Saturday, October 29, 2005

EMPLOYMENT LAW QUARTERLY | Fall 2005, Volume VII, Issue iii

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Ohio Courts Consider Compensability in Cases of Automobile Injury and Limb Loss

By Steve P. Dlott

Two recent cases in Ohio courts considered two different aspects of workers' compensation law: when an injury is received "in the course of employment," and when the loss of limb can result in permanent total disability compensation.

In Cartwright v. Conrad, an employee traveling as a passenger in her co-worker's vehicle suffered injuries in a car accident. The injured employee had asked her co-worker, a store manager, for a ride to and from a one-day training seminar. After the seminar, the co-worker stopped to obtain payroll packets for her store and another store before driving the employee home. At this stop, the employee actually went inside and obtained the payroll packets. The employee and her co-worker then dropped off the first payroll packet. However, while driving to the second store to drop off the second payroll packet, the co-worker got into an accident.

The employee filed a workers' compensation claim for injuries she suffered as a passenger in the car accident. The Bureau of Workers' Compensation denied her claim, and the employee appealed. The Industrial Commission affirmed the Bureau's decision, and the employee appealed the Industrial Commission's decision to court. The court found in favor of the employer.

The employee appealed, arguing that factual questions existed concerning whether her injury occurred "in the course of" or "arising out of" her employment. By statute, only an employee with an injury "received in the course of, and arising out of, the injured employee's employment" may receive workers' compensation benefits for that injury. The language "in the course of" limits compensation to injuries an employee receives while performing duties that his or her employer requires, while "arising out of" requires a causal connection between the injury and the employment.

The appeals court held that the employee's injury was not received either "in the course" or "arising out of" her employment. First, the court reviewed the accident in light of the "coming-and-going rule":
As a general rule, an employee with a fixed place of employment, who is injured while traveling to or from his place of employment, is not entitled to participate in the Workers' Compensation Fund because the requisite causal connection between the injury and the employment does not exist.
The court held that the employee had a fixed place of employment, even though her employer required her to attend the one-day seminar at a different location. Based on the coming-and-going rule, therefore, the employee could not receive benefits for injuries received in the car accident while traveling home from work. The employee argued that an exception applied in her case because she was performing a special errand for her employer at the time of the accident. The court disagreed, explaining that the exception does not exist unless the special errand was a major factor in the travel that produced the injury, not just incidental to the travel. The court held that the co-worker's errand was merely incidental to the employee's journey home. Therefore, the employee's injury did not occur "in the course of" her employment.

The court also reviewed the facts and circumstances surrounding the accident in light of three factors that the Ohio Supreme Court established for finding a causal connection between an employee's employment and injury: proximity of the place of employment to the accident scene; the employer's degree of control over the accident scene; and the benefit to the employer of the employee's presence at the accident scene.

The court found no causal connection between the employee's injury and her employment. First, the accident scene was remote from the employee's place of employment, as well as the hotel where the seminar took place. Second, the employer had no direct control over the accident scene. Finally, and most significantly for the court, the employee's presence at the accident scene provided no real benefit to the employer. The court found that the employee did nothing significant during the trip from the hotel to her home that aided her co-worker's mission on the employer's behalf. Therefore, the court held that the employee's injury was not one "arising out of" her employment.

It was clear from the facts in this case that the three-factor analysis did not point to a causal connection between the employee's injury and her employment. Nevertheless, employers should understand that any off-site employee work activity increases the risk of workers' compensation exposure.

***

The Ohio Supreme Court recently concluded that the loss of a leg is a loss of two limbs – a leg and a foot – for purposes of Ohio's permanent total disability ("PTD") statute. Under Ohio law, an individual may receive an award of PTD for "the loss or loss of use of both hands or both arms, or both feet or both legs, or both eyes, or of any two thereof."

In International Paper v. Trucinski, an employee suffered serious injuries to his leg during a chemical explosion at work. As a result of the injury, the employee underwent an above-the-knee amputation. The employee eventually applied for and received PTD. The employer unsuccessfully challenged the PTD award to an appeals court, and then to the Ohio Supreme Court.

The Ohio Supreme Court, in affirming the appeals court, also affirmed its own previous decision in a similar case. The Court previously held that a hand and an arm are distinct body parts for purposes of the PTD statute. Therefore, an employee's loss of an entire single extremity can equate to the loss of two body parts and an award of PTD under the statute. Based on its reading of the PTD statute and its previous case law, the Supreme Court held that the employee's loss of his leg equated to the loss of two body parts – a leg and a foot – for purposes of a PTD award.

The Supreme Court's decision is somewhat surprising. While the loss of a foot does not necessarily involve the loss of a leg, the converse is always true. One need not have a medical degree to recognize that the loss of a foot cannot survive the loss of a leg. Allowing employees, who unfortunately suffered the loss of a leg, to collect benefits for both the leg and the foot suggests a double recovery. However, the Supreme Court's sympathy for such tragic injuries appears to trump elementary anatomy in lost limb compensation awards.


Brain • Food • Breakfast • Law Series


Breakfast might the most important meal of the day. Most people skip it.

Keeping pace with workplace law is important too, yet many human resource professionals, attorneys, managers and business leaders skip that, too.

