BY Donald J. Spero, Esq.

I. Introduction

Since Congress enacted Title VII of the 1964 Civil Rights Act there has been a proliferation of federal, state and local protective laws governing the employment relationship. The traditional rule of law in the United States has been "employment at will." The substance of this doctrine under Florida law was summarized by the court in Maguire v. American Family Life Assurance Company of Georgia:

Without an employment contract specifically obligating both employer and the employee for a definite term of employment, the employment is considered to be indefinite and terminable at the will of either party. No action may be maintained for breach of the employment contract under these circumstances.

The foregoing is applicable unless. That is unless the reason for adverse action [i.e. actions such as refusal to hire, demotion, denial of a promotion, benefits or raise, disparate compensation, harassment and workplace segregation] is one that contravenes the prohibitions Title VII and its progeny.

The following is a summary and overview of the protections and prohibitions created by many of the most commonly applicable federal laws governing the employment relationship.

II. Title VII of the 1964 Civil Rights Act

Title VII makes it and "unlawful employment practice" to discriminate in employment against an individual on the basis of race, color, religion, sex or national origin. An employer may not "fail or refuse to hire or to discharge any individual with respect to his compensation, terms, conditions or privileges of employment" on the proscribed bases. Neither may an employer "limit, segregate, or classify his employees or applicants for employment or otherwise adversely affect his status as an employee " because of that person's being in one of the categories protected under Title VII.

There is a limited exception in Title VII that permits employers to give differential treatment for a position where "...religion, sex, or national origin is a bona fide occupational qualification reasonably necessary to the normal operations of that business." (a "BFOQ"). Possible examples would be the hiring of one to model clothing designed for a specific gender or to act in a drama. It would not be unreasonable for a religious congregation to insist that its pastor be of the same religion as the congregation. Schools which are operated primarily by religious organizations may require persons who they hire to be of a particular religion. BFOQ's will be carefully scrutinized. They are not a consideration in the overwhelming majority of hiring decisions.

It is also an unlawful employment practice to advertise or publish notices indicating a preference for or discriminating against persons based on race, color, religion, sex or national origin. Where religion, sex or national origin constitute a BFOQ for the position in question a preference for or limitation to individuals in those categories may be advertised.

Title VII is intended to level the playing field for those it is intended to protect. It is not intended to give them an undue advantage. It does not have an affirmative action requirement. The statute specifically provides that it does not require employers to grant "...preferential treatment to any individual or to any group because ... an imbalance which may exist with respect to the total number or percentage of persons of such race, color, religion, sex, or national origin in any community, state, section, or other area, or in the available workforce in any community, state, section, or other area."

Additionally Title VII does not prohibit employers from making employment decisions "...pursuant to a bona fide seniority or merit system, or a system which measures earnings by quantity or quality of production or to employees who work in different locations" as long as such differences are not "... designed, intended, or used to discriminate because of race, color, religion, sex, or national origin."

The Equal Employment Opportunity Commission (the "EEOC") has responsibility for enforcing Title VII. In order to claim rights under the statute a sworn administrative charge must be filed by or behalf of an individual with the EEOC setting forth the alleged violation. In states, counties or cities that have agencies with powers similar to those of the EEOC, the charge must be filed withing 300 days of the claimed violation. Such agencies are referred to as "deferral agencies." Where there is no deferral agency the charge must be filed within 180 days of the alleged violation. In a deferral jurisdiction no action can be commenced under Title VII until 60 days after a charge has been filed with the local agency. The EEOC is entrusted with investigating the allegations when a charge is properly filed with it.

The courts have not been overly demanding of particulars in an EEOC administrative charge. The scope of a judicial action under Title VII "... is limited to the scope of the EEOC investigation which can reasonably be expected to grow out of the charge of discrimination." (internal citations omitted) Sanchez v. Standard Brands. The action "...may encompass any kind of discrimination like or related to allegations contained in the charge and growing out of such allegations during the pendency of the case before the Commission." Further it has been held that an employee does not have to file a second charge to support a claim for retaliation for filing a previous charge."

The plaintiff in Sanchez checked off the check block indicating discrimination on the basis of sex when she filed her original, timely charge form with the EEOC. After the time for filing had run she amended her charge to allege national origin discrimination. The court allowed her allegations of national origin to stand in her judicial action. It found her allegations of national origin to be timely, relating back to her original filing. The court held that the change in allegations was a mere technicality.

If the EEOC determines "after such investigation that there is not reasonable cause to believe that the charge is true it shall dismiss the charge and promptly notify the person claiming to be aggrieved and the respondent of its action." If the EEOC finds that there is reasonable cause to believe the allegation the EEOC is required to try to eliminate the discrimination by "...conference, conciliation, and persuasion."

When the timeliness of an administrative charge is questioned there may be a dispute as to when the charge has been filed. The Supreme Court recently addressed this issue in Edelman v. Lynchburg College. The Court held that a letter which was not under oath or affirmation, faxed by the claimant to the EEOC within the required filing period could meet the requirements of a charge and thereby stop the clock from running. Edelman submitted a verified charge form 313 days after the denial of tenure of which he complained in the fax. The Court held that a charge does not have to be verified when filed. If it is verified after the filing time has run that verification can "relate back" to the original filing, at least where the charging party and the EEOC regard the initial contact as a charge.

On some occasions an individual may recover for acts committed more than 300 or 180 days prior to the filing of an administrative charge with the EEOC where those acts are part of a "continuing violation." The Supreme Court held in National Railroad Passenger Corporation v. Morgan that a discrete act, such as a dismissal, refusal to promote or failure to hire triggers the running of the time for filing a charge at once as the employee is aware of the act at the time it occurs. Where the employee's claim is one of hostile environment, however, the violation of the protective law may be one unlawful employment practice that continues right into the filing period, so long as there is at least one act making up part of the hostile environment that takes place within the filing period. The Court allowed that in such a case the employer may be able to avail itself of certain equitable defenses such as laches, waiver or estoppel where an employee has unreasonably delayed in pursuing a remedy.

The EEOC is empowered to sue employers to enforce compliance with Title VII, but due to its limited resources most judicial actions are brought by complaining employees or applicants for employment. Whether or not the EEOC finds reasonable cause the charging party may obtain a "Notice of Right to Sue" from the EEOC. The notice is a mandatory prerequisite for maintaining the action. Suit must be filed within 90 days of the charging party's receipt of the notice. If the plaintiff prevails the court may order appropriate relief, such as that the individual be hired, reinstated or given a wrongfully denied raise or promotion. Lost wages may also be awarded to the plaintiff.

C. Compensatory and Punitive Damages

Prior to the enactment of the 1991 Civil Rights Act relief available under Title VII was limited to lost wages, injunctive relief and attorney's fees. Congress added the right to a jury trial along with compensatory damages and punitive damages to the relief available to a Title VII plaintiff with that enactment. These damages may be obtained only where the discrimination is "intentional." They cannot be awarded in a disparate impact case. Compensatory damages include damages for "...future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non pecuniary losses..."

The total amount of compensatory and punitive damages that courts may award to an individual vary with the size of the employer. Where the employer has between 14 and 101 employees the cap is $50,000. For employers with more than 100 and fewer than 201 employees the total is limited to $100,000. The employer who employs more than 200 and fewer than 501 employees may be penalized with an award of up to $200,000. Those with more than 500 employees are subject to combined compensatory and punitive damage awards as high as $300,000. The jury may not be told of these limits.

The statute allows the recovery of punitive damages "...where the complaining party demonstrates that the respondent engaged in a discriminatory practice or discriminatory practices with malice or with reckless indifference to the federally protected rights of an aggrieved individual." Punitive damages may not be awarded against governmental bodies. The Supreme Court considered the type of conduct that will justify an aware of punitive damages in Kolstad v. American Dental Association. There the Court held that in order to obtain punitive damages the plaintiff must do more than merely prove intentional discrimination. The Court further held that the traditional agency principle of vicarious liability is inapplicable to holding an employer liable for punitive damages. An employer will not be subject to punitive damages merely because the illegal act was committed in the scope of the actor's employment.

Under Kolstad liability for punitive damages does not depend on how egregious the conduct was although this may go to a showing of the employer's motive. Liability turns rather on the employer's state of mind. The "...employer must at least discriminate in the face of a perceived risk that its actions will violate federal law to be liable for punitive damages." Before being held liable for punitive damage the employer must have a considerable degree of first hand knowledge that the actions were being committed and that the acts were illegal. The Eleventh circuit has held that "...punitive damages will ordinarily not be assessed against an employers with only constructive knowledge" of the complained of conduct. In Miller v. Kenworth of Dothan, Inc., the court disallowed punitive damages where the employer had only constructive and not actual notice of the offensive ethnic language that was being directed to the plaintiff. On the other hand, in EEOC v. W & O, Inc., D.B.A. Rustic Inn punitive damages were upheld where high level management was aware that its policy of not permitting pregnant servers to work past their fifth month of pregnancy was illegal sex discrimination.

D. Religious Discrimination

The prohibition against religious discrimination requires employers to allow for all aspects of an employee's "... religious observance and practice, unless an employer demonstrates that he is unable to reasonably accommodate [the individual's religious needs] without undue hardship on the conduct of the employer's business." This provision often comes into play with employees or applicants who belong to strict Sabbatarian religions whose beliefs forbid them from working on their Sabbath. In Transworld Airline, Inc. v. Hardison. the Supreme Court held that the employer did not have to violate the union seniority rights of other employees or incur more than a very minimal expense to accommodate an employee's religious observance. The employer was not required to pay other employees overtime to take the plaintiff's Saturday shift.

E. The Pregnancy Discrimination Act

Title VII's ban on sex discrimination was expanded by the pregnancy discrimination amendment to the statute, the Pregnancy Discrimination Act (the "PDA"). The amendment added to the definition of "because of sex" and "on the basis of sex," the conditions of "pregnancy, childbirth or related medical conditions." Pregnant employees must receive the same benefits, including medical and leave benefits as those who are not pregnant. The amendment specifically excludes any requirement for an employer's medical plan to pay for abortion except where the mothers's life would be endangered by carrying the fetus to term or where medical complications have arisen due to an abortion.

Subsequent to the enactment of the PDA the Supreme Court in Newport News Shipbuilding & Dry Dock Co. v. The Equal Employment Opportunity Commision held that the act was violated by an employer's medical plan that afforded less extensive benefits to wives of employees for hospital confinement for maternity than were allowed for non pregnancy related conditions. The court found this to be unlawful discrimination against male employees as it gave less coverage to spouses of male employees than to spouses of female employees. The Court also ruled in International Union UAW v. Johnson Controls that the employer could not bar women capable of child bearing from jobs that would expose them and their fetuses to potentially dangerous lead levels.

There have been no shortage of decisions involving the application of the PDA. In Byrd v. Lakeshore Hospital the Federal Appellate Court for the Eleventh Circuit ruled that a hospital illegally discharged an employee for using otherwise available sick leave for her pregnancy related condition. On the other hand in Spivey v. Beverly Enterprises, Inc. D/B/A Boaz Health and Rehabilitation Center the court found that the employer did not violate the PDA by dismissing a nurse's assistant who could not perform her job unassisted due to a 25 pound lifting restriction imposed by her pregnancy. The court based its decision on the fact that the employer's policy did not accommodate limitations due to illness or injury for any employee other than those injured on the job. The court further observed that the PDA does not require preferential treatment for pregnant employees. In Armindo v . Padlocker, Inc. the Eleventh Circuit held that it did not violate the PDA to dismiss a pregnant employee for excessive absenteeism where the employer's absenteeism policy was applied equally to non pregnant employees. The court ruled that a pregnant employee does not have to be treated more favorably than a non-pregnant employee.

III. Proving Discrimination

A. Proof of Intentional Discrimination by Circumstantial Evidence

The Supreme Court first addressed the order and allocation of proofs in a case where intentional discrimination is alleged in McDonnell Douglas v. Green. The plaintiff's burden to maintain a prima facie case is relatively light. While McDonnell Douglas was a refusal to hire race discrimination case brought under Title VII, the McDonnell Douglas shifting burden analysis has been adapted by the courts as a means of proving discrimination under the broad panoply of statutes prohibiting invidious discrimination. To prove a prima facie case the plaintiff must merely demonstrate membership in a group protected by the statute, that he or she applied for and was qualified for the position in question, that the applicant was denied the position and that after the claimant was rejected the employer continued to seek applicant with the complainant's qualifications. As the Court later noted in Texas Department of Community Affairs v. Burdine, a failure to promote on the basis of gender case:

The prima facie case serves an important function in litigation: it eliminates the most common nondiscriminatory reasons for the plaintiff's rejection. See Teamsters v. United States, 431 U.S. 324, 358 and n. 44 (1977) As the Court explained in Furnco v Waters, 438 U.S. 567, 577 (1978, the prima facie case 'raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on impermissible factors.' Establishment of the prima facie case in effect creates a presumption that the employer unlawfully discriminated against the employee.

To rebut the prima facie the employer has to "...articulate some legitimate nondiscriminatory reason for the employee's rejection." In Burdine, supra, the Court held that "The defendant need not persuade the court that it was actually motivated by the proffered reason...It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff." The defendant must merely introduce evidence of facts that are "...legally sufficient to justify a judgement for the defendant." The Court further noted that the "The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff."

