Employer Law Report : Employment and Labor Relations Lawyer & Attorney : Porter Wright's Employer Law Report : Employment Litigation, Non-Compete, Trade Secrets

The National Labor Relations Board has agreed to postpone the effective date of its employee rights notice-posting rule at the request of the federal court in Washington, DC hearing a legal challenge regarding the rule. The Board’s says it has determined that postponing the effective date of the rule would facilitate the resolution of the legal challenges that have been filed with respect to the rule. The new implementation date is April 30, 2012. A copy of the NLRB's very brief Press Release can be accessed here.

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Many employers may be surprised to learn that the ADA's prohibition of medical examinations treat alcohol tests differently from tests for illegal drugs.

Under the ADA, employers may not require employees to undergo medical examinations or inquiries unless they are job-related and consistent with business necessity. Unlike tests for illegal drug use, the EEOCs' enforcement guidance considers "blood, urine, and breath analyses to check for alcohol use" to be a medical examination under the ADA. Case law is sparse, but courts have generally followed the EEOC guidance.

So, if employers want to ensure their workers aren't under the influence of alcohol, what should they do? 

• The ADA allows employers to administer alcohol tests or other medical examinations where required by another federal law or regulation. An often-cited example is Department of Transportation (DOT) regulations that require safety-sensitive transportation employees undergo regular drug and alcohol testing.
• Even if their employees don't fall within an exception like the DOT regs, employers may still implement and enforce policies that prohibit employees from working under the influence of alcohol. They may administer alcohol tests to enforce such a policy when "job related and consistent with business necessity."
• Medical examinations like alcohol tests are job related and consistent with business necessity when the employer has objective medical evidence or reasonable suspicion that the employee's ability to perform his essential job functions is impaired, or the employee is a direct threat to himself or others.
• When conducting an investigation into an employee's use of alcohol on the job, an employer may always ask the employee if he has been drinking. If an employee admits to drinking in violation of the employer's policy, it may not be necessary to administer an alcohol test.

To stay within the strictures of the ADA when testing for alcohol use, employers are best-served by treating each situation case-by-case and avoiding blanket "one-size-fits-all" testing policies. Consideration should be given to the signs of the employee's impairment, any observed impact on their essential job functions or performance, and what else may explain his behavior beyond alcohol use. Internal guidance and training on the signs of alcohol impairment may also be appropriate.
 

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The recent Sixth Circuit case of McKelvey v. Secretary of United States Army highlights the plight of many disabled veterans returning to the civilian work force and presents a lesson for employers on how not to address those issues.

James McKelvey, an Army veteran who lost his right hand and suffered other serious injuries while trying to defuse a roadside bomb in Iraq in February 2004, returned to work at the Detroit Arsenal where he claimed his supervisors and co-workers at the armory constantly harassed him by calling him "cripple," and "worthless," and not assigning him an equal workload. McKelvey complained to two supervisors, the equal employment opportunity counselor, and a human resources specialist. McKelvey was told, "things aren't going to change." He was also told, "[All] I can tell you is if you don't like the way you're being treated, go find another job."

After McKelvey was offered a position with the Oakland County Sheriff's Department, he resigned from the armory on February 16, 2007.

In October 2007, McKelvey filed suit against the Secretary of the United States Army in federal district court, claiming failure to make reasonable accommodations, retaliation, hostile work environment and constructive discharge. The hostile work environment and constructive discharge claims survived summary judgment. Following a trial in October 2009, a jury ruled for McKelvey on both claims, awarding no compensatory damages on hostile work environment, but $4.4 million in front pay on the constructive-discharge claim.

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We’ve noticed some cases recently filed challenging employers’ use of the fluctuating workweek method to determine the overtime compensation for employees who receive commission payments. Plaintiffs are alleging that this practice is not permitted by the Fair Labor Standards Act (FLSA) when employees earn commissions in addition to their salaries. However, this issue is unresolved, and precedent seems to favor the employer defendants.

