Washington Federal Court ruling threatens validity of National Labor Relations Board actions

On August 13, 2013, the federal trial court for the Western District of Washington issued a ruling with a potentially major impact on employers defending against complaints brought by the National Labor Relations Board. In Hooks v. Kitsap Tenant Support Services, Inc., the court dismissed an unfair labor practice complaint and petition for injunctive relief brought by Region 19 of the NLRB on the basis that the Board lacked a properly appointed quorum and therefore did not have authority to act.

The case had been brought by the NLRB in an effort to prevent the employer, a home healthcare provider, from disciplining employees pending resolution of other pending unfair labor practice claims. At the time the lawsuit was filed, the NLRB had only two of five required members appointed and properly confirmed by the United States Senate. The employer successfully argued that with only two confirmed members out of a required five member Board, the Board lacked a sufficient quorum to validly act.

The court rejected the Board’s alternative argument that the complaint was proper because authority had been delegated to the Region by the Board’s Acting General Counsel. The court determined that like the members of the quorum, the Acting General Counsel’s appointment was procedurally flawed. As a result no delegation of authority to the Region was possible.

If actions were brought by the Board in the window during which the Board lacked a sufficient quorum, the Kitsap Tenant Services decision provides an argument that the Board actions were taken without authority. As the potential implications are substantial – possible invalidity of Board actions both locally in Region 19 and nationally – the issues are likely to require further court resolution and the Kitsap Tenant Support ruling may be appealed.

In the meantime, employers and their counsel should review any litigation or claims pending with the NLRB to determine the impact, if any, of this new decision.
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This post was written by Patrick Pearce, a Member of Ogden Murphy Wallace’s Employment and Labor Law Practice Group on August 28, 2013. This post does not constitue legal advice.

Supreme Court Clarifies Sexual Harassment Law

On June 24, 2013, the United States Supreme Court issued rulings in Vance v. Ball State University that provide valuable clarity in determining who will be considered a “supervisor” for purposes of harassment claims. The Court held that an employee may be considered a “supervisor” only when the employer has empowered the employee to take tangible employment action against the individual claiming harassment. In Vance, the Court ruled that the ability to take “tangible employment actions” against the complaining worker is the “defining characteristic” of supervisory status.

The distinction is important. Employers are exposed to substantially more risk of liability when a “supervisor” is accused of harassment. Under prior Court decisions, if a supervisor engaged in harassment that culminated in a tangible employment action, the employer was strictly liable for the supervisor’s actions. If harassment is committed by a non-supervisory co-worker, a claimant has a more difficult burden and must show that the employer was negligent in allowing the harassment in order to establish liability. With non-supervisory workers, the employer may also have an absolute defense to any claims if steps were taken to prevent or correct problems and the complaining worker unreasonably failed to take advantage of avenues for internal investigation and resolution.

Prior to Vance, federal appellate courts had been split on the method for determining supervisory status with some courts following a significantly broader test applied by the EEOC. Under the EEOC test, supervisory status depends on whether an individual is able to exercise significant direction of another’s day to day work. As stated by the Court in Vance, the EEOC test allows for “remarkable ambiguity” as determining whether an individual is a supervisor and inherently calls for a case-by-case determination heavily dependent on particular facts and circumstances.

This “remarkable ambiguity” was significant to the Court in rejecting the EEOC test and imposing the “tangible employment action” standard. In Vance, the majority expressed the expectation that a test requiring the ability to take “tangible employment action” would be easily workable, providing courts, employers and employees clarity for more efficient resolution of questions on supervisory status.

Going forward, employers should consider the following in light of the Vance decision:

• Employers should assess and clarify as necessary the authority of individuals who might qualify under the Vance test but are not clearly identified as “supervisors.” The key question is whether an individual has authority to impact another worker’s employment status including hiring, firing, promotion, and work assignments. Both employers and employees should know just who is a “supervisor” in light of Vance.

• Employers should ensure they have effective anti-harassment and anti-discrimination policies in place along with a procedure for presenting and investigating complaints of harassment or discrimination. Employers should also consider training all employees in the policies and what to do if there may be a violation.

• All employees qualifying as “supervisors” should be aware of their status as such and trained on anti-harassment and anti-discrimination practices. Taking steps to ensure that workers qualifying as “supervisors” know and apply best practices will help reduce both risk and complaints, and will help provide evidence to defeat any claims that may come.
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This post was written by Patrick Pearce, a Member of OMW’s Employment and Labor Law Practice Group. He can be reached at ppearce@omwlaw.com. This is a summary of a complex area of the law and is not legal advice and should not be relied on for any purpose.

Retaliation Claims on the Rise

Statistics compiled by the EEOC confirm that retaliation claims are on the rise both nationally and in Washington state.  For the 2012 fiscal year, retaliation charges constituted 38.1% of claims brought against employers -approximately  4% higher than in 2008.  The percentage is even higher for Washington state.   In 2012, EEOC retaliation charges brought by Washington employees made up 41.3% of all charges against employers – a 4% increase since 2009.  Both from in-state and nationally, retaliation charges were the most common claim asserted in 2012.

 

The elements required for a prima facie retaliation claim are functionally the same under Federal and Washington state law, and were recently restated in Lodis v. Corbis Holdings, Inc., ___ Wn.App. ___, 292 P.3d 779, 788 (January 13, 2013; Division One).  To establish a claim: 1) the employee must have engaged in a statutorily protected activity; 2) the employer must take adverse action against that employee; and 3) there must be a causal link between engaging in the protected activity and the adverse employment action. Id.