Once the employer has articulated a neutral reason for its actions the plaintiff must "...be afforded a fair opportunity to show that [the employer's] stated reason for [the plaintiff's] rejection was in fact pretext." The McDonnell Douglas court advanced some suggested means by which a plaintiff may be able to prove pretext. Among these would be evidence that individuals outside of the protected group ("comparators") were treated more favorably under like circumstances, the employer's treatment of the individual before the adverse action was taken, the employer's reaction to legitimate civil rights activities of the plaintiff and the employer's policies and practices with respect to minority employment. Statistics shedding light on the employer's policy and practices may also serve as evidence. The Burdine Court characterized the plaintiff's burden at this point with the following statement:

The plaintiff retains the burden of persuasion. She must have the opportunity to demonstrate that the proffered reason was not the true reason for the employment decision. This burden now merges with the ultimate burden of persuading the court that she has been the victim of intentional discrimination. She may succeed in this either directly or by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence.

The Supreme Court has considered the burdens of the parities to discrimination complaints on occasions subsequent to McDonnell Douglas and Burdine. In St. Mary's Honor Center v. Hicks, a Title VII race discrimination discharge case, the court found that disbelief of the defendant's proffered reason did not by itself conclusively establish plaintiff's case. It stated that "...the determination that a defendant has met its burden of production (and thus rebutted any legal presumption of intentional discrimination) can involve no credibility assessment." The Court observed that the burden of persuasion still remains with the plaintiff. The Court noted, however, that

The factfinder's disbelief that the reasons put forward by the defendant (particularly if accompanied by a suspicion of mendacity) may, together with the elements of a prima facie case, suffice to show intentional discrimination. Thus rejection of the defendant's proffered reasons, will permit the trier of fact to infer the ultimate fact of intentional discrimination. (citation omitted)

Some confusion followed as to what, if anything, a plaintiff must prove in addition to pretext in order to survive a motion for summary judgment. The Court addressed this question in Reeves v. Sanderson Plumbing, Inc., a discharge case brought under the Age Discrimination in Employment Act (the "ADEA"). There the Court decided that in most cases proving that the defendant's proffered neutral reason for its action is pretextual is all that a plaintiff needs to do to withstand a judgement as a matter of law. It held that the appellate court erred in assuming that "...a prima facie case of discrimination, combined with sufficient evidence for the trier of fact to disbelieve the defendant's legitimate, nondiscriminatory reason for its decision, is insufficient as a matter of law to sustain a jury's finding of intentional discrimination."

In Reeves the Court found that in most cases "pretext plus" is not necessary for a plaintiff to get to a jury. However the Court held out the possibility that in some cases more would be required than showing that the defendant's articulated reason is unworthy of belief. If it is evident that the employer gave a false reason for its explanation to cover up some reason other than discrimination it might be that "...no rational factfinder could conclude that the action was discriminatory." Justice Ginsburg postulated in her concurring opinion that she "...anticpate[d] that such circumstances will be uncommon."

B. Proof of Intentional Discrimination by Direct Evidence

While most employers are sufficiently sophisticated to avoid giving voice to explicit discriminatory reasons for negative actions there have been occasions where "smoking gun" statements that constitute direct evidence of discrimination were introduced into evidence. The Supreme Court considered such a situation in Price Waterhouse v. Hopkins, a Title VII sex discrimination case. The plaintiff complained of her being denied a partnership in the accounting firm in which she had performed some highly commendable work. The defendant advanced as its reason for denying the partnership that Hopkins lacked "interpersonal skills." She had been counseled about abrasiveness with staff members. On the other hand sex oriented remarks had been directed to her such as that "she overcompensated for being a woman" and that she should "take a course in charm school." She was told that it was objectionable for her to use foul language because she is a lady. She was advised that she should act and dress more femininely.

The court found that "...the plaintiff who shows that an impermissible motive played a motivating part in an adverse employment decision has thereby placed upon the defendant the burden to show that it would have made the same decision in the absence of the unlawful motive." It further held that "...when a plaintiff in a Title VII case proves that her gender played a part in an employment decision, the defendant may avoid a finding of liability only by proving by a preponderance of evidence that it would have made the same decision even if it had not taken the plaintiff's gender into account." Where there is substantial evidence of a "mixed motive" the employer has to more than merely proffer a neutral reason for its actions. The employer's nondiscriminatory reasons for its actions become an affirmative defense on which the employer has the burden of proof. Thus in a mixed motive case the employer has a much stiffer burden of mounting a defense than it does when the plaintiff has only circumstantial evidence.

In her concurring opinion Justice O'Connor reasoned that "...in order to justify shifting the burden on the issue of causation to the defendant, a disparate treatment plaintiff must show by direct evidence that an illegitimate criterion was a substantial factor in the decision." Justice O'Connor made some general comments on what does not constitute "direct" evidence that would give rise to burden shifting. Stray remarks, comments by non decision makers or comments by decision makers unrelated to the adverse action in question would not justify burden shifting. The traditional definition of direct evidence is that "...which, if believed, would prove the existence of a fact [in issue] without inference or presumption ....only the most blatant remarks, whose intent could be nothing other than to discriminate, on the basis of [a protected characteristic]...constitute direct evidence of discrimination.."

An example of what is not direct evidence is found in Rojas v. State of Florida, a sex discrimination case, in which a decision maker told a woman other than the plaintiff that the plaintiff did not deserve her job because she was a woman. This was not direct evidence as it was an isolated comment not bearing on any employment decision relating to the plaintiff. On the other hand in Wright v. Southland, an ADEA case, the court found direct evidence in the statement to a plaintiff that he was too old to understand the employer's new computer programs and another employee was told that they were looking for a younger person to take the plaintiff's job. See also Lindsey v. American Cast Iron Pipe Co., where a statement by a decision maker to the plaintiff that he was looking for a younger person to fill an assistant manager position was held to be direct evidence and Febres v. Challenger Carribean Corporation, where a manager's statement that in some cases age would be a criteria in determining which employees would be moved to a new facility rather than being laid off was found to constitute direct evidence.

The potential consequences of direct evidence were affected by the 1991 Civil Rights Act amendments to Title VII. The newly added section 42 U.S.C. §2000e-2(m) provides that an unlawful employment practice is established "...when a complaining party demonstrates that race, color, sex, or national origin was a motivating factor for any employment practice, even though other factors motivated the practice." Thus direct evidenced if believed by the fact finder establishes a violation of Title VII even when the employer can demonstrate that neutral factors were controlling in its decision. The harsh consequences of this section are moderated by 42 U.S.C. § 2000e-5(g)(2)(B) where the employer proves that it would have made the same decision in the absence of a discriminatory motive. In such a case the relief that a court can grant against the employer is limited to declaratory and injunctive relief along with costs and attorney's fees. The court may not, however, award damages or order "...admission, reinstatement, hiring, [or] promotion..."

C. Proof of Discrimination by Disparate Impact

The concept of proving discrimination by disparate impact in a discrimination case was first articulated by the United States Supreme Court in Griggs v. Duke Power Co. There the Court stated that "If an employment practice which operates to exclude Negroes cannot be shown to be related to job performance, the practice is prohibited." This doctrine applies to facially neutral policies and practices that have a discriminatory effect even though the employer does not intend to use the prohibited qualifying standard to discriminate.

Title VII does not prohibit using tests to make hiring or other employment decisions as long as those test do not discriminate on the prohibited grounds. However the law does forbid use of tests and other selection criteria that disparately disqualify members of the protected groups unless those criteria can be proven by the employer to be job related and consistent with business necessity. Where non job related criteria disproportionately disqualify people in a protected group there is a "disparate impact."

Employers should exercise caution in their use of tests as well as other selection procedures. The EEOC has promulgated Uniform Guidelines on Employee Selection Procedures which may be found in the Code of Federal Regulations. The Guidelines require extensive records to be maintained to determine the effectiveness of tests and other employee selection procedures in predicting performance of persons both in and out of the protected groups. The Guidelines also require that a selection procedure which disparately impacts members of protected groups must be shown to be job related for the specific job for which it is used through validation studies.

The order and allocation of proofs in a disparate impact case as developed in a series of Supreme Court cases were codified in the 1991 Civil Rights Act at 42 U.S.C. § 2000e-2(k). The plaintiff must demonstrate that an employment practice has a disparate impact based on race, color, religion, sex or national origin. The plaintiff must identify each practice that causes a disparate impact except where the plaintiff can show that "...the elements of a respondent's decision making process are not capable of separation for analysis, the decision making process may be analyzed as one employment practice." The employer must then "...demonstrate that the challenged practice is job related for the position and consistent with business necessity;" This is a burden of production and not a burden of persuasion. The employer must merely show that "...the challenged practice serves in a significant way the legitimate employment goals of the employer. The Court cautioned that "...There is no requirement that the challenged practice be 'essential' or 'indispensable' to the employer's business for it to pass muster. The degree of scrutiny would be almost impossible for most employers to meet..."

If the employer sustains the business necessity defense the plaintiff can still prevail. To do so the plaintiff must prove that an alternative practice that does not have a discriminatory effect would serve the employer as well and the employer declines to adopt that alternative practice.

D. Statistical Proof of Discrimination

In International Brotherhood of Teamsters v. The United States, ("Teamsters"), the Supreme Court stated that statistics can establish a prima facie case of discrimination. The Court cautioned, however, that statistics "...are not irrefutable; they come in infinite variety and, like any other kind of evidence, they may be rebutted. In short, their usefulness depends on all of the surrounding facts and circumstances."

In Hazelwood School District v. United States, the Court elaborated on the what constituted the correct pool of individuals from whom to draw statistics in attempting to prove or disprove discrimination using this method. Hazelwood was a suit in which the government accused the school district of a pattern and practice of discrimination in hiring black school teachers. The court held that "...a proper comparison was between the racial composition of Hazelwood's teaching staff and the racial composition of the qualified public school teacher population in the relevant labor market." However, that figure alone would not establish discrimination. The case was remanded to the lower court for consideration of the extent to which the vigorous minority recruitment policies of the neighboring St. Louis school district diverted black teachers from the available labor the pool and "... to what extent Negro teachers employed by the city would prefer employment in other districts such as Hazelwood." The Court also found that the experience of other school districts in St. Louis County could conceivably require eliminating the African American teachers in the St. Louis School District from being considered as part of the relevant labor pool.

In Hazelwood the Court pointed out a contrast in determining the available people in a case like Teamsters which involved hiring of truck drivers and a case involving hiring of people with highly specialized skills such as school teachers. Truck driving skills are more readily available or they can be more easily acquired.

The proper application of statistical proof of discrimination was further considered by the Court in Ward's Cove Packing Co., Inc. v. Atonio, a case involving salmon cannery employees. The lower paying non-skilled jobs were primarily filled by non-white employees while the more remunerative skilled jobs were filled primarily by white employees. The Court found that the mere existence of a largely segregated work force did not in this case establish proof of discrimination. Referring to Hazelwood the Court held that the proper statistical comparison was between the percentage of non-white employees in the applicable work force with the requisite skills and the percentage of non-white employees actually hired by the company. The Court rejected the notion that "any employer who ha[s] a segment of his work force that was -for some reason-racially imbalanced, could be haled into court and forced to engage in the expensive and time consuming task of defending the 'business necessity' of the methods used to select the other members of his work force." The Court further found that "Racial imbalance in one segment of an employer's work force does not, without more, establish a prima facie case of disparate impact with respect to the selection of workers for the employer's other positions..." The Court also held that even where minorities are shown to be under-represented the plaintiff must show that "...the disparity --- is the result of one or more of the employment practices that they are attacking...specifically showing that each challenged practice has a significantly disparate impact on employment opportunities for whites and non-whites." A "...plaintiff does not make out a case of disparate impact by showing 'at bottom line,' there is a racial imbalance in the work force."

Discrimination plaintiffs who seek to prove their cases with statistics have another obstacle to overcome. The statistical sampling must be large enough to assure its relevance. In Harper v. Trans World Airlines, Inc. the court found that a sampling of five instances of where a an individual had to resign because of a rule barring employment of spouses, and four of those adversely affected were women, was too small to be significant. The court stated that "...statistical evidence derived from an extremely small universe, as is the present case, has little predictive value and must be disregarded." See also Watson v. Fort Worth Bank & Trust where the Court noted that statistics could potentially be flawed by "...small or incomplete data sets."

E. Proving Retaliation

Title VII, like those protective laws passed in its wake, shields employees from retaliation for having invoked its protection or supported those who have sought the protection of the act. The statute makes it "... an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment ... because he has opposed any practice made an unlawful employment practice ... or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing...[under Title VII]." (emphasis supplied) The two branches of retaliation are sometimes referred to as "opposition" and "retaliation."

For purposes of retaliation former employees are considered employees. Therefore employers may be sued under Title VII for giving a retaliatory employment reference to a subsequent employer or prospective employer.

