By Brad E. Bennett*
As Z&R recently reported, on October 26, 2015, the 5th Circuit Court of Appeals scolded the National Labor Relations Board’s (NLRB) attack on mandatory arbitration agreements in the Murphy Oil decision. Murphy Oil was the second time in two years that the 5th Circuit overturned the NLRB’s position regarding class waivers in mandatory arbitration agreements. Undeterred, the NLRB is at it again in Acevedo v. Amex Card Services Co., case number 28–CA–123865.
In Amex, the NLRB once again ordered an employer to remove sections from its mandatory arbitration policy and from its employee signature form that require employees to waive their right to bring class and collective employment actions. Even though the employer’s arbitration policy clearly stated that individual employees were not barred from filing charges with the NLRB, the form employees had to sign acknowledging receipt of the policy did not include that language. As a result, the NLRB found that the policy and signature form, when read together, created an “ambiguity” that could lead workers to think they had no access to the NLRB.
In deciding Amex, the NLRB relied on Murphy Oil for the proposition that a company violates the NLRA by requiring employees to waive their right to bring class and collective claims. The NLRB simply ignored the glaring fact that the 5th Circuit overturned the NLRB’s position in the appeal of Murphy Oil, as it did in the previous case of D.R. Horton. In Murphy Oil, just like Amex, the employer required employees to sign arbitration agreements that prohibited class and collective actions. Murphy Oil also revised its arbitration agreement to state that employees were not barred from “participating in proceedings to adjudicate unfair labor practice charges before the” NLRB, similar to the wording in Amex’s arbitration agreement. The 5th Circuit made it clear that an employer does not engage in unfair labor practices by enforcing an arbitration agreement prohibiting employee collective actions and by requiring employment-related claims to be resolved through individual arbitration. The 5th Circuit also found that arbitration clauses that expressly state they do not prohibit individual employees from participating in proceedings before the NLRB cannot be reasonably interpreted otherwise.
Based upon the 5th Circuit’s previous holdings of Murphy Oil and D.R. Horton, the NLRB may once again be overturned should Amex decide to appeal. What should employers, who have arbitration agreements, do in the interim? Since the NLRB continues to defy federal courts by attacking arbitration agreements, employers should have their arbitration agreements reviewed to ensure that they comply with the 5th Circuit’s position. Taking time to review an arbitration agreement now may provide your company with the legal shield it needs should the NLRB decide to make it the next target for an attack.
*Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including assisting employers with the implementation and administration of alternative dispute resolution agreements. If you have any questions about arbitration agreements or other labor/employment matters, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Wednesday, December 16, 2015
Tuesday, December 15, 2015
EMPLOYMENT LAW QUARTERLY | Volume XVII, Issue iii
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In June, the U.S. Supreme Court issued a landmark decision in Obergefell v. Hodges, holding that all states must issue marriage licenses to same-sex couples and recognize same-sex marriages validly performed in other states. The legalization of same-sex marriage affects the way employers provide benefits to same-sex employees. Marriage is not the only front on which LGBT rights are evolving. With much of the public and the media’s spotlight on changes in the law regarding same-sex marriage, people may not realize that several federal agencies already interpret anti-discrimination laws to prohibit discrimination on the basis of sexual orientation and gender identity.
The Equal Employment Opportunity Commission (“EEOC”), the Department of Labor (“DOL”), and the Department of Justice (“DOJ”) all take the position that statutes and orders prohibiting sex discrimination, such as Title VII of the Civil Rights Act of 1964, prohibit discrimination on the basis of gender identity (e.g., identifying as transsexual or transgender). These federal agencies reason that discrimination on the basis of gender identity is a form of sex discrimination. The EEOC and the DOL have stated further that prohibitions against sex discrimination protect discrimination on the basis of sexual orientation as well. Therefore, an individual may file a charge of discrimination with the EEOC on the basis of sexual orientation or gender identity, as a form of sex discrimination. Indeed, the EEOC has reported an increase in sexual orientation and gender identity-based charges, from 765 filed in 2013 to 1,093 filed in 2014.
Ohio’s anti-discrimination laws prohibit discrimination on the basis of sex, but Ohio courts have yet to interpret state law to prohibit sexual orientation discrimination. While Ohio courts generally interpret Ohio’s discrimination law to match federal anti-discrimination protections, Ohio’s 10th district appellate court ruled in its 2014 decision in Burns v. Ohio State Univ. College of Veterinary Med., 2014-Ohio-1190, 2014 Ohio App. LEXIS 1101 (10th App. Dist. 2014), that the state’s prohibition of sex discrimination does not extend to sexual orientation discrimination. Given the rapidly changing legal landscape regarding LGBT rights, Ohio courts’ stance may soon shift. Regardless, employers should be aware that employees experiencing sexual orientation or sexual identity discrimination may seek recourse with state or federal agencies or the court system.
*Ami J. Patel practices in all areas of labor and employment law. If you have questions about your employment policies in light of legal changes regarding LGBT individuals, please contact Ami at (ajp@zrlaw.com) or 216.696.4441.
Years ago, we watched with bated breath as the French mastiff Hooch helped Detective Scott Turner (Tom Hanks) apprehend a murderer. Sadly (*spoiler alert*), Hooch died in the film’s final minutes. However, had he lived and Detective Turner continued to use Hooch in police work, the Cypress Beach Police Department may have faced a question now facing many police departments, officers, and courts – should police departments pay for off-the-clock time spent caring for police dogs?
The Fair Labor Standards Act (“FLSA”) generally requires employers to compensate employees for all hours worked. “Work” includes “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer.” Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U.S. 590 (1944). In addition, the FLSA requires that employers compensate employees for activities performed before or after the employee’s regular work shift if the “activities are an integral and indispensable part of the principle activity” for which the employee is employed. Steiner v. Mitchell, 350 U.S. 247 (1956).
Courts and the Department of Labor have concluded that time-spent off-the-clock caring for police dogs constitutes work and an “integral and indispensable part” of the officer’s principle activity of employment.Specifically, time spent training the dog at home and the dog’s “care” are compensable. U.S. Dept. of Labor Wage and Hour Opinion Letter August 11, 1993. “Care” includes: bathing, brushing, exercising, feeding, grooming, related cleaning of the dog’s kennel or transport vehicle, administering medicine for illness, and transporting the dog to and from the veterinarian. So how much time must an employer compensate law enforcement personnel for these activities and at what rate?
Generally, employers must pay employees a rate of at least one and one-half times the employee’s regular rate of pay for hours worked in excess of 40 hours in a week. 29 U.S.C. §207(a)(1). However, employers may calculate law enforcement personnel overtime over a longer time-period, up to 171 hours in 28-day period. 29 U.S.C. §207(k). In addition, the FLSA allows employers and employees to agree upon different straight-time hourly rates where the employee performs “two or more kinds of work.” 29 U.S.C. §207(g). In the event an employer agrees upon a different straight-time hourly rate for dog-care, it must ensure that it only pays that different rate for dog-care and not law enforcement activities.
How much time a police department must compensate its personnel to care for police dogs varies by court.In one case, the court concluded the District of Columbia had to pay its officers 30-minutes per day (seven days/week) for “the care, feeding, and grooming” of the police dogs. Levering v. District of Columbia, 869 F. Supp. 24 (D.C. Cir. 1994). However, another court upheld the City of Cincinnati’s agreement, reached through a collective bargaining agreement, to compensate its canine officers for 17 minutes of straight-time per day. Brock v. City of Cincinnati, 236 F.3d 793 (6th Cir. 2001). There, in finding the agreement Cincinnati reached with its police union reasonable, the court considered the following additional benefits the City provided (among others): take-home vehicles; concrete-based fenced dog kennel at the officer’s home; payment of food and veterinary care; and the benefit of having a highly trained police dog as a family pet.
Employers that maintain police department canine units should review their compensation system to ensure they are properly compensating those caring for the canines. When determining what constitutes proper payment, in addition to an hourly rate, employers may consider other benefits provided. Employers should attempt to reach an agreement with personnel on a reasonable amount of compensation and contact counsel with questions.
*Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office.He is well versed in all areas of labor and employment law including FLSA compliance.If you have questions about the FLSA and police department canine units, please contact Brad (beb@zrlaw.com) at 614.224.4411.
“Ok we got Bin Laden . . . let’s go get Kasich next . . . who’s with me?” “[C]an’t believe what a snake my boss is. . . . he needs to keep his [creepy] hands to himself . . . just an all around d-bag!!” “If you are on public assistance, you may not have additional children and must be on birth control (e.g. an IUD).” These are statements that employees made on Facebook for which they received discipline, yet courts and an arbitrator reached different conclusions regarding the appropriateness of the discipline.
The decisions raise many questions. Can employers discipline employees for comments, posts, etc. that employees make while off-duty on non-employer social media sites? What standards apply to employee off-duty conduct? The arbitrator evaluating whether the Ohio Department of Rehabilitation and Correction had just cause to terminate the employee who made the Bin Laden comment above considered these issues. State of Ohio, Ohio Dep’t of Rehab. and Corr., (Pincus, Mar. 6, 2013). There, four employees who worked in the same correctional institution “liked” the corrections officer’s Bin Laden Facebook comment, which he posted off-duty. The officer’s Facebook profile included his job location and public employee status. Once the employer learned of the comment, it investigated and ultimately discharged the officer. However, the arbitrator concluded that the officer’s statement was nothing more than empty words. In addition, the employer’s “E-mail, Internet, and On-line Services Use” policy did not place the employee on notice that the policy covered his off-duty conduct. As a result, the arbitrator concluded that while officer’s alleged threat justified a 14-month suspension, the employer did not have just cause to terminate his employment.
The First Amendment protects a public employee’s right “to speak as a citizen addressing matters of public concern.” Garcetti v. Ceballos, 547 U.S. 410 (2006). A public employee must show the following to establish the First Amendment protected his or her speech: (1) the employee spoke as a private citizen rather than pursuant to official duties; (2) the speech involved a matter of public concern; and (3) the employee’s “interest as a citizen” in commenting on the matter outweighed the State’s interest, “as an employer, in promoting the efficiency of the public services it performs through its employees.” Westmoreland v. Sutherland, 662 F.3d 714 (6th Cir. 2011).
Employees have raised the First Amendment as a defense to their social media posts in a number of contexts with varying results. For example, the court affirmed the discharge of the children’s services worker who made the above (and many other) comments about people who received public assistance. Shepherd v. McGee, 986 F.Supp. 2d 1211 (D. Or. 2013). The court reasoned that since her comments were banter “rather than speech intended to help the public actually evaluate the performance of a public agency,” they stood “on the periphery of First Amendment protection.” The court also emphasized the heightened government interest that existed since the employee held a “public contact role.” In addition, the employee’s statements impaired her ability to do her job – testify at proceedings, since her statements raised credibility issues for prosecutors.
In evaluating employee conduct, discipline, and social media use, it is helpful for employers to have social media and computer use policies. However, employers must be cautious about the content and prohibitions included in such policies. The National Labor Relations Board (“NLRB”) analyzes whether employers violate Section 7 of the National Labor Relations Act (“NLRA”), which guarantees employees the right to join unions and engage in “concerted activity” for the purposes of “mutual aid or protection.” 29 U.S.C. §157. In the social media context, the NLRB considers whether an employee could reasonably construe a rule or policy to chill the employee’s exercise of their Section 7 rights.
The NLRB has shown it will go to great lengths to protect employee speech. In Three D, LLC v. NLRB, the Second Circuit affirmed the NLRB’s ruling that an employee’s Facebook post that the employer was “[s]uch an asshole” was concerted, protected activity. No. 14-3284, 2015 U.S. App. LEXIS 18493 (2d Cir. Oct. 21, 2015). The NLRB found the activity concerted because it involved multiple employees and protected because it involved workplace complaints about tax withholdings. Furthermore, the statements were within the NLRA’s protection because the comment at issue did not mention, let alone disparage, the employer’s products. Therefore, at least according to the NLRB, an employee may call their boss an “asshole” on social media without repercussion.
Beyond controlling and responding to employee use of social media, the prevalence of social media bleeds into the hiring process. Social media provides employers with another forum to post jobs and conduct background checks. However, employers should engage in social media checks with caution. First, employers should consider the accuracy of the information (e.g., potential for false profiles or accounts). In addition, by viewing a prospective employee’s social media account, the employer may incidentally obtain information regarding the individual’s race, gender, national origin, religion, age, disability, or genetic background. This knowledge could expose the employer to claims of discrimination. Therefore, any employer who chooses to review prospective employees’ social media accounts should take the following precautionary steps: (1) ensure the person reviewing social media accounts is wholly uninvolved in making the hiring decision; (2) only review publicly available social media; and (3) do not request social media account passwords during the hiring process.
The growing prevalence of social media has created a host of potential issues for employers. Given social media’s fast-paced growth and ever-changing nature, employers should constantly keep abreast of the current status of the law.
*Drew C. Piersall works in the firm’s Columbus office and practices in all areas of labor and employment law. If you have any questions about employee use of social media, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Employers that wait too long to report claims to an Employment Practices Liability Insurance (“EPLI”) carrier may lose coverage. A federal court recently determined that an employer violated its EPLI policy when it waited nearly two years to notify its insurance carrier of an Equal Employment Opportunity Commission (“EEOC”) Charge of Discrimination (“Charge”). E. Dillon Co. v. Travelers Cas. & Sur. Co. of Am., No. 1:14-cv-00070, 2015 U.S. Dist. LEXIS 76295 (W.D. Va. June 12, 2015). As a result, the insurance carrier did not have to provide coverage for the EEOC Charge and subsequent litigation.
The employer twice waited too long to provide notice of claims to its EPLI carrier. First, the employer waited almost 23 months after it received notice of a pending EEOC Charge (Apr. 4, 2011) before notifying the insurance carrier (Feb. 28, 2013). During that time, the EEOC dismissed the Charge (Apr. 28, 2012), reversed course and found reasonable cause to believe the employer violated the Americans with Disabilities Act (Sept. 27, 2012) and scheduled mediation (Mar. 14, 2013). Later, the employer waited approximately five months after it was served with a lawsuit related to the Charge (Sept. 9, 2013) to notify the insurance carrier of the lawsuit (Feb. 3, 2014). The employer provided notice of the lawsuit eight days before court-scheduled mediation was to occur.
The insurance carrier denied both claims after it concluded the employer failed to provide timely notice. The insurance policy covered any “Employment Claim,” which specifically included EEOC proceedings, and required the employer to provide written notice of claims “as soon as practicable.” The insurance carrier concluded that the employer’s decision to wait nearly 23 months and five months respectively to provide notice of the claims violated the “as soon as practicable” requirement.
The court agreed and concluded that the employer’s failure to provide timely notice constituted a material breach of the insurance agreement.The employer’s notification delay was unreasonable because the insurance agreement specifically defined “Employment Claim” to include EEOC proceedings. In addition, the delay prejudiced the insurance carrier, because the carrier: lost the chance to investigate the claims, to direct the employer’s defense, and t0 attempt to resolve the matter before the EEOC found reasonable cause; and the EEOC’s proposed Conciliation Agreement ($178,000 payment) diminished any settlement leverage the insurance company may have possessed.The court concluded the length of delay alone was sufficient to find that the employer materially breached the insurance agreement. In reaching this conclusion, the court considered other court cases which held that any delay beyond 75 days, without reasonable excuse, was unreasonable.
Upon receipt of a potential claim, employers should carefully review their EPLI policy’s reporting requirements and work with their brokers to avoid losing coverage for failing to timely report.Finally, all employers should consider whether to purchase an EPLI policy.
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law, is head of the firm’s Labor and Employment Groups.If you have questions about this article, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.
