Showing posts with label Employment Practices Liability Insurance. Show all posts
Showing posts with label Employment Practices Liability Insurance. Show all posts

Tuesday, December 15, 2015

EMPLOYMENT LAW QUARTERLY | Volume XVII, Issue iii

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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.
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Thursday, August 30, 2012

EMPLOYMENT LAW QUARTERLY | Fall 2012, Volume XIV, Issue iii

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Putting a Price on Twitter Followers: The Importance of Employers Retaining Control of Their Social Media Accounts

By: B. Jason Rossiter*

A trade secrets suit accusing former PhoneDog LLC employee Nathan Kravitz of continuing to use a company Twitter account after his separation recently settled following litigation in the United States District Court for the Northern District of California.  Despite the case’s settlement and the lack of a formal court opinion, the case should serve as a warning to employers whose policies fail to address social media and related issues.

PhoneDog is an interactive mobile news web resource that reviews mobile products and services and allows users to research, price, and shop mobile carriers.  PhoneDog hired Kravitz in April 2006 as a product reviewer and video blogger and assigned him a Twitter account with the name (or handle) of “@PhoneDog_Noah”.  Kravitz regularly updated and submitted content (or tweeted) through the account.  PhoneDog assigned other employees Twitter accounts with similar names (“@PhoneDog_Name”) and claimed that all the Twitter accounts used by its employees, as well as the account passwords, constituted the company’s proprietary, confidential information.

Kravitz left PhoneDog in 2010.  After leaving PhoneDog, the company asked Kravitz to relinquish control of the Twitter account, which at the time had 17,000 followers.  Kravitz refused and instead changed the Twitter account name to “@noahkravitz”.  Kravitz continued to use the account and often tweeted to his followers, which had increased dramatically.

PhoneDog responded by filing suit for theft of company property, alleging $340,000 in damages calculated as $2.50 per follower per month for an eight month period.  PhoneDog claimed that Kravitz’s list of Twitter followers was akin to a client or customer list.  However, Kravitz’s attorneys presented documents demonstrating that PhoneDog had agreed to let Kravitz continue using the account following his separation and, in fact, asked him to continue tweeting occasionally on its behalf, which he did.  Under the only public terms of the parties’ settlement, Kravitz maintained sole custody of the account.

While the parties ultimately settled without a judicial decision, this case presents a valuable lesson for employers – that they should establish clear guidelines as to the use of social media and what happens to various social media accounts upon an employee’s discharge or separation.

*B. Jason Rossiter practices in all areas of employment litigation and is licensed to practice law in Ohio, Pennsylvania, and California.  Jason has extensive experience helping employers navigate through social media and related technology issues. For more information about this ever changing area, please contact Zashin & Rich at 216.696.4441.


Bad Medicine: Michigan Medical Marijuana Act Imposes No Restrictions on Private Employers Who Terminate Employees For Use of Medical Marijuana

By: Patrick M. Watts

The Sixth Circuit recently affirmed a district court’s dismissal of a former Wal-Mart employee’s claim of wrongful discharge.  The employee tested positive for marijuana, which he was using in accordance with the Michigan Medical Marijuana Act (“MMMA”).

The former Wal-Mart employee in Casias v. Wal-Mart Stores, Inc., used medical marijuana on the advice of his doctor and in accord with the MMMA.  The employee suffered from sinus cancer and an inoperable brain tumor.  When the employee suffered an injury at work, his manager took him to the hospital.  Pursuant to Wal-Mart’s policies, the hospital tested the employee for drugs, and he tested positive.  In response, the employee produced his user registry card to the hospital staff and explained that he was a qualifying patient under Michigan law.  He further stated that he did not use marijuana at work and that he did not come to work under the influence.

Wal-Mart’s corporate office directed the manager to discharge the employee for his use of marijuana.  The employee filed suit in state court, claiming wrongful discharge and violations of the MMMA.  Wal-Mart removed the case to federal court and moved to dismiss on the grounds that the employee failed to state a claim.  The district court dismissed the employee’s action for failure to state a claim.

The Sixth Circuit affirmed the district court’s ruling.  The court first analyzed and interpreted the statute, which provides that, “[a] qualifying patient who has been issued and possesses a registry identification card shall not be subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege, including but not limited to civil penalty or disciplinary action by a business or occupational or professional licensing board or bureau, for the medical use of marijuana in accordance with this act . . .”  Casias argued that the term “business” in the MMMA is independent, while Wal-Mart countered that it modifies the phrase “licensing board or bureau.”  The Sixth Circuit sided with Wal-Mart's interpretation.  The Court found that the MMMA imposes no restrictions on private employers, including Wal-Mart.  The MMMA does not refer in any way to employment.  The Court also noted that its interpretation was in line with those of courts in California, Montana, and Washington holding that similar state medical marijuana laws do not govern private employment actions.

This decision is likely to surface in Colorado and Washington, two states which have recently legalized the use of marijuana for more than medical use.  To combat the tension between state laws which allow for marijuana use, and federal laws which do not, some states have introduced bills to reconcile these differences.  For example, a U.S. Representative from Colorado has recently introduced legislation which urges the Department of Justice to respect Colorado’s state law and not prosecute those citizens who are in compliance with state law, even if in violation of federal law.

The laws governing the use of marijuana throughout the country are ever-changing and employers need to be wary of these changes and how they impact the workplace.


