NLRB on the Ropes: D.C. Circuit Holds Obama "Recess" Appointments to the NLRB Are Unconstitutional

*By Patrick J. Hoban
 
Today, the United States Court of Appeals for the D.C. Circuit ruled that President Obama’s recess appointments of three members to the National Labor Relations Board (“NLRB”) in January 2012 violated the United States Constitution. The Court, in Noel Canning v. NLRB, No. 12-1153 (January 25, 2013), ruled that the President unconstitutionally circumvented the Senate when he appointed Sharon Block, Terence Flynn, and Richard Griffin to the Board. As a result, every NLRB decision issued since January 4, 2012, is likely to be vacated because the NLRB did not have the three member quorum required to operate.

The President appointed Block, Flynn, and Griffin to the NLRB on January 4, 2012, as “recess appointments.” Because NLRB members are officers of the U.S. Government, the Constitution requires that the President submit nominations for the NLRB to the U.S. Senate for confirmation. The Constitution allows the President to make appointments during “the Recess” of the Senate, which has historically been understood as times when the Senate is unavailable to consider the nominee. On January 4, 2012, the Senate was operating pursuant to a unanimous consent agreement which provided that it would meet in sessions every three business days from December 2011 through January 2012. During this time, the Senate conducted some limited business, including convening the second session of the 122nd Congress on January 3, 2012.

In February 2012, an NLRB panel including two members appointed during “the recess” without Senate approval ruled that employer Noel Canning, a bottler and distributor, violated the National Labor Relations Act. Noel Canning appealed the decision and asserted that the NLRB’s decision must be vacated as it did not have a lawful, constitutionally legitimate quorum.

The D.C. Circuit agreed, held that the President’s recess appointments were unconstitutional, and vacated the NLRB’s decision. The Court noted that, “Considering the text, history, and structure of the Constitution, these appointments were invalid from their inception. Because the Board lacked a quorum of three members when it issued its decision in this case on February 8, 2012, its decision must be vacated.” The Court further found that, under the Constitution, “recess” refers to the intercession recesses - or the period between sessions of the Senate when the Senate is, by definition, not in session and is unavailable to consider presidential nominations. As the Court explained, the President made the “recess” appointments on January 4, 2012, the day after Congress began a new session and not when the Senate was in “the recess.” The Court vacated the NLRB’s decision against Noel Canning because the Board did not have the minimum of three members needed for a quorum when the decision issued.

The implications of this decision are enormous. The Obama Administration will almost certainly appeal to the United States Supreme Court. If the decision stands, then hundreds of decisions which the Board has issued over the past year would become invalid. It also would leave the Board with just one validly appointed member out of five, essentially shutting it down until a legitimate quorum of three members exists.

Among the Board decisions which are subject to challenge under today’s ruling are:

• Costco Wholesale Corp., 358 NLRB No. 106 (September 7, 2012) (employer policy which prohibits employees from making statements on social media that could damage the company or other employees’ reputations unlawful);
• Knauz BMW, Case No. 13-CA-046562 (September 28, 2012) (employer policy proscribing employee messages and communications potentially critical of the company deemed unlawful);
• WKYC-TV, Inc., 359 NLRB No. 30 (December 12, 2012) (contractual dues deduction provisions continue after the expiration of a collective bargaining agreement);
• Alan Ritchey, Inc., 359 N.L.R.B. No. 40 (2012)(December 14, 2012) (employers must give notice and offer to bargain before enforcing discretionary discipline on employees of a newly-certified union);
• Supply Technologies, LLC, 359 N.L.R.B. No. 38 (2012) (December 14, 2012) (mandatory dispute resolution program that does not expressly state that employees retain the right to file NLRB charges unlawful.)
• Piedmont Gardens, 359 NLRB No. 46 (December 15, 2012) (employer blanket policies protecting confidential employee investigation statements unlawful).

Moving ahead, and pending the outcome of an appeal, any party – employers and unions – against whom the NLRB has issued a decision since January 4, 2012, has grounds to vacate the decision based on the NLRB’s lack of legitimate legal authority to issue it. Additionally, any party with a case before the NLRB should include arguments that, absent a legal quorum, the NLRB is without power and authority to act. Zashin & Rich Co., L.P.A. will provide updates on the NLRB’s struggles with legitimacy as they develop.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of private and public sector labor relations. For more information about the NLRB or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

When is a Child a Child? Department of Labor Issues New Guidance Concerning FMLA Leave for Children 18 Years and Older

*By Stephen S. Zashin, Esq.
 
