Disgruntled Employees & Gun Violence: The Disturbing New Reality

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

In the aftermath of the mass shooting at a municipal building in Virginia Beach on Friday, May 31st which left twelve dead and others wounded, two familiar words were used to describe the gunman – “disgruntled employee.”

In the past two years, workplaces in Virginia Beach (May 31, 2019), Aurora, Illinois (Feb. , 2019), Harford County, Maryland (Sept. 20, 2018), Edgewood, Maryland (Oct. 18, 2017), San Francisco, California (June 14, 2017), and Orlando, Florida (June 5, 2017) have been victims of mass shootings by gunmen described as “disgruntled” current or former employees. Workplace shootings by “disgruntled” current or former employees have also occurred in Albuquerque, New Mexico (Nov. 13, 2018), Las Vegas, Nevada (April 16, 2018), Birmingham, Alabama (March 14, 2018), Taylor, Michigan (February 1, 2018), Nashville, Tennessee (Jan. 11, 2018), Houston, Texas (Dec. 29, 2017), Bronx, New York (June 30, 2017), New York, New York (Oct. 5, 2017), Charleston, South Carolina (Aug. 24, 2017), Cleveland, Ohio (June 15, 2017). and Dallas, Texas (April 24, 2017), amongst other locations.

So, why the surge in shootings? Postulations regarding the phenomenon of school shootings may provide an answer. In an October 12, 2015 New Yorker article, Malcolm Gladwell theorized that school shootings are akin to “a slow-motion ever-evolving riot in which each new participant’s action makes sense in reaction to and in combination with those who came before.” If this theory is accurate as to “disgruntled” workers, the explanation for past shootings also serves as an ominous sign of the future.

If employers have not yet become alarmed regarding the prevalence of workplace shootings, their employees certainly have. According to data compiled by the Society for Human Resources Management (“SHRM”) in 2019, approximately one out of seven Americans do not feel safe at work.  The same data indicates that nearly 50% of human resources professionals have experienced a workplace violence incident.  In a March 19, 2019 press release, SHRM President and CEO Johnny C. Taylor remarked: “This data shows we have a lot of work to do in terms of security, prevention, training and response.”

To be sure, not all gun violence is preventable by an employer.  An unavoidable consequence of the prevalence of gun violence, however, is the increasing pressure to hold employers legally responsible. As noted in another blog article by this author, the Occupational Safety & Health Administration (“OSHA”) can and has issued citations arising from workplace violence under the general duty clause of the Occupational Safety and Health Act. State worker’s compensation laws do not always insulate employers from wrongful death suits, especially in states where worker’s compensation insurance is optional.

With each new incident of gun violence, therefore, comes inevitable scrutiny as to the employer’s action or inaction beforehand. Increasingly, questions are being asked as to whether (1) the employer had a workplace violence prevention plan, (2) the “disgruntled” employee had a violent background before being hired by the employer, (3) the employer had policies and procedures regarding threats of workplace violence, (4) the employer had training for recognizing the signs of imminent violence, (5) there were any warning signs of violent behavior by the “disgruntled” employee, (6) the employer had security protocols for preventing firearms in the workplace, (7) the employer had security protocols for denying access to former employees, (8) the employer had a response plan, and (9) whether employees were trained as to the response plan.

The disturbing new reality for employers, therefore, is the immediate need to understand the importance and severity of the threat of gun violence by “disgruntled” workers. Guidance in this area is already available from OSHA and SHRM. From this guidance and legal advice, policies and procedures can be formulated by employers to mitigate the risk of loss of human life and legal liability.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

NLRB Restresses Risk Of Firing Employees Who Discuss Pay

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Employers understand the disruption to workplace morale which can result from open discussions about employee compensation.

For instance, on February 24, 2011, MCPc, Inc., a non-union company, invited employees to a “team building” lunch. The lunch quickly devolved from “team building” to complaints by employees about their excessive workloads. One employee urged the company to hire additional employees to alleviate these heavy workloads. He added the company could have hired several employees for the $400,000 annual salary being paid to a newly hired executive. Other employees agreed. Employee morale was worse after the lunch than it had been beforehand.

