1. Discrimination

Charges of discrimination in employment continue to increase, as do the size of settlements and verdicts paid by employers. Also, with mandatory attorney fee provisions under federal law for the prevailing plaintiff-employee, employers risk awards for the opponent’s attorney as they incur the ever-increasing expenses of litigation. Beyond these financial costs, employers involved with discrimination actions often suffer losses in productivity, employee morale, and public image. 

This brief outline identifies the risks of discrimination and wrongful terminations claims. Often times, charges of discrimination are combined with wrongful termination causes of action in a single suit filed as a result of an employment termination. The same type of conduct supporting a wrongful termination case can be used to support a claim of discrimination. Therefore, proactive efforts to avoid a wrongful termination case, such as strong human resource counsel and supervisory training, should also protect against the filing of a discrimination case. 

1. Protected Classes

   The first question for identifying or evaluating a discrimination claim is whether the employee is a member of a "protected class." The various discrimination statutes define the classes of individuals protected by the law. 

1. Title VII of the Civil Rights Act of 1964, 42 U.S.C. ' 2000e (a), as amended by the Civil Rights Act of 1991 ("Title VII"), makes it an unlawful practice for an employer to discriminate against an individual "with respect to his compensation, terms, conditions or privileges of employment, because of such individual’s race, color, religion, sex, or national origin. . . ." (Applies to employers with 15 or more employees; administrative complaints filed with EEOC.)
2. The Age Discrimination in Employment Act of 1967, 29 U.S.C. '' 621-634 ("ADEA") protects individuals who are at least 40 years of age with regard to compensation, terms, conditions or privileges of employment. (Applies to employers with 20 or more employees; administrative complaints filed with EEOC.)
3. The Americans with Disabilities Act of 1990, 42 U.S.C. ' 12101, et seq. ("ADA") protects individuals with disabilities. The term "disability" means, with respect to an individual: (a) a physical or mental impairment that substantially limits one or more of the major life activities of such individual; (b) a record of such impairment; or (c) being regarded as having such an impairment. (Applies to employees with 15 or more employees; administrative complaints filed with EEOC.)
4. The Idaho Human Rights Act, Idaho Code ' 67-5901, et seq. ("IHRA") embodies the classes protected by federal statutes, namely Title VII, the ADEA, and the ADA. The IHRA applies to employers with 5 or more employees. Administrative complaints, as a condition precedent to litigation, are filed with the Idaho Human Rights Commission, and often are co-filed with the EEOC.
5. The Equal Pay Act is part of the Fair Labor Standards Act. It prohibits sex-based wage discrimination between men and women in the same establishment when performing under similar working conditions. It is enforced and administered by the EEOC and can be enforced civilly by affected employees. The Idaho Human Rights Commission enforces the Idaho Discriminatory Wage Rate Act which is a similar state statute requiring equal pay for jobs of equal skill. (Applies to all employers.)
6. The Pregnancy Discrimination Act is an amendment to Title VII of the Civil Rights Act of 1964. Discrimination on the basis of pregnancy, childbirth, or related medical conditions constitutes unlawful sex discrimination under Title VII. Women affected by pregnancy or related conditions must be treated in the same manner as other applicants or employees with similar abilities or limitations. An employer cannot refuse to hire a woman because of her pregnancy-related condition as long as she is able to perform the major functions of her job. An employer cannot refuse to hire her because of its prejudices against pregnant workers or the prejudices of co-workers, clients or customers. An employer may not single out pregnancy-related conditions for special procedures to determine an employee’s ability to work. An employer may not have a rule which prohibits an employee from returning to work for a pre-determined length of time after childbirth. Employers must hold open a job for a pregnancy-related absence for the same length of time jobs are held open for employees on sick or disability leave. (Applies to employers with 15 or more employees.)
7. Although not an anti-discrimination statute, employers should know if they are covered by the Family and Medical Leave Act of 1993 ("FMLA"). Employers with 50 or more employees (working within a 75-mile radius if the employer has more than one location) must provide eligible employees with FMLA rights. The FMLA provides employees, who have worked for one year or more and 1250 hours in the year preceding leave, the right to unpaid leave from employment for up to 12 weeks in a given year for a serious health condition of themselves or immediate family members, or for the birth, adoption or placement of a child in foster care. Upon return to employment, the employee must be restored to the same or equivalent position. (Health benefits for the employee must be continued during the FMLA leave, with the employee contributing no more to the premium than before the leave. Provisions for intermittent leave, fitness for return to work certifications, and exceptions for "key employees" exist in this federal act.) If an employer wrongfully denies FMLA leave or fails to properly restore the employee, the employer may be faced with a lawsuit. The Americans with Disabilities Act, in combination with the FMLA and state workers’ compensation laws, have converged to create complicated scenarios when an employee is injured or suffers an illness, on or off the job, needs leave time, and later requests accommodation for a temporary or permanent "disability." The courts are struggling with these cases, so a detailed outline of the tripartite relationship between these laws is beyond the scope of this short presentation. However, the EEOC has published guidelines and guidance on the interaction between the ADA and state workers’ compensation laws, which are available at www.eeoc.gov. The guidelines discuss various issues, including the definition of disability, in light of an occupational injury; reasonable accommodation; light duty; and leaves of absence. The FMLA is enforced through the U.S. Department of Labor or private litigation. There is no state statute in Idaho requiring family and/or medical leave.
   
