President Obama Signs Executive Order Banning LGBT Job Discrimination by Federal Contractors and Government
What the Executive Order Does:
This Executive Order amends two earlier executive orders: it amends Executive Order 11246, which prohibits discrimination by federal contractors to add sexual orientation and gender identity to the existing prohibitions of race, color, religion, national origin, age and sex discrimination. In addition, Executive Order 11478, which, as amended, bars discrimination against federal employees on the basis of race, color, religion, sex, sexual orientation, national origin, disability and age, is further amended to include gender identity. Notably absent from the Executive Order is an expanded religious exemption requested by some communities of faith, similar to the one included in ENDA. However, President Bush’s Executive Order 13279, which permits religiously affiliated federal contractors to favor individuals of a particular religion when making employment decisions remains in effect.
The new Executive Order states that the provision affecting federal employees will take effect immediately. The provision affecting federal contractors and subcontractors likely will be implemented by early 2015.
What Does This Mean for Employees:
In eighteen states, including California, Minnesota, Oregon and Washington, and in the District of Columbia, laws already exist to protect employees from discrimination based on sexual orientation and gender identity. Additionally, the White House’s Office of the Press Secretary notes that most of America’s major companies have already included LGBT protections within their non-discrimination policies: 91% of Fortune 500 companies prohibit discrimination based on sexual orientation and 61% prohibit discrimination based on gender identity. Among the 50 largest federal contractors, which represent nearly half of all federal contracting dollars, 86% prohibit discrimination based on sexual orientation and 61% prohibit discrimination based on gender identity.
However, there are still 29 states without express job protections based on sexual orientation, and 32 states lack bans on gender identity discrimination. There are an estimated 14 million employees of federal contractors who live in states without state law protections that will now be covered.
What About the Employment Non-Discrimination Act (ENDA):
President Obama has reaffirmed that there remains a need for ENDA. Although ENDA was passed by the Senate in November 2013, ENDA is unlikely to be taken up for a vote in the House anytime soon. In signing the Executive Order, President Obama stated “I’m going to do what I can, with the authority I have, to act. The rest of you, of course, need to keep putting pressure on Congress to pass federal legislation that resolves this problem once and for all.”
Authored by Ed Reeves and law clerk, Dexter Pearce.
The U.S. Supreme Court has invalidated President Obama's 2012 "recess" appointments of several members of the National Labor Relations Board ("NLRB" or "Board"), which occurred while the Senate was in a three day recess. As a result, every decision issued by the Board between January 4, 2012, and July 30, 2013, is void, including some highly controversial decisions which negatively impacted employers. National Labor Relations Board v. Noel Canning (June 26, 2014). A copy of the Noel Canning opinion is here: http://www.supremecourt.gov/opinions/13pdf/12-1281_bodg.pdfContinue Reading...
Our colleague, Alyson Palmer, noted on our Food Liability Law Blog that the U.S. Occupational Safety and Health Administration (OSHA) published an interim final rule on February 13, 2014 creating the process for handling retaliation complaints brought by whistleblowers under Section 402 of the Food Safety Modernization Act (FSMA). Under the new rule, any employee who submits a complaint indicating a violation of FSMA or any FDA regulation or order is protected from any form of adverse employment action or harassment based in whole or in part on such a complaint. Businesses and employers within the food industry should strongly consider putting an adequate whistleblower protection policy in place, if they have not already done so. The interim final rule will be available for public comment until April 14, 2014.
As described by my colleague Howard Bye-Torre in his client advisory published earlier today, Mark Mazur, Assistant Secretary for Tax Policy at the Treasury Department announced in a Tuesday blog post that the effective date for imposing employer pay-or-play penalties (also known “shared responsibility payments”) will be delayed by the IRS until 2015.
The IRS is expected to issue official guidance on this announcement next week. We will update readers on the guidance once it becomes available.
The IRS blog post is available here: http://www.treasury.gov/connect/blog/Pages/Continuing-to-Implement-the-ACA-in-a-Careful-Thoughtful-Manner-.aspx
Continuing its campaign to educate employees about their rights, the National Labor Relations Board (NLRB) yesterday launched a public webpage that explains the rights of employees (union or non-union) to engage in concerted activity under the National Labor Relations Act (NLRA). The launch of this webpage follows shortly on the heels of a ruling by a South Carolina federal court that struck down the NLRB's requirement that employers post a notice of employee rights under the NLRA.
In addition to providing a description of protected concerted activity, the page recites recent Board cases involving such activity and identifies them by geographic location. These cases include examples involving a construction crew fired after refusing to work in the rain near exposed electrical wires, a customer service representative who lost her job after discussing her wages with a coworker, an engineer at a vegetable packing plant fired after reporting safety concerns affecting other employees, a paramedic fired after posting work-related grievances on Facebook, and poultry workers fired after discussing their grievances with a newspaper reporter. In each instance, the Board has indicated that the involved conduct is protected by the NLRA and that firing employees for engaging in such conduct violates the NLRA.
As was prudent in the face of the now-defunct NLRB posting requirement, employers should review their employment policies to ensure compliance with the NLRA. Employers also should train managers regarding the requirements of the NLRA specifically relating to protected concerted activity. Finally, employers should consider implementing employee education programs and reminding employees of the internal complaint procedures available to them.
The NLRB's new webpage can be found at www.nlrb.gov/concerted-activity.
On Friday, April 20, 2012, the EEOC issued a landmark ruling that intentional discrimination against a transgender individual is discrimination “based on … sex” and thus violates Title VII. Prior to this ruling, the EEOC generally declined to pursue discrimination claims that arose from transgender status or gender identity issues.
What does this mean for employers? In California, Oregon and Washington, state laws have protected transgender employees by prohibiting discrimination based on gender identity and gender expression. For employers in those states, this ruling raises the stakes: transgender employees with discrimination claims can now bring both state and federal claims, instead of being limited to a state court action. For employers in all states, the EEOC ruling provides new protections and is an important reminder of the evolving law of sex-based discrimination.
In response to two federal court cases we previously blogged about here and here, the NLRB has indefinitely postponed implementation of its notice posting rule pending appeals in both of those cases. The bottom line is that no employer needs to post the notice for the time being.
The U.S. Court of Appeals for the D.C. Circuit will hear the NLRB’s appeal of an emergency injunction that court issued against the rule, but the hearing will not occur before September 2012. In the trial court ruling in that case, the judge found the NLRB's posting rule valid, but its enforcement provisions invalid. The NLRB is also appealing the South Carolina federal trial court decision we previously blogged about, in which a judge deemed the NLRB's entire posting rule invalid. No schedule has yet been set for the South Carolina appeal.
See the NLRB’s statement about this issue here.
The NLRB’s new posting rule, which would apply to virtually all private sector employers, was scheduled to go in effect on April 30, 2012. Yesterday, we blogged about a South Carolina federal trial court decision striking down the posting rule. More good news for employers arrived today, as the United States Court of Appeals for the District of Columbia issued an emergency injunction preserving the “status quo” and delaying implementation of the NLRB’s posting rule until that Court of Appeals determines its validity. The D.C. trial court had previously determined the posting rule was valid (contrary to the South Carolina case) but that its remedies were invalid. Oral argument in the D.C. appellate case is currently estimated to occur in September 2012. A copy of the D.C. Court of Appeals injunction decision is here.
We now have two courts that have stymied the NLRB posting rule. It is still unknown whether the NLRB will appeal the South Carolina and D.C. Court of Appeals decisions. But for now, absent an emergency appeal, it appears that the NLRB’s posting rule will, at a minimum, be delayed for several months. We will keep you “posted” as developments occur.
As previously blogged here, a federal court located in the District of Columbia upheld the National Labor Relations Board's (“NLRB”) rule requiring nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act. While upholding the rule, that federal court did at least strike down the rule’s main enforcement provisions. A copy of that federal court decision is here. As we blogged then, another legal challenge to the NLRB’s rule was also pending in a South Carolina federal court. That decision is now here, and it is a good one for employers.
The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce challenged the NLRB’s rule. On April 13, 2012 (perhaps Friday the 13th from the NLRB’s perspective), the federal judge in that South Carolina case ruled that the NLRB’s entire posting rule is invalid, finding the NLRB exceeded its authority when it required employers to post notices explaining workers’ rights to form a union. In his ruling, the South Carolina federal judge said the NLRB lacked the legal authority to issue the notice and thus the rule was not lawful. “Based on the statutory scheme, legislative history, history of evolving congressional regulation in the area, and a consideration of other federal labor statutes, the court finds that Congress did not intend to impose a notice-posting obligation on employers, nor did it explicitly or implicitly delegate authority to the Board to regulate employers in this manner,” the court ruled.
Many labor law professionals feel that the NLRB has become overly aggressive in supporting and expanding union rights during the Obama administration. This sentiment is especially strong in a conservative state like South Carolina, which also was at the center of a now-settled dispute between the NLRB and Boeing over Boeing’s decision to move production of its 787 Dreamliner airplane from Washington State to South Carolina. The South Carolina federal judge appears to agree that the NLRB is becoming overly aggressive, stating, “The Board also went seventy-five years without promulgating a notice-posting rule, but it has now decided to flex its newly-discovered rulemaking muscles.” A copy of the South Carolina decision is here. Its authority is technically legally limited to that particular court, but because of its import we expect it to have an effect nationally as the NLRB seeks to regroup and rethink what it will do. If the NLRB does not appeal the South Carolina court’s decision, the ruling will stand and, from a practical perspective the posting requirement will be invalidated nationally. But most pundits anticipate that the NLRB will file an appeal over the South Carolina decision.
The bottom line is that we now have two conflicting federal court rulings on the issue, and await the NLRB’s decision on whether it will appeal the South Carolina ruling, and/or delay implementation of its previously stated April 30, 2012 posting deadline. Stay tuned.
In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012. Stay tuned.
For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.
Beginning September 1, 2012, the City of Seattle will require that all but the smallest employers provide paid sick leave to their Seattle employees. Sick leave mandates under the new law increase depending on the size of a company’s workforce, and employees must be allowed to use the leave for their own or their family members’ illnesses (“Paid Sick Leave”), as well as for certain safety-related reasons (“Paid Safe Leave”).
Seattle employers should use the coming months to plan how to best structure their paid leave programs to comply with the new law. The law has posting requirements and allows complaints to the Seattle Office for Civil Rights, including recovery of damages where violations are found (but not private lawsuits). Employers have an opportunity to provide comment to the City regarding the law before rules under the law are issued (see below).
Key aspects of the comprehensive new Paid Sick Leave and Paid Safe Leave ordinance include:
- Coverage. Employers of five or more full-time equivalent (“FTE”) employees (employees working outside Seattle must be counted) are covered. Employees, including temporary and part-time employees, who work in Seattle at least 240 hours in a calendar year, must be allowed to accrue leave.
- Waiting Period. Leave accrues from date of hire, but employees cannot begin to take leave until 180 calendar days after date of hire.
- Mandated Leave and Minimum Caps. The amount of required leave increases with the number of FTE employees. Employers in the different tiers are required to allow their employees to accrue leave at the following minimum levels:
- Tier One Employers of 5-49 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 40 hours per year.
- Tier Two Employers of 50-249 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 56 hours per year.
- Tier Three Employers of 250 or more employees must provide at least one hour of accrued paid leave time for each 30 hours worked, up to a minimum ceiling of 72 hours per year.
- Basis of Accrual. Non-exempt employees accrue leave time based on hours actually worked. Exempt employees’ leave accrual is based on their regular weekly schedule, up to 40 hours maximum.
- Carryover Required; No Payout on Termination. Mandated carryover is required for up to the same amount of leave time employers are required to allow an employee to accrue in any given year. (For instance, for employers of 49 or fewer, up to 40 hours may be carried over.) Payout on termination is not required.
- Special PTO Requirement for Largest Employers. Tier Three Employers that use a “universal” paid leave program (usually referred to as “paid time off” or “PTO”), rather than dedicated sick leave, must provide more paid leave under the law than those employers with dedicated sick leave. Tier Three Employers must allow accrual of at least 108 hours of paid leave per year and allow carryover up to the same amount.
- Leave Use. Leave can be used for the following purposes:
- Sick Leave. Absence resulting from an employee’s or a qualifying family member’s illness or injury, including diagnosis, treatment and preventative care. (Qualifying family members are the same as under Washington’s Family Care Act: spouse, registered domestic partner, child, parent, parent-in-law or grandparent.)
- Safe Leave. Absence (1) related to domestic violence, stalking or sexual assault of an employee or qualifying family member (amount of leave allowed and qualifying family members are the same as under Washington’s domestic violence leave law), or (2) due to a public health-related closure of the employee’s place of business or a child’s school.
- Notice and Certification. An employee must provide at least 10 days’ notice of foreseeable leave, and must generally follow employer notice policies. Certification of leave use is limited to leaves of three or more days. Where the employer does not provide health insurance, the employer must pay at least half of medical costs associated with obtaining the certification.
- Considerations and “To-Dos.”
- Opportunity for Comment to the City. Employers have the opportunity to provide comments to and receive updates from the City of Seattle related to the implementation of the law. An FAQ is expected by the end of the year on their website, and draft rules in the spring of 2012. Write to Elliott Bronstein at the Seattle Office for Civil Rights, at firstname.lastname@example.org, to be included in the notification list, and with any questions or comments you have about the law.
- Collective Bargaining Agreements. The ordinance allows unions to expressly waive their members’ rights under the law. To avoid application of the law, employers should take steps to negotiate with their unions for a “clear and unambiguous” waiver and put it in writing.
- Review Sick and Related Leave Policies, Including Short-Term Disability Policies. Employers must review policies and consider whether changes are needed to meet requirements under the new law.
- Special PTO Requirements. Tier One and Tier Two Employers should make sure their PTO policies meet the requirements of the law to avoid having to provide additional paid sick and safe leave. Tier Three Employers that use a PTO program need to allow accrual and carryover of additional paid leave as described above.
Stoel Rives is here to help employers plan for the implementation of this law on September 1, 2012, and will be providing comments to the City about the law in the near future. Please contact us for assistance.
The results are in, and based on the votes from you, our readers, Stoel Rives World of Employment was selected as a LexisNexis Top 25 Labor and Employment Law Blog of 2011! See here. We would like to take this opportunity to thank our readers for the initial nomination and the subsequent votes that made this distinction and honor possible. We hope you will continue to frequently check in on us as we continue to provide up to date and timely information, news items, expert anaylis, and helpful tips for employment and labor law practictioners.
-Your Stoel Rives World of Employment Bloggers.
Your bulletin board full of required workplace postings just got more crowded. The National Labor Relations Board (“NLRB”) has issued a final rule that will require nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act (“NLRA”). The notice must be posted by no later than November 14, 2011 (now postponed until January 31, 2012, see update below). The new rule is one of many new developments arising from the current NLRB’s implementation of the Obama administration’s labor policy.
This new notice is a form designed by the NLRB. Among other things, it contains:
· A summary of employee rights under the NLRA, including the right to discuss wages and working conditions with co-workers or a union, form or join a union, take collective action to improve working conditions, and engage in other protected activities.
· Examples of violations of those rights, and an affirmation that unlawful conduct will not be permitted.
· Information about the NLRB, the NLRB’s contact information, and details on how to file an unfair labor practice charge with the NLRB.
· A statement about the employer's obligation to bargain in good faith if a union has been selected by employees.
This new rule applies to almost all employers except public sector employers, very small employers below the NLRB’s jurisdictional standard for impacting interstate commerce, and other limited classes of employers outside of the NLRA’s jurisdiction. The NLRB may find that an employer’s failure to post the notice constitutes an unfair labor practice. The remedy for a violation may not be severe because the NLRB cannot impose fines – but much worse, a violation can be evidence of unlawful motive and prevent the running of the statute of limitations.
The full text of the actual required notice is available here. Private sector employers will be required to post this notice in conspicuous places, including where they customarily post other workplace notices. In addition, employers who customarily post personnel policies and rules on an internet or intranet site must include this new notice there or provide a link to the NLRB’s website section containing the notice. If an employer has employees working at another employer’s site, it will also need to determine whether it can post notices at that site if the other employer does not already have the notice posted. If 20 percent or more of an employer’s employees are not proficient in English and speak the same foreign language, the notice must also be posted in that language. The NLRB will provide translations in such circumstances. Copies of the required 11x17 posters will be available at no cost from the NLRB upon request, and will also be downloadable from the NLRB’s website, www.nlrb.gov. A federal contractor will be regarded as complying with the NLRB’s new posting requirement if it already posts the notice required of federal contractors by the U.S. Department of Labor. See our earlier discussion of those posting requirements here.
The NLRB fact sheet with further information about the rule is available here. There are likely to be legal challenges to the NLRB’s new notice posting rule, and at least one bill has already been introduced in Congress seeking to invalidate it. For now, employers will need to be prepared to comply with the new posting requirement. While already unionized employers will likely see little impact from the new rule other than the actual posting requirement itself, non-unionized employers may be faced with employees raising questions about their rights under the NLRA. Because such questions will invariably be directed toward their immediate supervisors, it is important for non-unionized employers to make sure that supervisors are properly trained regarding how to maintain a union-free environment without violating the NLRA. Non-unionized employers might also be tempted to post their own notice alongside the new NLRB poster, advising employees why a union is not needed. As with all such efforts, missteps can lead to challenges before the NLRB, so employers should consult with their Stoel Rives labor attorney.
UPDATE: On September 14, 2011, the NLRB made available the poster that employers must post. The link to that poster is here. The NLRB recently postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers. See here. The new effective date of the rule, and the date by which the new notice must be posted, is January 31, 2012.
Based on feedback from you, our readers, LexisNexis has nominated the Stoel Rives World of Employment as a "Top 25" law blog in the Labor and Employment category! Thanks to those of you who nominated us to this elite group. Readers now have until September 12 to vote for their favorite blog. After voting is completed LexisNexis will announce which of the nominated blogs are selected to the final top 25.
Please Cast Your Vote For Us
At this point we'd like to engage in a bit of shameless self-promotion, and urge you to cast your vote for us before September 12. To do that, simply click here to vote, scroll to the very bottom of the page to the Add a Comment section, and add a comment. In the comment field, type something like "I vote for the Stoel Rives World of Employment blog." You can also view information about the competition and see the other nominated blogs on this page too. If you haven't already used the LexisNexis Communities feature, you may need to create an account to be able to vote.
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- Your Stoel Rives World of Employment Bloggers
WISHA Amendment Impacts Washington Employers' Obligations to Correct Serious Safety Violations During Appeals
Under the current version of the statute, the requirement to correct a safety violation is stayed when the employer files a notice of appeal of the citation with the Department of Labor and Industries (“L&I”). Pursuant to the new amendment, an appeal of a citation involving a violation classified as “serious, willful, repeated serious violation, or failure to abate a serious violation” will no longer automatically stay the requirement to correct the underlying hazard. Instead, an employer who desires a stay under such circumstances must file a specific request for a stay of abatement requirements in connection with its notice of appeal.
In cases where L&I issues a redetermination decision regarding the substance of the appeal, it will simultaneously issue a decision regarding any request for a stay. L&I may grant the request unless it determines that the preliminary evidence shows a substantial probability of death or serious physical harm to workers if a stay is permitted.
Denial by L&I of an employer’s request for a stay can be appealed to the Board of Industrial Insurance Appeals (“BIIA”), which will employ an expedited review process regarding the request. Affected employees and their representatives will have the right to participate in that process. As with L&I’s redetermination decision, the BIIA will be statutorily required to deny the request if the preliminary evidence shows that it is more likely than not that a stay would result in death or serious physical harm to employees.
Employers appealing less serious safety citations will still be entitled to an automatic stay of abatement requirements during the appeal process, although many employers choose to voluntarily correct cited safety issues prior to resolution of an appeal. The amendment is scheduled to go into effect 90 days after the close of the legislative session.