The Voters Have Spoken: What Employers Can Expect From President Obama’s Second Term

By: David R. Vance*

On November 6, 2012, Americans voted to keep President Barack Obama in office for another four years. What can employers expect from President Obama’s second term as President?

First, it is noteworthy that the GOP retained control of the House of Representatives.  This makes it unlikely that the President will be able to push through any sweeping legislation, at least not until after the 2014 midterm elections.  However, a Republican controlled House is nothing new to the President, and he has worked around it in two ways.  First, the President has issued a large number of Executive Orders.  Second, the President has urged various federal agencies, including the Equal Employment Opportunity Commission (“EEOC”) and the Occupational Safety and Health Administration (“OSHA”), to take expansive, aggressive positions on existing laws.  The President is expected to utilize similar actions in his second term.

OSHA is one such agency which may become much more active.  OSHA’s Injury and Illness Prevention Program has been in development for over three years, but the Agency is expected to make it a focus during Obama’s second term.  OSHA also is expected to put comprehensive rulemaking in place to regulate crystalline silica, which is a form of quartz to which workers performing blasting, foundry work, tunneling, and sandblasting regularly are exposed.  Finally, OSHA has proposed stricter injury and illness reporting obligations on employers.  These regulations would require employers to report workplace amputations to OSHA within 24 hours, as well as all inpatient hospitalizations within eight (8) hours.

The EEOC is expected to take similar actions.  The EEOC’s Strategic Enforcement Plan calls for taking action against employers who require pregnant employees to take medical leaves of absence if they are unable to perform their job duties.  Currently, reasonable accommodation of normal pregnancy is not required.  The EEOC also intends to enforce non-discrimination against individuals based on their lesbian, gay, bisexual, or transgender status.  Currently, some courts have said that “gender stereotyping” and discrimination based on gender identity is a form of sex discrimination, but Title VII does not directly address this, and it does not prohibit discrimination based on sexual orientation.

The National Labor Relations Board (“NLRB”) has been aggressive during the last four years and that is not expected to change.  During the President’s first term, the Board’s decisions and rulemaking have favored organized labor.  This trend is expected to continue into the President’s second term.  Based on the Board’s actions during the President’s first term, employers should expect more Board decisions and opinions invalidating employer social media policies, taking a dim view toward employment-at-will disclaimers, and taking an expansive view on protected concerted activity.

President Obama’s reelection also means that the Patient Protection and Affordable Care Act (“PPACA”) is here to stay.  The three federal agencies tasked with PPACA’s enforcement are expected to move quickly to promulgate new regulations.  Although several legal challenges are still moving through the courts, employers need to ensure that they are compliant with the requirements of the Act.

Employers must also navigate new legalized marijuana statutes in two states.  Voters in Colorado and Washington have approved legalization of the sale or possession of marijuana in small amounts.  However, employers operating in these states should note that legalized marijuana may not affect the exclusion from protection under the Americans with Disabilities Act for “current use of illegal drugs.”  This is true because the illegal drug definitions in the ADA are based on federal law.  In other words, under the ADA as currently enacted, it may not be a violation for a Colorado or Washington employer to take action against an employee for testing positive for marijuana.  This is far from a settled area, however, as representatives in Congress from both states have introduced federal legislation asking the federal government to respect their states’ laws.

These are but a few of the changes and issues the President’s second term may pose for employers.  If the President’s first four years were any indication, employers can expect many more changes.

*David R. Vance practices in all areas of labor & employment law and has extensive experience dealing with administrative agencies, particularly the EEOC. If you have any questions on how any of these potential changes may affect your company, please contact David (drv@zrlaw.com) at 216.696.4441.


Does Your Company Need Employment Practices Liability Insurance?

By: Stephen S. Zashin*

Many employers maintain insurance coverage for the defense of claims brought by current or former employees.  This type of insurance is commonly known as employment practices liability insurance (“EPLI”).  EPLI policies typically provide coverage for a broad-range of claims including discrimination, retaliation, harassment and wrongful termination.  Most EPLI policies also cover other workplace torts.

Certain EPLI policies exclude coverage for claims arising under the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act, Occupation Safety and Health Administration claims, claims for punitive damages, claims alleging intentional acts and claims arising under workers’ compensation laws.  When purchasing a policy, employers need to be aware of any exclusions to the policy.  However, even with potential exclusions, most EPLI policies offer substantial coverage and can be tailored to the needs of an employer’s business.

Employers can purchase EPLI policies with coverage amounts up to millions of dollars.  EPLI policies generally include a deductible, which is often referred to as a self-insured retention, which varies based on the cost of the policy.  Typically, the cost of legal defense is included in the aggregate insurance limits, along with the costs of judgments and settlements.  The assignment of legal counsel is outlined in policy.  Oftentimes, the insurance company may appoint counsel from a pre-approved list of “panel counsel.”  Members of these pre-approved panels often have a continuing relationship with the insurance company and are selected based on their skill in defending employment based claims.

EPLI coverage is usually written on a claims-made basis.  This means the incident resulting in the claim must have occurred during the coverage period.  Employers often cannot forecast when a claim may be filed against them, and employees often file such claims months or even years after the alleged discrimination, harassment, or discharge occurred.  Therefore, it is important for employers to maintain consistent coverage.

No matter how carefully and skillfully an employer manages workplace conduct, a potential for a claim always exists.  The number of discrimination claims filed with the Equal Employment Opportunity Commission alone has steadily risen over the past few years, as has the amount of damages the EEOC has collected.  EPLI coverage can be an excellent resource for employers defending against an ever increasing number of employment related lawsuits and can help control the legal costs associated with such lawsuits.

