K&S Quick Clips

DC Circuit: ADA Amendments Act Not Retroactive

26 Jul 2009 13:40:38 GMT

DC Circuit: ADA Amendments Act Not Retroactive, July 24, 2009

I thought this was clear from the plain language of the ADA Amendments Act, but someone was bound to ask: is the law, which took effect January 1, 2009, retroactive? The response from the D.C. Circuit is that the ADAAA, which was enacted to "reinstate a broad scope of protection under the ADA," does not apply retroactively. Lytes v. District of Columbia Water & Sewer Auth. (WASA), No. 08-7002 (D.C. Cir. July 21, 2009). Floyd Lytes sued WASA, claiming that it refused to accommodate him and fired him in 2004. Under pre-ADAAA law, Lytes was not disabled within the meaning of the ADA, and summary judgment in WASA's favor was appropriate. But if the ADAAA now applied to the 2004 acts, maybe summary judgment wasn't correct. The D.C. Circuit did not buy the potential sandbagging of employers by retroactive application of the ADAAA.

Minimum Wage $7.25/hour as of July 24, 2009

26 Jul 2009 13:40:38 GMT

Minimum Wage $7.25/hour as of July 24, 2009, July 24, 2009

by Darrell R. VanDeusen

The U.S. Department of Labor's Wage and Hour Division reminds employers and employees that the federal minimum wage increases to $7.25 on Friday, July 24, 2009. With this change, employees who are covered by the federal Fair Labor Standards Act will be entitled to be paid no less than $7.25 per hour. This increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007. A revised Federal minimum wage poster is now available for viewing, downloading, and posting. Every employer of employees subject to the Fair Labor Standard Act's minimum wage provisions must post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it. The revised Federal minimum wage poster is available at http://www.dol.gov/esa/whd/regs/compliance/posters/flsa.htm

DOL To Get More Money? Look for Increased Enforcement

26 Jul 2009 13:40:00 GMT

DOL To Get More Money? Look for Increased Enforcement, July 24, 2009

by Darrell R. VanDeusen

The Obama administration is pushing Congress to give the DOL a budget of about $846 million more than it had last year. In asking Congress for the money, the administration said that it encourages the Congress to consider full funding of the request to rebuild the capacity of these agencies to "protect the wages and working conditions [of] the nation's workers, and reduce the amount of the H-1B rescission, which at its current level jeopardizes the department's enforcement capacity."

Meanwhile, DOL Secretary Hilda Solis says that her Department's increased enforcement of wage and hour laws is intended in part to "send a message" to employers that fail to comply with federal minimum wage, overtime, and other requirements. In a news conference about the increase in the minimum wage, Solis said that the DOL has found many FLSA violations. "We want to rectify that," she said. "We want to become a more robust department."

Wisconsin Supreme Court Endorses "Ministerial Exception," Rejecting Age Claim by Catholic School Teacher

26 Jul 2009 13:39:53 GMT

Wisconsin Supreme Court Endorses "Ministerial Exception," Rejecting Age Claim by Catholic School Teacher, July 24, 2009

by Darrell R. VanDeusen

Wisconsin's highest court has held 4-3 that a fired Catholic school teacher cannot pursue an age discrimination claim under state law because her teaching position fit within the First Amendment's "ministerial exception" to enforcement of employment discrimination laws. Coulee Catholic Schools v. Labor & Indus. Review Comm'n, No. 2007AP496 (Wisc. July 21, 2009). The majority said that permitting the teacher's age discrimination claim to proceed would impinge on the church's right to free exercise of religion under federal and state constitutions. "The ministerial exception is grounded in the idea that the 'introduction of government standards [in]to the selection of spiritual leaders would significantly, and perniciously, rearrange the relationship between church and state,' " said the court, citing Rayburn v. Gen. Conference of Seventh-day Adventists, 772 F.2d 1164 (4th Cir. 1985). "[The exception] recognizes that 'perpetuation of a church's existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.' "

Employee Free Choice Act Update

26 Jul 2009 13:39:52 GMT

Employee Free Choice Act Update , July 24, 2009

by Darrell R. VanDeusen

Last week was a big one for the EFCA - with the New York Times reporting a deal struck to eliminate the card check provision in return for elections within 5 to 10 days after a petition is filed by a union with the NLRB. But some Senate Democrats (and union supporters) claimed no deal had been struck. And, many business groups still find other aspects of the bill (H.R. 1409, S. 560) "non-starters," particularly the mandatory arbitration of first CBAs if the parties cannot reach agreement in a matter of a few months. Stay tuned.

Governor O'Malley Creates Task Force on Misclassification of Workers

26 Jul 2009 13:39:52 GMT

Governor O'Malley Creates Task Force on Misclassification of Workers, July 24, 2009

by Darrell R. VanDeusen

On July 14, 2009 Governor O'Malley issued an executive order that creates a "Joint Enforcement Task Force on Workplace Fraud." The task force is located in the state Department of Labor, Licensing and Regulation and chaired by the DLLR secretary. It include representatives from DLLR's Division of Unemployment Insurance and Division of Labor and Industry, as well as the comptroller, attorney general, Insurance Administration, and Workers' Compensation Commission. These agencies will compile and share information regarding employers who misclassify workers, and will coordinate enforcement of current laws and outreach. The task force must report to the governor by the end of each calendar year on a variety of matters, "including the amounts of wages, premiums, taxes, and other payments or penalties collected, and the number of employers cited for legal violations related to workplace fraud."

The creation of the task force comes on the heels of the passage of the Maryland Workplace Fraud Act, which subjects employers in the construction and landscape service sectors to civil penalties for the knowing misclassification of employees. The WFA takes effect October 1, 2009. It is clear that the O'Malley administration has its sights set on expanding the coverage of that law.

Maryland Court Enforces Arbitration Agreement

26 Jul 2009 13:39:52 GMT

Maryland Court Enforces Arbitration Agreement, July 22, 2009

by Eric Paltell

A Maryland federal court has ruled that a group of car salesmen must arbitrate their claims for unpaid commissions and wages. In Dieng v. College Park Hyundai, No. 8:09- cv-00068 (D. Md. July 9, 2009), Judge Chasanow ruled that College Park Hyundai's arbitration agreement was enforceable, even though the plaintiffs claimed to have difficulty reading English.

The five plaintiffs were former car salesmen, all of whom were required to sign an arbitration agreement on their first date of employment. The agreement was titled, in boldface and capitalized headings: "Agreement to submit all employment disputes to arbitration." The first paragraph was also in boldface and capital letters, and made the employees aware that "any claim that arises out of, or relates to, my employment or termination of my employment with the company, must be resolved through final and binding arbitration."

When the employees filed suit, College Park Hyundai moved to compel arbitration. Judge Chasanow granted the motion and enforced the agreements, finding that the arbitration agreement was supported by adequate consideration and that, even though English was not the employees' native language, they were all "fully capable of speaking, reading and writing in English."

Significantly, the court rejected the employees' argument that the shortened statute of limitations (60 days to inform the other party of a dispute and 180 days to bring the claim to arbitration) did not make the agreement unenforceable. These limitations periods are much shorter then the two or three year statute of limitations which would apply if the claims were brought under the Fair Labor Standards Act or the Maryland Wage and Hour Law and Wage Payment and Collection Statute. According to Judge Chasanow, "the statutory limitations periods may be shortened by contract, so long as the limitations period is not unreasonably short."

The Court's decision is significant to Maryland employers for several reasons. First, the court's willingness to enforce it, despite the short limitations period, provides employers with a mechanism to reduce exposure to "stale" claims from long departed employees. Second, the Court established some ground rules as to the types of measures an employer can take to ensure that any arbitration agreement is viewed as clear, conspicuous and understandable to its employees.

President Obama Continues to Show Support for The Employee Free Choice Act

26 Jul 2009 13:39:51 GMT

President Obama Continues to Show Support for The Employee Free Choice Act, July 16, 2009

by Andreas Lundstedt

Members of the recently formed National Labor Coordinating Committee met with President Obama on July 13 at the White House to, among other things, discuss the controversial Employee Free Choice Act (H.R. 1409, S. 560). The White House released a statement saying the meeting was a “productive conversation about shared priorities like creating jobs, health care reform, and the Employee Free Choice Act.� According to a union source, and not surprisingly, Obama pledged to collaborate with labor to pass the Act.

