NLRB's New "Vote Now, Litigate Later" Union Election Rules To Become Effective April 2012
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The NLRB gave organized labor a meaningful gift just before the holidays by issuing a final rule adopting new election case procedures that will likely result in more and faster union elections, and probably also result in more employers having unionized workforces. The new rule becomes effective on April 30, 2012.
The New Year: Out With The Old Rules...
During union campaigns, the union and the employer may disagree (vigorously) about the proper size ("scope") of the proposed bargaining unit. Such disputes can include whether certain employees are "supervisory" employees and thus ineligible to vote, or whether different classifications of employees share enough of a "community of interest" to be included in the same bargaining unit, and covered by the same contract. How those disputes are resolved often determine the outcome of the election. Under the existing (er, now old) election rules, employers had the opportunity to litigate these types of bargaining unit scope issues before the election.
...In With The New
The NLRB's new rule essentially eliminates the employer's opportunity to litigate, prior to the election, any disputes over the scope of the bargaining unit proposed by the union. Under the rule, such issues will ordinarily be addressed only after the election takes place. Employers should be aware of how this "vote now, litigate later" rule could impact union elections.
Shorter Election Campaigns: Under the old rules, litigating bargaining unit scope issues usually delayed the election, giving employers additional time to discuss the pros and cons of unions with its workers before the vote. That additional campaign period is now lost, depriving employers of valuable time to counter an organizing campaign that may have started months before the union went to the NLRB seeking an election.
Greater Difficulty in Challenging The Union's Proposed Unit: Although employers may technically be able to litigate unit scope and voter eligibility issues after the NLRB conducts the election, in those cases where the vote results in a "yes" vote for the union (which under the old rules happened more than 60% of the time), employers will be in the difficult position of having to contest threshold legal issues after the employees have already "won" the right to representation. This procedure tilts the playing field in favor of unions.
Considered in the context of the NLRB's August 2011 decision in Specialty Healthcare, this rule means that the petitioning union will get a quick election in the unit of employees it has chosen to organize. Specialty Healthcare enables unions to organize small or "micro" units of employees (such as single classifications of employees or individual departments). The Board held that for an employer to add excluded employees to the union's proposed unit, it must demonstrate that the excluded employees share an "overwhelming community of interest" with the employees the union seeks to represent. In a dissenting opinion, NLRB Member Brian Hayes noted that this test makes it “virtually impossible” for the employer to prove the union's proposed unit is not proper. To make matters worse, now the Employer will ordinarily have to make that argument after the union has already "won."
Why Now? Election Year Politics, That's Why.
That the NLRB issued these new rules now probably had less to do with the holiday spirit than with an election of a different sort--the 2012 U.S. Presidential election and the related gridlock in the U.S. Congress. Up until last week, the Board had three members (out of a possible five) which, after the U.S. Supreme Court's 2010 decision in New Process Steel, is the minimum required for the NLRB to decide cases and issue regulations. Last week was when President Obama's controversial recess appointment of Member Craig Becker ended. The NLRB may have wanted to enact the new rules before it was reduced to two members again, as that may be the last opportunity in an election year for the Obama Administration to do something substantial for organized labor, an important constituency. While nominations for the three NLRB Member vacancies are pending, the gridlocked Senate is not expected to act on those nominations any time soon. While the President could make another recess appointment to ensure a functioning, three-member NLRB, that risks (further) alienating Senate Republicans, all 47 of whom recently signed a letter urging the President not to fill NLRB vacancies using recess appointments. The next few weeks, before Congress reconvenes on January 23 from its holiday recess, could be very interesting for NLRB-watchers. Stay tuned...
Update!
...well you didn't have to stay tuned for long! President Obama has announced three recess appointments to the NLRB. The appointees include two Democrats (Richard Griffin and Sharon Block) and one Republican (Terence Flynn), giving Democrats a 3-2 Board majority. The President’s decision to bypass the Senate confirmation process quickly drew the ire of Senate Republicans, but the President chose that fight over the alternative of allowing the NLRB to go through a prolonged period in which it was unable to issue decisions or adopt regulations. As a result of these appointments, we can expect more pro-labor decisions in 2012.
