Monday, September 8, 2014

Is this the end of the independent contractor as we know it?


In Alexander v. FedEx Ground Package Sys. (8/27/14), the 9th Circuit Court of Appeals concluded that FedEx’s delivery drivers are employees of the company, not independent contractors.

The opinion’s introductory two paragraphs pretty much sum up the entire case:
As a central part of its business, FedEx contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards. FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent. 
FedEx contends its drivers are independent contractors under California law. Plaintiffs, a class of FedEx drivers in California, contend they are employees. We agree with plaintiffs.
Even though this case is decided under California law, it confirms that in determining whether one who performs services for pay is an employee or a contractor, the label placed by the company is irrelevant. As noted by the concurring opinion:
Abraham Lincoln reportedly asked, “If you call a dog’s tail a leg, how many legs does a dog have?” His answer was, “Four. Calling a dog’s tail a leg does not make it a leg.” … Bottom line? Labeling the drivers “independent contractors” in FedEx’s Operating Agreement does not conclusively make them so.… [O]ur decision substantially unravels FedEx’s business model.…
This case also confirms that if you exercise any control over how workers perform services for you, it is likely that they should be classified as employees, not independent contractors. This distinction is important, because, unlike contractors, employee are subject to a host of employment laws, including the anti-discrimination laws, workers’ comp laws, and wage-and-hour (minimum wage and overtime) laws.

While this case only covers employers governed by California law in the 9th Circuit, I would expect the filing of copycat lawsuits under the laws of different states in different courts. In other words, this case is not the final word on this issue. Thus, to answer the specific question I posed in the title to this post, while this case does not necessarily spell the end of the independent contractor, it very well could be the beginning of trend of cases leading down this path.

Friday, September 5, 2014

WIRTW #335 (the “Cutetallica” edition)


Cutetallica

“What is Cutetallica”, you ask? It’s my daughter’s latest School of Rock band (earlier, here and here). What else could it be?

If you’re in the Cleveland area over the next three weekends, you have three different chances to see the band.

  • September 6 and 13 at the Music Box Supper Club, 1148 Main Ave., on the West Bank of the Flats. Show time, 2 pm.
  • September 21, at the Metroparks Chalet, 16200 Valley Parkway, Strongsville. Show time, 4 pm.

If you’re there, please stop by and say hello.

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

Discrimination

Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

Thursday, September 4, 2014

6th Circuit agrees to re-hear telecommuting accommodation case


In April, the 6th Circuit issued a decision that recognized telecommuting as a possible reasonable accommodation under the ADA. Work-life balance advocates rejoiced. It seems that their revelry may have been premature.

Earlier this week, that same court agreed to rehear the case — EEOC v. Ford Motor Co.en banc. Thus, the entire panoply of 6th Circuit judges, and not just a random panel of three, will hear the case anew.

Would the 6th Circuit backtrack on its pronouncement that “[C]ommunications technology has advanced to the point that it is no longer an “unusual case where an employee can effectively perform all work-related duties from home?” Or will the court take issue with the panel’s decision that a fact issue existed over whether physical attendance at the place of employment was an essential function of this plaintiff’s job? Or will the en banc panel reach the same result with a new opinion?

Stay tuned. The outcome of this case will be one of the most significant ADA cases of 2015.

[Hat tip: Robin Shea]

Wednesday, September 3, 2014

“Wage Theft” is a fraud (or at least a misnomer)


Forgive them, for they know not what they do.
Over on LinkedIn, my friend (and author-extraordinaire of the Connecticut Employment Law Blog) Dan Schwartz wrote a post entitled, Beware: Use of Loaded Term “Wage Theft” On the Rise

