By Kathleen Kapusta, J.D.

Reversing the dismissal of a plaintiff’s Fair Housing Act (FHA) claim against Western & Southern Financial Group, which rescinded its employment offer to her because she signed a petition supporting a women’s shelter while it was engaged in a lengthy dispute with the shelter, the Sixth Circuit found she presented a plausible claim for relief. Her petition-signing to support the shelter fit within the meaning of the phrase “aided and encouraged,” and Western & Southern’s rescission of the employment agreement constituted an interference with that encouragement, the appeals court concluded (Linkletter v. Western & Southern Financial Group, Inc., March 23, 2017, Merritt, G.).

After she accepted a job with Western & Southern, the plaintiff signed an online petition supporting the shelter. Western & Southern then rescinded the agreement because she signed the petition while it was engaged in a real estate dispute with the shelter over its location in the same neighborhood as the company and its presence there interfered with the company’s “master plan for [that] end of town.”

Shelter removed. After the shelter refused to sell, the company engaged in a campaign to force a sale and the shelter residents sued. The parties eventually settled and Western & Southern bought the property and removed the shelter from the neighborhood.

FHA claim. The plaintiff sued Western & Southern and its senior VP of human resources claiming that the rescission of her contract in response to her supporting the housing rights of the shelter’s female residents violated FHA Section 3717. She argued that the defendants interfered with her employment because she encouraged the women of the shelter in the exercise of their rights under FHA Sections 3603–06. Specifically she claimed that she encouraged the rights in Section 3604(a)–(e) pertaining to anti-discrimination in the rental or sale of housing. The provision she sued under, Section 3617, protects individuals who “aided or encouraged” the rights protected by Section 3604.

Lower court proceedings. Dismissing her claim, the district court found she did not aid or encourage the women as contemplated by the statute. The court also dismissed her nearly identical state-law claim. The plaintiff appealed, arguing that Western & Southern used an illegal employment screening practice by disqualifying potential employees that advocate for the FHA and the Ohio Civil Rights Act.

Fair Housing Act. On appeal, the Sixth Circuit explained that the FHA not only prohibits discrimination against “any person because of race, color, religion, sex, familial status, or national origin” in the rental or sale of housing, it protects plaintiffs who “aided or encouraged” the statue’s enumerated housing rights. The plaintiff contended that by signing a petition she “encouraged” women to pursue their right to be free from sex discrimination in the rental or sale of housing under Section 3604, and that the defendants illegally retaliated by “interfering” with her employment.

Interference. Noting that rescission of an employment agreement can qualify as interference within the meaning of the statute, the appeals court found the defendants’ interference left the plaintiff with a distinct and palpable injury. Further, the Department of Housing and Urban Development has interpreted the statute in a manner consistent with the proposition that interference can refer to employment disputes. Moreover, said the court, because the language “interfere with” should be broadly interpreted to reach all practices that have the effect of interfering with housing rights, it found the scope of the statute extends to employers who cancel contracts in retaliation for FHA advocacy. Thus, the alleged interference appeared to be covered by the statute.

Aided or encouraged. To qualify for a Section 3617 claim, the interference must be in retaliation for a plaintiff having aided or encouraged another’s enjoyment of protected housing rights, the court explained, noting that the district court found the plaintiff’s “encouragement” in signing the petition to be minor. The allegations in the complaint, however, showed the action was concrete and important enough to alert the plaintiff’s future employer to her public support, and result in her termination. “If the encouragement is sufficiently concrete to lead to an individual’s firing, it is sufficiently concrete to state a plausible claim,” said the court. Finding that a plain-meaning understanding of “encouraged” clearly covers the act of signing a petition advocating support for a women’s shelter, the court concluded that interpreting “encouraged” to include the plaintiff’s action was is in keeping with both the plain meaning of the word and the overall purpose of the Act.

Nexus. While the defendants argued that the motivation for attempting to remove the shelter from the neighborhood was “economic,” not “sex,” and that financial motives excluded the case from the type of sex discrimination forbidden by the statute, the court pointed out that a violation of the FHA can be shown either by proof of discriminatory animus or of disparate impact or effect. The facts alleged by the plaintiff and detailed in the litigation between the shelter and the company were sufficient to state a valid claim that Western & Southern discriminated against the women of the shelter, the court concluded.

Nor was there a requirement in Section 3617 that the defendant-employer operate the housing shelter to violate the statute, said the court, finding that here, the defendants allegedly sought to remove housing designated for a protected class from the neighborhood. As a “non-houser” that allegedly denied housing rights to women, Western & Southern fell within the scope of the Act.

In reversing the lower court, the appeals court found that a factfinder could conclude that through the campaign against the shelter, Western & Southern interfered with housing rights under Section 3604 and that the plaintiff encouraged those same rights under Section 3617. For the same reasons, the court also reversed the dismissal of her state-law claim.