The Department of Labor (“DOL”) recently issued an Administrator Interpretation Letter that addressed when parents may take leave under the Family Medical Leave Act (“FMLA”) to care for their adult children who have a serious health condition. Under the FMLA, parents of adult children may take FMLA leave to care for an adult child when the adult child suffers from a serious health condition and is also incapable of self-care because of a physical or mental disability. Previously, the DOL issued two Opinion Letters regarding this issue which led to some confusion. As a result, the DOL received several inquiries concerning whether the timing of the onset of the adult child’s disability was relevant to determining the parent’s entitlement to FMLA leave to care for the adult child. Ultimately, the DOL concluded that the timing of the onset of a disability was not relevant to determining the parent’s entitlement to take FMLA leave.

The Family Medical Leave Act (“FMLA”) provides that an employee may take FMLA leave to care for certain family members, including a “son” or “daughter,” who has a “serious health condition.” Under the FMLA, a son or daughter is defined as a “biological, adopted, or foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis, who is – (A) under 18 years of age; or (B) 18 years of age or older and incapable of self-care because of a mental of physical disability.” Based on this definition, employees who meet all of the requirements of the FMLA are entitled to care for their adult children who are 18 years or older when the child is also “incapable of self-care because of a physical or mental disability.”

The DOL issued an Opinion Letter in 1994 and concluded that “the age on which the child became disabled is not a factor for determining an eligible employee’s entitlement to leave.” See Wage and Hour Opinion Letter FMLA 51. Later, the DOL issued an Opinion Letter in 2003 and emphasized that a child with a disability has a continued need for care in adulthood. See Wage and Hour Opinion Letter FMLA 2003-2. This Opinion Letter suggested that the child must have been disabled prior to turning 18 years of age in order to trigger the entitlement to FMLA leave under this provision. Within its recent Administrator Interpretation Letter, the DOL clarified that “It is the Administrator’s interpretation that the age of the onset of the disability is irrelevant….” Instead, there are four requirements a parent must meet in order to take leave to care for an adult child: (1) the adult child has a disability as defined by the Americans with Disabilities Act (ADA); (2) the adult child is incapable of self-care due to that disability; (3) the adult child has a serious health condition; and, (4) the adult child is in need of care due to a serious health condition.

The DOL also took the opportunity to address the meaning of the term “disability.” The DOL cited to the language of the ADA and noted that the definition of the term disability “shall be construed in favor of broad coverage.” The DOL noted that there is not minimum duration required for an impairment to be considered a disability. Indeed, the DOL, citing to the ADA, noted that even an impairment expected to last less than 6 months can constitute a disability.

The DOL illustrated these principles in a two hypothetical examples. First, the DOL considered a 37-year old daughter who suffered a shattered pelvis in a car accident. The daughter required hospital care for two weeks and then was unable to walk long distances for 6 months and needed help bathing, dressing and maintaining her residence. The daughter developed the condition well after she turned 18 years of age. The DOL noted that, assuming all the other requirements of the FMLA were met, the parent could take FMLA leave to care for the daughter because the daughter: (1) had a disability, (2) was incapable of self-care, (3) had a serious health condition, and (4) needed care due to the serious health condition. In another hypothetical example the DOL considered a 25-year old son who has diabetes, lives independently and does not need assistance caring for himself. The DOL concluded that the son had a disability, but that the parent was not entitled to FMLA leave because the son could care for himself. Although, the DOL noted that if the son was unable to walk and care for his own hygiene due to complications related to his diabetes, then the parent would be entitled to FMLA leave.

These examples illustrate that the new clarifying interpretation by the DOL has expanded greatly the circumstances upon which a parent can take leave for the serious health condition of an adult child. As a result, employers must reevaluate their policies and the application of their policies to comply with this new clarification.

* Stephen Zashin, an OSBA Certified Specialist in Labor and Employment Law and the head of the firm’s Employment and Labor group, regularly counsels employers on leave of absence and FMLA issues and defends employers in FMLA litigation. For questions about employee leaves of absence or the FMLA, please contact Stephen (ssz@zrlaw.com) at 216.696.4441.

What Happens in Vegas… Is FMLA-Protected

*By Helena Oroz

The beginning of that tag-line is perfectly obnoxious and overly worn, but the ending is new, and, interestingly enough, true—at least according to the Illinois federal court that recently handed down its decision in Ballard v. Chicago Park District.  In Ballard, the U.S. District Court for the Northern District of Illinois held that an employee who provided care to her terminally-ill mother during a Las Vegas vacation “cared for” her mother within the meaning of the FMLA.