The parties' burdens of proof in retaliation cases follow the order and allocation of proofs set forth in McDonnell Douglas v. Green, supra. To establish a prima facie case the plaintiff must show that he or she engaged in a statutorily protected activity, that there was adverse action on the part of the employer towards the employee and that there is a causal connection between the protected activity and the adverse action. To establish a causal connection the plaintiff must prove merely that "...the protected activity and the adverse action were not wholly unrelated." A plaintiff may on some occasions establish the requisite causal link by showing that there is "temporal proximity" between the individual's protected activity and the adverse action taken. Although temporal proximity is circumstantial evidence of retaliation it does not create an inference of retaliation. The Eleventh Circuit observed in Mize v. The Jefferson City Board of Education, "...the fact that the adverse employment decision took place shortly after Mize's complaint does not, by itself, permit a reasonable inference the Rook's decision was motivated by a desire to retaliate."

Once the plaintiff has demonstrated a prima facie case,

...the burden shifts to the defendant to rebut the presumption of retaliation by producing legitimate reasons for the adverse employment action. If the defendant offers legitimate reasons, the presumption of retaliation disappears. The plaintiff must then show that the employer's proffered reasons for taking the adverse action was actually a pretext for prohibited retaliatory conduct.

In Clark County School Board v. Breeden the Supreme Court considered what constitutes protected activity that might give rise to a retaliation case. Breeden had complained of alleged sexual harassment that grew out of the report of an off color comment in an application for employment that she was reviewing as part of her duties. The applicant was reported to have said "Making love to you is like making love to the Grand Canyon." The two co-workers with whom she was reviewing the application chuckled. When the plaintiff asked what the applicant's comment meant one said that he would tell her later. The Court reversed the Ninth Circuit's ruling for the plaintiff, finding that no reasonable person could have believed that this isolated incident amounted to sexual harassment.

F. After Acquired Evidence

It will sometimes happen that after an individual's employment was terminated that the employer will come upon some previously unknown misdeed that would have justified involuntary termination. This was the case in McKennon v. Nashville Banner Publishing Company an ADEA case in which the plaintiff lost her job in a reduction in force. During the course of the plaintiff's deposition it was learned that during her last year of employment she had copied confidential records to which she had access and taken them home to show to her husband. She had done so in anticipation of being laid off. The Supreme Court ruled that where one has been discharged for reasons that would violate a statute such as the ADEA or Title VII and the employer subsequently learns of misconduct that would have been a neutral reason justifying the dismissal the individual is not entitled to such equitable relief as reinstatement or front pay. The Court held that back pay may be recoverable from the date of the individual's discharge to the date of the discovery of the new evidence. This doctrine will only apply where the employer is able to establish that the employee would have been discharged for the particular misconduct alone if the employer had known of the misconduct at the time of the discharge. Presumably the after acquired evidence will not limit the employee's right to recover punitive damages or various compensatory damages.

IV. The Florida Civil Rights Act

The Florida Civil Rights Act (the "FCRA"), which was modeled after Title VII, states its prohibitions in like terms although it additionally covers discrimination on the basis of age, handicap and marital status. The FCRA makes it an unlawful employment practice for an employer "To discharge or to fail or to refuse to hire any individual, or otherwise to discriminate against any individual with respect to compensation, terms, conditions or privileges of employment, because of such individual's race, color, religion, sex, national origin, age, handicap, or marital status." It is also an unfair employment practice to "To limit, segregate, or classify employees or applicants for employment..." because of their status in one of the protected groups in any way that would adversely affect their employment status or opportunities. Like Title VII the FCRA bars discrimination by labor unions and employment agencies. Because of its being modeled after Title VII courts interpreting the statute will follow precedent established by courts in interpreting the federal statute. See Florida Department of Community Affairs v. Bryant.

The FCRA is administered and enforced by the Florida Commission on Human Relations (the "FCHR"). The statute covers persons "employing 15 or more employees in each working day in 20 or more calender weeks in the current or preceding calender year and any agent of such a person." In addition to attorney's fees the Florida statute allows an award of back pay to the plaintiff as well as unlimited recovery for "...mental anguish, loss of dignity, and any other intangible injuries." Punitive damages are also available but are limited to $100,000 against individuals. No punitive damages are permitted against the state and its agencies. Like Title VII and the Americans with Disabilities Act the FCRA does not allow punitive damage against governmental bodies. The total damages that can be assessed against governmental agencies is limited to $100,000.

In order to invoke the jurisdiction of the FCHR an individual must file a verified administrative complaint within 365 days of the alleged violation. The FCHR may then conduct an investigation to determine whether or not there is reasonable cause to believe that a discriminatory act has been committed. A reasonable cause determination by the FCHR is not admissible as evidence to prove the underlying facts in any proceeding under the FCRA. A complainant who receives a determination of reasonable cause has one year from the date of the determination to either bring a civil action under the statute or request an administrative hearing. In a judicial action under the statute the parties have the right to a jury trial. In Joshua v. The City of Gainesville the Florida Supreme Court held that where the FCHR makes no determination within 180 days of the filing of the charge the complainant is allowed four years to file civil suit which is the time allowed for bringing suits based on statutory liability.

Where there is a no reasonable cause determination the charging party may not sue under the FCRA but must pursue an administrative appeal. The complaining party has 35 days to appeal that determination. Where the FCHR fails to either issue a determination of whether there is reasonable cause within 180 days of the filing of the complaint or conciliate the claim the charging party may bring a judicial action. In White v. City of Pompano Beach a panel of Florida's Fourth District Court of Appeals considered the affect of a written communication from the EEOC stating that the agency "...is unable to conclude that the information obtained establishes violation of the statute. This does not certify that the respondent is in compliance with the statutes." The court held that this was not equivalent to a finding of no probable cause. Rather it was a failure to make a determination or conciliate within 180 days. The plaintiff thereby was enabled to file suit without making an administrative appeal as would be the case if there was a finding of no reasonable cause.

In White the court noted its agreement with the Second DCA in Cisko v. Phoenix Medical Products, Inc. on this issue and its disagreement with the Third DCA in Woodham v. Blue Cross and Blue Shield of Florida, Inc. In Woodham the court held that what it described as a "no cause" finding from the EEOC (likely identical to the communication received by White) was equivalent to a no probable cause finding by the FCHR. Accordingly Woodham's FCRA action was dismissed as the court reasoned that his only option was to file an administrative appeal of the EEOC no cause determination to the FCHR.

The FCHR is a deferral agency with a "work sharing" agreement with the EEOC. In Wells Fargo Guard Services, Inc. v. Lehman Florida's Third District Court of Appeals sitting en banc held that a charge is deemed to have been filed with the FCHR on the date that it is filed with the EEOC. The court pointed out that under the work sharing agreement "the EEOC and the [FCHR] each designate the other as its agent for the purpose of receiving and drafting charges." Thus Lehman was able to file his complaint 180 days after filing with the EEOC even though he did not

check the block on the EEOC charge affidavit to request a dual filing.

V. Title VII Protection against Sexual Harassment

A. What Constitutes Sexual Harassment

Employers may not discriminate against employees on the basis of sex in "...terms, privileges and conditions of employment." Sexual harassment is discrimination in terms, privileges and conditions of employment. The EEOC focused more of its attention on this issue when it issued its first guidelines on sexual harassment in 1980. The guidelines describe sexual harassment as:

Unwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature ...when (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or (3) such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive working environment.

The guidelines further provide that in determining whether conduct rises to the level of hostile environment sexual harassment it is necessary to look at the "...record as whole and at the totality of the circumstances, such as the nature of the sexual advances and the context in which the alleged incidents occurred." The Supreme Court expanded on this in Meritor Savings Bank v. Vinson where it stated that the harassment must be sufficiently severe and pervasive to alter the conditions of the individual's employment.

In Harris v. Forklift Systems the Supreme Court held that the conduct must meet two criteria to constitute actionable sexual harassment, an objective standard and a subjective standard. The objective standard requires that the conduct must be sufficiently severe and pervasive that a reasonable person would find it abusive. Mere insults or conduct that the unduly sensitive might find objectionable does not by itself rise to the level of justiciable sexual harassment. The Harris court held that the relevant circumstances include the frequency and severity of the conduct, whether it is humiliating or threatening and does it unreasonably interfere with the employee's work performance. That which is merely an offensive utterance is not by itself proscribed sexual harassment. In Oncale v. Sundowner Offshore Services, Inc. the Supreme Court declined to find that Title VII is "...a general civility code for the American workplace."

Certain explicit and offensive verbal conduct has been found as a matter of law not to create 0a sexually hostile environment. In Galloway v. General Motors Service Parts Operation the plaintiff was given an obscene gesture along with verbal abuse including being called a sick bitch. The Court found that the conduct did not create a hostile environment. There was a like finding in Weiss v. Coca Cola Bottling Company of Chicago where the plaintiff complained about being asked for dates, being called a dumb blond, being asked questions about her personal life, having a supervisor place his hand on her shoulder, having "I love you" signs put in her work station and one or more attempts to kiss her.

In Rabidue v. Oceola Refining Co. an exceptionally vulgar supervisor frequently made obscene comments about women and directed obscenities at the plaintiff. Additionally there were pictures of nude or scantily clad women in the workplace. The court stated in 805 F.2d 622 that

...Henry's obscenities, although annoying, were not so startling as to have affected seriously the psyches of the plaintiff or other female employees. The evidence did not demonstrate that this single employee's vulgarity substantially affected the totality of the workplace. The sexually oriented poster had a de minimis effect on the plaintiff's work environment when it is considered in the context of a society that condones and publicly features and commercially exploits open displays of written and pictorial erotica at the newsstands, on prime-time television, at the cinema and in other public places.

In Shepherd v. The Comptroller of Public Accounts of the State of Texas the plaintiff alleged that for two years she endured gross comments about her anatomy and attempts to look down her clothing along with touching of her arms. The court ruled that the foregoing conduct did not create a hostile environment.

The second criteria put forth by the Court in Harris is that the victim must subjectively perceive the conduct to be actionable. Some individual's may be indifferent to or impervious to highly atrocious behavior. Courts have found that the fact that a plaintiff has endured the offensive actions for an extended period of time without asking the actor to stop or without complaining to anyone else in authority indicates that the individual did not subjectively find the conduct to be abusive.

References to the foregoing cases are not suggestion that employers should condone or permit such antediluvian behavior in the workplace. Even where an employer prevails each case still represents significant cost, both in money and in distracting the attention of important personnel from the functions that they are employed to perform. These cases also suggest morale problems that may be a severe detriment to the employer and which may cost the employer the services of one or more valuable employee. Clearly such conduct should be purged from the employment environment. Relying on cases like those discussed above should be a last resort where a frivolous claim is made or where the employee's inaction failed to provide an opportunity for corrective action.

B. When is an Employer Liable for Sexual Harassment

The Supreme Court made it clear in Meritor Savings Bank v. Vinson, supra, that an employer is not automatically liable for the sexually harassing conduct of a supervisor. The Court held that traditional agency law should be looked at for guidance. The Meritor decision left the lower courts groping for concepts on which to base employer liability for supervisor sexual harassment.

The Supreme Court undertook to articulate a uniform standard when it handed down the decisions in two cases on the same day, Faragher v. The City of Boca Raton and Burlington Industries v. Ellerth. In those cases the Supreme Court ruled that an employer is presumptively liable where an employee proves his or her immediate supervisor or a manager in the direct line of supervision over the employee has created a sexually hostile working environment. After such a showing has been made by a plaintiff the employer can only escape liability by proving an affirmative defense by a preponderance of the evidence. That defense is that it exercised due care to prevent such conduct and that the employee unreasonably failed to take advantage of preventative or corrective measures presented by the employer. The Court also held that "No affirmative defense is available , however when the supervisor's harassment culminates in a tangible employment action such as discharge, demotion, or undesirable reassignment." In such a case the employer cannot escape liability.

C. How Should an Employer Protect Itself From Claims of Sexual Harassment

Faragher and Ellerth grant a defense to hostile environment sexual harassment to the employer who exercises due care. The employee who suffers from sexual harassment must make use of opportunities provided by the employer to take corrective action before being eligible for legal redress. When the employer is aware of the offensive conduct the ball is in its court to take appropriate action to end it whether the offender is a supervisor or a peer of the employee.

To avail itself of the defense provided by the Court the employer should in the first instance have an anti sexual harassment policy in place. The policy should be so well disseminated that no employee will be able to make a reasonable assertion that he or she not was aware of the policy. It should be disseminated as part of new employee indoctrination, in employee handbooks and on employee bulletin boards. The policy should be reaffirmed in periodic meetings at which attendance records are taken and retained.

An anti sexual harassment policy should furnish alternative avenues for reporting violations. It will be of little benefit to an employee if she is able to raise a complaint only with the person who is the source of the problem. Some employers effectively make use of a hot line to report transgressions.

Once an employer becomes aware of allegations of sexual harassment immediate steps must be taken to avoid further exacerbation of the situation. It may be beneficial to separate the complainant and the individual who is allegedly committing the abusive acts, at least while an investigation is pending. The investigation should proceed promptly to determine the credibility of the complaint. Employers are constrained to remember that they have obligations to the accused as well as the accuser.

