You're Fired

Michigan Makes it Harder to Collect Unemloyment Benefits

2011-12-22T17:41:00.000-05:00

In Public Act 269 of 2011, which became effective on December 28, 2011, the Republican Legislature passed and Governor Synder signed a bill that will make it tougher for workers to collect unemployment benefits. Here is a link to an analysis and summary of the new law prepared by Legislative Analyst Suzanne Lowe.

http://www.legislature.mi.gov/documents/2011-2012/billanalysis/Senate/htm/2011-SFA-0806-U.htm

New Obligation to Document Efforts to Find Work. The law was passed to address financial shortfalls within Michigan’s Unemployment Insurance Agency (“UIA”). While most of the provisions went into effect immediately, the new law’s change in the definition of what it means to be looking for work goes into effect on January 1, 2013. Starting then, an individual must conduct “a systematic and sustained search for work in each week he or she was claiming benefits.” The search must also be documented using one of the following methods:

• Reporting at monthly intervals on the UIA's online reporting system.

• Filing a written report with the UIA by mail or fax by the end of the fourth week after the end of the week in which the individual engaged in the work search.

• Appearing at least monthly in person at a Michigan Works Agency office to report.

The new law also changes and adds some definitions with regard to activities that will disqualify an employee from unemployment benefits.

No Call - No Show for 3 Days. The new law provides that an individual who is absent from work for a period of 3 consecutive work days or more without contacting the employer in a manner acceptable to the employer and of which the individual was informed at the time of hire shall be considered to have voluntarily left work without good cause attributable to the employer. Employees who leave work without “good cause attributable to the employer” are disqualified from benefits.

Theft, Assault and Battery or Willful Destruction of Property. The new law provides that an employee who has been discharged for an act of assault and battery connected with the individual’s work is disqualified for benefits. A discharge for “theft connected with the individual’s work” also disqualifies an employee from benefits as does a discharge “for willful destruction of property connected with the individual’s work.” Before the new law, the standard for disqualification was “a deliberate indifference of the employer’s best interests.” Courts and the UIA appeal board had come to different conclusions on specific acts that met this definition. The new law attempts to give examples of acts that meet this definition and appears to reduce the discretion of the administrative law judges who decide appeals from determinations and re-determinations of the UIA.

There are many other changes to the law that apply to employers, but this post highlights some of the more significant changes to the law affecting employees.

The Law of Damages in Employment Litigation

2010-06-02T15:29:00.002-04:00

This post is from the materials produced by myself and Michelle P. Crockett, an attorney with the law firm of Miller Canfield, at the Insititute of Continuing Education's 35th Annual Labor & Employment Law Institute presented on Friday, April 30,2010. Michelle practices employment law from the management side.

I. Introduction

Although the damages available in a wrongful discharge case will vary somewhat depending on the forum (federal v state) and the claims being pursued, some general rules apply. In most every case, the primary source of damages will be the difference between the employees’ earnings before and after the event (typically termination). In other words, what was the employee earning before the termination and what she could have reasonably expected to earn if she had not been terminated. From this sum, the amount earned in the employee’s new job or what she reasonably could have been expected to earn, if the employee was diligent in looking for comparable work, is subtracted. See, Parker v. West Bloomfield Twp., 60 Mich. App. 583, 600 (1975). See also, Am Jur 2d, Master and Servant, § 70, pp 104-106. The product of this calculation is the “back pay” or lost wages of the employee, if calculated through the date of trial. The lost wages earned after the trial or into the future are considered “front pay.”

Additions to the back pay and front pay may include: the value of fringe benefits lost, the expenses incurred in looking for alternative employment, damages for emotional distress and humiliation, and litigation expenses, including attorney fees and costs. Some statutory claims may allow doubling of compensatory damages, others permit both compensatory and punitive damages. Other statutory claims provide for “reinstatement of the employee, the payment of back wages, full reinstatement of fringe benefits and seniority rights, actual damages, or any combination of these remedies.” See, e.g., Whistleblowers’ Protection Act (“WPA”), MCL § 15.364.

II. Available Damages and Set-Offs.

A. Back Pay.

1. Generally.

Back pay includes all forms of compensation and is typically the largest portion of economic damages plaintiffs generally claim to have incurred as a result of an employer’s purported breach, tort, or discriminatory conduct. Rasheed v. Chrysler Corp., 445 Mich. 109, 117, 517 N.W.2d 19 (1994) (determining that back pay includes “all monetary awards based on earnings and other fiscal benefits that the plaintiff would have received but for the unlawful employment practice.”). Thus, a back pay award can include salary, sick leave, vacation pay, overtime, pension benefits, and/or any raises that the plaintiff may have received during his/her employment. See, Renny v. Port Huron Hosp, 427 Mich. 415, 439, 398 N.W.2d 327 (1986); Schafke v. Chrysler Corp., 147 Mich. App. 751, 383 N.W.2d 141 (1985); Gutzwiler v. Fenik, 860 F.2d 1317, 1333 (6th Cir. 1988); Grysen v. Dykstra, 591 F. Supp 282, 292-293 (W.D. Mich. 1984). The Michigan Supreme Court has determined that the period of back pay generally runs form the date of discharge to the date of trial. Stearns v. Lake Shore & Michigan Southern Ry. Co., 112 Mich. 651, 71 N.W. 148 (1897). Once a plaintiff satisfies her burden of proving the financial loss she claims to have suffered, she is presumed to be entitled to the amount claimed unless the employer can prove otherwise. EEOC v. Wilson Metal Casket Co, 24 F.3d 836 (6th Cir. 1994).

2. Reductions from Back Pay.

Michigan courts have determined that the amount of back pay a plaintiff is entitled to receive is “the difference between the salary the plaintiffs would have received but for their discriminatory treatment and the money actually earned during the appropriate backpay period.” EEOC v. Harper Grace Hosps., 689 F. Supp 708, 716 (E.D. Mich. 1988); Parker v. West Bloomfield, 60 Mich. App. 583, 231 N.W.2d 424 (1975). In other words, if a plaintiff receives wages from other employment during the backpay period, that amount is deducted from any award of backpay they may receive.

Employers will sometimes try to reduce the amount of a backpay award by arguing that plaintiff’s compensation would have been reduced for reasons other than their discharge. For example, arguments have been made that planned transfers or demotions should be taken into consideration when determining back pay awards. See e.g., In re Lewis, 845 F.2d 624 (6th Cir. 1988); Melchi v. Burns Int’l Sec Servs., Inc., 597 F. Supp 575 (E.D. Mich. 1984).

When an at-will plaintiff sues an employer for breach of contract after being discharged, and subsequently receives unemployment compensation, their back pay award must be reduced by the amount of unemployment they received. See, Corl v. Huron Castings, Inc.., 450 Mich. 620, 544 N.W.2d 278 (1996). This is not the case for discrimination cases. Michigan courts generally hold that back pay awards should not be reduced by unemployment compensation benefits. Thurman v. Yellow Freight Systems, 90 F3.d 1160, reh’g, en bac, denied, adhered to, and amended on other grounds, 97 F.3d 833 (6th Cir. 1996); Adama v. Doehler-Jarvis Div of NL Indus, Inc., 144 Mich App 764, 376 N.W.2d 406 (1985).

Worker’s compensation benefits must be deducted from a back pay award for all claims filed under the Michigan Persons With Disabilities Act. MCL 37.1606(4). However, in Title VII claims, it has been determined that, like unemployment benefits, worker’s compensation benefits may not offset an award of back pay. Knafel v. Pepsi-Cola Bottlers, In.c, 899 F.2d 1473 (6th Cir. 1990).

Social Security and other retirement benefits may also reduce the amount of a back pay award. In Hamlin v. Charter Township of Flint, 165 F.3d 426 (6th Cir. 1999) the Sixth Circuit concluded that pension benefits may constitute collateral source payments and accordingly set forth the following factors to determine whether pension benefits are collateral: 1) whether the employee makes any contribution to funding of the disability payment; 2) whether the benefit plan arises as a result of a collective bargaining agreement; 3) whether the plan and payments under it cover both work-related and non-work related injuries; 4) whether payments from the plan are contingent on the employee’s length of service; and 5) whether the plan includes any specific language contemplating a setoff of benefits received under the plan against a judgment received in a tort action.

3. Mitigation Requirements.

Plaintiffs in wrongful discharge cases must make all reasonable efforts to secure other employment following termination. Higgins v. Lawrence, 107 Mich. App. 178, 309 N.W.2d 194 (1981); Morris v. Clawson Tank Co, 459 Mich. 256, 587 N.W.2d 253 (1998). Thus, pursuant to both federal and state law, plaintiffs are precluded from attempting to maximize their back pay award by purposefully remaining unemployed. See, Suggs v ServiceMaster Educ Food Mgmt., 72 F.3d 1228 (6th Cir. 1996); MERC v Kleen-O-Rama, 60 Mich. App. 61, 230 N.W.2d 308 (1975).

The burden of proving a plaintiff’s failure to mitigate damages rests with the employer. Katch v. Speidel, Div. of Testron, In.c, 746 F.2d 1136 (6th Cir. 1984); Fothergill v. McKay Press, 374 Mich. 138, 132 N.W.2d 144 (1965). To prevail, an employer must show that other employment was available and that plaintiff failed to take reasonable care and exercise due diligence in securing that employment. Riethmiller v. Blue Cross & Blue Shield, 151 Mich. App. 188, 390 N.W.2d 227 (1986). In Title VII cases an employer must show the following in order to prevail: 1) that substantially equivalent positions were available; and 2) that the plaintiff failed to use reasonable care and diligence in seeking those positions. Wooldridge v. Marlene Indus Corp, 875 F.2d 540 (6th Cir. 1989). Therefore, in order to effectively mitigate damages, a plaintiff must make efforts that are reasonable to minimize economic loss, and if offered employment of a like nature that is subsequently turned down, all claims to further back pay is forfeited. Morris v. Clawson Tank Co., 459 Mich. 256, 587 N.W.2d 253 (1998).

