Washington Court of Appeals Holds Independent Contractors Are Protected from Retaliation by the Washington Law Against Discrimination
The Washington courts are strict in their interpretation of the classification of individuals as employees versus independent contractors, resulting in many an employer discovering that an “independent contractor” is instead an employee. But the Washington Court of Appeals’ recent ruling in Currier v. Northland Services, Inc., confirms that even those individuals who qualify as bona fide independent contractors will be deemed subject to the full protections of the Washington Law Against Discrimination (“WLAD”), including protection from retaliation.
In Currier, the plaintiff, who worked as an independent contractor truck driver for NSI, overheard another independent contractor make a racist “joke” to a Latino driver. Currier reported the incident to NSI’s quality assurance manager, who informed the dispatchers of Currier’s complaint. Two days later, the dispatchers terminated Currier’s contract, citing “customer service issues” and informing Currier that they had spoken with the other truck drivers and “they had decided that the joke was funny.”
Currier brought action against NSI under the WLAD, alleging that the termination of his contract was retaliatory due to his complaint. After a jury found NSI liable for retaliation, NSI appealed, arguing that: (1) Currier was not protected by the WLAD’s retaliation provisions because he was an independent contractor; and (2) the WLAD’s retaliation provisions did not apply because his complaint stemmed from conduct by another independent contractor.
The Court of Appeals rejected both arguments. First, the court confirmed that the WLAD’s prohibition on retaliation is intended to apply to independent contractors, noting that the WLAD extends protections to “any person” from retaliation by an employer or “other person.” Second, the court held that the fact the racist comment overheard by Currier was made by another independent contractor did not shield NSI from liability. Instead, Currier needed only to show a reasonable belief that the employment practice about which he complained was covered by the WLAD. In so holding, the court noted that it was not holding NSI liable for the independent contractor’s comment, but for NSI’s action in terminating Currier’s contract after he complained about the comment.
Following Currier, it is clear that Washington employers must be just as careful in taking adverse actions against independent contractors as against direct employees. Independent contractor status will not necessarily immunize the employer from claims of discrimination or retaliation.
Seattle employers are about to become much more restricted in their ability to inquire into or act upon the criminal records of applicants and employees. On November 1st, the Seattle Job Assistance Ordinance, SMC 14.17, takes effect and will apply to positions that are based in Seattle at least half of the time. The Ordinance does not apply to governmental employers (with the exception of the City of Seattle) or to positions involving law enforcement, crime prevention, security, criminal justice, private investigation, or unsupervised access to children under the age of sixteen or to vulnerable or developmentally disabled adults.
The Ordinance imposes the following new restrictions on the hiring process:
- Advertisements for positions cannot state that applicants with criminal records will not be considered or otherwise categorically exclude such applicants;
- The employer cannot implement any policy or practice that automatically excludes all applicants with criminal histories;
- The employer must complete an initial screening process to weed out any unqualified candidates before the employer can question applicants about their criminal histories or run criminal background checks on applicants;
- The employer cannot refuse to hire an applicant solely because he or she has an arrest record (as opposed to a conviction record); and
- The employer cannot refuse to hire an applicant solely because of his or her conviction record, conduct underlying his or her arrest record, or pending criminal charges unless the employer has a legitimate business reason to do so.
In addition, the Ordinance provides that an employer cannot take tangible employment actions against a current employee - such as termination, discipline, demotion, or denial of a promotion -- solely because of that employee’s arrest record. Nor can the employer take tangible employment actions against a current employee solely because of that employee’s conviction record, conduct underlying his or her arrest record, or pending criminal charges unless the employer has a legitimate business reason for doing so.
A “legitimate business reason” is considered to be circumstances in which the employer believes, in good faith, that a conviction will negatively impact the individual’s fitness or ability to perform the job at issue or will be likely to result in harm to people, property, business reputation, or business assets. The employer is required to consider the following factors in making the determination that a legitimate business reason justifies the employment action:
- The seriousness of the underlying criminal conviction or pending criminal charge;
- The number and types of convictions or pending criminal charges;
- The time that has elapsed since the conviction or pending criminal charge;
- Any verifiable information related to the applicant’s or employee’s rehabilitation or good conduct;
- The specific duties and responsibilities of the job at issue; and
- The place and manner in which the position will be or is performed.
Once the employer reaches the determination that a legitimate business reason supports action on the basis of an applicant’s or employee’s criminal record, the employer is required to notify the individual of the specific records or information on which the decision is based and hold the position open for at least two business days in order to provide the individual with the opportunity to explain or correct that information.
Affected Seattle employers should evaluate and revise their policies, application materials, and hiring practices to ensure compliance with the new Ordinance.
