Seventh Circuit Court of Appeals – Super Human Resource Department?

by Ruder Ware
The Seventh Circuit Court of Appeals (which addresses federal court cases brought in Wisconsin) has stated in the past that it does not intend to be a “super human resource department” for employers.  Recent court decisions have suggested that the Federal Court may be reconsidering that position.  There have been a number of employment law decisions in the Seventh Circuit that may significantly affect Wisconsin employers.
In one decision, the Seventh Circuit Court of Appeals reinstated a lawsuit brought by a legal assistant against a Chicago-based law firm alleging that she was fired because of her age and discriminatory treatment based upon her age.  The lower court had determined that the claim by the legal assistant was not plausible and dismissed the complaint.  The Seventh Circuit Court of Appeals reinstated the claim finding that the employee had met the initial standard to show there was a basis for an age discrimination claim and directed the matter be heard in order to get facts surrounding the alleged discrimination complaint.  The case focused on the size of the law firm and the suggestion that the Age Discrimination in Employment Act did not apply to the small law firm.  The Seventh Circuit Court of Appeals determined this type of defense was not appropriate at the initial stages of the case and reinstated a complaint to be considered by the lower court.

In another decision, the Seventh Circuit Court of Appeals found that a non-compete agreement signed by the former owner of a business was valid and binding upon the former owner, but also found that the former owner did not violate the non-compete agreement when the owner sold another business to a competitor and helped that competitor set up the business.  The case focused on whether or not the alternate business owned by the seller was a direct competitor of new owners of the business that was sold.  The Court found that the former owner who sold the distributor business was not directly competing with the business that was sold to the new owners and therefore the non-compete agreement did not apply to the actions of the seller relating to this second business.  The Court did uphold the non-compete agreement in a sale of business scenario, but then it narrowly interpreted the language of the non-compete agreement and did not enforce it as it related to competition with the new owners of the business.

In a third decision, the Seventh Circuit Court of Appeals has gone on record holding that the Americans with Disabilities Act (and the successor Americans with Disabilities Act Amendments Act) is not a leave extension law by finding that an employer was not automatically obligated to extend a leave of absence for an employee claiming a disability beyond the leave requirements of the Family and Medical Leave Act.  In other words, the Court of Appeals said that an employee cannot rely upon a disability discrimination claim to obtain more leave time than the 12 weeks of leave authorized under FMLA law.  This is a ruling of first impression and has been subject to a great deal of scrutiny as employee advocates claim that an employer must consider a reasonable accommodation of additional time off if an employee is still in the healing phase of a disabling condition.  This decision also conflicts with rulings in other federal circuits and is not a definitive statement on what duties of reasonable accommodation will apply to an employee suffering from a disability.  It is, however, a first crack in the wall of decisions that support a duty of an employer to make accommodations for any employee that suffers from a disability.

While several of these cases will be subject to further proceedings, it is clear that the Seventh Circuit Court of Appeals is going to be involved in reviewing employer decisions on how to address employee conduct and employee claims of discrimination.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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