If there is merit in an employee's complaint prompt corrective action should be taken to assure that there will be no recurrence, at least not with this particular transgressor. The complaining employee should be assured that corrective action has been taken. Periodic follow up conversations with the employee should also take place to determine if the offending conduct has ceased.

III. The Age Discrimination in Employment Act (ADEA)

A. Purpose and Coverage of the ADEA.

The ADEA which was passed by Congress in December of 1967 points out the disadvantage of older workers in retaining employment or regaining employment when displaced from jobs. Congress found that setting arbitrary age limits without regard to potential for job performance was common and that unemployment with attendant deterioration in skills and morale was higher for older workers as compared to those who are younger. The ADEA's stated purpose is

Those protected by the ADEA, with certain exceptions and exemptions to be discussed later, are individuals who are at least 40 years of age. A covered employer is one who is "...engaged in an industry affecting commerce who has 20 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year."

It is an unlawful employment practice for a covered employer "...to fail or refuse to hire or to discharge any individual or otherwise to discriminate against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual's age." Additionally, employers are not permitted to limit, segregate or classify employees in ways which would negatively affect their employment status because of age. Employers may not reduce the wage rate of any employee because of age.

The ADEA defines an employee as an individual employed by an employer but it exempts from that definition elected officials of a state or political subdivision of a state. Certain staff members or policy making appointees are also exempted from the definition of employee.

Although the ADEA protects employees only after they have attained at least 40 years of age, Florida employers should be aware of the broader coverage of the Florida Civil Rights Act (the "FCRA"). The FCRA also bars discrimination on the basis of age, but it does not limit its prohibition to any specific age group. Therefore, the FCRA forbids discrimination against any individual on the basis of age. How the prohibition against age discrimination will be applied with respect to persons at the lower end of the age spectrum is uncertain. Although other states have similar protections, there is a dearth of precedent applying the age discrimination statutes to the younger individuals.

The ADEA prohibits discrimination against one who has opposed any practices made unlawful by the Act. Discrimination against one who has filed a charge, testified, or assisted or participated in an investigation or suit under the Act is also prohibited. In EEOC v. Cosmair, Inc., L'Oreal Hair Care Division the court found that it was unlawful retaliation to discontinue severance payments to a former employee who had signed a release, when he subsequently filed a discrimination charge with the EEOC. The court found that a release of the right to file an EEOC claim is void as against public policy. In EEOC v. Board of Governors of State College the court found it was retaliation for a state university to discontinue processing grievances through its collectively bargained grievance procedure for employees who had also filed charges with the EEOC. (See also Williams v. Bristol-Myers Scribb Co. where the court held it was a jury question whether the plaintiff was fired for falsification of records or in retaliation for having testified in a co-worker's age discrimination suit.)

It is also unlawful for an employer to publish advertisements, notifications or other materials indicating any preference or specification based on age.

The ADEA as originally enacted provided for administration and enforcement by the Secretary of Labor. Pursuant to a reorganization plan effective February 23, 1978 the powers of the Secretary of Labor were transferred to the Equal Employment Opportunity Commission (the "EEOC"). The EEOC is empowered to issue rules and establish such reasonable exemptions from the ADEA as it may find necessary and proper in the public interest. The regulations issued by the EEOC are found in the Code of Federal Regulations beginning at 29 CFR §1625.

B. Exemptions From Coverage Under the ADEA

In addition to the exemption for certain state officials, the ADEA contains exemptions for some other types of employees. When an employer claims such an exemption, the burden of proof is on the employer to prove the exempt status of the employee. Therefore, close attention should be paid to whether the job of the employee for whom an exemption is claimed fulfills the requirements for the exemption.

The ADEA exempts "bona fide executives or high policy makers" who are not less than 65 years of age and who have held such a position for at least two years immediately before retirement. To be exempt such an employee must also be immediately entitled to a non-forfeitable annual retirement benefit of at least $44,000.

The executive or high policy maker exemption is not intended to apply to middle-management employees no matter how great their retirement income. It is limited to a few top level employees who exercise substantial executive authority over a significant number of employees and a large volume of business. Examples of employees covered under the executive exemption would be the head of a large local or regional operation or the head of certain large departments in company headquarters such as finance, marketing, legal, production and manufacturing.

The high policy maker exemption also applies to individuals who do not have significant line authority but who play an important role in the development and recommending the implementation of corporate policy. This might include a chief economist or a research scientist.

The Act further exempts state or municipal firefighters or law enforcement officers employed by a state or a political subdivision of a state where age limits are set by state or local law. These individuals may be retired pursuant to "...a bona fide hiring or retirement plan that is not subterfuge to evade the purposes of [the] Act."

The ADEA provides that it is not an unlawful employment practice for a covered entity "...to observe the terms of a bona fide seniority system...which is not a subterfuge to evade the purposes of [the] Act." The regulations provide that to be bona fide a seniority system must use length of service as a primary criteria for allocating opportunities or benefits, although the system may be qualified by merit factors. If the system gives lesser rights or favors treatment to those with longer service it may be found to be a subterfuge to evade the purposes of the Act.

The ADEA also permits employers to act on age based criteria "...where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age...". The regulations provide that the employer asserting a bona fide occupational qualification (BFOQ) defense has the burden or proving that the age limit is reasonably necessary

. The employer must prove that substantially all the people excluded from the job are disqualified or some of the individuals excluded have a disqualifying trait that cannot be ascertained except by reference to age. The "reasonable factor other than age" defense is not particularly susceptible to definition and must be considered on a case by case basis. In general different treatment based on the average cost of employing older employers is not permitted.

In Transworld Airlines, Inc. v. Thurston the Supreme Court held that preventing airline pilots who have reached the age of 60 from bumping into flight engineer's positions was not based on a BFOQ. Unlike pilots, flight engineers are not barred by FAA regulations from working on commercial carriers beyond the age of 60. Pilots disqualified from their jobs before reaching 60 were permitted to bump into flight engineer's jobs. Challenges to airlines' applying the FAA rule which prohibits pilots 60 years or older on commercial carriers have invariably failed. See Professional Pilots Federation v. Federal Aviation Administration.

State agencies are exempted from ADEA suits by individuals under the Eleventh Amendment to the Constitution which prohibits individuals from suing states in Federal Court. See Kimel v. Florida Board of Regents.

C Enforcement

Employers and other covered entities are required to post notices providing information on the applicability of the ADEA in form as prescribed by the EEOC. It must be posted in a prominent and accessible place where it can readily be observed by employees, applicants for employment and union members.

Employers are required to make and maintain certain records. Records must be maintained for three years showing the name, address, date of birth, occupation, rate of pay and weekly compensation of each employee. Employers must maintain certain other records for a period of one year. These include applications or other inquiries about employment, records of promotions, demotions, transfers, layoffs, recalls, discharges, tests administered to be considered in connection with personnel actions, physical examination results to be considered in connection with personnel actions and descriptions of employee benefit plans. When the EEOC commences an enforcement action, it may require the employer to retain any of the foregoing records until the final disposition of the action. The EEOC has the right to inspect the required records during the employer's general business hours.

Suits enforcing the rights of individuals under the ADEA may be brought by the EEOC or by the aggrieved individual. The plaintiff may recover lost wages. Where the violation is found to be willful, recovery will include an equivalent amount in liquidated damages. A violation is willful where the employer either knew or showed reckless disregard for the matter of whether its conduct violated the ADEA. Transworld Airlines v. Thurston. Where a violation of ADEA is found courts are not limited to awarding monetary relief. They may order the hiring one who was not offered a job because of age or they may order the promotion of one who was denied advancement because of age. A court may order the re-hire of an employee who was discharged in violation of the ADEA. Where reinstatement would not be an appropriate remedy the court may order the payment of lost future wages or "front pay." See Denesha v. Farmers Insurance Exchange (Front pay in lieu of reinstatement is appropriate where the hostility between the parties is too great to allow for a satisfactory working relationship) and Eskra v. Provident Life and Accident Insurance Co. (Front pay is appropriate only where there are egregious circumstances. The fact that the employer had offered Eskra another job, which Eskra declined, indicated that there were no demonstrated egregious circumstances.)

Attorney's fees can also be awarded to the prevailing plaintiff in an ADEA suit. It is a foregone conclusion that attorney's fees will be awarded to an employee who prevails in an ADEA action.

An employee may bring a class action on behalf of other employees similarly situated. The ADEA incorporates the "opt in" class action provisions of the Fair Labor Standard Act. No person can be made a party to an ADEA class action unless the individual's consent is given in writing and filed with the court. In some instances an employee who has not filed a charge with the EEOC may "piggy back" as an opt in plaintiff in an action brought by a similarly situated employee who has filed a timely charge. Grayson v. K-Mart Corp. For a contrary view, see Whalen v. W.R. Grace & Co.

An individual may not bring a civil action until 60 days after filing a charge alleging unlawful discrimination with the EEOC. The charge must be filed no later than 300 days after the actions complained of in a state such as Florida which has an act with comparable coverage. Such a state is referred to as a "deferral state." Where there is no such state agency, the aggrieved person has only 180 days to file an administrative charge. In a deferral state suit cannot be brought by an individual until 60 days after a claim is filed with the state agency such as the Florida Civil Rights Commission unless the agency terminates its proceedings sooner than 60 days after the claim is filed with it.

The EEOC may conduct investigations on its own initiative. Thus if a charging party withdraws his or her charge, the Commission may still proceed to investigate. The EEOC's power to investigate includes entering establishments, inspecting and copying records, interviewing employees and supervising the payment of sums owed. The EEOC also has the power to subpoena records and the attendance and testimony of witnesses.

Sometimes questions may arise where an employer is uncertain of the consequences under the ADEA of an action or a proposed action. An opinion letter may be requested by writing to the Equal Employment Opportunity Commission at 1801 L Street, N.W., Washington, D.C. 20507. The letter should provide a concise statement of the issues, a reasonably full statement of the relevant facts and address of the person making the request. 29 CFR §1626.17. The Commission may issue an opinion letter or provide informal advice. 29 CFR §1626.18. An opinion letter may be relied upon by the employer as though it were a written regulation, order, ruling or interpretation.

D. The Correlation Between Length of Service, Age and Salary: Age is Not Wage.

Obviously those who have most service with an employer are likely to be the employer's older employees. Not infrequently those who are older and have more service earn more than their younger peers. In some instances it is possible to replace them with younger employees at lower wages. It has sometimes been asserted that adverse action against employees with greater earnings is in and of itself discrimination in violation of the ADEA. This was the holding of the court in Metz v. Transmit Mix, Inc. The Supreme Court addressed this issue in Hazen Paper Company v. Biggins, specifically rejecting the reasoning of the Metz case. The Supreme Court held that the employer did not violate the ADEA when it discharged a 62 year old employee a few weeks before he would have been employed for the ten years necessary to vest in pension benefits. Finding in the employer's favor on the ADEA claim the court stated at 113 S.Ct. 1705 "we clarify that there is no disparate treatment under the ADEA when the factor motivating the employer is some feature other than the employee's age." The court further noted that "Because age and years of service are analytically distinct, an employer can take account of one while ignoring the other and thus it is incorrect to say that a decision based on years of service is necessarily 'age based' ". Id at p. 1707.

Where a discharged employee happens to earn a greater salary by virtue of greater service and happens to be in the protected age group, these facts by themselves do not make the employer's act violative of the ADEA. In Broaddus v. Florida Power Corporation (11^th Cir. 1998) the court stated that

The ADEA does not prohibit an employer from making an employment decision on the basis of higher salaries, increased benefits, or claims for medical expenses even though these characteristics are often correlated with an employee's age. Those decisions may violate ERISA, but they do not violate the ADEA. (Emphasis supplied)

The foregoing should not be taken as an invitation to discharge employees to prevent them from vesting in pension benefits. As it can be seen in Broaddus the court also made an observation consistent with what the Supreme Court noted in Hazen Paper, supra, that the Employee's Retirement Income Security Act ("ERISA") protects an employee from such conduct.

E. Replacement by a Younger Employee in the Protected Age Group.

An employer cannot defend an ADEA claim on the basis that a dismissed employee was replaced by another employee over 40 years old where the replacement is significantly younger than the person replaced. In O'Connor v. Consolidated Coin Caterers Corp. a dismissed 56 year old employee was replaced by a 40 year old. The older employer was allowed to proceed with his claim even though the replacement was also in the protected age group. The Supreme Court reasoned that the ADEA bars discrimination because of age, not because one is in the protected age group. However, the court observed that discrimination cannot be inferred where the age difference between the dismissed worker and the replacement is insignificant. See also Isenbergh v. Knight-Ridder Newspaper Sales, Inc. And Keller v. ORIX Credit Alliance, Inc.

The EEOC regulations go even further than the decision in the O'Connor case. At 29 CFR §1625.2(a) the regulations state that where two persons apply for a job, one 42 and the other 52, the employer cannot reject either one because of age. Thus according to the EEOC it is unlawful to give preference on the basis of age to an older person over a younger person in the protected age group.

F. The "Same Actor" Defense

Where the individual who hires an ADEA plaintiff is the same person who fired that individual there is an inference that the actor's views on age have not changed during the plaintiff's employment. This is particularly so where the time between the hiring and the discharge are not significantly far apart.

