EFCA Update - No Vote Until After August Recess, Maybe Longer, July 29, 2009
We’re not out of the woods yet, but lead EFCA sponsor Senator Tom Harkin (D-Iowa) has announced that the Senate will not vote on the Employee Free Choice Act (H.R. 1409, S. 560) before the August recess. And it may be even longer than that before there’s a vote. It appears that the opposition coming from all Republican senators and about 12 Democratic senators is making a compromise less likely. Although Harkin needs 60 votes in the Senate for debate to begin – and Democrats now have 60 seats – the divide among Democrats on EFCA’s provisions will continue to create uncertainty on the issue.
Dyslexic Teacher not Entitled to Exempt from Spelling and Grammar Portions of Certification Requirements, July 28, 2009
Can a teaching test be able to make sure a certified teecher speels good? The Second Circuit has held that a private teacher certification testing contractor did not violate Title III of the ADA when it denied a dyslexic former school teacher exemption from spelling and grammar portions of the state teacher certification test. The court held that the measurement of spelling and grammar skills is fundamental aspect of the test, and that those skills must be demonstrated by non-disabled examinees. The testing company did grant accommodations that did not interfere with measurement of tested skills, including providing the examinee with a reader and transcriber, as well as extra time and a separate testing room. Falchenberg v. NYS Dep't of Educ., No. 08-3602-cv (2d Cir. 2009).
"Card Checked" - The Game, July 28, 2009
This is too funny. A group called the Alliance for Worker Freedom (part of a group called “Americans for Tax Reform”) has created an on-line game that claims to show the negative results of the proposed card check component of the Employee Free Choice Act. It involves a hypothetical tattoo parlor that a union is trying to organize. Not surprisingly, groups that support EFCA and card check assert the game is “full of lies,” and note that every question and option in the game is designed to make the union look bad. Hmmmm. It is true that the game does not show employer ULPs, but the game authors state that “every one” of the union organizers' negative actions depicted in the game has occurred in real life. Go ahead, give the game a shot - and you don’t even have to pay dues to do it. “Card Checked” can be found at http://www.whatiscardcheck.com/
DC Circuit: ADA Amendments Act Not Retroactive, July 24, 2009
I thought this was clear from the plain language of the ADA Amendments Act, but someone was bound to ask: is the law, which took effect January 1, 2009, retroactive? The response from the D.C. Circuit is that the ADAAA, which was enacted to "reinstate a broad scope of protection under the ADA," does not apply retroactively. Lytes v. District of Columbia Water & Sewer Auth. (WASA), No. 08-7002 (D.C. Cir. July 21, 2009). Floyd Lytes sued WASA, claiming that it refused to accommodate him and fired him in 2004. Under pre-ADAAA law, Lytes was not disabled within the meaning of the ADA, and summary judgment in WASA's favor was appropriate. But if the ADAAA now applied to the 2004 acts, maybe summary judgment wasn't correct. The D.C. Circuit did not buy the potential sandbagging of employers by retroactive application of the ADAAA.
Minimum Wage $7.25/hour as of July 24, 2009, July 24, 2009
The U.S. Department of Labor's Wage and Hour Division reminds employers and employees that the federal minimum wage increases to $7.25 on Friday, July 24, 2009. With this change, employees who are covered by the federal Fair Labor Standards Act will be entitled to be paid no less than $7.25 per hour. This increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007. A revised Federal minimum wage poster is now available for viewing, downloading, and posting. Every employer of employees subject to the Fair Labor Standard Act's minimum wage provisions must post, and keep posted, a notice explaining the Act in a conspicuous place in all of their establishments so as to permit employees to readily read it. The revised Federal minimum wage poster is available at http://www.dol.gov/esa/whd/regs/compliance/posters/flsa.htm
DOL To Get More Money? Look for Increased Enforcement, July 24, 2009
The Obama administration is pushing Congress to give the DOL a budget of about $846 million more than it had last year. In asking Congress for the money, the administration said that it encourages the Congress to consider full funding of the request to rebuild the capacity of these agencies to "protect the wages and working conditions [of] the nation's workers, and reduce the amount of the H-1B rescission, which at its current level jeopardizes the department's enforcement capacity."
