Ninth Circuit Approves of "Preemptive" Fitness for Duty Examination
Yesterday the Ninth Circuit Court of Appeals issued a decision approving of an employer's use of a "preemptive" fitness for duty examination for an employee who exhibited bizarre and erratic behavior in the workplace, even though that behavior had not yet impacted his job performance. Click here to read the full opinion in Brownfield v. City of Yakima.
In Brownfield, a police officer was ordered to undergo a fitness for duty examination after he displayed several strange behaviors in and out of the workplace: swearing at and arguing with another officer, becoming upset after a child teased him during a traffic stop, domestic violence at home, and making vague suicidal comments . The City required Brownfield to undergo a fitness for duty examinations to determine whether he could perform police duties. When Brownfield refused, the City terminated him. Brownfield sued, alleging the City violated the Americans with Disabilities Act ("ADA") by unlawfully requiring a fitness for duty examination.
The Ninth Circuit held that the City did not violate the ADA by requiring the fitness for duty examination. Under the ADA, an employer may not require a fitness for duty examination "unless such examination ... is shown to be job-related and consistent with business necessity." The Ninth Circuit rejected Brownfield's argument that the examination could not be job-related unless the City showed Brownfield's job performance was affected by his behavior. Rather, the court held that a "propyhlacitc psychological examination" following an employee's erratic behavior may be job-related and satisfy the business necessity standard even though job performance is not impacted.
When can an employer order an employee who is behaving erratically to undergo a fitness for duty examination? In Brownfield, the Ninth Circuit adopted a "reasonable person" standard: the employer can order the examination when faced with "significant evidence that could cause a reasonable person to inquire as to whether an employee is still capable of performing his job." The court also warned against overuse of such examinations, however: "an employee's behavior cannot be merely annoying or inefficient to justify an examination; rather, there must be genuine reason to doubt whether that employee can perform job-related functions."
Brownfield will give employers in the Ninth Circuit greater leeway in addressing an employee's erratic behavior. Before ordering such an examination, however, employers should consider whether the behavior could raise a serious question of whether the employee can still perform the essential functions of his job. Overuse of such examinations could lead to meritorious discrimination claims.
Supreme Court issues Favorable Ruling for Employers in Texting/Privacy Case
Yesterday the United States Supreme Court issued a long-anticipated decision in City of Ontario v. Quon, unanimously ruling that a search of sexually explicit personal text messages sent by a police officer using his department pager was reasonable and did not violate the individual officer’s privacy rights. At issue was the right of a government employer to monitor its workers private communications because it believed employer-owned equipment was being abused. Even if a public employee has a legitimate privacy expectation, an employer’s intrusion on that expectation “for noninvestigatory, work-related purposes, as well as for investigations of work-related misconduct, should be judged by the standard of reasonableness under all the circumstances,” Justice Anthony Kennedy wrote. Click here to read the Supreme Court’s full decision in Quon.
In Quon, the employer, the City of Ontario, distributed to its police officers pagers with texting capability. The City audited the use of text messages by the officers to determine whether coverage charges may have been caused by personal use of the service. During the audit, it discovered that Quon had sent several personal, sexually explicit text messages. Quon sued the City, asserting violations of his right to privacy under the Fourth Amendment of the United States Constitution as well as under Article I, Section I of the California Constitution. The federal District Court dismissed Quon's suit after a jury found that the City conducted the audit to investigate usage, not misconduct. The Ninth Circuit Court of Appeals reversed, holding that the City violated Quon's constitutional privacy rights by reading his private texts, and the City's articulated policies did not give Quon sufficient notice that his texts could be read by others to overcome his privacy rights. The Ninth Circuit’s decision, which we blogged on the World of Employment, was unanimously overturned by the Supreme Court.
What does the Supreme Court’s decision mean for employers? The Supreme Court issued a narrow ruling in a case involving a public, not private, employer. For most private employers, this case could have little or even no impact because federal privacy rights such as those that come from the U.S. Constitution’s Fourth Amendment apply only to public, and not private, employers. Justice Kennedy cautioned that even with regard to public employers, the “Judiciary risks error by elaborating too fully on the Fourth Amendment implications of technology before its role in society has become clear . . . .” Private California employers should continue to be wary: California courts have sometimes applied state constitutional rights to private employers, and could rule that their employees have privacy rights in work-provided email and text systems. For all employers, whether or not the Fourth Amendment applies to them, it remains a “best practice” to adopt and distribute policies clearly stating that employees have no expectation of privacy in employer-owned equipment, or in communications they make using or interfacing with employer-provided equipment and systems, such as email, text messages, cell phones, social media and other avenues of technology.
