Tuesday, April 10, 2018

Salary History is No Defense to an “Equal Pay Act” Violation, Says Ninth Circuit

By Scott H. DeHart*

On April 9, 2018, the U.S. Court of Appeals for the Ninth Circuit – which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington – held that, under the Equal Pay Act of 1963 (“EPA”), employers can no longer rely on an employee’s prior salary to justify different wages paid to male and female employees. The case is Rizo v. Yovino, No. 1:14-cv-00423-MJS, slip op. (9th Cir. April 9, 2018). The Court’s decision came on the eve of “Equal Pay Day,” a symbolic date chosen each year to illustrate how far into the new year women in the U.S. must work to ‘catch up’ to men’s earnings from the prior year.

The female plaintiff, Aileen Rizo, was a math consultant hired by the Fresno County Office of Education. She previously worked as a middle and high-school math teacher. To determine her salary, Fresno County followed its policy of taking Rizo’s prior salary, adding 5%, and placing her in the appropriate “Step” on a 10-step hiring salary schedule. Several years later, Rizo learned that the County placed male colleagues who had been hired after her at higher salary steps. Rizo filed a lawsuit claiming, among other things, that her employer had violated the EPA.

Congress passed the EPA to prohibit sex-based wage discrimination in employment. The core principle of the EPA is that men and women should receive equal pay for doing equal work, regardless of their sex. The EPA contains several exceptions to this anti-discrimination principle, including a catch-all for a wage “differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1) (emphasis added).

The question before the Ninth Circuit in Rizo was whether an employee’s prior salary was a “factor other than sex” on which an employer could rely to defend different salaries between male and female employees. A three-judge panel of the Ninth Circuit initially answered yes to this question, and held that prior salary was a permissible “factor other than sex” under the EPA, relying on the Ninth Circuit’s 1982 decision in Kouba v. Allstate Insurance Co., 691 F.2d 873 (9th Cir. 1982). In Kouba, the Ninth Circuit had upheld a salary system that calculated employee salaries based on prior salary, along with ability, education, and experience.

After the three-judge panel’s decision, the Ninth Circuit agreed to rehear the case en banc (i.e., all the judges of the court hear the case, not just three). The full Ninth Circuit disagreed with the three-judge panel’s decision and overturned Kouba. The Ninth Circuit held that prior salary (alone, or in combination with other factors) cannot justify a wage differential. The Court explained that allowing employers to defend an EPA lawsuit based on ‘prior salary’ gives employers the ability to “capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum.” That would be contrary to the text and history of the Equal Pay Act, and would undermine the basic principle for which the EPA was passed.

Although the decision is only binding law in the states covered by the Ninth Circuit and not in Ohio, the Rizo decision may have far-reaching impact. In the era of #metoo and #timesup, employers are facing increased scrutiny of policies and practices that negatively impact women in the workforce. Other courts may soon be persuaded by the Ninth Circuit’s reasoning in Rizo and issue similar decisions limiting or prohibiting employer reliance on “prior salary” to justify different salaries for men and women who perform equal work.

Employers should work closely with legal counsel to ensure that their existing wages and compensation policies are consistent with the requirements of the EPA and other federal and state laws.

*Scott H. DeHart is a member of the firm’s Labor and Employment Group and practices out of the firm’s Columbus, Ohio office. Scott has experience defending against equal pay claims. If you have questions about employee pay or any other labor or employment issues, please contact Scott at shd@zrlaw.com or (614) 224-4411.

Monday, February 12, 2018

EMPLOYMENT LAW QUARTERLY | Winter 2018, Volume XX, Issue i

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Out with the Old, in with the New: A Look Forward and Back to Start the New Year

By Stephen S. Zashin*

Heading into 2018, Zashin & Rich has created a checklist for employers:

Policy Review:

☐ Review discrimination, harassment and retaliation policies;
☐ Review policies concerning Family and Medical Leave and disability accommodation issues;
☐ Review policies concerning pay for time worked (including reviews of pre and post shift work and meal and rest breaks);
☐ Review social media policies to ensure that they comply with recent guidance from the National Labor Relations Board (even if the company is a non-union employer);
☐ Review wage deduction policies to ensure that only proper deductions are made from employee pay; and,
☐ Update confidentiality, non-solicitation and non-compete agreements to take advantage of the Defend Trade Secrets Act.

☐ Revise employment applications to comport with "ban the box" rules governing questions about convictions; and,
☐ Review employment application procedures to ensure that all third party background checks comply with the Fair Credit Reporting Act.

☐ Train employees, managers and supervisors about discrimination, harassment and retaliation; and,
☐ Train managers and supervisors about FMLA and ADA leaves of absences and accommodations.

☐ Ensure that employees are properly classified as exempt or non-exempt under the Fair Labor Standards Act;
☐ Review pay practices to ensure that minorities are not statistically disadvantaged in compensation;
☐ Review workforce composition information to ensure that minorities are not statistically disadvantaged in management;
☐ Analyze health care enrollment to ensure that only eligible participants are on the company's medical plan; and,
☐ Review independent contractor classifications to ensure that those working under such arrangements are actually independent contractors.

Be sure to follow Zashin & Rich's Employment Law Quarterly to stay updated on labor and employment law developments in 2018.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, is the founder of the firm's Labor and Employment Groups and has extensive experience with all aspects of labor and employment law. If you have questions regarding the above checklist or any other labor or employment issues, please contact Stephen at ssz@zrlaw.com or (216) 696-4441.

How the Tables Have Turned: NLRB Shifts Course Under Trump Administration

By Patrick J. Hoban*

During the Obama administration, the National Labor Relations Board ("NLRB") was a thorn in the side of many employers - overturning long-standing precedent and broadly construing the National Labor Relations Act ("NLRA") to protect employee activities and prohibit employer enforcement of commonplace employment policies. Now, under the Trump administration, the NLRB has shifted in a more employer-friendly direction. The Republican-appointed NLRB majority recently issued two decisions that dramatically altered the framework for analyzing work rules and joint employer status. Also, the NLRB's General Counsel issued a memorandum to NLRB regional directors highlighting priorities going forward, including a focus on legal issues raised "in cases of the last eight years that overruled precedent."

A New Standard for Evaluating Work Rules

In recent years, many employers were frustrated and confounded by a seemingly endless string of NLRB decisions rendering work rules unlawful, including those commonly set forth in employee handbooks. In analyzing these rules, the NLRB used a standard (referred to as the Lutheran Heritage standard) that asked, in part, whether an employee would "reasonably construe" the work rule to prohibit NLRA-protected activity. The NLRB's application of this standard led to inconsistent and arbitrary results. For example, the NLRB found rules prohibiting "loud, abusive, or foul language" and an "inability or unwillingness to work harmoniously" to be unlawful, yet approved of rules prohibiting "abusive or threatening language" and "conduct that does not support the . . . [employer's] goals and objectives." The NLRB's application of the Lutheran Heritage standard "produced rampant confusion for employers" and allowed the NLRB to find neutral and innocuous work rules unlawful, without giving due consideration to legitimate business justifications underlying the rules.

Fortunately for employers, in December 2017, the NLRB overturned the Lutheran Heritage standard and adopted a new framework for analyzing work rules. See The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017). Under this new standard, the NLRB evaluates: (1) the nature and extent of the work rule's potential impact on employees' protected rights under the NLRA; and (2) the legitimate justifications associated with the work rule. In Boeing, the NLRB applied this new framework to a "no-camera rule" implemented by Boeing that restricted employee use of cell phones and other camera-enabled devices on company property. Initially, an Administrative Law Judge ("ALJ") found Boeing's no-camera rule unlawful under the Lutheran Heritage standard. Reversing the ALJ, the NLRB emphasized the "fundamental problems with the . . . application of Lutheran Heritage when evaluating the maintenance of work rules, policies and employee handbook provisions." These problems included the NLRB's failure to take into consideration legitimate justifications associated with the work rules, the false premise that employees are better served by no work rules as opposed to ones that may have some overlap with NLRA coverage, and the failure of the standard to allow the NLRB to differentiate among industries and work settings.

Applying its new standard to Boeing's no-camera rule, the NLRB held that any potential impact on Boeing's employees' exercise of protected rights under the NLRA was outweighed by the substantial and important justifications underlying the rule. These justifications included Boeing's need to maintain its security protocols, protect against the disclosure of sensitive and proprietary information (including employee personal information), and (as an aircraft manufacturer and military defense contractor) limit the risk of becoming the target of a terrorist attack.

A Return to a Prior Standard for Evaluating Joint Employer Status

In another December 2017 decision, the NLRB announced it was returning to its prior standard for evaluating whether two entities should be deemed a joint employer, and therefore, subjected to joint and several liability under the NLRA. See Hy-Brand Industrial Contractors, 365 NLRB No. 156 (Dec. 14, 2017). In 2015, the NLRB held that two entities are joint employers based on the mere existence of reserved joint control (i.e., a contractual right to exercise control), or based on "indirect" or "limited and routine" control. The NLRB could have deemed two entities joint employers even if they never actually exercised joint control over essential terms and conditions of an employee's employment. Under this broad standard, a parent company or even a client could face liability on legal obligations under the NLRA, even without exercising any control over a subsidiary's or vendor's employees.

