EMPLOYMENT LAW QUARTERLY | Fall 2010, Volume XII, Issue iii

Download PDF

• Lock It Up: Safeguard company property against trade secret theft
• Special Delivery: Workers' compensation awards must account for all jobs
• Unions Winning a Higher Percentage of Representation Elections, but the Numbers Don't Tell the Full Story
• Taking It All Off: Are employers required to pay employees for changing clothes?
• Child's Play: U.S. Department of Labor issues final child labor regulations
• Z&R Shorts

---

Lock It Up: Safeguard company property against trade secret theft

By Lois A. Gruhin

In today's difficult economic times, trade secret theft is becoming more frequent, particularly in the areas of corporate information technology, finance, accounting, sales, marketing, human resources, and communications. Employers have found that former employees steal data by transferring it to a CD or DVD and copy e-mail lists, employee records, and customer information. Often, former employees then use this information to find a new job or with their new employer.

There are a number of different methods and safeguarding techniques employers should consider to protect their confidential business information. Some of these include:

• Ensuring that documents and electronic data are adequately protected with locks, passwords, or other restrictions on access;
• Requiring employees to sign non-compete/non-disclosure agreements;
• Conducting exit interviews and obtaining assurance form the exiting employee that he/she has returned all company property and reminding the employee of any agreements he/she may have signed;
• Terminating computer access immediately after the employee leaves the company; and
• Conducting trade secret/non-compete audits regulary.

It is critical for companies to safeguard their trade secrets and technical information. Companies must be able to maintain customer relationships without worrying that former employees might use stolen information to the company's detriment. Implementing proper procedures and safeguards to protect confidential business information can help alleviate these concerns and assure your company's viability.

---

Special Delivery: Workers' compensation awards must account for all jobs

By Scott Coghlan*

Recently, the Ohio Supreme Court held in State ex rel. FedEx Ground Package Sys., Inc. v. Indus. Comm. that a Workers' Compensation claimant is entitled to both an average weekly wage (AWW) and full weekly wage (FWW) which includes income from a second job, even when that second job is unrelated to the first and when the second job pays more than the first.

In that case, Christopher Roper, injured himself while working for FedEx. In addition to his job at FedEx, Roper worked a second job with a pest control company and also operated another business on the side. After his injury at FedEx, FedEx set Roper's AWW at $160.45 and set his FWW at $250.80. FedEx derived these figures from his earnings at FedEx without taking into account his earnings from his second job at the pest control company.

Roper then moved the Industrial Commission of Ohio to increase his AWW and FWW to reflect his combined earnings from FedEx and the pest control company. The district hearing officer did so based on the "special circumstances" provision of R.C. 4123.61, increasing his AWW award to $417.05 and his FWW award to $457.36. The Franklin County Court of Appeals eventually affirmed the order.

The Ohio Supreme Court similarly affirmed, holding that the AWW, as the basis for benefit computation, "should approximate the average amount that the claimant would have received had he continued working after the injury as he had before the injury." The Court further stated that, while R.C. 4123.61 refers to the "average weekly wage for the year preceding the injury," the formula may be discarded if the AWW cannot justly be determined by applying the formula. When this occurs, the statute provides that the administrator for the Bureau of Workers' Compensation "shall use such method as will enable the administrator to do substantial justice to the claimants." Id.

To no avail, FedEx argued that the inclusion of wages from other, concurrent jobs would create a disincentive for claimants to return to work. FedEx also argued that secondary wages should be excluded entirely, or in the alternative that they be limited to situations where the two jobs are similar in character. In response to FedEx's first argument, the Court noted that R.C. 4123.56(A) expressly prohibits temporary total disability payments when the employer makes work available to the employee in a manner that is within his or her physical capabilities, or when another employer does so. The court, in dispensing with the second argument, noted that R.C. 4123.61 "refers to wages earned in the year prior to injury without qualification or exclusion." The court also noted that similar jobs can also have disparate earnings. Thus, limiting AWW awards to jobs which are similar in nature would not necessarily eliminate the wage differential which could potentially exist.

FedEx also challenged the amount of the FWW the Commission awarded to Roper. The Court also upheld this amount, giving broad deference to the Commission's calculation relying on Joint Resolution No. R80-7-48, issued by the Industrial Commission and Bureau of Workers' Compensation. The resolution states that the full weekly wage equals "the gross wages (including overtime pay) earned over the aforementioned six week period divided by six" or "the employee's gross wages earned for the seven days prior to the date of injury, excluding overtime pay," whichever is higher. The Court found that the Commission did not abuse its discretion in using the first formula to calculate Roper's FWW amount.

As a result of this case, employers need to understand that AWW and FWW awards must include all of an injured worker's income from the year prior to the injury from all employers. In addition, employers need to offer employment within the physical capabilities of the injured worker as soon as possible so as to minimize temporary total compensation payments.

*Scott Coghlan, the chair of the firms' Workers' Compensation Group, has extensive experience in all aspects of workers' compensation law. For more information about workers' compensation compliance, please contact Scott at 216.696.4441 or sc@zrlaw.com.

---

Unions Winning a Higher Percentage of Representation Elections, but the Numbers Don't Tell the Full Story

By Jon M. Dileno*

According to National Labor Relations Board ("NLRB") data, unions won 68.5 percent of representation elections conducted by the NLRB in 2009. This is up from the prior year's 66.9 percent and represents the highest win rate since 1955 when unions won 67.6 percent of the elections in which they participated. The 2009 union election win-rate represents more than a ten percent increase since 2004, although unions have won more representation elections than they have lost in each of the past 13 years.

While the union win-rate increased in 2009, the number of voters eligible to participate in the elections decreased from 2008.  Additionally, the NLRB conducted 1,293 elections in 2009 as compared to 1,612 in 2008, with the number of elections in 2009 (1,293) being nearly half the number of elections conducted in 1996 (3,300). Thus, while unions are winning at a greater percentage, the dramatic decrease in elections has resulted in a corresponding decrease in the actual number of elections they are winning.

Notably, these NLRB statistics do not reflect the full extent of organizing by labor unions.  Many unions organize through check-card recognition, neutrality agreements, and methods other than NLRB-run, secret ballot elections.  These statistics should encourage all non-union employers to review and revise workplace policies related to union organizing and monitor their workplaces for potential union organizing efforts.

*Jon M. Dileno practices in all areas of labor and employment law, with a focus on private and public sector labor law. For more information on NLRB statistics or any other labor or employment issue, contact Jon at 216.696.4441 or jmd@zrlaw.com.

---

Taking It All Off: Are employers required to pay employees for changing clothes?

By Patrick M. Watts

Recently, the Department of Labor ("DOL") issued yet another opinion letter regarding whether changing clothes at the beginning or end of the workday is compensable time under the Fair Labor Standards Act ("FLSA"). The DOL also addressed whether changing clothes could be considered a "principal activity" under the Portal to Portal Act making compensable all employee activities that occur after the changing of clothes at the beginning of the workday.

What are clothes?
The FLSA provides that when determining hours worked by an employee, the employer shall exclude "time spent in changing clothes or washing at the beginning or end of each workday which was excluded from measured working time during the week involved by the express terms of or by custom or practice under a bona fide collective-bargaining agreement…" 29 U.S.C. §203(o). The DOL has issued five (5) opinion letters over the past fifteen (15) years regarding the meaning of this provision and the meaning of "clothes." In one opinion letter, the DOL concluded that "clothes" did not include protective equipment such as: mesh aprons, plastic belly guards, mesh sleeves, plastic arm guards, wrist wraps, mesh gloves, runner gloves, polar sleeves, rubber boots, shin guards and weight belts. See Wage and Hour Opinion Letter, December 3, 1997. Later, the DOL revised its view of "clothes" and determined that "clothes" included protective gear. See Wage and Hour Opinion Letter, FLSA 2002-2.

In its most recent opinion letter, the DOL retreated to its previous position and now advises that "clothes" do not include protective gear. In support, the DOL cited to the legislative history of the law and also to current court cases which conclude that protective gear are not clothes. In citing the legislative history, the DOL noted that during Congressional debate on this provision an example of bakery employees was utilized to explain the purpose of this provision. The DOL concluded that the example of bakery employees changing "clothes" was incompatible with meatpackers or employees changing protective gear. Moreover, the DOL cited to three cases which concluded that, among other things, helmets, smocks, plastic aprons, arm guards, gloves, hooks, knife holders, sanitary and safety equipment, and protective equipment did not constitute "clothes." As a result, the DOL advises that time spent changing protective gear or equipment is not exempt from compensable time based on the express terms of or by custom or practice of a collective bargaining agreement as provided by 29 U.S.C. §203(o). The DOL disavowed any previous opinion letter which is inconsistent with this most recent opinion.

Can the workday start when the employee is changing clothes?

In the second part of its recent opinion letter, the DOL addressed whether changing clothes could still constitute a "principal activity," even if the act of changing clothes itself was not compensable. If changing clothes is a principal activity, then walking time and waiting time after changing clothes at the beginning of the day (and walking and waiting time before changing clothes at the end of the day) would constitute compensable time.

The DOL determined that changing clothes may be a principal activity. The DOL first noted that the language of §203 assumes that changing clothes can be a principal activity because that section states that "time spent in changing clothes or washing at the beginning or end of each workday…" The DOL concluded that the language itself assumes that the changing of clothes, while exempt from compensability in some cases, remains part of the workday. The DOL also cited to several court cases which addressed this issue. Many of these courts concluded that simply because the activity was not compensable did not also mean that the activity could not be considered the start of the workday. One court noted that although changing clothes may not be compensable under the FLSA, "it does not affect the fact that these activities could be the first 'integral and indispensable' act that triggers the start of the continuous workday…" As a result, the DOL concluded that changing clothes, even when not compensable, may still be a principal activity which effectively starts the workday.

Notably, the DOL did not opine that changing clothes will always be non-compensable or that changing clothes will always be a principal activity. Employers must consider a variety of factors to answer these questions, including whether there is a custom or practice or express language within a collective bargaining agreement and also whether changing clothes is an integral and indispensable act to an employees job. If you need assistance analyzing these or any FLSA compliance issues, please contact us.

---

Child's Play: U.S. Department of Labor issues final child labor regulations

By Michele L. Jakubs*

The United States Department of Labor (DOL) final regulations concerning child labor took effect on July 19, 2010. The regulations govern the employment of children for non-agricultural jobs. The final regulations incorporate statutory amendments to the Fair Labor Standards Act (FLSA) and specific recommendations made by the National Institute for Occupational Safety and Health and give employers clear notice of jobs that children may not perform.

