Put this in the “boring, but important” category.  Last month the 6th Circuit Court of Appeals found that Supplemental Unemployment Benefits (or “SUB”) payments are not considered wages and thus not taxable to the employee or the employer for FICA.

First, a little education.  What are SUB payments?  When an employer makes a reduction in force they sometimes set up a plan to make severance payments to employees to help them transition after losing their job and reduce the unemployment claims against the employer.

More specifically, Congress has provided that a SUB payment is: (1) an amount paid to an employee; (2) pursuant to an employer’s plan; (3) because of an employee’s involuntary separation from employment, whether temporary or permanent; (4) resulting directly from a reduction in force, the discontinuance of a plant or operation, or other similar conditions; and (5) included in the employee’s gross income.

Under the Quality Stores decision by the 6th Circuit, an employer can now offer a SUB plan for 7.65% less than before by escaping the FICA taxes.  Unfortunately, however, there is still some risk associated with using a SUB plan.  In another case by a different Federal circuit court, the payments were long ago held as taxable despite the very clear language in the tax code to the contrary.

If you are planning a reduction in force in the near future and would like to help minimize your unemployment claims, a SUB plan may be of benefit to you.  And, with the new case, hopefully a bit cheaper as well.

Remember that cruise ship that sank off the coast of Italy last year?  Remember the bumbling captain that ran the ship aground, cost the lives of 32 people, and abandoned the ship before his passengers?  His name is Francesco Schettino and the cruise line he worked for let him go immediately after the incident.  He is is facing charges of the European equivalent of manslaughter, but he is now suing for WRONGFUL TERMINATION!

Seriously?  Seriously.  Schettino’s lawyer, Bruno Leporatti reports to Reuters News:  “It is the right of every worker to appeal against his dismissal and Capt. Schettino has done no more than exercise that right.”

Well maybe, but that seems to be the way things are in Europe.  I really wasn’t planning to address this as a topic until I spoke with a former US, now French, attorney this week and asked about the differences.

I always thought it was less costly to run a business in Europe where they don’t have protections like the ADA, ADEA, and Title VII.  You simply don’t have to worry about those types of claims as much. Apparently I was wrong.  Instead of having many separate laws protecting employees, all of the claims are couched in terms of “wrongful termination” that allow this type of claim and was informed that virtually all European citizens make a claim for wrongful termination.  According to the attorney I spoke with, almost every European employer simply negotiates a severance agreement with their employees to avoid what they know will be the cost of even a poorly executed suit like Schettino is bringing against the cruise line.

Thankfully, Texas does not recognize a claim for wrongful termination.  At-will employment prevails allowing both employees and employers to terminate the relationship at any time.  Employers still have to worry about discrimination claims, but there are very few other claims an employee can make.   With many business owners lamenting the effects of Obamacare, it is nice to know there may still be a few reasons things are better over here.

Who, What, Why . . .

Who does it apply to: All employers, whether subscribers to workers’ compensation insurance or not.

What is the issue: Employees of businesses that make workers’ compensation claims sometimes engender the aggravation of their employer. Employers think the employee is faking injury, milking the claim, or simply preventing the employer from getting work done while the employee is out. This aggravation can sometimes turn into retaliation by the employer which is prohibited under the law.

What is the law: Employers are prohibited from discriminating (or retaliating) against an employee who has:

• made a claim for worker compensation in good faith;

• hired a lawyer to represent the employee in a claim;

• instituted or caused to be instituted an administrative proceeding regarding a workers’ compensation claim; and

• testified or is about to testify in an administrative proceeding regarding a claim for workers’ compensation.

Is termination retaliation: If you have not yet experienced a workers’ compensation claim, you don’t realize that this is THE question when it comes to workers’ compensation retaliation. Virtually all of the disputes regarding retaliation revolve around termination that occurs while the employee is out with the injury or when the employee returns.

As noted above, the law prohibits retaliation against an employee who has made a claim. So, employers cannot terminate the employee for making the claim. But, maybe they can terminate the employee because they have to refill the position.

