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New Ohio Law Allows Employers to Reduce Employee Hours to Avoid Layoffs
By Emily A. Smith*
On July 11, 2013, Ohio Governor John Kasich signed a law allowing
employers seeking to cut costs to reduce temporarily all employees’
hours by 10 to 50 percent. The law became effective immediately. Touted
by supporters as a win-win for both employers and employees, the
state-approved layoff prevention program (called SharedWork Ohio) allows
employees to keep their health and retirement benefits, as well as seek
unemployment compensation for up to half of their missing wages.
Employers will benefit by avoiding higher unemployment compensation
taxes and the costs associated with training new workers.
SharedWork Ohio, which is similar to state-approved programs in 25
other states, will be funded by the federal government for the next two
years. Thereafter, costs associated with the program will be funded
through the unemployment compensation system.
Employers wanting to participate in the program must submit a plan to
the director of the Ohio Department of Job and Family Services,
including (among other things) a certification that the aggregate
reduction in the number of hours worked by employees is in lieu of
layoffs. Seasonal or temporary employees are not eligible for the
program.
Whether employers with unionized employees must bargain over the
implementation of the shared work programs remains uncertain. Ohio’s
shared work program does not require union approval for employers’
shared work plans, which makes Ohio unique among most other states with
shared work programs. Although SharedWork Ohio garnered bipartisan
support generally, liberal supporters were in favor of a union sign-off,
but conservative supporters were not. Employers with unionized
employees are advised to seek advice from legal counsel as they develop
and implement any shared work program.
*
Emily A. Smith practices in all areas of
employment law and regularly navigates employers through the nuances of
Ohio employment laws and programs like SharedWork Ohio. If you believe
your organization would benefit from SharedWork Ohio, contact Zashin & Rich at
614-224-4411 for more information.
Ohio Follows Suit in Making Class Actions Harder to Certify
By Stephen S. Zashin*
Recently, the Ohio Supreme Court made it more difficult for plaintiffs bringing class action lawsuits in Ohio state courts. In
Stammco, LLC v. United Tel. Co. of Ohio,
2013 Ohio 3019, the Court ruled that Ohio Rule of Civil Procedure 23
requires a “rigorous analysis” at the class certification stage. The
Court also stated this analysis may “include probing the underlying
merits of the plaintiffs claim.” However, this in-depth probe should
only be used “for the purpose of determining whether the plaintiff has
satisfied the prerequisites of Civ.R. 23.”
Ohio Civil Rule 23, which is nearly identical to the corresponding
federal rule, lists the requirements of maintaining a class action suit.
The Court’s recent decision in the
Stammco case ended an eight
year legal battle in which the plaintiffs alleged the defendant engaged
in “cramming,” which is the unauthorized addition of third party
charges to telephone bills. Plaintiffs sought class certification under
Ohio Rule of Civil Procedure 23(B)(3). In refusing to certify the
proposed class, the Ohio Supreme Court found that “the need for
individualized determinations is dispositive in that the class did not
comport with Civ. R. 23.” The Court also found that remanding the issue
to the trial court “merely to reach an inevitable result” would be
unproductive and unnecessarily delay the eight-year-old litigation.
In
Stammco, the Ohio Supreme Court relied heavily on two recent United States Supreme Court decisions:
Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011) and
Amgen v. Connecticut Retirement Plans & Trust Funds, 133 S.Ct. 1184 (2013).
Dukes
was an employment discrimination case in which the United States
Supreme Court denied certification of a class of workers in part because
individualized proceedings would be required to determine the amount of
back pay due some class members. In
Amgen, a pharmaceutical
company misrepresented the safety of its products to the Food and Drug
Administration. Connecticut Retirement Plans filed suit seeking to
certify a class of shareholders. In certifying the class, the United
States Supreme Court clarified that the consideration of the underlying
merits at the certification stage is not unfettered. The Court stated,
“[T]he office of a Rule 23(b)(3) certification ruling is not to
adjudicate the case; rather, it is to select the ‘metho[d]’ best suited
to adjudication of the controversy ‘fairly and efficiently.’” Relying on
these cases,the Ohio Supreme Court denied class certification in
Stammco
because the case would require “individualized determinations as to
each member of the class…making certification of a class inappropriate
under Civ.R. 23(B)(3).”
Taken together, these three decisions are likely to reduce the number
of class action suits at both the state and federal levels that will
successfully get past the certification stage. The Ohio and United
States Supreme Courts have made it clear that cases that require
individualized determinations are likely not appropriate for class
action litigation. In addition, trial courts must conduct a more
in-depth analysis of class action suits at the certification phase.
