Legal Briefs for HR

Welcome to Legal Briefs for HR, an update on employment issues sent to over 4700 HR professionals, in-house counsel and business owners all over the U.S. to help them stay in the know about employment issues.  Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in!  Back issues are posted on my firm’s website at www.munckcarter.com under E-Newsletter.  Welcome to new readers who attended my presentation to the Texas Association of Community College Human Resource Professionals Conference in San Antonio on June 16!  I look forward to presenting at the Texas Employment Relations Symposium in San Antonio on July 15 . . . hope to see you there!  Go to www.txbiz.org for agenda and registration info. 

Here’s the latest:

1. Texas Tough– Want to sue your employer in Texas and collect damages for sexual harassment under the Texas Commission on Human Rights Act (TCHRA) AND for their alleged negligence in supervising and/or retaining the harasser? Tough!  The Texas Supreme Court said “As the complained-of acts constitute actionable harassment under the TCHRA, they cannot moonlight as the basis for a negligence claim, a claim that presents far different standards, procedures, elements, defenses and remedies.  It is untenable that the Legislature would craft an elaborate anti-harassment regime so easily circumvented.”  Waffle House v. Cathie Williams (Tex. 6-10).  The case involved a waitress who claimed she was subjected to offensive sexual comments, gestures and touching at the hands of a cook, and that her verbal and written complaints to local and corporate management went unanswered.  Her claims were filed as both statutory (i.e., TCHRA) and common law (i.e., negligence), a common practice designed to allow the plaintiff to elect the more generous award, which is normally the latter since TCHRA recoveries are capped at $300,000 for both compensatory and punitive claims.  If this outcome sounds familiar, you may be remembering Hoffman-LaRoche Inc. v. Zeltwanger (Tex. 2004), where the Court held that a claim for intentional infliction of emotional distress (another tort, like negligence) was not available to the alleged victim of sexual harassment because the TCHRA provided a remedy for essentially the same actions and that IIED claims were a “gap-filler” where another remedy is not available.  Yours truly wrote one of the amicus briefs (on behalf of SHRM Texas State Council) in the Zeltwanger matter.  Glad to see the basis for the holding in that case is still going strong!
2. Supreme Pizza– A sampling of tasty decisions from the U.S. Supreme Court:
   1. Can’t Count on It – Nearly 600 decisions issued by the National Labor Relations Board between Jan. 2008 and March 2010 are on thin ice after a finding that the two-member board lacked authority to issue decisions, due to a three-member quorum requirement when delegating authority.  New Process Steel LP v. NLRB (U.S. 6-10).
   2. Watch Your Monitor– In a case that affects public sector employers (and likely will inform the private sector, too), the City of Ontario “did not necessarily” violate a police officer’s 4^th amendment rights by looking over transcripts of the officer’s use of a City-issued pager.  The Court found the employer’s action reasonable, where the review was done to determine whether the existing wireless service contract service, which had a monthly limit on text messages, was sufficient to meet the City’s needs and to make sure employees were not forced to pay for work-related expenses or that the City was paying for purely personal communications.  While reviewing the officer’s texts, the police department found and eventually disciplined the officer for, shall we say, excessive, inappropriate content of a personal nature sent during work time.  This case was decided on narrow grounds and should not be seen as a free pass for employers (or certain employees, such as IT staff) to freely browse employees’ personal emails, texts and other messaging.  But if you’ve got a pretty strong business reason, a properly worded policy and conduct the search in the correct way, your defenses against privacy claims should hold up.  Ontario v. Quon (U.S. 6-10).
   3. Careful What You Wish For– With a slim 5-4 majority, the Court upheld a provision in a pre-employment agreement to arbitrate (not litigate) employment-related disputes, including enforceability of the agreement itself.  The employee wanted a court to declare the entire agreement unenforceable because it was unconscionable (read: unfair) and the 9^th Circuit agreed with him, but the Supreme Court did not.  The dissent would’ve liked the matter to be heard by a court based on their belief that arbitration agreements in the employment context can be more troubling than those between two business entities.  Rent-A-Center West Inc v. Jackson (U.S. 6-10).  For now, a well-crafted arbitration agreement may keep employers out of court (Hurrah!) but this decision may also hasten enactment of a federal bill that’s meant to nix use of mandatory arbitration in the employment context.   See H.R. 1020 & S. 931 at http://thomas.loc.gov for full text and status of the Arbitration Fairness Act of 2009.
   4. Time Bomb in Your Files? – City applicants took a written exam in 1995 and their numeric scores were used to classify them into three categories of eligibility for hire (i.e., well qualified, qualified, not qualified).  The scores were used in  1996 to make hiring decisions.  The “qualified” folks who were not hired sued in 1997, claiming the exam had a disparate impact on African-Americans, in violation of Title VII.  The issue before the Court was whether the EEOC charge, which is required prior to filing suit, was timely filed.  That means within 300 days of the latest discriminatory act, in most jurisdictions.  The City said assigning classifications in 1995 was the act.  Plaintiffs said using the classifications to deny employment in 1996 was the act.  The Court agreed with the plaintiffs and found the EEOC charge had been timely filed.  Lewis v. City of Chicago (U.S. 5-10).  Upshot?  Those test scores sitting in an applicant’s or employee’s file can form the basis for a “new” act of discrimination when they are used to make a hire, promotion or other employment decision.  Review your testing tools (and your hiring/promotion numbers) to see if they put you at risk for a disparate impact claim.