Meanwhile, DOL Secretary Hilda Solis says that her Department's increased enforcement of wage and hour laws is intended in part to "send a message" to employers that fail to comply with federal minimum wage, overtime, and other requirements. In a news conference about the increase in the minimum wage, Solis said that the DOL has found many FLSA violations. "We want to rectify that," she said. "We want to become a more robust department."
Wisconsin Supreme Court Endorses "Ministerial Exception," Rejecting Age Claim by Catholic School Teacher, July 24, 2009
Wisconsin's highest court has held 4-3 that a fired Catholic school teacher cannot pursue an age discrimination claim under state law because her teaching position fit within the First Amendment's "ministerial exception" to enforcement of employment discrimination laws. Coulee Catholic Schools v. Labor & Indus. Review Comm'n, No. 2007AP496 (Wisc. July 21, 2009). The majority said that permitting the teacher's age discrimination claim to proceed would impinge on the church's right to free exercise of religion under federal and state constitutions. "The ministerial exception is grounded in the idea that the 'introduction of government standards [in]to the selection of spiritual leaders would significantly, and perniciously, rearrange the relationship between church and state,' " said the court, citing Rayburn v. Gen. Conference of Seventh-day Adventists, 772 F.2d 1164 (4th Cir. 1985). "[The exception] recognizes that 'perpetuation of a church's existence may depend upon those whom it selects to preach its values, teach its message, and interpret its doctrines both to its own membership and to the world at large.' "
Employee Free Choice Act Update , July 24, 2009
Last week was a big one for the EFCA - with the New York Times reporting a deal struck to eliminate the card check provision in return for elections within 5 to 10 days after a petition is filed by a union with the NLRB. But some Senate Democrats (and union supporters) claimed no deal had been struck. And, many business groups still find other aspects of the bill (H.R. 1409, S. 560) "non-starters," particularly the mandatory arbitration of first CBAs if the parties cannot reach agreement in a matter of a few months. Stay tuned.
Governor O'Malley Creates Task Force on Misclassification of Workers, July 24, 2009
On July 14, 2009 Governor O'Malley issued an executive order that creates a "Joint Enforcement Task Force on Workplace Fraud." The task force is located in the state Department of Labor, Licensing and Regulation and chaired by the DLLR secretary. It include representatives from DLLR's Division of Unemployment Insurance and Division of Labor and Industry, as well as the comptroller, attorney general, Insurance Administration, and Workers' Compensation Commission. These agencies will compile and share information regarding employers who misclassify workers, and will coordinate enforcement of current laws and outreach. The task force must report to the governor by the end of each calendar year on a variety of matters, "including the amounts of wages, premiums, taxes, and other payments or penalties collected, and the number of employers cited for legal violations related to workplace fraud."
The creation of the task force comes on the heels of the passage of the Maryland Workplace Fraud Act, which subjects employers in the construction and landscape service sectors to civil penalties for the knowing misclassification of employees. The WFA takes effect October 1, 2009. It is clear that the O'Malley administration has its sights set on expanding the coverage of that law.
Maryland Court Enforces Arbitration Agreement, July 22, 2009
by Eric Paltell
A Maryland federal court has ruled that a group of car salesmen must arbitrate their claims for unpaid commissions and wages. In Dieng v. College Park Hyundai, No. 8:09- cv-00068 (D. Md. July 9, 2009), Judge Chasanow ruled that College Park Hyundai's arbitration agreement was enforceable, even though the plaintiffs claimed to have difficulty reading English.
The five plaintiffs were former car salesmen, all of whom were required to sign an arbitration agreement on their first date of employment. The agreement was titled, in boldface and capitalized headings: "Agreement to submit all employment disputes to arbitration." The first paragraph was also in boldface and capital letters, and made the employees aware that "any claim that arises out of, or relates to, my employment or termination of my employment with the company, must be resolved through final and binding arbitration."