Minnesota employers, take note: laws that impact you are changing this year. Not only did the Minnesota legislature recently expand the use of employee sick leave (as we blogged about here) and legalize same-sex marriage, but several other changes occurred this year that may directly impact your business. Here's a quick round up of some of the most important new laws enacted by the legislature affecting Minnesota employers.
Criminal Background Checks
Perhaps the most notable change is, beginning January 1, 2014, most Minnesota employers must change their standard employment applications and hiring practices related to use of a job applicant's criminal history. The new "ban the box" law, which refers to the check box on most employment applications asking about an applicant's criminal history, will bar private employers from asking about or considering an applicant's criminal history until (1) the applicant is selected for an interview or (2) if there is no interview, the applicant receives a conditional offer of employment. Employers who have a statutory duty to conduct criminal history investigations or otherwise consider criminal history in the employment process, such as school districts and many health and human services providers, are exempt from the new law.
When the law goes into effect, Minnesota employers who previously required all applicants to disclose criminal history will need to defer the inquiry until further into the interview process.
Deductions from Paychecks
The legislature also amended Minnesota Statutes Section 181.14 which applies to deductions from final wages of employees entrusted with money or property. The new language provides that "[n]o employer shall make any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer, except as permitted by section 181.79." The law went into effective on April 30, 2013.
Moreover, the Minnesota Supreme Court imposed another limitation on deduction from wages in the restaurant industry. In Karl v. Uptown Drink, LLC, No. A12–0166 (Minn. Aug. 14, 2013), the Court held that restaurants and bars may not deduct from employee's gratuities for bills of customers who left without paying or failed to sign credit card receipts. Bars and restaurants may also not deduct from employee's gratuities to cover register shortages.
These new laws highlight the very limited circumstances in which a Minnesota employer may make wage deductions. Employers are advised to review any wage deduction policies and seek the guidance of counsel to ensure legal compliance.
The Minnesota legislature also recently amended the Minnesota Whistleblower Act, which will increase the number of whistleblower claims while simultaneously making it more difficult for employers to defend against them. Generally, the Act prohibits an employer from penalizing an employee because the employee made a good faith report of a violation or suspected violation of federal or state law. Before the amendments, the Minnesota courts developed common law definitions of "good faith," "penalize," and "report," which were considered to be employer-friendly. The amended law, however, changes the meaning of these terms to make it easier to bring and prove a whistleblower claim:
- Good Faith. Under prior common law, to show that a report was made in "good faith," the employee needed to make the report with the intent to expose an illegality for the protection of a third party or the public in general. Chial v. Sprint, 569 F.3d 850, 854 (8th Cir. 2009); Freeman v. Ace Tel. Ass'n, 404 F. Supp. 2d 1127, 1140 (D. Minn. 2005). The amended statute, however, excludes the requirement that a "good faith" report be made for the benefit of someone other than the employee. To the contrary, now a "good faith" report is one that is not knowingly false or made in reckless disregard for the truth. This change will likely lead to more whistleblower claims because an employee is more likely to make a report about acts affecting him- or herself than to make a report of acts affecting others or the public at large.
- Report. Moreover, the amended statute greatly expands the definition of a statutorily-protected "report." Before the amendments, a report was protected if it brought forth a violation or suspected violation of the law. Now, under the amended statute, an employee may make a protected report of planned violations of the law, even if the act never takes place. Again, this change is likely to lead to more whistleblower claims because an employee may make a protected report of acts that never even occurred.
- Penalize. The Act has always prohibited an employer from penalizing an employee for making a protected report. Under the new amendments, however, the Minnesota legislature for the first time defines "penalize" to include "conduct that might dissuade a reasonable employee from making or supporting a report, including post-termination conduct by an employer or conduct by an employer for the benefit of a third party. Minn. Stat. 181.931 sec. 2, subd. 5. While it has always been clear that discipline or discharge could dissuade an employee from making a report, employers now need to carefully consider any planned action against a reporting employee, including changing job duties or altering any other term or condition of employment.
Last year, we posted about a decision from the Southern District of Texas in which the court ruled that firing a woman because she was lactating or breast-pumping did not amount to sex discrimination under Title VII or the Pregnancy Discrimination Act (PDA). The Fifth Circuit Court of Appeals recently reversed the district court’s decision. In a none-too-surprising opinion, the Fifth Circuit ruled that taking an adverse employment action against a woman because she is lactating or expressing breast milk is a cognizable sex discrimination claim because (1) it imposes upon women a burden that male employees do not suffer, and (2) lactation is a medical condition of pregnancy under the PDA.
