Labor & Employment Blog
In a recent case from a California Court of Appeal, McGrory v. Applied Signal Technology, Inc., the employer terminated the plaintiff after an outside investigator concluded that (1) the employer had not discriminated against a lesbian subordinate on the basis of sex or sexual orientation, (2) the employee had violated the employer’s policies on sexual harassment and ethics, and (3) the employee had been uncooperative and deceptive during the investigation.
The employer filed for summary judgment. It argued that the employee was terminated for a lawful reason, and that it made privileged statements about the termination. The trial court granted the motion.
The employee appealed, claiming that the employer violated public policy because an employee cannot be terminated for being male or for participating in an investigation. He also claimed that he was defamed when the employer’s Vice-President of Human Resources told another employee about the termination.
The Court of Appeals found no evidence that the employee was terminated for being male. It also found that being uncooperative or deceptive in an investigation is not legally protected, and that the employer’s statement about the termination was privileged.
Employers often confront the issue of what to do when an employee resists participating in an investigation. While all cases must be evaluated on their own facts, the McGrory case affirms that employees must participate honestly in legitimate investigations into allegations of harassment, discrimination, retaliation, and other unlawful conduct. Employers should also heed this case as a reminder not to convey information about a termination to anyone other than those with a legitimate business need for the information.
California Department of Fair Employment and Housing Issues Revised Pregnancy Discrimination Regulations
The California Department of Fair Employment and Housing has revised the regulations that apply to pregnancy discrimination. The revised regulations became effective on December 30, 2012. Key provisions include the following:
- The definition of “disabled by pregnancy” has been expanded. It now includes severe morning sickness, time off for pre-or postnatal care, bed rest, gestational diabetes, pregnancy-induced hypertension, preeclampsia, post-partum depression, childbirth, loss or end of pregnancy, and recovery from childbirth or loss or end of pregnancy. “Four months leave” under the California Pregnancy Disability Leave law (PDL) means time off for the number of days or hours the employee normally would work within 17 1/3 weeks (1/3 of one year). A full-time employee who works 40 hours a week would be entitled to 693 hours of PDL leave (40 hours x 17.3 weeks).
- Employers must give employees advance notice of their pregnancy discrimination and leave rights. The DFEH has provided template notices for employees both covered under PDL only and PDL and the California Family Rights Act:
- Employers must distribute the notice by posting it in a conspicuous space (electronic posting is acceptable); giving it to an employee who notifies the employer of her pregnancy; and publishing it in the employee handbook or distributing it annually (electronic distribution is acceptable). The employer must provide a translated version if 10 percent or more of its workforce speaks a primary language other than English.
- Employees must provide oral or written notice of the need for pregnancy-related accommodation, transfer, or leave. When the need is foreseeable, they must provide at least 30 days notice. When not foreseeable, they must provide notice as soon as practicable. Employers must respond within 10 days. An employer can require an employee to provide medical certification of the need for leave, accommodation, or transfer. The certification must indicate the description of the need, a statement regarding the medical advisability of the request, and the date and estimated duration of the request. The employer may develop its own form or use the one provided in the regulations. The employer must give the employee at least 15 days to return the form.
- Employees may take pregnancy leave intermittently, and an employer may account for the leave using the shortest period of time it uses to record other leaves, or one hour, whichever is less. Employers must provide group health insurance coverage for the entire period of PDL leave under the same conditions as if the employee had not taken leave.
- Employers must reasonably accommodate pregnant employees if the accommodation request is based on the advice of the employee’s health care provider and is reasonable. Employers must engage in a good faith interactive process with the employee to determine whether any reasonable accommodation exists.
- An employee is entitled to a transfer to a less strenuous or hazardous position if the employee’s health care practitioner states that it is medically advisable and the employee is qualified for the position. An employer can deny the transfer only if it cannot reasonably accommodate the request. Employers are not required to create a job, fire another employee, or transfer an employee with more seniority. An employer must create a light duty job for pregnant employees if it does so for occupationally-injured employees.