When the employees filed suit, College Park Hyundai moved to compel arbitration. Judge Chasanow granted the motion and enforced the agreements, finding that the arbitration agreement was supported by adequate consideration and that, even though English was not the employees' native language, they were all "fully capable of speaking, reading and writing in English."
Significantly, the court rejected the employees' argument that the shortened statute of limitations (60 days to inform the other party of a dispute and 180 days to bring the claim to arbitration) did not make the agreement unenforceable. These limitations periods are much shorter then the two or three year statute of limitations which would apply if the claims were brought under the Fair Labor Standards Act or the Maryland Wage and Hour Law and Wage Payment and Collection Statute. According to Judge Chasanow, "the statutory limitations periods may be shortened by contract, so long as the limitations period is not unreasonably short."
The Court's decision is significant to Maryland employers for several reasons. First, the court's willingness to enforce it, despite the short limitations period, provides employers with a mechanism to reduce exposure to "stale" claims from long departed employees. Second, the Court established some ground rules as to the types of measures an employer can take to ensure that any arbitration agreement is viewed as clear, conspicuous and understandable to its employees.
President Obama Continues to Show Support for The Employee Free Choice Act, July 16, 2009
Members of the recently formed National Labor Coordinating Committee met with President Obama on July 13 at the White House to, among other things, discuss the controversial Employee Free Choice Act (H.R. 1409, S. 560). The White House released a statement saying the meeting was a “productive conversation about shared priorities like creating jobs, health care reform, and the Employee Free Choice Act.” According to a union source, and not surprisingly, Obama pledged to collaborate with labor to pass the Act.
If passed, the Employee Free Choice Act would amend the National Labor Relations Act to force the National Labor Relations Board to certify a union as the bargaining representative of employees if a majority of the employees signs valid union authorization cards. It would also levy larger penalties on employers found to violate labor laws during organizing campaigns and would provide for arbitration and mediation of first contracts if parties are unable to reach timely agreements.
AFL-CIO President John Sweeney shared his experience from the meeting, saying Obama has always been a friend to the union movement and that the meeting illustrated Obama’s continued support of it. While Obama did not give specific promises on what he would do to help push it past the planned GOP filibuster in the Senate, Obama was overheard saying “he would do everything he could.”
Consultants Offer Advice on Potential Changes as a Result of Upcoming Health Care Legislation, July 15, 2009
Employers would be wise to prepare now for potential changes to major health care legislation. To begin with, employers need to have a thorough understanding of their organization’s current health care strategy. If possible, employers should then consider streamlining their situation by reducing the number of healthcare vendors they do business with. Health care reform will be easier to deal with by having fewer contracts to manage. Additionally, employers should reconsider the role of health care benefits within their overall compensation strategy.
According to Dean Hatfield, senior vice president and health practice leader at Sibson Consulting, who spoke on July 9 at a Web cast sponsored by the International Foundation of Employee Benefit Plans, statistics on the cumulative effect of health care costs are dramatic. The cumulative percentage increase in the cost of health care premiums from 1999 through 2008 was 119 percent during a period in which wages increased by only 34 percent, Hatfield said. The effect of those cumulative increases has been to raise employers' average annual health care premium costs to more than $9,300 per employee and individual employee costs to more than $3,300 a year, he said.
Hatfield and J. Richard Johnson, senior vice president and public sector health practice leader at Segal Co., both noted at the Web cast that coping with health care costs in a rapidly shrinking economy is challenging but employers can reduce their health care spending without expensive design changes in their health care plans or severe loss of employee coverage. As cost-saving measures, they recommended that employers consider:
- keeping their existing plan but introducing a lower-cost, portable plan under the Consolidated Omnibus Budget Reconciliation Act (Pub. L. No. 99-272) for employees that may be leaving the company because of economic layoffs;
- designing premiums that create incentives for employed spouses to use their own employer health plans;
- replacing general purpose wellness programs with programs tailored to the health profile of the employer's workers;
- offering voluntary benefits fully paid for by employees;
- conducting dependent eligibility audits to validate that all dependents receiving coverage are eligible for coverage;
- negotiating with vendors for discounts in exchange for test-driving vendors' new services or programs; and
- renegotiating existing contracts to get additional savings.