Is this earth-shattering news? Probably not. To most of us, it probably seems like common sense. But the opinion likely does represent a significant victory for the EEOC, which now has another tool in its belt to pursue pregnancy discrimination claims. Employers should be wise to know that pregnancy discrimination claims may now be viable for a longer period of time after childbirth than was the case prior to this ruling. The district court essentially took the position that a woman does not fall within the protections of the PDA after she gives birth to her child. Now, under the Fifth Circuit’s ruling, mothers could fall under the protections of PDA for as long as they are breastfeeding.
The Fifth Circuit was careful to note, however, the Title VII and the PDA do not require employers to provide special accommodations for nursing mothers to pump breast milk. Title VII and the PDA only prohibit an employer from taking an adverse employment action against a mother for lactating. Although the Fifth Circuit was careful to note this distinction, employers should remember that under the recent amendments to the FLSA imposed by the Affordable Care Act, employers must provide breaks and a room for nursing mothers to pump. Nursing mothers who are exempt under the FLSA are not afforded rights to pump in the workplace under either federal statute, but may be covered under applicable state statutes, which are summarized here.
Oregon Legislature Passes HB 2654 Prohibiting Employers From Requiring Access To Employee Social Media Accounts
Coming as no big surprise since other states, like Utah and California, have been passing similar laws, the President of the Oregon Senate recently signed the final version of HB 2654, which will prohibit Oregon employers from compelling employees or applicants to provide access to personal social media accounts, like FaceBook or Twitter. The law will also keep off limit to employers other sites that allow users to create, share or view user-generated content (like videos, still photos, blogs, videos, podcasts or instant messaging, email or website profiles), and also prohibits requiring that employees allow the boss to join or "friend" them on social media sites. It also prohibits retaliation against any employee or applicant who refuses to provide access to accounts or to add the employer to his or her contacts list. The law becomes effective in January 2014.
Specifically, under the new law Oregon employers will not be allowed to:
- Require or ask an employee or applicant to share a username or password allowing access to a personal social media account;
- Require employees or applicants to add their employers to their contacts or friends lists;
- Compel employees or applicants to access the accounts themselves to allow the employer to view the contents of a personal social media account;
- Take or threaten to take any action to discharge, discipline or otherwise penalize an employee who refuses to share their account access information, allow their employer to view content, or add the employer to their contact or friends list (or fail or refuse to hire an applicant for the same things).
On the other hand, under the new law Oregon employers may still:
- Require employees to share usernames and passwords for social media accounts that are provided by the employer or are used on behalf of the employer;
- Conduct investigations to ensure compliance with applicable laws, regulatory requirements or work-related employee misconduct rules if they receive specific information about employee activity on a personal social networking site, so long as the employer does not compel the employee to provide access to personal social media accounts;
- Require an employee, as a part of an investigation, to share content that has been reported to the employer and is necessary to making a factual determination about the matter being investigated;
- Continue to view any information online about employees or applicants that employees or applicants leave public.
- Employers will not be liable for inadvertent access to personal social media accounts of employees.
HB 2654 is off to the Governor for signature, and there is little doubt Gov. Kitzhaber will sign it into law. We’ll keep you posted on further developments. In the meantime, now may be a good time to review your social networking policies and application materials to make sure they don’t run afoul of the new law.
We continue our recent end-of-year postings (on new California employment laws and things every employer should resolve to do in 2013) with an update on recent cases by the National Labor Relations Board ("NLRB" or "Board"). In late December, 2012, the NLRB issued a series of controversial decisions which from an employer’s perspective cannot be considered Christmas presents. While some of these cases impact only narrow circumstances, each of the decisions dramatically changes the law, always in ways adverse to employers.
The Board's December 2012 Decisions
In Alan Ritchey, Inc., the Board created an entirely new obligation for employers operating a workplace where a union has been recognized or certified, but no collective bargaining agreement has yet been agreed to. In this setting, the Board concluded, an employer must notify the union and provide it with an opportunity to bargain over individual discretionary discipline before the discipline is imposed. The Board made clear that this obligation requires sufficient advance notice for meaningful bargaining. Moreover, the employer must respond to union requests for information regarding the discipline before such meaningful bargaining can occur. The Board dismissed concerns that the new obligation it had created would be unduly burdensome for employers, suggesting that there may be circumstances in which an employee could be removed from a job prior to bargaining, when leaving employee on the job might present “a serious imminent danger to the employer’s business or personnel.”
