The Mississippi Workers' Rights Blog
Severance Agreements: Gift or Trap?
Severance agreements come in two basic types. The first type includes those negotiated in advance, as part of your original employment agreement. The second type includes those voluntarily offered by the employer at the time employment ends. The two are fundamentally different.
1. Contractual: the
buy out or
golden parachute severance agreement.
Again, the first type of severance to consider is the
golden parachute. In this types of severance, everything is usually governed in your initial employment agreement. These are sometimes called a
buy out because the contract basically requires the employer to make a significant payment in order to end the employment.
These are unquestionably good for the employee. First and foremost, they act as an important check on the ability of the employer to fire the employee without a good reason. If the employee is doing well, the employer will keep them on even if they might otherwise prefer to fire them, so that they can avoid the buyout.
And there isn't much of a downside for the employee. By law, they typically cannot be interpreted to destroy statutory rights to file suit for things that happen during employment.
Often, these kinds of agreements tie the payout to the length of the employee's tenure, giving them, for example, a month of salary for each year worked for the employer. This kind of arrangement serves both employer and employee well, because it encourages the employee to stay on with the company longer, but also gives the employee an infusion of cash when beginning retirement or moving to other work. (This is basically an amped-up version of the annual leave buy-out, a very common practice which will be the subject of a future post.)
If you are in a profession where your unique skills are in high demand, you may be in a position to bargain for one of these clauses. I highly recommend it - particularly when the employer is asking for a very restrictive non-compete agreement. It makes a lot sense. If the employer wants you to promise not to practice your profession for a year or more after leaving working for them, then they ought to provide a big enough severance package to help you through that time on the sidelines. This can be a perfectly reasonable trade.
At the same time, any contract you sign - particularly one as important as an employment agreement - should be reviewed by an experienced employment lawyer to make sure it is fair to you. The firm provides this service at a surprisingly reasonable rate.
2. Post-employment severance: the
full release severance agreement.
More common - particularly among less highly-specialized work - is the severance agreement which is voluntarily offered by the employer when separating you from work, usually an involuntary separation.
These severance payments aren't required by contract, or by law, so you should be asking yourself:
Why am I being offered this? Is it a gift?
Usually, the answer is
no. Usually, these severance agreements are attached to what is called a
full release of the employer for any liability for anything they ever did wrong at any time during or after your employment up until the date of signature.
Now, I don't want to paint the wrong picture for you. Usually, you aren't really giving anything up, because you don't have a valuable lawsuit against the employer. Usually you weren't hand-picked for this severance because you pose a particular worry to the employer. Usually this does not indicate anything about how concerned your employer is about any potential lawsuit you might have. Usually, this just means your employer is smart, and wants to cover themselves and avoid any unnecessary albeit groundless litigation.
But not always. I have found it increasingly common for employers to handpick a few people to offer these
severance agreements to, people that they fear might pose a particular litigation risk. Although, again, this does not mean they actually fear the outcome of the litigation - necessarily - it means they've identified this person as someone that might want to sue. If so, this may also mean that they would be willing to offer you more to settle your disputes, and you would benefit from a bit of negotiation. Again, not always, but it is sometimes the case.
Regardless of the employer's intent, however, you should definitely review this agreement with a lawyer. These are completely different from the
golden parachute. These are basically full-blown settlement agreements, where you sign away significant legal rights forever in exchange for a payment.
They may have a confidentiality clause, where you promise to say nothing about the existence of the agreement. This is an alarm bell that there may be more to this than meets the eye.
They may have a non-disparagement clause, where you promise not to say anything bad about the company or your bosses ever again. This is another alarm bell.
And they may have liquidated damages provisions, where you agree to pay them (and their attorney) if you breach the contract. Huge alarm bell.
Whatever the issue, you want to know what your are giving up before you sign one of these. Buy some time - tell them you really appreciate their generosity and very much want to take it (never hurts to be nice) but that you need a few days to go over it in detail first. Then call a lawyer, talk everything through, and make an informed decision. Again, the firm provides this service at a surprisingly reasonable rate.