When an employee goes out with a workers’ compensation claim, the employer is left with an open position that it requires an employee to fill. The injured employee may be out a few days or a year. If it is a few days or weeks, most employers will simply make do. If it is a few months, the employer probably will need a replacement – at least temporarily – until the employee returns. If it is a few years, the employer will most likely want to bring in a permanent replacement. In either of the latter cases, the employer will need to know if it has to hold the position open or can fill it permanently with a replacement.

The need to fill a position can serve as a legitimate non-discriminatory reason to let an employee go. That said, employers need to be careful they can justify that decision. A court will likely agree that employers should make due for a few days or weeks, hire a temp if it is a few months, and possibly need a permanent replacement if it is a year or more. Stepping outside these confines may be seen as some evidence the employer is trying to get rid of the employee because of the claim.

What other considerations are there: Because it is often difficult to determine an employer’s motivation in terminating an employee out on workers’ compensation leave, the courts have developed a non-exclusive list of factors that lean toward discriminatory or retaliatory intent:

• knowledge of the compensation claim by those making the decision on termination;

• expression of a negative attitude towards the employee’s injured condition;

• failure to adhere to established company policies;

• discriminatory treatment in comparison to similarly situated employees; and

• evidence that the stated reason for the discharge was false.

Are there other laws to consider before terminating: If you are subject to the Family Medical Leave Act (50 employees, and other requirements), or the Americans with Disabilities Act (15 employees), you must follow the limitations those laws impose on your ability to terminate. For example, the time the employee is out for workers’ compensation should be designated as FMLA leave so the time out runs concurrently. Then, if subject to the ADA, you must consider whether the injury counts as a temporary disability requiring reasonable accommodation.

What can happen if retaliation occurs: Employers who are found to have retaliated against an employee are liable for reasonable damages incurred by the employee, punitive damages, and the employee may be reinstated to his or her former position.

Common Situations:

Missed the deadline: Sally is injured when a pile of boxes fall over on her in a hallway at Boxes-R-Us. She files a workers’ compensation claim and takes leave to recover. Boxes holds her position open and counts her time out toward her FMLA leave. Prior to her scheduled return date Boxes sends Sally a letter requesting a release from her doctor. Boxes doesn’t hear from Sally until 5 days after her scheduled return date. She offers no excuse. At this point Boxes has terminated Sally under its “3-day rule” which states that employees absent for 3 days or more without excuse will be considered to have abandoned their position or quit. Is Boxes in the right? As long as Boxes is uniformly enforcing an existing written policy and Sally has no justification, she is out of a job and a claim for retaliation.

But you only said termination: Kimmy injured her back while carrying a heavy box of tongue depressors at Health Hut. Kimmy makes a workers’ compensation claim which is accepted and goes out on leave for 3 months. Upon her return, Kimmy’s supervisor makes derogatory comments about how Kimmy cost the company money in an effort to warn other employees against making claims. Cal witnesses the comment and supports Kimmy to make a claim against Health Hut for retaliation for making a workers’ compensation claim. Health Hut cannot believe that Cal would back Kimmy in a claim and fires him. Is Health Hut in hot water? Yes. While most of the retaliation claims occur over termination, employers still can be liable for treating Kimmy badly and firing Cal for supporting her.

Horseplay hurts: Jenn, an employee at Stretch String, Inc., is injured one afternoon while double dutch jump roping with some co-workers using stretchy string as rope. Jenn makes a worker compensation claim, but before it can be approved or disproved, Stretch String fires her for violating company safety policies. Is Stretch in trouble? Likely not. Just because an employee is injured and makes a claim does not insulate them from company policies. Jenn was goofing off and Stretch does not have to stand for it.

What should I do:

Good: Keep your head if an employee makes a claim. Do not bad mouth them. If they are going to be out a short while or a period protected by law, be careful to follow the rules. If the employee will be out a long time, consult with your lawyer about possibly administratively terminating the employee.

