The dominos start to fall – some clarity on New Process Steel

On June 17, the Supreme Court held that the NLRB needs at least three members to have the authority to act. At the time, I wrote that with the stroke of their pens, the Supreme Court invalidated the nearly 600 decisions issued by the two-member NLRB over the prior 26 months. In truth, I was merely hypothesizing based on the practical meaning of that holding. Now, though, the circuit courts are beginning to weigh in. While the decisions issued by the two-member Board are invalid, the mechanics of what to do with them are very much up in the air.

In Galicks, Inc. v. NLRB (6th Cir. 6/24/10) (unpublished) [pdf], the 6th Circuit was presented with the review of an NLRB decision that had been issued by the two-member Board. The court refused to hear the case, and, in a terse eight-line opinion, remanded it back to the NLRB “for proceedings consistent with [New Process Steel].” The remand means that the now full five-member NLRB will be able to reconsider its prior decision.

The 6th Circuit’s approach, however, is not universal. As the GT LE Blog reported last week, the 2nd Circuit, facing the same issue, simply denied enforcement of the NLRB’s order, foreclosing any further proceedings by the five-member Board. In other words, because the Supreme Court provided no guidance to the circuit courts on what to do in light of its holding in New Process Steel, we are going to see a circuit-by-circuit approach. Some will remand, some will deny enforcement, and some may do something else. We may be left with a fragmented review of the last 26 months of federal labor law, with the reopening of these old decisions left up to the geographical whim of which part of the county from which they happen to hail. In other words, labor law is going to be a mess for a little while.

According to a footnote in Galicks, the NLRB intend to file motions to remand in all pending cases affected by New Process Steel. We’ll see if the NLRB’s proactive measures lead to a more uniform approach to the handling of these cases.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

WIRTW #132

Although earlier this week I touched on Rent-A-Center v. Jackson, I did not discuss it in-depth. Thankfully, there are a lot of bloggers who did:

• Breaking: U.S. Supreme Court Affirms Arbitration Provisions in Employment Disputes; What It Means for Employers – from Dan Schwartz’s Connecticut Employment Law Blog

• The Potential Impact of Today’s Supreme Court's 5-4 Decision on Arbitrability – from Michael Fox’s Jottings By An Employer’s Lawyer

• SCOTUS Addresses Arbitrability Determination – from Philip Miles’s Lawffice Space

• New SCOTUS Arbitration Opinion: Both Boring & Important – from Tim Eavenson’s Current Employment

• Supreme Court Rules in Favor of Employer on Arbitration Agreements – from Tom Crane’s San Antonio Employment Law Blog

• Supreme Court Expands Enforcement of Arbitration Clauses Calling for The Arbitrator To Decide Arbitrability Issues – from Wyatt Employment Law Report

• Victory for Business in Rent-A-Center West v. Jackson – from Sarah Cole at the ADR Prof Blog

• Supreme Court: Arbitrator, Not Court, Decides Whether Arbitration Agreement is Unconscionable – from the Workplace Prof Blog

• New rule for deciding validity of agreements to arbitrate arbitration – from SCOTUS Blog

• SCOTUS: Arbitrator, not court, decides whether arbitration agreement is unconscionable (5-4) – from LawMemo

Here’s the rest of what I read this week:

Wage & Hour

• Counting Sheep Over Ledbetter – from Stephanie Thomas at Compensation Cafe

• A Wage/Hour Story Told in Million-Dollar Lawsuits and Wage and Hour Simple? I Don't Think So – from HR Daily Advisor

• Minimum Wage — HR Song of the Week – from The Word on Employment Law with John Phillips

• Senate Committee Holds Hearing on Worker Misclassification – from Washington D.C. Employment Law Update

• Sales Representatives’ Overtime Lawsuits Continue To Result In Conflicting Decisions – from Hunton Employment & Labor Perspectives™

Discrimination

• Gay worker bullied and harassed at Las Vegas Walmart: What’s next, “always low prices” on pink triangles? – from David Yamada’s Minding the Workplace

