Surviving ERD & Other Discrimination Claims

Surviving ERD & Other Discrimination Claims

Atlanta, GA Asheville, NC Austin, TX Birmingham, AL Boston, MA Chicago, IL Columbia, SC Dallas, TX Fairfax, VA Greenville, SC Jacksonville, FL Kansas City, MO Lakeland, FL Los Angeles County, CA Macon, GA Madison, WI Nashville, TN

Port St. Lucie, FL Princeton, NJ St. Louis, MO Tampa, FL Ventura County, CA Winston-Salem, NC

Attorney Elizabeth E.

Erickson

Attorney Tony H. McGrath

What’s At Stake In An ERD Claim?

• Back pay for lost salary and fringe benefits plus interest

• Front pay or reinstatement• Compensatory and punitive

damages• Attorney fees• Separate proceeding in civil court

What’s At Stake In An ERD Claim?

Example: $40,000/yr employeeBack pay: $40,000-80,000Fringes: $10,000-100,000Interest (12%) $6,000-17,000Front pay: $0-30,000Punitives: $ ??Attorney fees $10,000-150,000

$66,000-377,000

Recent State Law Change

• Legislature passed February 21, 2012 • Gov. Walker signed April 5, 2012• Repeals law passed in 2009 that

allowed compensatory and punitive damages

• Applies to pending and future claims• Limits damages in ERD cases to back

pay, attorneys fees, and reinstatement• Does not apply to EEOC/federal court,

MEOC

Multiple Roles of HR Professional

• Critical member of defense team• Insider

– Often already knows the players – Has the trust of management– Knows “where the bodies are buried”

• Custodian of documents• Investigator• Liaison with decision makers and

witnesses

Agency Enforcement

• The Equal Rights Division (“ERD”) is charged with enforcing the Wisconsin Fair Employment Act.

• The Equal Employment Opportunity Commission (“EEOC”) enforces federal law

• The Madison Equal Opportunities Commission (“MEOC”) enforces City of Madison’s Equal Opportunity Ordinance

ERD & Other Agencies

• Overlapping jurisdiction• Work-sharing agreements/cross-

filed cases• Dismissal from EEOC gives right

to sue in federal court• Broader protected categories in

MEOC

ERD Process

1. 300-day statute of limitations2. Complaint

– Insurance issues– Duty to preserve evidence

3. Investigation– Internal investigation– Position Statement– ERD Investigation

4. Initial Determination– No probable cause– Probable cause

Complaint

• Must be filed within 300 days of alleged discrimination

• Complainant needs to allege that they have been discriminated against– Adverse employment action

• Based on race, age, gender, sexual orientation, religion, etc.

• Prima facie case• Very low burden

First Step

First step is always to notify your EPLI insurance carrier.

Failure to notify carrier may have Failure to notify carrier may have adverse consequences.adverse consequences.

Duty to Preserve Evidence

You have a legal duty:• As soon as possible after litigation

is threatened or filed• Preserve documents and other

evidence relevant to claims/defenses

• Paper documents, electronic documents, ee--mailmail


Steps:1. Written notification

– People with relevant documents– IT Department and Legal – Follow up!

2. Stop routine destruction of documents

– Document retention policy– Automatic deletion of e-mail and other

electronic documents


Scope of duty to preserve• Scope of preservation varies• What is “reasonable”?• Not practical to keep absolutely every

document/email ever created• Get in-house counsel or outside lawyer

involved early to set up cost-effective preservation strategy


Risks of failing to preserve• Adverse inferences in litigation• Adverse rulings in litigation• Monetary sanctions• Loss of credibility with the

decisionmaker

Internal Investigation

Objectives• Identify decision makers and witnesses• Understand decision making process• Evaluate strengths and weaknesses• Evaluate potential damages• Set goals for litigation• Evaluate cost of litigation


Assemble relevant documents• E-mail• Personnel file

Job Application Employment contractDisciplines and warnings Attendance RecordsEvaluations Salary/bonus historyPromotion history Demotion historyTermination paperwork Handbook sign off