In WKYC-TV, Inc., the Board reversed fifty year old precedent and concluded that even after a collective bargaining agreement contract has expired, the employer remains obligated to collect union dues. The general rule has long been that when a collective bargaining agreement expires, the employer must continue to abide by the contract because its terms and conditions represent the status quo, and the employer is not entitled to change the status quo until the parties have reached a new agreement or have bargained to impasse. For fifty years, one of the few exceptions to that rule has been the so-called “dues check off,” which enables employees to pay their union dues through payroll deduction. Recognizing that under the National Labor Relations Act the underlying obligation for employees to be members of the union expired with the expiration of the collective bargaining agreement, the Board had long held that the obligation to collect dues for the union similarly expired. In WKYC-TV, the Board concluded that there was no relationship between the employees’ obligation to maintain union membership, and the employers’ act of collecting dues to pay for their membership. The Board then held that employers must continue to collect dues for the union.
The Board also issued decisions that will affect a more limited number of employers. In Chicago Mathematics & Science Academy, the Board concluded that it had jurisdiction over a “public charter school” operated by a non-profit corporation. In Latino Express, the Board changed various aspects of how it implements back pay awards. If these issues are of concern to you, please contact your Stoel Rives labor lawyer.
Finally, in American Baptist Homes of the West d/b/a Piedmont Gardens, the Board overruled a 35-year old precedent and concluded that employers were not entitled to keep witness statements confidential from a requesting union. Under the Act, employers have the obligation to furnish the union with information relevant to employees’ terms and conditions of employment. This includes information relevant to specific instances of discipline, including information pertaining to witnesses to the incident leading to discipline. Since the late 1970s, however, the Board had recognized that this obligation did not extend to formal witness statements collected by an employer, where an employee had been promised confidentiality and reviewed and approved the witness statement. In Piedmont Gardens, the Board rejected this rule, instead concluding that witness statements are merely another type of confidential information, about which employers must balance their confidentiality concerns with the union’s need to review the information. Even when the employer has legitimate confidentiality concerns, the employer must be willing to bargain with the union about a possible accommodation to address the union’s need for the information. The Board was unconcerned about the possibility for intimidation or coercion of witnesses, in the absence of clear proof.
What Do These Decisions Mean For 2013?
Each of these decisions is a radical departure from existing law, as the Board implicitly acknowledged. In all three, the Board expressly overruled prior case law. Moreover, the Board admitted that it would work an injustice to apply the decisions in Alan Ritchey, WKYC-TV and Piedmont Gardens retrospectively. Thus, the new obligations created in those cases will only be applied to cases occurring after the decisions were issued.
Prospective application is cold comfort to employers now attempting to deal with these cases on an ongoing basis. The Alan Ritchey decision provides little guidance as to what might amount to the “exigent circumstances” preventing removal of the employee prior to the bargaining the Board now requires. Moreover, the decision is unclear as to the extent and duration of that bargaining. The Board did not address, for example, the delay that could be caused by responding to union information requests prior to such bargaining. Perhaps even more troubling, the Board seemed unconcerned about the fundamental revision it was making to the terms and conditions of employment it ordered for affected employees. Even though never yet covered by any collective bargaining agreement, these at-will employees were no longer truly at-will employees.
WKYC-TV offers no offset for the bargaining leverage taken away from the employer, which must now continue to provide financial support to the union with which it is involved in contract negotiations, regardless how acrimonious those negotiations might be. In Piedmont Gardens, the Board appeared unwilling to give any credence to the notion that bargaining unit employees may face coercion or retribution from their union or their pro-union co-workers if their identity must be revealed to the union.
Finally, employers must carefully consider what the Board’s actions imply for what may be in the future. The Obama Board has demonstrated a complete willingness to reverse decades-old precedent, so long as overturning that precedent helps unions. The recent Board cases emphasize that employers dealing with unions are entering an era of unprecedented uncertainty. For example, Alan Ritchey arose only in the context of a newly certified union, bargaining for its first contract. Will the Board extend Alan Ritchey to cases arising after a collective bargaining agreement has expired, before a successor agreement has been finalized? Given the Obama Board’s willingness to change well-settled rules, employers should proceed continuously when determining their next steps. If you face any of the issues raised by these recent Board actions, you should your contact your Stoel Rives labor lawyer.
Employers got some relief from a situation that is becoming more and more common: an employee that claims a scent allergy and wants a work accommodation. In Core v. Champaign County Board of County Commissioners, Case No. 3:11-cv-166 (S.D. Ohio Oct. 17, 2012), plaintiff claimed she was allergic to a particular scent that substantially limited her breathing and requested, as an accommodation, that her employer institute a policy requesting that all employees refrain from wearing scented products of any kind. The U.S. Court for the Southern District of Ohio threw the case out, concluding that (1) plaintiff was not disabled, as that term was used under the pre-2009 amendments to the Americans with Disabilities Act; and (2) even if the broader post-2009 definition of “disability” were used, plaintiff’s requested accommodation was not reasonable.
