Utah Supreme Court "Repudiates" the Federal Multi-Employer Worksite Doctrine

In an unapologetic rejection of a decades-old legal fiction hatched by the federal Occupational Safety and Health Administration ("OSHA") and embraced by Utah Division of Occupational Safety and Health ("UOSH"), on January 31, 2014, the Utah Supreme Court repudiated the multi-employer worksite doctrine. Hughes General Contractors v. Utah Labor Commission, 2014 UT 3. The Court based its repudiation on the doctrine’s “incompatibility with the governing Utah statute.”

The so-called multi-employer worksite doctrine makes a general contractor responsible for the occupational safety of all workers on a worksite, including those who are not even the general contractor’s actual employees. In rejecting that doctrine, the Supreme Court reaffirmed that the responsibility for ensuring occupational safety in Utah is limited to an employer’s actual employees.

Hughes was a general contractor overseeing a construction project involving multiple subcontractors, including a masonry subcontractor. UOSH invoked the multi-employer worksite doctrine and cited Hughes for improper erection of scaffolding in connection with the masonry subcontractor’s work, concluding that Hughes was responsible as a “controlling employer” under Section 34A-6-201 of the Utah Occupational Safety and Health Act (UOSH Act) given Hughes’ “general supervisory authority over the worksite.” Hughes challenged the legal viability of the doctrine before the Administrative Law Judge, who upheld the citation; and then the Labor Commission’s Appeals Board affirmed the ALJ’s decision. The Board based its decision on the notion that Section 34A-6-201 “mirrors its federal counterpart, which was interpreted [by the 10th Circuit] to endorse” the doctrine. Id., ¶5.

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Utah Passes Internet Employment Privacy Act

You have probably seen news accounts of employers requesting or requiring employees or applicants to disclose their usernames or passwords for their online accounts at services like Facebook and Twitter. Employers ostensibly request this information to learn more about job applicants and to monitor employee compliance with workplace requirements. Many employees and observers, however, see such requests as overly intrusive. The resulting controversy has led some states to pass laws restricting employers’ rights to make such requests. On March 7, 2013, the Utah State Legislature joined these states and passed the Internet Employment Privacy Act (the “Act”)

Under the Act, Utah employers may not request that an employee or job applicant disclose a username and password allowing access to a personal internet account. It also prohibits employers from taking an adverse employment action (like refusing to hire, demoting or firing) against an employee who fails or refuses to disclose a username or password for a personal internet account. A “personal internet account” is defined under the Act as an online account used by the employee or applicant for purely personal reasons unrelated to work.

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Proposed Utah Bill To Prohibit Discrimination Based On Sexual Orientation or Gender Identity

Utah State Senator Steve Urquhart (R-St. George) is sponsoring a bill that would amend Utah’s employment and housing antidiscrimination statutes to address discrimination on the basis of sexual orientation and gender identity. Urquhart introduced Senate Bill 262 to the Utah Senate Rules Committee on March 1, 2013. Currently, several municipalities in Utah have ordinances prohibiting employment or housing discrimination against LGBT individuals, but there is no state-wide protection against such discrimination, nor is the state’s Labor Commission empowered to investigate or remedy any such discrimination.

S.B. 262 would amend the Utah Antidiscrimination Act to make it unlawful for an employer to discriminate against or harass an otherwise qualified person because of that person’s sexual orientation or gender identity. The bill defines “sexual orientation” as “an individual’s actual or perceived orientation as heterosexual, homosexual, or bisexual.” The bill defines “gender identity” as “an individual’s internal sense of gender, without regard to the individual’s designated sex at birth.” Utah’s Antidiscrimination Act applies to employers employing 15 or more employees but does not apply to religious organizations or associations. S.B. 262 would also exempt organizations “engaged in public or private expression if employing an individual would affect in a significant way the organization’s ability to advocate public or private viewpoints protected” by the First Amendment from the definition of “employer.” Thus, certain advocacy groups would not be required to employ LGBT individuals under S.B. 262 if doing so was inconsistent with their mission and would significantly affect their ability to advocate their viewpoints.

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When Does Alcohol or a Controlled Substance Preclude Workers' Compensation Benefits?

Like most states, Utah’s Worker’s Compensation statute prohibits an employee from recovering disability compensation when “the major contributing cause of the employee’s injury” is the employee’s unauthorized use of alcohol or a controlled substance. See Utah Code Ann. § 34A-2-302(3)(b). If any amount of a controlled substance or its metabolites is found in an injured employee’s system at the time of the injury, the Worker’s Compensation statute presumes that drug use was the major contributing cause of the injury. 

An employee can rebut this presumption by:

  • challenging the accuracy of the drug test;
  • demonstrating that he or she did not actually use a controlled substance;
  • providing expert medical opinion suggesting that the level of controlled substance in the employee’s system does not support a finding that drug use was the major contributing cause of the injury; or
  • otherwise demonstrating that drug use was not the major contributing cause of the injury.

 

A Utah appellate court recently weighed in on this issue when it reversed the Utah Labor Commission’s denial of disability compensation to James Barron in Barron v. Labor Commission.

Mr. Barron was severely injured while at work when he stepped backward off the edge of temporary metal decking at a construction site and fell fourteen feet to a concrete floor below. A urine sample taken at the hospital on the day of the accident tested positive for cocaine metabolites. Mr. Barron admitted to sharing a quarter of a gram of cocaine with a friend two days before the accident but presented evidence tending to demonstrate he was not impaired at the time of the accident, including testimony from co-workers and medical personnel who observed Mr. Baron’s conduct on the day of the accident.