The best way to avoid litigation is to establish strong workplace rules and strictly enforce them.  However, an employer’s management of workplace conduct is not foolproof and with employee lawsuits on the rise, now is good time for employers to consider obtaining an EPLI policy or renegotiating their current policy.

*Zashin & Rich Co., L.P.A. is approved to defend claims covered by most EPLI carriers. Stephen Zashin, an OSBA Certified Specialist in Labor and Employment Law and the head of the firm’s labor and employment group, has worked closely with numerous representatives from various insurance providers and can help put those relationships to work for you. For more information about EPLI coverage and how it can help protect your business, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.

Time Is Not On Your Side: Ohio Supreme Court Interprets 90-Day Notice Requirement Following Discharge for Workers’ Compensation Retaliation Claims

By: Scott Coghlan*

Recently, the Ohio Supreme Court addressed when the 90-day period begins for a discharged employee to notify his or employer of a possible workers’ compensation retaliation claim under Ohio Revised Code Section 4123.90.  Under R.C. 4123.90, employers are prohibited from taking retaliatory action—defined as discharging, reassigning, demoting, or taking any other punitive action—against an employee following the employee’s pursuit of benefits associated with workers’ compensation.  The Court held that, as a general rule, the 90-day period begins to run on the date the employee is discharged.  However, the employer has an affirmative duty to notify the employee of the discharge within a reasonable period of time following the discharge so as not to interfere with the employee’s 90-day period.

In Lawrence v. City of Youngstown, the City of Youngstown suspended employee Keith Lawrence without pay.  Two days later, the city terminated Lawrence’s employment.  Lawrence alleged that he never received a copy of the termination letter.  Lawrence filed his complaint against the city in Mahoning County Common Pleas Court on July 6, 2007, alleging workers’ compensation retaliation under R.C. 4123.90 and racial discrimination.  In support of Lawrence’s R.C. 4123.90 claim, the complaint asserted that he had filed a workers’ compensation claim against the city and that his termination related to the filing.

After holding a hearing, the trial court ruled in Youngtown’s favor, and the magistrate granted summary judgment in favor of Youngstown.  As to Lawrence’s R.C. 4123.90 claim, the magistrate construed the disputed facts in favor of Lawrence and assumed that he did not know of his discharge until February 19, 2007.  However, the magistrate concluded that the operative date for starting the 90-day notification period was January 9, 2007, the date the city’s records indicated it discharged Lawrence, and that Lawrence’s delayed awareness of the termination was not relevant.

The Seventh District Court of Appeals affirmed.  As to the sole issue appealed by Lawrence, the court held that R.C. 4123.90’s 90-day notice period begins on the date of actual discharge, not the date the employee receives notice of his or her discharge.  Therefore, the appellate court determined that the trial court had no jurisdiction over the retaliation claim because Lawrence’s notice to his employer was received more than “ninety days immediately following the discharge.”

The Ohio Supreme court reversed the appellate court’s decision.  It held that “discharge” as used in R.C. 4123.90 means the date that the employer issued the notice of discharge, not the date of the employee’s receipt of that notice or the date of the employee’s discovery of a R.C. 4123.90 cause of action.  In this case, the employer apparently never sent a written notice to the employee (it sent it to the Union instead).  Lawrence eventually learned of his discharge, but his attorney did not send his notice of the claim until more than 90 days after Lawrence’s discharge (but less than 90 days after Lawrence received notice of his discharge).  The Court held that the lack of notice to the employee precluded dismissal of the case for failure to comply with the 90-day notice requirement.  The Court also concluded that R.C. 4123.90, when read in conjunction with R.C. 4123.95, places an implicit affirmative responsibility on an employer to provide its employee notice of the employee’s discharge within a reasonable time after the discharge occurs in order to avoid impeding the discharged employee’s 90-day notification obligation under R.C. 4123.90.  The Court reasoned that a reasonable time for an employer to inform an employee of a discharge is an inquiry dependent on the facts of each situation.  The Court did opine though that a delay of several days would not prevent the 90-day notification period from beginning to run on the actual day of the discharge.

Based upon this decision, employers should provide their employees with clear and timely notice of their discharges within a reasonable time after the discharge occurs.  According to the Ohio Supreme Court, this ensures that an employee will not be given additional time to meet his or her 90-day notice obligation.

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


Z&R Shorts

Zashin & Rich Co., L.P.A. is pleased to announce the addition of Helena Oroz, Emily A. Smith, and Jonathan D. Decker to its Employment and Labor Group.

Helena’s practice encompasses all aspects of general workplace counseling, compliance, and employment litigation defense work.  After working as employment counsel for a Fortune-500 company and representing employers at an internationally esteemed law firm, Helena returned to Z&R to put her varied experiences and sharpened expertise to work for the firm's clients.

Emily’s practice focuses on labor relations, equal employment opportunity, employment discrimination, unfair competition, and all other employment related torts.  Prior to joining Z&R, Emily practiced in the areas of director and officer liability insurance coverage, employment practices liability coverage, and other professional liability coverage.  Emily practices in Z&R’s Columbus office.