While the
Stammco decision is helpful for Ohio employers, they still must remain vigilant of potential class actions.
*
Stephen S. Zashin,
an OSBA Certified Specialist
in Labor and Employment Law, is the head of the firm’s labor and
employment group. Stephen’s practice encompasses all areas of labor and
employment law, and he works extensively in defending class and
collective actions. For more information about this article or any other
employment matter, please contact Stephen at 216.696.4441 or ssz@zrlaw.com.
Right to Remain Silent: The Do’s and Do Not’s of Internal Investigations
By Jonathan J. Downes*
The Ohio Supreme Court recently expanded the United States Supreme Court’s finding in
Garrity v. New Jersey, 385 U.S. 493 (1967). In
Garrity,
the New Jersey Attorney General questioned police officers about a
suspected traffic ticket fixing scheme. The investigation was not
criminal in nature, but officers were hesitant to cooperate, fearing
that their comments would be self-incriminating. The officers were told
that if they refused to cooperate with the investigation, they could be
removed from office. Ultimately, the officers complied with the
investigation and some were subsequently prosecuted for “conspiracy to
obstruct the administration of traffic laws.” The Supreme Court found
that the officers’ statements made during the initial investigation were
coerced. As such, they were inadmissible in the officers’ criminal
prosecution. The Court reasoned that allowing the coerced statements
into evidence would violate the officers’ Fifth Amendment right against
self-incrimination. The
Garrity warning applies to all public employees.
The Ohio Supreme Court recently faced a similar situation in
Ohio v. Graham, 2013 Ohio 2114, 2013 Ohio LEXIS 1348 (May 29, 2013)
. Relying on
Garrity,
the Ohio Supreme Court held that statements obtained from a public
employee under threat of job loss are unconstitutionally coerced and
inadmissible in subsequent criminal proceedings. In
Graham, the
Office of the Inspector General questioned several Ohio Division of
Wildlife (“DOW”) administrators about the punishment of another DOW
worker. The DOW worker at issue had illegally allowed a DOW worker from
South Carolina to register a hunting license to his address at a reduced
price. When DOW administrators learned of the infraction, they
addressed the employee’s discipline internally rather than informing the
authorities as required by protocol. The Ohio Division of Natural
Resources learned of this decision, and the Inspector General
investigated. Unlike the investigation in
Garrity, the
investigators never told the administrators that they could face
suspension or removal from office for refusing to comply. However, each
administrator received a “Notice of Investigatory Interview” which
stated that refusal to comply with the investigation could lead to
suspension or termination. The Court determined that: (1) the
administrators subjectively believed they could be terminated for
refusing to comply with the organization; and (2) their belief was
objectively reasonable. Accordingly, the Court found that the
administrators’ statements made during the investigation were
inadmissible in subsequent criminal proceedings against them.
So where does this leave public employers that are looking to undertake
an internal investigation? First, employers should remember that
statements obtained from a public employee under threat of job loss are
inadmissible in subsequent criminal proceedings. However, a public
employer may still compel a public employee’s cooperation in a
job-related investigation so long as the employee is not asked to
surrender the privilege against self-incrimination. Therefore, employers
should not attempt to bypass
Garrity by issuing a notice to employees as in
Graham. Finally, employers should also incorporate information about internal investigations into their employee handbook.
Contact us for policies or forms for
Garrity notices, a simple but critical step in internal investigations.
*
Jonathan J. Downes, is AV rated by Martindale
Hubbell and is an OSBA certified specialist in labor and employment law,
practices in the firm’s Columbus, Ohio office and has extensive
experience representing public sector employers, including conducting
internal investigations. If you have any questions about the above or
any other union/employee issue, contact Jonathan (jjd@zrlaw.com) at 614.224.4411.
Disorderly Conduct: EEOC Cracks Down on Employers’ Use of Applicants’ Criminal Histories
By Ami J. Patel*
An employer may consider an individual’s criminal record when making
employment decisions. However, the Equal Employment Opportunity
Commission (“EEOC”) has found that exclusions based on such records may
disparately impact minorities. Two employers’ screening policies have
recently fallen under scrutiny. The EEOC filed suit against Dollar
General and BMW on behalf of former and prospective African-American
employees, alleging that both companies utilized screening procedures
that disproportionately impacted African-Americans.
