Disparate Treatment

Avoid Costly Litigation by Staying Up to Date on Slurs: Texas Lawyer

Avoid Costly Litigation by Staying Up to Date on Slurs: Texas Lawyer

Texas Lawyer has signed up Alan Bush and Lee Winkelman as freelance contributors.  Their latest article, “Avoid Costly Litigation by Staying Up to Date on Slurs,” appeared in the September 7, 2015 issue in the In-House Texas section. 

Here’s what Alan and Lee had to say about staying up to date on slurs:

Punitive Damages Are Preventable

Six-figures.  That's what a rogue manager can cost you in punitive damages if he accidentally blows a call that HR would have caught.  It's surprisingly easy for an untrained manager to step in it.  We've written about a couple examples.

Don't add zeros to an employment claim.

Train your folks on your EEO and anti-harassment policy.  Training, plus a solid EEO and anti-harassment policy, may give you a strong defense against punitive damages.

Never training your employees on your EEO policy strips your defense.  In EEOC v. Service Temps, the company had never trained its folks.  The EEOC latched onto that.  At trial, the EEOC secured $68,000 in punitive damages and an injunction that imposed mandatory training.  The Fifth Circuit refused to overturn the award.

Punitive damages are no stranger to the Texas Supreme Court too.  In Safeshred v. Martinez, the Court expanded punitive damages to Sabine Pilot wrongful discharge claims.  Some commentators say the opinion lets Texas state discrimination law plaintiffs collect punitive damages more easily.

Over the past couple years, your company may have pushed training to the backburner.  The Fifth Circuit and Texas Supreme Court may have just sent you a friendly reminder to put training back on the agenda.

Texas Lawyer — Behind Enemy Lines: Employee-Side Lawyer Tactics

Texas Lawyer — Behind Enemy Lines: Employee-Side Lawyer Tactics

Texas Lawyer has signed up Alan Bush as a freelance contributor.  His latest article, "Behind Enemy Lines: Employee-Side Lawyer Tactics," appeared on May 14 in the In-House Texas pullout.

Here's what Alan had to say about how he stays one step ahead of employee-side opposing counsel:

How Independent Are Your HR Investigations?

Discrimination and retaliation claims can be eliminated with independent HR investigations.  That is, they can if your investigation is independent enough.

In Staub v. Proctor Hospital, the US Supreme Court ruled an HR investigation wasn't deep enough.  The ex-employee's allegedly biased supervisor went to HR looking for a termination approval.  The HR manager looked at the ex-employee's file which had several prior written warnings, then terminated the ex-employee.

The Court faulted the HR manager for relying on information supplied by the supervisor.  Had HR gone back and interviewed everyone herself, the Court would have dumped the ex-employee's claim.  That's what an independent investigation takes—face time with folks who know what happened.

Gold standard is for your HR to do a truly independent investigation on all significant employment decisions, like a termination.  But that can be time-consuming and expensive.  Imagine going back to interview the employee, supervisor and maybe even co-workers on all terminations.  You might not need to go that far.

Also, consider doing an independent investigation on high-risk decisions.  Now, you're looking at employees who have reported discrimination, harassment or overtime pay problems.  Don't forget employees who recently had an on-the-job injury or filed for workers' comp.

Even if your HR investigation doesn't entirely cut off liability, it can go a long way in front of a jury.  Jurors like to know that you at least tried to do the right thing.  And other fundamental HR practices can still help you put the claim in the wastebasket.

Play the Hand You're Dealt

Sexual harassment claims often come from things you can't fully control.  A rouge supervisor.  An on-the-side workplace romance that goes bad.  On top of that, you can't pick the employee who gets harassed and turns plaintiff.

The plaintiff's background, I think, can make or break a case--just look at O'Dell v. Wright.  The plaintiff testified that she had been abducted and sexually assaulted when she was five years old.  She also said that her supervisor had barraged her with lewd comments and touched her twice.  A Fort Worth jury awarded $425,000 for the plaintiff's mental anguish alone.  And the appellate court let the jury verdict stand.

Let's talk about what you can control.  A few simple steps will help keep you away from angry juries and preserve your defenses against higher damage awards.  You can:

  • Avoid a runaway jury by implementing an arbitration policy or jury waiver agreement for your employees;
  • Have a solid discrimination and harassment policy;
  • Train your employees on your policies; and
  • Investigate any reports of harassment and respond appropriately.

Arbitration Policies: Worth a double-check

Plaintiffs' lawyers usually hate arbitration.  That's why some companies have arbitration policies for employee disputes--thin the ranks of lawyers willing to sue.  The trick is writing your arbitration policy so that it's enforceable.

In Datamark, an employee challenged her employer's arbitration policy because it had a huge hole.  It was written so that the company could back out of its promise to arbitrate disputes by changing or revoking the policy just before an employee filed a claim.  The policy even said the company could revoke or change it at any time without notifying employees.  Worse still, these changes would apply to all employee disputes going forward.  Good argument under Texas law.

The Texas court of appeals sided with the employee.  The company had banked on its arbitration policy to put the dispute in front of a neutral arbitrator.  Instead, the company got stuck with an employee-friendly El Paso jury.  And it was on a pregnancy discrimination claim to boot.

A few tweaks to the policy would have landed the employee in arbitration.  Back in 2002, the Texas Supreme Court approved of Halliburton's arbitration policy that let the company revoke or change it.  The difference is that Halliburton's policy promised to give employees ten days' written notice of any changes.  Any claims filed during those ten days would be resolved using the old policy.  Halliburton got it right; so can everybody else.

Another Use for Good Sexual Harassment Investigations

Employees accused of sexual harassment can file lawsuits too.  In Jackson v. Cal-Western Packaging, an employee who was fired for sexual harassment tried it.  He denied harassing anyone and said the company really fired him because of his age.

But the federal trial and appellate courts for Houston chewed up the lawsuit and spit it out.  The company explained it tried to treat the accused employee fairly, yet believed the accusations.  After all, it had reports from several employees and two different investigations that all said the employee was guilty.  The employee could not get around that explanation for firing him with just his own word that he didn't do it.  He had nothing to show that the company's decision to trust the reports and two investigations was unreasonable or in bad faith.  No evidence, no lawsuit.

Look closely, there's a subtle warning for companies here: Don't haul off and immediately fire an employee accused of sexual harassment.  You're creating another lawsuit.  Even if it seems easier, resist the urge to make a snap judgment.  Stop, separate the accuser and the accused, and do a proper neutral investigation.  In my opinion, this company went above and beyond the call of duty by investigating the harassment allegations twice.  One good investigation can be enough.  You'll then have a reasonable basis for your decision and can defend it in court.