In This Issue

• Supreme Court Limits Definition of "Disability" Under ADA
• EEOC Can Pursue Claim Despite Employee's Arbitration Agreement
• Background Investigations —Do We Really Need To Do Them?
• Miscellaneous
• Ohio Supreme Court Clarifies Limitations Period for Wrongful Discharge Claims
• Challenge to New Ergonomics Guidelines Is Likely

Supreme Court Limits Definition of "Disability" Under ADA

By Tom Metzger

Summary: In one of the more important employment discrimination decisions in the past several years, the U.S. Supreme Court has unanimously determined that the Americans with Disabilities Act ("ADA") does not protect a person who is only limited in her ability to perform certain work-related manual tasks. Instead, a person with a disability for purposes of the ADA is one who struggles to perform basic tasks that are "central to daily life," as opposed to just particular job tasks.

Facts: Ella Williams was an assembly line worker at a Toyota plant. Ms. Williams claimed that due to her carpal tunnel syndrome, in which she developed pain in her wrists, neck and shoulders, she was unable to work with power tools. As a result, she was unable to perform her job, but she asserted that Toyota should have provided her with an accommodation consistent with the obligations under the ADA because she was disabled.

On appeal to the U.S. Supreme Court, the key issue was whether Ms. Williams in fact had a disabling condition that qualified under the ADA. At stake was the critical question of just how far the ADA goes to protect those with limiting conditions —and, therefore, which employees are entitled to protection under the law.

The Supreme Court determined that the definition of a disabled person under the ADA is actually quite narrow. Specifically, the Court emphasized that a person's everyday abilities and limitations are a key factor in determining whether a person is disabled. For example, the Court observed that "household chores, bathing and brushing one's teeth are among the types of manual tasks of central importance to people's daily lives" and as a result, a person such as Ms. Williams who can "still brush her teeth, wash her face, bathe, tend her flower garden, fix breakfast, do laundry and pick up around the house" does not have a disability for purposes of the ADA.

While Ms. Williams may have been unable to take jobs that required her to grip tools or to raise and lower her arms above her head for long periods of time, these specific workplace limitations did not make her disabled because they were not the kind of tasks "that are of central importance to most people's daily lives." In essence, the Court took the definition of a disability under the ADA (which is "a physical or mental impairment that substantially limits one or more of an individual's major life activities") to mean that particular workplace limitations alone will not suffice.

In the end, the Court explained that when trying to determine whether a person who has difficulty performing manual tasks is actually disabled, "the central inquiry must be whether the claimant is unable to perform the variety of tasks central to most people's daily lives, not whether the claimant is unable to perform the tasks associated with her specific job." Because Ms. Williams was capable of performing these daily tasks, such as tending to her personal hygiene, the U.S. Supreme Court concluded that she was not disabled within the meaning of the ADA, although she was prevented from performing a class of manual tasks associated with some assembly line jobs.

Closing Notes: The Supreme Court's decision, which greatly limits the definition of who is a disabled employee, offers substantial guidance to all employers who grapple with the question of just who fits within the protections of the ADA. The Court has clarified that there is a vast distinction between a person who suffers from an injury that limits specific work functions versus a person who suffers from a true disability that profoundly affects daily tasks. We will continue to monitor how this important decision is interpreted and applied by the courts, and will provide you with further updates.

Toyota Motor Manufacturing v. Williams, No. 00-1089, U.S. Supreme Court

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EEOC Can Pursue Claim Despite Employee's Arbitration Agreement

By Tom Metzger

Summary: The U.S. Supreme Court has decided that the Equal Employment Opportunity Commission can file a discrimination suit on behalf of an employee even though the employee signed a valid arbitration agreement with his employer.

Facts: Eric Baker worked as a grill operator at a Waffle House restaurant. At the beginning of the employment process he signed a mandatory arbitration agreement. The agreement required him to submit any employment dispute he may have to binding arbitration. Mr. Baker was fired 16 days after he started work, and he claimed that his termination was discriminatory after he suffered a seizure while at work.

