Florida Employers May (Still) Terminate Their Employees for Insubordination


In a legal environment where employers often feel the deck is stacked against them, it is good to know that Florida courts will support employers who do not discriminate, when they need to terminate an insubordinate employee.  Such was the case in Jones v. Suburban Propane, Inc., 2014 WL 204424 (N.D. Fla. 2014), decided just this month, where the court granted summary judgment in favor of employer Suburban Propane, Inc., in a suit brought by a former delivery driver who was discharged for being "insubordinate to an extent that many and probably most employers would find grounds for termination."

In 2010, Jones and another employee filed charges of racial discrimination with the Florida Commission on Human Relations.  The charges were settled two months later.  Two years later, a Suburban Propane manager received a call from a person who identified himself as Jones' nephew, who claimed that Jones was "driving a company truck while intoxicated, selling drugs from the truck, and transporting a nonemployee in the truck."  The manager called Jones to discuss the allegations.  Over the course of several telephone calls, Jones told the manager to "stay out of [his] business" because "[it] was a family problem."  He also purportedly "cursed" at the manager.  The manager believed that Jones' speech sounded slurred and requested his location in order to send someone to pick up the truck. 

Despite several requests by his manager, Jones refused to provide the address where the truck was located and threatened to "call a wrecker to have the truck towed." The manager informed Jones that his job was in jeopardy if he did not reveal the location of the truck and also instructed him not to have the truck towed.  Jones refused and, ultimately, he had the truck towed to Suburban Propane's lot.  It was later determined that the truck was at Jones' home the entire time.

Several days after this incident, two Suburban Propane managers met with Jones and provided him with an opportunity to explain his actions.  Jones exhibited a poor attitude during the meeting and could offer "no reasonable explanation for refusing to tell [the manager] the truck's location or for calling a tow truck contrary to [the manager's] instruction."  As such, Jones was terminated based on his poor attitude and insubordination during both the June 23rd calls and during the June 26th meeting.  Jones filed suit claiming that his termination was a result of racial discrimination and/or in retaliation for previously filing a charge of discrimination.  Suburban Propane moved for summary judgment.

After considering Jones' discrimination claim and his explanation for not providing the location of the vehicle because "he could not remember his address because of stress and high blood pressure," the court granted summary judgment for Suburban Propane concluding that the Jones was unable to show that Suburban Propane's proffered reason for his termination—insubordination—was pretext for discrimination.  The court opined:  "It is undisputed that Jones engaged in conduct that a reasonable employer could deem insubordinate.  Indeed, it is difficult to imagine any employer not deeming Jones's conduct insubordinate."  The court also emphasized that "…the critical issue is not whether Jones had an excuse for his insubordinate conduct, nor even whether he was in fact insubordinate (as he clearly was). The critical issue is whether [his manager] believed Jones was insubordinate and fired him for that reason."

The court also granted summary judgment in favor of Suburban Propane on Jones' retaliation claim, holding that Jones had not established a prima facie case of retaliation.  "The gap between [the filing of the charge of discrimination] and the termination was more than two years. And the record includes no other evidence suggesting any connection between the two events[,]" the court wrote.

Jones v. Suburban Propane is a good example of when the system gets it right, for the right reasons.  In the absence of an agreement to the contrary, Florida employers may terminate employees for any legitimate non-discriminatory reason, including insubordination, which is judged based on the employer's subjective belief.  However, as was the case in Jones, where the employee previously filed a charge of discrimination or engaged in protected activity, it is especially important for employers to consult with experienced labor and employment counsel to minimize the possibility of a lawsuit—even if it is one in which they will ultimately prevail.


Granting A Requested Job Transfer Can Be Considered An Adverse Employment Action


An employee who requested and was granted a lateral job transfer, and later sued for discrimination, was not precluded from claiming that the transfer was an "adverse employment action," according to a recent decision by the Sixth Circuit Court of Appeals, Deleon, et al. v. Kalamazoo County Road Comm'n, et al., (6th Cir., January 14, 2014).