If passed, the Employee Free Choice Act would amend the National Labor Relations Act to force the National Labor Relations Board to certify a union as the bargaining representative of employees if a majority of the employees signs valid union authorization cards. It would also levy larger penalties on employers found to violate labor laws during organizing campaigns and would provide for arbitration and mediation of first contracts if parties are unable to reach timely agreements.

AFL-CIO President John Sweeney shared his experience from the meeting, saying Obama has always been a friend to the union movement and that the meeting illustrated Obama�s continued support of it. While Obama did not give specific promises on what he would do to help push it past the planned GOP filibuster in the Senate, Obama was overheard saying “he would do everything he could.�

Consultants Offer Advice on Potential Changes as a Result of Upcoming Health Care Legislation

26 Jul 2009 13:39:51 GMT

Consultants Offer Advice on Potential Changes as a Result of Upcoming Health Care Legislation, July 15, 2009

by Andreas Lundstedt

Employers would be wise to prepare now for potential changes to major health care legislation. To begin with, employers need to have a thorough understanding of their organization�s current health care strategy. If possible, employers should then consider streamlining their situation by reducing the number of healthcare vendors they do business with. Health care reform will be easier to deal with by having fewer contracts to manage. Additionally, employers should reconsider the role of health care benefits within their overall compensation strategy.

According to Dean Hatfield, senior vice president and health practice leader at Sibson Consulting, who spoke on July 9 at a Web cast sponsored by the International Foundation of Employee Benefit Plans, statistics on the cumulative effect of health care costs are dramatic. The cumulative percentage increase in the cost of health care premiums from 1999 through 2008 was 119 percent during a period in which wages increased by only 34 percent, Hatfield said. The effect of those cumulative increases has been to raise employers' average annual health care premium costs to more than $9,300 per employee and individual employee costs to more than $3,300 a year, he said.

Hatfield and J. Richard Johnson, senior vice president and public sector health practice leader at Segal Co., both noted at the Web cast that coping with health care costs in a rapidly shrinking economy is challenging but employers can reduce their health care spending without expensive design changes in their health care plans or severe loss of employee coverage. As cost-saving measures, they recommended that employers consider:

keeping their existing plan but introducing a lower-cost, portable plan under the Consolidated Omnibus Budget Reconciliation Act (Pub. L. No. 99-272) for employees that may be leaving the company because of economic layoffs;
designing premiums that create incentives for employed spouses to use their own employer health plans;
replacing general purpose wellness programs with programs tailored to the health profile of the employer's workers;
offering voluntary benefits fully paid for by employees;
conducting dependent eligibility audits to validate that all dependents receiving coverage are eligible for coverage;
negotiating with vendors for discounts in exchange for test-driving vendors' new services or programs; and
renegotiating existing contracts to get additional savings.

Pesky Article III �Case or Controversy� Requirement Forecloses FLSA Collective Action

26 Jul 2009 13:39:50 GMT

Pesky Article III “Case or Controversy� Requirement Forecloses FLSA Collective Action , July 10, 2009

by John S. Bolesta

While Federalists and Progressives continue to debate whether the United States Constitution can be considered a “living and breathing� document, there can be no denying the fact that our centuries-old charter requires an Article III Court to first establish the existence of a living and breathing plaintiff who has a legally cognizable interest in the outcome of a “case or controversy.� A case becomes moot, and incapable of judicial resolution, when the issues presented are no longer “live� or the parties lack a legally cognizable interest in the outcome. This basic but vital prerequisite is sometimes overlooked. In a recent decision by the U.S. Court of Appeals for the 9^th Circuit, the Court addressed a situation where two former T-Mobile employees sought to represent a class of approximately 25,000 former and current T-Mobile employees (who had yet to opt-in) in a FLSA collective action after settling their individual claims with T-Mobile. Before reaching settlement, the parties represented to the district court that they discussed whether there existed a mechanism by which plaintiffs� individual claims could be settled while still preserving their ability to appeal the district court�s ruling denying FLSA certification. The parties then entered into a stipulated judgment that purportedly preserved the plaintiffs� standing to appeal. On appeal of the district court�s FLSA certification ruling, the 9th Circuit gently reminded the Plaintiffs that a “plaintiff seeking FLSA collection action certification does not have a procedural right to represent a class in the absence of any opt-in plaintiffs.� In other words, a FLSA plaintiff�s right to represent a class depends entirely in whether other plaintiffs have opted in. Without other plaintiffs, the Court was stripped of its jurisdiction to hear the case, and the appeal was dismissed. Although the attorney�s fees were not revealed, one can assume that the $10,000 paid in full satisfaction of the claims brought by the 2 plaintiffs was not what their attorneys had in mind when they pursued the appeal.

EFCA Update- 2010 Elections Force Some Lawmakers to Soften Support of EFCA

26 Jul 2009 13:39:50 GMT

EFCA Update- 2010 Elections Force Some Lawmakers to Soften Support of EFCA, July 10, 2009

by John S. Bolesta

As it turns out, our popularly elected officials in Congress are just as worried about job security as most Americans these days. Facing a withering economic climate and unrelenting lobbying by businesses, several Democratic members of Congress who are up for re-election in 2010 have softened their stance on the current version of EFCA. The latest one is Democratic Louisiana Rep. Charlie Melancon, who may run against Republican Sen. David Vitter. The Hill reported Wednesday that Mr. Melancon, a co-sponsor of the House version of EFCA, is working on a “bipartisan solution� to amend the bill to make it more appeasing to business groups. Moreover, Democratic Sen. Michael Bennet of Colorado, who filled former Sen. Ken Salazar�s seat when he was named Secretary of the Department of Interior and is running for re-election in 2010, facing similar pressure from business groups, has said he would have a “hard time� voting for cloture on the bill, according to the Denver Post. These are just the latest Democratic Congressmen who have followed Arkansas Democratic Sen. Blanche Lincoln, who last April appeared uneasy about the economic impact of the legislation, saying she “cannot support the bill in its current form.� With the recent swearing-in of Minnesota Senator Al Franken on July 7th, the economic realities of the pending legislation appear to be the only impediment to its passage.

Fourth Circuit Discards �Reasonable Cause� Requirement for Injunctive Relief Pursuant to Section 10(j) of the NLRA

26 Jul 2009 13:39:50 GMT

Fourth Circuit Discards “Reasonable Cause� Requirement for Injunctive Relief Pursuant to Section 10(j) of the NLRA, July 3, 2009

by Michael R. Severino

In Muffley v. Spartan Mining Company, the Fourth Circuit clarified the standard District Courts should utilize when resolving requests for injunctive relief pursuant to section 10(j) of the NLRA, 29 U.S.C. § 160(j) (2006). Section 10(j) provides a mechanism by which the NLRB can seek a court order temporarily enjoining asserted unfair labor practices. Pursuant to the NLRA, a court can order temporary injunctive relief “as it deems just and proper.�

This seemingly simple “just and proper� standard in section 10(j) has spun off two tests utilized by the federal circuits when weighing requests by the NLRB for injunctive relief. The first test requires courts to determine whether (a) reasonable cause exists to believe a violation of the NLRA exists and (b) injunctive relief is just and proper. This standard adds a reasonable cause requirement not found in the statute.

The second test equates the “just and proper� standard found in the statute with the general standard for injunctive relief set forth in Federal Rule of Civil Procedure 65. This standard requires courts to examine (a) the possibility of irreparable harm to the moving party if the injunction is denied, (b) the possible harm to the non-moving party if the injunction is granted, (c) the likelihood of the moving party�s success on the merits, and (d) the public interest. The Fourth Circuit had not previously addressed this split.

Finding guidance in Supreme Court caselaw requiring courts to utilize traditional equitable powers unless clearly mandated otherwise by Congress, the Fourth Circuit ruled that courts were to utilize the traditional four part test. While the practical effects of this ruling may be limited, Muffley clarifies the law in this Circuit as it relates to injunctive relief pursuant to section 10(j).

Supreme Court Rules in Favor of Firefighters

26 Jul 2009 13:39:48 GMT

Supreme Court Rules in Favor of Firefighters, July 1, 2009

by Michael R. Severino

In a closely followed case, the Supreme Court on Monday ruled in favor of eighteen white and Hispanic firefighters who claimed that the city of New Haven, Connecticut discriminated against them by throwing out lieutenant and captain test results.

The City promotes firefighters by administering a test, which is based on both written and oral questions, to applicants who have met certain criteria. The test was developed by an outside consultant, which performed extensive due diligence in developing the test questions and subject matter and in ensuring that the test was race neutral. Of the 77 candidates who took the lieutenant examination, 25 whites, 6 African-Americans and 3 Hispanics passed. Of the 41 candidates who took the captain examination, 16 whites, 3 African-Americans and 3 Hispanics passed.

