The New Year Brings Key Decisions for HR

As the new year begins, it’s an auspicious time to review recent changes in employment law, and to look at new workplace legislation. Last year brought significant changes in the Family and Medical Leave Act, and continued trends in the sexual harassment arena. In 2002, HR professionals should be aware of additional decisions on the FMLA, as well as crucial rulings that may affect the way employers can use mandatory arbitration. In addition, the Supreme Court will hear a case that could reshape the Americans with Disabilities Act. Maria Danaher, an employment attorney with the firm of Dickie, McCamey & Chilcote, reviews the key issues from 2001, and looks to the year ahead.

Looking at last year, what were the significant decisions?

One would be the Washington, D.C., circuit decision ruling that non-union employees are entitled to have a coworker present at an investigatory meeting. In this case, there were two guys who were trying to improve work conditions at a non-union shop. One was called into a meeting; he asked to have the other with him and the employer said no. The court ruled against the employer. That doesn’t mean that employers must inform employees that they have the right to have a coworker present at an investigatory meeting. But if the individual asks, you can’t say no-if there’s a reasonable expectation that the outcome of the meeting will include discipline. That’s important for non-union employers to note.

What was the hot legal issue for 2001?

The hot issue of 2001 was the FMLA. There were a number of circuit courts that decided issues regarding the FMLA. There was one major ruling: An employer’s mistake in granting FMLA leave to an ineligible employee doesn’t make that person eligible. In that case, an employer gave an employee FMLA leave, then found the employee had not worked for the requisite number of hours to be eligible for FMLA leave. But the employee demanded it anyway, because the employer had agreed to it. The court said no. So the courts have been using a commonsense approach in not expanding the language of the FMLA.

What were other big cases that helped interpret the FMLA?

The Seventh Circuit ruled that the right to be reinstated to employment after FMLA leave is not absolute. The court allowed a nursing-home employer to terminate an employee on her return from maternity leave because she had mismanaged her position. That’s a big issue for employers: “I’ve sent someone out on FMLA leave. When they come back, I can’t terminate them because the law requires me to keep their job open.” But in the Seventh Circuit case, there had been documentation of performance problems before the employee left. While she was out, the employer put somebody in her position who did a better job. When she came back, she was told about the complaints and offered an opportunity to resign, and she said they’d have to fire her. So they did. And when she sued them, the court ruled for the employer because there were discrepancies in the employee’s performance. It’s another tap on the shoulder to employers to understand how critical documentation is in these performance issues. The employer prevailed because it had documented her performance problems before she went on leave.

Have there been any other big issues that have been worked out in the courts in the past year?

We’re continuing on the path started by the 1999 Faragher and Ellerth sexual harassment decision: What kind of a response to an employee’s sexual harassment complaint really insulates an employer from legal liability? That’s come up in a number of circuits. The decisions are pretty consistently rational. There was a recent case in the Seventh Circuit where the court basically said: If you have managers with hiring authority and you don’t train them in the basic features of anti-discrimination law, then, in the court’s words, you are making an extraordinary mistake. So employers are understanding they need to put their managers through some kind of awareness training for how to investigate, respond, and follow up on these claims.

In 2002, it looks like the FMLA will remain an issue.

The Supreme Court will actually be looking at some FMLA cases in this term. One is Ragsdale v. Wolverine Worldwide. This concerns a DOL regulation stating that FMLA leave doesn’t start until an employer informs the employee he or she is on FMLA leave. So people were going on leave, then returning and demanding their 12 weeks of FMLA leave. They were getting chunks of medical leave they weren’t entitled to. In Ragsdale, the Eighth Circuit Court ruled that the regulation was invalid because it creates a right the statute didn’t confer. The statute only requires an employer to provide 12 weeks of unpaid leave, and under the DOL regulations, an employer can be forced to provide many more than 12 weeks. So this is the big one. It’s the case everyone’s looking at.

What is the expected outcome?

The Supreme Court is hesitant to allow a statute to be expanded-in a non-legislative manner-by the DOL. So it’s likely this Eighth Circuit Court decision will be upheld, but there’s no way to tell for sure.

Mandatory arbitration is another issue that will turn up this year, correct?

Yes, EEOC v. Waffle House will come in front of the Supreme Court. The question: Can the EEOC pursue a case on behalf of an individual who’s already agreed to arbitrate any employment claims? This is a big one for employers. “If I go through the trouble of getting my employees to sign an arbitration agreement, can the EEOC pick it up and take it to court anyway?” It really nullifies half of the benefits of having the arbitration agreement, because you still suffer the disruption and expense of the litigation you were trying to avoid. So that will be a big decision.

And finally, let’s talk about the major ADA case that will be resolved this year.

It’s huge: Toyota Motor v. Williams, about an ADA claim from a woman with carpal tunnel. It will be interesting to see whether the Supreme Court looks at this case narrowly or broadly. The narrow question is: Is carpal tunnel a disability? The broad question is: When is somebody truly disabled? The Sixth Circuit Court ruled in Williams that a woman’s carpal tunnel was sufficiently disabling to cover her under the ADA. The employer argued that to be covered by the ADA, you have to be substantially limited in a major life function-and working is a major life function. So even if I can eat, sleep, read, write, walk, if I can’t work-I’m not just unable to do one job function, but I’m unable to work-then I can be considered disabled. Toyota said the employee wasn’t unable to work. The only thing she couldn’t do was one particular job, where she had to hold brushes at shoulder level. But the court bypassed that rationale; it said that performing manual tasks is a major life activity. Even though it was only one aspect of her job, the fact that she can’t do manual tasks keeps her from performing a major life function.

So that’s a major development for employers.

That’s scary. Because that means people who aren’t necessarily disabled in a broad sense would be disabled for purposes of the ADA, if they had carpal tunnel syndrome. So the question is: What will the Supreme Court do with this? Will it deal narrowly with the Sixth Circuit’s rationale that performing manual tasks is a major life activity? Or will it rule on what it takes to include a person as disabled under the ADA? This is the one employers should keep their eyes on.

Update from January 8, 2002: After the publication of this article, the Supreme Court ruled that disabilities cannot be measured solely on the ability to do certain tasks at work. Justice Sandra Day O’Connor wrote that disabilities include “activities that are of central importance to most people’s daily lives,” such as seeing or hearing. You can get more information in the Legal Forum.