3. No Vacancy– It’s no secret that an employer may be required to reassign a disabled employee to a vacant position, as a form of reasonable accommodation under the Americans With Disabilities Act.  But what does “vacant” mean?  Finding the EEOC’s description “too broad” and no case precedent, the 10^th Circuit held that that it means the job opening would be available for a similarly-situated non-disabled employee to apply for and obtain.  Where the job desired was occupied by temporary workers supplied by an agency, as an interim measure prior to completely out-sourcing the department, there was no “vacancy” and no employer failure to accommodate by offering these unavailable jobs.  Duvall v. Georgia Pacific Consumer Products (10^th Cir. 6-10).
4. Dot Your I’s and I-9’s– Heads up, folks who are in charge of completing the Form I-9 on behalf of your employer.  A March decision from Dep’t of Justice’s Office of the Chief Administrative Hearing Officer says an employer’s failure to complete Section 2 of the Form I-9 within three business days of the employee’s hire is a substantive violation, not a technical one.  Unlike technical violations, there is no opportunity to correct substantive violations and the penalties can be steep.  So, fill in that section completely, including title of the document(s) being relied upon, identification number(s) and expiration date(s) or attach copies of the document(s) to the Form I-9.
5. Who’s Your Daddy? – You may have more than one, under Administrator’s Interpretation No. 2010-3 , issued by the U.S. Dep’t of Labor (DOL).  In clarifying the definition of “son or daughter” under the Family Medical and Leave Act, the DOL explains that in addition to biological and legal (e.g., adoption, guardianship) relationships between parent and child, in loco parentis relationships should be interpreted to include persons who provide day-to-day care or financial support and “Neither the statute nor the regulations restrict the number of parents a child may have under the FMLA.”
6. Redressed –In the continuing donning/doffing saga, the DOL upended Bush-era interpretations of “changing clothes” in a way that may change the way you pay certain non-exempt workers under the FLSA.  Per Administrator’s Interpretation No. 2010-2, 29 USC sec. 203(o) says time spent changing clothes or washing at the start or end of work shift is not compensable if the time is excluded by “the express terms of or by custom or practice under a bona fide collective bargaining agreement.”  DOL had seen protective equipment as being a type of “clothes” but now reverses those opinions and says that the 203(o) exclusion from compensable time does not apply to the donning/doffing of protective equipment that is required by law, by employer or due to the nature of the job.  The changed meaning is impactful because DOL is now saying that clothes changing, including protective equipment, may be a principal activity and if so, subsequent and prior activities like walking and waiting will be compensable.  As explained in IBP Inc. v. Alvarez (U.S. 2006), all activities occurring after the first principal activity and before the last principal activity are compensable . . . employers do not get to turn the time clock off to account for periods of idleness, such as walking and waiting, with exceptions for when an employee clocks out for lunch, personal errand, etc. 
7. Off the Clock is Off the Hook –A clothing retailer has settled a wage and hour class action for $4 million.  After clocking out, employees claimed they were required to wait in the store for up to 30 minutes, to allow inspection of their personal bags and belongings as part of the loss prevention program.  Multiply those unpaid minutes each day times a class of 6700 employees from May 2002 to January 2010 and you get . . . pain.  Otsuka v. Polo Ralph Lauren Corp. (N.D. Cal. 5-10).
8. Feeling Regular?– When do monies paid as per diem get rolled into a nonexempt employee’s “regular rate” and count towards overtime payments?  When the hourly rate appears artificially low for the job being done and/or when the per diem is paid as an hourly rate rather than a flat amount.  The 5^th Circuit sided with the employee, a skilled airplane painter, who was being paid $5.50/hour for nonovertime work, $20/hour for overtime work and $12.50/hour per diem, by awarding him $4,267 in back pay, $4,267 in liquidated damages and $55,908 in attorney’s fees.  Gagnon v. United Technisource Inc. (5^th Cir. 5-10).  The Court conceded that a true per diem can be excluded from the “regular rate” but they were suspicious that this was a scheme to reduce the amount of overtime paid.
9. Stated Differently– Here is a collection of developments at the state and local law level that may be of interest:
   1. Iowa – Effective July 1, IA has a “mini WARN” law which is more onerous than its federal sibling.  A closing or mass layoff that impacts 25+ full-time employees or a layoff impacting 25+ employees in a 30-day period triggers notice to employees or their reps and the IA Dep’t of Workforce Development.
   2. Wisconsin – Effective May 27, state law prohibits employer discrimination against employees who refuses to attend an employer-sponsored meeting or participate in communications with the employer that revolve around religious or political matters.  “Political matters” is broadly defined to include “the right to join or not to join” a union, which is contra to sections 7 and 8 of the federal National Labor Relations Act.   If challenged on those grounds, the new law is likely preempted but use caution until that little problem is resolved.
   3. Kansas – Effective July 1, no smoking in an enclosed area of any public place or place of employment, including restaurants and bars and communicate the prohibition (preferably in writing) to your employees within one week of July 1, and to all new hires as they come on board.
   4. New York City – The NYC Council is batting around a bill that would require employers to offer paid sick time to their employees, similar to what’s in place in San Francisco and Washington D.C.
10. For the Birds – If you like being tweeted and want breaking news on employment law changes, follow me on Twitter.  I’m at @amross.

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Carter LLP
600 Banner Place
12770 Coit Road
Dallas, TX  75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckcarter.com
www.munckcarter.com

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