In Hy-Brand, the NLRB rejected this standard in favor of the pre-existing joint employer test, under which "the essential element in . . . [the] analysis is whether a putative joint employer's control over employment matters is direct and immediate." In conducting this analysis, the NLRB will now focus, as it did in the past, on "whether an alleged joint employer 'meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision, and direction.'" Accordingly, the mere existence of reserved control, which has not been exercised, or indirect or limited and routine control is no longer sufficient to give rise to joint employer status and joint and several liability under the NLRA.

The NLRB's General Counsel's Memorandum

Also in December 2017, the NLRB's newly-appointed General Counsel issued a memorandum to the leadership of the NLRB's regional offices, which set forth guidelines and priorities going forward. These priorities include special attention to "[s]ignificant legal issues includ[ing] cases over the last eight years that overruled precedent and involved one or more dissents." The General Counsel enumerated a number of areas of focus, including employee access to employer email to engage in union-related and other protected activity under the NLRA, off-duty employee access to employer property, work rules, and joint employer status. The NLRB has already issued decisions regarding work rules and the joint employer standard. Additional decisions from the NLRB are likely forthcoming that further revise Obama-era policies.

As demonstrated by the Boeing and Hy-Brand cases, which were decided shortly after the General Counsel issued the memorandum, a dramatic shift appears to be underway at the NLRB. Zashin & Rich will continue to report on developments from the NLRB.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, regularly practices before the NLRB and counsels employers regarding work rules and protected activity. If you have questions about recent developments at the NLRB, please contact Pat at pjh@zrlaw.com or (216) 696-4441

Father Trucker: The Sixth Circuit Addresses a Truck Driver’s Discrimination Claim Premised Upon His Status as a Single Parent

By Jessi L. Ziska*

Most employers are familiar with prohibitions on discrimination based on an employee's race, color, religion, sex, national origin, age, and disability. As demonstrated in a recent decision by the U.S. Court of Appeals for the Sixth Circuit, however, employers also should beware of employment decisions based on other factors, including marital and familial status. See Reedy v. Rich Transp., LLC, No. 17-1085, 2017 U.S. App. LEXIS 22031 (6th Cir. Nov. 1, 2017). Although the Sixth Circuit ultimately found in favor of the employer, the Reedy decision serves as a warning to employers about actions and statements about an employee's family that could give rise to a lawsuit.

In Reedy, the plaintiff, who was married but separated from his wife, had custody of their five children. During one of his shifts as a truck driver, the plaintiff left his truck at a truck stop and went home early due to a snowstorm. When his supervisor ordered him to retrieve the truck the following day, the plaintiff refused because he could not find a babysitter. His supervisor responded: "I don't give a f*** about your kids. Get your f***ing ass in that truck because that's where we need to have you." Subsequently, another one of the plaintiff's supervisors told him that, if he had known the plaintiff was a single parent, he would not have hired him. A few days later, the employer terminated the plaintiff, citing issues with his performance including his refusal to retrieve the truck as ordered.

The plaintiff then filed a lawsuit alleging his employer discriminated against him based on his status as a single parent in violation of Michigan's antidiscrimination law, which specifically prohibits discrimination based on "marital status." After the district court dismissed his discrimination claim, the plaintiff appealed to the Sixth Circuit. On appeal, the Sixth Circuit assumed the plaintiff qualified for protected status, noting that the Michigan Supreme Court has never addressed whether the State's antidiscrimination law "covers single or separated parents (or the perception of single with children while still married)."

In support of his discrimination claim, the plaintiff relied solely on his supervisors' statements. Affirming the dismissal of his claim, the Sixth Circuit held that "[t]otal reliance on statements about [the plaintiff's] status as a single parent is not sufficient evidence of motivation to terminate his employment." The court noted that the supervisors' statements, although close in time to the plaintiff's termination, were not directly linked to the decision to terminate his employment. Furthermore, the plaintiff failed to present any additional evidence to call into question the legitimacy of the employer's stated reasons for his termination, including his failure to retrieve the truck as directed.

The Sixth Circuit also found that the plaintiff failed to present evidence that the employer treated him differently on the basis of his marital status. Specifically, the plaintiff was unable to point to anyone outside his protected class who enjoyed better treatment from the employer.

While the Sixth Circuit affirmed the dismissal of the plaintiff's discrimination claim, one of the judges felt his claim should have survived. In a dissenting opinion, Judge White stated that the supervisors' troubling statements "certainly . . . [gave] rise to an inference of unlawful discrimination."

Unlike Michigan's antidiscrimination law, Title VII of the Civil Rights Act of 1964 and Ohio's antidiscrimination law do not specifically prohibit discrimination based upon "marital status" in the employment context. Nevertheless, employers in Ohio and elsewhere still should be cautious of making employment decisions based upon employee or applicant marital or familial status as local ordinances may prohibit such conduct. Also, even in the absence of a law specifically prohibiting these types of discrimination, employees may be able to bring suit against their employers for sex-based discrimination arising out of comments or actions tied to their marital or familial status. For example, an employer could give rise to a discrimination claim by asking only female job applicants whether they are married or have young children.

In sum, employees' familial obligations can present challenges for employees and their employers alike. Although the Sixth Circuit in Reedy found the comments insufficient to prove discrimination, employers should be cautious of actions and comments based on or relating to their employees' marital or familial status.

*Jessi L. Ziska recently joined Zashin & Rich in their Cleveland office and practices in all areas of labor and employment law. If you have questions regarding the Reedy decision, please contact Jessi at jlz@zrlaw.com or (216) 696-4441.

EMS Captains and Lieutenants Are Supervisors, Not “Public Employees,” Under Ohio Collective Bargaining Law

By George S. Crisci*

In a recent directive, the State Employment Relations Board ("SERB") provided further clarification on the types of job responsibilities that will exempt employees from collective bargaining under Ohio law. Specifically, SERB held that EMS captains and lieutenants qualified under the "supervisor" exemption of Ohio's collective bargaining law. See In re Athens County EMS Association, Case No. 2017-REP-04-0053 (Nov. 17, 2017). This latest directive follows closely on the heels of another SERB decision (which Zashin & Rich reported on here) holding that captains in a fire department fell within the "confidential" and "management" employee exemptions.

Ohio Revised Code Section 4117.01 sets forth a number of exclusions from the definition of "public employee" under Ohio's collective bargaining law. If a public employee falls within one of these exclusions, then the employee is not entitled to collective bargaining rights. One such exclusion applies to "supervisors," which are defined, in part, as individuals who have the authority to "to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other public employees; to responsibly direct them; to adjust their grievances; or to effectively recommend such action, if the exercise of that authority is not of a merely routine or clerical nature, but requires the use of independent judgment." R.C. 4117.01(F).

In April 2017, a union filed a request to represent, for collective bargaining purposes, all EMTs, paramedics, lieutenants, and captains in the Athens County EMS Department. After the County Commissioners objected to this request, SERB directed the matter to its Office of General Counsel for an inquiry. SERB asked the General Counsel to determine whether the EMS captains and lieutenants were exempt from the definition of "public employees" under Ohio Revised Code Chapter 4117. On November 7, 2017, SERB's General Counsel issued findings of fact and conclusions of law, finding the captains and lieutenants qualified under the "supervisor" exemption. Subsequently, SERB adopted the General Counsel's conclusions, granted the Athens County Commissioners' objection, and denied the union's request to represent the EMS captains and lieutenants.

The Athens County EMS Department was comprised of the chief, assistant chief, five captains, two lieutenants, and 38 EMT/paramedics. Among various other duties, the captains and lieutenants were involved in hiring employees, including participating in candidate interviews and making hiring recommendations. Likewise, both the captains and lieutenants disciplined employees, including issuing verbal and written reprimands without prior approval, and developed and conducted annual performance evaluations.

In analyzing these responsibilities under R.C. 4117.01, SERB noted the captains and lieutenants did perform "duties that are routine and ministerial in nature: however, there are duties that require judgment to initiate action and utilize discretion without further review." Pointing specifically to the captains' and lieutenants' responsibilities with respect to employee performance evaluations and employee discipline through written and verbal reprimands, SERB found that the captains and lieutenants met the "supervisor" criteria as set forth in R.C. 4117.01(F). Therefore, they were exempted from the definition of "public employee" and were not entitled to collective bargaining rights under Ohio law.

As the operations of safety forces continue to develop, management must consider the structural application of their organizations. Petitions to amend existing bargaining units can be filed at SERB. Careful application of the standards and the procedural steps must be taken. These cases are fact specific, and public employers looking to amend a bargaining unit should contact counsel to evaluate the merits of doing so.

*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience representing employers before SERB. If you have questions regarding this SERB decision or other collective bargaining issues, contact George at gsc@zrlaw.com or (216) 696-4441.