MCPc, Inc. responded to the ill-fated “team building” lunch by terminating the employee who had accessed and shared the salary of the newly hired executive. At the time, the company likely did not anticipate this decision would be the catalyst for more than eight years of costly litigation culminating in a May 23, 2019 Order that the employee be (1) reinstated without prejudice to his seniority and with all records of his prior dismissal expunged, (2) made whole for lost earnings and other benefits, with interest, (3) compensated for “search-for-work” expenses, and (4) compensated for the adverse tax consequences, if any, of receiving a lump sum backpay award.

So, what did MCPc, Inc. allegedly do wrong? According to the National Labor Relations Board (“NLRB”) Decision accompanying the May 23, 2019 Order, the employee’s conduct at the “team building” lunch was protected concerted activity under the National Labor Relations Act (“NLRA”). Specifically, the employee had contributed to shared employee concerns regarding staff shortages. The NLRB found the company violated Section 8(a)(1) of the NLRA by discharging the employee for his protected concerted activity.

To be sure, MCPc, Inc. can, and likely will, appeal the NLRB decision in a federal appeals court. Still, its experience serves as a cautionary tale for other employers. The NLRA is applicable to both union and non-union employers. What an employer may regard as a disruption to workplace morale, the NLRB may regard as legally protected conduct. When employee misconduct even arguably implicates shared concerns over terms or conditions of employment, prudent risk management demands that the NLRA be considered before taking any further action.

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Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues.  To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Supreme Court To Hear Three LGBTQ Discrimination Cases

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

On Monday, April 21, 2019, the U.S. Supreme Court agreed to hear, during the 2019-2020 term, three cases alleging sex discrimination in employment under Title VII of the Civil Rights Act of 1964 (“Title VII”). These three cases provide the Court an opportunity to  decide whether Title VII’s bar against sex discrimination extends to discrimination based upon sexual orientation and gender identity.

Zarda v. Altitude Express, Inc.

On February 26, 2018, the Second Circuit ruled en banc that Title VII bars discrimination based on sexual orientation. The Court opined: “… the most natural reading of the statute’s prohibition of discrimination “because of sex” is that it extends to sexual orientation discrimination because sex is necessarily a factor in sexual orientation.”

Bostock v. Clayton County Board of Commissioners 

On May 10, 2018, the Eleventh Circuit reached a different conclusion as to whether Title VII bars discrimination based upon sexual orientation.  In doing so, the Court followed 1979 precedent from the 11th Circuit holding that “discharge for homosexuality is not prohibited by Title VII.”

EEOC v. R.G. & G.R. Harris Funeral Homes, Inc.

On March 7, 2018, the Sixth Circuit ruled that “[d]iscrimination on the basis of  transgender and transitioning status is necessarily discrimination on the basis of sex …”  The Court clarified that “discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping.”

Takeaways for Employers

As observed in a March 2018 post on this blog, a new wave of lawsuits alleging LGBTQ discrimination in employment had begun long before the Zarda ruling on February 26, 2018. Even in circuits which, as the Eleventh Circuit, have rejected the application of Title VII to LGBTQ claims, the chance that the Supreme Court may overturn such precedent has provided hope that such suits can ultimately prove successful.

To be sure, the Supreme Court may ultimately decide that Congressional, not judicial, action is needed to expand the scope of Title VII to include sexual orientation and gender identity discrimination. Such a decision, however, may not come until 2020. In the meantime, employers must manage the risk of LGBTQ lawsuits even in states which do not have state or local laws barring such discrimination.

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Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Hateful Conduct or Hate Hoax? Important Lessons For Employers

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

According to FBI statistics, hate crimes rose 17% in the U.S. in 2017. Amongst the motivations for hate crimes tracked by the FBI are “race/ethnicity/ancestry bias”, “religious bias”, “sexual orientation bias”, “disability bias” and “gender bias.” 

The FBI does not similarly document the number of false allegations of hate crimes. Recent events, however, have shown that hate hoaxes are real.

On January 29, 2019, actor Jussie Smollett, who is black and gay, claimed to have been attacked in Chicago by two masked men. According to Smollett, the two men yelled racist and homophobic slurs, wrapped a rope around his neck, physically assaulted him and poured a substance over him. The media, politicians and entertainers were quick to condemn the incident as a hate crime.