Supreme Court Invalidates Nearly 600 Decisions Made by Two-Member NLRB
This morning the United States Supreme Court issued a highly-anticipated decision in New Process Steel v. National Labor Relations Board, ruling 5-4 to effectively invalidate almost 600 decisions made by the NLRB during the time it only had two members.
Normally, the NLRB is comprised of five members, but typically delegates its powers to decide most cases to panels of three members, in which a two-member majority can (and often does) carry the day. However, from late 2007 through March 2010, the Board only had two members. Those two members argued that they had the authority to decide cases as long as they agreed on the decision; after all, had they been the majority on a three-person panel, they would have made the same decisions.
The Supreme Court disagreed. It held that the National Labor Relations Act (NLRA), the law that gives the NLRB its powers, only allows the Board to delegate the authority to decide cases to a panel of at least three members. Accordingly, no two-member panel could have decision-making authority under the NLRA.
What does this mean for employers? If you had one of the 600 cases decided by the two-member Board, it may mean that your case will have to be reconsidered by a new three-member panel. We suspect, however, that the vast majority of those cases will be decided the same way. For the rest of us, this decision will have little impact. The two-member Board did not take up any controversial cases and did not issue any decisions that would overturn existing precedent or make "new law."
More Federally Mandated Wallpaper: Federal contractors must post a notice of employee rights under the National Labor Relations Act
Once again, employers are being given an old line: we are from the federal government and we’re here to help you . . . with your office decorating. Shortly after his inauguration, President Obama issued Executive Order 13496 (the “Order”). The Order directed that all federal contractors post a notice to their employees advising the employees of their rights under the federal labor laws. The Order required the United States Department of Labor to prepare implementing regulations, including the text of the posting. After a year’s work, the Department has completed its work, and the required poster is now available. Federal contractors and all subcontractors must begin posting the required notice by June 19, 2010.
Posting requirements are not new for federal contractors. In the 1980s, the first President Bush required contractors to post a notice advising employees of their rights to refrain from supporting unions’ political activities (the so-called “Beck” notices named after the U.S. Supreme Court case addressing the issue). President Clinton issued an executive order rescinding the Beck poster requirement; the second President Bush then reinstated the posting obligation. No surprise – in the Order President Obama again rescinds the obligation to post the Beck notice.
The new poster is available from the Department of Labor’s website here. The poster generally advises employees about their rights to engage in protected concerted activity under the National Labor Relations Act, as well as their right to refrain from engaging in that activity. The poster also describes the industries and employees that are not subject to the NLRA. Generally, the poster does a fair job of describing employee rights, and unlawful actions by both employers and unions. Of course, a single 11-inch by 17-inch poster cannot describe all of the complexities that have developed in the 75 years of NLRA enforcement. For example, health care employers should note that the poster does not even attempt to address the special rules applicable to various union activities in patient care areas.
The obligation to post the notice applies to all federal contracts that are above the “simplified acquisition threshold” applicable to federal contracts. Generally, the simplified acquisition rules are applicable to contracts with a total value less than $100,000. These provisions of the federal acquisition regulations are sometimes complex, and employers with questions as to their coverage should consult their attorney.
Federal contractors are required to include a contract provision requiring posting of the notice in all subcontracts, with a value of more than $10,000. Thankfully, in the final regulations the Department backed off its original proposal that subcontracts had to include the full text of the poster; now contractors can satisfy their obligations in this regard by incorporating the regulation by reference. Contractors should note that among the requirements of the contract clause is the obligation for subcontractors to include the provision in their contracts with their subcontractors; the Department’s regulations thus expressly require all businesses performing work on the federal contract to post the notice, regardless of their subcontract “tier” or whether the subcontract might itself be under the simplified acquisition threshold.
The poster must be physically displayed in the normal “conspicuous places” other employment related posters are located. The notice must be posted at all locations on which work on the federal contract is performed or is being allocated to the federal contract. When a substantial portion of the workforce does not speak English, the notice must be posted in the language spoken by those employees. When the employer routinely provides employees notices by electronic means, the employer must do so in this instance as well, typically by providing a link to the Department of Labor website.
What is a federal contractor or subcontractor to do?
For federal contractors or subcontractors that are already ubiquitously unionized, the poster may not cause any substantial headaches. Indeed, reminding unionized employees that there are certain things their union cannot do, as the poster plainly does, may not be a bad thing. For federal contractors or subcontractors that are not currently unionized, however, substantial issues are raised – especially if the employer wants to remain union-free. The new poster may raise employees’ awareness of their rights under the NLRA. It should also raise union-free employers’ attention to a systematic union avoidance program:
- Nothing in the Executive Order or the Department’s regulations prevents an employer from posting its own notice, right alongside the newly required poster.
- Employers should remind employees that it is official company policy that the employer does not believe a union is necessary or appropriate.
