Episode 214: Circle K’s 8 Million Dollar Lawsuit

In this week’s episode of What The Hell Just Happened?! Paul Edwards sits down with CEDR Human Resources Manager CeCe Wilson to discuss how Circle K handled pregnant employees coming back from leave and why they found themselves in a lawsuit where the EEOC required them to pay out 8 million dollars. Can you require your new mothers to be “fully healed” upon returning to work? If they’re not, what do you do? Listen to find out how to navigate this situation in a safe and legally compliant way.


Voice Over: You’re about to listen to another episode of What The Hell Just Happened?! Join Paul Edwards and his guests as they discuss and sometimes even solve some interesting HR problems.

Paul: And… I’m gonna go off the rails sometimes and talk about whatever I want.

CeCe: Hey Paul!

Paul: Hey Cece. How are you?

CeCe: Good. How are you?

Paul: I’m pretty good. We’re recording this right before Christmas, but I think we should say Happy New Year because it’s not going to come out until next year.

CeCe: Yeah. I hope your new year off to a good start in the future. When this comes out.

Paul: When this comes out. When the new- Yes, I like it. By the way, just for context, CeCe is here at CEDR, so she’s an HR person of HR. So I say that every time CeCe comes on the podcast, I just think it carries more weight when you have to be the HR person for HR people. It’s a pain in your butt I think.

CeCe: It’s really cool. Helps up your game for sure.

Paul: Does it have to operate at a higher level?

CeCe: Yeah, yeah. It’s like a nice challenge.

Paul: They’re like “actually CeCe, you got that wrong”- no. Nobody here would do that, but.

[CeCe laughs]

Paul: Okay, so what are we gonna talk about today?

CeCe: Okay, so this is an EEOC case involving Circle K.

Paul: What’s the EEOC?

CeCe: The Equal Employment Opportunity Commission.

Paul: Okay. And they have a lot of laws that they are responsible for enforcing.

CeCe: Yeah.

Paul: And they will sue on behalf of a- they could sue on behalf of an employee if they choose to.

CeCe: Correct. And so that’s usually exactly what it is. It’s usually these suits are smaller. They involve maybe one or two employees and it just so happens that this one is actually one of the largest settlements in the last decade involving Circle K because it involves so many employees. So.

Paul: Oh, bummer.

CeCe: So Circle K is has an $8 million settlement.

Paul: Ouch.

CeCe: And all because they violated several laws involving pregnant employees.

Paul: Okay.

CeCe: So they were hit for involuntary unpaid leave requiring employees to be 100% healed to return from their FMLA covered leave. So, Family Medical Leave Act, and terminating employees when they deemed that they couldn’t accommodate them in their current roles instead of reassigning them.

Paul: Wow. Wow. Okay. So one thing I want to point out here, because we say Circle K and people think, well, if you don’t know who Circle K is, some of our listeners don’t have Circle K.

CeCe: Yeah.

Paul: I don’t know if Circle K gets back East or not. It’s a- it’s a gas station. It’s a-

CeCe: A convenience store.

Paul: But they’re generally mega stations. They have a lot of employees. They’re open 24/7. There they don’t ever close, which is a challenge in and of itself, I mean, for any business that does that. So when our listeners maybe hear this, because we have a lot of small business you know, managers and owners who are listening to us, they they can sometimes go, “well, we’re not Circle K, that’s a big that’s a big Circle K problem”.

CeCe: Well, that’s why I found this so interesting because Circle K as an employer nationwide is enormous.

Paul: Huge.

CeCe: But a lot of those stores operate with a skeleton crew.

Paul: Oh, gotcha.

CeCe: There’s only a few employees working at a time. Especially if you get into like the late hours of the evening, overnight shift.

Paul: It’s rare you see more than one sometimes you’ll see two in the morning when it’s really busy. By the way, I do want to say this one thing about Circle K, props to Circle K, the best convenience store coffee on the face of the earth.

CeCe: Oh! I don’t drink coffee.

Paul: Their coffee game is hot. I don’t mean like- Well, I think Starbucks sucks, but their coffee is they have so many different flavors and it’s always and they’re known for it, so it’s always fresh. And I digress. Just everybody knows we’re in the podcast rooms and CeCe is looking at me like “why we’re talking about coffee?” That Circle K, right?

