Carnival of HR is available

This week's Carnival of HR is available courtesy of HRO Manager, a blog dedicated to information on human resources outsourcing. In addition to featuring two posts from yours truly, it discusses many other excellent HR and employment law posts from the blogosphere from the past two weeks. I encourage all of my readers to check out HRO Manager and the other blogs listed in the Carnival.

The dog ate my sanity -- employee's strange behavior may place company on notice of "serious health condition"

Employees' excuses for missing work come in all shapes and sizes. For Beverly Stevenson, it was her fear of dogs that kept her away from her warehouse job at Hyre Electric Company, and her strange behavior on the job that, according to the 7th Circuit, should have put her employer on notice of a serious health condition for FMLA leave.

On February 9, 2004, a stray dog somehow entered the workplace and approached Stevenson. She immediately felt physical and mental symptoms, including a headache, a rush of blood to her head, a tightening of her neck and back, and agitation. When her supervisor entered the work area, Stevenson began screaming obscenities that animals shouldn't be there. After three or four minutes she calmed down, but two hours later she informed a manager she was feeling ill and had to go home. She did not visit a doctor until the next day, when she advised her supervisor that she wasn't feeling well and would be absent from work. On February 11, Stevenson returned to work to confront Hyre's president, screaming at him about dogs being in the building. After that encounter, Stevenson told her supervisor that she could not work and left. Stevenson continued to call in sick until February 17, when she only worked for a few hours, only to leave after feeling harassed despite having her workplace moved to accommodate her fear of stray animals. On February 23 she attempted to return to work with a doctor's note excusing at least some of her past absences, but she could not enter the building as the locks had been changed to keep her out. Hyre would also not accept her doctor's note. Stevenson's union asked the company for an explanation as to why the note was insufficient, and the doctor offered to supply whatever information the company sought. Hyre never responded to either request, and instead on March 9 notified Stevenson that she had been terminated effective February 25.

Typically, an employee is not entitled to the protections of the FMLA unless and until that employee notifies the employer of the need for the leave, either 30 days in advance or as soon as practicable if shorter. While it is the employee's burden to notify the employer, typically the employee just has to provide the employer with enough information to show that the employee believes there is an entitlement to FMLA leave. It then becomes the employer's responsibility to request additional information from the employee's doctor to confirm the FMLA entitlement.

Stevenson never told Hyre that she was missing work because of an illness. The 7th Circuit, however, found that Stevenson's case should go to a jury because a factual question existed as to whether Hyre had constructive notice of her need for FMLA leave. Constructive notice of a serious health condition may be established by either clear abnormalities in the employee's behavior or the employee's inability to communicate. The court concluded that one could find that Stevenson's behavior was so bizarre that it amounted to constructive notice of the need for leave. It was undisputed that she was a "model employee" prior to the dog incident on February 9. The company president acknowledged that her behavior on February 9, 11, and 17 was so strange that he had to change the locks: "We were concerned about Beverly coming into the workplace.... I was concerned about having a very angry employee." Thus, Hyre should have been on notice of Stevenson's need for FMLA leave:

Lengthy encounters of yelling and swearing at one's superiors so severe that a company locks out an employee with a previously unblemished record for safety concerns, coupled with that employees calling the police because her belongings have been moved to another desk, are undeniably unusual and could be viewed by a trier of fact as unusual enough to give Hyre notice of a serious mental health condition.

Companies have to be proactive with employees' needs for FMLA leave. If an FMLA-eligible employee has been absent from work, and you think it might be related to a medical reason, you act at your company's peril if you do not at least try to determine if the absences qualify for FMLA protection. After all, having to cover for an employee for 12 weeks is much less painful that having to litigate a termination for 12 months or more.

Stevenson v. Hyre Electric Co. is available for download here.

Gap sweatshop allegations highlights child labor issues

I heard about the Gap sweatshop allegations (Gap: Report of kids' sweatshop "deeply disturbing") on the news while I was eating dinner last night. After watching video of children at work in a New Delhi sweatshop, Gap President Marka Hansen said, "It's deeply, deeply disturbing to all of us. I feel violated and I feel very upset and angry with our vendor and the subcontractor who made this very, very, very unwise decision."

In American workplaces, the Fair Labor Standards Act sets wage, hours worked, and safety requirements for individuals under age 18 . The rules vary depending upon the age of the minor, the job involved, and the state in which the work is performed. In Ohio, for example, children under 16 are permitted only to work 3 hours per school day and 18 hours per school week. Their hours are capped at 8 hours per day and 40 hours per week otherwise. Generally, those same children cannot work later than 7 p.m. (or 9 p.m. 6/1 through 9/1 and during school holidays of 5 days or more). 16 and 17-year-olds have no limits on how many hours they can work per day or per week, but they are prohibited from working after 11 p.m. and before 7 a.m. on schooldays (or 6 a.m. if not working the night before). The FLSA also prohibits anyone under 18 from working a job that is considered hazardous or involves the operation of a motor vehicle. As one could imagine, the Department of Labor takes child labor violations very seriously, and the consequences for violations can be severe, not to mention the potential PR nightmare. Just ask Marka Hansen.