Courts determine if employment is of a “like nature” by evaluating the type of work, hours associated with the position, wages, tenure and working conditions. MERC v. Kleen-O-Rama, 60 Mich. App. at 64. The reasonableness of a plaintiff’s efforts to seek or accept employment is a question for the trier of fact. Morris, supra.

When determining whether employment is “substantially equivalent” in Title VII cases, federal courts have followed the standard set forth by the Supreme Court in Ford Motor Co v. EEOC, 458 U.S. 219 (1982): “the substantial equivalent of the position from which the claimant was discriminatorily terminated must afford the claimant virtually identical promotional opportunities, compensation, job responsibilities, working conditions, and status.” See, U.S . v. City of Warren, 138 F.3d 1083 (6th Ci.r 1998); NLRB v. Westin Hotel, 758 F.2d 1126 (6th Cir. 1985). This does not mean however, that a plaintiff must accept employment that she finds demeaning, is an unreasonable distance from her residence, or is a lower position in order to mitigate damages. Morris, supra; Rasheed v. Chrysler Corp, 445 Mich. 109, 517 N.W.2d 19 (1994); Wolff v. Automobile Club, 194 Mich. App. 6, 486 N.W.2d 75 (1992). Nevertheless, it should be noted that federal courts have held that at some point a plaintiff must lower her sights when seeking subsequent employment after an extended period of unemployment. NLRB v. Southern Silk Mills, Inc., 242 F.2d 697 (6th Cir.) cert denied, 355 U.S .821 (1957); NLRB v. Moss Planning Mill C.o, 224 F.2d 702 (4th Cir. 1955).

C. Front Pay.

1. Availability.

Front pay should be awarded only when reinstatement is not appropriate or feasible. See, Suggs v. Service Master Educ. Food Mgt., 72 F.3d 1228 (6th Cir. 1996). If the defendant employer has or asserts that there are no open positions for the plaintiff, then the court should award front pay. See, Roush v. KFC Nat. Mgmt. Co., 10 F3d 392, 398 (6th Cir. 1993) (District Court should have determined whether front pay was appropriate); Faber v. Massillon Bd. Of Educ., 917 F2d 1391, 1397 (6th Cir. 1990) ("Front Pay is a remedy presumed appropriate unless record evidence clearly demonstrates to the contrary").

2. Rejected Offers of Reinstatement.

Front pay is not available to an employee who unreasonably refused an offer of reinstatement. “[I]t is the duty of the trier of fact to weigh the evidence to determine whether a reasonable person would refuse the offer of reinstatement.” McKelvy v. Geren, 2009 US Dist. LEXIS 93567 (D. Mich. 2009). The employer bears “the burden of demonstrating [that the rejection of the employer’s reinstatement offer] was so unreasonable as to constitute a failure to mitigate damages.” Rasimas v Mich. Department of Mental Health, 714 F.2d 614, 625 (6th Cir. 1983). The reasonableness of the offer is determined by reviewing the terms of the offer and totality of the circumstances surrounding it. Toledo v. Nobel-Sysco, Inc., 892 F.2d 1481, 1493 (10th Cir. 1989). A plaintiff is justified in rejecting a reinstatement offer that is not made in “good faith.” Stanfield v. Answering Service, Inc., 867 F.2d 1277 (11th Cir. 1992).

2. Length of Payment.

In Shore v. Federal Express Corp., 777 F.2d 1155, 1160 (6th Cir. 1985), the court addressed factors which courts may consider in determining the amount and length of a front pay award: Some of the factors which district courts have applied to alleviate the speculative nature of future damage awards include an employee's duty to mitigate, "the availability of employment opportunities, the period within which one by reason efforts may be re employed, the employee's work and life expectancy, the discount tables to determine the present value of future damages, and other factors that are pertinent on prospective damage awards." Id. at 1160. The 6th Circuit has upheld an award of five years of front pay in an FMLA interference bench trial. See, Killian v. Yorozu Automotive Tennessee, Inc., 454 F.3d 549, 558 (6th Cir. 2006).

In Cooley v. Carmike Cinemas, Inc., 25 F.3d 1325, the jury awarded the plaintiff $116,363 in back pay and $249,741 in front pay. The 6th Circuit Court of Appeals upheld the award. The court noted that Mr. Cooley was 53 years old when he was fired, he had made substantial efforts to find new work after his termination, and "He eventually found work as a service technician in the maintenance department of a school." Id. at 1334. The jury in the Cooley case heard expert testimony regarding the plaintiff's economic damages and the damages were reduced to present value.

D. Liquidated Damages.

Under the Fair Labor Standards Act (“FLSA), the Age Discrimination in Employment Act (“ADEA”) and the Family and Medical Leave Act (“FMLA”), liquidated damages are available. Under these statutes, the plaintiff is entitled to an award of liquidated damages, unless the defendant can prove that it acted in good faith and had objectively reasonable grounds to believe that their actions did not violate the act. See, e.g., 29 USC § 2617(a)(1)(A)(iii). The liquidated damages are equal to the total compensation paid, including interest, but excluding attorney fees. ("[A]n additional amount as liquidated damages equal to the sum of the amount described in clause (i) [the amount of wages, salary, employment benefits, or other compensation] and interest described in (ii)"). Thus, liquidated damages essentially double the award due for damages and prejudgment interest.

There is a "strong presumption under the statute in favor of doubling." Hite v. Vermeer Mfg. Co., 446 F.3d 858, 868 69 (8th Cir. 2006). See also, Arban v. West Pub. Co., 345 F.3d 390, 408 (6th Cir. 2003) (reversing the trial court for failing to award liquidated damages in an interference and retaliation case involving the failure to reinstate following FMLA leave).

E. Emotional Distress Damages.

It is well established under Michigan law that emotional distress damages are not recoverable in breach of employment contract actions, even if the breach is found to be willful or malicious. Franzel v. Kerr Mfg Co., 234 Mich. App. 600, 600 N.W.2d 66 (1999); Stopczynski v. Ford Motor Co., 200 Mich. App. 190, 503 N.W.2d 912 (1993); Mourad v. Automobile Club Ins Ass’n., 186 Mich. App. 715, 465 N.W.2d 395 (1991); Rouse v Pepsi-Cola Metro Bottling Co., 642 F.Supp 34 (E.D. Mich. 1985). However, emotional distress damages are available to plaintiffs who recover under a tort theory of wrongful discharge or employment discrimination. See e.g., Phillips v. butterball Farms Co., 448 Mich. 239, 531 N.W.2d 144 (1995) (plaintiff prevailing in retaliatory discharge case for filing worker’s compensation claim rests in tort and therefore she is entitled to emotional distress damages in addition to various economic damages).

If found to be a victim of discrimination, plaintiffs can accordingly recover for humiliation, embarrassment, outrage, disappointment, and other forms of mental anguish that result from the discrimination. Reisman v. Regents of Wayne State Univ., 188 Mich. App. 526, 470 N.W.2d 678 (1991). For example, in Lilley v. B.T.M. Corp., 958 F.2d 746 (6th Cir.) cert den’d, 506 U.S. 940 (1992), an age discrimination case brought under ADEA and ELCRA, the court found that there was sufficient evidence to uphold a jury award of $350,000 for mental anguish to a plaintiff who established that 1) he felt anguished and embarrassed following his discharge, which was corroborated by his wife; 2) he was unable to secure employment; 3) the discharge affected his marriage; 4) he lost weight and had difficulty sleeping; and 5) he was treated by a psychiatrist.

It should be noted that difficulty in determining damages does not bar recovery, although an award may not be based on mere speculation and conjecture. Id. Thus, in a hostile work environment case, for example, a plaintiff’s general comments about the impact of an alleged hostile environment will not be enough to support an award for emotional damages. Betts v. Costco Wholesale Corp., 558 F.3d 461 (6th Cir. 2009).

F. Punitive Damages.

Under Michigan ELCRA claims, punitive damages are not available. Eide v Kelsey Hayes, Co., 431 Mich. 26, 28029 (1998). The WPA permits an award of “actual damages.” The term "actual damages" in tort cases includes compensation for mental distress and anguish. Phinney v. Perlmutter, 222 Mich. App. 513, 532 (1997). See also, Shaw v. Cassar, 558 F. Supp. 303, 311 (ED Mich, 1983). Exemplary damages are also available under Michigan law, so long as they do not duplicate the emotional distress damages that are awarded. See, Phillips v. Butterball Farms Co., Inc. (After Second Remand), 448 Mich. 239, 251 252 (1995).

Punitive damages are available under Title VII and the ADA pursuant to the Civil Rights Act 1991. The Act, 42 U.S.C. § 1981a, provides for the imposition of punitive damages against non-governmental entities where the employer “engaged in a discriminatory practice or discriminatory practices with malice or reckless indifference to the to the federally protected rights of an aggrieved individual.” The employee is not required to prove that the employer acted in an outrageous or egregious manner. Kolstad v. American Dental Ass’n., 119 S.Ct. 2118 (1999).

Section 1981a(b)(3) caps the damages for compensatory and punitive damages combined to $50,000 for employers with 15 to 100 employees, $100,000 for employers with 101 to 200 employees, $200,000 for employers with 201 to 500 employees and $300,000 for employers with more than 500 employees. These caps are in addition to amounts awarded to an employee for back pay and prejudgment interest.

G. Remittitur.

[T]he role of the district court is to determine whether the jury's verdict is within the confines set by state law..." Gasperini v. Center for Humanities, Inc., 518 U.S. 414, 437 (1996), citing Browning Ferris Industries of Vt., Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 279 (1989).