The fluctuating workweek method is permitted by FLSA regulation 29 C.F.R. § 778.114, promulgated by the Department of Labor to implement the Supreme Court's holding in Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 580 (1942). This method permits employers to pay non-exempt employees pursuant to the fluctuating hours method if five criteria are met:

1. The employee's hours must fluctuate from week to week;
2. The employee must receive a fixed weekly salary that remains the same regardless of the number of hours worked per week;
3. The fixed salary must be sufficient to provide compensation at a regular rate not less than the legal minimum wage;
4. The employee must receive at least 50 percent of his regular hourly pay for all overtime hours worked; and
5. The employer and the employee must have a clear mutual understanding that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek.

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Employers frequently require a high school diploma as a condition of employment. Employers not only look to hire individuals who possess basic skills in reading, writing and math, but also believe that having a high school diploma demonstrates a level of maturity and perseverance.

That requirement seems reasonable -- except when it "screens out" individuals based on their protected status. For instance, the EEOC has long taken the position, upheld by the courts, that high school diploma requirements have an adverse impact on minorities and therefore can be used only when a high school diploma can be shown to be job related and consistent with business necessity.

On November 17, 2011, the EEOC posted an informal discussion letter on its website indicating that high school diploma requirements likewise may have a disparate impact on individuals with disabilities. According to the EEOC, some individuals with learning disabilities have difficulty passing end-of-course assessments and cannot obtain a high school diploma; therefore, they cannot obtain jobs which require the applicant have a high school diploma.

The EEOC considered the possible impact of high school diploma requirements under the ADA and provided the following advice to employers:

[I]f an employer adopts a high school diploma requirement for a job, and that requirement “screens out” an individual who is unable to graduate because of a learning disability that meets the ADA’s definition of “disability,” the employer may not apply the standard unless it can demonstrate that the diploma requirement is job related and consistent with business necessity. The employer will not be able to make this showing, for example, if the functions in question can easily be performed by someone who does not have a diploma.

Even if the diploma requirement is job related and consistent with business necessity, the employer may still have to determine whether a particular applicant whose learning disability prevents him from meeting it can perform the essential functions of the job, with or without a reasonable accommodation.

It may do so, for example, by considering relevant work history and/or by allowing the applicant to demonstrate an ability to do the job’s essential functions during the application process. If the individual can perform the job’s essential functions, with or without a reasonable accommodation, despite the inability to meet the standard, the employer may not use the high school diploma requirement to exclude the applicant.

The EEOC informal discussion letters are not binding as law and certainly are not binding on courts. There is room for good faith argument about whether the EEOC has properly applied the disparate impact theory of discrimination to this issue. Nevertheless, the discussion letter does indicate how the EEOC will likely rule in a charge on these facts. Therefore, employers are wise to evaluate whether a high school diploma really is necessary to perform the essential functions of any job for which it is being required. Even in those situations where the high school diploma requirement can be justified, employers will still need to consider in any case where a person is being excluded for not having a diploma and information is brought to light that a disability may be the reason whether a reasonable accommodation can be provided that would permit otherwise qualified individuals with disabilities to perform those essential functions.

Of course employers should continue to be cautious about the use of high school diploma and similar educational screening tools in light of the possibility of race discrimination claims.
 

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Ohio employers with multi-state operations will want to know that several states and local governments have recently considered or enacted "wage theft" legislation to include the criminal and increased civil penalties and fines for employers who underpay their workers. The inclusion of notice requirements in California and New York create additional consequences for the unwary employer.