OCRC approves new maternity leave regulations

As predicted, today's Cleveland Plain Dealer reports that the Ohio Civil Rights Commission approved its new maternity rules that guarantee 12 weeks of leave for all pregnant employees of companies with 4 or more employees. 1 of the OCRC's 5 members voted against the new regulations. The proposal will now go the legislature's Joint Committee on Agency Rule Review, which will consider whether the OCRC overstepped its authority in enacting the new regulations. That Committee has no power to approve or reject the rules, but can merely recommend to the legislature that it invalidate improperly enacted rules. The new rules could go into effect by year's end, although business groups vow to lobby the legislature to invalidate them. Interestingly, yesterday's Plain Dealer reported that the rules did not spark much response from businesses prior to its approval.

For prior posts on this issue, see OCRC to vote on new maternity leave regulations, OCRC to vote on new maternity leave regulations - part 2, and The more things change the more they stay the same.

Racial harassment lawsuits on the rise

It seems like every day I'm reporting on another class of employment lawsuits that are multiplying in number. Today's victim is the racial harassment suit. Today's USA Today (Racial harassment lawsuits at work go up) is reporting that the EEOC has seen the number of racial harassment complaints filed with it more than double in the past 17 years, from 3,075 in 1991 to about 7,000 in 2007. Thursday, the EEOC settled for $290,000 a racial harassment complaint brought against a Gulf of Mexico oil driller stemming from the display of nooses (Global Drilling Company to pay $290,000 for Racial Harassment, Including Nooses). The USA Today article also discusses EEOC settlements involving allegations of the display of racial graffiti and the use of racial epithets. Hangman's nooses is also a popular allegation in these cases. Indeed, since 2001, the EEOC has filed more than 30 lawsuits involving the display of nooses at work, some of which resulting in 7-figure settlements.

While workplace harassment is typically thought of in terms of sexual harassment, a hostile work environment on the basis of any protected characteristic is just as unlawful. Racial harassment, national origin harassment, age-based harassment, disability harassment, religious harassment, and harassment based on any other protected class are all equally as unlawful as sexual harassment. All workplace harassment policies should make clear that all of these forms of harassment are illegal, and will be treated the same by management. Companies' annual or semiannual harassment training should not just be limited to sexual harassment, but should include all forms of unlawful harassment. This EEOC serves as a good tickler to remind all companies to check their harassment policies to ensure that it covers all types of harassment, and to update where necessary.

What else I'm reading this week #2

For those of you who've been with me for some time, you'll notice that the blog went under a bit of a redesign this week. I've not only made it a little more reader friendly, but I've also added some new functionality to the site. On the sidebar to the right you'll see a box that lists all of the items I've shared this week from my Google Reader account. Each Friday, I'm going to archive each week's links in a post. So without further fanfare, here's what I've been reading this week (in no particular order):

Please stop annoying me, from The Evil HR Lady, giving advice on the issue of unpaid time as a wage and hour violation.

CBO estimates minimal costs necessary to enforce ENDA, from Workplace Horizons, reporting that the Congressional Budget Office estimates a 5% increase in EEOC filings if the current version of the Employment Non-Discrimination Act of 2007 (which excludes gender identity as a protected class) in enacted.

Family friendly, also from The Evil HR Lady, discussing the difficult choices employees must make between job and family.

AT&T to pay $756,000 for religious bias against Jehovah's Witnesses, from the EEOC, reporting on a failure to accommodate religious discrimination case.

In-house counsel's biggest headache, from Gruntled Employees, noting that labor and employment cases are the biggest worry for in-house counsel.

Facebook, Employees and HR - You Can't Handle the Truth..., from The HR Capitalist, discussing the need for companies to be careful before fully embracing social networking sites for employee communication.

OCRC to vote on new maternity leave regulations - part 2

One short follow-up to this morning's post on the new OCRC maternity leave regulations. The USA Today article I linked to this morning talked about the rise of the "sandwich generation" — people who care both for children and an aging relative. This notion will have even greater meaning in Ohio if all employers have to provide 12 weeks of maternity leave to all employees. Take for example a pregnant employee who lawfully takes 12 weeks of FMLA leave during a year to care for a sick parent, and then in the same year gives birth. That employee would be entitled to an additional 12 weeks of leave under Ohio's new proposed regulations. Thus, pregnant women would receive double benefits. One modification to the hypothetical, however, illustrates the potential fundamental unfairness in the new regulations. Instead of the employee being a pregnant woman, let's suppose the employee is a man with a pregnant wife. If that man takes 12 weeks of leave to care for a sick parent, he would not be able to take even 1 day of extra leave for the birth of his child, and his employer would coldly have the right to terminate him in that situation. Everyone should be concerned about the potential disparities in implementing OAC 4112-5-05(G), both in its current and amended forms, and the potential for sex discrimination claims brought by male employees who are denied the same benefits as their female counterparts.

