‘Catch 22’ in FMLA Case

No Way Worker Could Win?

Remember Catch 22, the problem with no solution due to obtuse and cyclical reasoning?

A three-judge panel of the U.S. District Court of Appeals for the Eastern District of Missouri has issued a “Catch 22” opinion in denying legal relief to a welder who was fired after her employer forced her to take leave under the Family and Medical Leave Act (FMLA) even though she was healthy.

Trinity Marine Products, Inc. forced the welder, Tracy Walker, to take FMLA leave to get a doctor’s opinion about whether she had a serious medical condition. The doctor said she did not have a serious medical condition and was fit to work. Then Trinity required Walker to get a second opinion from a another doctor, who agreed with the first doctor and said Walker was fit for work . Then Trinity instructed Walker to consult a physician at Vanderbilt University Medical Center.

The Vanderbilt physician sent Walker a letter in which he agreed that Walker had no serious medical condition and was able to return to work without restrictions. Walker presented the letter to Trinity on Sept. 8, 2009 whereupon Trinity fired Walker on the grounds that she had exhausted her FMLA leave in August 2009.

Walker sued, alleging that Trinity interfered with her rights under the FMLA by placing her on involuntary FMLA leave even though she was healthy and then refusing to permit her to return to work. Trinity responded that Walker could not seek relief under the FMLA because “she never suffered a serious health condition that entitled her to take FMLA leave in the first place.”

The appeals court agreed with Trinity’s cyclical logic. The court said the FMLA prohibits an employer from interfering with, restraining or denying an employee’s exercise or or attempt to exercise rights under the statute. However, the Court states:

“… Walker admits that she never suffered a serious health condition within the meaning of the Act, [so] we conclude that she has no right to the benefits provided by the FMLA.”

Walker also raised the issue of  fairness, claiming that Trinity treated her as having a serious health condition and it is only fair that Trinity should be bound by that designation.

The appeal scourt denied the equitable claim, finding that Walker did not demonstrate she suffered monetary losses as a result of Trinity’s alleged interference with her FMLA rights. The court rejected Walker’s argument that she was required to travel to go to numerous medical examinations at Trinity’s insistence.  According to the court: 

“Trinity’s mistaken belief that Walker suffered a serious health condition could not entitle Walker to the benefits of the FMLA.” 

So Walker’s case has been thrown out of court, without ever reaching a jury.

The term Catch 22 is derived from  a 1961book  about the insanity of war by author Joseph Heller.  Here’s the passage:

“There was only one catch and that was Catch-22, which specified that a concern for one’s own safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane, he had to fly them. If he flew them, he was crazy and didn’t have to; but if he didn’t want to, he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle..”

Strippers are ‘Employees’

When is a worker  an employee who is entitled to a salary and unemployment benefits?

This question was at issue in a Kansas case that sheds light on the exploitative world of strip clubs and so-called gentlemen clubs.

Shortly after Milano’s, Inc. purchased a Topeka strip club called Club Orleans in 2002,  company President John Samples began treating the club’s exotic dancers as independent contractors rather than employees.  This meant the dancers were no longer paid even a nominal weekly wage, instead earning only tips paid by customers of Club Orleans. And they were not paid health or insurance benefits.

In 2005,  one of the dancers filed an unemployment claim, prompting the state to assign an auditor to investigate Milano’s. The auditor concluded  the dancers were not independent contractors but were employees under Kansas law.

Milano’s challenged the auditor’s determination on various technical grounds and two  lower courts upheld the determination. The case finally reached the Supreme Court of the State of Kansas.

Earlier this month, the Kansas Supreme Court  ruled that the determinative question was whether the dancers had the status of employees under common law rules that determine the employer-employee relationship. The Court said in Milano’s, Inc. v. Dep’t of Labor that the critical common-law factor in the analysis was the employer’s right of control over the employee and her work.