   
2. Theories of Discrimination

Mere proof of a "protected" status does not give employees carte blanche to sue the employer. The individual must be able to show: he or she was treated differently than others because of his or her protected status (disparate treatment); he or she was impacted adversely by seemingly neutral practices because of the protected status (disparate impact); the employer failed to make or allow reasonable accommodations for a disability or religion; or, the individual was retaliated against because the person engaged in a protected activity. Proof of discrimination can come in many forms, and may include any (or a combination) of the following:

1. Disparate Treatment

A finding of disparate treatment is based on intentional discrimination of an employee where the employee’s protected status is a "motivating" factor in the employer’s treatment. This usually occurs in a one-on-one setting. To meet the prima facie case, the employee must prove: membership in the protected class; he or she is qualified for the position; treatment adverse to others similarly situated (e.g., discipline; termination; no hire). To escape liability, the employer must proffer a legitimate, nondiscriminatory reason for the adverse action. To prevail, the employee must prove the employer’s reason is a pretext for discrimination.

2. Disparate Impact

To prevail with a disparate impact theory (typically seen with multi-employee actions, class actions, or reductions in force), the plaintiff must establish that: 1) a neutral policy, practice, or test; 2) adversely impacts members of the protected class more frequently than expected or experienced with the non-protected class; 3) the policy or practice is not job related or required by business necessity; and 4) less discriminatory alternatives to the policy or practice were available to accomplish the employer’s purpose. Unlike disparate treatment claims, it is not necessary to show the employer intended to discriminate for the employer to be found liable. Statistical proof is common with disparate impact claims.

3. Harassment

Harassment is a recognized theory of sex discrimination under Title VII and the IHRA. With nearly unanimous support in the courts, harassment based on other aspects of the classes protected by Title VII, the ADEA, and the ADA also is actionable.

The definition of sexual harassment originated with the EEOC guidelines:

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute harassment when:

1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment;

2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individuals; or

3) such conduct has the purpose or effect of unreasonable interference with an individual’s work performance or creating an intimidating, hostile or offensive working environment.

The first two prongs describe action or behavior more commonly characterized as "quid pro quo" harassment. The third prong is commonly recognized as "hostile work environment" harassment. Proof of either or both types of harassment are actionable. Also, disparate treatment evidence may be combined with proof of harassment.

As a result of two landmark decisions by the United States Supreme Court in 1998, Faragher v. Boca Raton and Burlington Industries v. Ellerth, the employer’s responsibility for acts of harassment committed by supervisors has been heightened, with more emphasis given to training work forces about what they should do if they experience or witness behavior of a harassing nature. In a nutshell, employers are liable for harassment by a supervisor, regardless of whether the employer "knew or should have known" of the supervisor’s conduct, if the employee suffers a tangible job injury as a result of the harassment. If, however, the harassment is co-worker, third party, or non-job injury supervisory harassment, the employer has an affirmative defense if it proves it:

1) Took steps to prevent and correct promptly harassment in the workplace (e.g., disseminated a policy; trained employees about its policy; investigated other complaints; disciplined violators), and

2) The plaintiff unreasonably failed to take steps to bring the harassment to management’s attention or to otherwise avoid harm (e.g., didn’t follow the employer’s complaint procedure).