First, the EEOC filed a nationwide lawsuit against Dollar General on
behalf of African-American applicants. The lawsuit challenged Dollar
General’s practice of conditioning all job offers on criminal background
checks. Between 2004 and 2007, 10% of African-American applicants were
discharged after they failed Dollar General’s background check (compared
to 7% of non-African-American applicants). The EEOC based its lawsuit
on charges of discrimination by two rejected applicants. One of the
rejected applicants was denied employment after Dollar General
discovered that she had a six year-old conviction for possession of a
controlled substance. Dollar General revoked her job offer pursuant to
its practice of disqualifying applicants for this type of conviction
within the last ten years. The second rejected applicant was refused
employment after a felony conviction turned up on Dollar General’s
background check. The EEOC claimed that the applicant's background check
results were inaccurate and that Dollar General failed to address the
applicants’ protests.
The EEOC also filed suit against BMW alleging the company’s use of
criminal background checks disproportionately precluded
African-Americans from jobs and was neither job-related nor consistent
with business necessity. BMW terminated eighty-eight employees after it
discovered they had prior convictions. Eighty percent of those
terminated were African-Americans. The employees originally bypassed
BMW’s screening process because they were employed by UTi Integrated
Logistics Inc. (“UTi”), which used a less stringent screening procedure
than BMW. BMW contracted with UTi to place UTi employees at various BMW
locations. BMW ended its relationship with UTi but allowed the UTi
employees to apply with BMW’s new contractor. BMW’s new contractor
screened these employees for prior arrests and convictions according to
BMW’s policy. BMW’s policy excluded applicants convicted of broad
categories of crimes, including assault, domestic abuse, various drugs
and weapons crimes, any crime of a violent nature, and criminal
convictions involving theft, dishonesty, and moral turpitude.
Eighty-eight employees failed the screening, and BMW directed the new
contractor to apply BMW’s criminal conviction policy and not hire these
individuals. The EEOC brought suit on behalf of sixty-nine
African-American employees not rehired pursuant to BMW’s policy,
alleging that BMW discriminatorily failed to distinguish between felony
and misdemeanor convictions. The EEOC also found that BMW’s policy acted
as a blanket exclusion without any individualized assessment of the
nature and gravity of the crimes, the ages of the convictions, or the
nature of the employees’ positions. These cases are both still pending
in their respective courts.
However, other courts have recently cast doubt on the EEOC’s efforts
to restrict employers' use of criminal-background checks in hiring. In
EEOC v. Freeman,
2013 U.S. Dist. LEXIS 112368 (D. Md. August 9, 2013), the United States
District Court for the District of Maryland dismissed a lawsuit filed
by the EEOC. The EEOC claimed that Freeman, a corporate events service
provider, had “unlawfully relied upon credit and criminal background
checks that caused a disparate impact against African-American,
Hispanic, and male job applicants.” The Court flatly rejected this
argument, stating “[i]ndeed, the higher rate might cause one to fear
that any use of criminal history information would be in violation of
Title VII. However, this is simply not the case. Careful and appropriate
use of criminal history information is an important, and in many cases
essential, part of the employment process of employers throughout the
United States. As Freeman points out, even the EEOC conducts criminal
background investigations as a condition of employment for all
positions, and conducts credit background checks on approximately 90
percent of its positions.”
Confusing the issue further, the EEOC Enforcement Guidelines on the
Consideration of Arrest and Conviction Records in Employment Decisions,
released in 2012, establish recommended screening practices for
employers. The guidelines draw from the Eighth Circuit’s decision in
Green v. Missouri Pacific Railroad, 549 F.2d 1158, 1160 (8th Cir. 1977).
Green established
that employers utilizing background checks should consider three
factors when analyzing criminal records: (1) the nature gravity of the
crime; (2) the time elapsed between when the crime was committed and the
employee’s work application; and (3) the nature of the job.
Green,
549 F.2d at 1160. The EEOC also recommends that convictions should be
related to the job sought by an applicant and that the employer’s
decision be consistent with business necessity.
The ambiguity surrounding the EEOC’s recommendations creates a dilemma
for employers. On one hand, if employers do not follow the EEOC’s
recommendations by providing an individualized assessment for screened
employees, they risk an EEOC lawsuit. On the other hand, if employers
hire an employee with a criminal history and that employee commits a
crime while at work, the employer risks being sued for negligent hiring
or retention.
Employers should conduct an individualized assessment for potential
employees who fail background checks. Employers should avoid “blanket”
exclusionary policies and ensure that criminal background policies are
tailored to the specific job at issue and have a reasonable time limit.
Employers also should allow individuals to explain past convictions and
be careful to distinguish between arrests and convictions. An employer
also should never make an employment determination based on an arrest,
but rather, the conduct underlying the arrest (if it would make that
individual unfit for the specific position).
So long as this issue remains in flux, employers must tread carefully
when using criminal background checks as part of the hiring process.