Mandatory Paid Sick Leave Law Passed in Seattle
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 elliott.bronstein@seattle.gov, 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 EEOC Reiterates the Importance of the Interactive Process
A recent decision from the federal Equal Employment Opportunity Commission (EEOC) reminds employers of their affirmative duty to engage in an interactive process once an employee raises a medical condition and requests some change to their work environment to accommodate it. The Americans with Disabilities Act (ADA), and the Rehabilitation Act at issue in Harden v. Social Security Administration, protect an employee from discrimination based on a disability, where the employee can otherwise perform his or her job with a reasonable accommodation. Tips for the interactive process are provided below, and next week we will go through a “hypothetical.”
In Harden, a claims assistant who was frequently late notified the SSA about her depression and general anxiety which were causing her problems sleeping and functioning early in the morning. She requested approval to arrive between 9:00 and 9:30 a.m., rather than between 7:00 and 9:00 a.m. like other employees, or else to use leave rather than leave without pay or discipline. The claims assistant supplied the SSA some medical documentation, but the SSA found that the documentation did not show that her medical condition kept her from getting to work before 9:00 a.m. The SSA denied the employee’s request for a modified schedule, and disciplined her when she was again tardy.
Based on information about the employee’s medical condition that came out during the EEOC complaint process, the EEOC found that the SSA engaged in discrimination. The claims assistant had a disability that could have been reasonably accommodated with a modified schedule. The EEOC disagreed with the SSA’s argument that medical documentation provided during the complaint process was irrelevant to the SSA’s decision to deny the modified schedule and discipline the employee.
What does Harden teach us? Disability discrimination laws place affirmative duties on employers to engage in a meaningful process after an employee raises a medical condition. Do not cut short the interactive process because the facts will come out eventually. This 4-step process provides a helpful framework for an ADA request.
1. Get the facts: What is the medical condition? Get documentation from the employee’s doctor if necessary (with an appropriate release), including any limitations and potential accommodations. Allow the employee or doctor to provide additional information if you are not satisfied. What is this employee’s job? Identify the essential functions of her position. Is the employee performing the job, except for reasons related to her disability?
2. Decide whether the employee is eligible for an accommodation: Based on the facts, is the employee qualified for the job? Can he or she perform the essential functions of the job, with or without an accommodation? Determine whether the individual has a physical or mental impairment that substantially limits a major life activity. Is the employee regarded as having such impairment?
3. Have an interactive dialogue with the employee about an accommodation: Ask the employee what he or she wants. Quite frequently, this simple communication can result in a practical, cost-effective solution that works for everyone involved. Can the employee do the essential functions of the job with the employee’s proposed accommodation? Identify other accommodations that may work, and consider the effectiveness of each proposed accommodation. Discuss the cost and burden of each effective accommodation and assess whether it would be an “undue hardship.”
4. Put the accommodation into action: Document the dialogue with employee. Choose and implement an accommodation. Document the expectations on all sides. Inform others of the accommodation, only to the limited extent they must know (such as a supervisor). Ensure confidentiality at all times, and maintain a separate confidential file for the employee’s medical documentation. Reassess the effectiveness of the accommodation after a time.
Why Should Employers be Fair?
Martha walks into your office and says she wants to fire her assistant, Roy, because he keeps sending emails with typos and it is embarrassing. Martha says, “We are at-will and I want him gone by the end of the day.” Like most others, Alaska is an “employment-at-will” state, which means that the employee and employer are free to end the employment relationship at any time and for almost any reason. But is there more to consider in terminating Roy?
Every employment relationship in Alaska contains an implied covenant of good faith and fair dealing. An employer can violate the covenant by acting with an improper motive, like firing an employee two weeks before he is tenured. The covenant also requires employers to treat employees in a way that a reasonable person would consider fair.