Please join Z&R in welcoming two new attorneys to its Employment and Labor Groups

Jessi L. Ziska earned her law degree, as well as certificates in both Litigation and Alternative Dispute Resolution and Health Law, from The University of Akron School of Law. Jessi was a member of the Moot Court Honor Society ("MCHS") and Trial Team. As a member of the MCHS, Jessi competed in the 2016 American Bar Association National Appellate Advocacy Competition in Boston, Massachusetts. Jessi was later elected to serve as the President of the MCHS. After her performance in Akron Law's Summer Trial Academy, Jessi was selected to join Akron Law's nationally-known Trial Team, which gave her the opportunity to compete in the 2016 Ohio Attorney General's Public Service Mock Trial Competition in Columbus. As part of Akron Law's Health Law program, Jessi completed an externship in the health law practice group of a well-established, Northeast Ohio firm. During her externship, she reviewed and revised employment agreements between physicians and hospitals, formed various corporate and non-profit entities, and ensured corporate compliance with federal and state laws.

Christopher D. Caspary's practice focuses on employment litigation and corporate employment counseling. Chris previously practiced in the areas of civil litigation and insurance defense, and appeared in courts throughout Ohio and in federal court. Chris's experience also includes taking and defending depositions, drafting pretrial motions and pleadings, and advising clients on complex legal issues. Following law school, Chris clerked for the Honorable Nancy A. Fuerst in the Cuyahoga County Court of Common Pleas, where he drafted opinions and rulings, conducted certain hearings and conferences, and provided legal recommendations to the Judge. While in law school, Chris specialized in labor and employment law, worked in the Employment Law Clinic, and externed with the Federal Trade Commission. Chris is the Vice-Chair and incoming Chair of the Cleveland Metropolitan Bar Association's Litigation Section. Chris is a member of the Cleveland Metropolitan Bar Association's Bar Admissions Committee and is a member of the William K. Thomas Inn of Court. Chris was also a delegate to the 8th Judicial District Conference in May 2015 and October 2016.

Upcoming Speaking Engagements

March 2, 2018
Jonathan J. Downes and Drew C. Piersall present "Beyond Sexual Harassment and Other Claims of Discrimination - Legal and Practical Realities" at the Ohio Municipal Attorneys Association's 2018 Spring Municipal Civil and Criminal Law Seminar at the Westin in Columbus, Ohio.

March 2, 2018
Stephen S. Zashin presents "Hearing Employment Law Cases" at The Supreme Court of Ohio Judicial College Webinar.

March 14, 2018
Patrick M. Watts presents "Conducting Harassment Investigations" at the Greater Ashtabula Chamber of Commerce in Ashtabula, Ohio.

March 19, 2018
Jonathan J. Downes presents "Legal Minefields to Avoid" at the Ohio Association of Chiefs of Police - New Chiefs' Workshop at the Crowne Plaza in Dublin, Ohio.

Tuesday, January 2, 2018

The “Tax” of Silence – Tax Reform’s Impact on Settling Sexual Harassment Claims

By Stephen S. Zashin*

On December 22, 2017, President Trump signed the “Tax Cuts and Jobs Act,” which is a sweeping tax reform law the size of which the United States has not seen in decades. As a significant part of this new law, employers can no longer deduct sexual harassment settlements and associated legal fees as a business expense, when the settlement is contingent upon a nondisclosure agreement. In this context, a nondisclosure agreement typically would prohibit the parties from disclosing the terms of the settlement or the alleged facts supporting the sexual harassment claim. The recent barrage of sexual misconduct allegations against celebrities, such as Harvey Weinstein, Matt Lauer, Bill O’Reilly, and Al Franken — and confidential settlements arising from these types of accusations — prompted this change to the tax law.

The “Harvey Weinstein Tax,” as some are calling it, is not a tax. Rather, the provision prohibits tax deductions. Prior to this law, sexual harassment settlements and related attorneys’ fees were deductible business expenses. However, the new law prohibits such deductions for amounts paid or incurred pursuant to a confidential settlement. To illustrate, under the new law, if a company paid a $1 million sexual harassment settlement, it is prohibited from deducting that amount if the settlement contained a nondisclosure agreement. However, in the absence of a nondisclosure agreement, and assuming a 21% corporate tax rate, the company may deduct the $1 million settlement for a tax savings of $210,000.

In the example above, the company would need to determine whether a tax savings of $210,000 is worth a nondisclosure agreement (i.e., prohibiting the employee from discussing the terms of the settlement and the underlying circumstances and allegations). This tax provision has both legal and tax consequences. Employers settling sexual harassment claims should discuss with counsel, chief financial officers and potentially their tax consultants, this new tax provision and its implications on settling any sexual harassment claim.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law and the head of the firm’s Labor, Employment and Sports Law Groups, has extensive experience litigating and resolving sexual harassment claims. For more information about settling sexual harassment claims, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.

Friday, September 15, 2017

EMPLOYMENT LAW QUARTERLY | Summer 2017, Volume XIX, Issue ii

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If It Ain’t Broke, Keep Fixing It! USCIS Releases another Revision of Form I-9

By Scott H. DeHart*

In January, Zashin & Rich reported that the U.S. Citizenship and Immigration Services (“USCIS”) had given its Employment Eligibility Verification Form I-9 a “smart” makeover, complete with new features such as drop-down menus, hover text for on-screen instructions, real-time error prompts, and quick response codes. Employers were required to begin using the new version of Form I-9 to verify employment eligibility for new hires on January 22, 2017.

The USCIS has made some additional changes and has issued another new Form I-9. Starting September 18, employers must begin using USCIS’s latest revision (which has a revision date of 07/17/2017).

The most-recent revisions to Form I-9 are minimal. References to the “Office of Special Counsel for Immigration-Related Unfair Employment Practices” have been replaced with that office’s new name: “Immigrant and Employee Rights Section.” The USCIS also removed “the end of” from the phrase “the first day of employment” and made changes to the order of the “List C” acceptable documents that may be submitted for employment authorization.

The USCIS also made corresponding updates to its Handbook for Employers: Guidance for Completing Form I-9 (M-274), which should make the Handbook easier for users to navigate.

Further revisions are expected between now and March 2018, when new regulations will take effect that will necessitate minor changes to the acceptable "List A" documents.

Employers can download a PDF version of the new Form I-9 at the USCIS website, along with instructions about how to complete the form: https://www.uscis.gov/i-9. The new Form I-9 may be completed using a computer and then printed for signing. Employers also may print and complete an alternate version of the form (without any smart features and fillable fields) by hand.

*Scott H. DeHart is a member of the firm’s Labor and Employment Groups and practices out of the firm’s Columbus, Ohio office. If you have questions regarding the new Form I-9, contact Scott (shd@zrlaw.com) at (614) 224-4411.

Fire Captains Are Not “Public Employees” Under Ohio Collective Bargaining Law

By Jonathan J. Downes*

Municipalities have struggled for years with the limitations on the exclusions of management positions in police and fire departments from collective bargaining. Supervisors in fire and police safety forces, with limited exceptions, have had bargaining rights in Ohio. The State Employment Relations Board ("SERB") recently provided clarification on the exemptions that apply. Municipalities should consider the clarified standards.

In April, SERB clarified the exemptions from collective bargaining for confidential and management employees in fire and police departments. In 2016, the fire union in West Chester Township, Butler County, petitioned SERB to include the rank of Captain in the union contract. SERB issued a Directive on April 21, 2017, adopting the staff attorney recommendations that the opt-in request for recognition by the West Chester Professional Firefighters, IAFF, be dismissed with prejudice. In re West Chester Township, Butler County, Case No. 2016-REP-07-0067 (Apr. 21, 2017).

SERB found that the Fire Bureau and Shift Captains are “confidential” and “management” employees within the meaning of R.C. 4117.01(K) and (L) and are, therefore, excluded from the definition of “public employee” under R.C. Chapter 4117 and are not to be included in the union contract.

The IAFF filed an “Opt-in Request for Recognition” to include the Fire Bureau and Shift Captains in an existing bargaining unit of firefighters. SERB directed the matter to an inquiry. The Township presented testimony and documentary evidence to show that the Captains were “confidential” and/or “management level” employees and should be excluded from the definition of “public employee” in R.C. Chapter 4117. The SERB Report instructs that exclusions to the definition of “public employee” must be construed narrowly, and that the party seeking exclusion bears the burden of establishing it by a preponderance of the evidence. SERB provided specific guideposts for the confidential and management exclusions.

“Confidential employees,” a concept borrowed from private sector labor relations under the National Labor Relations Act, are those employees with access to the employer’s confidential labor relations information. They must either: (1) work in the personnel offices of a public employer and deal with information to be used in collective bargaining; or (2) work in a close, continuing relationship with public officers or representatives directly participating in collective bargaining on behalf of the employer. SERB accepted the conclusion that Captains are “confidential employees” under the latter prong of the test because of their relationship to the Assistant Fire Chiefs who participate directly in collective bargaining for the employer. The Captains attend biweekly Command Staff meetings where personnel issues are discussed. In negotiations, the Captains provide information, make recommendations, and are sometimes even present at the bargaining table.