Zashin & Rich Co., L.P.A. presents you with a valuable opportunity to get the nutrition you need for breakfast and your brain. The Ohio Supreme Court has also approved these seminars for attorney CLE credit. Join Zashin & Rich attorneys for breakfast refreshments as they discuss topics from and take your questions about the ever-evolving world of workplace law:

Zashin & Rich Co., L.P.A.  presents
Overtime Over Your Head? Fair Labor Standards Act Update
This seminar will take place on November 10, 2005. Attorney Michele Jakubs will discuss a variety of useful FLSA topics, including:
  • how to determine whether an employee is exempt from overtime compensation (administrative, executive, professional, and others)
  • how to protect exempt status: dos and don'ts
  • how to understand what comprises working time, and what to do with waiting time, on-call time, break periods, training and the like
  • how to avoid overtime mishaps with hours, bonuses, and determining an employee's "regular rate"
  • what to do if your company makes a mistake

In addition, Attorney Christina Janice will discuss FLSA litigation and provide you with a useful understanding of:
  • collective actions, class actions, multidistrict litigation, and choice of remedy
  • which employers are subject to collective actions
  • current trends and recent decisions in class action FLSA litigation
  • defensive strategies for employers subject to collective actions
Details for the FLSA seminar:
Date: November 10, 2005
Time: 8:30 a.m.- 10:00 a.m.
How to register: call (216) 696-4441 and speak with Gwen Johnston

Because all seminars are strictly limited to 20 attendees, you must register for this seminar no later than November 8, 2005.

You may also register for our next breakfast seminar,
How Does Your Garden Grow? Cultivating a Union-Free Workplace
In this seminar, attorney Robert Hartman will discuss union organizing and union avoidance following recent developments involving the AFL-CIO. The information in this seminar will include:
  • current state of union organizing
  • exploring why employees unionize
  • proactive steps management can take to prevent union organizing
  • methods to win a union election campaign
Details for union organizing seminar:
Date: December 8, 2005
Time: 8:30 a.m.- 10:00 a.m.
How to register: call (216) 696-4441 and speak with Gwen Johnston

All brain · food · breakfast seminars:
  • take place at our offices. Call (216) 696-4441 for directions or more information.
  • begin with registration at 8:30 a.m. and conclude at 10:00 a.m.
  • are strictly limited to 20 attendees. You may register in advance by calling (216) 696-4441 (please ask for Gwen Johnston).
  • These courses have been approved by the Ohio Supreme Court Commission on Continuing Legal Education for 1.50 total CLE credit hours for each seminar (0.00 of ethics, 0.00 hour(s) of professionalism and 0.00 of substance abuse instruction).
  • cost $30.00 per session per attendee
  • include breakfast refreshments.
  • are led by Zashin & Rich attorneys who practice only workplace law all day, every day.
  • include time for your questions.
Join us for the brain · food · breakfast · law series. It's just good for you.

PRISON LOVE: California Puts Sexual Favoritism in the Slammer

By Lois A. Gruhin

The California Supreme Court recently expanded the grounds for employee harassment actions against employers. In Miller v. Department of Corrections, the court unanimously held that widespread sexual favoritism in the workplace may create an actionable hostile work environment under the state's anti-harassment law, the Fair Employment and Housing Act ("FEHA").

In Miller, two female former employees of a California prison ("the plaintiffs"), claimed that a supervisor accorded unwarranted favorable treatment to three female co-workers ("the paramours") with whom the supervisor had sexual affairs. The plaintiffs claimed that the supervisor's conduct constituted sexual discrimination and harassment in violation of FEHA. For example, one plaintiff served on an interview panel that evaluated applications for a promotion. Although the panel did not select one of the supervisor's paramours, who had applied for the promotion, the paramour nonetheless received the promotion, allegedly upon the supervisor's orders. When one of the plaintiffs competed for a promotion with a second paramour, the paramour again received the promotion, despite the plaintiff's higher rank, superior education, and greater experience.

The plaintiffs alleged a host of other conduct and unfair treatment they attributed to the supervisor's sexual relationships. The plaintiffs also alleged that their complaints were either ignored or dismissed. Both plaintiffs eventually resigned from their positions.

The lower courts awarded the employer summary judgment, finding, as have many other courts, that a supervisor's favoritism toward a workplace-lover does not constitute sexual harassment toward non-favored employees. The California Supreme Court reversed, however, finding that an employee may establish an actionable claim of sexual harassment under FEHA by demonstrating that widespread sexual favoritism was severe or pervasive enough to alter his or her working conditions and to create a hostile work environment.

The court relied heavily on a 1990 Equal Employment Opportunity Commission ("EEOC") policy statement concerning employer liability for sexual favoritism under the Civil Rights Act of 1964 ("Title VII"). In its policy statement, the EEOC observed that:
although isolated instances of sexual favoritism in the workplace do not violate Title VII, widespread sexual favoritism may create a hostile work environment in violation of Title VII by sending the demeaning message that managers view female employees as 'sexual playthings' or that 'the way for women to get ahead in the workplace is by engaging in sexual conduct.'
The court concluded that this was just such a situation. The evidence suggested to the court that the supervisor "viewed female employees as 'sexual playthings' and that his ensuing conduct conveyed this demeaning message in a manner that had an effect on the workforce as a whole." Moreover, the court found that the supervisor's sexual favoritism blocked plaintiffs' advancement and caused them to suffer harassment at the hands of one of the supervisor's paramours, who the supervisor failed to control. The court therefore concluded that the evidence created at least a triable issue of fact.

So what does this case mean for employers? How much can employers possibly do to control workplace romances? Generally speaking, all employers, not just those doing business in California, should determine how they want to manage workplace relationships. Some companies go so far as to prohibit workplace relationships altogether, while other employers prohibit romantic relationships between supervisors and subordinates. Still others require employees engaged in romantic relationships to report the relationship to management. Some companies require that upon such a report, one employee transfer to another location or even leave the company's employ. Some companies require the employees to sign a "love contract" acknowledging the consensual nature of their relationship.