Paradoxically, what started as a police investigation of a hate crime, quickly became an investigation of a hate hoax. On February 20, 2019, Smollett was formally charged with filing a false police report.

In 2017, the Jackson, Michigan home of Nikki Joly, a prominent member of the local LGBTQ community, was burned to the ground. The FBI initially regarded the incident as a hate crime. A Jackson newspaper named Joly its 2018 Citizen of the Year. After a lengthy investigation, Joly was surprisingly charged in 2018 with first degree arson in burning his own home.

Just as in society as a whole, hateful conduct continues to be an unfortunate reality in the workplace. Indeed, most employers understand their legal obligations to take reasonable measures to prevent such conduct and to take prompt remedial action in response to such conduct. Recent hate hoaxes nevertheless underscore three important lessons in exercising these legal obligations.

Lesson 1: Take All Allegations of Hateful Conduct Seriously

The possibility of a hate hoax does not diminish an employer’s obligations to be vigilant in remediating hateful conduct in the workplace. This duty requires that all explanations be considered, including the explanation that the allegation is truthful.  

A hate hoax thus cannot be the first and certainly not the only explanation embraced by an employer for alleged hateful conduct. The risk of precipitously embracing such an explanation is that it may ultimately prove to be wrong. Any action subsequently taken against the accuser could then result in a discrimination claim. Even worse, the accused may only be emboldened to engage in other misconduct in the future.

Lesson 2:  Look Beyond Mere Appearances

The possibility of a hate hoax does underscore the importance of a thorough investigation of alleged hateful conduct. This duty requires that all explanations be considered, including the explanation that the allegation is untruthful.  

What may appear at first to be a clear case of misconduct by the accused may through further investigation be revealed to be a case of misconduct by the accuser. The risk of a rush to judgment is that the accused may be wrongfully punished, and the accuser may be wrongfully rewarded. Any action taken against the accused could then be the basis of a reverse discrimination claim against the employer. Having been successful in one hoax, the accuser may also be encouraged to undertake other hoaxes in the future.

Lesson 3: Be Objective

The possibility of a claim by the accused or accuser does mandate an objective response by an employer to allegations of hateful conduct. Even as to conflicting accounts, such a claim can simply be based upon alleged favoritism in the employer’s response.

For some employers, such alleged favoritism may lean toward the conclusion of a hoax.   The alleged reasons for such favoritism can include (1) the prospect of punishing or losing the accused employee, especially if he or she is a productive employee, (2) the fear of finding evidence of its own culpability in failing to prevent the misconduct, or (3) previous performance or conduct issues of the accuser employee.

For other employers, such alleged favoritism may lean toward the conclusion that hateful conduct occurred. The alleged reasons for such favoritism can include (1) fear of suit by the accuser, (2) fear of backlash by the accuser’s community, (3) empathy for the accuser’s status, or (4) past discriminatory behavior by the employer.

In responding to allegations of hateful conduct, employer must thus avoid even the appearance that the process is being influenced by favoritism in either direction. The risk of not heeding this advice is a costly discrimination or reverse discrimination claim.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Non-Compete Agreements For Low-Wage Workers Under Fire

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

According to a University of Michigan Law & Economic Research Paper last revised on January 19, 2019, post-termination non-compete agreements “are more likely to be found in high-skill, high-paying jobs, but they are also common in low-skill, low-paying jobs.”

California is famous for outlawing virtually all covenants not to compete for employees. Historically, most other states have required only that such covenants have reasonable limitations as to time, geographical area and scope of activity to be restrained.

Increasingly, however, states are also limiting the types of jobs that may subject to a non-compete agreement. A Massachusetts law which became effective on October 1, 2018 provides that non-compete agreements cannot be enforced against an employee who is classified as non-exempt under the FLSA. An Illinois law which became effective on January 1, 2017 bans covenants not to compete for low-wage employees whose “earnings do not exceed the greater of (1) … the minimum wage required by … law or (3) $13 per hour.”

Other states, including New Hampshire and New Jersey, are considering similar legislation making non-compete agreements unenforceable against low-wage workers.