In Ballard, the employee filed suit under the Family and Medical Leave Act (“FMLA”) after she was terminated for unauthorized absences from work.  She alleged that her former employer interfered with her rights by denying her request for leave to care for a sick parent.  The employee was the primary caretaker for her terminally ill mother and did almost everything for her:  prepared her meals; administered medicine; operating a pump to remove fluids from her mother’s heart; bathed her; provided her with transportation; and provided comfort and support, among other responsibilities.  Why would her employer deny her leave under such seemingly clear-cut circumstances?

Vegas, baby.

Yes, the employee in this case requested leave to accompany her sick mother to that adult playground in the desert, Las Vegas, Nevada; and this detail, probably more than any other in this case, has captured the hearts and minds of employers (and their lawyers) everywhere.  Vegas?  Vegas?!  Why would a super fun trip to Vegas be FMLA-protected?

The court closely reviewed the (pre-2009 amendment) FMLA regulations to make just that determination:  whether the employee was entitled to leave under the FMLA to “care for” her mother on the Vegas trip, as the employee argued.  The employer argued that the trip was not FMLA-protected because the “care” has to have some connection with the family member’s need for treatment, and the mother did not seek treatment during the trip.  The court disagreed, finding that the FMLA includes no such limitation.

Under the FMLA, an eligible employee is entitled to leave to “care for” a parent with a “serious health condition.”  The Court noted that FMLA’s implementing regulations explain that “to care for” encompasses both physical and psychological care; but such care does not depend on a particular location or on participation in medical treatment itself.

There was no question in the case that the employee’s mother suffered from a “serious health condition” (end-stage congestive heart failure); that she was unable to care for her own basic needs; and that the employee provided physical care for her mother at home.  The court reasoned that because her mother’s needs did not change during the trip, the employee also “cared for” her mother while traveling to and vacationing in Las Vegas.

The court also gave short shrift to the employer’s argument that the employee did not “care for” her mother because there were no plans for the mother to seek medical care or treatment in Las Vegas.  The court found “no statutory or regulatory text stating something to the effect that ‘care’ must involve some level of participation in the ongoing treatment of the family member’s condition under the FMLA” as the regulations cover “terminal illnesses for which there is no active treatment at all.”

The court opined that at base, the text of the FMLA requires only that the employee sought leave to “care for” her mother who had a “serious health condition.”  “So long as the employee provides ‘care’ to the family member, where the care takes place has no bearing on whether the employee receives FMLA protections.”

Fiji, anyone?

Whether or not such a decision actually “broadens” the FMLA is debatable.  While not relevant to the legal analysis, it should be noted that the Vegas trip here was a gift, a charitable grant from an organization that grants wishes to persons with terminal illnesses.  The employee asked for leave to take the trip so that her dying mother could take the trip.  This is not a common situation for most employers (and arguably, considering the circumstances, one that the employer could have met with less scrutiny and more compassion).

It does, however, seem to open the door to abuse, a la “I need two weeks off to travel to (fill in fun destination) to care for my ill (family member)!”  But at the end of the day, the same rules would apply to such a request as to any regular FMLA-leave request, and the same tools would be available to the employer to determine its legitimacy.

*Helena Oroz practices in all areas of labor and employment law. For more information about FMLA leave, please contact Helena (hot@zrlaw.com) at 216.696.4441.

EMPLOYMENT LAW QUARTERLY | Winter 2012, Volume XIV, Issue i

Download PDF

• Good Intentions, Unintended Consequences: Paid Time Off Can Lead to Tax Liability
• Family & Medical Leave Act Protects a Pre-Eligibility Request for Post-Eligibility Leave
• Blowing the Whistle - OSHA Issues New Regulations and Revises Its Whistleblower Complaint Procedure
• California Dreamin' – Employers Need to Be Aware of Important Changes to California Employment Law
• Indiana Becomes First State in Over Ten Years to Pass "Right-to-Work" Law
• Writing on the Wall: New Jersey Employers Subject to New Posting and Notice Requirements
• Z&R Shorts

---

Good Intentions, Unintended Consequences: Paid Time Off Can Lead to Tax Liability

by Michele L. Jakubs*

Paid Time Off programs (“PTO”) allow employees to earn leave that they later can use for vacations, sicknesses and personal holidays. Under such programs, employees typically earn leave in accordance with factors such as years of service, position, and full or part-time status. PTO programs generally require employees to obtain approval from their employers prior to using their leave (except when advance notice is not possible, as in the case of an illness) and do not permit employees to carry a negative leave balance. Many employers believe PTO programs are less burdensome to administer because the employer does not have to track both “vacation” and “sick” time. However, employers must evaluate their PTO programs to ensure they comply with all applicable state and federal regulations.

