*By Stephen S. Zashin
In a 5-2 decision issued yesterday, the Ohio Supreme Court held that an
at-will employee who is terminated from employment while receiving
workers’ compensation benefits may not pursue a common law tort action
against the employee’s employer for wrongful discharge based on public
policy. In Bickers v. W. & S. Life Ins. Co., 2007-Ohio-6751,
the Court held that recovery pursuant to the anti-retaliation provision
of Ohio’s workers’ compensation statute, R.C. 4123.90, is the exclusive
remedy for plaintiffs who allege wrongful termination while receiving
workers’ compensation benefits.
The decision distinguishes the court’s previous ruling in Coolidge v. Riversdale Local School Dist., 100 Ohio St. 3d 141, 2003-Ohio-5357. In Coolidge,
the Court held that a teacher who was terminated while receiving
workers’ compensation benefits could sue her employer based on a
violation of public policy. As a public school teacher, Coolidge was
not an at-will employee and could be terminated only with “good and just
cause” pursuant to R.C. 3319.16.
The Bickers decision limits the application of Coolidge to public policy claims brought by public school teachers, and others similarly situated. As noted by the Court, “the Coolidge court decided a very limited issue. Specifically, the Coolidge
court held that judicial inquiry is warranted into whether an employer
acted contrary to public policy when it discharged an employee when R.C.
3319.16 is implicated. *** Coolidge does not create a cause of
action for an at-will employee who is terminated for nonretaliatory
reasons while receiving workers’ compensation.”
Plaintiffs, seeking to evade the limitations period and more
limited remedies contained in the workers’ compensation statute, have
relied on Coolidge to allege a common law claim of wrongful
discharge against employers who terminate employees while they receive
workers’ compensation benefits. The Bickers decision eliminates
this cause of action with respect to at-will employees and allows only
claims brought by public school teachers and presumably others with
statutory employment protection.
While Bickers is a favorable decision for Ohio
employers, employers are cautioned to continue to comply with the
nonretaliation provision contained in Ohio’s workers compensation
statute.
*Stephen S. Zashin is an OSBA Certified
Specialist in Labor and Employment Law and has extensive experience in
all aspects of workplace law, including wrongful discharge litigation.
For more information about defending allegations of public policy
discrimination, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.
Friday, December 21, 2007
Monday, November 5, 2007
DHS Issues Revised Form I-9
*By Patrick O. Peters
For the first time in 17 years, the U.S. Citizenship and Immigration Services department, a division of the Department of Homeland Security (“DHS”), has revised the Employment Eligibility Verification Form (“Form I-9”). The new form is valid as of November 7, 2007. DHS is in the process of posting a Notice in the Federal Register that will allow employers 30 days to transition to the new form.
All employers are required to complete a Form I-9 for each new employee hired in the United States. Form I-9 does not have to be filed with any government agency. However, employers must retain each employee’s Form I-9 for a period of three years from the date of hire or one year past termination, whichever is longer.
The revised Form I-9 seeks to achieve full compliance with the document reduction requirements of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, which reduced the number of documents employers may accept from newly hired employees during the employment eligibility verification process.
The revised Form I-9 removes five documents from the list of approved documents to verify employment and identity. These documents include: Certificate of U.S. Citizenship (Form N-560 or N-570); Certificate of Naturalization (Form N-550 or N-570); Alien Registration Receipt Card (Form I-151); the unexpired Reentry Permit (Form I-327); and the unexpired Refugee Travel Document (Form I-571). According to DHS, the forms were removed because they lack sufficient features to help deter counterfeiting, tampering, and fraud.
The most recent version of the Employment Authorization Document (Form I-766) was added to List A of the List of Acceptable Documents on the revised form. The revised list now includes: a U.S. passport (unexpired or expired); a Permanent Resident Card (Form I-551); an unexpired foreign passport with a temporary I-551 stamp; an unexpired Employment Authorization Document that contains a photograph (Form I-766, I-688, I-688A, or I-688B); and an unexpired foreign passport with an unexpired Arrival-Departure Record (Form I-94) for nonimmigrant aliens authorized to work for a specific employer.
There is no requirement that current employees complete the revised Form. Employers are advised to begin using the revised form immediately, however, for all newly hired employees.
For the first time in 17 years, the U.S. Citizenship and Immigration Services department, a division of the Department of Homeland Security (“DHS”), has revised the Employment Eligibility Verification Form (“Form I-9”). The new form is valid as of November 7, 2007. DHS is in the process of posting a Notice in the Federal Register that will allow employers 30 days to transition to the new form.
All employers are required to complete a Form I-9 for each new employee hired in the United States. Form I-9 does not have to be filed with any government agency. However, employers must retain each employee’s Form I-9 for a period of three years from the date of hire or one year past termination, whichever is longer.
The revised Form I-9 seeks to achieve full compliance with the document reduction requirements of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, which reduced the number of documents employers may accept from newly hired employees during the employment eligibility verification process.
The revised Form I-9 removes five documents from the list of approved documents to verify employment and identity. These documents include: Certificate of U.S. Citizenship (Form N-560 or N-570); Certificate of Naturalization (Form N-550 or N-570); Alien Registration Receipt Card (Form I-151); the unexpired Reentry Permit (Form I-327); and the unexpired Refugee Travel Document (Form I-571). According to DHS, the forms were removed because they lack sufficient features to help deter counterfeiting, tampering, and fraud.
The most recent version of the Employment Authorization Document (Form I-766) was added to List A of the List of Acceptable Documents on the revised form. The revised list now includes: a U.S. passport (unexpired or expired); a Permanent Resident Card (Form I-551); an unexpired foreign passport with a temporary I-551 stamp; an unexpired Employment Authorization Document that contains a photograph (Form I-766, I-688, I-688A, or I-688B); and an unexpired foreign passport with an unexpired Arrival-Departure Record (Form I-94) for nonimmigrant aliens authorized to work for a specific employer.
There is no requirement that current employees complete the revised Form. Employers are advised to begin using the revised form immediately, however, for all newly hired employees.
Monday, October 15, 2007
UPDATE: Commission Approves Changes to Maternity Leave
*By Jason Rossiter
In a 4-1 vote on Thursday, the Ohio Civil Rights Commission (“OCRC”) approved regulatory changes to the Ohio Administrative Code concerning pregnancy leave. If enacted, Ohio would join 18 other states and the District of Columbia in requiring private employers to offer more generous maternity benefits than required under federal law.
If the new regulations are enacted, Ohio employers would be required to grant pregnant employees at least 12 weeks of unpaid leave. Additionally, employers would be required to offer light-duty positions to pregnant employees if those positions are offered to workers temporarily disabled as a result of an on-the-job injury. Finally, employers would be required to reinstate employees to their original job, or to a position of like status and pay, upon their return from pregnancy leave.
Unlike the FMLA, the Ohio regulations would apply to virtually all Ohio employers and employees. While the FMLA applies to employers with 50 or more employees and contains minimum service requirements, the Ohio rules would apply to employers with more than four employees and would take effect on the first day of employment. There is an exception in the rule for employers who are able to demonstrate a business necessity for not following this requirement.
If enacted, the revised regulations present an additional consideration for Ohio employers. Employees covered by the FMLA who have previously exhausted their FMLA leave due to an unrelated health condition would be entitled to pregnancy leave under Ohio law. Thus, in certain instances, it is possible that a pregnant employee could take 24 weeks of unpaid leave in a single year.
Possibly as early as November or December, the OCRC will file the revised regulations with the Joint Committee on Agency Rule Review (“JCARR”). JCARR may then decide whether the commission acted within its administrative authority when it approved the regulatory changes. With congressional approval, JCARR can invalidate all or part of the new regulations. In the alternative, the committee can approve the changes without a vote of the Ohio House and Senate. If approved, the changes would take effect in 30 days. If JCARR decides to take no action, the new rules take effect 41 days after they are filed.
Employer-friendly lobbying groups, such as the Ohio Chamber of Commerce, have indicated their opposition to the revised regulations. According to published media reports, the Chamber intends to argue that the OCRC exceeded its authority by approving the revised regulations. It remains to be seen what action JCARR, comprised of legislators of both major political parties, will take.
Employers should be aware of the potential changes to the Ohio Administrative Code and the increased protections afforded to pregnant workers. Zashin & Rich will continue to monitor this important development and provide our clients with updated information as it becomes available.
*Jason Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about pregnancy discrimination or any other employment-related tort, please contact Zashin & Rich at 216.696.4441.
In a 4-1 vote on Thursday, the Ohio Civil Rights Commission (“OCRC”) approved regulatory changes to the Ohio Administrative Code concerning pregnancy leave. If enacted, Ohio would join 18 other states and the District of Columbia in requiring private employers to offer more generous maternity benefits than required under federal law.
If the new regulations are enacted, Ohio employers would be required to grant pregnant employees at least 12 weeks of unpaid leave. Additionally, employers would be required to offer light-duty positions to pregnant employees if those positions are offered to workers temporarily disabled as a result of an on-the-job injury. Finally, employers would be required to reinstate employees to their original job, or to a position of like status and pay, upon their return from pregnancy leave.
Unlike the FMLA, the Ohio regulations would apply to virtually all Ohio employers and employees. While the FMLA applies to employers with 50 or more employees and contains minimum service requirements, the Ohio rules would apply to employers with more than four employees and would take effect on the first day of employment. There is an exception in the rule for employers who are able to demonstrate a business necessity for not following this requirement.
If enacted, the revised regulations present an additional consideration for Ohio employers. Employees covered by the FMLA who have previously exhausted their FMLA leave due to an unrelated health condition would be entitled to pregnancy leave under Ohio law. Thus, in certain instances, it is possible that a pregnant employee could take 24 weeks of unpaid leave in a single year.
Possibly as early as November or December, the OCRC will file the revised regulations with the Joint Committee on Agency Rule Review (“JCARR”). JCARR may then decide whether the commission acted within its administrative authority when it approved the regulatory changes. With congressional approval, JCARR can invalidate all or part of the new regulations. In the alternative, the committee can approve the changes without a vote of the Ohio House and Senate. If approved, the changes would take effect in 30 days. If JCARR decides to take no action, the new rules take effect 41 days after they are filed.
Employer-friendly lobbying groups, such as the Ohio Chamber of Commerce, have indicated their opposition to the revised regulations. According to published media reports, the Chamber intends to argue that the OCRC exceeded its authority by approving the revised regulations. It remains to be seen what action JCARR, comprised of legislators of both major political parties, will take.
Employers should be aware of the potential changes to the Ohio Administrative Code and the increased protections afforded to pregnant workers. Zashin & Rich will continue to monitor this important development and provide our clients with updated information as it becomes available.
*Jason Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about pregnancy discrimination or any other employment-related tort, please contact Zashin & Rich at 216.696.4441.
Thursday, October 4, 2007
EMPLOYMENT LAW QUARTERLY | Fall 2007, Volume IX, Issue iii
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Hardly a day goes by without news that another employer has negotiated a settlement to a high profile class or collective action. Recent settlements such as the $55 million FedEx race discrimination case with its $15 million attorney fee award remind us that employment law cases are the fastest growing category of class and collective actions nationwide. In fact, employment cases now constitute over 10% of all class and collective filings in federal and state courts in arguably the most plaintiff-friendly state in the nation, California.
The settlements achieved in unlawful employment practices claims brought as class actions (in which an individual has the right to opt out), collective actions (in which an individual must opt in to participate), or a hybrid of both with federal and/or state law claims, can and do skyrocket into the hundreds of millions of dollars. These spoils are shared not only by “similarly situated” current or former employees who constitute the alleged “class,” but also the specialized trial attorneys, experts, consultants and vendors who make lucrative livings from investing their resources into the cottage industry of these complex employment claims.
Experienced plaintiffs’ lawyers know that most class and collective actions are settled before trial, to reduce a company’s risk of a high jury verdict, punitive and liquidated damages, interest, spiraling attorney fees, costs, injunctive orders imposing on a company invasive and expensive programmatic relief, and a public and investor relations nightmare. This potential for big rewards with very little risk of ever going to trial has made the vehicle of class and collective litigation attractive to plaintiffs not only at the nationwide level, but locally with much smaller employers.
Because it only takes one disgruntled employee to file a class or collective action, virtually every employer bears a very real risk of the substantial disruption and expense of defending this kind of case and, in many instances, the governmental investigation that may come with it. A prudent employer will take proactive steps to recognize and protect against this highly invasive and costly form of litigation. The following general guidelines may prove useful:
*Stephen S. Zashin defends employers in class and collective action litigation, pattern and practice statistical cases, compliance partnerships, and all aspects of employment related torts and violations of state and federal employment law. For more information on class and collective actions and corporate measures to protect against them, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.
While each state law varies, generally the acts allow family members of active duty military personnel to take unpaid leave prior to, immediately following, and during their family members’ deployment. While Ohio has not passed a Family Military Leave Act, Illinois, Indiana, Maine, Minnesota, Nebraska and New York have enacted some form of Family Military Leave law.
Under the Illinois Act, employers who have between 15 and 50 employees must provide up to 15 days of unpaid leave to employees who are either the spouse or parent of soldiers called into active duty. Employers with more than 50 employees must provide such employees with up to 30 days of leave. The Illinois Act contains eligibility and notice requirements and employees are entitled to restoration in the same or an equivalent position held prior to the leave. Additionally, employees, at their own expense, may continue all employment benefits. Finally, under the Illinois Act, an employer may require an employee to exhaust all accrued vacation leave, personal leave, compensatory leave and any other leave (excepting sick and disability leave) before granting an employee leave.
Under the Indiana Military Family Leave Law, which went into effect on July 1 of this year, eligible employees are entitled to 10 days of unpaid leave but may only take the leave during the 30 days before or after active duty or while the active duty soldier is on leave. Under the Maine Family Military Leave Law, effective September 20, 2007, employers with 15 or more employees must grant eligible employees leave during active deployment while the soldier is on leave and during the 15 days prior to and following deployment.
The New York Family Military Leave Law, which has been in effect since 2006, contains no notice and few eligibility requirements. In New York, the spouse of a – who works at least 20 hours per week – may take up to 10 days unpaid leave while the person in the military is on leave from active duty.
In Minnesota, employers must grant the family member of a person killed or injured while on active duty in the military up to 10 days of unpaid leave. An eligible employee need only provide the employer with as much notice as possible prior to taking leave. While there is no requirement that an employer grant leave to family members during periods of active duty deployment – either before, immediately after, or while the soldier is on leave – employers are required to provide up to one (1) day’s leave for family members to attend send-off or homecoming ceremonies.
Like Illinois, Nebraska employers with 15 to 50 employees must provide up to 15 days of unpaid leave when a member of the military is called to active duty for 180 days or longer. Employers with more than 50 employees must provide 30 days unpaid leave. The Nebraska’s law contains eligibility and notice requirements and employees are entitled to restoration in the same or an equivalent position held prior to the leave. While on leave, employees can continue to receive employment benefits at their own expense.