• The ADA and your EAP – from Sindy Warren at the Warren & Hays Employment Law Blog

• Can Social Recruiting Lead to Discrimination and Equal Opportunity Issues? – from Newton Software Blog

Competition & Technology

• Can Social Media Violate a Non-compete Clause? – from Lawyerist

• To Get Injunctive Relief, Be Able to Prove Specific Irreparable Harm – from Trading Secrets

• Email Rules - Beyond Foul Language – from Rob Radcliff’s Smooth Transitions

• Watch Out for Metadata – from Ken Adams’s AdamsDrafting

Miscellaneous

• Trends in Employment Background Screening – from Nick Fishman at employeescreenIQ Blog

• “Winning” Workplace Arguments is Really Just Consensus Building – from Victoria Pynchon’s Settle It Now Negotiation Blog

• Why and how to choose caddies and local counsel – from Michael’s Maslanka’s Work Matters

• Strategic Use of Swearing in the Workplace – from Bob Sutton

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

What do you do when the boss is accused of harassment?

Earlier this week, Forbes.com published an article entitled Bosses Behaving Badly. If you want an example of the type of misconduct the article chronicles, look no further than EEOC v. Fairbrook Medical Clinic (4th Cir. 6/18/10) [pdf], a sex harassment case decided last week. You really have to read the opinion to get the full picture of the degree and scope of inappropriate sex-based conduct in which the medical clinic’s sole owner, Dr. Kessel, was alleged to have engaged. Here’s some of the highlights:

• Repeatedly showing off an x-ray of his penis, calling it “Mr. Happy.”
• Referring to his wife’s “nice, tight pussy,” during a staff meeting.
• Telling dirty jokes, which included imitations of kissing a woman’s breasts.
• Frequently talking to staff members about oral sex and women’s breasts.
• Using terms like “slut” and “cunt” to describe female employees.
• Asking a female doctor if he could help her pump her breast milk, if he could see her breasts, and if he could like up some spilled breast milk.

The 4th Circuit, which is not necessarily known as being the most employee-friendly forum, decisively overturned the district court’s dismissal of the claim:

Activities like simple teasing, offhand comments, and off-color jokes, while often regrettable, do not cross the line into actionable misconduct. ... If they did, courts would be embroiled in never-ending litigation and impossible attempts to eradicate the ineradicable, and employers would be encouraged “to adopt authoritarian traits” to purge their workplaces of poor taste.... This case involves more than general crudity, however.… Kessel targeted her with highly personalized comments designed to demean and humiliate her.

This case, however, raises an issue above and beyond the difference between lawful workplace incivility and actionable harassment. The alleged perpetrator was also the sole owner of the business. If the buck stopped with him, to whom could an employee complain about his harassing behavior? In other words, what do you do when harassment reaches the highest levels of your organization? This question is a difficult one for businesses to answer. I’ll make a few suggestions:

1. Any harassment policy should have more than one avenue available for an employee to complain, such as different people across different department.

2. Additionally, employees should not be limited to complaining in person. Employees should be able to complain in writing, over the phone, or by email.

3. Consider setting up a telephone or email hotline to log complaints.

4. The owner, CEO, or other higher-up should be screened-off from any investigation, other than his or her investigatory interview.

[Hat tip: Daily Developments in EEO Law]

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Ohio Supreme Court rules that employers do not have to provide pregnant employees greater leave rights than non-pregnant employees

Yesterday, the Ohio Supreme Court handed businesses a huge victory on the issue of pregnancy leave rights.

Pataskala Oaks Care Center had a written policy that required all employees to work for a year before becoming eligible for leave for any reason. It fired Tiffany McFee three days after she gave birth because she was absent from employment before she had become eligible for leave under that policy. McFee sued for sex discrimination. The court of appeals held that Ohio’s antidiscrimination laws require that employers provide employees with a reasonable period of maternity leave, and the at-issue policy that denied McFee leave was direct evidence of sex discrimination.