When an employee separates from service, the employee often receives his or her unused leave balance in a single lump-sum payment. However, most employers may not know that amounts paid to an employee for unused leave upon separation constitute wages subject to income tax withholding and employment taxes. Employers must treat such payments accordingly.

Allowing employees to sell unused PTO back to the company at the end of the year is also another practice that can create tax problems for the employer and employee. If the employee has the option to either cash-out the PTO or roll it over to the next year, the employer must immediately tax the employee on the entire amount even if the employee actually elects to roll over the unused PTO. Under the federal income tax “constructive receipt” doctrine, the IRS considers the roll over amount received and taxable at the time the PTO is available for a taxpayer to cash out, even if the taxpayer elects to defer his or her receipt of the amount. To avoid this situation, employers should not give employees a choice to cash out or roll over their PTO. The IRS stated that mandatory cash outs do not create a “constructive receipt problem.”

To avoid these and other unintended tax consequences, employers should discuss the design of their PTO plans with a knowledgeable attorney.

*Michele L. Jakubs, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of employment law and has experience designing employee PTO plans. For more information about paid time off plans and the potential tax consequences, please contact Michele at mlj@zrlaw.com or 216-696-4441.

---

Family & Medical Leave Act Protects a Pre-Eligibility Request for Post-Eligibility Leave

by Patrick M. Watts

The Eleventh Circuit recently held that the Family & Medical Leave Act (“FMLA”) protects a pre-eligibility request for post-eligibility leave. Pereda v. Brookdale Senior Living Communities, Inc., No. 10-14723 (11th Cir. Jan. 10, 2012).

Brookdale Senior Living Communities (“Brookdale”) operates numerous senior living facilities. Brookdale hired Kathryn Pereda (“Pereda”) in October 2008. Pereda informed management in June 2009 that she was pregnant and would need leave under the FMLA after the birth of her child in November 2009. At the time Pereda requested leave, she was not eligible for FMLA protection because she had not worked the requisite hours (1,250 hours during the previous 12-month period) and had not yet experienced a triggering event, the birth of her child.

Pereda alleged she was a top performer but that Brookdale began harassing her after they learned of her pregnancy. She claimed Brookdale criticized her job performance and placed her on a performance improvement plan with “unattainable goals.” Moreover, Pereda alleged that Brookdale had given her permission to attend pregnancy-related doctors’ appointments but then subsequently disciplined her for attending those appointments. Brookdale terminated Pereda’s employment when she took time off in September 2009.

Pereda filed suit in the United States Court for the Southern District of Florida, alleging FMLA interference and retaliation. The Southern District held that Brookdale did not interfere with Pereda’s FMLA rights because she was not entitled to leave at the time she requested it, and that because she was not eligible for leave she could not have engaged in “protected activity” under the FMLA. Thus, according to the Southern District, Brookdale could not have retaliated against Pereda.

Pereda appealed to the Eleventh Circuit Court of Appeals. The Eleventh Circuit reversed and found for Pereda on both counts. As part of its decision, the Court resolved a question it had left open in a previous case, Walker v. Elmore County Bd. of Educ., 379 F.3d 1249 (11th Cir. 2004). The Walker court held that the FMLA did not protect a pregnant teacher who requested leave which would begin several days prior to her eligibility.

The Pereda court first found that, because the FMLA requires advance notice of a need for future leave, the FMLA protects employees from interference before a triggering event occurs. The Court reasoned that any other outcome would be illogical and “becom[e] a trap for newer employees and exten[d] to employers a significant exemption from liability.” After examining the various elements of the FMLA regulatory scheme, the court concluded that allowing the district court’s ruling to stand would frustrate the purpose of the FMLA.

The court then examined Pereda’s FMLA retaliation claim. The court held that a pre-eligible request for post-eligible leave is “protected activity” because the FMLA “aims to support both employees in the process of exercising their FMLA rights and employers for the absence of employees on FMLA leave.” Thus, Pereda also had stated a potential claim for FMLA retaliation.

The Court narrowed its finding to state that a pre-eligible discussion of post-eligible FMLA leave is protected activity and stated that an employer could still terminate an employee for legitimate reasons. While this case arose in the Eleventh Circuit, all employers must be mindful of employee eligibility for FMLA leave and evaluate all FMLA requests carefully – especially if the employee will become FMLA-eligible in the future.

