Practice Area: Employment Law

The Anthony decision provides welcome support for employers who find that a discrimination plaintiff has concealed a lack of basic credentials to hold a job.

In April 2020, the Ninth Circuit Court of Appeals ruled that an employer can defeat an Americans with Disabilities Act (ADA) claim with after-acquired evidence that the ex-employee lacked a required college degree. Anthony v. Trax International Corp., 955 F.3d 1123 (9th Cir. April 17, 2020).

Legal History

In 1995, the United States Supreme Court limited employers’ use of evidence of misconduct acquired after a plaintiff was terminated from a job. In an age discrimination case, McKennon v. Nashville Banner, 513 U.S. 852, 115 S. Ct. 879 (1995), the Court said that employers could not use after-acquired evidence to eliminate the employer’s liability to a discrimination plaintiff. The most that employers could do with after-acquired evidence was cut off an employee’s damage recovery as of the date of discovery of the misconduct.

McKennon did not address an employer’s ability to defeat an employee’s entire claim when the after-acquired evidence showed that the employee lacked the basic qualifications for the job, such as a degree or license.

The Facts of the Anthony Case

Anthony’s facts are simple. Trax employed Anthony as a technical writer. Trax required technical writers to have a bachelor’s degree from a four-year college. Anthony misrepresented that she had this degree in her job application. She later asked to work from home because of a disability. Trax refused the request and terminated Anthony.

Anthony sued, claiming discrimination under the ADA because the employer failed to offer her a reasonable accommodation for her disabilities. During the litigation, the employer became aware that Anthony had no degree. The degree was not just a prerequisite for Anthony’s job; the employer had billed the government a contract rate that assumed that Anthony had a degree.

The employer moved for summary judgment on the ground that Anthony was not a qualified individual entitled to the ADA’s protection against employment discrimination. The ADA prohibits discrimination against individuals who are “qualified to perform the essential functions of the job”.

In 2018, the Arizona United States District Court granted summary judgment to the employer and dismissed Anthony’s case. Anthony appealed to the Ninth Circuit.

The Ninth Circuit panel unanimously upheld the lower court’s ruling in favor of the employer.. The Ninth Circuit noted that the plaintiff had the burden of showing that she was a “qualified individual” as part of her prima facie disability case. Since the plaintiff could not show that she had the basic qualifications for the job, her case failed.

What does the ADA define as a “qualified individual”?

The ADA defines a “qualified individual” as someone who “with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” The Court said that the Equal Employment Opportunity Commission (EEOC) had established a two-step inquiry on an individual’s qualifications. The first step was to ascertain whether the individual satisfies the prerequisites for the job- i.e., the “requisite skill, experience, education and other job-related requirements of the employment position such individual holds or desired.” The second step was the inquiry into the individual’s ability to perform the essential functions of the position, with or without reasonable accommodation.

The Court then held, “At no time did Anthony satisfy the prerequisites of the qualified individual element of an ADA prima facie case: it is undisputed that she never possessed the requisite bachelor’s degree and …[under] Trax’s government contract, the bachelor’s degree was an actual requirement of the … position that could not be satisfied by any functional equivalent.” The Court dismissed the EEOC’s contention that the employer could not use after-acquired evidence, discovered during the suit, to defeat Anthony’s prima facie case.

The Court also dismissed Anthony’s contention that McKennon v. Nashville Banner precluded the use of after-acquired evidence. The Court distinguished between the ADA, which protects only qualified individuals, and the Age Discrimination in Employment Act in McKennon, whose protections extend to any individual employee subjected to age discrimination.

Further, in McKennon, the employer sought to use the after-acquired evidence to show a legitimate non-discriminatory reason for the employee’s discharge. In Trax, the after-acquired evidence defeated the plaintiff’s claim at an earlier stage in the case- the stage where plaintiff had to show that she had the minimum qualifications for the job. The Court held that employers could look to the employee’s ability to satisfy the basic job prerequisites before addressing whether reasonable accommodation could enable the employee to perform essential job functions.