On the final day of the sixty-first Legislature, Idaho lawmakers passed a bill which provides varying levels of tax credits for private employers who hire at least one employee after April 15, 2011. Governor Otter signed the legislation amending Idaho Code section 63-3029F on April 13.
In order to qualify for the credit, a newly hired employee must receive qualifying employer-provided health care benefits as determined by the Idaho State Tax Commission and be employed in a county within in the state of Idaho with an unemployment rate at or greater than the benchmarked annual employment rate as determined by the Department of Labor on the date the new employee was hired. That benchmark is either ten percent (10%) or more at average annual earnings of twelve dollars ($12.00) or more per hour, or less than ten percent (10%) at average annual earnings of fifteen dollars ($15.00) or more per hour. The available credit is not earned, however, until the new employee has worked for a minimum of nine consecutive months with any part of the qualifying period ending during the taxable year for which the credit is claimed. Additionally, the credit is not available when an employer acquires a trade or business or who operates in a place of business the same or substantially identical trade or business as operated by another qualifying business within the prior twelve months. Employees transferred from a related business shall also not be included in the computation of the credit.
The amount of the credit varies between 2-6% depending on how the employer is rated for unemployment tax purposes. Employers with a positive rating earn the highest amount of the credit while deficit rated business earn the lower amount. The credit is calculated based on the gross salary paid to the eligible new employee during the initial twelve months of employment and claimed during the qualifying taxable year.
The Tax Commission is charged with promulgating rules implementing the legislation. To claim the credit, rated employers must attach to the employer's income tax return the taxable wage rate notice issued by the department of labor for the income tax year for which the credit is claimed. An estimate of the financial impact from the Department of Labor and Division of Financial Management indicates that the legislation could draw $7.9 million per year from the general fund while generating $25.3 million in state tax revenue.
This legislation is very complex and may be difficult for employers to determine whether they may quality for the credit. If you have questions, please contact your attorney.
Editor's Note: Today we are pleased to post the following health care reform update on new IRS guidance that came out last week. Many thanks to our Seattle employee benefits colleagues, authors Howard Bye, Melanie Curtice and Erin Lennon, for sharing this timely content with World of Employment.
Health care reform requires employers to report the cost of health coverage on employees’ W-2 forms. Last week, the IRS released additional information on this requirement, Notice 2011-28. Below is a summary of the additional information, including the effective date, how to calculate the cost of coverage, which benefits (e.g., vision, dental, FSA, HSA, HRA) to include in the calculation, and certain exceptions. The cost of health coverage is reported in Box 12 of the W-2 form, under code DD.
- Please note: The requirement to report the cost of the health coverage on an employee’s W-2 does not mean the value of the health coverage is included in the employee’s taxable income. The reporting requirement is for informational purposes only and the cost of the health coverage is not included in the employee’s taxable income.
As previously announced, the W-2 requirement was waived for 2011. The new guidance confirms that large employers (250+ employees) are not required to report the cost of health coverage on W-2 forms issued for 2011 (typically issued in January 2012). Large employers will need to report the cost of coverage on W-2 forms issued for 2012 (those issued in January 2013). Notably, the new guidance indicates that employers will not have to report the cost of coverage on interim W-2 forms requested by employees before the end of the calendar year. Therefore, the first time that employers are required to report the cost of health coverage is on the W-2 forms issued in January 2013 (for 2012 wages).
Calculating the Cost of Coverage
Employee Contributions Included: The reported cost of coverage includes both the amount paid by the employer and the amount paid by the employee. So, if an employer contributes $900/month for the employee’s coverage and the employee contributes $100/month for each month in a calendar year, the amount reported on the W-2 for the year is $12,000.
Cost of Dependent Coverage Included: The reported cost of coverage includes the cost of coverage for any other persons covered under the plan as a result of the relationship with the employee (e.g., spouse, children, domestic partner, etc.). So, if an employee elects family health coverage that costs a total of $2,000/month, the annual cost reported on the employee’s W-2 will be $24,000. If an employee changes coverage during the year (for example, adding a new dependent), the reported cost of coverage should reflect those changes. So, if an employee had self-only coverage for January through March, and then had a baby and switched to family coverage for April through December, the reported cost of coverage is the cost of the self-only coverage for three months plus the cost of family coverage for nine months.
Three Methods for Calculating Cost of Coverage: The guidance offers employers three options for calculating the cost of coverage. First, employers can simply use the same method used to calculate the COBRA premium (without including the additional two percent allowed under COBRA). Second, employers with insured plans can choose to use the premium charged by the insurer. The third option clarifies that employers who subsidize COBRA coverage must use the full, unsubsidized COBRA premium amount to calculate the cost.
- Note for self-funded plans: the guidance does not provide any additional guidance on how to properly compute COBRA premiums for self-funded plans. The Notice merely states that employers must continue to calculate the COBRA premiums “in good faith compliance with a reasonable interpretation” of COBRA.
Mid-Year COBRA Election
For employees that terminate mid-year and elect COBRA (or other continuation) coverage, the new guidance allows the employer to use “any reasonable method” of reporting the cost of coverage while the employee is on COBRA, as long as the method is used consistently for all employees on COBRA. The guidance gives two examples of reasonable methods: the employer can choose to report the cost of health coverage only when the employee was an active employee, or the employer can choose to also report the cost of health coverage when the employee was on COBRA.
Which Benefits to Include
- Vision/Dental: Vision and dental benefits should be included in the reported cost of coverage if they are “integrated” into the group health plan. Vision and dental benefits should not be included in the reported cost of coverage if they are provided under a separate policy, certificate or contract of insurance.
- Health Flexible Spending Accounts (FSAs): The amount contributed by an employee to a health FSA should not be included in the reported cost of coverage reported on the W-2. However, if an employer contributes money to the employee’s health FSA, the amount of the employer’s contributionshould be included. For employers offering flex credit or flex dollar programs, the reported cost of coverage is amount of employer flex dollars which the employee allocates to the health FSA (the total amount in the employee’s health FSA for the calendar year, minus the amount contributed by the employee through the employee’s payroll deduction).
- Health Savings Accounts (HSAs) and Archer MSAs: Amounts contributed to an HSA should not be included in the reported cost of coverage reported on the W-2.
- Health Reimbursement Arrangements (HRAs): Amounts contributed to an HRA should not be included in the reported cost of coverage reported on the W-2.
- Specific Disease Policies/Hospital or Other Fixed Indemnity Policies: These benefits (such as a cancer policy) are not included in the reported cost of coverage in most instances.
- Retirees: Employers do not have to report the cost of health care coverage for any individual for whom the employer does not have to issue a W-2. Therefore, employers do not have report health care coverage costs for retirees.
- Small Employers: Employers that are required to file fewer than 250 2011 Forms W-2 are exempt from the reporting requirement for 2011 and 2012 wages. Thus, the soonest a small employer could be subject to the reporting requirement is January 2014 (for 2013 wages).
- Multiemployer Plans: Employers that provide coverage to their employees through a multiemployer plan are not subject to the W-2 reporting requirement.
The IRS indicates that future guidance may change these requirements and exceptions, but no future guidance will take effect until the calendar year beginning at least six months after the new guidance is issued.
At long last the EEOC has issued its final regulations for the Americans With Disabilities Amendments Act. In so doing, the EEOC has taken Congress’ words contained in the Act and declared (repeatedly) that the definition of “disability” is to be read very broadly and that employers should instead focus on whether discrimination has occurred or an accommodation is needed. As we've noted in our prior ADAAA coverage, we think that many more disability lawsuits will be filed and far fewer of them will be dismissed on summary judgment. As the EEOC sees it, “many more ADA claims will focus on the merits of the case.”
What Hasn’t Changed
Most of the terms used in the original ADA haven’t changed. The Final Regulations do not alter the definitions of “qualified,” “reasonable accommodation,” “direct threat,” and “undue hardship.” And there are still three ways to come within the scope of the statute: “Actual” disability; “record of” disability; and “perceived as” disabled. The “perceived as” category has some substantial changes, as discussed below.
What Has Changed
1. Mitigating measures can no longer be taken into account when determining whether a person is disabled. (Except, individuals with with regular vision correction such as eyeglasses or contact lenses are still considered in their mitigated state for purposes of determining whether they have a disability.) This means that if the employee’s condition is entirely treated (heart disease is kept under control by medication, for example), the employee’s “disability” is evaluated without consideration of the treatment. Of course, if a person’s condition is controlled entirely by medicine or an assistive device or some other measure, it may mean that no accommodation is needed.
2. A “regarded as” claimant need no longer prove that he or she is perceived as a “disabled” person (i.e., a person with a physical or mental impairment that substantially limits a major life activity). Instead, a “regarded as” claimant need only show that the employer discriminated against him or her based on a belief that the employee (or applicant) had an impairment. However, if the employer can show that that the employee’s (or applicant’s) condition is actually just “transitory [i.e., lasting six months or less] and minor,” then the employee can’t be “regarded as” disabled. The six month time limit does not apply to evaluation of an actual disability or a record of a disability. And, in fact, the “rules of construction” contained in the Final Regulations specify that a disability may last less than six months.
3. The list of examples of “major life activities” is expanded and now includes “major bodily functions.” The rules make it clear that this is not a demanding standard. The major life activity need not be central to daily living, and it doesn’t have to severely or significantly limit the person’s ability. The final rule provides non-exhaustive lists of what constitutes a major life activity. Such activities include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, sitting, reaching, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, interacting with others, working and performing major bodily functions. Bodily functions include the immune system, special sense organs and skin, normal cell growth, digestive, genitourinary, bowel, bladder, neurological, brain, respiratory, circulatory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions.
4. Given the new lists, some conditions will almost always be deemed to substantially limit a major life activity. The ones mentioned in the Final Regulations are: Deafness, blindness, intellectual disability (formerly known as mental retardation), partial or completely missing limbs, mobility impairments requiring use of a wheelchair, autism, cancer, cerebral palsy, diabetes, epilepsy, HIV infection, multiple sclerosis, muscular dystrophy, major depressive disorder, bipolar disorder, post-traumatic stress disorder, obsessive-compulsive disorder, and schizophrenia. Of these, perhaps the most troubling are autism and PTSD since both are ill-defined in the medical literature and exist on very broad spectrums of impairment.
5. The changed definition of “disability” applies to Title II of the ADA (State and local governments) and Title III (private places of public accommodation).
6. The phrase “qualified individual with a disability” has disappeared and instead the Final Regulations refer to “individual with a disability” and “qualified individual” separately. Again, these changes are intended to focus the inquiry on whether discrimination has occurred, and away from whether the individual meets the definition of “disability.”
More Lawsuits to Follow
In our experience, the vast majority of employers do try to fully comply with the ADA. Unfortunately, the ADAAA and these new Final Regulations assume just the opposite; by removing practically any burden on the employee to show that he or she is disabled, Congress and the EEOC have clearly shifted the burden to employers.
For more ADAAA information, check out:
- Questions and Answers on the Final Rule Implementing the ADA Amendments Act of 2008
- Questions and Answers for Small Businesses: The Final Rule Implementing the ADA Amendments Act of 2008
- Fact Sheet on the EEOC’s Final Regulations Implementing the ADAAA
The 59th legislative session of the Utah State Legislature ended last week. Below is a list of the winners and losers from legislative session preview post on February 18, 2011(and a couple of notable additions).
Immigration – Three highly controversial immigration bills affecting employment passed Utah’s House and Senate and were signed by Governor Gary Herbert on March 15, 2011.
- H.B. 497 grants immigration authority to state and local police to enforce general federal immigration laws when a person has been lawfully stopped, detained, or arrested for class a misdemeanors and felonies.
- H.B. 116 establishes a guest worker program for undocumented workers that would require background checks, proof of insurance and a Utah driving privilege card.
- H.B. 466 creates a state program coordinated with the federal guest worker program to begin a partnership between Utah and Mexico to allow Mexican temporary workers to work in Utah.
Community Service for Medicaid Coverage – Utah lawmakers approved H.B. 211 creating a pilot program requiring a small number of Medicaid recipients to do community service in exchange for medical coverage.
More Tax Breaks for New Full-Time Positions – The legislature also passed H.B. 17 which modifies provisions related to tax credits which may be claimed for new full-time employee positions to allow certain credits to be taken in consecutive years.
Construction Employees v. Owners – Both the House and Senate approved S.B. 35 targeting construction firms that classify employees as owners in order to avoid paying workers' compensation insurance premiums, contributing to unemployment insurance, or withholding taxes. The bill would require construction owners to file an annual ownership status report and includes penalties for violations for misclassifying employees and depriving employees of workers' compensation coverage, among other things. If signed by Governor Herbert, the bill will take effect July 1.
Worker Misclassification Task Force– S.B. 11 has been approved by the legislature and signed by Governor Herbert. This bill sets up a new task force for various state agencies to discuss and coordinate their efforts to enforce rules against the classification of workers as owners or as independent contractors.
Immigration – H.B. 253 would have required employer registration with E-Verify, but was defeated in the Senate.
Employee Noncompetition – H.B. 417, defeated in the House, would have enacted the Noncompetition Contract Act, which would have prohibited the enforcement of a noncompetition agreement against an employee who is discharged because of a reduction in force.
Gender Identity– S.B. 148 adding “gender identity” and “sexual orientation” to the list of protected classes under Utah discrimination in employment and housing statutes was defeated in the Senate.
Employment Practices & Protection from Violence – S.B. 40 giving victims of violence the right to sue an employer that denies extra time off work was defeated in the Senate.
Immigration was one of the top issues in the 2011 Utah Legislative session, which concluded last week. Contrary to early predictions, Utah did not adopt a carbon-copy of Arizona’s controversial immigration law. In fact, even the “enforcement” legislation, which got so much attention before the session, passed only after it was amended to remove language that some feared would lead to racial profiling. In addition, the Utah legislature also passed bills providing for a guest worker program (which will require federal approval) and a worker exchange program with Nueva Leon, Mexico. At the end of the day, Utah’s “omnibus” approach was seen by many as a kinder, gentler version of state immigration policy. (We hope our constitutional-expert readers will forgive that term). Some, however, take a more cynical view of Utah’s efforts in this arena, and Latino groups have called for a boycott of Utah businesses through March 28.
And the political drama over Utah’s immigration legislation is not over, either. None of these immigration bills have yet been signed by Utah Governor Gary Herbert. Governor Herbert has until March 30 to sign or veto the bills. Alternatively, he can allow the bills to take effect without his signature. Governor Herbert signaled his support and approval for the “omnibus” immigration package, noting that it comports with views he had previously articulated, and with the Utah Compact, which contains guidelines on immigration policy proposed by a diverse group of Utah community, business and religious leaders and groups. Nevertheless, Governor Herbert is being pressured by groups who seek stronger immigration enforcement to veto the guest worker legislation, which they fear will attract undocumented workers to Utah.
UPDATE: Governor Herbert today (3/15) signed all four immigration passed by the Utah legislature. According to news reports, Utah officials are already in discussions with the White House and members of Congress regarding federal waivers that would allow Utah’s guest worker program to operate constitutionally.
Employers and the courts continue to wrestle with issues involving “zero tolerance” drug testing policies and whether employers must accommodate medical marijuana use by their employees. Marijuana use is illegal under the federal Controlled Substances Act, and therefore does not need to be accommodated under the federal Americans with Disabilities Act (“ADA”). However, 15 states currently have legalized some form or another of medical marijuana use: Alaska, Arizona, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington as well as the District of Columbia. The language of each state’s law can differ, and the courts therefore interpret these state law issues on a case-by-case basis.
Most recently, in Casias v. Wal-Mart Stores, Inc., a Michigan federal district court ruled that an employee who was terminated by Wal-Mart after testing positive for validly obtained medical marijuana stated no legal claims for wrongful discharge. The court accepted Wal-Mart’s argument that Michigan’s medical marijuana law does not regulate private employment; rather, it merely provides a potential affirmative defense to criminal prosecution or other adverse action by the state. The court rejected the plaintiff’s argument that the law created a new protected employee class, which “would mark a radical departure from the general rule of at-will employment in Michigan.” The Casias decision is currently being appealed.
A similar ruling is under review by the Washington State Supreme Court. I argued the case for the employer on January 18, 2011. As I previously blogged, the Washington Court of Appeals in Roe v. Teletech Customer Care Management affirmed a trial court’s ruling and held that Washington’s Medical Use of Marijuana Act (“MUMA”) does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. In so doing, the Court of Appeals stated, “MUMA neither grants employment rights for qualifying users nor creates civil remedies for alleged violations of the Act.” Rather, the Court held that MUMA merely protects qualified patients and their physicians from state criminal prosecution related to the authorized use of medical marijuana. The Court further held that when Washington’s voters passed MUMA through the initiative process, they did not intend to impose a duty on employers to accommodate employee use of medical marijuana. A decision from the Washington Supreme Court is anticipated later this year.
Three other state Supreme Courts have already issued rulings on workplace medical marijuana issues, and all have found in the employer’s favor. In Ross v. RagingWire, the California Supreme Court ruled that it is not discrimination to fire an employee for using medical marijuana. The court held that employers in California do not need to accommodate the use of medical marijuana, even when users only ingest or smoke marijuana away from the workplace.
In Johnson v. Columbia Falls Aluminum Company, the Montana Supreme Court ruled, in an unpublished decision, that an employer is not required to accommodate an employee's use of medical marijuana under the federal ADA or the Montana Human Rights Act.
Also previously covered on World of Employment, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court ruled that because federal criminal law takes precedence over Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana. Stoel Rives filed a “friend of the court” brief on behalf of the employer in that case.
There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including, without limitation, customer requirements, government contracting requirements (including the federal Drug Free Workplace Act), federal or state laws (including DOT requirements for transportation workers), workplace safety, productivity, health and absenteeism, and liability. To best protect themselves, employers should review their policies to make sure that illegal drug use under both state and federal law are prohibited, and that their policies prohibit any detectable amount of illegal drugs in an applicant’s or employee’s system as opposed to using an “under the influence” standard. Employers should also ensure that all levels of their human resources personnel know how to handle medical marijuana issues as they arise. Finally, given the continued efforts by marijuana advocates and civil rights groups to “push the envelope” of medical marijuana laws into the workplace, it is important for employers to continue to closely monitor legislative and legal developments. A recent effort to include workplace protections for medical marijuana users via amendments to Washington’s medical marijuana laws was defeated, but we anticipate similar efforts will be made in Washington and other states in the coming years.
The Ninth Circuit Court of Appeals yesterday held in Lopez v. Pacific Maritime Association that an employer’s one-strike drug testing policy for applicants does not violate the Americans With Disabilities Act (“ADA”). The one-strike policy in question stated that the company would never hire any applicant who tested positive on a pre-employment drug screening. All applicants were given notice of the test seven days in advance. The plaintiff failed his test when he first applied in 1997. At the time he suffered from an addiction to drugs and alcohol. He re-applied in 2002, and was rejected based solely on his prior positive test. At that time the employer was unaware of plaintiff’s earlier addiction.
The plaintiff filed suit, alleging disparate treatment and disparate impact violations of the ADA based on his protected status as a rehabilitated drug addict. The trial court granted the employer’s motion for summary judgment, and the Ninth Circuit affirmed. The court dispensed with plaintiff’s disparate treatment arguments on the grounds that the rule, while arguably unreasonably harsh, was neutral, in that it “eliminates all candidates who test positive for drug use, whether they test positive because of a disabling drug addiction or because of an untimely decision to try drugs for the first time, recreationally, on the day before the drug test.” Citing the Supreme Court’s decision in Raytheon v. Hernandez, the court noted that “[t]he ADA prohibits employment decisions made because of a person’s qualifying disability, not decisions made because of factors merely related to a person’s disability.”
The Court also rejected plaintiff’s disparate impact argument, on the ground that he failed to produce evidence from which a juror could conclude that “the one-strike rule results in fewer recovered drug addicts in Defendant’s employ, as compared to the number of qualified recovered drug addicts in the relevant labor market.”
