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Employer Law Report

Sixth Circuit reverses course and holds that telecommuting may be a reasonable accommodation

Posted in EEO, Leave Administration

Courts in the past, including in the Sixth Circuit (which includes Ohio), have held that telecommuting is not required as a reasonable accommodation because regular attendance at work on a predictable schedule is an essential function of almost all jobs (excepting those that are regularly done by all employees from a remote location). On April 22nd, however, the Sixth Circuit reversed course in a 2-1 decision in EEOC v. Ford Motor Company and revived the EEOC’s lawsuit on behalf of a fired Ford worker with irritable bowel syndrome.

The employee utilized intermittent FMLA leave over a period of time when she could not report to work due to her condition. Ford permitted the employee to work from home on a trial basis, but the trial proved unsuccessful because the employee could not establish regular and consistent work hours to effectively interface with others to perform her job duties. Even though Ford permitted all of its employees to apply for telecommuting arrangements (usually 1-2 days per week), the request of the employee in question was denied because her position required in-person meetings with suppliers and teaming with co-workers that could not effectively be done remotely four out of five days per week, according to Ford. Ford did offer to relocate the employee’s office closer to a restroom or transfer her to a position more suitable for telecommuting. The employee rejected both proposals.

The Court held that the employee’s proposal to work from home four out of five days per week was not unreasonable. The Court justified its departure from its earlier decisions by stating that technology has changed in the past couple decades, and working from home is a more viable solution than it was when it previously was rejected by the Court in Brenneman v. MedCentral Health Sys., 366 F.3d 412 (6th Cir. 2004) and Smith v. Ameritech, 129 F.3d 857 (6th Cir. 1997). While attendance is still an essential function of every job, physical presence in an employer worksite might not be.  The Court held that, today, it is not unusual that an employee can effectively perform all work-related duties from a remote location—including teamwork with co-workers. The Court remanded the case to the trial court to determine if the employee could perform all of her job duties from home four out of five days per week.

Bottom Line:  Under this precedent, an employer may be required to grant some degree of telecommuting as a reasonable accommodation. However, employers still may require regular attendance during regular working hours, even if that attendance is via telecommuting.

S’il vous plaît – RSVP for our Employment Relations Seminar – HR Spring Cleaning – on May 7, 2014 – it’s going to be “Oh So, Ooh Là Là!”

Posted in Events

Join us on Wednesday, May 7, 2014 for our HR Spring Cleaning event and say “au revoir!” to old practices and “bon jour” to new ones!

There is no charge for this seminar; however, seating is limited. Please register now.

RSVP button fixed right

If you have any questions, please contact Erin Hawk at ehawk@porterwright.com.

 Wednesday, May 7, 2014
8:00 a.m. – 8:30 a.m. — Registration
8:30 a.m. – 12 p.m. — Program

 The Hilton Columbus at Easton Town Center

3900 Chagrin Dr, Columbus, OH 43219

Topics include:

Voilà! The Skinny on the Expanding ADA … or Rather, the Not-So-Skinny
Presented by Sara Jodka

 Do your ADA policies and practices comply with the new case law? Do they take into account the new disabilities recognized by the American Psychiatric Association under the new DSM-V? This session will help you understand how recent developments of what constitutes a disability, including guidance on height and weight as disabilities, make this a rapidly-expanding gray area for employers.

 Workplace Investigations Savoir Faire:
Developing Your Know How and Reducing Your Risk
Presented by Dave Croall and Charlie Warner

In this session, we will address best practices in investigations on all fronts, including how and when to investigate internal employee complaints, how to respond appropriately and effectively to external investigations by state or federal EEO and other agencies, and how to reduce your risk of retaliation claims in doing so.

The Crème de la Crème in Workplace Drug-Testing
Presented by Jamie LaPlante

 What are the key elements of a successful drug testing policy? This session will help you protect your company from the challenges of both illegal and prescription drug use in the workplace.