Pesky Article III “Case or Controversy” Requirement Forecloses FLSA Collective Action , July 10, 2009
While Federalists and Progressives continue to debate whether the United States Constitution can be considered a “living and breathing” document, there can be no denying the fact that our centuries-old charter requires an Article III Court to first establish the existence of a living and breathing plaintiff who has a legally cognizable interest in the outcome of a “case or controversy.” A case becomes moot, and incapable of judicial resolution, when the issues presented are no longer “live” or the parties lack a legally cognizable interest in the outcome. This basic but vital prerequisite is sometimes overlooked. In a recent decision by the U.S. Court of Appeals for the 9th Circuit, the Court addressed a situation where two former T-Mobile employees sought to represent a class of approximately 25,000 former and current T-Mobile employees (who had yet to opt-in) in a FLSA collective action after settling their individual claims with T-Mobile. Before reaching settlement, the parties represented to the district court that they discussed whether there existed a mechanism by which plaintiffs’ individual claims could be settled while still preserving their ability to appeal the district court’s ruling denying FLSA certification. The parties then entered into a stipulated judgment that purportedly preserved the plaintiffs’ standing to appeal. On appeal of the district court’s FLSA certification ruling, the 9th Circuit gently reminded the Plaintiffs that a “plaintiff seeking FLSA collection action certification does not have a procedural right to represent a class in the absence of any opt-in plaintiffs.” In other words, a FLSA plaintiff’s right to represent a class depends entirely in whether other plaintiffs have opted in. Without other plaintiffs, the Court was stripped of its jurisdiction to hear the case, and the appeal was dismissed. Although the attorney’s fees were not revealed, one can assume that the $10,000 paid in full satisfaction of the claims brought by the 2 plaintiffs was not what their attorneys had in mind when they pursued the appeal.
EFCA Update- 2010 Elections Force Some Lawmakers to Soften Support of EFCA, July 10, 2009
As it turns out, our popularly elected officials in Congress are just as worried about job security as most Americans these days. Facing a withering economic climate and unrelenting lobbying by businesses, several Democratic members of Congress who are up for re-election in 2010 have softened their stance on the current version of EFCA. The latest one is Democratic Louisiana Rep. Charlie Melancon, who may run against Republican Sen. David Vitter. The Hill reported Wednesday that Mr. Melancon, a co-sponsor of the House version of EFCA, is working on a “bipartisan solution” to amend the bill to make it more appeasing to business groups. Moreover, Democratic Sen. Michael Bennet of Colorado, who filled former Sen. Ken Salazar’s seat when he was named Secretary of the Department of Interior and is running for re-election in 2010, facing similar pressure from business groups, has said he would have a “hard time” voting for cloture on the bill, according to the Denver Post. These are just the latest Democratic Congressmen who have followed Arkansas Democratic Sen. Blanche Lincoln, who last April appeared uneasy about the economic impact of the legislation, saying she “cannot support the bill in its current form.” With the recent swearing-in of Minnesota Senator Al Franken on July 7th, the economic realities of the pending legislation appear to be the only impediment to its passage.
Fourth Circuit Discards “Reasonable Cause” Requirement for Injunctive Relief Pursuant to Section 10(j) of the NLRA, July 3, 2009
In Muffley v. Spartan Mining Company, the Fourth Circuit clarified the standard District Courts should utilize when resolving requests for injunctive relief pursuant to section 10(j) of the NLRA, 29 U.S.C. § 160(j) (2006). Section 10(j) provides a mechanism by which the NLRB can seek a court order temporarily enjoining asserted unfair labor practices. Pursuant to the NLRA, a court can order temporary injunctive relief “as it deems just and proper.”