Plaintiff worked for the Champaign County Department of Jobs and Family Services as a social service worker. Her job required her to conduct onsite inspections of childcare facilities, interact with the public and clients both onsite and offsite, and perform in-house client interviews, among other things. She claimed a disability because one particular scent she encountered occasionally in the workplace—Japanese Cherry Blossom—triggered asthma attacks, which substantially limited the major life activity of breathing. (She claimed reactions to other scents, too, but those reactions only included headaches and nausea, which the court found had no impact on plaintiff’s breathing or on any other major life activity.)
Allergy to Specific Perfume Not a Disability
The court, applying the pre-amendment definition of “disability,” concluded that plaintiff’s reaction to Japanese Cherry Blossom did not substantially limit her breathing because, among other things, she encountered it so rarely, and plaintiff admitted she was still able to perform the essential functions of her job even when exposed. The court acknowledged that, after January 1, 2009, the relevant inquiry is whether the asthma substantially limits plaintiff’s breathing when she is having an attack, rather than examining whether her breathing is substantially limited generally. But the court did not reach the issue of whether the amended standard would entitle plaintiff to relief because it concluded her requested accommodation was unreasonable.
Fragrance-Free Workplace Request an Unreasonable Accommodation
The court noted that, in the Sixth Circuit (encompassing Ohio, Michigan, Kentucky, and Tennessee), an accommodation requiring a fragrance-free workplace is objectively unreasonable. The court emphasized that it would be unreasonable to require employees to “alter all of their personal habits to ensure that all products of daily living, i.e., deodorant, lotions, hair products, etc., used in their private homes before coming into the workplace, are fragrant-free.” Moreover, plaintiff’s request that all fragrances be banned was not reasonable because she only alleged having breathing difficulty in response to one fragrance. Notably, her employer had offered her a wide array of accommodations—including allowing plaintiff to use an inhaler and take breaks, and circulating an email to all employees requesting that they refrain from wearing Japanese Cherry Blossom—all of which plaintiff inexplicably rejected.
What Does This Mean for You?
Employers should be cautious in relying on this decision. Because of the timing of the plaintiff’s claims, the court applied the pre-amendment definition of “disability.” An employee after January 1, 2009, who can demonstrate a substantial breathing impairment when encountering a particular scent can probably establish that he or she is disabled under the ADA Amendments Act. But that does not mean that employers are going to have to declare their businesses fragrance-free. The Sixth Circuit, at least, has declared such accommodations facially unreasonable; there does not yet appear to be any law in the Ninth Circuit on this issue.
So what should you do? When an employee complains about scents in the workplace, it is incumbent on the employer to gather as much information as possible. What scents trigger an episode? (This will help determine whether the employee has broad allergies/sensitivities that may require a broader response or has narrower allergies/sensitivities like the plaintiff in Core.) What happens when the employee encounters those scents? (If the reaction is headache and nausea, this may not qualify as a disability or may require very minor accommodations; if the reaction is anaphylactic shock, you can bet on probably having to find some accommodation(!).) If necessary, request that the employee provide medical verification of the allergy/sensitivity and its severity. Importantly, like the employer did in Core, talk to the employee about what might ameliorate the problem. The plaintiff in Core made the mistake of rejecting every accommodation offered—accommodations the court later concluded were all reasonable. Will a fan suffice? Can the employee be moved to a different work station? Will the job requirements permit the employee to work remotely part of the time? Are additional breaks to get fresh air adequate? The bottom line: Ask questions and get as much detail as possible.
As always, each case will depend on the particular circumstances. Note that the employer here was prepared to request (though not require) employees to not wear the particular scent to which plaintiff alleged an allergy. The court specifically declared that offer reasonable—though it did not say that kind of accommodation would have been required. Different facts—for example, an employee with broader scent allergies than the one particular scent at issue here—could well lead to a court concluding broader scent prohibitions are reasonable and necessary. All we can do is hold our breath and wait.
Is the Oregon Court of Appeals back in the wrongful-discharge business? It’s a fair question to ask after the court’s decision last week in Lucas v. Lake County, --Or. App.-- (2012). Reversing the trial court's motion to dismiss, the court held that a sheriff’s deputy who served as a correctional officer could sue for wrongful discharge in violation of public policy based on his allegation that he’d been fired for demanding that the sheriff implement a training program regarding sexual relations with inmates, and for concluding that another sheriff’s deputy had traded contraband for sex with an inmate.
What Is An "Important" Public Duty?