Violation of the covenant of good faith requires a very fact intensive inquiry, which often requires going through a trial with witnesses rather than resolving issues through a motion for summary judgment. Trial is incredibly expensive for employers, not only in court costs but also in terms of stress on staff and distraction from business. However, two Alaska Supreme Court cases issued in early July of this year, that you can see here and here, show that summary judgment is alive and well if an employer can adequately demonstrate it acted fairly and without improper motives in its termination process. The application of the implied covenant of good faith and fair dealing to the employment context varies from state to state, and clearly does not apply in some states, like Washington. Nonetheless these recent cases are a good reminder that fair and equitable treatment in discharging employees can help employers avoid costly and disruptive claims.
So what do we do about Roy? Here are five suggestions to help ensure compliance with the implied covenant of good faith and fair dealing:
- Follow a process. Require supervisors to provide good faith, fair reasons for discipline. Provide the employee an opportunity to respond to any allegations. Hear facts from Roy now, rather than for the first time in an EEOC proceeding or in court.
- Be fair. Enforce personnel policies in a way that a reasonable person would regard as fair. Follow personnel policies when disciplining employees. What policy is Roy violating? Is termination an appropriate response to Roy’s violations?
- Be consistent. Treat like employee alike, and justify any reasons for inconsistency in treatment. What type of conduct has resulted in other terminations? Have other employees received progressive discipline under similar circumstances, instead of termination? Treat Roy like other employees in similar situations.
- Act in good faith. Do not manufacture reasons to justify a termination. Is Martha frustrated with Roy for some other reason? Better to learn about it now.
- Document your process, fairness, consistency, and good faith.
Meghan M. Kelly also contributed to this post.
Idaho Supreme Court Rejects Lawsuit over Intra-Office Romance
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On June 29, 2011, the Idaho Supreme Court unanimously upheld a district court ruling that a state worker could not maintain an action against her employer for wrongful discharge based on allegations that her supervisor’s intra-office romance and consequent favoritism toward his paramour created a hostile work environment. See Patterson v. State of Idaho Dep’t of Health & Welfare. In the first Idaho case of its kind, the Court found that paramour favoritism did not violate Title VII and therefore opposition to such activity is not “protected activity” under the Idaho Human Rights Act (“IHRA”).
The longtime Idaho Health & Welfare employee who initiated the action, Lynette Patterson, asserted that her boss’s affair with another worker resulted in favoritism toward the other worker and created a hostile work environment for her and others in her unit. Following Patterson’s initial complaints of her supervisor’s misconduct, the department launched an investigation into her allegations and found that although Patterson’s supervisor did in fact have an inappropriate relationship with another employee in violation of the department’s internal policy, there was no evidence to support preferential treatment. Thereafter, Patterson claims she was the victim of retaliation. Upon receiving a performance evaluation stating that she had failed to achieve performance standards, she quit her job, alleging that she was constructively discharged.
Patterson’s complaint against the department asserted constructive discharge under the IHRA and violation of the Idaho Protection of Public Employees Act. Following an unfavorable summary judgment ruling, she appealed both issues to the Supreme Court.
In its analysis of Patterson’s retaliation claim under the IHRA, the Court used the Ninth Circuit’s three-prong test for a retaliation claim, which requires a plaintiff to demonstrate: 1) that she engaged in protected activity; 2) that she suffered an adverse employment action; and 3) there was a causal link between her activity and the adverse employment action. See EEOC v. Luce, Forward, Hamilton & Scripps. Courts have found the first prong satisfied when an employee demonstrates he or she subjectively and reasonably believed that he or she was opposing activity that violates Title VII. See Little v. United Technologies, Carrier Transicold Division.
The Court found that Patterson subjectively believed she engaged in protected activity when she opposed the paramour relationship allegedly resulting in favoritism, but it concluded that such a belief was not objectively reasonable. The Court noted that a critical element of the inquiry regarding objective reasonableness of an employee’s belief that he or she is engaging in protected activity is the existing case law at the time of the incident. The case law at the time of Patterson’s resignation did not support her position. Moreover, the Court found that the favoritism, even if true, affected all concerned on a gender-neutral basis.