In that post, Dan called out the use of the phrase, “wage theft.”
It’s time for employers to beware this phrase and fight its usage because, in my view, it’s really an attempt to turn something often unintentional, into something nefarious and intentional.… In other words, the use of the phrase is being pushed to push various agendas — not as a result of any legal theory or real change in the law.… And it’s time to call it out; it’s a phrase that is both misleading and loaded.
Dan was kind enough to point out that I covered this issue last year, in a post of my own entitled, Taking issue with the term “wage theft.” Here's what I said:
I have a huge problem with the term “wage theft.” It suggests an intentional taking of wages by an employer. Are there employees are who paid less than the wage to which the law entitles them? Absolutely. Is this underpayment the result of some greedy robber baron twirling his handlebar mustache with one hand while lining his pockets with the sweat, tears, and dollars of his worker with the other? Absolutely not. 
Yes, we have a wage-and-hour problem in this country. Wage-and-hour non-compliance, however, is a sin of omission, not a sin of commission. Employer aren’t intentionally stealing; they just don’t know any better. 
And who can blame them? The law that governs the payment of minimum wage and overtime in the country, the Fair Labor Standards Act, is 70 years old. It shows every bit of its age.… 
We are left with is an anachronistic maze of rules and regulations in which one would need a Ph.D. in FLSA (if such a thing existed) just to make sense of it all. Since most employers are experts in running their businesses, but not necessarily experts in the ins and outs of the intricacies of the Fair Labor Standards Act, they are fighting a compliance battle they cannot hope to win. 
As a result, sometimes employees are underpaid.
There is no doubt that our wage-and-hour laws need to be fixed. But the solution is not to craft heftier penalties for non-complying employers. Instead, we need to update our laws to account for the realities of the modern workplace, one in which the iPhone has replaced the time clock. 

Until Congress gets its act together to amend the FLSA, employee advocates will continue to push the term "wage theft" to drive an agenda. As this turn of phrase gains traction, it will focus attention on whether you, as an employer, are paying your employees correctly. These are expensive crosshairs in which to find yourself. As we round into the final quarter of 2014, make wage-and-hour compliance a priority, if for no other reason that because employees are watching, and no company is 100% error free under the FLSA.

Tuesday, September 2, 2014

Ohio Supreme Court punts on individual discrimination liability … for now


Earlier this summer, I reported on Hauser v. City of Dayton, which I hoped would answer the question of whether Ohio’s employment discrimination statute still provided for individual liability for managers and supervisors.

Last week, the Court issued its ruling in Hauser, and, disappointingly, punted on the issue. Yes, the employer technically won the case, and the Court held political-subdivision employees (i.e., public-sector workers) are immune from discrimination lawsuits.

On the bigger question, however, of whether Revised Code chapter 4112 imposes liability on managers or supervisors in general, the Court punted. It concluded that it did not have to revisit Genero (the case that originally concluded that 4112 imposes liability on individual managers and supervisors), because the employer in that case was in the private sector. Nevertheless, the Court concluded that its “reasoning in this case calls the Genaro majority’s reasoning into question, particularly its basis for distinguishing the prevailing interpretation of Title VII.”

For now, Genaro and its imposition of individual liability lives to fight another day. Private-sector managers and supervisors can still be sued for their own individual acts of discrimination. Moreover, Ohio employers are now split down public / private lines as to whether managers and supervisors can be held individually liable for discrimination.

Yet, Ohio employers have hope that when presented with the right case, this Court will overturn Genaro and rid Ohio of its anomalous individual liability. Or, Ohio’s legislature can do right by our state’s employers and pass legislation ending this incorrect interpretation of R.C. 4112, which will bring Ohio into line with the discrimination laws of nearly every other state and Title VII.

Friday, August 29, 2014

WIRTW #334 (the “these go to 11” edition)


Today is my 11th anniversary. I love my wife. That is all.

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

Discrimination

Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

 

Thursday, August 28, 2014

What does the ADA have to say about employer inquires about prescription drugs


Ritalin-SR-20mg-fullEmployers with employees working in safety-sensitive positions have an obligation to ensure that their employees are not impaired while engaged in their jobs. For example, earlier this week I discussed Blazek v. City of Lakewood, in which the 6th Circuit concluded that the ADA does not protect a drunk snowplow driver. We also know that the ADA does not protect employees under the influence of illegal drugs.

What about legally prescribed drugs? As an employer, can you test employees for prescription medications packaged with warnings about operating heavy equipment. And, if an employee tests positive, can you require those employees to disclose those medications to the third-party company hired to administer the tests. Surprisingly, the ADA is silent on these issues.