Better: Follow the above advice and also establish a 3-day rule to terminate employees absent for 3 or more days without an excuse and follow it so you may use it with a workers compensation employee if they do not come back on time. Hire temps to replace employees out for months or more. If you cannot get a temp, document it and consult your lawyer about letting the employee go.

Best: Keep on the straight and narrow with the advice above and train all supervisors and employees not to negatively treat employees who make a claim.

Yesterday the Huffington Post reported an interesting story about how Maneesh Sethi used Craig’s List to employ a “slapper” to keep him from wasting time on Facebook when he should be working.  Digging deeper, I found Sethi’s own blog post on his website Hackthesystem.com where he described how he first came upon the idea.  Using an app called RescueTime for a week Sethi discovered that he managed just 38% efficiency.  Sethi complained that he easily got off task to check Facebook or get on other social networking sites instead of working.

So, he got an idea to hire someone to sit with him and slap him in the face every time he got off task.  He posted an ad on Craig’slist and immediately received a rash of responses.  After working through the weirdos, he settled on the young lady pictured.  The next day, they met for several hours at a cafe.  Sethi gave her basic ground rules and set about getting things done.

It worked.  While the Slapper was with him, his productivity skyrocketed to 98%.

So, why post this on an employment law blog?  It raises a very important issue – Does employee Facebook and social networking usage negatively affect productivity?  

Sort of.  In April of this year many news articles were posted following an informal study by corporate wellness company Keas which found that employees were 16% more productive if they can take 10 minute Facebook breaks.

But, in the same breath, Marketwire reports that 26% of employees of employees quizzed in a separate study admitted wasting over an hour a day on Facebook or other social media sites.

What is an employer to do?  Leave it alone?  Attempt to manage it?  Cut Facebook and similar sites off completely?

If the information above is to be believed, employers should not cut Facebook off, but somehow find a way to keep employees to short breaks.  And, back to Mr. Sethi’s problem, how exactly does an employer do that?  Hire Slappers?  Not unless they want to be sued for committing assault and battery of their employees.

The best idea that occurs to me is for employers to use any one of many readily available internet monitoring programs that can tell how much employees use social media during the day.  Monitor one employee each week and discipline them for overusage – more than a predetermined acceptable amount per day.

Of course, employees are resourceful and many will just turn to their cell phones which offer streaming Facebook.

The chase continues . . .

Sometimes posts should just be fun.  One of my co-workers forwarded me a story yesterday on Lowering the Bar, a humor site for lawyers – about lawyers.  Apparently, a law firm in San Mateo, California has decided to hire some new associate lawyers and they are doing so with a little twist . . .

The firm plans to hire many candiates and then vote them off the island, so to speak until there is only one standing.  This is taken from the post on Craig’slist:

The Firm utilizes the following hiring process:

* All candidates are allowed to begin a paid contract legal assignment at $20.00/hour. If you apply you will be given an assignment.

* Each day the candidate with the weakest work product will be cut until one candidate remains. This process will take one or two weeks until the final candidate is offered on-going employment. If you have seen reality television shows where contestants are cut from episode to episode such as Top Chef, Top Shot or Project Runway — it will be like this. Do you have what it takes to be Top Associate?

* If you want to participate you will come to the first day of hiring with your laptop ready to begin. You will be given a group orientation, and then an individual interview. You should be free to work 8 hours per day for the next two weeks to participate in the evaluation.

If you are interested in applying to the Mellen Law Firm please call Molly Bell-Mellen re: “hiring” at (650) 638-0120 between the hours of 12:00 and 5:00 pm on October 3rd, 4th and 5th.

Setting aside the apoplectic reaction most HR professionals would have about what this might do to the moral of the applicants, the process sure feeds on the competitive personalities many lawyers have and that the firm likely wants to cultivate.

But is it legal?  I can’t speak for California where the firm is located because of all the unique laws they have favoring employees, but in Texas it certainly would be.  Texas is an at-will state and employers can hire as many people as they want and then fire them as soon thereafter as they choose.  It might not be the wisest decision in terms of your unemploment claims count with the Texas Workforce Commission, but you can do it.