This decision aligns Idaho with other jurisdictions that have confronted the specific issue of paramour favoritism and ruled that paramour favoritism does not constitute gender discrimination because it affects both men and women equally. The Court’s ruling is useful to Idaho employers to the extent that it requires employees to demonstrate the reasonableness of their belief that they are engaging in protected activity under the IHRA. Notwithstanding these holdings, employers must continue to be careful about the prospect of retaliation claims, which constituted 25% of all complaints filed with the Idaho Human Rights Commission in 2010.
California Overtime Rules Apply To Work Performed In California By Out-Of-State Employees
The California Supreme Court has ruled that California’s daily overtime requirements apply to work performed in California by non-residents. In Sullivan v. Oracle Corp., three employees of Oracle who were not residents of California worked as “instructors” and trained Oracle’s customers in the use of the company’s products. Required by Oracle to travel, the plaintiffs worked primarily in their home states but also in California and several other states. California is one of the few states that requires payment of daily overtime for hours worked in excess of eight in a day. At issue in the case was whether these non-residents of California were entitled to daily overtime for days they worked in California.
In a unanimous decision, California Supreme Court held that the California Labor Code does apply to overtime work performed in California for a California-based employer by out-of-state employees, such that overtime pay is required for work in excess of eight hours in a day. In reaching this conclusion, the Court noted California’s strong interest in applying its overtime law to all non-exempt workers, and all work performed, within the state’s borders. The Court stated that to permit non-residents to work in California without the protection of the state’s overtime law would completely sacrifice, as to those employees, California’s important public policy goals of protecting health and safety and preventing the evils associated with overwork. Additionally, not applying California law would encourage employers to substitute lower paid temporary employees from other states for California employees, thus threatening California’s legitimate interest in expanding the job market.
While not great news for employers, this decision provides guidance to multi-state employers about how to pay non-exempt employees who work occasionally in California. However, the Court left some important questions unanswered. First, the decision does not directly apply to employers that are based outside of California. The Court specifically limited its holding to out-of-state employees working for California-based employers. The question remains whether an employer based outside of California must comply with California’s overtime rules for those days its non-California employees work in California. Even though the ruling does not specifically address this scenario, the reasoning the Court employed in reaching its decision leaves the door open for an argument that its holding applies to employers based outside of California. Also, the Court was not asked to address, and did not address, whether other provisions of California’s wage law -- such as the contents of pay stubs, meal period requirements, the compensability of travel time, the accrual and forfeiture of vacation time, and the timing of payment to employees who quit or are discharged -- apply to work performed in California by non-resident employees.
California-based employers with non-exempt employees in other states who occasionally work in California should immediately confirm that all such employees are paid overtime in conformity with California law when working in California.
Why Employers Should Exercise Restraint and Objectivity
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Retaliation claims are increasing at an alarming pace. Not only have these claims tripled in number within the last two decades, they now exceed race discrimination as the leading claim filed with the U.S. Equal Employment Opportunity Commission. Click here to see EEOC statistics.
Why the startling trend? First, Congress has gone to great lengths to protect employees’ rights to speak out against unlawful employment practices. Protections are regularly included in new laws, such as the American Recovery and Reinvestment Act of 2009, the Patient Protection and Affordable Health Care Act of 2010, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Second, courts have adopted a broad definition of what constitutes retaliation and who should be protected. An employee must prove she engaged in a protected activity (like reporting harassment) and suffered an adverse employment action as a result (like being passed over for a promotion). An employer may ultimately defeat the harassment claim, but still face liability for retaliation. Third parties also may be protected from retaliation. For instance, in a recent United States Supreme Court decision the court found that the fiance of an employee who files a discrimination complaint is protected from retaliation under Title VII.
Third, jurors understand retaliation claims because they involve natural reactions to being accused of something awful, like sexual harassment. Jurors know how natural it is for the accused to have negative feelings after such an accusation, and at the same time jurors will sympathize with an employee who allegedly suffers for rocking the boat by making a complaint.