Despite his arbitration agreement, Mr. Baker filed a charge with the EEOC, claiming his termination violated the Americans with Disabilities Act. The EEOC investigated, and ultimately filed an enforcement action against Waffle House under the ADA in which it sought relief for Mr. Baker.

The Supreme Court determined that the EEOC was not limited in its ability to pursue the charge against Waffle House, even though the employee's arbitration agreement may otherwise have been fully enforceable. Most importantly, the Court found that the EEOC could pursue such legal relief as reinstatement, back pay and damages —including punitive damages —on behalf of Mr. Baker.

The Court reasoned that because the EEOC was not a party to the arbitration agreement, it was free to seek such "victim-specific" relief for an employee like Mr. Baker who claimed he had been subjected to on-the-job disability discrimination. In addition, the Court emphasized that the applicable law, the Federal Arbitration Act, does not specifically reference enforcement by public agencies such as the EEOC, and therefore it does not "place any restriction on a nonparty's choice of a judicial forum."

Closing Notes: While it appears that the Supreme Court's ruling amounts to giving workers "two bites at the apple" in discrimination cases, as expressed in the dissenting opinion, the EEOC is actually involved in less than 1 percent of all job bias cases. Consequently, while there is a theoretical possibility that an employee may seek to resolve claims through arbitration and also pursue relief through the EEOC, as a practical matter the decision does not greatly diminish the enforceability and finality of most arbitration agreements and decisions. In addition, because Mr. Baker had not pursued arbitration, the decision did not explain what would happen if the EEOC sues on behalf of an employee who already arbitrated or settled a claim before filing a charge with the agency. We will continue to monitor developments in this area and bring you updates as they occur.

Equal Employment Opportunity Commission v. Waffle House Inc., No. 99-1823, U.S. Supreme Court

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Background Investigations — Do We Really Need To Do Them?

By Larry Feheley

One of the new and expanding areas of employer liability arises in the context of background checks and "negligent hiring." The key to minimizing the potential for liability lies in an understanding of the applicable legal principles.

1. What About Background Checks for New Hires?

Courts and juries are imposing liability on employers for negligent hiring more frequently than in the past. Usually, the circumstances involve a third party who is injured because the employer did not use "reasonable care" to investigate the background of a prospective employee. The most prevalent cases are those where other employees or third parties are injured and performing a background check would have disclosed a history of violence, dishonesty, or poor driving.

One of the early cases claiming negligent hiring involved a situation where the employer sent two employees to a customer's house to remove some property that was leased from the employer. While in the house, one of the employees assaulted the female customer, ripped off her clothing, and attempted to rape her. The employee was later convicted of attempted rape and felonious assault. The employee admitted that he had smoked crack cocaine on the morning of the attack. He had previously been fired from a job for refusing to take a drug test. The evidence revealed that if the employer had investigated his prior work history, it would have learned of the drug test, and the employer admitted that it would not have hired the employee under those circumstances. The court allowed the negligent hiring claim to proceed against the company, stating that the primary issue was "whether the employer knew or should have known of the employee's criminal or tortious propensities." The court concluded that a reasonable jury could find that the failure to inquire into the employee's history before hiring him was causally connected to and caused the attack on the customer. [Stephens v. A-Able Rents Co. (Cuy. Co. 1995), 101 Ohio App.3d 20]

A similar case arose in Franklin County in 1997. Although the employer escaped liability in this case, the ruling underscores the possible dangers. In Staten v. Ohio Exterminating Co., Inc., 123 Ohio App.3d 529 (Fkln. Co. 1997), the exterminating company hired an individual to be a service technician who performed services in the customer's house. After a customer reported that a diamond ring had been stolen, criminal charges were filed against the employee. Six months later, the then-former employee shot and killed the customer so that they could not testify at the criminal trial. The customer's estate then sued the employer for wrongful death, claiming that the employer was negligent in hiring the employee because the employee had a criminal record which the company failed to discover or investigate. In this case, while the employee's history may have made the theft foreseeable, the court held that it was not reasonably foreseeable that he would kill the customer six months after his employment was terminated. However, in so ruling, the court reiterated that an employer has a "duty to exercise reasonable care in the selection of employees who, in the performance of their duties, will have the opportunity to commit a crime against a third person." The court observed that an employer can be held liable if it knew, or should have known, that its employee had a tendency for violence, and that the employment would create a situation where the violence would harm a third person.

