Welcome to Legal Briefs for HR, an update on employment issues sent to over 4800 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 at www.munckcarter.com under Media Center/Legal Briefs. Welcome to new subscribers who attended my lunchtime speech for the Staffing Management Association on January 19 and I’m looking forward to speaking at the February 28 meeting of the Dallas Bar Association’s Computer Law group! Welcome also to Michael Turpin, CEO of HT Staffing, who is incorporating LB4HR into his firm’s website.
The DFW area is hosting the Super Bowl this weekend, so LB4HR salutes the wide world of sports, especially football. Be sure to avoid the agony of defeat by huddling up with your management team and avoiding the following penalties:
1. In the Zone – The U.S. Supreme Court expanded the scope of “persons aggrieved” under Title VII by applying a “zone of interests” test. The ruling allowed a fired employee to proceed his retaliation claim even though it was his fiancée (they both worked for the same employer) who had filed an EEOC charge. In short, she engaged the protected activity (by filing a charge) but he was the one who suffered the adverse employment action (being fired). He filed a charge claiming retaliation and the EEOC issued a “reasonable cause” finding and a Right to Sue. The male employee’s suit was summarily dismissed by the district court and the dismissal affirmed in an en banc decision of the appeals court, based on their findings that he had not engaged in protected activity and had no standing to sue under Title VII. The Supremes, however, likened Title VII to other federal statutes which do allow a person who is closely associated with a person engaging in protected activity to file a claim, and found that Congress had intended that broader scope of protection. It also noted that the retaliation prohibition covers a wider range of employer conduct (including acts occurring outside of the workplace, per their 2006 decision in BNSF Co. v. White) than the discrimination prohibition. So who’s in the “zone?” No firm lines were drawn, but the Court did say that firing a close family member will almost always meet the standard while “a milder reprisal of a mere acquaintance will almost never do so . . . .” Thompson v. North American Stainless (U.S. Jan. 2011).
2. New Playbook – U.S. Citizenship and Immigration Services (“CIS”) issued a revised Handbook for Employers: Instructions for Completing Form I-9 (Employment Eligibility Verification Form)(revision date is 1-5-11). Go to www.uscis.gov/files/form/m-274.pdf for the English version. It’s available in Spanish, too. This is a very user-friendly guide which explains the process, has FAQs and displays samples of acceptable forms of identity and work authorization verification. I have one in my library. Do you?
3. Failed Sneak Attempt – Two of your employees (who signed noncompete agreements) have left and opened up a competing shop. You suspect they communicated via personal email accounts over your systems and, Eureka!, you find one of them left his personal email username and password on your work computers. You open his personal email account and find proof that the former employees copied your documents, stole your customers and more. Do you think you’ve got them nailed to the wall? Would you be surprised to find out that they have a viable claim against you? Such was the case in Pure Power Boot Camp v. Warrior Fitness Boot Camp (SDNY 2010) where the former employer was found to have violated the federal Stored Communications Act, with no proof of actual damages (to the former employees) needed for them to make the claim. Although the penalty is $1000 per unauthorized access, the court aggregated the intrusions down to four, but the evidence of the employees’ wrongdoing was excluded for use in the employer’s lawsuit against them. Lesson? Employers already know that they must have an electronic communications use policy which puts employees on notice that they have no reasonable expectation of privacy for what goes through the employers’ system, but most do not know that this defense does not cover all communications including those done via a personal password-protected account. Before you start trolling for electronic evidence to use against your current or former employees, talk to your counsel about the right way to obtain such evidence.
4. Bad Sports? – Dick’s Sporting Goods Inc. agreed to pay $15 million to settle wage and hour claims filed as a class action in NY plus 22 other states, encompassing around 190,000 current and former employees. The allegations include making employees work through their lunch hour and/or interrupting employees’ lunch hour by having them resume duties, without pay. It was also alleged that nonexempt employees worked more than 40 hours in a workweek with no overtime pay at all or an offer to take time off in the following workweek in lieu of receiving overtime. As a gentle reminder, there is no federal law requiring employers to provide time off for lunch or breaks, but many states do have such requirements (TX does not, for now). Further, the FLSA defines what constitutes “hours worked” (which must be paid) and an unpaid lunch break is not bona fide unless the employee is completely relieved of all duties. As for overtime, comp time in lieu of overtime is allowed in the public sector but not in the private sector. Multi-state litigation involving thousands of past and present employees can turn a small error into a large and costly one, so review your practices and make sure your managers and supervisors know the applicable rules.
5. On Injured Reserve – A supermarket chain received a painful penalty flag on its treatment of ill/injured employees in the form of a $3.2 million settlement plus remedial relief. At issue was its policy of requiring employees to be 100% healed before returning to work and effecting terminations in employment instead of exploring possible reasonable accommodations of employees with work restrictions. On top of the cash outlay, the consent decree signed with the EEOC requires [1] training of employees involved in decision-making relating to accommodation of disabilities; [2] hiring of a consultant to rework job descriptions (to reflect actual physical requirements) and advise on possible accommodations; [3] regular reports to the EEOC about accommodation efforts; and [4] revision of communications with employees to scrub out the 100% healed approach and replace with education on the types of accommodations which may be available from the employer. EEOC v. Jewel-OSCO (Jan. 2011).