Not happy with the pass rates of minorities, some African-American firefighters and members of the community lobbied the Mayor and New Haven�s Civil Service Board (which certifies or rejects test results) to throw out the test results and come up with a new test � one that presumably would advantage more minorities. The Civil Service Board threw out the test results because, it claimed, the City would have faced liability due to the disparate impact of the test. White and Hispanic firefighters who passed the test then sued the City (and others) for discrimination based on disparate treatment.

The Supreme Court again acknowledged a dilemma in Title VII practice: can an employer (or city) intentionally discriminate against a certain group based on race in order to prevent purported disparate impact discrimination. Put another way, can New Haven discriminate against white and Hispanic firefighters by throwing out the test results in order to prevent possible discrimination to African-Americans as evidenced by the skewered test results. The Supreme Court said not in this situation.

The Supreme Court began its analysis with the premise that the City�s actions in throwing out the test results violated Title VII�s disparate treatment prohibition. As such, the City must have a valid defense for its actions. The City argued that because it faced the threat of a disparate impact lawsuit from African-American firefighters, it had a legitimate justification for its unfair treatment of the firefighters who passed the test. Rejecting the firefighters� argument for a strict prohibition against race based actions, as well as the City�s argument that a good faith fear of liability under a disparate impact theory excused its actions, the Supreme Court borrowed a standard from Fourteenth Amendment jurisprudence and held that race based government action � such as that undertaken in New Haven � must be based on a “strong basis in evidence.� If the City could have shown that there was a strong basis in evidence that it violated Title VII�s disparate impact provisions, the City would likely have been permitted to throw out the test results. The majority opinion ruled that the City, however, only looked to the statistical disparity in the test results, not to possible defenses the City could have asserted � namely, (a) that the test was job related and consistent with business necessity or (b) there did not exist an equally valid, less discriminatory alternative the City failed to adopt. Because the City did not account for these disparate impact defenses, it did not have a strong basis in evidence for a disparate impact violation and, thus, could not apply race based actions and discard the test results.

As Justice Scalia pointed out in a concurring opinion, this is not the last word on the subject. At some point, the Supreme Court is going to have to reconcile Title VII�s disparate treatment provision with the Equal Protection Clause of the Constitution. Until that day, the lower courts will continue to grapple with these issues. Ricci, et al. v. DeStefano, et al. (October Term 2008; decided June 29, 2009).

Vice President Assures CWA That Employee Free Choice Act, June 25, 2009

26 Jun 2009 15:28:57 GMT

Vice President Assures CWA That Employee Free Choice Act, June 25, 2009

by Frank L. Kollman

Vice President Biden, pandering to organized labor, told the Communication Workers of America recently that he and the President continue to support the Employee Free Choice Act. That Act, which has nothing to do about choice, would effectively eliminate secret ballot elections for employees being organized by a union. Biden, who never seems to miss an opportunity to say something stupid, suggested that the National Labor Relations Board is not an impartial government agency. Most employers who have dealt with the NLRB would argue that the NLRB, if it favors anyone, favors labor unions.

Barney Frank Introduces Act Banning Discrimination Based on Sexual Preference and Gender Identity

26 Jun 2009 15:28:53 GMT

Barney Frank Introduces Act Banning Discrimination Based on Sexual Preference and Gender Identity, June 25, 2009

by Frank L. Kollman

Representative Barney Frank, a gay Congressman from Massachusetts, has proposed banning discrimination based on sexual preference and gender identity. While many states, including Maryland, prohibit discrimination based on sexual preference, gender identity discrimination is another story. An anatomically male person who lives as a woman would arguably be protected, which could present workplace questions about bathroom use and other delicate subjects. Stay tuned for details.

Catholic Church Weighs In On Unionization

26 Jun 2009 15:28:50 GMT

Catholic Church Weighs In On Unionization, June 23, 2009

by Frank L. Kollman

Religiously-based hospitals are not immune from unionization. The U.S. Conference of Catholic Bishops recently handed down guidelines for managers at those hospitals (and other health care institutions, such as nursing homes) for dealing with unionization.

Here are the seven principles the Conference adopted:

All parties are committed to demonstrate respect for each other's organization and mission.
"The union and employer should agree in advance on an equal number of written, verbal, or other communications for employees," and the employer should not conduct mandatory meetings about unionization.
All written communications should be "reviewed and jointly approved by the employer and union." Communications should be "factual, accurate, and holistically truthful."
Neither side will "make comments or engage in activities" that could be considered harassment, threats, intimidation, or coercion.
Employees will be allowed to vote through a secret ballot election supervised by the National Labor Relations Board or "another mutually agreed upon process," without lengthy hearings and delays.
A "neutral authority will be designated to ensure the principles are followed and resolve issues that arise."
All sides will honor the results of the election and will not engage in negative or disparaging conduct regardless of the outcome.

Lots of luck with that.

In unrelated news, the Supreme Court has turned down, in seven instances, requests to review a labor and employment case decided by a lower court. It seems the Court is not interested in labor and employment law this term. It may have plenty to look at once Congress begins passing new labor legislation.

No Mixed Motive Analysis In ADEA Cases

26 Jun 2009 15:28:46 GMT

No Mixed Motive Analysis In ADEA Cases, June 19, 2009

by Clifford B. Geiger

In Gross v. FBL Financial Services, Inc., the U.S. Supreme Court decided yesterday that mixed motive analysis does not apply to claims under the Age Discrimination in Employment Act (ADEA). In a 5-4 decision written by Justice Thomas, the court concluded that age discrimination cannot be established merely by proving that age was a “motivating factor� in an adverse employment decision. Instead, a plaintiff must prove, by a preponderance of the evidence, that the adverse action would not have been taken “but for� the employee�s age. Until yesterday�s decision, if there was evidence that age was a “motivating factor� in an employment decision, the burden of proof shifted to the employer to prove that it would have taken the same action regardless of the employee�s age. As a result of the decision, the burden of proof always remains with the employee. It may not seem like much, but this should make it substantially harder for employees to establish age discrimination under the ADEA. Justice Stevens issued a scathing dissent in which he said the majority disregarded precedent and engaged in unnecessary lawmaking. In all likelihood, the current Congress will take action to amend the ADEA to undo this decision, as it has done with Lilly Ledbetter and other Supreme Court decisions favorable to employers.

EEOC Takes First Step To Amend ADA Regulations, June 18, 2009

26 Jun 2009 15:28:42 GMT

EEOC Takes First Step To Amend ADA Regulations, June 18, 2009

by Clifford B. Geiger

On June 17, 2008 the U.S. Equal Employment Opportunity Commission (EEOC) voted to revise its regulations to conform to changes made by the ADA Amendments Act of 2008, which will make it easier for an individual seeking protection under the ADA to establish that he or she has a disability. This vote approving the proposed regulations represents an initial stage in the regulatory process.

The ADA Amendments Act, which went into effect Jan. 1, 2009, makes significant changes to the definition of the term "disability" by rejecting the holdings in several Supreme Court decisions and portions of EEOC's own prior ADA regulations. The effect of these changes is to make it easier for an individual seeking protection under the ADA to establish that he or she has a disability as defined by the ADA. Under the ADA Amendments Act, the definition of disability will be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA.

The statement of EEOC Assistant Legal Counsel Christopher J. Kuczynski, describing key provisions of the proposed regulatory changes, can be accessed at
http://www.eeoc.gov/abouteeoc/meetings/6-17-09/kuczynski.html

Arbitration of Class Claims Before the Supreme Court Again

26 Jun 2009 15:28:38 GMT

Arbitration of Class Claims Before the Supreme Court Again, June 17, 2009

by Clifford B. Geiger

The U.S. Supreme Court has agreed to consider whether class claims must be arbitrated when the arbitration agreement at issue is silent on the matter (Stolt-Nielsen v. AnimalFeeds Int'l Corp., U.S., No. 08-1198, cert. granted 6/15/09). While the underlying case involves federal antitrust law and has nothing to do with employment law, the Supreme Court�s decision regarding the parties� arbitration agreement will undoubtedly apply in other contexts, including to arbitration agreements between employers and employees. Recognizing that this issue has divided lower courts, the Supreme Court previous decided to address it in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003). However, the Supreme Court�s opinion in Green Tree, which was only a plurality decision that mostly avoided the issue, did little to resolve the uncertainty.