Clearly, it is important for employers who operate in these states to be familiar with these Family Military Leave laws.
The Ohio Civil Rights Commission (“OCRC”) recently held hearings relative to proposed regulatory changes to the Ohio Administrative Code concerning pregnancy discrimination. If the proposed changes take effect, pregnant employees – even those not eligible for FMLA leave – would be entitled to 12 weeks of maternity leave as soon as they are hired. If adopted, Ohio would join 18 other states that require employers to offer maternity leaves that exceed those mandated by the FMLA.
While the FMLA applies only to “covered” employers – those with 50 or more workers – and “eligible” employees – those who have worked at least one (1) year and 1,250 hours during the preceding 12 months – if enacted, the Ohio regulations would contain a less stringent standard. The Ohio regulations would apply to virtually all employers and employees.
If the new regulations are enacted, Ohio employers would be required to grant pregnant employees at least 12 weeks of unpaid leave, regardless of the size of employer or length of service of the employee. An exception, however, includes employers who are able to demonstrate a business necessity for not following this requirement.
While this change codifies a 12 week leave requirement for most Ohio employers, Ohio courts have previously interpreted the administrative code to provide for a leave of absence for a reasonable period of time on account of childbearing. This requirement applies regardless of whether an employer has a maternity or leave of absence policy. According to the Ohio courts that have examined this provision, a “reasonable period of time” may exceed 12 weeks depending on the circumstances.
The proposed regulations also bring about other significant changes. Perhaps most importantly, employers would be required to offer light-duty positions to pregnant employees if those positions are offered to workers temporarily disabled as a result of an on-the-job injury. This requirement represents a substantial increase in the protections afforded pregnant women under the current law. Employers who have a light duty program would have to make that program available to employees “affected by pregnancy, childbirth, or a related medical condition.”
Finally, under the proposed regulations, employers would be required to reinstate employees to their original job, or to a position of like status and pay, upon her return from pregnancy leave.
Testimony from the hearing held before the Civil Rights Commission has been compiled and presented to the Commissioners for review. According to published media reports, the OCRC has indicated that it is revising its proposal after business groups said the rules would hurt small businesses and Ohio’s economy. The Commission’s chair further stated that the Commission may be willing to negotiate on the number of weeks of guaranteed leave in light of opposition from the Ohio Chamber of Commerce and others. It remains to be seen what modifications, if any, will be made to the proposed regulatory changes.
Employers should be aware of the potential changes to the Ohio Administrative Code and the increased protections afforded to pregnant workers. Any changes or modifications to an employer’s policies should be reviewed to ensure that they comply with Ohio and federal law.
*Jason Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about pregnancy discrimination or any other employment-related tort, please contact Zashin & Rich at 216.696.4441.
A light duty assignment may qualify as “leave” under the FMLA, even if an employee is not absent from work. While no court has directly addressed this question, Department of Labor regulations provide some guidance.
The regulations provide that an employee may not waive his right to protection under the FMLA, but may voluntarily accept an employer’s offer of “light duty” while recovering from a “serious health condition.”
The Seventh Circuit Court of Appeals recently addressed the issue of whether an employee is entitled to his regular rate of pay while on light duty. In Hendricks v. Compass Group, USA, Inc., 2007 U.S. App LEXIS 18606, the plaintiff employee worked as a utility van driver for the defendant employer and made $12.23 an hour. Hendricks injured her rotator cuff while at work, applied for, and received workers’ compensation benefits. One week later, she returned to work to a light duty assignment at a rate of $9.00 per hour. Eventually, she exhausted her 12 week FMLA leave and did not return to her previous position.
Hendricks sued her employer seeking $3.23 for each hour she worked on light duty – the difference between her regular rate of pay and what she was paid for the light duty work. She contended that she was on “FMLA light duty” and that her employer was required to compensate her at her normal utility driver rate. The court disagreed.
The Hendricks court concluded that there is “no such thing as ‘FMLA light duty.’” The court observed that the statute and regulations do not address the rate of pay an employee must receive while on light duty because that matter is addressed by workers’ compensation. Moreover, the Court noted that the FMLA requires employers to restore employees to the same or an equivalent position, but the requirement only applies if the employee is physically able. Hendricks was not physically able to return to her former position or to an equivalent position. As such, the court found that her employer was not required to pay Hendricks her normal rate while on a light duty assignment.
The Hendricks court, however, failed to address a significant issue – whether an employee is entitled to FMLA protection while receiving workers’ compensation benefits and working light duty. Though the court noted that the regulations “contemplate” light duty when an employee receives workers’ compensation and FMLA leave concurrently, it failed to address whether an employee participating in a workers’ compensation light duty program is also entitled to restoration to the employee’s position pursuant to the FMLA.
Employers should evaluate their leave policies to ensure that they are in compliance with the FMLA and with their state’s workers’ compensation statutes. The result in Hendricks leaves open the possibility that employees receiving workers’ compensation benefits who are working a light duty assignment may be entitled to the restorative benefits of the FMLA.
The Substance Abuse and Mental Health Service Administration (“SAMHSA”), a division of the Department of Health and Human Services, recently released a study finding that approximately 16.4 million current illegal drug users and approximately 15 million heavy alcohol users hold full-time jobs. The study was based on data collected between 2002 and 2004 from a sample of 128,000 persons aged 18 to 64.
The study found the highest rates of current illegal drug use were among food service (17.4 percent) and construction workers (15.1 percent). Highest rates of current heavy alcohol use were found among construction, mining, excavation and drilling workers (17.8 percent), and installation, maintenance, and repair workers (14.7 percent).
According to the study, illegal drug use and heavy alcohol use are associated with higher levels of absenteeism and frequent job changes. For example, nearly twice as many current illegal drug users skipped one or more days of work in the past month compared with workers who did not abuse drugs. Drug users were also far more likely to report missing two or more work days in the past month due to illness or injury compared with workers who did not abuse drugs.
The study also found that:
Employers should be aware of the risks of their employees’ illegal drug and heavy alcohol use and consider implementing a random drug testing policy to avoid the loss of productivity and severe injuries associated with worker drug and alcohol abuse.
Zashin & Rich recently welcomed Jason Rossiter to the firm and to its expanding Employment and Labor Group. Jason defends employers in a wide variety of labor and employment matters, including harassment, discrimination, and federal and state civil rights. Jason is licensed to practice law in Ohio and California and has defended employers in employment based disputes in Ohio, California and throughout the country. He has extensive experience in class and collective action litigation. Law and Politics and Cincinnati magazines named Jason an “Ohio Super Lawyer Rising Star” in Labor and Employment Law in 2006 and 2007.
Please join us in welcoming Jason to Z&R!
Upcoming Seminar
On October 24 and 25, 2007, Stephen Zashin and George Crisci will speak at the Midwest Labor and Employment Law Conference in Columbus, Ohio presented by the Ohio State Bar Association. George will address public records requests and public sector obligations concerning records requests. George will also speak on the topic of defending and handling mandamus actions if records are not produced appropriately.
Stephen will present “The Latest in Leave Law.” This presentation will cover the latest trends in leave law with emphasis on FMLA, pregnancy, ADA and workers’ compensation as they relate to employee leave. The latest FMLA-related case law trends will be addressed as well as how pregnancy-related leave is treated under FMLA and non-FMLA scenarios and insight as to how workers’ compensation-related leaves should be treated.
- SOMETHING WICKED THIS WAY COMES: How to Spot and Get Ahead of a Class or Collective Action Forming in Your Workplace
- AWOL: States Enacting Family Military Leave Acts
- KNOCKED-UP: Proposed Changes Would Result in Added Protections for Pregnant Workers
- RESTORATION CONSTERNATION: Is Light Duty "Leave" Under the FMLA?
- URINE TROUBLE: Most Illicit Drug Users and Heavy Alcohol Users Are in the Workplace and May Pose Special Problem
- Z&R Shorts
SOMETHING WICKED THIS WAY COMES: How to Spot and Get Ahead of a Class or Collective Action Forming in Your Workplace
By Stephen S. Zashin* and Christina M. JaniceHardly a day goes by without news that another employer has negotiated a settlement to a high profile class or collective action. Recent settlements such as the $55 million FedEx race discrimination case with its $15 million attorney fee award remind us that employment law cases are the fastest growing category of class and collective actions nationwide. In fact, employment cases now constitute over 10% of all class and collective filings in federal and state courts in arguably the most plaintiff-friendly state in the nation, California.
The settlements achieved in unlawful employment practices claims brought as class actions (in which an individual has the right to opt out), collective actions (in which an individual must opt in to participate), or a hybrid of both with federal and/or state law claims, can and do skyrocket into the hundreds of millions of dollars. These spoils are shared not only by “similarly situated” current or former employees who constitute the alleged “class,” but also the specialized trial attorneys, experts, consultants and vendors who make lucrative livings from investing their resources into the cottage industry of these complex employment claims.
Experienced plaintiffs’ lawyers know that most class and collective actions are settled before trial, to reduce a company’s risk of a high jury verdict, punitive and liquidated damages, interest, spiraling attorney fees, costs, injunctive orders imposing on a company invasive and expensive programmatic relief, and a public and investor relations nightmare. This potential for big rewards with very little risk of ever going to trial has made the vehicle of class and collective litigation attractive to plaintiffs not only at the nationwide level, but locally with much smaller employers.
Because it only takes one disgruntled employee to file a class or collective action, virtually every employer bears a very real risk of the substantial disruption and expense of defending this kind of case and, in many instances, the governmental investigation that may come with it. A prudent employer will take proactive steps to recognize and protect against this highly invasive and costly form of litigation. The following general guidelines may prove useful:
- Know Your Risks.
Many federal and state claims for unlawful employment practices can be brought as class or collective actions, including but not limited to claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act (“ADEA”), the Employee Retirement Income Security Act (“ERISA”), the Equal Pay Act (“EPA”), and the Fair Labor Standards Act (“FLSA”). In fact, the fastest growing and one of the most challenging areas of employment litigation to defend is a company’s wage and hour practices, including classification of employees and methods for calculating and paying overtime.
- Know the Players.
Class action attorneys frequently join together in loose regional or nationwide consortiums to investigate and finance claims brought as class or collective actions. They often will form joint ventures with governmental agencies such as the EEOC to take advantage of the investigatory powers such agencies have, and the particular types of litigation they can bring. The governmental agency benefits by the partnership through the opportunity to use the pending claims to impose extensive programmatic relief on a company. This programmatic relief may require a complete overhauling of the offending company’s policies, procedures and practices, ongoing monitoring and reporting for anywhere from one to seven years, and the hiring of compliance personnel. Pay attention to the public profiles of attorneys who represent your employees in their claims of unlawful workplace practice, and the agency personnel assigned to any complaints, charges or investigations.
- The Numbers Game.
Class and collective actions for unlawful discrimination are not just brought for obvious cases of intentional misconduct. While an employee or group of employees may not appear to have strong individual claims, they may be able to bring a “pattern and practice” claim that can be proven through their use of economists, industrial psychologists or other statisticians. These experts are retained to scrutinize your company’s hiring, pay, promotions, discipline, and other historical data and personnel records. Their task is to calculate any statistically significant disparities they observe in terms or conditions of employment that favor one population of employees over another. Where any such disparity, real or imagined, is calculated “on paper,” the employer then faces the daunting task of digging beneath the data to justify the numbers based on legitimate, non-discriminatory reasons. That a company does not set out to discriminate does not protect it from a claim that the effects of discrimination can be found in its statistics. To protect itself, your company must monitor its own data to anticipate and remedy any statistically significant disparities in terms and conditions of employment among its workforce.
- Launch Other Protective Countermeasures.
There are many countermeasures that can aid a company in preventing or defending a class or collective action brought by employees, plaintiffs’ counsel and governmental agencies. Some of these are listed here. To afford your company the greatest protection:
- Develop and retain thorough written employment policies and monitor federal and state law changes that impact your policies.
- Develop consistent discrimination, harassment and other EEO training modules and implement them at all levels of your company.
- Develop and enforce an employee evaluation protocol and promotional posting process that utilizes objective criteria to the greatest extent possible while reducing the risks of subjectivism, playing favorites, or vesting too much control in one member or a few members of management.
- Develop and publicize one or more vehicles for employees to bring and have investigated confidential complaints, and consistently train your personnel assigned to handle them.
- Maintain complete and well-organized personnel records and workforce data in such a format that your defense team can access and review it on short notice.
- Implement and adhere to a strict document and electronic record retention policy.
- Carefully craft and implement an alternate dispute resolution program culminating in arbitration as a contractual substitute to the forum of a courtroom.
- Assign someone in your company to monitor the implementation and efficacy of your countermeasures with the authority to triage your management to grow and enhance these countermeasures as required.
- Conduct annual compliance audits across all regulated aspects of your employment practices.
- Make sure your company carries sufficient insurance to withstand a class or collective action.
Your investment in these and other countermeasures will give you valuable intelligence on your employment practices and any “problem areas” while potentially saving you tens of millions of dollars.
- Develop and retain thorough written employment policies and monitor federal and state law changes that impact your policies.
- Keep a Watchful Eye on the Horizon.
Even the most proactive company may sense something brewing on the horizon. Rarely does a class or collective action come without warning. Monitor your EEOC or state civil rights agency charges. Look for clusters of employees or patterns of complaints and investigate them thoroughly. Know how your company is perceived among your employees, in the marketplace and on the Internet. Coordinate and communicate your company’s mission, culture, diversity and sensitivity. Take immediate and effective steps to remedy complaints brewing among groups of employees. Enable and empower your human resources personnel to get ahead of the ball by anticipating where clustered complaints may spread. Take decisive steps to stop an infectious practice that could be toxic to your company.
*Stephen S. Zashin defends employers in class and collective action litigation, pattern and practice statistical cases, compliance partnerships, and all aspects of employment related torts and violations of state and federal employment law. For more information on class and collective actions and corporate measures to protect against them, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.
AWOL: States Enacting Family Military Leave Acts
By Patrick O. PetersWhile each state law varies, generally the acts allow family members of active duty military personnel to take unpaid leave prior to, immediately following, and during their family members’ deployment. While Ohio has not passed a Family Military Leave Act, Illinois, Indiana, Maine, Minnesota, Nebraska and New York have enacted some form of Family Military Leave law.
Under the Illinois Act, employers who have between 15 and 50 employees must provide up to 15 days of unpaid leave to employees who are either the spouse or parent of soldiers called into active duty. Employers with more than 50 employees must provide such employees with up to 30 days of leave. The Illinois Act contains eligibility and notice requirements and employees are entitled to restoration in the same or an equivalent position held prior to the leave. Additionally, employees, at their own expense, may continue all employment benefits. Finally, under the Illinois Act, an employer may require an employee to exhaust all accrued vacation leave, personal leave, compensatory leave and any other leave (excepting sick and disability leave) before granting an employee leave.