Under Michigan law, "a court may not substitute its judgment on damages for that of the jury." Palenkas v. Beaumont Hosp., 432 Mich. 527, 538 (1989). The primary issue for the court's consideration in deciding a motion for remittitur is whether the jury's award is supported by the evidence or whether it was "excessive." Id at 532. See also, MCR 2.611 (E)(1). The trial court's inquiry must be limited to objective considerations. The Palenkas court, in rejecting the more subjective "shock the conscious" test, stated:

While we agree with the established case law that a trial court, in making a decision on remittitur, should examine a number of factors (such as whether the verdict was induced by bias or prejudice), we believe its inquiry should be limited to objective considerations relating to the actual conduct of the trial or the evidence adduced.

Id., p 532.

The court should consider three factors in ruling on a motion for remittitur. Gilbert v. DaimlerChrysler Corp., 470 Mich. 749, 764 (2004). First, whether the verdict was the result of improper methods, prejudice, passion, partiality, sympathy, corruption, or mistake of law or fact. Second, whether the verdict was within the limits of what reasonable minds would deem just compensation for the injury sustained. Third, whether the amount actually awarded is comparable to awards in similar cases within the state and in other jurisdictions. Id. Cf, Gilbert, 470 Mich. 770 71 ($21 million dollar verdict in a sexual harassment case reduced because the plaintiff's counsel "deliberately tried to provoke the jury by supplanting law, fact, and reason with prejudice, misleading arguments, and repeated ad hominem attacks against defendant based on its corporate status.").

In reviewing the second factor, what is "just compensation," the court's inquiry should be limited to the damages evidence that was presented to the jury and whether the jury's decision was higher than the "highest possible amount that the evidence will support." Clemens v. Lesnek, 219 Mich. App. 245, 247 (1996). In making this decision, the court should review the verdict in the light most favorable to the plaintiff. Diamond v. Witherspoon, 265 Mich. App. 673, 693 (2005). A verdict awarding damages should not be set aside simply because the method of computation used by the jury in assessing damages cannot be determined, unless it is not within the range of evidence presented at trial. Id., p 694.

Courts should also be mindful of the rule that the award of non economic damages, such as emotional distress or pain and suffering must ordinarily rest in the sound judgment of the jury. Gilbert v. DaimlerChrysler Corp., 470 Mich. 749, 763 64 (2004). This rule is a corollary of the rule that the "authority to measure damages inheres in the jury's role as trier of fact." Id.

The third and final factor is a comparison of the award to other comparable cases and jury verdicts. Michigan courts have awarded substantial sums in employment cases. In Diamond v. Witherspoon, 265 Mich. App. 673, 693 (2005), the court upheld a jury verdict of $2.625 million in a sexual harassment case brought under the ELCRA. In Olsen v. Toyota Technical Center, U.S.A., Inc., ___ Mich. App. ___, 2002 WL 31958183 (2002), the court upheld a $5 million dollar award for emotional distress damages in a case involving the Persons with Disabilities Civil Right Act. In Phinney v. Perlmutter, 222 Mich. App. 513 (1997), the court found that a $989,200 verdict in a WPA case was not excessive. In Heckman v. City of Detroit, ____ Mich. App. _____ 2007 WL 1989518 (2007), the court upheld the denial of the remittitur motion in a WPA case and found that a $600,000 jury verdict was not excessive. In Badalucco v. City of Auburn Hills, ___ Mich. App. ____ 2001 WL 1699700 (2001), another WPA case, the court upheld a judgment based on a jury verdict in the amount of $859,365.22.

H. Attorney Fees and Costs.

Plaintiffs who are successful in actions filed under ELCRA are entitled to recoup attorney fees. The Michigan Court of Appeals has determined that the attorney fee provision of ELRA: 1) encourages individuals deprived of their civil rights to seek legal redress; 2) provides victims of employment discrimination access to the courts; and 3) ensures compliance with the goals of the act i.e., deterring discrimination in the workforce. King v. GMC, 136 Mich. App. 301, 356 N.W.2d 626 (1984). Attorney fees are also available to plaintiffs who are successful in claims filed under the PDCRA. See, MCL § 37.1606(3); Yuhase v. Macomb County, 176 Mich. App. 9, 439 N.W.2d 267 (1989). Likewise, under Title VII, plaintiffs who prevail may recover attorney fees under certain circumstances. According to Section 706(k) of Title VII, “the court, in its discretion may allow the prevailing party, other than the Commission or the United States, a reasonable attorney’s fee….” 42 U.S.C. 2000e-5(k). Attorney fees are also available under ADEA.

It is important to not however, that an attorney fee award is not mandatory. Thus, the decision to grant or deny an award of attorney fees under ELCRA is within the discretion of the court. Grow v WA Thomas Co., 236 Mich. App 696, 601 N.W.2d 426 (1999). The Michigan Supreme Court has established a non-exclusive list of factors to help guide a court’s discretion in determining the reasonableness of an attorney fee request: “1) the professional standing and experience of the attorney; 2) the skill, time and labor involved; 3) the amount in question and the results achieved; 4) the difficulty of the case; 5) the expenses incurred; and 6) the nature and length of the professional relationship with the client.” Wood v. DAIIE, 413 Mich. 573, 321 N/.W.2d 653 (1982). These factors have been used in the employment discrimination context. Department of Civil Rights v. Horizon Tube Fabricating, Inc., 148 Mich. App. 633, 385 N.W.2d 685 (1986).

Typically, the lodestar method is the most common starting point when determining the amount of a reasonable attorney fee, i.e., the number of hours reasonably expended on a case multiplied by a reasonable hourly rate. Thus, it is incumbent upon a party seeking attorney fees to establish entitlement to an award by documenting the hours expended and the hourly rates applied. See, Howard v. Canteen Corp., 192 Mich. App. 427, 481 N.W.2d 718 (1991) (concluding that while contemporaneous time records are not required, the lack of such records leaves room for doubt abut the reasonableness of the hours the attorney claims to have expended).

The Sixth Circuit has set forth the following factors to be considered when determining the reasonableness of the hours and rate for an attorney fee award under federal law: 1) the time and labor required; 2) the difficulty and novelty of the questions presented; 3) the skill needed to perform the legal services properly; 4) the preclusion of the attorney’s employment due to the acceptance of the case; 5) the customary fee; 6) whether the fee is fixed or contingent; 7) time and limitations imposed by the client or circumstances; 8) the amount involved and the results obtained; 9) the experience, reputation, and ability of the attorneys; 10) the “under-desirability” of the case; 11) the nature and length of the professional relationship with the client; 12) awards in similar cases. Isabel v City of Memphis, 404 F.3d 404 (6th Cir. 2005). The Isabel court specifically noted that the most important factor is the degree of success in a case. Consequently, in Thurman v. Yellow Freight Sys., supra, the district court used the lodestar method and reduced plaintiff’s attorney fee award by 5% due to plaintiff’s partial success on his claim.

The existence of a contingent fee agreement in an ELCRA case does not necessarily preclude an attorney fee award. Grow supra; Hamlin, supra. However, the Michigan Court of Appeals has determined that ELCRA simply provides for the award of a reasonable attorney fee, and not a fee enhanced by a premium for assuming risks inherent in a contingent fee case. See Wilson v. GMC, supra.
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III. Conclusion.

An initial damages assessment by plaintiffs’ counsel and defense counsel is key to determining whether at the onset, a cause of action should be initiated, and going forward, what strategy should be employed to establish and/or defend against a plaintiff’s damages claims. Assessment of economic damages is not enough. As discussed above, plaintiffs may be entitled to emotional distress damages, punitive damages, liquidated damages, and may also be able to recoup attorney fees and costs. Thus, in the employment context, the failure to consider all that may be at stake at the beginning of litigation can result in a nuisance value case evaluation award, or conversely, an astronomical award that is comprised of economic and non-economic damages. Consequently, the lesson that all employment practitioners should learn and diligently apply (especially in today’s economic climate) is to: Always assess damages at the beginning of a case as opposed to the end; since at the point – it may truly be too late!!!!

FMLA and USERRA

2009-10-06T12:14:00.003-04:00

The following outline is part of a presentation that I made in Ann Arbor on September 24, 2009 for an Instititute of Continuing Legal Education seminar entitled "FMLA and USERRA Issues with the Troubled Employee."

I. FMLA Issues.

A. Introduction.

The FMLA was enacted to allow workers flexibility in scheduling time for medical problems and to alleviate some of the tension caused by the competing demands of work and family. Stubl v. T.A. Systems, Inc., 984 F. Supp.1075, 1082 (E.D. Mich. 1997), citing S. Rep. No. 103-3, 103rd Cong., 2nd Sess. 4 (1993), reprinted in 1993 U.S. Code Cong. & Ad. News, 3, 6. The FMLA declares it unlawful for "any employer to interfere with, restrain, or deny the exercise of or the attempt to exercise any right provided under this subchapter." 29 U.S.C. § 2615(a)(1). The FMLA places affirmative obligations on employers to:

Notify employees of their rights and obligations under the Act, 29 U.S.C. § 2619;

Provide up to 12 weeks of unpaid leave to employees who qualify and provide sufficient notice to their employers, 29 U.S.C. § 2612;

Refrain from disciplining employees for taking leave covered by the FMLA, 29 U.S.C. 2615;

Reinstate employees to the same or equivalent job after their leave, 29 U.S.C. § 2614(a); and

Continue employees’ health care insurance during their absence. 29 U.S.C. § 2614(c).

Most FMLA Litigation results when employers terminate an employee who is on a medical leave of absence or when employers fail to reinstate an employee after an employee returns or is ready to return from a medical leave of absence.

B. Researching FMLA Issues.
There are detailed regulations that explain and interpret the act. See, 29 CFR 825.100 to 825.800. The regulations are available at the US Department of Labor website located here: http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_825/toc.htm.
The website includes subject headings and hypertext links, which allow for easy navigation and expedites research. The ABA Section of Labor and Employment Law also publishes an excellent reference guide, Ossip, The Family and Medical Leave Act (BNA 2006). The ICLE library has two books, Employment Litigation in Michigan and Employment Law in Michigan-An Employer’s Guide, that include detailed chapters on the FMLA.