 No More FMLA Intermittent Leave Faux Pas
Presented by Rachel Burke and Lisa Whittaker

Dealing with FMLA intermittent leave issues can be a headache for HR professionals. In this session, we will discuss the challenges and best practices to help you effectively manage some of your most problematic leave issues.

H-1B Cap Reached Again, but Employers May Have Options to Keep Foreign Employees Working

Posted in Immigration

This year brings more bad news for employers who filed H-1B petitions for foreign workers beginning on April 1, 2014.  On April 10, U.S. Citizenship & Immigration Services (USCIS) announced that it had received about 172,500 H-1B petitions, far above the 85,000 H-1B visas available each year (65,000 being available for bachelor degree-level graduates, with an additional 20,000 available for advanced degree graduates of American universities).  Thus, due to this H-1B visa “cap,” more than 50 per cent of the petitions filed will not be accepted for processing. USCIS has since completed a computer-generated lottery to select the petitions to be processed under the H-1B cap.  For cap-subject petitions not chosen in the lottery, USCIS will reject and return the petition with filing fees.

But not all hope is lost. For those employers whose H-1B petitions are rejected, there may be other means to keep their foreign workers employed, particularly if the employee is a foreign student working on the basis of post-graduate optional practical training (OPT). OPT allows foreign students who have completed a course of study at a U.S. university to obtain work authorization for a one-year period. Because OPT is granted following graduation, many student employees’ OPT will expire during the summer of 2014.  If an employer fails to file an H-1B petition for the student, or if the petition is not accepted by USCIS, they will not have another chance to file H-1B petition before April 1, 2015. By this time, these students’ OPT will have expired and they will either have to return to their home countries, begin another academic program, or, in a limited number of cases, change their student status to another nonimmigrant category and remain in the U.S.

However, it is possible for an employer facing this problem to help extend a student employee’s OPT for an additional 17-month period, assuming both the employer and employee meet specific criteria. The student employee may apply to USCIS to extend their OPT if: 1) the student employee has earned a bachelor’s, master’s or doctoral degree in Science, Technology, Engineering, and Mathematics (STEM) program fields from a U.S. university and has not already received a 17-month extension of OPT; and 2) the employer is enrolled in the E-Verify program and provides the student employee with their E-Verify number. Student employees authorized for the 17-month OPT STEM extension must work at least 20 hours per week in a position directly related to their degrees.  Additionally, the employer is required to report the departure or termination of the student employee to the designated school official (DSO) at the student’s university.

E-Verify is an Internet-based system implemented by the government that compares information from an employee’s Form I-9, Employment Eligibility Verification, to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. A list of eligible STEM degrees is found at http://www.ice.gov/sevis/stemlist.htm; and employer information regarding E-Verify is available at http://www.uscis.gov/e-verify/employers.

Eligible student employees may apply to extend their OPT by filing a Form I-765, Application for Employment Authorization, with USCIS. Once approved, the applicant receives a new employment authorization document (EAD) noting the 17-month extension. Even if the student employee has filed an application for the STEM extension, and their current OPT subsequently expires, they may continue working for an employer for up to 180 days while the extension is pending.

Based on the criteria above, not all student employees will be able to obtain a STEM OPT extension. But this option should be considered, and if you have any questions regarding the STEM extension or E-Verify, please contact one of our immigration attorneys, including Rob Cohen (614/227-2066), Catherine Kang (614/227-2081), or me at 614/227-2070, for further information.

Sixth Circuit summarily rejects EEOC expert in Title VII challenge to credit history checks

Posted in EEO, Workplace Privacy

In a harsh rebuke of the EEOC’s method of attempting to prove that Kaplan Higher Education Corp.’s consideration of credit history for hiring in select positions was discriminatory, the Sixth Circuit, only three weeks after oral argument, issued a decision upholding the federal district court’s order excluding the EEOC’s expert opinion from evidence and dismissing the EEOC’s case.  The first sentence of the court’s opinion pretty much tells the EEOC all it needs to know: “In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.” Indeed, the EEOC alleged that Kaplan’s use of credit checks causes it to screen out more African-American applicants than white applicants, creating a disparate impact that violates Title VII. Yet, according to the court, the EEOC runs credit checks on applicants for 84 of the agency’s 97 positions.