Under the Indiana Military Family Leave Law, which went into effect on July 1 of this year, eligible employees are entitled to 10 days of unpaid leave but may only take the leave during the 30 days before or after active duty or while the active duty soldier is on leave. Under the Maine Family Military Leave Law, effective September 20, 2007, employers with 15 or more employees must grant eligible employees leave during active deployment while the soldier is on leave and during the 15 days prior to and following deployment.
The New York Family Military Leave Law, which has been in effect since 2006, contains no notice and few eligibility requirements. In New York, the spouse of a – who works at least 20 hours per week – may take up to 10 days unpaid leave while the person in the military is on leave from active duty.
In Minnesota, employers must grant the family member of a person killed or injured while on active duty in the military up to 10 days of unpaid leave. An eligible employee need only provide the employer with as much notice as possible prior to taking leave. While there is no requirement that an employer grant leave to family members during periods of active duty deployment – either before, immediately after, or while the soldier is on leave – employers are required to provide up to one (1) day’s leave for family members to attend send-off or homecoming ceremonies.
Like Illinois, Nebraska employers with 15 to 50 employees must provide up to 15 days of unpaid leave when a member of the military is called to active duty for 180 days or longer. Employers with more than 50 employees must provide 30 days unpaid leave. The Nebraska’s law contains eligibility and notice requirements and employees are entitled to restoration in the same or an equivalent position held prior to the leave. While on leave, employees can continue to receive employment benefits at their own expense.
Clearly, it is important for employers who operate in these states to be familiar with these Family Military Leave laws.
KNOCKED-UP: Proposed Changes Would Result in Added Protections for Pregnant Workers
By Jason Rossiter*The Ohio Civil Rights Commission (“OCRC”) recently held hearings relative to proposed regulatory changes to the Ohio Administrative Code concerning pregnancy discrimination. If the proposed changes take effect, pregnant employees – even those not eligible for FMLA leave – would be entitled to 12 weeks of maternity leave as soon as they are hired. If adopted, Ohio would join 18 other states that require employers to offer maternity leaves that exceed those mandated by the FMLA.
While the FMLA applies only to “covered” employers – those with 50 or more workers – and “eligible” employees – those who have worked at least one (1) year and 1,250 hours during the preceding 12 months – if enacted, the Ohio regulations would contain a less stringent standard. The Ohio regulations would apply to virtually all employers and employees.
If the new regulations are enacted, Ohio employers would be required to grant pregnant employees at least 12 weeks of unpaid leave, regardless of the size of employer or length of service of the employee. An exception, however, includes employers who are able to demonstrate a business necessity for not following this requirement.
While this change codifies a 12 week leave requirement for most Ohio employers, Ohio courts have previously interpreted the administrative code to provide for a leave of absence for a reasonable period of time on account of childbearing. This requirement applies regardless of whether an employer has a maternity or leave of absence policy. According to the Ohio courts that have examined this provision, a “reasonable period of time” may exceed 12 weeks depending on the circumstances.
The proposed regulations also bring about other significant changes. Perhaps most importantly, employers would be required to offer light-duty positions to pregnant employees if those positions are offered to workers temporarily disabled as a result of an on-the-job injury. This requirement represents a substantial increase in the protections afforded pregnant women under the current law. Employers who have a light duty program would have to make that program available to employees “affected by pregnancy, childbirth, or a related medical condition.”
Finally, under the proposed regulations, employers would be required to reinstate employees to their original job, or to a position of like status and pay, upon her return from pregnancy leave.
Testimony from the hearing held before the Civil Rights Commission has been compiled and presented to the Commissioners for review. According to published media reports, the OCRC has indicated that it is revising its proposal after business groups said the rules would hurt small businesses and Ohio’s economy. The Commission’s chair further stated that the Commission may be willing to negotiate on the number of weeks of guaranteed leave in light of opposition from the Ohio Chamber of Commerce and others. It remains to be seen what modifications, if any, will be made to the proposed regulatory changes.
Employers should be aware of the potential changes to the Ohio Administrative Code and the increased protections afforded to pregnant workers. Any changes or modifications to an employer’s policies should be reviewed to ensure that they comply with Ohio and federal law.
*Jason Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about pregnancy discrimination or any other employment-related tort, please contact Zashin & Rich at 216.696.4441.
RESTORATION CONSTERNATION: Is Light Duty “Leave” Under the FMLA?
By Patrick M. WattsA light duty assignment may qualify as “leave” under the FMLA, even if an employee is not absent from work. While no court has directly addressed this question, Department of Labor regulations provide some guidance.
***the employee’s right to restoration to the same or an equivalent position is available until 12 weeks have passed within the 12-month period, including all FMLA leave taken and the period of ‘light duty.’See 29 C.F.R. § 825.220(d).
The regulations provide that an employee may not waive his right to protection under the FMLA, but may voluntarily accept an employer’s offer of “light duty” while recovering from a “serious health condition.”
The Seventh Circuit Court of Appeals recently addressed the issue of whether an employee is entitled to his regular rate of pay while on light duty. In Hendricks v. Compass Group, USA, Inc., 2007 U.S. App LEXIS 18606, the plaintiff employee worked as a utility van driver for the defendant employer and made $12.23 an hour. Hendricks injured her rotator cuff while at work, applied for, and received workers’ compensation benefits. One week later, she returned to work to a light duty assignment at a rate of $9.00 per hour. Eventually, she exhausted her 12 week FMLA leave and did not return to her previous position.
Hendricks sued her employer seeking $3.23 for each hour she worked on light duty – the difference between her regular rate of pay and what she was paid for the light duty work. She contended that she was on “FMLA light duty” and that her employer was required to compensate her at her normal utility driver rate. The court disagreed.
The Hendricks court concluded that there is “no such thing as ‘FMLA light duty.’” The court observed that the statute and regulations do not address the rate of pay an employee must receive while on light duty because that matter is addressed by workers’ compensation. Moreover, the Court noted that the FMLA requires employers to restore employees to the same or an equivalent position, but the requirement only applies if the employee is physically able. Hendricks was not physically able to return to her former position or to an equivalent position. As such, the court found that her employer was not required to pay Hendricks her normal rate while on a light duty assignment.
The Hendricks court, however, failed to address a significant issue – whether an employee is entitled to FMLA protection while receiving workers’ compensation benefits and working light duty. Though the court noted that the regulations “contemplate” light duty when an employee receives workers’ compensation and FMLA leave concurrently, it failed to address whether an employee participating in a workers’ compensation light duty program is also entitled to restoration to the employee’s position pursuant to the FMLA.
Employers should evaluate their leave policies to ensure that they are in compliance with the FMLA and with their state’s workers’ compensation statutes. The result in Hendricks leaves open the possibility that employees receiving workers’ compensation benefits who are working a light duty assignment may be entitled to the restorative benefits of the FMLA.
URINE TROUBLE: Most Illicit Drug Users and Heavy Alcohol Users Are in the Workplace and May Pose Special Problems
By Steven P. DlottThe Substance Abuse and Mental Health Service Administration (“SAMHSA”), a division of the Department of Health and Human Services, recently released a study finding that approximately 16.4 million current illegal drug users and approximately 15 million heavy alcohol users hold full-time jobs. The study was based on data collected between 2002 and 2004 from a sample of 128,000 persons aged 18 to 64.
The study found the highest rates of current illegal drug use were among food service (17.4 percent) and construction workers (15.1 percent). Highest rates of current heavy alcohol use were found among construction, mining, excavation and drilling workers (17.8 percent), and installation, maintenance, and repair workers (14.7 percent).
According to the study, illegal drug use and heavy alcohol use are associated with higher levels of absenteeism and frequent job changes. For example, nearly twice as many current illegal drug users skipped one or more days of work in the past month compared with workers who did not abuse drugs. Drug users were also far more likely to report missing two or more work days in the past month due to illness or injury compared with workers who did not abuse drugs.
The study also found that:
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Among full-time workers who reported current illicit drug use, 12.3 percent said they had worked for three or more employers in the past year compared with 5.1 percent of non-abusing workers;
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Nearly a third of current illicit drug users said they would be less likely to work for employers who conducted random drug testing;
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Approximately 30 percent of the full-time work force reported that random drug testing took place in their current employment setting with workers in transportation and material moving (62.9 percent) and protective services (61.8 percent) most likely to be subject to random testing; and
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Of the professions least likely to be subject to random testing, workers in legal occupations and arts, design, entertainment, sports, and medical, only ten percent reported working for an employer who tested for illegal drug or alcohol use on a random basis.
Employers should be aware of the risks of their employees’ illegal drug and heavy alcohol use and consider implementing a random drug testing policy to avoid the loss of productivity and severe injuries associated with worker drug and alcohol abuse.
Z&R Shorts
Zashin & Rich welcomes Jason Rossiter to its Employment and Labor GroupZashin & Rich recently welcomed Jason Rossiter to the firm and to its expanding Employment and Labor Group. Jason defends employers in a wide variety of labor and employment matters, including harassment, discrimination, and federal and state civil rights. Jason is licensed to practice law in Ohio and California and has defended employers in employment based disputes in Ohio, California and throughout the country. He has extensive experience in class and collective action litigation. Law and Politics and Cincinnati magazines named Jason an “Ohio Super Lawyer Rising Star” in Labor and Employment Law in 2006 and 2007.
Please join us in welcoming Jason to Z&R!
Upcoming Seminar
On October 24 and 25, 2007, Stephen Zashin and George Crisci will speak at the Midwest Labor and Employment Law Conference in Columbus, Ohio presented by the Ohio State Bar Association. George will address public records requests and public sector obligations concerning records requests. George will also speak on the topic of defending and handling mandamus actions if records are not produced appropriately.
Stephen will present “The Latest in Leave Law.” This presentation will cover the latest trends in leave law with emphasis on FMLA, pregnancy, ADA and workers’ compensation as they relate to employee leave. The latest FMLA-related case law trends will be addressed as well as how pregnancy-related leave is treated under FMLA and non-FMLA scenarios and insight as to how workers’ compensation-related leaves should be treated.
Monday, October 1, 2007
Supreme Court Reverses Itself and Holds Negligent Worker Entitled to Workers' Compensation Benefits
*By Steven P. Dlott
On Thursday, September 27, 2007, the Ohio Supreme Court reversed and reconsidered its earlier ruling that denied temporary total disability (TTD) benefits to an injured Columbus, Ohio fast food worker. Previously, in December 2006, the Court held that by knowingly violating a workplace safety rule – for which he had previously been warned could result in his immediate termination – the worker “voluntarily abandoned” his employment upon his firing and lost his eligibility to receive workers’ compensation benefits, including TTD. In its latest opinion, the Court affirmed the lower court’s award of TTD and held that “if an employee’s departure from the workplace ‘is causally related to his injury,’ it is not voluntary and should not preclude the employee’s eligibility for TTD compensation.”
In State ex rel. Gross v. Industrial Commission, a 16-year-old high school student working at a KFC restaurant, and several of his co-workers, were severely burned when he opened the lid of a pressure cooker containing boiling water. Gross, the employee, filed a workers’ compensation claim, which was allowed, and began receiving TTD benefits. KFC investigated the accident, and three months later, fired Gross for failing to follow safety instructions and procedures regarding the proper use and operation of the pressure cooker. Those safety instructions and procedures consisted of a safety warning in the employee handbook advising employees to never boil water in the pressure cooker to clean it, and notice to the employee in that handbook that violation of any safety guideline causing an injury was a dischargeable offense. In addition to those safety measures, a warning label affixed to the top of the pressure cooker reminded employees not to close the lid with water or cleaning agents in the pot. KFC’s investigation further revealed that other employees had advised Gross that putting water in the pressure cooker could cause serious injuries. Gross nevertheless ignored those warnings and injured himself as a result. Following its investigation, KFC sought to terminate Gross’s TTD, arguing that Gross’s misconduct constituted a “voluntary abandonment” of employment.
Reversing its prior decision, the Court noted that Ohio’s workers’ compensation statute is based on a “no-fault” system of compensation and that “voluntary abandonment” has never been applied to preinjury conduct or conduct contemporaneous with the injury. The Court further reasoned that, “[i]t is the role of the legislature, not the judiciary, to carve out exceptions to a claimant’s eligibility for TTD compensation.” Thus, the court held that, “[a]lthough KFC appears justified in firing Gross for violating workplace rules, the termination letter established that his discharge was related to his industrial injury” and was, therefore, involuntary.
Employers should view this case as an opportunity to examine their own safety procedures in light of those KFC employed here. First, employers should review their employee manuals to ensure that potentially dangerous work procedures are clearly identified and prohibited. Violations of these prohibitions should constitute a dischargeable offense. Second, front line supervisors should enforce strict compliance with the safety rules. Had Gross, a repeated violator of KFC’s safety rules, been discharged prior to the events that lead to his injury, both the injury and KFC’s resulting liability might have been avoided. A thoroughly written employment manual is meaningless without vigilant enforcement of its contents.
On Thursday, September 27, 2007, the Ohio Supreme Court reversed and reconsidered its earlier ruling that denied temporary total disability (TTD) benefits to an injured Columbus, Ohio fast food worker. Previously, in December 2006, the Court held that by knowingly violating a workplace safety rule – for which he had previously been warned could result in his immediate termination – the worker “voluntarily abandoned” his employment upon his firing and lost his eligibility to receive workers’ compensation benefits, including TTD. In its latest opinion, the Court affirmed the lower court’s award of TTD and held that “if an employee’s departure from the workplace ‘is causally related to his injury,’ it is not voluntary and should not preclude the employee’s eligibility for TTD compensation.”
In State ex rel. Gross v. Industrial Commission, a 16-year-old high school student working at a KFC restaurant, and several of his co-workers, were severely burned when he opened the lid of a pressure cooker containing boiling water. Gross, the employee, filed a workers’ compensation claim, which was allowed, and began receiving TTD benefits. KFC investigated the accident, and three months later, fired Gross for failing to follow safety instructions and procedures regarding the proper use and operation of the pressure cooker. Those safety instructions and procedures consisted of a safety warning in the employee handbook advising employees to never boil water in the pressure cooker to clean it, and notice to the employee in that handbook that violation of any safety guideline causing an injury was a dischargeable offense. In addition to those safety measures, a warning label affixed to the top of the pressure cooker reminded employees not to close the lid with water or cleaning agents in the pot. KFC’s investigation further revealed that other employees had advised Gross that putting water in the pressure cooker could cause serious injuries. Gross nevertheless ignored those warnings and injured himself as a result. Following its investigation, KFC sought to terminate Gross’s TTD, arguing that Gross’s misconduct constituted a “voluntary abandonment” of employment.
Reversing its prior decision, the Court noted that Ohio’s workers’ compensation statute is based on a “no-fault” system of compensation and that “voluntary abandonment” has never been applied to preinjury conduct or conduct contemporaneous with the injury. The Court further reasoned that, “[i]t is the role of the legislature, not the judiciary, to carve out exceptions to a claimant’s eligibility for TTD compensation.” Thus, the court held that, “[a]lthough KFC appears justified in firing Gross for violating workplace rules, the termination letter established that his discharge was related to his industrial injury” and was, therefore, involuntary.
