April, 2009 Issue of Legal Trends
Legal Trends Focuses on Victory in FMLA Case and Latest News in Retaliation Cases
In this issue of Legal Trends, we analyze the Hollander Law Offices’ win in Reaux v. Infohealth Management Corp., and highlight the latest developments concerning the growing number of retaliation claims.
Employment Law
Federal Court Expands Employer Liability in FMLA Arena.
Deborah Reaux was pregnant with her child and working at a company called Infohealth Management Corp. When she started her employment, she was given an employee handbook. In the handbook, Infohealth advised her and its other employees that they could take leave pursuant to the Family and Medical Leave Act, (“FMLA”), provided that they: 1) worked at the company at least one year, 2) logged at least 1,250 hours before requesting leave, and 3) needed it for a health condition such as childbirth.
Infohealth, however, was not obligated under federal law to provide such leave to Reaux. Under the FMLA, only employers who have 50 or more employees within 75 miles of the company’s worksite, are required to do so. The law is commonly known as the 50/75 rule. The FMLA generally requires an employer to hold an employee’s job for a serious health condition of the employee or their immediate family member.
When it came time for Reaux to take maternity leave, she filled out the company’s requisite paperwork and was told by her supervisors that she could take “FMLA leave.” Reaux did just that, and her child was delivered on August 1, 2006. She was due to return to work on September 11, 2006, but Infohealth inexplicably terminated her employment on September 7.
Reaux, through her attorneys, Eugene K. Hollander and Paul Ryan, filed suit against the company in federal court, alleging that the company was barred from arguing that it was not subject to the FMLA because it told its employees that they could take such leave. The company moved to dismiss the suit, arguing that under the 50/75 rule, Reaux was not eligible for FMLA leave, and that in any event, the handbook provided disclaimer language stating that it could terminate the employee at any time and for any reason.
The court noted that no federal court within the Seventh Circuit (comprising the states of Illinois, Indiana and Wisconsin) had expressly decided whether an employer could subject itself to the FMLA when it did not satisfy the 50/75 rule. The court noted that Infohealth should not be able to escape the clutches of the law when it promised Reaux verbally and in writing that she could take FMLA leave. The court also rejected the company’s argument that Reaux could not reasonably rely upon the written representations in the handbook and the verbal assurances that she could take the FMLA leave because as the company claimed
the handbook was not designed to create a contract between it and its “at-will” employees. The court reasoned that Infohealth’s position was at odds with the well-established rule that regardless of whether an employee may be terminated “at will,” the FMLA “prohibits an employer from interfering with an employee’s attempt to exercise medical leave.”
According to Paul Ryan, one of Reaux’s attorneys, “employers can get themselves into trouble when they promise employees benefits that they are not required to provide under federal law.” Indeed, though not specifically discussed in the Reaux opinion, Illinois courts have found for almost 20 years that an “at-will” relationship can be altered by the employer through poor drafting of an employee handbook.
In 1990, the Illinois Supreme Court held that an employee handbook under certain circumstances can create an enforceable contract. In that case, a hospital employee was discharged from his employer, St. Mary of Nazareth hospital. The employee was given an employee handbook at the outset of his employment. In the handbook, the employer promised its employees that they would be afforded a certain series of steps in a progressive disciplinary policy prior to discharge. The employee claimed that the hospital skipped a step. The Court held that if such a promise was made and reasonably relied upon by the employee, he could require the hospital to provide him all levels of discipline prior to discharge.
In the past two decades, employers have often been able to limit their liability by including disclaimers in their manuals and by using permissive language in the document, such as “we will attempt to provide you…” Nonetheless, as we still see, employers still make costly mistakes in their employment manuals.
Developments in Retaliation Cases.
Supreme Court Rules That Witnesses to Workplace Harassment Entitled to Protection.
Vicky Crawford was employed for more than thirty years as an employee of the school system for Nashville, Tennessee and Davidson County. A sexual harassment investigation was launched concerning Gene Hughes, the district’s employee relations director. Crawford did not initiate the investigation, but agreed to be interviewed by a human resources official who wanted to know whether Crawford witnessed any of the inappropriate behavior. Ultimately, Hughes was never disciplined.
Shortly thereafter, Crawford was accused of embezzlement and terminated from her employment. She filed suit but the district court threw her claim out. A federal appeals court agreed and held that the anti-retaliation provision of Title VII of the Civil Rights Act of 1964 did not protect employees who cooperate with an internal probe rather than complaining on their own.
The high court considered the claim, and in a 9-0 decision, reversed the appeals court and held that Crawford’s claim can go forward. The Court reasoned that a decade ago, it had decided that employers could shield themselves from sexual harassment lawsuits if they adopted strong policies requiring employees to report such claims and failed to do so. Here, the Court stated, employees should have the same type of protection. The case was sent back down to the district court for further proceedings.
While this was the first time that the United States Supreme Court considered this issue, Eugene K. Hollander handled a similar issue in 2003 before the Illinois Appellate Court. In that case, Pietryzinksi v. The McLier Corporation, an individual testified on behalf of his injured brother at a worker’s compensation hearing. The non-injured brother subsequently lost his job, and he claimed that he was retaliated against. The trial court dismissed the case. In a case of first impression, the appellate court reversed, stating that the non-injured brother’s testimony was protected under the law.
Former McDonald’s employee files whistle-blower lawsuit against company.
A former employee of the hamburger giant has filed suit in federal court in Chicago alleging that she was retaliated against for objecting to misrepresentations made in the company’s 2007 proxy statement.
Lisa Bridges was formerly employed by McDonald’s as the Senior Director of Compensation. She was hired by the company in 2006 and was responsible for “sub-certifying” compensation related matters in the company’s annual proxy statement. Bridges claimed that the company failed to accurately report various payments made to certain executives of the company.
Bridges claimed that she brought up these issues internally and was discharged the day before the proxy statement was published. The case is pending in U.S. District Court.
Indeed, retaliation claims are on the rise. The EEOC tracks the number of such claims involving federal employment discrimination laws. Ten years ago, employees filed 19,964 claims in the U.S. In fiscal year, 2008, however, that number rose to 32,690, representing 34.3% of all discrimination/retaliation claims filed. We expect that the gross number of these charges to increase.
About the author
Eugene Hollander is a trial attorney who currently heads his own law office in Chicago. Mr. Hollander has tried numerous cases in the state and federal courts. The Law Offices of Eugene K. Hollander is a full service law firm, concentrating its practice in employment discrimination claims, personal injury and medical malpractice suits, and various types of commercial litigation.
For more information, visit our web site at www.ekhlaw.com, or contact us directly at:
The Law Offices of Eugene K. Hollander
33 N. Dearborn
Suite 2300
Chicago, IL 60602
(312)-425-9100
E-mail: EHollander@ekhlaw.com