Laborsphere

Finding Employer’s Disclaimers Inadequate, New York High Court Rules For Employee Alleging Oral Bonus Promise

The New York State Court of Appeals recently issued a decision highlighting the importance of including clear disclaimers in employee handbooks. In Ryan v. Kellogg Partners Institutional Services, Plaintiff Daniel Ryan left an established securities firm to go to work for Defendant Kellogg Partners, a startup venture. According to Ryan, Kellogg lured him with the oral promise of a $175,000 bonus. When Kellogg failed to pay the bonus and then terminated his employment, Ryan filed a lawsuit asserting claims for failure to pay wages in violation of New York State Labor Law §§ 190-198 and breach of contract.

At trial, the jury returned a verdict in favor of Ryan. With interest, attorneys’ fees and costs, the judgment totaled $379,956.65. The Appellate Division, First Department, affirmed.

On appeal, Kellogg argued that statements in its employment application and employee handbook negated “Ryan’s alleged expectation of or entitlement to a guaranteed or non-discretionary bonus.” The Court observed that the “Acknowledgments” section of the employment application merely confirmed that, if hired, Ryan would be employed on an at-will basis. According to the Court, the at-will language was irrelevant because Ryan was not asserting an “alleged right to continued employment, compensation or benefits.”

The signed “Receipt” section of the employee handbook indicated that the handbook did not create “a promise of future benefits or a binding contract … for benefits or any other purpose.” The Court explained that this language did not undermine Ryan’s claims, because the “handbook [did] not say that oral compensation agreements are unenforceable, or mention bonuses at all.” Thus, the Court observed, “there are no statements in the handbook that bar Ryan’s recovery on his breach-of-contract and Labor Law claims for compensation alleged to be due and owing him.” The Court of Appeals affirmed the judgment for Ryan.

At-will language in employment applications and employee handbooks is critical. However, as the Ryan decision makes clear, employers should also be sure that policies state unequivocally that bonus decisions are left to the employer’s sole discretion. Policies should also state that promises regarding bonuses and other terms and conditions of employment are valid only if made in a writing and signed by the employer.

New Jersey Appellate Division Re-affirms Employers Are Not Required To Provide Indefinite Leaves Of Absence Under the New Jersey Law Against Discrimination

The New Jersey Appellate Division recently re-affirmed that an employer is not required to provide an indefinite leave of absence in order to meet its obligation under the New Jersey Law Against Discrimination (“LAD”) to reasonably accommodate the disabilities of its employees. In Lozo-Weber v. New Jersey Department of Human Services, Plaintiff, who suffered from lupus, requested a medical leave of absence and submitted a doctor’s note indicating that she would be unable to work for at least one year. The employer placed Plaintiff on leave pursuant to the Family and Medical Leave Act (“FMLA”). Once she exhausted her FMLA time, the employer agreed to an accommodation of an additional six months of unpaid leave, advising her in writing that it could not continue the leave longer than that due to operational needs. When the extended leave was about to expire, Plaintiff requested additional leave as an accommodation, but did not provide a date certain by which she would be able to return to work. Instead, the doctor’s note stated only that she would need to be out of work for “approximately” six more weeks. At the expiration of the approved six months leave, the employer terminated Plaintiff’s employment.

In affirming summary judgment for the employer on the claim of failure to accommodate under the LAD, the Appellate Division observed that the employer had provided Plaintiff with a reasonable accommodation by extending the FMLA leave by an additional six months. The court further held that an indefinite leave of absence was not a reasonable accommodation where the Plaintiff admittedly could not say when she would be able to return to work. While courts recognize that “reasonable accommodation” includes medical leaves of absence for reasonable periods of time, employers in New Jersey should look carefully at the notes submitted by doctors in support of requests for continued medical leaves, as there is no requirement to provide indefinite leave to employees who are physically unable to work and who cannot specify how long they will need to be out of work.

How the “Ambush” Election Process Will Work: NLRB’s Acting General Counsel Issues Guidance on New Procedures

The talk of the employer community lately has been the National Labor Relations Board’s highly controversial final rule that severely and substantially modifies certain procedures in representation cases. The Board claimed that the final rule, approved December 22, 2011, was designed to reduce unnecessary litigation in representation cases and thereby enable the Board to better fulfill its duty to expeditiously resolve questions concerning representation.

EEOC Issues New Guidance on Use of Arrest and Conviction Records Under Title VII

On April 25, 2012, the EEOC issued its first update in 20 years of its position on employers’ use of arrest and convictions records in making employment decisions.

The EEOC’s Guidance discusses employers’ use of arrest and conviction records in the context of Title VII of the Civil Rights Act’s prohibition on race and national origin discrimination. It first makes clear what most employers already know – employers cannot require or apply criminal background checks differently for one group of employees than another protected class of employees. The focusof the EEOC’s new Guidance, however, is that reliance on criminal records can have a disparate impact on certain protected groups and, therefore, violate Title VII.

$100 Million Pattern-or-Practice Gender Discrimination Suit Doomed By Company’s Arbitration Agreement

A federal district court in Massachusetts effectively gutted a prominent plaintiff’s class action firm’s attempt to avoid arbitration agreements and litigate on a class-wide basis in federal court in Boston. This ruling comes on the heels of a series of class and collective actions filed in federal courts against major U.S.-based and international employers by the Sanford Wittels & Heisler law firm.

In Karp v. CIGNA Healthcare, Inc., the plaintiff-employee was a senior contract manager at CIGNA who asserted discrimination claims in a proposed $100 million putative class action alleging systemic gender discrimination in violation of Title VII of the Civil Rights Act of 1964. Karp’s efforts to represent a class of potentially thousands of current and former female employees were halted when, the district court effectively foreclosed her from proceeding on a class-wide basis either in federal court or in arbitration.

Read the full alert here.

9th Circuit Follows 4th, 6th, 7th, 8th, 11th, DC and Federal Circuits in Finding the Relaxation of an Attendance Policy is Not Always a Reasonable Accommodation

In Samper v. Providence St Vincent Medical Ctr 2012 DJDAR 4559 (9th Cir. 04/11/2012), the plaintiff, a part-time neonatal intensive care unit (“NICU”) nurse sought an accommodation from her employer, Providence St. Vincent Medical Center, that would allow her to opt out of its attendance policy which permitted five unplanned absences in a rolling twelve month period, in addition to other scheduled absences. When Providence refused the request, Samper sued for failure to accommodate her disability (fibromyalgia) in the federal district court for the District of Oregon, which granted summary judgment for the employer. The 9th Circuit affirmed, citing to its many sister courts, finding that “[t]he commonsense notion that onsite regular attendance is an essential job function could hardly be more illustrative than in the context of a neonatal nurse.” The 9th Circuit provided some guidance and reassurance to employers in distinguishing as “an unusual case” Humphrey v. Memorial Hosps. Ass’n., in which the court stated, “regular and predictable attendance is not per se an essential function of all jobs.”

The Samper court does not, however, grant employers carte blanche to refuse similar accommodations in all situations, making clear that the inquiry remains highly fact-specific. Employers should note the court’s favorable discussion of Providence’s long history of accommodations and interactive processes with the plaintiff prior to her termination.