“Management-level” employees are top-level, high ranking personnel who perform one or more of the job responsibilities in R.C. 4117.01(L). SERB accepted the determination that Captains may reasonably be required on behalf of their public employer to assist in the preparation for the conduct of collective bargaining negotiations. Here, the Captains provided information and made recommendations, and four of the six Captains had sat at the negotiations table. Their participation at the negotiation table was not a prerequisite to being “management-level” employees, however, given their behind-the-scenes activities throughout the negotiation process.

SERB rejected several other bases presented by the Township in this matter, which may apply in other instances. Under R.C. 4117.01(L), Captains (or others) may be “management-level employees” if they formulate policies on behalf of the employer, “responsibly direct” the implementation of policy, administer the parties’ union contract, or have a “major” role in personnel administration.

As the operations of safety forces continue to develop, management must consider the structural application of their organizations. Petitions to amend existing bargaining units can be filed at SERB. Careful application of the standards and the procedural steps must be taken. These cases are fact specific and require careful consideration of these standards.

*Jonathan J. Downes, an OSBA Certified Specialist in Labor and Employment Law, is a member of the firm’s Labor and Employment Groups and practices out of the firm’s Columbus, Ohio office. If you have questions regarding this SERB decision or other collective bargaining issues, contact Jonathan (jjd@zrlaw.com) at (614) 224-4411.

When Policies Become Promises: Are Municipal Employers Liable for Promissory Estoppel?

By Sean S. Kelly*

We have all heard the adage, “a promise is a promise.” This adage can apply in the employment context and can have unintended consequences for employers.

In legalese, the adage is called promissory estoppel, but it means the same thing. If an employer makes a statement knowing that an employee might rely on it – and the employee makes a decision based on the promise – a court can bind the employer to the promise. These promises can come in various forms, from policies, to statements made during pre-employment screenings, to salary negotiations or disciplinary proceedings.

But there is good news for public-sector entities. The doctrine of promissory estoppel appears to apply only to private-sector employers. That is the holding of an important recent case, Patterson v. Licking Twp., 2017-Ohio-5803 (5th Dist.)

Charles Patterson, an employee of Licking Township, did not have a formal employment agreement. During his employment, however, the Township adopted written Personnel Policies and Procedures. Through 2010, the Township reimbursed employees at the standard hourly rate for up to 15 unused sick days at the end of each year. In 2011, the Township changed its policies to provide a single $500 attendance bonus to employees who had not used any of their 15 sick days.

Patterson had stellar attendance. In 2010, under the old policy, Licking Township paid Patterson $2,040 for 120 hours of unused sick leave. After changing the policy, Licking Township paid Patterson $500 each year from 2011 through 2015 for his perfect attendance record.

When Patterson retired, he demanded $6,600 for 45 days of accumulated sick leave. The Township refused, and Patterson filed a lawsuit seeking damages for breach of contract and – you guessed it – promissory estoppel. The Township filed a motion for summary judgment, and the trial court dismissed the case.

On appeal, Patterson argued that the Township’s written Personnel Policies and Procedures amounted to an enforceable contract. If the policies were not a contract, Patterson argued that they at least formed an enforceable promise upon which he relied when he remained in the Township’s employment.

The court of appeals disagreed. The court first addressed the breach of contract argument. Like any good employee handbook, the policies contained a clear disclaimer. The disclaimer stated that that the Personnel Policies and Procedures are “not to be considered a contract” and “may be changed by the Board of Trustees without notice.” In light of this disclaimer, the court refused to find that the policies amounted to a written employment agreement.

But the court went further, granting political subdivisions a blanket exemption from promissory estoppel claims. The court began by stating that a political subdivision cannot be held liable on a theory of promissory or equitable estoppel when it is engaged in a government function. Moreover, the court held that a political subdivision can only be bound by a written contract that has been ratified through proper channels. This is a departure from the rule applicable to private-sector employers, who can face liability for policies contained in handbooks, or statements made during interviews and negotiations.

The court found that Licking Township, a political subdivision, was engaged in a government function when it set policies concerning the compensation of its employees. The Township was, therefore, insulated from liability for promissory estoppel claims.

Public-sector employers should be cautious when relying on this blanket exemption, however. Like private-sector employers, public-sector employers should always include a strong disclaimer in their handbooks and policy documents. They should be wary of including any provisions in employment contracts referring to handbooks or other policies outside the contract. They also should be careful about the representations they make in their interactions with employees. Whether a public or private-sector employer, all employers should be leery of binding themselves unintentionally.

*Sean S. Kelly practices in all areas of employment and labor law. If you have questions regarding the Patterson decision or employer handbooks and policies, -contact Sean (ssk@zrlaw.com) at (216) 696-4441.

Massachusetts Court Bluntly Holds an Employer Failed to Consider Off-Duty Medical Marijuana Use as a Reasonable Accommodation

By Patrick M. Watts*

Is an employer required to engage in the “interactive process,” and possibly grant a waiver of compliance with its drug-testing policies, to accommodate a prospective employee who uses marijuana for medical purposes? Yes, according to a recent decision from Massachusetts’s highest court in Barbuto v. Advantage Sales and Marketing, LLC, 78 N.E.3d 37 (Mass. Jul. 17, 2017).

As background, in 2012, Massachusetts's voters approved a statute that protected “qualifying patients” (i.e. those diagnosed by a licensed physician as having a debilitating medical condition) from being arrested, prosecuted, or facing any civil penalty for the medical use of marijuana. Qualifying patients receive registration cards and are limited in the amount of marijuana they may possess for treatment purposes. The act provides that such persons “shall not be penalized . . . in any manner, or denied any right or privilege, for such actions.” Massachusetts is one of twenty-nine U.S. states that have enacted statutes to legalize the medical use of marijuana, including Ohio (see H.B. 523, effective September 8, 2016). However, under federal law, marijuana remains a “Schedule I” controlled substance under the Controlled Substances Act, 21 U.S.C. § 812(b)(1), and the possession of marijuana is a federal crime regardless of whether it is prescribed by a physician for medical use.

In an opinion applying and interpreting the Massachusetts state law, the Massachusetts Supreme Judicial Court reversed the dismissal of an employee’s claims, concluding that she had alleged a facially-valid claim of disability discrimination because her employer terminated her after she tested positive for marijuana in a pre-employment drug screen. The decision might have significant trend-setting implications in other states where the use of medical marijuana has been legalized, and may influence future marijuana-related discrimination cases arising under state and federal disability discrimination laws, including the Americans with Disabilities Act.

In Barbuto, after the plaintiff accepted an offer of employment, she was informed that she would be required to take a drug test. She then candidly disclosed she would test positive for marijuana. The plaintiff explained she had been diagnosed with Crohn’s disease, a debilitating gastrointestinal condition, and her physician had certified she should use marijuana for medicinal purposes.

To mitigate the symptoms of Crohn’s disease, the plaintiff typically consumed marijuana in small quantities at her home, usually in the evening, two or three times per week. Her condition, along with concomitant symptoms of irritable bowel syndrome, left her with “little to no appetite” and she had difficulty maintaining a healthy weight. However, after beginning to take medical marijuana, the plaintiff had gained fifteen pounds and had been able to maintain a healthy weight. The plaintiff told the employer’s representative she did not use marijuana daily, nor would she consume it before work or at work.

Initially, the employer’s representative told the plaintiff that her marijuana use “should not be a problem,” but he would need to confirm with others. He later telephoned the plaintiff again to confirm that her lawful use of marijuana would not be an issue. Shortly thereafter, the plaintiff completed her pre-employment urinalysis drug screening, attended a training program, and even completed her first day of work.

On the evening of her first day, however, the employer’s human resources representative contacted the plaintiff and informed her that she was being terminated for testing positive for marijuana. The representative noted that the lawful nature of the plaintiff’s use of marijuana was immaterial because the employer followed “federal law, not state law.”

The plaintiff filed a discrimination charge with the Massachusetts Commission Against Discrimination, which has jurisdiction to investigate charges filed under the state’s anti-discrimination statutes. The plaintiff later withdrew her charge and filed a complaint directly in Massachusetts state court. She claimed that the employer and its human resources representative personally engaged in “handicap discrimination” against her in violation of state law. The Superior Court dismissed the plaintiff’s anti-discrimination claim in favor of the employer, and the plaintiff appealed her case to Massachusetts’s highest court.

The Massachusetts Supreme Judicial Court analyzed the state’s anti-discrimination statutes, which prohibit any employer from dismissing or refusing to hire a person “because of [her] handicap” if she is qualified and capable of performing the essential functions of the position with accommodations that are reasonable and pose no undue hardship to the employer.