In Grady v. Affiliated Central, Inc., where the plaintiff was fired for incompetence seven days after she was hired. The court "...when the person who made the decision to fire was the same person who made the decision to hire, it is difficult to impute an invidious motivation that would be inconsistent with the decision to hire. This is especially so where the firing has occurred only a short time after the hiring." (Citations omitted)

The fact that the same actor is involved in the hiring and firing is only one factor that will be considered with all others. It is not likely to stand as a defense all by itself, but it will lend support to the employer's decision where other valid reasons for the employer's decision are advanced.

IV. Avoiding, Defending and Resolving ADEA Claims

The Older Workers Benefit Protection Act (OWBPA)

The best defense to any type of employment discrimination is carefully examining the basis and consequences of an adverse action before initiating it. Consider how the affected employee is to be treated in comparison to those in comparable situations, both in and out of the protected group.

When a complaint is received such as an attorney letter, an administrative charge from the EEOC or the FCHR, or when a suit is filed, employers should take a second look at the defensibility of the action. The employer should balance its interest in defending the action with both the cost of the defense and the likelihood of success. If re-examination suggests that resolution is the best course, the earlier settlement is reached, the less expense to the employer. It may be much easier to resolve the case before both the employer and the employee have incurred expenses. Thus it may be more economical to settle than to fight, even for the prevailing party. Additionally, the employer must consider that attorney's fees will be awarded against the employer if the employee prevails.

One technique that will immediately curtail the damages available to the employee is to make an unconditional offer of a job to the person who is complaining about refusal to hire or discharge. The job should be comparable to the position sought or lost. The offer should not be conditioned on the employee's releasing his or her claim. It should be made clear that the employee can continue to pursue the claim even after accepting the job. Where an unconditional job offer is made promptly there will be little if any back wages recoverable. Likewise, liquidated damages, if any, will be negligible. See Ford Motor Co. v. EEOC, where the court stated that the purpose of Title VII of the 1964 Civil Rights Act (and by inference the ADEA and similar statutes) is to "make the victims of unlawful discrimination whole by restoring them so far as possible...to a position where they would have been were it not for the unlawful discrimination. The offer of reinstatement must be 'a job substantially equivalent to the one he was denied.' id at p. 232. The offer must not be an offer to compromise the claim. It may not be conditioned on the employee giving up the right to any claim. Lightfoot v. Union Carbide Corp.

B. The Older Workers Benefit Protection Act (OWBPA)

Certain precautions must be observed in settling an ADEA claim. The employer will want a waiver or a release of the employee's claims. To be valid and enforceable a waiver of an ADEA claim must fulfill certain requirements. These requirements are spelled out in ("OWBPA") which amended the ADEA in October of 1990. OWBPA requires that a waiver must be "knowing and voluntary." The minimum requirements of OWBPA for a waiver to be knowing and voluntary are set forth in the statute:

Where a waiver is in settlement of a charge filed with the EEOC only the first five of the above requirements apply. However, the employee must be given a reasonable period of time to consider whether to sign. 29 U.S.C. §626(f)2(A) and (B). It is recommended that the employer be generous in allowing time. In at least one case the court found for determining a reasonable time to be the time limits for signing where no charge is involved. Jacobs v. New York Financial Center Hotel.

Where a waiver is requested in conjunction with the termination of employment it is necessary to provide the employee with the information required by OWBPA at the beginning of the period during which they have to consider whether they will sign the release.

Although the employer and the employee may settle an ADEA claim as between themselves, their settlement cannot bar the EEOC from proceeding. However, the EEOC cannot make a recovery for the benefit of the employee who has signed a release. EEOC v. Cosmair, Inc., L'Oreal Hair Care Division, supra and EEOC v. Kidder Peabody & Co.

On occasions employees have settled their claims and then filed suit claiming that the waiver did not bind them as it was invalid. Unfortunately for employers, the employee who has received consideration for signing a release does not have to tender back that consideration to be able to maintain a suit since the decision in Oubre v. Entergy Operations Inc. Sums paid to the plaintiff will, however, be set off against any subsequent judgement in favor of the employee. The moral is be certain that all the requirements for a release to be knowing and voluntary have been fulfilled in all cases. Where an ADEA case is involved be particularly diligent in observing the requirements of OWBPA.

V. The Americans With Disabilities Act (the "ADA")

A. What is a Disability

When Congress passed the ADA in 1990 it took note of the fact that "... some 43,000,000 American have one or more physical or mental disabilities, and this number is increasing as the population is growing older." Congress determined that "...the Nations proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self sufficiency for such individuals." Among the purposes of the ADA was "... to provide a clear and comprehensive mandate for the elimination of discrimination against individuals with disabilities." Title I of the ADA deals with the prevention of discrimination in employment.

The Equal Employment Opportunity Commission is charged by the ADA with issuing Regulations. These regulations are found in the Code Of Federal Regulations at 29 CFR §1630 et seq. The regulations define a "disability" as "... a physical or mental impairment that substantially limits one or more major life activities; ...a record of such an impairment...or being regarded as having such an impairment." A "physical or mental impairment" is a condition that affects any of the major body systems, "...a mental or physical disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities." A "major life activity"

"...means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working."

In determining whether an individual is substantially limited in a major life activity the regulations take into consideration the severity of the impairment, its expected duration, and its long term impact. As regards the major life activity of working a person is substantially limited if he or she is

...significantly restricted in the ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills and abilities. The inability to perform a single, particular job does not constitute a significant limitation in a major life activity of working.

In Toyota Motor Manufacturing Company, Kentucky, v. Williams the Supreme Court held that the plaintiff, who suffered from carpal tunnel syndrome, was not substantially limited in a major life activity where she was restricted in performing certain manual tasks. The Court found that in determining if one is disabled a court must look not at the specific disability. Rather each individual's condition must be analyzed on a case by case basis. The effects of a disability must be considered beyond an individual's limitations in the workplace. It held that:

...to be substantially limited in performing manual tasks, an individual must have an impairment that prevents severely restricts the individual from doing activities that are of central importance to most peoples lives. The impairment's impact must also be permanent or long term.

Ms. William's condition "...caused her to avoid sweeping, to quit dancing, to occasionally seek help in dressing, and to reduce how often she plays with her children, gardens and drives long distances." Nevertheless the Court held that the plaintiff's limitations "...did not amount to such severe restrictions in the activities that are of central importance to people's daily lives that they establish a manual-task disability as a matter of law."

In Sutton v. United Air Lines, Inc. the Court held that "...that the determination of whether an individual is disabled should be made with reference to measures that mitigate individual's impairment, in this instance eyeglasses and contact lenses ..." The vision of the plaintiffs, who were severely myopic, was correctable with lenses to 20/20. They were therefore held not to be disabled within the meaning of the ADA.

The Sutton court also held that being an individual's being disabled from performing one job or a limited class of jobs does not necessarily bring that person within the protection of the ADA. "When the major life activity under consideration is that of working, the statutory phrase "substantially limits" requires, at a minimum, that plaintiffs allege they are unable to work in a broad class of jobs."

B. What is Prohibited

The ADA forbids an employer to "...discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment." It is discrimination to limit, segregate, or classify applicants or employees "...in a way that adversely affects the opportunities or status of such applicant[s] or employee[s] because of the disability of such applicant[s] or employee[s]."

A "qualified person with a disability" is one who has the required skills, training or education to perform a job in question "and who, with or without reasonable accommodation, can perform the essential functions of such position." The essential functions "do[ ] not include the marginal functions of the position." The employer's judgement along with a written job descriptions prepared by the employer before of undertaking to fill a position are given weight as to what constitutes an essential function.

An employer may not use "...criteria, standards or methods of administration..." that discriminate on the basis of disability. Discrimination by association is also prohibited. An employer may not discriminate in employment or employment benefits against one because of the known disability of one with whom the individual has a relationship. For example an employer may not refuse to hire or to retain a qualified individual because that person has a disabled spouse, parent or child who might make demands on his or her time or on the employer's medical plan.

A highly significant requirement of the ADA is for employers to make reasonable accommodations "...to the known physical limitations of an otherwise qualified individuals with a disability who is an applicant or employee, unless [the employer] can demonstrate that the accommodation would impose an undue hardship..." on the operation of its business. Employers may not deny employment opportunities to otherwise qualified individuals with disabilities because of the need to make reasonable accommodations. Neither may an employer make use of

...qualification standards, employment tests or other selection criteria that screen out or tend to screen out an individual with a disability or a class of individuals with disabilities unless the standard, test or other selection criteria is shown to be job related and consistent with business necessity.

The regulations regard a wide variety of accommodations as reasonable. They include modifications to the job application process, to the work environment, making the employers facilities accessible, job restructuring, part-time or modified work schedules, reassignment to a vacant position, and providing special equipment or modifying existing equipment. In determining whether a particular accommodation will constitute an undue hardship for an employer consideration is given to such factors as the cost, available tax credits or outside funding, the employer's financial resources and the impact the accommodation would have on the employer's operations, including the ability of other employees to perform their work.

The statute specifically allows an employer to disqualify from employment one who "...pose[s] a direct threat to the health or safety of other individuals in the workplace." A regulation promulgated by the EEOC also permits an employer to deny a position to one whose employment would "...pose a direct threat to the health or safety of the individual..." The Supreme Court recently upheld the validity of this regulation in Chevron U.S.A., Inc. v. Echazabal.

In U.S. Airways, Inc. v. Barnett the Supreme Court held that in most cases an employer does not have to accommodate a disabled individual by violating a seniority system to allow the individual to take a position to which another employee has seniority rights. In such a case the plaintiff's claim would fail as a matter of law in the absence of special circumstances. One such special situation might be a showing of frequent exceptions having been made in the past leading to other workers not having a reasonable expectation of benefitting by virtue of their seniority.

The ADA requires administering tests in a manner to ensure that one with a disability is

accurately tested. When an individual is tested

... who has a disability that impairs sensory, manual, or speaking skills, such test results [must] accurately reflect the skills, aptitude or whatever other factor of such applicant or employee that such test purports to measure, rather than reflecting the impaired sensory, manual, or speaking skills of such employee or applicant (except where such skills are the factor that the test purports to measure).

In some instances the ADA will require an employer to make special provisions such as providing additional time, special lighting, giving a written test orally or an oral test in writing, giving the test in Braille or providing a reader and insuring accessability to the location where the test is administered.

An employer is not permitted to "...conduct a medical examination or make inquiries of a job applicant as to whether such applicant is an individual with a disability or as to the nature or severity of such disability." An employer may, however, "...make preemployment inquiries into the ability of an applicant to perform job-related functions." An employer is permitted to require a medical examination after a job has been offered to an applicant and before the commencement of the individual's employment duties, but only if a physical examination is required of all new employees in the same category, whether or not they are disabled.

The ADA contains strict confidentiality requirements for employee medical information. It must be maintained in a separate file apart from the individual's other employment records. Disclosure of this information is limited to supervisors or managers who need the information to address limitations on the individual's work restrictions or necessary accommodations. It may also be disclosed to first aid or safety personnel if the individual might require emergency treatment. In addition it may be disclosed to government personnel who are investigating the employer's compliance with the ADA.

The ADA provides a separate set of restrictions on the obtaining of medical information from employees who are already working for the employer. Medical examinations and inquiries as to whether a current employee has a disability and the nature and severity of the disability may not be made "...unless such examination or inquiry is shown to be job related and consistent with business necessity." Employers should make note of the fact that the statute requires job relatedness and business necessity only for information about current employees. This restriction does not apply to post offer information sought before an employee starts to work.

An employer is permitted to offer voluntary medical examinations and medical histories that are part of a health program made available to employees in which the employer may also inquire about an employee's ability "...to perform job related functions." Information obtained pursuant to a voluntary health program or about an individual's ability to perform job related functions must also be kept in a separate file. Dissemination is limited in the same manner as information obtained in a post offer examination.

The EEOC has undertaken to answer a number of questions in its "Title I:EEOC Guidance" dated October 10, 1995. The Guidance provides some examples of does and don'ts in obtaining pre offer information from applicants. For example it is permissible to require an applicant to lift and carry an object a given distance but it is not allowable to measure the person's heart rate or blood pressure after the task is performed. The Guidance admonishes against psychological tests interpreted by a psychologist to determine the presence of a mental illness. Psychological examinations that are not medical are not prohibited by the ADA. An impermissible pre-offer medical test would be one that would reveal a person's mental conditions such as excessive anxiety or depression. The Guidance, while prohibiting pre-offer eye examinations by a ophthalmologist or an optometrist, permits a basic vision test to see if an individual can read or discern objects sufficiently to perform the job in question.

The Guidance gives counsel on eliciting other pre-offer information. An employer may ask applicants if they can perform the job or the various functions of the job with or without accommodation. The employer may ask applicants to demonstrate or describe how they will perform job functions, but the employer may not ask in such a way as to elicit information from them as to whether they need an accommodation.