---

Blowing the Whistle - OSHA Issues New Regulations and Revises Its Whistleblower Complaint Procedure

by Lois A. Gruhin

The Occupational Safety and Health Administration (“OSHA”) recently issued an interim final rule amending its whistleblower regulations under the Sarbanes-Oxley Act of 2002 (“SOX”). OSHA published its interim rule in the Federal Register on November 3, 2011, and it became effective upon publication.

The Dodd-Frank Wall Street Reform and Consumer Protection Act amended SOX, making significant changes to SOX whistleblower procedures. The new regulations classify subsidiaries of publicly-traded companies as covered employers. Additionally, the regulations protect employees from retaliation, extend the statute of limitations for retaliation complaints from 90 days to 180 days, provide those who complain with the right to a jury trial in some instances, and restrict the ability of individuals to waive or arbitrate whistleblower claims under SOX. The regulations improve OSHA’s procedures for handling SOX whistleblower complaints and make the procedures consistent with OSHA’s procedures for handling other OSHA-administered statutes.

Another significant change pertains to the filing of whistleblower claims. The new regulations permit oral SOX whistleblower complaints. Upon receipt of an oral complaint OSHA prepares a written complaint. OSHA intended this change to be consistent with the Supreme Court’s recent decision in Kasten v. Saint-Gobain Perf. Plastics Corp., 131 S. Ct. 1325 (2011). OSHA will also now accept a complaint filed in any language. Finally, any person can file a complaint so long as the person has the consent of the affected employee.

Perhaps the most significant change for employers is that OSHA may order a company to provide a SOX whistleblower complainant with the same pay and benefits that he or she received prior to termination of employment, or what is referred to as “economic reinstatement.” This “economic reinstatement” differs from “preliminary reinstatement” in that the whistleblower is not obligated to return to work before the complaint is resolved, as he or she could have been under prior SOX regulations. Furthermore, employers do not have the option to choose between economic reinstatement and actual reinstatement. Instead, the interim rule allows OSHA to make the decision as to whether to allow for economic reinstatement, as opposed to decide on a case-by-case basis. The stated purpose for this rule change is to accommodate situations where the evidence indicates that reinstatement prior to the conclusion of administrative adjudication is inadvisable for some reason, such as where the company demonstrates the complainant to be a security risk.

If you would like further information about the whistleblower provisions of SOX and how they may affect your company, please contact us.

---

California Dreamin’ – Employers Need to Be Aware of Important Changes to California Employment Law

by Jason Rossiter*

Change is a-comin’ to California’s employment laws. Employers who operate in California should be aware of these important changes.

Gender Expression
Gender expression is now a protected class under California’s Fair Employment & Housing Act (“FEHA”). Gender expression refers to a person’s gender-related appearance and be­­havior, whether or not stereotypically associated with the person’s assigned sex at birth. “Sex” is now defined in several anti-discrimination statutes, including the FEHA, to include gender expression. The redefinition aims to protect the rights of transgender people. With this change, employers must allow employees to appear or dress consistently with his or her gender expression.

Wage-and-Hour Related Changes
The following wage and hour changes, a result of the Wage Theft Protection Act of 2011, went into effect January 1, 2012. The new changes require immediate employer action as employers must keep a signed, written acknowledgement for each employee. A template of the notice and acknowledgement is available via the Department of Industrial Relation’s website:
http://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html.

• Employer must provide all employees with:
• The rate(s) of pay and basis for such rate(s); allowances including meal or lodging, and the regular payday as designated by the employer.
• The full legal name of the employer, including any “doing business as” names used by the employer, as well as the address of the employer’s main office and the telephone number of the employer;
• The name, address, and telephone number of the employer’s workers’ compensation insurance carrier;
• The new regulations also require the employer to furnish new employees with “any other information the Labor Commissioner deems material and necessary;” and,
• If the above-mentioned information ever changes, all affected employees must receive notice of the change within seven days of the effective date of the change.
  
  
• If an employer has non-California employees working in the state of California, including temporary or daily employees, these employees are entitled to overtime under California’s laws.
  
  
• Additionally, any agreements between employers and employees who receive commissions must be in writing and signed by the employee in question.
• This writing must “set forth the method by which the commissions shall be computed and paid,” and the employee must receive a copy of his or her signed writing.

Leave-Related Changes

• California employees are also now entitled to up to six weeks of paid leave each year to donate organs and bone marrow.
• This is more expansive than federal and prior California law.
• The new law, California Labor Code sections 1508 through 1512, applies to employers with 15 or more employees.
  
  
• Pregnancy leave policies in California must also now allow for continuation of medical insurance benefits for pregnancy-related disabilities.

No Credit Checks Allowed

• Employers may no longer use credit checks in the employment application process.