Employers should view this case as an opportunity to examine their own safety procedures in light of those KFC employed here. First, employers should review their employee manuals to ensure that potentially dangerous work procedures are clearly identified and prohibited. Violations of these prohibitions should constitute a dischargeable offense. Second, front line supervisors should enforce strict compliance with the safety rules. Had Gross, a repeated violator of KFC’s safety rules, been discharged prior to the events that lead to his injury, both the injury and KFC’s resulting liability might have been avoided. A thoroughly written employment manual is meaningless without vigilant enforcement of its contents.
Tuesday, July 10, 2007
EMPLOYMENT LAW QUARTERLY | Summer 2007, Volume IX, Issue ii
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Under federal law, employers are not required to provide employees with a lunch break or a rest period. However, when employers do provide breaks, the Fair Labor Standards Act (“FLSA”) sets forth criteria that determine whether an employer must pay for that break. The Department of Labor (“DOL”) and the courts generally recognize two categories of breaks: rest and meal periods.
Employers are not required to include unauthorized extensions of work breaks as hours worked when the employer has expressly and unambiguously communicated that: (1) the authorized break is for a specific length of time; (2) an extension of the break is against company rules; and, (3) the employee will receive discipline for an extension of the authorized break.
Under the predominant benefit test, a meal period will qualify as hours worked if the predominant benefits serve the employer rather than the employee. In court, an employer has the burden to demonstrate that the employee received the predominant benefit of the meal period. Courts consider factors such as (1) the limitations and restrictions placed on the employees during the meal period, (2) the extent to which those restrictions benefit the employer, (3) the duties the employer holds the employee responsible for during the meal period, (4) and the frequency by which employer interrupts the meal periods.
As the restrictions and duties become greater during the meal period, the employer likely receives the predominant benefits. When analyzing whether meal periods should be included as hours worked, employers should thoroughly review restrictions on meal periods, the duties employees must perform during those periods, and the frequency that the employer interrupts the employee’s meal period.
According to the latest Census Bureau estimates, full-time year-round female workers make 77 cents for every dollar a male earns. This statistic has not gone unnoticed by advocacy groups who believe that this situation is caused by discriminatory employment practices and by plaintiffs’ attorneys who are all too willing to take up the cause by filing pay discrimination lawsuits. A decision issued by the U.S. Supreme Court will make it more difficult to bring certain types of pay discrimination claims because they will be untimely. The decision, however, does not affect all pay discrimination claims. As explained below, therefore, the much better practice is for employers to avoid becoming vulnerable to such claims by engaging in a “self-audit” of their pay practices.
A discrimination claim under Title VII of the Civil Rights Act of 1964 (“Title VII”) is not timely unless a charge of discrimination is filed with the Equal Employment Opportunity Commission (EEOC) within 180 days (or 300 days in states, such as Ohio, that have a comparable state agency) after the alleged discriminatory act or decision occurs (known as the “charging period”). Courts repeatedly have had to decide whether a discrimination claim is based upon conduct that occurred during the charging period or simply involves the continuing effects of prior conduct that occurred outside the charging period. In the latter instance, the claim is untimely. This issue arises frequently in pay discrimination cases, where the employee’s claim is based upon a decision that occurred long ago, but the effects of that action are felt every time the employee receives a paycheck. The U.S. Supreme Court recently addressed this issue. The Court held that many of these pay discrimination claims are untimely unless the employee’s compensation is based upon a decision that occurred during the charging period.
In Ledbetter v. Goodyear Tire & Rubber Co., pay raises for salaried employees were based upon performance evaluations conducted by the employees’ supervisors. Plaintiff Lilly Ledbetter, who worked for Goodyear from 1979 to 1998, claimed that one of her supervisors had retaliated against her when she rejected his sexual advances during the early 1980’s by giving her negative performance evaluations and did so again during the mid-1990’s when he allegedly falsified deficiency reports about her work. This alleged retaliation impacted the amount of her pay increases. She also claimed that this retaliatory treatment had a continuing impact upon how much she was paid. However, she waited until 1998 (shortly before she retired) before complaining to the EEOC about her pay. By the time the case went to trial, the supervisor had died. She claimed primarily that “her pay was not increased as much as it would have been had she been evaluated fairly, and that these past pay decisions continued to affect the amount of her pay throughout her employment.” A jury agreed with Ledbetter and awarded her damages, but the appellate court reversed because her claims were untimely.
Ledbetter argued that her pay discrimination claims were timely for two reasons. First, she contended that each paycheck issued to her during the charging period that contained an amount that was based upon prior unlawful action was a separate act of discrimination (known as the “paycheck accrual rule”). Second, she focused upon a decision denying her a pay raise that occurred during the charging period that she claimed was unlawful because it “carried forward intentionally discriminatory disparities from prior years.”
The Supreme Court rejected both arguments because neither one was based upon an alleged intentional discriminatory act that occurred during the charging period. The Court explained that “[a] disparate treatment claim comprises two elements: an employment practice and discriminatory intent,” and both have to occur during the charging period for the discrimination claim to be timely. Thus, “[t]he EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent non-discriminatory acts that entail adverse effects resulting from past discrimination.” The Court added, however, that “if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.” Ledbetter’s claim was untimely because she “makes no claim that intentionally discriminatory conduct occurred during the charging period or that discriminatory decisions that occurred prior to that period were not communicated to her. Instead, she argues simply that Goodyear’s conduct during the charging period gave present effect to discriminatory conduct outside of that period. But current effects alone cannot breathe life into prior, uncharged discrimination . . . .” The Court suggested that Ledbetter “should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her.”
The Supreme Court also noted that there are important exceptions to this rule. The most prominent is a claim that is based upon a “facially discriminatory pay structure that puts some employees on a lower scale because of” some unlawful classification such as race or gender. In distinguishing between the two, the Court explained that “an employer violates Title VII and triggers a new EEOC charging period whenever the employer issues paychecks using a discriminatory pay structure. But a new Title VII violation does not occur and a new charging period is not triggered when an employer issues paychecks pursuant to a system that is ‘facially nondiscriminatory and neutrally applied.’ The fact that pre-charging period discrimination adversely affects the calculation of a neutral factor (like seniority) that is used in determining future pay does not mean that each new paycheck constitutes a new violation and restarts the EEOC charging period.”
Another important exception involves claims under the Equal Pay Act (EPA). The Court noted that such claims do not require the filing of a charge nor do they require proof of discriminatory intent. Although Ledbetter originally had filed an EPA claim, the trial court dismissed that claim and Ledbetter did not pursue it on appeal.
The timeliness requirements established in Ledbetter are very helpful to employers. Previously, employers were forced to defend against pay discrimination claims that were based upon conduct that occurred many years in the past. This can prove especially difficult when the evidence tending to prove or disprove such a claim has become stale or non-existent. Employers, however, must be cautious in applying these timeliness requirements because there are some noteworthy exceptions, such as a separate claim under the federal Equal Pay Act or a claim based upon a facially discriminatory pay policy.
Employers in Ohio also should remember that the Ledbetter decision applies only to claims under federal law. Ohio courts have not yet adopted the decision and its underlying reasoning for similar claims of pay discrimination under Ohio’s discrimination statute – Chapter 4112 of the Ohio Revised Code – and there is no guarantee that the Ohio Supreme Court will do so. Moreover, the limitations period for commencing a discrimination claim under Ohio law (which does not require a charge filing before commencing a lawsuit) is much longer: six years in most cases versus 300 days under federal law. Likewise, other states also may not adopt the Ledbetter reasoning.
Employers are strongly encouraged to seek legal counsel in determining whether the favorable timeliness requirements under Ledbetter apply to a pay discrimination claim or a pay structure issue.
Finally, although the result in Ledbetter is welcome news for employers, preventative action is essential to successfully defend pay discrimination claims that are timely filed. Employers are encouraged to conduct an “employer pay equity self-audit” which is designed to assist employers in analyzing their own wage-setting policies and establishing consistent pay practices for all.
*George S. Crisci is an OSBA Certified Specialist in Labor and Employment Law. George practices in all areas of employment and labor law. For more advice on both other employment law inquiries and traditional labor law issues, please contact George at (216) 696-4441 or gsc@zrlaw.com.
On May 25, 2007, President Bush signed into law the Fair Minimum Wage Act of 2007 (the “Act”). The Act serves to amend the Fair Labor Standards Act (“FLSA”) of 1938 and increases the federal minimum wage from $5.15 an hour to $5.85 an hour on July 24, 2007, to $6.55 an hour on July 24, 2008, and to $7.25 an hour on July 24, 2009. The FLSA provides rigorous regulations that apply to all employees that include child labor, recordkeeping, and enforcement provisions in addition to rules relative to overtime compensation and the minimum wage.
The new federal minimum wage will have no immediate impact on most employers in states, such as Ohio, that have a higher state minimum wage. In November 2006, Ohio voters approved Statewide Issue 2. Issue 2 is an Amendment to Ohio’s Constitution that raised the minimum wage from $5.15 an hour to $6.85 an hour and became effective January 1, 2007. Under the Ohio Amendment, Ohio’s minimum wage will adjust annually, beginning January 1, 2008, to reflect inflation as tracked by changes to the consumer price index.
Allegations of wage and hour violations comprise one of the largest areas of potential liability for employers. Wage and hour litigation has increased 300% over the past decade and lawsuits based on FLSA violations are one of the fastest growing sources of employment-based class/collective action litigation. Wage and hour violations that commonly result in litigation include: misclassifying employees as “exempt” and failing to pay them overtime; failing to pay non-exempt employees overtime, including overtime not approved in advance; failing to pay for time worked “off the clock,” including allowing employees to arrive early to prepare for work or stay late to “close up;” and granting compensatory or “comp time” in lieu of overtime pay.
Employers should regularly conduct an audit of their wage and hour practices to minimize the risk associated with wage and hour violations. These audits include a thorough review of employee classification and payroll records and analysis of employment policies to ensure compliance with the FLSA. Taking proactive steps will help decrease an employer’s exposure to wage and hour liability, deter administrative agency investigation, and minimize exposure to litigation.
On June 14, 2007, the United States Supreme Court rejected a challenge to a Washington law that bars public-sector unions from spending non-members’ fees on political activity without first receiving their permission. In Davenport v. Washington Ed. Assn., the Court held that a state may require its public-sector unions to receive affirmative authorization before spending fees on political activities. Id. at syllabus.
While most states allow public-sector unions to levy fees on non-member employees in exchange for collective bargaining representation, the Court previously ruled that those fees may not be used for “ideological purposes not germane to the union’s collective bargaining duties.” Davenport, supra., citing Abood v. Detroit Bd. of Ed., 431 U.S. 209, 235-236 (1977). These ideological purposes include unions’ political activity.
Under the Washington state law, the non-members had to grant the union permission in order for the union to use non-member fees for a purpose other than collective bargaining.
The Supreme Court held that “courts have an obligation to interfere with a union’s statutory entitlement no more than is necessary to vindicate the rights of non-members does not imply that legislatures (or voters) themselves cannot limit the scope of that entitlement.” Id. (emphasis in original). The ruling paves the way for further restrictions on public-sector unions relative to the collective bargaining fees they generate from non-members.
*Jon M. Dileno represents employers in the full spectrum of labor and employment matters in both the public and private sector. Jon’s experience in collective bargaining matters extends beyond negotiating labor contracts and covers the full gamut of collective bargaining proceedings. For more information concerning public sector collective bargaining or any other labor issue, please contact Jon at (216) 696-4441 or jmd@zrlaw.com.
Generally, summer interns are employees covered by the Fair Labor Standards Act (“FLSA”) and are entitled to minimum wage and overtime protection. However, if interns qualify as “trainees,” rather than employees, the wage and hour requirements of the FLSA do not apply.
The U.S. Supreme Court has established a six factor test to determine trainee status. If the relationship between the employer and the intern meets all six criteria, the employer can treat the intern as a trainee. An intern is a trainee if: (1) the training is similar to training that would be offered at a vocational school (even though it includes actual operation of the facilities of the employer); (2) the training is for the intern’s benefit; (3) the intern does not displace regular employees (but may work under close supervision); (4) the employer receives no immediate advantage from the intern’s activities; (5) the intern is not necessarily entitled to a job at the completion of the training; and, (6) the employer and the intern understand that the intern is not entitled to wages for the training.
In addressing the substance of the training, courts and the Department of Labor (“DOL”) compare the curricula from community colleges and other similar institutions to determine if the employer’s training is similar. They next consider whether the skills learned are useful to the individual and transferable to other employers. For instance, one court determined that employees received general and non-transferable training when the employees assisted truck drivers by riding in trucks, moving boxes, learning general vending machine maintenance, and completing general paperwork. Equally important in the analysis is whether the intern has filled a position normally held by an employee.
The most important consideration relative to an intern’s status is the benefit of the intern’s work. In order for an intern to qualify as a “trainee,” an employer must provide training and cannot receive productive work from the intern. One court held that an employer received an immediate advantage when an intern performed productive work and the only cost to the employer was for supervision. Other courts have held that when an intern’s duties consist of simply assisting other employees, the employer receives an immediate advantage.
Courts have, however, held that employers are permitted to receive the immediate advantage of a well-trained applicant pool as a result of their training programs. While entitlement to a future position with an employer is prohibited, if an employer decides to hire a trainee, the employer does not have to compensate him until the training program has ended.
Finally, both the employer and the intern must understand that the trainee will not receive compensation for the training. While a written agreement is not required, a prudent employer attempting to meet each of the above factors should obtain written confirmation of this understanding.
Situations that satisfy each of the above requirements are limited. Generally, summer interns hold jobs that fall within the protections of the FLSA and are not “trainees”. Under most circumstances, employers must adhere to wage and hour requirements relative to summer interns as employees.
Zashin & Rich recently welcomed two attorneys to the firm and to its expanding Employment and Labor Group. Jon Dileno represents employers in the full spectrum of labor and employment matters in both the public and private sector. Jon serves as chief negotiator for some of the most high profile labor negotiations in Ohio. Jon has also successfully defended both private employers and public entities in numerous cases involving discrimination, retaliation, wrongful discharge, intentional tort, and defamation.
Jon received his undergraduate degree, cum laude, from Baldwin Wallace College and his law degree from Tulane University, cum laude, where he received the Outstanding Labor Law Student Award. Jon is admitted to practice law in the State of Ohio, the United States District Court for the Northern and Southern Districts of Ohio, and the Sixth Circuit Court of Appeals.
Patrick Peters also recently joined Zashin & Rich. Pat's practice areas include labor relations, equal employment opportunity, employment discrimination, and all other employment related torts. Pat earned his B.B.A. from the University of Notre Dame and went on to earn his law degree, cum laude, from Case Western Reserve University School of Law. Pat is admitted to practice law in the State of Ohio and the United States District Court for the Northern District of Ohio.
Please join us in welcoming Jon and Pat to Z&R!