OCRC to vote on new maternity leave regulations

Over the summer I reported on the Ohio Civil Rights Commission's proposed amendments to its pregnancy discrimination regulations, Ohio Administrative Code 4112-5-05(G), which would extend 12 weeks of guaranteed unpaid maternity leave virtually to all employees, not just those covered by the FMLA. See The more things change the more they stay the same, and OCRC appears to bend on pregnancy leave regulations. Now, after three months of inactivity on this issue, it appears that the OCRC is finally ready to act on these regulations. Today's Cleveland Plain Dealer is reporting that the OCRC will consider the new regulations today (see Ohio may expand maternity leave rights to all moms. As reported, the change would supersede the federal FMLA by extending guaranteed pregnancy leave to Ohio employees no matter how long they've worked at a company, to part-time workers, and to anyone at a company with at least four employees. As revealed by the text of the proposed amendment, the OCRC resisted lobbying by business groups to lessen the amount of available leave from 12 weeks to 8 weeks. It is expected that the OCRC will approve these regulations. The final step before they would go into effect is approval by a legislative subcommittee, which would probably happen fairly quickly. Once enacted, Ohio would join 18 other states that have granted maternity leave beyond that guaranteed by the FMLA.

Coincidentally, today's USA Today has an article on the growth of family responsibility discrimination ("FRD") lawsuits. While I still believe that the OCRC's new regulations do not substantively change the law, they will increase awareness about the rights of employees of small business to pregnancy-related leaves of absence. That awareness certainly will not do anything to slow down the trend of FRD lawsuits against Ohio businesses. Now is as good a time as any for all companies to review their maternity leave policies to ensure that they provide for 12 weeks of leave, so that new policies can be put in place if needed.

Ohio pushes to be on the forefront of paid sick leave

This morning's Columbus Dispatch reports that supporters of the proposed Ohio Healthy Families Act (a union-led, statewide coalition) have collected the required 140,000 signatures to put the statute before the General Assembly when it begins its 2008 session in January. If the legislature fails to act within 120 days, supporters could collect another 120,683 signatures to submit the issue to voters in the November election.

The proposed law would require all companies with at least 25 employees to give employees who work at least 30 hours a week 7 paid sick days a year. Part-time workers would receive a prorated number of paid days off. Employees would be able to use the sick days for themselves or to care for a child, parent, or spouse, and for physical and mental illnesses, injuries, other medical conditions, and preventative care. Employees would also be able to carry over a maximum of 7 unused sick days from year to year. The proposed law mirrors the FMLA on issues such as notice, medical certifications, and anti-retaliation.

While this law will clearly impact those small businesses that currently do not provide for any paid leave, even those employers who already provide paid sick leave should be concerned about this proposal. It will make it harder to monitor and enforce attendance policies, provide a potential disincentive for employees to return from sick leaves, and create a new cause of action employers will have to defend against. Additionally, the potential of a November 2008 ballot initiative adds intrigue to this issue. Will a liberal issue such as paid sick leave draw more Democrats to the polls and help carry Ohio for that party in the Presidential election? Does that risk create an incentive for the Republicans to act on this initiative in January? This law would put Ohio out in front of the curve on this issue, as it would be only the 4th state to enact a paid leave of absence law, fairly progressive for a state that is not known as such.

Click here for the full text of the Ohio Healthy Families Act.

Tepper v. Potter sets potentially narrow standard for religious accommodations

The Sixth Circuit this week handed down a significant decision that requires a job loss or some actual discipline before the denial of a religious accommodation can be actionable.
After several years of working for the U.S. Postal Service as a full-time letter carrier, Martin Tepper became a Messianic Jew, strictly observing the Sabbath every Saturday. From April 1992 through January 2003, the USPS accommodated his religion and did not require him to work Saturday's or Jewish holidays. At the time, its staffing levels enabled that accommodation without disrupting the rotating day-off schedule of other employees. It is estimated that the accommodation cost the USPS between $7,000 and $9,000 per year in overtime payments to covering employees. By 2003, however, Tepper's branch suffered a decrease in staffing levels, from 36 employees to 32 employees. Management found it more difficult to accommodate Tepper's day off, and had to assign co-workers to work more days than the rotating schedule allowed. While no co-worker formally complained about the arrangement, enough grumbled for their union to hold a meeting, to which Tepper was not invited and at which his co-workers unanimously voted to recommend ending the Saturday accommodation. Shortly thereafter, the Post Office ended the accommodation. Instead, it permitted Tepper to use annual leave and leave without pay on Saturdays, and encouraged him to reserve some of his vacation time for the Saturday absences.
While continuing to work at the Post Office, Tepper sued, contesting the removal of the Sabbath accommodation and claiming that the use of leave without pay reduced his annual pay and future retirement benefits. The District Court and the Sixth Circuit disagreed and found that the discontinuing of the accommodation did not discriminate against Tepper. The Court narrowly read the required elements of a failure to accommodate claim, and required Tepper to prove that he was either "disciplined or discharged" for failing to comply with an employment requirement that conflicted with his religious practice. Because a loss of pay does not amount to "discipline or discharge" Tepper could not prove his case.
As I wrote a couple of months ago (click here for my post on religious accommodation claims), common examples of reasonable accommodations for an employee's sincerely held religious beliefs are flexible scheduling, voluntary substitutions or job swaps, and job reassignments. The Tepper Court suggests, if not impliedly holds, that the denial of an accommodation, no matter how reasonable the request might be, is not actionable unless the affected employee suffers actual discipline or a job loss as a result of the denial. Thus, Tepper might have had a viable claim if he had quit the Post Office claiming religious intolerance, or if he observed his faith, did not show for scheduled Saturdays, and was terminated for attendance violations. I'm not sure that we want to force a job loss on a devout employee before that employee can claim a failure to accommodate. The Tepper decision seems to be much too narrow a ruling of the conduct Title VII is supposed to protect.
While Tepper is now the law in Ohio, Michigan, Kentucky, and Tennessee, I caution that all companies tread very lightly before denying or rescinding a religious accommodation in its wake. The next employee might not be as proactive as Mr. Tepper, instead opting to resign or force a termination before suing for the failure to accommodate.
Click for a copy of Tepper v. Potter.