Although the ruling appears on the surface to put employers in an untenable  position, consideration of the underlying facts is enlightening.  Important to the court's decision was the fact that even though the plaintiff applied and interviewed for the position, he was initially rejected, and the position was filled with another candidate, who left shortly thereafter.  Nine months later, the plaintiff was transferred into the position, without reapplying.  According to the employer's deposition testimony, the plaintiff did not have the option to stay in his former position at the time of his transfer.  The employer stated that the transfer was part of a larger "reorganization."

The conditions of the new position were somewhat hazardous including working in a garage with constant exposure to diesel fumes.  Plaintiff alleged that he developed bronchitis, a cough and sinus headaches from breathing the black soot every day.  

The employer defended by arguing that in accordance with settled case law, because the plaintiff's job reassignment resulted in no changes in salary, benefits, job title or work hours, it should not constitute an adverse employment action.  In fact, the plaintiff stated that he thought the job to which he was transferred had better career opportunities.  

However, the Supreme Court has indicated that whether a particular reassignment is materially adverse depends upon the circumstances of the particular case and should be judged from the perspective of a reasonable person in the plaintiff's position.  White v. Burlington N. & Santa Fe Ry. Co., 548 U.S. 53, 71 (2006).  Accordingly, the court focused on whether the conditions of the transfer would have been objectively intolerable to a reasonable person.  In doing so, the Sixth Circuit reversed the lower court's entry of summary judgment for the employer and remanded for further proceedings.  

Judge Sutton wrote a dissenting opinion explaining that, in his view, when an employee applies for and obtains a job transfer, his employer cannot be said to have subjected him to an adverse employment action.  But the majority opinion cited several other decisions in which courts have held that the fact that the employee requested the transfer does not categorically bar a finding of an adverse employment action.  Thus, it is important to consider the conditions of a transfer, even if lateral, before transferring an employee, or allowing an employee to transfer, to a new position.


Yes, Employers Can Win Summary Judgment in State Court


Given the opportunity, most defense lawyers will remove an employment discrimination case filed in state court to federal court because federal judges are more inclined to grant summary judgment, i.e. a judgment in favor of one party before the case goes to trial.  But as a recent case from Florida's Third District Court of Appeal illustrates, an employer can win summary judgment on a discrimination claim in state court given the right set of facts.

In Johnson v. Great Expressions Dental Centers of Florida, P.A., Case No. 3D13-794 (Fla. 3d DCA, January 8, 2014), the plaintiff, Cynethia Johnson, had been a patient coordinator for the defendant’s dental practice.  From the start of her employment, Johnson had a poor relationship with the primary dentist, Dr. Jessica Papir, and also had various disputes with co-workers and with Great Expressions’ patients.  After being issued two formal warnings, she was terminated in December 2009 when she showed up to work late, inappropriately dressed, and with a bad attitude.

Johnson sued under the Florida Civil Rights Act claiming racial discrimination. She claimed that her supervisor refused to transfer her to another Great Expressions location after she continued to have problems with Dr. Papir.  She also claimed that three of four black employees in the office had either quit or were fired in 2009, and that the fourth quit in 2011.  Johnson asserted that these allegations were circumstantial evidence from which a jury could infer that she was fired because of her race.  The trial court disagreed and granted summary judgment to the employer on the grounds that Johnson had failed to meet an essential element of her prima facie case – namely, that the employer treated similarly situated, non-black employees more favorably. 

The Third DCA affirmed the trial court's decision.  The court noted that it was undisputed that Johnson had poor relations with patients and co-workers and that she had reported to work on the day of her termination with a bad attitude.  Johnson could not point to any non-black co-worker who behaved similarly and was not terminated.  Johnson argued on appeal that it was not necessary for her to produce evidence of a non-black comparator – that it was sufficient if she presented a "convincing mosaic" of circumstantial evidence that Great Expressions terminated her employment based on her race.  But the court noted that no Florida court had adopted the "convincing mosaic" standard.  And, even assuming such a standard applied, Johnson could not meet it because there was no convincing evidence of racial discrimination.  Great Expressions had declined to transfer Johnson to the other office because that position required a Spanish speaker, and Johnson does not speak Spanish.  And the turnover in Johnson’s position was quite high, so the fact that other black employees had been terminated or resigned was not significant.

Florida state court judges are generally reluctant to grant summary judgment.  But employers should take heart from the Johnson case.  It shows that under the right set of facts, an employer can defeat a discrimination claim in state court without bearing the risk and expense of a trial.