- The employer should remind employees of the advantages they enjoy by being union-free.
- If the company has not reviewed its nonsolicitation and nondistribution policy, it should be reviewed promptly to make sure that all of its provisions are in compliance with the law. If the company does not have a nonsolicitation and nondistribution policy – implement one!
- Make sure that your nonsolicitation and nondistribution policy, and any other policies or practices that might impact employees or others engaging in union organizing, are applied in a fair and nondiscriminatory fashion.
Of course, before undertaking any these actions, federal contractors or subcontractors should consult with their labor law attorney.
Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice
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The Supreme Court today issued a judicial smackdown to the Seventh Circuit Court of Appeals, unanimously reversing its decision in Lewis v. City of Chicago (as we suggested it should when we reviewed the details of this case back in October!). Briefly put, the plaintiffs are a group of approximately 6,000 black firefighter applicants who filed charges of race discrimination with the EEOC more than 300 days after the initial announcement of their application test results, but within 300 days of the hiring of the new firefighter class from which they allege they were denied consideration. The Seventh Circuit held that the “discrimination was complete when the tests were scored...and the applicants learned the results.”
Justice Scalia, writing for the entire Court, stated that because there is no dispute that the claim was filed within 300 days of the hiring of the new class, the issue in this case is not “whether a claim predicated on the [on the hiring of the new firefighter class] is timely, but whether the practice thus defined can be the basis for a disparate-impact claim at all.” (Emphasis in original.) In other words, while the parties agreed that the adoption of a practice had a disparate impact, the real question was whether a cause of action can arise from the application of that same practice. The Court held that it could. Citing its recent opinion in another firefighter test case—Ricci v. DeStefano, the court noted that “a plaintiff establishes a prima facie disparate-impact claim by showing that the employer ‘uses a particular employment practice that causes a disparate impact’ on one of the prohibited bases.”
Per the Court, the City believes that this decision “will result in a host of practical problems for employers and employees alike,” in that it may subject employers to an increased number of disparate-impact lawsuits based on long-stranding practices. That may, in fact, be true. Following this decision, any employer engaging in a practice whose application may result in a disparate impact on some protected classification of employees should take the time to reevaluate that practice. While there may be a legitimate business defense for the practice (as remains to be seen in the Lewis case on remand), it’s going to be easier for employees to get their foot in the door and state a claim.
Court Dismisses Lawsuit Against Oregon Mandatory Meeting Law
Last week a federal judge dismissed a lawsuit aimed at blocking SB 519, the Oregon law the prohibits employers from requiring employees to attend meeting about, among other things, labor unions. Click here to read the District of Oregon's opinion in Associated Oregon Industries v. Avakian.
SB 519, passed by the Oregon legislature in 2009, prohibits employers from disciplining or threatening to discipline employees who refuse to attend mandatory or "captive audience" meetings on religious or political matters, including the employer's views on labor unions. SB 519 also requires employers to post a notice informing employees of their rights under the law, which you can download here.
Associated Oregon Industries brought a federal lawsuit on behalf of Oregon employers, arguing that the law is preempted by the National Labor Relations Act and violates employers' First Amendment free speech rights. The court did not reach the merits of that challenge; instead, the court held that the case was not ripe for review, and indicated it could not be challenged "until an employer holds a mandatory meeting, and then creates an employee's cause of action by disciplining an employee who refuses to attend."
In our humble opinion (not to be taken as legal advice!), the portion of SB 519 that applies to union meeting will someday be successfully challenged on the basis that it is preempted by federal labor law. This latest ruling, however, seems to indicate a court will be reluctant to rule on the bill until it is presented with a case involving employee discipline, and that may take an employer with enough interest in such meetings to be willing to run the risk and costs of litigation.
Supreme Court To Decide Scope of Cat's Paw in Employment Cases
Yesterday, the Supreme Court granted certiorari in Staub v. Proctor Hospital to address the question of when an employer may be held liable in “cat’s paw” situations, where an employee with unlawful intent influences a decisionmaker but is not involved in making the ultimate employment decision.
In this case the employee, Vincent Staub, was a member of the Army Reserves. He was required to attend occasional weekend training as well as a two-week training program during the summer. Reservists, of course, are protected from discrimination by the Uniformed Services Employment and Reemployment Rights Act (“USERRA”). The department’s second in command, Janice Mulally, resented the fact that Staub was in the Reserves. She made numerous anti-Reserves comments and purposely scheduled him on weekends when he had training. In the weeks leading up to his termination, Staub was disciplined for allegedly insubordinate behavior. The veracity of the allegations against him were suspect, coming largely from Mulally, who was known to dislike Staub. Staub was terminated by the Vice President of Human Resources after he allegedly engaged again in similar insubordinate behavior. The parties agree that the decisionmaker had no unlawful animus whatsoever. She testified that her decision was based on both the more recent allegations of insubordination, as well as Staub’s well-documented history of being difficult to work with.