Some guidance for dealing with office romances

Good Morning America this morning posed the question, "Office Romance: Is It Worth It?" GMA gives some tips for employees thinking about getting involved with a co-worker. I'm going to discuss several of them, from the employer's perspective:

1. Check the company policy. If your organization does not want co-workers dating each other, it is best to have a formal, written no-fraternization policy in place. Such policies can have a range of restrictions, depending on how strongly your company feels about intra-office relationships. The scenario that creates the greatest risk if a relationship goes south is a subordinate dating a manager or supervisor within the direct chain of command, or an executive. You should consider either prohibiting those relationships outright, or requiring full disclosure to HR with a signed writing by both parties stating that the relationship is consensual. For reasons that should be obvious, I prefer the former over the latter, but ultimately it is an organizational decision. Regardless, if you plan on disciplining or termination an employee for engaging in such a relationship, you best have a policy in place prohibiting the conduct that you can rely upon to support the decision. Any discipline, however, must be meted out fairly and equitably. The surest way to a discrimination lawsuit is to discipline one party to the relationship but not the other.
2. Keep e-mail clean. Employees generally should not have any expectation of privacy in corporate e-mails or internet usage. To be clear, it is best to have a formal written policy spelling out your company's expectations about appropriate computer usage. And again, it is largely an organizational decision. Some companies do not mind reasonable computer use for personal business at work, so long as employees are getting their work done and not abusing the privilege. Others want 8 hours of work every day, with no distractions. Regardless, computer usage must always be appropriate, and inappropriate usage (dirty e-mails, pornography, etc.) must be dealt with quickly.
3. Consider your colleagues and keep it professional. Courts are split as to whether employee favoritism as a result of a consensual relationship between two employees can create a sexual harassment cause of action for an uninvolved but negatively affected co-worker. For example, the California Supreme Court has recognized such a claim, while the Seventh Circuit has rejected it. This uncertainty in the law presents some risk for employers. The best risk management would be a blanket prohibition on all office romances, although some companies do not want to be that draconian. The next best practice is to put a policy in place that expresses your organization's protocol for office romances, uniformly apply that policy, and promptly investigate any complaints of harassment that stem from office romances or otherwise.

There is no such thing is a teflon employer. Employees can sue you at any time, and these days for just about any reason. The best you can do is have policies that match your organizational style, uniformly and neutrally apply those policies, and make the best business decisions that you can in the given circumstances. While these steps cannot prevent against a lawsuit, they will put you in the best position to defend against one if it is filed.

A little self promotion

I encourage everyone to check out this week's Carnival of HR hosted by The HR Capitalist, one of the truly excellent HR blogs. Kris has graciously linked to my post from a few weeks ago on Abdulnour v. Campbell Soup Supply Company and the importance of documenting performance issues.

If you want to stay on top of these posts, the best way to do it is by subscribing to my feed. I've made it easy for you by giving you two ways to have my musings delivered -- either in a reader (I'm partial to Google Reader), or by e-mail delivered to your inbox every time I post. I also encourage everyone to check out all of the links in my blogroll. The employment law and HR blogging community is flourishing, and all of the blogs listed have something worthwhile to read almost every day.

GO TRIBE

(with insincere apologies to any readers I may have in Boston)

Happy Boss's Day

Today is National Boss's Day. I was planning on writing a long post detailing the history of this important holiday, noting that it was first celebrated in 1958 by Patricia Bays Haroski, a State Farm employee who chose October 16 because it was the birthday of her boss, who also happened to be her father. I was going to remind everyone that the best bosses follow the golden rule -- treat your employees as you would want to be treated, or you would want your spouse, or child, or parent to be treated -- and that if more bosses followed this rule, 90% of employment lawsuits would never get filed.

Instead, let's all commemorate this day with the world's greatest boss, Dunder Mifflin's Michael Scott. Happy Boss's Day everyone.

6th Circuit affirms importance of an objective plan to support a reduction in force

It is always so refreshing when a court provides a nice, neat summary to explain its decision in a case. So, when you read the following introductory paragraph from today's 6th Circuit decision in Blair v. Henry Filters, Inc., you might be inclined to think there is no need to read any further:

When a fifty-seven-year-old's direct supervisor taunts him as "the old man on the sales force," removes him from a profitable account because he is "too old," and tells another employee he "needs to set up a younger sales force" before terminating the employee, can the employee's age-discrimination claim survive summary judgment? We believe it can.

The key facts in Blair are few. Blair, 57 years old at the time of his termination in August 2003, worked for Henry Filters, an industrial manufacturer, in 1986. In 2000, John Tsolis became Henry Filter's VP of Sales and Blair's immediate supervisor. Tsolis called himself as "The Terminator," a self-referential nod to his love of firing employees. Blair claimed that in the years leading up to his termination, Tsolis made ageist remarks about him, such as calling him "the old man."