While this case does present something of a win for employers with similarly neutral policies, I would caution employers from getting too excited for two reasons. First, the Court hinted that summary judgment may not have been appropriate had the employer known of the plaintiff’s addiction before he reapplied. Second, plaintiff’s disparate impact claim failed only because he could not produce any evidence of disparate impact. The Court made clear that to survive summary judgment he’d only have to produce “some” evidence—a very low threshold indeed.
Today the Supreme Court issued its opinion in Staub v. Proctor Hospital, upholding the "cat's paw" theory of employer liability, under which employers are liable for discrimination where lower-level supervisors with discriminatory motives influence, but do not make, adverse employment decisions made by higher-level managers. The near unanimous opinion, authored by Justice Scalia, is likely to greatly increase employer accountability for the actions and recommendations of lower-level supervisors.
Vincent Staub worked for Procter Hospital as an angiography technician; he was also a member of the Army Reserves. His immediate supervisors resented his absences, which required coworkers to “bend over backwards” to pick up the slack. In January 2004 Staub was placed on Corrective Action for failing to be at his desk as required, and in April 2004 his supervisor informed HR that Staub was again away from his desk without notifying a supervisor as required. Staub disputed the original Corrective Action, and also said he left a voice mail for his supervisor before leaving his desk in April. The HR Manager largely relied on the supervisor’s accusation, reviewed Staub’s personnel file, consulted with another HR employee, and decided to terminate Staub’s employment.
Staub sued under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), which prohibits discrimination based on military service. Under the so-called “cat’s paw” theory, Staub claimed that Procter Hospital was liable for discrimination, because the neutral decision-maker (the HR Manager) relied on information provided by lower-level supervisors who had discriminatory motives and were out to get him fired. After winning in a jury trial, the district court granted Proctor Hospital’s motion to dismiss. In affirming, the 7th Circuit had held that the employer should not be liable under the cat’s paw theory, because the lower-level supervisors’ input was not the “singular influence” on the decision, and because the HR Manager conducted “her own investigation into the facts relevant to the decision” and therefore was not “wholly dependent” on the discriminatory input.
Staub begins with an analysis of the text of USERRA, which expressly defines causation to include situations where discriminatory animus is "a motivating factor" in an adverse employment decision. Drawing also on tort and agency principles, Justice Scalia concluded that the cat’s paw theory applies in cases where 1) a supervisor acts with discriminatory motive, 2) the discriminatory supervisor intends to cause the adverse action, and 3) the discriminatory act is a “proximate cause” of the adverse action. Scalia rejected the argument that the decision-maker’s independent investigation should purge the decision of discriminatory motive, noting that the hostile supervisors’ recommendations remained a motivating factor in the decision. He also noted, in contrast to the 7th Circuit, that the HR Manager largely relied on the supervisors’ account of the facts underlying the termination, and did not independently determine whether the supervisors’ recommendations were justified.
What Employers Can Do: Don’t Be A Cat’s Paw
While Staub opens the door wider to discrimination cases under the cat’s paw theory, the case offers some guidance on what employers can do to minimize exposure from these claims. Most obviously, ultimate decision makers cannot simply rely on recommendations from subordinates, but should conduct a thorough and independent investigation into the facts underlying the employment action. The subtext of Staub suggests the HR Manager’s investigation was far from adequate—she merely reviewed the personnel file and consulted another HR employee, but largely relied on the (hostile) supervisor’s accusation that Staub had, in fact, violated a workplace rule. The better the independent investigation, especially into the underlying facts, the more likely it is to break the “proximate cause” nexus between coworkers’ discriminatory motive and the employer’s ultimate decision.
In addition, and perhaps just as obvious, employers should do everything possible to detect and immediately end discriminatory animus brewing among lower level employees. The plaintiff inStaub easily satisfied the other two prongs of the Court’s test—that the supervisor acted with a discriminatory motive and intended to cause Staub’s firing—because the trial record was full of choice remarks by coworkers disparaging his military duty and complaining about his absences. His supervisors described his Reserve military duty as a “bunch of smoking and joking and a waste of taxpayers’ money,” and scheduled him additional shifts “to pay back the department for everyone else having to bend over backwards to cover his schedule for the Reserves.”
The Reach of the Cat’s Paw
Staub makes clear that its reasoning applies to more than just USERRA cases. The opinion expressly noted that Title VII also uses the “a motivating factor” causation standard. What is less clear is whether it applies to just discriminatory supervisors, or also to non-supervisory coworkers. For the moment, however, the Supreme Court has given a green light to cat’s paw cases, and employers should assume it could apply broadly and to any discrimination claim.
Oregon’s 76th Legislative Assembly convened on February 1, 2011. The Legislature has wasted no time introducing a multitude of new labor and employment bills, some with potentially far reaching effects. Below is a (non-exhaustive) list of some of the more interesting bills up for debate:
- HB 2035 -- Standardizes statute of limitations period for filing discrimination lawsuits. A person who has filed a BOLI complaint must file a lawsuit within one year of the occurrence of the unlawful practice or within 90 days of the mailing of BOLI’s 90-day notice, whichever is later.
- HB 2036 -- This bill was introduced at the request of the Commissioner of BOLI, and attempts to accomplish several significant changes. First, it proposes to lower the standard as to what’s considered a “substantial limitation in a major life activity,” and clarifies certain aspects of state statutes related to discrimination against individuals with disabilities. Second, it grants BOLI the authority to enforce provisions for employees to take crime victim leave to attend criminal proceedings. Third, it will allow employers to make decisions based on credit history of applicants for public safety officer employment.
- HB 2243 -- Allows Attorney General or BOLI to file suit related to discrimination against person for uniformed military service; includes $50,000 penalty for first violation, and $100,000 penalty for each subsequent violation.
- HB 2446 and HB 2771 seek to respectively amend and repeal ORS 659.70 and 659.785 related to workplace communication on employer opinions on religion and politics. While HB 2771 would seek to repeal those provisions entirely, HB 2446 seeks to amend the definitions and exceptions to those provisions and amend the damages as well.
- HB 2828 -- Would make it unlawful (including a civil penalty of $750) to cease to provide health, disability, life or other insurance during period employee serves on a jury.
- HB 2862 -- This bill would extend various anti-discrimination laws to persons working for educational purposes or as volunteers.
- HB 2095 -- Requires granting family leave under OFLA for academic activities of the employee’s child, including teacher conferences or meetings, and requires granting up to 18 hours of family leave for academic activities in a one-year period, but not more than six hour per calendar month.
- SB 506 -- Allows eligible employee to take family leave related to the death of a family member.
- HB 2850 -- Adds siblings as covered family members under OFLA.
Wage and Hour:
- HB 2038 -- Modifies expression of breast milk provisions. Requires employers to provide a reasonable rest period each time an employee has a need to express milk and eliminates the undue hardship exception for employees with 50 or more employees
- HB 2040 -- Requires unpaid wages requested by employee post-termination or discharge to be mailed by certified mail, return receipt request.
- HB 2230 -- Requires employers to offer first payment to a new employee within 14 days of employment, unless declined by employee. Carries a maximum fine of $720 for violations.
- HB 2861 -- Expands Oregon’s wage discrimination law to bar wage discrimination based on a more expansive list of protected classifications, not just sex.
- Immigration: HB 2802 and HB 2973 include a variety of immigration-related provisions, some of which would affect employers. One such provision includes a prohibition against knowingly employing unauthorized aliens, which includes a maximum six-month prison sentence and/or up to $2,500 fine. Another would require employers to verify immigration status of employees hired after January 1, 2012, and authorizes the Attorney General to investigate violations and suspend or revoke business licenses of violators.
- Health Care Employees: SB 199 -- Requires health care facilities/employers of 25 or more employees to provide mandatory annual vaccinations against influenza, varicella zoster, pertussis, Hepatitis B, measles, mumps and rubella at no cost to employees.
World of Employment will keep you updated regarding the status of these (and other) bills up for debate this legislative session, and will provide an end-of-session wrap-up of the winners and losers.
The 59th legislative session of the Utah State Legislature convened in January, and several labor and employment-related bills were introduced. We’ve highlighted some of the more interesting bills below.
- Immigration – Immigration is an issue that has been a subject of intense debate in Utah and nationally and multiple bills have been proposed on the issue this session.
- H.B. 116 would establish a guest worker program for undocumented workers that would require background checks, proof of insurance and a Utah driving privilege card.
- H.B. 253 would require businesses with five or more employees to register with E-Verify, the federal government’s program that tracks the legal status of workers. It would repeal the Private Employer Verification Act.
- Employee Noncompetition – H.B. 417 would enact the Noncompetition Contract Act. The bill prohibits the enforcement of a noncompetition agreement against an employee who is discharged because of a reduction in force, but does not affect the enforcement of non-solicitation agreements or covenants not to disclose confidential information.
- Gender Identity– S.B. 148 defines “gender identity” and “sexual orientation” and adds them to the list of prohibited bases for discrimination in employment and housing. It includes sexual orientation and gender identity as a consideration in appointments to the Antidiscrimination and Labor Advisory Council.
- Community Service for Medicaid Coverage – Utah lawmakers have tentatively approved a proposal for a pilot program to require a small number of Medicaid recipients to do community service in exchange for medical coverage (H.B. 211).
- More Tax Breaks for New Full-Time Positions – H.B. 17 would modify provisions related to tax credits which may be claimed for new full-time employee positions to allow certain credits to be taken in consecutive years.
- Construction Employees v. Owners– On February 10, 2011, the Utah House approved S.B. 35 targeting construction firms that classify employees as owners in order to avoid paying workers' compensation insurance premiums, contributing to unemployment insurance, or withholding taxes. The bill would require construction owners to file an annual ownership status report and includes penalties for violations for misclassifying employees and depriving employees of workers' compensation coverage, among other things. If signed by Gov. Gary Herbert (R), the bill will take effect July 1.
- Employment Practices & Protection from Violence – S.B. 40 would allow employees who are victims of violence to sue an employer for damages who denies extra time off work for victims to seek a protective order, a stalking injunction, medical care or counseling.
We will report back later in the year on the winners and losers from this year’s session.
Check out this Washington Healthcare News article authored by Stoel Rives Labor and Employment attorneys Keelin Curran and Karin Jones, in which they discuss the developing trend of strict no-smoking policies in the workplace, including no-nicotine hiring practices. Research indicates that smokers impose significant additional health and disability costs on employers, and experience twice as many illness-related absences from work.
In the article, they note that many states have enacted legislation specifically prohibiting employers from discriminating against employees on the basis of lawful off-duty activities such as tobacco use. However, for those states without such protections, employers have thus far successfully defended their right to exclude tobacco users from their hiring pools.
Read Curran's and Jones' analysis of the issue, including court cases and the potential pitfalls under the Health Insurance Portability and Accountability Act (HIPAA) and the Employment Retirement Income Security Act (ERISA) when such policies are applied to current employees.
"Snuffing Out Employee Tobacco Use: The Trend Towards No-Nicotine Hiring Policies" was published by Washington Healthcare News, February 2011.
Employee handbooks can operate as a useful management tool to ensure fairness and consistency in employment practices which in turn may limit an employer’s exposure to unwanted and costly litigation. But if not carefully drafted an employee handbook may unwittingly supply a disgruntled employee with greater ammunition on the legal battlefield. A couple of Utah employers recently saw this play out with different results.
In Hoko v. Huish Detergents, Inc., a 2010 Utah District Court decision, an employee sued his employer alleging disparate treatment and wrongful termination after he was discharged for abuse of the internet policy set forth in his employee handbook. The handbook, however, disclaimed any intent to create an employment contract and the employee signed an acknowledgement of receipt of the handbook indicating he understood his at-will status. Further, there was no evidence his employer had enforced the internet policy differently with other employees holding similar positions. The Court ultimately dismissed both of the employee’s claims.
In Cabaness v. Thomas, a 2010 Supreme Court of Utah case, things went down much differently. In that case, the employee brought suit against his employer alleging breach of an implied contract created by promises made in the employment manual. As in Hoko, the employer argued that a disclaimer precluded a finding of intent to contract. But unlike in Hoko, the disclaimer only indicated that the handbook did not create a contract “with respect to” certain aspects of the employment relationship. The Court ruled that the limited disclaimer in conjunction with the promise like provisions set forth in the employment manual evinced the employer’s intent to undertake additional duties and accordingly held for the employee.
The Hoko and Cabaness cases provide examples of two opposite ends of the spectrum. Both provide useful insights into the do’s and don’ts of drafting employee handbooks. What follows is a short list of points an employer might glean from these cases as well as some additional thoughts to consider when drafting or reviewing employee handbooks.
1. Make sure your employee handbook contains a broad “clear and conspicuous” disclaimer indicating that neither the handbook, any provisions therein, nor other similar materials are intended to create a contract or alter the at-will employment status of an employee.
2. Use language that is easy to understand and not susceptible to various reasonable interpretations. This avoids confusion on the part of your employee and potential legal battles over whose interpretation is correct.
3. Avoid using language that could be read as a definitive promise. This includes avoiding word such as “must,” “shall,” “will,” “required,” or other words and phrases that imply an employer has made a definitive promise.
4. If your employee handbook includes specific grounds for disciplinary action or termination, make sure it also indicates the list is demonstrative and not exhaustive.
5. Once your policies and procedures are established, stick to them and apply them uniformly to avoid claims of disparate treatment.
6. Include and ask each employee to sign an acknowledgment provision that indicates the employee’s receipt of the employee handbook and documents their understanding that it does not create a contract.
7. Review and update employee handbooks regularly. Workplace conditions change rapidly. For example, the internet and social media continually demand greater attention within the work place. If you do not have any policies regarding internet usage in your handbook, it’s probably time to think about some revisions.
8. Consider having your employee manual reviewed by your legal team. State and federal laws are continually evolving and you want to make sure that your employee handbook is up to date with the latest changes in employment law.
Please join us for our Ninth Annual Stoel Rives/SHRM Labor and Employment Law Conference on March 10 at the Oregon Convention Center! This year's theme is "HR Horror Show."
We have an all star lineup this year, including keynote speaker David Rabiner, lunchtime speaker Ed Reeves, and a variety of presentations by Stoel Rives attorneys on the hot labor and employment issues that are currently affecting all employers.
For a full agenda and registration information, please click the image below. You don't want to miss it!
On Monday, February 7, the NLRB issued a news release about a settlement in a case in which an employee criticized her supervisor on her Facebook page. In that post, she called her supervisor a “17,” (which is terminology for a psychiatric patient) and said her supervisor was being a “d***” and a “scum***." This new development has garnered a significant amount of media attention.
We say “development” because, despite the media furor over this case, there was no landmark opinion issued by the NLRB, which is the way the Board makes a policy change or an announces a new policy. Instead, an NLRB Regional Director in Hartford, Connecticut -- there are over 35 of them nationwide -- decided to issue a complaint alleging the firing of the employee was unlawful and the policy was overbroad. After the complaint was issued, there was no hearing before an administrative law judge and there was no ruling by Members of the NLRB in Washington. There was simply a settlement for an undisclosed amount, which was likely modest since remedies under the NLRA are limited to reinstatement (waived in this case), back pay and benefits. The company also agreed to revise its policy.
So, what’s to be learned from this settlement? Not much. The basic rule that came into play is an employee’s right to engage in protected and concerted activity – sometimes referred to as “free speech” in the workplace. Under NLRB case law, broad rights are provided to employees to criticize their supervisors, their employer, and, in general, to communicate in the work place about good and bad developments, such as pay raises and bonuses. However, employees cannot make threats of physical violence and they cannot engage in disloyal conduct.
Unresolved questions going forward include:
(1) Whether an employee is engaged in concerted activity when posting on a social media platform?
(2) What is protected and unprotected on social media, and do the same rules that apply to verbal communications in the workplace apply to social media?
(3) Does it make a difference if the post is done during non-work time?
There are several issues to work through and unfortunately this case clarified very little.
The 27th Session of the Alaska Legislature convened in January, and several labor and employment-related bills were introduced. We’ve highlighted some of the more interesting bills below.
- “Alaska’s Oil, Alaska’s Jobs” -- HB 82 and SB 71 propose to authorize a rebate of the production tax on oil and gas, based on the employment of Alaska workers, expanding upon the current Alaska Employment Preference Act, AS 36.10, applicable to public construction projects.
- “Right to Work” -- HB 134 would provide employees a choice whether or not to join or pay the union at companies that are unionized. Such State laws are allowed under 29 U.S.C. § 164(b) and 22 other states have enacted them. (See also last week’s post regarding Idaho’s right to work statute.)
- The “Conscience Clause” -- SB 14 provides protection and “reasonable accommodation” of a health care provider’s expression of conscience regarding the provision of health care services. This expands Alaska’s current clause (AS 18.16.010) preventing healthcare providers from being forced to perform abortions, but SB 14 would broaden the “conscience” protection.
- Safety First! -- Three bills (HB22, HB 35, and HB 65) propose to prohibit the use of cell phones when driving a motor vehicle. These bills would have a significant impact on employers dependent on drivers, because drivers will no longer be reachable en route. However, if these bills are passed, all employers should review and update their personnel policies.
Bills Addressing Specific Employee Groups:
- HB 51 proposes to establish child care services for state officers and employees, either in state offices or other convenient places for state officers and employees.
- Reintroduced, SB 69 and HB 36 propose to repeal the prohibition against classified state employees participating in the management of political parties above the precinct level.
- HB 84 and SB 38 propose a one-time death benefit for peace officers and firefighters.
- To address the increasing shortage of healthcare professionals, HB 78 proposes a loan repayment and employment incentive program for certain healthcare professionals in Alaska.
- HB 28 proposes temporary 180-day courtesy licenses for certain nonresident professionals regulated by Title 8, with the exception of attorneys.
Two Proposed Oversight Groups:
- A “Workers’ Compensation Advisory Council” is reintroduced in HB 12, which also would abolish the more informal Medical Services Review Committee.
- SB 53 proposes the “Alaska Commission on the Status of Women,” with duties including research and recommendations on opportunities for women in employment, among other areas.
Health Care Issues:
- Proposed Alaska Constitutional Amendment HJR 5 would prohibit passage of laws that, among other things, compel a person to participate in a health care system.
- SB 70 proposes to establish the Alaska Health Benefit Exchange, aimed to facilitate individual purchase of qualified health plans, to establish small business health options and to generally reduce the number of uninsured Alaskans.
- Also likely directed at the new national health care law are two bills providing that Alaska will not follow unconstitutional laws. HB 8 provides that any federal act adopted in violation of the Constitution or federal statute has no effect on Alaska law. HB 88 prohibits any court or other authority from applying a law that violates an individual’s constitutional rights.
As Alaska’s short session progresses, we’ll keep you posted on these bills and others impacting the Alaska workforce.
Editor’s Note: This is just the first in a number of legislative preview posts for each of the states in which we have a presence. Stay tuned for legislative updates in Oregon, Washington, California, Utah and Idaho, as well as a federal update, in the upcoming weeks.
Never shy about taking on unions, especially in a state where organized labor enjoys little support outside the government sector, the Idaho Legislature recently introduced a pair of bills for addition to the state’s existing Right to Work statute.
Senate Bill 1007, named the “Fairness in Contracting Act,” is intended to “promote fairness in bidding and contracting.” This bill provides, among other things, that a “contractor or subcontractor may not directly or indirectly receive a wage subsidy, bid supplement or rebate on behalf of its employees, or provide the same to its employees, the source of which is wages, dues or assessments collected by or on behalf of any labor organization(s), whether or not labeled as dues or assessments.” The proposed measure would also prohibit labor organizations from “directly or indirectly” paying “a wage subsidy or wage rebate to its members in order to directly or indirectly subsidize a contractor or subcontractor, the source of which is wages, dues or assessments collected by or on behalf of its members, whether or not labeled as dues or assessments.” Use of any fund financed by wages collected by or on behalf of any labor organization, whether or not labeled as dues or assessments, to subsidize a contractor or subcontractor doing business in the state of Idaho would be deemed unlawful.
