March 2015 Practising Law Institute. Louis DiLorenzo, Gregory Gochanour and Vicki Walcott-Edim
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1 Retaliation & Whistleblower Claims March 2015 Practising Law Institute Louis DiLorenzo, Gregory Gochanour and Vicki Walcott-Edim
2 The Backdrop Cynthia Prattman is Director of Global Sustainability at It s Delicious, Inc. It s Delicious is a publicly held global food and beverages company with 15,000 employees. Cynthia joined It s Delicious in 2000 as an Administrative Assistant in the Marketing Department and has worked her way up to her current position, which she created and has held for 5 years. She is 52 years old. Last year she created and oversaw the execution of a green initiative where It s Delicious implemented a program for customers to recycle used plastic and bottle containers ( Go Green ). During her employment with It s Delicious, she received several promotions and raises, and her salary is now $150,000. She has received several discretionary bonuses.
3 The Backdrop Cynthia has received rave reviews from her supervisor, Vice President Molly Michael, over the past 5 years. Molly retired in December 2014 after 21 years with It s Delicious. The new boss, David Divine, replaced Molly as Vice President. He is 39 years old, is viewed as a rising star, and has been with It s Delicious for approximately 4 years.
4 The Backdrop David finds himself to be very busy in his new role. Though he sits just a few doors down from Cynthia, he s met with her one-on-one in person just a handful of times during the almost 3 months that he s supervised her. He has not asked Cynthia about what she does and her current projects and how they will work together going forward. He communicates mostly by and responds to Cynthia s calls and visits with terse responses. Most of their in-person interactions have been through group sessions and meetings. David has brought a new team with him, and most of them are younger and she often sees David sitting in their offices.
5 Discussion What else would you like to know about David s treatment of Cynthia? David s treatment of his new team? The reasons he replaced Molly Michael?
6 The Annual Review During Cynthia s annual performance review meeting, in March 2015, David sharply criticizes her for being late with several deadlines and for not being able to clearly articulate her vision and key priorities for her team for David tells Cynthia: Based on what I ve seen so far, I don t think you re up to the task of successfully leading the team in David explained that the entire department is under intense pressure to control expenses and the CEO has challenged their department to develop and execute 2 new key initiatives for Her review ratings are lower than any review she has received in her tenure with It s Delicious. Cynthia is taken aback and doesn t know how to respond. She abruptly leaves his office in a hurry before the meeting is finished.
7 Discussion What else would you like to know about David s review of Cynthia or others?
8 The Comments and the First EEOC Charge A few minutes after she leaves, Cynthia decides to return to David s office to challenge his conclusions and explain her successes and ideas for As she approaches his door, which is partially open, she hears him talking and realizes he is on the phone. David s back is to her as she waits in the doorway for a break in the conversation in order to announce herself.
9 The Comments and the First EEOC Charge While she waits, she hears him say,... having a bad day followed by a few unintelligible words. She then hears him say,... can t teach an old dog new tricks.... This is going to be a rough year. Cynthia turns and leaves his office. When she returns to hers, she calls her attorney and they file a charge with EEOC that same day.
10 Conversation with HR The next day Cynthia talks with Helen, the Assistant Director of Human Resources with whom she s friendly. She tells Helen about the incident in David s office, saying that David is treating her differently because she is older and is pushing her out, but asks her to keep her confidence. She also tells Helen that David is distant and appears to favor the younger workers. She does not mention the EEOC charge to Helen.
11 Discussion Is Cynthia engaged in protected activity? What should Helen from HR do about this conversation with Cynthia? What should Helen do about the request for confidentiality?
12 Go Green Project A few weeks later, now in April 2015, Cynthia is working late to meet another last-minute deadline that David has imposed. She is reviewing the data and analytical reports about the 2015 projections for the Go Green recycling program she started several years ago. In doing so, she comes across data that leads her to believe that an error was made in assessing the project s impact. Rather than saving $300k in costs and reducing the company s carbon footprint by 7% as announced publicly during a quarterly earnings call, Go Green will cost the company $700k and will only reduce the carbon footprint by 1.5%. Cynthia sends David an immediately with urgent please call in the subject line. Within 5 minutes, David responds, Can this wait until tomorrow morning? Cynthia says, Ok, and goes home.
13 Go Green Project The next morning, she meets with David and shares her concerns. He thanks her for raising the issue but suggests that she review the data again because she has a habit of not reviewing the data very carefully and missing key information in reports. Cynthia assures David that she did that and reiterates her concern about this error which not only will now cost It s Delicious a significant amount of money but also may impact the brand and investors. David instructs Cynthia to give him the report so he can analyze things and take it from there.