A well drafted policy and complaint procedure for harassment complaints is essential for all employers. Attached is a draft policy that identifies provisions which should be considered by every Idaho employer.

Also, training of both supervisory and non-supervisory employees is good business and a helpful piece of evidence in defense of harassment claims. Within the training, certain myths common to this area of the law should be dispelled:

• There can be no sexual harassment between individuals of the same gender. As confirmed by the U.S. Supreme Court in the Oncale case, situations of same-sex harassment may in fact be actionable.

• An isolated incident does not create a hostile work environment. A pattern of conduct is not necessary in a quid pro quo situation. In other words, one physical touching of an intimate body part by a supervisor may be sufficient.

• Employers are not responsible for sexual harassment that occurs off the premises. There may be facts or an inference of a connection between the harassing conduct and the workplace, depending upon the type of harassment that is alleged and the employment status of the alleged harasser.

• Only employees can harass. The statutes and case law that prohibit harassment in the workplace invoke an obligation upon employers to prevent harassment of its employees by non-employees, such as vendors, clients, contractors, and others. Such conduct is subject to a negligence standard, similar to the standard applicable to employer liability for co-worker (non-supervisory) harassment claims.

• There can be no retaliation if the complaint lacks merit. As long as the complaining employee has a good faith, reasonable basis in fact for believing there is harassing conduct, the complainant is protected from retaliation, regardless of whether investigation results in a finding of substantive merit to the complaint.

4. Reasonable Accommodation

Under the ADA, employers must not fire or refuse to hire an individual that is otherwise qualified for the job and can perform the essential job functions with or without reasonable accommodation. The employer does not have to hire the person or provide the accommodation if doing so would cause an "undue hardship" or if it would cause a direct safety risk or risk of harm to others.

Under the religious discrimination prong of Title VII and the IHRA, employers must assess whether reasonable accommodations can be made to hours of work or other work requirements to respect the employee’s firmly held religious beliefs (e.g., no work on Saturday Sabbaths). However, the "reasonableness" and undue hardship standards are subject to lesser scrutiny under Title VII than under the ADA.

5. Retaliation

Retaliation occurs where an employer takes adverse action because an employee has engaged in protected activity. Protected activities include (1) opposition of the employer’s practice as unlawful (such as reporting discrimination); or (2) participating as a witness in a charge. The underlying complaint does not need to have merit, as long as it was not malicious or falsified, to give rise to retaliation if adverse action is taken against the employee as a result of such complaint.

3. Remedies

   Under Title VII of the Civil Rights Act of 1964, the affected employee may receive back wages, reinstatement (or front pay in lieu thereof), and other declaratory and injunctive relief, as well as non-economic compensatory damages. The action may be brought by the EEOC or by the individual employee. In addition to the compensatory damages and front pay, an employer can be liable for punitive damages. The affected employee can recover punitive damages against the employer if it can be shown that the employer engaged in a discriminatory practice with malice or with reckless indifference to the employee’s federally protected rights. The amount of compensatory damages and punitive damages are capped based on the size of the employer. For an employer with between 14 and 101 employees, the cap is $50,000. The amount increases incrementally up to $300,000 for employers with over 500 employees. There is no cap on front pay.

   Damages available under the ADA are the same as under Title VII, including the mandatory attorney fee provision for prevailing plaintiffs.

   Under the Fair Labor Standards Act, employees can obtain equitable relief including reinstatement and promotion. Affected employees may obtain back wages and overtime for violations. Employers also may be liable for liquidated damages in an amount equal to the back wages in the event of a willful violation of the Act. Courts also may grant attorneys fees and costs to be paid by the defendant employer.

   Under the ADEA, employees can seek back and front pay, but no compensatory damages. Additional liquidated damages in the amount of unpaid wages and overtime are payable in cases of willful violations of the act. Prevailing employees are entitled to attorneys fees.

   Under the FMLA, the employee can obtain reinstatement, wages, salary, benefits, and other lost compensation caused by the employer’s violation. Liquidated damages in the amount of the losses will also be awarded when the employer’s violation was willful. The prevailing employee is entitled to attorney fees and costs.