Job Descriptions and Performance Reviews – Do They Help or Hurt Defend Against a Claim Under The American With Disabilities Act?


It depends.  When an employee files a claim under the American with Disabilities Act ("ADA"), two of the key issues for determination are whether the employee is "qualified" for the position and whether the employee can perform the "essential functions" of the job with or without a reasonable accommodation.   In determining these issues, courts focus on employers' job descriptions and performance reviews.

Accordingly, job descriptions that identify the "essential functions" of the position may be helpful to prove that a person is not "qualified" under the ADA.  For example, in Galloway v. Aletheia House, 509 Fed. Appx. 912, 2013 BL 41809 (11th Cir. 2013), the court reviewed the employer's job description for the case manager position at issue and found that because driving was essential for the position, the applicant, who was blind, was not qualified.  In Wehrley v. American Family Mutual Insurance Company, 2013 WL 1092856 (10th Cir. 2013), the court found that the written job description, stating that the job required the ability to work in high, precarious places between 1 and 33% of the time, and to stoop, kneel, crouch or crawl between 1 and 33% of the time, and further stating that "The information in this job description is intended to describe the essential job functions" was evidence that climbing ladders and working at exposed heights were essential functions of the job.  The court in Richardson v. Friendly Ice Cream Corp., 594 F.3d 69 (1st Cir. 2010) also relied on the employer's job description to conclude that the plaintiff's restaurant job as an assistant manager had a "substantial physical component" that was essential to the position.

Contrarily, job descriptions that are vague or general are not likely to be interpreted to create an "essential function".  This was the case in Szarawara v. County of Montgomery, No. 12-5714 (E.D. Penn. June 27, 2013) where the court rejected the employer's argument that the language in the job description, requiring employees to be able to work "various shifts", "rotating schedules", weekends and holidays, made working the night shift an essential function of the job.   

A performance review after the disability occurs may be evidence as to whether or not the person is "qualified" under the ADA.   Poor performance ratings may be helpful in showing the employee was not qualified, as was the case in Jones v. Walgreen Co., 679 F.3d 9, 26 AD Cases 261 (1st Cir. 2012) where the employee received bad reviews.  Contrarily, satisfactory to exceptional ratings may be evidence that the employee is "qualified".  In Colan-Fontanez v. Municipality of San Juan, 660 F.3d 17, 25 AD Cases 423, 2011 BL 262540 (1st Cir. 2011), the employee received good to superior ratings, which the court found to be strong evidence of the employee's qualifications and skills.  In EEOC v. Chevron Phillips Chemical Co., 570 F.3d 606, 21 AD Cases 1729 (5th Cir. 2009), the court found that the employee was "qualified" because the employee received satisfactory job reviews.     

These cases highlight the importance of assuring that job descriptions spell out the "essential functions" with enough detail to support the argument that the functions are truly "essential" to the job, and that employee evaluations should include sections directly related to the performance of those "essential functions" and should accurately state the employees' job performance.


Automatic Gratuities Are Now Wages For FICA Tax Purposes


Restaurateurs and wait staff beware: beginning this month, the IRS will classify automatic gratuities not as "tips," but as service charges reportable as regular wages which are subject to payroll tax withholdings.

Rev. Rul. 2012-18 provides that automatic gratuities – like that automatic 18 percent added to the bill for a party of six or more -- are service charges, rather than tips, for tax purposes. To the extent any portion of a "service charge" is distributed to an employee, it is wages for FICA tax purposes.  Thus automatic gratuities are not included in the wait staff's tip reports, but are to be treated by the employer in the same way as the wait staff’s hourly wages.

The original rule technically went into effect in June 2012, but the IRS pushed back enforcement until January 2014 to allow restaurants time to comply. So, starting now, those automatic gratuities for large parties are to be treated as service charges, not tips, for FICA purposes.

The fact that the restaurant and wait staff call such payments "tips" is not determinative. According to the IRS, it's not a "tip" unless it satisfies four criteria:

  1. The payment must be made free from compulsion.
  2. The customer must have the unrestricted right to determine the amount.
  3. The payment should not be the subject of negotiation or dictated by the employer policy.
  4. Generally, the customer has the right to determine who receives the payment.