6. (Not So) Free Agency – Once again, a long-term worker who was treated as an independent contractor has been found to be an employee. The worker was a building maintenance service provider for a property management firm for 12 years. After being let go, he filed a claim alleging he worked an average of 66 hours per week and was never paid overtime. As is the case with most exempt or contractor workers, the employer did not keep records of actual hours worked and is left mostly defenseless against such a claim, so summary judgment for the worker was granted. The employee vs. contractor analysis can be hazy, with different tests being used under various federal and state statutes, but here’s what this court zoned in on: [1] he was engaged in the core work of the business (as opposed to someone with a unique skill set being brought in to do work that is not integral to the employer’s business); [2] he was told what to do, when and where to do it and disciplined when he didn’t comply; [3] most of the work was basic janitorial work, not one of the skilled trades (e.g., carpentry, plumbing); [4] there was no opportunity for profit or loss depending upon the quality/quantity of his work, since he was paid a weekly salary (vs. by the project); and [5] the employer withheld taxes for him and he received a Form W-2 (not a Form 1099) at years’ end. Bulaj v. Wilmette Real Estate & Management Co. (N.D. Ill. Oct. 2010).
7. Making the Team – The U.S. Supreme Court weighed in on the scope of background checks in the public sector and, in so doing, put a stamp of approval on a wide range of questions used to evaluate candidates for hire in the public or private sector. Employees at NASA’s Jet Propulsion Laboratory objected to questions about recent illegal drug use and whether the candidate had received related treatment or counseling. They also fumed over questions sent to the candidates’ references, asking if there was any reason to doubt his/her honesty or if the reference had any “adverse information” (read: dirt) about the prospect’s “general behavior or conduct.” The rocket scientists felt this was an invasion of their Constitutional right to privacy, but the Supremes said that the government, like any employer, is entitled to hire employees who are reliable, law-abiding persons and that questions about illegal drug use are a useful way of figuring out which persons have these characteristics. In short, the government’s need to have solid citizens as workers, coupled with the Privacy Act’s prohibition against further, public dissemination of that info (by NASA) outweighed the individuals’ desire to avoid such disclosures. NASA v. Nelson (U.S. Jan. 2011).
8. Half Back – Six U.S. Courts of Appeal have now adopted the half-time approach to calculating backpay for nonexempt employees who were mistakenly classified as exempt under the FLSA. In short, the aggrieved employees are entitled to 50%, not 150% of their “regular rate” for the unpaid overtime hours. The U.S. Department of Labor has consistently followed the half-time formula and the 4th Circuit (MD, NC, SC, VA, WV) recently joined the 1st, 5th, 6th, 7th and 10th circuits in endorsing this approach. Desmond v. PNGI Charles Town Gaming (4th Cir. Jan. 2011).
9. Tackled For a Loss – LB4HR #11- 2010 mentioned a proposal by OSHA to amp up the requirements on employers in protecting their employees from noise. Never mind . . . they are now backing off of that proposal and sticking with the current approach of allowing employers to rely on issuance of ear plugs and other protective measures instead of eliminating or minimizing the noise itself.
10. Stated Differently – Here are some morsels for you multi-state employers:
1. California – Effective January 1, employers with 15+ employees must provide paid time off to employees who are organ donors (30 days) or bone marrow donors (5 days), per year. The employer can require the employee to use earned/accrued paid time off of up to two weeks for organ donation and five days for bone marrow donation. The leave is not concurrent with FMLA/CFRA and does have a job reinstatement right, similar to those statutes.
2. Florida – Florida agencies must now use E-Verify to check employment eligibility of their current workers and prospective hires, per Executive Order No. 11-02. Further, the contractors these agencies do business with will find a provision in their contract requiring them to use E-Verify on all persons employed in FL during the contract’s term and all persons, including subcontractors, assigned to work on the contract. The Order was signed by Governor Rick Scott only minutes after being sworn in and is likely to be challenged as it goes farther than what is allowed under current federal law.
3. Kentucky – If passed, HB 193 will ban smoking in all public places and places of employment, with violations punished by fines of up to $2500 for repeat violators. But don’t go too far in riding your workplace of smokers. KY also has a law which protects smokers against employment discrimination.
4. Massachusetts – Last year’s attempt at a noncompete statute failed, but it’s back in a modified form and pending in the legislature. The new version, if passed, [1] will not apply retroactively; [2] will not impact related restrictive covenants (e.g., nondisclosure, nonsolicitation; [3] will codify existing law relating to reasonableness in duration, geographic scope and proscribed activities; and [4] will require that the covenant be writing in signed by both parties and provided to the employee at least 7 days before employment begins. If the agreement is presented after employment starts, new consideration will be needed (and continued employment will not suffice).
5. Michigan – Effective December 21, 2010, employers can require their MI-based employees to be paid via direct deposit or a payroll debit card.
6. New York – Thinking of using interns to cut your wage-related costs? Then you might want to peruse an opinion letter recently posted by the New York State Department of Labor, which is posted at www.labor.ny.gov/sites/legal/counsel/pdf/Other/RO-09-0189.pdf.
7. Tennessee – Plaintiffs got a leg up, when the TN Supreme Court decided to abandon the McDonnell Douglas burden-shifting analysis in an employment case. An accounting employee alleged that he was fired for refusing to participate in the CFO’s alleged illegal activity involving the SEC and related securities laws. The lower court granted the employer’s motion for summary judgment as the employee had not reported the alleged illegality and the complaint is an essential element when claiming retaliatory discharge. The appeals court reversed and the Supreme Court agreed that summary judgment for the employer was not appropriate based on remaining fact issues and because reporting is not required where the employee refused to participate in the illegal activity. They went further, saying that the McDonnell Douglas framework is not compatible with TN’s jurisprudence on summary judgments. Gossett v. Tractor Supply Co. Inc. (Tenn. Jan. 2011).
11. 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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