Applying the statutory presumption, the Commission ignored Mr. Barron’s evidence of non-impairment and found that drug use was the major contributing cause of his injury. Specifically, the Commission determined that Mr. Baron must demonstrate that “some other force” apart from his own actions caused his injury to overcome the presumption. Following case law from a number of other states with similar statutory schemes, the Utah Court of Appeals reversed the decision of the Commission and, for the first time, clarified that employees are not required to show that their injury was the result of an outside force to overcome the statutory presumption. Rather, evidence of non-impairment at the time of the accident may be used to rebut the presumption and to demonstrate that drug use was not the major contributing cause of injury. 

So, when does the use of alcohol or a controlled substance preclude workers' compensation benefits?  The answer: almost always, but not when employees can demonstrate that they are not impaired, despite the presence of controlled substances within their systems.

Utah: 2011 Legislative Session Winners and Losers

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).

WINNERS 

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.

For more information and various perspectives on these bills see our prior post on the immigration issue and other local news sources.

Community Service for Medicaid CoverageUtah 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.

LOSERS

Immigration H.B. 253 would have required employer registration with E-Verify, but was defeated in the Senate.

Employee NoncompetitionH.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 IdentityS.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 ViolenceS.B. 40 giving victims of violence the right to sue an employer that denies extra time off work was defeated in the Senate. 

Utah Immigration Legislation Remains Up In the Air (UPDATED)

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.

Most predict that the Utah immigration bills will take effect. That will probably not be the end of the story, however. The scene may simply change to Washington or the courts.  

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.  

Utah: 2011 Legislative Session Preview

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 NoncompetitionH.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 IdentityS.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 CoverageUtah 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 PositionsH.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 ViolenceS.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. 

The Do's and Don'ts of Employee Handbooks

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.

New Salt Lake City Ordinances Prohibit Housing and Employment Discrimination Based on Sexual Orientation

Yesterday the Salt Lake City Council unanimously passed ordinances prohibiting discrimination on the basis of sexual orientation and gender identity.  Click here to download a copy of the City Council's Staff Report on the ordinances, along with full text of the new laws.  Highlights of the employment discrimination ordinance include:

  • Forbids employment discrimination based on a person's sexual orientation or gender identity in Salt Lake City. 
    • "Sexual orientation" is defined as "a person’s actual or perceived
      orientation as heterosexual, homosexual, or bisexual."
    • "Gender identity" is defined as "a person’s actual or perceived gender identity, appearance, mannerisms, or other characteristics of an individual with or without regard to the person’s sex at birth."
  • Creates a complaint and investigation process. The complaint could be resolved through mediation or a fine of up to $1,000.
  • Does not create a "private right of action" to sue over alleged discrimination.
  • Exempts religious organizations, the State of Utah, and businesses with fewer than 15 employees.
  • "Does not create any special rights or privileges," because "every person has a sexual orientation and a gender identity."
  • Requires annual reports by the city's Human Rights Commission on the effectiveness of the ordinances.
  • Takes effect on April 2, 2010.

In case you were wondering, the ordinances passed with the full support of the LDS Church.  "The church supports these ordinances," LDS spokesman Michael Otterson told the City Council, "because they are fair and reasonable and do not do violence to the institution of marriage."  For more coverage of the SLC ordinances, read this article from the Salt Lake Tribune, or this article from the Deseret News.

SLC employers should review the new laws and review existing policies and procedures to ensure compliance.  Many states, counties and cities across the country have adopted similar ordinances.  To check the state of the law in your location, check out this handy list of state and local sexual orientation and gender identity laws from the Human Rights Campaign

Use Workshare Program to Cut Costs and Keep Workers

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. 

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Utah: Employee Commuting May Be Within "Course and Scope" of Employment

Last week the Utah Supreme Court ruled that an employee's commute may in some cases be within the course and scope of his or her employment, such that an employer may be held liable for the employee's negligence during the commute. 

In Newman v. White Water Whirlpool, the defendant employed Bradley Sundquist as an installer of marble countertops and tile.  In his job, Sundquist would drive White Water's materials and equipment to jobsites in his own truck and trailer.  One morning, on his way to White Water's offices, Sundquist's truck collided with a car driven by plaintiff Newman, injuring him severely.  Newman sued both Sundquist and White Water, alleging that Sundquist was acting in the course and scope of his employment at the time of the accident, thus making White Water jointly liable for his injuries.  The trial court dismissed the lawsuit on the basis that Sundquist was merely commuting, and therefore not acting in the course and scope of his employment.

The Utah Supreme Court disagreed, holding that a jury could find that Sundquist was acting in the course and scope of his employment at the time of the accident.  Why?  Because Sundquist's job required him to drive his truck carrying the employer's equipment and materials, and then returning unused materials to White Water, reasonable minds could conclude that he was not merely commuting but was in fact returning materials to his employer.  If so, that would mean Sundquist was working at the time of the accident and White Water is liable for his negligence. 

Utah employers should pay close attention to this ruling.  Employees who merely commute to and from work without performing any duties during the commute are not acting in the course and scope of their employment and employers will not be liable for any accidents that they might cause.  Employers may, however, be liable for the negligent acts of employees who are driving as part of their job duties.  If you have an employee whose "commute" includes occasional job duties (such as ferrying equipment and supplies, talking on a cell phone, reviewing documents, etc.), you should realize that their negligence might be imputed on your company and take any appropriate steps to ensure that they are driving as safely as possible.