In attempting to prove that Kaplan’s use of credit checks to screen applicants for certain positions, including those that provide access to student financial loan information, created an unlawful disparate impact, the EEOC relied on statistical data compiled by Kevin Murphy, who apparently holds a doctorate in industrial and organizational psychology. Like the district court, the Sixth Circuit was not impressed with the reliability of Dr. Murphy’s methodology. This time, the last paragraph of the court’s opinion speaks volumes:

The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding Murphy’s testimony.

So, it looks like it is back to the drawing board for the EEOC on its quest to eliminate the use of credit history checks from the hiring process. It is hard to understand, however, how the EEOC can continue to justify its targeting of credit history checks when it uses them itself for the same reasons that businesses use them.  It will be interesting to see whether the EEOC revises its own practices in the near future as it continues to pursue this type of litigation in other federal courts. Undoubtedly, the EEOC will need to revise its litigation strategy in those cases because it does not appear that the methods used by and opinions of Dr. Murphy will survive to fight on. While its goal of eliminating systemic discrimination is laudatory, the EEOC needs to ensure that the methods it uses to identify criteria that discriminate are reliable.  Regardless, employers that use credit history checks to screen applicants for employment must recognize that the EEOC’s radar is on them and that should use credit history checks only when the positions for which application is sought justifies this kind of scrutiny.

Join us in Cleveland on April 29 for our Employment Relations Seminar: Keeping Your Workplace Healthy, Wealthy and Wise

Posted in EEO, Employee Benefits/ERISA, Events, Other Articles, Workers' Compensation

Join Porter Wright’s Employment Group for our Spring Employment Relations Seminar -Keeping Your Workforce Healthy, Wealthy and Wise – on Tuesday, April 29, 2014 in Cleveland.

Topics include:

Keeping Pace: Learn the Latest in Employment Law presented by Tracey L. Turnbull

De-Stress: Effectively Managing Mental Stress Claims in Workers’ Compensation Cases presented by Fred J. Pompeani

Shaping Up: Getting Your Health Care Reform Plan and Your Workforce in Shape for 2015 presented by Ann M. Caresani

Making Peace: Resolving Workplace Conflict Through An Alternative Dispute Resolution Program presented by Margaret M. Koesel

This program has been submitted for 3.0 hours of continuing legal education credit with the Ohio Supreme Court and 3.0 hours of credit through HRCI.

Register here

There is no charge for this seminar; however, seating is limited. Please register now.

If you have any questions, please contact Erin Hawk.

Tuesday, April 29, 2014

7:45 a.m. – 8:30 a.m. Registration

8:30 a.m. – 11:45 a.m. Program

Lockkeepers Restaurant
8001 Rockside Road Valley View, Ohio

 

Tech companies can’t escape antitrust liability for agreeing not to solicit competitors’ employees

Posted in Business Competition, Other Articles

Sometimes, the worlds of antitrust law and employment law intersect. For example, as most businesses know, it is generally permissible under federal, state, and local law for employers to enter into non-recruitment or non-competition agreements with their employees that are reasonably tailored to prevent unfair competition. A non-recruitment agreement typically prohibits an employee from stealing co-workers for another company. Similarly, a non-competition agreement typically prohibits an employee from working for the employer’s competitor both during employment and for a reasonable period of time thereafter. What happens, however, when employers simply bypass these employee agreements and instead enter into agreements with one another about who gets which employees, and at what price? This issue is playing out in In re High-Tech Employee Antitrust Litigation, No. 11-cv-02509-LHK (N.D. Cal.), a class action claiming that six of the country’s most well-known technology companies agreed not to poach each other’s skilled employees. Employment law, meet antitrust law.

