May 2007 SBH Quarterly Newsletter
PDF FormatEmployment Law Update
Arbitration clause in employment contract upheld.
Motsinger, a terminated employee, sued her former employer for sexual harassment. Her contract included an arbitration clause, which Ms. Motsinger claimed was one-sided and unconscionable. The court disagreed. Under Oregon law, an arbitration clause is unenforceable if it is both procedurally and substantively unconscionable. Ms. Motsinger argued procedural unconscionability because she was only 19 when hired, had no opportunity to negotiate, signed the form within a stack of 70 forms and would not have been hired if she had refused to sign. While the court found unequal bargaining power, it did not find deception, compulsion, or any high-pressure tactics. Employer allowed Ms. Motsinger to review the forms, ask questions, and view a video regarding hiring forms.
Ms. Motsinger also argued the contract was substantively unconscionable because it was one-sided and did not provide for company payment of fees. Again the court disagreed.
The arbitration process contained provisions requiring an arbiter who was a retired Oregon judge, decision based on law, did not limit recovery, and provided for a second arbiter appeal process. The court remanded to the trial court for abatement of litigation pending arbitration. This decision highlights a trend in the courts to encourage alternative dispute resolution clauses in employment contracts. Motsinger v. Lithis Rose-FT, Inc., 211 Or App 610 (2007).
Conduct resulting from a disability is part of the disability and not a separate basis for termination.
After her termination, Ms. Gambini sued her former employer for discrimination under Washington's Law Against Disability (WLAD). After hire, Ms. Gambini was diagnosed with bipolar disorder, which increased in severity. Her supervisors, unaware of the condition, created a performance improvement plan based on attitude and poor performance issues. When presented with the plan, Gambini reacted by throwing the paperwork and cursing the supervisors. The next day, Ms. Gambini checked into a hospital and her bipolar diagnosis was confirmed. Via phone, supervisors told her she was terminated based on her reaction at the meeting. Ms. Gambini replied in a letter stating her reaction was likely a product of bipolar disorder, but employer refused to reconsider the termination. At trial, a jury found in favor of the employer. The Court set aside the verdict for failure to provide a jury instruction explaining that conduct resulting from a disability is part of a disability and not a separate basis for termination.
This case provides a good reminder for employers that actions taken against an employee for disability-related reasons, even when behavioral, may still be considered discriminatory. Rather, the employer should seek to tie employment actions to essential job functions and--when aware of disability--consider whether there is an obligation to discuss possible accommodations with the employee. Gambini v. Total Renal Care, Inc., 2007 WL 1191929 (9th Cir WA 2007).
Trend towards class action wage lawsuits and importance of solid accounting practices.
Ongoing litigation against employer US Bank should be monitored for its impact on employers. This case signifies a trend towards class action wage lawsuits, and emphasizes the importance of solid accounting practices. The suit against US Bank was brought on behalf of hourly employees using time sheets in which hours were rounded down to the nearest tenth for payroll. The plaintiffs contended they lost 1 to 5 minutes of pay each day and thus were not fully compensated.
Employers finding themselves the target of a class action wage claim should become familiar with the Class Action Fairness Act, which allows removal to federal court. Specific requirements must be met of numerosity, minimal diversity, and amount in controversy. In the US Bank litigation, the employer was unable to remove the litigation to federal court because it was unable to demonstrate, with enough certainty, that the threshold amount in controversy ($5,000,000) had been met. Lowdermilk v. US Bank National Association, 479 F3d 994 (9th Cir OR 2007).
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