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EEO Internal Investigations: EEO Internal Investigations: Practical Guidance for Employment Counsel Planning and Conducting Investigations of Discrimination, Retaliation and Harassment Claims

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

WEDNESDAY, DECEMBER 7, 2011

Today s faculty features:

Marcia Nelson Jackson, Partner, Wick Phillips, Dallas

Barbara E. Hoey, Shareholder, Littler Mendelson, New York

Thomas M. Johnson, Jr., Gibson Dunn & Crutcher, Washington, D.C.

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66

Comply with the law Promptness Confidentiality Thoroughness Fairness Protect the Company/Brand End inappropriate behavior/prevent future occurrencesoccurrences

Encourage informal dispute resolution

77

f A formal complaint or grievance. Casual reports or comments. Unexplained changes in behavior, morale, or productivity.

Theft suspicions or inventory losses.

88

f Suspicions of other misconduct. Rumors. Administrative agency inquiry (e.g., EEOC, OSHA, DOL).

Receipt of lawsuit.

99

Drug or alcohol use suspicions. Safety concerns, including workplace violence or y , g paccidents.

Harm to property or others.p p y

1010

1. Review, revise or establish clear policies on which all relevant employees are trained.D i   d  i   i  “i i ”2. Designate and train appropriate “investigators.”

1111

Initial Decisions Is an investigation necessary? Should any interim personnel action be taken during the investigation?

1212

Advantages of resolving case informally –May limit/reduce: Hard feelings Rumors Costs of litigation or administrative action

* Even informal resolutions should be documented.

1313

What situations? Violence or harassment to employees, third parties on Company property

StalkingF d Fraud

Whistle‐blowing Other Other

1414

Possible Interim Personnel Actions: Leave of absence with or without pay Leave of absence with or without pay Suspension with or without pay Temporary transfer Temporary transferCommunications Regarding Removal From The Workplace:p

Whom to consult beforehand? Before or after confrontation? Make things better or worse? What to tell colleagues?

1515

When can/should the investigation occur? What law(s) govern the investigation?  What investigation techniques will be used—forensics, surveillance  email reviews  etc  surveillance, email reviews, etc. 

Who is the most appropriate investigator? Who are the witnesses? Who are the witnesses? What documents should be collected, preserved and reviewed?

Who will decide what, if any, discipline will be imposed? How will the results and findings be documented?

1616

Consider:◦ Skill level.◦ Relationships to any of the parties of the investigation.p y p g

◦ If affiliated or relationship exists, investigator should bow out to avoid perception of bias.

1717

Look for an investigator who is:g Respected. Able to be assertive Able to be assertive. Understands the “big” picture.K  th  C   li i   d   d  Knows the Company policies, procedures and applicable law(s).H   d i i i   kill Has good interviewing skills.

1818

Can communicate verbally and in writing.Abilit  t  d l   t  ith  it Ability to develop rapport with witnesses.

Be non‐confrontational.b Maintain objectivity.

Makes a good witness. Can take thorough notes. Maintains confidentiality. Manages conflicts that arise from breach of confidentiality.

1919

◦ Human Resources◦ In‐house Investigator In house Investigator ◦ Outside/Independent Party

◦ In‐house CounselIn house Counsel◦ Outside Counsel

2020

When sho ld an emplo er appoint an attorne  to When should an employer appoint an attorney to conduct an EEO internal investigation—and what special considerations arise from the attorney's special considerations arise from the attorney s involvement?

Consider: Privilege issues Ability /desire to use results in subsequent litigation Knowledge of the Company/expertise in area of law

2121

Complainant Complainant Witnesses identified by complaint Alleged wrongdoer Alleged wrongdoer Witnesses identified by alleged wrongdoer Witnesses identified by investigator Witnesses identified by investigator Witnesses identified by Company

2222

Discrimination claims: Race Religion Gender/Sexual Harassment National Origin Age Physical or Mental Disability

2323

Unjust Treatment: Promotion Discipline Compensation Assignments Work Worksite

2424

Violence in the workplace Fraud/theft Retaliation Wage and hour violations Other violations of law or Company policy

2525

Employee handbook HR policies and practices Benefits booklets Ethics guidelines Finance guidelines Security guidelines EmailsP l fil Personnel files

Medical/other files Company website/blogs/social networking sites

26

Company website/blogs/social networking sites

26

The investigation should commence and conclude “promptly.”N  d fi i i  i i   f “ ” h   d  No definitive interpretation of “prompt” has emerged from the courts, nor is one possible given the variables that impact each investigation  such as the number that impact each investigation, such as the number and availability of witnesses, the length of time the complainant takes to recount the wrongdoing alleged, and the complexity of corrective action required in response.