14 Go Green Project Cynthia s David twice to find out what the status is of his review. He never responded. Cynthia starts saving some of the relevant files about the project and the error on a flash drive just in case she needs them later on. In May 2015, Cynthia s David about the report saying, I am very concerned about this, and am worried that we aren t providing full information about the viability of our most important product to our clients and investors. David calls her in response and says, Cynthia, this data has been thoroughly vetted by me and our internal audit department, and the issue you described was not found. Thank you, in any event, for raising this.
15 Discussion What do you think about David s method of handling the data dispute?
16 Receipt of the EEOC Charge Later that day, Helen from HR learns from the in-house attorney that the company has received Cynthia s EEOC Charge, which alleges that: David is unfairly assessing my performance, is regularly abrupt with me, ignores me, has said he can t teach an old dog new tricks, and has made no attempt to get to know me although he regularly interacts with the younger team members. Helen advises David that the company has received the EEOC charge Cynthia filed and that the company s in-house attorneys will soon contact him to discuss the allegations so they can respond to the charge. Helen contacts Cynthia to investigate the concerns she raised in the EEOC charge and determine what steps It s Delicious needs to take in response to her allegations. David meets with It s Delicious attorneys about the EEOC Charge later that week.
17 Discussion How do you rate It s Delicious response to the receipt of Notice of the EEOC charge and receipt of the EEOC charge itself?
18 Post-Charge Activities Over the next few weeks, Cynthia revises her team s Strategic Plan for 2015 several times. David is highly critical of each draft, and states that her continued delays are a major problem. Cynthia feels that David and other managers are avoiding her, and that she is being left out of the loop on meetings and exchanges. Once she walked into a conference room for a meeting and everyone stopped to stare at her. Cynthia sees David and all of his direct reports (except her) in the conference room celebrating David s 40 th birthday. She didn t know about the celebration.
19 Post-Charge Activities David also denies her request to travel to attend a professional conference that she had attended for the last three years, telling her we can t budget for this conference in this economy, and anyway, you need to be here to finish the strategic plan for your team.
20 Post-Charge Activities Cynthia becomes distressed and distracted at work and begins calling out and using her vacation time more frequently and without notice. When she is in the office, David and others have found it difficult to find her and she often steps out for personal appointments during the day. David tells her: Cynthia, you don t seem to be focusing on your work these days, and it is affecting your performance and the business. If the delays do not stop and your performance doesn t improve, we will need to take formal steps to manage your performance.
21 Discussion How do you rate David s communication and warning?
22 The Last Chance Agreement In July, David s concerns continue and Cynthia is offered a six month last chance performance improvement plan ( Last Chance Agreement ). Under the terms of the Last Chance Agreement, in lieu of termination, Cynthia is permitted to continue her employment with It s Delicious, but only if she agrees to and signs the Last Chance Agreement. The Last Chance Agreement provides, among other things, that Cynthia agrees to the following: 1) waive the right to file a charge of discrimination for any past actions by It s Delicious; and 2) agree to waive any claim of unlawful discrimination with respect to any action taken by It s Delicious during the 6 month period of the Last Chance Agreement and if she is terminated during or at the end of the Last Chance Agreement, that the termination is not for an unlawful discriminatory reason. It s Delicious awards employee bonuses, but for the first time, Cynthia doesn't receive one.
23 Discussion Is a Last Chance Agreement a good strategy generally? How about in this situation? How about the specific terms of this Last Chance Agreement?
24 The Second EEOC Charge and Proposed Settlement Terms Two days later, Cynthia files a second EEOC charge, alleging retaliation based on David s treatment of her (e.g., ignoring, criticism, no travel allowance for conference), his unfair performance assessment and review, not getting a bonus, and the Last Chance Agreement.
25 The Second EEOC Charge and Proposed Settlement Terms Several months have passed by. After investigating the charge and conducting witness interviews, EEOC issues a Probable Cause Finding/Determination on both charges. As part of the conciliation process, EEOC invites the parties to meet to explore pre-suit settlement of the claims. After almost an entire day of discussions, the parties are close to reaching settlement. Then the issue of Cynthia s separation from It s Delicious comes up. She s surprised that It s Delicious expects her to resign. It s Delicious also insists that as part of the settlement she execute its standard Release and Waiver Agreement.
26 The Second EEOC Charge and Proposed Settlement Terms The Release and Waiver Agreement contains, among others, the following provisions: 1) agreement to not file complaint with any agency; 2) agreement not to disclose any confidential information ( confidential information includes any information about pay, personnel, and any other policy or practices of the Company); and 3) agreement not to make any disparaging, negative or critical remarks about the Company or any of its employees.
27 Discussion Is separation from employment a good mediation strategy for It s Delicious? Are the proposed settlement terms problematic?
28 Questions
29 Retaliation & Whistleblower Claims March 2015 Practising Law Institute Louis DiLorenzo, Gregory Gochanour and Vicki Walcott-Edim
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