3. Wait a minute, just one more: statutory WARN Act and COBRA violations
There is one more, but it isn't really
severance. If your employer has more than 100 employee and is laying off more than 50 or so employees in a particular month, then you may be entitled to 60 days notice under the WARN Act. If, and only if, no such notice is given, you may be entitled to up to 60 days of what is essentially severance pay instead of notice.
In addition, if you have health insurance through your employer do not get COBRA rights notifications, then you may be owed up to $110 per beneficiary per day until the proper notice is given.
Again, these aren't exactly severance, but they can function in a similar way under certain special circumstances.
I also highly recommend this linked Forbes article, which has a lot of sound advice for employees facing a decision on severance packages if you are interested in reading more.
Complaining about sexual harassment to HR
In a recent survey released by noted blog fivethirtyeight.com, over 1,000 respondents were asked what should you do when you have been the victim of sexual harassment. In the scenario presented, a combination of texts and verbal encounters with a co-worker showed the co-worker making repeated sexual advances, being rebuffed, and then insulting and criticizing the victim. Respondents were given five choices, with the following results:
- Compile the texts and confront the harasser. 7.8%
- Compile the texts and do nothing. 6.5%
- Compile the texts and take them to human resources to notify them ahead of any repeat incident. 40.1%
- Compile the texts, take them to HR, and ask to be moved. 33.2%
- None of the above is good advice. 12.5%
The law in this area is far more complicated than you might expect, and to make the best decision, it is important to understand this legal background.
Is this illegal sexual harassment?
Harassment was not explicitly addressed in the sex discrimination provisions of Title VII of the Civil Rights Act, which only spoke to adverse
employment practices - typically demotion, suspension, non-hiring, termination, etc. But the Supreme Court recognized in Meritor Savings Bank v. Vinson, 477 U.S. 57 (1986) that harassment because of sex can be unlawful.
But the Court explained that the harassment must be
severe or pervasive and it must be because of sex, race, disability, etc. An
equal opportunity harasser - that is, someone that is mean to everyone, or even a bisexual that sexually harasses on both men and women at work - is not violating the statute, as noted in among other cases, Holman v. Indiana, 211 F.3d 399 (7th Cir. 2000).
severe or pervasive standard is sometimes quite difficult to meet, especially in the Fifth Circuit, as the employee found in Jones v. Flagship Int'l, 793 F.2d 714 (5th Cir. 1986). My rule-of-thumb is, unless there has been either unwanted offensive touching (assault), or at least weekly explicit communication (well attested by evidence), then you can't be certain whether the court will see it as
severe or pervasive - although there are many cases where far less was accepted, such as in Idom v. Natchez-Adams School Dist., 115 F. Supp. 3d 792 (S.D. Miss. 2015).
What steps should be taken to respond to harassment?
The next steps depend on the precise nature of the harassment, and the victim's goals in addressing it. For example, if the harassment is by the boss, and involves a quid pro quo - like, sleep with me or you are fired; sleep with me and you get a raise; etc. - then sometimes the best next step is to file an EEOC charge, develop the evidence, and proceed into court if the matter does not settle. This kind of harassment the employer is liable for, even if it isn't reported to HR. With that said, depending on the claim, the kind of company, and the victim's career situation, sometimes it is better to go to HR first, or to take other steps. This is a question of strategy, rather than pure law.
But if the harassment is by a coworker or customer, or if the supervisor is not engaging in any explicit
quid pro quo, then a complaint to HR is generally MANDATORY before filing an EEOC charge. In fact, before the employer can be held liable, you must follow all the official procedures of the employer for reporting harassment, and give them a chance to fix it. This was the holding of the Faragher and Elerth cases. (This doctrine doesn't apply if the company has no such policy, or if the policy is futile - like reporting the misconduct directly to the harasser.)