There may be wisdom in each of these choices. Employers should consider the best method for their size, legal jurisdiction, and corporate culture. All employers must, however, ensure that employees work in a hostility-free work environment even when co-workers have consensual sexual relationships. Regardless of how your company manages workplace romances, all employers should be familiar with one very important word: discretion. For more information about sexual favoritism in the workplace, please contact Zashin & Rich Co., L.P.A.

Last Chance Agreements ADA-Okay

By Stephen S. Zashin*

Drugs and alcohol adversely affect the lives of so many people on a personal level that sometimes employers overlook the profound impact of substance abuse on the workplace. Employers must manage employee substance abuse while remaining cognizant of federal and state disability laws. Under the Americans with Disabilities Act ("ADA"), drug rehabilitation is considered a disability, although current, illegal use of drugs is not protected. An employer cannot, therefore, discriminate against an individual who no longer engages in drug use and who participates in or who has successfully completed a drug treatment program.

Many employers have utilized "last chance agreements" to work with recovering employees returning to work after treatment. "Last chance" or return-to-work agreements generally require an employee to abide by an employer's rules concerning drug or alcohol use, treatment, and testing in exchange for continued employment.

Although many federal courts have determined that such agreements are valid under the ADA, Ohio courts have not really considered the question. Recently the Cuyahoga County Court of Common Pleas decided that it agrees "with those federal courts that have found that last chance agreements or return to work agreements...do not violate the ADA."

In Partlow v. Blue Coral-Slick 50, the employee informed the employer's human resources department that he had a drinking problem. Pursuant to the employer's drug policy, the employer made its employee assistance program ("EAP") available to the employee. The employee saw a counselor through the EAP and divulged during a counseling session that he also had a cocaine addiction and depression. The employee began outpatient counseling and continued working with no incident – until three weeks later, when he relapsed. The employee then entered a treatment facility, and the employer placed him on medical leave.

When the employee received permission to return to work, the employer presented him with a "return to work agreement." The employer conditioned the employee's continued employment on successful participation and completion of a treatment plan and any aftercare counseling and treatment; periodic unannounced drug and alcohol testing; and no drug or alcohol use. The agreement also stated that any failure to abide by all of its terms would be cause for termination and ineligibility for rehire. The employee signed the agreement and returned to work without incident-until about two weeks later when he was arrested for cocaine possession.

After the employee returned to work, the employer contacted his drug treatment therapist, who confirmed that the employee had relapsed into drug use. The employer determined that the employee had violated the terms of his return to work agreement and terminated his employment. The employee sued under the ADA and Ohio state law, arguing that the return to work agreement unlawfully changed the terms and conditions of his employment solely because he sought treatment for his addiction.

The court reviewed federal case law interpreting the ADA and agreed that last chance agreements do not violate state or federal disability laws. The court reviewed a Pennsylvania federal case, for example, that held that an alcoholic's violation of a last chance agreement did not constitute a discharge based solely on disability, but rather a discharge based upon a breach of the agreement. The Pennsylvania court said that to attribute the firing to alcoholism was "defective reasoning that skips the key step of reality, i.e., the prior accommodation to alcoholism."

The employer in Partlow helped itself immensely by going by the book: abiding by its own drug policy and referring the employee to its EAP; using a clear and comprehensive last chance agreement that kept it in the loop concerning the employee's treatment; and confirming information regarding the employee's relapse with his drug counselor. Unfortunately, the employer still ended up in court. However, there is now clear guidance from an Ohio court that last chance agreements in this context are okay.

Keep in mind, however, that last chance agreements should be drafted clearly and carefully to avoid violation of other state or federal laws. For more information about last chance agreements or other ADA-compliance issues, please contact Stephen Zashin at (216)696-4441 or ssz@zrlaw.com.

*Stephen S. Zashin is an OSBA Certified Specialist in Labor and Employment Law and has extensive experience in defending ADA based litigation. For more information about the Americans with Disabilities Act or state disability laws, please contact Stephen at (216) 696-4441 or ssz@zrlaw.com.

USERRA UPDATE: Finalization of New Regs Just Around the Corner

By Helena J. Oroz*

You probably know that the Uniformed Services Employment and Reemployment Rights Act of 1994, or USERRA, is a federal law that affects employment, reemployment and retention in employment, when employees serve or have served in the uniformed services. But did you know that new regulations implementing USERRA will go into effect soon?

The regulations clarify employer and employee responsibilities under USERRA in a question-and-answer format that covers USERRA's various provisions. The new regulations are expected to become finalized and effective by the close of 2005. As always, Zashin & Rich will keep you posted concerning these regulations.

*Helena Oroz practices in all areas of employment law and compliance issues.
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Friday, September 9, 2005

EMPLOYMENT LAW QUARTERLY | Summer 2005, Volume VII, Issue ii

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DON'T PUT THE CART IN FRONT OF THE HORSE: ADA Places Medical Exams Last

By Christina M. Janice

The Americans with Disabilities Act ("ADA") bars employers from discriminating against individuals in their hiring and employment practices. The ADA also prescribes the sequence of events that employers must follow in the hiring process. The statute prohibits medical examinations and inquiries until after the employer has made a "real" job offer to an applicant.