The FLSA requires workers be at least 16 years old to work in non-agricultural occupations. However, the DOL deems certain occupations suitable for workers between 14 and 15 years old. For example, prior to the regulations, 14- and 15-year olds could work in retail, food service, and gasoline service establishments. With the new regulations, permissible occupations for workers ages 14-15 now include: office and clerical work, computer programming, writing software, tutoring, serving as a peer counselor or teacher's assistant, singing, playing a musical instrument, cashiering, modeling, price marking, assembling orders, packing and shelving, bagging and carrying out customer orders, kitchen work, and other food, beverage prep and service work. Fifteen year olds can also work as lifeguards.

The new regulations make clear that any job not specifically permitted for 14- and 15-year olds is prohibited. The regulations also include a non-exhaustive list of prohibited occupations including: manufacturing, mining, processing, working with a hoisting apparatus, working with power-driven machinery such as lawn mowers and golf carts, all work requiring the use of ladders or scaffolds, and occupations in warehousing, storage, communications, public utilities or public messenger services. Fourteen and 15-year olds also are prohibited from door-to-door "street" sales. However, charitable or fundraising efforts, such as selling cookies for the Girl Scouts or school fundraisers, are exempt from this provision.

The new regulations also clarify times and maximum number of hours 14- and 15-year olds may work. From June 1st through Labor Day, 14- and 15-year olds may work between the hours of 7 a.m. and 9 p.m. They may work a maximum of 8 hours per day and no more than 40 hours in one week. When school is in session, 14- and 15-year olds may work between 7 a.m. and 7 p.m. Additionally, during the school year they may not work more than 3 hours per day or 18 hours per week.

The new regulations also expand prohibitions for workers between the ages of 16 and 18. The prohibited occupations for workers between ages 16 and 18 now include: working with, tending, riding upon, repairing, servicing or disassembling an elevator, crane, manlift, hoist or high-lift truck; and working with chain saws, reciprocating saws, wood chippers and abrasive cutting discs.
The regulations also increase the penalties for child labor violations. Violators can be subject to a civil penalty between $11,000 and $50,000 for each violation and $100,000 for repeated or willful violations. The regulations also add a new penalty for causing death or serious injury to an employee under the age of 18. "Serious injury" is defined as:

• Permanent loss or substantial impartment of one of the senses (sight, hearing, taste, smell, tactile sensation);
• Permanent paralysis or substantial impairment of the function of a bodily member, organ, or mental faculty, including the loss of all or part of an arm, leg, foot, hand, or other body party; or
• Permanent paralysis of substantial impairment that causes loss of movement or mobility of an arm, leg, foot, hand or other body part.

In addition to the above, the regulations also include new work-study programs for workers aged 14-15. As a result of these new regulations, this may be a good time for employers to revisit their child labor policies and make any necessary changes.

*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of employment litigation and FLSA compliance. For more information about complying with child labor laws, please contact Michele at 216.696.4441 or mlj@zrlaw.com.

---

Z&R Shorts

Welcome Stefanie L. Baker
Zashin & Rich Co., L.P.A. is pleased to announce the addition of Stefanie L. Baker to its Employment and Labor Group.

Stefanie's practice encompasses all areas of public and private labor and employment issues.
Stefanie earned a B.A. with honors from Miami University.  She earned her law degree (J.D.) with honors from Cleveland-Marshall College of Law.  During law school, Stefanie served as Editor-in-Chief of the Journal of Law and Health.  She was also a member of Moot Court and completed an externship with the Honorable Christopher A. Boyko of the Northern District of Ohio.  Stefanie is admitted to practice law in the State of Ohio.  She is a member of the Ohio State Bar Association, the Cleveland Metropolitan Bar Association, and the Cleveland-Marshall Law Alumni Association.

Please join us in welcoming Stefanie to Z&R!

Congratulations to Patrick J. Hoban
Zashin & Rich Co., L.P.A. would like to congratulate Patrick J. Hoban on his recent certification by the Ohio State Bar Association as a Specialist in Labor and Employment law. Pat fulfilled several requirements to earn this specialty certification, including demonstrating a substantial and continuing involvement in Labor and Employment law. Congratulations Pat!

Federal District Court Finds "Individual Mandate" Provision of Health Care Reform Law Unconstitutional

*By Patrick J. Hoban

On December 14, 2010, Judge Henry E. Hudson of the Federal District Court for the Eastern District of Virginia granted summary judgment to the Commonwealth of Virginia in an action against the U.S. Secretary of Health and Human Services (“HHS”).  In the lawsuit – Commonwealth of Virginia v. Sebelius (Case No.:  3:10CV188-HEH) – the Commonwealth’s central claim was that the Patient Protection and Affordable Care Act’s (“PPACA”) requirement that every U.S. citizen, with limited exceptions, maintain a minimum level of health insurance coverage after January 1, 2014 or pay a “fine” was unconstitutional. Specifically, the Commonwealth contended that the provision exceeded the power of the U.S. Congress under the Commerce and General Welfare clauses of the U.S. Constitution. Judge Hudson granted summary judgment for the Commonwealth after finding that Congress has no authority to regulate economic “inactivity” regardless of the reasons it has for such regulation. The Judge also held that, contrary to HHS’s arguments, the fines levied by the provision were not an exercise of Congress’s taxing authority but were a means to enforce a regulatory mechanism that exceeded congressional powers. Notably, the Judge determined that the unconstitutionality of the individual mandate did not render PPACA itself unconstitutional.

Yesterday’s ruling is the third from federal district courts on challenges to PPACA’s individual mandate provision since it was enacted on March 23, 2010. Two prior rulings upheld the constitutionality of the individual mandate. PPACA will prohibit insurers from denying health insurance coverage for preexisting conditions, mandate minimum benefits, and limit insurers ability to charge premiums based upon a covered individual’s medical conditions. HHS contends that the individual mandate is necessary to ensure that individuals cannot wait until they develop a medical condition to seek health insurance and that the provision will generate approximately $4 billion annually to offset other costs of the legislation.  Although HHS’s arguments prevailed in the two prior rulings, this decision was the first in a challenge to PPACA filed by a state. Another lawsuit filed by 20 states attorney generals raising claims similar to those decided in favor of the Commonwealth of Virginia yesterday is ongoing in a Florida district court.

HHS is expected to appeal yesterday’s decision and the U.S. Supreme Court is expected to render the ultimate decision as to the constitutionality of PPACA’s individual mandate provision. Additionally, the results of November’s congressional elections have increased the likelihood for changes to or a repeal of PPACA during the next Congress. Employers should keep abreast of these legal and political developments as part of their overall strategies to adjust their employee health insurance benefits to comply with PPACA.

*Patrick J. Hoban has tracked PPACA’s effect on employers since the legislation was introduced in 2009 and has advised employers on strategies for complying with its various employer-specific provisions. For more information about PPACA and its potential effect on your operations, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

EEOC Releases Performance and Accountability Report for 2010 Fiscal Year Announcing Record Number of Discrimination Charges

By Stefanie L. Baker

In the fiscal year ending September 30, 2010, the Equal Employment Opportunity Commission (EEOC) received a record 99,922 private sector discrimination charges. Despite the record increase, the EEOC managed to keep its charge backlog at 86,338 pending charges. EEOC Chair Jacqueline Berrien attributes keeping its charge backlog down to increased training and 198 new hires in 2010. The new hires included 66 investigators and 8 mediators. These new staff members are expected to help process an additional 6,000 charges a year.

The EEOC reports that during the 2010 fiscal year, discrimination charges reached their highest level in the EEOC’s 45-year history. The previous record for number of discrimination charges in one fiscal year was 95, 402 charges filed during 2008. Despite the increase in charges received, the EEOC resolved a total of 104,999 charges in 2010.

During 2010, the EEOC recovered $319 million in monetary relief for private sector discrimination claimants. Of the $319 million, $142 million came from mediation resolutions. The EEOC participated in 9,370 mediations in 2010, indicating mediation is a favored track in resolving discrimination charges. The record number of 2010 mediations indicates a 10% increase from 2009 mediations.

The EEOC resolved 285 lawsuits in 2010, recovering $85 million dollars for discrimination claimants. Of these resolutions, 197 contained Title VII claims, 60 contained Americans with Disabilities Act claims, and 38 contained Age Discrimination in Employment claims. From these lawsuits the EEOC recovered:

     •$73.9 million in Title VII claims;
     •$5.2 million in ADA claims;
     •$2.8 million in ADEA claims; and
     •$2.9 million in claims involving more than one statute.

EEOC field units filed 250 new merit lawsuits in 2010. The majority of new lawsuits focus on Title VII claims. Of the 250 new lawsuits, 192 contained Title VII claims, 40 contained Americans with Disabilities Act claims, 28 contained Age Discrimination in Employment claims, and 2 contained Equal Pay Act claims.

The EEOC’s report indicates an increase and focus on its systemic initiative, which includes cases commonly known as “pattern or practice” cases. The agency has hired experts in statistics, industrial psychology, and labor market economics to work with district EEOC offices on large cases. The EEOC focuses on these complex cases because it allows the agency to examine employer practices that impact a large number of individuals. During the 2010 fiscal year, the agency conducted 465 systemic investigations. The EEOC expects the quantity of systemic lawsuits to steadily increase.

GINA Has a Significant Impact on Requesting Medical Information under the ADA and the FMLA

By Patrick M. Watts

The Genetic Information Non-Discrimination Act of 2008 (“GINA”) prohibits employers from discriminating against employees because of genetic information related to the employee. GINA makes it unlawful for employers to “request, require, or purchase genetic information.” As one exception, GINA states that an “inadvertent” request does not violate this prohibition against requesting genetic information.

Recently, the Equal Employment Opportunity Commission published the final regulations interpreting GINA. The final regulations provide additional explanation regarding what constitutes an inadvertent request. The final regulations state that a request or acquisition of genetic information “will not generally be considered inadvertent unless the covered entity directs the individual and/or health care provider…not to provide genetic information.” 29 C.F.R. §1635.8. Further, the final regulations go on to specifically state the requirement for an inadvertent disclosure statement applies to (1) requests for medical information to support a request for a reasonable accommodation and (2) requests for medical information “as required, authorized, or permitted by Federal, State, or local law, such as where an employee requests leave under the Family and Medical Leave Act…” 29 C.F.R. §1635.8.