If an applicant is a wheel chair user or has some other disability that is obvious or known to the employer, the employer may ask what accommodation, if any, is necessary for the applicant to perform the job. An employer may also ask one to voluntarily self identify as disabled as part of an affirmative action plan if the employer intends to use the information for the benefit of disabled individuals.

The ADA does not prohibit preemployment drug tests. The statute specifically provides that one who is currently engaging in the illegal use of drugs is not a "qualified individual with a disability." Additionally "A test to determine the illegal use of drugs [is] not considered a medical examination." It follows that an applicant or employee may be asked if he or she is illegally using drugs currently. An employer may not ask questions about legal use of drugs, as that information might reveal information about a disability. However if an employee or applicant tests positive for drugs the employer may determine if it is the result of prescription medicine that the individual is taking legally. It is important for employers to be aware that the ADA does protect those who have successfully completed or who are currently participating in a drug rehabilitation program.

Alcoholism is a protected disability under the ADA. Therefore an applicant or an employee may not be asked questions to determine whether he or she is an alcoholic. However the ADA specifically allows employers to prohibit the use of alcohol and illegal drugs in the workplace and to require that employees not be under the influence of alcohol while at work. An employer may also hold an employee who is alcoholic or who engages in the illegal use of drugs to the same standards of conduct and performance as other employees even if the employee's deficiencies are related to alcoholism or illegal drug use.

D. Enforcement of the ADA

The ADA adopts by incorporation the enforcement provisions of Title VII. One who wishes to enforce his or her rights under the ADA must file an administrative with the EEOC within the same time limits and with the same deferral requirements that are applicable under Title VII. The EEOC may investigate and sue to cure violations on its own initiative. The same remedies are also available under the ADA. However an employer may be relieved of liability for punitive damages if, after learning of the need for accommodation, it has engaged in good faith efforts to identify and make a reasonable accommodation.

VI. The Family and Medical Leave Act (the "FMLA")

Congress enacted the Federal Family and Medical Leave Act (the "FMLA" or the "Act") effective August 5, 1993 (February 5, 1994 if a collective bargaining agreement was in effect) based on its findings that there were various, significant family needs. These included the importance that parents be able to participate in early child rearing and a lack of employment policies to accommodate working parents forcing them to choose between job security and parenting. Congress also found that there was inadequate job security for employees who have serious health conditions that prevent them from working for temporary periods. The stated goals of the Act include balancing the demands of the workplace with family needs, promoting economic security, promoting security of family and promoting the national interest in preserving family integrity. The Act has as its purpose allowing employees to take reasonable leave for medical reasons, for parenting and for the care of close relatives who have serious health conditions. Congress also intended to minimize the potential for employment discrimination on the basis of sex by providing in the FMLA that leave is available for medical reasons or family reasons on a gender-neutral basis.

To be covered by the Act, an employer must be engaged in commerce or in an industry affecting commerce and must employ 50 or more employees for each working day of 20 or more calendar work weeks in the current or proceeding calendar year. The FMLA applies to public agencies without regard to the number of employees employed. A public agency is one that is so defined in §3(x) of the Fair Labor Standards Act, 29 U.S.C. §203(x). The government of the United States, of a state or political subdivision of a state or of any agency of the United States, state or political subdivision of a state are public agencies.

To be eligible for the leave provisions of the Act an "eligible employee" must have worked at least 12 months for the employer from whom the leave is requested. The 12 months need not be consecutive months. If an employee is on the payroll for any part of a week, the week counts as a week of employment. The employee must also have worked at least 1,250 hours during the preceding 12 month period. Periods when the employee is not actually working are not counted as part of the 1,250 hours. Thus, the employee does not get hours credit for paid sick leaves, vacations or holidays. The determination of the number of hours worked and whether the employee has worked for at least 12 months is made as of the date leave commences. However, if the employee works at a work site that employs less than 50 employees and the total number of employees employed by the employer within 75 miles of the work site is less than 50, the employee is not eligible for leave under the Act.

There are four circumstances under which an employee is entitled to leave under the Act:

The statute broadly defines a son or daughter as a biological, adopted or foster child, a stepchild, a legal ward or child for whom the employee stands in loco parentis. The child must either be under 18 years of age or incapable of self-care because of a mental or physical disability. One is incapable of self-care if the individual requires active assistance or supervision to provide daily self-care in three of more of the "activities of daily living" or "instrumental activities of daily living." The activities of daily living include caring appropriately for one's grooming and hygiene, bathing, dressing and eating. Instrumental activities of daily living include cooking, cleaning, shopping, taking public transportation, paying bills, maintaining a residence and using telephones and directories. Physical or mental disability means an impairment that substantially limits one or more of the major life activities of the individual as that term is described in the federal regulations relating to the Americans with Disabilities Act.

A parent within the meaning of the statute is a biological parent or an individual who stood in loco parentis to the employee when the employee was a son or daughter. Persons who are in loco parentis are those who have day-to-day responsibilities to care for and financially support a child.. A biological or legal relationship is not necessary. A spouse is a husband or wife as defined or recognized under state law for purposes of marriage in the state of the employee's residence.

A serious health condition within the meaning of the FMLA includes an illness, injury, impairment or physical or mental condition that involves inpatient care. It also includes conditions requiring continuing treatment by a health care provider where certain circumstances exist. Where there is a period of incapacity of more than three consecutive calendar days a serious health condition exists. Absences two or more times for treatment by a health care provider relating to a condition during which the employee was incapacitated for more than three days are also regarded as being for serious health conditions. Absences subsequent to the absence of more than three days are also covered by the FMLA where there is a treatment by a health care provider on at least one occasion resulting in a regimen of continuing treatment under the supervision of the health care provider. The Regulation delineating what constitutes a serious health condition is found at 29 CFR §825.114. It is a good practice to consult that regulation when there is any question as to whether a serious health condition exists.

Also included under the definition of serious health conditions are periods of incapacity, due to pregnancy or for pre-natal care. FMLA leave is also required for periods of incapacity or treatment of a chronic serious health condition which requires periodic visits for treatment by a health care provider, which continues over an extended period of time and which may cause episodic continuing periods of incapacity. Examples of the latter type of incapacity include asthma, diabetes and epilepsy.

The regulations also include under the definition of a serious health condition certain incapacities for which treatment may not be effective where the employee or family member is under the continuing supervision of a health care provider. Incapacity due to Alzheimer's disease or a severe stroke or the terminal stages of a disease would be included in this definition.

Periods of absence for multiple treatments by a health care provider or on referral by a health care provider may also be serious health conditions. Examples would be restorative surgery after an accident or for a condition that would likely result in a period of incapacity of more than three consecutive calendar days if it were not treated. Some examples are chemotherapy or radiation treatment for cancer, physical therapy for severe arthritis and dialysis for kidney disease.

Cosmetic treatments such as plastic surgery are not serious health conditions unless inpatient hospital care is required or unless complications develop. The Regulations exclude from the definition of serious health condition, the common cold, flu, earaches, upset stomach, minor ulcers, headaches other than migraine, routine dental or orthodontic problems and periodontal disease unless complications develop. Under some circumstances, substance abuse may be regarded as a serious health. Leaves that are required for absence due to the employee's use of the substance rather than for treatment are not serious health conditions.

An employee will be considered unable to perform the functions of the position where the health care provider finds that the employee is unable to perform any one of the essential functions of the employee's position within the meaning of the Americans with Disabilities Act. Absence from work to receive medical treatment for a serious health condition is considered being unable to perform the essential functions of the position during the absence for treatment. What constitutes an essential function of a job can be a highly debated factual issue. Employers should consider formulating job descriptions. The descriptions may help when the issue of what is an essential function comes up under the FMLA or the ADA.

Leave because of a need to care for a close family member must be granted whether it encompasses either physical or psychological care. Such a need exists because of a serious health condition where a family member is unable to care for his or her own basic medical, hygienic, or nutritional needs or safety or is unable to get to the doctor without assistance. The need for care of a close family member may also include providing psychological comfort which would be beneficial to the family member.

An eligible employee is entitled to a total of 12 working weeks of FMLA leave during any 12 month period based on the occurrence of any of the four previously mentioned events. Leave may be taken intermittently or on a reduced leave schedule for the care of a spouse, son, daughter or parent of the employee who has a serious health condition. Intermittent or reduced scheduled leave may also be taken if necessary because of the employee's own serious health condition. Where a husband and wife are employed by the same employer, the aggregate leave permissible for birth, adoption, foster placement or care of a close relative may be limited to 12 weeks during any 12 month period. No such limitation is placed on leave for an employee's personal serious health condition.

An employer has four choices in determining the 12 month period in which the employee is entitled to 12 weeks of FMLA leave. The employer may designate (1) the calendar year, (2) any fixed 12 month leave year including a fiscal year or the year starting on the employee's anniversary date, (3) a 12 month period measured forward from the date any employee's first FMLA leave begins or (4) a rolling 12 month period, measured backward from the date the employee uses the FMLA leave.

Intermittent leave or leave on a reduced leave schedule may only be taken if there is a medical need for such a leave which can be best accommodated through an intermittent or reduced leave schedule. Intermittent leave or a reduced leave schedule may be taken for the birth or placement of a child for adoption or for foster care only if the employer agrees to permit it. Intermittent leave is leave taken in separate blocks of time due to a single qualifying reason. A reduced leave schedule is a leave schedule that reduces an employee's usual number of working hours per week or per work day.

Intermittent leave may be appropriate where it is necessary for periodic medical appointments or treatment such as chemotherapy. A pregnant employee may take intermittent leave for prenatal examinations or for her own condition such as severe morning sickness. A reduced leave schedule may be taken by an employee who is recovering from a serious health condition and is not yet able to work a full work schedule. Where intermittent leave is taken over a period of time for the same reason the employee needs to establish eligibility only before the first absence

An employee may take intermittent leave or leave on a reduced leave schedule in any time increment that is necessary. The employer may not require the employee to take more FMLA leave than is necessary for the circumstances requiring the leave.

Employees are required to attempt to schedule their intermittent leave or reduced schedule leave in a manner so as not to disrupt the employer's operations. Where an employee takes an intermittent or reduced schedule leave, the employer may assign the employee to an alternative position with equivalent pay and benefits temporarily, where it better accommodates the employee's schedule.

When an employee takes an intermittent or reduced leave schedule, the employee may only be charged with the amount of leave actually taken. If an employee ordinarily works five days a week and takes one day off, that counts as one-fifth of a week of FMLA leave. If that employee worked an eight hour day and took four hours off, the employee would only be charged with one-tenth of a week of FMLA leave. Part-time employees entitlements are determined on a pro rata or proportional basis. For example, when an employee who ordinarily works 30 hours per week works only 20 hours on a reduced leave schedule, the ten hours of leave would count as one-third of a week of FMLA leave. Where an employee's schedule varies from week to week, a weekly average of the hours worked over the 12 week period prior to the beginning of the leave is used to calculate the employee's normal work week.

The FMLA does not require an employer to pay the employee during the allowable leave period. However, the employee may elect to use accrued paid vacation leave, personal leave or family leave that the employer ordinarily provides as part of the FMLA leave. Alternatively the employer may require the employee to use these leaves during the 12 week leave period. Accrued paid vacation, personal or family leave may be substituted by the employee for unpaid FMLA leave if the leave is for the birth, placement of a child for adoption or foster care, or care of a close family member with a serious health condition. Where the leave is for care of a family member with a serious health condition or for the employee's own serious health condition, the employee may elect to use accrued paid vacation leave, personal leave or medical or sick leave.

Where the need for leave is foreseeable t based on an anticipated qualifying event, the employee must provide the employer no less than 30 days notice. If the qualifying event is to take place in less than 30 days, the employee is obligated to give the employer as much notice as is practicable. No specific form is required for the notification. It may be oral. The employee does not have to specifically invoke rights under the FMLA. The employee merely needs to state that leave is needed for some reason such as birth or adoption, care of a close family member or personal health reasons. The employer has an obligation to inquire further to determine if the leave is FMLA eligible. The employee has an obligation to furnish the employer sufficient information to enable the employer to determine whether the leave qualifies under the FMLA. Where the leave is FMLA eligible, the employer must designate it as such. The employer must give notice to the employee of whether or not the leave is allowable for FMLA purposes.

When an employer learns that an employee is taking vacation or other paid leave for FMLA eligible purposes the employer may designate it as FMLA leave. Notice that the employer has so designated the leave as FMLA leave must be given within two business days absent extenuating circumstances. The Department of Labor has developed a form that may be helpful to employers in meeting their obligations to designate the leave. A copy is attached as Appendix "A".

The Supreme Court recently struck down a regulation that penalizes employers for not advising employees that leave has been designated as FMLA leave in Ragsdale v. Wolverine. The regulation, 29 CFR § 825.700(a), provided, in part, that "If an employee takes paid or unpaid leave and the employer does not designate the leave as FMLA leave, the leave taken does not count against an employee's FMLA entitlement." The court held that the regulation ignores Congress' legislative determination limiting FMLA leave to 12 weeks.