On October 30, 2015, the Equal Employment Opportunity Commission (“EEOC”) released a Notice of Proposed Rulemaking setting forth proposed changes to the regulations governing employer wellness programs in relation to Title II of the Genetic Information Nondiscrimination Act (“GINA”). GINA is a federal law that, in part, protects employees and applicants from discrimination based upon genetic information, including that of their family members. The proposed rule seeks to clarify the circumstances under which employers may offer inducements (i.e., wellness program incentives) in exchange for health-status information of employee spouses who participate in the employer’s group health plan.
A wellness program is “a program offered by an employer that is designed to promote health and prevent disease.” 42 U.S.C. 300gg-4(j)(1)(a). Wellness programs include a wide range of employer-sponsored services, from smoking cessation to workout programs to health assessments. Under GINA, wellness programs cannot condition employee inducements upon employee genetic information. “Genetic information” includes, among other things, information about employees and their family members’ (including spouses) genetic tests and family medical history.
Employers covered by GINA (i.e., those with 15 or more employees) are prohibited from requesting, requiring, or purchasing employee genetic information, unless a statutory exception applies. One exception allows employers to obtain genetic information as part of employer-provided voluntary health or genetic services, including wellness programs. This exception only applies if: (1) the provision of genetic information is actually voluntary (i.e., employees are not required to provide the genetic information and there is no penalty for not providing it); and (2) the individual provides “prior knowing, voluntary, and written authorization.” 29 C.F.R. 1635.8(b)(2)(i).
The EEOC’s proposed rule adds an additional requirement that an employer’s wellness program must be “reasonably designed to promote health or prevent disease.” This means the wellness program “must have a reasonable chance of improving the health of, or preventing disease in, participating individuals, and must not be overly burdensome, a subterfuge for violating [GINA] or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease.”
The EEOC’s proposed rule explains that, under GINA, employers can offer limited inducements for information about the current or past health status of an employee’s spouse covered by the employer’s group health plan. The provision of this information must be part of a “health risk assessment,” (e.g., medical questionnaire or examination to detect high cholesterol) conducted in connection with the spouse’s receipt of health or genetic services as part of the employer’s wellness program. The wellness program inducements may take various forms, from discounts or rebates to the avoidance of a premium surcharge. The total inducements offered under the wellness program may not exceed 30 percent of the total annual costs of coverage. To be valid, the provision of the spouse’s information must meet the requirements of GINA’s wellness program exception discussed above (i.e., voluntary and with prior written authorization). Furthermore, the information provided in exchange for the inducement must be limited to current and past health status and cannot include genetic information such as results of genetic tests.
The proposed exception for inducements is limited to employee spouses who are covered under the employer’s group health plan. Employers may not provide inducements in exchange for employee genetic information or their biological or non-biological child’s genetic information or current or past health status. Employers may offer inducements for completion of health risk assessments that ask questions about family medical history and other genetic information; however, the employer must make it clear that the inducement will be available regardless of whether the specific genetic information questions are answered.
Prior to announcing the proposed rule, the EEOC initiated litigation taking issue with multiple employers’ wellness programs. See, e.g., EEOC v. Honeywell Int’l. Inc., N0. 0:14-cv-04517 (D. Minn. 2014); EEOC v. Orion Energy Systems, Inc., N0. 1:14-cv-01019 (E.D. Wis. 2014). In Honeywell, the EEOC sought a temporary restraining order and preliminary injunction preventing the company from imposing surcharge penalties on employees and spouses that did not participate in biometric testing for health data including cholesterol and nicotine levels. The EEOC argued that the wellness program violated GINA and the Americans with Disabilities Act. The court denied the EEOC’s motion, but noted that “great uncertainty persists in how the [Affordable Care Act], [Americans with Disabilities Act] and other federal statutes such as GINA are intended to interact,” with respect to wellness programs.
The EEOC’s proposed GINA rule comes on the heels of an April 2015 proposed rule (discussed by Z&R here) addressing, in part, amendments to the EEOC’s regulations and guidance on the Americans with Disabilities Act relating to employer wellness programs. The comment period for the proposed Americans with Disabilities Act rule closed in June. The EEOC may make revisions in light of the comments before voting on the final rule. The EEOC is accepting comments on its proposed GINA rule until January 28, 2016. Employers can anticipate continued developments, and litigation, in this nascent area of employment law.
*Patrick Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about wellness programs, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Zashin & Rich is pleased to congratulate the following 2016 Super Lawyers:
Brad E. Bennett, George S. Crisci, Jon M. Dileno, Jonathan J. Downes, Michele L. Jakubs, and Stephen S. Zashin were named Super Lawyers. Helena Oroz, Ami J. Patel, and David R. Vance were named Rising Stars.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.
Super Lawyers Magazine features the list and profiles of selected attorneys and is distributed to attorneys in the state or region and the ABA-accredited law school libraries. Super Lawyers is also published as a special section in leading city and regional magazines across the country.
Lisa A. Kainec Joins Z&R Cleveland
Lisa is a legal and human resources professional with 20+ years of experience in employment law across multiple industries including retail, healthcare, municipal, professional services, construction and manufacturing. Lisa has worked in-house as a human resources executive and senior employment counsel at Jo-Ann Stores. Lisa was a Certified Specialist in Labor and Employment Law. Lisa devotes her practice to providing practical strategies for proactive workforce management as well as vigorous defense of employee claims and litigation.
Brad E. Bennett Joins Z&R Columbus
Brad has 18 years of employment law experience as an attorney and human resources professional across multiple industries including healthcare, aviation, retail, public sector and construction. He represents public and private sector employers in all aspects of labor and employment law. In addition to his litigation practice, Brad represents public sector employers in collective bargaining, grievance arbitrations, and impasse proceedings. Additionally, Brad has drafted civil service rules for municipalities, represents public sector employers before the State Personnel Board of Review (SPBR), and counsels public employers regarding compliance with Ohio’s Open Meetings Act and Public Records Act. Brad is an OSBA Certified Specialist in Labor and Employment.
- Quiet Changes to Employment Laws: Federal Agencies Recognize Sexual Orientation and Gender Identity Discrimination
- How Much Is That Doggie In the Window? Or, Rather, How Much Do Employers Have to Pay Police Officers To Care For Those Police Doggies
- My Employee Said What on Facebook?
- Employment Practices Liability Insurance – Do Not Wait to Notify Carrier of Claims
- EEOC to Change Genetic Information Nondiscrimination Act Regulations on Wellness Programs
- Z&R SHORTS
Quiet Changes to Employment Laws: Federal Agencies Recognize Sexual Orientation and Gender Identity Discrimination
By Ami J. Patel*In June, the U.S. Supreme Court issued a landmark decision in Obergefell v. Hodges, holding that all states must issue marriage licenses to same-sex couples and recognize same-sex marriages validly performed in other states. The legalization of same-sex marriage affects the way employers provide benefits to same-sex employees. Marriage is not the only front on which LGBT rights are evolving. With much of the public and the media’s spotlight on changes in the law regarding same-sex marriage, people may not realize that several federal agencies already interpret anti-discrimination laws to prohibit discrimination on the basis of sexual orientation and gender identity.
The Equal Employment Opportunity Commission (“EEOC”), the Department of Labor (“DOL”), and the Department of Justice (“DOJ”) all take the position that statutes and orders prohibiting sex discrimination, such as Title VII of the Civil Rights Act of 1964, prohibit discrimination on the basis of gender identity (e.g., identifying as transsexual or transgender). These federal agencies reason that discrimination on the basis of gender identity is a form of sex discrimination. The EEOC and the DOL have stated further that prohibitions against sex discrimination protect discrimination on the basis of sexual orientation as well. Therefore, an individual may file a charge of discrimination with the EEOC on the basis of sexual orientation or gender identity, as a form of sex discrimination. Indeed, the EEOC has reported an increase in sexual orientation and gender identity-based charges, from 765 filed in 2013 to 1,093 filed in 2014.
Ohio’s anti-discrimination laws prohibit discrimination on the basis of sex, but Ohio courts have yet to interpret state law to prohibit sexual orientation discrimination. While Ohio courts generally interpret Ohio’s discrimination law to match federal anti-discrimination protections, Ohio’s 10th district appellate court ruled in its 2014 decision in Burns v. Ohio State Univ. College of Veterinary Med., 2014-Ohio-1190, 2014 Ohio App. LEXIS 1101 (10th App. Dist. 2014), that the state’s prohibition of sex discrimination does not extend to sexual orientation discrimination. Given the rapidly changing legal landscape regarding LGBT rights, Ohio courts’ stance may soon shift. Regardless, employers should be aware that employees experiencing sexual orientation or sexual identity discrimination may seek recourse with state or federal agencies or the court system.
*Ami J. Patel practices in all areas of labor and employment law. If you have questions about your employment policies in light of legal changes regarding LGBT individuals, please contact Ami at (ajp@zrlaw.com) or 216.696.4441.
How Much Is That Doggie In the Window? Or, Rather, How Much Do Employers Have to Pay Police Officers To Care For Those Police Doggies
By Brad E. Bennett*Years ago, we watched with bated breath as the French mastiff Hooch helped Detective Scott Turner (Tom Hanks) apprehend a murderer. Sadly (*spoiler alert*), Hooch died in the film’s final minutes. However, had he lived and Detective Turner continued to use Hooch in police work, the Cypress Beach Police Department may have faced a question now facing many police departments, officers, and courts – should police departments pay for off-the-clock time spent caring for police dogs?
The Fair Labor Standards Act (“FLSA”) generally requires employers to compensate employees for all hours worked. “Work” includes “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer.” Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U.S. 590 (1944). In addition, the FLSA requires that employers compensate employees for activities performed before or after the employee’s regular work shift if the “activities are an integral and indispensable part of the principle activity” for which the employee is employed. Steiner v. Mitchell, 350 U.S. 247 (1956).
Courts and the Department of Labor have concluded that time-spent off-the-clock caring for police dogs constitutes work and an “integral and indispensable part” of the officer’s principle activity of employment.Specifically, time spent training the dog at home and the dog’s “care” are compensable. U.S. Dept. of Labor Wage and Hour Opinion Letter August 11, 1993. “Care” includes: bathing, brushing, exercising, feeding, grooming, related cleaning of the dog’s kennel or transport vehicle, administering medicine for illness, and transporting the dog to and from the veterinarian. So how much time must an employer compensate law enforcement personnel for these activities and at what rate?
Generally, employers must pay employees a rate of at least one and one-half times the employee’s regular rate of pay for hours worked in excess of 40 hours in a week. 29 U.S.C. §207(a)(1). However, employers may calculate law enforcement personnel overtime over a longer time-period, up to 171 hours in 28-day period. 29 U.S.C. §207(k). In addition, the FLSA allows employers and employees to agree upon different straight-time hourly rates where the employee performs “two or more kinds of work.” 29 U.S.C. §207(g). In the event an employer agrees upon a different straight-time hourly rate for dog-care, it must ensure that it only pays that different rate for dog-care and not law enforcement activities.
How much time a police department must compensate its personnel to care for police dogs varies by court.In one case, the court concluded the District of Columbia had to pay its officers 30-minutes per day (seven days/week) for “the care, feeding, and grooming” of the police dogs. Levering v. District of Columbia, 869 F. Supp. 24 (D.C. Cir. 1994). However, another court upheld the City of Cincinnati’s agreement, reached through a collective bargaining agreement, to compensate its canine officers for 17 minutes of straight-time per day. Brock v. City of Cincinnati, 236 F.3d 793 (6th Cir. 2001). There, in finding the agreement Cincinnati reached with its police union reasonable, the court considered the following additional benefits the City provided (among others): take-home vehicles; concrete-based fenced dog kennel at the officer’s home; payment of food and veterinary care; and the benefit of having a highly trained police dog as a family pet.
Employers that maintain police department canine units should review their compensation system to ensure they are properly compensating those caring for the canines. When determining what constitutes proper payment, in addition to an hourly rate, employers may consider other benefits provided. Employers should attempt to reach an agreement with personnel on a reasonable amount of compensation and contact counsel with questions.
*Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office.He is well versed in all areas of labor and employment law including FLSA compliance.If you have questions about the FLSA and police department canine units, please contact Brad (beb@zrlaw.com) at 614.224.4411.
My Employee Said What on Facebook?
By Drew C. Piersall*“Ok we got Bin Laden . . . let’s go get Kasich next . . . who’s with me?” “[C]an’t believe what a snake my boss is. . . . he needs to keep his [creepy] hands to himself . . . just an all around d-bag!!” “If you are on public assistance, you may not have additional children and must be on birth control (e.g. an IUD).” These are statements that employees made on Facebook for which they received discipline, yet courts and an arbitrator reached different conclusions regarding the appropriateness of the discipline.
The decisions raise many questions. Can employers discipline employees for comments, posts, etc. that employees make while off-duty on non-employer social media sites? What standards apply to employee off-duty conduct? The arbitrator evaluating whether the Ohio Department of Rehabilitation and Correction had just cause to terminate the employee who made the Bin Laden comment above considered these issues. State of Ohio, Ohio Dep’t of Rehab. and Corr., (Pincus, Mar. 6, 2013). There, four employees who worked in the same correctional institution “liked” the corrections officer’s Bin Laden Facebook comment, which he posted off-duty. The officer’s Facebook profile included his job location and public employee status. Once the employer learned of the comment, it investigated and ultimately discharged the officer. However, the arbitrator concluded that the officer’s statement was nothing more than empty words. In addition, the employer’s “E-mail, Internet, and On-line Services Use” policy did not place the employee on notice that the policy covered his off-duty conduct. As a result, the arbitrator concluded that while officer’s alleged threat justified a 14-month suspension, the employer did not have just cause to terminate his employment.
The First Amendment protects a public employee’s right “to speak as a citizen addressing matters of public concern.” Garcetti v. Ceballos, 547 U.S. 410 (2006). A public employee must show the following to establish the First Amendment protected his or her speech: (1) the employee spoke as a private citizen rather than pursuant to official duties; (2) the speech involved a matter of public concern; and (3) the employee’s “interest as a citizen” in commenting on the matter outweighed the State’s interest, “as an employer, in promoting the efficiency of the public services it performs through its employees.” Westmoreland v. Sutherland, 662 F.3d 714 (6th Cir. 2011).
Employees have raised the First Amendment as a defense to their social media posts in a number of contexts with varying results. For example, the court affirmed the discharge of the children’s services worker who made the above (and many other) comments about people who received public assistance. Shepherd v. McGee, 986 F.Supp. 2d 1211 (D. Or. 2013). The court reasoned that since her comments were banter “rather than speech intended to help the public actually evaluate the performance of a public agency,” they stood “on the periphery of First Amendment protection.” The court also emphasized the heightened government interest that existed since the employee held a “public contact role.” In addition, the employee’s statements impaired her ability to do her job – testify at proceedings, since her statements raised credibility issues for prosecutors.
In evaluating employee conduct, discipline, and social media use, it is helpful for employers to have social media and computer use policies. However, employers must be cautious about the content and prohibitions included in such policies. The National Labor Relations Board (“NLRB”) analyzes whether employers violate Section 7 of the National Labor Relations Act (“NLRA”), which guarantees employees the right to join unions and engage in “concerted activity” for the purposes of “mutual aid or protection.” 29 U.S.C. §157. In the social media context, the NLRB considers whether an employee could reasonably construe a rule or policy to chill the employee’s exercise of their Section 7 rights.
The NLRB has shown it will go to great lengths to protect employee speech. In Three D, LLC v. NLRB, the Second Circuit affirmed the NLRB’s ruling that an employee’s Facebook post that the employer was “[s]uch an asshole” was concerted, protected activity. No. 14-3284, 2015 U.S. App. LEXIS 18493 (2d Cir. Oct. 21, 2015). The NLRB found the activity concerted because it involved multiple employees and protected because it involved workplace complaints about tax withholdings. Furthermore, the statements were within the NLRA’s protection because the comment at issue did not mention, let alone disparage, the employer’s products. Therefore, at least according to the NLRB, an employee may call their boss an “asshole” on social media without repercussion.