As a result, in order to comply with GINA and protect against inadvertent disclosures, employers should conduct a review of their current procedures regarding requests for medical information. In doing so, employers should consider whether to modify their procedures, including correspondence to employees, to exclude, specifically, genetic information. If you need any assistance in your leave of absence administration, please feel free to contact us.

GEORGIA ON MY MIND: Georgia Non-Competes can now be "blue-penciled"

By Roy E. Lachman

For employers with restrictive covenants with their employees, Georgia’s recent constitutional amendment makes a dramatic change in Georgia law. Before the amendment, Georgia courts were hostile to restrictive covenants such as non-competition, non-solicitation, and confidentiality provisions. If a court found any of the covenants in an agreement to be unreasonable, then the court would strike down the entire agreement. This could harm the employer not only with respect to the employee involved in the case, but also with respect to all other employees who had signed similar agreements. As a result, an employer could lose all its contractual protections with its employees.

The recent amendment ends the risk for employers in Georgia, and conforms its law to that of the majority of other jurisdictions. A Georgia court will now have “the power to limit the duration, geographic area, and scope of prohibited activities in a contract…to render such contract…reasonable under the circumstances for which it was made.” This means that even if a court finds a covenant restriction unreasonable, the court will not invalidate the entire agreement. Instead, it can modify the provision to a reasonable restriction under the circumstances.

This amendment was intended to attract businesses to Georgia and to enhance the predictability of employment agreements in that state. However, even with the amendment now in place, employers should continue to exercise care to draft agreements with reasonable restrictions. Such careful drafting will provide greater certainty that the restrictions will apply. If you have any questions about restrictive covenants, please do not hesitate to contact us.

FACEBOOKED: Does your company need to revise its social media policy?

*By Jason Rossiter and Patrick J. Hoban

With the onslaught of Facebook, Twitter, and related social networking services, many employers drafted aggressive policies regarding employee use of social media. Now, many of those polices may be in jeopardy.

The National Labor Relations Board (“NLRB”) recently issued a complaint against an employer that fired an employee who posted negative remarks about her supervisor on her personal Facebook page. The negative remarks drew supportive "comments" from her co-workers, which in turn led to further negative comments being made about this supervisor from the employee. The employee was fired three weeks later.

The NLRB took the position that the employee’s posting on her personal Facebook page constituted protected concerted activity. The NLRB stated its belief that the company’s social media policy, which also covered blogging and internet posting, contained unlawful provisions. Specifically, in its policy, the company prohibited “employees from making disparaging remarks when discussing the company or supervisors” and “depicting the company in any way over the internet without company permission.” The NLRB concluded that this policy language interfered with the employees’ exercise of their rights to engage in protected concerted activity.

Though no court has yet adopted the NLRB's position, it is nonetheless likely that, given the NLRB's broad authority, its decision to pursue this case could have a far-reaching effect on how far employers can safely go in enacting social media, blogging, and internet policies. The NLRB's complaint could also have the effect of greatly limiting the extent to which employers can control employees' off-duty internet use – including in workplaces that do not have labor unions.

The NLRB has scheduled an administrative hearing for January 25, 2011. Until then, employers should carefully review their social media policies and watch for further updates. Based upon the NLRB’s position in this case, employers face an increased risk for disciplining employees who use social media to criticize their employer. Such discipline may result in an unfair labor practice charge. If you have questions about whether your company’s social media policy is at risk of violating the National Labor Relations Act or any other laws, please feel free to contact us.

*Jason Rossiter and Patrick J. Hoban, have extensive experience in all aspects of workplace law, including drafting and implementing social media policies for union and non-union employers. For more information about the use of a social media policy, please contact  Pat (pjh@zrlaw.com) at 216.696.4441.

Do I Need To Give Employees Time Off To Vote?

*By Stephen S. Zashin

With the 2010 elections just a week away, many employers wonder if they must give employees time off to vote. Most states require that employers provide time for employees to vote on Election Day. Because no federal law requires private employers to grant employees leave time to vote, the laws vary from state to state. The laws vary greatly – some specify whether the employer must provide paid time off while others only specify how many hours the employer must provide.

In general, most employers will need to provide time to vote if the polls are not open within two to three hours of the employee's scheduled shift. Is your company required to give employees time off to vote?

• The following states require employers provide voting leave and require a specific amount of time the employer must provide to vote: Alabama (up to one hour), Alaska (two hours) Arizona (three hours), California (two hours), Colorado (two hours), Georgia (two hours), Hawaii (two hours), Illinois (two hours), Iowa (up to three hours), Kansas (up to two hours), Kentucky (at least four hours), Maryland (up to two hours), Massachusetts (up to two hours), Missouri (up to three hours), Nebraska (two hours), Nevada (up to three hours), New Mexico (two hours), New York (two hours), Oklahoma (at least two hours), South Dakota (two hours), Tennessee (up to three hours), Utah (two hours), Washington (up to two hours), West Virginia (up to three hours), Wisconsin (up to three hours), and Wyoming (one hour)

• The following states require employers provide voting leave, but do not specify the amount of time required: Arkansas, Minnesota, Ohio, and Texas.

In many states, employers can specify the time an employee may vote. For example, Colorado and Utah provide that the employer may require the time to vote be at the start or end of a shift. California has a similar provision for voting time.

• The following states allow employers to designate voting hours: Alabama, Arizona, Colorado, Georgia, Illinois, Iowa, Kansas, Kentucky, Massachusetts (limited to certain employers), Missouri, Nebraska, Nevada, New York, Oklahoma, South Dakota, Tennessee, Utah (limited to certain employers), Washington, Wisconsin, Wyoming. 

In some states, employers must pay its employees for taking time off to vote. The qualifications and conditions employees must meet vary from state to state.

• Paid leave for voting exists in 23 states, including: Alaska, Arizona, California, Colorado, Hawaii, Illinois, Iowa, Kansas, Maryland, Minnesota, Missouri, Nebraska, Nevada, New Mexico, New York, Oklahoma, South Dakota, Tennessee, Texas, Utah, Washington, West Virginia and Wyoming. 

• Seven states do not require paid time off: Alabama, Arkansas, Georgia, Kentucky, Massachusetts, Ohio, and Wisconsin. 

Some states also have specific requirements that an employee must follow to request the leave. 18 states currently require employees to give advance notice.

• States that require advance notice include: Alabama (reasonable notice), Arizona (one day), California (two workdays), Colorado, (one day), Georgia (reasonable notice), Illinois (one day), Iowa (one day), Kentucky (at least one day), Massachusetts (one day), Missouri (one day), Nebraska (one day), Nevada (one day), New York (two to ten days), Oklahoma (one day), Tennessee (by noon before Election Day), Utah (one day), West Virginia (three days), and Wisconsin (one day). 

If your company’s employees have not requested voting leave already, be prepared for many of them do to so. Employers should first investigate the applicable laws where the company does business. In most instances, employers should contact counsel if it has questions about employee leave time to vote and whether the employer is required to pay for such time off.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including questions about employee leave. For more information about employment law, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.

Massachusetts Law Requires Employees Receive Notice of Negative Information in Personnel Records

By Patrick M. Watts

Massachusetts recently passed an amendment to their Personnel Records Statute (Mass. Gen. Laws c. 149, § 52C). Employers of 20 or more employees must notify employees when negative information is placed into personnel files.

The Office of the Attorney General will enforce this amendment and may set fines anywhere from $500 to $2,500 per violation. To date, no guidelines from the Attorney General have been issued.

Under Massachusetts law, an employee’s personnel record is defined by what it contains – not by where the records are kept. Formal personnel files maintained by Human Resources are contained within the definition. More problematic are more informal supervisor files and reviews which are also included in an employee’s “personnel record.”

The language within the amendment is broad and vague, leaving many employers confused over how to implement this change. The amendment requires employers notify employees within 10 days when “any information” is placed within an employee’s “personnel record” that “may be used” to “negatively affect” an employee’s qualifications. This includes anything that could negatively affect employment, including: promotion, transfer, compensation, or the possibility of disciplinary action. Employers must comply with an employee’s request for review within five days of the request.

Employees in Massachusetts have a right to review personnel records up to two times per year. However, if the notice is triggered, the employee’s review does not count in the two reviews permitted annually. Additionally, employees may seek judicial action to expunge any information from personnel records the employer knew or should have know was false.

Employers affected by this statute should examine their policies and practices to comply with the new amendment.

Nickel and Dimed – Ohio’s Minimum Wage Increases to $7.40 in 2011

*By Michele L. Jakubs

As part of a Constitutional Amendment approved by voters in 2006, Ohio’s minimum wage will increase by ten cents in January 2011. The Amendment provides for an indefinite increase every January 1st tied to the rate of inflation. After a stagnant year in 2009, inflation rose 1.4 percent in the 12 months ending August 31, 2010. This rise in inflation will increase the minimum wage by 10 cents in January.

Workers who are 16 years and older and do not receive tips will see an increase of ten cents to $7.40 per hour. Tipped employees will see an increase of five cents to $3.70 per hour. This new wage affects employers who gross more than $271,000 annually.

Employers who gross less than $271,000 annually will be required to pay the same as the federal minimum wage, currently set at $7.25 per hour. Employees who are 14- and 15-years old will also receive $7.25 per hour, regardless of company revenue.

If you have any questions about complying with these new wage increases, please contact Michele L. Jakubs.

*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including wage and hour compliance. For more information about employment law, please contact Michele at 216.696.4441 or mlj@zrlaw.com.

Sign of the Times: State of Economy Sees Explosion of EEOC Claims

*By Jon M. Dileno

More than 70,000 claims were filed with the Equal Employment Opportunity Commission (EEOC) for the six months leading up to April 2010, alleging various types of discrimination. This amounts to a 60% increase in claims filed for the same period last year. The dramatic increase in claims is likely a product of the economy, where more workers are being terminated and are also finding it more difficult to find jobs, thereby becoming more likely to sue.

One of the specific areas of increased claims are those based on disability discrimination. In 2009, more than 21,000 individuals filed disability-based claims with the EEOC, amounting to a 10% increase from 2008, and a 20% increase from 2007. Congress’ recent amendments to the Americans with Disabilities Act, wherein it expanded the definition of “disability,” have undoubtedly contributed to the increase in claims based on physical or mental disabilities.

The EEOC has also seen an increase in complaints generated by employees of Muslim faith. In 2009, Muslim workers filed a record 803 claims – an increase of 20% from the previous year. Muslims make up less than two percent of the U.S. population but account for about one-quarter of the religious discrimination claims filed with the EEOC. The EEOC has recently filed several lawsuits on behalf of Muslims. Additionally, the EEOC has seen a significant increase in complaints from males alleging sexual harassment and complaints from federal employees.