Upcoming Seminars On June 28, 2007, Stephen Zashin and Steven Dlott will present “Interplay: Solving the FMLA, ADA and Workers’ Compensation Leave of Absence Puzzle” to the Greater Cleveland Safety Council. The event will be held at the Holiday Inn South, 6001 Rockside Road, Independence, Ohio with registration at 11:15a.m. and a luncheon meeting to follow at 11:30.am. Cost, including lunch, is $22 for members of the Council and $27 for non-members. Please contact the Greater Cleveland Safety Council at (216) 621-0059 or gcsafety@ameritech.net for more information.
On August 7, 2007, Stephen Zashin and George Crisci will speak to the Council on Education in Management’s Ohio FMLA Update 2007 seminar. Stephen will present “The Tangled Web of the FMLA, ADA, Workers' Comp, and Other Leave Laws: Pulling the Threads Apart.” George will present “Weeding-Out Fraudulent Claims and Avoiding Intermittent Leave Abuse: Effectively Using Recertification, Second and Third Opinions, and Fitness-for-Duty Examinations.” The seminar will be held in Cuyahoga Falls. To register or for more information visit www.counciloned.com or contact the Council on Education and Management at (800) 942-4494 or registration@counciloned.com.
- BREAKS AND REST PERIODS: What are employers required to pay for under the FLSA?
- U.S. Supreme Court Strikes Down Title VII Pay Discrimination Claim Where Unlawful Action Occurred Outside of Charging Period
- MOVIN' ON UP: Congress Passes a New Minimum Wage
- PUBLIC SECTOR UPDATE: Supreme Court Limits Unions' Rights to Use Non-Member Fees for Political Purposes
- TO PAY OR NOT TO PAY: Summer Interns under the Fair Labor Standards Act
- Z&R SHORTS
BREAKS AND REST PERIODS: What are employers required to pay for under the FLSA?
By Christina M. JaniceUnder federal law, employers are not required to provide employees with a lunch break or a rest period. However, when employers do provide breaks, the Fair Labor Standards Act (“FLSA”) sets forth criteria that determine whether an employer must pay for that break. The Department of Labor (“DOL”) and the courts generally recognize two categories of breaks: rest and meal periods.
1. Rest Periods
DOL Regulations provide that rest periods of a short duration, running from 5 minutes to “about 20 minutes,” must be included as “hours worked” by an employee. However, break time does not qualify as hours worked when the break exceeds 20 minutes, the time is sufficient for the employee to use it for his own purposes, and the employer completely relieves the employee from duty.Employers are not required to include unauthorized extensions of work breaks as hours worked when the employer has expressly and unambiguously communicated that: (1) the authorized break is for a specific length of time; (2) an extension of the break is against company rules; and, (3) the employee will receive discipline for an extension of the authorized break.
2. Meal Periods
DOL Regulations provide that bona fide meal periods do not count as hours worked. Generally, the meal period must last 30 minutes or longer, but may be shorter under certain circumstances. DOL Regulations require that during a meal period the employer must completely relieve the employee from duty for the purpose of eating a regular meal. While some courts strictly require that the employer completely relieve the employee from duty, others utilize the “predominant benefit” test to determine whether a meal period qualifies as hours worked.Under the predominant benefit test, a meal period will qualify as hours worked if the predominant benefits serve the employer rather than the employee. In court, an employer has the burden to demonstrate that the employee received the predominant benefit of the meal period. Courts consider factors such as (1) the limitations and restrictions placed on the employees during the meal period, (2) the extent to which those restrictions benefit the employer, (3) the duties the employer holds the employee responsible for during the meal period, (4) and the frequency by which employer interrupts the meal periods.
As the restrictions and duties become greater during the meal period, the employer likely receives the predominant benefits. When analyzing whether meal periods should be included as hours worked, employers should thoroughly review restrictions on meal periods, the duties employees must perform during those periods, and the frequency that the employer interrupts the employee’s meal period.
U.S. Supreme Court Strikes Down Title VII Pay Discrimination Claim Where Unlawful Action Occurred Outside of Charging Period
By George S. Crisci, Esq.*According to the latest Census Bureau estimates, full-time year-round female workers make 77 cents for every dollar a male earns. This statistic has not gone unnoticed by advocacy groups who believe that this situation is caused by discriminatory employment practices and by plaintiffs’ attorneys who are all too willing to take up the cause by filing pay discrimination lawsuits. A decision issued by the U.S. Supreme Court will make it more difficult to bring certain types of pay discrimination claims because they will be untimely. The decision, however, does not affect all pay discrimination claims. As explained below, therefore, the much better practice is for employers to avoid becoming vulnerable to such claims by engaging in a “self-audit” of their pay practices.
A discrimination claim under Title VII of the Civil Rights Act of 1964 (“Title VII”) is not timely unless a charge of discrimination is filed with the Equal Employment Opportunity Commission (EEOC) within 180 days (or 300 days in states, such as Ohio, that have a comparable state agency) after the alleged discriminatory act or decision occurs (known as the “charging period”). Courts repeatedly have had to decide whether a discrimination claim is based upon conduct that occurred during the charging period or simply involves the continuing effects of prior conduct that occurred outside the charging period. In the latter instance, the claim is untimely. This issue arises frequently in pay discrimination cases, where the employee’s claim is based upon a decision that occurred long ago, but the effects of that action are felt every time the employee receives a paycheck. The U.S. Supreme Court recently addressed this issue. The Court held that many of these pay discrimination claims are untimely unless the employee’s compensation is based upon a decision that occurred during the charging period.
In Ledbetter v. Goodyear Tire & Rubber Co., pay raises for salaried employees were based upon performance evaluations conducted by the employees’ supervisors. Plaintiff Lilly Ledbetter, who worked for Goodyear from 1979 to 1998, claimed that one of her supervisors had retaliated against her when she rejected his sexual advances during the early 1980’s by giving her negative performance evaluations and did so again during the mid-1990’s when he allegedly falsified deficiency reports about her work. This alleged retaliation impacted the amount of her pay increases. She also claimed that this retaliatory treatment had a continuing impact upon how much she was paid. However, she waited until 1998 (shortly before she retired) before complaining to the EEOC about her pay. By the time the case went to trial, the supervisor had died. She claimed primarily that “her pay was not increased as much as it would have been had she been evaluated fairly, and that these past pay decisions continued to affect the amount of her pay throughout her employment.” A jury agreed with Ledbetter and awarded her damages, but the appellate court reversed because her claims were untimely.
Ledbetter argued that her pay discrimination claims were timely for two reasons. First, she contended that each paycheck issued to her during the charging period that contained an amount that was based upon prior unlawful action was a separate act of discrimination (known as the “paycheck accrual rule”). Second, she focused upon a decision denying her a pay raise that occurred during the charging period that she claimed was unlawful because it “carried forward intentionally discriminatory disparities from prior years.”
The Supreme Court rejected both arguments because neither one was based upon an alleged intentional discriminatory act that occurred during the charging period. The Court explained that “[a] disparate treatment claim comprises two elements: an employment practice and discriminatory intent,” and both have to occur during the charging period for the discrimination claim to be timely. Thus, “[t]he EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent non-discriminatory acts that entail adverse effects resulting from past discrimination.” The Court added, however, that “if an employer engages in a series of acts each of which is intentionally discriminatory, then a fresh violation takes place when each act is committed.” Ledbetter’s claim was untimely because she “makes no claim that intentionally discriminatory conduct occurred during the charging period or that discriminatory decisions that occurred prior to that period were not communicated to her. Instead, she argues simply that Goodyear’s conduct during the charging period gave present effect to discriminatory conduct outside of that period. But current effects alone cannot breathe life into prior, uncharged discrimination . . . .” The Court suggested that Ledbetter “should have filed an EEOC charge within 180 days after each allegedly discriminatory pay decision was made and communicated to her.”
The Supreme Court also noted that there are important exceptions to this rule. The most prominent is a claim that is based upon a “facially discriminatory pay structure that puts some employees on a lower scale because of” some unlawful classification such as race or gender. In distinguishing between the two, the Court explained that “an employer violates Title VII and triggers a new EEOC charging period whenever the employer issues paychecks using a discriminatory pay structure. But a new Title VII violation does not occur and a new charging period is not triggered when an employer issues paychecks pursuant to a system that is ‘facially nondiscriminatory and neutrally applied.’ The fact that pre-charging period discrimination adversely affects the calculation of a neutral factor (like seniority) that is used in determining future pay does not mean that each new paycheck constitutes a new violation and restarts the EEOC charging period.”
Another important exception involves claims under the Equal Pay Act (EPA). The Court noted that such claims do not require the filing of a charge nor do they require proof of discriminatory intent. Although Ledbetter originally had filed an EPA claim, the trial court dismissed that claim and Ledbetter did not pursue it on appeal.
The timeliness requirements established in Ledbetter are very helpful to employers. Previously, employers were forced to defend against pay discrimination claims that were based upon conduct that occurred many years in the past. This can prove especially difficult when the evidence tending to prove or disprove such a claim has become stale or non-existent. Employers, however, must be cautious in applying these timeliness requirements because there are some noteworthy exceptions, such as a separate claim under the federal Equal Pay Act or a claim based upon a facially discriminatory pay policy.
Employers in Ohio also should remember that the Ledbetter decision applies only to claims under federal law. Ohio courts have not yet adopted the decision and its underlying reasoning for similar claims of pay discrimination under Ohio’s discrimination statute – Chapter 4112 of the Ohio Revised Code – and there is no guarantee that the Ohio Supreme Court will do so. Moreover, the limitations period for commencing a discrimination claim under Ohio law (which does not require a charge filing before commencing a lawsuit) is much longer: six years in most cases versus 300 days under federal law. Likewise, other states also may not adopt the Ledbetter reasoning.
Employers are strongly encouraged to seek legal counsel in determining whether the favorable timeliness requirements under Ledbetter apply to a pay discrimination claim or a pay structure issue.
Finally, although the result in Ledbetter is welcome news for employers, preventative action is essential to successfully defend pay discrimination claims that are timely filed. Employers are encouraged to conduct an “employer pay equity self-audit” which is designed to assist employers in analyzing their own wage-setting policies and establishing consistent pay practices for all.
*George S. Crisci is an OSBA Certified Specialist in Labor and Employment Law. George practices in all areas of employment and labor law. For more advice on both other employment law inquiries and traditional labor law issues, please contact George at (216) 696-4441 or gsc@zrlaw.com.
MOVIN' ON UP: Congress Passes a New Minimum Wage
By Patrick O. PetersOn May 25, 2007, President Bush signed into law the Fair Minimum Wage Act of 2007 (the “Act”). The Act serves to amend the Fair Labor Standards Act (“FLSA”) of 1938 and increases the federal minimum wage from $5.15 an hour to $5.85 an hour on July 24, 2007, to $6.55 an hour on July 24, 2008, and to $7.25 an hour on July 24, 2009. The FLSA provides rigorous regulations that apply to all employees that include child labor, recordkeeping, and enforcement provisions in addition to rules relative to overtime compensation and the minimum wage.
The new federal minimum wage will have no immediate impact on most employers in states, such as Ohio, that have a higher state minimum wage. In November 2006, Ohio voters approved Statewide Issue 2. Issue 2 is an Amendment to Ohio’s Constitution that raised the minimum wage from $5.15 an hour to $6.85 an hour and became effective January 1, 2007. Under the Ohio Amendment, Ohio’s minimum wage will adjust annually, beginning January 1, 2008, to reflect inflation as tracked by changes to the consumer price index.
Allegations of wage and hour violations comprise one of the largest areas of potential liability for employers. Wage and hour litigation has increased 300% over the past decade and lawsuits based on FLSA violations are one of the fastest growing sources of employment-based class/collective action litigation. Wage and hour violations that commonly result in litigation include: misclassifying employees as “exempt” and failing to pay them overtime; failing to pay non-exempt employees overtime, including overtime not approved in advance; failing to pay for time worked “off the clock,” including allowing employees to arrive early to prepare for work or stay late to “close up;” and granting compensatory or “comp time” in lieu of overtime pay.
Employers should regularly conduct an audit of their wage and hour practices to minimize the risk associated with wage and hour violations. These audits include a thorough review of employee classification and payroll records and analysis of employment policies to ensure compliance with the FLSA. Taking proactive steps will help decrease an employer’s exposure to wage and hour liability, deter administrative agency investigation, and minimize exposure to litigation.
PUBLIC SECTOR UPDATE: Supreme Court Limits Unions' Rights to Use Non-Member Fees for Political Purposes
By Jon M. Dileno, Esq.*On June 14, 2007, the United States Supreme Court rejected a challenge to a Washington law that bars public-sector unions from spending non-members’ fees on political activity without first receiving their permission. In Davenport v. Washington Ed. Assn., the Court held that a state may require its public-sector unions to receive affirmative authorization before spending fees on political activities. Id. at syllabus.
While most states allow public-sector unions to levy fees on non-member employees in exchange for collective bargaining representation, the Court previously ruled that those fees may not be used for “ideological purposes not germane to the union’s collective bargaining duties.” Davenport, supra., citing Abood v. Detroit Bd. of Ed., 431 U.S. 209, 235-236 (1977). These ideological purposes include unions’ political activity.
Under the Washington state law, the non-members had to grant the union permission in order for the union to use non-member fees for a purpose other than collective bargaining.
The Supreme Court held that “courts have an obligation to interfere with a union’s statutory entitlement no more than is necessary to vindicate the rights of non-members does not imply that legislatures (or voters) themselves cannot limit the scope of that entitlement.” Id. (emphasis in original). The ruling paves the way for further restrictions on public-sector unions relative to the collective bargaining fees they generate from non-members.
*Jon M. Dileno represents employers in the full spectrum of labor and employment matters in both the public and private sector. Jon’s experience in collective bargaining matters extends beyond negotiating labor contracts and covers the full gamut of collective bargaining proceedings. For more information concerning public sector collective bargaining or any other labor issue, please contact Jon at (216) 696-4441 or jmd@zrlaw.com.
TO PAY OR NOT TO PAY: Summer Interns under the Fair Labor Standards Act
By Patrick M. WattsGenerally, summer interns are employees covered by the Fair Labor Standards Act (“FLSA”) and are entitled to minimum wage and overtime protection. However, if interns qualify as “trainees,” rather than employees, the wage and hour requirements of the FLSA do not apply.
The U.S. Supreme Court has established a six factor test to determine trainee status. If the relationship between the employer and the intern meets all six criteria, the employer can treat the intern as a trainee. An intern is a trainee if: (1) the training is similar to training that would be offered at a vocational school (even though it includes actual operation of the facilities of the employer); (2) the training is for the intern’s benefit; (3) the intern does not displace regular employees (but may work under close supervision); (4) the employer receives no immediate advantage from the intern’s activities; (5) the intern is not necessarily entitled to a job at the completion of the training; and, (6) the employer and the intern understand that the intern is not entitled to wages for the training.