While the
Freeman decision provides employers hope, the EEOC
has and likely will continue to heavily scrutinize employers’ use of
criminal background checks for potential new hires, possibly leaving
employers vulnerable to costly and time-consuming litigation.
*
Ami J. Patel practices in all areas of
employment litigation. She has extensive experience helping employers
navigate the EEOC’s policies and procedures, as well as related
employment issues. For more information about this ever changing area,
please contact Ami (ajp@zrlaw.com) at 216.696.4441.
Road to Riches: Paying Employees Who Work While Commuting
By Michele L. Jakubs*
Smart phones, laptops, tablets, and other mobile devices have made it
easier for employees to work outside of the office. Employees may use
these devices to work during their morning and evening commutes.
Unbeknownst to many employers, however, work done during a commute may
be compensable under the Fair Labor Standards Act (“FLSA”).
Employers generally must pay their nonexempt employees no less than
the federal or state minimum wage, whichever is higher, for each hour
worked. Employers must also pay their non-exempt employees
one-and-one-half times their regular rate for hours worked in excess of
forty in a workweek. Typically normal travel between home and work is
not considered work time. This general rule, however, only applies if
the employee performs no work during his or her commute.
Should the employee work during his or her commute, the time from the
point he or she starts working becomes work time. In addition, an
employer must pay for an employee’s commuting time if that time is being
used primarily for the employer’s benefit, not the employee’s. For
example, if the employee is required to pick up work supplies, some or
all of this travel time may be compensable.
If an employee performs work outside of normal working hours, and
does not receive compensation for those hours worked, an employer also
may be liable for unpaid wages. Courts routinely find that employer
policies prohibiting employees from performing unauthorized work,
including during their commute, do not prevent this liability.
There are several ways employers can reduce their potential wage and
hour liability. Employers should institute policies prohibiting
unauthorized work, regularly remind employees of those policies and
discipline those employees who violate the policies. Employers should
also take away employer-owned mobile devices if employees use them to
perform unauthorized work.
Further, employers may not be liable for work done in cases where
they had no actual or constructive knowledge that an employee worked off
the clock. For example, one employer was found not liable for time an
employee spent working at lunch when the employee admitted she did not
follow the employer’s procedures for reporting such time.
White v. Baptist Memorial Health Care Corp.,
2012 WL 5392621 (6th Cir. 2012). Employers should be aware that an
employee’s use of company provided cell phones, tablets, or other mobile
devices strengthens the likelihood that the employer actually knew work
occurred.
Another potential hurdle employers face occurs when an employee
performs additional work after returning home. For example, is an
employee’s commute time compensable under a continuous working theory
when the employee performs services for the employer after returning
home at the end of the day? According to some courts, the answer is no,
so long as the employer gave the employee enough flexibility to schedule
his day. In
Kuebel v. Black & Decker, Inc., 643 F.3d 352
(2nd Cir. 2011), the employee was a retail specialist whose main job was
to ensure that Black & Decker (“B&D”) products were properly
stocked, priced, and displayed in stores. B&D expected him to spend
between five and eight hours per day completing these tasks. B&D
also provided the employee with a PDA to record his entry and exit at
stores. When the employee synced his PDA with B&D’s server, the PDA
automatically communicated the employee’s hours. The employee also
performed job-related tasks, such as responding to emails, late at night
from his home office. He filed suit, claiming that B&D should have
compensated him for his commute home since he was required to continue
working after he arrived home. The court disagreed, holding that the
employee had flexibility to complete his daily responsibilities so he
was not working continuously.
Finally, with the advent of improved technology, many employers now
permit employees to “telecommute.” While telecommuting employees
generally work from home or another off-site location, it is sometimes
necessary for these employees to commute into the office for meetings.
If a telecommuting employee attends a meeting during the day, the travel
time likely constitutes working time because the employee presumably
already started working that day at his/her remote location. However, if
the meeting is scheduled for first thing in the morning and is the
employee’s first job related activity, the employee’s time spent
commuting to the office likely is not compensable.
Employers must remain vigilant of the need to compensate employees
for all work performed. If an employee works during his or her commute,
that time is generally compensable and the employer must pay the
employee for that time. Employers should have clear policies and
procedures addressing unauthorized work and should require mandatory
reporting of any work performed outside of normal working hours. Strict
compliance with these policies will go a long way in helping employers
avoid liability.
*
Michele L. Jakubs, an OSBA certified specialist
in labor and employment law, practices in all areas of employment law
and has extensive experience representing employers in wage and hour
matters. If you have any questions about the FLSA or wage and hour
issues affecting your workplace, contact Michele (mlj@zrlaw.com) at 216-696-4441.
