An Applicant Sued Because He Thought He Was More Qualified Than The Person Hired

July 26, 2010

The court considered whether hiring someone with arguably inferior qualifications, combined with the Company’s failure to retain and produce the candidate applications, was sufficient to have the matter argued in front of a jury. 

The applicant applied along with approximately 60 other applicants for a position with the defendant Company.  The Company chose to hire a 40 year old applicant who possessed what the Company found to be superior qualifications (and which the plaintiff believed to be inferior qualifications).  The applicant was not interviewed.  Unfortunately for the Company, the employment applications of the candidates could not be located, which the plaintiff argued was evidence that the employer had tried to conceal pertinent fact regarding his rejection.  The court found that the Company had presented a legitimate business reason for his rejection (the other applicant was more qualified), so the burden shifted to the plaintiff to establish that the Company’s reasons were a pretext for age discrimination. His attorney argued, in part, that (1) his client had superior qualifications, and (2) the Company’s inability to produce the applications received showed that the company had something to hide.

Courts generally defer to the legitimate business decisions of employers in determining which applicant is best qualified for the job.  Here, as in most instances, some candidates are stronger in some areas than others.  In this case, the applicant/plaintiff was found to have superior qualifications in some areas, but the court also found the successful applicant possessed other advantages.  In concluding that the plaintiff had failed to establish that the Company’s reasons were pre-textual, it found that his “qualifications cannot be reasonably viewed as ‘vastly superior’….[and] were not ‘so superior to those of the person selected…as the make the selection of that person unreasonable….”  As for the Company’s failure to produce the applications, the court found that this failure alone cannot create an issue of fact sufficient to have the matter move forward. The case was dismissed.

This case upholds the authority of California employers to select who they deem to be the most qualified applicant from the available pool for an open position. Employers are well advised to carefully weigh and evaluate the inevitably competing qualifications of the candidates and carefully document the reasons for the successful applicant’s selection.  Further, California employers should ensure they are complying with record retention requirements (2 years for employment applications).

Ninth Circuit Court of Appeals Reverses Against Employers

July 19, 2010

Continuing the recent trend in questioning the propriety of classifying workers as independent contractors instead of employees, the Ninth Circuit reversed an employer’s victory on this issue in Narayan v. EGL, Inc.  EGL enters into contracts with persons intended to be independent contractors (ICs).  The ICs lease vehicles and acknowledge that they will act as independent contractors to provide delivery services for EGL.  Each IC acknowledged that he or she was not an employee, and that he or she would “exercise independent discretion and judgment to determine the method, manner and means of performance of its contractual obligations.”  And, by contract, the ICs agreed that the contracts were to be enforced under Texas law. Nonetheless, a number of such California-based persons sued EGL claiming that they were employees and entitled to overtime pay, reimbursement of expenses, off-duty meal periods and other employment related claims.

The District Court for the Northern District of California found that the plaintiffs’ claims did not have merit and granted summary judgment in favor of EGL.  The District Court not only held that Texas law applied and that under Texas law, the plaintiffs could not be considered to be employees, but also held that the same result would follow under California law.   Unfortunately for EGL, the District Court did not make any factual analysis to support the alternative finding and conclusion.

The Ninth Circuit reversed the District Court’s decision and held that the plaintiffs’ claims arose under California’s regulatory scheme and were governed by California law. Thus, the issue was whether under California’s labor laws (not Texas law), the plaintiffs were employees or independent contractors.  And, despite the trial court’s express finding that the plaintiffs would be considered to be independent contractors in California, the Ninth Circuit disagreed and found a triable issue of fact on this question.

What should Companies do in light of Narayan and other recent court decisions and enforcement efforts focused on improper independent contractor classification?  Companies that have entered into Independent Contractor contracts (or verbal agreements) with persons located in California should consider having these relationships reviewed to assess whether the IC designation will hold up in California.

Two Pending Legislative Items-Pregnancy Accommodation/Credit Reports

July 12, 2010

There are two new pieces of pending legislation that could impact employers. The first, and pretty much consistent with current law, the employer can ask for a “Medical Certification” regarding a reasonable accommodation due to pregnancy. The new law appears to permit such certification for: The employee is disabled because of pregnancy; it is medically advisable for the employee to be transferred to a less strenuous or hazardous position or duties or otherwise reasonably accommodation.

It is also important to understand what is meant by a “Reasonable Accommodation.”

1. Modifying work practices;

2. Modifying work duties;

3. Modifying work schedules to permit earlier or later hours;

4. Providing more frequent rest breaks;

5. providing a rest area;

6. Modifying lifting requirements; and

7. Allowing an employee to sit rather than stand or otherwise alter her physical work requirements.

The above are being proposed which in my opinion is long overdue. Employers in the past had to be careful until the employee asked for the accommodation. This would give the employer an opportunity to ask or accommodate a pregnant employee without running the risk of violating state or federal guidelines. I will keep you posted.

The second issue-Employers using credit reports for employment purposes.

Under the California Fair Employment & Housing Act, an employer cannot pull a credit report on an applicant. Yes, I know, some employers do it through their third party background check company. I have always expressed this was not a good policy even though the applicant signs off that they are consenting to it. Why wouldn’t he or she? They are trying to get a job. Arguably they could later argue they were under duress when they signed off on it. Anyway, the new proposed legislation would prohibit employers, with the exception of financial institutions, from obtaining a consumer credit report for employment purposes.

There are two exceptions. If the information is substantially job related, meaning that the position of the person for whom the report is sought has access to money, or other assets, or confidential information; and the second; a person is being hired for a managerial position.

I will keep you posted if these proposed laws are passed.

FMLA Applies To Care For The Child Of A Same Sex Partner

July 6, 2010

The U.S. Department of Labor (“DOL”) has published an Administrator’s Interpretation to address the question of whether an employee is entitled to leave under the Family Medical Leave Act (“FMLA”) to care for the child of a same sex partner.  Under the FMLA, employees who have no biological or legal relationship with a child may still be considered to stand in “loco parentis” to the child and be entitled to leave to care for the child.  An in loco parentis relationship can be demonstrated either by provision of day-to-day care for the child, or provision of financial support to the child. In the Interpretation, the DOL makes it clear that same sex partners can establish the requisite in loco parentis relationship.  The Interpretation states, “[f]or example, where an employee provides day-to-day care for his or her unmarried partner’s child (with whom there is no legal or biological relationship) but does not financially support the child, the employee could be considered to stand in loco parentis to the child and therefore be entitled to FMLA leave to care for the child if the child had a serious health condition.”  The Interpretation further states that the same applies for “an employee who will share equally in the raising of a child with the child’s biological parent” and “an employee who will share equally in the raising of an adopted child with a same sex partner, [but] does not have a legal relationship with the child.”  The DOL also notes in the Interpretation that “the fact that a child has a biological parent in the home, or has both a mother and a father, does not prevent a finding that the child is the ‘son or daughter’ of an employee who lacks a biological or legal relationship with the child for purposes of taking FMLA leave.” 

It is important for employers to be aware that the FMLA and California child care leave laws are not limited to traditional definitions of family and parentage.  When faced with a request for child care leave, employers need to make an individualized fact-based determination regarding the relationship between the employee and the child.