Recent Developments from Around the States

Marcia Sniecinski started working for Blue Cross/Blue Shield in 1983 and in 1987 became a telemarketing representative. Following the 1989 merger of Blue Cross/Blue Shield subsidiaries, Sniecinski continued her role as a telemarketing representative with Blue Care Network of East Michigan (BCN). During her tenure, Sniecinski went on three pregnancy-related leaves of absence. Just before going on her third leave of absence, Sniecinski interviewed for and was offered an account representative position with Blue Cross/Blue Shield's sales department in connection with its merger with the sales team of Blue Care Network of East Michigan (BCN). Sniecinski's telemarketing position was terminated in March 1994 under BCN's long-term disability policy when she had exhausted her long-term leave.

Over the years, Sniecinski's supervisor had made pregnancy-related comments to her; for example, he mentioned in connection with one of Sniecinski's medical leaves that he would never again hire anyone in their childbearing years. When Sniecinski indicated after her last medical leave that she was ready to return to work, the company informed her that her old BCN position had been eliminated in the merger with Blue Cross/Blue Shield and that there was no available position for her. Sniecinski sued. A jury found the company liable for pregnancy discrimination and awarded Sniecinski a total of $351,000 in damages.

A divided Michigan Supreme Court set aside the verdict. Sniecinski's supervisor's remarks regarding pregnancy amounted to nothing more than “stray remarks,” the court wrote. Instead, the court found, Sniecinski's employment had lapsed under the long-term disability policy, the terms of which Sniecinski was aware and accepted. The court further noted that Blue Cross/Blue Shield's custom of allowing employees returning from disability leave to return to their old positions was not relevant to Sniecinski's case, since her old position had been eliminated. “Sniecinski did not seek to return to her previous job. Rather, she sought to begin new employment[.]” Thus, Sniecinski could not show that she was treated differently than others returning from pregnancy leave and could not establish a causal connection between her pregnancy and the company's refusal to reinstate her. The dissenters to the majority opinion found that Sniecinski's supervisor's comments created a reasonable inference of a causal connection.

MINNESOTA

Combative Conduct Insufficient to Support Emotional Distress Claim

A radio station employee who harassed her supervisor with false police reports, threats of legal action, and combative conduct may have been unprofessional and even bizarre, but was not liable for intentional infliction of emotional distress, the Minnesota Supreme Court has held. Langeslag v. KYMN Inc., 664 N.W.2d 860 (Minn. July 17).

Sharon Langeslag was hired for an outside sales job in August 1996 by Wayne Eddy, the principal owner of a radio station. The two had a hostile relationship from the outset of Langeslag's employment. Langeslag also had “continued conflicts” with other employees in which she was accused of threatening and insubordinate behavior. The conflict between Eddy and Langeslag often led to heated arguments and shouting matches. Against the background of this conflict, Langelsag testified against Eddy when, in January 1998, Eddy was involved in “an incident” in at the radio station that led to his arrest and conviction. In June 1999, Langeslag brought a number of claims against KYMN and Eddy, including sexual harassment, failure to pay wages, and violation of the state whistle-blower statute. Eddy counterclaimed, alleging intentional infliction of emotional distress. He discharged Langeslag in October 1999 for deficient job performance and because of his inability to work with her. A jury found entirely in favor of Eddy and awarded $535,000 for intentional infliction of emotional distress. A state appeals court affirmed.

On review by the Minnesota Supreme Court, however, the verdict was reversed, holding that Langeslag's conduct did not rise to the “extreme” or “outrageous” level necessary to support a claim for intentional infliction of emotional distress. The court acknowledged that Langeslag's conduct was bizarre and went far beyond an ordinary workplace dispute. Langeslag's conduct toward Eddy, however – the filing of police reports and lawsuits, as well as her initiation of workplace arguments – did “not rise to the level of outrage that is 'utterly intolerable to the civilized community,'” the court said, citing the standard for emotional distress claims. There was no evidence supporting Eddy's contention that the police reports had been made to extort money from him, and, as for her threatened lawsuits, “threatening to bring a lawsuit in and of itself is not 'so atrocious that it passes the boundaries of decency.'” Accordingly, Eddy could not satisfy the “high threshold of proof” necessary for an emotional distress claim.