Given the protracted nature of our country’s economic downturn, complaints with the EEOC are not likely to subside anytime soon. In response, Employers need to make sure their work environments are free from discrimination by maintaining adequate policies and through the training and education of their workforce. To that end, Employers should consider whether their employment policies and training practices are in need of updating and review, in light of recent trends and developments in the law.

*Jon M. Dileno has extensive experience in all aspects of public and private sector workplace law, including defending contentious claims with the EEOC. For more information, please contact Jon at 216.696.4441 or jmd@zrlaw.com.

Put the Phone Down! The DOT Announces Hazmat Truck Drivers Banned From Texting

*By Stephen S. Zashin

The Department of Transportation (DOT) announced September 21, 2010, during the National Distracted Driving Summit, that the agency will implement a new rule banning commercial truck drivers from texting while transporting hazardous materials. The rule will also ban train operators from using cell phones or other wireless devices while working. Drivers cited for texting will be subject to civil or criminal penalties of up to $2,750.

The announcement comes as no surprise as the agency has begun to crack down on distracted driving. The DOT stated that nearly 5,500 people were killed and 450,000 injured in distraction-related crashes in 2009 alone.

These new rules complement additional rules being finalized by the Obama Administration that prohibit commercial bus and truck drivers from sending text messages on the job. Federal employees driving on government business are already prohibited from texting and 30 states currently ban text messaging for all drivers.

The DOT reports that nearly 1,600 companies have agreed to be part of a program to encourage private firms and groups to implement distracted driving policies. In addition, 550 organizations have already pledged to enact distracted driving policies for their employees. Both of these initiatives are estimated to cover twelve million U.S. workers within the next year.

If your company does not have a policy about employees driving while texting or talking on a cell phone, you should consider whether such a policy makes sense for your organization.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including drafting workplace policies for employers. For more information about Ohio employment law, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.

Employee Free Choice Act: It’s Back… Or Is It?

By Jessica Tucci

On August 11, 2010, the Arizona legislature approved a referendum that guarantees a worker’s right to vote in a secret ballot election when deciding whether to be represented by a labor union. The referendum will appear as Proposition 113 in Arizona’s next general election. Proposition 113, if approved by voters, will amend the Arizona Constitution by “guarantee[ing] the right to vote by secret ballot where local, state or federal law permits or requires elections, designations or authorizations for employee representation.”

Currently, the National Labor Relations Act (NLRA) requires a secret ballot election once a petition is filed with the National Labor Relations Board (NLRB). However, President Obama publicly supports the Employee Free Choice Act (EFCA) or card check, which allows the NLRB to certify a union as an exclusive bargaining agent if the union collects a majority of union authorization cards from a bargaining unit. As proposed, EFCA also requires binding arbitration of labor contract terms after only 90 days of negotiation. While EFCA failed to pass in 2009, opponents fear its rebirth with a potential swing of power in Congress looming. Legislation like Proposition 113 attempts to block EFCA’s card check provision but may not survive a legal challenge if a lame-duck Congress enacts EFCA.

In anticipation of a renewed effort to pass EFCA, employers should consider updating their solicitation, distribution, posting, and workplace attire policies to ensure compliance with the NLRA and consistent enforcement. Employers should also and consider updating or training supervisors regarding company policies for identifying and dealing with a union organizing campaign.

FMLA: Who's your Daddy... or your Mommy for that matter?

By Patrick M. Watts

On June 22, 2010, the Deputy Administrator of the Wage and Hour Division of the Department of Labor issued Interpretation No. 21010-3, clarifying the definition of “son or daughter” pursuant to the Family Medical Leave Act (“Act”). The Act entitles employees to take family medical leave for up to 12 weeks after the birth of a son or daughter, the placement of a son or daughter due to adoption or foster care or to care for a son or daughter with serious health conditions. “Son or daughter” is defined as “a biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis. . . .” The Act further defines in loco parentis as including all individuals responsible for the daily care and financial support of the child.

The Deputy Administrator concluded that an employee stands in loco parentis to a child if they intend to assume the daily care or financial support for the child. Further, the Deputy Administrator concluded that the “Neither the statute nor the regulations restrict the number of parents a child may have under the FMLA.” Consequently, employers should recognize that some employees may be considered “parents” even though a son or daughter has an existing relationship with a biological, adoptive, foster or step parent.

Ohio Supreme Court Rejects Ohio Civil Rights Commission’s Interpretation on Mandatory Pregnancy/Maternity Leave

By Lois A. Gruhin

In a long-awaited decision, the Ohio Supreme Court rejected the Ohio Civil Rights Commission’s (“OCRC”) attempt to require all employers with four or more employees to provide reasonable pregnancy and/or maternity leave regardless of the employee’s length of service.  In McFee v. Nursing Care Management of America, Inc., 2010-Ohio-2744 (June 22, 2010), the Court held that, “[a]n employment policy that imposes a uniform minimum-length-of-service requirement for leave eligibility with no exception for maternity leave is not direct evidence of sex discrimination under R.C. Chapter 4112.”

Eight months into her employment, the plaintiff presented a doctor’s statement, indicating that the plaintiff could not work due to a pregnancy-related condition.  The employer’s leave of absence policy contained a no-exception, minimum twelve-month employment eligibility requirement.  The plaintiff left work, and the employer terminated her employment for taking an unauthorized leave.  The plaintiff filed a discrimination charge with the OCRC, which ruled that the denial of pregnancy leave constituted gender discrimination.  The common pleas court reversed the OCRC, but the Fifth District Court of Appeals reversed the common pleas court.

At issue were a statutory provision in R.C. Chapter 4112 and two provisions in an OCRC administrative regulation.  R.C. Section 4112.02(B) requires that employers treat pregnant employees the same for employment purposes as employees who are not pregnant, and therefore, prohibits an employee’s discharge because of pregnancy or related condition.  O.A.C. Rule 4112-5-05(G)(2) provides that, “[w]here termination of employment of an employee who is temporarily disabled due to pregnancy or related condition is caused by an employment policy under which insufficient or no maternity leave is available, such termination shall constitute unlawful sex discrimination.”  O.A.C. Rule 4112-5-05(G)(5) provides that women shall not be penalized in the conditions of their employment when they take time off for childbearing, if they are eligible to do so.

The Court first held that R.C. Chapter 4112 does not prohibit uniformly applied minimum-length-of-service requirements.  The statutory requirement that pregnant employees be “treated the same” as non-pregnant employees “does not provide greater protections for pregnant employees than non-pregnant employees.”  Since the employer’s length-of-service requirement treated all employees the same, the policy is “pregnancy blind.”

The Court then rejected the OCRC’s interpretation of its own administrative regulation.  Harmonizing Rule 4112-5-05(G)(2) and (G)(5), the Court held that (G)(2) “must mean that when an employee is otherwise eligible for leave, the employer cannot lawfully terminate that employee for violating a policy that provides no leave or insufficient leave due to temporary disability due to pregnancy or a related condition.”  (emphasis in original)

Finally, the Court held that the plaintiff could not prove gender discrimination in her termination.  The parties agreed that the employer terminated the plaintiff’s employment because she took leave from work even though she was not eligible for it, and not because she had become pregnant.

This decision provides two important directives to Ohio employers.  R.C. Chapter 4112 does not require employers to provide pregnancy/maternity leave when it provides no other leave or to waive or ignore minimum-length-of-service eligibility requirements for obtaining a leave of absence when an employee requests pregnancy/maternity leave.  However, if an employer provides leave benefits and an employee meets all eligibility requirements (including length-of-service requirements), the employer must extend the leave benefits to include pregnancy/ maternity leave and cannot terminate an employee for attempting to take pregnancy/maternity leave under that policy.

In light of this decision, an employer should consult with legal counsel and review its leave of absence policies to ensure that such policies comply with Ohio’s anti-discrimination laws.

Ohio Supreme Court Holds That Insurance Policy Can Cover Attorney Fees Awarded as a Result of Punitive Damages

*By Stephen S. Zashin, Esq.

Generally, Ohio public policy prohibits insurance companies from covering punitive damage awards. Until now, this prohibition presumably included attorney fees awarded solely as a result of a punitive damage award. This month, the Ohio Supreme Court addressed whether an insurance policy provided coverage for attorneys’ fees awarded due to a punitive damage award.

In Neal-Pettit v. Lahman, No. 2009-0325, 2010-Ohio-1829 (May 4, 2010), the Ohio Supreme Court refuted that presumption of non-coverage of attorney fees. The 4-2 majority held that, “Attorney fees are distinct from punitive damages, and public policy does not prevent an insurance company from covering attorney fees on behalf of an insured when they are awarded solely as a result of an award for punitive damages.”

This issue arose from a personal injury automobile lawsuit. The accident involved an intoxicated driver who fled the scene of an earlier collision. The jury awarded compensatory and punitive damages. The jury also awarded the plaintiff attorneys’ fees because the jury found that the driver acted with malice. The insurer denied payment of both punitive damages and attorneys’ fees.

The insurance policy did not mention coverage for attorney fees. The policy included language concerning “damages” for “bodily injury.” Although “bodily injury” was defined, “damages” was not. The policy also excluded coverage of “punitive or exemplary damages, fines or penalties.”

The insurer contended that: (1) attorney fees did not constitute “damages because of bodily injury”; (2) the policy’s exclusion of “punitive or exemplary damages, fines or penalties” excluded coverage of attorney fees; and (3) Ohio public policy precluded coverage of an attorneys’ fee award made in conjunction with a punitive damage award. The Court rejected all three arguments.

On the issue of inclusion, the Court phrased the controlling question as “whether the attorney fees awarded are damages that [the defendant] is legally obligated to pay because of the bodily injury sustained by [the plaintiff].” The Court held that, “although an award of attorney fees may stem from an award of punitive damages, the attorney-fee award itself is not an element of the punitive-damages award.” The Court added that, “The language of the policy does not limit coverage solely because of bodily injury.” Thus, “insofar as the parties have offered their own separate interpretations of the language of the policy, both of them plausible, we must resolve any uncertainty in favor of the insured.”

On the issue of exclusion, the Court held that “the exclusion does not refer in any way to attorney fees or litigation expenses. . . . Therefore, the term ‘punitive or exemplary damages’ does not clearly and unambiguously encompass an award of attorney fees.” The Court also noted that the insurer never argued that attorney fees are a “fine” or “penalty” under the exclusions or cited any cases to that effect. Thus, whether attorney fees constitute such an exclusion remained unresolved.