And, in this case, I am not sure I object.  The applicants who choose to participate know the score at the beginning.  There are no secrets about how it will work.  It is not facially discriminatory.  In the end, the law firm benefits from what it percieves is the most important characteristics in a future employee.

The traditional method of interviewing candidates is such a crap shoot anyway.  They all will tell you in varying degrees what they think you want to hear.  The only way to know for sure is to take a chance.

Who, What, Why . . . 

Who does it apply to:  All employers that use criminal backgroundchecks to evaluate applicants or employees.

What is the issue:  Blacks and Hispanic people are statistically more likely to be arrested and convicted of crimes than whites.  As a consequence, employers who make a blanket rule that any person with an arrest or conviction should not be hired or promoted may be unintentionally discriminating.  The EEOC recently used these statistics to force a settlement with Pepsi® over its policy against hiring anyone who has been arrested.   Following the settlement, the EEOC issued new guidelines regarding the use of criminal background checks.

Are the EEOC’s guidelines law:  The guidelines do not change existing law, but they reflect the EEOC’s focus on this issue and its intent to use the statistics against businesses.

How is the discrimination happening:  You all know discrimination is illegal.  You are probably less clear on the legal framework underlying discrimination, which comes in two forms: “disparate treatment” and “disparate impact”.  Disparate treatment involves intentionally treating one employee or a group of employees differently because of a protected characteristic.   Disparate impact is a little more subtle.  It involves a rule or policy established by an employer that disproportionately affects people in a protected group – in this case, Black and Hispanic people.  The EEOC’s new guidelines are primarily directed toward disparate impact discrimination where employers use criminal background checks as a threshold test to weed out applicants without considering the facts of each individual case.  Even though the employer’s policy is not discriminatory on its face, it can have the unintended consequence of reducing the number of Blacks and Hispanic people in the employer’s workforce.

What are employers supposed to do differently:  To avoid accidentally denying a disproportionate number of Black and Hispanic people a job or promotion, employers who use criminal background checks are required to make an in-depth analysis of that background.  Employers cannot simply deny all people employment because they have been arrested or convicted of a crime.  Instead, an employer must determine whether the specific criminal history should be used as a consideration for the job or promotion at issue.   Stated simply, employers should consider whether the particular crime should really act as a reason to deny a person employment to the particular job or promotion at issue.  As an example, a person considered for a night watchman position where people are rarely encountered should not necessarily be denied a job because of a conviction for assault in high school.   The EEOC wants to foster the use of targeted exclusions for particular positions.  This means that employers should evaluate each job category and exclude applicants with a criminal history only if that history relates to the performance of the job in question.

Are arrests somehow distinguishable from convictions:  In the EEOC’s view, employers should not ever use an arrest alone as a basis to deny a job or promotion to a candidate.  The EEOC cites two primary reasons for this view: (1) arrested people are still innocent until proven guilty; and (2) criminal databases are sometimes incomplete, leaving final dispositions out of records which might reflect an acquittal or failure to prosecute.  Interestingly, the EEOC does believe that employers can evaluate the underlying facts and act as judge and jury to decide whether the person committed the crime and whether there are extenuating circumstances that negate the arrest.

What type of in-depth analysis is required:  The EEOC cites to court of appeals cases setting out a three pronged analysis:

   • What was the nature and gravity of the offense;

   • How much time has passed since the offense; and

   • The nature of the position sought.

Are there some businesses that have to exclude convicts:  There are a large number of federal and state laws that restrict businesses from hiring people with certain criminal records.  For example, there are federal laws restricting people with criminal histories from having federal law enforcement positions, and being child care workers for federal agencies, bank employees, and port workers.  For a complete understanding of the restrictions that may affect your business, consult a lawyer.

Common Situations:

But we’re diverse:  Bakery of the South has a policy against hiring anyone with a criminal conviction in the last 10 years.   An applicant complains under the new EEOC guidelines.  After learning of the EEOC’s new guidelines and that its rule might not be legal, Bakery’s lawyer argues that there is no disparate impact against Black or Latino people at Bakery because 40% of its employees are Latino and 35% are Black.  Are Bakery’s excellent diversity statistics sufficient to overcome the claim.  Unfortunately, no.  While it might seem counter-intuitive, simply having a diverse workforce does not change the fact that Bakery’s hiring practices have a disparate impact.  Without the policy Bakery might be 50% Black and 50% Latino.