Contractors, including subcontractors, or labor organizations that violate the provisions of this proposed law will be guilty of a misdemeanor and could be fined an amount not to exceed ten thousand dollars ($10,000) for a first offense, twenty-five thousand dollars ($25,000) for a second offense, and one hundred thousand dollars ($100,000) for each and every additional offense.
The legislation would also confer standing on any “interested party,” including a bidder, offeror, contractor, subcontractor or taxpayer, to challenge any bid award, specification, project agreement, controlling document, grant or cooperative agreement in violation of the provisions of the law. If an interested party prevails in a lawsuit challenging the bill, it will be awarded costs and attorney's fees.
A companion bill, Senate Bill 1006 (“The Open Access to Work Act”), introduced at the same time, bars bidders on public works projects from paying a predetermined amount of wages or wage rate; or type, amount or rate of employee benefits. The law does not apply when federal law requires the payment of prevailing or minimum wages to persons working on projects funded in whole or in part by federal funds. A separate provision makes clear that the contractor party cannot be required to enter into an agreement with a labor organization as part of the contract.
Both of these bills were printed and sent to the State Affairs Committee for further action last week. Yesterday, the full Senate considered and voted on SB 1006, approving it by a 27-7 vote. It has now been referred to the Idaho House. SB 1007 on Monday passed the Committee by a 7-2 party line vote, and will soon be taken up by the full Senate.
Although these bills remain at a relatively early stage, questions have been raised about their legality and potential conflict with federal labor law. Stay tuned for more.
In Collins v. Gee West Seattle, LLC, a three member Ninth Circuit panel held 2-1 that employees who receive notice of a plant closing, but stop returning to work before the plant closing takes effect, have not “voluntarily departed” under the Worker Adjustment and Retraining Notification Act (WARN).
In Collins, the employer announced to its employees in late September 2007 that it would be closing its doors at the end of business on October 7, 2007. Before that announcement, the employer had approximately 150 employees. By October 5, however, only 30 employees continued to report to work, the remainder having opted to stop coming in.
Under the WARN Act, an employer must provide at least 60-days notice to each affected employee, assuming the closing or shutdown would result in “an employment loss…during any 30-day period for 50 or more employees.” 29 U.S.C. § 2101(a)(5). An “employment loss” is defined as a termination “other than a discharge for cause, voluntary departure, or retirement.” (Emphasis added.)
In Collins, the employer argued that the 120 employees who stopped coming to work were “voluntary” departures because they left of their own free will before the plant closed. As a result, only the 30 remaining employees were "involuntary" terminations, and therefore the WARN Act was never implicated. The Ninth Circuit disagreed, reversing the District Court’s grant of summary judgment, and holding that employees who stopped coming to work because of the notice that the plant would close did not depart “voluntarily” within the meaning of the Act. The Court noted that the employer’s interpretation is “inconsistent with the Act’s general structure and its overall purpose,” and would render “superfluous” the “faltering business” exception to the WARN Act—which allows employers who are uncertain as to the future of the business to provide notice of the closure “as is practicable.”
While Collins applies to only a narrow set of circumstances, employers facing the unfortunate circumstance of an uncertain mass layoff or plant closing must take into consideration that employees who stop coming to work before the layoff or closure, but based on the representation that the layoff or closure will occur, must be counted for purposes of WARN Act calculations. When faced with such an uncertain situation, employers are better off providing notice when practicable, and consider arguing a faltering business defense.
See also World of Employment's prior WARN Act related posts:
- FOREWARN Act Introduced - Changes to WARN Act in 2009?
- Changes Coming to the WARN Act?
- Tenth Circuit Affirms Dismissal of WARN Act Case
The United States Supreme Court issued a unanimous opinion today in Thompson v. North American Stainless, LP., 562 U.S. ___ (2011), that confirms the expansive scope of persons protected by Title VII. The Court held that it is unlawful for an employer to intentionally harm one employee in order to retaliate against another employee who engaged in protected activity.
Plaintiff Thompson and his fiancée Regalado were engaged to be married and both worked for North American Stainless (NAS). The EEOC notified NAS that Regalado had filed a charge of sex discrimination. Thompson was fired three weeks later. The issue was whether Thompson could state a claim for retaliation, even though he had not engaged in any protected activity. The Court confirmed that “Title VII’s antiretaliation provision must be construed to cover a broad range of employer conduct.” It “prohibits any employer action that well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” The Court found that it was “obvious” that Regalado would have been dissuaded from making her complaint if she knew that Thompson would lose his job as a result.
The employer argued that to permit a third party retaliation claim in this case would lead to a dangerous slippery slope – would firing an employee’s boyfriend count? How about just a friend? Anytime the employer fired a person who happened to have a connection to someone else who had filed an EEOC charge, the employer would have potential liability. The Court responded: “Although we acknowledge the force of this point, we do not think it justifies a categorical rule that third-party reprisals do not violate Title VII. . . . Given the broad statutory test and the variety of workplace contexts in which retaliation may occur, Title VII’s antiretaliation provision is simply not reducible to a comprehensive set of clear rules.” In other words, there is no bright line test for who is protected from retaliation.
After concluding that the antiretaliation provision of Title VII was broad enough to encompass the activity in this case, the Court tackled the question of whether Thompson could sue NAS. Here the Court took a more narrow approach. It declined to follow the Court’s prior view that, to be “an aggrieved person” under Title VII, all that was required was that the person have “minimal Article III standing, which consists of injury in fact caused by the defendant and remediable by the court.” That minimalist approach would lead to “absurd consequences.” For example, if the minimalist approach was applied, a shareholder who could show that his stock value declined because of the company’s unlawful termination of a valuable employee could sue under Title VII. Instead, the test, the Court said, is as follows: “[A] plaintiff may not sue unless he falls within the zone of interests sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” Thompson, it said, fell within the “zone of interests” protected by Title VII because he was a NAS employee and NAS intended to injure him in order to punish Regalado.
What This Case Means for Employers
Employers probably didn’t need another reminder that the potential claims they face are only limited by the imagination of plaintiffs’ attorneys. Before an employer takes any disciplinary action against anyone, it must ensure that it has legitimate business reasons for doing so and that an improper reason – such as a desire to exact revenge on another employee – hasn’t infected the decision.
The Oregon Supreme Court has recognized an exception to limits on punitive damage awards in certain employment cases where the compensatory damages are low. In Hamlin v. Hampton Lumber Mills, Inc., the Oregon Supreme Court considered the case of a plaintiff who was injured on the job and whose employer failed to reinstate him as required by ORS 659A.043. That statute requires employers to reinstate injured workers on request within three years of the injury, unless other exceptions apply. A jury found the employer had violated ORS 659A.043 and awarded the plaintiff $6,000 in lost wages and $175,000 in punitive damages.
As the Court noted, the Due Process Clause in the Fourteenth Amendment of the United States Constitution imposes limitations on punitive damages awards. The exact limitations are based on factors including the ratio of compensatory to punitive damages and the reprehensibility of the act, among other things. Courts have held that in the ordinary case, the ratio of punitive damages to compensatory damages should be limited to single digits (for example, 4:1). In this case, the ratio was 22:1. The Oregon Court of Appeals held that the punitive damages award was unconstitutional and ordered it reduced to $24,000 – or a 4:1 ratio.
The Oregon Supreme Court reversed, upholding the 22:1 ratio because it determined that the compensatory damages were “relatively small” and that a violation of ORS 659A.043 was particularly reprehensible. The Court noted that “the harm that offending employers inflict may be more than monetary and . . . a plaintiff who is not reinstated and who is, therefore, unemployed, is in a more vulnerable position than is a person who is employed when he or she suffers monetary loss. A person who suffers a loss of employment is without the present ability to earn money to recover economic loss and to avoid further consequential loss.”The ruling leaves a number of perplexing loose ends. First, as the dissenting justices noted, the opinion creates the possibility that a plaintiff who receives a larger compensatory damage award could actually be limited to a smaller punitive damages award. For example, a plaintiff who received $25,000 in lost wages could be limited to a ratio of 4:1, allowing only $100,000 in punitive damages – less than those awarded in this case. Second, the ruling leaves unclear whether ORS 659A.043 is the only statute that the Court will consider it particularly reprehensible to violate, or whether the Court’s holding applies to any unlawful employment practice that leaves the plaintiff employee without a job. The matter may end with the United States Supreme Court. In an unusual move, the dissenting justices specifically requested further clarification from that Court.
Supreme Court: Disparate Impact Plaintiffs Can Sue Based on the Application of the Discriminatory Practice
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.
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.
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.
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.
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).
This week President Obama announced that he would make recess appointments to fill vacancies on the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC). The move allows the White House to bypass the Senate confirmation process, which promised to be extremely contentious.
The appointments will add two Democratic members to the NLRB: Craig Becker and Mark Pearce. Both appointees were strongly opposed by Republicans because of their anticipated pro-labor viewpoints. Becker, a labor law professor, has been associate general counsel for the Service Employees International Union (SEIU) since 1990 and has also served as an AFL-CIO staff counsel since 2004. Pearce is a partner with the firm of Creighton, Pearce, Johnsen & Giroux in Buffalo, New York, where he represents unions and employees. President Obama's recess appointments do not include Republican nominee Brian E. Hayes, the Republicans' labor policy director for the Senate Committee on Health, Education, Labor and Pensions, but Hayes' Senate confirmation is not expected to encounter any significant roadblocks.
The EEOC appointments will bring the agency up to a full compliment of five directors. The new appointments include: Jacqueline Berrien as EEOC chair, Chai Feldblum and Victoria Lipnic. Berrien has served as associate director of the NAACP Legal Defense and Educational Fund Inc. (LDF) in New York since 2004 where she has worked on voting rights and political participation issues. Feldblum, a Georgetown University law professor, played a leading role in drafting the original Americans with Disabilities Act and more recently worked on the ADA Amendments Act. She has also worked on the proposed Employment Non-Discrimination Act, which would ban employment bias based on sexual orientation or gender identity. Lipnic is a lawyer with Seyfarth Shaw in Washington, D.C. and served in President George W. Bush's administration as assistant secretary of labor for employment standards from 2002 until 2009. In addition, EEOC supervisory attorney P. David Lopez will appointed to the post of EEOC general counsel.
What will these appointments mean for employers? First, expect to see more rule changes. Both the EEOC and the NLRB have for some time operated without quorums, meaning that the agencies have not been able to take on any controversial cases or make significant rule changes. Now that they have enough members, expect a flurry of activity from both bodies. For the NLRB in particular, this may mean reversals of many pro-employer decisions made during the Bush years. Second, expect both agencies to get a lot more employee-friendly. President Obama's appointments will appease labor unions and employee advocates who adamantly supported his campaign but until now have not received much in return. Those groups expect to get a return on their investment, and these appointments will go along way towards making that happen.
President Obama is today expected to sign the Hiring Incentives to Restore Employment (HIRE) Act, which in its final form passed The House of Representatives 217-201 on March 4 and the Senate 68-29 on March 17. Click here to download the final version of the HIRE Act.
Key provisions of the HIRE Act include:
- An exemption from Social Security payroll taxes for private employers for each worker hired in 2010 who previously had been unemployed for at least 60 days;
- A $1,000 income tax credit, or a credit of 6.2% of total wages paid, for private employers for each new employee hired in 2010 and retained for at least 52 weeks and claimed on the employer's 2011 income tax return;
- An extension of the small business “expensing” tax break for one year, allowing small businesses to continue writing off up to $250,000 of certain capital expenditures instead of depreciating them over time;
- A $4.6 billion Build America Bonds program, which would provide an optional direct subsidy payment in lieu of a tax credit for tax credit bonds issued for certain school and energy projects; and
- Expanded federal aid for highway programs estimated to save or create 1 million jobs.
As previously reported in the Stoel Rives World of Employment, a slightly different version of the HIRE Act passed through the Senate on February 24. While the bill was in the House, several changes were to the Act, including increased funding to the Build America Bonds program and greater flexibility to the hiring tax credit program.
Yesterday the U.S. Senate voted 70-28 to approve the Hiring Incentives to Restore Employment (HIRE) Act, a $15 billion bill aimed at creating jobs, helping small businesses, and rebuilding public infrastructure. However, the bill does not include a further extension of the current COBRA subsides for unemployed workers, nor does it increase funding for state unemployment insurance programs. Click here to read the New York Times' coverage of the HIRE Act's passage. Click here to read the full text of the HIRE Act.
The key features of the HIRE Act include:
- An exemption from Social Security payroll taxes for private employers for each worker hired in 2010 who previously had been unemployed for at least 60 days;
- A $1,000 income tax credit for private employers for each new employee hired in 2010 and retained for at least 52 weeks and claimed on the employer's 2011 income tax return;
- An extension of the small business “expensing” tax break for one year, allowing small businesses to continue writing off up to $250,000 of certain capital expenditures instead of depreciating them over time;
- A $2 billion Build America Bonds program, which would provide an optional direct subsidy payment in lieu of a tax credit for tax credit bonds issued for certain school and energy projects; and
- Expanded federal aid for highway programs.
The HIRE Act now goes to the House of Representatives. Although some House Democrats have grumbled that the bill does not do enough, it is still expected to quickly pass and become law.
While the HIRE Act does not extend the COBRA subsidy or unemployment insurance, extensions of those programs are not off the table. Both of those programs are set to expire on February 28, but yesterday Senate Majority Leader Harry Reid proposed language that would extend the unemployment benefits program to April 5, 2010 and COBRA benefits to March 28, 2010. Click here to read the text of Senator Reid's proposed COBRA extension. We expect to see quick debate on Senator Reid's proposal, either as an amendment to an existing bill or a stand-alone bill, so stay tuned to the Stoel Rives World of Employment Blog to see if it passes.
Most of us assume that if an employee swears at a manager or, he or she can be disciplined or even fired. That assumption may be wrong, depending on the context in which the swearing occurs. A federal judge recently held that the Federal Aviation Administration violated federal labor law when it removed a local union president from its premises after he used profanity toward his supervisor in the course of union activity. Click here to read the opinion in FAA and National Air Traffic Controllers Association.
In FAA, an employee (who was also the union president) got into a verbal altercation with his supervisor over what the employee felt were insufficient staffing levels under their union contract. In the course of that altercation, the employee told his boss: “F*** you, I don't give a f***!” (Imagine a certain four-letter word that rhymes with "duck.") In response, the supervisor had the employee escorted off of the employer's premises. A federal judge held that the employer's response violated the employee's rights under federal labor law. The judge ruled that because the swearing occurred in the course of union activity, it was protected speech: “the use of profanity, standing alone, does not remove conduct or speech from the protection of [federal labor law]." The Judge also noted that the outburst was brief, made in a normal tone of voice, and not overheard by other employees.
FAA teaches us an important lesson: even relatively robust swearing by an employee during the course of otherwise protected activity may be protected. The same logic behind the FAA decision could possibly apply to other types of protected employee speech: union activity, harassment complaints, discrimination complaints, safety reports, etc.
So when does profanity, even in the scope of protected activity, lose its protection? There are no "bright line" rules, but courts look to several factors:
- the volume, severity and duration of the outburst
- whether it is accompanies by threats or threatening gestures
- whether there is a workplace culture that condones or encourages profanity
- whether it is overheard by other employees
- whether the profanity is likely to disrupt workplace operations
- whether it rises to the level of verbal harassment that may violate the employer's policies
- whether it was a spontaneous outburst made out of frustration, instead of a premeditated attempt to humiliate the supervisor.
In any event, employers should proceed with a great deal of caution before disciplining an employee who uses profanity in the course of a protected activity. If the swearing was not in the course of a protected activity, disciplining the employee for insubordination or unprofessional behavior is relatively risk-free.
It's always risky to misclassify someone who should be an employee as an "independent contractor," but President Obama's 2011 budget proposal will increase the risks for employers. According to this budget summary from the U.S. Department of Labor, the misclassification of employees as contractors is estimated to cost the Treasury Department over $7 billion in lost payroll tax revenue over the next ten years. To help make up for this shortfall, the proposed budget includes funds earmarked for a "joint proposal" between the DOL and the Treasury Department to eliminate legal incentives for such misclassification, and an additional $25 million to target misclassification with 100 additional enforcement personnel and competitive grants to boost states’ incentives and capacity to address this issue.
If this budget provision goes into effect, employers will need to be particularly careful not to misclassify employees as contractors. Of course, it's already a risky proposition to misclassify employees as contractors. For example, as we reported back in 2008, FedEx was on the wrong end of a $14 million award after a California court concluded that the shipping giant misclassified hundreds of drivers as contractors. Lawsuits in this area are common, ranging from individuals seeking unpaid wages and overtime to multi-million dollar class actions. Federal and state governments are also known to go after employers for unpaid payroll taxes and associated penalties.
Are you concerned that your independent contractor might actually be a misclassified employee? The IRS has published this handy information on how to determine whether the employee is correctly classified. There is even an IRS form (Form SS-8) that you can file to seek the Service's help in determining if your employee is correctly classified. Of course, if you believe that you have misclassified employees working as contractors, it might be a good time to contact your labor and employment attorney.
On my way in to work this morning, I was listening to NPR’s Morning Edition, and caught an interview with Lewis Maltby, president of the National Workrights Institute. The interview was ostensibly to promote Mr. Maltby’s new book, “ Can They Do That?” in which he discusses employment termination cases that were deemed legal, but seem, in his opinion, to be disproportionately severe or unjust.
What Mr. Maltby appeared to decry (without using the proper terminology) is the American presumption of “at will” employment—the notion that an employer may terminate an at will employee’s employment for any reason or no reason, so long as it’s not otherwise illegal. A couple of Mr. Maltby’s examples demonstrate that concept well. For example, he mentioned instances where it was permissible for an employer to terminate an employee based on the political bumper sticker on the employee’s car, and for a school to terminate an overweight teacher’s employment because the teacher did not project the correct image. As there are no laws that specifically protect individuals from discrimination based on political affiliation or weight, these terminations were in fact permissible. (I would caution, of course, that terminating an overweight employee does carry risk to the extent the employee might be considered to have a disability under state or federal law.)Continue Reading...
As originally enacted as part of the 2009 stimulus package, the COBRA subsidy provided up to nine months of health insurance premium assistance for covered workers who were involuntarily terminated on or before December 31, 2009. Last week, President Obama signed a bill that extends the COBRA subsidy for involuntarily terminated employees in two ways: First, it extends the eligibility period to provide assistance to workers who were involuntarily terminated on or before February 28, 2010; second, it provides up to 15 months of insurance premium assistance.
Employers should, as soon as possible but in any case no later than February 21, 2010, provide notices to all former employees who may be affected by the extension informing them of their rights. Employers should also update the COBRA subsidy information they are currently providing to employees upon termination to ensure that it accurately reflects the eligibility period.
Want to know more? For more information on the COBRA subsidy in general, read Stoel Rives' COBRA Subsidy Alert from earlier this year (but ignore the out-of-date eligibility dates). You can also click here to read the IRS' COBRA subsidy information page, with answers to frequently asked questions.
The Genetic Information Nondiscrimination Act (GINA) takes effect November 21, 2009. Is your workplace ready? Employers will soon be required to post a notice stating that they do not discriminate on the basis of genetic information, under proposed regulations interpreting GINA.
If you don't already have one, click here to download the full "EEO is the Law" poster, which describes all of the Federal laws prohibiting job discrimination based on race, color, sex, national origin, religion, age, equal pay, disability and genetic information. If you already have a copy of "EEO is the Law," then you can download and print the "EEO is the Law Supplement," which contains GINA information. (If you don't want to print it yourself, or if you need the poster in Arabic, Chinese or Spanish, click here to order a copy from the EEOC.)