This played out to agonizing effect in Harvill v. Westward Comm. LLC, 433 F.3d 428 (5th Cir. 2005) In that case, the plaintiff was clearly harassed:
In her deposition, Harvill testified that, during that seven-month period, Rogers grabbed her and kissed her on the cheek, popped rubber bands at her breasts, fondled her breastsHarvill reported the harassment to her supervisor over and over, and he did nothing. But Harvill still lost the case. This was because Harvill did not use the employer's complaint proceedure that the employer had in the handbook to address sexual harassment, and therefore didn't go over her bosses head, for about seven months. And:numerous times,patted her on her buttocksnumerous times,and came behind her and rubbed his body against her. At one point, Harvill estimated that Rogers touched her breasts or her buttocks perhaps as often as once a week—although she later stated that it may not have been as often as once a week. She also claims that on one occasion Rogers made comments to her about her sex life and her abilities in bed.
When Harvill did contact Human Resources, the company immediately separated Rogers and Harvill, after which time Harvill concedes that all harassment ceased. Therefore, Westward contends that it did take prompt remedial action that was calculated to end the harassment after Harvill bypassed [supervisor] French and took advantage of the corrective opportunities made available to her [by HR].The failure to call HR sooner was enough to completely shield the company from liability for the harassment.
Pitfalls: retaliation and sham investigations
Be aware though: HR
representatives are not your representatives, they are the company's representatives, and their first mission is to cover the company's butt. This may mean helping you, and it may mean proving you a liar (even if you are telling the truth).
Also be aware that going to HR about sexual harassment is statutorily protected activity: you cannot lawfully be fired or disciplined or in any other way retaliated against because of it. But that does not mean it does not happen, so be sure to document who knows about your complaint and when they learned of it. It may be helpful to tell the harasser and your boss immediately by emailing them a copy of the complaint, to prove any subsequent actions are potentially retaliation.
Taken together, this means that occassionally - rarely - the best response for some victims' goals is to ignore it and look for other work. I wish it were not so, but practically speaking, the law is sometimes not strong enough to meaningfully protect the complainant. I'm thinking most particularly of complainants in careers or environments with a
small pond culture, where an informal blacklist can develop that destroys the victim's career if she complains. This is becoming far less common nowadays, but it is still true sometimes.
The bottom line: call a lawyer
The bottom line, though, is that the 73% percent of respondents to the survey that said to go to HR were generally right - and I would add that the victim should read the employee policy handbook carefully and follow it. But equally important is the advice of good lawyer first, who can keep you on the straight and narrow path to best protect your career and interests.
Leaving work the right way
Leaving work is never easy, but for employees that have potential legal claims, it can also be a trap for the unwary.
If you resign, for example, this means you weren't terminated, and that can have a number of consequences for legal claims. It is not easy to argue that you were wrongfully terminated if the decision to leave work is one that you made on your own. It isn't impossible, but it makes the case significantly more complex and difficult than a true termination case.
For example, suppose a boss said something offensive and the employee responded
well I'll see you in court and walked off the job. This may have just ruined the case. First, you can bet the boss will deny what he said, and with nothing in writing it can be hard to prove him a liar. Second, he didn't fire the employee, and by walking off the employee risks (at least) the lion's share of any potential back pay. The employee may have benefited from getting advice from an attorney before quitting.
To be clear, quiting isn't always fatal to a case. Sometimes the Courts will treat a resignation as if it were a termination under the doctrine of
constructive discharge. There are two ways to prove a constructive discharge: (1) either the employee was given an ultimatum to
resign or get fired, or (2), the employee was in working conditions so terrible that any reasonable person would feel compelled to resign.
ultimatum-type case is simple to prove, so long as the employee has some kind of email, text message, or other written proof of the ultimatum.
The working-conditions-type case, however, is always difficult. Usually, some demotion or extraordinary harassment must take place.
Courts weigh the following factors to determine constructive discharge: (1) demotion; (2) reduction in salary; (3) reduction in job responsibility; (4) reassignment to menial or degrading work; (5) reassignment to work under a younger supervisor; (6) badgering harassment, or humiliation by the employer calculated to encourage the employee's resignation; or (7) offers of early retirement or continued employment on terms less favorable than the employee's former status. Dediol v. Best Chevrolet, Inc., 655 F.3d 435, 444 (5th Cir.2011).