Increasingly, employers are expected to investigate the background of prospective employees. Thus, criminal records should be checked for jobs that involve interaction with customers or the public. Credit reports, criminal records, and drug tests may be relevant to hiring decisions for those who handle money, or medications, or who work with children. Driving records are especially important for those who will operate vehicles in the course of their employment.

Employers have the right to obtain information from a reporting agency that bears on an individual's character, reputation, or personal characteristics under the Fair Credit Report Act (15 U.S.C. §1681), provided that they obtain authorization prior to requesting the background checks. Although the statute does not address the issue, the Federal Trade Commission has issued a guidance which concludes that the Fair Credit Report Act does not prohibit an employer from refusing to hire an applicant that does not authorize the employer to obtain the background report. (See, FTC Staff Opinion; Oct. 1, 1999)

2. Recommendations for Avoiding Negligent Hiring Liability.

It is usually easy to claim negligence, or carelessness, with the advantage of perfect hindsight after an injury occurs. While nothing can guarantee that an employer will not be sued, or ultimately held liable, for negligent hiring, the following steps will minimize the potential exposure:

(a) Require a Job Application

1. Include questions on prior criminal convictions (including follow-up details on the type of crime, date of conviction, and penalty imposed) and civil liability for any intentional torts (including the nature of the tort and disposition of the litigation);

2. Be sure the application is completely filled out;

3. Investigate any gaps or inconsistencies in the applicant's prior employment or education;

4. Verify the reason given for any gap in employment or education;

5. Ask if the applicant has ever used or been known by a different name. If so, conduct background checks on all names.

(b) Check Prior Employment

1. Contact all prior employers for information and record their responses.

2. If only basic information is revealed, inquire simply whether the prior employer would rehire the applicant.

3. Record and document all attempts to obtain information and all information received.

(c) Obtain Background Information

1. Obtain a written consent and authorization for all background checks;

2. Conduct a criminal background check;

3. Where applicable, obtain a credit report and/or driving record report;

4. Check compliance with the Fair Credit Reporting Act when information is obtained from an outside agency.

Employers that are reluctant to provide information on former employees, and the paperwork obligations imposed by the Fair Credit Reporting Act, are certainly obstacles to conducting quick and thorough background checks. However, the growing potential for liability for negligent hiring virtually mandates that employers institute reasonable methods to investigate the background of those they hire.

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Miscellaneous

By Larry Feheley

1. OSHA — Bloodborne Pathogen Rule

Most employers don't have any idea what OSHA's Bloodborne Pathogen Rule covers, or even that such a rule exists. The bloodborne pathogen standard applies primarily to health care workers and public safety workers (doctors, dentists, nurses, firefighters, EMTs, etc.). The standard requires employers to develop exposure plans and train employees where there is a risk that employees might come in contact with blood or bodily fluids when performing their work.

Many employers may be covered by this OSHA standard and not realize it. The reason is because the standard applies to any employee with a duty to render some form of medical care. This could cover, for example, plant nurses, designated medical emergency responders, etc.

2. Computer Professionals — Overtime Exemption

There is an exemption from the Fair Labor Standards Act overtime payment requirement for "computer professionals." However, in order to be considered exempt, the employee must meet all of the specific and demanding criteria for the exemption. According to an Opinion Letter issued by the Wage-Hour Office of Enforcement Policy (No. 2090), the employee's "primary duty" must consist of one of the following:

1. The application of systems analysis techniques and procedures to determine hardware, software, or system functional specifications; or

2. The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs including prototypes, based on and related to user or system design specifications; or

3. The design, documentation, testing, creation, or modification of computer programs related to machine operations systems.