Push Me � Pull You Compliance

26 Jun 2009 15:28:35 GMT

Push Me � Pull You Compliance, June 11, 2009

by Peter S. Saucier

The press enjoys besmirching employers with allegations that abuse and misuse of immigrants is the order of the day. Our experience is that almost all employers simply want hard workers, to whom they pay a fair wage. Still, the public clamor to attack employers who employ “illegal aliens� is deafening. It is nearly impossible for an employer to satisfy the political whims of popular opinion.

Overhill Farms could tell you all about it. Some 254 workers whose social security numbers were invalid were given 30 days to correct the problem. When they failed to do so, Overhill Farms terminated their employment rather than face the wrath of government penalties, including possible criminal prosecution, for knowing ly employing illegal aliens.

No good deed goes unpunished. Overhill Farms now faces a frontal assault from the United Food and Commercial Workers Union, and others, claiming that the Company is racist and discriminatory. The Company�s explanation that it regretted the terminations of productive, skilled employees were ignored.

There is no constitutional right to consistent government. Ask Overhill Farms.

Congress Sniffs At Mandatory Arbitration

26 Jun 2009 15:28:29 GMT

Congress Sniffs At Mandatory Arbitration, June 11, 2009

by Peter S. Saucier

For years, popular opinion has lauded mandatory arbitration, the favored stepchild of unions, as the vehicle of deliverance from the evils of the corporate legal system. But now that discharged employees have had a taste of the system, it does not seem so sweet. Dutifully, Senatorial champions of the oppressed have stepped in to present the Arbitration Fairness Act of 2009, a bill to ban pre-dispute mandatory arbitration from the workplace (absent a union agreement, of course). The more things change, the more they remain the same.

Company Owes $4.1 Billion To Former Marketing Employee

26 Jun 2009 15:28:23 GMT

Company Owes $4.1 Billion To Former Marketing Employee, June 1, 2009

by Kelly C. Hoelzer

Employers take heed � ignoring a former employee's claims can be very costly � in this case to the tune of billions of dollars. This was the mistake made by iFreedom Communications Inc. and its founder Timothy Ringgenberg when former marketing manager, Paul Chester, brought breach of contract claims against them. Chester, who only worked for iFreedom for 15 months, had an employment contract with the company providing him a monthly salary of $12,000, plus commissions of 5% of gross sales. The contract stated that if iFreedom fired Chester without cause, he would continue to receive commissions. Chester was also contractually entitled to 1.1 million shares of company stock upon hiring and an additional 600,000 shares upon meeting certain sales targets.

After he was terminated, Chester filed an arbitration claim alleging that the company fired him without cause and breached his contract when it failed to pay him commissions. Chester also claimed violations of California wage laws. Ringgenberg fired company attorneys and represented the company himself. Ringgenberg apparently did not take his arbitration obligations seriously � ignoring discovery requests, refusing to provide documents, and failing to show up at the arbitration hearing � for which he and his company paid the price. After the arbitration hearing, at which Chester provided all the evidence regarding sales revenues and revenue growth rates, the arbitrator ruled in Chester's favor, finding that the defendants "engaged in a pattern of despicable conduct that constitutes oppression, fraud and malice." The arbitrator awarded Chester $977 million in compensatory damages and interest, three times that amount in punitive damages, $57,000 in statutory penalties, $634,500 in attorneys' fees and costs, and sanctions against his former employer.

Chester petitioned to confirm the arbitration award in California state court, which was granted on May 28, 2009. The court judgment awards Chester $3.9 billion in damages, over $203 million in interest through May 28, plus post-judgment interest of about $1.125 million per day until the judgment is paid. Chester v. iFreedom Communications, Inc., Case No. BC353567 (Cal. Sup. Ct. May 28, 2009).

Exotic Dancers � Employees Or Independent Contractors?

26 Jun 2009 15:28:04 GMT

Exotic Dancers � Employees Or Independent Contractors? June 1, 2009

by Kelly C. Hoelzer

The Playground Lounge and Casino in Great Falls, Montana, is a nightclub with female exotic dancers performing on stage and providing "lap dances" to individual patrons in more private settings. Recently, the Montana Supreme Court addressed the unusual issue of whether the exotic dancers were independent contractors or employees. In the Matter of Wage Claims of Renne L. Smith, et al. v. TYAD, Inc., Case No. 07-0305 (Mont. May 20, 2009). Prior to January 2003, Playground considered its dancers to be employees and paid them hourly wages, making appropriate withholdings and keeping wage records. In 2003, however, the club decided to treat the dancers as independent contractors, requiring them to sign a "rental agreement" in which they agreed to pay a fee (between $10 and $20) to "rent" the dance stage and dressing room for the nights they worked, plus an additional $10 for each lap dance performed. In exchange, the dancers could keep all tips and lap dance fees they received from customers.

The exotic dancers brought wage claims against Playground to the state labor department, claiming that they were employees and entitled to back wages and overtime pay under Montana law. The agency agreed, finding that they were subject to the nightclub's direction and control, and ordered Playground to pay each dancer a specific amount of backpay. On appeal, Playground argued that the agency's backpay calculation was far too generous. Because Playground stopped keeping any time records after 2003, however, the court found that it was reasonable for the agency to rely solely on the testimony of the dancers regarding the number and length of on-stage shifts they worked and the number of lap dances performed each night (and the fees collected for each dance). The court also required Playground to reimburse each dancer for the "rental" fees she paid to use the stage and the "lap dance" fee.

UNITE HERE�S Raynor Quits

30 May 2009 17:54:25 GMT

UNITE HERE�S Raynor Quits, May 30, 2009

by Darrell R. VanDeusen

UNITE HERE has developed a reputation as a force you don�t want to mess with. Now it�s just a mess. The union was formed with the 2004 merger of UNITE - the primarily textile and apparel workers' union led by Bruce Raynor, and HERE - the hotel, restaurant, and casino workers' union led by John Wilhelm. This past year the marriage suffered what now appears to be irreconcilable difficulties. Raynor was suspended from the office of president earlier this month, and he has now announced his resignation. Raynor said he decided to resign not out of "my own volition but because I have been forced out of office by the same people that ruined the merger of our two unions." Raynor has pledged to continue a "fight to demonstrate that their [the Wilhelm faction�s] actions have been unconstitutional and illegal." Meanwhile, UNITE HERE has issued a statement applauding Raynor's resignation as "good news." And you thought unions brought people together, didn�t you?

An FMLA Regulation Oops?

30 May 2009 17:54:24 GMT

An FMLA Regulation Oops? May 28, 2009

by Darrell R. VanDeusen

Under the FMLA, employees have the right to take leave on an "intermittent" or "reduced leave schedule" basis. The statute itself provides that such leave may be taken in order to care for a spouse, son, daughter, or parent with a serious health condition. 29 U.S.C. § 2612(b)(1).

But the new DOL regulations, which took effect in January, do not say the same thing. Under new section 825.202(b)(1), intermittent leave may be taken for a serious health condition of a parent, son, or daughter, or for the employee's own serious health condition " . . . which requires treatment periodically, rather than for on continuous period of absence." There is no indication that your "spouse" qualifies. And there�s no mention that a reduced leave schedule is available. The section then provides that for intermittent leave or leave on a reduced leave schedule to be taken because of one's own serious health condition, or to care for a parent, son, or daughter with a serious health condition, there must be a medical need for the leave. "Spouse" is again omitted.

Unless and until the DOL clarifies this language, employers are well advised to rely on the statute, not on the regulatory omission.

FMLA Regs Will be Repealed if House Bill Gains Momentum

30 May 2009 17:54:24 GMT

FMLA Regs Will be Repealed if House Bill Gains Momentum, May 23, 2009

by Darrell R. VanDeusen

After waiting years for the DOL to revise FMLA regulations, changes took effect in January of this year. Legislation introduced by Congresswoman Shea-Porter (D-NH) on April 29, 2009, and co-sponsored by 24 other representatives would turn back the clock and restore some of the more “employee friendly� portions of the old regulations. House Bill 2161, titled “To Nullify Certain Regulations Promulgated Under the Family and Medical Leave Act of 1993 and Restore Prior Regulations and Direct the Secretary of Labor to Revise Certain Regulations Under that Act� would - according to Congresswoman Shea-Porter - "restore the Family and Medical Leave Act to its original intent and spirit."

The legislation would repeal the following new regulations and restore their predecessors: 825.205(a)(2), 825.207, 825.215, 825.220(d), 825.302, 825.303, 825.307, and 825.312. It would also modify 825.308(b), 825.115(a) & (c), and revise the medical certification form. Keep your eyes on this legislation; employers already have a hard time weaving their way through the changes from the old to new regulations.