2727

However, investigations started the day of an employee’s complaint have been found to be timely, as have some that have commenced a few days or within a week after the initial complaint   Employers within a week after the initial complaint.  Employers who wait more than a week to investigate may be asking for trouble.g

2828

Send complaint confirmation letter Nail down the issues Assure due process Reaffirm confidentiality and cooperation Reaffirm confidentiality and cooperation Send personnel action notice, if necessary◦ Outline issues under investigationg◦ Pay status and expected duration◦ Assure due process

Consider drafting formal/standard opening/closing  Consider drafting formal/standard opening/closing remarks for interviews

Consider pros/cons of written witness statements

2929

EEO Internal Investigations: Practical Guidance for Employment CounselGuidance for Employment Counsel

Conducting the Investigation

Barbara Hoey, Shareholder

212 497 8488212.497.8488 

Bhoey@littler.com

30

The Investigationg

K StKey Steps

31

Receiving The Complaintg p

Get as much detailed informationGet as much detailed information from the complainant as possible

Emphasize complaint will be p ptaken seriously/but no opinions

Advise the complainant as to basic psteps

Address confidentiality, non‐retaliation

Ask for a writing/ DON’T REQUIRE

32

Prepare for the Complainant’s QuestionsQuestions

Will I get a copy of the final report?Will I get a copy of the final report?

Does the ‘harasser’ get my name?

Can you keep this ‘confidential’?

Can I tell you what happened, but not make an “official”  complaint?

Will other employees know I complained?Will other employees know I complained?

How can you protect me?

Can I talk to other employees about this?

How will this be resolved?

33

Anonymous Reportsy p

Anonymous complaints should Anonymous complaints should be encouraged because you want maximum feedback on how your employees are acting.  

Could be a good source of i f tiinformation.

Should not be discounted.

Should you try to get a name? Should you try to get a name?

34

Finalize The Plan

Once the complaint is taken – review your plan Once the complaint is taken  review your plan.  

Make sure it is appropriate 

Addresses the complaintAddresses the complaint

Considers the right legal obligations

Incorporates your proposed strategy.Incorporates your proposed strategy.  

As information is gathered, your plan can (and should) be refined 

35

The Plan

You always must be prepared to explain why you You always must be prepared to explain why you did what you did.  

Never put yourself in the position of explainingNever put yourself in the position of explaining your plan by saying that you never considered any other course of action.

36

The Client?

Identify the client so scope of privilege is Identify the client – so scope of privilege is clear

I it th C ?– Is it the Company?

– The Board (or) a Sub‐Committee of the Board

R l I i i di id l l ?– Rarely – Is it an individual employee?

37

Set Schedule

Consider:Consider:

Legal deadlines (e.g. Dodd Frank, 120 days; EEOC/SDHR 30 60 d )EEOC/SDHR, 30‐60 days)

Internal deadlines

38

Attorney Client Privilege –Do you Want One?Do you Want One?

39

What Is Privileged?g

Does not apply to all communications to an Does not apply to all communications to an attorney Protects from disclosure any communication Protects from disclosure any communication made in confidence between a lawyer and person who is a client or is about to become pa client for the purpose of obtaining legal advice or assistance– Client holds the privilege– Only applies to communications, not facts– Confidentiality must be preserved

40

Will We Waive?

Remember the investigation and remedial Remember – the investigation and remedial action may be an affirmative defense

L b it– Lawyer becomes a witness

– Cannot defend the company

N l i il– Notes lose privilege

41

Model Rules of Professional Conduct

AdvocateAdvocateRule 3.7 Lawyer As Witnessa) A lawyer shall not act as advocate at a trial in which the 

l i lik l t b it llawyer is likely to be a necessary witness unless:1) the testimony relates to an uncontested issue;2) the testimony relates to the nature and value of legal services 

d d i threndered in the case; or,3) disqualification of the lawyer would work substantial hardship on 

the client.

b) A l t d t i t i l i hi h thb) A lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 [ fli t f i t t ith t li t] R l 1 9[conflict of interest with current client] or Rule 1.9 [conflict of interest with former client]. 42