Jonathan's practice encompasses all areas of employment and labor law, including employment discrimination, retaliation, and labor relations.  Jonathan earned his law degree from Cleveland-Marshall College of Law. While in law school, Jonathan was a legal extern with the United States Equal Employment Opportunity Commission. Jonathan also was a member of the school's nationally-ranked moot court team, where he earned the Lewis F. Powell Medal for Excellence in Oral Advocacy.
Please join us in welcoming Helena, Emily, and Jonathan to Z&R!

Ohio’s 2013 Minimum Wage Increase

On January 1, 2013, Ohio’s minimum wage will increase.  The new wage will increase by $.15 per hour to $7.85 for non-tipped employees.  The new minimum for tipped employees will be $3.93 per hour, plus tips, a wage increase of $.08 per hour.

There is also a slight change for companies that have to pay minimum wage.  As of next year, the minimum wage will apply to businesses with annual gross receipts of $288,000, a $5,000 increase over this year.  Companies with gross receipts under $288,000 must pay the federal minimum wage of $7.25 per hour.  The federal rate also applies to 14- and 15-year-old employees.
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Saturday, May 1, 2010

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

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EMPLOYERS BEWARE: Use of Fake Job References On The Rise

by Jason Rossiter*

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

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

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

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

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

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

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

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

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

To Report or Not To Report an EPLI Claim

by Stephen S. Zashin*

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

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

Based on the following provision in NWA’s EPLI policy, Travelers successfully argued that its policy precluded coverage:
This [l]iability coverage shall not apply to, and [Travelers] shall have no duty to defend or to pay, advance or reimburse [d]efense [e]xpenses for, any [c]laim…based upon, alleging, arising out of, or in any way relating to…any fact, circumstance, situation, transaction, event or [w]rongful [a]ct underlying or alleged in any prior or pending civil, criminal, administrative or regulatory proceeding..., against any [i]nsured as of or prior to [the effective date of the policy].
The Court agreed with Travelers that NWA’s former employee’s unemployment benefit proceeding was an “administrative proceeding” subject to the provision above. NWA’s former employee made the same allegations in both her unemployment proceeding and later filed complaint – that NWA wrongfully discharged her. Since the unemployment proceeding occurred prior to the start of NWA’s EPLI policy’s coverage date, Travelers was not required to defend or indemnity NWA against its former employees later filed wrongful discharge complaint.

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

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

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

by Patrick M. Watts

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

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

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

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

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

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

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

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

by Jon M. Dileno*

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

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

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

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

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

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

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

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

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

by Lois A. Gruhin

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

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

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

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

EEOC Claims Drop Slightly in 2009


by Jessica T. Tucci

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

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

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

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

Z&R Shorts

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

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

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

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

Zashin & Rich Would Like to Congratulate its 2010 SUPERLAWYERS®
George S. Crisci
Jon M. Dileno
Victoria A. Glowacki
Patrick J. Hoban
Jason Rossiter
Patrick M. Watts
Andrew A. Zashin
Stephen S. Zashin

Upcoming Speaking Engagements

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

George Crisci will present “Human Resources Issues” on June 16, 2010 at the Holiday Inn, Independence, Ohio. For more information, go to www.nbi-sems.com.
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Thursday, January 24, 2008

EMPLOYMENT LAW QUARTERLY | Winter 2008, Volume X, Issue i

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NLRB Has Legendary September To Remember

By George S. Crisci*

The National Labor Relations Board (“NLRB”), which regulates and enforces the National Labor Relations Act (“NLRA”), has been criticized in recent years for its tremendous backlog of undecided cases. At times, hundreds of cases were pending before the NLRB for a final decision, some of which languished for years. Several of those cases involved major issues that have a significant impact upon the process of unionization and collective bargaining in private sector employment.

In September 2007, the NLRB made a sizeable dent in its backlog issuing decisions in dozens of these cases. The five-member NLRB (three of whose terms expired at the end of 2007) put its stamp on federal labor law by issuing six major decisions during a three-day period. Given that the three-person majority of the NLRB consisted of Republicans appointed by President Bush, all of these decisions favored employers and/or disfavored unions.

These decisions were each decided along a party-line 3-2 vote and impact a broad range of issues covering the spectrum of federal labor law.  Here is a brief summary of those rulings and the issues they decided:
  • “Permanent” Employment Status of Replacement Workers:  Striking employees traditionally are not entitled to reinstatement to their old jobs once a labor dispute ends if they were “permanently” replaced during the strike. They are entitled to reinstatement only when the employment of the permanent replacement ends.  In Jones Plastic & Engineering Co., 351 NLRB No. 011 (Sept. 27, 2007), the NLRB overruled a ten year precedent and held that persons hired as “at-will” employees to replace striking employees (who are usually not “at-will” employees) can be considered “permanent replacements.” Consequently, striking employees who are replaced by “at will” employees are not entitled to immediate reinstatement.