   Under the IHRA, there are no caps on compensatory damages but punitive damages are limited to $1,000 per violation. The Idaho anti-discrimination statute does not include a mandatory attorney fee provision.

2. Wrongful Discharge

   Idaho law "presumes" for private employers that the employment relationship is "at-will," unless an express or implied contract, or some other like situation, guarantees employment for a specific period of time or restricts the reasons (or manner) for which employment can be terminated. Unless the employment arrangement or other law creates an exception to the at-will relationship, either the employer or employee can terminate the relationship at any time, for any or no reason, and with or without notice. Therefore, an employer should be able to terminate an at-will employee without liability for "wrongful discharge."

   Under Idaho case law, two exceptions in addition to express contracts have been recognized for wrongful discharge claims: (1) violation of public policy; and (2) the implied covenant of good faith and fair dealing.

1. Contract Claims from Handbooks

   Few employees sign a written contract with their employer outlining the terms and conditions of their employment. However, even without a signed piece of paper, courts have determined that promises for continuing employment can exist in employee handbooks and policy manuals. In Idaho, employers may include a conspicuous disclaimer, acknowledged by the employee, in the handbook or manual to preserve the at-will relationship by clearly stating that the provisions in the handbook or manual are "guidelines," not contractual terms, and that the relationship remains "at-will."

2. Violations of Public Policy

   As a general rule, Idaho employees can sue for wrongful discharge under a common law exception to the at-will rule if the employee is terminated for doing something Idaho public policy would encourage or for not doing something contrary to Idaho public policy. Specifically recognized by public policy are service on jury duty and filing a worker’s compensation claim. Other aspects of "public policy," developed at the state or federal level, may provide protection.

1. OSHA Whistleblower Protection

   The OSH Act contains an anti-retaliation provision for employees who believe they have been subjected to adverse employment action (e.g., discrimination or discharge) as a result of complaining to OSHA or cooperating with an OSHA investigation. The law provides an administrative procedure for the employee to pursue, within thirty (30) days of the alleged adverse action, by filing a complaint with the Secretary of Labor. (29 U.S.C. ' 660(c)(1).) However, federal courts (with the exception of the 9^th Circuit which to date has not addressed the issue) have held that there is no private right of the employee who alleges adverse treatment in employment for blowing the whistle under OSHA to file a lawsuit in court against the employer other than through the Secretary of Labor.

   Given the existence of a federal remedy for the alleged whistleblower, it is currently unknown whether an employee could file a state cause of action in Idaho for violation of public policy if the employee loses his or her job allegedly as a result of reporting a violation to or cooperating with OSHA. Although this theory was espoused in a federal lawsuit filed against an Idaho Employer, the resolution of the case by summary judgment did not specifically address the existence of a private cause of action under federal law or the viability of the state cause of action as a matter of law.

   Human resource professionals and company managers should be appraised of and kept in the loop of disciplinary actions that may result from an accident or injury that also results in an OSHA investigation and/or OSHA citation. Supervisors must be trained to know that any form of retaliation against employees for reporting to or cooperating with OSHA should be avoided. Instead, employees should be encouraged to candidly speak with OSHA if requested as part of an investigation, but informed that they are under no obligation to "offer" unrequested information during the investigation. Also, they should be told that they will not be the subject of retaliation if they tell the truth, although disciplinary actions for the underlying behavior that may have caused the accident or injury should not be ruled out. In other words, the OSHA investigation and outcome for the employer, and the employee’s role in the same, should be independent of the employer’s evaluation of the underlying employee behaviors or conduct involved in causing the accident or injury itself.

3. Covenant of Good Faith and Fair Dealing

   Under Idaho law, a limited exception to employment at-will exists for violations of the implied covenant of good faith and fair dealing. This "covenant" is implied in every employment relationship. It has been recognized in at least two appellate cases, both of which involved situations where employers in essence penalized employees who legitimately took advantage of employment benefits provided by the employer (e.g., fired for excessive absences which were within the allotted sick leave entitlement; denied vacation pay for days unused due to pressure by employer).

3. FLSA

   The federal Fair Labor Standards Act ("FLSA") applies to all Idaho employers who engage in interstate commerce. The FLSA sets minimum wage and overtime pay requirements for most employers. Unless an employee fits an "exemption," the employer must compensate employees at the minimum wage rate or above for all hours worked and time and one-half for any time over 40 hours in a given work week.