In addressing the substance of the training, courts and the Department of Labor (“DOL”) compare the curricula from community colleges and other similar institutions to determine if the employer’s training is similar. They next consider whether the skills learned are useful to the individual and transferable to other employers. For instance, one court determined that employees received general and non-transferable training when the employees assisted truck drivers by riding in trucks, moving boxes, learning general vending machine maintenance, and completing general paperwork. Equally important in the analysis is whether the intern has filled a position normally held by an employee.
The most important consideration relative to an intern’s status is the benefit of the intern’s work. In order for an intern to qualify as a “trainee,” an employer must provide training and cannot receive productive work from the intern. One court held that an employer received an immediate advantage when an intern performed productive work and the only cost to the employer was for supervision. Other courts have held that when an intern’s duties consist of simply assisting other employees, the employer receives an immediate advantage.
Courts have, however, held that employers are permitted to receive the immediate advantage of a well-trained applicant pool as a result of their training programs. While entitlement to a future position with an employer is prohibited, if an employer decides to hire a trainee, the employer does not have to compensate him until the training program has ended.
Finally, both the employer and the intern must understand that the trainee will not receive compensation for the training. While a written agreement is not required, a prudent employer attempting to meet each of the above factors should obtain written confirmation of this understanding.
Situations that satisfy each of the above requirements are limited. Generally, summer interns hold jobs that fall within the protections of the FLSA and are not “trainees”. Under most circumstances, employers must adhere to wage and hour requirements relative to summer interns as employees.
Z&R SHORTS
Zashin & Rich welcomes two attorneys to its Employment and Labor GroupZashin & Rich recently welcomed two attorneys to the firm and to its expanding Employment and Labor Group. Jon Dileno represents employers in the full spectrum of labor and employment matters in both the public and private sector. Jon serves as chief negotiator for some of the most high profile labor negotiations in Ohio. Jon has also successfully defended both private employers and public entities in numerous cases involving discrimination, retaliation, wrongful discharge, intentional tort, and defamation.
Jon received his undergraduate degree, cum laude, from Baldwin Wallace College and his law degree from Tulane University, cum laude, where he received the Outstanding Labor Law Student Award. Jon is admitted to practice law in the State of Ohio, the United States District Court for the Northern and Southern Districts of Ohio, and the Sixth Circuit Court of Appeals.
Patrick Peters also recently joined Zashin & Rich. Pat's practice areas include labor relations, equal employment opportunity, employment discrimination, and all other employment related torts. Pat earned his B.B.A. from the University of Notre Dame and went on to earn his law degree, cum laude, from Case Western Reserve University School of Law. Pat is admitted to practice law in the State of Ohio and the United States District Court for the Northern District of Ohio.
Please join us in welcoming Jon and Pat to Z&R!
Upcoming Seminars On June 28, 2007, Stephen Zashin and Steven Dlott will present “Interplay: Solving the FMLA, ADA and Workers’ Compensation Leave of Absence Puzzle” to the Greater Cleveland Safety Council. The event will be held at the Holiday Inn South, 6001 Rockside Road, Independence, Ohio with registration at 11:15a.m. and a luncheon meeting to follow at 11:30.am. Cost, including lunch, is $22 for members of the Council and $27 for non-members. Please contact the Greater Cleveland Safety Council at (216) 621-0059 or gcsafety@ameritech.net for more information.
On August 7, 2007, Stephen Zashin and George Crisci will speak to the Council on Education in Management’s Ohio FMLA Update 2007 seminar. Stephen will present “The Tangled Web of the FMLA, ADA, Workers' Comp, and Other Leave Laws: Pulling the Threads Apart.” George will present “Weeding-Out Fraudulent Claims and Avoiding Intermittent Leave Abuse: Effectively Using Recertification, Second and Third Opinions, and Fitness-for-Duty Examinations.” The seminar will be held in Cuyahoga Falls. To register or for more information visit www.counciloned.com or contact the Council on Education and Management at (800) 942-4494 or registration@counciloned.com.
Wednesday, April 4, 2007
EMPLOYMENT LAW QUARTERLY | Spring 2007, Volume IX, Issue i
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If you are an employer with more than fifty employees, you have probably faced the task of validating an employee’s Family and Medical Leave Act (“FMLA”) leave of absence. Generally speaking, the FMLA provides employers with four methods of validating an employee’s need for leave: certification, clarification, second (and third) opinions, and recertification. These valuable employer tools are also riddled with the complexity of exceptions, prohibitions, and strict usage rules that employers must clearly understand prior to applying any verification method.
Certification: require and double check CHPs. The first method an employer may use to validate an employee’s FMLA leave is requiring the requesting employee to provide it with a completed “Certification of Healthcare Provider,” or CHP. The employer must provide the employee with a CHP form within two days after the employee provides notice that he or she needs a leave of absence that may be FMLA-qualifying. A sufficient CHP under the FMLA includes: (1) the date the serious health condition began; (2) the probable duration of the condition; (3) relevant medical facts; and (4) a statement that the employee is unable to work. Zashin & Rich recommends that employers utilize the Department of Labor’s (“DOL”) template CHP, or “WH Form 380.”
The employee must return the CHP to the employer within the time period that the employer specifies. However, the employer must allow the employee at least fifteen (15) days to return the form. If the employee fails to provide the form within the specified time, the employer may delay, and possibly deny, the protected status of the employee’s leave. If the employee provides an incomplete CHP, the employer must notify the employee and provide him or her with a reasonable opportunity to cure the deficiency. If the employee then fails to cure the deficiency, the employer may reject the employee’s request for leave.
Under the FMLA, a CHP is sufficient to validate an employee’s leave of absence if (1) the employee completes the CHP; (2) the employee provides the CHP within the specified time period; (3) the CHP indicates that the employee requires time off from work due to a serious health condition; and (4) a health care provider signs the CHP. Some courts have held that if the CHP is left unchallenged when provided, an employer may not later challenge the CHP’s validity in litigation. Moreover, according to the DOL, an employer cannot unilaterally reject a CHP that meets the above criteria. Instead, the employer should utilize the other methods of validation that the regulations provide.
Clarification: contact the employee’s health care provider. Upon receiving a complete CHP, the employer may seek clarification if the employer first obtains the employee’s permission. However, the employer may contact the employee’s healthcare provider only through another healthcare professional.
If the CHP is complete, the employer may seek clarification only of information already contained in the CHP. The employer cannot seek additional information from the healthcare provider that does not clarify information already provided.
Recertification: require the employee to recertify the condition. The FMLA’s regulations cover four recertification situations: (1) pregnancy, chronic conditions, and permanent conditions; (2) conditions that cause an incapacity of more than thirty days; (3) intermittent conditions; and (4) all other situations not covered under (1) through (3).
An employer may request recertification every thirty days—but only in connection with an absence for pregnancy, chronic conditions or permanent conditions. For conditions involving incapacity of more than thirty days, an employer may request recertification only after the initial duration of incapacity stated in the employee’s CHP passes. For intermittent leave, an employer may request recertification only at an interval equal to or greater than the period specified in the employee’s CHP. Employers may request recertification every thirty days for all other circumstances.
However, these rules have a few important exceptions. Employers may request recertification sooner than the above rules allow if: (a) the circumstances described in the original CHP change significantly, or (b) the employer receives information that casts doubt on the employee’s reason for the leave. An employer can also require recertification upon a request for an extension of leave, so long as the leave is not due to pregnancy, a chronic condition, or a permanent condition. Finally, if an employer requires an employee to attain recertification, the employer may not then also require the employee to attend a second or third opinion concerning that recertification.
Second (and third) opinions. In addition to clarifying and seeking recertification of an employee’s condition, an employer may request a second medical opinion if the employer has reason to doubt the validity of an employee’s CHP. An employer must, however, grant an employee a provisional leave of absence while awaiting the second opinion. The employer may choose the second-opinion physician, but the chosen physician cannot be a regular provider of services to the employer. The employer must bear the cost of the second opinion and any reasonable out-of-pocket travel expenses that the employee incurs to obtain the second opinion.
The employer may require a third opinion if the second opinion conflicts with the information contained in the initial CHP. The employee and the employer must jointly agree on the third-opinion healthcare provider. The third opinion is final and binding. The employer must pay for the third opinion as well as any reasonable out-of-pocket travel expenses the employee incurs to obtain the third opinion. An employer must provide an employee with a copy of any second or third opinion within two days of the employee’s request.
Employers with a thorough understand of these FMLA tools of the trade have the ability to not only avoid liability for improper administration of employee leave, but also to curb abuse.
In a case that generated national publicity, the Ohio Supreme Court recently denied temporary total disability compensation to an employee whose reckless conduct precipitated his work injury.
In State ex rel. Gross v. Industrial Commission, a sixteen-year-old employee working at a KFC restaurant sustained severe burns after he lifted the lid of a pressure cooker containing boiling water. The employee filed a workers’ compensation claim and began receiving temporary total disability benefits (“TTD”), which an employee injured on the job can receive for lost earnings while recovering.
The company investigated the accident and determined that the employee had willfully failed to follow safety instructions and procedures regarding the proper use and operation of the pressure cooker. The employee handbook specifically advised employees to never boil water in a pressure cooker to clean it. The handbook warned employees that violating any safety guideline that caused an injury was a dischargeable offense. Additionally, a warning label affixed to the top of the pressure cooker reminded employees not to close the lid with water or cleaning agents in the pot.
These were not the only warnings the employee ignored. The employee’s supervisor had previously warned him not to put water into the cooker to clean it. The investigation further revealed that on the night of the accident, the employee’s supervisor directed him to drain the water from the cooker. The employee ignored his supervisor, instead leaving water in the cooker and heating it with the lid on. Moments later, a second co-worker warned the employee not to open the cooker’s lid because the now boiling water was under extreme pressure. The employee ignored all warnings, including the warning label on the cooker, and opened the lid. As a result, he injured himself and two of his co-workers. At the conclusion of its investigation, the company fired the employee.
The employer then asked the Industrial Commission of Ohio to terminate the employee’s TTD compensation as of the date of his termination. The employer contended that the employee’s termination constituted a voluntary abandonment of employment, which can disqualify an employee from TTD benefits. Generally speaking, “voluntary abandonment” means a person leaves his or her job for a reason unrelated to the injury. The Industrial Commission agreed that the employee’s termination for workplace misconduct constituted a voluntary abandonment of his employment and terminated the employee’s TTD benefits. The employee took his case to the Tenth District Court of Appeals, which reversed the Industrial Commission’s decision. The Company appealed to the Ohio Supreme Court.
On appeal, the employee denied that he abandoned his employment. The employee argued that if a claimant is already disabled at the time of separation from employment, and thus does not have the physical capacity for the employment, there can be no abandonment. The employee claimed, therefore, that because his doctor certified temporary total disability months before he was fired, he could not have abandoned his job. The Court disagreed, finding that the employee’s disability and the misconduct occurred simultaneously. Moreover, the Court reasoned, “the date of disability onset preceded the date of termination only because the Company investigated the accident first rather than firing him on the spot, which, given the gravity of the misconduct, may not have been unwarranted.”
The Court also rejected the appellate court’s application of its precedent, including Coolidge v. Riverdale Local School District, to classify the employee’s separation from employment as involuntary. Coolidge, the Court explained, was an employment case that did not involve the claimant’s eligibility for TTD compensation or any other workers’ compensation law. The employee in this case “was not fired because of absenteeism or any work rule or policy related thereto” but rather “because he directly and deliberately disobeyed repeated written and verbal instructions not to boil water in the pressurized deep fryer and injuries followed.”
Finally, the employee argued that allowing his negligent act to bar TTD compensation would reinsert negligence into Ohio’s workers’ compensation system, the purpose of which is to compensate injured employees regardless of fault. The Court rejected the employee’s characterization of his behavior as negligent, noting that he willfully ignored repeated warnings not to engage in the prohibited conduct.
The facts of this case illustrate the unfortunate truth that thoughtful, thorough safety procedures will not automatically trigger employee compliance. Employers should consider this decision as an opportunity to examine not only their own safety procedures, but their follow-through as well. Review employee manuals and ensure that they clearly identify and prohibit dangerous work conduct, as well as designate such conduct as a dischargeable offense. Insist that front-line supervisors enforce compliance with safety procedures by holding employees accountable for failing to follow them. A thoroughly written employment manual is meaningless without vigilant enforcement of its contents. Such precautions may not eliminate all workplace accidents, but they may, as illustrated in this case, dramatically reduce an employer’s financial exposure when a non-compliant employee files a claim following a workplace injury.
On March 1, 2007 the U.S. House of Representatives passed H.R. 800, the “Employee Free Choice Act” (“EFCA”) by a final vote of 241-185 with eight abstentions. The bill, as written, amends the provisions of the National Labor Relations Act (“NLRA”) to permit union recognition based solely on signed employee authorization cards, impose limitations on the amount of time the parties have to negotiate a first contract, establish a mandatory dispute resolution procedure at the expiration of the initial bargaining period and increase the penalties on employers who violate the NLRA. This bill, if it passes the Senate and is signed into law, would be the most significant change to the NLRA since the 1947 passage of the Taft-Hartley Act.
At present, the National Labor Relations Board (“NLRB”) exhibits a clear preference toward a Board-certified election as the primary method for establishing union representation. Although an employer may voluntarily recognize a union informally or through a card check, the employer is not required to recognize a union based solely on card checks. If an employer questions whether a union represents the majority of the employer’s employees after a formal demand for recognition, the employer may file a petition with the NLRB requesting an election. The NLRA also provides that the employees and/or their bargaining representative may file a petition for election upon a showing that at least 30% of the employees in the proposed bargaining unit support the Union.
Upon a proper showing of interest, the NLRB conducts a secret-ballot election among the employees in the proposed bargaining unit. Both the Union and the employer are permitted to campaign during the time leading to the election, so long as neither party coerces or threatens employees regarding their decision. Once employees vote, the votes are tallied and the union is recognized as the bargaining representative for employees within the proposed bargaining unit if it obtains a majority of the votes.
Once a union is recognized, the parties have an obligation to bargain in good faith toward an agreement. So long as the parties bargain in good faith, there is no requirement that the parties actually reach an agreement. Rather, the parties are free to agree or not agree so long as each bargains in good faith with respect to the terms and conditions of employment.
If passed and signed into law, the EFCA would legislatively alter the Board’s stated preference for a Board-conducted election. The EFCA amendment would require the NLRB to recognize a union without an election “[i]f the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative.” To implement this legislative mandate, the EFCA also authorizes the Board to develop procedures “to be used by the Board to establish the validity of signed authorizations designating bargaining representatives.”
In addition to broadening the permissible methods for recognition of a union, the EFCA imposes time limits on negotiations for an initial contract between an employer and a union. The parties must meet within 10 days of receiving a written request from the other party to bargain collectively. If the parties are unable to reach agreement after 90 days, either party may contact the Federal Mediation and Conciliation Service (“FMCS”) to request mediation. The FMCS will then conduct mediation.