Background

In September 2010, the Antitrust Division of the Department of Justice reached a settlement with Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc., and Pixar that prevents them from entering into non-solicitation agreements with each other for employees of their respective companies. Following that settlement, several software engineers sued these companies in 2011 for violations of the federal and state antitrust laws. The plaintiffs alleged that these companies had entered into a series of bilateral agreements with one another where they agreed not to solicit each other’s employees. The result of these bilateral agreements was to suppress wages and other employee compensation because the companies were prohibited from competing for talent, which would have increased the cost of hiring that talent.

The Decision

After various motions to dismiss, amended pleadings, and a fight over class certification that the plaintiffs won, the district court addressed separate motions for summary judgment filed by the defendants. The federal district court found that the plaintiffs presented sufficient evidence to proceed to trial. The decision is In re High-Tech Employee Antitrust Litigation, 2014 U.S. Dist. LEXIS 46335 (N.D. Cal. Mar. 28, 2014). Much of the evidence in this case involved various high ranking executives discussing the fact that competition for talent tends to drive up employees’ salaries, which hurts the bottom line. For instance, Edward Catmull, President of Pixar, noted in his deposition that solicitation of employees “messes up the pay structure.” Similarly, George Lucas (of Lucasfilm Ltd., one of the defendants) stated “we cannot get into a bidding war with other companies because we don’t have the margins for that sort of thing.”

The Impact

This decision is an excellent reminder to businesses across industries. While companies may be able to enter into agreements with their employees restricting their ability to compete, entering  into agreements with competitors in an attempt to reach the same result may violate antitrust laws. On that point, an interesting facet of this case is that the companies involved were largely employing individuals in California. California state law prohibits non-competition agreements with employees, except if the agreement is part of the sale of a business. In any event, agreements among competitors tend to receive the highest antitrust scrutiny, and unless there is a valid, procompetitive reason for the agreement, it will likely raise some serious concerns. And while employment-related agreements are not the usual antitrust fodder, one must be aware of the “rules of the road,” as these issues do indeed pop up from time to time. In fact, antitrust law could arise in the context of a company trying to avoid expensive litigation over non-compete agreements by entering into “a gentleman’s agreement” with one or more competitors, as was apparently the case in this recent litigation. Antitrust concerns could similarly arise in the context of settling a non-competition lawsuit where the parties agree on “carve-outs” for certain customers or territories. These types of agreements require close examination and consideration.

The Bottom Line

 Before entering into any arrangement with another company that may reduce competition, consult with your antitrust counsel. No company wants to face the U.S. Department of Justice (or state attorneys’ general for that matter) knocking at the door—and almost certain civil litigation following any such governmental investigation. As the famous “Sergeant Phil Esterhaus” used to say on Hill Street Blues: “Hey, let’s be careful out there.”

You must watch the company you keep to ensure FMLA compliance!

Posted in Leave Administration

The Sixth Circuit Court of Appeals has reversed a district court finding of summary judgment in the employer’s favor in Demyanovich v. Cadon Plating & Coatings et al., concluding that Cadon Plating may be a covered employer under the FMLA based on its relationship with an affiliated company and that its termination of an employee almost immediately after he requested FMLA leave may have violated both the FMLA and ADA.

Facts

Alan Demyanovich worked for Cadon Plating & Coatings for over 20 years as a helper, operator, and an area leader. In late 1998, Demyanovich experienced health problems.  His doctor diagnosed him with congestive heart failure. Demyanovich took 2-1/2 months of FMLA leave due in early 1999 and was cleared to return to work with two restrictions. Demyanovich was not to lift more than 50 lbs. and was not to work more than 40 hours per week.

Over the next 10 years, Demyanovich took FMLA leave several times for his heart and other medical reasons. In November of 2009, Demyanovich’s heart condition worsened, so he again requested FMLA leave. Demyanovich returned in mid-December with the same two restrictions. His physician also stated he was not to work overtime indefinitely. Around that same time, Demyanovich requested he be given lighter duty assignments, including switching to a sorting position, which would allow him to sit while working, or assigning him to a position at the end of the plant line, where he would not need to move as quickly. Cadon denied these requests and continued to schedule Demyanovich to work overtime.