Misclassification Penalties Increase
Employers who misclassify employees as independent contractors face increased sanctions, including:

• criminal sanctions;
•  joint-and-several liability for those who advise employers to misclassify; and,
• civil penalties of up to $25,000 for each infraction.

Employers with California employees, even those with temporary or daily employees, should take note of these significant changes and ensure they are in full compliance so as to avoid significant penalties.

*Jason Rossiter practices in all areas of labor and employment law and has extensive compliance experience. He is licensed to practice law in California, Pennsylvania and Ohio. For more information about these and other changes to California law contact Zashin & Rich at 216-696-4441.

---

Indiana Becomes First State in Over Ten Years to Pass “Right-to-Work” Law

by Patrick J. Hoban*

Governor Mitch Daniels signed Indiana’s “Right-to-Work” (“RTW”) law on February 2, 2012 – making Indiana the first state in over a decade to do so.  The law prohibits companies and unions from negotiating a contract requiring non-members to pay fees for union representation.

Indiana’s contentious RTW law came after much-heated debate.  In February, 2011, Democratic representatives left the state for five weeks to deny a quorum prohibiting their Republican colleagues from moving forward on RTW legislation.  However, Governor Daniels succeeded in signing the RTW law, making Indiana the 23rd state with RTW laws on its books.

The National Right to Work Legal Defense Foundation launched a task force to defend the law and announced that it will give free legal advice to workers who wish to exercise their new rights.  Current union members will not be able to stop paying dues immediately as the law only applies to contracts enteredinto after March 14, 2012. 

For or Against Right-to-Work Laws
Supporters of the law emphasize that it will attract business and create jobs pointing to research showing employers favor states with RTW laws. They also lodge ideological arguments against compulsory payment for an unwanted service. Specifically, they argue that forcing employees to pay union dues violates their Constitutional right to freedom of association.

Critics argue that Indiana’s new law will fail to provide the benefits promised by legislators.  In addition, critics believe that RTW laws harm workers by encouraging freeloading. The National Labor Relations Act forces unions to intervene on behalf of members when their employers take illegal action, regardless of whether the member pays dues. Critics fear this costly and time-consuming burden will significantly weaken union power.

What Can We Learn from Oklahoma
Oklahoma was the last state to sign a RTW law.  Proponents of the law expected it to bring new companies to Oklahoma and increase job growth. On the ten-year anniversary of its signing, the National Right to Work Committee celebrated what it claimed was a 12.2% growth in employee compensation since 2001 and a 3.2% increase in private sector employment between 2003 and 2010.

However, the Economic Policy Institute (“Institute”) tells a different story. According to the Institute, the number of new companies coming to Oklahoma has decreased by one-third as has the number of manufacturing jobs. The Oklahoma Department of Commerce admits the latter, but emphasizes that the law has increased productivity. However, the Institute points out that this means fewer workers are producing more, an outcome it does not applaud.

On the National Level
President Barack Obama made his stand on RTW laws clear during a Labor Day Speech last year stating “when I hear of these folks trying to take collective bargaining rights away, trying to pass so-called ‘right-to-work’ laws for private sector workers, that really means the right to work for less and less.”  It comes as no surprise that the Republican presidential candidates have a much different attitude. After the Indiana House passed its RTW law, presidential candidate Ron Paul wrote a congratulatory letter to the National Right to Work Committee stating, “every American owes you a debt of gratitude for your leadership and dedication.” According to his official website, Paul has made passing a national RTW act a “centerpiece” of his campaign. While Paul has been the most enthusiastic RTW supporter, Newt Gingrich, Rick Santorum and Mitt Romney have all spoken approvingly of a national RTW law. 

What Can Indiana Expect
Organizations disagree as to what the citizens of Indiana can expect. The Indiana Chamber of Commerce estimates that “personal income per capita in 2021 [will] be $968 higher, or $3,872 higher for a family of four, than if a RTW law [had] not [been] enacted.” However, The Economic Policy Institute found that in Oklahoma, wages and benefits are approximately $1,500 lower than comparable (union and non-union) workers in non-RTW states.  Additionally, Oklahoma workers are less likely to get health care or retirement benefits. The Institute also warns that RTW laws have no effect on job growth.

Union members went to federal court on February 22, 2012 asking that Indiana's new right-to-work law not be enforced.  This is the first lawsuit and latest conflict over the divisive legislation.  The long-term impact of Indiana’s RTW legislation remains to be seen.

