Saturday, May 1, 2010

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

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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

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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.