What else should employers do to prepare for GINA? Here's a short, non-exhaustive list of things you can do to get ready:
- Add appropriate language to your EEO and anti-discrimination policies stating that you do not discriminate on the basis of genetic information;
- Review your employment applications and employee questionnaires to make sure you are not intentionally or inadvertently requesting information about an applicant’s/employee’s family medical history;
- If you need to get information about a family member’s illness for purposes of determining whether a request for leave qualifies for Family and Medical Leave Act or state law leave coverage, make sure it is limited to only what you need to know to make the determination;
- Determine whether incoming medical information you receive on an employee contains genetic information (defined as: genetic tests of an individual or his/her family members; the manifestation of a disease or disorder in family members of an individual, genetic services and participation in genetic research by an individual or his/her family member) and if so, maintain and treat the information as you would a confidential medical record for ADA purposes – i.e., maintained in a separate confidential medical file with proper limitations on disclosure.
- Make sure appropriate policies and procedures are in place to prevent inadvertent disclosure of genetic information when responding to a litigation discovery request, like a subpoena. If you require a court order compelling disclosure before releasing the information, this should protect you.
- If you are a self-insured entity, make sure that you do not request or require or use purchased genetic testing or information for purposes of underwriting or to determine an individual’s contribution/premium amounts. Note that you can use genetic test results for purposes of making a determination regarding payment, though.
- Also note that genetic information is included as “protected health information” for HIPAA purposes and should be treated accordingly.
Last week, President Obama signed an executive order prohibiting all federal employees from text messaging while driving on official business or while using government equipment. Click here to read President Obama's executive order on texting while driving. While President Obama's order does not effect private employers, it does directs federal agencies to encourage contractors and their employees to also to ban texting while driving on government business.
Private employers may also want to consider adopting policies prohibiting employees from texting or using cell phones while driving. Several studies, including this one from Car and Driver Magazine, show that texting while driving is more dangerous than driving while intoxicated. There have been numerous cases in recent years where employers have been sued by the victims of accidents alleged to have been caused while the employees were texting or using cell phones and driving.
Several states have banned cell phone use while driving (including Washington and, effective Jan. 1, 2010, Oregon) and several more are banning texting while driving. Need to know the law in your state? Check out this great overview of cell phone/texting while driving laws by state from the Governors' Highway Safety Association.
We expected many changes in federal labor and employment law in 2009 - for the first time in years, Democrats control the White House and both houses of Congress and have the political ability to make significant reforms. However, not much has happened in 2009: we have only significant labor and employment bill signed into law. To be fair, President Obama and the Congress have had other things to worry about: a war or two, a lousy economy, health care and selecting a new White House dog to name a few.
But, the 2009-2010 legislative session is still not over, and Congress may yet pass some of the many labor and employment-related bills still pending. Employers may want to take note, as some of these may become law before the end of the session in 2010. Click on "continue reading" for a complete list.Continue Reading...
The Equal Employment Opportunity Commission (EEOC) will in today's Federal Register publish proposed regulations implementing the ADA Amendments Act (ADAAA). The public will have 60 days - or until November 23, 2009 - to submit comments. Click here to read the full text of the proposed regulations.
Congress intended that ADAAA, which took effect January 1, 2009, would broaden the coverage of the Americans with Disabilities Act (ADA) by expanding the definition of "disability." The ADAAA also directed the EEOC to enact new regulations consistent with the purpose and goals of the ADAAA. Key changes now being proposed by the EEOC include:
- Redefining the term “substantially limits” to provide that a limitation does not have to “significantly” or “severely” restrict a major life activity to qualify an individual as "disabled." Under the new definition, an impairment constitutes a disability “if it ‘substantially limits' the ability of an individual to perform a major life activity as compared to most people in the general population.”
- Expanding the definition of “major life activities” and providing non-exhaustive lists of such activities and bodily functions.
- Removing the requirement that an individual seeking ADA coverage prove a " limitation in the ability to perform activities of central importance to daily life” to have a qualifying disability.
- Redefine “regarded as” disabled so that it is no longer necessary for an employee to prove the employer perceived him or her as substantially limited in a major life activity; rather, under the new rules, it is sufficient for the employee to prove that the employer took an employment action against him or her because of an actual or perceived impairment.
Unhappy with the new regulations? Have a suggestion to make them better? Want to express your wrath? You can do so by clicking on Regulations.gov, the U.S. Government's portal for regulations and comments. Want to know more about the ADAAA? You can click here for complete ADAAA coverage on the Stoel Rives World of Employment.
Last week The Stoel Rives World of Employment posted about fake job reference site Alibi HQ and provided some pointers for employers on how to verify the legitimacy of job references provided by job applicants. Given that the site has numerous broken internal links, we speculated that it may be a joke. It's not. Picking up on our blog post, ABC News investigated Alibi HQ and competitor CareerExcuse.com (a site that also purports to provide fake job references) to determine whether the services provided are real, and sought comment from us regarding the legality of lying on employment applications.
CareerExcuse.com's founder, William Schmidt, confirmed for ABC News that his service is real, and that it has "helped at least 20 people find work" by providing false job references. Alibi HQ boasted that business has quadrupled in the current recession, but was somewhat more circumspect about the details of the company (they also provide fake landlord references and fake doctor's notes), refusing to identify the company's location because to do so "poses a security risk." Both companies appear aware that their services tread on shaky legal ground. Each purports to take steps to avoid liability such as not providing references to government job applicants. That's wise because lying to the government runs afoul of federal criminal law, and can carry with it up to 5 years in prison.
But what about lying to private employers? Are the lies promulgated by these companies somehow protected because the target of the lie is a private, rather than a public, entity? As I stated in the ABC News article, I think not. If a company relies on the misrepresentation of an applicant and is later damaged by that misrepresentation, it very well may constitute actionable fraud.
The companies acknowledge that their services are based on "fibbing" and that they have some "moral issues." They argue, however, that the means are justified by the end--finding someone a new job. Some commentators take the same position, arguing that these services level the playing field between the jobless and the "evil" employers. It's not that simple. Putting aside the obvious moral and ethical issues related to lying, there is a social and economic cost. These services don't just put someone in a new job; they falsely puff up an applicant's experience to help get her get a job for which she is not qualified. That's bad for the applicant who is ultimately found to be unqualified for the job, and costly for the duped employer. Far from leveling the playing field, it creates an unfair advantage over the honest applicants with actual experience who get passed over for a position because of someone who lied.
Our advice to employees: These are tough times and we know that finding a job is hard. Still, maintain your integrity and steer clear of services like these and overt resume puffery. Hang in there!
Our advice to employers: As noted in our prior post, when considering an applicant, take the time to diligently review prior job references and history to verify that the applicant has the experience he or she has advertised.
Yesterday the Department of Transportation (DOT) reinstated its rule that employers must conduct observed urination drug testing for all return-to-duty and follow-up tests for transportation workers in safety-sensitive positions. The new regulations will apply to workers in safety-sensitive positions in the aviation, motor carrier, rail, transit, maritime, and pipeline industries. Click here to read the DOT rule, which will take effect August 31.
This rule isn't new; as noted by the Stoel Rives World of Employment, the DOT issued the same rule a year ago. However, the D.C. Court of Appeals stayed implementation of the new rule until July 1 of this year, when it held that the rule was neither arbitrary nor capricious and did not violate employees' Fourth Amendment rights. Click here to read the court's decision in BNSF Railway Co. v. U.S. Department of Transportation.
Why the need for such strict scrutiny? According to the rule, observation is necessary "to allow the observer to check the individual for prosthetic or other cheating devices." Seriously. Such things do exist. The most famous is the Whizzinator, used by celebrities including actor Tom Sizemore. Now there's an endorsement. If you have employees that are subject to the new rule, just hope they don't suffer from shy bladder syndrome, or things are going to get really complicated.
The Department of Labor's Office of Disability Employment Policy today launched a new website that may be of use to employers seeking information on how to accommodate a disabled worker. At www.disability.gov an employer can research the applicable law and regulations, get ideas for appropriate reasonable accommodations, and locate additional resources. For example, clicking here will take you to information about accommodating deaf and hearing impaired workers. And here is useful information about tax incentives for complying with the ADA. The new site offers a myriad of social networking capabilities including a Twitter feed, RSS feeds and a blog. The site also includes a handy multi-state guide which employers could find very useful as they work to comply with all applicable federal and state disability laws.
Last week, the proposed Strengthen and Unite Communities with Civics Education and English Skills Act (SUCCESS) was introduced in both the House and Senate during the week of July 20 that supporters say would help immigrants integrate into U.S. society and workplaces and includes tax breaks for businesses offering English literacy programs to their employees. The bill was introduced by Rep. Mike Honda (D-CA.) Sen. Kirsten Gillibrand (D-N.Y.) and has several co-sponsors in both houses. Click here to read Rep. Honda's press release on SUCCESS.
Key features of the SUCCESS Act include:
- Businesses that provide English language courses to their employees could receive a 20 percent tax credit for those expenses, up to $1,000 per employee.
- Teachers who teach immigrants English language skills would receive tax breaks up to $750 per year for the first five years of teaching and $500 for each year after that, up to a maximum of 10 years.
- The bill would double the amount of funding for English language programs the Department of Education provides for states from about $70 million to $200 million in fiscal year 2010, with the majority of the funding going to states with the largest and fastest-growing immigrant populations.
If it becomes law, SUCCESS will encourage businesses to invest in educating their non-English speaking workforce, a laudable goal. What we don't understand, however, is the acronym. SUCCESS? Really? Shouldn't it be SUCCEES? While technically correct, it wouldn't spell a catchy word and would doom the bill to a slow death in committee.
The Washington state class action by Wal-Mart employees for missed meal and rest breaks and for being forced to work off the clock finally ended this week with a payment to the workers of $35,000,000 and $10,000,000 to their attorneys. Wal-Mart (are you surprised?) denies any wrongdoing. For more on the lawsuit and subsequent settlement, click to read the Huffington Post's analysis or this coverage by Forbes. The settlement, which is just one of many for Wal-Mart, is another important reminder that liability for wage and hour violations can really add up. And it adds up really fast when the class size is over 80,000 workers.
Washington employers should check with the Washington State Department of Labor and Industries for information on meal and rest break rules.
Now, Washington Wal-Mart workers, go spend those "stimulus" dollars! You have until August 19 to fill out your claim form.
Last week Oregon Governor Ted Kulongoski signed Senate Bill 786, which will require employers to more extensively accommodate employees' religious practices and observation. The bill passed both the Oregon House and Senate by wide margins earlier this Spring. The new law will take effect January 1, 2010.
Oregon law already prohibits discrimination based on an employee's religion. Senate Bill 786 also requires employers to reasonably accommodate employees' religious practices. The law specifies types of accommodations that may be required, such as shift changes, approving vacation time for religious holidays, and allowing employees to wear jewelry or religious clothing. The bill makes exceptions if the requested accommodations create an undue hardship on the employer. The law contains only one occupation-specific exception: public school teachers will be prohibited from wearing religious dress while at work.
The new Oregon law is modeled after federal regulations interpreting the Civil Rights Act of 1964, and guidance on those regulations will help Oregon employers comply with the new law. For an excellent guide on accommodating religious practices, check out this article on religious accommodation from HR Hero. And, expect more tattooed and pierced employees to request accommodations due to their membership in the Church of Body Modification.
Are you looking for ways to hang on to staff, yet reduce costs? Those goals are not necessarily mutually exclusive if you choose to participate in your state's workshare program. A workshare program allows your employees to collect some unemployment benefits but continue working part time. Here's an article from the Center for Law and Social Policy that gives additional detail.
Seventeen states have such programs: Arizona, Arkansas, California, Connecticut, Florida, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, New York, Oregon, Rhode Island, Texas, Vermont and Washington. For a sample of a workshare law, see Section 1279.5 of California's unemployment insurance code.
Each state’s program is a little different, but they have common attributes. We’ll use Oregon’s program as an example.Continue Reading...
Recognizing that severance agreements are becoming more and more prevailant in the down economy, the Equal Employment Opportunity Commission (EEOC) yesterday issued a new technical assistance document titled Understanding Waivers of Discrimination Claims in Employee Severance Agreements (click on the title to access the document). The new document is intended to help both employers and employees navigate the complexities of waivers in severance agreements.
Of particular interest is the EEOC's guidance regarding the Older Workers Benefit Protection Act, which places certain requirements on waivers of age discrimination claims by employees age 40 and older, including a 21 day period to consider the agreement and a seven day period to revoke acceptance. Also of note is the EEOC's admonition that signing a severance agreement and accepting payment to waive discrimination claims does not prevent an employee from then filing a charge of discrimination with the Commission or a similar state agency.
Employers should review their existing severance agreements in light of the EEOC's new guidance, as this document provides insight into how both the Commission and courts will review such agreements and how employees might find ways to avoid their waiver obligations.
What's an employer to do when it is ordered to reinstate former employees, but those employees are not legally authorized to work in the United States? Pay liquidated damages instead, according to the Ninth Circuit's recent decision in NLRB v. C&C Roofing Supply Inc.
In C&C, the National Labor Relations Board (NLRB) alleged that the employer unlawfully fired 20 workers for engaging in union activity. The parties reached a formal settlement that called for reinstatement of the illegally fired workers and payment of specific amounts of liquidated damages to each. However, the employer then refused to reinstate the employees because many of them were unauthorized aliens and rehiring them would violate the Immigration Reform and Control Act (IRCA) and the Legal Arizona Workers Act, which both prohibit hiring unauthorized aliens.
The Ninth Circuit solved the dilemma by ordering the employer to pay the agreed-upon liquidated damages, but did not require the employer to reinstate the unauthorized employees. But how does this case square with Hoffman Plastic Compounds Inc. v. NLRB? There, the U.S. Supreme Court held 5-4 that the board may not order back pay for unauthorized aliens, despite their firing in violation of federal labor law, because doing so would violate immigration policy expressed in IRCA. In C&C, the Ninth Circuit dodged that issue by ruling that agreed-upon liquidated damages as part of a settlement do not raise the same issues as back pay ordered by the court, as the employees need not be "available to work" in order to receive liquidated damages. Don't be surprised if this one gets appealed up to the Supreme Court for a determination if it really does square with Hoffman.
Ricci v. DeStefano -- Supreme Court Holds City Violated Title VII By Rejecting Racially Disparate Test Results
To end its term, the Supreme Court today issued its long awaited opinion in Ricci v. DeStefano--a case that has received extra media attention because Supreme Court nominee Sonia Sotomayor was on the Second Circuit Court of Appeals panel that decided the case below. The conservative justices on the Court reversed the Second Circuit (and by extension, Judge Sotomayor) in a 5-4 decision, ruling that the city of New Haven violated Title VII by discarding the results of a firefighter promotion test where white applicants fared disproportionately better than other applicants. As one might expect, Justice Kennedy provided the swing vote and authored the majority opinion.
New Haven used the test in question to identify firefighters best qualified for promotion. Despite being objectively administered, the test's racially disproportionate results led the city to question whether it should validate the results. The city, of course, found itself in a "damned if you do, damned if you don't" position: certify the test results, and face Title VII disparate impact litigation from minority applicants; fail to certify them, and face Title VII reverse discrimination litigation from the white officers who passed but were denied a promotion. The city opted for the latter course, and, as expected, the white firefighters filed a reverse discrimination lawsuit. The city prevailed on summary judgment at the district court level, and the Second Circuit affirmed.
The Supreme Court found that discarding the tests violated Title VII , while certifying the test would not have been a violation of law because there was no "strong basis in evidence" for believing that the black firefighters would prevail on a disparate impact claim. The court noted that despite what otherwise would have constituted a "prima facie" showing of disparate impact race discrimination, several defenses were available to the city--namely that the exam at issue was job related, consistent with business necessity, and there existed no equally valid, less discriminatory alternative that suited the city's needs but was not adopted. The four dissenting justices disagreed, arguing that the majority's analysis was flawed because "New Haven had ample cause to believe its selection process was flawed and not justified by business necessity."
Ultimately, the Ricci decision will have little to no impact on most employers, but represents a small victory for employers (despite the positioning here that held against the city/employer). Employers can now take a somewhat more confident stand in backing test results that may demonstrate some disparate impact, so long as the test was objective and no other less discriminatory alternative exists. The Ricci decision may not last for long, however. Political condemnation by Democrats has been swift, with Senator Patrick Leahy (D-VT) saying that "it is less likely now that employers will conscientiously try to fulfill their obligations under this time-honored civil rights law. This is a cramped decision that threatens to erode these protections and to harm the efforts of state and local governments that want to build the most qualified workforces." Don't be surprised if Congress passes legislation down the road aimed at upending the Ricci decision.
Just in time for Pride Month, Representative Barney Frank (D-MA) introduced the Employment Non-Discrimination Act of 2009 (ENDA) earlier this week. If passed, ENDA would prohibit employment discrimination on the basis of sexual orientation or gender identity. It would also prohibit employers retaliation against employees who oppose such discrimination who participate in any investigation or proceeding under ENDA. To read more about ENDA, check out this article from the Human Rights Campaign.
ENDA would be the first federal law prohibiting sexual orientation and gender identity discrimination. Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of, among other things, sex; it does not explicitly prohibit sexual orientation or gender identity discrimination). Several states already have similar protections in place, but ENDA would apply nationwide. ENDA would exempt from its coverage small businesses (those with less than 15 employees), religious organizations, and the armed forces.
This isn't ENDA's first trip through Congress; versions of the bill have been introduced in almost every Congress since 1994. However, with a strong Democratic majority in both houses of Congress, a Democratic President who is feeling the heat from the GLBTQ community, and the gay rights movement riding a wave of successes in state legislatures, 2009 may well be the year ENDA becomes law.
Employers whose policies and handbooks don't already address discrimination on the basis of sexual orientation or gender identity should consider a revision. For an example of how one company has addressed such discrimination, click here to read IBM's anti-discrimination policy. Click here for a state-by-state analysis of existing sexual orientation discrimination laws;
In a new development on yesterday's story, the City of Bozeman, Montana must have been listening to the cacophony of criticism from privacy and employment lawyers alike relating to its new policy asking job applicants for their username and passwords for social networking sites such as Facebook and MySpace.
The Billings Gazette reports that the Bozeman City Commission has voted to abandon the policy, which one commissioner called an "egregious violation of privacy." Interestingly, the policy has been in place for well over a year, but nobody bothered to look closely at the privacy or employment law implications until the media picked up on the story.
Given that most HR professionals wouldn't dream of asking applicants about the kinds of information easily found on social networking sites (even without needing a password), this reversal of course falls in the "better late than never" category of HR decisions.
Besides asking about applicants' educational history and employment background, the City of Bozeman, Montana is also asking job applicants for their usernames and passwords for social networking websites such as Facebook and MySpace. Click here to read the full story from ABCnews.com.
It has become increasingly common over the last few years for employers to research job applicants through social networking sites. In fact, the Delaware Employment Law Blog has some very interesting results from a study on employers' use of social networking sites to screen job applicants. Employers are rejecting job candidates based on postings on drug and alcohol use, inappropriate pictures, and even inappropriate screen names.
But is researching applicants through Facebook, MySpace and Twitter always such a good idea? The conventional interviewing wisdom is to avoid personal questions that could make the hiring process appear biased. Interview questions like "are you married?" or "do you have children?" are generally avoided, as they might make the interview appear to be making decisions based on marital status or family composition. Social networking sites often contain the same information that a good HR person wouldn't dream of asking in a million years. To be safer, employers might want to make reviewing Facebook part of a post-offer background check.
Speaking of social networking, the Stoel Rives World of Employment is there. Click here to follow us on Facebook; click here to follow us on Twitter. Please just ignore those pictures of us from last year's office New Year's party.