In Leonel v. American Airlines, Inc., the employer recently learned what a "real" job offer is. In Leonel, three individuals applied for flight attendant positions. The application process included a telephone survey, written application, and an in-person interview at the employer's headquarters. The employer made employment offers contingent upon "successful completion of a drug test, a medical examination, and a satisfactory background check." The three applicants were all HIV positive. After completing the interview process, the employer extended the three individuals conditional offers of employment.

After making the offers, the employer directed the applicants to go immediately to the company's medical department for medical examinations. They completed a series of forms, including a drug testing notice that asked them to provide a urine specimen for drug testing and identify all medications they were taking. The employer also required the applicants to complete medical history forms. After completing the forms, they met with nurses to discuss their medical histories. None of the applicants disclosed their HIV-positive status or relevant medications at any point during the medical examination process, despite warnings about falsifications and omissions.

During the medical examinations, nurses drew blood samples. The employer ran a blood test to determine whether each applicant had "sufficient oxygen-carrying capacity to perform his duties in a high-altitude environment." The results showed that the three applicants had an elevated level of certain cells generally only associated with alcoholism, certain medication regimens, and certain blood disorders like sickle-cell disease. Because nothing in any of the applicants' medical histories indicated a cause, the employer requested explanations for the results. Not until this time did the applicants, acting through their personal physicians, disclose their HIV-positive status and medications. As a result, the employer rescinded the conditional offers of employment.

The applicants filed a lawsuit alleging that the employer's hiring practices violated the ADA and California law. Although the trial court granted the employer summary judgment, the Ninth Circuit Court of Appeals reversed. The court explained that the ADA requires that employers conduct medical examinations as a separate, second step of the selection process (i.e., after an individual has met all other job prerequisites).

To issue a "real" job offer, an employer must have completed all non-medical components of its application process prior to issuing an offer. The court explained that this two-step process allows applicants to isolate medical considerations and "to determine whether they were rejected because of a disability, or because of insufficient skills or experience or a bad report from a reference."

In the instant case, the court held that the employer's offer was not "real." The employer did not complete all non-medical components of its application process – namely, the background check, including employment verification and criminal history checks – before administering the medical components of the application process. The court held, therefore, that the medical examination process was premature, and that the employer could not penalize the applicants for failing to disclose their HIV-positive status.  

Although this is a Ninth Circuit case (which includes California, Nevada, Arizona, Washington, Oregon, Idaho, Wyoming, and Alaska), it is a (surprisingly) clear interpretation of the ADA. Hiring procedures must strictly follow the sequence prescribed by the ADA. Don't put the cart before the horse – complete all non-medical portions of your hiring process before administering any medical examinations to applicants.

FIRM NEWS: Z&R's Growth Spurt Continues


Zashin & Rich Co., L.P.A. recently welcomed two new faces to its Employment and Labor Group and expanded its client services to include workers' compensation defense.

Attorney Christina M. Janice brings more than fourteen years of experience in trial advocacy and appellate practice in Ohio and federal courts. Christina practices in employment discrimination defense with an emphasis on multidistrict litigation ("MDL"), complex federal litigation and class actions. Christina has served in strategic leadership positions in nationwide cases, involving both litigation and litigation management. She defends employers in all actions involving alleged violations of state and federal discrimination laws and all other employment related torts. Christina is admitted to practice law in Ohio, the U.S. District courts for the Northern and Southern Districts of Ohio, and the U.S. District Court for the Eastern District of Texas.

Christina earned her Bachelor of Arts, cum laude , from John Carroll University and her law degree from the Cleveland-Marshall College of Law. She is a candidate for master's degrees at both Concordia University, St. Paul and Trinity Evangelical Divinity School. In addition to her legal practice, Christina serves on the ministry staff at Our Redeemer Lutheran Church in Solon, Ohio and works toward the revitalization of urban and suburban neighborhoods in Greater Cleveland. She is a published author, and her work includes contributions to The Encyclopedia of Cleveland History and various continuing legal education publications.

Attorney Steven P. Dlott has also joined Z&R's Employment and Labor Group, bringing with him extensive experience in litigating workers' compensation matters before the Industrial Commission and in the courtroom. Steve's expertise also includes advising employers on preventative claims administration and aggressive claims management, as well as defending employers before the Industrial Commission and at trial.

Steve's legal career includes eleven years as an Assistant Attorney General, five of which was spent defending the Ohio Bureau of Workers' Compensation, where he developed close working relationships with Bureau officials and department heads. For the past five years, Steve has defended employers at a prominent workers' compensation defense firm. During that time, Steve defended employers at all levels before the Industrial Commission and at trial and appellate courts throughout the State of Ohio. Steve has also successfully litigated cases before the Ohio Supreme Court.

Steve earned his Bachelor of Arts from New York University. He obtained his law degree at Case Western Reserve University, where he was a member of Case Western Reserve Law Review.

In addition to his legal practice, Steve serves on the Cleveland Bar Association's Unauthorized Practice of Law Committee and the Association's Workers' Compensation Subcommittee. Steve is also active in University Heights city government, serving as a member of the Citizens Advisory Lay Financial Committee.

Zashin & Rich extends a warm welcome to Christina and Steve.

DISCRIMINATING TASTES: Sixth Circuit Finds no Pretext in Firing Based on Employee’s Derogatory Comment

By Lois A. Gruhin

Sometimes things are exactly as they seem – no mystery, no mishap, no cover-up. That was essentially the Sixth Circuit Court of Appeals' determination in the case of Hagedorn v. Veritas Software Corp. The employer in that case fired an employee for making a racially derogatory comment about a customer. The employee tried to prove that the employer's reason for the termination was really pretext for firing him because of his age. The Sixth Circuit did not see it that way.