C. Employee Eligibility.
To be eligible for FMLA protection, employees must meet the criteria set forth in the statute and its regulations. There are three primary requirements.
12 months of Employment. Employees must have been employed for 12 months at the time the leave of absence was taken. 29 USC 2611(2)(B)(ii); 29 CFR 825.110(a)–(b). To determine eligibility, the 12 month period should be counted backward beginning with date leave is scheduled to begin. 29 CFR 825.110(d). There can be a break in service in counting the 12 month period, so long as the break was less than seven years. (There is an exception for breaks caused by military service obligations).

1,250 Hours. Employees must have worked 1,250 hours in the 12 months preceding the date leave is scheduled to begin. 1,250 hours is roughly equivalent to a 24 hour a week schedule, assuming that the employee missed no time for vacations, sick days, etc. The regulations adopt the Fair Labor Standards Act ("FLSA") definition of "hours worked." 29 CFR 825.110(c)(1).

50 Employees in a 75 Mile Radius. Employees must work at a location that includes at least 50 of the employer’s employees at that location or within 75 miles of that location. 29 CFR 825.110(a)(3). There are special rules for employees who do not work from a fixed work site, such as salesperson or construction workers. For those employees, it is the employer location from which their work is assigned, that governs the 50/75 rule. 29 CFR 825.111(a)(2).

D. Employer Coverage.
50 Employee Threshold. Employers must employ at least 50 employees for each working day during 20 or more calendar workweeks in either the current or preceding calendar year to be regulated by the act. 29 CFR 825.104. The employees may be full or part time, and so long as they are on the payroll roster, they do not need to have received any compensation for the week. (i.e, employees on vacation or a leave of absence are included in the calculation).
Joint Employers. The FMLA regulations recognize the concept of joint employment. When an employee is found to be employed by joint employers, employees from both employers are considered in deciding upon the 50 employee threshold. 29 CFR 825.106(a). Common examples of joint employment include cases where a temporary employment agency supplies employees to another employer. Differing obligations apply to both employers, depending upon which employer is deemed to be the primary employer. Typically, the employer that provides the employee’s paycheck will be deemed to be the primary employer. 29 CFR 825.106(c). "Integrated employers" are also combined to determine the 50 employee threshold. 29 CFR 825.104(c).

Public Agencies. Public agencies, including Federal and State government agencies, and local agencies, including public schools, are governed by the FMLA, regardless of whether they meet the 50 employee threshold. 29 CFR 825.104(a).

E. The Reasons for Which FMLA Leave May be Taken.
Employees may take FMLA leave for (1) for the birth of the employee’s child and to care for a newborn child, (2) for the placement of a child with the employee for adoption or foster care, (3) to care for the employee’s spouse, child, or parent with a serious health condition, or (4) because the employee has a "serious health condition" that makes the employee unable to perform one or more of the essential functions of his or her job. 29 USC 2612(a)(1) and (a)(3); 29 CFR 825.112(a)(1)–(6).

What is a Serious Health Condition? To qualify for FMLA leave (for reasons other than caring for a new child or for the birth of a child), an employee must show that he or a family member needing his care suffers from a "serious health condition." A "serious health condition" is defined as an "illness, injury, impairment, or physical or mental condition that involves inpatient care...or continuing treatment by a health care provider." 29 U.S.C. § 2611(11).

Inpatient Care. There is little controversy over this term. It means an overnight stay at a hospital or other medical care facility. 29 CFR 825.114.

Continuing Treatment by a Health Care Provider. The term "continuing treatment by a health care provider" includes both episodic and "chronic" conditions. For non-chronic condition, the most commonly used definition of serious health condition is a period of incapacity requiring an absence from work for more than three consecutive days, provided that this absence also involves two or more visits to a health care provider or one visit to a health care provider that results in a regimen of continuing treatment supervised by the health care provider. 29 CFR 825.115(1)-(2). If the employee is relying upon the two or more visits component of the definition, the two visits do not necessarily have to take place during the period of incapacity. They must occur within 30 days of the first day of incapacity, unless extenuating circumstances exist. 29 CFR 825.115(a)(1). The first treatment must occur within seven days of the first day of incapacity. 29 CFR 825.115(a)(3).

Chronic Conditions. The regulations define "chronic" serious health conditions as a period of incapacity that (A) requires periodic visits for treatment by a health care provider, or by a nurse or physician’s assistant under the direct supervision of a health care provider; (B) Continues over an extended period of time (including recurring episodes of a single underlying condition); and (C) May cause episodic rather than a continuing period of incapacity (e.g., asthma, diabetes, epilepsy, etc.). 29 C.F.R. § 825.114(a)(2)(iii).

In Miller v. GB Sales & Service, Inc., 275 F. Supp. 2d 823 (E.D. Mich. 2003), the court held that the plaintiff’s panic disorder, related to her depression, was a serious health condition. The plaintiff in Miller was fired for excessive absenteeism. In Conrad v. Eaton Corp., 303 F. Supp. 2d 987 (W.D. Iowa 2004), the court also found that the employee’s major depression was a serious health condition. In Conrad, the employee was fired for engaging in certain threatening behavior.
Incapacity. The FMLA regulations state that an employee must suffer from a period of incapacity, further described as "(i.e., inability to work, attend school or perform other regular activities of daily living due to the serious health condition, treatment for or recovery therefrom.)." 29 C.F.R § 825.114(a)(2) (emphasis added). The regulations thus contemplate that an employee could be incapacitated from work but not from other activities.

The case law also recognizes that the incapacity definition relates to the particular job of the FMLA plaintiff. It does not mean the same as incapacity under the ADA. See, Hulbert v St. Mary’s Health Care Sys., 439 F.3d 1286, 1295 (11th Cir. 1986) and Steckloff v St. John’s Mercy Health Sys., 218 F.3d 858, 861 (8th Cir. 2000)("[W]e hold that a demonstration that an employee is unable to work in his or her current job due to a serious health condition is enough to show that the employee is incapacitated, even if that job is the only one the employee is unable to perform.").

Common/Minor Ailments. The definition of continuing treatment by a health care provider does not include routine physicals or examinations, nor does it include common ailments such as colds, the flu, headaches (other than migraines), routine dental problems, and upset stomachs unless complications arise. 29 CFR 825.113(c)-(d). Yet, such common ailments can qualify so long as the objective criteria of two doctor visits and more than three days of incapacity are met. This "objective test for ‘serious health conditions’ [] avoids the need for employers - and ultimately courts - to make subjective decisions about [whether an illness qualifies under the statute]." Thorson v. Gemini, Inc., 205 F.3d 370, 380 (8th Cir. 2000). See also, Brannon v. OshKosh B’Gosh, Inc., 897 F. Supp 1028, 1036 (M.D. Tenn. 1995) (Section 825.114 constitutes a "bright-line test" for determining whether an illness is a "serious health condition."); See, Corcino v Banco Popular De Puerto Rico, 200 F. Supp.2d 507 (D. Virgin Islands 2002) (pharyngitis which required employee to visit her doctor and remain off work for six days was a ‘serious health condition’ within meaning of FMLA).

F. FMLA Employee Notice Requirements.
Employee Notice. One common misconception about the FMLA is than an employee must fill out FMLA paperwork or use the words "FMLA" or "leave of absence" in order to be protected from being fired during if the employee misses work due to an injury or illness. But an employee only needs to give the employer enough information so that the employer may conclude that the employee has a serious health condition necessitating his absence. 29 CRF 825.301. To be entitled to FMLA protected leave, a plaintiff must show that he gave his employer notice of the need for a leave of absence and a qualifying reason for the leave. Cavin v Honda of Am. Mfg., 346 F.3d 713, 723-24 (6th Cir. 2003).

The Timing and Content of the Notice. The FMLA regulations provide that notice of unforeseeable leave should be given "as soon as practicable under the facts and circumstances of the particular case." 29 C.F.R. § 825.303(a). The original regulation stated that, "It is expected that an employee will give notice to the employer within no more than two working days of learning of the need for leave, except in extraordinary cases where such notice is not feasible." Id. The regulation provided that "in the case of a medical emergency requiring leave because of an employee’s own serious health condition... written advance notice pursuant to an employer’s internal rules and procedure may not be required ...." Id.
This regulation was revised based on employer’s objections that lack of notice for unscheduled absences was wreaking havoc with production schedules. The new rule provides that an employee needing FMLA leave must follow the employer’s usual and customary call-in procedures for reporting an absence, absent unusual circumstances.
The regulations also state, "in the case of medical conditions, the employer may find it necessary to inquire further to determine if the leave is because of a serious health condition and may request medical certification to support the need for such leave." 29 U.S.C. § 825.302(c).

No Magic Words Required. An employee "does not have to expressly assert his right to take leave as a right under the FMLA." Cavin, 346 F.3d at 723. Nor is the failure to use the term ‘leave’ or the phrase ‘leave of absence’ of any consequence in assessing whether the employer received sufficient notice pursuant to the requirements of the FMLA. Id at 725. Instead, "the critical question is whether the information imparted to the employer is sufficient to reasonably apprise it of the employee’s request to take time off for a serious health condition." Id at 723.
Method of Providing Notice. Notice may be provided "in person or by telephone, telegraph, facsimile (‘fax’) machine or other electronic means." 29 C.F.R. § 825.303(b). In Cavin, the Sixth Circuit determined that Mr. Cavin put his employer on notice when he told a security officer employed by the company that he "was injured in a motorcycle accident" and that "he just got out of the hospital." Id at 725. Courts recognize that once an employer is on notice of an employee’s illness, the employer is obligated to inquire further with regard to whether particular absences are FMLA protected.

