11 May 2015 10:00:59 +0000 On May 5, 2015, Governor Pence signed Indiana House Bill 1469, which amended the damages provision of Indiana’s Wage Claims Act and Indiana’s Wage Payment Statute to make it more favorable for employers. The Wage Claims Act covers former employees, who lost their job involuntarily, who are owed wages from their previous employer. The Wage Payment Statute covers current employees, and former employees who voluntarily resigned, who are owed wages from their previous employers.

The amendment inserted a good faith safe harbor provision for treble/liquidated damages. Prior to the amendment, both statutes provided remedies of lost wages, attorneys’ fees and costs, and automatic treble/liquidated damages not to exceed double the amount of wages due. In other words, if an employee was owed $10,000.00 in wages, the employee could recover $10,000.00 in lost wages, $20,000.00 in treble/liquidated damages, plus attorneys’ fees and costs. Prior to the amendment, there was no good faith exception. The treble/liquidated damages were automatically awarded. There a number of public policies behind the automatic treble/liquidated damages provision, most notably the need to provide incentives for injured claimants, and legal counsel, to force employers’ compliance with the law when individual damages were relatively small.

With HB1469, employers will now attempt to avoid treble/liquidated damages by arguing to the Court (not the jury) that their actions/inactions were made in good faith. The statute does not define good faith, so expect a fair amount of ensuing litigation on the definition, scope, and application of this new good faith safe harbor component to Indiana’s wage laws. The new law takes effect July 1, 2015.

Social Security Disability and the ADA Amendments Act – No Paradox Wed, 06 May 2015 10:00:36 +0000 In Rutledge v. Illinois Dept. of Human Services, et al (7th Cir. May 5, 2015), the Seventh Circuit reaffirmed the principle that being “disabled” for VA disability benefits or Social Security Disability (SSD) benefits does not automatically mean that a plaintiff is foreclosed from pursuing an employment discrimination claim under the Americans with Disabilities Act, as amended, or the Rehabilitation Act.  The definition of “disability” under the ADA Amendments Act (ADAAA) and Rehabilitation Act is different than the definition of “disability” to receive VA benefits or SSD benefits.  Many employers will argue that plaintiffs are judicially estopped from claiming protection under the ADAAA/Rehabilitation Act if they have also applied for VA or SSD disability benefits, because the latter definition requires affirmation that you are unable to work.

In Rutledge v. Illinois Dept. of Human Services, et al, the plaintiff was deemed 100% totally disabled by the Veterans Administration, yet sued his previous employer under the Rehabilitation Act on the basis that he was fired due to his mental disorders.  The District Court, at a very early stage of litigation, dismissed plaintiff’s case on the grounds, in part, that plaintiff’s VA disability rating meant that plaintiff could not also be disabled and able to perform the essential functions of his job under the Rehabilitation Act.  The Seventh Circuit reversed the District Court and held “That’s wrong too.”

Social Security Disability and the ADA Amendments Act – No Paradox

One sentence by the Seventh Circuit stands out: “There is no paradox in a person deemed totally disabled by the Social Security Administration or the Department of Veterans Affairs or some other agency nevertheless wanting, finding, and holding a job, whether out of desperation or by extraordinary effort or because his employer feels sorry for him or because the agency that found him totally disabled was mistaken in thinking that his physical or mental ailments, even if very serious, were totally disabling.”  In other words, there is nothing inherently contradictory about a plaintiff being disabled under VA/SSD and also, at the same time, being disabled and able to perform the essential functions of a particular position under the ADAAA/Rehabilitation Act.

The Seventh Circuit’s position makes sense given the differences in the definitions.  The VA/SSD definition does not take into account whether reasonable accommodations would have permitted the employee to perform the essential functions.  The ADAAA/Rehabilitation Act requires employers to make reasonable accommodations to those with covered disabilities. Further, as explained by the Seventh Circuit, numerous other examples may explain how a single plaintiff can coexist within these definitions.

If plaintiffs find themselves in the position of claiming disability protection under seemingly contradictory statutes, plaintiffs should know that their case will not automatically be dismissed on this basis, there is no automatic presumption against plaintiffs, and there may be a sufficient explanation as to why the individual is claiming protection under multiple statutes.