At his time of hire, the employee was sixty years old. The employer, a software company, hired the employee to work as a sales representative in a newly formed division. The company hired the employee in part based on the employee's previous work experience with one of its key customers. The key customer was the employee's only account during his employment.

About four months into his employment, the employee had a telephone conversation with his supervisor that was inadvertently recorded on the key customer's voice mail. During this telephone conversation, the employee made a racially offensive comment and his supervisor laughed in response.

The key customer later heard the comment on his voicemail, found it offensive and forwarded the voice mail to the key customer's Human Resources Director. The Human Resources Director, in turn, forwarded the voice mail to the employer's Chief Administrative Officer. The key customer wanted both the employee and his supervisor off of its account.

In response, the employer fired the employee for making the remark. The employer reassigned the account to another employee who was forty-four years old at the time. The employer issued the supervisor a written warning and temporarily removed him from the account.

The employee filed a Complaint in federal court in Ohio alleging that his employer fired him based on his age in violation of the Age Discrimination in Employment Act ("ADEA"). The trial court found in favor of the employer, finding that the employee failed to establish a prima facie case of age discrimination.

On appeal, the Sixth Circuit held that the employee met his initial prima facie burden by showing that he was over forty, was qualified for his job, was terminated, and was replaced by a substantially younger individual. The employee still had to overcome the employer's legitimate reason for termination-the offensive comment on the client's voice mail. The employee, caught on tape, obviously could not refute that he made the remark. Nonetheless, he attempted to prove that his termination was pretext for age discrimination in other ways.

First, he claimed that his termination had no factual basis. The employee argued that the employer terminated him because he failed to appreciate the gravity of the situation and failed to acknowledge that his conduct had been inappropriate and in violation of Company policy. The employee claimed that he did appreciate and acknowledge the gravity of his conduct and the violation because he offered to apologize. The court gave this argument short shrift. Regardless of the employee's remorse, he did not dispute making the comment – the legitimate, non-discriminatory reason for his termination.

Second, the employee claimed that his age motivated his termination because other employees at the company made derogatory comments. The court also rejected this argument. The employee presented no proof that the employees who allegedly made derogatory comments wielded any influence over the decision-makers who terminated the employee.

Finally, the employee argued that the derogatory comment was not a sufficient reason to terminate his employment because his supervisor was involved in the incident but not fired. The court rejected this argument because their positions were too different to be "similarly situated." Moreover, the employee and his supervisor did not engage in comparable conduct. The employee actually made the comment. His supervisor laughed in response. The court held, therefore, that the employee failed to show that his "discriminating taste" in commentary was not the real reason for his termination.

This case demonstrates a tough lesson – that virtually any employee termination can result in litigation. It also demonstrates, however, that an employer that can clearly establish a legitimate, non-discriminatory reason for an employee termination can defeat such a claim. The employer in this case prevailed by proving that it has discriminating taste, too – in employing people who do not offend its customers.

AFL-CIO DEFECTORS SHAKE IT UP: Resurgence In Union Organizing Likely To Follow

By Robert W. Hartman

The American Federation of Labor and Congress of Industrial Organizations ("AFL-CIO"), the largest federation of North American labor unions, saw quite a shake-up in membership recently.

Within a week's time, three large unions left the federation: the Service Employees International Union ("SEIU") and International Brotherhood of Teamsters ("Teamsters") defected on July 25, followed by the United Food and Commercial Workers ("UFCW") on July 29. Another major affiliate, UNITE HERE, boycotted the federation's convention this year and also may defect.

The SEIU, Teamsters, and UFCW (as well as UNITE HERE) are members of the Change to Win Coalition, which describes itself as a "growing coalition...focused on rebuilding the labor movement through a commitment to growth and organizing." Other Change to Win members include the Laborers' International Union of North America (LIUNA), United Brotherhood of Carpenters and Joiners of America, and the United Farm Workers.

The root of labor's current shakeup is a fundamental disagreement over how to strengthen union influence: politics versus membership. Union membership rates among private-sector workers have steadily fallen from 33% in the 1950s to less than 8% today. In contrast to the AFL-CIO, Change to Win vows to focus more on recruiting and less on politics activism.

Employers, for their part, can expect an increase in grassroots labor-organizing activities. Employers susceptible to unionizing may observe increased union campaigning in the near future, especially from Change to Win affiliates no longer paying dues to the AFL-CIO. Those unions are now free to budget that money for organizing activities aimed at increasing union membership.

Employers can manage union pressures with preparation and education. As a proactive measure, smart employers will have an understanding of what competing employers in their industry – both unionized and non-unionized – offer their employees. All employers should understand how they stack up against their competition. This sort of analysis can at least prepare and educate an employer as to the types of issues that they could face by virtue of a union organizing campaign.

For employers not currently facing an organizing campaign, it is imperative to develop a communication strategy to build employee loyalty and to counteract any potential unionizing efforts. To do so, employers should determine how to effectively convey the company's message to the entire organization.

Identifying the early signs of labor organizing efforts can affect how well an employer can manage an organizing campaign. It is imperative for employers to identify immediately that a union is attempting to organize their facility even before the union files an election petition with the National Labor Relations Board.

Finally, employers in the midst of a union campaign must train and monitor supervisors to ensure that they properly manage employees within the confines of the law.

PICK YOUR POISON: Your Employee is either Exempt or Non-Exempt: But NOT Both

By Michele L. Jakubs*

According to the Department of Labor ("DOL"), the Fair Labor Standards Act ("FLSA") bars employers from classifying one employee as both exempt and nonexempt.