These changes will obviously result in more paperwork and added costs for restaurants, and, as a result, many restaurants are changing policies.  Some restaurants have resorted to simply providing the customer the calculation of the tip at 15, 18 or 20 percent, regardless of the size of the party. That shift may be an unintended positive consequence of this ruling for those who would prefer to cruise through life without doing math at all.



Florida's Minimum Wage is Now $7.93


Florida's minimum wage rate increased to $7.93 effective January 1, 2014.  As we reported in November, Florida's minimum wage law requires the Florida Department of Economic Opportunity to recalculate Florida's minimum wage annually based upon the increase in the federal Consumer Price Index for Urban Earners and Clerical Workers in the Southern Region. This minimum wage increase applies to all employees who are covered by the federal Fair Labor Standards Act.

This hourly increase also impacts the wages that must be paid to tipped employees working in Florida.  While employers of tipped employees may take a credit of up to $3.02 per hour, tipped employees must also receive a direct hourly wage.  Effective January 1, 2014, this direct hourly wage must be at least $4.91 – calculated as Florida's minimum wage ($7.93) minus the permissible tip credit ($3.02).



Your Digital Workplace: Pitfalls and Remedies for Employees' Internet Use


Computers are a doubled-edged sword—a vital convenience for everyone while simultaneously a potential source of liability if used improperly by employees. Employers' liability has expanded to the point where an employer may be liable to a third party for harm caused by an employee's misuse of computer systems at work.  For example, an employer may be held liable to a third party for failing to investigate an employee whom it suspects of using company computer systems to view child pornography.  See Doe v. XYC Corp., 887 A.2d 1156 (2005).  But, employers are not left helpless—every business should create and implement clear policies on employees' use of computer equipment in the workplace.  Employers must also be cognizant of how employees are using their computer systems and create a system by which computer use is monitored.  At the same time, employees should be informed of such monitoring and that they will have little or no expectation of privacy when using company computers for personal matters. 

In Stengart v. Loving Care Agency, 990 A.2d 650 (N.J. 2010), the court addressed the parameters of the attorney-client privilege for an employee who was using the employer's computer system to communicate with her attorney through her personal Yahoo!© email account.  The court found that because the employee had an expectation of privacy in her Yahoo!© account, she was entitled to the attorney-client privilege, despite her using the employer-monitored system.  Here, a policy (and an employee acknowledgement) that notified the employee that her computer communications were not private may have helped the employer defend against the claim of privilege.

What about the use of Facebook®, Twitter©, and Instagram© at work? Employees’ use of social media raises legal issues about the outer limits of employer supervision.  Some employers request login information for personal social media accounts as a condition of either obtaining or maintaining employment.  But, more than a dozen states have enacted statutes regarding "social media privacy" that prohibit employers from requesting access to personal social media accounts as a condition of employment.  Currently, S.B. 198 is pending before the Florida Senate, and, if the bill is made law, employers will be liable to employees for conditioning employment upon providing access to personal social media accounts.  In addition, the federal Stored Communications Act, 18 U.S.C. § 2701 et. seq., could become a pitfall for employers that seek or force access to employees' social media accounts.  Any access to such an account must be authorized or must be obtained by a user for whom the information on the social media account was intended, such as a coworker who is a Facebook friend.  See Ehling v. Monmouth-Ocean Hosp. Serv. Corp., 2013 WL 4436539 (D.N.J. Aug. 20, 2013).  In light of these statutes, employers should avoid seeking to gain too much control over employees' personal social media accounts.

So what should an employer do to prevent employees' misuse of company computer systems and equipment? Some employers have managed the risks associated with company computer systems by instituting internet restrictions on the company computer system that block any attempt to access social media sites and other potentially hazardous websites.  These "blocks" and attendant computer system policies explain that the employee's attempt to access the site will be logged and further reinforce that employees have little or no expectation of privacy when using company computer systems.  In addition, while employers may be restricted in monitoring the content of employees' social media activity, employers are not restricted from creating strong policies regarding employee misuse.  

In sum, supervision, monitoring, and strong policies should make internet use in the workplace more efficient and effective for both employers and employees.