The record showed that the dancers were required to sign what was essentially  a “contract for hire” in the form of an application to work at Milano’s. The contract required the dancers to  abide by the house rules and gave Milano’s the right to fine or terminate the dancers.  Furthermore,  Milano’s, without consulting the dancers, adopted a  minimum tip policy for various types of dances and required the dancers to accept drinks from customers. Milano’s enforced the house rules.

According to the Court:

“Ample substantial competent evidence in the record before us, as echoed in the factual findings below, demonstrates that Milano’s possessed such a right of control over the dancers at Club Orleans. Most telling, the house set various rules, and dancers’ violations of those rules were punishable by fines and termination.”

The Court concluded that exotic dancers subject to a right of control by the owner of the club where they perform are employees under the “usual common law rules” incorporated into K.S.A. 44-703(i)(1)(B) of the Kansas Employment Security Law.

Although the ruling was limited to unemployment insurance benefits, it could have an impact on other independent contractors who seek employee status to be eligible for employment benefits such as workers compensation, disability benefits, etc.

Wage theft is epidemic  in the United States, according to the Progressive States Network (PSN),  a non-partisan, non-profit organization dedicated to supporting the work of progressive state legislators around the country and to the advancement of state policies that support issues that matter to working families.

Wage theft occurs when employers  misclassify workers as exempt employees when they are actually non-exempt employees (who are entitled to overtime)  or  misclassify workers as  independent contractors when they are truly employees.

The PSN estimates that more than 60 percent of low-wage workers suffer wage violations each week. On average, the PSN reports, low-wage workers lose $51 per week to wage theft, or $2,634 per year.  For low-wage workers, that amounts to 15 percent of their annual income, at average earnings of $17,616 per year.

SEXUAL HARASSMENT, DINE EQUITY & PEANUTS

peanutsThe EEOC has been settling lawsuits at a frenzied pace of late, some for the monetary equivalent of peanuts.

This week, the EEOC settled for $1 million a sexual harassment case filed against IHOP restaurants in New Mexico that are owned and operated by Fahim Adi.  The EEOC says the case is the second-largest litigation settlement ever reached by the EEOC’s Albuquerque Area Office.  An EEOC press release says:  “At least 22 women are expected to receive relief through the decree.”

If it  is only  22 women and they split full amount of the award equally among themselves  – without any deductions by the EEOC for fees and costs – they will each get about $45,454.

I submit that this is not a large amount of money for women – some were teenage girls – whom the EEOC says were subjected to sexually offensive conduct by Lee Broadnax, then manager of the defendant’s IHOP restaurant. The EEOC doesn’t go into details but says Broadnax’ illegal conduct included sexual comments, innuendo and unwanted touching (i.e., otherwise known as battery).

Some of the women were forced to quit their jobs because IHOP did nothing when they complained.  People who work as servers at a pancake house generally are not well-to–do and this is not an economy where jobs are easy to find.  Some of the victims were pretty college girls en route to a better future but others were mature women (including several members of a minority group).

One wonders how many IHOP  employees were forced to tolerate abuse because they had children to feed at home and no other options?

The figure of $1 million particularly pales when one considers the IHOP brand is owned by Dine Equity, Inc., which is based in Glendale, California and also owns the Applebee’s Neighborhood Grill & Bar brand.

According to Nation’s Restaurant News  magazine, Dine Equity had $7.9 billion in food service sales in 2011, making it  the ninth rranked in the United States for  “systemwide foodservice sale.”  For the quarter ending Sept. 30, 2012, DineEquity’s net income almost quadrupled to $58.7 million.  DineEquity operates almost entirely through subsidiaries and over 400 franchisees, which operate 1,842 Applebee restaurants and 1,535 IHOPs  around the world.

Dine Equity  vigorously enforces any encroachment upon the the IHOP brand.   One wuld hope that Dine Equity also would vigorously enforce the human rights of employees in IHOP and Applebee restaurants.  What could Dine Equity do?  For one thing, Dine Equity could train franchisors to follow  discrimination laws and respond appropriately to complaints. Dine Equity also could get rid of franchisors that tolerate hostile work environments and fail to respond to discrimination complaints.  Now that would get their attention!