Finally, on the issue of public policy, the Court explained that the language of the statutory prohibition of insurance coverage extends only to punitive and exemplary damages, and not attorney fees. Thus, the Court declined to add to the prohibition what the General Assembly declined to do. The Court also commented that, “Our holding will not encourage wrongful behavior merely because it permits insurers to cover attorney fees for which tortfeasors become liable. The tortfeasors remain liable for punitive damages awarded for their malicious actions, and these punitive damages remain uninsurable.”

The impact of the Ohio Supreme Court’s holding is clear: an insurance policy covers attorneys’ fees unless it expressly excludes them. Equally clear is that while Ohio public policy permits coverage of attorneys’ fees, it also does not require coverage. Also, the decision reinforces the Ohio Supreme Court’s position that punitive damages are uninsurable in the state of Ohio.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience in all aspects of workplace law, including the defense of employment practices liability claims.  For more information about Ohio employment law, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.

EMPLOYMENT LAW QUARTERLY | Summer 2010, Volume XII, Issue ii

Download PDF

• Unpaid Break Time for Nursing Mothers is Now Mandatory
• Employee or Non-Employee That is the Question…
• Handbook Disclaimer: Include One or Suffer the Consequences
• Up in Smoke: Employers Need Not Reasonably Accommodate Medicinal Marijuana Use
• Alcoholics Who Violate a No Call / No Show Policy Are Not Protected by the ADA
• The Enemy From Within: The Dangers of Unrestricted Technology
• On the Edge: Government Employers Walk a Thin Line When Contemplating Searches of Technology Utilized by Their Employees
• Z&R Shorts

---

Unpaid Break Time for Nursing Mothers is Now Mandatory

By Michele L. Jakubs*
 
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (“PPACA”). PPACA Section 4207 (“Section 4207”), “Reasonable Break Time for Nursing Mothers,” amends Section 7 of the Fair Labor Standards Act by requiring employers to grant employees who are also nursing mothers a reasonable amount of break time to express milk. The break time is unpaid and must be granted each time the employee has the need to express milk for up to one year following the birth of a child.

Employers must also designate a lactation area, other than a bathroom, that is out of sight, sufficiently private and free from intrusion.

Section 4207 does not apply to employers with less than fifty employees if compliance would impose an undue hardship on the employer. Factors for determining an undue hardship include the employer’s size, financial resources, nature of the work performed, or structure of the place of business.

Importantly, Section 4207 also does not preempt state laws that provide greater protections to nursing mothers. Several states have already implemented laws regarding the rights of nursing employees in the workplace. For example, the state of Indiana has enacted a law which protects nursing mothers in the workplace. This law has many similar provisions to those set forth in Section 4207, but it exceeds the scope of Section 4207 in that it applies to businesses with twenty-five employees or more, and it requires employers to provide a cold storage space or allow employees to bring their own portable cold storage device to store expressed milk. Ohio presently does not have a law protecting nursing employees in the workplace, but it does have a law protecting individuals nursing in public.

Section 4207 took effect immediately. However, the Department of Labor is currently establishing complimentary rules to clarify the law including enforcement procedures. Consequently, employers employing fifty or more employees should implement policies that comply with Section 4207 immediately if they have not done so already. Further, employers of all sizes should review state and local laws to ensure compliance with laws related to nursing employees.

*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of employment litigation and wage and hour compliance and administration. For more information concerning changes to the Fair Labor Standards Act or any other employment issue, please contact Michele at 216.696.4441 or mlj@zrlaw.com.

---

Employee or Non-Employee That is the Question…

By Stephen S. Zashin*

Congress recently introduced the Employee Misclassification Prevention Act (“EMPA”) known as H.R. 5107 with its counterpart S. 3648. EMPA, if passed, would require employers to keep certain records concerning non-employees or independent contractors who perform labor or service for remuneration.

EMPA would amend the Fair Labor Standards Act (“FLSA”) by creating a special penalty for employers who misclassify employees as non-employees or independent contractors. The Department of Labor could impose fines as high as $5,000 per violation and “willful” violations would be subject to triple damages.

Presently, there are a multitude of different tests applied by various government agencies to determine whether a particular individual is an independent contractor or an employee; employers should apply the most stringent of these tests to avoid liability under the various laws for which this is an issue (including the FLSA as well as Title VII and other antidiscrimination statutes).

In Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989) the U.S. Supreme Court examined twelve factors to determine whether the hired individual is an employee or independent contractor under common law agency principles. The Court considered most important the hiring party's ability to control the manner and means by which the work was accomplished, but stated that there were other relevant factors to look at and that no single factor outweighed another.

Employers should carefully review the following factors when determining whether a particular person should be deemed an independent contractor or an employee:

1. The skill required;
   
2. The source of the instrumentalities and tools;
3. The location of the work;
   
4. The duration of the relationship between the parties;
   
5. Whether the hiring party has the right to assign additional projects
   to the hired party;
   
6. The extent of the hired party's discretion over when and how long to work;
   
7. The method of payment;
   
8. The hired party's role in hiring and paying assistants;
   
9. Whether the work is part of the regular business of the hiring party;
   
10. Whether the hiring party is in business;
    
11. The provision of employee benefits; and,
    
12. The tax treatment of the hired party.

The consequences for making the wrong decision and misclassifying the person can be severe: liability for failure to withhold and pay the employer’s share of employment and social security taxes; liability for failure to make contributions to employee benefits plans; disqualification from retirement benefits plans; liability for wage-hour violations (such as failure to pay overtime); liability for health insurance claims under COBRA; and, liability for violations of employee’s rights under laws protecting employees from discrimination.

Employers may avoid misclassification problems by increasing the frequency of communication between workers and their employees. Employers should schedule recurring meetings with their workers to assess job duties and responsibilities; this can be done during annual performance reviews.

The passing of EMPA would heighten the importance of avoiding worker misclassification. Employers should clarify the terms of their relationship with workers and anticipate future changes. Employers who take a proactive approach to classification issues will help to minimize their risk of costly consequences and future litigation.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience with employee classification issues. If you have classification questions or any other questions regarding employment or labor issues please contact Stephen S. Zashin at 216.696.4441 or ssz@zrlaw.com.

---

Handbook Disclaimer: Include One or Suffer the Consequences

By Lois A. Gruhin

Employers frequently rely on employee policy manuals and handbooks to disseminate important policies and practices. These manuals and handbooks may subject unsuspecting employers to contractual liabilities, especially when a properly crafted disclaimer is not included.

A recent Ohio Court of Appeals decision offers significant insight regarding the importance of including disclaimers in handbooks and policy manuals. According to the holding of Dunlap v. Edison Credit Union, Inc., an employer may avoid contractual liability for the contents of a handbook by including in the handbook an express disclaimer of contractual intent and a reservation of rights to change the contents of the handbook.

In Dunlap, a retiring employee sought compensation for 38.5 unused vacation days. She argued that a provision in the policy manual – “‘Employees will receive vacation pay for all unused vacation at the time of termination’” – entitled her to all of her accrued and unused vacation time dating back to 2000. In response, the employer argued that the manual was not a contract, but instead was merely a “set of guidelines.” The employer also argued that the purpose of the manual was only “to establish a framework around which the efforts of all employees can be coordinated.”

The employee manual in question contained the following additional language: “The Board of Directors and Credit Union Management may modify, suspend or delete any of the policies stated in the [policy manual] without notice. To be effective, such changes must be in writing and signed by the Manager.” Importantly, the manual also included a multi-part disclaimer:

The manual is a management guide to general human resource methods at the Credit Union. It does not promise that the policies mentioned will be applicable in any given instance. The manual does not change the employment-at-will relationship in any way.

The [manual] is not an employment contract and does not provide any enforceable contractual rights to the employee with respect to his/her terms or conditions of employment. Neither these guidelines, nor any written or oral polices, practices or procedures which may develop from these guidelines create either an express or implied employment contract.

The Court of Appeals held that these disclaimers prevented the employee from recovering her vacation time. The Court held that while, in other circumstances, handbooks and policies might form the basis of an express or implied contractual obligation, that could not be the case here in light of the disclaimers, which specifically negated the possibility of contractual intent. Because of the disclaimers, therefore, the handbook became ”merely a unilateral statement of rules and policy which creates no obligations and rights.”

This decision clarifies that employers can avoid untended contractual obligations arising out of a handbook by including a well crafted disclaimer to make it clear that there is no intent to contract, and that the employer reserves the right to change the policies in the handbook at any time.

---

Up in Smoke: Employers Need Not Reasonably Accommodate Medicinal Marijuana Use

By David R. Vance*

The Supreme Court of Oregon recently ruled that an employer has no duty to reasonably accommodate medical marijuana use by employees.

The Oregon Medicinal Marijuana Act (“OMMA”) authorizes persons holding a registry identification card to use marijuana for medicinal purposes and exempts those persons from criminal prosecution. The Federal Controlled Substances Act (“CSA”) does not authorize medicinal marijuana use and classifies marijuana as an illegal drug for which criminal charges may be imposed.

In Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries, the employer, Emerald Steel Fabricators (“Emerald Steel”), hired a temporary employee as a drill press operator. Unbeknownst to Emerald Steel the employee used medicinal marijuana off the clock one to three times per day. Emerald Steel considered the employee for a permanent position but fired the employee when the employee disclosed his use of medicinal marijuana. Emerald Steel fired the employee despite the fact that he provided his registry card and documentation from his treating physician attesting that medical marijuana was the most successful form of treatment for his medical condition.

Two months later, the employee filed a complaint with the Oregon Bureau of Labor and Industries (“BOLI”). The employee claimed that Emerald Steel discriminated against him in violation of Oregon Revised Statute § 659A.112, which prohibits discrimination against an otherwise qualified individual because of a disability and requires an employer to make a reasonable accommodation to those with disabilities. BOLI found that the employee was not fired based on his disability, but ruled that Emerald Steel violated Ore. Rev. Stat. § 695A.112 by failing to reasonably accommodate the employee’s disability and denying employment opportunities to an otherwise qualified person.

On appeal, Emerald Steel argued that Ore. Rev. Stat. § 659A.112 must be interpreted consistent with its federal counterpart – the Americans with Disabilities Act (ADA). Further, Emerald Steel argued that because the ADA prohibits protection to those engaged in illegal drug use and CSA classifies marijuana as an illegal drug the employee’s use of medical marijuana is not protected by Ore. Rev. Stat. § 695A.112. The Court of Appeals upheld BOLI’s reasoning that Emerald Steel did not properly preserve its argument at the administrative level. However, the Oregon Supreme Court disagreed and proceeded with review on the merits of Emerald Steel’s argument.