In Miller v GB Sales & Service, Inc., 275 F. Supp. 2d 823 (E.D. Mich. 2003), the court found that the employer unlawfully retaliated against an employee when it terminated her for absences, some of which were necessitated by her diabetes and depression. The plaintiff in Miller missed work frequently because of her illnesses. She did not seek FMLA coverage for her absences until after she was fired. GB Sales & Service, Inc. ("GB") argued "that the law did not require it to designate every one of Miller’s absences as FMLA leave merely because her supervisors were aware of Miller’s diabetes and depression." Id at 829. The court did not agree. Id.

In Rodriguez v. Ford Motor Co., 382 F. Supp.2d 928 (E.D. Mich. 2005), the court found a genuine issue of material fact as to whether the employee had provided timely notice to his employer about FMLA coverage for previous absences. Ford Motor Company had sent the plaintiff a notice that he was deemed to have quit by not showing up for work for five days. After Ford mailed the five day quit letter, the plaintiff’s treating physician sent a letter to Ford advising the company that the plaintiff was unable to work until further notice. The court stated, "Therefore, plaintiff may have enjoyed the protection of the FMLA before an actual designation by defendant Ford that the absences were or were not qualifying." Id.

Notice for Foreseeable Medical Leaves of Absence. Employees must provide 30 days’ advance notice of their need to take an unpaid FMLA leave when the leave is foreseeable (e.g., childbirth, newborn care, placement of a child for adoption or foster care, or planned medical treatment for a serious health condition of the employee or a family member). If the FMLA leave is for planned medical treatment, the employer may request a change in the scheduling of the leave to address the employer’s business needs. If such a request is made, the employee must make a reasonable effort to schedule the treatment to not unduly disrupt the operations of the employer so long as the change is approved by a health care provider. 29 USC 2612(e)(1), (2); 29 CFR 825.302(e).

G. Employer Notice Requirements.
Employers under the new FMLA regulations are required to notify employees of their eligibility for FMLA and rights and responsibilities under the act within 5 days after an FMLA qualifying leave is requested, absent extenuating circumstances. 29 CFR 825.300 (b). Employer’s must also post information about employees FMLA rights and include such information in employee handbooks, if such handbooks are distributed to employees. 29 CFR 825.300(a). There is no private cause of action for failing to post information about FMLA rights, but the failure may prevent the employer from relying upon the employee’s failure to follow through on one or more of its notice requirements.
Prototypes of the suggested Eligibility Notices and Certification forms, Forms WH-380-E and F, WH-381 and WH-384 are available on the DOL’s FMLA web page. http://www.dol.gov/esa/whd/fmla/index.htm

Notice Content.
The Designation Notice must contain the following information:
Notice of whether or not the absence is designated as FMLA-qualifying, 29 CFR 825.300(d)(1)
Whether the employer requires paid leave to be substituted for unpaid FMLA leave or if paid leave taken must be counted as FMLA leave, 29 CFR 825.300(d)(1)
Whether the employer will require the employee to present a fitness-for-duty certification to be restored to the same or an equivalent position, 29 CFR 825.300(d)(3), .312
The amount of leave that will be counted against the employee’s FMLA leave entitlement in hours, days or weeks, if known, 29 CFR 825.300(d)(6).
According to the new regulations:
If it is not possible to provide the hours, days, or weeks that will be counted against the employee’s FMLA leave entitlement (such as in the case of unforeseeable intermittent leave), then the employer must provide notice of the amount of leave counted against the employee’s FMLA leave entitlement upon the request by the employee, but not more often than once in a 30-day period and only if leave was taken in that period. 29 CFR 825.300(d)(6).

H. Pay and Benefits During a Leave of Absence.
The FMLA does not require that an employer pay an employee during a medical leave of absence. But the act does require that employee benefits be maintained during the leave. 29 USC 2614(c)(1); 29 CFR 825.209(a). The employer is required to maintain the same group plan benefits for employees on FMLA leave as the benefits that were in effect for the employee before the leave. The employer must also maintain the same employer contribution, if any, towards the benefits during the period of leave. 29 CFR 825.209(a).

I. Restoration Rights after FMLA Leave.
Employees are entitled to be restored to the positions held previously or an equivalent position. 29 USC 2614(a)(1). The regulations provide:
General rule. On return from FMLA leave, an employee is entitled to be returned to the same position the employee held when leave commenced, or to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment. An employee is entitled to such reinstatement even if the employee has been replaced or his or her position has been restructured to accommodate the employee's absence. See also Sec. 825.106(e) for the obligations of joint employers.
29 CFR 825.214. This is sometimes referred to as the "entitlement" theory of FMLA liability or the "interference" theory. The right to restoration of employment exists under the entitlement theory without the necessity of showing that the employer was motivated by an anti-FMLA bias in deciding not to reinstate the employee. 29 CFR 825.216(a).
The right to reinstatement is not absolute, however. Another FMLA regulation states: "An employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period." 29 CFR 825.216(a). The same regulation provides that "An employer must be able to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment." (Id).

Two recent 6th Circuit cases show that the failure to reinstate an employee on the grounds that the employee was a poor performer, is fraught with peril for the employer. See, Arban v West Publishing Co., 345 F.3d 390, 401 (6th Cir. 2003)(Jury verdict for plaintiff employee upheld even though "West presented considerable evidence that the decision to terminate Arban had been made before Arban went on medical leave, but that his actual termination had been deferred until after the holidays."). Moorer v Baptist Memorial Health Care System, 398 F.3d 469, 490 (6th Cir. 2005) (Where termination decision was made after FMLA leave, jury could reasonably infer that employee would not have been fired but for his leave of absence).

J. No Fault Attendance Policies.
Many manufacturing employers maintain policies that provide for progressive discipline, leading up to discharge, for employees who miss work or are tardy. FMLA protected absences may not be counted under such "no-fault" attendance policies. 29 CFR 825.220(c). Employers who fail to consider whether absences leading to discharge were protected FMLA leave absences have been found to have violated the FMLA.

The case of Bradley v. Mary Rutan Hosp. Assoc., 322 F.Supp.2d 926 (S.D. Ohio 2004), is instructive. In Bradley, the court found that there were genuine issues of material fact regarding whether the employee’s two days of no call-no show absences were the primary determining factor in the employer’s decision to terminate the employee. In Bradley, there was no dispute that the employee failed to report to work or call in on September 24 and September 25, 2001. On September 26, the employee called in to state that she was having car trouble and would arrive later. When the employee called the second time she was notified she had been terminated. The employee was terminated on the basis of the two no call-no shows and a record of excessive absenteeism.

The court found that plaintiff had at least one absence point assessed against her in connection with time off taken to care for her spouse with a serious health condition. The court then noted that the employer had written to the employee, "As a result of your continued absenteeism coupled with your refusal to return to work from leave, you [sic] actions are inexcusable and you have abandoned your job." The court held that because the employer cited the employee’s continued absenteeism as part of the justification for termination, "A reasonable jury could conclude that either defendant ‘discriminated against Bradley for taking leave to care for her husband’ or that Mary Rutan used the leave as a ‘negative factor’ in its decision to terminate her." Id at 946. The court stated that, "A termination based only in part on an absence covered by the FMLA, even in combination with other absences, may still violate the FMLA." Id at 946-947.

K. Discrimination Claims.
The failure to reinstate or the termination of an employee during a leave of absence can trigger liability under both the entitlement/interference theory and the "discrimination" theory. Both claims are typically pleaded in a complaint.

L. Procedural Issues.
Statute of Limitations. The limitations period for filing an FMLA complaint is two years, but the limitations period is extended to three years if a "willful" violation of the act is shown.
No Exhaustion. Unlike Title VII, there is no requirement that a complaint or charge be filed with an administrative agency before a complaint may be pursued in court. The US Department of Labor has authority to investigate claims of FMLA violations. The DOL has authority that is similar to the EEOC.
Role of the US Department of Labor. The US DOL has also issues regulations interpreting the act. See, 29 U.S.C. 2654. "Regulations promulgated pursuant to such an express delegation of authority are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute." Miller v. AT&T Corp., 250 F.3d 820, 833 (4th Cir. 2001).

M. Remedies.
Both equitable relief, such reinstatement or promotion and monetary relief, such as back pay, lost fringe benefits and interest is available under the act. Reasonable attorney fees, expert witness fees and other court costs are also available to a successful plaintiff. Liquidated damages, equal to the award of economic damages are to be awarded to a successful plaintiff unless the employer can show that it actions were taken in good faith. See, 29 USC § 2617(a)(1)(A) and (a)(3). See, Elwell v. University Hosps Home Care Services, 276 F.3d 832, 840 (6th Cir. 2002) ("Although in the final analysis, we review a district court’s decision on liquidated damages for abuse of discretion, that discretion must be exercised consistently with the strong presumption under the statute [FMLA] in favor of doubling.").
　
II. Military Family Leave and USERRA

A. National Defense Authorization Act (NDAA) for 2008.
Section 585(a) of the NDAA amended the FMLA to provide two new leave entitlements.
Military Caregiver Leave. Eligible employees who are family members of covered service members are entitled to take up to 26 weeks of leave in a "single 12-month period" to care for a covered service member with a serious illness or injury incurred in the line of duty on active duty. FMLA protection is, thus, longer for family of service members than it is for other employees. The scope of the employees is also expanded to include additional family members (next of kin) beyond the protection available to family members of non-military personnel. For example, only care for an employee’s minor children is covered by the FMLA. Leave may be taken the care of a service member who is a child of the employee, regardless of the child’s age.
Qualifying Exigency Leave. A new military leave is now available to assist families of the members of the National Guard and Reserves. This provision makes the normal 12 weeks of FMLA leave available to eligible employees with a covered military member when the member is called to active duty or is on active duty. Employees are permitted protected FMLA time off for military events and related activities, childcare and school activities, financial and legal arrangements, counseling, and rest and recuperation time.