- If the requested accommodation is a change in job duties or a job restructuring, the employee’s right to take up to four months of PDL is not affected. If the requested accommodation is a reduced work schedule or intermittent leave, the employer may consider this a form of PDL and deduct those hours from the four month leave entitlement.
- If the employee’s health care provider indicates that the employee has a need for intermittent leave or leave on a reduced work schedule, the employer may require the employee to transfer temporarily to an equivalent position in terms of pay and benefits (but not duties). When the transfer need ends, the employer must reinstate the employee to the same or a comparable position.
- Employers must also provide reasonable accommodations other than transfers and leave, which can include modifying practices, policies, duties, breaks, schedules, and furniture (e.g., providing stools or chairs).
- Upon the conclusion of PDL leave, the employer must reinstate the employee to the same position, unless the employee would not have been employed for legitimate business reasons, such as a layoff or plant closure. The employee would then be entitled to a comparable position unless the employer would not otherwise have offered the employee a comparable position had she not taken leave, or if no comparable position exists on either the date of reinstatement or within 60 days of that date. Employers must provide notice to the pregnant employee of comparable positions.
- Employees may be entitled to leave in addition to PDL leave, as a reasonable accommodation, to be determined on a case-by-case basis and applying the standards provided under disability law.
In the wake of the revised regulations, employers should (1) become familiar with all aspects of the new regulations, and train managers accordingly; (2) post the requirements and update employee handbooks to reflect all changes; and (3) designate an individual to handle and respond to pregnancy leave-related requests. Because these regulations are complex, employers should consult legal counsel when dealing with specific situations.
California Employers Cannot Deny Family Medical Leave Based on Honest Belief That An Employee Worked Another Job During Leave
Can an employer terminate an employee on medical leave, when the employer has reason to believe that the employee is secretly working at another job?
A new California appellate case issued on November 14, 2012, Richey v. AutoNation, Inc., provides an answer. In Richey, the Plaintiff, Avery Richey, was a Sales Manager at Power Toyota of Cerritos. Richey suffered a back injury while moving furniture at home. His physician certified that he was unable to perform his duties, and Richey went out on approved California Family Rights Act (CFRA) leave. While Richey was on leave, one of his supervisors sent him a letter, advising him of the company’s policy barring other employment, including self-employment, while on a leave of absence. Richey did not respond because he believed that the policy, as stated in the employee handbook – “you are not allowed to accept employment with another company while you are on approved CFRA leave” – did not apply to him because he was the owner of a restaurant. The employer received information suggesting that Richey had been working at his restaurant while on leave. Richey’s supervisor directed another employee to drive by the restaurant. The employee observed Richey sweeping, bending over, and using a hammer to hang a sign. Another supervisor visited the restaurant for about twenty minutes and believed he saw Richey working. Several other co-workers observed Richey taking orders and acting as a cashier. Based on this information, Richey was terminated four weeks before his leave expired.
Richey sued alleging violation of CFRA rights, and the case went to arbitration. The arbitrator concluded that Power Toyota could terminate Richey if it had an honest belief that he was abusing medical leave. Richey acknowledged that he had taken orders, handled payments, and answered the telephone, but claimed that he had only engaged in limited light duty tasks, as authorized by his doctor. The Court of Appeal vacated the arbitrator’s decision, holding that the honest belief defense – the idea was that an employer should not be held liable for discrimination if the employer honestly, even though mistakenly, believed in a nondiscriminatory reason – has not been extended by the majority of courts to the family medical leave context. The Court found that under the federal Family Medical Leave Act (FMLA), the deprivation of the right to reinstatement is a violation, regardless of the employer’s intent, and an employer’s good faith does not protect it from liability. The Court then cited various California decisions applying FMLA principles to CFRA claims.
Employment decisions seemingly based on common sense – an employee on legitimate medical leave would ordinarily not be working somewhere else – can nevertheless result in liability for employers. Based on the strict language of the CFRA, employers cannot rely on their honest belief that an employee working two jobs is abusing the leave process. Richey reminds employers that employment leave laws are complex, and that leave issues must be considered carefully, particularly before any termination decision is made.