Demyanovich went to his doctor again in February of 2010, during which time his doctor allegedly told him he should quit work and apply for social security disability benefits. In spite of that advice, Demyanovich returned to Cadon and requested FMLA leave. Al Ensign, Cadon’s Vice President, denied Demyanovich’s leave request, stating he believed Cadon did not have enough employees to be subject to the FMLA. Mr. Demyanovich also alleges Mr. Ensign informed him he no longer had enough points under Cadon’s attendance policy to take additional absences and called him a liability. Mr. Ensign terminated Mr. Demyanovich from employment in or around February 23 or 24th.

Demyanovich Files Suit

Demyanovich sued Cadon and Ensign in federal district court in December of 2010.  His amended complaint included allegations of  FMLA interference, FMLA retaliation, disability discrimination, and ADA retaliation.  Cadon moved for summary judgment, which the district court granted.

The district court provided the following reasoning:

  • Demyanovich was not an eligible employee under the Act, because he did not show he would have been able  to work after the end of his 12-week FMLA leave.
  • Cadon did not have to accommodate him by modifying his work schedule or permitting him to take leave;
  • Demyanovich could not work in any capacity; and
  • Demyanovich failed to create a genuine issue of fact as to his FMLA retaliation claim,
  • Demyanovich could not prove his ADA discrimination or retaliation claims because he was not a “qualified individual;” and
  • The evidence unquestionably showed that Demyanovich was incapable of performing any job.

The court did, however, recognize a question of material fact remained whether Cadon was a covered employer under the FMLA.

The Sixth Circuit Disagrees

Demyanovich appealed to the Sixth Circuit Court of Appeals. The court ultimately reversed the district court’s ruling regarding the FMLA interference claim, FMLA retaliation, and the ADA claim.

Continue Reading

H-1B cap reached as expected

Posted in Immigration

This morning, the USCIS announced that the H-1B cap was reached during the initial filing period. More than 65,000 petitions were received for the regular cap, and more than 20,000 petitions were received for the advanced degree exemption. This announcement was expected, and it will take another couple of weeks for the USCIS to enter sufficient data for the petitions filed to run the random selection, and decide which cases to accept and process. The rest of the cases will be rejected. We expect another announcement when the number of petitions has been counted, and we will be able to assess the odds of a selection. Here is a link to the USCIS press release.

To account for logistic problems with deliveries, several years ago, USCIS implemented a rule that extended the initial filing period from the first of April to the first five business days of the month. Indeed, this year, processing problems at Federal Express centers created some additional problems for approximately 200 petitions that were caught in the conveyer belt and torn open. USCIS has promised to address the problems for these petitions. (We note that Porter Wright submitted all petitions by UPS, and therefore were not affected by the problems at Federal Express.)

Sixth Circuit holds contract clause to arbitrate future claims does not apply to past claims

Posted in Employment Class & Collective Actions, Leave Administration

In Russell v. Citigroup, Inc. the Sixth Circuit held that an agreement to arbitrate “all employment-related disputes” with the company does not include cases already pending in court when the employee signed the arbitration agreement.

Background

From 2004 to 2009, Keith Russell worked at Citicorp’s call center in Florence, Kentucky. As a condition of employment, he signed an arbitration agreement, which covered individual claims but not class actions. In January 2012, Russell filed a class action against the company claiming wage/hour violations. Because the arbitration agreement did not extend to class actions, Citicorp did not seek to arbitrate the class matter.

To complicate an otherwise uncomplicated case, in late 2012, with the lawsuit still in progress, Russell applied to work once more at Citicorp’s call center in Florence, Kentucky. The call center agreed to rehire him. By this time, Citicorp had updated its standard arbitration contract to cover class claims as well as individual ones. Russell signed the new contract, and in January 2013 began working in the call center. Relying on the new contract, Citicorp sought to compel Russell to arbitrate the class action, which was in the discovery stage. The district court concluded that the new arbitration agreement did not cover lawsuits commenced before the agreement was signed.  Citicorp appealed.