So what’s an employer to do?
- Start with a clear anti-retaliation policy and train employees on it. Include an outlet for employees to raise retaliation concerns.
- Counsel supervisors to be vigilant in their efforts to be objective, to exercise restraint, and to avoid knee-jerk reactions, and educate supervisors on how to spot situations where retaliation among co-workers is a risk.
- Limit retaliatory behavior between employees by limiting the number of people who know about employee complaints.
- Establish consistent processes that will catch subtle or unintended retaliation, so that employment decisions are based on legitimate business-related factors.
- Timely investigate and address any appearance or allegation of retaliation.
Victory For Employers in Washington Medical Marijuana Case
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In a victory for employers, the Washington Supreme Court has ruled 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. Click here to download a copy of the decision in Roe v. Teletech Customer Care Management. The lawsuit and all appeals were handled for the employer by Stoel Rives attorneys Jim Shore and Molly Daily.
Jane Roe (who did not use her real name because medical marijuana use is illegal under federal law) sued Teletech for terminating her employment after she failed a drug test required by Teletech’s substance abuse policy. She alleged that she had been wrongfully terminated in violation of public policy and MUMA since her marijuana use was “protected” by MUMA. The trial court granted summary judgment in favor of Teletech, and Roe appealed. As discussed in a previous blog, the Washington Court of Appeals, Division II affirmed the trial court’s dismissal of Roe’s case. Roe then appealed to the Washington Supreme Court.
The Supreme Court ruled 8-1 in favor of in Teletech, holding that MUMA provides an affirmative defense to state criminal prosecutions of qualified medical marijuana users, but “does not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor does MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy.” The Court’s holding applies regardless of whether the employee’s marijuana use was while working or while off-site during non-work time. Adding to a significant victory for employers, the Court’s decision extends to the current version of MUMA as amended by the Legislature in 2007, and not just the original version passed by the voters in 1998 in effect when the facts of the case arose.
The plaintiff in the Teletech case did not raise a disability discrimination or reasonable accommodation claim under Washington’s Law Against Discrimination, and the Supreme Court therefore did not expressly reach that particular issue. But the Court did point out that marijuana remains illegal under federal law regardless of what the State of Washington does, and that it would be incongruous “to allow an employee to engage in illegal activity” in the process of finding a public policy exception to the at-will-employment doctrine. Moreover, the Court noted that the Washington State Human Rights Commission itself acknowledges that “it would not be a reasonable accommodation of a disability for an employer to violate federal law, or allow an employee to violate federal law, by employing a person who uses medical marijuana.”
The workplace implications of medical marijuana continue to be a developing area in many states. California’s Supreme Court has ruled in a manner consistent with Washington. Also previously covered in World of Employment, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court ruled that because federal criminal law preempts Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana. But some states are more protective of an employee’s medical marijuana use. 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 may be made in other states in the coming years.
There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including customer requirements, government contracting requirements (e.g.,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 is prohibited, and that their policies prohibit any detectable amount of illegal drugs as opposed to 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.
Supreme Court Rules Oral Complaints Of Wage Violations Are Protected Under FLSA
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Today the U.S. Supreme Court issued another employee-friendly opinion in Kasten v. St. Gobain Performance Plastics Corp., holding by a 6-2 margin that the Fair Labor Standards Act ("FLSA") anti-retaliation provisions protect an employee’s oral complaints to supervisors about wage and hour violations. This is the latest of three opinions this term that have expanded the reach of various anti-retaliation provisions in employment discrimination statutes. (See World of Employment's analysis of the other two cases, Thompson v. North American Stainless, LP and Staub v. Proctor Hospital).