Landmark US case:  Upjohn Co v United StatesUpjohn Co. v. United States, 

449 U.S. 383 (1981)

Independent auditor finds apparent FCPA violations Chairman authorizes GC to conduct internal investigation Sends questionnaire to all foreign managers over Chairman’s Sends questionnaire to all foreign managers over Chairman s 

signature Instructs managers to treat investigation as highly 

fid ti lconfidential GC and OC also conduct interviews of managers Company submits report to SEC and IRSp y p IRS demands investigation documents and interview notes

43

Upjohn, cont’d

ld i i i il d Held:  questionnaires were privileged

Held:  attorneys’ notes were protected work product:  “Forcing an attorney to disclose notes and memoranda of witnesses’ oral statements is particularly disfavored because it tends to reveal the attorney’s mental processes ... what he saw fit to write down regarding witnesses’ g gremarks.” 

Work product may only be discovered if there is “substantial need and [the information] cannot withoutsubstantial need ... and [the information] cannot, without undue hardship,” be obtained.  Rule 26 (b)(3)(A)(ii)

Court must nevertheless “protect against disclosure of the t l i i l i i i l l th imental impressions, conclusions, opinions, or legal theories 

of a party’s attorney ....”  Id. 44

Collect Facts and Preserve the Evidence

45

Consider

Wh t i th id ? What is the evidence?

Where is it located?

How will you collect and preserve that evidence?

While not trampling on privacy and/or destroying moraledestroying morale

46

Where is the Evidence?

Evidence

People Electronic

Paper Property

Gathering evidence from these four sources will require four  slightly different approaches, but should be part of a coordinated effort.

47

The Cause of the Trouble:  Uniquely Broad US DiscoveryUniquely Broad US Discovery

Fed.R.Civ.P. 26(b)(1):  “Parties may obtain discovery regarding any non‐privileged matter that is relevant to any party's claim or defense — including the existenceany party s claim or defense  including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverableand location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action Relevant information need not be admissiblethe action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence ”evidence.

48

The Hold

Once you have a complaint a “triggering Once you have a complaint – a  triggering event” – federal law requires you to gather and preserve all paper and electronicand preserve all paper and electronic “evidence,” the same way as if you were in litigationlitigation– Counsel/executives are personally exposed, if you don’t take the correct steps quickly to preservedon t take the correct steps quickly to preserve evidence

– Gather it and “hold” it – make sure it is not beingGather it and  hold  it  make sure it is not being destroyed (even inadvertently) 49

3 Essential Elements

1 Who does it go to identify the right1. Who does it go to – identify the right people

2 A t l d fi th i2. Accurately define the issue

3. Give clear instructions as to what to “hold”– Follow up periodically – to make sure all are 

aware the “hold” is still in place

50

Peoplep

Identify witnesses: Identify witnesses:– Executives

M– Managers

– Employees (in & outside department)d– 3rd Party Witnesses• Contractors

Cli t / t• Clients/customers

MAKE SURE THEY ARE NOT DOING THE INVESTIGATIONMAKE SURE THEY ARE NOT DOING THE INVESTIGATION

51

Key Peopley p

“Harasser” / “Embezzler” / “Abuser” Harasser  /  Embezzler  /  Abuser

and

Victim or Whistleblower– Does anyone need to be removed from the workplace

– Usually best to place one on leave with pay

52

Witnesses

Basic Considerations:Basic Considerations:

What do we tell them? General statement?

Instruct witnesses not to discuss issues

Instruct investigator to – Presume innocence• NOT A “CSI” EPISODENOT A  CSI  EPISODE

53

Manage The Peopleg p

Instruct all witnesses not to create “new” Instruct all witnesses not to create  new  evidence

D ’t t lk t h th di th it ti– Don’t talk to each other or discuss the situation (except with counsel)

Don’t start writing “memos to file” describing– Don t start writing  memos to file  describing the incident or regarding the allegations

54

Don’t destroy/discard evidence Don t destroy/discard evidence– Don’t delete e‐mails

D ’t th t d i ll– Don’t throw out any paper or records – give all files to the investigator

DO t th i t ti i iti DO – put these instructions in writing or an e‐mail

55

Paperp

Find It Find It

Gather It

Store It – in one place – for duration of case/investigation

56

Documents —What can you / should you look at?should you look at?