If the parties fail to reach a contract after 30 days of mediation, the EFCA requires the parties to submit the remaining open issues to an arbitration board established in accordance with FMCS rules and regulations. The arbitration panel will render a decision on the open issues binding on the parties for two years.
The EFCA also stiffens penalties and enforcement during organizing drives. Unfair labor practices are given investigative priority pursuant to Section 10(l) of the NLRA. Additionally, the EFCA permits the NLRB to seek injunctive relief upon an unfair labor practice charge of misconduct during an initial election campaign. Prior to this amendment, the NLRB had power under Section 10(j) of the NLRA to seek injunctive relief upon the issuance of an unfair labor practice complaint. These injunctive provisions are buoyed by increased financial penalties. Thus, if an employer is found to have discriminated against an employee based on his or her union activities during a representation campaign, the employer is liable for back pay and liquidated damages equal to two times the amount of back pay. Moreover, employers who willfully or repeatedly commit unfair labor practices during representation campaigns are subject to a civil penalty of up to $20,000 for each violation.
Should the EFCA become law, employers will want to redouble their efforts to prevent unionization prior to any organized union campaign. The best employer defense against unionization is to ensure that employees have no reason to seek a union in the first place.
*George S. Crisci is an OSBA Certified Specialist in Labor and Employment Law. George practices in all areas of employment and labor law. For more advice on traditional labor law issues or other employment law inquiries, please contact George at (216) 696-4441 or gsc@zrlaw.com.
In Aero Fulfillment Services, Inc. v. Tartar, a Vice President of Sales at a Cincinnati, Ohio-based fulfillment-services company resigned after fifteen years of employment to take a similar position at another fulfillment-services company. This prompted his former employer, Aero to seek injunctive relief in court—but not promptly enough to get it. Not that timing was its only problem.
Aero originally hired the employee in 1990. In 1998, the employee signed an employment agreement that contained non-competition provisions. The agreement restricted the employee from disclosing confidential information. It further restricted him, for twelve months following his separation from the company, from soliciting the company’s employees; and from competing within 100 miles of Cincinnati, Ohio. The agreement further stipulated that a violation of the covenants would result in irreparable injury and damage to the company.
The employee resigned in January 2005 and accepted a position with a fulfillment-services company based in Massachusetts. Six months later, Aero filed its complaint against the employee. About four months after that, in October 2005, Aero filed for injunctive relief. Aero claimed that the employee violated his agreement by disclosing its confidential information and trade secrets and using that information to solicit business in his new employment. At issue was “the Brock Study,” a marketing study that the employee used in a presentation at a fulfillment-services trade conference. Aero alleged that the employee used this information to solicit fulfillment-industry business.
To obtain a preliminary injunction, Aero had to establish, among other things, that it would suffer irreparable harm if the court did not grant the injunction. After a three-day hearing, the trial court denied Aero’s request, holding that it failed to present convincing evidence of irreparable harm, even if the employee had breached the confidentiality provision of his agreement.
An Ohio appellate court agreed, holding that Aero failed to show irreparable harm, for a number of reasons. First, Aero failed to show a threat of harm sufficient to justify equitable relief. The First District Court of Appeals explained that the company need not prove actual harm, as the mere threat of harm may be sufficient to grant an injunction, as it previously held in Procter & Gamble Co. v. Stoneham. However, “where the threat of harm is speculative, the moving party must do more than make a conclusory allegation of the threat of harm” to obtain an injunction. Otherwise, said the court, anyone could get one.
For example, in Stoneham, the evidence was “overwhelming.” The employee in that case worked in Procter & Gamble’s hair care division as a senior-level manager responsible for international marketing. In that role, he became familiar with all things hair-conditioning: development of new products; revitalization of existing products; product-specific market research results; product-specific financial data; technological developments in existing and new products; and a ten-year marketing plan for a best-selling hair-conditioning product.
When the employee went to the international division of a company whose hair care products competed with Procter & Gamble’s products, Procter & Gamble went to court. In that case, a threat of harm existed because the employee possessed years of product-specific knowledge and began working in a position that caused him to directly compete with his old employer and his old product line. The Stoneham decision was based on the “inevitable-disclosure doctrine.” According to this doctrine, a threat of harm warranting injunctive relief can be shown by facts establishing that an employee with detailed and comprehensive knowledge of an employer’s trade secrets and confidential information has begun employment with a competitor in a substantially similar position to that held during the former employment.
Aero could not establish that the inevitable-disclosure doctrine applied to its case. Compared to the product-specific data in Stoneham, which the court described as “tangible, highly technical, and specific,” Aero’s information was general marking data about the service industry in which the company competed. The court found that Aero’s competitors could have obtained the same data through their own research. Moreover, Aero failed to show that the Brock Study contained critical information, and further failed to explain how this information would have given the employee and his new employer any competitive advantage.
It certainly did not help Aero’s case that it waited so long to file for injunctive relief. The company waited three months after it filed its complaint, almost ten months after the employee left, and little more than two months before the employee’s non-competition and non-solicitation covenants expired to seek an injunction. The court found that this “lack of urgency” in filing for injunctive relief “militated against a finding of irreparable harm.” Finally, the court found that the company failed to treat the Brock Study as confidential.
Personnel transitions can be painless or painful. Depending on your business, they can also be harmful to your company’s best interests. Pick your lesson from this case, as there are several. First, be realistic about your non-competition agreements and what they should protect. Chances are that not every piece of paper or data under your roof is a protectable trade secret, even if you treat it as confidential property. Second, if your company actually considers certain materials to be confidential trade secrets, treat them that way: mark them appropriately, lock them up, restrict access to them and/or password-protect them. Finally, if a situation warranting legal action arises following a key employee’s departure, take appropriate action as soon as possible.
Zashin & Rich welcomes two OSBA Certified Specialists to its Employment & Labor Group
Zashin & Rich recently welcomed two attorneys to the firm and to its expanding Labor and Employment Group. Patrick Watts received his undergraduate degree from the College of Wooster and his law degree from The Ohio State University Moritz College of Law. Patrick was admitted to practice before the Ohio Supreme Court in 2002. He is also admitted to practice before the U.S. District Courts for the Northern and Southern Districts of Ohio as well as the U.S. Court of Appeals for the Sixth Circuit.
Patrick is certified by the Ohio State Bar Association as a Labor and Employment Law Specialist. He has litigated and advised clients on a wide variety of labor and employment law matters, including Fair Labor Standards Act compliance, Family and Medical Leave Act issues, and various anti-discrimination laws.
George Crisci also recently joined Zashin & Rich. George has practiced employment and labor law in both the public and private sectors for more than 23 years. George is an Ohio State Bar Association Certified Specialist in Employment and Labor Law. Law and Politics and Cincinnati magazines named George an “Ohio Super Lawyer” in Labor and Employment law in 2004, 2005, 2006 and 2007.
George received his undergraduate degree from the College of Wooster, where he graduated with Departmental Honors and Phi Beta Kappa. He received his law degree from Case Western Reserve University School of Law, where he was a member of the Case Western Reserve Law Review and graduated Order of the Coif. George is admitted to practice law in the State of Ohio, the United States District Courts for the Northern and Southern Districts of Ohio and the Eastern District of Michigan, the Sixth Circuit Court of Appeals, and the United States Supreme Court.
Please join us in welcoming Patrick and George to Z&R!
Steve Dlott Receives OSBA Certification as Specialist in Workers’ Compensation
Zashin & Rich is also proud to announce that Steve Dlott is now an Ohio State Bar Association Certified Specialist in Workers’ Compensation Law.
Andrew Zashin among Top 100 Ohio Super Lawyers
Andrew Zashin was recently included in Ohio Super Lawyer magazine’s list of the “Top 100 Super Lawyers” in the State of Ohio. Only four family law attorneys were similarly recognized from a field of almost 30,000 lawyers. Northern Ohio Live magazine also included Andrew in its list of the “Top 50 Super Lawyers” in the Cleveland area, an honor accorded to only two family law attorneys.
Upcoming Seminars
Steve Dlott and Stephen Zashin will present a free seminar with Dr. Kevin Trangle on March 30, 2007 at the Monarch Building, 5885 Landerbrook Road in Mayfield Heights, Ohio from 9:00 a.m. to 11:00 a.m. Zashin & Rich and Ben Katz of Cedar Brook Financial Partners invite you to attend this informative crash course on warning signs, protective tips, and other practical advice for avoiding workplace disasters like out-of-control absenteeism. Please contact Zashin & Rich at (216) 696-4441 or nee@zrlaw.com for more information or to register.
Steve Dlott will present “How to Defend a Workers’ Comp Claim” on April 24, 2007 at the Weymouth Country Club, 3946 Weymouth Road in Medina, Ohio. The seminar, sponsored by the Medina County Safety Council, begins at 9:00 a.m. and ends at 12:00 p.m. For only $25.00, attendees will receive three hours of Attorney Steve Dlott’s expertise in workers’ compensation matters and lunch. Please contact the Medina County Chamber of Commerce at safety@medinaohchamber.com or Zashin & Rich at (216) 696-4441 for more information.
- TOOLS OF THE TRADE: Properly Verifying Employee FMLA Leaves
- FALLING ON DEAF EARS: Willful Disregard of Safety Precautions Cuts off Comp
- CONGRESS POKES THE BEAR — “Employee Free Choice Act” Passes the House, Awaits the Senate
- SEPARATION ANXIETY: No Harm, No Injunctive Relief
- Z&R SHORTS
TOOLS OF THE TRADE: Properly Verifying Employee FMLA Leaves
By Patrick M. WattsIf you are an employer with more than fifty employees, you have probably faced the task of validating an employee’s Family and Medical Leave Act (“FMLA”) leave of absence. Generally speaking, the FMLA provides employers with four methods of validating an employee’s need for leave: certification, clarification, second (and third) opinions, and recertification. These valuable employer tools are also riddled with the complexity of exceptions, prohibitions, and strict usage rules that employers must clearly understand prior to applying any verification method.
Certification: require and double check CHPs. The first method an employer may use to validate an employee’s FMLA leave is requiring the requesting employee to provide it with a completed “Certification of Healthcare Provider,” or CHP. The employer must provide the employee with a CHP form within two days after the employee provides notice that he or she needs a leave of absence that may be FMLA-qualifying. A sufficient CHP under the FMLA includes: (1) the date the serious health condition began; (2) the probable duration of the condition; (3) relevant medical facts; and (4) a statement that the employee is unable to work. Zashin & Rich recommends that employers utilize the Department of Labor’s (“DOL”) template CHP, or “WH Form 380.”
The employee must return the CHP to the employer within the time period that the employer specifies. However, the employer must allow the employee at least fifteen (15) days to return the form. If the employee fails to provide the form within the specified time, the employer may delay, and possibly deny, the protected status of the employee’s leave. If the employee provides an incomplete CHP, the employer must notify the employee and provide him or her with a reasonable opportunity to cure the deficiency. If the employee then fails to cure the deficiency, the employer may reject the employee’s request for leave.
Under the FMLA, a CHP is sufficient to validate an employee’s leave of absence if (1) the employee completes the CHP; (2) the employee provides the CHP within the specified time period; (3) the CHP indicates that the employee requires time off from work due to a serious health condition; and (4) a health care provider signs the CHP. Some courts have held that if the CHP is left unchallenged when provided, an employer may not later challenge the CHP’s validity in litigation. Moreover, according to the DOL, an employer cannot unilaterally reject a CHP that meets the above criteria. Instead, the employer should utilize the other methods of validation that the regulations provide.
Clarification: contact the employee’s health care provider. Upon receiving a complete CHP, the employer may seek clarification if the employer first obtains the employee’s permission. However, the employer may contact the employee’s healthcare provider only through another healthcare professional.
If the CHP is complete, the employer may seek clarification only of information already contained in the CHP. The employer cannot seek additional information from the healthcare provider that does not clarify information already provided.
Recertification: require the employee to recertify the condition. The FMLA’s regulations cover four recertification situations: (1) pregnancy, chronic conditions, and permanent conditions; (2) conditions that cause an incapacity of more than thirty days; (3) intermittent conditions; and (4) all other situations not covered under (1) through (3).
An employer may request recertification every thirty days—but only in connection with an absence for pregnancy, chronic conditions or permanent conditions. For conditions involving incapacity of more than thirty days, an employer may request recertification only after the initial duration of incapacity stated in the employee’s CHP passes. For intermittent leave, an employer may request recertification only at an interval equal to or greater than the period specified in the employee’s CHP. Employers may request recertification every thirty days for all other circumstances.
However, these rules have a few important exceptions. Employers may request recertification sooner than the above rules allow if: (a) the circumstances described in the original CHP change significantly, or (b) the employer receives information that casts doubt on the employee’s reason for the leave. An employer can also require recertification upon a request for an extension of leave, so long as the leave is not due to pregnancy, a chronic condition, or a permanent condition. Finally, if an employer requires an employee to attain recertification, the employer may not then also require the employee to attend a second or third opinion concerning that recertification.
Second (and third) opinions. In addition to clarifying and seeking recertification of an employee’s condition, an employer may request a second medical opinion if the employer has reason to doubt the validity of an employee’s CHP. An employer must, however, grant an employee a provisional leave of absence while awaiting the second opinion. The employer may choose the second-opinion physician, but the chosen physician cannot be a regular provider of services to the employer. The employer must bear the cost of the second opinion and any reasonable out-of-pocket travel expenses that the employee incurs to obtain the second opinion.
The employer may require a third opinion if the second opinion conflicts with the information contained in the initial CHP. The employee and the employer must jointly agree on the third-opinion healthcare provider. The third opinion is final and binding. The employer must pay for the third opinion as well as any reasonable out-of-pocket travel expenses the employee incurs to obtain the third opinion. An employer must provide an employee with a copy of any second or third opinion within two days of the employee’s request.
Employers with a thorough understand of these FMLA tools of the trade have the ability to not only avoid liability for improper administration of employee leave, but also to curb abuse.
FALLING ON DEAF EARS: Willful Disregard of Safety Precautions Cuts Off Comp
By Steve P. DlottIn a case that generated national publicity, the Ohio Supreme Court recently denied temporary total disability compensation to an employee whose reckless conduct precipitated his work injury.
In State ex rel. Gross v. Industrial Commission, a sixteen-year-old employee working at a KFC restaurant sustained severe burns after he lifted the lid of a pressure cooker containing boiling water. The employee filed a workers’ compensation claim and began receiving temporary total disability benefits (“TTD”), which an employee injured on the job can receive for lost earnings while recovering.
The company investigated the accident and determined that the employee had willfully failed to follow safety instructions and procedures regarding the proper use and operation of the pressure cooker. The employee handbook specifically advised employees to never boil water in a pressure cooker to clean it. The handbook warned employees that violating any safety guideline that caused an injury was a dischargeable offense. Additionally, a warning label affixed to the top of the pressure cooker reminded employees not to close the lid with water or cleaning agents in the pot.
