Interpreting The Scope of Protected Activity: New Guidance From the Law Court

Controlling precedent interpreting Maine's Whistleblower Protection Act tends to be infrequent, so the Law Court's decision in Hickson v. Vescom Corporation, 2014 ME 27, Docket No. WAS-13-214, issued Tuesday, makes for interesting and instructive reading.

Richard Hickson was a shift supervisor employed by Vescom Corporation, a contractor that provided private security services at the Woodland paper mill in rural Baileyville.  Hickson's termination by Vescom followed a series of events that occurred after a visit to the mill by former Maine Governor John Baldacci, State Representative Anne Perry and a party of staffers.
 
Domtar, which owned the mill at that time, enforced specific safety policies pertaining to all employees and visitors.  Hickson alleged that he was terminated after reporting violations of those policies by the visiting group and for sending an email to Governor Baldacci expressing his concerns about the safety violations he observed during the visit.  Vescom claimed that his termination was driven by a couple of non-retaliatory factors, including Hickson's failure to follow Vescom's chain of command before he sent the email, as well as two previous instances of misconduct.

Vescom appealed a Washington County Superior Court jury’s decision in Hickson’s favor, which included a substantial punitives damages component.  The central issue on appeal involved portions of a jury instruction that treated the doctrine of protected activity and the lower court's ruling on a post-verdict motion for judgment as a matter of law.  At trial, Vescom argued that Hickson's report involved no violation of law or unsafe work condition or practice that implicated them.  Vescom unsuccessfully sought to obtain an instruction that would have defined protected activity in a limited fashion, that is, under circumstances in which Hickson reported what he reasonably believed to be a violation, condition or practice created by Vescom rather than by Domtar or the visitors themselves.
 
In an opinion authored by Chief Justice Leigh Saufley, the Law Court rejected Vescom's arguments with respect to the jury instruction and affirmed the lower court's denial of Vescom's motion following the jury's verdict, which was intended to set aside the verdict based upon an interpretation of whether Hickson's conduct met the statutory standard for "protected activity."
 
Elaborating upon its holding in a prior whistleblower decision, the Law Court clarified that "neither our [earlier] opinion nor the statute limits a whistleblower claim to those reports that are exclusively related to an affirmative action of the employer."  The Court's reasoning makes clear that a plaintiff-employee's report need only involve conduct that "bears a relationship to his employment," such that it "must be connected to the employer in such a way that the employer could take corrective action to effectuate a relevant change" in the conduct.  Among the evidence introduced at trial was the fact that Vescom had adopted Domtar's safety polices at the mill verbatim, and Vescom's employees, including Hickson, were required to enforce them.

One takeaway from the Hickson decision is that recent interpretations of "protected activity" are trending in favor of a broader rather than narrower scope.  Not only is this trend appearing in connection with Maine's statute, but several federal courts have also recently interpreted the doctrine broadly in the context of whistleblower claims brought pursuant to the Sarbanes-Oxley Act of 2002.  Another takeaway, of a more general nature, is that defending adverse employment actions involving whistleblowers is usually fraught with peril. The fact that an employee need only act "in good faith" in connection with the exercise of protected activity, with a "reasonable belief" concerning the subject of his or her complaint or report, often renders it difficult to challenge an employee's status as a whistleblower through pre-trial motion practice.  Once a dispute reaches a jury, legal arguments fall by the wayside and jurors rely more and more on what they already know and how they feel to evaluate gray areas presented in the testimony and in applying the court's instructions during their deliberations.

The complete decision in Hickson v. Vescom Corporation can be read here.

Maine Legislature Considering Privacy in Social Media

Joining a growing trend nationally, the Maine Legislature is considering a bill that would prohibit employers from requiring employees to disclose their log-in information for social media and personal e-mail accounts. The bill, L.D. 1194, An Act to Protect Social Media Privacy in School and the Workplace, is currently being considered by the Judiciary Committee and has been the subject of several work sessions since the beginning of the year.  In a recent work session, the Committee recommended that the Legislature create a commission to study privacy issues further, rather than enact the bill as drafted.  The exact fate of the bill, however, remains to be seen.

Ten states have already passed legislation similar to Maine’s L.D. 1194, including Arkansas, Colorado, Illinois, Nevada, New Jersey, New Mexico, Oregon, Utah, Vermont and Washington.  Meanwhile, in 2014, similar legislation is currently pending in twenty-five other states, including California, Florida, Massachusetts, New Hampshire, New York and Rhode Island.  This flurry of legislation at the state level follows failed efforts at the federal level, where several social media privacy bills have been introduced but not passed.

Employers should we aware, however, that even if requesting password information from employees is not strictly prohibited, making these kinds of requests can still be risky.  By gaining access to places where employees reveal personal information about themselves, employers may stumble upon information that is protected by other laws, including state and federal anti-discrimination laws.  Employers should therefore proceed with caution in this area.