For example, in one case, the City of Meridian wanted to get rid of a chemist working at the water treatment plant. Their attorney told them they didn't have sufficient grounds to fire her. And so, instead, they reclassified her as a
laboratory technician and drastically cut her pay to try to force her out. She resigned. The Court held that this was a
constructive discharge. Loftin-Boggs v. City of Meridian, Miss., 633 F. Supp. 1323, 1327 (S.D. Miss. 1986). (The employee still lost the case, though.)
On the other hand, with only harassment to go on, these cases are usually losers. E.g., Simpson v. Alcorn State Univ., 27 F. Supp. 3d 711 (S.D. Miss. 2014). Sometimes, though, in just the right circumstances, a harassment-based constructive discharge claim can turn out to be a winner. E.g., Idom v. Natchez-Adams School Dist., 115 F. Supp. 3d 792 (S.D. Miss. 2015).
The upshot here is to be certain to understand the consequences of resignation. Some employers are very savvy at forcing an employee out in subtle ways that can be difficult to prove as a constructive discharge. Employees facing these hard choices may need to consult with an attorney for legal advice about their options.
What to do before you sign a non-compete agreement
You're excited. The new boss seems great, everybody is really friendly, and you'll finally be able to escape that miserable service job and actually use your degree.
Then the initial paperwork arrives: an I-9, insurance notices and brochures, some kind of contract... wait a minute, what is this? A Noncompete Agreement...
Well, you say to yourself,
I guess that only matters if I leave this job. I'm not thinking about that right now. And I have to sign it, I guess, so I'm sure this will work itself out later...
Think again. You need to understand what you are signing before you sign it: you could be signing away your right to practice your profession. The average tenure in one job is only about five years. There are no guarantees about tomorrow, and, whether it is a better offer somewhere else, or that jerk Dave getting promoted over you and treating you like dirt, or family reasons that require you to move away, you could find yourself leaving this job very quickly - and deeply regretting that noncompete agreement.
Mississippi law allows non-compete agreements, so long as they are
reasonable, which is as vague as it sounds. Redd Pest Control Co. v. Heatherly, 248 Miss. 34 (1963). What it amounts to, in practice, is that the courts will enforce your non-compete agreement to whatever extent they think is
reasonable for someone doing the kind of work you do for the kind of employer you have. Some non-competes can prohibit you from engaging in your profession anywhere in the nation for a period of a year or more. Others will be limited to a particular county, or to a five-mile radius. It will depend on the nature of the business and your place in it. If, for example, you develop close relationships with the employer's customers all over the state, the courts will likely enforce an agreement preventing you from practicing the same profession for yourself or any competitor anywhere in the state, perhaps for year or even longer.
Some of these agreements are unclear. For example, consider a veterinarian prohibited from practicing
within Madison County, within a ten-mile radius of the employer's practice. Suppose the veterinarian opens a practice 9 miles away, but in Rankin County? Is this prohibited? It is good to notice these issues before signing, and the trained eye of an attorney can identify and advise about these kinds of issues.
What about bargaining with the employer about the non-compete before signing? This is a matter requiring a great deal of sensitivity: the new employee doesn't want to send a signal to the employer that she is already planning to leave, or that she loves to litigate, but at the same time she needs to protect herself.
The strategic, confidential advice of an attorney could be extremely helpful in this situation. And it may be more affordable than you think.
Dancers sue Illusions Gentlemen's Club for unpaid wages
The class of dancers and former dancers at Illusions Gentlemen's Club in Woodville, Mississippi, have recently filed a wage lawsuit against the company. The employees are represented by Joel Dillard, P.A. You can read more about the suit, including viewing the Complaint and Motion for Conditional Class Certification, at the firm's informational website for the Illusions Lawsuit.
University teaching assistants and research assistants can now organize labor unions under the NLRA
The NLRB just issued a decision expanding the protections of labor law to apply to college
teaching assistants and
research assistants, finding that they are statutory employee under the National Labor Relations Act.
The Board held that “student assistants who perform work at the direction of their university for which they are compensated are statutory employees.” The majority rejected the argument that the Act was intended to only cover employment relationships that are
primarily economic in nature, noting that this language doesn't appear anywhere in the statute. It also rejected arguments by the schools that they were somehow
special under labor law, either because bargaining is somehow impossible with graduate students or that
academic freedom required individual rather than collective bargaining.