Nonexempt employees are entitled to overtime pay. Hours that an employee works over 40 hours in a work week are generally considered overtime. Nonexempt employees are entitled to overtime pay at a rate of one and a half times their regular rate. On the other hand, exempt employees are not entitled to overtime pay; regardless of the number of hours they work.

In today's complex corporate world, employers are faced with the following enigma – can an employee work for the same employer in two separate jobs, one exempt and one nonexempt, and be classified as both exempt and nonexempt? In an opinion letter, the DOL answered the question with a resounding – No!

Under the FLSA, in order for a position to be exempt, the employee's primary duty must be exempt work. "Primary duty" means the "principle, main, major or most important duty that the employee performs." Factors to consider include the relative importance of the exempt duties as compared with other types of duties; the amount of time spent performing exempt work; the employee's relative freedom from direct supervision; and the relationship between the employee's salary and the wages paid to other employees for the kind of nonexempt work performed by the employee. The amount of time an employee spends doing exempt work is a useful guide, but not necessarily determinative of an employee's status. Employees who spend more than 50% of their time performing exempt work generally satisfy the "primary duty" requirement.

What is the impact to employers with an employee holding two positions? If an employee performs primarily exempt work, employers do not have to pay for overtime. If the employee performs primarily nonexempt work, employers must pay time and a half the regular rate for all overtime hours worked.

If an employer must pay overtime, an employer must determine the employee's overtime rate. If the two positions have the same rate, an employer must pay the employee one and a half times the regular hourly rate. If the employer pays two different rates for the positions, an employer must compute the overtime pay rate by using either of two methods.

The first method uses the weighted average of the two hourly rates. Here, the earnings from both rates are added together and divided by the total number of hours worked in both positions. The employer must pay the employee one and a half times this weighted average rate for overtime. The second method requires an employer to pay the employee one and a half times the rate of the work being performed during the overtime hours. The employer and employee must agree in advance to utilize the second method. Clearly, employers must ensure that they pay employees who occupy two different positions the appropriate rate as set forth by the DOL.

*Michele L. Jakubs practices in areas of employment litigation and wage and hour compliance and administration. For more information concerning FLSA or changes to the FLSA Regulations, please contact Michele at (216) 696-4441 or mlj@zrlaw.com.
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Friday, February 18, 2005

EMPLOYMENT LAW QUARTERLY | Spring 2005, Volume VII, Issue i

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LEGISLATIVE ALERT

By Stephen S. Zashin*

STATE: Tort Reform in Ohio
On January 6, 2005, Governor Taft signed Senate Bill 80 (“S.B. 80”) into law. S.B. 80 goes into effect on April 6, 2005. The new law does not affect economic compensatory damages, or those damages awarded to compensate a plaintiff for actual monetary losses, like lost wages or the cost of medical treatment. Rather, S.B. 80 caps the non-economic and punitive damages a plaintiff may receive in most tort actions.

Non-economic losses include damages awarded for mental anguish. S.B. 80 limits such damages to $250,000.00 or three times the economic losses, whichever is greater, up to a maximum of $350,000.00 per person and $500,000.00 per occurrence. This limitation does not, however, apply to injuries of a catastrophic nature.

S.B. 80 also limits the amount of punitive damages that a court may award based upon the size of the employer. For employers with 100 or less employees, and certain manufacturing sector employers with 500 or less employees, the law caps the amount of punitive damages that can be awarded at the lowest of:
  • twice the amount of compensatory damages awarded;
  • 10% of the employer’s net worth when the tort occurred; or
  • $350,000.00.
For all other employers, the law caps punitive damages at twice the amount of compensatory damages awarded. In addition, a court may not award prejudgment interest on punitive damage awards.

FEDERAL: Filing Fees Increase in U.S. District Courts
On December 8, 2004, President Bush signed an appropriations act into law that, in part, raises the civil filing fee in federal courts from $150.00 to $250.00. The change becomes effective on February 7, 2005. The civil federal filing fee was last increased nine years ago from $120.00 to $150.00.

*Stephen S. Zashin is an OSBA Certified Specialist in Labor and Employment Law and has extensive experience in defending employment based litigation. For more information about Ohio Tort Reform or other changes in federal or state employment laws, please contact Stephen at (216) 696-4441 or ssz@zrlaw.com.

SAY WHAT YOU MEAN: NLRB Continues Enforcement of “Clear and Unmistakable” Waiver Standard

By Robert W. Hartman

The National Labor Relations Board (“NLRB”), the federal body that administers the National Labor Relations Act (“the Act”), recently affirmed its position that employee waivers of statutorily granted rights must be clear and unmistakable. In Englehard Corp., the NLRB held that a broad no-strike provision in a union contract failed to do just that.

The employer and the union in Englehard were seemingly on the same page when they entered into their collective bargaining agreement. In the agreement, the parties included a statement of intention “to prevent any suspension of work due to labor disputes during the term of this Agreement.” The employer agreed not to lock out employees during the term of the agreement. The employer also agreed not to discriminate against any employee for resorting to the grievance procedure. In return, the union agreed that it would not “call, participate in, or sanction any strike, boycott, picketing, work-stoppage or slow-down whatsoever.”

Before the agreement expired, the union and the employer began negotiating a new contract. At the end of the third negotiating session, the employer declined to schedule further negotiations. To pressure the employer into returning to the bargaining table, the union decided to picket—but not at the employer’s plant. Instead, the union picketed the employer’s shareholder meeting, held about seventy miles away.