The Oregon Supreme Court ruled in favor of Emerald Steeling finding that employers are not required to reasonably accommodate the use of medicinal marijuana by employees, and employers do not engage in discrimination when terminating employees for use of medicinal marijuana. The Oregon Supreme Court recognized the United States Supreme Court’s ruling in Gonzalez v. Raich, 545 U.S. 1 (2005), that under the Commerce Clause Congress may prohibit the possession, manufacturing and distribution of marijuana even when state law permits it for medical use. The Oregon Supreme Court furthered reasoned that as a result of Gonzalez, CSA partially preempted OMMA to the extent that OMMA explicitly authorized use of a drug CSA classified as illegal. Therefore, the Oregon Supreme Court ruled that Ore. Rev. Stat. § 695A.112, similar to the ADA, does not protect those engaged in illegal drug use. Therefore, Emerald Steel was relieved of its obligation to reasonably accommodate the employee pursuant to Ore. Rev. Stat. § 695A.112.

Strictly speaking, this decision allows Oregon employers to use discretion without being subject to discrimination claims when hiring, retaining or discharging employees who use medicinal marijuana. However, this issue remains unsettled in other jurisdictions such as California with laws similar to OMMA. Therefore, employers operating in these jurisdictions should proceed with caution when making employment related decisions related to an employee’s use of medicinal marijuana.

*David R. Vance, a member of the firm’s Cleveland office, has extensive experience with drug and alcohol issues. For more information about reasonably accommodating employees or any other employment or labor issues, please contact David at 216.696.4441 or drv@zrlaw.com.

---

Alcoholics Who Violate a No Call / No Show Policy Are Not Protected by the ADA

By Patrick M. Watts
 
Recently, the Second Circuit Court of Appeals held in VandenBroek v. PSEG Power CT LLC, that where regular attendance is an essential job function, the Americans with Disabilities Act (“ADA”) and the Family and Medical Leave Act (“FMLA”) did not protect an alcoholic employee who nonetheless repeatedly violated his employer’s attendance policy.

The plaintiff in the case, Bruce VandenBroek, worked as a boiler utility operator at Power Connecticut LLC (“PSEG”). PSEG maintained a no-call/no-show rule requiring employees to call their shift supervisor before the start of a missed shift so that PSEG could arrange coverage. In 2005, VandenBroek took FMLA leave to treat back pain and recover from back surgery. In February 2006, VandenBroek violated the no-call/no-show policy on two occasions. The day after VandenBroek violated the no-call/no-show policy for a second time, he informed PSEG he was entering a program for treatment of alcoholism and drug abuse.

On March 1, 2006, VandenBroek’s physician released him for work beginning March 6, 2006. On March 2, 2006, PSEG terminated VandenBroek for violating its no-call/no-show policy. VandenBroek filed suit against PSEG alleging violations of the ADA and FMLA. Specifically, he alleged PSEG discriminated against him by terminating his employment for conduct causally related to his disability and retaliated against him for taking leave afforded to him by the FMLA.

The Second Circuit upheld the District Court’s finding that VandenBroek failed to establish a prima facie case to support his discrimination claim. Essentially, the Second Circuit agreed with the lower court that VandenBroek was not “otherwise qualified” to perform his job because PSEG could not rely on his regular attendance. The Court reasoned that while attendance is essential to most jobs, it was particularly important in this case where attendance is necessary to prevent a power outage or explosion.

Further, VandenBroek improperly relied on Teahan v. Metro-North Commuter Railroad Co., 951 F.2d 511 (2d Cir. 1991), which held that when an employer terminates an employee based on conduct caused by a disability, the employer terminates the employee because of the employee’s disability. The District Court distinguished Teahan, a case decided under the Rehabilitation Act of 1974, because the ADA, 42 U.S.C. § 12114(c)(4), permits employers to “hold an employee…who is an alcoholic to the same qualification standards for employment or job performance and behavior that such entity holds other employees, even if any unsatisfactory performance or behavior is related to the…alcoholism of such employee.”

The Second Circuit also upheld the District Court’s decision that the employer did not retaliate against VandenBroek because he had taken FMLA leave, but rather terminated the employee for a legitimate business reason: violating the employer’s “no call/no show” policy. The Court found the employer’s decision to terminate VandenBroek was unrelated to his prior FMLA absences for back pain and nasal surgery. 

VandenBroek provides only limited guidance for employers making employment related decisions when dealing with employees suffering from alcoholism. Employers making decisions to terminate employees suffering from alcoholism because of poor attendance must be prepared to show specific reasons why attendance is an essential job function. Additionally, this issue has not been decided by the United States Supreme Court. As a result, employers operating outside the Second Circuit may not be afforded similar discretion.

---

The Enemy From Within: The Dangers of Unrestricted Technology

By Jason Rossiter*

In a time when most employees have unlimited access to the Internet, employers must establish a clear and concise electronic information policy to avoid disclosure of sensitive and confidential information by its employees. Without a clear and concise electronic information policy, employers risk infinite abuses of employee work time, exposure to viruses, loss of trade secrets, and misuse of employer owned property.

An effective electronic information policy includes an unambiguous statement regarding the employer’s expectations of computer use, data storage, and distribution of employer owned documents. Additionally, the policy must establish simple rules regarding use of employer issued e-mail accounts, cellular and smart phones, and personal digital assistants (“PDAs”), as well as a requirement to maintain the confidentiality of employer owned documents and proprietary information. Employers must also establish ownership of networks, computers, servers, files, e-mails, and phones to reduce an employee’s expectation of privacy when using employer owned property.

Any policy should clearly define the scope of permitted internet usage. Leaving internet use entirely within the discretion of an employee may lead to the very abuses that the policy is designed to eliminate. Employers should also describe what kinds of language, material, and images employees are permitted to transmit when using employer-provided networks and computing equipment, including mobile phones. The policy should make employees aware that the employer intends to utilize technology to monitor all activity and that employees have no expectation of privacy when using company-owned systems and networks.

The policy should also prohibit employees from syncing confidential business information, including customer lists, into “cloud” based Internet services without the employer’s permission. The policy should also prohibit employees from using their own personal smartphones, mobile broadband cards, online services such as Google Voice, or other such technologies as a means of circumventing the employer’s policies or of stealing confidential data.

Most importantly, employers should enforce all of these policies by implementing monitoring mechanisms.

Employers should distribute their policy to all employees and designate a contact person who can answer questions about it. Finally, since technology changes rapidly, employers should revisit their electronic information policies at least annually.

*Jason Rossiter has extensive experience drafting and editing electronic information policies. For more information about the ever changing technology issues facing employers or any other employment or labor issue, please contact Zashin & Rich  at 216.696.4441.

---

On the Edge: Government Employers Walk a Thin Line When Contemplating Searches of Technology Utilized by Their Employees

By George S. Crisci*

On June 17, 2010, the United States Supreme Court ruled that a government employer may search employee text messages sent from a government-issued pager, despite an employee’s reasonable expectation of privacy when the search is motivated by a legitimate work-related purpose and it is not excessively intrusive in light of the purpose.

In City of Ontario, California v. Quon, No. 08-1332 (June 17, 2010), the employee, Jeff Quon, alleged that his employer, the City of Ontario, (“Ontario”) and Arch Wireless (“Arch”), the pager provider, violated his Fourth Amendment rights and the federal Stored Communications Act (SCA) by searching the text messages he made on his government issued pager.

Ontario issued its police officers pagers with text messaging capabilities. The police officers, including Quon, signed Ontario’s computer policy, which stated that Ontario “reserves the right to monitor and log all network activity including e-mail and Internet use, with or without notice. Users should have no expectation of privacy or confidentiality when using these resources.” The policy did not apply explicitly to the pager text messages, although Ontario informally informed its employees that it would treat the text messages in a similar manner.

Almost immediately after the pagers were issued, Quon exceeded the number of allowed text messages for the month. Quon reimbursed Ontario for the overages. Ontario told Quon that an audit of his text messages would not occur so long as he paid for the overages. This pattern continued for the next few months, which prompted the police chief to investigate whether Ontario’s text message contract with Arch met the department’s text messaging needs. Subsequently, the police chief and Quon’s supervisor requested and obtained two months worth of text message transcripts. Upon review, they discovered Quon used his pager mostly for personal use. As a result, Ontario allegedly disciplined Quon for violating its employment policies.

Quon filed suit alleging that Ontario and Arch violated his Fourth Amendment rights and the SCA by obtaining and reviewing his text messaging transcripts, and that Arch violated the SCA by turning over the transcripts. The District Court granted Arch’s motion for summary judgment on the SCA claim, but denied the motion of Ontario and Arch as it applied to the Fourth Amendment claim. The District Court applied a two part test – whether Quon had a reasonable expectation of privacy in the text messages, and whether the text message audit was reasonable – to determine whether Ontario and Arch violated Quon’s Fourth Amendment rights. The District Court determined that Quon had a reasonable expectation to privacy, but Ontario had not violated his Fourth Amendment rights because the search was reasonably conducted to determine the efficacy of Ontario’s text messaging plan. The Ninth Circuit reversed the District Court, and instead found that Ontario’s search, while conducted for a legitimate work-related reason, was unreasonable in its scope. Quon appealed to the Supreme Court.

The Supreme Court ruled that Ontario did not violate Quon’s Fourth Amendment rights. In reaching its conclusion, the Supreme Court did not rule on whether Quon had a reasonable expectation of privacy with regards to his text messages, but instead assumed he had such an expectation of privacy, and then determined that the review of the text messages was a reasonable search.

The Supreme Court held that a search conducted by a government employer is Constitutional if it is “justified at its inception and if the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of the circumstances giving rise to the search.” The Court found that Ontario’s search was justified because it was reasonable for Ontario to conduct the audit to determine the adequacy of its contract with Arch. Additionally, the scope of the search was reasonable because it was an efficient and expedient way to determine whether Quon’s text messages were work-related.

Government employers should remain cautious when searching employee information stored in government issued/owned property. Additionally, government employers should keep searches involving personal employee information limited in its scope so as to avoid violating its employees’ Fourth Amendment rights. Government employers contemplating such a search may wish to consult counsel to address issues raised in Quon prior to conducting a search involving private employee information.

*George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, represents employers in all facets of labor and employment law, in both the public and private sector. For more information concerning any labor or employment issue, please contact George at 216.696.4441 or gsc@zrlaw.com.