Wrongful discharge has had an eventful history in the Oregon courts. Broadly speaking, in a wrongful discharge claim an employee alleges that the employer terminated him for a reason that is inconsistent with an important public policy. The key (and usually thorny) legal issue is identifying the public policy and weighing whether it is sufficiently important to protect an employee from being fired. The Oregon courts have deemed an employee’s need to be absent from work to serve on a jury (Nees v. Hocks, 272 Or. 210 (1975)) and an employee’s internal protest that a fire department covered up evidence of a safety violation (Love v. Polk County Fire Dist., 209 Or. App. 474 (2006)) important enough to qualify. On the other hand, a doctor’s disagreement with his medical group’s treatment recommendations (Eusterman v. Northwest Permanente P.C., 204 Or. App. 224 (2006)) and private security guards’ lawful arrest of drunken concertgoers (Babick v. Oregon Arena Corp., 333 Or. 401 (2002)) didn’t make the cut.
Courts and attorneys attempting to discern the difference among these cases were left scratching their heads about how to figure out whether a public policy was “important.” Three years ago, the Oregon Supreme Court appeared to bring some clarity to the “important public policy” question in Lamson v. Crater Lake Motors, 346 Or. 628 (2009), where the court decided that a car salesman’s complaints about what he deemed to be unethical (although not unlawful) sales tactics did not go to an important policy, even though Oregon’s consumer protection laws clearly indicate a general policy against deceptive trade practices. Going forward, the court said, an employee would have to do more than identify “some general public policy expressed in statute, constitution, or case law that would be ‘thwarted’ by the discharge at issue.” Instead, “the sources of law that express the asserted ‘public policy’ must in some sense speak directly to those acts” that got the employee fired in the first place.
Lucas: Keeping The Peace Is Sufficiently Important Public Duty For Prison Guards
Turning back to Lucas, is there any portion of Oregon law that “in some sense speak[s] directly” to a deputy’s recommendation that a sheriff’s office adopt a particular training policy, or his investigation of a subordinate's misconduct? Not exactly. Oregon law states that county sheriffs must be certified police officers, have the obligation to “arrest and commit to prison all persons who break the peace, or attempt to break it,” and that a deputy’s duties are derivative of the sheriff’s. ORS 206.010. But that's as close as it comes to addressing the conduct that (allegedly) precipitated the deputy's termination.
That was enough for the Court of Appeals, which said that because the deputy "alleged that he was terminated for seeking to enforce the criminal laws by preventing, detecting and investigating crime," he was entitled to go before a jury on his claim that his firing violated an important public duty.
Whither Wrongful Discharge?
In the long term, it's hard to know whether the Lucas decision signals that the Court of Appeals will be more receptive to wrongful-discharge cases that aren't grounded directly in a clear statutory command. Certainly, the lurid facts of Lucas (not to mention the public safety context) made it easy for the Court to conclude that the termination violated public policy. In addition, and whatever the difficulty of explaining just what is or isn’t an “important” public policy, it remains relatively simple for a plaintiff to state a similar type of claim under Oregon’s various whistleblower-protection statutes, primarily ORS 659A.199 (prohibiting employers from taking action against employees who report literally any unlawful activity), but also potentially ORS 659A.203 (for public employees), 659A.230 (protecting employees who complain of criminal conduct), and 659A.233 (employees who report violations of specific laws). An employee who lacks a discrimination claim under Oregon’s anti-discrimination statutes can use the considerable ambiguity of the Lucas opinion (and of the whistleblower statutes) to pursue a wrongful discharge claim against his employer. This area of the law bears watching in the future.
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.
Some Washington state employers may be wondering whether any workplace implications have been created by the election day passage of voter Initiative 502, which made Washington the first state, with Colorado, to reject federal drug-control policy and legalize recreational marijuana use. The simple answer is it does not change a Washington employer’s rights.
We previously blogged a similar issue when discussing a 2011 Washington Supreme Court decision holding that Washington’s Medical Use of Marijuana Act does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. Also previously covered in World of Employment, 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.
Similar concepts apply to the new Washington State marijuana legalization law. Marijuana still remains illegal for all purposes under the federal Controlled Substances Act. Employers simply do not have to condone illegal drug use, possession or influence at their workplace.
In light of state marijuana legalization efforts, 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.
This issue has been getting a lot of attention in the state and national media since the election. For example, see this story in the Puget Sound Business Journal, and another article I wrote at the Law360 website (note that you need a subscription for Law 360).