The memorandum issued by President Obama yesterday extends some benefits to the same-sex partners of federal employees, including access to a government insurance program that pays for long-term conditions such as Alzheimer's disease, and to sick leave to care for a sick same-sex partner or a non-biological child. However, the extension did not provide eligibility for health care to same-sex partners, drawing protest from gay activists.
Why did President Obama stop short? The Defense of Marriage Act (DOMA), the 1996 federal law that, among other things, defines marriage as a legal union exclusively between one man and one woman. According to President Obama's press statement, the White House determined that DOMA prevented an extension of all benefits to same-sex partners, including health care. In the statement, President Obama called on Congress to repeal DOMA and signaled an intend to extend all benefits to same-sex partners if and when that happens.
President Obama's actions will clearly impact Federal agencies and their employees, but what effect does it have on private employers? For now, none - the memorandum only applies to the federal government. However, it does signal a growing trend in mandating the extension of employee benefits to same-sex partners. States that recognize same-sex marriage generally require private employers to extend benefits to same-sex spouses; other states that do not recognize same-sex marriages but do recognize same-sex partnerships (such as Oregon, Washington and California) may require private employers to extend benefits to same-sex partners under certain circumstances. Private employers should consult legal counsel about their possible obligation to provide such benefits.
The New York Times is reporting that President Obama will sign an order later today extending some -- but not all -- job benefits to the same-sex partners of federal employees. According to reports, the order will come short of providing full health care coverage to same-sex partners. Check back in with the Stoel Rives World of Employment for details as they emerge.
A French court recently awarded 11,000 euros (about $15,000) in damages to three contestants in a reality television show, finding that the contestants were entitled to overtime and other benefits. The three plaintiffs appeared in L'Ile de la Tentation (Temptation Island), a show that follows couples separated on a tropical island, where single people attempted to seduce them. (Click here for the full story from the BBC.)
Why the overtime? The French court ruled that the contestants were actually working 24 hours a day while being seduced: "Temptation Island constitutes a job and therefore justifies an employment contract," the court said. "Tempting a person of the opposite sex requires concentration and attention." Concentration, indeed. Don't be surprised if American reality show contestants try the same thing (especially those that get voted off in the first few rounds).
Back stateside, the Screen Actors Guild voted overwhelmingly to approve a new two-year contract with the Hollywood Studios by a vote of 78 percent to 22 percent. Not only does the vote end a year-long impasse, it should also ease our collective fears of an actors' strike, which, like last year's writer's strike, would have resulted in another wave of dreadful reality shows like Temptation Island. Thank you actors!
Oregon Democratic Senator Jeff Merkley has announced he will today introduce the Breastfeeding Promotion Act (BPA) in the U.S. Senate. The BPA would guarantee working mothers the right to breast-feed their children at their workplaces. Click here to read about Merkley's proposal on Oregonlive.com.
The bill is identical to one introduced yesterday in the House by Rep. Carolyn Maloney, D-N.Y. and Rep. Lois Capps, D-CA. The law would amend Title VII of the Civil Rights Act of 1964, by to protect breast-feeding in the workplace; provide tax incentives for employers that establish private lactation methods in the workplace; establish minimum safety standards for breast pumps; make breast feeding equipment tax deductible; and create time and privacy for working mothers to express milk.
Oregon implemented a breastfeeding law in 2007, which gives women the right to privately express breast milk in the workplace. Employers with questions about that law may consult this helpful breastfeeding rest period fact sheet from the Oregon Bureau of Labor and Industries. Meanwhile, the Stoel Rives World of Employment will continue to follow the progress of the BPA as it makes its way (or not) through the 111th Congress.
It seems like just a couple days ago that we reported that implementation of the E-Verify System was delayed until June 30. Actually, it was a couple days ago. Well, you can forget that; the The Department of Homeland Security’s Citizenship and Immigration Service (USCIS) has announced that it will delay mandatory use of E-Verify, this time until September 8, 2009. Click here to read the USCIS's press release on the delay.
Why the delay? For once, it's okay to blame the lawyers: the parties in a lawsuit over the legality of E-Verify, Chamber of Commerce of the United States of America, et al. v. Napolitano, agreed to delay implementation of the rule from June 30 until September 8 to give the Obama administration more time to review the case and determine its position. Initially, federal contractors were supposed to start using E-Verify on January 15, but the rule has been postponed, and postponed, and postponed again. Keep watching the Stoel Rives World of Employment's continuing e-verify coverage to see if the new September 8 date will stick, or whether there will be more delays.
Federal contractors take note: a new bill recently introduced in the House of Representatives aims to suspend or debar contractors found to employ unauthorized aliens. The bill, the Border Control and Accountability Act (H.R. 1668), was introduced by Rep. Ginny Brown-Waite (R-Florida) earlier this year. The bill also would prohibit the Department of Homeland Security from contracting with companies that do not use E-Verify. The Stoel Rives World of Employment will continue to follow this and other legislation that may impact your workplace.
Still another delay for implementation of the mandatory E-Verify system for federal contractors. The Department of Homeland Security’s Citizenship and Immigration Service (USCIS) announced for a third time that it will delay mandatory use of E-Verify, this time until June 30, 2009. Click here to read the USCIS's press release on the delay. Click here for the Stoel Rives World of Employment's continuing e-verify coverage.
Under the current tax code, employer-provided health care benefits for employees, their spouses and dependent children are exempt from federal income and payroll taxes; however, health care benefits provided to unmarried domestic partners are subject to both payroll tax (for the employee) and to income tax (for the domestic partner beneficiary). But if passed, the proposed Tax Equity for Health Plan Beneficiaries Act introduced last month in Congress would end the taxation of health care benefits of both same- and opposite-sex domestic partners.
The Act was introduced in the House of Representatives by Rep. Jim McDermott (D-Wash.) and in the Senate by Sen. Charles Schumer (D-N.Y.) A similar bill was introduced last year, but failed to gain enough traction to make it out of committee. The bill might have more potential this time around, with a friendlier climate in both Congress and the White House.
To learn more about the tax laws the Act may impact, check out this article on the taxation of domestic partner benefits from the Human Rights Campaign. The Stoel Rives World of Employment will pay attention to this and other important Labor and Employment legislation, so check back for updates!
If passed in its proposed form, the Employee Free Choice Act ("EFCA") will revolutionize federal labor laws by allowing unions to organize without a secret-ballot election. Other onerous provisions include shortening the time to negotiate a first contract and, if the parties do not agree, allowing an arbitrator (a judge) to decide the terms of the first contract. While Congress is debating several compromises over EFCA, just about any version of the law will tilt the playing field sharply in favor of labor unions. Union and non-union employers must be prepared to face new organizing tactics in light of EFCA and the unions’ sophisticated use of the Internet.
Please join Labor & Employment attorneys Victor Kisch and Dennis Westlind for a seminar about EFCA and the do’s and don’ts for remaining union-free in the new environment. We will also discuss other likely changes to labor laws. The seminar will cover:
- How will EFCA make it easier for unions to organize? What can a non-union employer do under EFCA?
- How do unions organize in the age of Facebook, MySpace, Twitter, chat rooms, websites, text messages, email and so on?
- Effective no solicitation policies;
- What key issues make a work force vulnerable to union organizing? How can an employer address employee concerns?
- Salts -- If union organizers seek employment at your company, what can you do?
Thursday, June 11, 2009
Complimentary (lunch included)
Stoel Rives LLP
We will validate parking for most nearby parking garages.
Space is limited! Click here to register online by June 9.
Judging from organized labor's reaction, Judge Sotomayor may be a pro-labor justice if her appointment is confirmed by the Senate. "Judge Sotomayor is a sound, progressive judge who is blessed with a brilliant legal mind," said United Steelworkers President Leo W. Gerard. Praising her nomination, AFL-CIO President John Sweeney says Sotomayor possesses a “direct and personal understanding of the struggles America’s workers endure every day.” She's also received these glowing recommendations from the SEIU, Change to Win and the Labor Council for Latin American Advancement, just to name a few.
Labor's love affair with Judge Sotomayor goes back to 1995, when she issued the injunction that effectively ended the 1994-95 baseball strike. (In announcing her nomination, President Obama was quick to point that she singlehandedly saved the American Pastime.)
While organized labor falls all over themselves to praise Judge Sotomayor, employers' groups are taking a more cautious approach. The U.S. Chamber of Commerce, known to butt heads with unions over many issues (notably the Employee Free Choice Act), is still weighing whether to endorse Sotomayor. While we don't necessarily see anything in her background to make us nervous, such a warm reception from labor unions certainly should raise an eyebrow or two.
Meanwhile, for those who are interested, here's a clip of Judge Sotomayor speaking about her nomination:
President Obama recently nominated Judge Sonia Sotomayor to replace outgoing Justice David Souter on the United States Supreme Court. If you're like us, you're wondering what her nomination might mean for employment law. While it's never easy to predict how a nominee will rule once on the Supreme Court (just ask George H.W. Bush), early indications are that Judge Sotomayor takes an even-handed approach to employment law issues.
In her 16-year career on the bench, first as a District Court Judge and then as a Judge on the Second Circuit Court of Appeals, Judge Sotomayor has been involved in over 100 opinions on employment cases. She's ruled in favor of both employers and employees, and her decisions do not seem to be skewed one way or the other. Click here for a list of of Judge Sotomayor's employment law decisions.
If you look through this list, you'll see that she's made several rulings in favor of employers. While some conservatives are already attacking Judge Sotomayor for "judical activism," they will find no support for those charges in her employment law record. Assuming she takes this same approach on the Supreme Court, we can expect her to be a critical swing vote on future employment cases.
Tomorrow: Judge Sotomayor's Labor Record
Every now and then we need a reminder to illustrate the dangers of misclassifying employees as "independent contractors." Last week, the Montana Supreme Court provided such a reminder, ruling that exotic dancers were employees, not independent contractors. Click here to read the opinion in Smith v. TYAD Inc. d/b/a Playground Lounge & Casino.
In Playground, the employer required each dancer to sign a contract acknowledging that she would be considered an “independent contractor" who would pay a "stage fee" to “rent” the stage and a dressing room for every night she worked. In return, each dancer would retain all tips and dance fees. According to the Montana Supreme Court, not only were the dancers actually employees entitled to payment of minimum wage for all hours worked, but the "stage fees" were illegal kickbacks. It held the dancers were entitled to payment of hourly wages, overtime, repayment of the "stage fees" and penalties.
Does Playground have any lessons for the 99.99% of employers that don't employ exotic dancers? Absolutely: all employers should be careful when classifying anyone as an "independent contractor." Whether an individual is properly classified as an employee or an independent contractor is a complex question of both state and federal law. Besides being held liable for back pay and overtime, employers who misclassify employees can be charged with unpaid wage withholdings and unemployment insurance premiums. Worse yet, employers who don't pay workers' compensation insurance on misclassified employees can find themselves in a world of hurt if one of those employees sustains an on-the-job injury. (The Playground Lounge should be thankful none of its dancers fell off the stage.) For more information on the criteria courts and agencies use, check out this page on the IRS' Independent Contractor Status Test.
Another slow news day, another fun case: the Texas Court of Appeals affirmed summary judgment in favor of Frito Lay, Inc. and against a former route sales representative who was fired for using his saliva to remove the "best before" dates from expired products. Click here to read the decision in Cantu v. Frito Lay, Inc.
When one of Frito Lay's customers caught Cantu using his spit to remove expiration dates, it banned him from entering any of its many stores; Frito Lay then terminated him, following its policy to terminate any employee who is banned from a customers' premises. Cantu sued Frito Lay claiming age and sex discrimination, because Frito Lay did not also fire a younger female sales rep who was also banned from the same customer's stores.
Well, it turned out not to be so simple. The younger female employee was banned from only one store because she was gossiping about that store's manager, who happened to be her relative; further, that manager intervened and asked that she not be reprimanded. Cantu, on the other hand, was barred from all of the customer's stores, and as the court noted, had “wiped bags of Frito-Lay chips with his saliva, conduct that is qualitatively different and distinct from the imprudent sharing of personal information.”
Is there a lesson to be learned here? We can think of two. First, don't use spit to remove expiration dates. Really. Second, when disciplining employees, make sure that you apply consistent standards to similar behaviors. Cantu lost because the younger female employee was not similarly situated, as she had engaged in much less egregious misconduct. Had she also been caught smearing her spit on the merchandise, the case may have turned out differently.
The Obama Administration has released its fiscal year 2010 budget request. Among the items are several increases for the federal agencies that oversee labor and employment matters. Here are some highlights:
- $104.5 billion to the Department of Labor, an increase of 10 percent, to increase its staff and enforcement activity.
- $283 million for the National Labor Relations Board, an increase of 7.9 percent.
- $267 million for the Equal Employment Opportunity Commission, an increase of 6.6 percent, to increase staffing.
- $145 million of the Justice Department's Civil Rights Division, an increase of 18 percent.
- $112 million to the Department of Homeland Security for the E-Verify program.
Assuming they are passed by Congress, these increases reverse a long trend under the Bush Administration to cut funding to the federal agencies that enforce labor and employment laws. Employers can expect increased enforcement of those laws by the federal government in the years to come.
The Equal Employment Opportunity Commission (EEOC) has issued two helpful resources for employers coping with the Swine Flu outbreak. First, the Commission has issued this technical assistance document on ADA-Compliant Employer Preparedness For the H1N1 Flu Virus. It answers basic questions about workplace preparation strategies for the 2009 H1N1 flu virus (swine flu) that are compliant with the Americans with Disabilities Act (ADA).
Second, the Commission has issued this notice on Employment Discrimination and the 2009 H1N1 Flu Virus, reminding employers that the Swine Flu outbreak is not an excuse to discriminate against employees and potential employees on the basis of disability or national origin. Of course, you didn't need that reminder because you read the Stoel Rives World of Employment, right?
A bill introduced in the United States Senate late last month will, if passed, prohibit mandatory, pre-dispute arbitration agreements in employment. Senate Bill 931, also known as the Arbitration Fairness Act of 2009 (AFA) was introduced by Sen. Russ Feingold (D-Wis.) and seven co-sponsors. A similar bill, HR 1020, was introduced in the House of Representatives by Rep. Hank Johnson (D-Ga.) and 36 co-sponsors.
If passed, the AFA will amend the Federal Arbitration Act (FAA), and will apply only to disputes or claims arising on or after the date of enactment. Why the AFA? Sponsors and supporters believe that while arbitration is a good way to settle disputes, pre-dispute arbitration agreements in employment are unfair. For more details, click here to read Sen. Feingold's press release on the AFA.
It would not surprise us if the AFA becomes law this term. If so, employers will no longer be able to require employees to agree to resolve employment disputes through arbitration. As a result, more cases will go to the state and federal courts and employers will pay more to resolve workplace disputes.
Judith Warner wrote this interesting editorial in today's New York Times on how the Swine Flu may force changes in sick leave policies. Warner concludes by advocating for the Healthy Families Act, which would require employers who employ 15 or more employees to provide up to 7 paid sick days per year. This flu outbreak may give the Healthy Families Act the push it needs to become law, so watch for more updates
In the meantime, wash your hands frequently, don't lick pigs, and visit PandemicFlu.gov for the latest information on the Swine Flu.
The U.S. Government has set up this new website, PandemicFlu.gov, to provide "One-stop access to U.S. Government swine, avian and pandemic flu information." It has posted a great deal information to help employers and employees reduce the risk of infection on its workplace planning page.
The Centers for Disease Control has posted this H1N1 Flu (Swine Flu) Page with links to helpful and up-to-date information on the swine flu, how it spreads, and how employers can help employees reduce the risk of contracting the flu.
The Department of Labor's Job Accommodation Network has issued a fact sheet titled "Considering the Needs of Employees with Disabilities During a Pandemic Flu Outbreak" (click to download).
Also, you can click to download the current Form I-9 (Employment Eligibility Verification) in Spanish. Note, however, that the Spanish version may be filled out by employers and employees in Puerto Rico ONLY. Spanish-speaking employers and employees in the 50 states and other U.S. territories may print this for their reference, but may only complete the form in English to meet employment eligibility verification requirements. Click here to download the Form I-9 in English.
Every employer and HR manager is sure they have dealt with the worst employee of all time, but how do your experiences stack up? Compare your most dreadful employees to this list of the 10 worst employees of 2008, courtesy of Careerbuilder.com.
If you haven't heard yet, these two Domino's employees are topping the list of the worst employees for 2009. Yikes!
According to the Wall Street Journal, discrimination filings with the Equal Employment Opportunity Commission (EEOC) went up 15 percent in 2008 compared to 2007, and age discrimination suits in particular showed a dramatic 29 percent increase over the previous year. Click here to read the WSJ Article.
The conventional wisdom is that discrimination claims go up in a down economy -- more people lose their jobs through layoffs or heightened performance standards, and a certain percentage of those affected will file discrimination claims. That doesn't necessarily explain the spike in certain types of claims, however, such as the recent increase in age discrimination claims.
So why the spike in claims? It could be as simple as an aging workforce, but we suspect more is at work. In a troubled economy, many employers focus their layoffs on more highly-compensated employees, and that can have a greater impact on older workers (while specifically targeting older workers for layoff is unlawful, it may be lawful to select higher-paid workers). Also, older workers have a harder time finding replacement employment, and that might lead them to file claims against their former employers rather than move on.
These are challenging times for employers, and now more than ever it pays to be careful when conducting layoffs and terminations.
We love New Zealand! It's land of Peter Jackson, Flight of the Conchords, Crowded House, and Steinlager beer. It's also the land of being able to tell your boss where to stick your job and getting away with it.
According to the New Zealand Employment Relations Authority, a man did not resign his employment when he told his boss to "stick his job up his arse." According to the Authority, a fair and reasonable employer would not have interpreted that comment as a resignation, but rather as an emotional outburst as part of a heated exchange. You can read the full story here.
Of course, that's New Zealand; here in America, if telling the boss to take his job and shove it isn't a resignation, it's probably insubordination and enough to get fired over. But that doesn't mean we don't have a rich tradition of telling off the boss in this country. If you need a reminder, here's the classic song from Johnny Paycheck:
If Johnny Paycheck isn't your cup of tea, or if you want to hear the entire song in only one minute and twenty-four seconds, here's the Dead Kennedys version:
Nevada's minimum wage will increase effective July 1, 2009, pursuant to state law that requires the Nevada Labor Commissioner to adjust the minimum wage to reflect increases in the cost of living.
The minimum wage for employees who receive qualified health benefits from their employers will increase from the current $5.85 per hour to $6.55 per hour, while the minimum wage for employees not receiving health benefits will increase from $6.85 per hour to $7.55 per hour. Click here to download the Nevada Labor Commissioner's 2009 Minimum Wage Bulletin.
Wondering what the tax implications of the subsidy are, or whether the person asking for the subisidy is truly eligible? Click here to read the IRS's Premium Assistance for COBRA Benefits. If that doesn't answer your tax questions, click here to visit the IRS's ARRA page.
As a reminder, employers can click here to download the new model COBRA notices.
Sick to death of COBRA and need to relieve the stress it's caused? Click here to visit Orisinal - a site full of calming, zen-like computer games.
And finally, click here to visit the Stoel Rives World of Employment's complete COBRA coverage.
More news on the Employee Free Choice Act (EFCA): last week, Pennsylvania Senator Arlen Specter, long considered a critical swing vote for both sides, came out in opposition to EFCA. Click here to read the New York Times' coverage. Specter's "no" means that the pro-EFCA senators will fall short of the 60 votes they need to overcome an expected Republican filibuster.
You know the Republicans are serious when they trot out Joe the Plumber. And they have, according to the Huffington Post, in an effort to defeat EFCA. We're not sure if Joe's support is going to matter much, but at least it increases the entertainment value.