In Kasten, the plaintiff complained orally to his supervisors on several occasions that the location of time clocks in the workplace violated the FLSA, because it prevented employees from punching in and out while they were donning and doffing protective clothing and equipment. Shortly afterwards, his employment was terminated for, ironically, multiple failures to properly punch in and out. Plaintiff sued, claiming that his termination was in retaliation for his having complained that the Company was violating the FLSA. The District Court dismissed his case, and the 7th Circuit affirmed, holding that the FLSA anti-retaliation provision, which prohibits employers from taking adverse action against employees because they “file any complaint or instituted or caused to be instituted any proceeding” complaining about wage and hour violations, protects only written complaints, not oral ones.
The Supreme Court reversed, holding that oral complaints are also protected under the FLSA. The Court held first that the phrase “file any complaint” in the statute was ambiguous; the term “file” generally indicated a writing (although not always), while “any” indicated Congress intended to cover many different types of complaints. The Court went on to look at the legislative history and purpose, Department of Labor interpretations, and numerous lower court opinions to ultimately decide that Congress must have intended the FLSA to protect oral complaints.
At the end of the day, this opinion may change little for west coast employers. While the Kasten decision resolves a split among the Circuit courts, the law in the Ninth Circuit (which includes, amongst others, Oregon, Washington and California), has recognized for over a decade that oral complaints are protected under the FLSA. Further, the anti-retaliation provisions of other state and federal anti-discrimination statutes—most notably Title VII—also protect employees who make oral complaints of discrimination. Finally, the opinion merely holds that Mr. Kasten can go ahead with his lawsuit—he still needs to prove his case that his employer fired him because of his protected activity.
Still, Kasten and other recent U.S. Supreme Court decisions in Thompson and Staub provide useful reminders that courts--including the Supreme Court--read anti-retaliation protections broadly. Employers must be careful to ensure and adequately document that any adverse employment actions against employees who have made any complaints about alleged unlawful activity in the past are for legitimate business reasons only. Retaliation claims are already the most common type of employment claims filed against employers. This opinion isn’t going to change that.
Ninth Circuit Places Burden of Proof on Employers to Justify Refusal to Reinstate in FMLA Interference Claims
A Ninth Circuit panel ruled yesterday in Sanders v. City of Newport that when an employer opts to not restore an employee who was on FMLA leave to her former position, that the burden falls on the employer to demonstrate that such action was justified.
In Sanders, the plaintiff, a billing clerk, started feeling ill after an office move to a new location and the use of new low-grade billing paper. She was diagnosed with multiple chemical sensitivity, and took FMLA leave. Upon being cleared to work by her doctor, the City terminated her employment on the grounds that it could not guarantee a safe workplace for her given her sensitivity to chemicals. In instructing the trial court on plaintiff’s FMLA interference claims, the trial court placed the burden on plaintiff to prove that the employer lacked reasonable cause to reinstate her. On that instruction, the jury rendered a decision for the City on all claims.
The plaintiff appealed on the grounds that the instruction improperly placed the burden of proof on her, and the Ninth Circuit panel, consistent with rulings in the Eighth, Tenth and Eleventh Circuits, agreed. The Court based its decision on the plain text of regulations stating that “[a]n employer must be able to show, when an employee requests restoration, that the employee would not otherwise have been employed if leave had not been taken in order to deny restoration to employment.” The court held that the error was not harmless, and remanded the case for a new trial.
While this case was remanded based on a technicality in the jury instructions, and may yet culminate in an employer verdict, it provides a good reminder for employers that if they decide to deny restoration of employment to an employee following protected FMLA leave, it will be their burden to demonstrate that they had objective justification for the decision. Even if the decision was made in good faith, lack of objective justification may serve to limit damages, but not liability.
Supreme Court Upholds "Cat's Paw" Theory In Employment Discrimination Cases
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.
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.
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.
NLRB to Consider Scope of Permissible Solicitation On Employer Premises
The National Labor Relations Board (NLRB) is on its way to making some significant changes, which favor organized labor. One change that may be coming relates to non-solicitation rules. These rules determine when a union organizer can come on a company’s property and solicit employees to join a union. For the time being, a company can prohibit a union organizer from coming on its property so long as it’s not discriminating by allowing other third parties on its property to solicit employees.