Personnel files Personnel files

Time cards

Email texts Email , texts

Others Electronic files

M di l fil Medical files

Expense files

j fil Project files

Documents in possession of the claimant and itwitnesses

57

Other Sources??

Property ‐ desks and lockers

Private Investigations Private Investigations

Workers’ Compensation Carriers

Criminal Records

Drug and Alcohol Testsg

Medical Vendors

58

Other Sources??

Text messages

Social Media

Outside work emails

Personal computer

Personal cell phonesPersonal cell phones 

59

Should You Use Google,  Facebook, Twitter and Other Online Search Tools?Other Online Search Tools?

60

Should You Look at Social Media?

What laws are implicated What laws are implicated– Lawful activity laws

P i l– Privacy laws

– Discrimination laws (ADA, Title VII?)

– NLRA

Are you getting information that you do not want/ and you cannot use?

61

Electronic Data & Communications IssuesCommunications — Issues

E‐mails on the system E‐mails on the system 

Cameras/videos

Recordings Recordings

Internet searches

V i il Voice mail

Text messages

Consider federal laws 

62

Witness InterviewsPreliminary IssuesPreliminary Issues 

How will your interviewer will How will your interviewer will deal with these questions:

Is this confidential?

Who do you represent? Who do you represent?

Can I get in trouble?

Am I a target? Am I a target?

63

Confidentiality: The Balancey

Confidentiality

Fair OpportunityTo Respond

64

Planning For Confidentialityg y

Discuss why interviews or other data must be Discuss why interviews or other data must be kept confidential:– “The complaint will be handled confidentially, except;The complaint will be handled confidentially, except;

• The needs of the employer or the law may require that information be disclosed on a need to know basis

Think about the use of notes and memos before you write them.

65

Scripting Each Interviewp g

Make sure that the interviewer will: Make sure that the interviewer will:

Explain steps in investigation.

Warn against retaliation.g

Document the interview.

Answer tough questions Answer tough questions.

66

“Who Made This Allegation Against Me?”

Consider ways to give the targeted employee Consider ways to give the targeted employee notice of the claims against him/her without compromising confidentialitycompromising confidentiality.

67

Lawyer as Investigator – The Upjohn Warning: “Mirandizing” Your EmployeesWarning:  Mirandizing  Your Employees

Elements:Elements: Explain that you’re conducting a confidential investigation on behalf of the employer

Explain the purpose of speaking with your particular witness (i.e., that s/he has information 

f th l t i l l d i )necessary for the employee to receive legal advice) Explain that the interview is confidential and privileged but that the privilege belongs to theprivileged, but that the privilege belongs to the employer – not the employee

Make clear that she is counsel for the employer, not any particular employee 

68

How Would You Respond?p

Employee says Employee says...“I want my attorney here!”

69

Civil Matter

Discrimination/Harassment complaints; Discrimination/Harassment complaints; workplace misconduct

C l i t/E l b l t i ht t– Complainant/Employee – no absolute right to a lawyer at an interview in a civil matter• What is your policy/practice• What is your policy/practice

• Be aware of “Weingarten” rights

• Be aware of limits on questioning a minorq g

When should you allow it?When should you allow it?

– What rules will you set? 70

Criminal Matter

Witnesses may need to be told to obtain Witnesses may need to be told to obtain counsel

If l i i li t d i d i If employee is implicated in wrongdoing, separate counsel is warranted

71

“I refuse to speak to you!”p y

You are not law enforcement so you cannot You are not law enforcement – so you cannot “compel” cooperation

Y “ ’ fi d” Your weapon – “you’re fired”

Review your policy and make sure cooperation is required

72

How Would You Respond?p

Employee says Employee says...“I refuse to be interviewed unlessinterviewed unless I can bring my co worker Bertaco‐worker, Berta, into the interview with me ”with me.

73

What Will You Do?

Witnesses complain that Complainant is “harassing” them to cooperateharassing  them to cooperate Complainant starts openly discussing ComplaintComplaint Complainant is not doing his jobC l i t b di ti Complainant becomes disruptive

74

Recording the Interviewg

Should you tape record?

Who gets the tapes?

Who takes notes?

Who keeps the notes

Will you type up the notesWill you type up the notes

75

The Investigation Fileg

Should Contain:Should Contain:

The Complaint

Witnesses Interviewed

Documents searched/reviewed/

copies of key documents

Witness interviews Witness interviews

Final report?