NEW YORK

Florida Telecommuter Cannot Collect Unemployment in New York

A Florida-based telecommuter is not eligible to receive unemployment benefits from New York State, the New York Court of Appeals has held. In re Allen, 2003 WL 21512450 (N.Y. July 2).

Maxine Allen began working as a financial specialist for Reuters-America, Inc. in 1996. Beginning her employment in New York, Allen moved to Florida for personal reasons in 1997. Reuters permitted Allen to continue her work for the company by telecommuting, providing remote access to its mainframe computer in New York. Allen maintained daily contact with her New York supervisor and was expected to keep the same working hours as an ordinary employee. After about a year and a half of this arrangement, however, Reuters asked Allen to return to New York. She refused and her employment was terminated. Allen then filed for unemployment insurance benefits in Florida. Reuters objected since, it contended, Allen had voluntarily left its employ. Allen then filed for benefits in New York, stating that, by virtue of her telecommuting, she worked at Reuters' New York address.

Citing New York Labor Law Section 511, the New York Commissioner of Labor denied the claim on the theory that Allen performed service for her employer in Florida, not New York. The New York Unemployment Insurance Appeal Board sustained the ineligibility determination, finding that Allen did not work in New York within the meaning of Section 511. An intermediate court affirmed the board decision and Allen appealed to the Court of Appeals, New York's highest court.

The Court of Appeals rejected Allen's appeal, holding that Allen worked in Florida, not New York. “In our view,” the court wrote,” physical presence is the most practicable indicium of localization for the interstate telecommuter who inhabits today's 'virtual' workplace linked by Internet connections and data exchanges.” Section 511 derives from a uniform definition of “employment” adopted by New York and most other states. This uniform definition was intended to serve two purposes: first, to allocate the employment of an individual to a single state; and second, to ensure that the state to which employment is allocated is most likely to be the state in which the individual will be unemployed and seek work. Unemployment, the court explained, has the greatest impact of the state in which an employee physically resides. Therefore, Allen worked in Florida because she resided there.

SOUTH DAKOTA

Employer Liable for Invasion of Privacy in Record Handling

In a case of first impression, the South Dakota Supreme Court found an employer liable for an invasion of its employee's privacy based on mishandling of records belonging to that employee. Roth v. Farner-Bocken Co., 2003 WL 21666132 (S.D. July 16).

When Greg Roth considered suing his former employer, Farner-Bocken Co., for age discrimination, he discussed his claims with an attorney. When the attorney wrote to inform Roth that she could not take the case, she enclosed a tape of Roth's termination and Roth's handwritten notes concerning his claim. Through a clerical error, the letter and enclosed materials were sent to Roth in care of his former employer. Roth's former supervisor opened the package, photocopied its contents, and placed them in Roth's personnel file. Roth eventually brought an age bias claim against the company and obtained his personnel file through discovery. Roth added a claim for invasion of privacy when he discovered the privileged materials among the contents of his personnel file. Although a jury found for the company on Roth's age discrimination claims, it awarded Roth $25,000 in compensatory damages and $500,000 in punitive damages on his invasion of privacy claims.

The Supreme Court of South Dakota upheld the verdict and the compensatory damages award, but held that the punitive damages award was excessive. The court held that while the company's handling of Ross' private documents constituted an invasion of his privacy rights, there was no evidence that that mishandling evidenced a company policy or practice that put any other employee's privacy at risk. In so holding, the Supreme Court emphasized the great disparity between the award of compensatory and punitive damages and the company's relatively low degree of reprehensibility.

WISCONSIN

Conservative Business Image Is 'Reasonable Business Purpose'

Affirming the decision of the trial court, the Wisconsin Court of Appeals has held that Sam's Club, Inc. did not violate a local ordinance prohibiting discrimination based on physical appearance when it fired an employee for wearing an eyebrow ring to work. Sam's Club Inc. v. Madison Equal Opportunities Comm'n, 2003 WL 21707207 (Wis. Ct. App. July 24).