The reaction of the union-side bar has been positive, though some have been surprised at the breadth of the reasoning in the decision, particularly in light of the Board refusal to apply the Act to student athletes.
It will be interesting to see the impact of this case. There have already been some successful efforts to organize, for example, medical residents under the 1999 decision in Boston Medical Center. Will this case lead to a rennaisance of labor organizing with student staff, or will the schools find ways to reorganize their programs to avoid characterizing the activities of the students as compensable work? The opinion is written with sufficient bredth that it may prove difficult to avoid.
This was also an interesting case in that it forms part of a new adjudicatory approach for the Board which marries some of the administrative advantages of rulemaking and adjudication. The Board issued a public request for amicus briefs, which resulted in the generation of a significant body of real-world information which the Board was able to bring to bear in its analysis.
Regarded as Disabled
Today's post is by the firm's summer clerk, Schuyler Konior-Kinneman.
Society's accumulated myths and fears about disability and disease are as handicapping as are the physical limitations that flow from actual impairment.
– Justice William J. Brennan Jr.
Since the passing of the Americans with Disabilities Act (ADA) in 1990, the law regarding discrimination against those with disabilities has been strengthened. With the amending of the ADA by Congress in 2008, the law provides greater coverage in protecting the employment rights of the disabled. So who is disabled? Although it may seem obvious in the real world, in the legal world it is a complicated issue.
To be considered disabled under the ADA an employee has to meet one of the three requirements: (1) the employee has a physical or mental impairment that substantially limits one or more major life activities; (2) the employee has a record of such impairment; or (3) the employee is regarded as having such an impairment. In other words, even if you are not disabled any more, or if you have never been disabled but other people think you are, then you may be protected by the ADA.
My focus in this post is on the third type: being
regarded as disabled. This means the employer cannot rely on stereotypes about people with medical conditions. This factor is becoming a larger part of disability discrimination law since the ADA has recently been amended to make it easier to prove you are
regarded as disabled. Promotions, the amount of work hours, pay rate, and general interactions at the workplace can all be affected by an employer's belief that you are disabled.
The standard used to be that an employee had to prove that their employer wrongly believed, not only that they had a medical condition, but that the condition affected them in a major way. Sutton v. United Air Lines, Inc., 527 U.S. 471 (1999). This was often difficult to prove because employers aren't likely to get into the details of exactly what they think employees can and cannot do. Instead they simply act on their beliefs without explanation, then try to justify themselves later.
Congress recognized this problem, and in 2008 amended the ADA to make it crystal clear that someone who is wrongly regarded as having a medical limitation or condition is covered by the Act. This means employees don't have to prove exactly what the employer thought was wrong with the employee. Instead, the employee just has to prove that the employer thought the employee had a limitation or condition which the employee didn't have, and discriminated against the employee because of it.
[A] plaintiff now need only show that his employer perceived him as having an impairment; he is not required to show that he is substantially limited in a major life activity, as is still required to meet the other two definitions ofdisability.A plaintiff is also not required to show how or to what degree [his employer] believed the impairment affected him.
Mendoza v. City of Palacios, 962 F. Supp. 2d 868 (Dist. Court, SD Texas 2013) (quoting Hilton v. Wright, 673 F.3d 120, 129. (2d Cir. 2012))
I'm glad that Congress has addressed this. It makes it easier for employees who have been mistreated to get some kind of justice. No longer can employers hide behind a technicality to get away with doing terrible things to the disabled.
Carpet installers sue Southern Floor Covering for overtime pay
The class of employees and former employees of Southern Floor Covering, a carpet installation company based out of Pearl, Mississippi, have recently filed an overtime lawsuit against the company. The employees are represented by Joel Dillard, P.A. You can read more about the suit, including viewing the Complaint and Motion for Conditional Class Certification, at the firm's informational website for the Southern Floor Covering Overtime Lawsuit.