At the federal level, legislation limiting jobs subject to a non-compete agreement was first proposed by Democratic Senator Christopher Murphy in 2015. Earlier this month, Marco Rubio became the first Republican Senator to propose such legislation with the introduction of the Freedom to Compete Act. In a January 15, 2019 press release, he proclaimed: ““Non-compete agreements that arbitrarily restrict entry-level, low-wage workers from pursuing better employment opportunities are egregious and outdated in the twenty-first century American economy.”

Senator Rubio’s bill seeks to amend the Fair Labor Standards Act (“FLSA”) to (1) void any non-compete agreement with an employee entered into before enactment, and (2) prohibit any non-compete agreement with an employee after enactment.  The term “non-compete” agreement is broadly defined as an agreement “that restricts [an] employee from performing, after the employment relationship … terminates “[a]ny work for another work for another employer for a specified period of time”, “[a]ny work in a specified geographical area”, or “[a]ny work for another employer that is similar to such employee’s work for the employer that is a party to such agreement.”

As with other provisions of the FLSA, Senator Rubio’s bill states that any employee employed in a bona fide executive, administrative or professional capacity, or in the capacity of outside salesman, would not be protected by the proposed amendment. Also, the proposed legislation clarifies that it does not “preclude an employer from entering into an agreement with an employee to not share any information (including after the employee is not longer employed by the employer) regarding the employer or the employment that is a trade secret, as defined in section 1839 of title 18, United States Code.”

The genesis of the movement to ban non-compete agreements for low-wage workers appears to be an October 15, 2014 Huffington Post article which ridiculed Jimmy Johns for including non-compete agreements in hiring packets for low-wage employees.  The practice ultimately prompted (1) a class action suit, (2) investigations by, and settlements with, the States of Illinois and New York, and (3) legislative initiatives to curb such practices by other employers.

Non-compete agreements for low-wage workers have rarely been a good idea for employers. Non-compete agreements are generally justified as necessary to protect an employer’s good will, trade secrets or specialized training. Typically, only management and sales employees are privy to such information.  Asking low-wage employees to sign non-compete agreements can thus strain the credibility of a claim that their enforcement is necessary as to management and sales employees. That such agreements are now the target of legislative efforts is simply another reason to avoid them.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Employers Should Be Monitoring “Right to Disconnect” Initiatives

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

As many employers already know, states and municipalities have recently been at the forefront in enacting legislation to protect the rights of workers. Previous articles on this blog have highlighted new laws governing predictive scheduling, state-specific sexual harassment preventionnon-disclosure agreements, job candidate screening, paid sick time, and other terms and conditions of employment.

So what other legislative initiatives should employers be monitoring? Based upon a bill scheduled this week for hearing by the New York City Council, “right to disconnect” initiatives should certainly be on this list.

Under the proposed New York ordinance, it would be unlawful for a covered private employer “to require an employee to access work-related electronic communications outside of such employee’s work hours, not including overtime, except in cases of emergency.” The term “electronic communications” includes “electronic mail, text messages, or other digital means of conveying data electronically.”

Under the proposed ordinance, a covered employer would face a fine of $250 “for each instance of an employee being required to access work-related electronic communications outside of the standard work hours.” For an employee terminated in violation of the proposed ordinance, available remedies include “reinstatement” and “full compensation including wages and benefits lost.”

The proposed ordinance would take effect a mere 120 days after its enactment.

The New York City initiative comes on the heels of “right to disconnect” laws enacted in 2017 in France and Italy.  India is also currently considering a “right to disconnect” law.

Whether or not New York City enacts the proposed ordinance, it is likely states and other municipalities will take notice of the arguments cited in favor of enactment. These arguments include quality of life away from work, which has already been successfully  cited as a reason for predictive scheduling ordinances. Even if New York City does not pass a “right to disconnect” law, another jurisdiction will likely do so.

As previously advised on this blog, compliance and risk management strategies by employers must adapt to the ever-changing legal landscape, especially at the state and local level.  This landscape can change in months, not years. The price of not being diligent in monitoring this landscape may be liability for fines, damages or worse.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Predictive Scheduling: Yet Another Type of Law For Employers To Worry About

By Robert G. Chadwick, Jr., Seltzer, Chadwick, Soefje & Ladik, PLLC.