But the law says I can:  If the federal limitations for working in banks are convictions within the last 10 years, Bankorama figures limiting for 20 years would be even better.  It can pride itself on the security it takes for its customers.  Is this OK?  There is no clear answer, but you can bet the EEOC is going to take the position that 10 years is good enough for the federal regulations, so it ought to be good enough for you.  If there are limitations in your industry, you probably should not go beyond them.

Only for applicants:  Nick has been a faithful employee of Fidget Widget, Inc. for 15 years, when the company’s owners sell out to Conglomerate.  Conglomerate wants to promote Nick to head Fidget Widget in the absence of the old owners, but finds a criminal conviction for felony assault 25 years ago when running a background check before the promotion.  Conglomerate refuses Nick the promotion because of this single criminal event.  Is Conglomerate within its rights?  No.  The guidance by the EEOC doesn’t just apply to applicants – it applies to all employment decisions.  As long as there is not a business justification consistent with Nick’s position, Conglomerate will be in the wrong with the EEOC.

What should I do:

Good: Be certain you are following all federal and state requirements applicable to your business restricting the hiring of convicted individuals.  Avoid using criminal convictions or arrests to make hiring decisions without a good connection to the position and your business.

Better: If using arrest as a basis to make hiring decisions, obtain the underlying facts and make your own decision about whether the applicant committed the offense.  Create conviction history restrictions for each job position in your business with strong consideration of whether the restrictions set are consistent with business necessity for that job.

Best:  All of the above, plus, document all facts considered for arrests and individualized circumstances considered when using convictions.  Be sure to draw the connection between the job and the need of the business in doing so.  Be careful not to create restrictions that are tenuous which might be questioned by the EEOC.

A jury in an Atlanta Federal Court has determined that a white male was discriminated against according to a recent article by the Atlanta Journal-Constitution.

The Plaintiff, former Human Services Deputy Director Doug Carl, filed suit five years ago when he was denied the Human Services Director’s job in favor of a black female.

Fulton County attorney, David Ware, who lost the case was incredulous about the jury’s decision.  According to Ware, who is himself black, Carl lost the job because he “completely blew his interview,” but there was apparently a lot of evidence to the contrary.

The jury heard testimony that County Commissioner Emma Darnell told one employee that there were “too many white boys” in Human Services.  Darnell was further attributed with saying that the new director should be “black and female.”

And, County Manager Tom Andrews admitted calling employees “black marbles” and “white marbles” in hiring decisions.

I regularly lament to clients that white males are the least protected class in America.  The law appears to protect everyone from white men.  I certainly acknowledge that the vast majority of discrimination has been against persons in other protected groups, but white men are becoming much more of a minority in America.  Women outnumber men in college now.  Hispanics in Texas are quickly coming to outnumber whites.

As these demographics change, perhaps white males will come to be a more protected group.   Personally, I just wish we could all get along.

Who, What, Why . . .

Who does it apply to: All employers with 100 or more full-time employees (not counting workers who have less than 6 months on the job and employees who work fewer than 20 hours per week) or employ 100 or more employees that work 4,000 hours per week combined.

What is the purpose of the law: When a business covered by the Act is laying off a large number of people at a single worksite, the Act requires the employer to give advance notice so that the employees can begin looking for other work.

What circumstances trigger the notice requirement: Of course, it is complicated, but the following represent most of the possibilities:

  • Closing a facility or operating unit on a temporary or permanent basis in a way that will affect 50 or more employees (at that location or that location plus other places);

  • Making a mass layoff during any 30-day period of at least 33% of employees at a single site of employment, unless the percentage affects less than 50 employees, or, at least 500 employees (not including part time employees) regardless of the percentage.

  • A combination of a facility closing and mass lay-off during a 90 day period that would meet either threshold.