As the map shows, Indiana was the first in the generally union-friendly “Rust Belt” to pass RTW legislation, and the first nationally to do so in a decade.  The highlighted states represent “Right-to-Work” states:




*Patrick J. Hoban, an OSBA Certified Specialist in Labor & Employment law, practices in all areas of labor & employment law and has extensive experience representing management in labor disputes.  For more information about right-to-work laws, please contact Pat at pjh@zrlaw.com or 216-696-4441.

---

Writing on the Wall: New Jersey Employers Subject to New Posting and Notice Requirements

by Stefanie L. Baker

The New Jersey Department of Labor and Workforce Development (“NJDLWD”) recently issued new regulations concerning employer posting and notice requirements. These changes come on the heels of New Jersey’s 2010 law requiring employers to maintain and report records under state wage, benefit, and tax laws.

These newly-implemented regulations require an employer to “conspicuously post” a notice of its obligations in an accessible place. Employers can access a sample notice online at the NJDLWD’s website (http://lwd.state.nj.us/labor/forms_pdfs/EmployerPosterPacket/MW-400.pdf). Employers can comply either by posting the notice where other employment-related notices are posted or by posting the notice on the employer's Internet/intranet site, provided the employer has an Internet/intranet site for exclusive use by its employees and to which all employees have access. Along with the posting requirement, employers must also provide every employee a copy of the notification.

Additionally, New Jersey employers must provide employees hired after November 7, 2011 with written copies of the notification upon hire, and all current employees should have received written copies by December 7, 2011. New Jersey employers can comply with the notice requirement by sending copies of the notice via e-mail.

The required postings address employers’ obligation to maintain payroll records, temporary disability insurance records, workers’ compensation records, and Employer’s Quarterly Reports pursuant to the New Jersey Gross Income Tax Act. New Jersey employers should assess whether they are in compliance with these new regulations. Failure to comply with the posting and distribution requirements could lead to a fine of up to $1,000, as well as criminal penalties.

---

Z&R Shorts

George S. Crisci will present “Social Media in the Workplace” on May 17, 2012, at the Ohio State Bar Association and NLRB Region 8 Annual Labor Law Seminar beginning at 9 AM at Ritz Carlton Hotel in Cleveland, Ohio.  To register, go to www.ohiobar.org.

NLRB ALJ Doubles Down on D.R. Horton – Employment Arbitration Program Prohibiting Class Litigation but Allowing Employees to Opt-Out Found Unlawful

*By Patrick J. Hoban

In a decision issued on November 6, 2012, a National Labor Relations Board (“NLRB”) administrative law judge (“ALJ”) ruled that an employer’s decade-old employment arbitration program violated the National Labor Relations Act (“NLRA”).  The ALJ decision in 24 Hour Fitness USA, Inc., JD(SF)-51-12, NLRB Case No.:  20-CA-035419, is the NLRB’s most recent assault on employment arbitration policies and doubles down on its 2012 decision in D.R. Horton, 357 NLRB No. 184 (2012) by invalidating arbitration programs that waive an employee’s right to pursue class action litigation.

The employer maintained the mandatory arbitration policy requiring arbitration of employment disputes for over a decade.  The policy was contained in the employee handbook presented to all employees at the time of hire and included a written acknowledgement.  In 2005, the employer amended the policy to include a waiver of class litigation – including class arbitration.  In 2007, the employer further amended the policy to allow employees to opt out of the arbitration program by submitting a form within 30 days of hire.  At the time of the ALJ’s decision, the employer was attempting to compel arbitration of employment disputes under its policy in 11 state and federal courts.

An employee hired in 2008, who had the opportunity to opt out of the arbitration program but did not do so, filed an unfair labor practice charge alleging that the class action waiver provision violated the NLRA.  The employer contended that requiring a waiver of class litigation and arbitration rights did not violate the NLRA and, if it did, the employee’s failure to opt out rendered his subsequent waiver of class action rights voluntary.  After characterizing the arbitration program as “unilaterally devised” and “highly self-serving,” the ALJ relied on D.R. Horton to find that the class waiver provision was unlawful.

Specifically, the ALJ rejected the employer’s reliance on a string of recent U.S. Supreme Court decisions applying the Federal Arbitration Act (“FAA”) to uphold class waivers in arbitration agreements.  The ALJ referred to the employer’s reliance on the Supreme Court’s rulings as “tedious” and proclaimed that “they have little, if anything, to do with arbitration in the context of the employer-employee relationship.”  The ALJ went on to discount the opt-out provision, stating that it was “an illusion” and that employees could not be required to “affirmatively act to preserve rights already protected by Section 7 [of the NLRA].”  The ALJ further questioned whether the thousands of employees who had not taken advantage of the opt-out really knew what they were doing.

