I am presently representing a client claiming national origin discrimination. My client, who is originally from Asia and for whom English is his second language, alleges he was demoted from a position in part because his superiors believed his accent would make it difficult for him to deal with customers.

In researching this matter, I have learned that the 6th Circuit has recognized that linguistic discrimination constitutes national origin discrimination. In re Rodriguez, 487 F.3d 1001, 1008 (6th Cir. 2007). In this case, the 6th Circuit held that an employer’s comments concerning the plaintiff’s accent constituted direct evidence of national-origin discrimination. Id. at 1009.

The Rodriguez case also tracks the EEOC’s position, which “defines national origin discrimination broadly as including, but not limited to, the denial of equal employment opportunity because of an individual’s, or his or her ancestor’s, place of origin; or because an individual has the physical, cultural or linguistic characteristics of a national origin group.” See 29 C.F.R. § 1606.1. 29cfr1606.1

Click here for additional guidance on national origin discrimination from the EEOC.

April 15, 2010 is not far away and as most folks know that is the deadline for filing your federal income tax return. I have been busy lately dealing with a number of tax issues affecting my employment clients. One issue in particular is worth mentioning.

First, as an initial matter, monies received in the settlement of an employment case are almost always taxable. The exception is monies that can be said to have been paid on account of personal injuries. These monies are not taxable. See 26 U.S.C. 104(a)(2). Click here. Accordingly, unless monies are paid to the client on account of personal injuries, the monies received will be subject to income tax.

When one of my employment clients settles a case and receives money in exchange for dismissing the case, a portion of the money is generally allocated as payment of back wages and a portion of the money is generally allocated as compensatory damages or liquidated damages. When money paid to the client represents back wages, a Form W-2 is issued by the company to my client. When money paid to the client represents compensatory or liquidated damages, a Form 1099 is issued by the company to my client.

Often, the Form 1099 issued to my clients is incorrectly completed by the company. Form 1099-misc. By this I mean that Box 7 “nonemployee compensation” on the Form 1099 is checked, rather than Box 3 “other income”, which is the correct box that should be checked on Form 1099 for payments of compensatory damages or liquidated damages. Box 7 is for payments made to independent contractors.

The impact of Box 7 being checked is that the client is erroneously subjected to the self-employment tax. Click here. Accordingly, to avoid this negative consequence I try to include language in all settlements agreements that Box 3 “other income” should be checked when monies are being paid as compensatory damages or liquidated damages.

Under the FMLA, any eligible employee who takes FMLA leave shall be entitled – on return from such leave -to be restored by the employer to the position of employment held by the employee when the leave commenced, or to be restored to an equivalent position. 29 U.S.C. § 2614(a)(1). This right is qualified however by 29 U.S.C. § 2614(a)(3)(B), which essentially provides than an employee returning from FMLA leave is not entitled to restoration unless he would have continued to be employed if he had not taken FMLA leave. A recently decided case from the 6th Circuit Court of Appeals addresses the interplay between these statutory provisions.

In Cutcher v. Kmart Corp., 2010 WL 346131 (6th Cir. Feb. 1, 2010), the plaintiff returned from FMLA to learn that her employment had been terminated allegedly because of a reduction in force. Cutcher v. Kmart Corp. Invoking 29 U.S.C. § 2614(a)(3)(B), the defendant argued that the plaintiff would have been terminated even had she not taken FMLA leave. The plaintiff, however, challenged her termination arguing that the defendant negatively considered her use of FMLA when it made the decision to terminate her employment and that the defendant retaliated against her by she used FMLA leave.

The 6th Circuit reviewed the evidence presented by the plaintiff, which included the defendant’s consideration of the plaintiff’s use of leave on her appraisal score, and determined that a reasonable jury could conclude that the plaintiff’s termination was based in part on the plaintiff’s use of FMLA protected leave. Notably, the 6th Circuit held that the proof amassed by the plaintiff established a jury issue on plaintiff’s FMLA interference claim under 29 U.S.C. § 2615(a)(1) and plaintiff’s FMLA retaliation claim under 29 U.S.C. § 2615(a)(2).