This seemingly simple “just and proper” standard in section 10(j) has spun off two tests utilized by the federal circuits when weighing requests by the NLRB for injunctive relief. The first test requires courts to determine whether (a) reasonable cause exists to believe a violation of the NLRA exists and (b) injunctive relief is just and proper. This standard adds a reasonable cause requirement not found in the statute.
The second test equates the “just and proper” standard found in the statute with the general standard for injunctive relief set forth in Federal Rule of Civil Procedure 65. This standard requires courts to examine (a) the possibility of irreparable harm to the moving party if the injunction is denied, (b) the possible harm to the non-moving party if the injunction is granted, (c) the likelihood of the moving party’s success on the merits, and (d) the public interest. The Fourth Circuit had not previously addressed this split.
Finding guidance in Supreme Court caselaw requiring courts to utilize traditional equitable powers unless clearly mandated otherwise by Congress, the Fourth Circuit ruled that courts were to utilize the traditional four part test. While the practical effects of this ruling may be limited, Muffley clarifies the law in this Circuit as it relates to injunctive relief pursuant to section 10(j).
Supreme Court Rules in Favor of Firefighters, July 1, 2009
In a closely followed case, the Supreme Court on Monday ruled in favor of eighteen white and Hispanic firefighters who claimed that the city of New Haven, Connecticut discriminated against them by throwing out lieutenant and captain test results.
The City promotes firefighters by administering a test, which is based on both written and oral questions, to applicants who have met certain criteria. The test was developed by an outside consultant, which performed extensive due diligence in developing the test questions and subject matter and in ensuring that the test was race neutral. Of the 77 candidates who took the lieutenant examination, 25 whites, 6 African-Americans and 3 Hispanics passed. Of the 41 candidates who took the captain examination, 16 whites, 3 African-Americans and 3 Hispanics passed.
Not happy with the pass rates of minorities, some African-American firefighters and members of the community lobbied the Mayor and New Haven’s Civil Service Board (which certifies or rejects test results) to throw out the test results and come up with a new test – one that presumably would advantage more minorities. The Civil Service Board threw out the test results because, it claimed, the City would have faced liability due to the disparate impact of the test. White and Hispanic firefighters who passed the test then sued the City (and others) for discrimination based on disparate treatment.
The Supreme Court again acknowledged a dilemma in Title VII practice: can an employer (or city) intentionally discriminate against a certain group based on race in order to prevent purported disparate impact discrimination. Put another way, can New Haven discriminate against white and Hispanic firefighters by throwing out the test results in order to prevent possible discrimination to African-Americans as evidenced by the skewered test results. The Supreme Court said not in this situation.
The Supreme Court began its analysis with the premise that the City’s actions in throwing out the test results violated Title VII’s disparate treatment prohibition. As such, the City must have a valid defense for its actions. The City argued that because it faced the threat of a disparate impact lawsuit from African-American firefighters, it had a legitimate justification for its unfair treatment of the firefighters who passed the test. Rejecting the firefighters’ argument for a strict prohibition against race based actions, as well as the City’s argument that a good faith fear of liability under a disparate impact theory excused its actions, the Supreme Court borrowed a standard from Fourteenth Amendment jurisprudence and held that race based government action – such as that undertaken in New Haven – must be based on a “strong basis in evidence.” If the City could have shown that there was a strong basis in evidence that it violated Title VII’s disparate impact provisions, the City would likely have been permitted to throw out the test results. The majority opinion ruled that the City, however, only looked to the statistical disparity in the test results, not to possible defenses the City could have asserted – namely, (a) that the test was job related and consistent with business necessity or (b) there did not exist an equally valid, less discriminatory alternative the City failed to adopt. Because the City did not account for these disparate impact defenses, it did not have a strong basis in evidence for a disparate impact violation and, thus, could not apply race based actions and discard the test results.
As Justice Scalia pointed out in a concurring opinion, this is not the last word on the subject. At some point, the Supreme Court is going to have to reconcile Title VII’s disparate treatment provision with the Equal Protection Clause of the Constitution. Until that day, the lower courts will continue to grapple with these issues. Ricci, et al. v. DeStefano, et al. (October Term 2008; decided June 29, 2009).
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