Employment Law Heather Schlozman, Dugan Schlozman LLC Susan Nell Rowe, The Stolar Partnership LLP

Employment Law
 Heather Schlozman, Dugan Schlozman LLC
Susan Nell Rowe, The Stolar Partnership LLP

Missouri Human Rights Act

Employment “At Will”

• An Employer can use its business
  judgment in terminating an Employee
• A termination can:
  – Be for a bad or silly reason;
  – Be based on a personality conflict;
  – But, CANNOT be based on an illegal
    reason (i.e., the employee’s race, gender,
    etc.)

It is Easier to Survive
             Summary Judgment

Daugherty v. City of Maryland Heights, 231
 S.W. 3d 814 (Mo. Banc 2007)
  • Plaintiff must merely show that discrimination was a
    “contributing factor”
  • Title VII requires the higher standard of “motivating
    factor”
  • MHRA and Missouri Supreme Court define
    “discrimination” more broadly than definition used by
    Title VII
  • Daugherty involved age and disability discrimination

The Exodus from Federal
          Precedent Continues
Cynthia Hill v. Ford Motor Company,
277 S.W. 3d 659 (Mo.banc 2009)

  • Hill was a sexual harassment case;
  • Supreme Court used the Daugherty analysis
  • Employee only has to show that her gender
    was a “contributing factor” in the harassment

State Court, State Court, State Court!

  • As a general rule, Employees are better off in
    Missouri state courts;
  • An Employee must first file with the MCHR,
    then:
      – Allow the MCHR to complete processing
        • If probable cause is found, the MCHR can conduct an
          administrative hearing, review is by a petition for review
          in STATE COURT;
        • If case is dismissed, the Employee can file an action in
          STATE COURT;
      – Request a right to sue letter before the MCHR
        completes processing, and file an action in
        STATE COURT.

Conducting a
Reduction in Force

Employment Claims
              Can be Expensive

•   Salary and Benefits (2 years)         $90,000
•   Emotional Distress/Punitives           50,000
•   Plaintiff’s Attorneys’ Fees & Costs   100,000
•   Defendant’s Attorneys’ Fees & Costs   100,000
                            Total         $340,000

The Unemployment Rate

                                                  Missouri
                                                 National

Source: 2010 Federal Reserve Bank of St. Louis
44% of unemployed have been out of work 6 months or
longer

Steps in a Reduction in Force

• Establish selection criteria
  – E.g., seniority, attendance, productivity
• Statistical Analysis
• Evaluate the evidence sustaining the
  selection criteria
• Pick Decision-maker

Statistical Analysis

The 80% is one method:
       % of protected class within
           the job classification
                     v.
       % of protected class within
         the group being laid off
(www.hr-guide.com/data/G8702.htm)

Common Pitfalls

•   Failing to consider legal exposure
•   Failing to quantify selection criteria
•   Failing to conduct statistical analysis
•   Posting new positions during lay-off
•   Adding/changing job duties

Particular Legal Issues
•   Employment agreements
•   Collective bargaining agreements
•   WARN Act (Notice requirements)
•   Payment of final wages, bonuses, commissions
•   Payment of vacation days and other accrued
    time off
•   Immigration issues
•   Continuation of health insurance (COBRA)
•   Severance agreements and release of claims
•   Non-compete and Confidentiality Agreements

Non-Compete & Confidentiality
       Agreements

Non-Competition Agreements in Missouri

 • Presumptively void
 • Enforceable only to the extent that they
   are demonstratively reasonable
 • Reasonable if no more restrictive than
   necessary to protect the legitimate
   interests of the employer
 • Reasonable as to time and place

Customer Contacts can be Protected

• “Customer contacts” means the influence an Employee
  acquires over the Employer’s customers through
  personal contact

• Court will look at the quality,
  frequency and duration of an
  Employee’s exposure to
  customers

• Employer has to show that
  the Employee had enough
  contact to influence the
  customer to leave

Trade Secrets can be Protected
6 factors to be considered when looking at whether
  something is a trade secret:
  • The extent to which the information is known outside
    of the business;
  • The extent to which it is known by Employees and
    others involved in the business;
  • The extent of measures taken by Employer to guard
    the secrecy of the information;
  • The value of the information to the Employer and the
    competitors;
  • The amount of effort or money expended by
    Employer in developing the information; and
  • The ease or difficulty with which the information could
    be properly acquired or duplicated by others.