  • Sale of a business which will result in a facility closing and/or mass lay-off as part of or shortly after a sale.

WARN ActEmployers do not have to give notice when closing a facility or location due to completion of the project for which it was created (think construction site), if the facility was originally temporary, or in certain circumstances, involving unions.

Who counts as an employee: Anyone who will be laid off for more than six months, whose hours will be reduced by 50% or more, or who has been temporarily laid off with an expectation to be recalled that will no longer be recalled (including employees on worker’s comp, FMLA, or other leave). That said, “employee” does not include part-time employees, individuals who have worked less than 6 months in the last 12 months, people who are contractors or understand that their position is temporary, striking union employees, or employees who will be offered a transfer (in certain circumstances).

 Who gets notice and when: Deliver notice, timed to reach the following parties, 60 days or more before the lay-off:

  • Affected employees;
  • Employees who may be laid off if seniority allows an affected employee to bump another employee out (“bumping”);
  • The Dislocated Worker Services Department at the Texas Workforce Solutions office for your region;
  • The highest ranking elected official at the local level of government in which the site is located (probably the Mayor or County Commissioner); and

The chief representative of the union or bargaining organization for union employees.

What is the notice supposed to say: To affected employees, the notice must explain whether the planned action is temporary or permanent, whether the entire facility will be closed, the expected date when the closing or lay-off will begin and conclude, information about bumping rights (if any), and the name of the company representative employees may contact for more information. To the other recipients listed above, the notice should include the items above, the address of the site, and what positions will be affected.

Are there exceptions to giving notice 60 days in advance: You still have to give notice, but the notice may be shorter if the layoff is the result of a natural disaster, unforeseeable business circumstances, or if the company falters. Understand, however, that the Department of Labor will take a very narrow view of what meets these exceptions and when the business really knew about the need to lay-off employees.

What happens if I do not give notice: Companies may be liable for up to 60 days back pay and benefits for the affected employee, plus possible penalties and attorney fees. That said, the Act specifically prohibits the government from attempting to prevent an employer from engaging in either a facility closing or mass lay-off.

Common Situations:

We may pull it out: MegaBrands has determined that it must make a mass lay-off at its Dallas ice cream making plant because Americans have flipped over Italian gelato and business is down. They prepare the required notice under the WARN Act and send it out. A month into the warning period an earthquake in Italy levels its biggest competitor. MegaBrands can hang on for a little longer. Will its past notice suffice? It depends. If the date the lay-offs are to begin is for some reason postponed by less than 60 days, notice must be given to that effect as soon as possible. If the date the lay-offs are to begin is postponed by more than 60 days, a completely new notice will be required.

No one can know: Secrets, Inc. is going to have to close one of its plants in Lubbock, but it fears advance notice of the closing will be a sign of weakness to its competitor who has been angling for a hostile stock purchase. Secrets, Inc. decides to pay all of the employees at the Lubbock facility 60 days pay but provides no notice before closing its plant. Employees are required to sign a release of all claims against the company in exchange for the payment. Can Secrets, Inc. avoid the WARN notice requirement by paying off its employees? Yes, but in this instance they did it wrong. Secrets, Inc. could make an unconditional payment to the employees effectively cancelling whatever recovery they would be entitled to under the Act. By requiring a release of all claims, however, Secrets, Inc. made the payment about more than just avoiding the WARN notice which does leave the employees with a compensable claim.

Will it happen this month: GigantiCo has facilities all over the country and has been trying to sell its Midwest division for the last two years. Hoping to find a suitable buyer and close quickly, GigantiCo has been providing WARN notices to its employees all over the United States every 60 days since the division went up for sale. Has the company overstepped? Yes, an employer may not attempt to circumvent the timing provided by the WARN act while driving its employees totally insane.

What should I do:

Good, Better, and Best: Comply with the notice requirements above if the act becomes applicable to your business. Be careful to consider this issue in a sale of the business. Most buyers require termination of all employees before the sale so that the buyer may pick and choose who it wants to keep.