Paycheck Fairness Act Still Lurking About

30 May 2009 17:54:23 GMT

Paycheck Fairness Act Still Lurking About, May 23, 2009

by Darrell R. VanDeusen

On May 21, Sen. Dodd (D-Conn.), Sen. Mikulski (D-Md.), and Rep. DeLauro (D-Conn.) met (ok, they held a news conference) to press for traction to get passage of the proposed Paycheck Fairness Act, which would make compensatory and punitive damages available as remedies in Equal Pay Act cases. The House approved H.R. 12 on January 9 with a 256-163 vote. The Senate version (S. 182) was introduced the day before by then Senator Clinton (D-N.Y.), but was not taken up. The bill would amend the EPA to add non-retaliation requirements, increase penalties, and authorize the labor secretary to seek additional compensatory or punitive damages. Supporters argue that women are routinely paid less than men for comparable work and that current laws are not strong enough to deter employers. Opponents respond that the bill is unnecessary because there are protections against pay discrimination under Title VII .

Reintroduced Bill Intended to Aid Farmers and Immigrant Workers

16 May 2009 13:07:34 GMT

Reintroduced Bill Intended to Aid Farmers and Immigrant Workers, May 15, 2009

by Andreas Lundstedt

On May 14, legislation (S. 1038, House bill number not available) was reintroduced in both houses of Congress. The current bill is essentially identical to one introduced in the 110th Congress and is said to ease shortages of farm labor by allowing illegal immigrants to work in the U.S. agricultural sector while on the path to legal residence.

The bill would create a five-year pilot program to identify undocumented agricultural workers and legalize the immigration status of those who have been working in the United States for at least two years. The bill would also revise the H-2A visa system by allowing farmers to bring guest-workers to the United States to harvest their crops.

The bill would make undocumented agricultural workers eligible for a “blue card� provided they can show they have worked in the United States at an agriculture job for at least 150 work days over the two years that ended Dec. 31, 2008. The blue card would grant a worker temporary legal resident status. The total number of blue cards would be capped at 1.35 million over a five-year period, and the program would last five years. Once in possession of a blue card, the worker would have to be employed for three years (working at least 150 days per year) or five years (working at least 100 days per year) before the person would be eligible to apply for a green card. In addition, before applying for a green card, workers would have to pay a $500 fine, show that they do not owe any taxes, and demonstrate that they have not been convicted of any crime involving bodily injury, the threat of serious bodily injury, or harm to property in excess of $500.

Supporters of the bill argue that Congress must pass this legislation. Currently, because of a shortage in workers, the agricultural sector is not operating at an optimum level, and many farmers are forced to see their crops go lost. Sen. Diane Feinstein (D-Calif.) said that there is a ripple effect throughout the economy when farmers suffer economically, noting effects on agriculture-related businesses such as farm equipment manufacturing, packaging, processing, marketing, lending and insurance.

Worker Misclassification Bill Passed In Maryland

16 May 2009 13:07:33 GMT

Worker Misclassification Bill Passed In Maryland, May 13, 2009

by Andreas Lundstedt

On May 7, Governor Martin O�Malley signed S.B. 909 into law. The bill creates a presumption that work performed by an individual who is paid by an employer creates an employer-employee relationship. The bill applies to three areas of State government: labor and industry, workers� compensation, and unemployment insurance. It prohibits construction companies and landscaping businesses from failing to adequately classify an individual as an employee and sets up investigation procedures and penalties for noncompliance.

The bill distinguishes between employers who “improperly� classify employees and those who “knowingly� misclassify them. If an employer improperly misclassifies employees, the employer has 45 days to pay restitution to affected workers and come into compliance with all applicable labor laws. If not remedied within that time, the employer could incur a penalty of up to $1000 per each misclassified employee. If the employer has “knowingly� misclassified employees, the employer is subject to a penalty of up to $5,000 per misclassification, regardless of whether the employer enters into compliance within 45 days. An employer who has been found to have knowingly misclassified employees on three or more occasions may be assessed an administrative penalty of up to $20,000 for each misclassified employee. A misclassified worker also has the ability to sue the employer, provided he does so within three years of the violation.

A recent national study of misclassification in the construction industry revealed that 5% of randomly audited Maryland construction companies misclassified their employees as independent contractors (well below the estimated national average of 15% to 20%). It is believed that the new law could potentially save Maryland taxpayers almost $100 million annually in recovered income tax collections and unemployment insurance payments.

Maryland OKs Collecting Fees From Unaffiliated State Union Members

16 May 2009 13:07:33 GMT

Maryland OKs Collecting Fees From Unaffiliated State Union Members, May 11, 2009

by Andreas Lundstedt

On May 7, Maryland Governor Martin O�Malley, as part of his legislative priorities for the 2009 General Assembly Session, signed legislation S.B. 264, dubbed “The Fair Share Act.� The bill will go into effect on July 1, 2009, and will affect nearly 33,000 state employees in nine Executive Branch bargaining units.

The bill gives the State the go ahead to collectively bargain with the exclusive representative of a bargaining unit for service fees from State employees who are not members of that exclusive representative. Employees who are dues-paying members of an employee organization that is not the exclusive representative would also be required to pay any negotiated service fee.

Employees who because of religious beliefs prevent them from joining or financially supporting a collective bargaining organization would however be exempted from the bill. Such employees may still have to pay a certain negotiated amount, equal to that of the service fee, to a tax-exempt nonreligious, nonlabor-related organization, and would also have to provide proof of such payment. The bill also states that service fees may not be bargained for in negotiations between an employee organization and a University System of Maryland institution, Morgan State University, St. Mary�s College of Maryland, or Baltimore City Community College. Twenty-three states already either require state employees to pay a service fee or permit the fee to be mandated through collective bargaining.

White House Announces DOL "Surge"

16 May 2009 13:07:32 GMT

White House Announces DOL “Surge�, May 8, 2009

by John Bolesta

In an effort to boost troop levels in its ongoing war on employers (now known as mainland employer contingency operations), the White House proposed a $104.5 billion Labor Department budget for fiscal year 2010. As part of the proposed increase, a discretionary request of $13.3 billion would allocate $1.7 billion for worker protection programs, a 10 percent increase over the prior year's budget. Specifically, the DOL's Wage and Hour Division would receive $228 million, an increase of $35 million from the prior year, including funding to hire 200 new investigators. The Employee Benefits Security Administration is expected to hire 75 new employees, and the Office of Federal Contract Compliance Programs hopes to add 213 staff members. Employers- gird your loins!

Proliferation of �Green Jobs� May Have Economy Seeing Red

16 May 2009 13:07:32 GMT

Proliferation of “Green Jobs� May Have Economy Seeing Red, May 8, 2009

by John Bolesta

Apparently, the grass on the renewable energy side of the fence is not quite as green as many have claimed. Calling the green jobs proposals put forth by the Obama Administration a “myth�, several economists at a May 4 Heritage Foundation discussion unequivocally denounced claims by several policy groups and the current Administration that green job creation will boost the sagging economy. According to several prominent panelists, the Spanish government�s investment in alternative energies beginning in 1997 can only be viewed as a resounding failure and “any country that tries to do what Spain has done will have the same result.� Stating that “the whole system collapsed� because of the reliance on government subsidies, an economics professor at the King Juan Carlos University in Madrid found that for each green job created by government subsidies in the renewable energy sector in Spain, 2.2 jobs would have been created in the rest of the economy without those subsidies. Moreover, the panelists pointed out that green energies, such as solar and wind power, produce less energy than other power sources and cost more due to the increased labor demands typically seen with green energy production. Lastly, reports touting green jobs as a way to help the economy fail to account for the jobs that would be lost in a shift to different energy sources, which could result in a net loss of jobs in the energy sector. Congress and President Obama brushed these concerns aside, however, as $500 million of the recently enacted American Recovery and Reinvestment Act was directed specifically for preparing workers for green economy jobs.

Video of the Heritage Foundation discussion may be viewed at http://www.heritage.org/press/events/ev050409c.cfm.

