Occupational hazards - employers' concern over the new employment law - Cover Story

Reason, May, 1997 by Walter Olson

It was a case of "a basic lack of human decency," a "sickness in the organization." Exxon knew its captain had a history of alcoholism, yet it chose to let him command a tanker, accepting his story that his problems were behind him. And the result? The Exxon Valdez had run aground in Alaska's Prince William Sound, causing one of history's worst oil spills. And it happened because the giant company had taken a "callous, cold-hearted business risk."

Thus, in his closing arguments, spake the plaintiff's attorney suing Exxon in the main damage case resulting from the spill. To reflect the uncomplicated nature of the moral issues at stake, he even quoted from the best-selling book of homilies Everything I Know I Learned in Kindergarten. Reason enough, he said, for a punitive damage award of $20 billion for his clients. (Contingency fees for plaintiff's lawyers commonly run at around a third of the total award.) The jury, doubtless thinking itself moderate, responded by awarding $5 billion.

In other courtrooms, meanwhile, other lawyers were suing Exxon on other grounds. In particular, they were suing on behalf of workers with drinking pasts whom the company had taken off safety-sensitive positions. By the mid-1990s at least 100 challenges to the company's substance abuse policies had been filed, and dozens of cases were pending around the country. Lawyers citing language in the company's employee handbook, which they argued should be treated as a binding contract, had already won one big verdict for an officer in Portland, Maine, whom Exxon had transferred with no cut in pay. "Public perception of the Valdez incident as having been caused by a recovering alcoholic," declared a Department of Labor administrative law judge in 1992,"does not justify discrimination against all recovering alcoholics."

It became a standing joke: After the lawyers were done suing you up one side of the street, they'd sue you down the other. They'd sue when you gave a bad reference, then sue for failure to warn - failure to give a bad reference when your old employee committed some atrocity in his new job. They'd sue when you turned away a job applicant with a violent or criminal past, or sue if you did take him and he hurt someone: A landmark California case allowed a negligent-hiring suit against a laundromat owner who'd taken on an unstable halfway-house graduate, though the man had no criminal record.

Rules on dating and nepotism are another sued-if-you-do, sued-if-you-don't favorite. Letting office mates get romantically involved invites suits by other workers charging favoritism or sexualized environment, or more commonly suits by the junior-ranking participant in the affair charging hostile environment or retaliation after it ends. Even third parties may have claims: A Texas court ruled in 1994 that the spouse of an employee carrying on an adulterous affair could sue the company for letting it happen. But clamping down runs into claims of privacy invasion, interference with off-hours conduct, defamation, and so forth. Companies have been sued both for carrying on nepotism (unfair to minorities who aren't in the family) and for enforcing rules against it (unfair to married couples).

Litigators have targeted employers over "English-only" rules that prevent workers from talking among themselves in the language with which they're most at home. Yet New York's Bellevue Hospital lost when an English-speaking nurse sued, charging that co-workers' casual use of the Filipino language Tagalog kept her from doing her job by depriving her of critical information about patients. Federal law and fear of accident liability push companies to carry on employee drug testing even where they might not wish to do so, but guessing wrong about which employees may be put through such tests has led to six-figure verdicts. Then there's the perennial puzzle of how to find out about employees' protected-group status, so as to file all the proper reports and the like, without seeming to take an interest in the topic. "We're not supposed to ask, but we are supposed to know," as more than one business person has put it.

"Disparate impact" doctrine leads to compliance jams too. Courts have generally held it unlawful for companies voluntarily to accord hiring preference to U.S. war veterans, since such policies have adverse impact on women. But some laws on the books require many private employers to observe such a preference. To resolve the issue, it was ruled that veterans' preferences would be forbidden - everywhere they weren't mandatory and mandatory everywhere they weren't forbidden the truly unthinkable alternative, of course, being to allow employers to follow their own wishes on the subject.

The discipline of misbehaving workers is a constant source of double binds. The sheriff of Suffolk County, New York, tried to fire two white officers he considered responsible for fairly egregious taunting of minority workers in the county prison system, but civil service appeals gave them their jobs back; the county proceeded to lose a huge harassment case filed by the outraged minority workers. Civil service and union protections often lead to reinstatement of sex harassers as well.