By Kathleen Kapusta, J.D.

This tragic case, said the Seventh Circuit, which ended in the death and rape of a pregnant employee at the hands of her supervisor, “tests the scope of Illinois employers’ tort liability for intentional torts committed by their supervisory employees against other employees where the employer has been negligent.” Finding that Illinois law permits recovery from employers whose negligent hiring, supervision, or retention of their employees causes injury, and predicting that intentional torts committed by the abuse of a supervisory employee’s authority satisfies the requirements of the Restatement (Second) of Torts, and that the complaint here stated a claim for negligent hiring, supervision, or retention, the appeals court reversed the dismissal of the negligence claim brought on behalf of the deceased employee against three joint employers. This, said the court, was “an old story that has been told too many times. Its ending is both shocking and predictable. Alisha’s family is entitled to prove its truth” (Anicich v. Home Depot, U.S.A., Inc., March 23, 2017, Hamilton, D.).

The employee began working for Home Depot as a teenager, working there seasonally until her death six years later. Her supervisor, who had a history of harassing young female subordinates, called her his girlfriend, swore and yelled at her, and called her names like “bitch,” “slut,” and “whore” in front of customers. He would also call and text her outside of work and pressured her to spend time with him alone. When she became pregnant, he reacted angrily.

Murdered, then raped. The employee complained to other supervisors and managers and while they admitted they knew about his behavior, he remained her supervisor. At one point, he was required to take anger-management classes but did not complete the course. When the employee was about seven months pregnant, he asked her to go with him to his sister’s wedding in Wisconsin, telling her he would fire her or reduce her hours if she refused. She went and after the wedding, he took her to a hotel room where he murdered her and then raped her corpse.

Her mother, as the administrator of her estate, sued Home Depot and the companies that managed its garden centers, alleging that as joint employers their negligence caused the employee’s death. Finding that the defendants did not owe her a duty of care, the district court dismissed the complaint.

Employers’ duty. While employers have a duty under Illinois tort law to act reasonably in hiring, supervising, and retaining their employees, the defendants argued they had no obligation to fire or demote employees for their use of inappropriate language or sexual misconduct. Rejecting their contention that creating this obligation would result in intolerable burdens, the court pointed out that employers already have this obligation as both Title VII and the Illinois Human Rights Act impose liability for failing to discipline harassing employees. The plaintiff did not ask it to impose any new obligations on employers, said the court, nor did it “do so by allowing this case to proceed.”

Supervisory authority. Section 317(a) of the Restatement (Second) of Torts, which Illinois has adopted, provides that employers have “a duty to exercise reasonable care” to control employees who are acting outside the scope of their employment if the employees are on the employers’ premises or using the employers’ chattels. In this case, the supervisor was not on the defendants’ premises when he killed the employee, nor did he use their chattel. But, the court pointed out, he used something else they gave him: supervisory authority over the employee.

His threats to fire her or reduce her hours if she did not go with him were “what the Supreme Court calls ‘tangible employment actions,’” the court explained, stating that he could do that only because the defendants made him her supervisor. “We believe,” said the court, “that § 317(a) should be satisfied by a tortfeasor’s use of supervisory authority. We predict that the Illinois Supreme Court would agree, for two reasons: because supervisory authority is in this respect analogous to a chattel, and because other grounds support holding employers liable in tort for misuse of supervisory power.”

Finding no principled reason to hold employers liable for the tortious abuse of their chattels but not for the tortious abuse of supervisory authority, the court reasoned that formalistic adherence to the literal terms of Section 317(a) would produce odd, even arbitrary results. Injuries caused by using a chattel and injuries caused by abusing supervisory authority both occur by virtue of the tortfeasor’s employment and not because they merely know each other through their work, the court stated.

Ground for liability. Citing Burlington Industries, Inc. v. Ellerth, the court noted that the law has moved toward holding employers vicariously liable for their supervisory employees’ intentional torts committed outside the scope of their employment but by abusing their supervisory authority, subject to an affirmative defense. It discussed this, it explained, to show its holding was part of a broader trend toward recognizing employer liability for supervisors’ intentional torts committed outside the scope of employment and only an incremental shift, when there are good grounds to go much further. The court then confined itself to predicting that intentional torts committed by the abuse of a supervisory employee’s authority satisfies the requirements of Section 317(a) and that the complaint stated a claim for negligent hiring, supervision, or retention.

Foreseeability. To succeed on a claim for negligent hiring, supervision, or retention, a plaintiff must demonstrate that the employee’s “particular unfitness … rendered the plaintiff’s injury foreseeable to a person of ordinary prudence in the employer’s position,” and here the supervisor’s “particular unfitness” was his harassing, controlling, and aggressive behavior toward his female subordinates. The defendants argued the employee’s injures were not foreseeable from that conduct because his violent attack was a radical break from even his most offensive prior behavior, and a reasonable employer could not have predicted violence at all since he had not made explicit threats and had not yet hit anyone. However, the court found these arguments presented fact issues that could not be decided on a motion to dismiss.