Approximately fifty employees attended the demonstration. The employees did not actively participate in the picketing, which the employer videotaped, but engaged in silent protest. The employer ultimately suspended thirty-eight employees for three days each for violating the no-strike provision. The union filed grievances on behalf of the thirty-eight suspended employees. When the employer refused to process the grievances, the union filed an unfair labor practice charge.

The employer argued that the employees, through their union, waived their right to engage in any kind of picketing or strike. The union clearly agreed that it would not “call, participate in, or sanction any strike, boycott, picketing, work-stoppage or slow-down whatsoever.” Any picketing, the employer reasoned, means what it says—including picketing its shareholder meeting.

The NLRB disagreed. Initially, the Board noted that any waiver of employee rights in a collective bargaining agreement must be “clear and unmistakable.” In this case, the Board held that the language of the parties’ agreement did not meet this standard. First, the parties mutually agreed to the no strike/no lockout provision to “prevent any suspension of work due to labor disputes.” This statement of intent effectively limited the application of the no strike/no lockout provision. The provision expressly prohibited any conduct that would reasonably lead to the suspension of work.

The Board then found that the union’s conduct could not reasonably have led to the suspension of work. First, the picketing occurred seventy miles away from the employer’s work site. Second, the employer had scheduled only three of the employees who attended the picketing to work at the plant that day, and those employees received advance permission to miss work. The Board found, therefore, that the picket did not cause a suspension of work.

Because the picket did not cause a suspension of work, the no strike/no lockout provision did not clearly and unmistakably waive the employees’ right to picket under these particular circumstances. The Board thus held that the employer violated the Act when it suspended the employees who participated in the picketing.

This case reinforces some basic principles with respect to collective bargaining agreements. First, the language in a collective bargaining agreement must clearly state the intent of the parties. Ambiguous language often leads to unintended results. Second, when the NLRB or other arbiter interprets a collective bargaining agreement, it considers the document as a whole, not particular language in isolation, to reach the parties’ intent. Broad statements of policy in an agreement can accordingly affect the interpretation of other provisions. Finally, any waiver of an employee’s statutory rights must be clear and unmistakable. If there is any ambiguity as to whether a union waived a statutory right, the NLRB will not likely find a waiver. Any waiver of statutory rights should, therefore, explicitly state the right waived in the most specific terms possible.

Z&R Update

Z&R Welcomes Two New Associates and Settles into a New Office Space

Zashin & Rich is always busy, but even busier than usual as of late with two new faces and a new work space to boot.

First, Z&R recently welcomed new additions to both its Employment and Labor and Domestic Relations practice groups.

Robert Hartman has joined the firm to practice in the areas of labor relations, employment discrimination, and all other employment-related issues. Rob works extensively in the areas of labor-management relations and the National Labor Relations Act (“NLRA”).

Rob joined Zashin & Rich in 2002 as a law clerk. He earned his law degree, cum laude, in May 2004 from the Case Western Reserve University School of Law and became a certified member of the Ohio Bar in November 2004. Rob is also certified to appear before the U.S. District Courts for both the Northern and Southern Districts of Ohio. Rob is a member of the Ohio State Bar Association.

Likewise, Z&R’s Domestic Relations group recently welcomed Ryan Long. Ryan practices in all areas of domestic relations law, including divorce and dissolution, spousal support, child support and property division.

Ryan earned his law degree in May 2004 from the Case Western Reserve University School of Law and became a certified member of the Ohio Bar in November 2004. Ryan is a member of the Ohio State, Cuyahoga County, and Medina County Bar Associations.

In other news...first Z&R’s Columbus office moved to its new space on the 19th Floor of the Fifth Third Center building on East State Street....then the Cleveland office took on taking over the 4th Floor at 55 Public Square.

Now that we have settled into our new spaces for the past several weeks, it finally feels like “home.” With all the glass, loft-like ceilings, and high-tech capabilities, we don’t look a lot like our old selves, but we are even better able to serve the needs of our clients. We invite all of our clients and friends to stop by and see us in Cleveland or Columbus.

WORKING UNDER THE INFLUENCE: The “Drug-Free Workplace” Gets Help Getting There

By Lois A. Gruhin

Ask anyone to think of a slice of American life that drug or alcohol abuse has adversely affected, and you will likely hear something about the dangers of people driving, flying, or boating under the influence. What about working under the influence?

According to the Ohio Bureau of Workers’ Compensation (“BWC”), 38% to 50% of nationwide workers’ compensation claims are related to alcohol or drug abuse in the work place, and 47% of serious workplace accidents and 40% of fatal work place accidents have drug and/or alcohol involvement.

To combat these problems, many employers now have Drug-Free Workplace Policies in place. The BWC even provides discounts to qualifying state-fund employers that implement some version of a Drug-Free Workplace Policy. Having the right policy can only do so much, however, and many employers still must deal with drug- or alcohol-related accidents.

A change in Ohio law now gives employers a leg up in defending against such claims with the “rebuttable presumption” law that took effect this past October. Under the old law, employers had to prove, usually through medical testimony, that an injured employee should be disqualified from receiving workers’ compensation. Employers are still free to drug test after an accident and use medical testimony to defend claims, but the new law allows employers to presume that an employee’s injury resulted from working under the influence. The new law shifts the burden of proof to the employee. Now it is up to the injured employee to rebut, or disprove that presumption.

An employer can presume that the employee was injured as a result of substance abuse as a result of (1) a positive “qualifying chemical test” OR (2) the employee’s refusal to submit to the drug test. The employer must, however, post a written notice explaining that the results of, or refusal to submit to a chemical test can affect eligibility for workers’ compensation benefits. This notice must be at least the same size as the employer’s BWC certificate and must be posted in the same location.