Beyond controlling and responding to employee use of social media, the prevalence of social media bleeds into the hiring process. Social media provides employers with another forum to post jobs and conduct background checks. However, employers should engage in social media checks with caution. First, employers should consider the accuracy of the information (e.g., potential for false profiles or accounts). In addition, by viewing a prospective employee’s social media account, the employer may incidentally obtain information regarding the individual’s race, gender, national origin, religion, age, disability, or genetic background. This knowledge could expose the employer to claims of discrimination. Therefore, any employer who chooses to review prospective employees’ social media accounts should take the following precautionary steps: (1) ensure the person reviewing social media accounts is wholly uninvolved in making the hiring decision; (2) only review publicly available social media; and (3) do not request social media account passwords during the hiring process.
The growing prevalence of social media has created a host of potential issues for employers. Given social media’s fast-paced growth and ever-changing nature, employers should constantly keep abreast of the current status of the law.
*Drew C. Piersall works in the firm’s Columbus office and practices in all areas of labor and employment law. If you have any questions about employee use of social media, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Employment Practices Liability Insurance – Do Not Wait to Notify Carrier of Claims
By Stephen S. Zashin*Employers that wait too long to report claims to an Employment Practices Liability Insurance (“EPLI”) carrier may lose coverage. A federal court recently determined that an employer violated its EPLI policy when it waited nearly two years to notify its insurance carrier of an Equal Employment Opportunity Commission (“EEOC”) Charge of Discrimination (“Charge”). E. Dillon Co. v. Travelers Cas. & Sur. Co. of Am., No. 1:14-cv-00070, 2015 U.S. Dist. LEXIS 76295 (W.D. Va. June 12, 2015). As a result, the insurance carrier did not have to provide coverage for the EEOC Charge and subsequent litigation.
The employer twice waited too long to provide notice of claims to its EPLI carrier. First, the employer waited almost 23 months after it received notice of a pending EEOC Charge (Apr. 4, 2011) before notifying the insurance carrier (Feb. 28, 2013). During that time, the EEOC dismissed the Charge (Apr. 28, 2012), reversed course and found reasonable cause to believe the employer violated the Americans with Disabilities Act (Sept. 27, 2012) and scheduled mediation (Mar. 14, 2013). Later, the employer waited approximately five months after it was served with a lawsuit related to the Charge (Sept. 9, 2013) to notify the insurance carrier of the lawsuit (Feb. 3, 2014). The employer provided notice of the lawsuit eight days before court-scheduled mediation was to occur.
The insurance carrier denied both claims after it concluded the employer failed to provide timely notice. The insurance policy covered any “Employment Claim,” which specifically included EEOC proceedings, and required the employer to provide written notice of claims “as soon as practicable.” The insurance carrier concluded that the employer’s decision to wait nearly 23 months and five months respectively to provide notice of the claims violated the “as soon as practicable” requirement.
The court agreed and concluded that the employer’s failure to provide timely notice constituted a material breach of the insurance agreement.The employer’s notification delay was unreasonable because the insurance agreement specifically defined “Employment Claim” to include EEOC proceedings. In addition, the delay prejudiced the insurance carrier, because the carrier: lost the chance to investigate the claims, to direct the employer’s defense, and t0 attempt to resolve the matter before the EEOC found reasonable cause; and the EEOC’s proposed Conciliation Agreement ($178,000 payment) diminished any settlement leverage the insurance company may have possessed.The court concluded the length of delay alone was sufficient to find that the employer materially breached the insurance agreement. In reaching this conclusion, the court considered other court cases which held that any delay beyond 75 days, without reasonable excuse, was unreasonable.
Upon receipt of a potential claim, employers should carefully review their EPLI policy’s reporting requirements and work with their brokers to avoid losing coverage for failing to timely report.Finally, all employers should consider whether to purchase an EPLI policy.
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law, is head of the firm’s Labor and Employment Groups.If you have questions about this article, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.
EEOC to Change Genetic Information Nondiscrimination Act Regulations on Wellness Programs
By Patrick Hoban*On October 30, 2015, the Equal Employment Opportunity Commission (“EEOC”) released a Notice of Proposed Rulemaking setting forth proposed changes to the regulations governing employer wellness programs in relation to Title II of the Genetic Information Nondiscrimination Act (“GINA”). GINA is a federal law that, in part, protects employees and applicants from discrimination based upon genetic information, including that of their family members. The proposed rule seeks to clarify the circumstances under which employers may offer inducements (i.e., wellness program incentives) in exchange for health-status information of employee spouses who participate in the employer’s group health plan.
A wellness program is “a program offered by an employer that is designed to promote health and prevent disease.” 42 U.S.C. 300gg-4(j)(1)(a). Wellness programs include a wide range of employer-sponsored services, from smoking cessation to workout programs to health assessments. Under GINA, wellness programs cannot condition employee inducements upon employee genetic information. “Genetic information” includes, among other things, information about employees and their family members’ (including spouses) genetic tests and family medical history.
Employers covered by GINA (i.e., those with 15 or more employees) are prohibited from requesting, requiring, or purchasing employee genetic information, unless a statutory exception applies. One exception allows employers to obtain genetic information as part of employer-provided voluntary health or genetic services, including wellness programs. This exception only applies if: (1) the provision of genetic information is actually voluntary (i.e., employees are not required to provide the genetic information and there is no penalty for not providing it); and (2) the individual provides “prior knowing, voluntary, and written authorization.” 29 C.F.R. 1635.8(b)(2)(i).
The EEOC’s proposed rule adds an additional requirement that an employer’s wellness program must be “reasonably designed to promote health or prevent disease.” This means the wellness program “must have a reasonable chance of improving the health of, or preventing disease in, participating individuals, and must not be overly burdensome, a subterfuge for violating [GINA] or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease.”
The EEOC’s proposed rule explains that, under GINA, employers can offer limited inducements for information about the current or past health status of an employee’s spouse covered by the employer’s group health plan. The provision of this information must be part of a “health risk assessment,” (e.g., medical questionnaire or examination to detect high cholesterol) conducted in connection with the spouse’s receipt of health or genetic services as part of the employer’s wellness program. The wellness program inducements may take various forms, from discounts or rebates to the avoidance of a premium surcharge. The total inducements offered under the wellness program may not exceed 30 percent of the total annual costs of coverage. To be valid, the provision of the spouse’s information must meet the requirements of GINA’s wellness program exception discussed above (i.e., voluntary and with prior written authorization). Furthermore, the information provided in exchange for the inducement must be limited to current and past health status and cannot include genetic information such as results of genetic tests.
The proposed exception for inducements is limited to employee spouses who are covered under the employer’s group health plan. Employers may not provide inducements in exchange for employee genetic information or their biological or non-biological child’s genetic information or current or past health status. Employers may offer inducements for completion of health risk assessments that ask questions about family medical history and other genetic information; however, the employer must make it clear that the inducement will be available regardless of whether the specific genetic information questions are answered.
Prior to announcing the proposed rule, the EEOC initiated litigation taking issue with multiple employers’ wellness programs. See, e.g., EEOC v. Honeywell Int’l. Inc., N0. 0:14-cv-04517 (D. Minn. 2014); EEOC v. Orion Energy Systems, Inc., N0. 1:14-cv-01019 (E.D. Wis. 2014). In Honeywell, the EEOC sought a temporary restraining order and preliminary injunction preventing the company from imposing surcharge penalties on employees and spouses that did not participate in biometric testing for health data including cholesterol and nicotine levels. The EEOC argued that the wellness program violated GINA and the Americans with Disabilities Act. The court denied the EEOC’s motion, but noted that “great uncertainty persists in how the [Affordable Care Act], [Americans with Disabilities Act] and other federal statutes such as GINA are intended to interact,” with respect to wellness programs.
The EEOC’s proposed GINA rule comes on the heels of an April 2015 proposed rule (discussed by Z&R here) addressing, in part, amendments to the EEOC’s regulations and guidance on the Americans with Disabilities Act relating to employer wellness programs. The comment period for the proposed Americans with Disabilities Act rule closed in June. The EEOC may make revisions in light of the comments before voting on the final rule. The EEOC is accepting comments on its proposed GINA rule until January 28, 2016. Employers can anticipate continued developments, and litigation, in this nascent area of employment law.
*Patrick Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about wellness programs, please contact Pat (pjh@zrlaw.com) at 216.696.4441.
Z&R SHORTS
Z&R Announces Its 2016 Super Lawyers and Rising Stars
Zashin & Rich is pleased to congratulate the following 2016 Super Lawyers:
Brad E. Bennett, George S. Crisci, Jon M. Dileno, Jonathan J. Downes, Michele L. Jakubs, and Stephen S. Zashin were named Super Lawyers. Helena Oroz, Ami J. Patel, and David R. Vance were named Rising Stars.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.
Super Lawyers Magazine features the list and profiles of selected attorneys and is distributed to attorneys in the state or region and the ABA-accredited law school libraries. Super Lawyers is also published as a special section in leading city and regional magazines across the country.
Please join Z&R in welcoming two new attorneys to its Employment and Labor Groups.
Lisa A. Kainec Joins Z&R Cleveland
Lisa is a legal and human resources professional with 20+ years of experience in employment law across multiple industries including retail, healthcare, municipal, professional services, construction and manufacturing. Lisa has worked in-house as a human resources executive and senior employment counsel at Jo-Ann Stores. Lisa was a Certified Specialist in Labor and Employment Law. Lisa devotes her practice to providing practical strategies for proactive workforce management as well as vigorous defense of employee claims and litigation.
Brad E. Bennett Joins Z&R Columbus
Brad has 18 years of employment law experience as an attorney and human resources professional across multiple industries including healthcare, aviation, retail, public sector and construction. He represents public and private sector employers in all aspects of labor and employment law. In addition to his litigation practice, Brad represents public sector employers in collective bargaining, grievance arbitrations, and impasse proceedings. Additionally, Brad has drafted civil service rules for municipalities, represents public sector employers before the State Personnel Board of Review (SPBR), and counsels public employers regarding compliance with Ohio’s Open Meetings Act and Public Records Act. Brad is an OSBA Certified Specialist in Labor and Employment.
Monday, December 14, 2015
Public Sector Alert: Ohio “Bans the Box” – Public Employers Cannot Ask About Felony Convictions on Job Applications
By Brad E. Bennett*
On December 9, 2015, House Bill 56, known as the “ban the box” bill, passed both the Senate and the House. The bill becomes effective within ninety (90) days of Governor Kasich’s approval. This bill prevents all public employers, including counties, townships, and municipal corporations, from asking about previous criminal convictions on their job applications. The bill also modifies Ohio’s civil service law, making it clear that classified employees who are convicted of a felony “while employed in the civil service” may be removed under R.C. 124.34(A). Further, if an unclassified employee loses their position because they are convicted of a felony “while employed in the civil service,” the employee forfeits their right to resume a position in the classified service under R.C. 124.11(D)(3)(a).
The bill does not prohibit a public employer from including in a job application a statement, notifying applicants about potential disqualification, if they have a particular criminal history. The bill also does not prohibit public employers from inquiring about felony convictions later in the hiring process. The inquiry is only “banned” from the job application itself.
Public employers should also remain mindful of the EEOC’s 2012 Enforcement Guidelines. The EEOC has taken the position that employers cannot refuse to hire applicants simply because they have a felony conviction. Instead, the EEOC requires employers to demonstrate that the refusal to hire based upon a conviction is “job related and consistent with business necessity.” This will typically require the employer to weigh various factors including the nature of the job, the type of conviction, and the amount of time that has passed since the conviction occurred.
What actions should public employers take now? Public employers should immediately review and revise their job applications to ensure that they comply with House Bill 56. They should also provide training to managers involved in the hiring process to ensure compliance with House Bill 56 and the EEOC’s 2012 Enforcement Guidelines.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including assisting public sector employers with establishing lawful hiring guidelines. If you have questions about the H.B. 56 or your hiring process, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
On December 9, 2015, House Bill 56, known as the “ban the box” bill, passed both the Senate and the House. The bill becomes effective within ninety (90) days of Governor Kasich’s approval. This bill prevents all public employers, including counties, townships, and municipal corporations, from asking about previous criminal convictions on their job applications. The bill also modifies Ohio’s civil service law, making it clear that classified employees who are convicted of a felony “while employed in the civil service” may be removed under R.C. 124.34(A). Further, if an unclassified employee loses their position because they are convicted of a felony “while employed in the civil service,” the employee forfeits their right to resume a position in the classified service under R.C. 124.11(D)(3)(a).
The bill does not prohibit a public employer from including in a job application a statement, notifying applicants about potential disqualification, if they have a particular criminal history. The bill also does not prohibit public employers from inquiring about felony convictions later in the hiring process. The inquiry is only “banned” from the job application itself.
Public employers should also remain mindful of the EEOC’s 2012 Enforcement Guidelines. The EEOC has taken the position that employers cannot refuse to hire applicants simply because they have a felony conviction. Instead, the EEOC requires employers to demonstrate that the refusal to hire based upon a conviction is “job related and consistent with business necessity.” This will typically require the employer to weigh various factors including the nature of the job, the type of conviction, and the amount of time that has passed since the conviction occurred.
What actions should public employers take now? Public employers should immediately review and revise their job applications to ensure that they comply with House Bill 56. They should also provide training to managers involved in the hiring process to ensure compliance with House Bill 56 and the EEOC’s 2012 Enforcement Guidelines.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including assisting public sector employers with establishing lawful hiring guidelines. If you have questions about the H.B. 56 or your hiring process, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Wednesday, December 2, 2015
Z&R ANNOUNCES ITS 2016 SUPER LAWYERS AND RISING STARS
Zashin & Rich is pleased to congratulate the following 2016 Super Lawyers:
Brad E. Bennett, George S. Crisci, Jon M. Dileno, Jonathan J. Downes, Michele L. Jakubs, and Stephen S. Zashin were named Super Lawyers. Helena Oroz, Ami J. Patel, and David R. Vance were named Rising Stars.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.
Super Lawyers Magazine features the list and profiles of selected attorneys and is distributed to attorneys in the state or region and the ABA-accredited law school libraries. Super Lawyers is also published as a special section in leading city and regional magazines across the country.
About Zashin & Rich Co., L.P.A.
With offices in Cleveland and Columbus Ohio, Z&R represents employers in all aspects of employment, labor, and workers' compensation law. The firm represents private and publicly traded companies as well as public sector employers throughout Ohio and the United States. Z&R defends employers in all aspects of private and public sector traditional labor law, employment litigation, and workers' compensation matters. The firm also counsels employers on a variety of daily workplace issues including, but not limited to, employee handbooks, non-compete agreements, social media, workplace injuries, investigations, disciplinary actions, and terminations.
Brad E. Bennett, George S. Crisci, Jon M. Dileno, Jonathan J. Downes, Michele L. Jakubs, and Stephen S. Zashin were named Super Lawyers. Helena Oroz, Ami J. Patel, and David R. Vance were named Rising Stars.
Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.
Super Lawyers Magazine features the list and profiles of selected attorneys and is distributed to attorneys in the state or region and the ABA-accredited law school libraries. Super Lawyers is also published as a special section in leading city and regional magazines across the country.
About Zashin & Rich Co., L.P.A.
With offices in Cleveland and Columbus Ohio, Z&R represents employers in all aspects of employment, labor, and workers' compensation law. The firm represents private and publicly traded companies as well as public sector employers throughout Ohio and the United States. Z&R defends employers in all aspects of private and public sector traditional labor law, employment litigation, and workers' compensation matters. The firm also counsels employers on a variety of daily workplace issues including, but not limited to, employee handbooks, non-compete agreements, social media, workplace injuries, investigations, disciplinary actions, and terminations.