Some harm. In order to satisfy the foreseeability component, the court observed, it is not necessary that a defendant must have foreseen the precise nature of the harm or the exact manner of occurrence. Rather, it is sufficient if, at the time of the defendant’s action or inaction, some harm could have been reasonably foreseen. Thus, the magnitude of harm the supervisor inflicted on the employee did not by itself render the harm unforeseeable.

Left with the question whether “some harm” was foreseeable to a person of ordinary prudence, the appeals court noted that the district court said as a matter of law, the answer was no. Reiterating that this is a question of fact, the court reversed that decision. “If the plaintiff can prove her allegations at trial, a reasonable jury could find that ‘some harm’ was foreseeable,” it reasoned, observing that the complaint recounted how the supervisor’s behavior escalated: from private inappropriate comments and touching, to workplace retaliation, to continual harassment and monitoring, and finally to public outbursts, verbal abuse, and physical intimidation.

“Hearing such evidence, a reasonable jury could easily find that the employers could and should have foreseen that [the supervisor] would take the small further step to violence,” said the court, reversing the decision of the court below.

By Marjorie Johnson, J.D.

A confidentiality agreement that restricted employees from discussing ongoing disciplinary investigations involving themselves or coworkers ran afoul of their established rights under federal labor law to share employment-related information with one another, the D.C. Circuit held, affirming the NLRB’s ruling on that issue. However, it rejected the Board’s determination that the employer’s investigative nondisclosure policy also violated the NLRA, finding that there was insufficient evidence to show that employees’ nondisclosure was categorically requested in all HR investigations involving certain types of misconduct (Banner Health System v. NLRB, March 24, 2017, Pillard, C.).

A Banner Health System employee filed an unfair labor practice charge after he received a coaching for refusing his supervisor’s instructions to clean medical instruments using hot water from the coffee machine after a steam pipe broke. This prompted the regional director to file a retaliation claim, which was later amended to include claims that Banner also made employees sign an overbroad confidentiality agreement and maintained an overbroad rule requiring nondisclosure of investigative interviews.

Employer policies. All new hires were required to sign a confidentiality agreement that defined “confidential information” to include “private employee information (such as salaries, disciplinary action, etc.) that is not shared by the employee.” It also stated that “keeping this kind of information private and confidential is so important that if I fail to do so, I understand that I could be subject to corrective action, including termination and possibly legal action.”

The nondisclosure policy was contained in an “interview of complainant” form that Banner’s HR consultant relied upon when investigating complaints. The “Introduction for all interviews” section included the statement: “I ask you not to discuss this with your coworkers while this investigation is going on, for this reason, when people are talking it is difficult to do a fair investigation and separate facts from rumors.” The HR consultant testified that employees were never given a copy of the form and that she requested nondisclosure “half a dozen” times in 13 months, and only “in the more sensitive situations.”

She also testified that she made nondisclosure requests only during investigations in which she needed to speak to more than one person. When asked whether there were particular types of investigations with certain sensitivity issues leading her to ask someone to keep things confidential,” she mentioned complaints of sexual harassment, hostile work environment, and suspicion of abuse.

Earlier rulings. The ALJ held that the confidentiality agreement violated the NLRA but that its investigative nondisclosure policy did not. The Board unanimously affirmed as to the confidentiality agreement, while a divided panel reversed as to the investigative nondisclosure policy. A two-member majority held that Banner had an unlawful policy of asking employees not to discuss certain types of workplace investigations without performing the requisite individualized inquiry into the need for confidentiality. After the D.C. Circuit vacated and remanded the decision following the Supreme Court’s decision in NLRB v. Noel Canning, the Board reached the same conclusions on remand, again over one member’s partial dissent.

Confidentiality policy. The D.C. Circuit upheld the Board’s conclusion that the confidentiality agreement unlawfully suppressed employee Section 7 activity. First, it was overbroad as it explicitly directed employees not to discuss coworkers’ “private employee information (such as salaries, disciplinary action, etc.)” unless the information was “shared by the employee.” Since the directive expressly reached information about salaries and discipline, it could be reasonably understood to prohibit discussion protected by Section 7.

Moreover, the agreement’s permission to discuss information “shared by the employee” was ambiguous and inadequate to protect employees’ right to share innocently obtained information. First, it was not clear with whom the information must be “shared” in order to be fair game for employee discussion. Moreover, it was unclear how Banner’s rule would apply to situations where information was leaked inadvertently.