Maryland Governor Signs �Me Too� Ledbetter Statute

16 May 2009 13:07:30 GMT

Maryland Governor Signs “Me Too� Ledbetter Statute, May 8, 2009

by John Bolesta

On April 14, 2009, at the close of the Maryland General Assembly�s 2009 session, Maryland Governor Martin O�Malley signed the Maryland Lilly Ledbetter Civil Rights Restoration Act, which mirrors federal legislation passed earlier in the year. The federal Lilly Ledbetter Fair Pay Act reverses the Supreme Court�s 2007 decision in Ledbetter v. Goodyear Tire & Rubber Company, which requires employees to file discrimination claims within no more than 300 days of the date on which the discriminatory compensation decision was made. Both the federal and Maryland law clarify that an unlawful employment practice occurs when a decision or practice is adopted, when an individual becomes subject to that decision or practice, or when an individual is affected by the decision or practice. Supporters of the Maryland version expressed concern that Maryland courts would rely on the decision in Ledbetter v. Goodyear Tire & Rubber Company when interpreting state anti-discrimination laws. In light of the federal Lilly Ledbetter Fair Pay Act�s unequivocal objective - invalidating the Supreme Court�s decision in Ledbetter - it is not entirely clear the extent to which Maryland Courts would have utilized the Ledbetter decision when interpreting state employment discrimination laws. What is clear, however, is that every Maryland employer will now be expected to preserve personnel files of departed employees indefinitely and will be expected to adequately document every decision concerning employee compensation.

A summary of the federal Lilly Ledbetter Fair Pay Act and some of its effects on employers may be viewed at http://kollman-saucier.com/articles/article60.html.

It Wasn't Me, It Was Him, No Him

9 Apr 2009 16:46:52 GMT

It Wasn't Me, It Was Him, No Him, April 6, 2009

by Peter S. Saucier

According to Gary Lizalec, as a result of his religious beliefs, his corporeal self was in fact three separate beings. Lizalec refused to comply with his employer's direction "that he stick with a single identity for professional purposes." As a result, the employer determined that Lizalec's difficult communication style, and inaccurate tax forms were cause to end his employment. Lizalec sued for religious discrimination based upon his claim that he had "covenanted all of [his] time, talent, effort, energy, everything . . . to the building up of the Kingdom of God on Earth." The employer was forced to go through "considerable discovery," with accompanying costs and fees, before the case was dismissed on summary judgment.

Is Exorcism In The Workplace Constitutionally Protected?

6 Apr 2009 17:41:51 GMT

Is Exorcism In The Workplace Constitutionally Protected? April 6, 2009

by Kelly C. Hoelzer

The University of Texas in Arlington fired two administrative assistants after they said prayers and rubbed olive oil on a coworker's office cubicle because they believed her to be "demonically oppressed." The two employees, who considered themselves to be devout Christians, were having trouble interacting with the coworker, and wanted to exorcise what they believed to be the demons that possessed her. When the university learned of their bizarre ritual, they were fired for harassing the coworker and for disregarding university property.

The two women sued, alleging that the university violated their First Amendment rights to free speech and religious freedom. The court found that because their ritual related to an internal personnel dispute, it did not involve a matter of public concern, and therefore was not protected free speech. The court did acknowledge, however, that because the employees claimed their actions were part of a religious ritual, they could be protected as the free exercise of religion. The court granted summary judgment to the university on the free speech claim, but requested additional legal arguments on the free exercise of religion claim. Shatkin v. Univ. of Texas, Case No.: 4: 06-CV-882-Y (N.D. Tex. Mar. 10, 2009).

Cheating On Certification Form Means Loss Of Fmla Rights

6 Apr 2009 17:41:51 GMT

Cheating On Certification Form Means Loss Of Fmla Rights, April 6, 2009

by Kelly C. Hoelzer

The FMLA entitles eligible employees to up to 12 weeks of unpaid leave for, among other things, a serious health condition that prevents them from performing their job functions. As permitted under the law, most employers require employees seeking such leave to obtain written documentation from their health care provider certifying the need for the FMLA leave. If an employee fails to provide the certification in a timely manner, the employer may deny the leave.

What happens if the employee falsifies the medical certification form? The Seventh Circuit recently held that an employee who did so lost her leave and reinstatement protections under the FMLA. See Smith v. Hope School, Civil Action No.: 08-2176 (7th Cir. Mar. 30, 2009). Because she tried to defraud her employer, the court found that the employer did not violate the statute by firing the employee for unauthorized absences from work, even though she might have otherwise been eligible for FMLA leave.

Tanum Smith worked as an instructional aide at Hope School, a residential treatment facility for kids with developmental disabilities. Smith was injured by students at the facility twice within two months, and in September 2006, told the school that she was stressed out by concerns of future injuries and needed to take leave. The school requested medical certification before granting FMLA leave, and Smith brought in a physician's certification form which stated only that she had recurrent headaches, as well as neck and arm pain. Before submitting it to the school, however, Smith added to the note "plus previous depression." She never told the doctor that she wanted to add that, and the doctor confirmed that it did not authorize the addition to the note. Smith also backdated her signature on the certification form by three days.

Hope School checked with the DOL about how to handle Smith's fraud and was told it could deny her FMLA leave. The school then fired Smith for unauthorized absences from work, and Smith sued for violation of her FMLA rights. The trial court granted summary judgment for the school.

On appeal, the circuit court affirmed summary judgment, finding that "where an employee adds to a medical care provider's certification form a condition that she has not been diagnosed with, without the knowledge or approval of her physician, an employer can deny her request for FMLA leave." Even though she would have been entitled to FMLA leave based on the certification as written by the doctor, her falsification of the form by adding a non-existent condition nullified her rights. The court was quick to point out, however, that its ruling did not necessarily address whether more minor alterations to a certificate, such as correcting a typo, would have the same result.

California Nurses Union and SEIU Agree to Get Along

26 Mar 2009 15:40:50 GMT

California Nurses Union and SEIU Agree to Get Along
March 26, 2009

by Darrell R. VanDeusen

There was talk of burying the hatchet, but for the longest time it seemed the location was the skull of the other side. Last week, however, the Service Employees International Union and the California Nurses Association/National Nurses Organizing Committee announced that they have reached an agreement to work collegially in organizing health care employees throughout the country. The collective effort will initially target the nation's largest hospital systems, including Tenet Healthcare Corp., HCA, and Catholic hospital chains, with Florida as "ground zero" for organizing.

Employee Free Choice Act Update

26 Mar 2009 15:40:50 GMT

Employee Free Choice Act Update
March 26, 2009

by Darrell R. VanDeusen

Keep your fingers crossed. Supporters of the Employee Free Choice Act were dealt a major blow this week when Senator Arlen Specter (R-Pa.) said that he will not support the card-check legislation (H.R. 1409, S. 560). If Spector went the other way, it would probably give EFCA supporters the 60 votes in the Senate needed to end debate and have a majority final passage vote. It appears that EFCA has the support of all 58 Democratic senators, and proponents are hopeful that Al Franken will be seated as a Democratic senator from Minnesota, giving them 59.

Estoppel Dooms Employer�s FMLA Defense

25 Mar 2009 19:45:36 GMT

Estoppel Dooms Employer�s FMLA Defense
March 25, 2009

by Darrell R. VanDeusen

Employers have to be extremely careful when granting FMLA rights to employees who are not FMLA qualified, by handbook or otherwise. While the FMLA provides that nothing precludes an employer from being more generous than the FMLA requires, employers have found that terminating an employee who was mistakenly offered FMLA leave but who was really ineligible for the leave, can result in a lawsuit claiming that the employer was estopped from denying the leave, and the protections offered under the FMLA. This is precisely what happened in Reux v. Infohealth Mgmt. Corp., No. 08-5068 (N.D. Ill. March 10, 2009).

Reux was told by her supervisor that she would be entitled to maternity leave under the FMLA if she submitted the FMLA paperwork. She followed procedures in the company handbook, requested FMLA leave, and received written approval for the leave. Reux began what she believed was approved maternity leave under the FMLA. She gave birth and was scheduled to return to work. But instead she was fired for � she was told � "financial reasons." Reux sued. Only then did the company tell her that she actually was not eligible for FMLA leave because the company did not have 50 employees within a 75 mile radius.

Except, that was not what the handbook said. The handbook made no reference to the FMLA's limits and suggested all employees were eligible for FMLA leave. The court said the company was barred from arguing that Reux was ineligible for the FMLA leave because (1) it had misrepresented that she was eligible; (2) Reux had relied on this misrepresentation; and (3) she was injured (terminated) as a result of this reliance. While, under the 50/75 rule, Reux was not protected under the FMLA, the court held that the company could not first give her written and verbal assurances of her eligibility for the leave and then fire her after she took the approved leave. One of the lessons here? Employers need to review their handbooks, and make sure that they are not promising something on which they won�t deliver.