The Department of Labor has published four model notices to help employers, plans and individuals comply with the notice requirements of the COBRA subsidy provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). Each model notice is designed for a particular group of qualified beneficiaries and contains information to help satisfy ARRA’s notice provisions. Click on the title of each to download:
- General Notice (Full version). Plans subject to the Federal COBRA provisions must send the General Notice to all qualified beneficiaries, not just covered employees, who experienced a qualifying event at any time from September 1, 2008 through December 31, 2009, regardless of the type of qualifying event, AND who either have not yet been provided an election notice or who were provided an election notice on or after February 17, 2009 that did not include the additional information required by ARRA. This full version includes information on the premium reduction as well as information required in a COBRA election notice.
- General Notice (Abbreviated version). The abbreviated version of the General Notice includes the same information as the full version regarding the availability of the premium reduction and other rights under ARRA, but does not include the COBRA coverage election information. It may be sent in lieu of the full version to individuals who experienced a qualifying event during on or after September 1, 2008, have already elected COBRA coverage, and still have it.
- Alternative Notice. Insurance issuers that provide group health insurance coverage must send the Alternative Notice to persons who became eligible for continuation coverage under a State law. Continuation coverage requirements vary among States, and issuers should modify this model notice as necessary to conform it to the applicable State law. Issuers may also find the model Alternative Notice or the abbreviated model General Notice appropriate for use in certain situations.
- Notice in Connection with Extended Election Periods. Plans subject to the Federal COBRA provisions must send the Notice in Connection with Extended Election Periods to any assistance eligible individual (or any individual who would be an assistance eligible individual if a COBRA continuation election were in effect) who (1) had a qualifying event at any time from September 1, 2008 through February 16, 2009; and (2) either did not elect COBRA continuation coverage, or who elected it but subsequently discontinued COBRA. This notice includes information on ARRA’s additional election opportunity, as well as premium reduction information. This notice must be provided by April 18, 2009.
For more information about the COBRA subsidy, click here to read our coverage at the Stoel Rives World of Employment. Or, click here to go to the Department of Labor's COBRA Subsidy Website.
Back in October 2008, the Ninth Circuit Court of Appeals upheld a San Francisco city ordinance that requires many employers to either contribute a specified amount toward their employees' health care costs on a regular basis or pay into a city health care fund for San Francisco residents. Earlier this week, the Ninth Circuit denied a petition for rehearing en banc, meaning that the law will continue to be in effect--until or unless the Supreme Court decides to hear an appeal.
The San Francisco Health Care Security Ordinance went into effect on January 9, 2008. It is a "pay or play" health care plan, as it requires employers either to "pay" for health care or "play" by the rules of the city health care fund. The ordinance applies to for-profit employers with at least 20 employees and non-profit employers with at least 50 employees. For more information on the ordinance, including compliance information, click here.
In the underlying lawsuit, Golden Gate Restaurant Association v. San Francisco, a group of employers brought a lawsuit seeking the federal court to declare that the San Francisco ordinance is preempted by the federal Employee Retirement Income Security Act of 1974 (ERISA). The Ninth Circuit disagreed, and the ordinance will continue to be in effect. This decision may pave the way for other state and local governments to pass similar "pay or play" health care laws, knowing that they will likely withstand a legal challenge.
The Worker Adjustment and Retraining Notification ("WARN") Act is getting a lot of airplay these days; that's the federal law that requires qualifying employers to give 60 days’ notice of a plant closing, a layoff of 500 or more people at one location, or a cut of at least one-third of the work force at a site. But many critics of the WARN act think it doesn't go far enough because it covers only the largest layoffs by the largest employers. Now, some economists are calling for a tougher, broader WARN Act.
We'll be watching to see if these calls for revising the WARN Act gain traction in Congress this term. For now, there are resources out there to help you cope with the current version of WARN:
- For a basic overview of the law, here's a basic WARN Act Fact Sheet.
- For more detailed information, download the Employer's Guide to the WARN Act (a great resource and our personal favorite).
- Next, if your layoff is caused by an "act of God," you might want to download the WARN Act Natural Disaster Fact Sheet.
- And finally, you can read what the DOL is telling your employees: the Workers' Guide to the WARN Act, and for Spanish-speaking employees, the Guía para el Trabajadores.
Employers: The Internal Revenue Service has issued a new Form 941 (Employer's Quarterly Federal Tax Return) that provides for any credits due because of the new COBRA Premium Assistance Credit. You can download the new form by clicking on the links below:
The IRS also has put up this web page to provide tax assistance to employers taking advantage of the COBRA credits. To read more on the COBRA Premium Assistance Credit, check out our coverage at the Stoel Rives World of Employment.
The Department of Labor's Employee Benefits Security Administration has posted answers to 10 frequently asked questions regarding the COBRA subsidies included in the new stimulus package. Most relate to individual claims for the subsidy, but the information may be helpful to employers as well.
For more information about the subsidy, click here to read our coverage at the Stoel Rives World of Employment. Or, click here to go to the Department of Labor's COBRA Subsidy Website.
(Okay, this picture has nothing to do with the continuation of health care, and the FAQs don't say anything about snakes. We just like to keep things interesting at the Stoel Rives World of Employment.)
Today the EEOC published its proposed regulations on the Genetic Information Nondiscrimination Act (GINA). Click here to download the proposed regulations. Interested members of the public have 60 days (or until May 1, 2009) to comment on the new regs.
GINA, passed by Congress last year, prohibits the improper use of genetic information in health insurance and employment. GINA prohibits group health plans and health insurers from denying coverage or charging higher premiums based solely on the insured's genetic predisposition to developing a disease in the future.
Title II of GINA, which takes effect November 21, 2009, will prohibit employers from using genetic information to make hiring, firing, promotion or other employment decisions based on genetic information. Why would anyone want to do that? Perhaps you should watch this movie:
The Department of Labor's Employee Benefits Security Administration has just released a salvo of new forms and information on the COBRA subsidy. Click on the titles below to download:
- COBRA Premium Reduction Fact Sheet
- Job Loss Poster (8½" x 11")
- Loss Poster (11" x 17")
- Flyer for Employers • Flyer for Employees
- COBRA Continuation Health Coverage FAQs for Employees
- COBRA Continuation Health Coverage FAQs for Employers
- IRS Information on COBRA Premium Reduction
- DOL Information Related to the American Recovery and Reinvestment Act of 2009
Keep watching the Stoel Rives World of Employment for more information on the COBRA subsidy!
The Senate confirmed California Representative Hilda Solis by a vote of 80 to 17 as the new Secretary of Labor in the Obama administration, ending several weeks of delays prompted by Republican concerns over her nomination and the disclosure that her husband paid $6,400 in tax liens earlier this year on his auto repair business.
Solis is widely regarded to be a very pro-labor pick, and is a fervent supporter of the Employee Free Choice Act. Solis' confirmation will not be met with much enthusiasm by American employers. But there is a silver lining: at least she's not Andy Stern.
We have more information for you on the provisions of the stimulus bill affecting the Consolidated Omnibus Budget Reconciliation Act (COBRA). First, the Employee Benefits Security Administration (part of the Department of Labor) has published this website with information on COBRA continuation coverage assistance. The Web site also includes a "Subscribe To This Page" link, allowing users to receive e-mail updates when new items are posted. Second, in case you didn't receive it, Stoel Rives sent out this client alert last week, with more detailed information on the COBRA assistance program.
Among the provisions of the new stimulus package signed by President Obama are subsides for unemployed workers continuing their health care benefits through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The key points of the package are:
- Who is eligible? Employees who have been involuntarily terminated between September 1, 2008 and December 31, 2009 with annual incomes less than $125,000 (single) or $250,000 (couples) are eligible for the COBRA premium assistance. Qualified individuals, who initially decline COBRA coverage, would be given an additional 60 days after they receive notice of the special election period to elect to take advantage of the subsidy.
- How much is the subsidy? Eligible employees may receive a 65 percent subsidy toward their health care premium for up to nine (9) months. The Treasury Department will provide employers (or health plans, if they administer COBRA benefits) a credit against payroll taxes to cover the cost of the subsidy. The subsidy terminates upon any offer of new health care coverage through an employer or with Medicare eligibility.
- Are there new notice requirements? Of course! COBRA notices must include information on the availability of the premium assistance. Model notices from the Department of Labor are due 30 days after enactment (so by March 18, 2009). The Act requires employers to notify all plan participants of the new subsidies within 60 days of enactment (or by April 17, 2009). We'll post the model notice as soon as it is available.
- When does the subsidy take effect? March, 2009.
For more information on COBRA, check out this page from the Department of Labor.
President Obama recently signed his fourth labor-friendly executive order, this time allowing the federal government to require project labor agreements (PLAs) on large-scale federal construction projects. This order overturns a prior order from President Bush disallowing PLAs. Click here to read the text of the order. This latest action follows Obama’s three executive orders earlier this month that reversed a trio of Bush-era orders governing the way federal contractors deal with union workers.
A PLA is defined as "a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project." PLAs are relatively common in the construction industry. Unions tend to like project labor agreements as they streamline the bargaining process and generally set high wages and benefits, making it easier for union contractors who pay those higher wages and benefits to get the work.
Not surprisingly, union officials are very happy about the latest order. You can bet non-union builders and contractors aren't as happy. Click here to read the Associated Builders and Contractors' position on PLAs.
What do terms like "feisty," "spry," "elderly" and "grandmotherly" have in common? Yes, they are commonly used to refer to older people; but they can be used to express derogatory stereotypes about someone because of age.
An article in today's New York Times, "Goodbye Spry Codgers, So Long Feisty Crones," reports that two groups, the International Longevity Center in New York City and the Aging Services of California, have put together a stylebook to guide media professionals through the minefield of politically correct and politically incorrect ways of identifying and portraying the elderly. Among the potentially unwelcome terms identified are “senior citizen," “golden years," “feisty,” “spry,” “feeble,” “eccentric,” “senile” and “grandmotherly.” Likewise, it can be viewed as patronizing to call someone “80 years young.” As for what's on our coffee mug? Don't even go there.
Is this another example of "political correctness" run amok, and can we just ignore it? Probably not. As previously reported here in the Stoel Rives World of Employment, ageist remarks like "grandma" can form the basis of an age discrimination lawsuit. Employers should be careful about how age-related terms are used in the workplace. It is unlikely that using a term like "senior citizen" by itself will lead to a lawsuit, but using it in the context of a performance review or a termination meeting might.
We recently reported that President Obama nominated California Representative Hilda Solis as our next Secretary of Labor. It now appears her nomination is in serious trouble. The Senate delayed confirmation hearings after finding out that Solis' husband owed some back taxes on his auto repair business. Whoops.
Conservatives opposed to Solis' nomination - and her support for the Employee Free Choice Act (EFCA) - are sensing weakness and are gearing up for a major opposition to her nomination. Labor unions, on the other hand, are calling for her to swiftly be confirmed.
Conservatives might want to be careful what they ask for. If Solis' nomination is withdrawn, one of the front runners to replace her is Andy Stern, head of the Service Employees International Union. It's pretty safe to say he supports EFCA.
On January 30, 2009 President Obama signed three executive orders affecting federal contractors and their employees. Two of the three orders affect union rights. (Click the title of each order to download it).
- Economy in Government Contracting. Denies federal contractors reimbursement for funds spent on activities designed to persuade employees to join or to not join a union, such as printed materials, consultants or meetings (activities sometimes known as "union busting").
- Notification of Employee Rights Under Federal Labor Laws. Requires all federal contracts to require contractors to post a notice informing employees that they have a right either to join or to not join a union. A prior order from President Bush, required contractors to post a notice informing employees that they had a right not to join a union.
- Nondisplacement of Qualified Workers Under Service Contracts. Requires all federal contracts to include a provision requiring any contractor who assumes the contract from a previous contractor to retain that previous contractor's qualified employees.
The orders are part of President Obama's Task Force on Middle Class Working Families and, according to the White House, are designed to "level the playing field for workers and the unions that represent their interests." If you're curious about what labor unions think of the orders, check out this uncurbed enthusiasm from the AFL-CIO. We haven't seen a lot of reaction from employers groups, but we'll make the bold prediction that they won't be too happy. Keep in mind: these orders only affect federal contractors; if you don't sell goods or services to Uncle Sam, they probably don't apply to you.
New year, new forms: The Internal Revenue Service has released new W-4 Forms for 2009, and we have them for you right here! Just click below to download:
A 2009 Spanish version is pending approval, and we'll post it when it is available.
As previously reported here at the Stoel Rives World of Employment, employers will be required to adopt the new Form I-9 (Verification of Employment Eligibility) by February 2, 2009. We'd love to give you a link to download it, but guess what: it's not available yet. We'll keep watching and post it here as soon as it's released.
Here's another new employment law that goes into effect on January 1, 2009: the Bicycle Tax Credit (BTC). Passed as part of that $700 billion bailout plan we've all heard so much about, the BTC allows employers to reimburse employees up to $20 per month for bicycle-commuting related expenses; the employer can then claim a tax deduction for the reimbursements. Click here for an informative article on the tax credit from the San Francisco Chronicle. (Even though he eventually voted against the bailout bill that contained the BTC, the tax credit is the brainchild of Oregon Congressman Earl Blumenauer, a long-time bicycle advocate who just happens to be this author's congressman.)
If you are interested in starting a bike commuting reimbursement program at your workplace, you might want to consult a tax lawyer to make sure you follow all legal requirements. Want more information on bike commuting? Here's our favorite bike blog, bikeportland.org.
Today's New York Times is reporting that President-Elect Barack Obama will nominate California Representative Hilda Solis as his administration's Secretary of Labor, the cabinet-level position that oversees the Department of Labor.
John Sweeney, head of the AFL-CIO (a coalition of labor unions) praised the appointment of Solis to the position. And not without good reason: Solis has been a champion of the Employee Free Choice Act (EFCA), which labor unions have made their #1 legislative priority for 2009. The EFCA would , among other things, require employers to recognize a union as the exclusive bargaining agent for its employees based solely on a "card check" process rather than a secret ballot election. If passed, it is expected to drastically increase union organizing and unionization rates.
Of course, if the unions are happy about the Solis pick, you can bet some employers are not. As reported in the Times, the U.S. Chamber of Commerce, a pro-employer group, expressed "disappointment" over the selection of a labor secretary that supports EFCA, but promised to work with Solis.
The selection of Solis should not come as a surprise: President-Elect Obama has voiced his support for EFCA and other pro-employee legislation, and was expected to select a like-minded labor secretary. This selection does not, however, mean that EFCA will pass without a fight. Don't be surprised if the Republicans use their filibuster power either to delay its passage or to win some pro-employer concessions before allowing it to pass.
On December 15, German engineering company Siemens AG and three of its subsidiaries pleaded guilty to multiple violations of the Foreign Corrupt Practices Act (FCPA). Siemens also reached a settlement agreement with the Securities and Exchange Commission (SEC) under which Siemens will pay a record $800 million (a $450 million criminal fine and $350 million in disgorgement of profits ) and retain an independent compliance monitor for a four-year term. Combined with penalties levied by the German government, Siemens will pay a total of $1.6 billion to settle the bribery charges. That's no typo: $1.6 billion. That's a Dr. Evil ransom.
What did Siemens allegedly do that was so bad? According to the U.S. Attorney General's office, among other things, Siemens paid over $800 million in bribes to foreign officials. Perhaps Siemens didn't realize that the FCPA makes it illegal to bribe a foreign official to get business. The FCPA also requires issuers (companies whose stocks trade on U.S. exchanges) to have internal controls and to maintain accurate books and records.
Want to avoid ending up paying $1.6 billion to settle a case? The U.S. Department of Justice has published this handy Layperson's Guide to the FCPA. If you do business overseas, be sure that your employees are trained on the FCPA and understand the limitations it places on their actions abroad.
The Equal Employment Opportunity Commission (EEOC) split yesterday over whether to approve a notice of proposed rulemaking on the ADA Amendments Act (ADAAA). The commissioners voted 2-2 on whether to approve a set of proposed rules that had been drafted by EEOC's Office of Legal Counsel. Under the EEOC's rules, a tie vote is the same as a "no," meaning the proposed rules will not be presented to the public for comment. (For those of you suspecting political motives, you could be right: the two Republican Commissioners voted in favor of releasing the rules, and the two Democrats voted no.)
What does this mean? The ADAAA will go into effect January 1, 2009 without any interpretive regulations to help us navigate the new law. The ADAAA requires the EEOC to create new regulations, but does not set any deadlines. When the EEOC does make new regulations, it will publish them and allow public comment for 60 days before the regulations may take effect. And if the Commissioners remain deadlocked, it make take an appointment from President-Elect Obama to break the tie.
For more information on the ADAAA, check out the Stoel Rives World of Employment's ADAAA Archives.
Do you reimburse your employees for mileage for business driving? If so, get ready to pay a little less: effective January 1, 2009, the standard mileage reimbursement will drop to 55 cents per mile, down from the 58.5 cents per mile it has been in the last half of 2008. Why the drop? Well, prices at the pump are down sharply from where they were six months ago. For more information, click here to read the IRS Press Release on the new mileage rates. Or for a lot more information, click here to read Revenue Procedure 2008-72, which explains the new mileage rates in detail.
Washington employers get ready to give your minimum-wage employees a raise: effective January 1, 2009, Washington's minimum wage will increase to $8.55 per hour, allowing Washington to maintain the highest minimum wage in the country. For more information, click here to read the Department of Labor and Industries' Press Release. Washington's current minimum wage is $8.07 per hour.
As previously reported in the Stoel Rives World of Employment, Oregon's minimum wage will increase to $8.40 also effective January 1, 2009. Following voter initiatives, both Oregon and Washington now tie their minimum wages increases to the Consumer Price Index.
The federal minimum wage is now $6.55 per hour, but will go up to $7.25 per hour effective July 24, 2009. For information on minimum wages in other states, check out this interactive map of the United States showing minimum wage rates, available from the U.S. Department of Labor.
- commercial motor vehicle drivers may continue to drive up to 11 hours within a single workday; and
- drivers may now reset their weekly limits after they have been off duty for at least 34 consecutive hours.
Several advocacy and consumer protection groups are critical of the new rule, which they say puts fatigued and dangerous drivers behind the wheel. Click here to read Public Citizen's reaction. Don't be surprised if the Obama administration takes a new look at this rule in 2009.
In case you missed it, Barack Obama will be the next President of the United States! And both houses of Congress will be controlled by Democratic majorities. Wondering what this will mean for labor and employment law? So are we! But we've gone a step further and made some educated guesses on what to watch out for.
- The Employee Free Choice Act (EFCA). The EFCA would be the most wide-ranging revision to federal labor law in 50 years. It would, among other things, require employers to recognize a union as the exclusive bargaining agent for its employees based solely on a "card check" process rather than a secret ballot election. If passed, it is expected to drastically increase union organizing and unionization rates. The Stoel Rives World of Employment will be watching this one very closely.
- The Re-Empowerment of Skilled and Professional Employees and Construction Tradeworkers Act (RESPECT). No, it's not an Aretha Franklin song. The "RESPECT" Act would reverse the NLRB’s recent rulings that clarified the requirements to be a "supervisor" under federal labor law. RESPECT would dramatically increase the number of employees who could unionize. Sock it to me!
- The Paycheck Fairness Act and the Equal Remedies Act. These statutes—competing versions to address the same issue—would reverse the U.S. Supreme Court’s recent Ledbetter ruling addressing the statutes of limitations under Title VII. Both would enable plaintiffs to press viable claims going back much further in time.
- The Civil Rights Act of 2008. The proposed amendments to the civil rights laws would make numerous changes including removal of damage caps on sex, religion, and disability discrimination, as well as retaliation lawsuits.
- The Employment Non-Discrimination Act (ENDA). ENDA would amend Title VII to add sexual orientation as a protected class.
- The FOREWARN Act. This amendment to WARN would increase the notice period for plant closings or mass layoffs from 60 to 90 days.
- Minimum wage. President-elect Obama has also expressed his support for raising the minimum wage to $9.50 per hour by 2010.