---

Z&R Shorts

George Crisci’s article entitled “Recent Developments in Public Sector Collective Bargaining” has been selected for inclusion in the 2010 edition of the OSBA CLE Institute’s The Best of Labor & Employment Law.

Stephen Zashin will be part of a panel presenting “Trial: Direct and Cross of an Expert Witness on Damages” at the 47th Annual Midwest Labor & Employment Law Seminar on October 14, 2010 at the Hilton at Easton Town Center in Columbus, Ohio.  For more information go to www.ohiobar.org.

EMPLOYMENT LAW QUARTERLY | Spring 2010, Volume XII, Issue i

Download PDF

• EMPLOYERS BEWARE: Use of Fake Job References On The Rise
• To Report or Not To Report an EPLI Claim
• FMLA ENFORCEMENT: Northern District Of Illinois Bans Employers Doctor’s Note Policy
• THE EMPEROR’S NEW CLOTHES: Fourth Circuit Rules On Donning and Doffing of Protective Gear Under a Collective Bargaining Agreement
• BULLS ON PARADE: Do State Laws Follow the Lilly Ledbetter Fair Pay Act
• EEOC Claims Drop Slightly in 2009
• Z&R Shorts

---

EMPLOYERS BEWARE: Use of Fake Job References On The Rise

by Jason Rossiter*

There is a new breed of service providers that create fake job references for people struggling to find jobs. For an initial cost of $60 to $200, plus monthly fees, these services create fake companies, complete with telephone numbers, logos, websites, a LinkedIn profile and live references. Additionally, these service providers sell fake diplomas, transcripts, letters of recommendation, landlord references, doctor’s excuses and even funeral excuses.

Founders of these companies claim that applicants utilize their services to get ahead in today’s competitive job market. According to these companies, they simply provide a service made necessary by the poor economy. When asked about the ethical implications, one company proclaimed that it is helping its customers feed their families. One company claims to have guidelines including reviewing criminal backgrounds prior to giving references and refusing to provide references for lawyers, health care professionals and those seeking employment with the federal government. However, all other industries appear susceptible.

Questions regarding the legality of these services remain unanswered. In fact, even these service providers question the legality of their services by warning customers to check state laws regarding the legal implications of lying on one’s resume. As for the legal implications to the service providers, speculation exists that they could face claims of fraud, misrepresentation and detrimental reliance, and could potentially face criminal prosecution, regardless of their disclaimers.

Hiring mistakes cost employers valuable resources. To avoid such mistakes, employers should consider the following practices:

Cross reference past employers listed on a resume or application against an applicant’s social networking profile. Many social networking sites such as LinkedIn allow subscribers to list their employment history.

Insist on talking to real people when checking references. Fake employers often avoid live conversations with reference checkers. If the reference insists on faxing or sending written responses this may indicate a fake reference.

Verify a referring employer’s incorporation. Ask the referring employer its state of incorporation. Follow up with the office of the secretary of state of the alleged incorporating state to verify.
Amend employee handbooks, application forms and workplace policies to make clear that falsifying a resume, application or reference is grounds for immediate termination.

Question inconsistencies on an applicant’s resume with answers given during interviews.

*Jason Rossiter has extensive experience in developing hiring and retention employment policies. If you need further information about updating or developing employment policies please contact Zashin & Rich at 216.696.4441.

---

To Report or Not To Report an EPLI Claim

by Stephen S. Zashin*

The Supreme Court of Connecticut in National Waste Associates, LLC v. Travelers Casualty and Surety Co. of America, 294 Conn. 511 (2010), reestablished the importance of employers timely notifying their employment practices liability insurance (“EPLI”) carrier of events potentially covered by their policy. National Waste Associates, LLC (“NWA”) filed a complaint against Travelers Casualty and Surety Co. of America (“Travelers”), after Travelers refused to provide a defense or indemnify NWA for a wrongful termination claim filed by one of NWA’s former employees. Connecticut’s highest court held that Travelers had no duty to indemnify NWA.

NWA purchased an EPLI policy from Travelers for the period of February 15, 2007 to February 15, 2009. On May 12, 2007, one of NWA’s former employees filed a wrongful termination action against NWA. Prior to filing her wrongful termination complaint and prior to NWA’s EPLI policy start date, the former employee also filed an action for unemployment benefits alleging that NWA wrongfully discharged her.

Based on the following provision in NWA’s EPLI policy, Travelers successfully argued that its policy precluded coverage:

This [l]iability coverage shall not apply to, and [Travelers] shall have no duty to defend or to pay, advance or reimburse [d]efense [e]xpenses for, any [c]laim…based upon, alleging, arising out of, or in any way relating to…any fact, circumstance, situation, transaction, event or [w]rongful [a]ct underlying or alleged in any prior or pending civil, criminal, administrative or regulatory proceeding..., against any [i]nsured as of or prior to [the effective date of the policy].

The Court agreed with Travelers that NWA’s former employee’s unemployment benefit proceeding was an “administrative proceeding” subject to the provision above. NWA’s former employee made the same allegations in both her unemployment proceeding and later filed complaint – that NWA wrongfully discharged her. Since the unemployment proceeding occurred prior to the start of NWA’s EPLI policy’s coverage date, Travelers was not required to defend or indemnity NWA against its former employees later filed wrongful discharge complaint.

As this case demonstrates, it is critical for an employer to understand the intricacies and nuances of its EPLI policy. When it is unclear as to whether an incident should be reported to the carrier, employers should err on the side of reporting the incident so as to not preclude them from coverage later. More specifically, employers should alert their EPLI carriers when a former employee alleges wrongful discharge even if done in connection with a claim for unemployment benefits.

*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience representing employers covered by EPLI insurance against claims of workplace discrimination, harassment and retaliation. If you need further information about EPLI coverage or reporting claims to EPLI providers please contact Stephen at 216.696.4441 or ssz@zrlaw.com.

---

FMLA ENFORCEMENT: Northern District of Illinois Bans Employers Doctor’s Note Policy

by Patrick M. Watts

Recently, the court for the Northern District of Illinois ruled that a policy requiring employees to produce a doctor’s note for each absence occurring during intermittent family medical leave violated the Family Medical Leave Act (“FMLA”). In Jackson v. Jernberg Industries, Inc., 2010 U.S. Dist. LEXIS 1581 (January 26, 2010), the court reasoned that such a policy was an impermissible interference by the employer. The court held that the policy was not supported by the language of the FMLA and accompanying administrative rules and it discouraged an employee’s right to leave under the FMLA.

The employer, Jernberg Industries, Inc., (“Jernberg”) maintained an attendance policy that assigned employees points for each day an employee missed work. Generally each absence equated to one point. However, if an employee missed two or more consecutive days and produced a doctor’s note Jernberg awarded only one point for all days missed. Jernberg expunged points upon the one year anniversary of receipt of a point. Accumulation of points triggered disciplinary actions: five points resulted in a written warning, eight points resulted in a second written warning, twelve points resulted in a three day suspension and fourteen points resulted in termination. The policy excluded leave taken under the FMLA. To receive FMLA leave, Jernberg required employees to sign a form stating they, “understood and agreed that for intermittent leave, documentation must be presented with each absence for the absence to be applied to the FMLA status.” To satisfy this requirement, Jernberg required a doctor’s note verifying the leave was related to an FMLA-certified condition.

The plaintiff went on continuous family medical leave from August 4, 2004 through October 24, 2004. Jernberg assessed no points to the plaintiff for this leave. On August 28, 2005, the plaintiff applied for intermittent family medical leave by completing Jernberg’s form with the above detailed language. Prior to his leave, the plaintiff produced a Certification of Health Care Provider stating that the plaintiff’s condition was a FMLA-certified condition, but did not list the specific dates the plaintiff would miss work. Jernberg approved the plaintiff’s intermittent leave. Between August 29, 2005 and February 6, 2006, the plaintiff took 88 days of intermittent FMLA-leave, all of which were supported by a doctor’s note verifying that the days were related to his FMLA-certified condition.

Between February and June of 2006, The plaintiff missed an additional 12 days of work, which he verbally claimed were related to his FMLA-certified condition but failed to produce a supporting doctor’s note. Jernberg assessed the plaintiff one point for each of the 12 days missed. By the end of June 2006, the plaintiff exceeded the allowable points limit, and on June 29, 2006, Jernberg terminated the plaintiff’s employment.

The plaintiff brought suit arguing that Jernberg’s policy interfered with his FMLA rights. In particular, he argued the policy was an impermissible recertification requirement. Under 29 U.S.C. § 2615 an employer cannot interfere with, restrain or deny the exercise of or the attempt to exercise any FMLA rights, including intermittent leave. Further, under 29 C.F.R. 825.220(b) an employer cannot refuse or discourage an employee from taking family medical leave. In response, Jernberg argued its policy was a reasonable safeguard against employee abuse of FMLA leave.

The Court granted the plaintiff’s motion for summary judgment finding that Jernberg’s policy of requiring third party approval was onerous, and thus an impermissible interference with the plaintiff’s FMLA rights. The court reasoned that the FMLA and supporting regulations do not expressly permit employers to request medical verification to substantiate absences taken during intermittent leave. To the contrary, the regulations expressly restrict employers from requesting additional information from health care providers beyond that required by a certification form. Additionally, the regulations provide employers the option of verifying absences through the recertification process once the recertification requirements are satisfied. However, even upon recertification, an employer cannot request a doctor’s note because it can only seek information required by a certification form. The court further noted, that as a practical matter, Jernberg’s policy discouraged the plaintiff from taking FMLA leave because it required the plaintiff to produce five doctor’s notes in a 12 month period and required him to produce an additional six more to satisfy its policy.

This case demonstrates that employers should not request medical information from a health care provider beyond that expressly permitted by the FMLA. In addition, employers that have policies similar to Jernberg should rewrite their policy to avoid violating the FMLA, and may want to contact an attorney to audit the entirety of their FMLA policies.

---

THE EMPEROR’S NEW CLOTHES: Fourth Circuit Rules On Donning and Doffing of Protective Gear Under a Collective Bargaining Agreement

by Jon M. Dileno*

Recently, the United States Court of Appeals for the Fourth Circuit upheld a decision allowing an employer to maintain a policy of not paying employees for time spent donning and doffing protective gear. Generally, the Fair Labor Standards Act (“FLSA”) requires employers to include in compensable work time the time spent donning and doffing if it is an integral and indispensible part of an employee’s principal activities. Under 29 U.S.C. § 203(o), an employer may exclude from compensable work time any time spent “changing clothes or washing at the beginning or end of each work day. . . by the express terms of or by custom or practice under a bona fide collective bargaining agreement. . . .” In Sepulveda v. Allen Family Foods, Inc., 591 F.3d 209 (4th Cir. 2009), the Fourth Circuit agreed that donning and doffing protective gear is “changing clothes” within the meaning of 29 U.S.C. § 203(o), thus, allowing an employer with an organized workforce to exclude this time from compensable work time if doing so is an established practice under a bone fide collective bargaining agreement (“CBA”).