In McFee v. Nursing Care Mgmt. of Am. (6/22/10) [pdf], the Ohio Supreme Court disagree, and held:

An employment policy that imposes a uniform minimum-length-of-service requirement for leave eligibility with no exception for maternity leave is not direct evidence of sex discrimination….

In reaching this decision, the Court pointed out that the pregnancy discrimination laws do not require preferential treatment for pregnant employees. They merely mandate that employers treat pregnant employees the same as non-pregnant employees who are similarly situated with respect to their ability to work. Because the at-issue length-of-service requirement is pregnancy-blind—it treats all employees the same by requiring every employee to 12 months of employment before becoming eligible for leave—it is not direct evidence of sex discrimination.

The court also harmonized Ohio’s pregnancy discrimination regulations on mandatory maternity leave—Ohio Adm. Code 4112-5-05(G)(2) and (G)(5).

• (G)(2) provides: “Where termination of employment of an employee who is temporarily disabled due to pregnancy or a related medical condition is caused by an employment policy under which insufficient or no maternity leave is available, such termination shall constitute unlawful sex discrimination.”
  
• (G)(5) provides: “Women shall not be penalized in their conditions of employment because they require time away from work on account of childbearing. When, under the employer’s leave policy the female employee would qualify for leave, then childbearing must be considered by the employer to be a justification for leave of absence for female employees for a reasonable period of time. For example, if the female meets the equally applied minimum length of service requirements for leave time, she must be granted a reasonable leave on account of childbearing.”
  

The Court recognized the potential tension between these two provisions. (G)(2) appears to indicate that a policy providing no leave is discriminatory, while (G)(5) states that a uniform minimum-length-of-service requirement for leave eligibility is permissible. But:

Reading these rules in light of the statutory purpose, Ohio Adm.Code 4112-5-05(G)(2) must mean that when an employee is otherwise eligible for leave, the employer cannot lawfully terminate that employee for violating a policy that provides no leave or insufficient leave for temporary disability due to pregnancy or a related condition…. This interpretation of the rule harmonizes (G)(2) with (G)(5), which specifies that when a woman qualifies for leave, the leave provided for childbearing must be reasonable.

Thus, an employer may terminate a pregnant employee who has not yet met a minimum-length-of-service requirement under a neutral leave policy. There are a three key takeaways for employers from this case.

1. Leave policies must be neutral. An employer cannot have a maternity leave policy with a length-of-service requirement, and a different leave policy for other situations with no length-of-service requirement, or one of a shorter duration.
   
2. Employers do not have to offer maternity leave to employees. However, if leave is offered for any reason, it must include maternity leave in at least the same amount and on the same conditions as other types of leave.
   
3. Merely having a neutral policy does not grant an employer carte blanche to terminate pregnant employees or new moms. The policy must still be applied equally to all employees with similarly disabling conditions. If new-employee Bill in accounting needs six weeks off to recover from back surgery, you cannot let Bill take the time unless you are prepared to similarly ignore the length-of-service requirement for all pregnant employees. Otherwise, you are opening yourself up to a claim of pretext—that the application of the facially neutral policy is a pretext for pregnancy discrimination.

DOL permits FMLA leave for gay parents (and others too)

The Internet has been ablaze with news that the Department of Labor would be expanding the rights of gay workers to take FMLA leave to care for sick or newborn children of same-sex partners (but not for each other). The change comes in the form of Wage & Hour Division Administrator’s Interpretation No. 2010-3. This Interpretation clarifies the definition of “son or daughter” under the FMLA as it applies to an employee standing “in loco parentis” (that is, one assuming the obligations of a parent without the legal formalities of an adoption) to a child.

The FMLA entitles an employee to 12 workweeks of unpaid leave for the birth or placement of a son or daughter, to bond with a newborn or newly placed son or daughter, or to care for a son or daughter with a serious health condition. The definition of “son or daughter” under the FMLA includes not only a biological or adopted child, but also a “foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.” According to the DOL, “Congress stated that the definition was intended to be ‘construed to ensure that an employee who actually has day-to-day responsibility for caring for a child is entitled to leave even if the employee does not have a biological or legal relationship to that child.’”