Trade Secrets, con’t
                           • Matters of public knowledge are
                             not trade secrets

                           • Matters of general knowledge
                             within an industry are not
                             protectable interests

• No protection for customer lists that can be readily
  found from other sources

• May be protected if considerable time and money went
  into compiling lists

• Fact specific question

Temporal and Geographical Restrictions

• Time and space limitations must be
  narrowly drawn

• Cannot be any greater than fairly required
  for Employer’s legitimate protection

• Fact specific question

• Bottom line – Missouri courts will
  invalidate non-competition agreements,
  but the practical problem is the fight.
NEGOTIATE NEGOTIATE NEGOTIATE

ADA Amendments

Disability
• The definition of “disability” has not
  changed
• “Disability” is defined as:
  – A physical or mental impairment that
    substantially limits one or more of the major life
    activities
  – A record of having such an impairment
  – Being regarded as having such an impairment

Disability, continued
   • Congress has directed the EEOC to pass
     new regulations defining “substantially
     limits”
     – “Congress finds that the current Equal
       Employment Opportunity Commission ADA
       regulations defining the term ‘substantially
       limits’ as ‘significantly restricted’ are
       inconsistent with congressional intent, by
       expressing too high a standard”

Disability, continued

 In determining whether
 someone has a “disability,
 Congress mandated that
 the ameliorative (i.e.,
 beneficial) effects of
 mitigating measures must
 be ignored
   – Except: Eye glasses and
     contact lenses

Disability, continued

 Mitigating measures include:
   • Medication, equipment, devices or supplies
   • Use of assistive technology
   • Reasonable accommodations or auxiliary aids
     or services
   • Learned behavioral or adaptive
     neurological modifications

Disability, continued
  “Major life activity” has been expanded
    • Statute provides examples of major life
      activities
    • Statute now says “major life activity” includes
      operation of a major bodily function
       − Examples:
          • Insulin dependent diabetes
          • Heart disease
          • Cancer

Disability, continued

  Has been expanded to include episodic or
   transitory impairments
    • Would the episodic impairment substantially
      limit a major life activity when active?
    • Examples:
      − Mental illness
      − Crohn’s disease

Disability, continued

“Regarded as” has been expanded
  • Has the individual been discriminated against
    because of an actual or perceived impairment?
    − Impairment need not limit or be perceived to limit
      major life activity
    − Does not apply to minor and transitory impairments

“Reasonable Accommodation”

• The definition of “reasonable
  accommodation” did not change, but
  expanded definition of “disability” means
  more focus will be on reasonable
  accommodation
• Expect more litigation on this point:
  – Was a “disabled” employee denied reasonable
    accommodation?

“Reasonable Accommodation”, continued

   • “Reasonable Accommodation” for any
     limitations the employee has because of the
     disability
   • “Reasonable Accommodation” not required
     if the employee is only “regarded as”
     disabled

Employers Should

• Review job description, qualifications and
  accommodation procedures
• Focus on performance, not assumptions
• Communicate with employees
• Train frontline supervisors and managers
• Document decisions and actions

Employees Should

• Speak up about what they need to be
  successful
• Be able to do the essential functions of the
  position with or without reasonable
  accommodation
• Be flexible about the accommodation
  needed

Bottom Line

• The amendments favor Plaintiffs and will
  enable more individuals to qualify under
  the ADA
• Expect to see more litigation on whether a
  “disabled” employee was denied
  accommodation

A Few More New Developments

EEOC Charges in 2009

Total Charges Filed:    -2%↓
 Disability             10%↑
 National Origin         5%↑
 Religion               3.4%↓
 Retaliation            2.8%↑
 Age                   -7.3%↓

Gender Stereotyping

Lewis v. Heartland Inns, 591 F.3d 1033 (8th Cir.
  2010)

  • 8TH Circuit found evidence of gender
    stereotyping

  • Part of a growing trend in other circuits to
    recognize gender stereotyping as a form of
    discrimination based on sex.

Age Discrimination

“Reasonable Factors Other Than Age”

  • Smith v. City of Jackson, 544 U.S. 228
    (2005)

  • An employment practice that has a disparate
    impact on older workers is discriminatory
    unless it is justified by a reasonable factor
    other than age.

Age Discrimination, continued

Proposed Rule Issued by EEOC

  • Practice must be age-neutral

  • Practice must be objectively reasonable
    • Reasonable employer under like circumstances
    • Based on all the facts and circumstances
    • Non-exhaustive list of factors

Age Discrimination, continued

“Reasonableness”
    • Common business practices
    • Related to stated business goal
    • Took steps to define the factor accurately
      and to apply it fairly
    • Took steps to assess adverse impact
    • Severity of harm and preventative steps
    • Other options available

Questions?