A “qualifying medical test” must be conducted by a certified laboratory that meets or exceeds the U.S. Department of Health and Human Services standards. It also means that the employer administered the test because it had “reasonable cause” to suspect that the employee was under the influence. “Reasonable cause” can be:
  • direct observation of use/possession/distribution of drugs or alcohol, or physical symptoms of being under the influence;
  • a pattern of abnormal conduct, erratic behavior, or deteriorating work performance not attributable to other factors;
  • identification of the employee as the focus of a criminal investigation involving controlled substances;
  • a report of use of drugs or alcohol by a reliable source; or
  • repeated/flagrant violations of safety/work rules.
If an employer can submit evidence that it complied with these requirements, the burden falls on the employee to prove that the employee’s use of drugs or alcohol did not cause the injury. The new law may not look like a proactive measure in the drug-free workplace movement, but it might make employees think twice about working under the influence.

WHAT’S UP WITH FORM I-9? Myth Busters for Those Confused About Employment Verification

By Michele L. Jakubs*

It may seem like every time you turn around these days, there is new legislation out there affecting your business—or at least your HR manager. Unfortunately, sometimes the word on the street about a new rule or modified paperwork generates confusion for employers. The buzz around Form I-9 is one such example.

The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (“the Act”) requires employers to verify both the employment eligibility and identify of all new hires. The Immigration and Naturalization Service (“INS”) designated the Form I-9 for this purpose.

The Act’s implementing regulations provide for three lists of documents to accomplish verification. Acceptable “List A” documents establish both identify and employment eligibility. Acceptable “List B” documents establish identity only. Acceptable “List C” documents establish employment eligibility only. The current Form I-9 in use lists these documents in handy columns. The word on the street though is that there are new I-9 rules and maybe even a new Form I-9 floating out there somewhere. To clarify these and other burning questions, consider the following myths and myth busters:

Myth #1: I heard there is a new version of Form I-9 that I should be using, so why didn’t the INS tell anybody?

First, the INS is no more. As of March 1, 2003, the INS transitioned into several parts of the Department of Homeland Security, including the U.S. Citizenship and Immigration Service (“USCIS”).

Second, CIS has not issued a new version of Form I-9. The current version is dated 11/21/91. CIS is currently revising the Form and may make a revised version available sometime in 2005. To date, CIS has not set a release date.

Myth #2: I also heard that there are a bunch of new rules going into effect that will change the type of documents I can accept for verification purposes.

Passing new regulations is often a long, complicated process that involves several stages of rules (proposed, interim, and final) and intervening periods of public comment. Interim and final rules have the force of law, but proposed rules do not. You may have heard about proposed changes to the employment verification rules that came out in February of 1998. Those rules are not currently in effect.

The current rules describing acceptable documents for verification have not changed since September of 1997. These interim rules made some changes to the lists of acceptable documents in effect at that time.

Myth #3: Great, that clears things up. It’s good to know that the Form I-9 hasn’t changed and is totally accurate.

You should be aware that the list of “List A” documents on Form I-9 is not accurate. Apparently, no one has had time to revise Form I-9 since 1991, so the changes made eight years ago are not reflected on the “current form.” Therefore, you should not accept the following “List A” documents:
  • Certificate of U.S. Citizenship (Form N-560 or N-561)
  • Certificate of Naturalization (Form N-550 or N-570)
  • Form I-151
  • Unexpired Reentry Permit (Form I-327)
  • Unexpired Refugee Travel Document (Form I-571)
Although not included as a “List A” document, you may additionally accept Form I-766.

Myth #4: Fantastic, somebody just yesterday handed me a Form N-560, which I accepted as proof of their identity and employment eligibility. I’m in serious trouble.

Unlikely. The point of the interim rule was to maintain the status quo as much as possible while still making changes required by law. The INS understood that employers would not have much notice of the changes or a revised Form I-9 reflecting the changes. For these reasons the INS, and now the CIS, has forgone enforcement against employers who “continue to act in reliance upon and in compliance with existing employment verification forms, guidance, and procedures.” You are not in serious trouble—but you should comply with the current law next time.

*Michele L. Jakubs practices in all areas of employment litigation. For more information on wage and hour compliance other employment-related record keeping, please contact Michele at mlj@zrlaw.com or (216) 696-4441.

MILITARY LEAVE UPDATE: USERRA Extends Continuation Coverage for Employees Called to Serve

By Helena Oroz*

USERRA (the Uniformed Services Employment and Reemployment Act of 1994) is the federal law that grants employees on military leave reemployment rights upon return. President Bush signed new language into law on December 10, 2004 that amends USERRA.

USERRA originally required employers to offer health care continuation to eligible employees called up to military active duty (and their dependents) for up to 18 months. The new law extends coverage rights for up to 24 months at the employee’s cost. This change affects individuals electing coverage beginning on and after December 10, 2004.

An employer may require a person electing continuation coverage under this USERRA provision to pay up to 102% of the full premium under the plan. However, if the person performs service in the uniformed services for less than 31 days, an employer cannot require the person to pay more than the employee share, if any, for the coverage.

In addition, employers must provide a notice of USERRA rights and obligations to employees, either through a general posting or otherwise, on an annual basis. Employers must provide or post the notice starting March 10, 2005. The U.S. Department of Labor will likely issue in the interim a model notice that employers may use to fulfill this obligation.

*Helena Oroz practices in all areas of employment law, as well as benefits litigation and compliance issues.
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