The plaintiff alleged that she was handicapped by her Crohn’s disease, but was capable of performing the essential functions of her position with a reasonable accommodation – i.e., a waiver of the employer’s policy that bars anyone from employment if he or she tests positive for marijuana. Citing specifically the deleterious effects of her medical conditions on her appetite and weight, the court had no trouble finding the plaintiff to be a “handicapped person” under state law. The plaintiff also clearly suffered an adverse employment action vis-à-vis her termination. Accordingly, the question of whether she adequately stated a claim for disability discrimination essentially turned on whether her requested “accommodation” was reasonable on its face. Although the court noted an absence of “hard and fast” rules of reasonability and emphasized the contextual nature of the analysis, it characterized the plaintiff’s burden as one of showing that her requested accommodation was “feasible for the employer under the circumstances.”

The employer raised two primary arguments in opposition to the plaintiff’s claims. It argued that: (1) because medical marijuana use is still a punishable federal crime, the requested accommodation was facially unreasonable and therefore the plaintiff was not a “qualified handicapped person” under state law; and (2) even if plaintiff could state a claim for disability discrimination, the employer terminated her employment because she had used marijuana and failed a drug test that all employees are required to pass, and not due to her “handicap” status (Crohn’s disease). The court rejected both arguments.

First, the court noted that employers have no sound reason to interfere with an employee taking medication to alleviate or manage a debilitating medical condition, and should not terminate an employee for using such medication. Also, if an employer’s drug policy prohibits the use of a particular medication, that policy does not alleviate the employer of its duty to engage in the interactive process with the employee to attempt to identify equally effective alternative treatments that would not violate the policy.

Even where no such alternative treatment exists, the employer still carries the burden of showing that a waiver of its drug policy would cause an “undue hardship” to the employer’s business to justify its refusal to make an exception. Even though marijuana remains a Schedule I controlled substance under federal law, that status did not make the plaintiff’s request “facially unreasonable,” nor did it relieve the employer of its obligation to engage in an interactive process before terminating the plaintiff’s employment. The employer’s failure to engage in such a process was sufficient to support the facial validity of the plaintiff’s claim.

As to the employer’s second argument, the court explained that terminating an employee for the use of a certain medication to alleviate or manage a handicapping medical condition is the same as a denial of employment because of the handicap. The court likened the employer’s conduct to an employer separating a diabetic employee because its policy barred the use of insulin.

The court did leave the door open for the employer to produce evidence of an “undue hardship” justifying its denial of a waiver of its drug policy for the plaintiff’s marijuana use. For example, allowing the plaintiff’s use of medical marijuana would not be a reasonable accommodation if it was shown to impair the performance of her work; pose an “unacceptable significant” safety risk to the public, the employee, or her coworkers; or violate a contractual or statutory obligation. As to this third basis for denying such a waiver as an accommodation, the court specifically referenced U.S. Department of Transportation regulations that prohibit any safety-sensitive employee subject to drug testing under those regulations from using marijuana (see 49 C.F.R. §§ 40.1(b), 40.11(a)). The court also noted that federal contractors and federal grant recipients are obligated to comply with the Drug Free Workplace Act, 41 U.S.C. §§ 8102(a), 8103(a), which prohibits employees from using controlled substances in the workplace and requires employers to make a good-faith effort to have a drug-free workplace. The court hinted that this argument might be unavailing for the employer, however, as nothing in the Massachusetts marijuana legalization statute required employers to allow employees to use marijuana on-duty and/or in the workplace.

Fortunately for Ohio employers, Ohio’s recently-enacted medical marijuana law states, in part, that nothing in the law: (1) “Requires an employer to permit or accommodate an employee's use, possession, or distribution of medical marijuana;” (2) “Prohibits an employer from refusing to hire, discharging, disciplining, or otherwise taking an adverse employment action against a person with respect to hire, tenure, terms, conditions, or privileges of employment because of that person's use, possession, or distribution of medical marijuana;” or (3) “Prohibits an employer from establishing and enforcing a drug testing policy, drug-free workplace policy, or zero-tolerance drug policy.” R.C. 3796.28. However, as more states legalize medical or recreational marijuana and more courts address marijuana-related discrimination claims – raised under both state and federal laws – all employers should keep apprised of legal developments. Otherwise, they may be in for a major buzzkill.

*Patrick M. Watts, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of employment and labor law. If you have questions about medical marijuana laws, contact Patrick (pmw@zrlaw.com) at (216) 696-4441.

Leveling the Fee-Shifting Playing Field: Can Ohio Employers Now Recover Fees and Costs after Defending against a Discrimination Charge?

By Ami J. Patel*

A recent change to Ohio’s anti-discrimination statutes has opened the door for Ohio employers to potentially recover attorney’s fees and costs from plaintiff employees after mounting a successful defense against charges of employment discrimination.

The new law – Substitute House Bill 463 – passed the 131st General Assembly on December 8, 2016 and went into effect on April 6, 2017. Among the various provisions of H.B. 463, which also amended other unrelated sections of the Ohio Revised Code, the Ohio Legislature added new language to a section of Ohio’s anti-discrimination statutes. The new language, which can be found in R.C. 4112.05(H), provides:

If, upon all the evidence presented at a hearing under division (B) of this section on a charge, the commission finds that a respondent has not engaged in any unlawful discriminatory practice against the complainant or others, it may award to the respondent reasonable attorney's fees to the extent provided in 5 U.S.C. 504 and accompanying regulations.

Under this new provision, the Ohio Civil Rights Commission ("OCRC") now has discretion to award attorney’s fees and costs to Ohio employers if, after a hearing, the OCRC finds that the employer did not unlawfully discriminate against the employee who filed the charge of discrimination.

Fee Shifting and the “American Rule”

Generally, each party to a legal dispute is responsible for paying for its own legal expenses, a principle that courts across the country refer to as the “American Rule” (as opposed to the “English Rule,” under which fee shifting is common). Under this American Rule, a prevailing party usually cannot force the opposing party to pay the attorney’s fees it has incurred in connection with the parties’ dispute. As with many legal principles, of course, there are important exceptions. Parties may be able to obtain costs and attorney’s fees from the opposing party if a court has awarded a judgment of punitive damages in the case, or if the plaintiff’s claims were frivolous or brought in bad faith. Attorney’s fees and costs are also routinely recovered from the losing party where there is a contract or a statute that expressly allows for such fee shifting to occur.

Various federal anti-discrimination laws – such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act – are notable examples of statutory exceptions to the American Rule in the context of employment-discrimination proceedings. These federal laws contain fee-shifting mechanisms, so that a “prevailing party” (a legal term of art) becomes entitled to recover reasonable attorney’s fees from the losing party. For employee plaintiffs who prevail in advancing their claims, this fee shifting is an automatic feature and can represent a significant cost to employers, above and beyond their own expenditures in mounting a defense.

Most state anti-discrimination laws mirror their federal counterparts in both substantive and procedural aspects, and likewise contain fee-shifting provisions. Unfortunately, fee shifting mechanisms for employment discrimination claims are one-sided: the prevailing employee can recover fees and costs for bringing and pursuing the lawsuit, but the employer is not entitled to the same benefit when it prevails. This one-sided design for fee shifting traces its roots to the social policies of the civil rights era. Congress and state legislatures allowed for one-sided fee shifting in employment-related lawsuits to provide a financial incentive to would-be plaintiffs and their lawyers, as a means of encouraging them to help advance emerging civil rights protections.

Does H.B. 463 Signal a New Fee-Trend?

Prior to the enactment of H.B. 463, Ohio’s anti-discrimination statutes (which can be found in Revised Code Chapter 4112) permitted only a one-sided fee-shifting mechanism that favored employees. Ohio employees could recover attorney’s fees and costs if they prevailed over their employers in a discrimination charge or in a lawsuit, but their employers had no reciprocal right to recover attorney’s fees and costs if they prevailed over the employees.

H.B. 463 effects an important change in the law, but it does not fully place employers and employees on equal footing with respect to fee shifting. Under the new language of H.B. 463, the OCRC now has discretion to award attorney’s fees and costs to prevailing employers. Thus, the fee shift in favor of employers is not automatic, but depends on case-by-case determination by the OCRC. The fee shift in favor of employers only applies in actions before the OCRC, and is not a remedy available from Ohio courts.

Because the new fee-shifting provision for employers depends on the OCRC’s discretion, it remains to be seen whether employers now have a viable mechanism under R.C. 4112.05(H) to recover fees and costs from unsuccessful employee claimants. The OCRC very well may limit the exercise of its new statutory discretion to extreme circumstances where employees have acted in bad faith or have advanced frivolous claims.

Also, the 132nd General Assembly currently is debating a series of significant substantive changes to Ohio’s anti-discrimination laws in the form of Substitute House Bill 2, which was introduced on February 1, 2017. Sub. H.B. 2 is currently under review by the Economic Development, Commerce, and Labor Committee of the Ohio House of Representatives. While the current text of the bill does not vary the new fee-shifting provision of R.C. 4112.05(H), the OCRC’s implementation of the current provision might influence the evolution of Sub. H.B. 2 or other future legislation.