There are exceptions; for example, an employer can allow third parties on its property if it’s intended as a benefit for employees, such as a yoga or fitness company holding meetings on site to describe group rates. An employer is also allowed to bring charities such as United Way on site to solicit employees. If an employer allows only these types of solicitations, it is not considered discriminatory to prohibit union organizers from the premises. The blurry line relates to the situation when employees solicit for third parties that are good causes but not charities, such as the girl scouts or fundraisers for public schools.
A pending NLRB case called Roundy’s involved distribution of handbills on company property in front of its retail stores (sidewalks and parking lots). The handbills asked consumers not to shop at Roundy’s claiming unfair wages. The Union contends that Roundy’s allowed several outside third parties on its property – bloodmobiles, Salvation Army, Veteran of Foreign Wars, Shriners and others – and that union agents should be allowed the same access.
The NLRB took the unusual step of requesting amicus briefs from interested parties before it makes a decision. This often signals a major policy shift. Given the labor-friendly composition of the NLRB, it’s likely to give greater rights for union organizers to enter onto a company’s property, such as parking lots, sidewalks and possibly inside the facility itself – in a non-work area. If this becomes law, it’ll be much easier for an organizer to solicit an employee on company property.
One step employers can take now is to review and update their non-solicitation policy and ensure that’s it’s being applied in a consistent manner. That is, ensure that you’re not allowing third parties on your property to solicit your employees – or you may be opening your door to a union organizer.
Oregon Employers: Download SB 519 (Mandatory Meeting Ban) Notice Here!
Back in June, we reported on Oregon SB 519 - the law taking effect January 1, 2010 that will prohibit Oregon employers from disciplining any employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters - including labor unions.
SB 519 also requires ALL Oregon employers to post a notice informing employees of their rights under the new law. We usually rely on the Oregon Bureau of Labor and Industries (BOLI) to supply us with all mandatory postings, but BOLI has chosen not to publish an SB 519 posting.
We at the Stoel Rives World of Employment and Stoel Rives couldn't just leave you in the lurch - we have created our own SB 519 Poster - just click the link to download, free of charge. It's a .pdf document, and we've included two per page, just in case you want multiple copies. We would recommend that you post the notice wherever you typically put up your employment law posters. If you have an extra copies, we think they make excellent stocking stuffers (at least for the HR professional in your family).
DISCLAIMER! (You knew this was coming, right?) No government official or agency has approved this poster as fulfilling the SB 519 requirements. This poster represents our best efforts to create a poster that complies with those requirements, but we make no representations, promises or warranties as to whether it fulfills the legal requirements of SB 519. As always, the materials available at this web site/blog are for informational purposes only and not for the purpose of providing legal advice or soliciting legal business. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site/blog or any of the materials or e-mail links contained within the site do not create an attorney-client relationship between Stoel Rives and the user or browser.
Recovery of Attorney Fees for the Employer in Oregon Wage and Hour Cases
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A recent Oregon Court of Appeals case, Rogers v. RGIS, LLP, presents an opportunity for employers. In Rogers, the court awarded an employer a whopping $180,854.09 in attorney fees. The plaintiff brought one lawsuit but several wage and hour claims (overtime, minimum wage, late payment of final wages, unpaid wages for rest and meal breaks).
The court found the plaintiff prevailed on a few claims, but the employer prevailed on most. As a result the employer was awarded six figures and the plaintiff was awarded only $880 to cover fees.
This case is saying that a prevailing party may recover fees, which relate to each separate wage claim. For example, if the plaintiff brings five separate wage claims and the employer prevails on four, the employer will (in the court’s discretion) get to recover its fees to defend against the four claims upon which it prevailed.
If you’re sued under Oregon wage and hour laws, you should seek fees under ORS 20.077 and 653.055(4). You can also use the potential for recovering fees as leverage before a lawsuit is filed. Will this logic be extended to other employment claims, such as discrimination and retaliation claims?
Model COBRA Subsidy Notices Now Available
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.
