NLRB Considering Revisions to Definition of "Supervisor" Under the NLRA, June 26, 2006
by Eric Paltell
Whenever a union tries to organize an employer, one of the most important issues is determining who is a "supervisor" under the National Labor Relations Act ("NLRA"). Supervisors are not permitted to be part of unions with non-supervisory employees, and unions and employers often fight protracted legal battles regarding an employee's supervisory status before the NLRB.
In 2001, the United States Supreme Court decided a case, NLRB v. Kentucky River Community Care, in which it rejected the NLRB's previously used test for deciding whether a worker was a supervisor. As a result, the NLRB invited parties to file "amicus briefs" analyzing the impact of the Kentucky River decision on three pending cases before the NLRB. The issue before the NLRB is the test for determining whether or not an individual assigns work or "responsibly directs" employees while exercising independent judgment, thereby qualifying them as a supervisor.
Organized labor is concerned that the current NLRB, which consists of a majority of Republican appointees, will limit the definition of supervisor. In fact, some union officials have claimed that as many as 8 million employees could lose the right to be part of unions if the NLRB redefines the definition of supervisor. As a result, the AFL-CIO filed a brief asking for oral argument before the NLRB. However, on June 23, 2006, the NLRB denied this motion.
The NLRB ruling has been closely watched in the healthcare industry, where issues often arise as to whether or not charge nurses are supervisors excluded from coverage under the NLRA. With the increased focus on nurse organizing by labor unions, the outcome of the NLRB decisions could have a dramatic impact on the future of union activity in the healthcare industry.
Federal Judge Strikes Down Wal-Mart Bill, June 26, 2006
by Eric Paltell
In a major victory for Governor Ehrlich and Maryland employers, a federal judge struck down the recently enacted Maryland "Fair Share Healthcare Fund Act," popularly known as the "Wal-Mart Bill." Judge Motz of the United States District Court for the District of Maryland ruled that the law is preempted by the federal Employee Retirement Income Security Act ("ERISA"). Retail Industry Leaders Assn. v. Fielder, D. Md. No. 06-316 (July 19, 2006).
In January 2006, the Maryland General Assembly overrode Governor Ehrlich's veto and enacted the Wal-Mart Bill, which requires that for-profit employers with more than 10,000 employees in Maryland contribute at least 8% of total wages to employee health benefits or else pay the difference to a public health fund. Non-profit employers are required to contribute 6% of wages for health benefits or else contribute to the fund. Only two for-profit employers in Maryland have enough employees to be covered by the law, and Wal-Mart is the only one that did not meet the health care spending requirement (the other employer, Giant Food, is a unionized grocery store chain).
Following the General Assembly's override of Governor Ehrlich's veto, the Retail Industry Leaders Association filed suit, seeking to enjoin the law. Judge Motz granted their motion for summary judgment, ruling that the law "violates ERISA's fundamental purpose of permitting multi-state employers to maintain nationwide health and welfare plans, providing uniform nationwide benefits and permitting uniform national administration." Judge Motz found that the Maryland law's healthcare spending requirements conflict directly with laws in other jurisdictions, and they also conflict with similar legislation in other states. According to Judge Motz, as a result of the Maryland law, "a nationwide employer like Wal-Mart must segregate a separate pool of expenditures for its Maryland employees and structure its contributions -- and employee deductibles and co-pays -- with an eye as to how this will affect the Act's 8% spending requirement." Because the intent and effect of the law was to force Wal-Mart to increase its contributions to employee health benefit plans, it is state regulation of an ERISA plan, and is therefore preempted by ERISA.
Unfortunately for Maryland business, the battle is far from over. The Attorney General's office is considering an appeal to the United States Court of Appeals for the Fourth Circuit, and Democratic legislators have promised to redraft the legislation in a way to avoid ERISA preemption. Moreover, 30 other states are considering similar legislation, meaning that this issue will be addressed in the courts for years to come.