The General Assembly’s renewed attention to Ohio’s anti-discrimination statutes might signal the start of a new trend benefitting employers. On the other hand, the new fee-shifting position of H.B. 463 might turn out to be business-as-usual for Ohio employers. Zashin & Rich will continue to monitor future developments from the OCRC and the General Assembly as Ohio continues to refine its anti-discrimination remedial scheme.

*Ami J. Patel practices in all areas of labor and employment law. If you have questions about this legislation, contact Ami at (ajp@zrlaw.com) or (216) 696-4441.



To Our 10 Attorneys Named to the 2018 Best Lawyers List
George Crisci, Jon Dileno, Deanna DiPetta, Jonathan Downes, Amy Keating, Christopher Reynolds, Jonathan Rich, Jeffrey Wedel, Andrew Zashin, Stephen Zashin

Zashin & Rich is pleased to announce that it was named a recipient of the
2017 Smart Business Family Business Achievement Award

Zashin & Rich – Family Business Achievement Award

Upcoming Speaking Engagements

Jonathan J. Downes
September 20-22, 2017
Jonathan J. Downes presents “FLSA and Storms on the Horizon” at the Ohio GFOA 30th Annual Conference & Membership Meeting at the Cleveland Marriott Downtown in Cleveland, Ohio.

Brad E. Bennett
Wednesday, September 27, 2017
Brad E. Bennett presents “Dealing with Guns, Marijuana, and Background Checks in the Workplace: Top Employment Policies for 2017” at the 2017 PCSAO Conference at the DoubleTree in Columbus, Ohio.

Jonathan J. Downes
Monday, October 2, 2017
Jonathan J. Downes presents “Labor and Employment Law Challenges” at the Ohio Association Chiefs of Police New Chiefs’ Workshop at the Crowne Plaza Columbus North‐Worthington in Columbus, Ohio.

George S. Crisci
Thursday, October 12, 2017
Stephen S. Zashin presents “Emerging Issues with Trade Secrets and Non-Competes” and George S. Crisci presents “Latest Developments from SERBia” at the Ohio State Bar Association’s 54th Annual Midwest Labor and Employment Law Seminar held in Columbus, Ohio.

Lisa A. Kainec
Tuesday, October 24, 2017
Lisa A. Kainec presents “Employment Law Hot Topics and Legislative Update” at the Medina Society for Human Resource Management seminar held at the Weymouth Country Club in Medina, Ohio.

Tuesday, June 27, 2017


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Akron United: The Rubber City Passes New Law to Combat Discrimination

By Emilie M. Carver*

On March 20, 2017, the City of Akron joined a growing list of Ohio cities with non-discrimination ordinances when Mayor Dan Horrigan signed Ordinance Number 82-2017 into law. The new law protects Akron residents and visitors against discrimination in employment, housing, and public accommodations, and creates the Akron Civil Rights Commission to hear complaints and enforce the new law. The Mayor and City Council “wish to affirm the dignity and worth of all people and provide certainty to the residents and visitors of Akron that unlawful discrimination will not be tolerated in this City.”

The new ordinance is structured similarly to Ohio’s statewide anti-discrimination law, but includes protected classes not covered by state (or federal) law. Akron’s ordinance, like Ohio law, prohibits discrimination based on a person’s age, race, color, religion, national origin, ancestry, disability, sex, and military status, but adds protections for creed, marital status, familial status, gender identity or expression, and sexual orientation. Akron’s law follows the trend set by Cincinnati, Cleveland, Columbus, Dayton, Toledo, and Youngstown, among other Ohio cities.

With respect to employment discrimination, Akron’s law applies to employers that regularly employ four or more individuals. Similar to Ohio law, Akron’s law also applies to “any person acting on behalf of an employer, directly or indirectly.” Attorneys representing employees may argue the law provides for individual supervisor liability.

The ordinance also establishes the Akron Civil Rights Commission, whose five members will be appointed by the Mayor and confirmed by the Akron City Council. The Commission will “aim to include a diverse set of members from classes of individuals protected from discrimination” by the new ordinance. Commission members must be residents of the City of Akron.

The Akron Civil Rights Commission will hear and investigate complaints brought by individuals who believe they have been discriminated against. A party must file a complaint with the Akron Civil Rights Commission within one year of the alleged discriminatory practice. The new ordinance does not limit the right to file complaints with other agencies, including the Ohio Civil Rights Commission and the Equal Employment Opportunity Commission. Notably, the Akron Civil Rights Commission is empowered to order some substantial remedies for discrimination: hiring, reinstatement, upgrading or promotion; back pay; compliance reporting; notice posting; damages for injury, humiliation, and embarrassment; costs; attorney fees; and civil penalties to the Akron Civil Rights Commission of up to $1,000.00 for each violation.

*Emilie M. Carver practices in all areas of employment and labor law. If you have questions regarding Akron’s new non‑discrimination ordinance, please contact Emilie (emc@zrlaw.com) at (216) 696-4441.

The Saga Continues: Sixth Circuit Rules Employment-Related Class Action Waivers In Arbitration Agreements Are Unenforceable

By Helena Oroz*

The U.S. Court of Appeals for the Sixth Circuit recently issued a much-anticipated decision that cracked the current class action waiver circuit court split even wider. In NLRB v. Alternative Entertainment, Inc., the Sixth Circuit held that an arbitration provision requiring employees to arbitrate individually all employment-related claims is unenforceable because it violates the National Labor Relations Act’s (“NLRA”) guaranteed right to collective action. 858 F. 3d 393 (6th Cir. 2017).

The case began, as so many do, with an employee’s termination. A field technician for Alternative Entertainment, Inc. (“AEI”) voiced his concerns about AEI’s changes to its compensation structure to coworkers, a manager, AEI’s Chief Financial Officer, and even the company’s president, repeatedly referring to technicians collectively. Two days after the employee spoke with the CFO and emailed the president, the company terminated his employment because the “relationship [was] not working out.”

The employee filed charges with the National Labor Relations Board (“NLRB”). An Administrative Law Judge determined that the company violated the NLRA, and the NLRB adopted that decision and filed an application to enforce the order. And that, in short, is how an employee literally makes a federal case out of discontent with compensation practices.

Specifically at issue in the case was AEI’s “Open Door Policy and Arbitration Program.” AEI’s arbitration program required employees to resolve employment-related disputes exclusively through binding arbitration. The company’s arbitration agreement contained a provision stating that the parties agreed that “a claim may not be arbitrated as a class action…and that a claim may not otherwise be consolidated or joined with the claims of others.” The NLRB concluded that this provision violated the NLRA because it prevented employees from taking any concerted legal action.

In reviewing the NLRB’s decision, the Sixth Circuit considered the compatibility of the Federal Arbitration Act (“FAA”), which governs the enforceability of arbitration agreements, and the NLRA, which protects the right to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection,” commonly referred to as “Section 7 rights.” The Court determined that the statutes do not conflict because of the FAA’s savings clause. The FAA’s savings clause provides that arbitration agreements are as enforceable as other contracts, but likewise are not any more enforceable than any other contracts “at law or in equity.” In other words, the Court reasoned that the FAA’s savings clause does not require enforcement of any arbitration agreement with illegal provisions. In this case, the arbitration agreement at issue included provisions that prohibited collective and class action suits – illegal under the NLRA as interfering with employees’ Section 7 rights.

In so holding, the Sixth Circuit agreed with the Seventh and Ninth Circuits’ previous holdings on the issue and completely disagreed with the Fifth Circuit’s previous holdings that arbitration provisions mandating individual arbitration of employment-related claims are enforceable. Now it is up to the U.S. Supreme Court to decide how the saga ends. Before the Sixth Circuit even had issued this decision, the Supreme Court had already granted writs of certiorari this past January in Morris v. Ernst & Young, LLP (9th Circuit, 2016), Lewis v. Epic Systems Corp. (7th Circuit, 2016), and Murphy Oil USA, Inc. v. NLRB (5th Circuit, 2015) and consolidated the three cases. The consolidated cases are currently in the briefing stage, so it remains unclear when the Supreme Court will actually issue a decision to resolve this ongoing circuit split.

In the meantime, if you are an employer with an arbitration program, keep tabs on these developments – and perhaps prepare for a change to your program pending the Supreme Court’s decision. Another take away, beyond the immediate scope of this article? Don’t rush to terminate an employee you find annoying because he or she is complaining about compensation changes or other terms and conditions of employment something, especially on behalf of a group. It’s a good way to start the NLRB ball rolling and end up in federal court.

*Helena Oroz, an OSBA Certified Specialist in Labor and Employment Law, is is a member of the firm’s Labor and Employment Groups and has extensive experience with arbitration agreements. If you have questions regarding your arbitration program, contact Helena at hot@zrlaw.com or (216) 696-4441.

More Data, More Problems? EEO-1 Now Requires Reporting of Summary Pay and Hours Worked Data

By Lisa A. Kainec*

If you thought the Equal Employment Opportunity Commission ("EEOC") was all up in your business before, 2017 won’t bring you any relief. Beginning with 2017 data, the EEOC has created additional reporting requirements for employers required to submit an Employer Information Report, or EEO-1.

