Avoiding Employment Practices Liability Pitfalls

At the 2019 PARMA Annual Conference, a panel discussed challenges around employment practices liability claims in California. The panel was

• Anthony Carlton – Chula Vista Elementary School District
• Robert Cutbirth – Freeman, Mathis & Gary LLP
• Marc Liebowitz – Laughlin, Falbo, Moresi & Moresi LLP

Employers in California are seeing more employment practices liability
(EPL) claims than ever before. The primary lawsuits being filed relate to age discrimination with disability related a close second. Other types of litigation commonly seen include engagement in protected activity, sex/gender, race, and sexual harassment.

The EEOC in Southern California is very active right now and they are the primary source of complaints that are seen in the EPL area. Most complaints are coming out of Los Angeles County, but Orange County is climbing and is second. San Bernadino and Riverside are also in the top five now. Those are areas that are considered more conservative when it comes to litigation. It was noted that claims cost more in Southern California than the rest of the state as nuisance settlements are costing one-third higher than the rest of the state.

There is an increased focus on complaints focused on race. If you look at the breakout of total claims filed by race the breakout is 31% white, 28% Hispanic and 23% black.

Privacy concerns can be a challenge when it comes to EPL claims. If the person overseeing the workers’ compensation claim is also involved in the Human Resources issues, they have access to information that otherwise they would not know. They have to be very careful how they use this information so they do not create an EPL claim.

The panel stressed the importance of maintaining separate files for separate purposes because the legally not everyone can access the same information. For example:

• The General Personnel File should NOT contain information pertaining to their workers compensation or disability/leave of absence files. As you transition to paperless files important to have permission limits on those files and background logs so you can tell who accessed. This file should contain general work performance information. It is extremely important that workers’ compensation, leave, and accommodation issues cannot impact performance appraisals. You cannot penalize an employee from a performance appraisal standpoint because they were out on workers’ compensation or leave.
• Disability/Accommodation (separate file for each distinct request). This should contain all accommodation requests, medical information and documentation of the interactive process and efforts to accommodate. 
• Leave of absence (separate file for each situation). Only Human Resources can access this information. It should contain leave requests and supporting documentation. 

If you have multiple locations you should only have a personnel file in the central office. Managers should not keep their own files on employees. Having multiple personnel files focused on performance issues is a big red flag in litigation.

There is a lot of confusion around HIPAA as this law only applies to health agencies. It does not apply to a workers’ compensation claim. HIPAA is not an excuse for not allowing access to an employees’ medical records for a workers’ compensation claim. However, California does have a Confidential Medical Information Act in it’s civil code (Section 56.20). This requires the employer to have an authorization from the employee before they share medical information with anyone else. Exception for this are lawsuits where both employer and employee are parties and administration of benefit plans including short term disability, long term disability and worker’ compensation.

Other points made by the panel included:

• Employers should not have meetings discussing workers’ compensation and leave/accommodation issues at the same time. These are separate issues.
• You cannot gather medical information for workers’ compensation claim then share it relative to the disability/accommodation claim.

• Employers should not be “file surfing” looking for information. You cannot let Human Resources review a workers’ compensation file looking for random information. 
• In a job accommodation meeting you cannot share medical information with supervisors. They are not entitled to that information. 
• On the accommodation side of things, it is important to use language focused on “capabilities” vs focusing on “disabilities” on the workers’ compensation side. 
• The essential functions of the job cannot be changed. They are “essential” functions for a reason.

• If you are entitled to see a particular file or review particular information to perform your specific job functions they you are probably entitled to see/use the information in the file. BUT….there are always exceptions. 
• Avoid information in a file that has nothing to do with the claim. Divorces. Vacations. Etc. You cannot let these issues impact decisions around EPL issues because they are not valid issues. 
• Make sure you notify your workers’ compensation attorney immediately if the employee files an EPL claim. Ideally you should try to settle both claims at the same time in a global settlement. 
• On the workers’ compensation claim, you care about prior claims to the same body part because of apportionment issues. However, you cannot use information obtained on a disability side to pursue apportionment on a workers’ compensation claim.
• They are seeing an increase in 132A claims, which is retaliation for filing a worker’s compensation claim.