Law stated as of 04 Oct 2016 • USA (National/Federal)
A round-up of this month's major horizon issues in labor and employment law for General Counsel.
Practical Law asked leading experts in labor and employment law to discuss key developments General Counsel should be aware of this month.
Expanded Title VII Cat's Paw Liability for Employer's Negligence
A recent Second Circuit decision reminds employers that they must conduct workplace investigations carefully or risk liability for unintentional retaliatory acts influenced by low-level, non-managerial employees. Practical Law asked Frank Birchfield of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Thomas H. Wilson of Vinson & Elkins LLP, and Robert P. Lewis of Baker & McKenzie LLP for their takeaways on this case.
In Vasquez v. Empress Ambulance Service, Inc., Andrea Vasquez, an employee of Empress Ambulance Service, Inc., alleged that she received unwanted sexual advances and sexual photographs from another employee (Gray) and complained to her supervisor. Having learned of the complaint, Gray gave the employer false documents to show that Vasquez had sexually harassed Gray. Vasquez's superiors credited Gray's version of events, refused to consider Vasquez's contradictory evidence, and fired Vasquez for harassing Gray.
Vasquez sued Empress under Title VII and state law for retaliatory discharge. The district court dismissed Vasquez's suit, holding that Empress could not be held liable under the "cat's paw" theory where the individual acting with discriminatory animus was not a manager.
The Second Circuit vacated the district court's dismissal and held that any employee's discriminatory motives can be attributed to an employer if the employer acted negligently in making the adverse employment decision, even if the final decision-maker acted without discriminatory intent. This may make it more difficult for employers to win summary dismissals in cat's paw Title VII cases.
Vasquez reminds employers about the importance of thoroughly and carefully investigating workplace complaints and performance issues before taking adverse actions against any employees. Employers should:
Have well-crafted reporting and investigation policies and procedures.
Increasing Agency Scrutiny of Settlement Agreements
Recent guidance by OSHA and other agency actions caution employers to revisit standard confidentiality and waiver provisions in their form settlement agreements. Practical Law asked John F. Martin of Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Thomas H. Wilson, Vinson & Elkins LLP, and Celina Joachim and Jordan A. Faykus of Baker & McKenzie LLP to discuss what employers should know.
OSHA released new policy guidelines on September 15, 2016, stating that it will not approve settlement agreements that impermissibly restrict or discourage protected whistleblower activity. Offending provisions include those that:
Prohibit or inhibit employees from providing information to the government, including:
filing a complaint;
participating in an investigation; or
testifying in proceedings.
Require either advance notice to their employers before communicating with the government or affirmation that they have not done so.
Waive the employee's right to receive a monetary whistleblower award.
Award disproportionate liquidated damages.
The OSHA guidance is the latest in a trend of recent challenges to similar confidentiality and waiver provisions by other administrative agencies, including the SEC, the NLRB, and the EEOC.
Given recent agency scrutiny, employers should:
Avoid a one-size-fits-all approach to settlement agreements and tailor language based on the type of claim being settled.
Examine waiver and confidentiality provisions in settlement and other agreements for overbreadth and advance notice requirements.
Consider specific carveouts from confidentiality provisions that allow employees to:
provide information to government agencies, including OSHA and the SEC, without notice to the employer; and
recover whistleblower rewards for providing information to government agencies, but still waive the employee's ability to recover damages or other remedies from the employer.