As most Seattle employers know by now and as we blogged about earlier, beginning September 1, 2012, the City of Seattle will require that all but the smallest employers provide paid sick leave to their Seattle employees. Seattle Paid Sick and Safe Time (PSST) mandates that most employers provide paid leave, which increases depending on the size of a company’s workforce. Once employees have worked 180 days or more, they must be allowed to use PSST for their own or their family members’ illnesses, as well as for certain safety-related reasons.
We are getting many questions from employers about this new leave mandate. This update will provide answers to some common questions.
Remember that you need to notify Seattle employees of their PSST rights by September 1. We are here to assist you in administering this new leave. Below are a few common questions that may come up.
Q: What general notice do we have to provide our employees?
A: Regularly Work in Seattle. As of September 1, 2012 or soon thereafter, current Seattle employees (of employers of any size) should receive notice of their PSST rights, and new employees should receive such notice at the time of hire. This can be accomplished in several ways:
- A poster displayed conspicuously and accessibly in your usual posting place,
- A notice to employees provided in employee handbooks or similar employee guidance, and/or
- A notice to employees handed out to each new employee upon hiring.
The notice can be given either electronically or on paper. The City of Seattle’s model notice and poster (in a number of languages) are available online (scroll down to “Resources” box in right column).
Occasional Seattle Employees. If your only Seattle employees are those who work in Seattle occasionally and not on a regular schedule, you do not have to provide notice to all employees, provided that notice is given to occasional-basis employees reasonably in advance of their first period of work in Seattle.
Q: What notice do we have to provide our employees regarding their PSST accruals?
A: Each time wages are paid, employees who are accruing PSST (even those who have not worked 180 days yet) must be given information (either on paper or in electronic format) about the amount of PSST they have available.
Q: What categories of employees are covered by the law, and what leave must these employees be given?
A: Regularly Work in Seattle. These are employees (regular part-time or full-time, and temporary) who regularly work at least 240 hours per year in Seattle, either at your workplace, by teleworking from a Seattle location or by traveling from another location to regularly work in Seattle. These employees begin to accrue leave on September 1, 2012, and can take it as soon as they have worked 180 days or more (even if those 180 days occurred before September 1, 2012). Leave is only required to be provided during times the employee is working in Seattle.
Occasionally Work in Seattle. These are employees (regular part-time or full-time, and temporary) who occasionally work in Seattle, not on a schedule. These employees begin to accrue leave for every hour they work in Seattle after the 240th hour in a calendar year, and can take leave on their 181st day of employment (even if some or all of those 180 days occurred before September 1, 2012). You can begin to count these employees’ Seattle hours as of September 1. You can delegate to employees the duty to track “Seattle hours” as long as you notify them of this and provide a reasonable way for them to track hours. Once an occasional employee is covered, he or she is covered for that calendar year and the following calendar year. Leave is only required to be provided during times the employee is working in Seattle.
In order to determine accruals, you must determine your Tier Size. See our past post for further information on Tier Size and accrual amounts.
Q: How do we figure out what rate of pay employees earn during leave?
A: Generally. Employees earn the rate of pay they would have earned during the time PSST is taken—but only for hours they were scheduled to work. Employees need not be paid for lost tips or commissions, but must receive at least Washington’s current minimum wage ($9.04 in 2012).
Nonexempts. Employees who would have been paid overtime during their PSST hours need only be paid their regular hourly rate of pay.
Exempts. Employees receive an hourly rate of pay by dividing the annual salary by the number of weeks worked per year, to get the weekly salary, and dividing the weekly salary by the number of hours of the employee’s normal work week.
Q: How do we coordinate PSST with other leave, including paid leave such as Short-Term Disability and other Income Replacement Policies?
A: PSST may run concurrently with other leave (such as FMLA) where both apply, and can be provided as a part of paid leave policies (such as vacation, sick and PTO) if those policies meet the eligibility, use, accrual and carryover requirements of PSST. Determining how you will do this and how to amend your policies must be done on a case-by-case basis. The language of your short-term disability leave arrangement, whether provided via insurance, policy or a plan, also requires a case-by-case review.
Please contact Keelin Curran or your Stoel Rives attorney with your questions regarding coordination of PSST with other leave benefits.
The Obama NLRB’s regulatory agenda continues to fare poorly in the federal courts. On the heels of court decisions staying the NLRB’s new “notice” requirement, see previous posts here, the United States District Court for the District of Columbia Circuit has just struck down the NLRB’s new rules designed to speed up union representation elections.
Employers and their representatives have been concerned about the Board’s new election rules since they were issued in September. See our previous posting here. Employers’ concerns were heightened when the Board’s Acting General Counsel issued a “Guidance Memorandum” directing the Board’s Regional Offices on how to implement the new rules. That Guidance Memorandum is available here. That Guidance Memorandum articulated several “best practices” that would further accelerate the election process.
