Presenting a live 90‐minute webinar with interactive Q&A
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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© All rights reserved 2011
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Comply with the law Promptness Confidentiality Thoroughness Fairness Protect the Company/Brand End inappropriate behavior/prevent future occurrencesoccurrences
Encourage informal dispute resolution
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f A formal complaint or grievance. Casual reports or comments. Unexplained changes in behavior, morale, or productivity.
Theft suspicions or inventory losses.
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f Suspicions of other misconduct. Rumors. Administrative agency inquiry (e.g., EEOC, OSHA, DOL).
Receipt of lawsuit.
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Drug or alcohol use suspicions. Safety concerns, including workplace violence or y , g paccidents.
Harm to property or others.p p y
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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.”
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Initial Decisions Is an investigation necessary? Should any interim personnel action be taken during the investigation?
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Advantages of resolving case informally –May limit/reduce: Hard feelings Rumors Costs of litigation or administrative action
* Even informal resolutions should be documented.
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What situations? Violence or harassment to employees, third parties on Company property
StalkingF d Fraud
Whistle‐blowing Other Other
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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?
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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?
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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.
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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.
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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.
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◦ Human Resources
◦ In‐house Investigator In house Investigator
◦ Outside/Independent Party
◦ In‐house CounselIn house Counsel
◦ Outside Counsel
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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
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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
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Discrimination claims: Race Religion Gender/Sexual Harassment National Origin Age Physical or Mental Disability
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Unjust Treatment: Promotion Discipline Compensation Assignments Work Worksite
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Violence in the workplace Fraud/theft Retaliation Wage and hour violations Other violations of law or Company policy
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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
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Company website/blogs/social networking sites
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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.
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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
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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
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EEO Internal Investigations: Practical Guidance for Employment CounselGuidance for Employment Counsel
Conducting the Investigation
Barbara Hoey, Shareholder
212 497 8488212.497.8488
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The Investigationg
K StKey Steps
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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
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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?
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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?
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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
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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.
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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?
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Set Schedule
Consider:Consider:
Legal deadlines (e.g. Dodd Frank, 120 days; EEOC/SDHR 30 60 d )EEOC/SDHR, 30‐60 days)
Internal deadlines
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Attorney Client Privilege –Do you Want One?Do you Want One?
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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
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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
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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
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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
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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
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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.
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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.
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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
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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
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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
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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
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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
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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
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Paperp
Find It Find It
Gather It
Store It – in one place – for duration of case/investigation
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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
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Other Sources??
Property ‐ desks and lockers
Private Investigations Private Investigations
Workers’ Compensation Carriers
Criminal Records
Drug and Alcohol Testsg
Medical Vendors
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Other Sources??
Text messages
Social Media
Outside work emails
Personal computer
Personal cell phonesPersonal cell phones
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Should You Use Google, Facebook, Twitter and Other Online Search Tools?Other Online Search Tools?
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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?
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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
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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?
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Confidentiality: The Balancey
Confidentiality
Fair OpportunityTo Respond
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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.
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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.
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“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.
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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
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How Would You Respond?p
Employee says Employee says...“I want my attorney here!”
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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
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“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
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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.
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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
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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
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The Investigation Fileg
Should Contain:Should Contain:
The Complaint
Witnesses Interviewed
Documents searched/reviewed/
copies of key documents
Witness interviews Witness interviews
Final report?
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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) [email protected]
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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
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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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