NLRB's Election Procedure Rule wins decisive victory in Fifth Circuit
It's a funny thing about the practice of law: when you get involved in something big, it can consume your working life completely, and everything you've devoted yourself to comes to hinge on a single, decisive moment.
For me, one such ultimate moment came this week, when the Fifth Circuit issued its decision in the NLRB's Election Procedure Rule. This rule has, in one form or another, consumed the greater part of my working life. You can see a brief run down of the rule by clicking here, and a discussion of my involvement in the rule by clicking here.
And I'm not the only one. As hard as I and a handful of my colleagues at the Board fought for this rule, an army of corporate lawyers fought tooth and nail against it. Through more than five years of fierce dispute, including four days of hearings, the submission of some 75,000 comments, who knows how much Congressional lobbying, and three separate lawsuits, I'd guess that corporate special interests probably spent some $100 Million all told opposing the rule. Why? Who knows, really. Much of the effort was plainly wasted - or even counterproductive - such as the Chambers 2012 litigation, which ultimately resulted in a more aggressive rule.
And now the rule has received what is likely to be its most decisive vindication. A politically hostile panel of the Fifth Circuit just affirmed the rule in no uncertain terms. At this point, it looks like it's all over but the shouting, and the good guys won.
Judge Edith Brown Clement's decision is emphatic. First, the Court described the rule in its most unfavorable terms, using language lifted from the corporate lawyers' briefs. Then the Court held that the rule was valid, embracing the Board's rationale for upholding the rule. The result is a vindication, not only of what the rule actually does, but of what even the rule's fiercest opponents pretend that it does: even if the rule could result in 11 day elections as the opponents claim, it would still be valid.
This shouldn't come as a surprise - the caselaw and authorities were extremely one-sided, with the corporations relying almost solely on out-of-context snippets of legislative history, and the Board on the text and actual history of the statute - and yet in the age of an increasingly partisan judiciary, it does. Let this be a reminder that law is not the same as politics, and even a very politically salient argument to a very politically sympathetic judge can and will fail when the law is set inflexibly against it.
- The Fifth Circuit decision text.
- Post about the D.C. District Court's decision upholding the rule, 8/11/2015
- Complete text of D.C. Dist., Judge Jackson's opinion, 7/29/2015
- NLRB Election Rule Wins in Texas District Court, 6/1/2015
- Complete text of the prior decision by Judge Pitman of Texas upholding the rule, 6/1/2015
- NLRB's new election rule going into effect today! - 4/15/2015
- Obama Vetoes NLRB Election Procedure Rule CRA Challenge - 4/2/2015
- ALSO RELATED: Voting Unions and Democracy at Work - 3/24/2015
Firm wins big NLRB victory for the employees of Victory Casino Cruises
On Friday, the National Labor Relations Board issued a resounding victory to the employees of Victory Casino Cruises, a gambling boat operating out of Jacksonville and Cape Canaveral, Florida. The Board found multiple violations of federal law.
The employer had a policy prohibiting employees from disclosing
compensation data and
disciplinary actions, among many other things, and had a second policy stating that
the company consideres all information about present or past employees to be confidential and prohibiting its disclosure to anyone.
The unanimous Board found that these policies violate federal law. As the majority of the Board panel (Hirozawa and McFerran) found
it is settled that Section 7 of the Act grants employees the right to discuss information about other employees and
it is likewise settled that employees have a Section 7 right to discuss their conditions of employment with third parties, such as union representatives, Board agents, and the public in general. As Republican appointee Phillip Miscimarra stated in his concurring opinion on this point,
the right to engage in protected concerted activity involving the disclosure of such information is central to the Act. (Read more about Free Speech Rights at Work on the blog.)
The Board majority also struck down a mandatory arbitration agreement, which was essentially the same as those at issue in the Board's prior decisions in D.R. Horton and Murphy Oil. Miscimarra dissented for the same reasons as in Murphy Oil.
This is a strong decision in favor of workers' rights. Read the full decision here. I highly recommend a careful reading of both majority and concurring views about the confidentiality provisions.
The charging party employee in this matter was represented by Joel Dillard, P.A., and The Bonderud Law Firm, P.A.
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