EEOC Obtains Record Relief From Companies


On Monday, December 16, 2013, the EEOC announced that it had obtained $372.1 million in relief from private companies during the 2013 fiscal year, which is a record in monetary benefits collected through enforcement actions.

According to the EEOC's Performance and Accountability Report for fiscal year 2013, which ended September 30, 2013, this figure represents a $6.7 million increase over last year's recovery total, which was also a record-breaking number. The EEOC said the figure includes benefits obtained for more than 70,522 people through administrative enforcement activities, which include litigation, mediation, settlement and conciliation.

In keeping with its strategic plan (which we discussed here), the EEOC focused on systemic matters during 2013. According to the EEOC, at the end of the fiscal year, there were 300 systemic investigations resulting in 63 settlements or conciliation agreements that recovered approximately $40 million.

The EEOC said that it received a total of 93,727 private sector charges of discrimination and was able to resolve a total of 97,252 charges. 

The lesson for employers is clear. The EEOC is increasingly aggressive, and employers need to ensure that their policies and procedures are in full compliance with EEOC regulations for the 2014 calendar year.


On Second Thought, Wage Ordinance Does Not Expand Federal Court's Jurisdiction


Miami-Dade County's prevailing wage ordinance, which sets minimum wages on publicly funded construction projects, does not authorize plaintiffs to litigate prevailing wage claims in court under the auspices of the Fair Labor Standards Act, according to a recent court decision, Calderon v. Form Works/Baker JV, LLC (S.D. Fla., December 12, 2013).  The opinion is a reversal of the court's prior decision in the case, and a significant victory for employers. 

The defendant was involved with the construction of Marlins Park, a baseball stadium funded with public monies.  The plaintiffs claimed to have worked more than 40 hour per week for the defendant.  The plaintiffs also claimed that the defendant misclassified them into lower-paying job categories in violation of the ordinance, resulting in a shortfall in wages.  The plaintiffs filed suit, asserting claims under the FLSA and the ordinance.  The defendant filed a motion to dismiss, but the court initially denied the motion.  The court reasoned that if the defendant misclassified the plaintiffs' jobs under the ordinance, the plaintiffs' hourly rates, though higher than the federal minimum wage, were deficient, and this deficiency resulted in a deficiency in plaintiffs' overtime wages under the FLSA. 

The defendant filed a motion for reconsideration.  Revisiting the issue, the court reversed its prior decision and dismissed the case, holding that because the ordinance did not create a private cause of action, the court lacked subject matter jurisdiction over the plaintiffs' claims:

In effect, the [court's prior order] furnished Plaintiffs a private cause of action in federal court for wages allegedly owed to them pursuant to a local ordinance despite the presence of an administrative process and the lack of legislative authority from the County (or state) granting a private right of action.  Upon further careful review, the Court agrees with Defendant that such a result, absent binding authority to the contrary, works to improperly expand the Court's subject-matter jurisdiction.

The Calderon case is significant because if the court's initial opinion stood, the plaintiffs would have been able to circumvent the ordinance's administrative process and litigate their prevailing wage claims in court.  The effect of such a decision would have been to create a new federal cause of action for employers covered by the Miami-Dade County prevailing wage ordinance.  The court's revised opinion ensures that the administrative process is the exclusive method for plaintiffs to vindicate their prevailing wage claims. 



Employee's Dishonesty About Facebook Posts Supports Defense to Retaliation Claim


A recent opinion out of the 10th Circuit Court of Appeals demonstrates the important role social media plays in labor and employment lawsuits.  In Debord v. Mercy Health System of Kansas, Inc., a Kansas hospital was found not to have engaged in unlawful retaliation when it fired an employee who had complained of sexual harassment, in part because she repeatedly, falsely denied having authored Facebook posts that accused her supervisor of misconduct. 

The plaintiff, Sara Debord, alleged that her former employer, Mercy Health, knew or should have known that her supervisor created a hostile workplace through unwanted touching and offensive sexual remarks.  She also claimed that the hospital did not do enough to prevent sexual harassment in the workplace, and that when she finally reported the harassment, Mercy Health retaliated by firing her.  