4. A combination of the above duties, the performance of which requires the same level of skills.

Although these criteria are not the only requirements necessary to establish the exemption, if the employee's primary duties do not entail one of these prescribed functions, the overtime exemption will not apply.

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Ohio Supreme Court Clarifies Limitations Period for Wrongful Discharge Claims

By Tom Metzger

Summary: The Ohio Supreme Court has determined that the limitations period for a claim of wrongful discharge in violation of public policy is four years.

Facts: Larry Pytlinski allegedly complained to management that certain working conditions threatened the health and safety of employees. Sometime after making these complaints, Mr. Pytlinski was demoted.

Mr. Pytlinski persisted, and he later delivered a memorandum to management in which he expressed concern that there were workplace conditions that violated regulations of the Occupational Safety and Health Administration ("OSHA"). Mr. Pytlinski was discharged the next day.

Approximately one year after his employment was terminated, Mr. Pytlinski filed a complaint in which he claimed that his termination was in violation of public policy. Specifically, he alleged that the public policy of Ohio prohibits the termination of employees for making a complaint regarding alleged violations of the law, such as OSHA regulations.

The employer asserted, among other things, that the complaint was too late because Ohio's Whistleblower Act (which is set out in Ohio Revised Code § 4113.52) provides for a 180-day limitations period.

The majority of the Supreme Court of Ohio, however, looked at the issue a bit differently. In particular, the Supreme Court determined that although Ohio does have a specific statutory provision dealing with whistleblower claims by employees, a claim for violation of public policy regarding workplace safety "is an independent basis upon which a cause of action for wrongful discharge in violation of public policy may be prosecuted." In effect, the majority of the Ohio Supreme Court has determined that an employee can completely ignore the mandatory procedures for making a statutory whistleblower-type claim —such as meeting the 180-day limitations period within which to file the claim.

Because the limitations period from the Ohio Whistleblower Act does not apply to a claim for violation of public policy, the court had to determine what limitations period did apply. Conveniently, Ohio has a statutory provision that provides a four-year limitations period for certain types of claims that are not specifically covered by another limitations period. The Supreme Court determined that this four-year limitations period fit Mr. Pytlinski's public policy claim. Consequently, the claim was considered to be timely filed, and the case has now been sent all the way back to the trial court.

Closing Notes: Claims for wrongful discharge in violation of public policy are becoming more and more prevalent —and this case represents yet another reason why. Claims that otherwise would be thrown out because they were not filed in time, or could not meet some other statutory requirement, are given new life when recast as a claim for a "public policy" violation. We will continue to provide you updates on this critical subject for Ohio's employers.

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Challenge to New Ergonomics Guidelines Is Likely

By Tom Metzger

The ergonomics saga continues. The Bush administration has decided to issue voluntary guidelines (and no mandatory regulations) to address ergonomics related injuries —and this decision is likely to see continued challenges from Democratic leaders.

The new guidelines, which will be administered by the Occupational Safety and Health Administration, will involve taking the following steps to address musculoskeletal injuries in the workplace:

1. The development of industry and task specific guidelines that are designed to reduce workplace injuries (for example, the Department of Labor just issued guidelines for nursing homes);

2. The use of OSHA's "general duty clause" to cite employers who do not adequately address ergonomics hazards in their workplace;

3. Development of an advisory committee that will work to identify more productive methods of applying ergonomics in the workplace; and

4. The development of specialized training and information that relates to successful ergonomics programs.

These voluntary guidelines are designed to replace the Clinton administration's ergonomics regulation that was going to require employers to establish a specific ergonomics program once an employee reported a musculoskeletal injury. Soon after the Clinton administration regulations were announced, business groups launched a strong campaign against the plan. Shortly after President Bush was inaugurated, the regulations were repealed by Congress. We'll let you know what happens in the next chapter of this story.

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