CeCe: I’m a coffee hater, so I can’t really like coffee.

Paul: Oh you don’t like coffee? Okay. All right, back to this thing. They are often working with just one or two people. It’s rare they have more than a couple of people in there.

CeCe: Yeah. So I thought that this would be relevant to our members, even though Circle K as an entity has a lot of employees, in the individual stores, they really don’t.

Paul: So the challenge is, is when someone’s missing, they’re missing. It’s the same as it is in your in your practice or your business. If you’re listening, if you have that, I mean, even when you get you can have 30 employees. If one key person goes missing, they’re missing. Somebody else has to do their job for them.

CeCe: Yeah, yeah, yeah. And so even given that your Circle K is facing a huge settlement and I’m sure that they saved money, wouldn’t you agree, by not going the litigation route.

Paul: So that when it settles.

CeCe: I think, yes, this is this is a smaller figure than they could have faced if they-

Paul: It could have been about ten times that. Yeah.

CeCe: Yeah, yeah. And but they violated the Americans with Disabilities Act, the Civil Rights Act, and the Pregnancy Discrimination Act.

Paul: Yeah they did. And this all started from a single decision made by someone who handled things. This- the way that they handled it. And it got spread across the entire organization.

CeCe: Yes.

Paul: And so if we could give them anything, we would say that they were consistent. They can got this consistently wrong. They managed to screw it up in every single area, right?

CeCe: Yes.

Paul: Yeah. I mean, according to the EEOC, the one case and what we can discern from what we’re seeing in the settlement.

CeCe: Yeah.

Paul: I- you know, the lesson here is, is that it’s a game of telephone. It’s or maybe not- it- Look, one bad habit gets spread to the next to the next. And the next thing you know, it’s the way you’re doing things. And we see this in in our in our community of small businesses and practices where one person is seeking guidance and they may go online or go someplace, do some research, or talk to a mentor or someone else and they and they say, “well, you don’t have to really worry about that this is how I handle it”. And because they’ve been doing it for 30 years and they’ve never gotten any trouble, you hear what they say and you go, “Okay, well, that sounds fair. This guy or gals, they’re doing this. So I’m going to handle it that way.” And then the next thing you know, you’re the one who gets sued for handling it the way that they were handling it for 30 years, which was the wrong way.

CeCe: Right. Because you’re right, it spreads in social media groups, Reddit, Facebooks, all those things. But the flip side is that the sometimes the employees are talking about those things there too, and one person has success and then tells someone else how to go about it.

Paul: Exactly.

CeCe: So yeah, yeah. The best we can do is avoid violating their rights in the first place.

Paul: In the first place. So there’s a way that this was supposed to be handled. If we look at some of the things that they did… the involuntary paid leave, involuntary unpaid leave… So look, one of the ways this violates somebody’s civil rights is and particularly if you’re talking about a pregnant employee is what you’re doing is you’re saying, “I’ve decided that since you were causing me such a pain in the rear end to do it to accommodate some of your doctor’s appointments, or maybe some of your requests for more breaks, maybe you want to you need to sit down more often because of what’s going on at this particular time of your pregnancy. We’ve decided that this is all just too much. And what we are thinking is you should just go ahead and go on leave now.” Even though the pregnancy may be weeks or even months out, you put them on in an involuntary unpaid leave. And what you’ve done is you’ve just taken away their capability to pay their bills.

CeCe: Right. And you’re exhausting their protected leave potentially. If you-

Paul: On your side, you’re okay. Yeah. And on their side, you’re exhausting it. They’re- you’re forcing them to take their protected leave. Now, can you arrive at this with the with an employee and say that an employee might want to consider availing themselves of going on leave earlier? You can get there but you don’t get to make the decision for them. And we help people through that process all the time. It involves documents, it involves job descriptions, involves you know, this isn’t a minor inconvenience. Like, you know, there is no accommodation that says you can’t come to work ever.

CeCe: Right.

Paul: We don’t have to make that accommodation.

CeCe: Right. Right. Now, the involuntary piece is the kicker there.