In recent years, the rights of applicants and employees have been expanded significantly through new state and local initiatives. These initiatives have included ban-the-box laws, which protect the rights of applicants with criminal conviction records, paid sick time laws, harassment training laws, and laws which ban inquiries about the salary history of job candidates.

In 2014, San Francisco became the first jurisdiction to adopt another new type of employment law. The Formula Retail Employee Rights Ordinances addressed predictive scheduling for employees in the retail industry. As with most new initiatives, other jurisdictions, including Seattle and New York City, quickly followed suit. On July 1, 2018, Oregon became the first state with a predictive scheduling law.

So, what are predictive scheduling laws?

Predictive scheduling laws vary from jurisdiction to jurisdiction. Common components, however, include:

* Advance written notice to an employee before the employee’s work shift.

* Rest periods between work shifts.

* The right of an employee to decline any work shift not included on the employee’s written schedule or which encroaches on a rest period.

San Francisco, Seattle and Oregon allow for variances, but subject to compensation schedules favorable to employees. New York City has completely banned the practice of on-call scheduling.

Which employers are subject to predictive scheduling laws?

For now, predictive scheduling laws apply only to employees of retail, hospitality and food services establishments. Some legal scholars, however, are predicting the laws could expand to other industries.

Where else are predictive scheduling laws under consideration?

In New York, a proposed new State Labor Department predictive scheduling regulation was published for comment on November 22, 2017. A predictive scheduling ordinance is currently under consideration in Chicago. Proposed legislation has also been introduced in Connecticut, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, North Carolina and Rhode Island.

What should employers take away from these developments?

As noted in a previous article on this blog, states and municipalities are increasingly the new frontier in employment law. For multi-state employers, this reality presents multiple challenges, including (1) understanding new types of laws for which guidance is sparse or nonexistent, (2) keeping up with fast-changing laws in multiple jurisdictions, and (3) compliance with laws which vary from state-to-state and municipality-to-municipality and which frequently have location-specific mandates. Although these challenges are more daunting with the passage of each new law, the price for not facing the challenges can be fines, damages, or worse.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

 

State-Specific Harassment Prevention Mandates: The Emerging Reality For Multi-State Employers

By Robert G. Chadwick, Jr, Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC.

For more than thirty years, sexual harassment has been a recognized form of discrimination prohibited by federal and state employment discrimination laws. Prudent employers have thus long recognized written policies and training to be essential risk management tools for combating sexual harassment in the workplace.

Recently, the effectiveness of employer policies and training has come into question. A June 2016 Report of the EEOC Select Task Force on the Study of Harassment in the Workplace noted: “Much of the training done over the last 30 years has not worked as a prevention tool—it’s been too focused on simply avoiding legal liability.”

Although the June 2016 EEOC Report set forth only recommendations for effective sexual harassment training, some state legislatures have gone further.  On April 12, 2018, New York joined California, Connecticut, and Maine in prescribing sexual harassment prevention measures which must be undertaken by private employers.

These state prescriptions include not only the content and form of harassment policies, but also the content, form, timing, frequency, length, trainer qualifications, and proof of attendance requirements of harassment training. Although much of the prescribed content can be used in any state, some of the prescribed content is state-specific.

New York

The New York legislation, for instance, requires the adoption by the New York State Division of Human Rights (“DHR”) of a model prevention policy. The model policy must meet certain minimum standards, which include references to “state statutory provisions concerning sexual harassment” and state “forums for adjudicating sexual harassment complaints administratively and judicially.” Employers must either adopt the model policy or establish a policy that equals or exceeds the minimum standards of the model policy.

The legislation also mandates the production by the DHR of a model prevention training program. The model program must be interactive and include references to “state statutory provisions concerning sexual harassment”, and available state forums for adjudicating complaints. Employers must either adopt the model program or establish a program that equal or exceeds the minimum standards of the model program. Under either option, training must be provided annually.

New York’s new law is effective October 9, 2018.

California

Since 2004, California has required that employers with 50 or more employees provide detailed sexual harassment training for supervisors. Such training must be provided within six months of hire and on a biennial basis. The training must be provided in a classroom setting, through interactive learning, or through a live webinar, and must be at least two hours in length. Only attorneys, human resources professionals, harassment prevention consultants and professors or instructors with specific credentials can provide training.