The company, after suffering some financial hardship, between 2001 and 2003, reduced its workforce by terminating 67 employees, out of which 24 were not replaced. That reduction in force lacked a clear plan for its execution. The Court described it as "chaotic, occurring in fits and starts." In August 2003, without explanation, Tsolis notified Blair that his employment was terminated. At the same time, Henry Filters also terminated the employment of a 37-year-old salesperson and a 39-year-old secretary. A few months prior, Tsolis was overheard saying that he needed to set up a younger sales force, although he had no referred to anyone by name. After Blair's departure, a 42-year-old current employee assume his responsibilities for about four months, after which it hired a man in his twenties for a sales position, although there was no evidence of whether than person took over any of Blair's former sales territories. The Court first concluded that the district court correctly concluded that Blair had not presented any direct evidence of age discrimination. The ageist comments he attributed to Tsolis were either not related to the termination decision, or lacked a connection between Tsolis's desire for a younger workforce and Blair's termination.

Notwithstanding the lack of direct evidence of age discrimination, the Court found that the trial court erred in dismissing the age claim. Even though the alleged ageist comments were attenuated in time from the termination decision and not directly tied to the decision to terminate Blair, the Court found that they nevertheless were sufficient circumstantial evidence the Henry Filter singled out Blair for discharge because of his age. The Court also relied heavily on the lack of an objective plan for the reduction in force, noting that "a lack of evidence regarding a company's objective plan to carry out a reduction in force is a factor that might indicate that an alleged reduction in force is pretextual."

There are two key issues worth some discussion. First, there is no reconciliation by the Court of ageism, on the one hand, versus the inclusion of a 37-year-old comparable in the RIF. Secondly, the Court seems to blur of the required showing for a prima facie case and pretext in a reduction in force context. The Court relies on the same exact evidence to conclude that a genuine issue of material fact exists for the 4th element of Blair's prima facie case (i.e., whether there is additional evidence tending to indicate that the employer singled out the plaintiff for discharge for an impermissible reason) and pretext. It appears that if a genuine issue of material fact exists on the 4th prima facie element, the same will hold true for the issue of pretext. Thus, in RIF cases, the Court seems to have eliminated the pretext analysis, putting it all up front in the prima facie showing. At the end of the day, it may not make a difference, since in a RIF case the employer's legitimate non-discriminatory reason (the RIF itself) is self-justifying, and it is always the employee's burden to overcome that reason and prove that it was a discriminatory reason that motivated the discharge. In other words, the battle front is whether the plaintiff was legitimately included in the RIF, and it doesn't much matter through which hoop one makes the plaintiff jump in meeting that burden.

The Blair decision also importantly highlights the need for written objective criteria in carrying out a bona fide reduction in force. Ideally a RIF should be carried out with severance payments in exchange for signed releases, but that is not always the case. Economic or other realities sometimes make severance payments impractical, and some employees would rather take their chances in court than sign a release. All RIFs should be designed and implemented with the understanding that the selection criteria may have to be defended in court. As Blair illustrates, that defense is more difficult without objective criteria as to who stays and who is RIFed. As always, these programs are best designed, or at a minimum reviewed, by employment counsel.

Mandatory maternity leave does not qualify flight attendant for unemployment

Unemployment cases do not usually grab my attention. Continental Airlines v. Peters, however, did. April Peters was a flight attendant for Continental Airlines, a union employer. Continental's collective bargaining agreement has a provision under which a pregnant flight attendant is placed on mandatory maternity leave at the end of her 27th week of pregnancy. Apparently, that provision is consistent with FAA regulations forbidding flight attendants from flying past their 27th week of pregnancy. During that maternity leave, the flight attendant accrues all seniority, is eligible to use accumulated sick leave. The contract also permits the flight attendant to elect a one-time 12-month maternity leave following the birth. Peters became pregnant, and Continental, consistent with the collective bargaining agreement, placed her on maternity leave at the end of her 27th week of pregnancy. Once on the mandatory leave, Peters filed a claim for unemployment compensation benefits. Along with her application she submitted a doctor's note stating that she was able to work full-time and that she had not been advised to quit her job.

The unemployment commission awarded Peters benefits. The court of appeals, however, affirmed the trial court's reversal of that decision. The issue before the appellate court was whether Peters was "involuntarily" unemployed and whether she could waiver her right to unemployment benefits through the collective bargaining agreement. Peters argued that she was involuntarily unemployed because she was willing and able to continue her job beyond the 27th week and that she could have performed some other task for the remainder of her pregnancy. Continental, on the other hand, argued that Peters' union membership voluntarily subjected her to the terms of the collective bargaining agreement, including the maternity leave policy.

The court was unpersuaded by Peters' argument that her willingness and ability to work rendered her separation involuntary:

Peters' physical ability to continue working after her 27th week of pregnancy is immaterial to the question of whether she waived the right to unemployment benefits by virtue of a collective bargaining agreement. The terms of the maternity leave policy are clear.... Although Peters might have been physically capable of performing, and willing to perform, her duties as a flight attendant after the 27th week of pregnancy, her voluntary agreement, via the collective bargaining agreement, to the terms of the maternity leave policy makes these facts irrelevant.