Sam's Club, Inc.'s dress code prohibits employees from wearing facial jewelry to work. Plaintiff Tonya Maier was fired when she wore an eyebrow ring in contravention of the dress code. Maier filed a claim under Madison [Wisconsin] General Ordinance Section 3.23, which prohibits discrimination on account of an employee's physical appearance. The Madison Equal Opportunities Commission (MEOC) issued an order finding that Sam's Club had violated the local ordinance by firing Maier. Specifically, MEOC found that Sam's Club had failed to meet its burden in proving that Maier's discharge was lawful under an exception to the local ordinance which allows an employer to make employment decisions based on physical appearance in furtherance of a reasonable business purpose. Sam's Club appealed MEOC's order in the state trial court, which reversed, holding that Sam's Club, Inc.'s prohibition on facial jewelry fell within the “reasonable business purpose” exception in light of the employer's efforts to promote a conservative business image. Maier appealed.

On review, the Wisconsin Court of Appeals affirmed the trial court, concluding that “no reasonable decisionmaker could determine that the evidence did not establish that the prohibition against wearing eyebrow rings was 'for a reasonable business purpose.'” On appeal, MEOC had emphasized case law standing for the proposition that customer preferences do not justify discriminatory practices. The court held, however, that such an emphasis urged a “circular logic”: In this case, Sam's Club, Inc.'s dress code requirements fell within the “reasonable business purpose” exception and thus did not amount to unlawful discrimination. The court further rejected MEOC's contention that Sam's Club, Inc.'s efforts to present a conservative image to the public were unreasonable because notions of what is “conservative” and “trendy” vary from place to place. Such variation, the court wrote, “has no rational connection to whether it is reasonable to promote an image of 'conservative' or 'trendy.'”

MICHIGAN

Pregnancy Unrelated to Failure to Reinstate Returning Employee

Setting aside a $351,000 verdict in favor of a pregnant employee, the Michigan Supreme Court recently held that the employee could not establish a causal connection between her pregnancy and Blue Cross/Blue Shield's refusal to reinstate her, despite repeated pregnancy-related comments from a supervisor. Sniecinski v. Blue Cross And Blue Shield Of Michigan, 2003 WL 21694603, (Mich. July 22).

Marcia Sniecinski started working for Blue Cross/Blue Shield in 1983 and in 1987 became a telemarketing representative. Following the 1989 merger of Blue Cross/Blue Shield subsidiaries, Sniecinski continued her role as a telemarketing representative with Blue Care Network of East Michigan (BCN). During her tenure, Sniecinski went on three pregnancy-related leaves of absence. Just before going on her third leave of absence, Sniecinski interviewed for and was offered an account representative position with Blue Cross/Blue Shield's sales department in connection with its merger with the sales team of Blue Care Network of East Michigan (BCN). Sniecinski's telemarketing position was terminated in March 1994 under BCN's long-term disability policy when she had exhausted her long-term leave.

Over the years, Sniecinski's supervisor had made pregnancy-related comments to her; for example, he mentioned in connection with one of Sniecinski's medical leaves that he would never again hire anyone in their childbearing years. When Sniecinski indicated after her last medical leave that she was ready to return to work, the company informed her that her old BCN position had been eliminated in the merger with Blue Cross/Blue Shield and that there was no available position for her. Sniecinski sued. A jury found the company liable for pregnancy discrimination and awarded Sniecinski a total of $351,000 in damages.

A divided Michigan Supreme Court set aside the verdict. Sniecinski's supervisor's remarks regarding pregnancy amounted to nothing more than “stray remarks,” the court wrote. Instead, the court found, Sniecinski's employment had lapsed under the long-term disability policy, the terms of which Sniecinski was aware and accepted. The court further noted that Blue Cross/Blue Shield's custom of allowing employees returning from disability leave to return to their old positions was not relevant to Sniecinski's case, since her old position had been eliminated. “Sniecinski did not seek to return to her previous job. Rather, she sought to begin new employment[.]” Thus, Sniecinski could not show that she was treated differently than others returning from pregnancy leave and could not establish a causal connection between her pregnancy and the company's refusal to reinstate her. The dissenters to the majority opinion found that Sniecinski's supervisor's comments created a reasonable inference of a causal connection.