Obama Appoints Zoo Director to Supervise Federal Workers - Really!!

25 Mar 2009 19:45:30 GMT

Obama Appoints Zoo Director to Supervise Federal Workers - Really!!
March 6, 2009

by Frank L. Kollman

President Obama has appointed John Berry, director of the National Zoological Park, to be the Director of the Office of Personnel Management. The OPM is the federal government's human resources department. Mr. Berry will become one of the highest officials in the federal government to be openly gay.

Secretary of Labor Pledges Anti-Business Stance

5 Mar 2009 00:39:35 GMT

Secretary of Labor Pledges Anti-Business Stance
March 4, 2009

by Frank L. Kollman

The new Secretary of Labor, Hilda Solis, addressed a meeting of the AFL-CIO Executive Council yesterday where her remarks were met with wild cheers. Pledging to increase enforcement of labor laws against employers and to decrease enforcement of labor laws against unions, Secretary Solis also expressed her complete support for the most undemocratic bill being proposed in Congress this year, the card check bill cynically called the Employee Free Choice Act. Although the Department of Labor does not enforce the National Labor Relations Act, her remarks were met with more wild applause.

Former Supervisor's Comments Can Taint a Legitimate Termination

2 Mar 2009 14:27:46 GMT

Former Supervisor's Comments Can Taint a Legitimate Termination
March 2, 2009

by Frank L. Kollman

A federal court in Nevada has ruled that an employee can pursue her age and sex discrimination claims, despite evidence that she was fired by unbiased supervisors. The court found that her termination was based, in part, on her prior disciplinary record, which included discipline imposed by a supervisor who allegedly had made sexist and ageist comments. The court found this was sufficient to give the employee a trial. Lanahan v. Southern Nev. Health Dist., No. 2:06-cv-01176 (D. Nev., February 17, 2009).

While it is normally a good idea to rely on a poor disciplinary record to support a termination, this case illustrates the hazard of doing so if the only reason is to bolster a good discharge decision. If the reasons for termination can stand on their own, it is sometimes more prudent not to "pile on" by referring to a disciplinary record that may be tainted by other factors. If the employee would have been terminated without the poor disciplinary record, consider not referring to it at all.

Ban On Political Payroll Deductions Does Not Infringe Free Speech

25 Feb 2009 19:52:56 GMT

Ban On Political Payroll Deductions Does Not Infringe Free Speech, February 25, 2009

by Clifford B. Geiger

The Supreme Court ruled that an Idaho law barring local government employers from allowing payroll deductions for political activities does not violate a union�s First Amendment right to free speech. (Ysura v. Pocatello Educ. Ass�n, U.S., No. 07-869, 2/24/09). Writing for the 6-3 majority, Chief Justice Roberts noted that while the First Amendment prohibits the government from abridging the freedom of speech, it “does not confer an affirmative right to use government payroll mechanisms for the purpose of obtaining funds for expression.�

A group of public employee unions had challenged Idaho�s Voluntary Contributions Act (VCA). The VCA, which was enacted in 2003, amended the state Right to Work Act and deleted a provision that allowed payroll deductions to be made to a political committee if the employee annually provides a written authorization. The VCA banned unions from using dues for political activities, required unions to pay for political activities out of separate segregated funds, placed restrictions on union's solicitations for donations to such funds, and banned payroll deductions for political activities even if authorized by the employees. “Political activities� were defined to include “electoral activities, independent expenditures, or expenditures made to any candidate, political party, political action committee, or political issues committee or in support of or against any ballot measure.�

While acknowledging that content-based restrictions on speech are presumptively invalid and are subject to strict scrutiny, the court disagreed with the unions� position that the ban on political deductions treats political speech differently. Chief Justice Roberts wrote, “[w]hile in some contexts the government must accommodate expression, it is not required to assist others in funding the expression of particular ideas, including political ones.� He further pointed out that Idaho “is not constitutionally obligated to provide payroll deductions at all.� According to the court, “[w]hile publicly administered payroll deductions for political purposes can enhance the unions' exercise of First Amendment rights, Idaho is under no obligation to aid the unions in their political activities ... And the State's decision not to do so is not an abridgement of the unions' speech; they are free to engage in such speech as they see fit. They simply are barred from enlisting the State in support of that endeavor.� Because the unions� free speech rights are not infringed, the VCA is not subject to strict scrutiny. The State needed only a rational basis for banning political payroll deductions. In this case, the ban was reasonably “justified by the State's interest in avoiding the reality or appearance of government favoritism or entanglement with partisan politics.�

Supreme Court Declines Review Of Retaliation Claim

25 Feb 2009 19:52:52 GMT

Supreme Court Declines Review Of Retaliation Claim, February 25, 2009

by Clifford B. Geiger

Alshafi Tate is a former employee of Executive Management Services in Indianapolis. Tate claimed that his employment was terminated in retaliation for his decision to discontinue a consensual sexual relationship with his female supervisor. Tate told his supervisor he was ending their relationship because he had recently married and he wanted to be faithful to his wife. The court ruled that Tate did not have a Title VII retaliation claim, because there was no evidence that Tate believed he was opposing activity made illegal by Title VII. Tate v. Exec. Mgmt. Servs., Inc., 546 F.3d 528 (7th Cir. 2008). In other words, Tate did not have a retaliation claim because he ended the relationship for personal reasons, rather than because of a belief that his supervisor�s demands were unlawful. On February 23, 2009 the Supreme Court declined to review the Seventh Circuit�s decision.

But I Thought Unions Were Supposed to Bring People Together?

20 Feb 2009 19:39:52 GMT

But I Thought Unions Were Supposed to Bring People Together? February 20, 2009

by Peter S. Saucier

Earlier this month, a group of officials with UNITE HERE filed a lawsuit in New York to try splitting the union into two units. Union officials describe the complaint as a product of a civil war within UNITE HERE. According to the Complaint, "There are broad and irreconcilable differences" within the leadership ranks of the union. That follows closely upon a legal action against the US Airline Pilots Association filed by pilots who are convinced the union failed to represent them responsibly. The lawsuit came after the pilots already had been forced to arbitration with the union to try to resolve differences in 2006. The USAPA lost a motion to dismiss and the case is moving forward. Ah, brotherly love!

Remember When Staying Home Sick Meant Staying Home?

19 Feb 2009 18:22:10 GMT

Remember When Staying Home Sick Meant Staying Home? February 19, 2009

by Peter S. Saucier

The Village of Hempstead, New York, determined that if it was going to pay an employee to stay home sick from work, she should stay home sick. Dawn Borum, a police detective collecting benefits for not working, considered the policy discriminatory. She wanted to go to church while she collected pay for being home sick, which she could not do under the policy during the time that she was supposed to be home sick and unable to work. Borum claimed that the policy violated her religious freedom, and discriminated against her on the basis of race and sex. The religion component was dismissed for procedural reasons, but Borum is permitted to pursue her race and sex claims against Hempstead. Omigod!

Most Recent Congressional Efforts To Expand FMLA Coverage

17 Feb 2009 17:06:31 GMT

Most Recent Congressional Efforts To Expand FMLA Coverage, February 17, 2009

by Kelly C. Hoelzer

On the heels of the new FMLA regulations implemented by the DOL last month, Rep. Carolyn B. Maloney (D-NY) has introduced the Family and Medical Leave Enhancement Act (H.R. 824) which would significantly expand FMLA coverage. Rep. Maloney's bill amends the statute to allow employees to use FMLA leave for "parental involvement" activities, such as their children's or grandchildren's extracurricular activities, as well as for "family wellness" to take family members to doctor's appointments. In addition, H.R. 824 would extend coverage under the FMLA to employees working for businesses with more than 25 employees. This would significantly expand coverage under the act, which currently only applies to employees working for companies with 50 or more employees working within a 75 mile radius. Rep. Maloney introduced similar legislation during the last congressional session that died in committee. With only eight co-sponsors so far, it remains to be seen what level of success her bill will have this session.

Senior Citizen Employee Yelling At Other Seniors Has No Age Discrimination Claim

17 Feb 2009 17:06:26 GMT

Senior Citizen Employee Yelling At Other Seniors Has No Age Discrimination Claim, February 17, 2009

by Kelly C. Hoelzer

The grievant in a recent arbitration decision was an employee of a nursing home who herself was in her early seventies. She had worked at the facility since the early 1970's in a variety of positions, finally ending up in the dietary department. One day during lunch, a resident asked the grievant for a glass of ice tea. When the grievant failed to bring the glass, the resident asked again. In response, the grievant became angry, told the resident to "shut up" and that she was "stupid." The resident complained, and the nursing home conducted an investigation that ultimately led to the grievant's termination two days later. She filed a grievance and complaint that there was no just cause to terminate her and instead that she was fired because of her age.