Tuesday, December 1, 2015
FOOL’S GOLD: When HR Policies Are Not Enough
By Lisa A. Kainec*
Every HR professional knows that solid policies are essential to protect a company against legal claims and liabilities. Unfortunately, even the best policies cannot provide the best protections. Ask yourself a few “what if” scenarios about your key employees, your monetary investment in those employees, the information they have at their fingertips, and what would happen to your business if that information made its way to your competition? If your answers to those questions raise concerns, let’s talk about getting your best protections in place now and hope you’ll never need to use them.
Consider the following policies:
So why isn’t an employee handbook enough to protect you? In virtually every instance, a company’s employee handbook is not a contract of employment and the employer can amend, change, or modify the handbook at any time. In light of such rights, the statements made in an employee handbook are not contractual. The same also holds largely true for offer letters, codes of conduct, and other employer communications. In virtually all of these documents, the employer correctly advises employees that the policies are not contracts and that either the employer or the employer can terminate the relationship at any time.
While those disclaimers protect an employer from certain contractual claims, many employers are left vulnerable and unprotected. The above examples (among others) are instances where an employer’s best protection is a simple written agreement with the employee that specifies their obligations during and after employment. That is why a separate written agreement is essential for certain employees and situations. It also is critically important that a company work with labor and employment lawyers to ensure that their policies will hold up when challenged and are otherwise lawful.
*Lisa A. Kainec, former Vice President of Human Resources and Senior Employment Counsel for Jo-Ann Stores, recently joined the firm’s labor and employment group in its Cleveland office. Lisa represents employers in all areas of labor and employment law including policy review and compliance. If you have questions about employer policy or contract drafting, please contact Lisa A. Kainec | lak@zrlaw.com | 216.696.4441
Every HR professional knows that solid policies are essential to protect a company against legal claims and liabilities. Unfortunately, even the best policies cannot provide the best protections. Ask yourself a few “what if” scenarios about your key employees, your monetary investment in those employees, the information they have at their fingertips, and what would happen to your business if that information made its way to your competition? If your answers to those questions raise concerns, let’s talk about getting your best protections in place now and hope you’ll never need to use them.
Consider the following policies:
- Confidential Information: Most employee handbooks clearly set forth the employer’s policies on protecting the proprietary and confidential nature of information available to the employees. Those policies certainly provide the basis for corrective action up to and including termination of the employment relationship. But do those handbook policies adequately protect the employer if the employee takes confidential information – in paper or electronic form – prior to leaving the company?
- Relocation Benefits: Does your company provide relocation benefits to new employees? Many employers have great relocation packages that afford new employees payment for numerous relocating expenses. However, does your company only have a relocation policy that explains the benefits, but no contractual agreement that permits you to recoup those expenses if the employee leaves employment after a short time?
- Non-Compete and Non-Solicitation: What if the employee leaves and solicits his or her existing accounts to work with his or her new company? What if the employee solicits co-workers to join his or her new company? What happens when an employee leaves and attempts to compete with the prior employer? Is the employer protected from losing its customers and employees?
So why isn’t an employee handbook enough to protect you? In virtually every instance, a company’s employee handbook is not a contract of employment and the employer can amend, change, or modify the handbook at any time. In light of such rights, the statements made in an employee handbook are not contractual. The same also holds largely true for offer letters, codes of conduct, and other employer communications. In virtually all of these documents, the employer correctly advises employees that the policies are not contracts and that either the employer or the employer can terminate the relationship at any time.
While those disclaimers protect an employer from certain contractual claims, many employers are left vulnerable and unprotected. The above examples (among others) are instances where an employer’s best protection is a simple written agreement with the employee that specifies their obligations during and after employment. That is why a separate written agreement is essential for certain employees and situations. It also is critically important that a company work with labor and employment lawyers to ensure that their policies will hold up when challenged and are otherwise lawful.
*Lisa A. Kainec, former Vice President of Human Resources and Senior Employment Counsel for Jo-Ann Stores, recently joined the firm’s labor and employment group in its Cleveland office. Lisa represents employers in all areas of labor and employment law including policy review and compliance. If you have questions about employer policy or contract drafting, please contact Lisa A. Kainec | lak@zrlaw.com | 216.696.4441
Monday, November 16, 2015
DOL PRESSES PAUSE: Delays Implementation of its Proposed Changes to the FLSA
By Brad E. Bennett*
Have you prepared to comply with the Department of Labor’s (“DOL”) proposed rule amendment to the Fair Labor Standards Act’s "white collar" exemption tests for executive, administrative, and professional employees? You know, the proposed rule that will increase the salary basis test from $455 per week to $970 per week ($50,440 annually) beginning in 2016? As Z&R previously explained, the proposed rule will cause many employees that are currently exempt to lose their exemption and will dramatically increase the number of U.S. workers who are eligible for overtime pay.
Many have anticipated that the DOL would implement its pending final rule by the end of this year or in early 2016. According to a recent Wall Street Journal article, however, the rule will not appear until the end of 2016. Why the delay? Solicitor of Labor Patricia Smith recently stated that the DOL needed more time to draft the final regulations due to the sheer volume of comments it received during the comment period. The DOL received 270,000 comments from individuals and organizations during the comment period – more than three times what it anticipated.
While this is certainly good news for employers, employers should utilize this period to ensure compliance with existing employee classifications and plan for the implementation of the proposed FLSA rule amendment.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including FLSA compliance. If you have questions about the DOL’s proposed regulations, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Have you prepared to comply with the Department of Labor’s (“DOL”) proposed rule amendment to the Fair Labor Standards Act’s "white collar" exemption tests for executive, administrative, and professional employees? You know, the proposed rule that will increase the salary basis test from $455 per week to $970 per week ($50,440 annually) beginning in 2016? As Z&R previously explained, the proposed rule will cause many employees that are currently exempt to lose their exemption and will dramatically increase the number of U.S. workers who are eligible for overtime pay.
Many have anticipated that the DOL would implement its pending final rule by the end of this year or in early 2016. According to a recent Wall Street Journal article, however, the rule will not appear until the end of 2016. Why the delay? Solicitor of Labor Patricia Smith recently stated that the DOL needed more time to draft the final regulations due to the sheer volume of comments it received during the comment period. The DOL received 270,000 comments from individuals and organizations during the comment period – more than three times what it anticipated.
While this is certainly good news for employers, employers should utilize this period to ensure compliance with existing employee classifications and plan for the implementation of the proposed FLSA rule amendment.
Brad E. Bennett, an OSBA Certified Specialist in Labor and Employment Law, practices at the firm’s Columbus office. He is well versed in all areas of labor and employment law including FLSA compliance. If you have questions about the DOL’s proposed regulations, please contact: Brad E. Bennett | beb@zrlaw.com | 614.224.4411
Thursday, October 29, 2015
Fifth Circuit Re-Rebukes the National Labor Relations Board on the Validity of Class and Collective Action Waivers
By David P. Frantz
On October 26, 2015, the U.S. Court of Appeals for the Fifth Circuit once again butted heads with the National Labor Relations Board (“NLRB”) over the issue of class and collective action waivers in employment dispute arbitration agreements. See Murphy Oil USA, Inc. v. NLRB, No. 14-60800 (5th Cir. Oct. 26, 2015). In Murphy Oil, the Fifth Circuit rejected the NLRB’s decision that arbitration agreements with class/collective action waivers violate employees’ rights to engage in protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA”). The Fifth Circuit’s December 2013 decision in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) (which Z&R discussed here) reached the same conclusion.
In D.R. Horton, the Fifth Circuit previously held that the NLRA does not prohibit mandatory arbitration agreements with class/collective action waivers. The court explained that class or collective action procedures are not substantive legal rights; they are merely procedural devices. Thus, the NLRA’s protection of employees’ substantive rights does not extend to filing class or collective actions. However, the Fifth Circuit also held that the language of the arbitration agreement at issue reasonably could be construed to prohibit employees from filing unfair labor practice charges (“ULP”) with the NLRB. Such prohibitions violate the NLRA.
When issuing its underlying decision in Murphy Oil, the NLRB engaged in “Board nonacquiescense” and disregarded the Fifth Circuit’s D.R. Horton holding. Murphy Oil involved four employees who filed a federal wage and hour collective action after signing arbitration agreements with class/collective action waivers. Murphy Oil moved to dismiss and compel arbitration, and the federal court stayed the collective action proceeding pending arbitration (which never was initiated). While the motion to dismiss was pending, one of the employees filed a ULP with the NLRB, alleging the arbitration agreement violated her rights under the NLRA.
In October 2014, ten months after the Fifth Circuit’s ruling in D.R. Horton, the NLRB issued its decision in Murphy Oil, holding that the arbitration agreement violated the employees’ substantive rights under the NLRA and reasonably could be construed to prohibit employees from filing ULPs. The NLRB also found that Murphy Oil’s motion to dismiss and compel arbitration in the wage and hour lawsuit was a separate violation of the NLRA. The NLRB determined that Murphy Oil “acted with an illegal objective in seeking to enforce an unlawful contract provision.”
On appeal before the Fifth Circuit, the court reaffirmed its analysis in D.R. Horton, stating: “Our decision was issued not quite two years ago; we will not repeat its analysis here.” Murphy Oil asked that the court hold the NLRB in contempt for its “defiance” of the D.R. Horton decision. The court declined to do so because the NLRB’s Murphy Oil decision could have been appealed in a number of jurisdictions outside the Fifth Circuit, and the NLRB may not have known which circuit’s law would apply. The court stated, “[w]e do not celebrate the Board’s failure to follow our D.R. Horton reasoning, but neither do we condemn its nonacquiescence.”
The Fifth Circuit also addressed whether Murphy Oil’s arbitration agreements reasonably could be construed to prohibit the filing of ULPs. The court examined two versions of the arbitration agreements: one in effect for employees hired before March 2012, and a revised version for employees hired thereafter. The pre-March 2012 version included language that “any and all disputes or claims” must be resolved through arbitration. The Fifth Circuit held that this broad “any claims” language, without any qualification, can create the reasonable impression that the employee is waiving both trial rights and administrative rights. Employee-employer agreements that limit the NLRB’s ability to prevent unfair labor practices violate the NLRA. As waivers of administrative rights would have such an effect, they are illegal.
The Fifth Circuit did not hold that the arbitration agreement must expressly state that the employee may file ULPs with the NLRB; however, “[s]uch a provision would assist, though, if incompatible or confusing language appears in the contract.” Murphy Oil’s revised arbitration agreement included such language, stating that it does not preclude employees from participating in ULP proceedings. Based on this language, the Fifth Circuit held that the revised agreement was valid.
Finally, the Fifth Circuit rejected the NLRB’s conclusion that Murphy Oil violated the NLRA by moving to dismiss and compel arbitration in the wage and hour suit filed by its employees. Based in part on its D.R. Horton decision, the court held Murphy Oil’s motion was not a baseless attempt at discouraging employees from exercising their rights under the NLRA.
The Murphy Oil decision reassures employers that, at least in the Fifth Circuit, arbitration agreements with class and collective action waivers are enforceable. Likewise, the Second, Eighth, Ninth, and Eleventh Circuits have reached the same conclusion or indicated that they would. However, employers should ensure that their arbitration agreements and class/collective action waivers cannot be construed to prohibit employees from pursing administrative claims, including ULPs.
*David P. Frantz practices in all areas of labor and employment law. If you have questions about the Murphy Oil decision, arbitration agreements, or class and collective action waivers, please contact: David P. Frantz | dpf@zrlaw.com | 216.696.4441
On October 26, 2015, the U.S. Court of Appeals for the Fifth Circuit once again butted heads with the National Labor Relations Board (“NLRB”) over the issue of class and collective action waivers in employment dispute arbitration agreements. See Murphy Oil USA, Inc. v. NLRB, No. 14-60800 (5th Cir. Oct. 26, 2015). In Murphy Oil, the Fifth Circuit rejected the NLRB’s decision that arbitration agreements with class/collective action waivers violate employees’ rights to engage in protected concerted activity under Section 7 of the National Labor Relations Act (“NLRA”). The Fifth Circuit’s December 2013 decision in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) (which Z&R discussed here) reached the same conclusion.
In D.R. Horton, the Fifth Circuit previously held that the NLRA does not prohibit mandatory arbitration agreements with class/collective action waivers. The court explained that class or collective action procedures are not substantive legal rights; they are merely procedural devices. Thus, the NLRA’s protection of employees’ substantive rights does not extend to filing class or collective actions. However, the Fifth Circuit also held that the language of the arbitration agreement at issue reasonably could be construed to prohibit employees from filing unfair labor practice charges (“ULP”) with the NLRB. Such prohibitions violate the NLRA.
When issuing its underlying decision in Murphy Oil, the NLRB engaged in “Board nonacquiescense” and disregarded the Fifth Circuit’s D.R. Horton holding. Murphy Oil involved four employees who filed a federal wage and hour collective action after signing arbitration agreements with class/collective action waivers. Murphy Oil moved to dismiss and compel arbitration, and the federal court stayed the collective action proceeding pending arbitration (which never was initiated). While the motion to dismiss was pending, one of the employees filed a ULP with the NLRB, alleging the arbitration agreement violated her rights under the NLRA.
In October 2014, ten months after the Fifth Circuit’s ruling in D.R. Horton, the NLRB issued its decision in Murphy Oil, holding that the arbitration agreement violated the employees’ substantive rights under the NLRA and reasonably could be construed to prohibit employees from filing ULPs. The NLRB also found that Murphy Oil’s motion to dismiss and compel arbitration in the wage and hour lawsuit was a separate violation of the NLRA. The NLRB determined that Murphy Oil “acted with an illegal objective in seeking to enforce an unlawful contract provision.”
On appeal before the Fifth Circuit, the court reaffirmed its analysis in D.R. Horton, stating: “Our decision was issued not quite two years ago; we will not repeat its analysis here.” Murphy Oil asked that the court hold the NLRB in contempt for its “defiance” of the D.R. Horton decision. The court declined to do so because the NLRB’s Murphy Oil decision could have been appealed in a number of jurisdictions outside the Fifth Circuit, and the NLRB may not have known which circuit’s law would apply. The court stated, “[w]e do not celebrate the Board’s failure to follow our D.R. Horton reasoning, but neither do we condemn its nonacquiescence.”
The Fifth Circuit also addressed whether Murphy Oil’s arbitration agreements reasonably could be construed to prohibit the filing of ULPs. The court examined two versions of the arbitration agreements: one in effect for employees hired before March 2012, and a revised version for employees hired thereafter. The pre-March 2012 version included language that “any and all disputes or claims” must be resolved through arbitration. The Fifth Circuit held that this broad “any claims” language, without any qualification, can create the reasonable impression that the employee is waiving both trial rights and administrative rights. Employee-employer agreements that limit the NLRB’s ability to prevent unfair labor practices violate the NLRA. As waivers of administrative rights would have such an effect, they are illegal.
The Fifth Circuit did not hold that the arbitration agreement must expressly state that the employee may file ULPs with the NLRB; however, “[s]uch a provision would assist, though, if incompatible or confusing language appears in the contract.” Murphy Oil’s revised arbitration agreement included such language, stating that it does not preclude employees from participating in ULP proceedings. Based on this language, the Fifth Circuit held that the revised agreement was valid.
Finally, the Fifth Circuit rejected the NLRB’s conclusion that Murphy Oil violated the NLRA by moving to dismiss and compel arbitration in the wage and hour suit filed by its employees. Based in part on its D.R. Horton decision, the court held Murphy Oil’s motion was not a baseless attempt at discouraging employees from exercising their rights under the NLRA.
The Murphy Oil decision reassures employers that, at least in the Fifth Circuit, arbitration agreements with class and collective action waivers are enforceable. Likewise, the Second, Eighth, Ninth, and Eleventh Circuits have reached the same conclusion or indicated that they would. However, employers should ensure that their arbitration agreements and class/collective action waivers cannot be construed to prohibit employees from pursing administrative claims, including ULPs.