  • Refusal to Hire a Union “Salt”:  A “salt” is a person who is sent by a union to a non-unionized workplace to obtain employment and attempt to unionize the employees.  More than ten years ago, the U.S. Supreme Court held that a “salt” can be included as an “employee” who is entitled to protection under the NLRA. In Toering Electric Co., 351 NLRB No. 018 (Sept. 29, 2007), the NLRB held that a “salt” who is refused employment is not protected under the NLRA unless it can be proven that the person is “genuinely interested in seeking to establish an employment relationship with the employer.” The NLRB explained that it was attempting to address certain “abusive tactics” by labor unions, such as having persons who were not interested in obtaining employment submit applications and then engage in conduct that was designed to motivate an employer not to hire them so that they could file unfair labor practice charges. 
In May of 2007, the NLRB changed the traditional remedy for salts who were unlawfully refused employment. Previously, the remedy for an unlawful discharge or refusal to hire included the employer’s payment of backpay to the employee for the period from the unlawful act until the employer made a valid offer of employment. In Oil Capitol Sheet Metal, Inc., 349 NLRB No. 118 (May 31, 2007), the NLRB held that a full backpay remedy is unavailable unless the union proves that it would have allowed the salt to continue working indefinitely for the employer and would not have moved the salt to a different employer.  In addition, the salt would not be entitled to employment if the salt would have left the job before the NLRB issued a decision that the refusal to hire was unlawful.
  • Challenges to Voluntary Recognition of a Union: For decades, unions have obtained “voluntary recognition” as a collective bargaining representative without a secret-ballot election by presenting the employer with union authorization cards from a majority of the employees to be represented and asking the employer to recognize the union (called a “card-check majority”). When voluntary recognition occurred, a union’s status as bargaining representative could not be challenged by the employees for a “reasonable period of time,” which often provided the union with sufficient time to negotiate a labor contract (which then generally bars challenges for up to three more years). In Dana Corporation, 351 NLRB No. 028 (Sept. 29, 2007), the NLRB held that the voluntary recognition of a union can be challenged by a secret-ballot election. Employees who opposed unionization could file with the NLRB a petition supported by 30 percent of the employees to be represented within 45 days after receiving notice of both the voluntary recognition and the employees’ right to seek an election challenging the recognition.  Absent such notice, any voluntary recognition – even if a labor contract subsequently is negotiated – can be invalidated by a timely-filed petition for a secret-ballot election. 
This is the second decision in 2007 that weakened a union’s ability to maintain its status as a bargaining representative. In Truserv Corporation, 349 NLRB No. 23 (Jan. 31, 2007), the NLRB overturned a ten year precedent regarding the disposition of a decertification petition filed when unfair labor practice charges against an employer are pending but those charges subsequently are settled. The NLRB previously required that any petition challenging the union’s majority status that is filed after the employer’s allegedly unlawful conduct, and before the settlement, must be dismissed. Now, a decertification petition filed after the occurrence of alleged unfair labor practices by the employer, and prior to settlement of those charges, should not be dismissed where there has been no finding or admission that the employer actually engaged in the alleged wrongful conduct.
  • Employer Lawsuits Against Unions: For many years, an employer committed an unfair labor practice if it unsuccessfully sued a union in retaliation for the union engaging in statutorily protected activities regardless of whether the employer had an objectively reasonable basis for suing the union. In BE & K Construction Co., 351 NLRB No. 029 (Sept. 29, 2007), the NLRB held that an employer’s reasonably based, but unsuccessful, lawsuit against a union is not an unfair labor practice, even if the employer had a retaliatory motive for doing so.  Consequently, it will be easier for employers to sue a union in response to the union’s activities without running the risk of committing an unfair labor practice.

  • Limiting “Make-Whole” Remedies Based Upon Improperly Obtained Evidence of Employee Misconduct:  Employees who suffer an adverse employment action (such as a discharge) because of an employer’s unfair labor practices traditionally are entitled to a “make-whole” remedy, such as reinstatement with backpay.  In Anheuser-Busch, Inc., 351 NLRB No. 040 (Sept. 29, 2007), the NLRB established an important exception by overruling cases decided more than ten years ago. The NLRB held that the employer had committed an unfair labor practice when it installed and used hidden surveillance cameras without first negotiating with the union, and it ordered the employer to cease and desist from using the hidden surveillance cameras. However, the NLRB refused to provide a make-whole remedy to 16 employees who were discharged or disciplined for misconduct that had been detected through the use of the hidden cameras. Rather, the NLRB held that these employees were disciplined “for cause,” so they were prohibited under the NLRA from receiving reinstatement and/or backpay. It did not matter that the evidence had been improperly obtained through the employer’s unlawfully implemented hidden cameras.

  • Proof of Mitigation of Damages:  An employer traditionally has been permitted to challenge a backpay award to an employee who was unlawfully discharged or suspended by contending that the employee failed to mitigate damages. In the past, the employer had the burden of showing both that there were substantially equivalent jobs available to the employee and that the employee unreasonably failed to apply for those jobs. In St. George Warehouse, 351 NLRB No. 042 (Sept. 29, 2007), the NLRB shifted to the employee the burden of showing that he or she took reasonable steps to seek substantially equivalent jobs that were available.  This decision potentially makes it easier for employers to reduce the size of a backpay award and more difficult for employees to obtain a full backpay award unless they have taken reasonable steps to find another job when such employment opportunities were available.
With the start of 2008, the terms of three Board members (two Republicans and one Democrat) expired, leaving the NLRB with only two members. Until those vacancies are filled, few decisions will be issued, and none will be of the significance summarized above.

The lasting impact of these major decisions is uncertain. The Democratic majority in Congress has already introduced legislation to overturn many of these decisions.  While a Presidential veto of any such legislation by President Bush is a virtual certainty, there is no telling who will hold that power after the 2008 election.

For the present, however, employers should enjoy the improvements to the labor front that have been brought about by these decisions and consult with experienced labor counsel to determine how best to take advantage of them.