Obesity is a Disease: from the A.M.A.’s Lips to the EEOC’s Ears?
By Helena Oroz*
Weight loss is somewhat of an obsession in this country. With the
likes of New Jersey Governor Chris Christie, Oprah Winfrey, and even
former President Bill Clinton talking about their own weight loss
experiences, the national conversation about being overweight and losing
weight is as animated as ever, among famous folks and regular Joes
alike.
Discussing obesity (defined by the U.S. Centers for Disease Control and Prevention as having a body mass index of 30 or higher
1),
however, seems to make people uncomfortable – even, strangely enough,
some doctors who may fail to counsel their patients about it. This is
one reason many in the medical community are applauding the American
Medical Association’s designation last Tuesday of obesity as a disease
requiring treatment and prevention.
“Recognizing obesity as a disease will help change the way the medical
community tackles this complex issue that affects approximately one in
three Americans,” according to A.M.A. board member Patrice Harris, M.D.
2
Those who laud the A.M.A.’s decision agree that it may help people in a
variety of ways, from changing the way insurance companies reimburse
for obesity drugs and treatments to changing the way society views
obesity.
Of course, designating one third of Americans as diseased is not going
to sit well with everyone (even those who are supposed to benefit from
the change). And even though the A.M.A.’s decision carries no legal
authority, it does carry influence, so employers have legitimate
concerns about how their responsibilities under the Americans with
Disabilities Act (“ADA”) may change as a result.
After all, the Americans with Disabilities Act Amendments Act of 2008
(“ADAAA”) has already massively broadened the scope of the ADA’s
protections, and per the U.S. Equal Employment Opportunity Commission
(“EEOC”), the determination of disability should not require extensive
analysis. If the AMA says obesity is a disease, EEOC Guidance on how to
accommodate individuals with this condition may not be far behind.
*
Helena Oroz practices in all areas of employment
litigation and has extensive experience helping employers comply with
the ADAAA. For more information about this ever changing area, please
contact Helena (hot@zrlaw.com) at 216.696.4441.
1
In general, the U.S. Centers for Disease Control and Prevention (CDC)
considers an adult with a body mass index (BMI) of 30 or higher obese;
an adult with a BMI between 25 and 29.9 is considered overweight.
Centers for Disease Control and Prevention:
http://www.cdc.gov/obesity/ adult/defining.html
2 AMA Press Release:
http://www.eeoc.gov/laws/regulations/adaaa_fact_sheet.cfm
Z&R Shorts
Zashin & Rich is pleased to announce the addition of Todd Ellsworth to the firm's Employment and Labor Group in its Cleveland office.
Prior to joining Z&R, Todd served as a member of the U.S. Navy.
He has represented private and public employers in all areas of labor
and employment law and has wide-ranging experience representing
employers in collective bargaining negotiations, before state and
federal administrative agencies, and state and federal courts. Todd
also has broad experience in advising and representing public sector
clients concerning Ohio's Sunshine Laws, specifically public records.
Best Lawyers ®
Z&R is happy to announce the following Z&R Employment and
Labor Group lawyers have been selected for inclusion in Best Lawyers in
America 2014:
Since it was first published in 1983, Best Lawyers® has become
universally regarded as the definitive guide to legal excellence.
Because Best Lawyers is based on an exhaustive peer-review survey in
which almost 50,000 leading attorneys cast nearly five million votes on
the legal abilities of other lawyers in their practice areas, and
because lawyers are not required or allowed to pay a fee to be listed,
inclusion in Best Lawyers is considered a singular honor.
Thursday, September 12, 2013
Jonathan Downes
presents "Workforce Reduction, Layoffs, and Job Abolishments" for the
Ohio Government Finance Officers Association Annual Conference at the
Hilton Columbus at Easton. For more details, go to
www.ohgfoa.com.
Thursday, October 2, 2013
Stephen Zashin will be
co-presenting "A Peek Behind the Curtain: Discovery Tactics" at the
50th Annual Midwest Labor and Employment Law Seminar. For more details,
go to
www.ohiobar.org.
Thursday, October 17, 2013
Jonathan Downes
presents "Terminating Employees Without Getting Sued" for the South
Central Ohio Human Resource Association. For more details, go to
scohrc.com/.
Thursday, November 7, 2013
George Crisci will be
part of a panel presenting "It's Always 1983 in the American Workplace"
for the ABA Labor and Employment Section's Annual CLE meeting. For more
details, go to
www.americanbar.org.
Wednesday, November 13 2013
Jonathan Downes
presents "Managing the Discipline Process" for the Ohio Association of
Chiefs of Police at the Richfield BCII Facility. For more details, go to
www.oacp.org.