The Wall Street Journal reported yesterday that Augusta National Golf Club has admitted two women as members: financier Darla Moore and former Secretary of State Condoleezza Rice.

Augusta Allows WomenI don’t know much about golf, but I do know that Augusta National is  hallowed ground in the minds of most golfers.  As an employment lawyer, I also know about the history of discrimination at the course.

What I didn’t know is that Augusta National has roughly 300 members or that women have been allowed to play the course as guests for many years.  In fact, there are only four days a year where “members only” events are conducted and women are (were) completely excluded.  I’ve also learned that you cannot “apply” for membership at Augusta, you are nominated and approved for membership by a board.

So, how did Augusta get away with keeping women out for so long?  It is a private golf club.  Yes, that matters.  You see, the decision to allow women at Augusta national doesn’t have a lot to do with employment law, but it does have to do with a common misconception folks have about Title VII and the other anti-discrimination laws.  People think that these laws prohibit discrimination anywhere – restaurants, parks, and private clubs.

Unfortunately, or fortunately (depending on your point of view) a purely private organization can still decide who can be a member.  So, just as the neo-nazi’s can restrict membership against Jews, Augusta National can restrict membership to all men and the anti-discrimination laws we enforce as employers have no effect.

What prompted the change you may ask?  A change of heart, perhaps?  Nope. Most commentators believe it was pressure from corporate sponsors.  Many of America’s largest corporations are very sensitive to diversity and some are headed by women.  In fact, it is likely that IBM CEO Ginni Rometty was impetus for change.  IBM is a major sponsor of the Masters golf tournament which is held each year at Augusta National and its CEO is traditionally offered membership to the club.

Yet, the club did not announce membership to Rometty in the spring during the tournament.  Instead, it waited to the end of summer after the smoke cleared to pick two other high profile women to bring in as members in a likely effort to avoid being viewed to cow to pressure.

Regardless of the cause, I am glad to see the change.  Employment laws can go only so far to stamp out discrimination.  People have to do the rest.

Ellen Pao is a partner at Silicon Valley venture capital firm of Kleiner, Perkins, Caulfield & Byers.  She has recently filed a lawsuit against the company for sexual harassment as the Huffington Post reports.  Pao alleges that she was harassed by a senior partner in the firm who began excluding her from key meetings and withholding key information after she rebuffed his repeated advances.  The senior partner is no longer with the firm, but the trouble continues.  Pao is still working at the company.  She has not done anything to be fired and she hasn’t quit.

KPCB.com. No Claim to to Original Work

The Pao story brings into specific perspective an issue in employment that that many employers do not even conceive could happen.  Someone sues your company for discrimination, but is still working there.  Still facing you every day.  Still showing up for company parties, as Pao has done.  How uncomfortable!

It happens more often than you think.  An employee feels passed over for a promotion, or sexually harassed and talks to an employment lawyer who believes they may have a case.  The employee then files a complaint with the EEOC but doesn’t leave the company.  While uncomfortable, the employer lives with it since the EEOC is an administrative body investigating on its own.  And then, after the EEOC investigation concludes without resolution, the employee sues.

Now that the employer is spending money on a lawyer to fight an existing employee they invariably ask the question: “They are suing me! Can’t I fire them?”  And their lawyer will reply “No”, because, it would be discrimination to terminate an employee who is making a claim.  Whether the underlying claim has merit or not, the employer would certainly be violating the discrimination laws by letting the employee go with a lawsuit in play.

And, at the same time, the employee can’t really quit either unless they want to cut off their damages.  The only way an employee can quit in the face of discrimination without limiting their damages from that point forward is to be “constructively” discharged.  This means that the conditions at the workplace have become so bad that a reasonable person placed in the same situation would have no real alternative except to quit.  And, with the offending partner gone, that certainly is not the case for Ellen Pao.  So, she really shouldn’t leave.

The tension can become unbearable as both sides try to make it along that it often causes the employee to look for another job and the employer to look for a settlement just to get rid of the uncomfortable environment.

Just another twist on employment law you may not have been thinking about brought about by current events.