In Bates v. Dura Automotive Sys. (8/26/14) [pdf], the 6th Circuit attempted to give us some answers.

1. Does the ADA permit an employer to test for prescription medications?

Whether the ADA permits an employer to test employees for prescription medications will hinge on whether the test is a “medical examination.” If the test is a “medical examination,” then the ADA only permits it during employment if the test is “job-related and consistent with business necessity.” According to the Court, whether the prescription-drug screen is a “medical examination” will hinge on whether the test “is designed to reveal an impairment or physical or mental health,” which examines both the employer’s reasons in using the test and the test’s typical uses and purposes.

The Court concluded that this issue presented a close enough call for a jury to decide:

Dura denies using its drug-testing protocol to reveal impairments or health conditions…. Far from a “free peek into a[n] … employee’s medical history,” … the evidence shows that Dura abstained from asking plaintiffs about their medical conditions…. The urine test itself revealed only the presence of chemicals—amphetamines, barbiturates, benzodiazepines, cocaine, ecstasy, marijuana, methadone, methamphetamine, opiates, oxycodone, phencyclidine, and propoxyphene. No one suggests that the consumption of prescription medications containing these chemicals constitutes protected medical information (or even an “impairment”) under the EEOC definition of medical examination….

Although some prescription medications may reveal more than meets the eye because of brand-name recognition and ubiquitous marketing campaigns, an employer might struggle to discern medical conditions from the prescription drugs discovered here, which included a number of prescription pain relievers. Arguably, this attenuated testing protocol—with a narrow focus on substances containing machine-operation restrictions, as opposed to all prescription drugs—reflects Dura’s effort to avoid obtaining information about employees’ medical conditions and to avoid discriminating against all employees who take prescription drugs.

Still, much depends on Dura’s credibility. Inconsistencies between Dura’s written and actual drug-testing policies and its disparate treatment of individual employees may evince a pernicious motive. For instance, one plaintiff (Bates) claims that Dura asked her directly about her prescription medications and fired her for reporting them, and Dura allowed another plaintiff (Long) to return to work despite testing positive. If credited, a jury could reject Dura’s explanation as a pretext for screening out potentially disabled employees. Moreover, plaintiffs-appellees may present evidence that the disclosure of machine-restricted medications typically reveals confidential health information, such that the jury could determine that the test targets information about an employee’s physical or mental health, regardless of Dura’s intent.

2. Does the ADA permit an employer to require employees, after a positive test, to disclose medications to a third-party administrator?

The 6th Circuit concluded that there exists a huge difference between a general requirement that employees disclose a list of all prescription medications taken (possibly illegal), versus a policy that only requires the disclosure of machine-restricted medications after a positive test. Given the fact-based nature of this inquiry, the court concluded that a jury should decide this question, too.

Dura denies asking employees about their general prescription-drug usage. Viewing the evidence in its favor, Dura’s third-party-administered test revealing only machine-restricted medications differs from directly asking employees about prescription-drug usage or monitoring the same…. A drug test that requires positive-testing employees to disclose medications to a third party, who then relays only machine-restricted medications to the employer, need not reveal information about a disability….

A jury could reasonably conclude that Dura implemented a drug-testing policy in a manner designed to avoid gathering information about employees’ disabilities.

How can an employer make sense of this discussion? These are difficult issues that balance an employer’s right to maintain a safe workplace against an employee’s right to medical privacy. What is an employer to do?

  1. Limit testing for the use of prescription drugs to safety-sensitive positions and only those medications that could pose a safety risk.

  2. Be consistent in your treatment of employees who test positive.

  3. Only disclose the results to those who need to know.

  4. Do not ask employees to disclose the underlying medical condition for which they are taking the medication.

These steps will help limit your risk in the event an employee challenges your testing or the use of the results.

Ritalin-SR-20mg-full” by en:User:Sponge - Created by en:User:Sponge. Transferred from en.wikipedia. Licensed under CC BY-SA 3.0 via Wikimedia Commons.