On January 16, 2014, the EEOC issued a press release advising the public that J.C. Penney had agreed to pay $40,000 to settle a pregnancy discrimination lawsuit brought by the EEOC. In the lawsuit, the EEOC charged J.C. Penney refused to hire a female applicant for a salon position after she told the manager she was pregnant. Such actions are in violation of the Pregnancy Discrimination Act ("PDA"). The EEOC tried to resolve the matter without litigation, but was unsuccessful. The settlement also requires J.C. Penney to implement an equal employment opportunity training and reporting program including posting of anti-discrimination notices.

The EEOC reports 4,901 pregnancy discrimination charges were filed in FY2006, up approximately 1,000 cases over FY 1997. However, there was a jump in cases beginning FY2007 that has remained high. In FY2011, 5,797 complaints were filed with the EEOC. Importantly, in FY 2011, employers paid out $17.2 million in monetary benefits, excluding amounts awarded in litigated cases, arising out of pregnancy discrimination claims. Such cases are costly not just in terms of cash outlay, but also in terms of employee morale, workplace environment and employer reputation.

Are you next? The PDA was passed in 1978 as an amendment to Title VII of the Civil Rights Act of 1964. Unfortunately, after such an extended period of time, employers become lured into a false sense of security that everyone understands what they can and cannot do in the workplace. That simply is not true and employers who want to avoid costly claims such as that experienced by J.C. Penney must be proactive.

Construction companies are not immune to PDA claims. There are ways for all employers to reduce the risks to such claims. If you do not have a plan in place to address discrimination in the workplace, contact an attorney experienced in employment law to assist you in developing a program.

Consider these facts: You hire a female to work as your leasing manager for your apartment complex on Monday, August 3rd. The manager’s workplace is a desk in a small front office. During her first week, two male maintenance workers enter her office and hover over her at her desk and "sniff" her. The two men sometimes go to the office alone and at other times go together. Despite being told several times by the female worker that their behavior was bothering her, the men continued the conduct. In fact, over the course of her first few days, the men "sniffed" her twelve times each.

On Wednesday of this first week of employment, the female worker complained to her supervisor. The supervisor responded to "let it slide" because "you know how men are like when they get out of prison." By Thursday, the supervisor decided to have a meeting to air the complaints. In the meeting, the female worker said that she did not like the men "sniffing" her. One maintenance worker claimed to have a medical condition, while the other worker stated that he "needed to get a release."

How would you handle this situation? What do you do now? In this case, the supervisor fired the female worker the same afternoon as the group meeting. The supervisor gave no reason for the firing. Unsurprisingly, the female worker sued for sexual harassment and retaliation. Before the case was ever tried by a jury, the lower court granted summary judgment in favor of the employer. The lower court determined that the conduct of the maintenance worker was not objectively unreasonable so as to create a hostile work environment so there could be no sexual harassment. The lower court then concluded that, because a reasonable person would not believe that sexual harassment had occurred, the female could not have been fired for complaining about an unlawful employment practice and thus her claim of retaliation was unsupported.

The employer was probably rejoicing at this point, but the celebration didn’t last long. The U.S. Court of Appeals for the Fifth Circuit in Royal v. CCC&R res Arboles, L.L.C. considered the case on appeal. Click here to read the decision.  For whatever reason, the female worker did not appeal the sexual harassment claim itself, but only appealed the claim of retaliation. Needless to say, the Fifth Circuit reversed the judgment and sent the retaliation claim back to the lower court for trial.

In evaluating the case, the Fifth Circuit first discussed whether the maintenance workers’ conduct could constitute an unlawful practice under Title VII of the Civil Rights Act of 1964. The conclusion was that a reasonable jury could determine that the workers’ conduct violated Title VII because it was carried out in a small, confined space over a short period of time with multiple instances of such behavior. The appeals court concluded that, in fact, "the only thing interrupting this conduct seems to have been [the female worker’s] termination." The court then addressed whether the female could have been fired in retaliation for her reporting of the conduct. The employer claimed the female was fired for "swatting a fly harder than was necessary and slamming a door." The court noted that those reasons are "legitimate," although they may not be "plausible." However, the termination of the female worker on the same day as the meeting was clearly an adverse employment action that, combined with all the other factors, could lead a reasonable jury to believe that the termination was done in retaliation. Therefore, the case was sent back to the lower court for a jury to decide.