California

Additional notice, recordkeeping requirements, and increased penalties for wage and hour violations are the highlights of California's Wage Theft Protection Act, which will take effect on January 1, 2012. It makes the following changes to California wage and hour law for private employers:

• Written notice of certain pay and employer information: Notice must be provided to newly hired, non-exempt employees. This notice must include the employee's rate of pay and what the rate is based upon (e.g. hourly, by piece, etc.), overtime rates, certain employer contact information, and the contact information for the employer's workers' compensation insurance carrier. Note, however, that notice is not required for newly hired non-exempt employees who are subject to a collective bargaining agreement that provides premium rates for overtime and a regular pay rate of at least 30% more than California's minimum wage.
• Increased penalties: Some of these increased penalties include fines or prison time for employers who willfully refuse to pay wages pursuant to a court judgment or order.
• Longer statute of limitations: The California Division of Labor Standards Enforcement now has three years to pursue employer wage and hour violations, compared to the current one-year time limit.
• Additional recordkeeping requirements: Employers are required to retain wage statements and deduction records for three years, compared to current law under which employers must maintain these records for only two years. Employers may not prohibit employees from maintaining personal records of their own time or piece-rate units earned.

New York

This type of law should sound familiar for employers with operations in New York, where similar legislation took effect in April 2011. In New York, the following requirements now exist for private employers:

• Written notice of certain pay and employer information: New York requires that private employers provide written notice of certain pay information and employer contact information by February 1, 2012 for all employees (not just those who are newly hired or non-exempt). This notice must include the employee's rate of pay and what the rate is based upon (e.g. hourly, by piece, etc.), overtime rates if applicable, allowances taken as part of the minimum wage (tip, meal and lodging deductions), and certain employer contact information. In addition, New York also requires that the notice be in English and the employee's primary language, if it is not English and the New York Department of Labor (NY DOL) has a translation in that other language available.
• Broader protection against retaliation: Threats of retaliation against employee complaints made in good faith are now illegal in New York and any person can be held liable for any retaliatory act. Under previous law, only employers could be cited for violations and threats of retaliation were not illegal.
• More remedies and criminal penalties for retaliation: Reinstatement or a lump sum payment in lieu of retaliation is available to employees, in addition to the previous penalty of up to $10,000 liquidated damages. Criminal penalties are also possible for retaliatory acts.
• Public posting of violations: For certain violations of law by employers, the NY DOL can post notice of the violation in an area conspicuous to employees for up to one year. Willful violations by employers are also subject to public posting for a 90-day period by the NY DOL.

Ensuring Compliance

In New York and California, the devil is in the details regarding the specific information required in the notices, which employees are to receive them, and on what timing, requiring close attention and preparation now by employers with operations in New York or California to issue their employee notices in January 2012. For their respective notices, New York provides templates and California is expected to have a template available in mid-December; however, in both states employers are permitted to use their own forms so long as they are in compliance with the states' requirements.
 

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As we reported last week, on November 18th, the NLRB announced that it would vote on "whether to adopt a small number of the amendments to its election procedures that it had proposed earlier this year." Yesterday, the Board moved forward with that vote. Predictably, the two Democratic Board members voted in favor of the amendments while Republican appointee, Brian Hayes dissented. Member Hayes had threatened to resign from the Board in order to block the vote from going through, but ultimately decided not to do that.

The controversial NLRB proposed rule includes various measures that would significantly shorten the time between when a petition for a representation election is filed and when the election occurs, making it difficult for employers to adequately respond to union organizer claims and promises. In response to the anticipated vote, the Republican majority in the House of Representatives was able to pass a bill intended to override the NLRB vote, but that measure almost certainly has no chance of passing in the Senate, where the Democrats have the majority.

It is expected that the Board will attempt to issue and vote on a final rule before the end of the year. We will keep you up to date on any developments on this critical story.
 

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Employers are closer to a nation-wide rule on the appropriate classification of pharmaceutical sales representatives (PSRs). On Monday, the Supreme Court granted cert to resolve a split between the Ninth and Second Circuits on whether PSRs are covered by the outside sales exemption of the Fair Labor Standards Act (FLSA).

In February, we covered the Ninth Circuit's decision in Christopher et al. v. SmithKline Beecham Corp., where it held that GlaxoSmithKline's PSRs were properly classified as exempt. In that decision, the Ninth Circuit disagreed with the Second Circuit, which in 2010 held such employees to be non-exempt in In re Novartis, and in doing so, deferred to Department of Labor guidance that required direct sales by employees for the exemption to apply. The Supreme Court previously declined to hear the appeal of the Novartis decision.

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