Instead, the court believed that Peters', through her union, waiver her right to unemployment benefits:

As a union represented worker, Peters is a party to the collective bargaining agreement. As such, she agreed to stop flying after the 27th week of pregnancy in exchange for the accrual of seniority while on maternity leave, continued coverage under Continental's health insurance plan for the duration of the leave, the option of using sick time during the maternity leave, and full reinstatement at the end of the maternity leave..... These contract terms were reached as a result of arms-length negotiations between Continental and Peters' union, so Peters validly waived the right to unemployment compensation benefits.

The court distinguished between an arms-length, bargained for collective bargaining agreement and a unilaterally imposed policy, such as a retirement plan. The latter, the court reasoned, might render the separation involuntary.

What I find most interesting in the opinion, however, is the following throwaway line by the majority: "While is is not an issue in this case, we share the dissent's concern that there may be legal questions relating to the interplay of the collective bargaining agreement and the Pregnancy Discrimination Act ... and other potentially applicable federal or state laws." While I appreciate the court's concern that a paternalistic maternity leave policy might violate the pregnancy discrimination laws, the issue has long been settled that employers can implement leave of absence policies for legitimate safety reasons. Moreover, it does not appear that the airline harbored any discriminatory intent -- it allowed the accrual of seniority during maternity leave, provided continued health insurance coverage, gave an option for the use of sick time, guaranteed full reinstatement, and offered a 12-month postpartum leave of absence. Any claim for pregnancy discrimination would have to test the veracity of the airline's lack of available light duty. Provided, though, that there genuinely was no light duty available for Peters, I do not see any viable discrimination claim based on the mandatory, bargained-for leave of absence.

What else I'm reading this week #1

Several worthwhile links to pass along to everyone on this Friday.

The HR Capitalist has an interesting post on the 27 hospital employees suspended for one month without pay for looking at George Clooney's medical records. He comments (and I concur) that companies gather a lot of medical information on employees, all of which is governed by HIPAA and the ADA. While everyone is doing that wage and hour audit I've been suggesting over the past couple of weeks, you might as well audit personnel and medical files to ensure that no medical information is contained in personnel files and that access to medical files is limited to a strict need to know basis.

The Pennsylvania Employment Law Blog has an informative post on the 5 things every HR generalist should know about the National Labor Relations Act.

Finally, on a topic near and dear to my heart, the Connecticut Employment Law Blog advises on appropriate blogging policies for your employees. If you are unaware of all of the ways your employees can have an on-line presence writing about your company, check out A Trial Lawyer's Guide To Social Networking Sites on the Deliberations Blog. It's a great introduction to blogging, social networking, and microblogging. The best way to control (to the best you can) your employees' off-work on-line activities is to have a clearly defined policy that outlines your business's expectations for on-line speech.

And Go Tribe!

Stripping independent contractor protections

Today's New York Daily News reports on the filing of a class action lawsuit against a chain of gentlemen's clubs. The lawsuit challenges the club's practice of skimming 10 cents off every dollar the dancers earn from a lap dance, paying less than minimum wage, and cheating employees out of overtime. The article quotes one of the club's dancers, "We're independent contractors. If a girl doesn't like it, she can go somewhere else." Another girl added, "I had no idea it was happening, I thought they were taking out taxes and stuff like that." (Insert your own joke here). The first girl is correct. If the dancers are independent contractors, then the club most likely has no liability, and certainly has no liability for any minimum wage and overtime violations. The wage and hour laws only apply to employees; they do not reach independent contractors.

If Senator Barack Obama has his way, though, the scope of who qualifies as an independent contractor will narrow. The Senator introduced the Independent Contractor Proper Classification Act of 2007. Currently, Section 530 of the Internal Revenue Code has a safe harbor for employers who have classified workers as independent contractors. That safe harbor requires the IRS to excuse misclassifications and allow an employer to continue reporting employees as 1099 independent contractors if the employer (1) has been treating similarly situated workers as independent contractors, (2) has been consistently reporting the workers as independent contractors to the IRS and has been issuing 1099s to the workers, and (3) has a reasonable basis to classify employees as contractors. An employer has a reasonable basis if it relied on a long-standing practice of a significant segment of the industry or relied on a revenue ruling or court decision. The bill seeks to amend Section 530 by requiring employers to reclassify workers that had been misclassified as independent contractors, and by prohibiting employers from relying upon industry practice as a justification for misclassifying employees.

Independent contractor classifications have not necessarily been on the Department of Labor's radar up to now. The enforcement provisions of the Act, would place employee classifications squarely in the DOL's cross hairs. The Act directs the IRS to develop a process for workers to request an evaluation of their classification, requires the IRS to inform the DOL of discovered misclassification practices, and requires the DOL to conduct investigations in industries with high misclassification rates. The Act would also require each employer to notify any independent contractors of their federal tax obligations, that labor and employment law protections that do not apply to them, and their right to seek a classification determination from the IRS. Finally, the Act safeguards against employer retaliation and provides for the payment of attorney's fees to employees who successfully challenge their classification.

As with most other Democratic legislative initiatives coming out of the current Congress, it is unlikely the President would sign this bill into law even if Congress were to pass it. Nevertheless, the Independent Contractor Proper Classification Act is another good reminder that companies should not classify a worker as an independent contractor without first considering all of the risks, consulting with employment counsel, and putting in place a written agreement outlining the terms of the relationship.