Amongst the prescribed content of training are the definition of “sexual harassment” under the California Fair Employment & Housing Act (“FEHA”), and “FEHA … statutory provisions and case law principles concerning the prohibition against and the prevention of unlawful sexual harassment, discrimination and retaliation in employment.”

Since 2016, California regulations state that a covered employer in California must have a harassment, discrimination and retaliation policy meeting several minimum requirements. Among these requirements are the protections afforded to employees by FEHA.  Under California regulations, employers also have a continuing obligation to distribute to employees the brochure regarding sexual harassment published by the California Department of Fair Employment and Housing.

Pending Legislation

In the wake of the #MeToo movement, state-specific measures are likely only to gain steam.  In California, bills have been introduced to extend mandated training to smaller employers and non-supervisory employees. Existing bills in Connecticut seek to update that state’s existing mandates.  A bill to require harassment training has also been introduced in Delaware.  

The Emerging Reality for Multi-State Employers

Most multi-state employers already have a national strategy for preventing and redressing sexual harassment. Multi-state employers with workers in California have  long recognized the importance of also having a California strategy for managing the risks associated with sexual harassment in that state.

The New York legislation, and the pending legislation in other states, highlight an emerging reality for multi-state employers. The number of states requiring state-specific risk management strategies as to sexual harassment is growing.  For multi-state employers with workers in New York this emerging reality already has a due date – October 9, 2018.

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Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Employee Non-Disclosure Agreements Post-Weinstein And #MeToo

The Winter 2018 Edition of Professional Liability Defense Quarterly, published by the Professional Liability Defense Federation (PLDF), features an article by Robert G. Chadwick, Jr., entitled “Employee Non-Disclosure Agreements Post-Weinstein And #MeToo.”

READ ARTICLE

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Employers Beware: The Customer Is Not Always Right!

By Robert G. Chadwick, Jr., Managing Member, Seltzer Chadwick Soefje & Ladik, PLLC

In today’s divisive political and cultural climate, it is not surprising that confrontations between workers and customers are commonplace.

On February 12, 2018, a state trooper who had pulled up to the drive-thru of a Normal, Illinois McDonald’s restaurant was allegedly greeted by an employee with the expletive “F*** the police.” Upon hearing of the incident, the franchise owner made the immediate decision to terminate the offending employee.

In this circumstance, the employer was likely acting within its legal rights in firing the offending employee. After all, the customer did nothing to provoke the employee. The customer was right.

But, what if the circumstances are different? What if a female employee berates or slaps a male customer who gropes her? What if an African American employee curses a Caucasian customer who calls him “boy?” What, if anything, does the employer risk by doing nothing? What, if anything, does the employer risk by disciplining or discharging the employee?

The Risk of Acceding To Customer Preferences

A good starting point for addressing these questions is the clash often faced by employers between customer preferences and employment discrimination laws. The desire to please a paying customer can be a compelling incentive to accede to his or her preferences or demands. However, if the preference or demand is that the employer engage in unlawful employment discrimination, the price of acquiescence can be civil liability.

In Chaney v. Plainfield Healthcare Center, for instance, an African-American healthcare worker challenged, under Title VII of the Civil Rights Act of 1964, a nursing home’s policy of honoring the racial preferences of its residents in assigning health care providers. The nursing home acknowledged it routinely acceded to patient demands for white-only health care providers.

In denying the nursing home’s motion for summary judgment, the 7th Circuit said in a July 20, 2010 opinion: “It is now widely accepted that a company’s desire to cater to the perceived racial preferences of its customers is not a defense under Title VII for treating employees differently based on race.”

In Wilson v. Southwest Airlines, male applicants said they had been rejected for positions as Southwest flight attendants based upon gender, in violation of Title VII. Southwest  admitted its policy of hiring only female flight attendants, but argued their sex appeal was a bona fide occupational qualification.

In rejecting Southwest’s defense, a Texas federal court opined in a June 12, 1981 decision:
“Southwest is not a business where vicarious sex entertainment is the primary service provided. Accordingly, the ability of the airline to perform its primary business function, the transportation of passengers, would not be jeopardized by hiring males. Southwest does not face the situation … where an established customer preference for one sex is so strong that the business would be undermined if employees of the opposite sex were hired.”

