Suit Filed to Stop Implementation of New No-Match Rules, August 30, 2007
A group of labor and immigration activists has filed suit to stop the new no-match rules from going into effect on September 14. For more information on the new rules, which affect how employers must deal with letters from the social security administration stating that the social security numbers being used by their employees do not match the names on record, please read this month’s newsletter.
New York Deals with Expressing Breast Milk in the Workplace, August 28, 2007
Last week, the Governor of New York signed into law a bill that requires employers in that state to provide a quiet room and break time (uncompensated, unless the employee chooses to use a paid break instead) to express breast milk. There are also anti-discrimination provisions in the bill. The bill was apparently a reaction to news reports that someone was fired for expressing breast milk at work.
There will be no editorial comments in this quick clip. Please feel free to make up your own.
Federal Appeals Court Approves "Blended" Overtime Rate, August 27, 2007
Under the Fair Labor Standards Act, employers may pay employees different rates for different work. A federal appeals court was asked whether an employer, in this case a school district with bus drivers, could pay different rates for different bus routes, and then pay overtime based on a blended pay rate. The court said it could. Allen v. Bibb County, No. 06-12131 (11th Cir., August 17, 2007).
The drivers argued that driving a bus on one route was the "same task" as driving a bus on another route. Thus, they claimed, they could not be paid different rates for the same work, especially when computing overtime. The court disagreed, finding that the regulation in question did not preclude an employer from concluding that driving one route was a "different task" from driving another route.
Court Rejects After-Acquired Evidence In FMLA Retaliation Case, August 27, 2007
The U.S. Court of Appeals for the Sixth Circuit recently ruled an employer cannot rely on after-acquired evidence of an employee’s inability to return to work to defeat an FMLA retaliation claim. A retaliation claim exists when an employer takes adverse action against an employee for exercising FMLA rights. In Bryson v. Regis Corp., 6th Cir., No. 06-5137, 8/16/07, Bryson, a store manager for Supercuts, requested and was granted FMLA leave for a knee operation. However, there was evidence that Bryson’s supervisor was angry about the request for leave, repeatedly told Bryson she was being selfish, criticized Bryson for missing work during her absence, and told Bryson she would make sure Bryson did not have a job to come back to.
Bryson later was unable to return to work when her approved leave expired, and her employment was terminated. Even though it was undisputed that Bryson was not able to return to work, she was permitted to pursue a retaliation claim, because the court focused on the employer’s motive. There was evidence that Bryson’s employment was terminated before Supercuts received medical information indicating Bryson would be unable to perform the functions of her job. When this evidence was combined with the evidence of the supervisor’s bad behavior, the court found there was a genuine disputes regarding the motive for terminating Bryson’s employment and when that decision was actually made.
Deferred Compensation Rules Apply Far And Wide, August 27, 2007
In April 2007 the IRS issued final regulations under Section 409A of the Internal Revenue Code, which deals with deferred compensation plans. A deferred compensation plan is any plan (including one covering a single person) under which an employee or other service provider obtains a legally binding right to compensation in one tax year, but that compensation is payable in a later tax year. There are many exceptions built into the new regulations, but employers cannot ignore Section 409A by thinking it applies only to exotic or complicated compensation schemes. Individual employment agreements, consulting agreements, severance plans, and change in control agreements are examples of very common arrangements that should be reviewed for compliance with Section 409A. Even a simple offer letter promising deferred payments could lead to unintended tax liabilities if the rules are not followed.
There are severe adverse tax consequences for not complying with the new Section 409A regulations. All compensation that was intended to be deferred (to the extent it is not subject to a substantial risk of forfeiture) must be included immediately in income for the current tax year. The IRS also imposes an additional tax equal to 20% of the deferred compensation, plus interest.
All employers should review their compensation and severance plans to determine which ones are subject to Section 409A. Remember, even a plan that applies to one person, such as an individual employment contract, may be subject to Section 409A. If a plan is subject to Section 409A, the employer should determine what changes, if any, are necessary to fit the plan into one of Section 409A’s exceptions or to bring the plan into compliance with the new regulatory requirements. All deferred compensation plans must be fully compliant with Section 409A before January 1, 2008.