In response to the new rules, the US Chamber of Commerce and other groups sued the Board, citing a number of substantive and procedural objections to the new rules. Judge James Boasberg (an Obama appointee) struck down the Board’s decision solely on procedural reasons: the absence of a quorum. Just two years ago, the United States Supreme Court had emphasized the importance of the Board having a minimum of three members to act. The court had emphasized in New Process Steel that the quorum requirement is not, under the Taft-Hartley Act, a mere “technical obstacle.” Ironically, concern about the then-impending loss of a quorum in December, 2011, caused the Board to rush its normal internal processes. Member Hayes had previously expressed his opposition to the proposed rules. When the final proposed rules were circulated among the three Board members, member Hayes did not participate – but the two member majority adopted the rules anyway. The District Court concluded that the Board thus acted without a quorum:
“According to Woody Allen, 80% of life is just showing up. When it comes to satisfying a quorum requirement, though, showing up is even more important than that.”
In the absence of a lawful quorum, the rules were not properly adopted, and therefore must be struck down. The judge expressly did not reach any of the substantive objections to the rules.
This will likely raise substantial uncertainty in the near term. The Board could attempt to readopt the rules with its current membership – but doing so would only be more controversial: any quorum relying on the President’s “recess” appointments to the Board (made at a time when the Senate was not in recess!) will be subject to further attack. It is also not clear what course Regional Offices will take as to elections that were being handled under the now-stricken rules or what effect will be given to the Acting General Counsel’s “Guidance Memorandum.”
Employers should stay tuned for further developments – and if you receive a union election petition you should call your Stoel Rives labor lawyer immediately!
In its long-anticipated decision in Brinker v. Superior Court, a unanimous California Supreme Court has clarified the scope of an employer’s obligation to provide meal and rest breaks to non-exempt employees in California. The Court's full opinion is available here.
California law requires employers to provide employees with a meal period of not less than 30 minutes for workdays lasting more than five hours, and to provide two meal periods for workdays in excess of ten hours, subject to waiver in certain circumstances. At issue in Brinker was whether an employer must ensure that an employee’s work stops for the required 30 minutes, or whether an employer is only obligated to make meal periods available, with no responsibility for whether they are taken. The Court concluded that an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desires. The employer must relinquish control over its employee’s activities and give the employee a reasonable opportunity to take an uninterrupted 30 minute break, and the employer may not impede or discourage the employee from doing so. However, the employer is not obligated to police meal breaks and ensure no work is performed.
Timing of Meal Breaks
The Court held that an employer must provide a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s tenth hour of work. The Court found that there are no additional timing requirements, such as rolling five hour meal periods.
Under California law, employers must authorize and permit employees to take rest periods based on the total hours worked daily, at the rate of ten minutes net rest time per four hours worked or major fraction thereof. A rest period need not be authorized for employees whose total daily work time is less than three and one-half hours. The Court summarized the rest period obligation as follows: employees are entitled to ten minutes’ rest for shifts from three and one-half hours to six hours in length, 20 minutes for shifts of more than six hours up to ten hours, 30 minutes for shifts of more than ten hours up to 14 hours, and so on. The 10-minute breaks must fall within the middle of a four hour period of work, to the extent practicable.
Timing of Rest Periods
The Court held that employers do not have a duty to permit their employees a rest period before any meal period.
What Brinker Means For Employers
Brinker is generally regarded as a favorable ruling for employers, and the decision provides a roadmap for employers to reduce the risk of claims arising from alleged meal and rest period violations. Post-Brinker, it is essential that California employers carefully review and, if necessary, revise policies to state that meal periods are duty-free, 30 minutes in length and are to be taken before the end of the fifth hour of work. Rest period policies should now detail that rest periods are authorized and permitted in accordance with the specific standards set forth above.
Employers should continue to require employees to clock out and in for meal breaks, and to carefully monitor and manage whether employees are working through their meal periods. Employers are liable for straight time or overtime pay if they know or should have known employees have worked through meal breaks. If an employee is not clocking out for meals, an employer would likely be found to be on notice that the employee continued to work and thus should be paid for that time. Additionally, if there is a pattern of employees not taking meal periods, or taking meal periods of less than 30 minutes in length or after the end of the fifth hour of work, management should look into whether the employees are really being given the opportunity to take timely 30-minute off-duty meal periods.
Finally, supervisors and managers should be trained on the importance of allowing employees to take meal and rest periods as prescribed in Brinker. While the outcome in Brinker is good news for employers, managers who discourage or prevent employees from taking meal or rest breaks will expose the company to substantial liability.
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...
...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.
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 email@example.com, 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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?
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.