To be sure, there may be circumstances where customer preference can be a bona fide occupational qualification. The aforementioned cases, however, show that customer preference cannot always justify otherwise unlawful discrimination against an employee.

The Risk Of Doing Nothing

The issue of customer preference also arises when an employee complains of discriminatory harassment by a customer. The employer may prefer not to upset or lose a customer by taking prompt remedial action. However, if the employer does nothing it risks potential liability to the complaining employee.

In Lockard v. Pizza Hut, another Title VII suit, a female waitress employed by a Pizza Hut franchisee claimed her employer did not respond properly to the inappropriate conduct of “two crude and rowdy made customers” who frequented the restaurant. She specifically testified her employer did nothing when the men made sexually offensive comments to her, such as “I would like to get into your pants”, and one man pulled her to him by the hair, grabbed her breast and put his mouth on her breast.

In denying the employers motion to set aside a jury verdict in favor the female waitress, the 10th Circuit noted in a December 14, 1998 opinion: “An employer who condones or tolerates the creation of such an environment should be held liable regardless of whether the environment was created by a co-employee or a nonemployee, since the employer ultimately controls the conditions of the work environment.”

The Risk Of Firing The Employee

Finally, the behavior of an employee in response to inappropriate conduct of a customer may, viewed in isolation, be considered grounds for discipline or termination. Viewed in context, however, the behavior may arguably be protected opposition under employment discrimination laws. Disciplining or terminating the employee, therefore, may prompt a retaliation claim.

In Folkerson v. Circus Circus Enterprises, Inc., for example. a mime artist punched a casino patron who attempted to embrace her during a performance. For this behavior, the mime was terminated. The mime sued under Title VII arguing her behavior was protected opposition to discrimination.

In an October 16, 1995 opinion, the 9th Circuit agreed that “reasonable defense against physical violence may be protected oppositional activity.” Finding the mime’s reaction reasonable under the circumstances, the court reversed a grant of summary judgment for the employer.

In Van Horn v. Specialized Support Services, Inc., the Title VII plaintiff was a female employee of a company which provides services to developmentally disabled clients.  In her complaint, she detailed the conduct of a client who, over the course of time, said he loved her, and attempted to hug her. Although the female employee complained of the client’s behavior, the employer allegedly did nothing. One day, the client pinched the female employee’s breast. In response, the female employee instinctively slapped the client. For this behavior, the female employee was terminated.

Although the Iowa federal court found insufficient evidence of a hostile work environment, a January 29, 2003 ruling found that slapping the client was protected opposition under Title VII. The Court opined: “when an employer’s failure to act forces an employee to act in self- defense at the workplace, the employee’s defensive conduct is reasonable and the employee cannot be terminated for doing so.”

To be clear, most federal discrimination cases have sided with the employer where an employee responds to perceived discrimination by cursing, shouting or resorting to physical violence. The aforementioned cases, however, show that courts may be more willing to find questionable behavior to be reasonable if it follows inaction by the employer in responding to prior incidents of harassment.

The Risk Of Siding With The Employee

No discussion of the risks arising from confrontations between employees and customers is complete without mention of an employer’s potential liability to customers for discrimination. Federal, state and local laws prohibit discrimination in public accommodations and contracts.  A comprehensive discussion of these laws is beyond the scope of this article. An employer must nevertheless be mindful of such laws before terminating a customer contract or refusing service to a customer based upon a confrontation with an employee.

Takeaway For Employers

When presented with evidence of a confrontation between an employee and a customer, an employer’s first instinct may be to side with the customer. Following that instinct, however, may risk liability under employment discrimination laws. Siding with the employee can also have legal consequences.

As with any unfortunate incident involving an employee, therefore, an employer must  undertake a reasonably diligent and unbiased effort to determine the truth. Sometimes, appearances can be deceiving, and the truth may lie beyond the single incident. Admittedly, a more comprehensive investigation will require more work than a rush to judgment. Still, it is more prudent to work to prevent an unwanted claim, than to work to defend an unwanted claim.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com