Don’t Crib Your Liquidated Damages, June 12, 2006
There’s a joke about cheating on exams that goes like this:
Teacher: You copied from Fred’s paper, didn’t you?
Student: How did you know?
Teacher: Fred’s answer was "I don’t know" and you wrote "Me, neither."
The plaintiff in a recent Maryland case got a "failing grade" for copying clauses from a competitor’s employment contract. Willard Packaging Company made its salespeople sign a contract promising not to compete within 75 miles of Willard’s headquarters for one year after terminating employment. When Demetrio Javier went to work for a nearby competitor, Willard sued him and won a judgment for breach of contract.
When it came time to assess damages, however, the court refused to impose the $50,000 penalty provided for in the agreement. Why? Because at trial it was revealed that Willard had copied the so-called liquidated damages provision, including the $50,000 amount, from a competitor’s contract. Willard had made no independent effort to calculate a reasonable estimate of the actual damages Willard itself could expect to suffer if Javier broke his contract.
The outcome: The court awarded Willard only one dollar, in nominal damages.
The lesson: liquidated damage clauses must be crafted carefully, based on the particular harm to be expected from a breach of contract. This inquiry must be performed before the contract is signed. Courts will not enforce huge penalties designed only to strike terror in the hearts of contract-breaking employees.
Willard Packaging Co. v. Javier, No. 2097, Sept. Term 2004 (Md. App., June 1, 2006).
Deadlines Matter in Worker’s Compensation, June 12, 2006
Under Maryland law, injured employees have only two years within which to file a worker’s compensation claim. In a recent Maryland case, an employee was injured on January 1, 2002, but did not filed a claim until February 20, 2004. Even though the commission ruled in his favor (finding that the employer had waived the statute of limitations defense), both the circuit and appellate courts found that the defense had not been waived. Case dismissed, judgment for employer.
An interesting twist is that a claims adjuster with the employer’s insurance company had sent the employee a letter, forwarding a claim form to be filled out and returned. This letter and form were sent within the two-year limitations period. The employee filled out the form and sent it back to the adjuster within the two-year period. But employers have no duty to file claims with the commission on behalf of employees, and this claim was not filed. The appellate court found that, while the adjuster’s behavior "could have" led the employee to believe that the claim would be filed by the insurer on his behalf, there was no evidence that the letter "in fact induced" the employee to hold that belief.
Griggs v. C&H Mechanical Corp., No. 2264, Sept. Term 2004 (Md. App. June 1, 2006).
Without Medical Experts, Disability Claim Fails, June 12, 2006
Employees with pre-existing workplace injuries often seek to re-open their cases to show that accident-related disabilities have worsened over time. Proof of such deterioration can yield higher monetary benefits. Often, the employer does not dispute that the employee’s condition has worsened. What's disputed is causation: was the deterioration caused by the original injury?
In a recent case, an employee who had slipped and fallen years ago claimed to be permanently and totally disabled due to an array of ailments, including coronary disease, diabetes, hypertension, hyperthyroidism, and carpal tunnel syndrome. At trial, the employee failed to put on testimony from a medical expert establishing a causal link to the workplace injury. This failure meant that she could not carry her burden of proof.
There are some situations where such expert testimony is not needed. Where the causal connection is clearly apparent even to laymen (for example, the connection between an on-the-job laceration and a subsequent infection of the same wound), expert testimony may be dispensed with. But in this particular case, the plaintiff slipped and fell while working at a restaurant, injuring her head, neck, and back. Expert testimony was necessary for her to succeed in drawing a connection to complex ailments that developed over a period of years in other parts of her body. She didn't have an expert, so she lost.
Kantar v. Grand Marques Café, No. 0665, Sept. Term 2005 (Md. App. June 7, 2006).