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

Supreme Court Bars Common Law Claim For Age Discrimination

By Jason Rossiter*

Finding that the Ohio Civil Rights Act (“OCRA”) provides a “full range of remedies” for plaintiffs alleging discrimination due to their age, the Ohio Supreme Court recently upheld dismissal of a lawsuit brought outside of the statute, pursuant to the common law under a theory of violating public policy.

In Leininger v. Pioneer Natl. Latex, 2007-Ohio-4921, the Ohio Supreme Court closed a loophole previously available to plaintiffs that fail to timely file age discrimination lawsuits. The OCRA, R.C. 4112.01, et seq., provides a statutory framework for the prosecution of age discrimination lawsuits including a 180-day limitations period. Compared to the four-year limitations period applicable to a common law public policy claim, the shorter statutory requirement favors employer defendants.

Marlene Leininger, age 60, claimed she was wrongfully discharged by her employer, Pioneer National Latex (Pioneer), in 2001. Leininger felt many of her responsibilities as a human resources administrator were ultimately given to a 21 year old co-worker. Leininger filed her lawsuit more than 180-days after her termination. The Ashland County Court of Common Pleas granted Pioneer’s motion for summary judgment finding that Leininger missed the deadline for filing a statutory claim and that Ohio law did not provide her with an alternative common law cause of action.

The Fifth District Court of Appeals, relying on a 1997 Supreme Court of Ohio decision, Livingston v. Hillside Rehabilitation Hospital, 1997-Ohio-155, reversed the trial court’s decision and vacated the order granting summary judgment. Livingston, decided without an opinion, reversed an appellate decision that refused to allow an age-based common law claim for wrongful discharge.

The Leninger Court reversed and reinstated summary judgment for the employer. The Court found that the statute had been amended since Livingston to expand the range of remedies available to victims of age discrimination. Consequently, there are no longer “gaps” or limitations in the statute necessitating the recognition of a separate common law right of action. The Court noted that the statue allows a plaintiff to obtain a variety of remedies including a cease and desist order barring further discriminatory acts; reinstatement with backpay; restored seniority and fringe benefit credit; and all damages, including punitives and attorneys fees. While limited to claims of age discrimination, the Court’s rationale suggests that its prohibition on public policy claims would also apply to other protected classifications under the Ohio Civil Rights Acts including sex, national origin, religion, and disability.

Although Leininger is a favorable decision for Ohio employers, it does not absolve employers of potential liability for age discrimination. Quite the opposite, Leininger recognizes that remedies are available to employees pursuant to the statute, including punitive damages and attorneys fees. The Leininger decision, however, is useful when defending a claim brought in an Ohio court outside of the 180-day limitations period.

*Jason Rossiter has extensive experience representing employers in litigating and arbitrating workplace disputes in Ohio, California and throughout the country. For more information about age discrimination or any other employment-related tort, please contact Zashin & Rich at 216.696.4441.

EPLI UPDATE: Timely Notify Your Carrier Of A Potential Claim

By Stephen S. Zashin*

Employers routinely maintain insurance coverage for the defense of claims brought against them by their employees. This type of insurance is commonly known as Employment Practices Liability Insurance (“EPLI”) and often includes the defense of employment discrimination claims. Generally, EPLI policies include a “timely notice” provision requiring the insured employer to notify the carrier of a potential claim “as soon as practicable,” or similar language to that effect. As one employer recently discovered, the failure to give an insurance carrier the notice required under an EPLI policy could result in a loss of coverage for the claim.

In American Ctr. for Int’l Labor Solidarity v. Federal Ins. Co., 518 F. Supp. 2d 163 (D.C. 2007), a federal district court held that an employer who failed to provide its carrier with notice of a potential claim for 17 months violated a condition precedent of the insurance contract and was not entitled to coverage under the policy. The dispute between the insurance company and its insured involved the definition of a “claim” requiring notice.

In August 2002, the employer received notice that a former employee had filed a charge of discrimination against it with the Equal Employment Opportunity Commission (“EEOC”). The initial notice indicated that no action was required of the employer at that time. Later, in November 2002, the employer received a second, more detailed notice of the charge, requesting that the employer either agree to participate in mediation or submit a position statement. The employer declined the request for mediation and, through its outside counsel, submitted a position statement on December 19, 2002 setting forth its analysis of the facts of the charge.

Following its investigation, the EEOC dismissed the charge of discrimination and issued a Right-to-Sue letter to the employee. On December 12, 2003, the employee filed a race discrimination lawsuit against the employer in federal court.

On January 20, 2004, the employer notified its carrier of the claim and requested that its outside counsel be assigned to defend the lawsuit. In March 2004, the insurer denied coverage because the employer had failed to give timely notice (defined in the policy as “as soon as practicable”) of the claim. According to the policy, a “claim” included a “formal administrative or regulatory proceeding.”

The employer then sued the insurer for coverage, arguing that the charge of discrimination before the EEOC was not a “formal” administrative proceeding because the EEOC could not adjudicate liability and used informal methods to resolve charges of discrimination. The court disagreed and concluded that administrative proceedings before the EEOC are “formal” because nearly all aspects are prescribed by statute or regulation; the EEOC’s investigation can produce significant consequences for the parties; and the EEOC is empowered to take testimony, receive evidence, subpoena witnesses, and compel witness attendance through initiation of enforcement proceedings.

While the court noted that the determination of the EEOC does not control the outcome of the lawsuit, it reasoned that the proceedings do have consequences to resulting litigation. By failing to give the insurer the notice required under the policy and unilaterally electing to waive mediation, the court found that the employer prejudiced the insurer’s right to investigate and potentially resolve the claim.