In Summary

The Ninth Circuit’s decision in Anthony v. Trax allows employers to look into an ex-employee’s ability to meet threshold job qualifications after the ex-employee makes an ADA discrimination claim. The decision is consistent with the relatively few decisions from other circuits on this issue. The decision is also consistent with logic. An employee lacking the basic credentials for a job cannot, by definition, have the qualifications to perform the job.

It is still open to question whether an employer can use after-acquired evidence to challenge an ex-employee’s qualifications where a statute does not state that an employee must be qualified to perform a job. But the requirement of qualification for a job position is not unique to the ADA; the requirement is one element of the test that an employee must satisfy to go forward with a prima facie case of discrimination. So the ability to use after-acquired evidence in this threshold area may arise again.

As PA counties move into the green phase of reopening and non-essential business commences, employers and business owners in PA have many questions. We have compiled and answered some the most important questions below.

by Employment Attorneys James B. Shrimp and Thomas D. Rees

1. My business has reopened and I have an employee that HAS tested positive for COVID-19. What are my options?

The legal answer to this question depends upon the size of your business. You should also look to CDC guidelines regarding additional cleaning of the workplace and any contact tracing and additional quarantine of employees that is recommended. The answers below can also apply to employees that have recently been exposed to another person who has the coronavirus.

A. Businesses with 500 or more employees

There are no enhanced paid leave benefits. Your HR department should apply its PTO and unpaid time off policies, with the understanding that CDC guidelines likely require a period of quarantine for the employee. It would not be advisable to terminate the employee during this period of quarantine.

B. Businesses with Under 500 employees

The employee may be entitled to two (2) weeks of paid sick leave.

The Families First Coronavirus Response Act (“Act”) was the first coronavirus related legislation passed by Congress. The Act seeks to address the impact of coronavirus in a number of areas – including certain employee benefits.

The Act applies to employers with under 500 employees. Employers with under 50 employees are entitled to seek an exemption from the Department of Labor, if providing the benefits provided by the Act would put the employer out of business.

The Act provides two new paid benefits which expire on December 31, 2020:

• A two-week paid sick leave for coronavirus related illness; and
• Up to 12 weeks of paid Family and Medical Leave for caring for a child whose school or child care provider has closed.

Who Can Take advantage of the two-week paid sick leave?

1. This benefit is for employees who are unable to work (or telework) because the employee is subject to a governmentally mandated quarantine or isolation order;
2. has been advised by a health care provider to self-quarantine;
3. has symptoms of being infected with coronavirus and is seeking a medical diagnosis;
4. is caring for an individual who is quarantined or self-quarantining;
5. is caring for a son or daughter if the school or place of care has been closed.

If any of the circumstances above apply, the employee is eligible for two (2) weeks of full pay, based on his/her typically schedule. There is a maximum benefit of $511 per day.

If the employee has employer based sick time/PTO, the employer is required to apply the government emergency leave, before applying the employer based benefit.

The employer is reimbursed via a payroll tax credit, which will be provided by the Federal government within 3 months. If the employer pays more in paid benefits and health insurance premiums than the payroll tax, the government will send the employer an “overpayment” check for the difference.

C. Other Employees

The employer is entitled to screen employees for Covid related symptoms. See EEOC Guidance - “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” (April 23, 2020).

2. My business has re-opened and I have an employee that HAD COVID-19. What steps should I take?

You are entitled to require a return to work note from the employee’s physician. Once you receive the return to work note, that employee is permitted to return to work and should be treated like all other employees.

3. Due to Schools and Childcare Centers being closed, my employees cannot get into work. What are my options?

The answer to this question depends upon the size of your business.

A. 500 or more employees

There are no enhanced paid leave benefits. Your HR department should apply its PTO and unpaid time off policies. If the employee’s PTO has exhausted and there is no unpaid time off policy that would apply, the employee has no right to continued employment. Ensure that terminations made under these circumstances are done in a non-discriminatory fashion.

B. Under 500 employees

The employee may be entitled to twelve (12) weeks of Family and Medical Leave.

The Families First Coronavirus Response Act (“Act”) was the first coronavirus related legislation passed by Congress. The Act seeks to address the impact of coronavirus in a number of areas – including certain employee benefits.