Mercy Health first became aware of Debord's allegations when she made a series of public posts on Facebook in July 2009.  The relevant posts said:

(At 9:00 am) Sara DeBord loves it when my boss adds an extra $600.00 on my paycheck for hours I didn't even work ... awesome!!(At 1:37 pm) Sara DeBord is sooo disappointed ... can't believe what a snake my boss is ... I know, I know everyone warned me:(At 2:53 pm) Oh, it's hard to explain .... basically, the MRI tech is getting paid for doing MRI even though he's not registered and myself, nor the CT tech are getting paid for our areas ... and he tells me "good luck taking it to HR because you're not supposed to know that" plus he adds money on peoples checks if he likes them (I've been one of them) ... and he needs to keep his creapy hands to himself ... just an all around d-bag!!

The hospital immediately began an investigation into both the allegations of worker overpay and the possibility of sexual harassment raised by the posts.  Debord denied having authored the posts, saying three times that anyone could have posted them from her cellphone before finally admitting she had, in fact, written them.  Debord was suspended for one day without pay for lying about the Facebook posts, and a week later, after determining that the overpay claim was false, and learning that Debord had been sending disruptive text messages to coworkers during the investigation, the hospital terminated Debord.

The court found that Mercy Health's reasons for terminating Debord, namely her dishonesty about the Facebook posts posted while at work and disruptive behavior during the investigation, were not pretextual.  Debord "[could] not dispute that dishonesty is a valid ground for terminating an employee." 

This case demonstrates the increasing role social media plays in the workplace and the variety of ways it can affect traditional employment discrimination or retaliation cases.  Employers should, however, consult with outside counsel to determine whether and how social media may be used in defense of such cases, since regulating or monitoring employees' social media communications may run afoul of state privacy laws.



Religious Challenges by For-Profit, Secular Employers and the Affordable Care Act


On November 26, 2013, the Supreme Court of the United States agreed to hear challenges to the requirement that employer-provided health insurance include certain contraceptive methods.  The Supreme Court will consider two cases: Hobby Lobby Stores, Inc., et al., v. Sebelius, et al. from the Tenth Circuit Court of Appeals and Conestoga Wood Specialties Corp., et al. v. Sebelius, et al. from the Third Circuit Court of Appeals.  The critical issue is whether for-profit, secular corporations that operate based on religious principles can assert the Free Exercise Clause and seek relief under the Religious Freedom Restoration Act (RFRA).  The answer to this question will determine whether these corporations may challenge the Patient Protection and Affordable Care Act (ACA) requirement for post-fertilization contraceptives, like Plan B, based on religious grounds. 

The ACA requires employers with 50 or more employees to provide their employees with a minimum level of health insurance.  Further, it requires non-exempt group plans to provide coverage without cost-sharing for preventative care and screening for women in accordance with the guidelines set by a sub-agency of the Department of Health and Human Services. The guidelines require coverage for approved contraceptive methods, among other things.  The approved contraceptive methods include contraceptives like intrauterine devices and emergency contraceptives (Plan B and Ella), which may be used post-fertilization.  As of June 1, 2013, employers that fail to comply with the ACA face penalties of $100 per day per offending employee and possible litigation brought by the Department of Labor and plan participants. 

In Hobby Lobby and Conestoga Wood, for-profit, secular corporations, which do not meet the exemptions outlined in ACA for religious organizations, challenged the mandate requiring coverage of certain post-fertilization contraceptives on religious grounds.  However, the Tenth and Third Circuits came to completely different conclusions on the issue of whether these corporations could challenge the ACA on such grounds.  The Tenth Circuit found that the corporations have standing to seek relief under the RFRA.  The Third Circuit found that the corporations could not seek relief under the RFRA and challenge the ACA on religious grounds. 

The Supreme Court will now decide whether these for-profit, secular corporations may assert the Free Exercise Clause and challenge the ACA under the RFRA.  When the Supreme Court does render its opinion, it will be the first decision on the issue of whether for-profit, secular corporations can engage in the exercise of religion and assert claims under the Free Exercise Clause.


In Employment Arbitrations, Prevailing Party Fee Provision "Chills" But is Not Cool


In recent years the United States Supreme Court has ruled in favor of businesses in several cases involving the enforceability of arbitration agreements.  But as illustrated by a recent decision by Florida's Second District Court of Appeal, Hernandez v. Colonial Grocers, Inc., courts will decline to enforce arbitration agreements that have a "chilling effect" on the filing of employment-related claims.