Here’s the key language expounding upon the coverage of FMLA-leave:

It is the Administrator’s interpretation that the regulations do not require an employee who intends to assume the responsibilities of a parent to establish that he or she provides both day-to-day care and financial support in order to be found to stand in loco parentis to a child.  For example, where an employee provides day-to-day care for his or her unmarried partner’s child (with whom there is no legal or biological relationship) but does not financially support the child, the employee could be considered to stand in loco parentis to the child and therefore be entitled to FMLA leave to care for the child if the child had a serious health condition.  The same principles apply to leave for the birth of a child and to bond with a child within the first 12 months following birth or placement…. 

Where an employer has questions about whether an employee’s relationship to a child is covered under FMLA, the employer may require the employee to provide reasonable documentation or statement of the family relationship. A simple statement asserting that the requisite family relationship exists is all that is needed in situations such as in loco parentis where there is no legal or biological relationship.

Based on this interpretation of in loco parentis, the FMLA covers:

• An employee who will share equally in the raising of an adopted child with a same sex partner, but who does not have a legal relationship with the child.
  
• An employee who will share equally in the raising of a child with the child’s biological parent.
  
• Stepparents.
  
• Where a grandparent or other relative takes in a child and assumes ongoing responsibility for raising the child because the parents are incapable of providing care.
  

While the rights of same-sex partners have garnered all of the attention, this Administrator’s Interpretation actually goes further by expounding upon the definition of in loco parentis. The publication of this Interpretation is a good excuse for employers to review FMLA policies to ensure that coverage for parental rights is up to date.

Do you know? Does mandatory arbitration of employment disputes work?

Yesterday, in Rent-A-Center v. Jackson [pdf] the U.S. Supreme Court held that the issue of the enforceability of an arbitration agreement should be decided by the arbitrator and not by a court. As fellow employment Dan Schwartz, of the Connecticut Employment Law Blog, tweeted moments after the decision’s announcement, “SCOTUS continues to heart arbitration provisions in employment cases.”

The bigger question, though, is whether employers should continue to heart arbitration of employment cases. The Winter 2010 edition of the ABA Journal of Labor & Employment Law has an article entitled Is Mandatory Employment Arbitration Living up to Its Expectations? A View from the Employer’s Perspective, by Charles Coleman, in-house counsel at Raytheon. Mr. Coleman argues that many companies are not all that satisfied with choosing mandatory arbitration of their employment disputes.

One of Mr. Coleman’s central arguments is that arbitration may not be faster or less expensive than traditional litigation. And, he has the numbers to bear this out. In a study of 19 recent employment cases filed against one company, Mr. Coleman discovered that arbitration is 30% more expensive and takes nearly 25% longer:

• The average costs and fees in an employment arbitration were $102,338, as compared to $70,491 in litigation.
  
• The average life cycle of an employment arbitration, from filing to decision, was 21 months, as compared to 17 months in litigation.
  

While this is a small sample-size, it at least illustrates that the premise that arbitration is a quicker and cheaper way to resolve employment disputes may be faulty. Aside from expense-control and speed-of-resolution, the other reason that employers favor employment arbitrations is to guard against runaway jury verdicts. But, if the premise is faulty as to cost and speed, then businesses should be questioning whether there are other ways to insure against juries.

To this end, let me suggest that instead of arbitration agreements businesses consider implementing jury trial waivers as a condition of employment. A jury trial waiver agreement both eliminates the risk of a runaway jury’s high damage award, and also preserves all appeal rights that arbitrations virtually eliminate.

There is no hard and fast answer to whether your business would be better served by arbitrations, bench trials, or some other solution. But, there are options other than the conventional wisdom that businesses should be arbitrating their employment claims.

Texting does not make you a bad parent

A day late, but here’s a Fathers’ Day message from Louis C.K. (maybe the funniest human being the planet) that explains how texting while spending time with your kids makes you a good dad:

Louis C.K. on Father’s Day (and, if you’re familiar with Louis, this is from CBS News, and totally safe for work).

Back to more substantive stuff tomorrow.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.