At trial, Staub sought to attribute Mulally’s animus to the decisionmaker, arguing that the decision would not have been made but for Mulally’s unlawful animus. The jury returned a verdict in Staub’s favor. On appeal, the Seventh Circuit reversed that decision, noting that in order to successfully assert a cat’s paw theory, the discriminatory animus of the non-decisionmaker can only be attributed to the decisionmaker where the non-decisionmaker had “singular influence” over the decisionmaker. The Court held that while the decisionmaker was clearly influenced by Mulally, there was no evidence of “blind reliance,” and the cat’s paw theory should never have gone before the jury. The Court pointed to undisputed evidence that the decisionmaker took into account other aspects of Staub’s employment unrelated to the alleged acts reported by Mulally, including his reputation for being difficult to work with, and his history of employment issues dating back to the beginning of his employment--before Mulally became second in command of the department.
While not completely eviscerating the cat’s paw doctrine, the Seventh Circuit in Staub enunciated a very narrow, pro-employer, interpretation of the “singular influence” requirement. What the Supreme Court may do is anybody’s guess, but it seems likely that given the Court’s current makeup it will affirm the Seventh Circuit’s narrow interpretation of the cat’s paw doctrine. A copy of the Seventh Circuit opinion can be found here.
Oregon Supreme Court: Employers Are Not Required to Accommodate Medical Marijuana
Yesterday the Oregon Supreme Court conclusively ruled that employers are not required to accommodate the use of medical marijuana in the workplace, ending years of doubt and confusion on this critical issue. Click here to read the Court’s opinion in Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries.
In Emerald Steel, a drill press operator was terminated after his employer learned he was using medical marijuana to treat a medical condition that qualified as a disability under Oregon law. The employee filed a claim with the Oregon Bureau of Labor and Industries, alleging that the employer’s refusal to accommodate his use of medical marijuana violated Oregon law requiring employers to reasonably accommodate an employee’s disability. A judge ruled that the employer did not properly engage in the interactive process to determine whether other reasonable accommodations were possible.
The employer appealed that decision, arguing that neither federal nor state disability law requires employers to engage in the interactive process with users of medical marijuana, given that their use of marijuana is prohibited by federal law. The Oregon Court of Appeals ruled in favor of the employee on the basis that the employer failed to preserve that argument in the case below. Further, a prior Oregon Court of Appeals case—Washburn v. Columbia Forest Products—had held that employers do have a duty to accommodate the use of medical marijuana by a disabled employee.
On appeal, the Oregon Supreme Court reversed the decisions of the trial judge and the Court of Appeals, and reversed the Oregon Court of Appeals’ decision in Washburn. The Supreme Court held that employers do not have to accommodate employees’ use of illegal drugs. Because marijuana—medical or otherwise—is illegal under federal law, employers are not required to accommodate its use under any circumstance.
Since the original Washburn decision, many Oregon employers have assumed they were obligated to accommodate the use of medical marijuana by disabled employees. The Emerald Steel decision should give all Oregon employers comfort in knowing that, until or unless federal law changes, they are definitely not required to accommodate medical marijuana use. A similar ruling from the Washington Court of Appeals is being reviewed by that state’s supreme court. Stoel Rives represents the employer in that case. Click here to read the World of Employment's coverage of that case.
IRS Issues HIRE Act Affidavit
The Internal Revenue Service released yesterday Form W-11, the Hiring Incentives to Restore Employment (HIRE) Act Employee Affidavit. Employers can use the form to claim the special payroll tax exemption that applies to many newly hired workers during 2010. Click here to download a copy of Form W-11.
The HIRE Act, which President Obama signed into law on March 18, 2010, allows employers to claim an additional income tax credit equal to 6.2 percent of paid wages for every new qualified employee retained for 52 weeks, up to $1,000 per employee. Under the Act, a "qualified employee" is one who:
- Begins employment after February 3, 2010 and before January 1, 2011;
- certifies by signed affidavit (such as Form W-11) that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employee begins employment;
- is not hired to replace another employee unless the other employee separated from employment voluntarily or for cause (including downsizing); and
- is not related to the employer.
For more , click here to read the Stoel Rives World of Employment's previous coverage of the Hire Act.
How Does the Heath Care Reform Package Impact Employers?
The health care reform legislation passed by Congress places significant new responsibilities on employers, group health plans, insurers, and individuals. The Stoel Rives Employee Benefits team has developed the following overview of the most significant issues affecting employers and group health plans, in order of effective date. (click on CONTINUE READING" for the full text of the overview).
Effective Immediately