Banner also failed to show that a substantial business justification outweighed the burden the agreement imposed on employees. It was not tailored to Banner’s substantial interest in protecting patient privacy since it was not limited to “patient information,” but separately identified “private employee information … not shared by the employee” as “confidential information.”

Investigative nondisclosure policy. However, the circuit court rejected that part of the Board’s order which sanctioned Banner for maintaining a “categorical non-disclosure rule” regarding certain types of workplace investigations, finding instead that the record lacked substantial evidence. Notably, the Board had interpreted the HR consultant’s testimony as establishing that she requested confidentiality in any investigation into alleged sexual harassment, hostile work environment claims, charges of abuse, or similar misconduct. Thus, it found that she unlawfully utilized a categorical approach without making individualized determinations that confidentiality was necessary to maintain the integrity of any particular investigation or interview.

The D.C. Circuit disagreed, finding that the Board had made “unwarranted logical leaps that the evidence cannot fairly support.” Significantly, the HR consultant was never asked key questions to establish whether, in practice, Banner had a policy of categorically requesting nondisclosure regarding any particular kind of investigation. There was no evidence that any employee was aware of the form or the content of its nondisclosure script, and the HR consultant’s testimony suggested that Banner’s policy was not to request nondisclosure in “all investigations.” Her testimony was “simply too terse and unclear” to sustain the Board’s determination that Banner had a policy of categorically requesting nondisclosure of an entire subset of investigations.

Australia’s Grand Prix has come under fire after it, along with Adecco, the world’s largest staffing firm, offered the opportunity to work for nothing, according to the Age Australia.

The offer prompted union claims that the Grand Prix, which is sponsored by the Victorian Government, is in breach of workplace laws. Event workers have also said that the Grand Prix is setting a precedent for major events to rely on free labour, which they claim could exacerbate the problem of unpaid work and internships in Australia.

Adecco, which partnered with the Grand Prix, sent text messages to casual workers on its local database offering a volunteer opportunity for this year’s race which involved pre-event training and three full days’ work in customer service, all unpaid.

Union director Adam Portelli​ stated that the text messages that were sent to the casual workers pressured them to work for nothing, and constituted as a possible breach of the amusement and events award. Portelli insisted that the Victorian Government should insist in its contracts with the Grand Prix that it pays its workers award rates.

“The Grand Prix is a jewel in Victoria’s tourism crown, attracting major corporate sponsorship and global attention, and it beggars belief that it would not employ paid customer service staff,” Portelli said.

Grand Prix chief executive Andrew Westacott commented,​ “The corporation enlisted Adecco to help recruit and it was made clear they were volunteer opportunities.”

Businesses in Japan are paying recruitment agencies higher fees to hire experienced workers due to labour shortages, according to Nikkei Asian Review.

Many companies and recruitment firms are closing contracts at rates more than 5% higher than several years ago for IT and construction engineers. According to Adecco, in Japan, “contracts sometimes close at double the usual rate for the hiring of system engineers.”

In February 2017 the job-to-applicants ratio increased to 1.82 for mid-career workers, up 0.14 points compared to the previous year, according to data from Recruit Career, a recruitment services firm and subsidiary of Recruit Holdings.

Labour shortages were seen for IT engineers as the ratio reached 3.67, while the ratio for construction engineers reached 4.41. Demand for construction engineers is expected to grow due to the upcoming Tokyo Olympics in 2020.

The average pay rise rate in China will decrease by 0.2% to 6.7% in 2017, compared to last year, according a data from HR service provider China International Intellectech (Shanghai) Corporation.

“The slower pay rise is not surprising as the whole economic growth is slowing down and the employers are also suffering from narrowing profit margins,” Zhou Jing, manager of the CIIC research center, said. “Meanwhile, employers are also bearing increasing burden of human resource costs as employees’ pay had been risen fast in previous years.”

The only industry expected to have a higher pay rise rate than last year is the tech industry.

Shanghai is expected to have a pay rise rate of 6.4% this year, down from 6.7% last year. The growth rate in second-tier cities will still be higher than in first-tier cities.

The impact of automation could lead to four out of ten jobs being lost to robots by 2021, reports the Economic Times. PeopleStrong CEO and Founder Pankaj Bansal, stated that there will be a visible change in the next 3-4 years with the first major effects will be seen in the sectors like manufacturing, IT and ITeS and security services and agriculture. According to Bansal, low skill and high transaction jobs will be affected as automation takes away their jobs.

Meanwhile, hiring for short term projects, flexi hiring would be the way forward in these areas for roles that cannot be automated. Francis Padamadan, Country Director, Kelly Outsourcing and Consulting Group India, said, “automation will not take away all the jobs because you still need someone to build and monitor the robots. So, while jobs mostly at the bottom of the pyramid will be affected, new jobs will get added”.