*David P. Frantz practices in all areas of labor and employment law. If you have questions about the Murphy Oil decision, arbitration agreements, or class and collective action waivers, please contact: David P. Frantz | dpf@zrlaw.com | 216.696.4441
Tuesday, October 13, 2015
DOES YOUR COMPANY CONDUCT THIRD-PARTY BACKGROUND CHECKS… AND COMPLY WITH FCRA? The frightful law you may not fear, but you should.
By Helena Oroz*
In honor of the scariest, spookiest month of the year, here are the scariest things we are hearing these days about using background reports and complying with the law that governs use of that information:
Okay, full disclosure: these are not real quotes. But they do represent real misunderstandings and confusion about employer obligations under the Fair Credit Reporting Act (“FCRA”).
If these questions and statements sound reasonable, the FCRA class action bar is looking for your company. Here is a small sampling of large companies that settled FCRA class actions in 2015:
But it doesn’t matter if you are small or large, local or national – you are just their type.
Third-party background check reports are “consumer reports.” In simplest terms, the Fair Credit Reporting Act, or FCRA, is a federal law that governs the collection, assembly, and use of information about consumers. The first thing you need to understand about FCRA is that it applies to employers, but also lots of other entities, so it’s not written for employers. Its name is confusing and so is the term “consumer reports,” both which feed misperceptions about what the law covers.
So know this: if your company requests any information about an applicant (or current employee) from a third party and then uses it to make an employment decision, your company has requested a “consumer report” and must comply with FCRA’s disclosure, authorization, and adverse action notice requirements. Common “consumer reports” that employers use to vet applicants include criminal history reports, driving records, education records, employment history, and yes, credit history.
Employers are on their own when it comes to FCRA compliance. This is the second thing you need to understand about FCRA: it is a hyper-technical statute with little to no guidance to lead you to compliance. Even if you have the right notices in place, they still may not be technically compliant if, for example, they contain extraneous language or too much information.
Explanatory regulations? Model forms? FCRA is no FMLA, people. Don’t look to government agencies to fill that guidance vacuum anytime soon. The Consumer Financial Protection Bureau has been the primary agency responsible for interpreting FCRA for more than five years, yet it has not issued a single piece of useful guidance regarding employer FCRA obligations during that time. As for the Federal Trade Commission, if this blog post is any indication, no one is at the wheel there anymore (if they ever were).
Instead, that vacuum is being filled, slowly but surely, with court decisions and an absolute deluge of recent FCRA class actions across the county. According to a recent report from WebRecon, FCRA lawsuits increased 83% in August 2015 from the same period in 2014. From Whole Foods to Michaels Stores to Amazon, even the giants are getting hit for FCRA violations.
What should employers do? Don’t let FCRA scare the living daylights out of you. First, review your hiring practices to ensure that your company is at least doing the following:
(1) making a clear, conspicuous written disclosure to each applicant that consumer reports may be obtained about them for employment purposes;
(2) obtaining each applicant’s written authorization to obtain consumer reports;
(3) when your company decides not to hire an applicant based on information in a consumer report, providing the applicant a copy of the report at issue and a summary of their FCRA rights before taking the action (commonly referred to as pre-adverse action notice); and,
(4) after taking the action, providing the applicant with notice of the adverse action, contact information for the agency that provided the report, and other information (commonly referred to as post-adverse action notice).
Second, if you think your company is FCRA-compliant because it does complete each of the above steps, review your disclosure, authorization, and adverse action notices. Extra information or confusing language in those documents could jeopardize your company’s compliance efforts. Additionally, if your company uses “investigative reports" – reports based on personal interviews concerning a person's character, general reputation, personal characteristics, and lifestyle – your company has additional obligations under FCRA.
Third, if your company operates in more than one state, be aware that a number of states (a number which is growing) have their own “mini-FCRAs” with separate disclosure, authorization, and/or adverse action requirements. Many states also severely restrict use of credit information and/or criminal background information for employment purposes.
Finally, DO NOT rely on your background check provider for FCRA compliance. Ask questions and make sure you know exactly what your background check company is doing on your behalf. Do not forget that FCRA compliance is ultimately your company’s responsibility, not your provider’s.
*Helena Oroz practices in all areas of employment law compliance and often assists Z&R’s clients with FCRA and state fair credit reporting and background check laws. For more information or assistance with your company’s FCRA compliance, please contact Helena | hot@zrlaw.com | 216.696.4441
In honor of the scariest, spookiest month of the year, here are the scariest things we are hearing these days about using background reports and complying with the law that governs use of that information:
- “I think FCRA is that law about credit reports. But we don’t check credit for our job applicants. So we’re good, right?”
- “Do we disclose to applicants that we’re requesting consumer reports? We inform them of a lot of stuff. I think it’s in our employment application somewhere.”
- “Adverse action letters? Two of them? Is that a new thing?
- “My background check company handles all those forms. So we’re good, right?”
- “I’m pretty sure we’re doing most of that stuff right some of the time. But don’t quote me on that.”
Okay, full disclosure: these are not real quotes. But they do represent real misunderstandings and confusion about employer obligations under the Fair Credit Reporting Act (“FCRA”).
If these questions and statements sound reasonable, the FCRA class action bar is looking for your company. Here is a small sampling of large companies that settled FCRA class actions in 2015:
- Fernandez v. Home Depot – $3 million
- Brown v. Delhaize America (owns Food Lion grocery stores) – $2.99 million
- Marcum v. DolgenCorp (owns Dollar General stores) – $4.08 million
But it doesn’t matter if you are small or large, local or national – you are just their type.
Third-party background check reports are “consumer reports.” In simplest terms, the Fair Credit Reporting Act, or FCRA, is a federal law that governs the collection, assembly, and use of information about consumers. The first thing you need to understand about FCRA is that it applies to employers, but also lots of other entities, so it’s not written for employers. Its name is confusing and so is the term “consumer reports,” both which feed misperceptions about what the law covers.
So know this: if your company requests any information about an applicant (or current employee) from a third party and then uses it to make an employment decision, your company has requested a “consumer report” and must comply with FCRA’s disclosure, authorization, and adverse action notice requirements. Common “consumer reports” that employers use to vet applicants include criminal history reports, driving records, education records, employment history, and yes, credit history.
Employers are on their own when it comes to FCRA compliance. This is the second thing you need to understand about FCRA: it is a hyper-technical statute with little to no guidance to lead you to compliance. Even if you have the right notices in place, they still may not be technically compliant if, for example, they contain extraneous language or too much information.
Explanatory regulations? Model forms? FCRA is no FMLA, people. Don’t look to government agencies to fill that guidance vacuum anytime soon. The Consumer Financial Protection Bureau has been the primary agency responsible for interpreting FCRA for more than five years, yet it has not issued a single piece of useful guidance regarding employer FCRA obligations during that time. As for the Federal Trade Commission, if this blog post is any indication, no one is at the wheel there anymore (if they ever were).
Instead, that vacuum is being filled, slowly but surely, with court decisions and an absolute deluge of recent FCRA class actions across the county. According to a recent report from WebRecon, FCRA lawsuits increased 83% in August 2015 from the same period in 2014. From Whole Foods to Michaels Stores to Amazon, even the giants are getting hit for FCRA violations.
What should employers do? Don’t let FCRA scare the living daylights out of you. First, review your hiring practices to ensure that your company is at least doing the following:
(1) making a clear, conspicuous written disclosure to each applicant that consumer reports may be obtained about them for employment purposes;
(2) obtaining each applicant’s written authorization to obtain consumer reports;
(3) when your company decides not to hire an applicant based on information in a consumer report, providing the applicant a copy of the report at issue and a summary of their FCRA rights before taking the action (commonly referred to as pre-adverse action notice); and,
(4) after taking the action, providing the applicant with notice of the adverse action, contact information for the agency that provided the report, and other information (commonly referred to as post-adverse action notice).
Second, if you think your company is FCRA-compliant because it does complete each of the above steps, review your disclosure, authorization, and adverse action notices. Extra information or confusing language in those documents could jeopardize your company’s compliance efforts. Additionally, if your company uses “investigative reports" – reports based on personal interviews concerning a person's character, general reputation, personal characteristics, and lifestyle – your company has additional obligations under FCRA.
Third, if your company operates in more than one state, be aware that a number of states (a number which is growing) have their own “mini-FCRAs” with separate disclosure, authorization, and/or adverse action requirements. Many states also severely restrict use of credit information and/or criminal background information for employment purposes.
Finally, DO NOT rely on your background check provider for FCRA compliance. Ask questions and make sure you know exactly what your background check company is doing on your behalf. Do not forget that FCRA compliance is ultimately your company’s responsibility, not your provider’s.
*Helena Oroz practices in all areas of employment law compliance and often assists Z&R’s clients with FCRA and state fair credit reporting and background check laws. For more information or assistance with your company’s FCRA compliance, please contact Helena | hot@zrlaw.com | 216.696.4441
Friday, September 4, 2015
THE NFL AND TOM BRADY: How does Roger Goodell’s discipline affect my workplace?
By Stephen S. Zashin*
In a highly anticipated decision, a federal court judge vacated NFL Commissioner Roger Goodell’s (“Goodell”) four-game suspension of New England Patriots quarterback Tom Brady (“Brady”). On May 11, 2015, the NFL suspended Brady for his role in the Patriots use of under-inflated footballs in the 2014 AFC Championship Game and Brady’s subsequent failure to cooperate with the NFL’s investigation.
The NFL suspended Brady under the applicable collective bargaining agreement (“CBA”). CBAs generally contain processes, which culminate in binding arbitration, for employees to appeal discipline. Once the arbitrator renders a decision, that decision is virtually untouchable. However, parties may appeal arbitration awards to the courts under the Federal Arbitration Act (“FAA”). The FAA provides very limited grounds upon which a court may vacate an arbitration decision. Such instances include when arbitrators refuse to hear “evidence pertinent and material to the controversy” or are not impartial.
In this case, Brady first challenged his suspension though the arbitration process which Commissioner Goodell, acting as the arbitrator, denied. However, Brady had better luck in the court system. A federal court vacated Brady’s discipline because the NFL gave Brady a) inadequate notice of potential discipline, b) inadequate opportunity to examine one of two lead investigators, and c) inadequate access to evidence during his arbitration proceeding.
The court first held that the NFL gave Brady inadequate notice of his potential discipline. In reviewing arbitration rulings, courts consider whether the arbitrator’s decision arises from the CBA. The arbitrator must interpret the CBA in accordance with the “industrial common law,” which entails providing advance notice of prohibited conduct and potential discipline. Here, the NFL gave Brady inadequate notice on four bases. First, NFL policy did not give Brady notice that he could receive a four-game suspension for general awareness of tampering or failing to cooperate with an investigation. Second, no NFL policy or precedent provided notice that a player could receive discipline for general awareness of another person’s alleged misconduct. The NFL based its discipline on the independent investigatory report (“Wells Report”), which concluded Brady was “generally aware” of the alleged tampering. Third, Brady did not have notice that he could receive a suspension, as opposed to a fine. The NFL suspended him under the Competitive Integrity Policy, which only provided notice to owners, executives, and head coaches. Finally, Goodell improperly relied on the CBA’s broad “conduct detrimental” policy to discipline Brady instead of specific Player Policies. Since Goodell did not provide sufficient notice, the court concluded he “dispense[d] his own brand of industrial justice.”
In addition, the court concluded the NFL violated the FAA by refusing to afford Brady the opportunity to confront one of the lead investigators. Jeff Pash, an NFL Executive Vice-President and General Counsel, served as co-lead on the Deflategate investigation (“Pash/Wells Investigation”) and reviewed/edited the Wells Report prior to its release. However, the NFL refused Brady’s request to cross-examine Pash at the arbitration proceeding. The court concluded this was “fundamentally unfair” and prejudiced Brady because 1) it foreclosed Brady from exploring whether the Pash/Wells Investigation was truly “independent” and how/why the NFL’s General Counsel could edit an independent report, and 2) no other witness was competent to address the substantive core of Brady’s claim (that the NFL shaped the “independent” investigation). Therefore, the court determined that Brady’s inadequate opportunity to present evidence and arguments warranted vacating the arbitration decision under the FAA.
Finally, the court concluded Commissioner Goodell improperly denied Brady equal access to investigative files during the arbitration process. Prior to the arbitration hearing, Commissioner Goodell rejected Brady’s request to review the documents and notes which served as the basis for the Wells Report. The court concluded this decision was fundamentally unfair and prejudiced Brady in violation of the FAA. The court noted the NFL’s counsel had greater access to “valuable impressions, insights, and other investigative information” because its role changed from independent investigator to arbitration hearing counsel. Brady’s inability to access the investigative files prejudiced him on multiple grounds: he did not have access to the interview notes (the basis for the Wells Report); and, he did not have the chance to examine and challenge materials (which likely led to the investigation and facilitated the NFL’s cross-examination of Brady). Therefore, Goodell failed to ensure each party had full and timely access to the same relevant documentary evidence.
Whether your workplace is unionized or not, there are several takeaways from this decision:
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law and the head of the firm’s Labor, Employment and Sports Law Groups, has extensive experience counseling employers on labor relations, employee discipline, the Federal Arbitration Act and sports related issues. For more information about the Deflategate decision or your labor, employment or sports law needs, please contact Stephen Zashin | ssz@zrlaw.com | 216.696.4441
In a highly anticipated decision, a federal court judge vacated NFL Commissioner Roger Goodell’s (“Goodell”) four-game suspension of New England Patriots quarterback Tom Brady (“Brady”). On May 11, 2015, the NFL suspended Brady for his role in the Patriots use of under-inflated footballs in the 2014 AFC Championship Game and Brady’s subsequent failure to cooperate with the NFL’s investigation.
The NFL suspended Brady under the applicable collective bargaining agreement (“CBA”). CBAs generally contain processes, which culminate in binding arbitration, for employees to appeal discipline. Once the arbitrator renders a decision, that decision is virtually untouchable. However, parties may appeal arbitration awards to the courts under the Federal Arbitration Act (“FAA”). The FAA provides very limited grounds upon which a court may vacate an arbitration decision. Such instances include when arbitrators refuse to hear “evidence pertinent and material to the controversy” or are not impartial.
In this case, Brady first challenged his suspension though the arbitration process which Commissioner Goodell, acting as the arbitrator, denied. However, Brady had better luck in the court system. A federal court vacated Brady’s discipline because the NFL gave Brady a) inadequate notice of potential discipline, b) inadequate opportunity to examine one of two lead investigators, and c) inadequate access to evidence during his arbitration proceeding.
The court first held that the NFL gave Brady inadequate notice of his potential discipline. In reviewing arbitration rulings, courts consider whether the arbitrator’s decision arises from the CBA. The arbitrator must interpret the CBA in accordance with the “industrial common law,” which entails providing advance notice of prohibited conduct and potential discipline. Here, the NFL gave Brady inadequate notice on four bases. First, NFL policy did not give Brady notice that he could receive a four-game suspension for general awareness of tampering or failing to cooperate with an investigation. Second, no NFL policy or precedent provided notice that a player could receive discipline for general awareness of another person’s alleged misconduct. The NFL based its discipline on the independent investigatory report (“Wells Report”), which concluded Brady was “generally aware” of the alleged tampering. Third, Brady did not have notice that he could receive a suspension, as opposed to a fine. The NFL suspended him under the Competitive Integrity Policy, which only provided notice to owners, executives, and head coaches. Finally, Goodell improperly relied on the CBA’s broad “conduct detrimental” policy to discipline Brady instead of specific Player Policies. Since Goodell did not provide sufficient notice, the court concluded he “dispense[d] his own brand of industrial justice.”