Specifically, certain employers must now submit summary pay and hours worked data for their workforce. Starting with the 2017 report, due March 31, 2018:
  • Private employers and federal contractors/subcontractors with 100 or more employees will submit summary pay data.
  • Federal contractors/subcontractors with 50 to 99 employees will continue to report the same job category and demographic data as required in previous years (no summary pay data).
  • Private employers with 99 or fewer employees and federal contractors/subcontractors with 49 or fewer employees are not required to submit an EEO-1 report.

Until now, the EEO-1 required all reporting employers to categorize employees by job and demographics. Employers first categorize their employees into ten job categories, which remain the same (Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers). Next, employers report the number of employees within each job classification by sex and ethnicity or race (White; Black or African American; Native Hawaiian or Pacific Islander; Asian; Native American or Alaska Native; or Two or More Races).

Now, applicable employers also must report summary pay data. The revised EEO-1 contains twelve pay bands into which the employer must categorize employees. Employers should pull employee pay data from Box 1 of employee Forms W-2 to prepare the revised EEO-1 but should not report individual pay or salaries. Instead, employers will mark the number of employees in a pay band that fall within a particular job category and demographic. For example, an employer may report five Native Hawaiian men in pay band 10 ($128,960 - $163,799) in the Executive/Senior Level Officials and Managers job category. See the new EEO-1 here: https://www.eeoc.gov/employers/eeo1survey/2016_new_survey_2.cfm.

In addition, applicable large employers must count and report hours worked for employees. Employers will report the total number of hours worked for all employees in a particular pay band and may count hours based on records required under the Fair Labor Standards Act (“FLSA”). For FLSA non-exempt employees, employers should report based on the hours those employees worked. For FLSA exempt employees, employers may: 1) report 20 hours per week for each part-time employee and 40 hours per week for each full-time employee; or 2) report the actual number of hours worked by each exempt employee. For example, four employees in a particular ethnicity and pay band (e.g., Black/African American in pay band 11) could work the following hours: 2,080; 2,500; 1,660; and 1,040. In that case, the employer would report 7,280 hours worked in the year in the Black/African American and pay band 11 column/row. See this portion of the new EEO-1 here: https://www.eeoc.gov/employers/eeo1survey/2016_new_survey_3.cfm.

Since applicable employers now must submit cumulative information for a given year (e.g., hours worked), the EEOC also changed the reporting deadline. Previously, the EEOC required employers to submit their EEO-1 report by September 30th in a given year. Now, the deadline is March 31st. Therefore, applicable employers must submit the next EEO-1 report, which reflects 2017 data, by March 31, 2018 (and will submit 2018 data by March 31, 2019, etc.).

The EEOC also modified the “workforce snapshot period” – the three-month window during which employers choose one pay period to identify and count employees for EEO-1 reporting purposes. Previously, the “workforce snapshot period” was July 1 to September 30. Under the revised EEO-1 report, that “workforce snapshot period” is from October 1 to December 31. Once the employer identifies the individuals on which it will report, it reports their information, including summary pay and hours worked data, for the calendar year.

While employers have some time to adjust to the new reporting requirements, they should begin developing and identifying processes for gathering the newly required data now.

*Lisa A. Kainec, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of employment and labor law. If you have questions about the EEO-1 or its new reporting requirements, contact Lisa (lak@zrlaw.com) at 216.696.4441.

Top Five Handbook Policies for Employers to Review in 2017

By Brad E. Bennett*

Federal and state legal developments over the past couple of years have brought changes that impact workplace policies and procedures. While President Trump has indicated that federal employment regulations will be pulled back under his administration, employers should make sure their handbooks are up to date in order to comply with current federal and state laws. Here are five policy provisions to review based upon federal and state developments over the past couple years.

1. Whistleblower Provisions

Employers should make sure their handbook provisions do not inadvertently discourage employees from reporting potential legal violations to the employer or to government agencies. The Equal Employment Opportunity Commission (“EEOC”) has been targeting any policy that may be interpreted as curbing an employee's right to go to the EEOC—or any other agency—to report violations of the law. Reviewing language throughout a handbook in order to address this issue is encouraged. Further, ensuring that a strong anti-retaliation policy or provision is contained in the handbook will prove to be invaluable.

2. Background Checks

Public employers also should take a close look at their background check policies and procedures to make sure they align with Ohio’s “ban-the-box” law that went into effect in March of 2016. The law prohibits Ohio public employers from asking about criminal convictions in the initial application.

The EEOC also has previously issued an Enforcement Guidance regarding the use of criminal background checks in employment. The EEOC Guidance, which is applicable to both public and private sector employers, should also be taken into consideration when revising background check policies and procedures. The EEOC Guidance states that policies which exclude applicants with any criminal conviction from employment are considered discriminatory. Instead, the EEOC requires employers to determine whether specific criminal conviction exclusions are “job related and consistent with business necessity.” To make such a determination, the EEOC utilizes a three-factor test utilized by the Eighth Circuit Court of Appeals in Green v. Missouri Pacific Railroad Co., 523 F.2d 1290 (8th Cir. 1975) (the "Green factors"). Based upon the Green factors, the EEOC will review whether the employer considered the following in denying employment based upon a criminal conviction:
  • The nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and/or completion of the sentence; and
  • The nature of the job held or sought.

Therefore, employers are encouraged to review their background check policy and procedure in light of Ohio’s “ban-the-box” law and the EEOC Guidance.

3. Drug Testing Policies

As of September 2016, medical marijuana is legal in Ohio. However, nothing in the new law interferes with an employer’s right to prohibit the use, possession or distribution of marijuana in the workplace. Because marijuana is still listed on Schedule I of the Federal Controlled Substance Act, it is also still illegal under federal law. Therefore, Ohio’s medical marijuana law specifically authorizes employers, through a drug-free workplace policy, to treat medical marijuana’s presence in an employee’s system as a violation of the policy. It is advisable for employers to make it clear in their drug-free workplace policies that detection of the presence of medical marijuana in an employee’s system through a drug test will violate the policy.

4. Weapons Ban Policies

Effective March of 2017, Ohio’s new concealed carry law prohibits both public and private employers from having or enforcing policies that restrict valid concealed carry holders (as well as covered active military members) from transporting or storing their firearms and ammunition in their personal vehicles. While nothing in the new law requires employers to allow concealed carry holders to bring their weapons into employer buildings or employer owned or operated vehicles, it does permit concealed carry holders and covered active military members to store their personal firearms and ammunition in their personal vehicles as long as the vehicle is in a location where it is otherwise permitted to be (e.g. a parking lot).

As a result, weapons policies, vehicle usage policies, and other applicable policies should be reviewed and revised in order to ensure continued compliance with Ohio law in this area.

5. Workplace Accommodations and Light Duty Policies

By now, employers are well aware of their obligation to provide a “reasonable accommodation” to a qualified employee or applicant with a disability under Ohio and Federal law. As such, most employers already have a “disability accommodation” policy. However, an employee or applicant with a disability is not the only area where employers must provide a reasonable accommodation.

Title VII of the Civil Rights Act (“Title VII”) also requires employers to provide reasonable accommodations for an employee’s religious practices. In 2015, the requirement to provide religious accommodations was brought to the forefront when the U.S. Supreme Court found that Abercrombie & Fitch failed to inquire whether a reasonable accommodation to its dress code policy could be provided when it rejected a Muslim applicant who wore a hijab to the job interview. See EEOC v. Abercrombie & Fitch, 135 S.Ct. 2028 (2015).

In the case of Young v. UPS, 135 S.Ct. 1338 (2015), the U.S. Supreme Court also held that employer light duty policies that are limited to only workplace injuries and which cannot be utilized by pregnant employees violate the Pregnancy Discrimination Act and Title VII. The U.S. Supreme Court made it clear that polices must treat “women affected by pregnancy . . . the same for all employment-related purposes . . . as other persons not so affected but similar in their ability or inability to work.” As a result, light duty policies and accommodation policies should address female employees who, due to pregnancy, are limited in their ability to work.

Based upon the U.S. Supreme Court’s duel opinions regarding religious accommodations and accommodating pregnancy-related limitations, employers should take a second look at both their light duty and workplace accommodations policies and procedures. Employers should spell out in their handbooks not only the legal basis for accommodations but also the employer’s intention to comply with them when they are reasonable.

So, there you have it – the top five handbook policies to review for 2017 (thus far). Of course, don’t forget the value of supplying employee and management training once your handbook policies are revised. Managers also should be trained regarding their obligations when confronted with a request for an accommodation or for light duty under the law and under the handbook policy.

*Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment law, is a member of the firm’s Labor and Employment Groups and practices out of the firm’s Columbus, Ohio office. If you have questions regarding your company’s handbook policies, contact Brad at beb@zrlaw.com or (614) 224-4411.