Federal Judge indefinitely blocks Social Security "No Match" Rules

A California federal judge yesterday placed an indefinite hold on the Bush Administration's proposed rules for the handling Social Security "no match" letters. The rules would have required employers, upon receipt of a no match letter from the SSA to either verify the offending employee's immigration/ citizenship status or terminate the employee. Today's New York Times does a nice job summarizing the judge's order and the fall out from it:

The judge, Charles R. Breyer of the Northern District of California, said the government had failed to follow proper procedures for issuing a new rule that would have forced employers to fire workers if their Social Security numbers could not be verified within three months. Judge Breyer chastised the Department of Homeland Security for making a policy change with "massive ramifications" for employers, without giving any legal explanation or conducting a required survey of the costs and impact for small businesses.... If allowed to take effect, the judge found, the rule could lead to the firing of many thousands of legally authorized workers, resulting in "irreparable harm to innocent workers and employers." ...

Some conservative lawmakers who argue for vigorous enforcement of the immigration laws as a priority said they were outraged by the judge’s ruling. "What part of 'illegal' does Judge Breyer not understand?" asked Representative Brian P. Bilbray, Republican of California and chairman of the House Immigration Reform Caucus. "Using a Social Security number that does not belong to you is a felony. Judge Breyer is compromising the rule of law principles that he took an oath to uphold." ...

Judge Breyer found that the Social Security database that the rule would draw upon was laden with errors not related to a worker’s immigration status, which could result in no-match letters being sent to legally authorized workers. "There is a strong likelihood that employers may simply fire employees who are unable to resolve the discrepancy within 90 days," even if they are legal, he wrote.

This decision indefinitely blocks the new rules until the court conducts a trial sometime next year and reaches a final decision. It is unlikely, however, that Judge Breyer will change his mind. Most likely, the Bush Administration will continue to push this issue through trial and into the appellate courts. A Democratic Administration in 2009, however, would almost certainly bring an end to this cause.

NLRB issues quartet of lead cases

While this blog focuses primarily on employment law issues, the National Labor Relations Board has had a busy October thus far, issuing four significant decisions that merit some discussion.

In Toering Electric Co., the NLRB ruled that an applicant for employment must be genuinely interested in seeking to establish an employment relationship with the employer in order to qualify as an "employee" under the meaning of the National Labor Relations Act, and thus be protected against hiring discrimination based on union affiliation or activity. The Board explained, "One cannot be denied what one does not genuinely seek.... Submitting applications with no intention of seeking work but rather to generate meritless unfair labor practice charges is not protected activity. Indeed, such conduct manifests a fundamental conflict of interests ... between the employer's interest in doing business and the applicant's interest in disrupting or eliminating this business."

In BK & E Construction Company, the NLRB held that the filing and maintenance of a reasonably based lawsuit does not violate the National Labor Relations Act, regardless of whether the lawsuit is ongoing or completed and regardless of the the motive for bringing the suit. While recognizing that the filing of a lawsuit against a labor union or an employee could be a powerful instrument of coercion or retaliation, the Constitutional right to petition courts is too important to be called an unfair labor practice. According to the NLRB, the prospect of liability for an unfair labor practice would reasonably tend to chill a litigant from exercising that fundamental First Amendment right to petition the courts. Thus, as long as the lawsuit is not objectively baseless, or if no reasonable litigant could realistically expect to succeed, the filing of the lawsuit does not constitute an unfair labor practice.

In Jones Plastic & Engineering, the NLRB held that at-will employment status does not detract from an employer’s otherwise valid showing that it has permanently replaced striking employees. In other words, the mere fact that a replacement worker is hired "at-will" and told that their employment was for "no definite period" and could be terminated for "any reason" and "at any time, with or without cause" did not detract from the showing of permanent replacement status. The dispositive issue remains whether there was a mutual understanding with the replacement employees that they would not be displaced by returning strikers at the end of the strike, and not whether the replacements are at-will employees.

Finally, in Dana Corp., the Board modified its recognition-bar doctrine, and held that an employer’s voluntary recognition of a labor organization does not bar a decertification or rival union petition that is filed within 45 days of the employer's recognition notice. The Board will process the petition if, like other petitions, it is supported by 30% of the bargaining unit.

Toering Electric is probably the most significant of these four policy-making decisions, as it deals a serious blow to the popular union organizing tactic known as "salting". Salting is when a union sends members undercover (known as "salts") to seek employment from a nonunion employer with the intent of obtaining employment and then organizing the employer's employees. Now, if the employer discharges or refuses to hire the salt because of his union affiliation or activity, the employer's conduct can be lawful if the employer can present evidence that puts at issue the genuineness of the applicant's interest in going to work for that employer.

Butt I was doing it on my free time

Findlaw is reporting on the termination of a Virginia high school art teacher who is suing his former employer over his termination after officials learned he moonlighted by creating paintings using his bare buttocks. School officials terminated Stephen Murmer after they saw a YouTube video in which he wore a swim thong and a Groucho Marx mask to demonstrate how he applies paint to his rear and presses it onto a canvas. The lawsuit, filed by the ACLU, claims that Murmer's termination violates his First Amendment right to free expression. According to the lawsuit, Murmer was terminated for art he created on his free time and under a pen name, all of which he kept private from his students. A copy of the Findlaw article is available here. If you are curious, Findlaw links to Murmer's website and the YouTube video.