• “Unofficial” personnel files


Relevant documents• Employee Handbook• Relevant policies• Severance Agreement• Personnel files of similarly

situated employees


Identify and interview witnesses• Identify decision makers• Understand what happened and why• Identify any additional documents that

may exist• Consider obtaining:

– witness statements– affidavits

• Evaluate credibility and demeanor• Uncover bad facts


•• AlwaysAlways conduct an investigation• Do not just put together a position

statement• Worst case scenario:

– Later investigation reveals facts inconsistent with position statement

– Must defend why you “lied” to ERD– Changed/updated story as evidence

of pretext

Confidentiality

• Share facts regarding lawsuit only with decision makers– Avoids confusion– Maintains privilege

• Copy attorney on key/strategic discussions

• Advise witnesses– maintain confidentiality– exercise caution in complainant

conversations• Be smart about creating documents

throughout the process

Contesting Unemployment

• Unemployment compensation as a matter of right

• Employer may contest• High burden – willful misconduct

– Boynton Cab Company v. Neubeck, 237 Wis. 249, 296 N.W. 636 (1941):

Contesting Unemployment

• Limited benefit– Employer is unlikely to prevail

• High risk– Plaintiffs’ lawyers use UC hearings

to test discrimination cases– Hope to catch employers unaware

and without counsel– Free discovery

Position Statement

• Employer’s opportunity to state its case.

• Burden: State a legitimate, non-discriminatory reason for the adverse employment action.

• Due 45 days after notice of complaint is issued.

Position Statement

Strategic Issues• How many of your cards to play?• Whether to provide key

documents?• Depends on:

– facts– overall litigation strategy– whether employee is represented

ERD Investigation

• ERD Investigator conducts own investigation

• May include written questions or documents requests to employer

• Complainant normally provides information that they believe supports their case

• ERD may request interviews with employer’s personnel

Initial Determination

Significance of Findings:• No probable cause

– Employee may appeal within 30 days

– hearing on probable cause• Probably cause

– hearing on the merits• Discovery begins

Initial Determination

BUT:• Employee has easier time

finding lawyer• Settlement costs typically go up

A finding of Probable CauseA finding of Probable Causedoes NOT mean that the does NOT mean that the

employer is liable.employer is liable.

Discovery

Three Main Forms of Discovery• Written interrogatories• Document production• DepositionsStrategic Concerns• Added Expense• “Asymmetrical Warfare”

Settlement Considerations

• Sending a message• Complainant’s attorney• Publicity/confidentiality• Management’s risk tolerance

– Total potential exposure– Likelihood of prevailing– Cost of defense

Settlement Considerations

• Disruptive effect of litigation– Management/HR time commitment– Involvement of other employees

• Insurance company• Certain claims cannot be waived• Can prohibit future application and

employment

Hearings

• Hearing on the merits vs. hearing on probable cause– If on the merits, formal Answer to

Complaint due 21 days prior to hearing• Both sides must disclose witnesses

and exhibits 10 days before hearing– Significant trap for the unwary– Party failing to disclose could have all

witnesses or documents excluded from hearing

• May subpoena witnesses to testify at hearing

Hearings

• “Miniature Trial”– Time and expense

• Administrative law judge presides• Typically held in a conference room of

a public building near Complainant’s location (i.e. not always in Madison)

• Witnesses present sworn testimony• Documents admitted into evidence• Post-hearing briefs

Hearings

• ALJ will issue written decision• No hard deadline for issuance of

decision• Result may be appealed• Appeals go to LIRC and then

circuit court• Fewer hearings likely due to new

damage legislation

Retrospective Assessment

• What went well?

• What went poorly?

• What can we do better in our HR/employment practices to avoid claims or limit damages?

Avoiding Future Claims

• Clear policies and handbook provisions

• Progressive discipline policies• Documentation• Front-line supervisor training• Consistent enforcement of

policies

Thank You

Questions?