The Act applies to employers with under 500 employees. Employers with under 50 employees are entitled to seek an exemption from the Department of Labor, if providing the benefits provided by the Act would put the employer out of business.

The Act provides two new paid benefits which expire on December 31, 2020:

• A two-week paid sick leave for coronavirus related illness; and
• Up to 12 weeks of paid Family and Medical Leave for caring for a child whose school or child care provider has closed.

Pertinent to the question posed is the twelve weeks of paid Family and Medical Leave.

This benefit is available for employees who are unable to work (or telework) because the employee must care for children (up to 18 years old) whose schools or child care facilities have closed because of the coronavirus.

The employee is eligible for up to 12 weeks of two-thirds pay, with health insurance. The maximum benefit is $200 per day and $10,000 total. The first two weeks of this leave may be unpaid (that gap is filled by the Paid Sick Leave benefit).

The employer is reimbursed via a payroll tax credit, which will be provided by the Federal government within 3 months. If the employer pays more in paid benefits and health insurance premiums than the payroll tax, the government will send the employer an “overpayment” check for the difference.

4. My business is ready to reopen but I several employees tell me that they have underlying health conditions; what are my options?

If the health condition qualifies as a disability under the Americans with Disabilities Act, you need to provide the employee with a reasonable accommodation to returning to work, so long as the accommodation does not create undue difficulty or cost for you.

The first step is to find out whether the employee’s condition interferes with the employee’s ability to perform major life activities (e.g., asthma impairs breathing). The next step is to discuss various accommodations, since the ADA requires employer and employee to engage in an interactive process. The type of accommodation depends on the nature of the employee’s job. Possible accommodations include continued work from home; work in a protected area (either a separate part of the office or work behind shielding); work when others are not present (staggered hours); or a reasonable modification of duties, including a possible exchange of duties with other employees.

Reasonable accommodation does not require an employer to fundamentally alter the basic qualifications for a job (minimum skills, licensure). Be sure to document all discussions with the employee and all steps taken to accommodate the employee.

5. My business is ready to reopen but have an employee who feels uncomfortable returning to the workplace because of COVID-19; what are my options?

It is wise to ask the employee the reasons for discomfort. A refusal to come to work just because someone feels uncomfortable is not a legitimate excuse. But the discomfort may have underlying causes that may constitute a disability under the Americans with Disabilities Act. You may ask the employee for medical reasons for the discomfort; this inquiry is job related and consistent with business necessity under the ADA. The inquiry may uncover a psychological reason for the employee’s concerns, such as generalized anxiety disorder or post traumatic stress syndrome. Or there may be a medical reason for the concern, such as an underlying condition that makes the employee susceptible to COVID-19. If the employee can document a condition that constitutes a disability, then you should try to work out a reasonable accommodation that allows the person to work with some degree of separation from the office. However, if the employee cannot document the condition, you may require the employee to come into work, and you may treat the refusal to come to work as a voluntary quit that precludes the employee’s receipt of unemployment compensation

6. We are ready to reopen but the nature of my business makes social distancing very difficult; what can I do?

Many businesses face this issue, particularly stores that have inventory in small spaces (drugstores, coffee shops, bookstores). The first step is of course to require the wearing of masks at all times. State governments have already imposed this requirement. The second step would be to take whatever steps can reasonably be taken to increase social distancing. These could include such steps as staggered hours; staggered breaks; setting up one-way corridors or spaces in the office; setting up zones in the office that specific individuals would cover; and having plenty of disinfecting wipes and hand sanitizers around. Some businesses may be able to transact customer business through a window opening onto the street or to use curbside delivery. You may need to be extra careful to require any employee with any illness to stay away from work. Each business has its own different needs. It will be wise to establish written guidelines to minimize close social contact and to post those guidelines for both employers and employees. Remember that you have the duty to have a safe workplace and written guidelines will help you show that you have fulfilled this duty.

7. I am re-opening my business - do I need to offer masks to my employees?

In Pennsylvania, employers are required to provide non-medical masks to employees and are required to ensure that customers wear masks as well.