Maine Human Rights Commission Changes Process to Weed Out Weak Cases

In response to significant concerns about the timeliness of handling claims and the often unnecessary drain of going through the full process of responding to meritless Human Rights Commission claims, the Commission has become more aggressive about administratively dismissing cases.  Typically, the Human Rights Commission process has been routine.  A charge comes in and it takes up to two months for that charge to be sent to the Respondent while the Commission initially processes it and drafts a document and information request to the employer.  That causes a lot of work for the employer.  In cases that appear to be particularly without merit, the Commission has concluded it simply is not fair to require that work from the employer.  As a result, we have started to see cases where rather than drafting the document or information request to the employer, the employer is receiving a copy of the complaint and a copy of a request for more information to the employee.  If the employee is unable to provide additional information to support the claim, the claim will be administratively dismissed without the employer ever doing anything.  This is a significant potential upgrade to the process, and hopefully, it will be used extensively by the Commission.

In my recent discussions with the Chief Investigator, it is clear that this is being done because of the recognition that the vast majority of cases are not meritorious and the Commission needs to focus its limited resources on cases which truly need to be investigated.

Small Employer Coverage Under the Affordable Care Act

The Affordable Care Act (ACA) does not require small employers to offer health coverage to their employees.  If coverage is offered, however, the coverage must meet ACA requirements.  The only exception is for grandfathered plans. Grandfathered plans are those health plans that were in effect when the ACA was enacted on March 23, 2010 and have not been changed.

A small employer plan must provide the following Essential Health Benefits. If it does not, the plan must be changed unless it is a grandfathered plan.

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

Small employer plan deductibles are limited to $2,000 for individuals and $4,000 for families. Out-of-pocket expenses are limited to $6,250 for singles and $12,500 for families.   If these limits are exceeded, the plan, unless exempt, must be changed.

The Small Business Health Options Program (“SHOP”) gives small employers the opportunity to go online (https://www.healthcare.gov/small-businesses/) and choose a health plan from among several coverage options and contribution levels.  If an employer selects a SHOP plan, the coverage must be offered to all of its full-time employees (those working 30 or more hours per week on average).  Generally, at least 70% of full-time employees must enroll. The minimum percentage may vary by state; for example, the New Hampshire minimum is 75%. The minimum enrollment requirement does not apply if SHOP coverage is selected during the open enrollment period that runs each year from November 15 to December 15.

A small business that buys SHOP coverage may also be eligible for a health care tax credit.  In order to qualify, the employer must have fewer than 25 full-time equivalent employees making an average annual salary of $50,000 or less. The employer must pay at least half of the insurance premium.  The tax credit is worth up to 50% of the employer’s contribution toward employee premium costs. The tax credit is highest for companies with fewer than 10 employees who are paid an average of $25,000 or less. The smaller the business, the bigger the credit.

NH Court Provides Guidance on Title VII Third-Party Retaliation Claims

The U.S. Supreme Court has made clear that a third party may bring a retaliation claim against an employer under Title VII, broadly interpreting the law’s prohibition of any employer conduct that might dissuade a reasonable worker from making or supporting a charge of discrimination.  It can be difficult for an employer to anticipate when disciplinary or other adverse action against a third party may lead to a retaliation claim, because the Court could not draw a line demarking who is in and out of this protected group.  The Court has provided some guidance, offering that termination of a close family member will almost always meet the standard while a lesser action against a mere acquaintance will almost never suffice, which leaves a wide swath in the middle.   A recent decision of the District of New Hampshire illustrates the difficulty of knowing when a third party is permitted to bring a retaliation claim.

In EEOC v. Fuller Oil (2014 DNH 20, decided 1/31/14), the Court permitted a retaliation claim to go forward where the terminated employee was within “the gray area between a close friend and a casual acquaintance.”  The employee was terminated within a few weeks after her co-worker served notice on the company of an intent to file a sexual harassment claim, which the employee claimed was retaliatory.  The two women had worked together at another company, the co-worker helped the terminated employee get her job at Fuller Oil, they exchanged cards on special occasions, socialized together outside of work, displayed photos of them together outside work, and were viewed by the employer as being friends.  As a result, the Court declined to dismiss the case at an early stage in the proceedings.

When taking adverse action against an employee who is connected to someone involved in a discrimination claim, employers must be mindful of the potential retaliation claim.  As it depends on the circumstances, employers must carefully examine the nature of the relationship between the two employees and consider whether the adverse action could be viewed as dissuading a reasonable worker from making or supporting a charge of discrimination.  If it could, extra care must be taken to ensure the legitimacy of the adverse action.