In addition, the court concluded the NFL violated the FAA by refusing to afford Brady the opportunity to confront one of the lead investigators. Jeff Pash, an NFL Executive Vice-President and General Counsel, served as co-lead on the Deflategate investigation (“Pash/Wells Investigation”) and reviewed/edited the Wells Report prior to its release. However, the NFL refused Brady’s request to cross-examine Pash at the arbitration proceeding. The court concluded this was “fundamentally unfair” and prejudiced Brady because 1) it foreclosed Brady from exploring whether the Pash/Wells Investigation was truly “independent” and how/why the NFL’s General Counsel could edit an independent report, and 2) no other witness was competent to address the substantive core of Brady’s claim (that the NFL shaped the “independent” investigation). Therefore, the court determined that Brady’s inadequate opportunity to present evidence and arguments warranted vacating the arbitration decision under the FAA.
Finally, the court concluded Commissioner Goodell improperly denied Brady equal access to investigative files during the arbitration process. Prior to the arbitration hearing, Commissioner Goodell rejected Brady’s request to review the documents and notes which served as the basis for the Wells Report. The court concluded this decision was fundamentally unfair and prejudiced Brady in violation of the FAA. The court noted the NFL’s counsel had greater access to “valuable impressions, insights, and other investigative information” because its role changed from independent investigator to arbitration hearing counsel. Brady’s inability to access the investigative files prejudiced him on multiple grounds: he did not have access to the interview notes (the basis for the Wells Report); and, he did not have the chance to examine and challenge materials (which likely led to the investigation and facilitated the NFL’s cross-examination of Brady). Therefore, Goodell failed to ensure each party had full and timely access to the same relevant documentary evidence.
Whether your workplace is unionized or not, there are several takeaways from this decision:
- Employers should ensure that employees have sufficient notice of potential disciplinary consequences for certain types of conduct;
- Employers should discipline employees on specific policies, not general guidance or principles;
- In an arbitration proceeding, employers should not withhold evidence requested by the employee if that is the evidence the employer will rely on during the hearing; and,
- When utilizing an independent investigation, employers should not attempt to alter the findings of that investigator.
*Stephen S. Zashin, an OSBA Certified Specialist in Labor and Employment law and the head of the firm’s Labor, Employment and Sports Law Groups, has extensive experience counseling employers on labor relations, employee discipline, the Federal Arbitration Act and sports related issues. For more information about the Deflategate decision or your labor, employment or sports law needs, please contact Stephen Zashin | ssz@zrlaw.com | 216.696.4441
Friday, August 28, 2015
Whether You Knew It or Not, the NLRB Says You Just Might Be a “Joint Employer”
By Patrick J. Hoban*
Yesterday, in a 3-2 decision, the National Labor Relations Board (“NLRB”) reversed a 30-year old standard for determining joint employer status under the National Labor Relations Act (“NLRA”). In Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015)(“Browning-Ferris”), the NLRB considered whether a recycling company and the staffing agency it used to recruit, hire, supervise, and compensate contingent workers in its facility were joint employers for the purposes of collective bargaining. In a decision that has attracted significant national attention, the NLRB scrapped its longtime joint employer analysis and created a new joint employer test under which more companies that use staffing and subcontracting agencies to provide contingent workers will be deemed “joint employers” with the staffing and subcontracting agencies under the NLRA.
The circumstances at issue arise when a company (“User”) contracts with a staffing or subcontracting agency (“Supplier”) to provide contingent workers to perform a function the User’s employees do not perform. These arrangements may include providing temporary employees to fill short-term User needs, providing temporary employees who the User evaluates for full-time employment, or providing contingent workers on an ongoing basis to perform a task in support of the User’s operations (e.g., maintenance, housekeeping, processing). Although there is significant variation in these arrangements, the User generally sets staffing requirements and worker qualifications, and the Supplier recruits, hires, compensates, sets benefits for, and administers the employment of the contingent workers. The User typically pays a fee based on a total hourly cost of each contingent worker including compensation, benefits, and administrative costs. The Supplier may or may not provide on-site supervision of the contingent workers.
Since the early 1980s, the NLRB’s joint employer analysis focused on the extent of the actual control a User exercised over the contingent workers. To be deemed a “joint employer” with the Provider, the User had to actually exercise control over the contingent workers’ terms and conditions of employment in a “direct and immediate” manner. In other words, a User was not a joint employer if it merely exercised “limited and routine” supervision over contingent workers. Absent joint employer status, a User is not subject to a collective bargaining obligation or liability for unfair labor practices under the NLRA even if the Supplier is (and vice versa).
In Browning-Ferris, the NLRB determined that its former analysis was out of step with “changing economic circumstances.” The NLRB cited significant growth in contingent employment relationships and revised its standard to adapt to the “changing patterns of industrial life.”
Under the NLRB’s new standard, multiple entities are “joint employers” of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Central to both analyses is the “existence, extent and object” of a putative joint employer’s control.
Under the first prong, the “right to control” is the key and the NLRB will no longer consider whether the entity exercises that right. Therefore, if an entity reserves a contractual right to determine a specific term or condition of employment (e.g. ultimate discharge authority, job qualifications), it may have created a common law “employer” relationship with contingent workers whether it has ever exercised that right. Additionally, an entity that exercises even indirect control over terms and conditions of employment may meet the common-law employer standard (e.g., gives direction to the Supplier to discipline a contingent worker).
Under the second prong, the NLRB considers the variety of ways in which entities may “share or co-determine” the “essential terms and conditions of employment.” “Essential terms and conditions of employment” include wages, hours, hiring, firing, discipline, supervision, and direction. Evidence of an entity’s control over essential terms and conditions of employment includes: dictating the number of contingent workers supplied; controlling scheduling, seniority, and overtime; and assigning and determining the manner and method of work performance.
Through its Browning-Ferris decision, the NLRB abandoned the certainty over three decades of joint employer analysis precedent provided to most contingent worker agreements. The NLRB’s new standard will very likely impose NLRA bargaining obligations, unfair labor practice liability, and/or lawful economic protest activities (e.g., strikes, boycotts, picketing) on entities that previously were not considered joint employers by the NLRB. The decision stands to significantly affect a wide-range of common business relationships including user-supplier, lessor-lessee, parent-subsidiary, contractor-subcontractor, franchisor-franchisee, and predecessor-successor. Additionally, as the dissent warned, the new standard may render smaller employers that lie outside the NLRA’s Commerce Clause-based jurisdiction subject to the statute’s terms.
Although the NLRB recognized the almost tectonic significance of the Browning-Ferris decision, it insisted that the new standard is in full accord with the purposes of the NLRA. As the majority summarized its decision:
Employers who participate in contingent worker, subcontracting, temporary worker, and/or franchise agreements should closely examine the new standard and reevaluate the terms, benefits, and potential risks of such agreements. The examination must include a realistic assessment of the control employers retain over the terms and conditions of the contingent workforce, the potential for NLRA-based liability and alternatives that will reduce the risk of a joint employer determination under the new standard. Additionally, companies with parent/subsidiary structures should examine the relative control reserved to component entities and the risks of joint employer status.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the Browning-Ferris decision or labor & employment law, please contact Pat Hoban | pjh@zrlaw.com | 216.696.4441
Yesterday, in a 3-2 decision, the National Labor Relations Board (“NLRB”) reversed a 30-year old standard for determining joint employer status under the National Labor Relations Act (“NLRA”). In Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (Aug. 27, 2015)(“Browning-Ferris”), the NLRB considered whether a recycling company and the staffing agency it used to recruit, hire, supervise, and compensate contingent workers in its facility were joint employers for the purposes of collective bargaining. In a decision that has attracted significant national attention, the NLRB scrapped its longtime joint employer analysis and created a new joint employer test under which more companies that use staffing and subcontracting agencies to provide contingent workers will be deemed “joint employers” with the staffing and subcontracting agencies under the NLRA.
The circumstances at issue arise when a company (“User”) contracts with a staffing or subcontracting agency (“Supplier”) to provide contingent workers to perform a function the User’s employees do not perform. These arrangements may include providing temporary employees to fill short-term User needs, providing temporary employees who the User evaluates for full-time employment, or providing contingent workers on an ongoing basis to perform a task in support of the User’s operations (e.g., maintenance, housekeeping, processing). Although there is significant variation in these arrangements, the User generally sets staffing requirements and worker qualifications, and the Supplier recruits, hires, compensates, sets benefits for, and administers the employment of the contingent workers. The User typically pays a fee based on a total hourly cost of each contingent worker including compensation, benefits, and administrative costs. The Supplier may or may not provide on-site supervision of the contingent workers.
Since the early 1980s, the NLRB’s joint employer analysis focused on the extent of the actual control a User exercised over the contingent workers. To be deemed a “joint employer” with the Provider, the User had to actually exercise control over the contingent workers’ terms and conditions of employment in a “direct and immediate” manner. In other words, a User was not a joint employer if it merely exercised “limited and routine” supervision over contingent workers. Absent joint employer status, a User is not subject to a collective bargaining obligation or liability for unfair labor practices under the NLRA even if the Supplier is (and vice versa).
In Browning-Ferris, the NLRB determined that its former analysis was out of step with “changing economic circumstances.” The NLRB cited significant growth in contingent employment relationships and revised its standard to adapt to the “changing patterns of industrial life.”
The New “Joint Employer” Standard
Under the NLRB’s new standard, multiple entities are “joint employers” of a single workforce if (1) “they are both employers within the meaning of the common law” and (2) they “share or co-determine” matters governing the essential terms and conditions of employment. Central to both analyses is the “existence, extent and object” of a putative joint employer’s control.
Under the first prong, the “right to control” is the key and the NLRB will no longer consider whether the entity exercises that right. Therefore, if an entity reserves a contractual right to determine a specific term or condition of employment (e.g. ultimate discharge authority, job qualifications), it may have created a common law “employer” relationship with contingent workers whether it has ever exercised that right. Additionally, an entity that exercises even indirect control over terms and conditions of employment may meet the common-law employer standard (e.g., gives direction to the Supplier to discipline a contingent worker).
Under the second prong, the NLRB considers the variety of ways in which entities may “share or co-determine” the “essential terms and conditions of employment.” “Essential terms and conditions of employment” include wages, hours, hiring, firing, discipline, supervision, and direction. Evidence of an entity’s control over essential terms and conditions of employment includes: dictating the number of contingent workers supplied; controlling scheduling, seniority, and overtime; and assigning and determining the manner and method of work performance.
Through its Browning-Ferris decision, the NLRB abandoned the certainty over three decades of joint employer analysis precedent provided to most contingent worker agreements. The NLRB’s new standard will very likely impose NLRA bargaining obligations, unfair labor practice liability, and/or lawful economic protest activities (e.g., strikes, boycotts, picketing) on entities that previously were not considered joint employers by the NLRB. The decision stands to significantly affect a wide-range of common business relationships including user-supplier, lessor-lessee, parent-subsidiary, contractor-subcontractor, franchisor-franchisee, and predecessor-successor. Additionally, as the dissent warned, the new standard may render smaller employers that lie outside the NLRA’s Commerce Clause-based jurisdiction subject to the statute’s terms.
Although the NLRB recognized the almost tectonic significance of the Browning-Ferris decision, it insisted that the new standard is in full accord with the purposes of the NLRA. As the majority summarized its decision:
It is not the goal of joint employer law to guarantee the freedom of employers to insulate themselves from their legal responsibility to workers, while maintaining control of the workplace. Such an approach has no basis in the [NLRA] or in federal labor policy.
Employers who participate in contingent worker, subcontracting, temporary worker, and/or franchise agreements should closely examine the new standard and reevaluate the terms, benefits, and potential risks of such agreements. The examination must include a realistic assessment of the control employers retain over the terms and conditions of the contingent workforce, the potential for NLRA-based liability and alternatives that will reduce the risk of a joint employer determination under the new standard. Additionally, companies with parent/subsidiary structures should examine the relative control reserved to component entities and the risks of joint employer status.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. For more information about the Browning-Ferris decision or labor & employment law, please contact Pat Hoban | pjh@zrlaw.com | 216.696.4441
Tuesday, August 18, 2015
Z&R Attorneys Named Best Lawyers in America 2016
- George S. Crisci – Employment Law - Management, Labor Law - Management, and Litigation - Labor and Employment
- Jon M. Dileno – Employment Law - Management
- Jonathan J. Downes – Employment Law - Management and Labor Law - Management
- Stephen S. Zashin – Labor Law – Management and Litigation - Labor and Employment
- Deanna L. DiPetta - Family Law
- Amy M. Keating - Family Law
- Jonathan A. Rich - Family Law
- Andrew A. Zashin - Family Law
Tuesday, July 14, 2015
EMPLOYMENT LAW QUARTERLY | Volume XVII, Issue ii
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A Federal Court recently affirmed an employer’s decision to discharge a janitor who claimed the employer discriminated against him on the basis of his religious belief. Bolden v. Caravan Facilities Mgmt., LLC, No. 1:14-CV-26-RLM, 2015 U.S. LEXIS 73619 (N.D. Ind. June 8, 2015). The employer, pursuant to a neutral, rotating schedule, assigned the plaintiff-employee janitor to work on six Sundays over a ten-week span. The employer had negotiated the schedule as part of the collective bargaining agreement (“CBA”) it entered into with the employee’s union. However, the employee, an ordained Baptist minister, did not work any of the scheduled shifts. He called off, did not appear, or traded shifts with another employee in order to observe the Sabbath. After the employer terminated his employment based on unsatisfactory performance, the employee sued, claiming the employer violated Title VII of the Civil Rights Act of 1964 (“Title VII”).
The Court found the employer did not violate Title VII by failing to accommodate the employee’s religious belief. Reasonable accommodations eliminate conflicts between religious practices and employment requirements. According to the Court, the employer provided a reasonable accommodation through two mechanisms. First, the employer utilized a neutral, rotating shift schedule that spread weekend work among the employees. Second, the employer permitted employees to trade shifts. The opportunity to trade shifts eliminated any conflict the neutral schedule created with an employee’s request for days off.
The Court also reasoned that any additional accommodation would impose an undue hardship on the employer. Employers do not have to incur more than a de minimis cost, in lost efficiency or higher wages, to accommodate an employee’s religious practice. Here, the Court considered the following accommodations: 1) making an exception to the neutral, rotating schedule by never scheduling the employee on Sunday; or 2) moving the employee to third shift. According to the Court, these options imposed more than a de minimis cost. If the employer did not change the employee’s schedule, the employer had to a) pay someone overtime to cover the shift (placing the burden on co-workers), b) work with one less employee (loss of productivity), or c) hire another employee (additional expense).
The CBA’s neutral, rotating schedule and seniority system played a significant role in the Court’s decision. Under the CBA, seniority determined shift selection. The employee worked second shift because he was one of the least-senior union members. Therefore, if the employer moved him to a different shift, it would violate the CBA and deny other employees their contractual rights. The employer had consulted with the union, but the union was unwilling to make an exception to the neutral, rotating schedule it negotiated.
Employers subject to CBAs should consider this decision when presented with requests for accommodations based on religious belief, particularly when those requests violate the CBA.
* George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about the impact of religious accommodations on your workplace, please contact George (gsc@zrlaw.com) at 216.696.4441.
On April 1, 2015, the Equal Employment Opportunity Commission (“EEOC”) ruled that a federal agency discriminated against a transgendered employee when it prohibited the employee from using the common women’s restroom. Lusardi v. McHugh, Dep’t of Army, Appeal No. 0120133395, (EEOC Apr. 1, 2015). The employee presented as female and had not undergone medical procedures to transition from male to female. According to the EEOC, when the employer required the employee to use a single-user restroom, the employer committed sex discrimination in violation Title VII of the Civil Rights Act of 1964 (“Title VII”).
In its decision, the EEOC adopted a standard for determining the sex of transgendered individuals – how the employee identifies himself/herself. Specifically, the EEOC concluded “there is no cause to question that Complainant – who was assigned the sex of male at birth but identifies as female – is female.” Here, after the employee began transitioning her gender presentation, she reached a mutual agreement with her employer regarding bathroom use: she would use a single-user restroom instead of the women’s restroom until she had undergone surgery. The employer advocated this approach based on anticipated discomfort from other female employees. Subsequently, the employee used the women’s restroom when her designated restroom was out-of-order. A supervisor confronted the employee about this use, claiming the employee must prove she had undergone “the final surgery” before she could use the women’s restroom.