Jose Hernandez filed an action against Colonial Grocers alleging a violation of the Fair Labor Standards Act and Florida's worker's compensation anti-retaliation statute, section 440.205, Fla. Stat. Colonial moved to compel arbitration in accordance with its employee manual, which provided that "any controversy or claim arising out of or relating to the employment relationship" was subject to arbitration.  The arbitration provision also provided:

Although the parties shall initially bear the cost of arbitration equally, the prevailing party, if any as determined by the arbitrator at the request of the parties which is hereby deemed made, shall be entitled to reimbursement for its share of costs and reasonable attorneys' fees, as well as interest at the statutory rate.

The trial court granted Colonial's motion, and Hernandez appealed.

The Second DCA reversed the trial court's order, holding that the attorney's fee provision had a "chilling effect" that discourages employees from bringing Fair Labor Standards Act claims.  The court noted that under the FLSA, a prevailing plaintiff is entitled to an award of reasonable attorney’s fees, whereas the statute does not allow for prevailing party fees for the defendant. In contrast, under Colonial's arbitration agreement, whichever party prevails "shall be entitled to reimbursement for its share of costs and reasonable attorneys' fees." The result is that if the arbitrator were to declare Colonial the prevailing party, Hernandez would be obligated to pay Colonial's attorney's fees. "This renders the potential cost of arbitration to be far greater to Hernandez than the potential cost of civil litigation," the court wrote, "which under no circumstances would include Colonial's attorney's fees. As such… [the agreement] expose[s] him to a potential liability to which he would not be exposed if the litigation occurred in civil court because the federal statute specifically protects him from such liability."

The Hernandez decision points to one of the principal limitations of arbitration agreements:  They will not pass judicial muster if they defeat the remedial purposes of employment laws.  Employers that fail to recognize this and adopt arbitration agreements that limit an employee’s substantive rights, or that discourage employees from bringing statutory claims by making arbitration more expensive than litigation, will likely find themselves back in court.


A New Protected Class?: LGBT Workplace Discrimination and the Employment Non-Discrimination Act of 2013


Congress is currently considering the creation of a new protected class for purposes of workplace discrimination.  The Employment Non-Discrimination Act (ENDA) would create a new federally-protected class of individuals: lesbian, gay, bisexual and transgender applicants and employees.  Generally, ENDA will prohibit employment discrimination on the basis of sexual orientation and gender identity by covered entities.  Most states do not have employment discrimination laws that protect lesbian, gay, bisexual and transgender individuals.  Other states and cities vary with the types of laws and ordinances they have in place.  Some states prohibit employment discrimination based on sexual orientation or gender identity, whereas others only prohibit employment discrimination based on sexual orientation.  Additionally, some laws make a distinction between public and private employment. 

While the bill may undergo changes, there are some key provisions in ENDA of which employers should be aware:

  • Like Title VII of the Civil Rights Act, a covered employer must have at least 15 employees.
  • Sexual orientation includes homosexuality, heterosexuality and bisexuality.
  • Similar to the Americans with Disabilities Act, employers may not discriminate against individuals based on actual or perceived sexual orientation or gender identity. 
  • Individuals who associate with lesbian, gay, bisexual or transgender individuals are protected from discrimination as well. 
  • ENDA permits claims of disparate treatment but not claims of disparate impact. 
  • Employers would not be required to create additional facilities for lesbian, gay, bisexual and transgender individuals in the workplace. 
  • Employers can require an employee to adhere to reasonable dress and grooming standards during working hours. 
  • Employers are prohibited from collecting statistics on lesbian, gay, bisexual and transgender individuals.  Presumably, such information would not be included in EEO-1 Reports.
  • Aggrieved individuals would not be permitted to recover under both Title VII for sex discrimination and ENDA.

ENDA passed the Senate vote on November 7, 2013.  The bill will now proceed to the House of Representatives.  However, House Speaker John Boehner has not scheduled a vote on the bill. Regardless, human resources professionals should keep ENDA on their radar heading into 2014.


Will You Be Ready When The Whistle Is Blown?


Claims by employees "blowing the whistle" on their employer are on the rise in today's workplace.  Will you be ready when the whistle is blown on your company?  Better yet, can you prevent whistleblower claims from being raised in the first place?