1. Compensable Time

   Under the Fair Labor Standards Act, the definition of employ is to "suffer or permit to work." Work time is all time controlled or required by the employer. Generally speaking, it is all the time actually spent in production. Employers must compensate employees for all time spent "working." Time when employees are not specifically engaged in their job duties but are not released to free time is compensable work time. An example is when an equipment operator waits while maintenance employees address a mechanical problem with his equipment. It also includes time that the employer does not necessarily require, such as working extra hours by arriving early and/or staying late. These extra hours at work are compensable. If the employer knows or should know the employee was working extra hours, the employer must pay, even if the employer considered the time as "off the clock."

   The employer should have rules requiring overtime to be preauthorized, and should enforce these rules. For non-exempt employees, the employer must prohibit the taking of work home, early arrivals to "prepare" for work, and working through lunch hours.

   Meal breaks that are at least 30 minutes long with the employee completely relieved from duty are not compensable. However, if the employee is expected to stay on duty, answer the phone, etc., the time is compensable.

   Employees who take company vehicles home with them are not "working" just because they are driving a company vehicle. Driving home and back to work is not compensable if it is just normal commuting. However, if employees are called out in the middle of the night and take the company truck, the time is compensable for non-exempt employees.

2. Overtime

   There is no limitation on the number of hours an adult can be required to work. An employer can require a 60 hour workweek. However, employers are required to pay a premium (time and one-half) for time worked over 40 hours in the week. There is no daily overtime obligation.

   Employers cannot avoid overtime pay by simply paying a salary. Employees must fit an exemption pursuant to FLSA regulations. Employees who do not fit the exemption cannot agree to the exemption. The U.S. Department of Labor has the enforcement authority to require reclassification of employees with back pay and other penalties.

3. White Collar Exemptions

   The primary exemption under the FLSA are the white collar exemptions: "any employee employed in a bona fide executive, administrative, or professional capacity...or capacity of outside salesman." Attached are two charts regarding the administrative and executive exemptions. If the exemption fits, the employee is exempt from the requirement that they be paid minimum wage for all hours worked and overtime for time worked in excess of 40 hours per week. To be exempt, the employee must be paid on a salary basis. This means they are paid the same amount on a regular basis that is "not subject to reduction because of variations in the quality or quantity of the work performed." Usually, litigation in this area has to do with unpaid overtime for an improper exemption.

   The employer bears the burden of proving the exemption applies, based on the actual job duties of the employee. The employer has to prove that the person meets each aspect of the exemption. Hourly rates of pay will disqualify employees from the exemptions. If the employer is docking a person’s pay for hours missed, the exemption is destroyed.

4. Recordkeeping

   The FLSA requires employers to keep records on wages, hours, and other items, as specified in the Department of Labor’s recordkeeping regulations. Most of the information is of the kind generally maintained by employers in the ordinary business practice and in compliance with other laws and regulations. The records do not have to be kept in any particular form, and time clocks need not be used. However, inadequate or insufficient records can result in a penalty and, more so, in deference to employee’s self-serving (and sometimes "after the fact") records.

   With respect to an employee subject to the minimum wage provisions or both the minimum wage and overtime pay provisions, the following records must be kept:

(1) personal information, including employee's name, home address, occupation, sex, and birth date if under 19 years of age;

(2) hour and day when workweek begins;

(3) total hours worked each workday and each workweek;

(4) total daily or weekly straight-time earnings;

(5) regular hourly pay rate for any week when overtime is worked;

(6) total overtime pay for the workweek;

(7) deductions from or additions to wages;

(8) total wages paid each pay period; and

(9) date of payment and pay period covered.

Records required for exempt employees differ from those for non-exempt workers, because precise records of work time are not required or typically maintained. Also, special information is required for home workers, for employees working under uncommon pay arrangements, for employees to whom lodging or other facilities are furnished, and for employees receiving remedial education.

Idaho Construction Law
presented by The Seminar Group
Boise, Idaho

November 5 & 6, 2001

Candy W. Dale
Hall, Farley, Oberrecht & Blanton, P.A.
702 W. Idaho, Suite 700
Boise, ID 83702
(208) 395-8500
cwd@hallfarley.com