Don’t get me wrong. If the EEOC had not taken on this case, it is quite possible that some of these victims would not have gotten anything at all (except, possibly Post Traumatic Stress Syndrome).  Courts seem to be utterly unsympathetic to victims of employment-related discrimination these days, which is probably why it is so prevalent in society. Poor people can’t afford to hire lawyers and pay court costs.  But lets get real – $1 million is  not exactly a windfall for people who likely suffered emotional trauma and stress and whose lives were completley upended by an IHOP franchisor.

In addition to the monetary relief, the decree prohibits the defendants’ IHOP restaurants from further discriminating or retaliating against its employees and requires IHOP to implement policies and practices that will provide its employees a work environment free of sex discrimination and retaliation. The defendants must also provide its employees in Bernalillo and Sandoval County IHOPs with anti-discrimination training and notice of the settlement.

In this case, the IHOP franchisor ignored the women’s sexual harassment complaints. Training cannot solve an employer’s lack of motivation to protect its workers from sex discrimination.

The Best is Yet to Be?

Grow old along with me!
 The best is yet to be,
 The last of life, for which the first was made.
– ROBERT BROWNING

An AARP national survey points to the existence of  a climate of fear among older workers of seemingly  pervasive and unchecked age discrimination in America.

The AARP survey finds that 64 percent of older American voters think workers over the age of 50 face age discrimination in the workplace and 34 percent report that they or someone they know has experienced age discrimination in the workplace.  Meanwhile, older workers face increased pressure to work longer than ever before as a result of dwindling savings and disappearing pensions.

In addition, the AARP reports roughly 8 in 10 older American voters say:

  •  It is important for Congress to take action and restore workplace protections against age discrimination (81%).
  •  Across party and ideological lines, they support the Protecting Older Workers Against Discrimination Act (POWADA) (78%).

Age discrimination has flourished since the U.S. Supreme Court ruled in 2009 that workers who assert they are discriminated against because of their age have a higher burden of proof than workers who  are discriminated because of their race, sex, national origin, religion, etc. (see Gross v. FBL Fin. Servs., Inc., 129 S.Ct. 2343, 2351 (2009))

The proposed POWADA would restore the previous legal rules and protections that existed before the 2009 decision.

POWADA was introduced in March by  Iowa Senators Tom Harkin (D-IA) and Chuck Grassley (R-IA) and Senator Patrick Leahy (D-VT).  Harkin is Chairman of the Health, Education, Labor and Pensions (HELP) Committee while Leahy and Grassley are the Chairman and ranking member respectively of the Senate Judiciary Committee.

The AARP notes the unemployment rate for older workers has soared in recent years, and once out of work, older jobseekers experience far longer spells of unemployment – well over a year, on average – than their younger counterparts.   The AARP says age discrimination is one of the significant reasons why it takes so much longer for older jobseekers to become reemployed.

The Supreme Court decision requires age discrimination victims to show that  “but for” age discrimination they would not have suffered an adverse employment action.  In other words, they must prove that age was the decisive factor in how they were treated.

 Prior to the ruling, age discrimination victims, like other discrimination victims, were required to show only that discrimination was a factor behind how they were treated.  The employer then was required to show that discrimination was not a factor.

The number of age discrimination complaints filed with the Equal Employment Opportunity Commission has more than doubled in the past decade, to a total of 23,465 in 2011.

Here are some other findings in the AARP survey:

  • Seventy-seven percent of respondents are concerned that their age would be an obstacle  to finding work if they had to find a new job in the current economic climate;  56% say they are “very concerned.”
  • Ninety-one percent agree that older Americans should be protected from age discrimination just as they are protected from other forms of discrimination, including a 73 percent supermajority of respondents who strongly agree.

The AARP (a.k.a. the massive insurance company) describes itself as a nonprofit, nonpartisan organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to themand society as a whole.