Various provisions of state and federal law prohibit retaliation against employees who "blow the whistle" on employer misdeeds.  Laws prohibiting retaliation against whistleblowing employees include:

  • Florida's Private Whistleblower Act
  • Florida's Public Whistleblower Act
  • False Claims Act
  • Sarbanes-Oxley Act
  • Dodd-Frank Act
  • 21 whistleblower laws in OSHA’s Whistleblower Protection Program

While the specifics of each of these laws can differ greatly so that each whistleblower claim must be treated individually and on a case by case basis, certain common threads can be found in all whistleblower claims.  First, the employee's claim must be made in opposition to or about an improper practice by the employer.  For most whistleblower statutes, the employee must complain about an actual violation of a law, rule or regulation.  This means that the action complained of must constitute a violation of a law, rule or regulation and not the mere suspicion of a violation or a belief that a violation has occurred.  Under Florida's Private Whistleblower Act, Florida Statutes § 448.101, et seq., only a validly enacted law, rule or regulation can form the basis of a claim.  Thus, employee handbooks or policies, industry standards, even governmental executive orders and opinion letters cannot form the basis of a whistleblower claim because they do not qualify as a validly enacted "law, rule or regulation" necessary to trigger Florida's statute.
Another common thread running throughout all whistleblower statutes is the anti-retaliation provision.  Stated simply, once the complaint is made, the complaining employee cannot be subject to any retaliatory personnel action as a result of the claim. This includes discharge, suspension, demotion, decrease in pay or loss of benefits, or any other action that negatively impacts that employee's working conditions.  Unless the decision to take such action against the employee was already made prior to the assertion of the complaint and you have the documentary evidence to prove it, it is wise to forego any negative treatment of the employee until the whistleblower claim has been addressed.

The above topics, as well as many more related to understanding and avoiding whistleblower and retaliation claims, will be discussed at Akerman's upcoming breakfast seminar on November 20th in West Palm Beach, FL.


OSHA Proposes Major Recordkeeping Change


The Occupational Safety and Health Administration (OSHA) has proposed a major change to its rules regarding the way that employers report injury and illness data to the agency.

On November 7, 2013, the OSHA Assistant Secretary Dr. David Michaels announced a new proposed rule that would require establishments with more than 250 employees, which are already required to keep injury records, to electronically submit them to OSHA on a quarterly basis, and establishments with 20 or more employees in industries with high injury and illness rates to electronically submit their injury and illness logs each year. Michaels said OSHA will post the data on its website, once personally identifying information is removed.

Michaels said the newly proposed submission requirements will enable employers to compare their safety records against peers and will allow workers to know the safety records of potential employers. Aggregating data across industries also will help researchers identify emerging hazards and patterns, Michaels said. On January 9, 2014, OSHA will hold a public meeting on the proposed rule in Washington, D.C.  In addition, OSHA is accepting public comments for 90 days, until February 6, 2014.

Under current rules, employers are required to post annual summaries of injury and illness reports in a common area where employees can see them. While the OSHA website contains raw numbers about incidents at certain workplaces, it doesn't describe what the injury was or how it occurred. Business groups say they are likely to oppose the plan, claiming that raw injury data can be misconstrued or may disclose sensitive information that may be misused. 

Marc Freedman, executive director for labor policy at the U.S. Chamber of Commerce, said the mere recording of an injury does not tell the full story about the circumstances surrounding it or whether the company has a good safety program.  "Making company-specific data on injuries available for all to see would be a major problem and would likely lead to companies being targeted by outside groups who want to characterize these employers as having bad safety records," Freedman said

Michaels announced the rule on the same day the Bureau of Labor Statistics released its estimate that there were almost 3 million nonfatal U.S. recordable workplace injuries and illnesses by private-industry employers in 2012, resulting in an incidence rate of 3.4 cases per 100 equivalent full-time workers. "Three million injuries are three million too many. We can and we must do better," Michaels said. Michaels called the proposed submission requirements "an effective, inexpensive, and non-prescriptive way" to encourage employers to do this.

With the possibility that OSHA reporting requirements could change soon, it's important for businesses to make sure they remain in compliance with OSHA’s recordkeeping rules.


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