The EEOC concluded that the employer’s act of prohibiting the employee from using the women’s restroom constituted direct evidence of discrimination. Here, the employer admitted the employee’s transgendered status was the motivating factor for its decision to prohibit the employee from using the women’s restroom.
The EEOC also determined that restricting the employee from using the women’s restroom was an adverse employment action. According to the EEOC, “equal access to restrooms” constitutes a significant, basic condition of employment. Therefore, where a transgendered individual has begun living and working as a woman (or man), the employer must allow the employee access to the women’s (or men’s) restroom.
Finally, the EEOC rejected the employer’s arguments of 1) anticipated discomfort of female employees and 2) the employee-employer transition agreement. “Nothing in Title VII makes any medical procedure a prerequisite for equal opportunity.” The EEOC concluded an employer may not condition access to terms, conditions, or privileges of employment on completing certain medical procedures that the employer feels conclusively proves the individual’s gender identity. Even though the employee originally agreed to use the single-user restroom, employees cannot prospectively waive their Title VII rights.
This EEOC decision is not an anomaly or new trend. Rather, the EEOC has begun pursuing these types of sex discrimination cases with increasing frequency. In its most-recent Strategic Enforcement Plan, the EEOC identified “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions” as a top enforcement priority. Additionally, as Zashin & Rich previously reported, the EEOC filed two sex-stereotyping, gender-discrimination lawsuits in September 2014. In these cases, the EEOC alleged the employer discriminated against the transgendered employee because the employee failed to conform to the employer’s “sex or gender-based preferences, expectations, or stereotypes.” On April 21, 2015, one court concluded the EEOC sufficiently stated a claim under Title VII and allowed the case to proceed. EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-13710, 2015 U.S. LEXIS 52016 (E.D. Mich. Apr. 21, 2015) In addition, the U.S. Court of Appeals for the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee, previously held that a transgendered individual presented a valid Title VII discrimination claim. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004). On June 1, 2015, as Zashin & Rich recently highlighted, the Occupational Safety and Health Administration released a new best practice guide concerning transgendered workers’ use of workplace restrooms.
Given the EEOC’s increased emphasis on transgendered employees, employers must be cognizant of the protections Title VII and related state laws afford transgendered employees. In particular, employers should consider this EEOC decision when presented with employees transitioning their gender identity and employers should update their company handbooks and policies accordingly.
* Andrew J. Cleves, practices in all areas of labor and employment law. If you have questions about the impact of transgendered issues on your workplace, please contact Andrew (ajc@zrlaw.com) at 216.696.4441.
Recently, the trial between Ellen Pao and her former employer, venture capital firm Kleiner Perkins Caufield & Byers (“Kleiner Perkins”), captivated the business and technology world. Pao, formerly a junior partner at the firm, sued Kleiner Perkins for gender discrimination and retaliation, seeking $16 million in damages. Pao argued that the firm’s culture prevented women from advancing into the more lucrative senior partner positions and that the firm retaliated against her after she filed the lawsuit, eventually terminating her employment. Kleiner Perkins asserted that Pao’s poor performance and inability to get along with colleagues prevented her from receiving a promotion and led to her discharge. On March 26, 2015, a California jury found for Kleiner Perkins on all counts. Since then, Kleiner Perkins has sought to recover close to $1 million in expenses incurred during trial from Pao, and a judge has tentatively ruled that Pao must reimburse Kleiner Perkins for about $250,000 in expenses. Pao recently filed a notice of appeal.
The lawsuit captured headlines in major newspapers and blogs because it pulled back a curtain on the inner workings of one of Silicon Valley’s most respected venture capital firms (known for funding Google and Amazon in their start-up days). From an employment law perspective, the trial highlighted some of the benefits and pitfalls of employee performance reviews. Both sides used Pao’s performance reviews as evidence, with Pao’s attorneys claiming they showed Kleiner Perkins’ bias against Pao, and the defense relying on them as records of her sub-par performance. In particular, Pao’s attorneys’ use of the performance reviews highlights the potential for reviews to backfire against the employer if not done well. Pao’s attorneys pointed to the reviews as evidence of retaliation, since she received poor performance reviews in the year after she filed her lawsuit (despite receiving far more positive reviews the year prior). They also used the performance reviews as evidence of discrimination, noting that Pao received conflicting feedback (advising her to be both more and less aggressive) and that her male peers who received similar comments were later promoted.
The trial serves as a reminder to employers on how to best use employee performance reviews to encourage better work from employees – and how to avoid potential legal pitfalls. Performance reviews can help employers by motivating employees to improve in certain aspects of their jobs or continue good work in other areas. They also create a written record showing that the employer counseled an employee on poor performance and track improvements (or lack thereof).
Abiding by the following tips will help employers more effectively use employee performance reviews:
Finally, to the extent that the employer can identify objective criteria, the review will be all the better.
* Sarah K. Ott practices in all areas of labor and employment law. For more information about conducting employee evaluations or other questions related to performance reviews, please contact Sarah (sko@zrlaw.com) at (216) 696-4441.
The Fair Credit Reporting Act (“FCRA”) regulates the collection and use of consumer information, including employee background and credit checks, and requires employers that rely on third-party companies to conduct background checks to follow certain procedures in notifying the individual being checked. The requirements include the following:
The FCRA requires additional action from employers who take an adverse action based on the information learned from a background check conducted by a third-party company, such as deciding not to hire an applicant, revoking a job offer, or termination. Before taking the adverse action, the employer must provide the individual with a copy of the report and a document summarizing the individual’s rights under the FCRA and give the individual a meaningful opportunity to respond to the information.
Absent an adequate response and assuming the employer takes the adverse action, the employer must: (1) notify the individual of the adverse action; (2) provide the individual with specific credit score information from the report; (3) inform the individual of his or her right to obtain a free copy of the report within 60 days and dispute the information in the report; and (4) provide the contact information of the third-party company that compiled the report for the employer and explain that the third-party company did not make the decision to take the adverse action and cannot explain the reasons for the action. Employers also must destroy any background reports in a secure manner, such as by shredding them or permanently deleting electronic copies.
Despite the many requirements placed on employers by the FCRA, a spate of recent cases show that courts have little sympathy for employers who commit minor technical violations of the law, even when complying with the spirit of the law’s requirements. For example, a federal court in Virginia recently denied summary judgment to an employer who allegedly violated the FCRA when it failed to provide “stand alone” notice that it would be conducting a background check by including a liability waiver on the same document. Milbourne v. JRK Residential America, LLC, No. 3:12cv861, 2015 U.S. Dist. LEXIS 29905 (E.D. Va., Mar. 15, 2015). Other cases involve employers rescinding job offers based on information discovered through a background report before providing the job applicants with a meaningful opportunity to respond to the information. In one case, the employer revoked a job offer to an applicant based on erroneous information in a background report without giving the applicant a chance to challenge the report. Jones v. Halstead Management Co., LLC, No. 14-CV-3125, 2015 U.S. Dist. LEXIS 12807 (S.D.N.Y., Jan. 27, 2015). In another case, the employer rescinded a job offer after its receipt of an unfavorable criminal background report on an applicant without giving the applicant time to correct the inaccurate information with the consumer reporting agency before filling the position. Miller v. Johnson & Johnson, No. 6:13-cv-1016, 2015 U.S. Dist. LEXIS 4448 (M.D. Fla., Jan. 14, 2015).
In a more employer-friendly decision, a federal court in Massachusetts recently granted summary judgment for an employer despite the plaintiffs’ argument that the employer’s notice and request for authorization to conduct a background check did not limit itself “solely” to the disclosure because it included a short preamble regarding customer safety. Goldberg v. Uber Techs., Inc., No. 14-14264-RGS, 2015 U.S. Dist. LEXIS 44675 (D. Mass., Apr. 6, 2015). The court held the employer did not violate the FCRA by including “a few sensible words” about why the company chose to use background checks (i.e., customer safety). The court also found that the employer did not violate the FCRA by failing to notify the job applicant that it intended to make an adverse decision based on information included in the background report. The court found that the statute does not require advanced notice that the employer intends to take an adverse action – it merely requires providing the individual with the background report and a document stating the individual’s rights under the FCRA.
With FCRA cases seemingly on the rise, employers who use third-party companies to compile background information should review their background check policies and procedures. Failure to strictly comply with FCRA requirements can lead to costly litigation, including class action lawsuits brought on behalf of employees and applicants subject to the employer’s non-compliant background check policies and procedures.
* Drew C. Piersall works in the firm’s Columbus office and practices in all areas of labor and employment law. If you have questions about conducting background and credit checks or the FCRA in general, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Congratulations!
Drew C. Piersall was selected to serve as the Chair of the Columbus Bar Association’s Labor & Employment Law Committee for 2015-2016. The Labor & Employment Law Committee meets on a monthly basis in the fall, winter and spring. In an effort to better serve clients and the legal profession, the Committee shares ideas and provides information on topics of concern to all who participate in the field of labor and employment law.
Jonathan Downes was inducted as a Fellow into the College of Labor and Employment Lawyers. The College of Labor and Employment Lawyers is an intellectual and practical resource for the support of the legal profession and its many audiences. The primary purpose of the College is recognition of individuals, sharing knowledge, and delivering value to the many different groups who can benefit from its value model.
Seminars
Thursday, July 16, 2015 at 10:30 am
Patrick M. Watts presents "2015 Legal Update" at 10:30 a.m. at the Lake/Geauga Area Chapter of the Society for Human Resource Management luncheon.
Tuesday, September 22, 2015 at 1:00 pm
Jonathan Downes presents "Risk Management for Supervisors" for the Ohio Association of Chiefs of Police beginning at 1 p.m. at the Crowne Plaza Columbus North.
Crowne Plaza Columbus North | 6500 Doubletree Avenue, Columbus, OH
Thursday, September 24, 2015 at 10:00 am
Jonathan Downes and Drew C. Piersall present "Negotiations – Post Recession and Impact of The Affordable Care Act" for the Ohio GFOA – Annual Conference & Membership Meeting to be held at the Hilton Netherland Plaza in Cincinnati.
Hilton Netherland Plaza | 35 West Fifth Street, Cincinnati, OH
Friday, November 6, 2015 at 10:15 am
Patrick J. Hoban presents “Affordable Care Act” at 10:15 a.m. at the Ohio Conference for Payroll Professionals (OCPP) to be held at the Embassy Suites Hotel in Dublin, Ohio.
Friday, November 6, 2015 at 10:15 am
Michele L. Jakubs presents “FLSA/Time and Attendance Best Practices” at 10:15 a.m. at the Ohio Conference for Payroll Professionals (OCPP) to be held at the Embassy Suites Hotel in Dublin, Ohio.
- Religious Accommodations and Bargaining – Why Collective Bargaining Agreements May Trump Accommodations
- EEOC: Transgendered Employees Can Use the Restroom of Their Choice
- Employee Performance Reviews Have Their Day in Court: How Employers Can Get the Most out of Employee Performance Reviews
- Courts Have Little Sympathy for Employer Mistakes in Complying with the Fair Credit Reporting Act
- Z&R SHORTS
Religious Accommodations and Bargaining – Why Collective Bargaining Agreements May Trump Accommodations
By George S. Crisci*A Federal Court recently affirmed an employer’s decision to discharge a janitor who claimed the employer discriminated against him on the basis of his religious belief. Bolden v. Caravan Facilities Mgmt., LLC, No. 1:14-CV-26-RLM, 2015 U.S. LEXIS 73619 (N.D. Ind. June 8, 2015). The employer, pursuant to a neutral, rotating schedule, assigned the plaintiff-employee janitor to work on six Sundays over a ten-week span. The employer had negotiated the schedule as part of the collective bargaining agreement (“CBA”) it entered into with the employee’s union. However, the employee, an ordained Baptist minister, did not work any of the scheduled shifts. He called off, did not appear, or traded shifts with another employee in order to observe the Sabbath. After the employer terminated his employment based on unsatisfactory performance, the employee sued, claiming the employer violated Title VII of the Civil Rights Act of 1964 (“Title VII”).
The Court found the employer did not violate Title VII by failing to accommodate the employee’s religious belief. Reasonable accommodations eliminate conflicts between religious practices and employment requirements. According to the Court, the employer provided a reasonable accommodation through two mechanisms. First, the employer utilized a neutral, rotating shift schedule that spread weekend work among the employees. Second, the employer permitted employees to trade shifts. The opportunity to trade shifts eliminated any conflict the neutral schedule created with an employee’s request for days off.
The Court also reasoned that any additional accommodation would impose an undue hardship on the employer. Employers do not have to incur more than a de minimis cost, in lost efficiency or higher wages, to accommodate an employee’s religious practice. Here, the Court considered the following accommodations: 1) making an exception to the neutral, rotating schedule by never scheduling the employee on Sunday; or 2) moving the employee to third shift. According to the Court, these options imposed more than a de minimis cost. If the employer did not change the employee’s schedule, the employer had to a) pay someone overtime to cover the shift (placing the burden on co-workers), b) work with one less employee (loss of productivity), or c) hire another employee (additional expense).
The CBA’s neutral, rotating schedule and seniority system played a significant role in the Court’s decision. Under the CBA, seniority determined shift selection. The employee worked second shift because he was one of the least-senior union members. Therefore, if the employer moved him to a different shift, it would violate the CBA and deny other employees their contractual rights. The employer had consulted with the union, but the union was unwilling to make an exception to the neutral, rotating schedule it negotiated.
Employers subject to CBAs should consider this decision when presented with requests for accommodations based on religious belief, particularly when those requests violate the CBA.
* George S. Crisci, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. If you have questions about the impact of religious accommodations on your workplace, please contact George (gsc@zrlaw.com) at 216.696.4441.
EEOC: Transgendered Employees Can Use the Restroom of Their Choice
By Andrew J. Cleves*On April 1, 2015, the Equal Employment Opportunity Commission (“EEOC”) ruled that a federal agency discriminated against a transgendered employee when it prohibited the employee from using the common women’s restroom. Lusardi v. McHugh, Dep’t of Army, Appeal No. 0120133395, (EEOC Apr. 1, 2015). The employee presented as female and had not undergone medical procedures to transition from male to female. According to the EEOC, when the employer required the employee to use a single-user restroom, the employer committed sex discrimination in violation Title VII of the Civil Rights Act of 1964 (“Title VII”).
In its decision, the EEOC adopted a standard for determining the sex of transgendered individuals – how the employee identifies himself/herself. Specifically, the EEOC concluded “there is no cause to question that Complainant – who was assigned the sex of male at birth but identifies as female – is female.” Here, after the employee began transitioning her gender presentation, she reached a mutual agreement with her employer regarding bathroom use: she would use a single-user restroom instead of the women’s restroom until she had undergone surgery. The employer advocated this approach based on anticipated discomfort from other female employees. Subsequently, the employee used the women’s restroom when her designated restroom was out-of-order. A supervisor confronted the employee about this use, claiming the employee must prove she had undergone “the final surgery” before she could use the women’s restroom.
The EEOC concluded that the employer’s act of prohibiting the employee from using the women’s restroom constituted direct evidence of discrimination. Here, the employer admitted the employee’s transgendered status was the motivating factor for its decision to prohibit the employee from using the women’s restroom.
The EEOC also determined that restricting the employee from using the women’s restroom was an adverse employment action. According to the EEOC, “equal access to restrooms” constitutes a significant, basic condition of employment. Therefore, where a transgendered individual has begun living and working as a woman (or man), the employer must allow the employee access to the women’s (or men’s) restroom.
Finally, the EEOC rejected the employer’s arguments of 1) anticipated discomfort of female employees and 2) the employee-employer transition agreement. “Nothing in Title VII makes any medical procedure a prerequisite for equal opportunity.” The EEOC concluded an employer may not condition access to terms, conditions, or privileges of employment on completing certain medical procedures that the employer feels conclusively proves the individual’s gender identity. Even though the employee originally agreed to use the single-user restroom, employees cannot prospectively waive their Title VII rights.