MINNESOTA

Combative Conduct Insufficient to Support Emotional Distress Claim

A radio station employee who harassed her supervisor with false police reports, threats of legal action, and combative conduct may have been unprofessional and even bizarre, but was not liable for intentional infliction of emotional distress, the Minnesota Supreme Court has held. Langeslag v. KYMN Inc. , 664 N.W.2d 860 (Minn. July 17).

Sharon Langeslag was hired for an outside sales job in August 1996 by Wayne Eddy, the principal owner of a radio station. The two had a hostile relationship from the outset of Langeslag's employment. Langeslag also had “continued conflicts” with other employees in which she was accused of threatening and insubordinate behavior. The conflict between Eddy and Langeslag often led to heated arguments and shouting matches. Against the background of this conflict, Langelsag testified against Eddy when, in January 1998, Eddy was involved in “an incident” in at the radio station that led to his arrest and conviction. In June 1999, Langeslag brought a number of claims against KYMN and Eddy, including sexual harassment, failure to pay wages, and violation of the state whistle-blower statute. Eddy counterclaimed, alleging intentional infliction of emotional distress. He discharged Langeslag in October 1999 for deficient job performance and because of his inability to work with her. A jury found entirely in favor of Eddy and awarded $535,000 for intentional infliction of emotional distress. A state appeals court affirmed.

On review by the Minnesota Supreme Court, however, the verdict was reversed, holding that Langeslag's conduct did not rise to the “extreme” or “outrageous” level necessary to support a claim for intentional infliction of emotional distress. The court acknowledged that Langeslag's conduct was bizarre and went far beyond an ordinary workplace dispute. Langeslag's conduct toward Eddy, however – the filing of police reports and lawsuits, as well as her initiation of workplace arguments – did “not rise to the level of outrage that is 'utterly intolerable to the civilized community,'” the court said, citing the standard for emotional distress claims. There was no evidence supporting Eddy's contention that the police reports had been made to extort money from him, and, as for her threatened lawsuits, “threatening to bring a lawsuit in and of itself is not 'so atrocious that it passes the boundaries of decency.'” Accordingly, Eddy could not satisfy the “high threshold of proof” necessary for an emotional distress claim.

NEW YORK

Florida Telecommuter Cannot Collect Unemployment in New York

A Florida-based telecommuter is not eligible to receive unemployment benefits from New York State, the New York Court of Appeals has held. In re Allen, 2003 WL 21512450 (N.Y. July 2).

Maxine Allen began working as a financial specialist for Reuters-America, Inc. in 1996. Beginning her employment in New York, Allen moved to Florida for personal reasons in 1997. Reuters permitted Allen to continue her work for the company by telecommuting, providing remote access to its mainframe computer in New York. Allen maintained daily contact with her New York supervisor and was expected to keep the same working hours as an ordinary employee. After about a year and a half of this arrangement, however, Reuters asked Allen to return to New York. She refused and her employment was terminated. Allen then filed for unemployment insurance benefits in Florida. Reuters objected since, it contended, Allen had voluntarily left its employ. Allen then filed for benefits in New York, stating that, by virtue of her telecommuting, she worked at Reuters' New York address.

Citing New York Labor Law Section 511, the New York Commissioner of Labor denied the claim on the theory that Allen performed service for her employer in Florida, not New York. The New York Unemployment Insurance Appeal Board sustained the ineligibility determination, finding that Allen did not work in New York within the meaning of Section 511. An intermediate court affirmed the board decision and Allen appealed to the Court of Appeals, New York's highest court.

