Oregon Court of Appeals Upholds Claim of Negligent Failure to Investigate
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In Steele v. Mayoral et al., the Oregon Court of Appeals ruled that a plaintiff could take to the jury her claim that her employer had failed to prevent sexual harassment by her supervisor by not investigating earlier incidents about the supervisor’s relationships with other employees.
The plaintiff, a high school guidance counselor, was dating her supervisor, the principal. She complained that the supervisor had sexually assaulted her during a date. The school district investigated the complaint and recommended the supervisor be terminated. The plaintiff sued. In addition to alleging sexual harassment and retaliation, she also alleged that the school district had been negligent by not terminating her supervisor before the incident had even occurred. She based that allegation on three earlier incidents involving the principal’s relationships with other school district employees. The juicy allegations involve (1) the principal’s affair with the wife of another principal in the same school district, (2) the principal’s complaint that another district employee was “stalking” him after he “rebuffed her advances,” and (3) yet another employee’s allegation that she was dating the principal when he slept with yet another employee. The plaintiff alleged that the school district should have investigated those incidents – and that if it had, it would have terminated her supervisor years before.
The trial court dismissed the plaintiff’s negligence claim, but the Court of Appeals reversed, ruling that a jury should be able to decide whether or not the school district’s failure to investigate had caused the sexual harassment. We don’t know what a jury would say about liability in this case, but it is a sobering reminder to employers to investigate all incidents of potential misconduct involving the workplace.
Oregon Court of Appeals Rejects Wrongful Discharge Claims for Health and Safety Retaliation
This morning the Oregon Court of Appeals rejected a plaintiff's common-law wrongful discharge claim that she was terminated for reporting a health and safety violation. The Court ruled that the state and federal statutory remedies were adequate, and that she should have filed a statutory claim instead.
Plaintiff Andrea Deatherage was an employee of Super 8 Inn when she filed a health and safety complaint against her employer with Oregon OSHA. Deatherage was terminated the next day. She sued for the common-law tort of wrongful discharge, claiming she was terminated in retaliation for filing the complaint.
In Oregon, wrongful discharge is a "gap filling" remedy that is available only when there is no adequate remedy by statute. In Walsh v. Consolidated Freightways, 278 Or 347, 563 P2d 1205 (1977), the Oregon Supreme Court ruled that the state and federal statutory remedies for health and safety complaint retaliation were sufficient to preclude a common-law remedy. Citing Walsh, the trial court dismissed plaintiff's claim.
So why the fuss at the Court of Appeals? Plaintiff claimed that a federal case issued since Walsh had cast doubt on whether the statutory remedies were actually adequate. The Court of Appeals rejected the invitation to ignore an Oregon Supreme Court case, and adhered to Walsh, agreeing with the trial court. (Oddly, the court declined to fill a gap in Oregon law by explaining exactly what remedies are available for an Oregon statutory health and safety reporting claim under ORS 654.062.)
So why is this case important? At this point, it creates a difference in how these kinds of wrongful discharge cases will be treated in state courts as opposed to federal courts. The World of Work will be watching future developments, as the Oregon Supreme Court may have an opportunity to weigh in on this issue.
Recovery of Attorney Fees for the Employer in Oregon Wage and Hour Cases
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A recent Oregon Court of Appeals case, Rogers v. RGIS, LLP, presents an opportunity for employers. In Rogers, the court awarded an employer a whopping $180,854.09 in attorney fees. The plaintiff brought one lawsuit but several wage and hour claims (overtime, minimum wage, late payment of final wages, unpaid wages for rest and meal breaks).
The court found the plaintiff prevailed on a few claims, but the employer prevailed on most. As a result the employer was awarded six figures and the plaintiff was awarded only $880 to cover fees.
This case is saying that a prevailing party may recover fees, which relate to each separate wage claim. For example, if the plaintiff brings five separate wage claims and the employer prevails on four, the employer will (in the court’s discretion) get to recover its fees to defend against the four claims upon which it prevailed.
If you’re sued under Oregon wage and hour laws, you should seek fees under ORS 20.077 and 653.055(4). You can also use the potential for recovering fees as leverage before a lawsuit is filed. Will this logic be extended to other employment claims, such as discrimination and retaliation claims?
Oregon Court of Appeals Upholds Employer's Right to Ask Potentially Disabled Employees to Take Medical Exams
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Today in Heipel v. Henderson et al., the Oregon Court of Appeals affirmed summary judgment on an Oregon disability discrimination claim in favor of an employer who asked an employee to take an independent medical exam (IME) as part of an investigation into the employee's disturbing work-related behavior. The court confirmed that such exams must be "job related and consistent with business necessity," and that the exam in this case met those criteria.
Plaintiff Barbara Heipel worked for the Oregon Employment Department. Her supervisors received an escalating string of complaints about her job performance and erratic behavior. Her actions included:
- standing in the bathroom in a "trance" pulling out paper towels into an overflowing trash can;
- leaning against a bathroom stall in a "despondent state";
- total loss of emotional control with supervisors and coworkers;
- accusing her coworkers of stealing shredded documents from a trash can and pasting them together for personal use; and
- false and contradictory complaints to customers about her employer and coworkers.
Heipel's employer asked her to take an IME to determine whether she posed a threat to herself and others and whether she could perform the essential functions of her position. Plaintiff refused, and the Employment Department terminated her for refusing. Plaintiff filed a lawsuit claiming, among other things, that her employer had unlawfully discriminated against her under Oregon employment statutes for having a disability.
ORS 659A.136(1) provides that such examinations are appropriate only where they are "job related and consistent with business necessity." The Oregon Court of Appeals, relying on federal cases in the Sixth and Eighth Circuits, ruled that, under these circumstances, the requested exam met both requirements.
This decision should not be seen as a blanket endorsement of all IMEs in the workplace. Although this exam was ruled appropriate, the Court of Appeals' inquiry was fact-specific -- and the facts here were unusual. Employers should understand the risk of requesting such exams and should carefully evaluate the individual circumstances before forging ahead.
Oregon: Arbitration Agreements Need Not Contain Express Waiver of Jury Trial
Late last month, the Oregon Court of Appeals held that an arbitration agreement between an employer and an employee need not contain an express waiver of the employee's right to a jury trial to be enforceable. The opinion can be read here: Hays Group, Inc. v. Biege.
In Hays Group, a trial court denied an employer's motion to compel arbitration of an employee's wage and age discrimination claims on the basis that the arbitration agreement did not contain an express waiver of the right to a jury trial, just a statement that claims would be “settled by final and binding arbitration.” The Court of Appeals reasoned that the employee did knowingly waive his right to a jury trial, given that “[c]laims cannot be settled by ‘final’ and ‘binding’ arbitration except by a waiver of the right to a jury trial.”
This decision gives Oregon employers some added leeway in drafting arbitration agreements. The best practice remains to include an express waiver of the right to a jury trial - there is no harm in including one, and it helps cut off any employee's arguments that he or she did not understand the scope of the agreement.
Oregon employers should also be aware that, pursuant to a new statute effective January 1, 2008, all employee arbitration agreements must be presented in a "written employment offer" that must be "received" by the employee at least two weeks before the first day of the employee's employment. Arbitration agreements may be presented to current employees, but will not be enforced unless entered into at the time of a "bona fide advancement" (such as a promotion).