76

EEO Internal Investigations: Practical Guidance for Employment Counselp y

December 7, 2011

PART III: POST-INVESTIGATION STRATEGIES

Thomas M. Johnson, Jr. Gibson Dunn & Crutcher LLP( )(202) 887-3781TJohnson@gibsondunn.com

77

Create a “Confidential” Memorandum to File◦ Define the issue(s) investigated Was Bob denied a promotion due to his race? Was Bob denied a promotion due to his race? Was Mary harassed by Tom during the business trip?

◦ Identify dates of complaint and relevant incident(s)◦ Identify dates and duration of investigation ◦ Summarize investigative steps taken Include names of persons who conducted investigation Include names of persons who were interviewed in conjunction with investigation

◦ Attach all relevant documents and witness statementsAttach all relevant documents and witness statements Include a copy of any relevant employer policies or guidelines

◦ Generally relate facts, not opinions◦ State conclusions in non-legal terms, with appropriate caveats◦ Describe remedial action taken in response to allegations

Create documentation even when the investigation was informal, or the solution was simple

Have counsel review initial draft

78

Have counsel review initial draft

Remember that there are at least two sides (and two potential plaintiffs)

Determine whether accounts of the incident(s) are plausible◦ Everyone may be right; no one may be right

Assess the credibility of the complainant, the accused, and any other witnesses

E l b d l i i ’ i◦ Evaluate body language; assess interviewees’ reactions to allegations; determine consistency of statements made

Consider corroborating evidence◦ Review relevant e mail or written communications; interview◦ Review relevant e-mail or written communications; interview

witnesses Are there any patterns of behavior?◦ Have there been other complaints regarding the conduct of theHave there been other complaints regarding the conduct of the

accused? ◦ Has the complainant made frequent complaints that have

proven to be unfounded?

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The employer’s response should be both prompt and effective Although there is no particular combination of remedial steps that Although there is no particular combination of remedial steps that

must be followed in every case, the response should always be:◦ Proportionate to the allegations; and

D i d f◦ Designed to prevent future recurrence. Possible remedial measures include: ◦ Warnings

C li◦ Counseling ◦ Training or educational programs◦ Probationary period ◦ Official disciplinary action O c a d sc p a y act o Suspension, demotion, or transfer

◦ Termination

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An employer can be held liable for an employee’s harassment by a co-worker if the employer (1) knew or should have known of the harassment(1) knew or should have known of the harassment and (2) failed to implement prompt and appropriate corrective action.

In a recent case in the District Court for the District of Columbia, a resource manager brought suit under Title VII against the Department of Veterans Affairs, alleging that g g p g gthe Department was liable for a hostile work environment created by her co-worker’s sexual harassment. See Johnson v. Shinseki, --- F. Supp. 2d ----, 2011 WL 4351443 (D.D.C. Sept. 19, 2011). ◦ Th D t t ht j d t i th t it h d t k i t◦ The Department sought summary judgment, arguing that it had taken appropriate

remedial measures in response to the alleged harassment, including (1) reprimanding the accused; (2) placing the accused on administrative leave; (3) conducting a formal investigation; (4) providing sexual harassment training for all employees in the section; and ( ) d f f h d d ff(5) considering transfer of the accused to a different section.

◦ The Court, however, denied summary judgment, based on the plaintiff ’s allegation that more than 6 months had elapsed between the time she informed her superiors of the alleged harassment and the time the Department took any corrective action. g p y

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Effective Remedial Action:EEOC v. Xerxes Corp.,

Ineffective Remedial Action: West v. Tyson Foods, Inc.,

639 F.3d 658 (4th Cir. 2011) 374 Fed. Appx. 624 (6th Cir. 2010)

The court found that the defendant-employer’s response to certain incidents of race-based harassment in the

Affirming a jury verdict for the plaintiff in a Title VII case, the court found that the evidence “was sufficient for

workplace “was reasonably calculated to end the harassment and, therefore, reasonable as a matter of law.”

In so finding, the court emphasized that the defendant, upon learning of the alleged misconduct, had taken the f ll

the jury to find that the [defendant’s] response [to the plaintiff ’s complaints of sexual harassment] was neither reasonably prompt nor effective.”

The supervisor’s only response to the employee’s complaints was to say, “well, you know, you are hot,” and then to reassign the employee to a new office further awayfollowing actions:

◦ Individually counseled the accused; ◦ Held a meeting to review the corporation’s anti-

harassment policies; and ◦ Issued warnings to the accused, instructing them

then to reassign the employee to a new office further away from the office of the accused.