B. The Uniformed Services Employment and Reemployment Rights Act (USERRA).
USERRA, 38 USC 4301 et. seq., provides rights and remedies to veterans in connection with their employment following or during their military service. Employees who are called to military service are entitled to be reinstated to any civilian job held before deployment. This job protection is similar to FMLA job protection in the sense that veterans must be returned to the same job or one with equivalent pay and benefits as if the service person had been continuously employed. An employer is not required to reemploy a person under this chapter if-- the employer's circumstances have so changed as to make such reemployment impossible or unreasonable; or, for certain persons, if such employment would impose an undue hardship on the employer. See, 38 USC 4312(d).
The USEERA also prohibits employers from discriminating against employees on the basis of past or the prospect of future military service. See, 38 US 4311.
　
III. New FMLA Forms
On November 17, 2008, the DOL published its final rule to implement the amendments to the FMLA signed into law by former President Bush in January, 2008. The forms follow this paper and include:
　
WH-381 Notice of Eligibility and Rights & Responsibilities (FMLA)
WH-384 Certification of Qualifying Exigency for Military Family Leave
WH-385 Certification for Serious Injury or Illness of Covered Servicemember
WH-380-E Certification of Health Care Service Provider for Employee’s Serious Health Condition (FMLA)

Public Policy Exception to the "at-will" Rule Expanded

2009-07-24T15:46:00.002-04:00

The Michigan Supreme Court issued a decision that expands upon the Public Policy Exception to the at-will employment rule. On July 21, 2009, in McNeil v Charlevoix County, the court ruled that a local health department rule that prohibited employers in Charlevoix County from discharging or retaliating against an employee for exercising his or her right to a smoke free environment was enforceable in a private lawsuit.

The decision expands upon the types of cases that can be pursued under an important exception to the at-will employment rule. (For a full discussion of the at-will rule, read the first few posts to this blog).

More importantly, the case suggests that the new composition of the Michigan Supreme Court (with the addition of Justice Hathaway in the 2008 election) may change the recent trend of cases that had eroded the exceptions to the at-will rule.

Amendments to the Americans With Disabilities Act

2009-03-24T12:01:00.002-04:00

The Americans with Disabilities Act of 1990 ("ADA") was passed with much fanfare, but the act's narrow interpretation by the courts has meant that very few employees with disabilities were protected by the statute. In order to receive protection, employees needed to show "an impairment which substantially limits a major life activity." 42 U.S.C. 12102(2). The impairment also had to be unrelated to the employee's ability to do the job. For the vast majority of employees, that meant that they were either too disabled or not disabled enough to receive protection from the act. Statistics showed that more than 80 percent of ADA cases that were filed in court were resolved in favor of the employer.

The ADA Amendments Act of 2008 ("ADA AA"), which was signed into law on October 3, 2008 and went into effect on January 1, 2009, was passed to expand the number of employees who are protected by the ADA. The ADA AA did not change the definition of what constitutes a disability, but the act did adopt a new rule of construction for the courts to follow. The act states: "the definition of disability shall be construed in favor of broad coverage of individuals" and "the question of whether an individual's impairment is a disability should not demand extensive analysis." The ADA AA also "abrogates" or reverses previous court decisions that had narrowly construed the ADA. The act also makes it easier for employees to assert claims under the "regarded as" portion of the ADA and includes employees who have disabilities that may be minimized by "mitigating measures." For example, if an employee has diabetes, but she controls the disease with medication, the courts are to consider whether the employee would have a qualifying impairment without the medication.

These changes in the law should increase the willingness of attorneys to file more ADA cases against employers. But it will take time to see how the lower courts interpret the changes in the law.

What Damages Are Available In A Wrongful Discharge Lawsuit

2008-12-21T20:57:00.002-05:00

When contemplating a lawsuit against your former employer, it may be helpful to know what type of damages are available if you win. The answer to that question will depend somewhat on the nature of the lawsuit and the law or laws that are involved. For example, some statutes, like the Family and Medical Leave Act and Fair Labor Standards Act (governing minimum wages and overtime) have double damages provisions.

But in general, the damages that can be claimed for most types of wrongful discharge include the following: lost wages, lost fringe benefits, attorney fees, interest and litigation costs. Employees are generally unable to collect for pain and suffering, even though these damages are available in a personal injury case.

Damages are usually calculated from the date of the employee's discharge to the date of trial. For example, an employee who was earning $40,000 per year and whose fringe benefits, such as health and life insurance, were worth an additional $10,000 per year, and who was unemployed for 14 months between the date of her discharge and the date of trial, would calculate his damages as follows:

$50,000 per year / 12 months = $4,167 per month
$4,167 x 14 months = $58,338

An employee is often also entitled to reinstatement to her old job if she wins at trial. Occasionally, a judge will order "front pay" instead of reinstatement. Front pay is lost wages from the date of trial to some point in the future. The length of front pay will depend on the employee's age and how long it may take for the employee to reach the wage level or salary that she was earning had she not been wrongfully discharged.

An employee is also obligated to try to reduce or "mitigate" damages by looking for comparable employment. If an employee is offered a comparable position, but refuses to accept the position, the employee's right to future damages may be cut off.

It is the former employer's burden to prove that an employee failed to mitigate damages. To rebut the employer's claim that the employee did not properly mitigate her damages, the employee should keep track of all positions applied for. The employee should keep a spreadsheet or chart showing the date she applied for a position, the name of the company to whom the application was submitted, a description of the position and the result (example, not hiring or no response).

If an employee does find a new job between the date of discharge and the date of trial, the earnings from the new job will be subtracted from the earnings that the employee could have been expected to earn had she not been fired.

Using the example from above, if the employee had found a job making $25,000 a year and no benefits six months after she was fired, her damages would be reduced by the income from the new job. The reduction would equal $2,083 per month x 8 = $16,664. The new wrongful discharge damage figure would be $58,338 - $16,664 = $41,674.

Workplace Fairness Web Site

2008-11-04T10:34:00.002-05:00

Clients and potential clients often have questions about the process involved with filing a wrongful discharge lawsuit. Common questions include: How long will it take? What will I have to do? What is mediation?

General answers to these questions and many others can be found at a web site affiliated with the National Employment Lawyers Association or NELA. The site is WorkplaceFairness.org.

As described by the site, Workplace Fairness is a non-profit organization helping to preserve and promote employee rights. This website provides information about job rights and employment issues around the country and in all 50 states. It is for workers, employers, advocates, policymakers, journalists, and anyone else who wants to understand, protect, and strengthen workers' rights.

The site is an excellent place to get educated about your rights and what is involved in a wrongful discharge lawsuit.

Emloyment Discrimination Claims in Federal Court

2008-10-07T09:12:00.004-04:00

The Harvard Law & Policy Review (Winter 2009, volume 3, number 2) recently published an analysis of employment discrimination claims filed in Federal courts. The authors conclusions: (1) the number of cases filed in Federal courts have dropped dramatically, nearly 40 percent since 1999, (2) employees fare substantially better in jury trials as compared to judge trials and (3) defendant employers fare substantially better on appeal, reversing forty-one percent of their losses, compared with a nine percent reversal rate for plaintiff employees who lose at trial.

The percentage of summary judgement motions granted- requests by an employer that a case be dismissed before it ever gets to a jury - was also alarming. On average, the judges in the 6th Circuit Court of Appeals, which includes appeals from Michigan Federal Courts, granted the employer's motion for summary judgment 73% of the time.

It was not clear from the article how many of the cases dismissed following summary judgement motions were cases filed without the assistance of a lawyer.

The Family and Medical Leave Act

2008-07-29T16:36:00.004-04:00

The Family and Medical Leave Act, 29 USC 2612, was enacted to allow workers flexibility in scheduling time for medical problems and to alleviate some of the tension caused by the competing demands of work and family. Generally speaking, the act provides employees who have a "serious health condition" with an unpaid medical leave for up to 12 weeks per year. The employer must hold open a job for an employee on FMLA leave during the medical leave period.

Not all employees are eligible for an FMLA leave. Employees must have worked for the employer for 12 months before the leave begins and must have worked 1250 hours (about 24 hours per week on average) during the previous 12 months. Only employers who employ at least 50 employees at the location where the employee works (other locations within 75 miles of the employee's location may also be considered) are covered.

There are a few common misperceptions about the FMLA.

First, an employee does not have to use the words "FMLA" or "leave of absence" in order to be protected from being fired during if the employee misses work due to an injury or illness. He or see only needs to give the employer "enough information so that the employer may conclude that the employee has a serious health condition necessitating his absence."

Second, the damages in an FMLA case are not limted to income lost during the 12 week leave period permitted by the statute. Violating the FMLA may expose an employer to damages for lost wages well beyond the date the employee would have returned to work. FMLA liability includes an obligation for reinsatement, back pay, penalty or liquidated (double) damages , attorney fees, and costs of litigation.

The US Department of Labor has published the regulations governing the FMLA in a simple to read and understand question and answer format. The regulations may be found at this link: http://www.dol.gov/esa/regs/compliance/whd/whdfs28.htm

When does a firing not equal a lawsuit?

2007-02-22T20:37:00.001-05:00

More often than not, a termination of employment is completely lawful and cannot be challenged in court. Employees who are fired for legitimate reasons, such as misconduct at work, poor attendance, downsizing, etc., have no recourse to court.

Even some employees who are fired for dumb reasons, for example, so that the boss can hire a family member, or because they have a personality conflict with their boss, have no recourse in court.

The at-will employment rule means that employees are only protected from a "wrongful discharge" if their case fits into the of the exceptions described in the posts below.

So, What makes a good lawsuit?

2007-02-03T19:48:00.001-05:00

Since most employees are "at-will," when can employees sue their employer when they think they have been wrongly fired?

Most employees must be able to fit their situations into one of the at will exceptions discussed in the previous post. For example, an employee who takes an FMLA leave has the right to return to his position so long as his doctor clears him to return to work within 12 weeks of taking the leave. An employee who is fired six weeks into their medical leave may have a strong claim that her employer violated the FMLA. Or, an employee is fired for refusing her boss' sexual advances. This is the classic example of sexual harassment. Sexual Harassment in Michigan is prohibited by both Federal and state law.