Paul: Yeah. It’s that interactive process that get you gets used in these things in these instances, all the time that we bring in the interactive thing with the doctor and everybody’s involved. So, you know, you’re violating their civil rights because guess what? You can’t go apply for unemployment on the basis that you’re pregnant. That does not apply in the United States.

CeCe: Right.

Paul: So that doesn’t follow. So what you basically said is, is, “hey, you’ve been working for us even though you’re in a protected status I’m taking your job away from you and I’m sending you home”. And and as you said, “I’m also going to pre-exhaust your amount of leave for recovery”. And that’s 12 weeks that would apply to these folks.

CeCe: Correct.

Paul: I want to make it clear, to everybody listening. We’re talking about FMLA, Family Medical Leave. A lot of our listeners have businesses that have 50 or more employees, and that’s where FMLA kicks in. Many of you listening shouldn’t be- you don’t have to comply with FMLA, but you can’t send people home involuntarily. You can’t still violate their civil rights. You still can’t violate many of these laws. And the EEOC laws kick in when you have 15 or more employees. But also many of your states have lowered that threshold. They brought it down to say if you have any employees or if you have more than three employees or- and I point that out because that’s where going and asking a listserve, you know, or going and asking someone else these questions is not always a good idea unless that someone else really is an expert in H.R. and CeCe, I, I’ve been in an interview where we’re interviewing an attorney for a job here and granted everybody who’s listening, we have to retrain everybody who comes in to be an advisor. And they don’t know the answer to these questions. Just because you have a law degree doesn’t mean that this is an area that you have a- a granular understanding.

CeCe: Right. Right. Yeah. No, it takes a lot of experience seeing lots of different circumstances and having a broad perspective, which is why our team is so great, because they can bounce ideas off each other and talk about their experiences. And the cumulative effect is comradery.

Paul: And we’ve we’ve set everybody up for success in this area. Yes. Like you don’t have FMLA language if you’re not supposed to have it. If you’re in a state where there’s things are lowered, we know. And we approach the problem solving that way. We have the skills, the paperwork that we have everything to help you get the very best outcome. And I want to point one other thing out before we go. All right. So I mean, they screwed up the ADA, the civil rights, you know, terminating people, wrongful termination.

CeCe: Not providing modified schedules or equipment when they come to return.

Paul: You and I could do an hour on all the things that they have done right and what they didn’t. And what I believe is also important is whoever was responsible for starting this and whoever was brought on board, you would think that they’d have a big H.R. department I bet they don’t that they never got the benefit of this additional learning.

They never- they don’t they didn’t know what they were doing because they made three mistakes that tell me here they they have hardly any HR proper training. Now, I could be wrong. I can’t look into it. But that’s one of the benefits that I think I love about CEDR. When I look over at CEDR, we don’t just hand people policies… you go through a training process, and that’s not something that happens anyplace else. So if you’re a manager and you’re working with us, you’re getting smarter and you’re getting better. And after you’ve gone through one thing of FMLA with an employee, if you have 50 or more employees, or even if you go through it, you know, with less than that, you come out way better.

Paul: Like you can handle just about anything that’s thrown at you. Yeah, because of the because of the education that should be given behind.

CeCe: Or at least know where there’s some risk that you need to someone else about.

Paul: Yeah, yeah, exactly. Yeah. So that was very interesting. I love to talk about things that happen in the news. Sorry, this applies to Circle K equally regret seeing all those pregnant employees have- be treated this way. Yeah, I have a feeling they’re going to get better and that’s all you can ask. I think, you know, unfortunately, they’re going to pay out 8 million. That’s a lot of money. Maybe not a ton of money for them, but you know, overall, this is something where they’re going to have to make huge adjustments.

CeCe: Looking forward to their improvement.

Paul: Yeah, I’m looking forward to their improvement too. Thanks CeCe.

CeCe: Thanks!

Voice Over: Thanks for joining us for this week’s episode of What The Hell Just Happened? do Paul a favor; share this with your network. If you have an HR issue or a question, you’d like us to discuss on this show, send it to podcast@WTHjusthappened.com. For more HR advice and insights from Paul and his team of experts, you can also join the private Facebook group, HR Base Camp, or visit HRbasecamp.com. Make sure you tune in next week. And remember: better workplaces make better lives.

Jan 24, 2023

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance based on applicable local, state and/or federal U.S. employment law that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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