Given this response, the court found it reasonable for the jury to conclude that the defendant had “failed to take a number of steps that would clearly be necessary to establish a base level of reasonably appropriate corrective g g

that future misconduct would result in disciplinary action.

o The court noted that “[t]he fact that formal disciplinary action, such as suspension or termination, was not taken against [the accused] . . . is an insufficient basis for

f y pp paction under the circumstances, such as speaking with specific individuals identified by [the plaintiff ], following up with [the plaintiff ] regarding whether the harassment was continuing, and reporting the harassment to others in management.” g

concluding that the [defendant’s] response was unreasonable.”

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Often, additional legal issues may arise as a result of an internal investigation, such as:

F l◦ False statements When an employee makes false statements during the course of an internal investigation,

may he be disciplined by his employer? In answering this question, does it matter whether the investigation is purely internal, or whether it

i i i i d i f l l i l d d i h h EEOC?is initiated in response to a formal complaint lodged with the EEOC?

◦ Refusals to cooperate When an employee refuses to cooperate during the course of an internal investigation, may

he be forced to cooperate? If not, may he be disciplined by his employer for his failure to cooperate?

◦ Retaliation claims How can an employer guard against retaliation claims by employees who initiate

or participate in EEOC investigations?or participate in EEOC investigations?

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In a recent Seventh Circuit decision authored by Judge Posner, the court addressed whether an employee can be disciplined for false or defamatory statements made during the course of a purely internal investigation of possible sex discrimination in the workplace. See Hatmaker v. Memorial Med. Ctr., 619 F.3d 741 (7th Cir. 2010).( )

◦ The court explained that while 42 U.S.C. § 2000e-3(a) forbids an employer from discriminating “against any individual . . . because he has . . . participated in . . . an investigation under [Title VII],” the word “investigation” in 42 U.S.C. § 2000e-3(a) does not encompass purely internal investigations that are initiated by the employer, “as distinct from [those] by an official body

h d f T l VII ” Id 746authorized to enforce Title VII.” Id. at 746. ◦ Moreover, the court said, even assuming that a purely internal investigation was “an ‘investigation’

within the meaning of . . . Title VII,” mere participation in an investigation “doesn’t insulate an employee from being discharged for conduct that, if it occurred outside an investigation, would warrant termination ” Id at 745warrant termination. Id. at 745. In other words, an employee may be disciplined for “making frivolous accusations, or

accusations grounded in prejudice” during his participation in an EEOC investigation. Id.◦ Judge Posner acknowledged that some courts have disagreed with this position, and have found

that “even defamatory and malicious accusations made in the course of an EEOC investigationthat even defamatory and malicious accusations made in the course of an EEOC investigation cannot be a lawful ground for discipline.” Id. at 746.

◦ Nevertheless, he stressed that “[l]ying in an internal investigation is disruptive of workplace discipline and in tension with the requirement that opposition to an unlawful practice . . . be based on an honest and reasonable belief that the employer may be violating Title VII.” Id.p y y g

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With the Complainant◦ State of investigationState of investigation◦ Reiterate policy◦ Provide avenue for future

complaints/concerns

With the Accused With the Accused◦ State of investigation◦ Reiterate policyp y◦ Remind of prohibition on retaliation

and expectations for future conduct

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PART IV LITIGATION CONSIDERATIONS PART IV: LITIGATION CONSIDERATIONS

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Severance Agreements

Alternative Dispute Resolution (ADR) ◦ Pre-dispute, via company policy or agreement◦ Voluntary ADR post-dispute

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EEOC Guidance on Waivers of Discrimination Claims in Employee Severance Agreements (July 21, 2009) ◦ Adequate Consideration. Valid releases must be supported by adequate consideration

(e.g., benefits provided by the employer to the employeein addition to any existing entitlements).

◦ Knowing and Voluntary. The waiver must be clear and specific so that it can be understood by the employee.

◦ Limitations on Releases. Employers cannot lawfully limitLimitations on Releases. Employers cannot lawfully limit employees’ rights to testify, assist, or participate in EEOC hearings or investigations.

Age Discrimination WaiversTh ddi i l i bli h lid i f l i d h A◦ There are additional requirements necessary to establish a valid waiver of claims under the Age Discrimination in Employment Act (ADEA).