The Court of Appeals rejected Allen's appeal, holding that Allen worked in Florida, not New York. “In our view,” the court wrote,” physical presence is the most practicable indicium of localization for the interstate telecommuter who inhabits today's 'virtual' workplace linked by Internet connections and data exchanges.” Section 511 derives from a uniform definition of “employment” adopted by New York and most other states. This uniform definition was intended to serve two purposes: first, to allocate the employment of an individual to a single state; and second, to ensure that the state to which employment is allocated is most likely to be the state in which the individual will be unemployed and seek work. Unemployment, the court explained, has the greatest impact of the state in which an employee physically resides. Therefore, Allen worked in Florida because she resided there.

SOUTH DAKOTA

Employer Liable for Invasion of Privacy in Record Handling

In a case of first impression, the South Dakota Supreme Court found an employer liable for an invasion of its employee's privacy based on mishandling of records belonging to that employee. Roth v. Farner-Bocken Co., 2003 WL 21666132 (S.D. July 16).

When Greg Roth considered suing his former employer, Farner-Bocken Co., for age discrimination, he discussed his claims with an attorney. When the attorney wrote to inform Roth that she could not take the case, she enclosed a tape of Roth's termination and Roth's handwritten notes concerning his claim. Through a clerical error, the letter and enclosed materials were sent to Roth in care of his former employer. Roth's former supervisor opened the package, photocopied its contents, and placed them in Roth's personnel file. Roth eventually brought an age bias claim against the company and obtained his personnel file through discovery. Roth added a claim for invasion of privacy when he discovered the privileged materials among the contents of his personnel file. Although a jury found for the company on Roth's age discrimination claims, it awarded Roth $25,000 in compensatory damages and $500,000 in punitive damages on his invasion of privacy claims.

The Supreme Court of South Dakota upheld the verdict and the compensatory damages award, but held that the punitive damages award was excessive. The court held that while the company's handling of Ross' private documents constituted an invasion of his privacy rights, there was no evidence that that mishandling evidenced a company policy or practice that put any other employee's privacy at risk. In so holding, the Supreme Court emphasized the great disparity between the award of compensatory and punitive damages and the company's relatively low degree of reprehensibility.

WISCONSIN

Conservative Business Image Is 'Reasonable Business Purpose'

Affirming the decision of the trial court, the Wisconsin Court of Appeals has held that Sam's Club, Inc. did not violate a local ordinance prohibiting discrimination based on physical appearance when it fired an employee for wearing an eyebrow ring to work. Sam's Club Inc. v. Madison Equal Opportunities Comm'n, 2003 WL 21707207 (Wis. Ct. App. July 24).

Sam's Club, Inc.'s dress code prohibits employees from wearing facial jewelry to work. Plaintiff Tonya Maier was fired when she wore an eyebrow ring in contravention of the dress code. Maier filed a claim under Madison [Wisconsin] General Ordinance Section 3.23, which prohibits discrimination on account of an employee's physical appearance. The Madison Equal Opportunities Commission (MEOC) issued an order finding that Sam's Club had violated the local ordinance by firing Maier. Specifically, MEOC found that Sam's Club had failed to meet its burden in proving that Maier's discharge was lawful under an exception to the local ordinance which allows an employer to make employment decisions based on physical appearance in furtherance of a reasonable business purpose. Sam's Club appealed MEOC's order in the state trial court, which reversed, holding that Sam's Club, Inc.'s prohibition on facial jewelry fell within the “reasonable business purpose” exception in light of the employer's efforts to promote a conservative business image. Maier appealed.

On review, the Wisconsin Court of Appeals affirmed the trial court, concluding that “no reasonable decisionmaker could determine that the evidence did not establish that the prohibition against wearing eyebrow rings was 'for a reasonable business purpose.'” On appeal, MEOC had emphasized case law standing for the proposition that customer preferences do not justify discriminatory practices. The court held, however, that such an emphasis urged a “circular logic”: In this case, Sam's Club, Inc.'s dress code requirements fell within the “reasonable business purpose” exception and thus did not amount to unlawful discrimination. The court further rejected MEOC's contention that Sam's Club, Inc.'s efforts to present a conservative image to the public were unreasonable because notions of what is “conservative” and “trendy” vary from place to place. Such variation, the court wrote, “has no rational connection to whether it is reasonable to promote an image of 'conservative' or 'trendy.'”