On-Call Anxiety, August 20, 2007
Andrey Zubkov was a database technician. His employer, an Arizona state agency, assigned him to handle technical service requests on a rotating on-call schedule. But his doctor said that was a bad idea. It seems that Zubkov suffered from a general anxiety disorder that would keep him from getting back to sleep after a service call. That sleep loss would build and escalate over time, to Zubkov’s detriment.
Zubkov offered to work four 10-hour days a week instead. But that wouldn’t satisfy the employer’s desire to provide 24-hour technical coverage. However, the agency did allow him to reduce his regular hours by the previous night’s number of actual work hours. For several months, the discussion continued. Concluding that on-call work was an essential part of his job, the agency offered to let him transfer to another position.
Zubkov decided to stay on as a database technician. Within a few days, however, his doctor said he couldn’t perform any work for the agency. The agency terminated his employment.
Zubkov sued, alleging disability discrimination. The trial court denied the agency’s motion for summary judgment, ruling that a jury must decide whether he was disabled under federal standards. The court also said that the agency may not have provided a reasonable accommodation, and that on-call work may not have been an essential function of Zubkov’s job.
A final irony: the Arizona agency that Zubkov worked for is devoted to health care cost containment.
Zubkov v. Arizona Health Care Cost Containment System, No. CV 06-0599-PHX-JAT (D. Ariz., Aug. 9, 2007).
Federal Government Ignores Own Advice, August 20, 2007
The federal government loves to tell companies how easy it is to hire the disabled. But the government itself is finding it hard to follow its own advice.
Naomi Earp, Chair of the EEOC, says federal agencies are "not doing well" at hiring people with "targeted disabilities," meaning handicaps that are immediately noticeable (as contrasted with mental disabilities or problems with vision or hearing). Disabled veterans in particular are complaining of being overlooked. Agencies have been manipulating job postings to avoid hiring veterans, instead favoring current employees.
Earp also called upon federal agencies to do more to recruit people with mental disabilities.
Assigning Tasks Doth Not a Supervisor Make, August 20, 2007
Supervisor status is important in sex harassment cases, because employers can be held liable for a supervisor’s misdeeds even if the company didn’t know about them. In a recent case, a court found task assignment to be an inadequate basis for that status.
The plaintiff, Mytosha Merritt, was a female lubrication technician. Greg Dodson, a reliability technician, had authority to assign Merritt to work with this or that lubrication technician. Merritt thought Eric Eades, another lubrication technician, was unsafe to work with because he failed to observe lockout/tagout procedures. When Dodson made sexual advances toward Merritt, he overcame her resistance by threatening to assign her to work with Eades.
Merritt sued her employer, and the Eighth Circuit had to decide whether Dodson’s ability to assign Merritt to a particular team made him a supervisor, subjecting the employer to vicarious liability. The court said no. Dodson’s authority was similar to that of a team leader, who is not a supervisor under Title VII. Dodson could not change Merritt’s duties, only the details of circumstances under which they were performed.
Merritt v. Albemarle Corp., No. 06-2952 (8th Cir., Aug. 6, 2007).
Picketing at the Labor Board, August 16, 2007
This is great: There was picketing and leafletting at the NLRB on August 15 by union employees who claim that the Board’s General Counsel is refusing to bargain with them. The placards stated: "NLRB: Unfair to Its Employees" and "No Longer Respects Bargaining." The leaflets called for General Counsel Meisburg to resign, stating that he is the "chief enforcer" of the NLRA and yet is violating federal labor law by refusing to bargain regarding a unit that was certified by the FLRA.
The crux of the issue is that there is a combined unit including field examiners and attorneys who work in the regional offices across the country as well as support staff who work in the field offices, the headquarters offices under the General Counsel's supervision, and the headquarters offices under the Board's supervision. A separate union represents headquarters attorneys in two units split by those employees working for the General Counsel and those working for Board members. General Counsel Meisburg objects to the consolidated unit because it contains employees who report to him and employees who work for the Board.
Payback: Governor O’Malley Signs Executive Order Granting Collective Bargaining Rights to Family Childcare Providers, August 16, 2007
Payback is a way of political life, but not always so incredibly transparent. Unions that gave loads of money to Martin O’Malley’s campaign for governor have been trying to get legislation passed in Maryland that would grant collective bargaining rights to family day care providers. The effort has failed to garner significant support in Maryland’s General Assembly the past two years. The Maryland Committee for Children, and other childcare support groups are not in favor of it either. In fact, only unions supported the proposed legislation because the providers would have to pay dues to the unions for representation rights. But some opposition by everyone else hasn’t stopped the Governor from finding away to get the unions what they want.