Where an employee seeks leave to care for a close family member with a serious health condition or for the employee's own serious health condition, the employer may require a certification by the health care provider of the eligible employee or the employee's relative. The employer may also require an eligible employee to obtain a re-certification from time to time on a reasonable basis. Where an employer requires a certification the employee must be notified of that fact in advance. At a minimum, the certification must provide the following information:

The FMLA provides that a health care provider is a doctor of medicine or osteopathy authorized to practice medicine or surgery by the state in which the doctor practices. The statute also allows the Secretary of Labor to designate as health care providers other persons providing health care services. The Secretary has designated a number of people and professions as health care providers where they are licensed by state law and by the laws of their respective states. The Secretary's designation includes podiatrists, dentists, clinical psychologists, optometrists, chiropractors, nurse practitioners, nurse midwives, clinical social workers and Christian Science practitioners who are listed with the First Church of Christian Scientists in Boston, Massachusetts. The Secretary has also designated any health care provider from whom the employer's group health plan will accept a certification of the existence of a serious health condition to substantiate a claim for benefits.

Where leave is requested to care for a close relative, the certification must contain a statement that such leave is necessary for the person's care and will assist in the person's recovery. Where intermittent leave or leave on a reduced schedule is needed for care of a close family member the certification must indicate the expected duration and schedule of the intermittent leave or reduced leave schedule.

Where intermittent leave or leaave on a reduced leave schedule is requested for medical treatment, the certification must provide an estimate of the probable number of treatments and interval between treatments if known It must also indicate the period required for recovery.

If the employer has reason to doubt the validity of the certification provided by the employee, the employer may require, at its own expense, that the employee obtain a second opinion from another health care provider who the employer approves or designates. Such a health care provider may not be one who is employed on a regular basis by the employer. Where the second opinion conflicts with the opinion of the employee's health care provider, the employer may require at its own expense that the employee obtain an opinion from a third health care provider which the employer and employee jointly designate or approve. Where an opinion is obtained from a third health care provider regarding the certified information, that opinion is binding on the employer and employee.

Before permitting an employee to return from leave for a serious health condition, the employer may require a certification from the employer's health care provider that the employee is able to resume work providing there is no bar to such a requirement under a valid state law, local law or collective bargaining agreement relating to return to work of employees. The employer may only require a certification of ability to return to work where it has a uniform policy of doing so. Employers are not prohibited by the Act from periodically requiring the employee to report on his or her status and intention to return to work.

An employee who takes FMLA leave must be returned by the employer to the position which the employee held prior to the commencement of the leave or to an equivalent position without loss of benefits, pay or other terms or conditions of employment. The employer is not permitted to require the forfeiture of any benefits accrued by the employee prior to the commencement of the leave. However, the employer is not required to allow the employee to accrue seniority during the leave or to receive any right, benefit or position that the employee would not have received if the employee had not taken leave.

In some circumstances, the employer may be relieved of restoring employment to certain highly compensated or "key" employees. For the employee to be exempt from restoration, the individual must be among the highest paid ten percent of the employees employed by the employer within 75 miles of the facility at which the employee is employed. Before the employer may deny restoration, the situation must fulfill three prerequisites:

While an eligible employee is on leave, the employer is required to continue coverage for the employee under any group health plan the employer maintains. The coverage must be maintained at the same level and under the same conditions that it would have provided the employee if the employee were not on leave. If an employee elects not to retain group health plan coverage while on FMLA leave, the employer must reinstate the employee to the plan without excluding pre-existing conditions or requiring a qualifying period, or a physical examination.

If an employee on FMLA leave is more than 30 days late in paying the employee's contribution for health insurance, the employer is no longer obligated to maintain that insurance. However, before dropping coverage, the employer must provide the employee written notice at least 15 days before coverage is to cease. The notice must advise the employee that coverage will be dropped on a specified date at least 15 days after the date of the notice unless payment is made. If an employer has a policy with a greater grace period than that allowed by the regulations the employer must apply the more lenient policy.

If the employee fails to return after the leave to which the employee is entitled has expired, the employer may in some instances recover the premium that it paid for maintaining coverage during the leave. The employer may not recover these sums if the employee fails to return due to the continuation, recurrence or onset of a serious health condition of the employee or of a covered close relative. The employer may require certification from the health care provider that the employee is unable to return to work because of a serious health condition.

Employers accused of violating the FMLA are subject to legal actions brought by employees on their own behalf as well as on behalf of other employees similarly situated. (The enforcement provisions of the FMLA are found at 29 USC §2617) An employee may sue for damages and for equitable relief such as reinstatement to employment or promotion. Suit may be filed in federal or state court. Employees may recover any compensation or other employment benefits lost as a result of a violation. If there has been no loss of compensation or benefits the employee may recover actual monetary losses sustained as a result of the violation, such as the cost of providing up to 12 weeks of care. The lost wages are subject to interest at the prevailing rate plus an additional amount equivalent to the actual damages as liquidated damages. If the employer is able to demonstrate that the violation of the Act was in good faith and that the employer had reasonable grounds for believing that it had not violated the Act, the court may eliminate the liquidated damages. It can be expected that in most cases liquidated damages will be awarded.

The limitation period for bringing an action under the FMLA is two years from the date "...of the last event constituting the alleged violation for which the action is brought." Where the alleged violation is "wilful" the time limit is extended to three years. These are the same as the limitation periods in the Fair Labor Standards Act. Since most FSLA violations are found to be wilful, it is likely that most violations of the FMLA will also be found to be wilful.

The Secretary of Labor is empowered to receive, investigate and attempt to resolve complaints of violations of the FMLA in the same manner as the Secretary does so under the Fair Labor Standards Act. The Secretary may also file suit to recover the same damages as can be recovered by an employee. The Secretary may also seek injunctions to restrain violations of the FMLA, including the withholding of wages and benefits. The employee's right to bring a suit terminates upon the filing of a complaint by the Secretary of Labor.

The Act covers employees of both public and private schools, without regard to the number of employees in the institution. There are, however, special provisions applicable to the school employees who are employed principally in instruction. Where their absences are for various lengths and at times that will seriously interrupt instruction they may be compelled to remain on leave to the end of the school term. The specific regulations should be consulted.

The FMLA requires employers to keep those records required to be maintained under section 11(c) of the Fair Labor Standards Act can be found at 29 CFR §825.500. The employer must maintain payroll data identifying employees, hours worked, wage data including deductions from wages. FMLA leaves taken by individual employees must also be recorded. If the leave increments are less than a full day the hours of leave should be recorded. The employer must also retain any written notices of leave furnished by employees, documents describing employment benefits, premium payments of employment benefits and records of any disputes with employees regarding designation of leave.

The Act requires the employer to post in a conspicuous place where notices to employees and applicants are customarily posted, the notice prepared by the Secretary of Labor summarizing the pertinent provisions of the FMLA. Copies of the required notices are available from the Department of Labor. The telephone number of the Miami Office of the Department of Labor is (305) 653-7414. There is also an FMLA information line, 1-(800)-959-FMLA.

Where an employer covered by the FMLA has an employee handbook or other form that it disseminates to employees advising them about benefits or leave rights, the employer must include within that material, information about the employee's FMLA rights and obligations. If the employer does not have such written policies, manuals or handbooks, the employer should provide guidance to employees in written form about their FMLA rights and obligations. Employers may fulfill this obligation with a fact sheet which is available from the offices of the Wage and Hour Division of the Department of Labor.

Employer are required to provide employees with written notice advising them of the following information:

1. That leave will be counted against his or her FMLA entitlement;

at the end of leave;

6. The employee's status as a key employee if applicable;

7. The employee's right to be restored to the same or equivalent job,

Notice of the foregoing must be given no less frequently than the first time in a six month period that the employee gives notice of need for FMLA leave. The employer should give the notice within a reasonable time which is one or two business days if feasible. If the employer fails to provide the notice it may be barred from taking adverse action for the employee's failure to fulfill the requirements of the FMLA that are required to be set forth in the notice.

VII The Immigration Reform Control Act (IRCA)

The Immigration Reform Control Act of 1986 (IRCA) makes it illegal to knowingly employ unauthorized aliens who are not properly documented to work in the United States and to employ individuals without obtaining the verification required by IRCA. The statute requires the employer to attest, under penalty of perjury, that it has verified that new employees are not unauthorized aliens by viewing identification showing proof of identity and proof of their right to work in the United States. The employee is also required to attest, under penalty of perjury, that he or she is a United States citizen or national, an alien lawfully admitted for permanent residence or authorized by the Attorney General to work in the United States. Proof of compliance with these requirements is a defense to a claim that an employer has violated the proscription against hiring unauthorized aliens.

Regulations issued by the Immigration and Naturalization Service ("the service" or the "INS") provide specifics on how employers should comply with IRCA. The service has designated its I-9 form as the required Employment Eligibility Verification Form. Copies are available from INS District Offices or from the Superintendent of Documents, Washington, DC 20402. I-9 forms must be completed by employers for all individuals hired after November 6, 1986 who remain employed after September 1, 1987. The employer and the employee must complete an attestation on the form under penalty of perjury. The employer must attest within three days of the hire to having physically examined documents establishing the individual's identity and eligibility to work.

The regulations list the following documents, if they appear to relate to the individual being hired, as acceptable to establish both identity and eligibility to work:

(1) United States passport (unexpired or expired);

(2) Alien Registration Receipt Card or Permanent Resident Card, Form I-551;

(3) An unexpired foreign passport that contains a temporary I-551 stamp;

(4) An unexpired Employment Authorization Document issued by the Immigration And Naturalization Service which contains a photograph, Form I-766; Form I-688, Form I-688A, or Form I-688B;

(5) In the case of a nonimmigrant alien authorized to work for a specific employer incident to status, an unexpired foreign passport with an Arrival-Departure Record, Form I-94, bearing the same name as the passport and containing an endorsement of the alien's nonimmigrant status, so long as the period of endorsement has not yet expired and the proposed employment is not in conflict with any restrictions or limitations identified on the Form I-94.

The regulations list the following documents as being acceptable to establish identity only:

(1) For individuals 16 years of age or older:

(i) A driver's license or identification card containing a photograph, issued by a state (as defined in section 101(a)(36) of the Act) or an outlying possession of the United States (as defined by section 101(a)(29) of the Act). If the driver's license or identification card does not contain a photograph, identifying information shall be included such as: name, date of birth, sex, height, color of eyes, and address;

(ii) School identification card with a photograph;

(iii) Voter's registration card;

(vi) U.S. military card or draft record;

(v) Identification card issued by federal, state, or local government agencies or entities. If the identification card does not contain a photograph, identifying information shall be included such as: name, date of birth, sex, height, color of eyes, and address;

(vi) Military dependent's identification card; (vii) Native American tribal documents; (viii) United States Coast Guard Merchant Mariner Card;

(ix) Driver's license issued by a Canadian government authority;

Individuals under 18 years of age who can not produce the foregoing document to establish identity are permitted to use the following:

(i) School record or report card;

(ii) Clinic doctor or hospital record;

(iii) Daycare or nursery school record.

Alternatively, if none of the preceding documents are available to them, Minors under the age of 18 may have their parent or legal guardian complete on the I-9 the Employee Verification and Information write in the place for the employees signature "minor under age 18."

Handicapped individuals who are unable to produce the above listed identity documents may follow the same procedures minors under the age of 18. In lieu of ``minor under age 18'' they should substitute ``special placement.'' In addition to a parent or legal guardian, a representative from the nonprofit agency that places them. into a position of employment may fill out and sign the form.

Employment eligibility only may be established by the following documents:

(1) A social security number card other than one which has printed on its face ``not valid for employment purposes'';

(2) A Certification of Birth Abroad issued by the Department of State, Form FS-545;

(3) A Certification of Birth Abroad issued by the Department of State, Form DS-1350;

(4) An original or certified copy of a birth certificate issued by a State, county, municipal authority or outlying possession of the United States bearing an official seal;

(5) Native American tribal document;

(6) United States Citizen Identification Card, INS Form I-197;

(7) Identification card for use of resident citizen in the United States, INS Form I-179;

(8) An unexpired employment authorization document issued by the Immigration and Naturalization Service.

An employer will be considered to have complied with the verification requirements of IRCA with respect to the hiring of an individual referred by a state employment agency if it receives and retains documentation from the agency that certifies that the agency has complied with the required verification procedures.

Where an employee's work authorization expires the employer must reverify it. Employers must retain I-9 forms for three years after the employee's date of hire or one year after the employee's date of termination. Employers are subject to having their I-9's inspected, after three days prior notice, by the Immigration and Nationalization Service, the Special Counsel for Immigration-Related Unfair Employment Practices or the Department of labor.

From the foregoing it is obvious that employers obtain the necessary documentation from all employees, properly prepare the I-9 forms and retain the documentation for the required three year period to avoid incurring penalties under the Immigration Reform Control Act.

VII The Employee Retirement Income Security Act (ERISA)

A. The Purpose of ERISA

In passing the Employee Retirement Income Security act or "Erisa" Congress took note of the fact that

...the continued well-being and security of millions of employees and their dependants are directly affected by [employee benefit] plans; that they are affected with a national public interest; [and] they have become an important factor affecting the stability of employment and the successful development of industrial relations.

Congress also noted a "...lack of employee information and adequate safeguards concerning their [the plans'] operation." In ERISA Congress undertook to make certain that adequate information was available and furnished to employees and that there are safeguards in place to protect the operations of covered plans.