The effect of this decision on employer’s EPLI policies depends on whether the policy contains language defining a federal or state administrative hearing as a “claim” requiring notice to the insurance carrier. This court’s decision should serve as a reminder to employers to review the terms of their EPLI policies and provide notice to their insurance carriers immediately so as to avoid a loss in coverage over a claim.

Zashin & Rich Co., L.P.A. is approved to defend claims covered by insurance policies carried by most EPLI carriers. For more information about these carriers, please contact Stephen Zashin.

*Stephen Zashin, an OSBA Certified Specialist in Labor and Employment Law, has extensive experience defending employers involved in employment litigation, as well as administrative hearings before the Equal Employment Opportunity Commission and various state administrative civil rights agencies. For more information about the defense of an administrative hearing, lawsuit, or EPLI, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.

HOTMAIL – NLRB Limits Employees Use Of Company Email To Further Union Activity

By Jon M. Dileno*

On December 16, 2007, the National Labor Relations Board (“NLRB”) rendered a much anticipated decision in The Guard Publishing Company d/b/a/ The Register-Guard, 351 NLRM No. 70. In a 3-2 split, the NLRB held that “employees have no statutory right to use [an employer’s] email system for Section 7 purposes.” The majority characterized the ruling as a natural extension of the well-established precedent that an employee has “‘no statutory right…to use an employer’s equipment or media,’ as long as the restrictions are nondiscriminatory.” Under the decision, an employer can lawfully craft a policy restricting the use of the employer’s email system for non-work-related messages, including those related to union activity.

The NLRB based its decision on the premise that employers have a “basic property right” to “regulate and restrict employee use of company property.” Email and computer equipment qualify as company property and, therefore, an employer has a legitimate business interest in maintaining the efficient operation of its email system. The NLRB viewed Register-Guard’s Communications Systems Policy (“CSP”) as a codification of this legitimate business interest in company property. The CSP stated in relevant part:
Company communication systems and the equipment used to operate the communication system are owned and provided by the Company to assist in conducting the business of The Register-Guard. Communications systems are not to be used to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job-related solicitations.
In 2000, Register-Guard disciplined Suzi Prozanski (“Prozanski”), a company employee and the union president, for violating the CSP. Prozanski repeatedly used Register-Guard’s email system to distribute union-related messages to employees. She received written warnings for three specific violations. Two of the emails solicited employees to support the union’s collective bargaining efforts and to participate in union activities. The other email clarified facts related to a union rally and was otherwise not a solicitation.

In 2002, an administrative law judge (“ALJ”) ruled that Register-Guard discriminatorily enforced the CSP, according to the NLRB standard endorsed in Fleming Co., 336 NLRB 192 (2001), enf., denied 349 F.3d 968 (7th Cir. 2003). Under the Fleming framework, “[i]f an employer allows employees to use its communications equipment for non-work related purposes, it may not validly prohibit employee use of communications equipment for Section 7 purposes.” The ALJ found that Register-Guard permitted its employees to use email for various personal messages, including baby announcements, jokes, party invitations, and the occasional offer of sports tickets or request for services such as dog walking. Consequently, the ALJ determined that the company had committed an unlawful discriminatory practice consistent with Fleming.

The NLRB reversed the ALJ’s decision and applied a narrower, more employer friendly standard for determining whether an employer’s conduct discriminates against Section 7 activities. Now, unlawful discrimination must involve “disparate treatment of activities or communications of a similar character because of their union or other Section 7-protected status.” Under this new framework, the NLRB must determine the nature of each individual union-related communication to effectively compare it to “similar” non-union communications. For example, in Register-Guard the NLRB held that the company could legally prohibit Section 7 communications that are solicitous because there was no evidence that the company permitted employees to use company email to solicit support for any group or organization. The Board found email to be more similar to employer owned equipment like telephones and bulletin boards, which may be restricted during nonworking hours, than to face-to-face solicitation, which cannot be restricted during nonworking hours.

The NLRB’s decision in Register-Guard increases the employer’s ability to restrict certain non-work communications, while allowing others. Under this new framework, the employer may draw a line between charitable solicitations and non-charitable solicitations, between solicitations of a personal nature (e.g., car for sale) and solicitation for the commercial sale of a product (e.g., Avon products), between invitations for an organization and invitations of a personal nature, between solicitations and mere talk, and between business-related use and non-business related use. It is important that employers review their current policies and procedures relative to the use of company email and enforce them uniformly.

*Jon M. Dileno represents employers in the full spectrum of labor and employment matters in both the public and private sector. Jon’s experience in collective bargaining matters extends beyond negotiating labor contracts and covers the full gamut of collective bargaining proceedings. For more information concerning organized labor protected activity or any other labor issue, please contact Jon at 216.696.4441 or jmd@zrlaw.com.

UPDATE: Changes To The Ohio And Federal Minimum Wage

By Michele L. Jakubs*

On May 25, 2007, President Bush signed into law the Fair Minimum Wage Act of 2007 (the “Act”). The Act amended the Fair Labor Standards Act (“FLSA”) of 1938 and increased the federal minimum wage to $5.85 an hour on July 24, 2007, and will further increase the federal minimum wage to $6.55 an hour on July 24, 2008, and to $7.25 an hour on July 24, 2009. The FLSA provides additional regulations that apply to all employees that include child labor, recordkeeping, and enforcement provisions in addition to rules relative to overtime compensation and the minimum wage.

