Court Report

Jun 1, 2005
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HR Magazine, June 2005 Harassment claim survives; pharmacists are professionals; premature medical exam unlawful; more.

Pharmacists Are Professionals Not Entitled to Overtime
De Jesus-Rentas v. Baxter Pharmacy Services Corp.,
1st Cir., No. 03-2679, March 9, 2005.

First to consider the issue, the 1st U.S. Circuit Court of Appeals has held that discretion makes pharmacists exempt professional employees under the Fair Labor Standards Act (FLSA) and, therefore, not entitled to overtime compensation.

A group of five pharmacists sued their employer, Baxter Pharmacy Services Corp., claiming that they were entitled to overtime. The pharmacists argued that they were not exempt professional employees because they were required to comply with the company’s standard operating procedures, which consisted of pharmacological data and protocols for performing their duties.

With no material facts in dispute, the trial court granted summary judgment for the employer, finding that the pharmacists were exempt because they consistently exercised discretion and judgment in the performance of their duties.

The 1st Circuit affirmed, ruling that because the pharmacists had discretion to depart from the company’s operating procedures when required, they were “professional” employees not entitled to overtime pay. Specifically, the court determined that with little supervision, the pharmacists used their specialized knowledge to make numerous discretionary decisions, including how to follow up with a physician over a questionable prescription; when a drug should not be dispensed because of a potential danger to the patient; and how to assign, supervise and review the work of pharmacy technicians.

Moreover, the court noted that the pharmacists often reviewed the standard operating procedures that they were required to follow and offered input for improving those procedures. Further, the court observed that although the pharmacists supervised pharmacy technicians, the pharmacists were not themselves closely supervised.

By Kellam Warren, an attorney with the firm of Lehr Middlebrooks Price & Vreeland PC in Birmingham, Ala., an affiliate of Worklaw Network.

Harassment Case Proceeds Despite Failure To Report
Clark v. United Parcel Service,
6th Cir., No. 03-6393, March 9, 2005.

An employer may be liable for sexual harassment—despite having a thorough sexual harassment policy—if lower-level supervisors observe offensive behavior by a higher-level manager but do nothing to stop it, the 6th U.S. Circuit Court of Appeals has held.

An employer will not be held strictly liable for sexual harassment when an employee does not suffer a tangible employment action—if the employer has exercised reasonable care to prevent and promptly correct the sexual harassment, and if the employee unreasonably failed to take advantage of preventive or corrective opportunities.

Sandra Clark and Rhonda Knoop worked in the claims department of United Parcel Service (UPS). Eli Brock was their manager. Following years of Brock’s sexually inappropriate behavior, the two filed hostile work environment and outrageous conduct claims against UPS and Brock in federal court. The plaintiffs claimed that on several occasions lower-level supervisors witnessed Brock’s offensive behavior but failed to report it or to take any action to stop it.

UPS’s sexual harassment policy included examples of prohibited conduct and set out the channels for reporting sexual harassment, including a toll-free help line. The policy held managers and supervisors responsible for maintaining a harassment-free environment and required them to report incidents of prohibited conduct.

UPS argued that even if the supervisors had observed the conduct, the company had no duty to take corrective action. It pointed out that the supervisors were not Brock’s managers, were not high in the company hierarchy and had no authority to control Brock’s actions.

UPS further noted that Clark and Knoop failed to report Brock’s offensive conduct. The trial court granted summary judgment to UPS and Brock.

On appeal, the 6th Circuit held that UPS’s policy met the criteria for a reasonable sexual harassment policy unless the supervisors unreasonably failed to report incidents of potential sexual harassment. Regardless of whether any one incident created a hostile work environment, the court said, “there is a real question as to whether the supervisors should have taken the first step.”

Consequently, the court held, a jury should decide whether the supervisors should have reported Brock’s conduct.

By Lois A. Baar, an attorney with Janove Baar Associates LC in Salt Lake City, an affiliate of Worklaw Network.

Review Tied to Lesser Raise Is Adverse Action
Gillis v. Georgia Department of Corrections,
11th Cir., No. 04-11014, Feb. 18, 2005.

An evaluation that directly prevents an employee from receiving a significant raise is an adverse employment action under Title VII of the Civil Rights Act of 1964, the 11th U.S. Circuit Court of Appeals has held.

The Georgia Department of Corrections used a uniform evaluation process by which every employee was given one of three overall ratings—“did not meet expectations,” “met expectations” or “exceeded expectations”—that automatically determined the amount of each employee’s salary increase.

Thalia Gillis, a black woman, had worked for the department since 1987. Under the department’s evaluation system, Gillis received an “exceeded expectations” rating only once, in 1995.

In 2000, Gillis’ supervisors, Alvina Chance and Nan Duffey, gave Gillis a “met expectations” rating on her evaluation. Chance allegedly told Gillis that no matter what she did on the job, she would never receive an “exceeded expectations” rating. Duffey and Chance gave only two employees “exceeded expectations” ratings that year, both of whom were white.

Based on these events, and on Duffey’s use of the n-word to refer to Gillis after she filed an internal grievance, Gillis sued the department for race discrimination. Gillis alleged that she was denied the “exceeded expectations” rating because she was black, and, as a result, her raise was 2 percent smaller than it otherwise would have been.

The district court held that Gillis’ evaluation could not be considered “adverse” because it was not negative (she “met expectations”) and Gillis was not penalized (she received a raise). Therefore, the district court granted the department’s motion for summary judgment.

On appeal, the 11th Circuit found that Gillis’ evaluation and Gillis’ compensation were “inextricably intertwined.” If “actions that affect compensation” are adverse employment actions, the court reasoned, so is an evaluation that “directly disentitles” an employee to a certain raise. That was the case here, the 11th Circuit concluded, so Gillis’ case should go forward.

By John A. Berg, an attorney with the firm of Connelly Sheehan Harris in Chicago, an affiliate of Worklaw Network.​

Web Extras​

Professional Pointer 1

While it is true that a federal appeals court decided that pharmacists can be exempt under the FLSA, that does not mean that pharmacists are always exempt. Even if a particular job classification is otherwise exempt from the overtime provisions of the FLSA, an employers practices can destroy the exemption. For example, the exemption is lost if an employee is not paid on a salary basis of at least $455 per week, or if the employees salary is docked. An employer must maintain a constant vigil to protect the exempt status of its professional, administrative and executive employees. For a review of the salary basis test, see Step by Step in the February 2005 issue of HR Magazine.

Professional Pointer 2

All supervisors must understand that they are accountable for immediately reporting incidents of potential sexual harassment regardless of chain of command. These supervisors failure to report caused the case to go to trialpotentially, a very costly mistake.

Professional Pointer 3

Increases should not be automatic, based only on an employees evaluation rating. Employers should maintain a written policy making raises non-obligatory and based on the totality of circumstances. Keep in mind, however, that nothing substitutes for the careful consideration of whether disparities in proposed salary increases are justified by legitimate and demonstrably nondiscriminatory reasons.

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