- Family and Medical Leave Act (FMLA). President-elect Obama has also indicated his support for expanding the Family and Medical Leave Act to cover companies with 25 or more employees (currently 50).
A Massachusetts federal court last week approved a consent decree settlement of an Equal Employment Opportunity Commission (EEOC) lawsuit against the Salvation Army over the firing of two Spanish-speaking employees who failed to adhere to the employer's "English only" policy. To read the consent decree in that case, click here.
In that suit, the EEOC had accused the Salvation Army with national origin discrimination under Title VII for enforcing an English-only policy that required its thrift store employees to speak only English in the workplace, even when on breaks. The EEOC argued that the English-only policy violated Title VII because it was not justified by “business necessity," as it was used to terminate two clothes sorters who had no customer contact.
Under the consent degree, the Salvation Army will adopt new policy that employees shall use English in the workplace “to the best of their abilities when speaking to any other employee, beneficiary, customer, or a supervisor"--however, the policy will allow non-English speaking employees to speak their native language during work breaks and to use languages other than English with customers who speak the same foreign language.
This case is a reminder to employers that English-only policies may only be used and enforced if English is a "business necessity." Requiring employees to speak English during working time when speaking to customers, supervisors and coworkers is generally accepted. However, requiring employees to speak only English during breaks or in private, or requiring employees to demonstrate English proficiency when English is not a bona fide job requirement is highly risky. If you have or are considering an English-only policy for your workplace, you may want to ask your employment attorney to review that policy. To read the EEOC's guidance on English-only policies, click here.
Yesterday the Department of Homeland Security (DHS) issued a supplemental final rule regarding employers' obligations upon receiving a "no match" letter from the Social Security Administration (SSA). (A "no match" letter states that an employee's reported Social Security number appears invalid). The final rule is identical to the department's previous rule, which was blocked from implementation by a California federal district court; however, DHS said it hopes that additional explanatory material provided in the rule will address the issues raised by the court. For more information, read DHS's press release.
Under the final rule, the SSA will be required to include in all no-match letters information telling employers that they are required to resolve discrepancies or risk legal liability. The rule also provides employers with a "safe harbor" provision, which provides steps employers may take when they receive a no-match letter. DHS will not use anemployer's receipt of a no-match letter as evidence to find that it violated the law by knowingly employing unauthorized workers as long as the employer follows the safe harbor rules. For text of the final rule, click here.
The final rule will not be effective until published in the Federal Register, and even then it will not go into full effect until the federal court lifts its injunction against the rule - assuming the court is convinced the final rule is lawful. Stay tuned to the Stoel Rives World of Employment for further updates.
It's a slow news day here at the Stoel Rives World of Employment. No Supreme Court cases, no big lawsuits, not even an obscure city ordinance to report on. But here's an amusing photo, courtesy of the Fail Blog:
Come to think of it, I believe I spoke at that seminar....
The U.S. Congress is currently considering legislation that would impose significant penalties on employers who improperly classify employees as "independent contractors" to avoid paying for benefits.
The Employee Misclassification Prevention Act (S. 3648) was introduced in the Senate on September 29, and is sponsored by Senators Edward M. Kennedy (D-Mass.), Barack Obama (D-Ill.) and John Kerry (D-Mass.). Features of the bill include:
- Amending the Fair Labor Standards Act (FLSA) to prohibit the misclassification of an employee as an independent contractor, providing for liquidated damages and civil penalties of up to $10,000.
- Requiring employers to keep records on and notify workers of their employment or independent contractor classification and their right to challenge that classification.
- Requiring state unemployment insurance agencies to audit employers who misclassify employees.
- Allowing the Department of Labor and the Internal Revenue Service to share information on cases where employers misclassify workers.
- Requiring the Department of Labor to perform targeted audits focusing on employers in industries that frequently misclassify employees.
- Directing the Department of Labor to establish a Web site that summarizes the rights of employees under the FLSA and other federal laws.
A companion bill, H.R. 6111, was introduced in the House in May. Don't expect this bill to become law as long as President Bush is in the White House, but with a likely democratic majority in Congress and a new President, passage of the bill appears very likely. Employers should be aware of the existing risks of incorrectly classifying employees as "independent contractors," including claims for unpaid overtime, minimum wage claims, benefits claims, workers' compensation liability, and tax penalties.
The New York Times is reporting that Starbucks has settled with the National Labor Relations Board an unfair labor practice claim filed by a former employee who alleged he was terminated for attempting to organize his coworkers to join the Industrial Workers of the World, aka "the Wobblies."
Under the terms of the settlement, Starbucks will post a notice in the employee's store for 60 days informing workers they have a right to unionize under federal law. Starbucks will also remove from its files any reference to the employee's firing and will repay him for any loss of earnings. (Starbucks had already voluntarily reinstated the employee before he filed his charge with the NLRB). For more about the Starbucks Workers' Union (a branch of the IWW), click here.
This case is a reminder to employers that it is unlawful to discharge or take any other adverse action against an employee because of that employee's support for or activities on behalf of a labor union. Just because the employee supports a union does not require you to give him or her special treatment, nor does it make them immune for discipline unrelated to their union activities; however, if you terminate a union organizer, you proceed at your own (substantial) risk.
As expected, President Bush yesterday signed the ADA Amendments Act ("ADAAA") into law, significantly expanding the scope of the Americans with Disabilities Act. The final version of the law can be downloaded here. The Stoel Rives World of Employment has been actively covering the law as it wound its way through Congress, and you can follow our reporting here.
The ADAAA goes into effect January 1, 2009. To help you get ready, Stoel Rives is offering free seminars on the ADAAA in its Portland, Boise and Seattle offices on December 2, 2008. For more information and to register, click one of these links:
Yesterday, the U.S. House of Representatives and the U.S. Senate both passed laws that will require employee health plans to offer the same benefits for mental illness as they do for other medical conditions.
The House approved H.R. 6983 by a 376-47 vote, and the Senate passed another version, H.R. 6049 (a tax and energy bill containing the mental health parity legislation as a rider), by a 93-2 vote. There are some minor discrepancies between the two versions (such as how it will be paid for) to be worked out, but that should not prevent the bill from becoming law. The Bush administration has stated that it supports the Senate version of the law.
If Congress can iron out the differences before it adjourns for the year, the bill will go into effect January 1, 2008. Keep an eye on the Stoel Rives World of Employment for more developments.
This week the Ninth Circuit Court of Appeals ruled that the Legal Arizona Workers Act (LAWA) is not preempted by the federal (IRCA). Rather, the court held, LAWA falls within the scope of the “savings clause” of IRCA’s express preemption provision as a “licensing law” and is therefore enforceable. A coalition of human rights and employers' groups challenged the law on several grounds, all of which were rejected by the Ninth Circuit. To read the court's opinion, click here: Chicanos Por La Causa v. Napolitano.
LAWA allows Arizona state courts to suspend or revoke business licenses of employers who intentionally employ "unauthorized aliens," and also required Arizona employers to use the E-Verify System to check applicants' eligibility for employment. Arizona employers should review this Notice to Employers from the Arizona State Legislature for more information.
Now that the Arizona law has been upheld (and assuming the U.S. Supreme Court does not hear further challenges), the Stoel Rives World of Employment expects anti-immigration groups to push for similar laws in other states.
"The Americans with Disabilities Act of 1990 is instrumental in allowing individuals with disabilities to fully participate in our economy and society, and the Administration supports efforts to enhance its protections. The Administration believes that the ADA Amendments Act of 2008, which has just passed Congress, is a step in that direction, and is encouraged by the improvements made to the bill during the legislative process. The President looks forward to signing the ADAAA into law."
To read the final version of the law, click here.
The law will go into effect January 1, 2008. The House of Representatives yesterday passed the version of the bill previously approved by the Senate, which included some employer-friendly revisions designed to reach a compromise. For example, the new version removed a list of "per se" disabilities, and consistent with current law places the burden of proving a disability on the employee. However, the new law will overturn the U.S. Supreme Court's decision in Sutton v. United Airlines that mitigating measures must be considered in determining whether an individual is disabled, and the Court's decision in Toyota v. Williams, which takes a restrictive view of what constitutes a substantial limitation in the major life activity of working.
The ADAAA will make it much more difficult for employers to take the position that an individual is not "substantially limited in a major life activity" and therefore not disabled under the ADA. More requests for accommodation (and more lawsuits) are expected to follow. Watch the Stoel Rives World of Employment for continuing updates as the law goes into effect.
The ADA Amendments Act ("ADAAA") was passed by the U.S. House of Representatives earlier today. For more information, read the House's Press Release. As reported previously by the Stoel Rives World of Employment, the same version of the bill was recently approved by the U.S. Senate.
The next stop for the ADAAA is the White House. President Bush previously indicated he has some misgivings about the ADAAA, but given the broad bipartisan support that carried the bill through Congress, he is expected to sign it into law. (Keep in mind, it was George H.W. Bush that signed the original ADA.)
Assuming it becomes law, the ADAAA will greatly broaden the scope of the ADA. Some highlights of the ADAAA:
- Reverses several Supreme Court decisions that have seemingly narrowed the coverage of the ADA, restoring what the drafters perceive to be the original Congressional intent
- Broadens the definition of disability, including what it means to be “substantially limited in a major life activity
- Clarifies that accommodations are not be required if an individual is merely "regarded as” having a disability
- Prohibits the consideration of mitigating measures such as medication, prosthetics, and assistive technology, in determining whether an individual has a disability
- Provides coverage to people who experience discrimination based on a perception of impairment regardless of whether the individual experiences disability
The Stoel Rives World of Employment will let you know as soon as we receive word on what the White House intends to do. Stay tuned!
The touchstone in any litigation regarding termination is fairness. A jury will look to see if the employee was treated fairly given the circumstances, or if the employer acted in an arbitrary and unfair manner. An employer should always ask, "Is this termination fair to the company? To the employee? To our customers? To our shareholders?"
- Interactive dramatization
- Written materials guiding you through the important steps leading up to a termination
- How to avoid pitfalls in the termination process
- How to minimize the risk of employment litigation
For more information (including registration information) click here.
In the first case of its kind before a federal circuit court, the Seventh Circuit Court of Appeals held recently that an employer violated Title VII for terminating a female employee who underwent in vitro fertilization treatments. To read the opinion in Hall v. Nalco Company, click here.
The employer terminated the employee citing “absenteeism—infertility treatments.” It then replaced her with a female employee who was incapable of becoming pregnant. The employee sued, alleging her termination violated the Pregnancy Discrimination Act (PDA), which amended Title VII to include pregnancy and childbirth as bases for discrimination. The employer argued that the termination was for a gender-neutral reason: infertility. However, the Seventh Circuit held that there was evidence the termination was for her gender-specific quality of childbearing, in violation of Title VII.
Despite Hall, employment actions based on infertility are not unlawful as long as they affect men and women equally. For example, employers may lawfully exclude all treatments for infertility from their health benefit plans. Employers should beware, however, of adverse treatment of a particular infertility-related procedure that affects women only. Just as an employer may not discriminate against women because of pregnancy or maternity leave, it may not discriminate against women who undergo in vitro fertilization. For more information on avoiding pregnancy discrimination, read this fact sheet from the EEOC.
Number of Companies with Top Rating for Lesbian, Gay, Bisexual and Transgender Workers Jumps by One-Third
The Human Rights Campaign Foundation yesterday released its seventh annual Corporate Equality Index ("CEI"), which rates 583 large businesses on a scale from 0 to 100 percent on their treatment of lesbian, gay, bisexual and transgender employees. This year 259 businesses--employing more than 9 million full-time employees--achieved a perfect score, a one-third increase over last year. These companies protect their employees from employment discrimination based on sexual orientation and gender identity or expression through policies on diversity & inclusion, training, health care, and domestic partnership benefits.
One notable trend is that of the 583 business rated in the CEI, 99 percent have policies prohibiting discrimination on the basis of sexual orientation, a 13 percent increase over last year. 92 percent of rated employers provided health insurance coverage to employees' same-sex domestic partners.
According to Marvin Odum, president of Shell Oil, “A 100-percent rating helps us to better attract, recruit and retain diverse talent to contribute to our overall business success.” But having anti-discrimination policies is frequently more than good business--it is also the law. Many states, including California, Oregon, Minnesota and Washington, have state laws prohibiting discrimination on the basis of sexual orientation and/or gender identity, and more states are considering adopting such laws. If you don't already have an anti-discrimination policy that prohibits such discrimination, now might be a good time to adopt one.
Under the proposed rule, the DOL will require that before agencies can issue rulemaking dealing with health issues, they first must solicit input on studies, scientific information, and data on frequency, intensity, and duration of worker exposure. Rulemaking agencies, such as the Occupational Safety and Health Administration and the Mine Safety and Health Administration, will be required to publish an advanced notice of proposed rulemaking soliciting public information when developing risk assessments for health standards regulating occupational exposure to toxins and chemicals.
The proposed rule is already under attack by congressional Democrats, who describe the rule as a "secret regulation" that could have "a profound negative impact on the health and safety of American workers." The DOL will accept public comments on the notice of proposed rulemaking until Sept. 28.
It's a slow news week in American labor and employment law, so we have to go all the way to Russia for a newsworthy story: a Russian judge recently ruled that sex harassment is lawful because it's necessary for human procreation. According to the judge, sex harassment is "gallant," not criminal: "If we had no sexual harassment we would have no children," wrote the judge in his opinion dismissing a female executive's lawsuit.
Don't expect this to become a successful defense in this country any time soon. If you have an employee that thinks sex harassment is "gallant," have them read this fact sheet on sex harassment from our friends at the EEOC.
Here's something to be watching: a bill currently winding its way through Congress is likely to bring significant changes to the Americans with Disabilities Act. The bill, knows as the ADA Amendments Act ("ADAAA"), will greatly broaden the scope of the ADA.
Some highlights of the ADAAA:
- Reverses several Supreme Court decisions that have seemingly narrowed the coverage of the ADA, restoring what the drafters perceive to be the original Congressional intent
- Broadens the definition of disability, including what it means to be “substantially limited in a major life activity
- Creates a list of per se "major life activities"
- Clarifies that accommodations are not be required if an individual is merely "regarded as” having a disability
- Prohibits the consideration of mitigating measures such as medication, prosthetics, and assistive technology, in determining whether an individual has a disability
- Provides coverage to people who experience discrimination based on a perception of impairment regardless of whether the individual experiences disability
The ADAAA passed the House of Representatives on June 25, 2008 by a vote of 402-17. The bill was introduced to the Senate on August 1, and reports are that at least 70 Senators have vowed to support the bill. A vote is expected when the Senate reconvenes in September. No word yet from the White House on whether President Bush will sign the bill into law, but it seems to have a veto-proof majority.
To read an official summary of the ADAAA, click here. To read the full text of the current bill, click here. Stay tuned to the Stoel Rives World of Employment for updates on this landmark legislation.
A 6-foot-tall, 250-pound mail carrier in Lacey, Washington, wants the U.S. Postal Service to add kilts as a uniform option for men, according to this article from the Seattle PI. David Peterson, the mail carrier/kilt enthusiast in question, has successfully lobbied the Oregon and Washington mail carrier union locals to endorse kilts; however, his efforts were defeated at the July convention of the 220,000-member National Association of Letter Carriers. Peterson, undaunted, vows to continue the fight for his right to wear a kilt on the job.
Why does Peterson want to wear a kilt? According to Peterson, "In one word, it's comfort." With his build, Peterson said, his thighs "fill slacks to capacity, causing chaffing and scarring."
Scarring? Really? If so, could Peterson have a disability claim? In any event, this author is now shopping for a nice, business-casual UtiliKilt.
According to a recent study, plaintiffs in civil lawsuits should be more willing to settle their cases, and perhaps defendants should stick to their guns and take more cases to trial.
The study (as reported in this New York Times article), concludes that when plaintiffs reject the defendant's settlement offer and go to trial, they end up with a worse result 61% of the time. Defendants fare far better: only 24% of the time do defendants receive a worse result at trial than they would have had the plaintiff taken their last settlement offer. In 15 percent of the cases, both sides were right to go to trial — the defendant paid less than the plaintiff demanded but the plaintiff won more than the defendant offered.
The full results of the study will be published in the September Journal of Empirical Legal Studies. We'll be waiting to see if the full published study makes any recommendations specific employment litigation.
Effective August 25, 2008, the Department of Transportation will require transportation workers who previously tested positive for prohibited drugs to give urine specimens while being watched by specimen collectors. The new regulations will apply to workers in safety-sensitive positions in the aviation, motor carrier, rail, transit, maritime, and pipeline industries.
Under current regulations, only workers suspected of tampering with their specimens are required to provide samples while being watched. However, the DOT is concerned that a "various mechanical devices are now readily available to individuals who want to adulterate or substitute their urine specimen during a drug testing collection." The new regulations require an employee giving the sample to raise his shirt, lower his pants and turn around to show the observer that he is not using a "prosthetic device."
"Prosthetic device?" Think we're joking? Guess again.
This increase does not affect most Western states, which have higher state minimum wages. Employers in Utah and Idaho, however, are affected by the increase and should make sure they comply. Need to verify your state's minimum wage? The Department of Labor has this great chart - just click on your state for current minimum wage information.
The plea agreement was announced by the Washington Department of Labor and Industries, which brought the claims.
Florida Governor Charlie Crist signed such a law, which went into effect July 1, although that law is being challenged in Federal Court. Georgia Governor Sonny Perdue signed his state's version in April, which took effect immediately. Louisiana passed its version in July, and it will go into effect August 15. Oklahoma passed such a law in 2004, but a federal district court issued an injunction blocking the law from taking effect, and that case is currently pending before the 10th Circuit Court of Appeals.
Firearm rights' groups such as the National Rifle Association were very active in passing these laws. Employer groups like the Society for Human Resource Management, the Brady Center and major employers like Disney World opposed them on the basis that they infringe upon employers' property rights, violate federal occupational safety laws and increase the risk of workplace violence.
Given the momentum it received from Supreme Court's ruling on the D.C. gun ban, we anticipate the pro-gun lobby will become even more active in seeing similar laws passed in more states. The western states, with their libertarian attitudes and high rates of gun ownership, are likely to become the gun lobby's next targets. Major employers and employer groups will likely challenge these laws, both in the state legislatures and the courts. The 10th Circuit ruling on the Oklahoma law may well decide how prevalent these laws will be. And rest assured, Ted Nugent will be involved.
In Washington, both the cell phone and the text messaging laws are "secondary enforcement " laws, meaning that offenders will only receive a ticket if pulled over for another traffic violation such as speeding or running a stop sign. California law enforcement, however, is authorized to ticket drivers only for cell phone use. As far as I know, Oregon does not yet prohibit reading while driving (but it should!)
Want more information? The California DMV has a great Q&A site on its new law. Don't live in Washington or California but want to know what the law is in your state? Check out this handy chart of state cell phone laws from the Governor's Highway Safety Association.
Employers should alert their employees who may drive in California or Washington as part of their job duties. And employers in all states might consider implementing a cell phone policy that restricts the use of cell phones while driving. Recent years have seen a large upswing in lawsuits against employers who supply their employees with cell phones, if the employee is then in an accident while using the phone.
Still using the old form? Don't worry - using the new one won't be mandatory until 30 days after appearing in the Federal Register (and this hasn't even happened yet), but you can start using the new form now if you want to.
The last substantive changes to the I-9 were made in 2007. If you're interested, you can read the USCIS's Press Release describing those changes. If you have general questions about the I-9, read the 2007 I-9 Handbook for Employers, also from the USCIS. And, feel free to complain to your congressperson about the Paperwork Reduction Act.
I don't know about you, but I'll think twice the next time I walk past a construction site.
If Grant's claims have merit, she's certainly entitled to just compensation. But whenever I see a plaintiff ask for huge sums of money (and for an employment case, $225 million is "huge"), this is the image it conjures in my mind.