B. ERISA Regulates Employee Benefit Plans

ERISA's overall term for the plans that it regulates is "employee benefit plans" or "plans."

This term includes "employee welfare benefit plans" and "employee pension benefit plans" or "pension plans." "Employee welfare benefit plans"or "welfare plans" are defined as plans established by an employer, employee organization or, both, to provide "...participants or their beneficiaries, through the purchase of insurance or otherwise , (A) medical, surgical, or hospital care or benefits ... vacations benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services."

Pension plans are defined as "...any plan, fund, or program ...established or maintained by any employer, or by an employee organization, or both...to provides retirement income to employees , or...results in a deferral of income by employees for periods extending to the termination of employment or beyond..." A review of the essential requirements ERISA will help those who deal with the covered plans an understanding that will avoid potential pitfalls.

C. ERISA Plans Must be in Writing

ERISA requires covered plans to be in writing. The written instrument establishing the plan must name the plan fiduciary or fiduciaries. It must also incorporate a procedure for amending the plan and identify those with authority to amend it. The plan instrument is also required to "...specify the basis on which payments are made to and from the plan." The written instrument should identify the plan sponsor, which is the employer, employee organization, or combination of both, that establish and maintain the plan. The instrument should also identify the plan administrator. If it does not, the sponsor will be the administrator of the plan.

D. Denial of Claims and Review Procedures

Employee benefit plans are required to provide in writing to any participant or beneficiary whose claim for benefits under the plan is denied, a written notice "...setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant." Regulations promulgated by the Secretary of Labor require the initial denial of the claim to contain the following:

(1) The specific reason for the denial;

(2) Specific reference to pertinent plan provisions on which the denial is based;

Benefit plans are also required to afford a participant whose claim for benefits has been denied "...a full and fair review by the appropriate named fiduciary of the decision denying the claim.

E. Summary Plan Descriptions

The plan administrator is responsible for seeing that a summary plan description (an "SPD") is furnished to each plan participant and beneficiary. The SPD must be in language calculated to be understood by the average plan participant. Among the information required to be contained in the SPD are the name and address of the agent for service of process if it is some person other than

the administrator, the name and address of the administrator, a description of relevant provisions of any collective bargaining agreement, the eligibility requirements for participation, circumstances which may result in disqualification, ineligibility or denial of benefits, the source of financing of the plan.

Of special importance is that the summary plan description states the procedure for presenting claims for benefits and "...the remedies available under the plan for the redress of claims which are denied in whole or part."

A participant must receive the SPD withing 90 days after becoming a participant. A beneficiary must receive an SPD within 90 days after he or she first becomes eligible for benefits. Update Summary plan descriptions must be furnished to each participant and to each beneficiary receiving benefits every fifth year.

F. Availability of Plan Information

The administrator must make copies of the plan description, the latest annual report and other pertinent plan documents available for examination by any participant or beneficiary in the principal office of the administrator or such other places as may be necessary to make this information available to participants and beneficiaries.

The administrator must provide updated copies of the summary plan description and of the latest annual report along with other plan documents upon written request of any participant or beneficiary.

The annual reports, the contents of descriptions and other plan documents are public information which are available for inspection in the public document room of the Department of Labor.

The retention requirement for matters of which disclosure is required is six years.

G. Standard of Care Owed to Plan Particpants

ERISA requires the fiduciary who administers the plan to perform duties relating to participants and beneficiaries with "...the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims."

H. Assignment or Alienation of Benefits and "QDRO's"

Pension plans must provide that benefits not be assigned or alienated. Therefore an employee's judgement creditor cannot garnish the employee's pension benefits. An exception to the non-alienation provision is the "qualified domestic relations order" or "QDRO." A QDRO is a judgement, order or decree of a court that provides for child support, alimony or marital rights to a spouse or former spouse made pursuant to a stated domestic relations law.

A QDRO is required to have the name and last know mailing address of the participant and the alternate payee covered by the order, the amount or percentage of the participant's benefits to be paid by the plan to each alternate payee, the number of payments or periods to which the order applies and each plan to which the order applies. Upon receipt of a QDRO, the plan administrator is required to promptly notify the plan participant or any alternate payee.

A QDRO may not require a pension plan to provide any benefit or type of payment which is not otherwise provided under the plan nor can it require the plan to increase benefits on the basis of actuarial value. While it is not necessary to memorize all the requirements for a QDRO, when a wage deduction order is received it should be carefully checked against the statutory requirements.

H. Claims Against Employers or Fiduciaries Under ERISA

Employers must be concerned with suits brought under two different sections of ERISA. Section 502 allows a participant or beneficiary to bring an action to enforce the obligation of the administrator of to supply requested information, to require benefits due to him or her under a plan, to enforce his or her rights under a plan or to clarify rights to future benefits under a plan. Actions demanding information from an administrator must be filed in federal court. Both state and federal courts have jurisdiction in other types of 502 actions.

Section 510 of the act gives a cause of action to an employee who claims adverse or discriminatory action by his or her employer because he or she exercised right to which he or she is entitled under a plan or under ERISA or to an employee who claims an employer took adverse action to interfere with his or her attainment of rights under the plan or the act. Federal courts have exclusive jurisdiction in section 510 actions.

I. Requirement That Participants Exhaust Plan Review Procedures Before Suing

Although ERISA does not specifically mention the need to exhaust the internal appeal procedure before filing suit, courts have found the exhaustion requirement to be implicit. Exhaustion is required because "ERISA itself requires covered benefit plans to provide administrative remedies for persons whose claims for benefits have been denied." Amato v. Bernard. Exhaustion will not be required as a prerequisite to a suit where the plaintiff can show that exhaustion would be futile.

The existence of the notice and exhaustion requirement indicates that certain precautions should be taken by Human Resource ("HR") persons, in house counsel or any other person to whom a beneficiary may submit a claim or a complaint of a denial of benefits. None of these individuals should inform (or even suggest to) a beneficiary that he or she is not entitled to the benefit desired. The role of interpreting the provisions of the plan belongs exclusively to the plan administrator. The administrator is entrusted with making decisions and only he or she should be involved in any form of denial. If a participant or beneficiary wishes to make a claim or to appeal the denial of a claim, the processing should be facilitated regardless of whether or not the claim appears to be well founded. Where a claimant complains to an HR person about the denial of a claim the individual should be advised, preferably in writing, of the right to appeal that denial. The claimant should also be furnished in writing with the name and address of the person to whom the appeal should be directed. Following this practice will improve the chance for successful invocation of the exhaustion doctrine as a bar to a suit by a claimant. Furthermore, if the claim is denied after the claimant exhausts the internal remedy, the likelihood of a successful defense of the claim is enhanced where the plan administrator can document the careful review of all significant facts and the basis for the decision with respect to the claim.

J. Defending the Administrator's Decision to Deny A Claim for ERISA Benefits

Where an ERISA plan is properly worded to give the administrator or the trustee the power to interpret the plan a court will not overturn their decisions unless there is an abuse of discretion. Up to the time of the Supreme Court decision in Firestone Tire and Rubber v. Bruch, most courts applied a "deferential" standard when asked to set aside a plan administrator's decision to deny plan benefits. The courts would generally give great deference to the decision of those who were entrusted with administering the ERISA plan in question. The critical point in determining whether or not the decision would be overturned was not whether, in the court's judgement, a different decision should have been reached. The administrator's decision was overturned only if it was "arbitrary and capricious" or if there was an abuse of discretion.

The Firestone case held that the deferential or arbitrary and capricious standard would not apply in every case. The Court applied the law applicable to reviewing decisions of trustees, Citing Restatement (Second) of Trusts §187 (1959). The Court held that "Where discretion is conferred upon the trustee with respect to the exercise of a power, its exercise is not subject to control by the court except to prevent abuse of discretion." Thus the applicable language in the plan document determines if deference will be given to the administrator's decision or whether a court will second guess that decision.

In the Firestone case the Court declined to apply the arbitrary and capricious standard because "...there is no evidence that under Firestone's termination pay plan the administrator has the power to construe uncertain terms or that eligibility determinations are to be given deference. Obviously, we now know that the wise course is to include in the plan a provision granting the administrator the power to construe the terms of the benefit plan. Otherwise a court will feel free to apply its own judgement as to whether a claim should or should not have been denied. The court's judgement may differ from that of the administrator. Where the plan confers the appropriate discretion on the administrator the court is obliged to defer to the administrators decision if there has been no abuse of discretion.

The Court pointed out one precaution in Firestone. The Court noted that the administrator who makes the decision may be in a position of conflict of interest if he is working for the entity that must provide the funds to pay the claim. The Court found, however, that such a situation did not negate the application of the deferential standard. It reasoned that the conflict is to be weighed as a factor in examining whether there was an abuse of discretion.

Administrators' decisions have been overturned even applying the arbitrary and capricious standard. In Wildbur v. Arco Chemical Co. the court provided some helpful guidelines in applying that standard:

In answering the first question, i.e., whether the administrator's interpretation of the plan was legally correct, a court must consider:

1. whether the administrator has given the plan a uniform construction,
2. whether the interpretation is consistent with a fair reading of the plan, and
3. any unanticipated costs resulting from different interpretations of the plan.

If a court concludes that the administrator's interpretation is incorrect, the court must then determine whether the administrator abused his discretion. Three factors are important in this analysis:

1. the internal consistency of the plan under the administrator's interpretation,
2. any relevant regulations formulated by the appropriate administrative agencies, and
3. the factual background of the determination and any inferences of lack of good faith.

Although the fact that an administrator's interpretation is not the correct one does in itself establish that the administrator abused his discretion, "[w]hen [his] interpretation of a plan is in direct conflict with express language in a plan, this action is a very strong indication of arbitrary and capricious behavior." (citations omitted)

K. COBRA

The statute known as COBRA is included in The Combined Omnibus Budget Act which is a 1986 amendment to ERISA. The purpose of COBRA is to remedy the plight of those who leave their employment and are unable to obtain health insurance. COBRA require employers to provide health insurance to extend benefits to employees for a period of up to 36 months.

The coverage offered to eligible employees must be identical to the coverage under the plan to those who are still working. The right to COBRA coverage is triggered by what the statute calls a "qualifying event." Qualifying events include the death of a covered employee, termination for other than gross misconduct, divorce or legal separation and the covered employee becoming entitled to social security medical benefits. The employee may be required to pay premiums for continuation coverage. Those premiums must not exceed 102% of the applicable premium. The payer may elect to pay it in monthly installments. "Applicable premium" means the cost to the plan for similarly situated employees who are still working. The person to whom a qualifying event has occurred must be provided with an election period of at least 60 days after the termination of the coverage due to the qualifying event.

A group health plan must notify employees who participate in the plan and their spouses of their COBRA rights at the time of the commencement of their coverage in the plan. The employer must notify the administrator of a qualifying event within 30 days of its occurrence. Employees must

notify the administrator of the occurrence of a qualifying event within 60 days after its occurrence. The administrator has the obligation to notify beneficiaries of their COBRA rights. It is important for the administrator to do so and to document that fact. It may well become a factual issue whether the proper notification was given by the administrator.

COBRA coverage in most cases must be made available for a maximum period of 18 month. Coverage is required from the date of the qualifying event until "The date on which the qualified beneficiary first becomes, after the date of the election - (i) covered under any other group health plan (as an employee or otherwise) which does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary..." Coverage may be required for up to 36 months when, within the 18 month period there occurs the death of the covered employee, the divorce or legal separation of the employees from his or her spouse, the covered employee becomes entitled to medicare benefits, or a dependant child ceases to be a dependant child under the ordinarily applicable requirements of the plan.

6/14/2002

Donald J. Spero is a graduate of the University of Michigan Law School who has practiced labor and employment law for over 30 years, both in private practice and as in-house counsel for Sears, Roebuck and Co. from which her retired as Senior Employment Counsel. He is Board Certified in Labor and Employment Law and a Fellow of The College of Labor and Employment Lawyers. He now devotes his time to serving as a mediator and an arbitrator. He is also a frequent speaker on employment law subjects as well as on alternative dispute resolution. Mr. Spero has defended management in cases dealing with an exceptionally wide variety of factual situations arising under a broad spectrum of statutes and common law theories affecting the employment relationship. His experience includes advising management on diverse issues under Title VII, ADEA, the FLSA, the FMLA, the ADA, ERISA, as well as on the employment benefit issues with which employers are frequently confronted. At Sears Mr. Spero emphasized preventative measures, including training of management and providing counsel in hiring and disciplining of employees. He is a member of the state bars of Florida and Illinois. Mr. Spero has been certified by the Florida Supreme Court as a circuit and county court mediator. He is on the panels of employment arbitrators and mediators of the American Arbitration Association and the arbitration and mediation panels of the NASD. He is also on the mediation panels of the United States District Courts for the Southern and Middle Districts of Florida. Mr. Spero serves on the Employment & Labor Law committee of the Palm Beach County Bar Association. He is a member of the Labor and Employment Law Sections of the Florida and the American Bar Associations. He is also a member of the Chicago and Illinois Bar Associations.

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