Employees usually must also suffer lost wages as a result of the employer's action to have a good lawsuit. A long period of unemployment or the necessity of taking a lower paying job leads to a claim for lost wages.

The "At-Will" Employment Rule

2007-01-30T16:47:00.005-05:00

Overview and History

The Creation of the Employment-At-Will Rule.

Historically, the employment-at-will rule was a byproduct of the industrial revolution in England and the United States. Before the industrial revolution, the employer/employee relationship was more like the relationship between a master and servant. In fact, as late as 1823, it was a crime for an employee to terminate a relationship with a master prematurely. 4 Geo IV ch 34 (1823). The employer too was expected to retain the employee on at least a year to year basis, although this obligation was imposed not by statutory law but by common law and as a matter of public policy.

The industrial revolution changed the status of workers and employment soon became a purely economic relationship. By 1877, Horace G. Wood wrote an authoritative treatise on the law of master and servant and expressed the American rule as follows: "with us the rule is inflexible, that a general or indefinite hiring is prima facie hiring at-will..." H.G. Wood, A Treatise On The Law Of Master And Servant (1877). Under the "at-will-employment rule", an employee was free to terminate his or her employment relationship at any time for any reason and the employer was likewise permitted to terminate the employee with no reason. This nearly absolute employment-at-will rule remained the law until the rule began to be eroded through statutory exceptions.

Current Status and Statutory Developments.

The erosion of the employment-at-will rule began with exceptions being created for certain classes of employees. For instance, employees represented by trade unions and civil servants were given protection against arbitrary dismissals. Later, the protection was afforded to certain members of classes historically subjected to discrimination. Today, there are a whole host of statutory restrictions or exceptions to the employment-at-will rule.

Federal Law.

Congress has enacted various statutes which prohibit termination for specific motives typically associated with the protection of groups of employees historically subjected to discrimination. Those statutes are discussed below.

National Labor Relations Act (NLRA), 29 USC §158(a)(1)(3)(4).
The NLRA prohibits the discharge of employees for union activity, protected concerted activity, filing charges or giving testimony under the Act. The NLRA was passed in 1935 and established a federal policy to promote collective bargaining and to define employee rights in detail. In addition to prohibiting discharge of employees for unionizing activities, the NLRA also gave rise to labor unions which negotiated collective bargaining agreements restricting arbitrary termination of unionized employees.
Fair Labor Standards Act (FLSA), 29 USC §215(a)(3), 216(b). The FLSA prohibits discharge of employees for exercising rights guaranteed by the minimum wage and overtime provisions of the Act. In general, the FLSA requires employers to pay time and one half to employees who work more than 40 hours per week. Certain employees are exempted from the provisions of the FLSA based upon their executive, administrative or professional status.
Title VII, Civil Rights Act of 1964, 42 USC §2000(e)-23(a).
Title VII prohibits discharge of employees based on race, color, religion, sex or national origin. The Act also prohibits an employer from retaliating against an employee for exercising Title VII rights. In 1991, the Civil Rights Act was amended to broaden the coverage of the Act for jury trials and to provide for compensatory/punitive damages under certain circumstances.
Age Discrimination Employment Act (ADEA), 29 USC §623, 631, 633(a).
The ADEA prohibits age based discharges of employees by private employers and the federal government and protects employees against retaliation for exercising statutory rights.
Americans With Disabilities Act (ADA), 42 USC §1201 et seq.
The ADA was enacted in 1990 but was made effective in 1992 for entities of more than 25 employees. The purpose of the statute was to provide a clear comprehensive national mandate for the elimination of discrimination against individuals with disabilities. The Act prohibits discrimination against employees who have a physical or mental impairment that substantially limits them in one or more major life activities and requires employers to make reasonable accommodations to disabled employees.
Employee Retirement Income Security Act of 1974 (ERISA), 29 USC §1140, 1141.
ERISA prohibits the discharge of employees in order to prevent vesting of pension rights and governs how pension plans are to be administered by private employers.
Consumer Credit Protection Act (CCPA), 115 USC §1674(a).
The CCPA prohibits discharge of employees because of garnishment of wages for any one indebtedness.
Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C.A. §§ 4301 - 4333. The USERRA requires reinstatement of employees who have served in the armed services and prohibits an employer from discriminating against those in the armed services.

State Law

Michigan has also enacted certain legislative provisions that often mirror the federal statutes prohibiting certain types of discharges.

Elliott Larsen Civil Rights Act (ELCRA), MCLA §37.2101.
The ELCRA prohibits discharge based on race, color, religion, national origin, age, height, weight, marital status, or sex. The ELCRA provisions mirror, in many respects, the provisions of Title VII. The scope of coverage for Michigan employers is somewhat larger under the ELCRA.
Michigan Persons with Disabilities Civil Rights Act (PDCRA), MCLA §37.1101.
The Handicappers' Act prohibits discharge based on a handicap which is unrelated to the individual's ability to perform the particular job or position. The statute mirrors in many respects, the Americans With Disabilities Act. A review of the differences between the two statutes is beyond the scope of this manual.
Michigan Whistleblowers' Protection Act (MWPA), MCLA §15.362.
The Whistleblowers' Protection Act prohibits retaliatory discharge of employees for reporting a violation or suspected violation of law, regulation, or rule of state or political subdivision, unless the employee knows the report is false. The Act also prohibits the discharge of an employee requested to participate by a public body in an investigation, hearing, inquiry, or court action. The Act imposes strict time limits on employees who wish to pursue the Whistleblower claims.
Retaliatory Discharges.
Certain statutes in Michigan also prohibit the discharge of an employee because he or she chooses to exercise rights under that law. e.g. Michigan Occupational Safety and Health Act (MI-OSHA), MCLA §4081001 et seq.

Special Exceptions to the Employment-At-Will Doctrine

In 1980, the Michigan Supreme Court revolutionized this area of law with its decision in Toussaint v Blue Cross and Blue Shield of Michigan, 408 Mich 579 (1980). In that case, the court found an employment contract of indefinite duration was enforceable. This position was contrary to a century of Michigan law which had held that "special consideration" in addition to services rendered was necessary to create an enforceable employment contract when the contract was not for a definite term. More importantly, the Toussaint court also held that a contract of such indefinite duration could be created by an express, oral, or written agreement or "as the result of employee's legitimate expectations grounded an employer's policy statements." In cases that followed Toussaint in the mid-1980's, juries found such "legitimate expectations" and, as a result, awarded sizable verdicts, based on verbal assurances of an employer that the employee would have a job "so long as he did a good job," or words to that effect. Often these verbal contracts were made by supervisors who were no longer with the company or who could not recall whether such a statement was ever made to the employee. Even when the person who allegedly made the statement testified that he never said such a thing, the employee nevertheless prevailed on his contract claim by relying on a probation policy or progressive discipline policy, set forth in an employee handbook or another supervisor's statement that the policy of the company was to discharge only for cause.

Toussaint also expressly condoned a practice of explicitly informing employees of that at-will nature of the employer's employment policy. The court in Toussaint explained:
[If] the employers had desired, they could have established a company policy of requiring prospective employees to acknowledge that they served at the will or pleasure of the company and, thus, avoided the misunderstandings that generated this litigation. 408 Mich App 612.
This method of protection calls for employers to refrain from making any promises of job security and to explicitly inform their employees that they can be terminated with or without cause. This "just cause disclaimer" method of avoiding wrongful discharge litigation has proven successful for companies that are willing to risk the adverse impact that the disclaimer may have on employee recruiting efforts and on the employer's ability to thwart a union-organizing campaign.

Since the Toussaint decision, Michigan courts have consistently upheld the dismissal of implied employment contract claims on the strength of language which explicitly provides for at-will status. Ironically, the most successful employer in this regard has been a company that drafted an employment application which included the at-will language prior to the court's decision in Toussaint. Sears Roebuck & Company has successfully defended numerous implied contract cases by arguing that it took the precise steps outlined by the Toussaint court to preclude employees from gaining a legitimate expectation of just cause employment. See Reid v Sears Roebuck Co, 790 F2d 453 (6th Cir 1986); Summers v Sears Roebuck & Co, 459 F Supp 1157 (ED Mich 1982); and Eliel v Sears Roebuck & Co, 150 Mich App 137 (1985).
The language used in the Sears Roebuck & Company employment application states:

In consideration of my employment, I agree to conform to the rules and regulations of Sears Roebuck & Company and my employment and compensation can be terminated with or without cause and with or without notice, at any time and at the option of either the company or myself. I understand that no store manager or representative of Sears Roebuck & Company, other than the President or Vice President of the company, has any authority to enter into any agreement for employment for any specified period of time or to make any agreement contrary to the foregoing.

This language is incorporated into an employment application which is signed by each employee before they begin working for the company.

Throughout the mid to late 1980's, most wrongful discharge cases based on oral promises or "legitimate expectations" created by employee handbooks revolved around the sufficiency of at-will disclaimers. In fact, most employers adopted at-will disclaimers on the advice of counsel to protect against the type of claim that was raised by the employees in Toussaint. Toussaint proved to be the "high water mark" for employees and recently the pendulum has swung back to restrict the types of claims that can be characterized as exceptions to the at-will-employment rule. Nevertheless, there are four clearly defined exceptions to the rule that still remain.

Written Contracts.

Perhaps the easiest way for an employee to establish a just cause contract is to produce a written employment contract for a specific term. The Toussaint decision recognized that a just cause arrangement was implied in a contract for a particular period of time, e.g. a written contract for a two year term. In other words, unless a contract for a specific term expressly contains language supporting the employer's right to terminate at will, it will be construed to require a good reason for termination.
Of course, even if the contract is construed to be terminable only for just cause, it may still contain a specific provision limiting damages for breach of the contract. There are few reported cases discussing written contracts since those contracts typically contain explicit provisions dealing with termination.