The July 24, 2008 increase to the federal minimum wage will have no immediate impact on most employers in states, such as Ohio, that have a higher state minimum wage. In November 2006, Ohio voters approved Statewide Issue 2. Issue 2, an Amendment to Ohio’s Constitution, raised Ohio’s minimum wage effective January 1, 2007. Under the Ohio Amendment, Ohio’s minimum wage adjusts annually to reflect inflation as tracked by changes to the consumer price index. On January 1, 2008, the Ohio minimum wage increased to $7.00 an hour. The Ohio Amendment also requires employers to maintain certain payroll information and provide it, free of charge, to their employees upon request. Moreover, employers must furnish new employees with certain information – including the employer’s name, address, telephone number, email address, website, fax number, and the name and address of the employer’s statutory agent. Employers must keep this information current and provide updates to current employees within 60 days of a change.

Allegations of wage and hour violations comprise one of the largest areas of potential liability for employers. Wage and hour litigation has increased 300% over the past decade and lawsuits based on FLSA violations are one of the fastest growing sources of employment-based class/collective action litigation. Wage and hour violations that commonly result in litigation include: misclassifying employees as “exempt” and failing to pay them overtime; failing to pay non-exempt employees overtime, including overtime not approved in advance; failing to pay for time worked “off the clock,” including allowing employees to arrive early to prepare for work or stay late to “close up;” and granting compensatory or “comp time” in lieu of overtime pay.

Employers should regularly conduct an audit of their wage and hour practices to minimize the risk associated with wage and hour violations. These audits include a thorough review of employee classification and payroll records and analysis of employment policies to ensure compliance with the FLSA. Taking proactive steps will help decrease an employer’s exposure to wage and hour liability, deter administrative agency investigation, and minimize exposure to litigation.

*Michele L. Jakubs practices in all areas of employment litigation and wage and hour compliance and administration. For more information concerning changes to the minimum wage or any other aspect of the FLSA, please contact Michele at 216.696.4441 or mlj@zrlaw.com.

Z&R Shorts

Zashin & Rich Welcomes Pat Hoban to Its Employment and Labor Group
Patrick J. Hoban represents public and private sector employers in labor relations and employment issues. Pat, previously an attorney with Littler Mendelson’s Cleveland office (formerly known as Duvin, Cahn & Hutton), represents municipal clients in collective bargaining, labor arbitrations, unfair labor practice proceedings and provides day-to-day counsel to public employers on matters including contract administration, work rules, compliance with state and federal employment regulations and civil service issues. Pat has also represented and advised large national and local private sector employers on a variety of issues arising under labor contracts and the National Labor Relations Act. Additionally, he has successfully represented clients before the Ohio State Employment Relations Board, the National Labor Relations Board and in Federal Court.
Please join us in welcoming Pat to Z&R!


George Crisci Designated a 2008 Ohio Super Lawyer
Zashin & Rich Co., L.P.A. is pleased to announce that George S. Crisci has been named as a 2008 Ohio Super Lawyer in the field of labor and employment law. Only five percent of Ohio attorneys receive this honor each year. Super Lawyers is a list of outstanding lawyers from more than 60 practice areas who have attained a high degree of peer recognition and professional achievement. The exclusive list of Ohio Super Lawyers is published annually in the January issue of Cincinnati Magazine, Northern Ohio Live and Ohio Super Lawyers Magazine.
Congratulations, George!


Upcoming Speaking Engagements

On January 24, 2008, Stephen Zashin moderated a panel discussion on the topic of “Claims Management: Fostering an Integrated Relationship between Insurers and Defense Counsel to Ensure Timely Resolution” at the Employment Practices Liability Insurance Conference presented by the American Conference Institute in New York, NY. The discussion included tips for streamlining the claims process; key reasons why claims are denied; top ways defense counsel can stay out of trouble with carriers and ensure that they will be used again; establishing a mutual understanding of expectations from the defense counsel and carrier perspectives; understanding various perspectives when weighing the factors to settle or try a case; controlling defense costs; who has the final say in whether to settle or try a case; and notice provisions: untangling the uncertainties.

George Crisci will speak at the State and Local Government Bargaining & Employment Law Committee of the Section of Labor and Employment Law of the American Bar Association’s Midwinter Meeting in Puerto Vallarta, Mexico on February 1, 2008. George will present “Mandatory Bargaining Subjects” to the committee.

On April 16, 2008, Steven Dlott will speak at the Second Annual Advanced Workers’ Compensation seminar being held in Cleveland. Steve will present “Claims Management Best Practices to Minimize Costs and Maximize Efficiency” and “Employer Pitfalls and Protections.” The event will be held at the Hilton Garden Inn, 1100 Carnegie Avenue, Cleveland, Ohio with registration at 8:00 a.m. Please contact Sterling Education Services, Inc. at (715) 621-00855-0498 or go to www.sterlingeducation.com for more information.

George Crisci will present a private client training in January on the topic of “Proper Performance Document Techniques.” Stephen S. Zashin will present two private trainings in January and February to clients on various topics associated with the FMLA.


Legal Brief The IRS recently issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business. Beginning January 1, 2008, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be 50.5 cents per mile for business miles driven, compared to 48.5 cents per mile for 2007.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile conducted by Runzheimer International, independently contracted by the IRS.
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