Employees of private (i.e., non-governmental) employers have much less protection than their public counterparts. Given the explosion of websites such as YouTube and MySpace, not to mention personal blogs, into our collective consciousness, employees should be on notice that what they post is more or less fair game to their employers. If a YouTube video undermines an employer's confidence in an employee, the employer should be within its rights to terminate the employee for that reason, provided the reason is non-discriminatory.

How narrow is the scope of the public policy tort in Ohio?

Just as it seemed that Ohio courts were narrowing the scope of the wrongful discharge public policy tort, they toss a curve ball. Hycomp, Inc., a manufacturer of airplane engine parts, terminated David Zajc, one of its quality control managers, after he refused to ship a part he deemed either noncompliant with contract specifications or had quality issues. Zajc claimed that his termination jeopardized the clearly defined public policy found in the Uniform Commercial Code, the Ohio Products Liability Act, and federal aviation regulations. The trial court disagreed and dismissed Zajc's claim on Hycomp's motion for summary judgment. The Cuyahoga County Court of Appeals, however, reversed that dismissal. It agreed with Zajc that the UCC (which permits a buyer to reject nonconforming products), the Products Liability Act (which imposes strict liability where the risks exceed the benefits of a product design), and federal aviation laws and regulations (which authorize the FAA to regulate the production of aircrafts and provide for a inspection system for subcontracted parts). According to the Court, it is irrelevant that those laws do not expressly prohibit Zajc's termination, but that it is enough that the termination places those public policies in jeopardy, notwithstanding that Zajc never complained, but merely refused to carry out his bosses directive to ship the at-issue parts.

The dissent argues that Zajc's claim is nothing more than a back door whistleblower claim, that there is no evidence that Zajc complained about any safety concerns, and that even if he did, he failed to comply with the mandatory prerequisites of the Whistleblower Act. In the words of the dissenting Judge Gallagher:

Absent facts demonstrating a clear safety concern, I do not find any clear public policy expressed in the above statutes that would be jeopardized by the termination of an employee who disagrees with his employer about whether a part is nonconforming or defective and then disobeys instructions to ship the goods.... In this case, Zajc is asking us to find a clear public policy that an employer cannot discharge an employee who disagrees about the quality of parts and refuses to ship the parts without any showing that public safety is being endangered. I do not believe that Zajc has shown that the narrow public policy exception to the employment at-will doctrine should be extended to the limited facts of this case.

Those who are regular readers of this blog will not be surprised that I think the dissent has the better of the argument. The tougher question is how to interpret the implications of this decision. For the past several years, we've seen a tightening of the public policies that will support a wrongful discharge claim. The Zajc case, though, seems to open up a can of worms by permitting employees to shoehorn a termination into a tangentially implicated statute. For employers, the bottom line is to make employment decisions based on legitimate, non-discriminatory, non-retaliatory business reasons. Companies should never fail to take a legitimate employment action out of a fear of being sued. Cases like Zajc, however, certainly inject a little more uncertainty into the process for companies and for the lawyers advise them.

A copy of Zajc v. Hycomp, Inc. is available for download here.

Wal-Mart ordered to pay $140.5 million on overtime claim

Last week, I commented on the risks companies face from a lack of control over wage and hour practices (here, and here). This week, a federal judge in Pennsylvania reinforced my point for me by ordering Wal-Mart to pay an additional $62 million in statutory liquidated damages to 124,506 current and former Pennsylvania employees who last year a Philadelphia jury found were not properly compensated for off-the-clock work and missed rest breaks. That jury had previously awarded $78.5 million in compensatory damages to 186,000 current and former Wal-Mart employees. That jury verdict was based on the finding that Wal-Mart failed to pay its employees for time they worked off the clock or for their missed rest breaks. Motions are still pending on whether the plaintiffs are entitled to interest on their award, and whether they are entitled to recover attorneys' fees, which are estimated at a staggering $48 million.

This verdict is a good time to remind everyone that it is a good idea to have a policy in your handbook that requires all overtime to be authorized and forbids any hourly employee from working through a break without prior approval. It is unclear whether Wal-Mart had such a formal policy, if it was merely its practice to do so. Whatever Wal-Mart was doing, however, it was negatively affecting hundreds of thousands of its employees. Regardless, if it is your expectation that your employees take their breaks, you should spell out that expectation in the employee handbook. That way, if an employee is serially violating the policy by working through lunch without permission, you have a defense to refusing to pay that employee if you so choose.

Jury rules against Isiah Thomas

The jury in the Isiah Thomas sexual harassment trial has returned a verdict of $11.6 million dollars against Madison Square Garden and its chairman, James Dolan. The jury spared Isiah Thomas any personal liability, although it is certainly hard to calculate the damage this trial has done to his reputation. The verdict breaks down as follows: MSG owes $6 million for condoning a hostile work environment and $2.6 million for retaliation. Dolan owes $3 million. ESPN.com quotes U.S. District Judge Gerard E. Lynch calling the verdict "eminently reasonable." It is therefore doubtful he will do anything to reverse the verdict or lessen the amount. MSG, meanwhile, is quoted as saying: "We believe that the jury's decision was incorrect. We look forward to presenting our arguments to an appeals court, and believe they will agree that no sexual harassment took place and MSG acted properly."