The Sixth Circuit’s Opinion

A section of the arbitration agreement, captioned “Scope of Policy,” provided:

This Policy applies to both you and to Citi, and makes arbitration the required and exclusive forum for the resolution of all employment-related disputes (other than disputes which by statute are not subject to arbitration) which are based on legally protected rights (i.e., statutory, regulatory, contractual, or common-law rights) and arise between you and Citi, its predecessors, successors and assigns, its current and former parents, subsidiaries, and affiliates, and its and their current and former officers, directors, employees, and agents . . . .

The question before the Court was whether this language applied to the pending class action, and it held that it did not for two main reasons. First, the present tense text of the policy suggested the agreement does not displace pending lawsuits as it used “arise,” as opposed to the past-tense “arose” or present-perfect tense “have arisen.” This language suggested the contract was only intended to govern disputes that occurred in the present or future, not past.

Second, the preamble of the agreement labeled “Statement of Intent” provided “Citi values each of its employees and looks forward to good relations with, and among, all of its employees. Occasionally, however, disagreements may arise between an individual employee and Citi . . . Citi believes that the resolution of such disagreements will be best accomplished . . . by external arbitration.” Since the language of the preamble looks forward, not backward, the Court found “the text of the agreement and its preamble show the parties signed this agreement to head off future lawsuits, not to cut off existing ones.”

Takeaways

While courts favor arbitration, as the Sixth Circuit made clear, “arbitration is a matter of consent, not coercion,” and a provision in a contract must be interpreted against the backdrop of “the contract as a whole, . . . the situation of the parties and the conditions under which the contract was written,” not in isolation. In contract interpretation, the words the parties use matter, and as this case demonstrates, the tense of those words also matters. The decision makes sense, both grammatically and logically, and highlights the importance of the words, and word tense, contracting parties choose to use.

Ohio Supreme Court to hear notable employment dispute at special off-site session in Toledo

Posted in Leave Administration

Two centuries ago, the Justices of the Ohio Supreme Court “rode the circuit” on horseback across the State, holding court in Ohio’s many county courthouses. A bit of that tradition survives today under the Court’s Off-Site Court Program, which is held twice a year outside of Columbus in order to educate high school students and other Ohio citizens about Ohio’s judicial system. As the Court’s website explains,

“When the Supreme Court holds court off-site, public, private and home-schooled high school students from throughout the host county are invited to participate. The students and their teachers are provided with curriculum material to study before the session, including summaries of the specific cases to be argued. Local attorneys team with educators at each participating school to explain Ohio’s judicial system and review case materials. On the morning of the court session, selected students attend a question and answer session with the justices of the Court. Then, students from each participating school attend one of the four oral arguments. After their assigned case has been argued, each group of students meets with the case attorneys for a debriefing.”

On April 9, at an off-site session to be held at the University of Toledo College of Law, the Ohio Supreme Court will be hearing oral arguments in an interesting employment dispute, Cedar Fair, L.P. v. Falfas, Ohio Supreme Court Case No. 2013-0890. The case concerns Jacob “Jack” Falfas, a longtime employee of Cedar Fair, which is the publicly-traded entity that owns Cedar Point and several other amusement parks across the country. Falfas worked his way up the corporate ladder to become Chief Operating Officer, and he was employed pursuant to a 2007 Amended and Restated Employment Agreement, with an automatic three-year renewal commencing on December 1, 2009 (and on every subsequent three-year anniversary) unless one of the parties provided advance notice of intent to terminate.

In June 2010, after a short telephone call with Cedar Fair’s CEO, Falfas’s employment ceased. Cedar Fair took the position that Falfas had resigned, while Falfas contended that he was terminated. In a 2-1 decision, an Arbitration Panel determined that Falfas was terminated for reasons other than cause, and that the facts failed to establish resignation. Most notably for purposes of this appeal, the arbitrators found that “equitable relief was needed to restore the parties to the positions they held prior to the breach of the Employment Agreement.” The Arbitrators thus directed that Falfas be restored to his former position as COO, with back pay. Continue Reading