The ALJ also ruled that the arbitration policy’s non-disclosure provision separately violated the NLRA.  The provision in question stated that, “except as may be required by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.”  The ALJ found that this language “imposes extreme limitations on activities protected by [the NLRA]” and speculated that it would lead a reasonable employee to conclude that he was prohibited from discussing employment claims with fellow employees, identifying supporting witnesses, seeking monetary contributions to pay for “the very expensive costs of” arbitration or asking fellow employees to provide moral support.

On the basis of his decision, the ALJ ordered the employer to stop maintaining any provision of the policy that prohibited class litigation and attempting to enforce the arbitration policy’s provisions in state and federal courts.  The ALJ specifically ordered the employer to withdraw any motion it had in state or federal court seeking to enforce the arbitration policy and notify the courts that it “no longer objected to its employees bringing or participating in ... class or collective actions.”

In 24 Hour Fitness, the ALJ issued a full-throated defense of the NLRB’s D.R. Horton decision – despite the fact that numerous federal courts have refused to follow the decision on grounds that the NLRB is not competent to interpret and apply the FAA and/or hold that the NLRA’s protection of concerted activity extends to employment litigation unrelated to the NLRA.  The decision also refutes the NLRB’s suggestion in D.R. Horton that an opt-out provision might save an arbitration program including a class waiver.  Moreover, the ALJ’s expansive and highly speculative reading of the non-disclosure provision threatens to undermine arbitration confidentiality provisions generally.

In the end, the NLRB continues and intensifies its assault on employment arbitration programs and employers may want to review and carefully consider implementing new programs to avoid violating the NLRA.  However, given federal courts’ almost unanimous rejection of D.R. Horton, employers may be best served by awaiting a federal court decision either upholding or striking down the NLRB’s stance on class waivers in arbitration agreements before making any changes to current arbitration programs.  Z&R will provide further updates and analysis as this issue develops.

*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, appears before the National Labor Relations Board and practices in all areas of private and public sector labor relations.  For more information about the NLRB’s decisions on employment arbitration programs or labor & employment law, please contact Pat (pjh@zrlaw.com) at 216.696.4441.

The Ohio Supreme Court Has Vacated and Modified Its Opinion in Fishel

*By Jason Rossiter

Today, the Ohio Supreme Court reversed itself. The Court has vacated its earlier opinion in Acordia of Ohio LLC v. Fishel, and has held instead that a successor entity can jump into the shoes of its predecessor and enforce the predecessor’s noncompetition agreements.

The earlier opinion had stated that the predecessor entity met its end once the merger took place, and that this event started the running of the “noncompete clock” if that clock was triggered by the employee’s termination of employment with the predecessor entity (as opposed to termination of employment with the predecessor entity “or its successors and assigns”).

The problem with the earlier opinion, according to the Court, was its false assumption that once an entity merged into some other entity, the older entity necessarily ceased to exist. That is a wrong statement of Ohio corporation law, according to today’s opinion.

Instead, “the absorbed company becomes a part of the resulting company following merger. The merged company has the ability to enforce noncompete agreements as if the resulting company had stepped into the shoes of the absorbed company. It follows that omission of any ‘successors or assigns’ language in the employees’ noncompete agreements in this case does not prevent the L.L.C. from enforcing the noncompete agreements.”

The Supreme Court did note that this does not necessarily mean that old noncompetes that had passed through several iterations of mergers and whatnot are always enforceable. “[T]he employees still may challenge the continued validity of the noncompete agreements based on whether the agreements are reasonable and whether the numerous mergers in this case created additional obligations or duties so that the agreements should not be enforced on their original terms.”

Since the lower courts had not yet analyzed whether or not the particular noncompete agreement at issue in Fishel was reasonable under this test, the Supreme Court sent the case back down to the lower court for that analysis to be conducted.

*Jason Rossiter practices in all areas of labor and employment law.

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

Download PDF

• Putting a Price on Twitter Followers: The Importance of Employers Retaining Control of Their Social Media Accounts/li>
• Bad Medicine: Michigan Medical Marijuana Act Imposes No Restrictions on Private Employers Who Terminate Employees For Use of Medical Marijuana
• The Voters Have Spoken: What Employers Can Expect From President Obama’s Second Term
• Does Your Company Need Employment Practices Liability Insurance?
• Time Is Not On Your Side: Ohio Supreme Court Interprets 90-Day Notice Requirement Following Discharge for Workers’ Compensation Retaliation Claims
• Z&R Shorts

---

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.