8. Do I need to update my employee manuals with Covid (general pandemic) information before hiring new employees?

No. As an employer, you can update your employee manuals/policies at any time. Therefore, if you are re-opening and you need additional staff, do not slow hiring to get additional policies in place.

With that said, once your business is up and running at all cylinders, it is worth sitting down with your business lawyer to discuss what revisions and additions you might want to make to your employee manual.

9. My employee refuses to come back to work because they are receiving more money on unemployment compensation as a result of the $600 per week federal supplement. Can employees do this?

An employee “can” do this, but he/she will lose the entitlement to future unemployment benefits. The employee should know that the $600 per week federal supplement expires at the end of July and currently there is no appetite in the United States Senate to extend this supplement, for the very reasons stated in the question.

If an employee refuses to come back to work, you should advise the employee in writing that since he/she has refused to return to work, that he/she is being terminated for job abandonment. You should then notify the bureau of unemployment compensation that the employee refused to return to work and was terminated for job abandonment.

10. Employees have asked me whether the shelter in place order counts against my sick or vacation time; what should my response be?

A shelter in place order will almost never count against preexisting leave entitlements offered by an employer. A shelter in place order will qualify an employee for paid sick leave if the order prevents the employee from doing work that the employer has for the employee. This means that if the shelter in place order keeps an employee from being able to work or telework, and the you have work for the employee, the employee may get paid sick leave. If either of these requirements are not met, either because the employee can telework or you have no work for the employee, then the shutdown will not enable the employee to receive paid sick leave.

Paid sick leave is additional to whatever leave your employee has under your business’ leave policies. In rare situations, an employer and employee may agree to combine paid sick leave under the Emergency Paid Sick Leave Act and paid leave under the employer’s policies, where the addition will increase the employee’s compensation. The rules for family leave under the Emergency Family and Medical Leave Expansion Act give employers a little more flexibility. Employers may require employees to use up paid regular paid vacation and personal leave (but not sick or medical leave) concurrently with family leave; again, this helps to close the compensation gap between paid family leave (maxing out at $200 per day and $10,000 aggregate) and full paid leave under the employer’s plans.

If you are are a business owner and have more questions during the Pandemic, please reach out to the employment attorneys at High Swartz and call 610-275-0700 or fill out our contact form.

If you meet one of the following employment statuses, you may be eligible for unemployment compensation in Pennsylvania.

Both employees and employers are trying to navigate the unprecedented measures being implemented by the government to attempt to slow the spread of the COVID-19 virus (Coronavirus). With many businesses being forced to close or alter operations, employers are struggling with deciding how to adjust operations and whether to furlough or even lay off employees. At the same time, employees need to be proactive and look ahead to their options. Below are unemployment compensation eligibility statuses that may effect many employees in Pennsylvania.

Unemployment compensation eligibility statuses for employees

Employees in Pennsylvania are likely eligible for unemployment compensation if:

• their employer has closed
• the employee is furloughed (a temporary leave of employees due to the outstanding needs of the employer)
• laid off
• forced to work at home (if it results in a reduction of hours)

What if and employee is under quarantine for coronavirus?

If the employee is quarantined, they may also be eligible for unemployment compensation benefits, but the employee must first exhaust all sick leave/paid time off benefits.

The Pennsylvania Unemployment Compensation Bureau (“UCB”) has made some important changes to its typical operations/requirements in this unprecedented COVID-19 and coronavirus outbreak in 2020. Most importantly, UCB has temporarily:

• eliminated the one week waiting period for receipt of unemployment benefits
• eliminated the requirement to search for work while receiving unemployment benefits

This is in light of the fact that, at least for now, many of the requests for benefits will be for furloughed workers. Employers that close as a result of COVID-19 impacts will be granted relief from charges and the employers’ unemployment tax rate will not increase.