◦ Pursuant to the Older Workers Benefit Protection Act (OWBPA), any waiver of age discrimination claims must be: (1) written in a manner that can be clearly understood; (2) specifically refer to rights

i i d h ADEA (3) d i h l i i i l (4) id harising under the ADEA; (3) advise the employee in writing to consult an attorney; (4) provide the employee with 21 days to consider the offer; (5) give the employee 7 days to revoke her signature; and (6) not include rights and claims that arise after the date on which the waiver is executed.

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Waivers in Severance Agreements for Groups of Employees Subject to Layoff ◦ There are additional requirements necessary to establish a valid waiver of claims when a group

of employees are laid off. ◦ Namely, the employer must give all employees who are being laid off:Namely, the employer must give all employees who are being laid off: Written notice of their layoff At least 45 days to consider whether to sign the waiver A description of the “decisional unit” – i.e., the group from which the

l h h l h ld b bj l ffemployer chose the employees who would be subject to layoff A list of the employees within the decisional unit who were retained

and separated, broken down by age and job title

Example – What is a “Decisional Unit” ?p◦ The EEOC Guidance on Waivers of Discrimination Claims in

Employee Severance Agreements provides the following examples of what constitutes a “decisional unit” for purposes of the above requirements:

E l 1 If h l d id li i 10% f i kf i l f ili i Example 1. If the employer decides to eliminate 10% of its workforce at a particular facility, it must provide the titles and ages of all employees at the facility who were and who were not selected for the layoff.

Example 2. If the employer decides to eliminate 15 jobs in its accounting department, the employer must provide the title and ages of all employees in the accounting department whose positions were andmust provide the title and ages of all employees in the accounting department whose positions were and were not selected for layoff.

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Th S C h d l h di bi i i The Supreme Court has made clear that pre-dispute arbitration agreements in employment contracts “can be enforced under the FAA without contravening the policies of congressional enactments giving employees specific protection against discrimination prohibited by federal law” Circuit City Stores v Adamsagainst discrimination prohibited by federal law. Circuit City Stores v. Adams, 532 U.S. 105, 123 (2001) (citing Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991)).

Nevertheless there are certain types of claims for which pre-dispute Nevertheless, there are certain types of claims for which pre-dispute arbitration agreements cannot be enforced: ◦ Whistleblower claims under the Sarbanes-Oxley Act (SOX)◦ Certain claims by employees of defense contractors with large DoD contracts,Certain claims by employees of defense contractors with large DoD contracts,

including: Claims under Title VII, or any tort claims relating to, or arising out of, sexual assault or

harassment, including assault and battery, intentional infliction of emotional distress, false i i t li t hi i i i t tiimprisonment, or negligent hiring, supervision, or retention.

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Most recently, the Supreme Court upheld the validity of a pre-dispute arbitration agreement in a consumer contract, which prohibited class-wide arbitration. See AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). ◦ The contract at issue provided for arbitration of all disputes between AT&T and

purchasers of AT&T cellular telephones, and required that all claims by purchasers against AT&T be brought by persons proceeding in their “individual capacity,” rather than as members of a classrather than as members of a class.

◦ The Ninth Circuit, applying California’s so-called Discover Bank rule, struck down the contract’s class-action waiver as unconscionable.

◦ Reversing the Ninth Circuit, the Supreme Court, in a 5-4 decision, held that g , p , 5 ,California’s Discover Bank rule, by “[r]equiring the availability of classwidearbitration[,] interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” Id. at 1748. H h C f d h h D B k l d b h FAA◦ Hence, the Court found that the Discover Bank rule was preempted by the FAA.

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Although AT&T Mobility, LLC v. Concepcion involved an arbitration provision in a consumer contract it would seem equally applicable in the context ofin a consumer contract, it would seem equally applicable in the context of arbitration provisions in employment contracts.

In other words, post-Concepcion, employers who seek to avoid exposure to employment related class actions may want to amend the mandatoryemployment-related class actions may want to amend the mandatory arbitration provisions in their employment contracts to include express class action waivers.

But note: In order to be valid and enforceable such waivers still must meet But note: In order to be valid and enforceable, such waivers still must meet basic contract principles, e.g., ◦ Must be supported by adequate consideration◦ Must be entered into knowingly and voluntarilyMust be entered into knowingly and voluntarily

Also note: The precise meaning of Concepcion for class action waivers in arbitration provisions in employment contracts is yet to be determined.

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