Oral Promises.

Oral promises still constitute a proper basis for establishing the existence of a just cause employment contract. Richards v Detroit Free Press, 173 Mich App 256, affirmed; 433 Mich 911 (1989). Currently, however, Michigan courts apply an extremely rigorous standard for finding that oral promises are sufficient to create a just cause employment contract.
In Rowe v Montgomery Ward & Co, 437 Mich 627 (1991), the Michigan Supreme Court retreated from Toussaint and held that special circumstances must be present before oral representations rise to the level of creating a just cause employment contract. In that case, the employee was told that she "would have a job as long as" she met her sales quota, and the employee signed Rules of Conduct providing for dismissal in the case of theft or dishonesty. In holding no just cause relationship existed, the court stressed the plaintiff's failure to inquire about job security before accepting the position and her failure to engage in pre-employment negotiations about job security. Prior to Rowe, it had not been necessary for an employee to show that she had inquired about job security or engaged in negotiations over job security before she accepted the position.

In Rood v General Dynamics Corp and Schippers v SPX, 444 Mich 107 (1993), the Supreme Court expanded upon its analysis in Rowe and further restricted the oral promises prong of Toussaint. In Rood, the court found that a reasonable juror could not conclude that a reasonable employee in the plaintiff's position could interpret certain oral statements as a promise of just cause employment. The assurances were in the nature of statements that the employee's job "was fine, it's secure" and that he was a "key player." Id. at 128. The employee in Schippers also raised oral assurances that would have been sufficient to create a just cause contract before the Rowe decision. Before accepting a transfer to a less secure position, Schippers specifically inquired about job security. He was told by a member of management that "as far as he was concerned, unless something was really wrong (Schippers) would be there for retirement." Id. at 120. The Supreme Court nevertheless concluded that the parties had not discussed job security in the sense of requiring just cause for Schippers' termination. Id. at 124.

Based upon the analysis of the Supreme Court in Rowe, it will be a rare case where an employee can allege the specific facts necessary to create an oral contract of employment. For instance, in Prysak v R.L. Polk Co, 193 Mich App 1 (1992), the court found that a manager's statement that "you can't just go firing people for no reason... you got to have a reason," was insufficient to create a just cause employment contract because the statement was not a clear and unequivocable promise of job security. The court also noted that the statement was not made during pre-hire negotiations. Similarly, in Biggs v Hilton Hotel Corp, 194 Mich App 239 (1992), the defendant's general manager's statements during a pre-employment interview that "he saw plaintiff as a person who would go places" and that the relationship "would be a good one in which there would be an opportunity to grow and maintain some type of long term relationship" were found insufficient to create a just cause contract.

Cases recognizing that a just cause contract may be based upon oral statements include Snell v UACC MidWest, Inc, 194 Mich App 511 (1992), where the plaintiff was told during pre-employment negotiations, "if you mind your p's and q's and do your job, you really have to screw up to get terminated." Significant to the court was the lack of any contrary statement regarding the lack of employment security in an employee handbook.
In Barnell v Taubman Co, 203 Mich App 110 (1993), pre-employment negotiations involving the recruitment of a Vice President of Finance were found sufficient to create an oral employment contract. During several job interviews, the plaintiff in Barnell had specifically inquired about job security and was told that the defendant had a policy of just cause employment. Barnell is also significant because the defendant employer published a memorandum stating that all employees were at-will eight months after the plaintiff accepted the position. Plaintiff refused to sign the memorandum acknowledging his at-will status and the court refused to void the enforceable oral express contract of employment on the basis of the memorandum. The court noted that an express contract of just cause employment may only be modified with the employee's consent.

Legitimate Expectations.

As discussed above, Toussaint recognized that a just cause employment contract can be proven through language contained in policy manuals and employee handbooks. This is the so-called "legitimate expectations" prong of the Toussaint decision. The legitimate expectation doctrine does not rely upon traditional contract principles. In fact, there need not be any meeting of the minds on the subject, there is no requirement for pre-employment negotiations and the employee need not even learn of the policy until after he or she is hired. Toussaint explained the rationale for the legitimate expectations doctrine as follows:

It is enough that the employer chooses, presumably in its own interest, to create an environment in which the employee believes that, whatever the personnel policies and practices, they are established and official at any given time, proported to be fair, and are applied consistently and uniformly to each employee. The employer has then created a situation "instinct with an obligation".

Toussaint, 408 Mich at 613.

In Renny v Port Huron Hospital, 427 Mich 415 (1986), the Michigan Supreme Court held that an employee handbook containing a list of disciplinary violations and a penalty for each violation and an optional grievance procedure was sufficient to create a legitimate expectation of just cause employment. Essentially, in Renny, the court held that such policies will be construed to create a just cause contract if the handbook does not contain an express at-will statement or disclaimer.

In Rood v General Dynamics Corp, and Schippers v SPX Corp, 444 Mich 107 (1993), the Michigan Supreme Court discussed in detail the legitimate expectations prong from the Toussaint decision. The plaintiff in Rood was a plant physician claiming he was wrongfully discharged when his position was replaced by a new employee. Dr. Rood's claim was based on a combination of oral assurances, an elaborate performance appraisal system and personnel policies governing the circumstances for termination. There was no disclaimer of just cause employment. The Michigan Supreme Court concluded that a jury should resolve the issue of whether or not the combination of circumstances in Rood was sufficient to create a just cause contract.

In Schippers, the plaintiff was a truck driver who agreed to transfer to a less secure position with the defendant. He claimed that he only agreed to the transfer because of oral assurances of job security. He also relied upon an employee handbook that discussed fairness, but did not discuss or even mention just cause as controlling or limiting management termination decisions. There was certain language in the handbook proporting to disclaim a just cause contract, but the language was not the explicit just cause disclaimer language upheld in the Sears Roebuck line of cases.

The court in Schippers held that the plaintiff's evidence was insufficient to create a legitimate expectation question for the jury. The court found that written statements guaranteeing fairness were insufficient to permit a reasonable juror to conclude that the employer had given up its right to discharge employees at-will. The court also rejected a non-exclusive list of shop rules to be sufficient to create a just cause contract. One issue left open in the Michigan Supreme Court decisions to date is the so-called mixed message cases involving employee handbook language that arguably creates a just cause termination policy and, at the same time, declares all employees at-will through the use of ambiguous language.

In Lytle v Malady, (On Rehearing), 458 Mich 153 (1998), the court held that the company’s employee handbook was insufficient to create a jury question over whether the plaintiff had a legitimate expectation of just cause employment. The particular language involved stated, "no employee will be terminated without proper cause or reason and not until management has made a careful review of all facts." The handbook also contained a disclaimer stating that the text of the book did not constitute a contract between the employer and any group of employees. The court held that the employer's explicit policy statement which forbade discharge except for just cause could not have reasonably created a legitimate expectation of just cause employment. The court accepted the employer's argument that the language providing that the handbook did not create a contract was a sufficient at-will disclaimer. The Lytle case rejected the argument that a jury issue is created when an employer sends "mixed signals" to its work force regarding the nature of the employment relationship. In other words, so long as the employer has an at-will disclaimer in place, it negates any reliance upon other provisions in the handbook which may create a legitimate expectation of just cause employment.

Public Policy.

Employers are precluded from discharging employees, even employees who are employed at-will, when the discharge would violate settled public policy. Wrongful discharge actions for violating public policy can be premised on one of three grounds:
a) Explicit legislative statements prohibiting discharge, discrimination or adverse treatment of employees who act in accordance with the statutory right or duty;b) "Legislative expression of policy" - for example, discharging an employee for refusing to violate the law during employment; or,c) Retaliatory discharge.

The leading case in this area is Trombetta v Detroit, 81 Mich App 49 (1978). Trombetta involved an employee who was terminated for refusing to forge reports on behalf of his employer. Trombetta is somewhat unique in that there was no express legislative provision involved which prohibited retaliatory discharge. In Dudewicz v Norris-Schmid, Inc, 443 Mich 68 (1993), the court held that a claim based on a violation of public policy cannot be raised when an applicable statute prohibits a retaliatory discharge for the plaintiff's conduct. Under those circumstances, the statute provides the plaintiff exclusive remedy.

The statute most involved in retaliatory discharges is the Workers' Disability Compensation Act of 1969 (WDCA), MCLA §418.101 et seq. In Sventko v Kroger Co, 69 Mich App 644 (1976), the court held that cause of action is stated when an employee is discharged in retaliation for having filed a Workers' Compensation claim. In Philip's v Butterball Farms Co, 448 Mich 239 (1995), the Michigan Supreme Court resolved a conflict in the Court of Appeals and held that a claim of retaliatory discharge sounds in tort and not in contract. Consequently, the full tort remedies are available for a retaliatory discharge in violation of public policy. The Whistleblowers' Protection Act (WPA), MCLA §15.361 et seq. is a subset of the public policy exception to the at-will-employment rule. The WPA provides that an employer cannot discharge, threaten, or otherwise discriminate against an employee because the employee reports or is about to report a violation or suspected violation of federal or state statute or regulation to a public body.
There is an exceedingly short Statute of Limitations for claims under the Whistleblowers' Protection Act. An action must be brought within 90 days after the occurrence of the alleged violation of the Act.

Copyright© Bos & Glazier

What I'm About

2007-01-29T21:58:00.000-05:00

This is a new blog discussing employment law issues. It is written by an attorney in Grand Rapids, Michigan. For information about me, see http://www.bosglazier.com/brad_glazier.shtml.

In this blog, I will be sharing information about what facts make a good employment lawsuit, the at-will employment rule and its exceptions, Federal and state laws that protect employees from a wrongful discharge and how the courts decide which wrongfully discharged employees are entitled to an award for damages and which former employees get thrown out of court.

I am interested in your comments and feedback. Just remember, reading or commenting on this blog does not create an attorney-client privilege and posts on this site do not constitute legal advice.