Substance Over Form: Employers Need the Right Evidence to Combat Disability Discrimination Claims

By David P. Frantz*

Even though a stock clerk could not fulfill his job’s lifting requirements, a court concluded that he was qualified for the job. In Camp v. Bi-Lo, LLC, 662 Fed. Appx. 357 (6th Cir. 2016), a grocery store discharged a stock clerk when the clerk’s doctor did not clear him to lift 60 pounds, which was a “frequent” requirement of his job. The clerk sued, claiming the store discriminated against him on the basis of his disability in violation of the Americans with Disabilities Act (“ADA”).

At issue in Camp was whether the stock clerk was qualified for his position, given his inability to lift 60 pounds and the employer’s contention that this was an essential job function. When determining whether a particular job function is essential, courts consider a number of factors: 1) the employer’s judgment; 2) the written job description; 3) the amount of time the employee spends performing the function; 4) the consequences of not requiring the employee to perform the function; 5) the work experience of previous employees who held the position; and 6) the current work experiences of employees in similar jobs.

The court in Camp rejected the employer’s reliance on the stock clerk job description. The employer created the job description more than thirty years after the clerk started working for the company. In addition, the clerk’s immediate supervisor testified that heaving lifting was not an essential job function. The court found that a supervisor’s testimony may rebut claimed essential functions detailed in a job description.

Further, the employer submitted nothing more than the job description to prove two facts: 1) that heavy lifting took up a significant percentage of the clerk’s job; and 2) the clerk’s inability to lift more than 35 pounds caused an actual burden. In contrast, everyone who worked with the clerk testified that heavy lifting was a small and non-important part of the job. The court also concluded that any consequences resulting from the clerk’s disability were de minimis, as the clerk and his co-workers had an arrangement alleviating the clerk from having to lift the heaviest items. Those co-workers also testified that such an arrangement would have minimal effect on store operations. Finally, the court considered that the clerk fulfilled his job duties for years with his disability and the help of co-workers.

The Camp case teaches employers several important lessons. Disability discrimination cases are fact-specific. It is imperative that employers engage in an interactive process with individual employees to determine if any reasonable accommodations exist. In addition, employers should fully evaluate whether a job function is truly essential and should not simply rely on an old written job description. Employers also should ensure that management and supervisors have the same understanding regarding a job’s essential functions.

*David P. Frantz practices in all areas of employment and labor law. If you have questions about this decision, disability discrimination, or reasonable accommodations, please contact David (dpf@zrlaw.com) at 216.696.4441.


Please join Z&R in welcoming Sean Kelly to its Employment and Labor Groups.

Sean Kelly joined Zashin & Rich in 2017. He represents public and private sector employers in all aspects of labor and employment law and employee benefits disputes. Sean has extensive litigation experience before state federal courts and administrative agencies. His representative cases include complex occupational safety and health, workplace intentional tort, employment discrimination, and whistleblower matters. Sean also has experience handling disputes arising under the Employer Retirement Income Security Act of 1974 (ERISA) and state insurance law. Sean has appeared before the Supreme Court of Ohio, and has set Ohio precedent in the area of workers' compensation. In addition to his litigation practice, Sean counsels employers in EEO, OSHA, employee benefits, executive compensation, wages and hours, and other compliance matters. He brings over a decade of experience in highly specialized industry sectors including aviation, maritime, health care, and oil and gas production. His practice includes helping employers properly address inspections by government agencies including OSHA, NIOSH, and the FAA.

Upcoming Speaking Engagements

Monday, August 21, 2017
Patrick M. Watts presents “Creating Fair Labor Standard Act (FLSA) Compliance Strategies That Work” at the National Business Institute’s seminar on Advanced Employment Law held at the Hilton Garden Inn Akron in Akron, Ohio.

Wednesday–Friday, September 13–15, 2017
Patrick M. Watts and Lisa A. Kainec present “Medical Marijuana and the Heroin Epidemic: Impact on the Workplace” at the Ohio Society for Human Resource Management seminar held at Kalahari Resorts in Sandusky, Ohio.

Monday, October 2, 2017
Jonathan J. Downes presents “Labor and Employment Law Challenges” at the Ohio Association Chiefs of Police New Chiefs’ Workshop held at the Crowne Plaza Columbus North‐Worthington in Columbus, Ohio.

Tuesday, October 24, 2017

Lisa A. Kainec presents “Employment Law Hot Topics and Legislative Update” at the Medina Society for Human Resource Management seminar held at Weymouth Country Club in Medina, Ohio.

Monday, March 27, 2017

Ohio Senate Bill Proposes New Protections for Retail & Fast Food Workers

*By Scott H. DeHart

On March 15, 2017, State Senator Michael Skindell (D-Lakewood) introduced Senate Bill 101, the “Retail and Restaurant Employee Rights Act.” The Bill is intended to address hiring and scheduling practices of large retailers and fast-food restaurant franchises that employ part-time workers at relatively low wages, which results in many workers holding multiple jobs. The Bill takes aim at "just in-time" scheduling practices that are perceived to make it difficult for employees to hold second jobs or handle personal needs such as caring for family members.

Senate Bill 101 outlines a series of hiring, scheduling, and other provisions that employers must follow in order to make work schedules fair and predictable for their employees.

  • Under the proposed law, employers would be required to offer additional work to any “available” existing workers before hiring or leasing new employees. “Available” workers include those who are scheduled for less than 35 hours per week and are qualified to perform that work.
  • Employers would also be required to post their employees’ schedules publicly at least 14 days in advance, including both regular and on-call shifts.
  • If an employer cancels a worker’s shift with less than 14 days’ notice, the employee must still be paid some compensation that will vary with the length of notice given. In addition, the legislation outlines pay for on-call shifts.
  • The legislation also includes provisions requiring part-time and full-time employees to be treated similarly regarding hourly wages, employee benefits including healthcare, access to time off, and eligibility for promotions.
  • Successor employers would also be subject to certain requirements to retain existing workers after a transition in ownership.

In a press release about the Bill, Senator Skindell explained that “[t]he proposed legislation would provide hours and retention protections for fair and predictable scheduling and treatment of part-time employees of some chain stores and fast food restaurants. It is imperative that we work toward increasing economic security and providing strong worker protections at the state level.” If enacted, the Ohio Department of Commerce would be responsible for the enforcement of the Bill’s requirements. Remedies for an employer’s violation of the proposed law would include requiring employers to offer additional work, reinstate employees, pay lost wages and penalties, and pay for enforcement costs and attorney’s fees.

Senate Bill 101 has the potential to dramatically increase the legal compliance burdens of retail and fast-food businesses operating in Ohio. Zashin & Rich, Co. L.P.A. will continue to monitor new developments as SB 101 proceeds through the legislative process in the General Assembly.

*Scott H. DeHart is the newest member of the firm’s Labor and Employment Groups and practices out of the firm’s Columbus, Ohio office. If you have questions regarding this proposed legislation, contact Scott at shd@zrlaw.com or 614-224-4411.

Friday, January 20, 2017

U.S. Citizenship and Immigration Services Give Form I-9 a “Smart” Makeover

By Scott H. DeHart*

One of the most widely-recognized “new hire” employee forms in the United States has received a twenty-first century makeover. Beginning January 22, 2017, employers must complete a new Form I-9, Employment Eligibility Verification, for all new hires in the United States.

Employers have had to complete Form I-9s since November 1986, when Congress passed the Immigration Reform and Control Act (“IRCA”). The IRCA prohibits employers from hiring workers, including U.S. citizens, for employment in the U.S. without verifying their identity and employment authorization using Form I-9.

The new Form I-9, dated November 14, 2016, includes a number of changes designed to make the form easier for employers to complete. Those changes include the following new “smart” features (i.e., enhancements for completing the form on a computer) and modifications to the form’s content:

Smart Features
  • Drop-down menus, lists, and calendars;
  • Hover text for on-screen instructions;
  • Real-time prompts to notify users that a required field has been left blank or not completed correctly;
  • Automatically marking fields as “Not Applicable,” based on the employee’s selected citizenship or immigration status; and
  • Automatically creating a quick response (QR) code when the form is printed.

Content Changes
  • Instructions for completing Form I-9 moved to a separate document;
  • The “Other Names Used” field replaced with “Other Last Names Used” field;
  • A supplemental page added to designate preparers/translators who assist in completing the form; and
  • A dedicated area for including additional information.

Employers can download a PDF version of the new Form I-9 at the website for U.S. Citizenship and Immigration Services (“USCIS”), along with instructions about how to complete the form: https://www.uscis.gov/i-9. USCIS designed the new Form I-9 so that it could be completed using a computer and then printed for signing. Employers may also print and complete an alternate version of the form (without any smart features and fillable fields) by hand.

Beginning January 22, 2017, companies must begin using the new Form I-9. Employers should review and monitor their hiring processes, and consult with their legal counsel for assistance as needed to ensure that they are using the Form I-9 correctly.

*Scott H. DeHart is the newest member of the firm’s Labor and Employment Groups and practices out of the firm’s Columbus, Ohio office. If you have questions regarding your company’s transition to the new Form I-9, contact Scott at shd@zrlaw.com or 614-224-4411.