This EEOC decision is not an anomaly or new trend. Rather, the EEOC has begun pursuing these types of sex discrimination cases with increasing frequency. In its most-recent Strategic Enforcement Plan, the EEOC identified “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions” as a top enforcement priority. Additionally, as Zashin & Rich previously reported, the EEOC filed two sex-stereotyping, gender-discrimination lawsuits in September 2014. In these cases, the EEOC alleged the employer discriminated against the transgendered employee because the employee failed to conform to the employer’s “sex or gender-based preferences, expectations, or stereotypes.” On April 21, 2015, one court concluded the EEOC sufficiently stated a claim under Title VII and allowed the case to proceed. EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-13710, 2015 U.S. LEXIS 52016 (E.D. Mich. Apr. 21, 2015) In addition, the U.S. Court of Appeals for the Sixth Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee, previously held that a transgendered individual presented a valid Title VII discrimination claim. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004). On June 1, 2015, as Zashin & Rich recently highlighted, the Occupational Safety and Health Administration released a new best practice guide concerning transgendered workers’ use of workplace restrooms.
Given the EEOC’s increased emphasis on transgendered employees, employers must be cognizant of the protections Title VII and related state laws afford transgendered employees. In particular, employers should consider this EEOC decision when presented with employees transitioning their gender identity and employers should update their company handbooks and policies accordingly.
* Andrew J. Cleves, practices in all areas of labor and employment law. If you have questions about the impact of transgendered issues on your workplace, please contact Andrew (ajc@zrlaw.com) at 216.696.4441.
Employee Performance Reviews Have Their Day in Court: How Employers Can Get the Most out of Employee Performance Reviews
By Sarah K. Ott*Recently, the trial between Ellen Pao and her former employer, venture capital firm Kleiner Perkins Caufield & Byers (“Kleiner Perkins”), captivated the business and technology world. Pao, formerly a junior partner at the firm, sued Kleiner Perkins for gender discrimination and retaliation, seeking $16 million in damages. Pao argued that the firm’s culture prevented women from advancing into the more lucrative senior partner positions and that the firm retaliated against her after she filed the lawsuit, eventually terminating her employment. Kleiner Perkins asserted that Pao’s poor performance and inability to get along with colleagues prevented her from receiving a promotion and led to her discharge. On March 26, 2015, a California jury found for Kleiner Perkins on all counts. Since then, Kleiner Perkins has sought to recover close to $1 million in expenses incurred during trial from Pao, and a judge has tentatively ruled that Pao must reimburse Kleiner Perkins for about $250,000 in expenses. Pao recently filed a notice of appeal.
The lawsuit captured headlines in major newspapers and blogs because it pulled back a curtain on the inner workings of one of Silicon Valley’s most respected venture capital firms (known for funding Google and Amazon in their start-up days). From an employment law perspective, the trial highlighted some of the benefits and pitfalls of employee performance reviews. Both sides used Pao’s performance reviews as evidence, with Pao’s attorneys claiming they showed Kleiner Perkins’ bias against Pao, and the defense relying on them as records of her sub-par performance. In particular, Pao’s attorneys’ use of the performance reviews highlights the potential for reviews to backfire against the employer if not done well. Pao’s attorneys pointed to the reviews as evidence of retaliation, since she received poor performance reviews in the year after she filed her lawsuit (despite receiving far more positive reviews the year prior). They also used the performance reviews as evidence of discrimination, noting that Pao received conflicting feedback (advising her to be both more and less aggressive) and that her male peers who received similar comments were later promoted.
The trial serves as a reminder to employers on how to best use employee performance reviews to encourage better work from employees – and how to avoid potential legal pitfalls. Performance reviews can help employers by motivating employees to improve in certain aspects of their jobs or continue good work in other areas. They also create a written record showing that the employer counseled an employee on poor performance and track improvements (or lack thereof).
Abiding by the following tips will help employers more effectively use employee performance reviews:
- Common standards: create and adhere to the same standards so that every employee with the same job or role is evaluated based on the same criteria;
- Set goals: doing so sets a benchmark for the employer to evaluate that employee’s performance;
- Be specific: specificity helps employees understand the employer’s expectations and helps to prevent miscommunication;
- Use deadlines: informing employees of when they are expected to reach a goal creates a record of the employer treating the employee fairly; and
- Avoid personality critiques: rather than general criticism of an employee’s personality traits, employers should focus on specific instances when that trait created a problem.
Finally, to the extent that the employer can identify objective criteria, the review will be all the better.
* Sarah K. Ott practices in all areas of labor and employment law. For more information about conducting employee evaluations or other questions related to performance reviews, please contact Sarah (sko@zrlaw.com) at (216) 696-4441.
Courts Have Little Sympathy for Employer Mistakes in Complying with the Fair Credit Reporting Act
By Drew C. Piersall*The Fair Credit Reporting Act (“FCRA”) regulates the collection and use of consumer information, including employee background and credit checks, and requires employers that rely on third-party companies to conduct background checks to follow certain procedures in notifying the individual being checked. The requirements include the following:
- The employer must notify the individual that the information obtained in the background report may be used in the employer’s decision-making. The notice must be in a “stand-alone” format and may only have minimal additional information accompanying it.
- The employer must obtain the individual’s written permission to perform the background check. The permission form may be part of the notification document.
- For permission to obtain background reports throughout the individual’s employment, the employer must clearly state that intention on the permission form.
- In order to obtain an investigative report, including information on the employee or applicant’s lifestyle, personality, and reputation, the employer must inform the individual of his or her right to a description of the investigation and its scope.
The FCRA requires additional action from employers who take an adverse action based on the information learned from a background check conducted by a third-party company, such as deciding not to hire an applicant, revoking a job offer, or termination. Before taking the adverse action, the employer must provide the individual with a copy of the report and a document summarizing the individual’s rights under the FCRA and give the individual a meaningful opportunity to respond to the information.
Absent an adequate response and assuming the employer takes the adverse action, the employer must: (1) notify the individual of the adverse action; (2) provide the individual with specific credit score information from the report; (3) inform the individual of his or her right to obtain a free copy of the report within 60 days and dispute the information in the report; and (4) provide the contact information of the third-party company that compiled the report for the employer and explain that the third-party company did not make the decision to take the adverse action and cannot explain the reasons for the action. Employers also must destroy any background reports in a secure manner, such as by shredding them or permanently deleting electronic copies.
Despite the many requirements placed on employers by the FCRA, a spate of recent cases show that courts have little sympathy for employers who commit minor technical violations of the law, even when complying with the spirit of the law’s requirements. For example, a federal court in Virginia recently denied summary judgment to an employer who allegedly violated the FCRA when it failed to provide “stand alone” notice that it would be conducting a background check by including a liability waiver on the same document. Milbourne v. JRK Residential America, LLC, No. 3:12cv861, 2015 U.S. Dist. LEXIS 29905 (E.D. Va., Mar. 15, 2015). Other cases involve employers rescinding job offers based on information discovered through a background report before providing the job applicants with a meaningful opportunity to respond to the information. In one case, the employer revoked a job offer to an applicant based on erroneous information in a background report without giving the applicant a chance to challenge the report. Jones v. Halstead Management Co., LLC, No. 14-CV-3125, 2015 U.S. Dist. LEXIS 12807 (S.D.N.Y., Jan. 27, 2015). In another case, the employer rescinded a job offer after its receipt of an unfavorable criminal background report on an applicant without giving the applicant time to correct the inaccurate information with the consumer reporting agency before filling the position. Miller v. Johnson & Johnson, No. 6:13-cv-1016, 2015 U.S. Dist. LEXIS 4448 (M.D. Fla., Jan. 14, 2015).
In a more employer-friendly decision, a federal court in Massachusetts recently granted summary judgment for an employer despite the plaintiffs’ argument that the employer’s notice and request for authorization to conduct a background check did not limit itself “solely” to the disclosure because it included a short preamble regarding customer safety. Goldberg v. Uber Techs., Inc., No. 14-14264-RGS, 2015 U.S. Dist. LEXIS 44675 (D. Mass., Apr. 6, 2015). The court held the employer did not violate the FCRA by including “a few sensible words” about why the company chose to use background checks (i.e., customer safety). The court also found that the employer did not violate the FCRA by failing to notify the job applicant that it intended to make an adverse decision based on information included in the background report. The court found that the statute does not require advanced notice that the employer intends to take an adverse action – it merely requires providing the individual with the background report and a document stating the individual’s rights under the FCRA.
With FCRA cases seemingly on the rise, employers who use third-party companies to compile background information should review their background check policies and procedures. Failure to strictly comply with FCRA requirements can lead to costly litigation, including class action lawsuits brought on behalf of employees and applicants subject to the employer’s non-compliant background check policies and procedures.
* Drew C. Piersall works in the firm’s Columbus office and practices in all areas of labor and employment law. If you have questions about conducting background and credit checks or the FCRA in general, please contact Drew (dcp@zrlaw.com) at 614.224.4411.
Z&R SHORTS
Congratulations!
Seminars
Thursday, July 16, 2015 at 10:30 am
Patrick M. Watts presents "2015 Legal Update" at 10:30 a.m. at the Lake/Geauga Area Chapter of the Society for Human Resource Management luncheon.
Tuesday, September 22, 2015 at 1:00 pm
Jonathan Downes presents "Risk Management for Supervisors" for the Ohio Association of Chiefs of Police beginning at 1 p.m. at the Crowne Plaza Columbus North.
Crowne Plaza Columbus North | 6500 Doubletree Avenue, Columbus, OH
Thursday, September 24, 2015 at 10:00 am
Jonathan Downes and Drew C. Piersall present "Negotiations – Post Recession and Impact of The Affordable Care Act" for the Ohio GFOA – Annual Conference & Membership Meeting to be held at the Hilton Netherland Plaza in Cincinnati.
Hilton Netherland Plaza | 35 West Fifth Street, Cincinnati, OH
Friday, November 6, 2015 at 10:15 am
Patrick J. Hoban presents “Affordable Care Act” at 10:15 a.m. at the Ohio Conference for Payroll Professionals (OCPP) to be held at the Embassy Suites Hotel in Dublin, Ohio.
Friday, November 6, 2015 at 10:15 am
Michele L. Jakubs presents “FLSA/Time and Attendance Best Practices” at 10:15 a.m. at the Ohio Conference for Payroll Professionals (OCPP) to be held at the Embassy Suites Hotel in Dublin, Ohio.
Wednesday, July 1, 2015
Department of Labor’s Proposed Rule Would Make Millions of Employees Eligible for Overtime
The United States Department of Labor’s Wage and Hour Division recently announced a proposed rule that would change the Fair Labor Standard Act (“FLSA”) overtime rules by increasing the salary thresholds for exemptions under the FLSA. The proposed rule, if ultimately implemented, will have huge implications for employers.
The FLSA generally requires that employers pay employees for any time worked in excess of forty hours per week at a rate of one and a half times the employee’s regular rate. Contrary to some people’s belief, salaried employees are not automatically exempt from the FLSA’s overtime requirements. The law does, however, exempt so-called “white collar” employees and highly compensated employees from its overtime requirements. The proposed rule would significantly raise the salary threshold for those exemptions.
Currently, employees qualify for a “white collar” exemption by meeting three criteria: (1) the employee receives a fixed salary; (2) the salary meets the minimum threshold requirement of $455 per week, or $23,660 per year; and (3) the employee’s responsibilities primarily involve executive, administrative, or professional duties. Highly compensated employees who regularly perform one or more exempt duties and receive a salary of at least $100,000 per year are also exempt. The Department of Labor last updated the salary thresholds in 2004.
Prompted by President Obama, the Department of Labor seeks to raise the threshold amounts to $921 per week or $47,892 per year for the “white collar” exemptions and to $122,148 for highly compensated employees. Under the new rules, these thresholds would increase annually and for 2016 are projected to be $970 per week, or $50,440 per year. The threshold for highly compensated employees’ is also projected to increase in 2016. Of course, the increases would have a significant effect on businesses. The Department of Labor estimates that approximately 4.6 million employees would fall in the salary gap between the current thresholds and newly proposed thresholds. Absent an increase in these employees’ salaries, they would no longer meet an exemption and would be entitled to overtime for hours worked in excess of forty hours per week.
The Department of Labor is currently accepting comments on the proposed rule. The comment period will be closed in sixty days. Zashin & Rich will monitor any developments concerning the proposed rule closely.
*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law and is particularly adept at handling wage and hour issues. If you have questions about how the Department of Labor’s proposed regulations may impact your company, please contact: Michele L. Jakubs | mlj@zrlaw.com | 216.696.4441
Monday, June 29, 2015
The Supreme Court Recognizes a Fundamental Right to Same-Sex Marriage
In Obergefell v. Hodges, Case No. 14-556 (June 26, 2015), a five-justice majority of the Supreme Court held that the Due Process and Equal Protection clauses of the Fourteenth Amendment to the U.S. Constitution guarantee same-sex couples the fundamental right to marry under state law. The decision overturned last summer’s Sixth Circuit Court of Appeals decision which consolidated four actions and upheld state-law prohibitions on same-sex marriage in Michigan, Kentucky, Tennessee, and Ohio.
The Supreme Court based its decision upon the following analysis of law and tradition:
- Same-sex couples’ desire to participate in state-sanctioned marriage strengthens the societal institution;
- The historical concept of marriage has transformed with time;
- Marriage is a personal choice that is “central to the individual dignity and autonomy” and includes “intimate choices defining personal identity and beliefs” which the Constitution protects;
- “Two-person unions” and the “intimate association” they represent are a fundamental right;
- Same-sex marriage safeguards children and families by preventing the stigma and “humiliation” of the states’ refusal to recognize the individual choices upon which they are based;
- Marriage is a “keystone” of the Nation’s social order and, as a result, laws prohibiting same-sex marriages deny same-sex couples the “constellation of benefits” linked to marriage;
- Laws that prohibit same-sex marriage are unequal and deny same-sex couples from exercising a fundamental right;
- The right to marry is “a fundamental right inherent in the liberty of the person” and under the Due Process and Equal Protection clauses of the Fourteenth Amendment; and,
- Same-sex couples need not wait for legislative action before asserting a fundamental right.
Each of the four dissenting justices filed separate opinions which criticized the majority for “legislating” and not adjudicating, “revising” the Constitution, “exault[ing] judges at the expense of the People,” and “usurp[ing] the constitutional right of the people to decide whether to keep or alter the traditional understanding of marriage.”
For employers, the key significance of the Court’s decision is the effect it will have on spousal benefits and administration of employee payroll taxes. Many employers, whether self-insured or fully-insured, already have extended health and other insurance benefits to same-sex spouses of their employees in recent years. However, employers who have not done so based on state-laws prohibiting the recognition of same-sex marriages must discuss changing health and other employment-based insurance benefits contracts to extend coverage to same-sex spouses. Additionally, employers must review their human resources practices to ensure that employees in same-sex marriages receive the same leave and other employment benefits as opposite-sex married employees and seek legal counsel as needed.
The Obergefell decision recognizes that some individuals with religious beliefs that reject same-sex marriage continue to enjoy the protection of the First Amendment with regard to “advocating” those beliefs. Of course, the First Amendment states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” At this time it is unclear whether the federal courts will recognize a “conscience objection” to the Obergefell decision under the Free Exercise clause of the First Amendment. Employers who may consider a policy or practice at odds with Friday’s decision must carefully consider the potential risks and seek legal counsel concerning such policies or practices.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of private and public sector labor relations. Pat regularly counsels employers on LGBT issues. For more information about the Obergefell decision, labor & employment law, or any other workplace related issues, please contact Pat | pjh@zrlaw.com | 216.696.4441.
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