If you are thinking that this must be a very old case because the facts are so far-fetched, think again. These events occurred in 2009 and the Fifth Circuit just issued its opinion on November 21, 2013. Even though Title VII has been around since 1964, it does not mean that employees know what they should and should not do in the workplace, nor does it mean that supervisors know how to properly handle complaints. Many employers become trapped in a false sense of security that everyone knows how to act. Don’t be one of those employers. A training program for all employees—both workers and supervisors—will educate your workforce on acceptable behavior and will go a long way in defending against claims of this kind.

If you need assistance training your workforce you should call your attorney to review your current program, develop a training session for you and do on-site training at your convenience. Don’t wait until you face a claim in court to decide to be proactive!

In an article published on June 9, 2011, by Brenda Redfern, employers were reminded that effective July 1, 2011, the Mississippi Employment Protection Act requires all Mississippi businesses to E-Verify all new employees. In conjunction with this statutory mandate, the Mississippi Department of Employment Security (“MDES”) has announced it will E-Verify any prospective employees for employers who are looking to retain workers through MDES.  Click here to see the article published regarding this e-verify service in the Mississippi Business Journal on July 18, 2011.  An employer simply has to place a job order with MDES by calling 888-844-3511 or contacting a WIN Job Center. MDES will send a list of prospective employees, all of whom will be E-Verified. When an individual is hired, the employer simply notifies MDES and it will send an official “Certification of I-9 Completion” to the employer. This service can assist contractors in identifying potential employees and save many administrative hours and headaches.

In addition, MDES has also agreed to implement a process it calls “reversal referrals”. This is where an employer identifies a prospective employee and can send him/her to a WIN Job Center where the individual is E-Verified. The name of the individual is sent back to the prospective employer by MDES and, if hired, MDES will send the required certification. Employees that use MDES for E-Verification may relieve themselves from potential liability under the Mississippi Employment Protection Act.

Contractors should consider taking advantage of this free service by MDES in these difficult economic times.

In Mississippi, workers’ compensation laws replace traditional negligence actions against the employer in exchange for a no-fault system of payment to the employee. This exclusivity of remedy is the product of the "bargain" underlying the workers compensation laws. According to that bargain, the benefit to workers is compensation for all work-related injuries without reference to fault of either the employee or employer. Employees, in return, surrender the right to pursue "all other liability." Employers benefit by having the amount they have to pay to any worker capped. Employers in turn agree to assume the financial burden (through insurance) of all work-related injuries without reference to fault.

The exclusive remedy creates immunity to suits for damages by the employee against the employer but only if the employer actually provides the insurance required by the statutes. If the employer is required to provide insurance and fails to do so, then the employee may pursue a claim under the workers’ compensation act or can sue the employer for damages. The employee gets to decide which route to take and, if a suit for damages is filed, the employer is even prohibited from asserting that the employee assumed the risk or contributed to the injury.

The penalty for failing to maintain required workers compensation insurance gets even stronger. The employer (including the president, secretary and treasurer if the employer is a corporation) can be subject to criminal prosecution for a misdemeanor which carries a potential penalty of $1,000 and/or imprisonment of up to one year, in addition to the recovery to which the employee is entitled. A civil penalty up to $10,000 can also be assessed by the Mississippi Workers Compensation Commission.

For contractors, the burden is even greater. General contractors are considered "statutory employers" of the employees of subcontractors. If the subcontractor provides workers compensation insurance, then the general contractor gets the same protections as the subcontractor has. However, if the subcontractor does not provide workers compensation insurance, the general contractor is statutorily responsible to provide the insurance and be liable for payment or compensation to the injured employee.

The potential consequences (damages, fines and jail time) for failure to provide required insurance are too great to ignore. General contractors cannot assume that subcontractors are carrying workers compensation coverage. As a matter of routine, general contractors should require proof of such insurance, together with an acknowledgement from the insurance provider that coverage will not be cancelled without advance written notice to the general contractor. It is also wise for the general contractor to require that the subcontractor’s coverage add the general contractor as an additional named insured.