With little fanfare, O’Malley signed an Executive Order on August 6 that does what the General Assembly refused to do: provide collective bargaining rights to family child care providers. The Order claims that Maryland will benefit from a system of representation for family child care providers in light of a need to stabilize the workforce. The Order says the state will recognize organizations as bargaining representatives if they are designated by a majority of registered and registration-exempt family child care providers who participate in the state's child care subsidy program and who vote in a mail ballot election.
Another Order provides representation rights for home health aides if a union is designated by a majority of home health providers who participate in several Medicaid and home care programs and who vote in a mail ballot election.
FMLA Does Not Limit Light Duty Assignment Pay, August 15, 2007
The FMLA does not require any particular wage rate, and an employee who agrees to a light duty assignment when returning from FMLA leave does not have to be paid at a higher regular salary. Hendricks v. Compass Group USA Inc., No. 06-3637 (7th Cir. August 6, 2007). Hendricks worked for Compass Group as a utility driver. She was injured at work and applied for workers' compensation benefits, but not for FMLA leave until months later. Because of her injury Hendricks was unable to perform her usual driving duties. Instead, she accepted a light duty assignment offered by the company under a workers' compensation program. Compass assigned Hendricks to perform office work, but paid her only $9 per hour, instead of the $12.23 per hour she earned as a driver. She then sued under the FMLA to recover the $3.23 per hour differential. The district court, and then the Seventh Circuit, rejected her claim, with the appellate court noting that "[t]here is no such thing as 'FMLA light duty' whether pursuant to the statutes or their corresponding regulations."
NOTE OF CAUTION:
While this decision seems self-evident to anyone familiar with the FMLA, employers need to remember that they cannot require an employee on FMLA leave to return to work on light duty, even under pressure from the employer’s workers’ compensation carrier.
God-Fearing Protestant Or Sexual Harasser? August 3, 2007
HearthStone Homes, Inc. in Omaha, Nebraska encourages spirituality in the workplace. The company's owner openly believes in reincarnation. In fact, he told one of his managers that her ancestors died during the Ice Age on the site of one of the company's subdivisions and that she had been reincarnated to defend that site (against whom is unknown). To encourage better work performance, HearthStone requires employees to attend "mind body energy" ("MBE") meetings to cleanse their negative energy. The company also requires employees to carry cards identifying the company's values, including: "spirituality and leaving behind all experiences from past lives, as well as the beliefs that everything in the universe is connected (including animals and past lives) and that uncorrected problems from past lives must be corrected in the present life." Ollis v. HearthStone Homes, Inc., No. 06-2852 (8th Cir. July 27, 2007). HearthStone kept a record of employees' attendance at MBE sessions.
Some of HearthStone's employees were not too keen on attending the MBE classes and discussing their past lives. In fact, some of them, such as salesman Doyle Ollis, didn't even believe in past lives. Ollis, a Protestant, stopped going to the MBE meetings and complained to the company's owner about the spiritual pressure in the workplace. He was subsequently fired for "poor leadership and lack of judgment."
In his lawsuit against the company, Ollis claimed he was fired because of his religious beliefs and for complaining. HearthStone claimed that it fired Ollis because he sexually harassed a subordinate female employee by asking her about sexual encounters, how many sexual partners she had, and whether she was wearing thong underwear. Ollis countered that the female employee actually initiated the sexual banter and even presented evidence that some time after HearthStone fired Ollis, it also terminated the female employee after she removed her clothes at a golf outing and did cartwheels naked on the golf course.
Whose spiritual vibe prevailed? Ollis must have been better in his past lives, because the jury found in his favor, although awarding him only $1.00 for his trouble. The Eighth Circuit, while noting that the evidence of religious discrimination and retaliation was thin, affirmed that there was enough for a jury to believe Ollis.
Kollman & Saucier, P.A., The Business Law Building, 1823 York Road, Timonium, MD 21093 Phone: 410-727-4300
Fax: 410-727-4391 © 1999 - 2010 Kollman & Saucier, P.A. All rights reserved.
Website maintained by Armistead Technologies, Llc.tm