Anti-Avon Lady Doesn't Pass Sniff Test on ADA Claim, July 5, 2006
by Clifton R. Gray
Under the Americans with Disabilities Act, employers can be held liable if they do not "reasonably accommodate" the needs of prospective or current employees who are disabled within the meaning of the ADA. An example of this would be the employer who refuses to make his place of business wheelchair accessible and because of this refuses to hire any job applicant who is wheelchair-bound. Sometimes, however, what the disabled person requires in order to be an employee would impose such financial or administrative burdens that it can no longer be considered "reasonable" under the circumstances. If it can be shown that there simply is no reasonable accommodation that is feasible, the employer will not be liable under the ADA.
This reasonableness of the accommodation requirement was recently addressed in Kaufmann v. GMAC Mortgage Corp., No. 04-CV-5671 (E.D. Pa. May 17, 2006), a case which involved Linda Kaufmann, a loan specialist who suddenly began experiencing severe adverse reactions whenever she was exposed to perfumes and scents used by coworkers. The reactions were so severe that they resulted in Kaufmann having trouble breathing. She seemed to have a particularly bad reaction whenever a coworker would use an Avon product. GMAC certainly appeared to go out of its way to prevent Kaufmann from having allergic reactions, and took measures which included moving Kaufmann's desk away to a more secluded area, changing the air filters on the floor where she worked, providing her with a personal air purification device at her desk, and instituting a zero-tolerance perfume policy with respect to her coworkers. When Kaufmann continued to complain and began to make a habit out of missing work because of her allergy, GMAC had enough and terminated her employment.
The question squarely before the federal district court was whether GMAC's act of terminating Kaufmann's employment was in violation of the ADA. After recognizing that Kaufmann was indeed to be considered "disabled" under the ADA, the court considered whether GMAC failed to reasonably accommodate her allergy. Going through a laundry-list of the steps that GMAC did take to accommodate Kaufmann's disability, the court found that Kaufmann simply was unable to continue her employment at GMAC even with reasonable accommodation, and that the ADA does not force employers to "provide employees the maximum accommodation or every conceivable accommodation possible." The court stated that what Kaufmann wanted, a "completely scent-free environment to be policed by her supervisors and enforced with disciplinary punishments . . . would not only be impractical, it would be virtually impossible." Thus, summary judgment was granted to GMAC, as Kaufmann's termination was not made illegal by the ADA.
Employers Are Not Bound By Over Accommodating For An Employee Disability, July 5, 2006
by Kevin J. Allis
It was highlighted in a recent federal court case in Ohio, that an employer who bends over backwards to accommodate an employee, by going beyond what is required under the ADA, should not be punished for its efforts. The plaintiff had suffered a disabilitating injury on the job, after which the employer provided accommodations that eliminated essential functions of her job. When new management took control, an audit was conducted that resulted in the decision to cease providing accommodations related to the essential functions of her position. The Plaintiff argued that the employer was required to continue furnishing the accommodations it provided for the last five years.
On this issue, the court ruled that it will not discourage employers from providing accommodations that may be beyond the scope of the ADA if it chooses to do so. However, any accommodation that relates to an employee's essential functions, if later rescinded by the employer, does not violate the ADA. (Dabney v. Ohio Dep't of Administrative Services).
Employer Found Liable for Overtime Not Reported by Employees, July 5, 2006
A federal trial court has ruled that an employer is liable for overtime worked by its employees, even though there was a rule against working overtime, and the employees did not report the overtime worked. The Court, in ruling against the employer, found that the company knew its instructors were working overtime and allowed them to do it. The employer's options, according to the court, was to stop the overtime or pay the employees for it. Fletcher v. Universal Technical Inst. Inc., No. 05-585 (M.D. Fla., June 15, 2006).
The court also found that the employer was liable for liquidated damages, a penalty imposed on employers who do not pay what is required under the Fair Labor Standards Act. Employers need to understand that employees cannot legally agree to work overtime and not be compensated for it, regardless of the circumstances.
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