The company's position that it had just cause to fire the employee was upheld in arbitration. The grievant had been suspended for three days only a few months earlier for verbally abusing a resident. The arbitrator also believed the testimony of other residents who witnessed the altercation. On the other hand, the grievant could not remember many details about her earlier suspension and could not even remember the name of the grandson she was raising. The arbitrator found that the nursing home had given her fair warning of the consequences of continued verbal abuse of residents and had just cause to fire her. As for her age discrimination claim, the arbitrator credited the testimony of nursing home managers who denied ever telling the grievant that she "was getting too old for the job," as she had claimed. Instead, he relied on records showing that the company had hired several senior citizens, at least one of whom was born in 1938, to deny her age claim and deny the grievance. GMG Inc., 125 LA 1537 (Heggie Jan. 15, 2009).

Kitchen Worker With Double Identity

17 Feb 2009 17:06:20 GMT

Kitchen Worker With Double Identity, February 17, 2009

by Kelly C. Hoelzer

The story of El Palenque Mexican Restaurant and Cantina in Houston should serve as a good reminder to employers of the importance of maintaining accurate payroll records. Jesus Bustamante, an undocumented foreign worker in the restaurant's kitchen, sued El Palenque for failure to pay overtime wages in violation of the FLSA. Bustamante, who usually worked the early shift, claimed that he was forced to work under a different identity � that of his cousin, Angel Bustamante � for afternoon shifts so that the restaurant would not have to pay him any overtime. Jesus claimed that he clocked in as himself in the morning and as Angel in the afternoon and received two different paychecks.

El Palenque's defense was pretty simple � Jesus and Angel were two different people, so Jesus was not entitled to any overtime for Angel's hours. Restaurant managers knew of an Angel Bustamante, who strangely was taller and heavier than Jesus. And the restaurant used a fingerprint timekeeping system, making it almost impossible for one person to clock in as two different people. Finally, El Palenque produced its payroll records showing that on at least one occasion, Jesus and Angel worked the same shift, and that during one week their combined hours were less than ten. When Jesus could not explain how that occurred, if he was actually working under a double identity, the court found he could not overcome the evidence in the payroll records to make his case. The court also noted that the restaurant's records showed that it paid several other employees overtime, undermining Jesus's claim that it refused to pay him overtime. Bustamante v. El Palenque Mexican Rest. & Cantina Inc., No. 4:07-cv-02506 (S.D. Tex. Feb. 3, 2009).

HR Manager�s Failure to Check FMLA Rules Results in Double Damages for Employee

7 Feb 2009 00:42:03 GMT

HR Manager�s Failure to Check FMLA Rules Results in Double Damages for Employee, February 6, 2009

by Darrell R. VanDeusen

An HR managers failure to check the FMLA rules before deciding an employee was not eligible for FMLA leave resulted, not only in a jury verdict for the employee, but in the doubling of damages because the court found that the employer had not acted in “good faith� as required to avoid liquidated damages. Brown v. Nutrition Mgmt. Servs. Co., No. 06-2034, 2009 U.S. Dist. LEXIS 4199 (E.D. Pa. Jan. 21, 2009)

Brown was hired in November 2002, and when her services were contracted to a different group in August 2004, she continued to work in the same capacity. In October 2004, Nutrition Management fired Brown when she told them she was pregnant. Brown sued for violations of the FMLA as well as other claims. The company claimed that Brown was not eligible for FMLA leave because she was in her probationary period with the new group. The jury disagreed and award Brown $ 74,000. Brown sought liquidated damages, claiming that the company did not act in good faith.

The company argued it had a good faith belief that Brown was not an eligible employee under the FMLA, and offered testimony of its director of human resources, who was also a lawyer. But the human resources director had done nothing other than make a cursory decision. He did not check to see whether Brown really was eligible or not. The court noted that “Nutrition Management presented no evidence that it researched the requirements of the FMLA, or was otherwise aware of the factors governing whether the FMLA would apply to Brown's request for leave. Nutrition Management, having made no legal inquiry into the requirements of the FMLA, had no reasonable grounds to believe Brown's termination was not a violation.“

There is an important lesson to be learned here. The FMLA is a highly technical law. The FMLA�s new regulations have created even more reasons to make sure that employers are familiar with the nuances of the law, and are consulting knowledgeable counsel before taking adverse action. It is more than worth the cost.

No Sexual Harassment in Unisex Bathrooms

7 Feb 2009 00:42:02 GMT

No Sexual Harassment in Unisex Bathrooms, February 4, 2009

by Darrell R. VanDeusen

Companies with unisex bathrooms sometimes face - and sometimes lose - claims of sexual harassment by employees who suffer invasions of privacy, sex-based insults, or threatening behavior by members of the opposite sex in the restroom. A New York federal court has held, however, that a female employee who complained of no such behavior, but instead that the employer's unisex bathrooms were often dirty and unavailable to her because men were using them, cannot proceed with her claim of sexual harassment. The court found that the employee could not establish that the bathroom circumstances rendered her workplace "objectively hostile" to women, but amounted only to "mere inconvenience" that does not trigger a Title VII claim. See Dauer v. Verizon Communications Inc., No. 03-5047 (S.D.N.Y. January 26, 2009).

Federal Contractors: Executive Order � Notice of Rights of Employees Under Federal Labor Laws

3 Jan 2009 15:25:03 GMT

Federal Contractors: Executive Order � Notice of Rights of Employees Under Federal Labor Laws, February 3, 2009

by Darrell R. VanDeusen

On January 30 the President issued an Executive Order requiring that all federal contracts include a provision requiring that contractors post a notice in plants and offices in which employees covered by the National Labor Relations Act are employed, describing the rights of employees under federal labor laws. The Executive Order takes effect immediately and applies to federal contract solicitations issued on or after the effective date of implementing regulations to be issued by the Secretary of Labor. The Executive Order revokes Executive Order 13201, which required federal contractors to post notices of employee "Beck" rights concerning the payment of union dues or agency shop fees throughout their facilities and to include provisions regarding compliance with E.O. 13201 in all non-exempt subcontracts. The Executive Order also directs the heads of executive departments and agencies to revoke any implementing rules and regulations of Executive Order 13201.

Delay in Effective Date of E-Verify

3 Feb 2009 15:24:55 GMT

Delay in Effective Date of E-Verify , February 3, 2009

by Darrell R. VanDeusen

An amendment to the final rule requiring certain federal contractors to participate in the Department of Homeland Security�s E-Verify system, was published in the January 30 Federal Register. The amendment delays the effective date of the final rule to May 21,2009.

Delay in Effective Date of Amended Form I-9

3 Feb 2009 15:24:55 GMT

Delay in Effective Date of Amended Form I-9, February 3, 2009

by Darrell R. VanDeusen

The U.S. Citizenship and Immigration Services (USCIS), Department of Homeland Security, has announced an extension of the effective date of its previously released Interim Final Rule amending the types of acceptable identity documents and receipts that employees may present to their employers for the completion of Form I-9, Employment Eligibility Verification. The rule and the required use of the amended Form I-9 included in the rule was scheduled to take effect on February 2. The announcement extends the effective date to April 3, 2009, and re-opens the comment period on the rule for 30 days.

No Implied Right to Sue Public Employers Under Section 1981 Says Third Circuit

3 Jan 2009 15:24:55 GMT

No Implied Right to Sue Public Employers Under Section 1981 Says Third Circuit, February 1, 2009

by Darrell R. VanDeusen

Joining the majority of federal appellate courts that have considered the issue, the Third Circuit has held that Section 1981 of the Civil Rights Act of 1866, as amended by the 1991 Civil Rights Act, does not an implied right to sue public employers. McGovern v. Philadelphia, No. 08-1632 (3d Cir. January 28, 2009).

The court held that nothing in the 1991 amendments to Section 1981 suggests that Congress intended to overturn the Supreme Court's decision in Jett v. Dallas Independent School District, 491 U.S. 701(1989), which held that Section 1981 provides no remedy against public employers. Five other circuits have followed this reasoning; only the Ninth Circuit has come to the opposite conclusion. See Federation of African American Contractors v. Oakland, 96 F.3d 1204 (9th Cir. 1996).