On March 18, 2020, the president signed the Families First Coronavirus Response Act. Click here to see if you as an employee or employer is affected. (Link to JBS Blog on FFCRA)

Our advice here at High Swartz is that if you meet any of the above criteria, consider filing a unemployment compensation claim as soon as possible. If you have filed for UC before, you may enter your PIN (Personal Identification Number) that will pull up your past information. If you are new to the process, there are a few things that are necessary for you to have before you get started.

• Your Social Security Number
• Your Home address or mailing address
• The best phone number to reach you
• The best email address to reach you. This must be a valid address
• Direct Deposit information (optional) – bank name, address and routing number

If you need help or advice during these trying times, High Swartz’s attorneys are here to help. Please contact Employment Attorney, Jim Shrimp at jshrimp@highswartz.com or call 610.275.0700.

In late 2018, the Pennsylvania Supreme Court decided that employees may sue employers for the release of stolen confidential employee data. The Court’s decision in the Dittman vs. University of Pittsburgh Medical Center, allowed University of Pittsburgh Medical Center (“UPMC”) employees to bring a class action for negligence after a data breach from UPMC’s computer systems.

The Decision’s Impact

The Court’s decision will have a far-reaching impact. First, the decision will require employers to use reasonable care to protect employees’ personal and financial information. Second, the decision allows negligence lawsuits even where the plaintiffs’ losses were purely economic and no physical injury or tangible property damage occurred. As such, the decision limits the “economic loss doctrine” that courts had used to dismiss such lawsuits.

The Back Story

The cyber attack took place in 2014. The data breach led to the theft of 62,000 employees’ names, addresses, birth dates, social security numbers, salaries, or tax and bank information. The hackers taking the information then used the stolen data to file fraudulent tax returns and steal employees’ tax refunds.

The Lawsuit

Right after the breach, a group of employees sued UPMC for negligence and breach of implied contract. The employees contended that UPMC had a duty to use reasonable care to protect employees’ personal and financial information from being compromised, lost, stolen, misused, and /or disclosed to unauthorized parties. The employees claimed that UPMC had breached this duty. Specifically, UPMC had (1) failed to undertake adequate security measures, (2) failed to monitor network security, (3) allowed unauthorized access to information, and (4) failed to recognize that information had been compromised. The employees alleged that UPMC failed to meet current standards for encryption, firewalls, and authentication.

UPMC filed preliminary objections seeking immediate dismissal of the complaint. UPMC argued that no duty of care existed to protect against data breaches, and that the economic loss doctrine barred negligence claims.

The Lower Courts Dismiss the Case

The Allegheny County Court of Common Pleas agreed with UPMC and dismissed the employees’ suit. The Court both relied on the economic loss doctrine and held that courts should not create a new affirmative duty of care to protect against data breaches. The Court had concerns that this new duty of care would flood the court system with lawsuits. The Court also said that data breach liability was a policy issue to be addressed by the legislative branch.

The employees appealed to the Superior Court, where a three judge panel upheld the lower court in a 2-1 decision. One dissenting judge stated that employers have a duty of care to protect against data breaches.

The PA Supreme Court Allows Employees to Sue for Data Breach

After accepting the case for appeal, the Pennsylvania Supreme Court overturned the two lower court decisions on both the duty of care and the economic loss issues. The Supreme Court held that UPMC had the duty to protect employee information since UPMC had taken the affirmative step to require employees to provide certain information. The Court said that this duty existed despite the intervening third party theft, because theft was foreseeable without proper data protection.

On the economic loss issue, the Court allowed a negligence claim for economic loss where a duty existed outside the parties’ contractual relationship. The Court found that the employees alleged that UPMC had a duty, outside any contract, to act with reasonable care in collecting and storing personal and financial information on computer systems. The Court’s decision is a setback for efforts to invoke the economic loss doctrine in defending against business-related tort claims.

Practical Implications: Employers Need to Use Reasonable Care to Protect Employee Data

What are the practical implications of the UPMC ruling? Employers will have to take additional steps to lock down confidential employee information. The decision will affect every employer, since all employers collect confidential data in the course of setting up basic transactions like direct deposit and tax and social security withholding. Legislative action may also provide more specific guidance on data protection. The decision will have a continuing effect in the workplace and in development of new data protection policies.