 

Retaliation claims are most often brought as companion claims to other charges such as discrimination or harassment, but may be brought independently.  At times, retaliation charges may develop when an initial workplace misconduct claim or complaint is brought, investigated, and rejected by the employer and the complaining worker is subsequently disciplined for an unrelated issue.  In such circumstances, a worker may argue the discipline was in fact retaliation for previously bringing the rejected charge.

 

Several practices can help reduce the risk of retaliation claims.  First, employers must be aware of both an employee’s rights to engage in protected activity and what activities are protected.  Supervisors and management considering disciplinary action should consult with HR or employment counsel to confirm whether an employee has or is engaging in a protected activity and whether that participation is implicated in the anticipated discipline.  If a protected activity is potentially at issue, double check the motivations and basis for the possible adverse action.

 

Next, employers should be sensitive to timelines.  The closer an adverse action against a worker is to the time the worker engaged or participated in a protected activity, the greater the risk the adverse action could be argued as retaliatory.  This is not to say an employer should feel unable to take disciplinary action when and as warranted.  Instead, the employer should be fully aware of risks and whether the timeline presents a potential issue.

 

Third, the employer should make sure to have clear supporting documentation.  Good records and related communication with the worker regarding the underlying problem can help prevent a retaliation claim arising.  If a claim does come, contemporaneous documents can be crucial in reaching a successful legal result.  This consideration applies both for disciplinary actions and for decisions on non-disciplinary issues such as promotions or task assignments.

 

Finally, employers should strive for consistent treatment of workers whenever possible.  Along with creating other potential issues, treating similar employees differently may create evidence for a retaliation claim.  Ideally, an employer can establish that like workers were treated the same in similar circumstances.

 

Public Employees, Pagers and Privacy

The U.S. Supreme Court issued its opinion in The City of Ontario v. Quon yesterday: http://www.supremecourt.gov/opinions/09pdf/08-1332.pdf

This had been a widely anticipated decision in employment law circles because it was assumed that the Court would give guidance on employees’ privacy interests in private communication on employer-owned communication devices, like pagers and cell phones.  However, the Court’s opinion, written by Justice Kennedy, decided not to decide “the whole concept of privacy expectations in communications made on electronic equipment owned by a government employer.”  Instead the Court decided the case applying basic Fourth Amendment principles:

[W]hen conducted for a “noninvestigatory, work-related purpos[e]”or for the “investigatio[n] of work-related misconduct,” a government employer’s warrantless search is reasonable if it is “‘justified at its inception’” and if “‘the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of’” the circumstances giving rise to the search. 480 U. S., at 725–726.

Slip Opinion at 12.

Score one for judicial restraint, but employers do not have much more guidance on how to evaluate employees’ privacy interests than they did before this decision.

Corporations Cannot Appear in Court Without an Attorney

The current economy may cause corporations to try to cut costs by having a non-attorney such as a corporate officer appear in court on their behalf.  After all, individuals can appear in court pro se (representing themselves without an attorney).  Foregoing legal representation is not a good strategy in Washington State, however, because the state’s case law requires corporations to be represented by an attorney.  For example, in a case called Lloyd Enterprises v. Longview Plumbing and Heating Co., the attorney for one of the parties, a corporation called Berry, Inc., withdrew and Wade Berry, the president of the company (who was not an attorney licensed to practice in Washington State) filed legal documents with the Superior Court himself on behalf of the corporation.  The attorneys for other parties in the case moved to strike the documents signed by Berry. 

The Superior Court gave  Berry, Inc. 20 days to file an answer signed by an attorney and when the corporation failed to do so, the court entered default judgments against Berry, Inc.  The Court of Appeals upheld the judgments against Berry, Inc. and stated: “Because corporations are artificial entities that can only act though their agents, we agree with the general common law rule, recognized by courts in other jurisdictions, including all federal courts, that corporations appearing in court proceedings must be represented by an attorney.”  The Court of Appeals in the Lloyd Enterprises case also noted that “save in a few aberrant cases” corporations, partnerships or associations cannot appear in federal court other than through a licensed attorney.

A later case, Biomed Comm, Inc., v. State Dept. of Health Bd. of Pharmacy, upheld the Lloyd Enterprises case and also made it clear that if a non-lawyer files legal documents in court on behalf of a corporation, the court should give the corporation a reasonable amount of time to have the documents signed by an attorney before dismissing the case.  In the Biomed Comm case, the corporation’s Board chair filed a petition for review from an administrative decision one day before the deadline and the Superior Court dismissed the petition because it was not signed by a licensed attorney.  The Court of Appeals reversed the order of dismissal and sent the case back to the Superior Court for further proceedings.

Three things to keep in mind about the requirement for corporations to be represented by a lawyer in court – first, the lawyer has to be licensed to practice in Washington State or admitted pro hac vice (a process by which a licensed Washington State attorney vouches for a licensed out-of-state attorney who is in good standing).  Second, having the corporation assign its claims to an individual who then appears pro se is not a feasible work-around.  Third, the requirement does not apply to cases in small claims court where the parties are not allowed to have lawyers appear for them (though lawyers can help the parties prepare their small claims court case).

The information in this post is not legal advice, nor does it create an attorney-client privilege.   It is a general overview only and should not be relied on.  Also, keep in mind that the law may have changed since this post was written on June 7, 2010.