These were not the only warnings the employee ignored. The employee’s supervisor had previously warned him not to put water into the cooker to clean it. The investigation further revealed that on the night of the accident, the employee’s supervisor directed him to drain the water from the cooker. The employee ignored his supervisor, instead leaving water in the cooker and heating it with the lid on. Moments later, a second co-worker warned the employee not to open the cooker’s lid because the now boiling water was under extreme pressure. The employee ignored all warnings, including the warning label on the cooker, and opened the lid. As a result, he injured himself and two of his co-workers. At the conclusion of its investigation, the company fired the employee.
The employer then asked the Industrial Commission of Ohio to terminate the employee’s TTD compensation as of the date of his termination. The employer contended that the employee’s termination constituted a voluntary abandonment of employment, which can disqualify an employee from TTD benefits. Generally speaking, “voluntary abandonment” means a person leaves his or her job for a reason unrelated to the injury. The Industrial Commission agreed that the employee’s termination for workplace misconduct constituted a voluntary abandonment of his employment and terminated the employee’s TTD benefits. The employee took his case to the Tenth District Court of Appeals, which reversed the Industrial Commission’s decision. The Company appealed to the Ohio Supreme Court.
On appeal, the employee denied that he abandoned his employment. The employee argued that if a claimant is already disabled at the time of separation from employment, and thus does not have the physical capacity for the employment, there can be no abandonment. The employee claimed, therefore, that because his doctor certified temporary total disability months before he was fired, he could not have abandoned his job. The Court disagreed, finding that the employee’s disability and the misconduct occurred simultaneously. Moreover, the Court reasoned, “the date of disability onset preceded the date of termination only because the Company investigated the accident first rather than firing him on the spot, which, given the gravity of the misconduct, may not have been unwarranted.”
The Court also rejected the appellate court’s application of its precedent, including Coolidge v. Riverdale Local School District, to classify the employee’s separation from employment as involuntary. Coolidge, the Court explained, was an employment case that did not involve the claimant’s eligibility for TTD compensation or any other workers’ compensation law. The employee in this case “was not fired because of absenteeism or any work rule or policy related thereto” but rather “because he directly and deliberately disobeyed repeated written and verbal instructions not to boil water in the pressurized deep fryer and injuries followed.”
Finally, the employee argued that allowing his negligent act to bar TTD compensation would reinsert negligence into Ohio’s workers’ compensation system, the purpose of which is to compensate injured employees regardless of fault. The Court rejected the employee’s characterization of his behavior as negligent, noting that he willfully ignored repeated warnings not to engage in the prohibited conduct.
The facts of this case illustrate the unfortunate truth that thoughtful, thorough safety procedures will not automatically trigger employee compliance. Employers should consider this decision as an opportunity to examine not only their own safety procedures, but their follow-through as well. Review employee manuals and ensure that they clearly identify and prohibit dangerous work conduct, as well as designate such conduct as a dischargeable offense. Insist that front-line supervisors enforce compliance with safety procedures by holding employees accountable for failing to follow them. A thoroughly written employment manual is meaningless without vigilant enforcement of its contents. Such precautions may not eliminate all workplace accidents, but they may, as illustrated in this case, dramatically reduce an employer’s financial exposure when a non-compliant employee files a claim following a workplace injury.
CONGRESS POKES THE BEAR — “Employee Free Choice Act” Passes the House, Awaits the Senate
By George S. Crisci*On March 1, 2007 the U.S. House of Representatives passed H.R. 800, the “Employee Free Choice Act” (“EFCA”) by a final vote of 241-185 with eight abstentions. The bill, as written, amends the provisions of the National Labor Relations Act (“NLRA”) to permit union recognition based solely on signed employee authorization cards, impose limitations on the amount of time the parties have to negotiate a first contract, establish a mandatory dispute resolution procedure at the expiration of the initial bargaining period and increase the penalties on employers who violate the NLRA. This bill, if it passes the Senate and is signed into law, would be the most significant change to the NLRA since the 1947 passage of the Taft-Hartley Act.
At present, the National Labor Relations Board (“NLRB”) exhibits a clear preference toward a Board-certified election as the primary method for establishing union representation. Although an employer may voluntarily recognize a union informally or through a card check, the employer is not required to recognize a union based solely on card checks. If an employer questions whether a union represents the majority of the employer’s employees after a formal demand for recognition, the employer may file a petition with the NLRB requesting an election. The NLRA also provides that the employees and/or their bargaining representative may file a petition for election upon a showing that at least 30% of the employees in the proposed bargaining unit support the Union.
Upon a proper showing of interest, the NLRB conducts a secret-ballot election among the employees in the proposed bargaining unit. Both the Union and the employer are permitted to campaign during the time leading to the election, so long as neither party coerces or threatens employees regarding their decision. Once employees vote, the votes are tallied and the union is recognized as the bargaining representative for employees within the proposed bargaining unit if it obtains a majority of the votes.
Once a union is recognized, the parties have an obligation to bargain in good faith toward an agreement. So long as the parties bargain in good faith, there is no requirement that the parties actually reach an agreement. Rather, the parties are free to agree or not agree so long as each bargains in good faith with respect to the terms and conditions of employment.
If passed and signed into law, the EFCA would legislatively alter the Board’s stated preference for a Board-conducted election. The EFCA amendment would require the NLRB to recognize a union without an election “[i]f the Board finds that a majority of the employees in a unit appropriate for bargaining has signed valid authorizations designating the individual or labor organization specified in the petition as their bargaining representative.” To implement this legislative mandate, the EFCA also authorizes the Board to develop procedures “to be used by the Board to establish the validity of signed authorizations designating bargaining representatives.”
In addition to broadening the permissible methods for recognition of a union, the EFCA imposes time limits on negotiations for an initial contract between an employer and a union. The parties must meet within 10 days of receiving a written request from the other party to bargain collectively. If the parties are unable to reach agreement after 90 days, either party may contact the Federal Mediation and Conciliation Service (“FMCS”) to request mediation. The FMCS will then conduct mediation.
If the parties fail to reach a contract after 30 days of mediation, the EFCA requires the parties to submit the remaining open issues to an arbitration board established in accordance with FMCS rules and regulations. The arbitration panel will render a decision on the open issues binding on the parties for two years.
The EFCA also stiffens penalties and enforcement during organizing drives. Unfair labor practices are given investigative priority pursuant to Section 10(l) of the NLRA. Additionally, the EFCA permits the NLRB to seek injunctive relief upon an unfair labor practice charge of misconduct during an initial election campaign. Prior to this amendment, the NLRB had power under Section 10(j) of the NLRA to seek injunctive relief upon the issuance of an unfair labor practice complaint. These injunctive provisions are buoyed by increased financial penalties. Thus, if an employer is found to have discriminated against an employee based on his or her union activities during a representation campaign, the employer is liable for back pay and liquidated damages equal to two times the amount of back pay. Moreover, employers who willfully or repeatedly commit unfair labor practices during representation campaigns are subject to a civil penalty of up to $20,000 for each violation.
Should the EFCA become law, employers will want to redouble their efforts to prevent unionization prior to any organized union campaign. The best employer defense against unionization is to ensure that employees have no reason to seek a union in the first place.
*George S. Crisci is an OSBA Certified Specialist in Labor and Employment Law. George practices in all areas of employment and labor law. For more advice on traditional labor law issues or other employment law inquiries, please contact George at (216) 696-4441 or gsc@zrlaw.com.
SEPARATION ANXIETY: No Harm, No Injunctive Relief
By Lois A. GruhinIn Aero Fulfillment Services, Inc. v. Tartar, a Vice President of Sales at a Cincinnati, Ohio-based fulfillment-services company resigned after fifteen years of employment to take a similar position at another fulfillment-services company. This prompted his former employer, Aero to seek injunctive relief in court—but not promptly enough to get it. Not that timing was its only problem.
Aero originally hired the employee in 1990. In 1998, the employee signed an employment agreement that contained non-competition provisions. The agreement restricted the employee from disclosing confidential information. It further restricted him, for twelve months following his separation from the company, from soliciting the company’s employees; and from competing within 100 miles of Cincinnati, Ohio. The agreement further stipulated that a violation of the covenants would result in irreparable injury and damage to the company.
The employee resigned in January 2005 and accepted a position with a fulfillment-services company based in Massachusetts. Six months later, Aero filed its complaint against the employee. About four months after that, in October 2005, Aero filed for injunctive relief. Aero claimed that the employee violated his agreement by disclosing its confidential information and trade secrets and using that information to solicit business in his new employment. At issue was “the Brock Study,” a marketing study that the employee used in a presentation at a fulfillment-services trade conference. Aero alleged that the employee used this information to solicit fulfillment-industry business.
To obtain a preliminary injunction, Aero had to establish, among other things, that it would suffer irreparable harm if the court did not grant the injunction. After a three-day hearing, the trial court denied Aero’s request, holding that it failed to present convincing evidence of irreparable harm, even if the employee had breached the confidentiality provision of his agreement.
An Ohio appellate court agreed, holding that Aero failed to show irreparable harm, for a number of reasons. First, Aero failed to show a threat of harm sufficient to justify equitable relief. The First District Court of Appeals explained that the company need not prove actual harm, as the mere threat of harm may be sufficient to grant an injunction, as it previously held in Procter & Gamble Co. v. Stoneham. However, “where the threat of harm is speculative, the moving party must do more than make a conclusory allegation of the threat of harm” to obtain an injunction. Otherwise, said the court, anyone could get one.
For example, in Stoneham, the evidence was “overwhelming.” The employee in that case worked in Procter & Gamble’s hair care division as a senior-level manager responsible for international marketing. In that role, he became familiar with all things hair-conditioning: development of new products; revitalization of existing products; product-specific market research results; product-specific financial data; technological developments in existing and new products; and a ten-year marketing plan for a best-selling hair-conditioning product.
When the employee went to the international division of a company whose hair care products competed with Procter & Gamble’s products, Procter & Gamble went to court. In that case, a threat of harm existed because the employee possessed years of product-specific knowledge and began working in a position that caused him to directly compete with his old employer and his old product line. The Stoneham decision was based on the “inevitable-disclosure doctrine.” According to this doctrine, a threat of harm warranting injunctive relief can be shown by facts establishing that an employee with detailed and comprehensive knowledge of an employer’s trade secrets and confidential information has begun employment with a competitor in a substantially similar position to that held during the former employment.
Aero could not establish that the inevitable-disclosure doctrine applied to its case. Compared to the product-specific data in Stoneham, which the court described as “tangible, highly technical, and specific,” Aero’s information was general marking data about the service industry in which the company competed. The court found that Aero’s competitors could have obtained the same data through their own research. Moreover, Aero failed to show that the Brock Study contained critical information, and further failed to explain how this information would have given the employee and his new employer any competitive advantage.
It certainly did not help Aero’s case that it waited so long to file for injunctive relief. The company waited three months after it filed its complaint, almost ten months after the employee left, and little more than two months before the employee’s non-competition and non-solicitation covenants expired to seek an injunction. The court found that this “lack of urgency” in filing for injunctive relief “militated against a finding of irreparable harm.” Finally, the court found that the company failed to treat the Brock Study as confidential.
Personnel transitions can be painless or painful. Depending on your business, they can also be harmful to your company’s best interests. Pick your lesson from this case, as there are several. First, be realistic about your non-competition agreements and what they should protect. Chances are that not every piece of paper or data under your roof is a protectable trade secret, even if you treat it as confidential property. Second, if your company actually considers certain materials to be confidential trade secrets, treat them that way: mark them appropriately, lock them up, restrict access to them and/or password-protect them. Finally, if a situation warranting legal action arises following a key employee’s departure, take appropriate action as soon as possible.
Z&R SHORTS
Zashin & Rich welcomes two OSBA Certified Specialists to its Employment & Labor Group
Zashin & Rich recently welcomed two attorneys to the firm and to its expanding Labor and Employment Group. Patrick Watts received his undergraduate degree from the College of Wooster and his law degree from The Ohio State University Moritz College of Law. Patrick was admitted to practice before the Ohio Supreme Court in 2002. He is also admitted to practice before the U.S. District Courts for the Northern and Southern Districts of Ohio as well as the U.S. Court of Appeals for the Sixth Circuit.
Patrick is certified by the Ohio State Bar Association as a Labor and Employment Law Specialist. He has litigated and advised clients on a wide variety of labor and employment law matters, including Fair Labor Standards Act compliance, Family and Medical Leave Act issues, and various anti-discrimination laws.
George Crisci also recently joined Zashin & Rich. George has practiced employment and labor law in both the public and private sectors for more than 23 years. George is an Ohio State Bar Association Certified Specialist in Employment and Labor Law. Law and Politics and Cincinnati magazines named George an “Ohio Super Lawyer” in Labor and Employment law in 2004, 2005, 2006 and 2007.
George received his undergraduate degree from the College of Wooster, where he graduated with Departmental Honors and Phi Beta Kappa. He received his law degree from Case Western Reserve University School of Law, where he was a member of the Case Western Reserve Law Review and graduated Order of the Coif. George is admitted to practice law in the State of Ohio, the United States District Courts for the Northern and Southern Districts of Ohio and the Eastern District of Michigan, the Sixth Circuit Court of Appeals, and the United States Supreme Court.
Please join us in welcoming Patrick and George to Z&R!
Steve Dlott Receives OSBA Certification as Specialist in Workers’ Compensation
Zashin & Rich is also proud to announce that Steve Dlott is now an Ohio State Bar Association Certified Specialist in Workers’ Compensation Law.
Andrew Zashin among Top 100 Ohio Super Lawyers
Andrew Zashin was recently included in Ohio Super Lawyer magazine’s list of the “Top 100 Super Lawyers” in the State of Ohio. Only four family law attorneys were similarly recognized from a field of almost 30,000 lawyers. Northern Ohio Live magazine also included Andrew in its list of the “Top 50 Super Lawyers” in the Cleveland area, an honor accorded to only two family law attorneys.
Upcoming Seminars
Steve Dlott and Stephen Zashin will present a free seminar with Dr. Kevin Trangle on March 30, 2007 at the Monarch Building, 5885 Landerbrook Road in Mayfield Heights, Ohio from 9:00 a.m. to 11:00 a.m. Zashin & Rich and Ben Katz of Cedar Brook Financial Partners invite you to attend this informative crash course on warning signs, protective tips, and other practical advice for avoiding workplace disasters like out-of-control absenteeism. Please contact Zashin & Rich at (216) 696-4441 or nee@zrlaw.com for more information or to register.
Steve Dlott will present “How to Defend a Workers’ Comp Claim” on April 24, 2007 at the Weymouth Country Club, 3946 Weymouth Road in Medina, Ohio. The seminar, sponsored by the Medina County Safety Council, begins at 9:00 a.m. and ends at 12:00 p.m. For only $25.00, attendees will receive three hours of Attorney Steve Dlott’s expertise in workers’ compensation matters and lunch. Please contact the Medina County Chamber of Commerce at safety@medinaohchamber.com or Zashin & Rich at (216) 696-4441 for more information.
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