The employer, Allen Family Foods (“Allen”), processed poultry. Prior to the start of a shift, Allen required employees to don protective gear in its locker room and to sanitize the gear by dipping their gloves into a tank, splashing solution onto their aprons and stepping through a foot bath. Allen gave employees a thirty minute lunch break during which time the production line was nonoperational. During scheduled lunch breaks, employees typically removed some of their protective gear. Upon returning to work, employees put their protective gear back on and re-sanitized. At the end of the shift, employees doffed their protective gear before leaving the site. As a long standing practice under their bona fide CBA, Allen did not pay its unionized employees for time spent donning and doffing protective gear before and after shifts or during lunch breaks.

In 2002, the union representing Allen’s employees attempted to negotiate pay for time spent donning and doffing protective gear. While it was the subject of collective bargaining, Allen rejected this term, and the parties did not incorporate such a term into the employee’s CBA. In 2007, employees initiated a lawsuit against Allen claiming violations of the FLSA for failing to compensate them for time spent donning and doffing protective gear. As their primary argument, the employees asserted that donning and doffing protective gear did not constitute “changing clothes” within the meaning of 29 U.S.C. § 203(o).

Upon completion of discovery, Allen filed a motion for summary judgment arguing that the plain meaning of § 203(o) permitted its pay practice. The District Court granted Allen’s motion finding that donning and doffing protective gear was “changing clothes” within the meaning of § 203(o). On appeal, the Fourth Circuit determined that two conditions must be met in order to trigger § 203(o): (1) the activity must constitute “changing clothes,” and, (2) the express terms of a CBA or practices under a bona fide CBA must exclude from compensable work time the time spent “changing clothes.”

Ultimately, the Fourth Circuit considered the plain meaning of the terms “changing” and “clothes” with the purpose of § 203(o) and determined that donning and doffing protective gear constituted “changing clothes.” Additionally, the employees conceded that Allen had a long standing practice under the CBA to exclude time spent donning and doffing protective gear from compensable work time. The Fourth Circuit found that § 203(o) permitted Allen’s pay practice.

As an ancillary argument, the employees argued sanitizing protective gear did not constitute “washing” under § 203(o). However, the Fourth Circuit disagreed, finding that the plain meaning of “washing” included sanitizing protective gear. The Fourth Circuit also rejected the employee’s argument that they should be paid for time spent donning and doffing before and after lunch breaks. The Court reasoned that this time actually occurred during a bona fide meal period under 29 U.S.C. § 785.19 and, in the alternative, that this time was de minimis.

In summary, § 203(o) applies only when the express terms of a bona fide CBA or customs or practices under a bona fide CBA exclude the donning and doffing of protective gear from compensable work time. Due to the complexity of this issue and the FLSA, employers should seek the advice of counsel if they have questions related to employee compensation.

*Jon M. Dileno has extensive experience in handling FLSA allegations and negotiating collective bargaining agreements for public and private sector employers.  If you need further information about the FLSA or collective bargaining please contact Jon at 216.696.4441 or jmd@zrlaw.com.

---

BULLS ON PARADE: Do State Laws Follow the Lilly Ledbetter Fair Pay Act

by Lois A. Gruhin

In December 2009, the New Jersey Superior Court decided that it will not follow the recent Congressional Amendment to Title VII known as the Lilly Ledbetter Fair Pay Act of 2009 (the “Act”). The Act, in its preamble, expressly rejects the United States Supreme Court decision Ledbetter v. Goodyear, 550 U.S. 618 (2007) (the “Ledbetter case”). The Act also extends the definition of unlawful employment practices. The extended definition includes occurrences when an individual is affected by application of a discriminatory compensation decision, including each time compensation is paid. In Alexander v. Seton Hall Univ., 410 N.J. Super. 574 (2009), the New Jersey Superior Court upheld a ruling that the plaintiff’s claims were time barred under the New Jersey Law Against Discrimination (“LAD”) despite the fact that Plaintiffs received a paycheck reflecting pay discrimination within the two year statute of limitations. This decision flatly rejected the Act by: (1) following the Ledbetter case and (2) failing to recognize an unlawful employment practice occurring when an individual receives compensation reflecting a discriminatory decision.

In August 2005, the plaintiffs discovered that their salaries were disproportionately lower than less senior, younger male faculty in similar positions. In July 2007, the plaintiffs filed their complaint alleging pay discrimination based on sex and age. Seton Hall filed a motion to dismiss arguing that the plaintiffs’ claims were time barred because they were not brought within the two year statute of limitations from the date Seton Hall made the alleged discriminatory decision to pay male faculty more then female faculty. The plaintiffs argued that their claims were not time barred because each paycheck reflecting pay discrimination constituted a continuous violation of LAD rather than a discrete discriminatory act occurring outside the statute of limitations.

The trial court granted Seton Hall’s motion to dismiss relying on the Ledbetter case. In the Ledbetter case, the United States Supreme Court ruled that Ledbetter was time barred from bringing her claim because the discriminatory decision to pay her less than her male counterparts occurred outside the statute of limitations. The United States Supreme Court rejected the argument that each paycheck constituted a continuous violation. The New Jersey Superior Court applied the reasoning in the Ledbetter case and held that the Act did not amend the LAD. As such, the Superior Court concluded that the statute of limitations for pay discrimination claims begins to run at the time the discriminatory decision is made. Any claims brought outside of the statute of limitations are time barred.

It remains unclear whether other states will follow the New Jersey decision to reject the Act or if this decision will spur state legislatures to amend state anti-discrimination laws to read similar to the Act. Therefore, until these questions and other interpretation questions are answered, employers should continue to monitor and retain compensation records indefinitely.

---

EEOC Claims Drop Slightly in 2009

by Jessica T. Tucci

COMPLAINTS FILED ANNUALLY WITH EEOC
Category	FY 2008	FY 2009	Percent Change
Total Charges	95,402	93,277	(2.2)%
Race	33,937	33,579	(1.1)%
Retaliation	32,690	33,613	2.8%
Sex	28,372	28,028	(1.2)%
Age	24,582	22,778	7.3%
Disability	19,453	21,451	10.3%
National Origin	10,601	11,134	5.0%
Religion	3,273	3,386	3.5%
Equal Pay Act	954	942	(1.3)%
Source: Equal Employment Opportunity Commission (Complaints can be filed in multiple categories.)

The number of workplace discrimination claims filed with the Equal Employment Opportunity Commission (“EEOC”) fell slightly from a record high of 95,402 claims filed in 2008 to 93,277 claims filed in 2009. The EEOC experienced a 15% spike in the number of discrimination claims filed in 2008 over the previous year, which led at least one EEOC official to incorrectly predict that claims might rise above 100,000 in 2009. While the number of claims filed in 2009 decreased, claims based on disability, religion, national origin and retaliation hit an all-time high. The record high number of disability claims comes in the wake of the Americans with Disabilities Act Amendments Act of 2008, which became effective January 1, 2009, and expanded protections under the law for disabled Americans.

To avoid facing an EEOC charge, employers should maintain open lines of communication with their employees so that their employees are less likely to cry foul in the event of a layoff, termination, reduction in hours or other important employment decision. Being concise, clear, open and honest with employees about changes in their employment status often provides an employee with a sense of closure and prevents the hassle of dealing with frivolous discrimination claims. Furthermore, employers should maintain clear and consistent Equal Employment Opportunity and anti-harassment reporting policies and take allegations of discrimination and harassment seriously by conducting thorough well documented investigations.

Factors influencing the large number of discrimination claims include increased diversity and demographic shifts in the labor force, a heightened awareness of the laws enforced by the EEOC and the high unemployment rate. Traditionally, the number of claims filed with the EEOC increases in tough economic times. As the economy continues to rebound, employers must maintain vigilant in their approach in understanding and complying with employment laws.

---

Z&R Shorts

Zashin & Rich Co., L.P.A. is pleased to announce the addition of Roy E. Lachman as the chair of the firm’s Class, Collective and Multidistrict Actions Group and Scott Coghlan as chair of the firm’s Workers’ Compensation Group.

Roy E. Lachman has over twenty-six years of experience as bank counsel, having served as General Counsel of AmTrust Bank and a number of its affiliated corporations. In addition, he also worked at a global law firm and as a Staff Attorney for a federal appeals court. He specializes in the law of banking and financial transactions, employment and discrimination matters, complex and class litigation, financial fraud, real estate and securities brokerage, insurance, legal compliance and internal investigations, and general commercial litigation. He has extensive experience dealing with administrative and regulatory agencies, both in helping clients avoid legal exposure and in limiting such exposure once it has arisen.

Scott Coghlan has over seventeen years of experience defending workers’ compensation claims. Scott has represented employers in hundreds of workers’ compensation lawsuits in more than fifty of Ohio’s common pleas courts, five courts of appeal, and the Ohio Supreme Court. Scott has won numerous jury verdicts resulting in the return of premiums to employers and regularly prosecutes and defends mandamus actions before the Franklin County Court of Appeals. He has also successfully obtained orders preventing claims for permanent total disability. Scott also defends employers with respect to claims of successorship liability, intentional torts and Violation of Specific Safety Rule (VSSR). He regularly counsels employers about developing workplace safety programs and establishing workers’ compensation premium reduction programs.

If you have any workers’ compensation issues or any employee injury issues, please contact Scott (sc@zrlaw.com) at 216.696.4441.

Zashin & Rich Would Like to Congratulate its 2010 SUPERLAWYERS®

George S. Crisci
Jon M. Dileno
Victoria A. Glowacki
Patrick J. Hoban
Jason Rossiter
Patrick M. Watts
Andrew A. Zashin
Stephen S. Zashin

Upcoming Speaking Engagements

Patrick Watts will be one of the presenters of “Employment Law Alphabet Soup” on June 8, 2010 at the Holiday Inn, Independence, Ohio. For more information, go to www.nbi-sems.com.

George Crisci will present “Human Resources Issues” on June 16, 2010 at the Holiday Inn, Independence, Ohio. For more information, go to www.nbi-sems.com.