Second Circuit Addresses Effectiveness of Sexual Harassment Policy

On February 19, 2010, the Second Circuit Court of Appeals vacated a district court decision and reversed JetBlue Airways’ favorable summary judgment in a case brought by a former customer service supervisor who complained to her supervisor, who was also the alleged harasser, about a hostile work environment because other avenues of complaint may have appeared to be futile.

The employee alleged that over a seven-month period her supervisor made several remarks about wanting to massage or suck on a woman’s breasts, remarked about going home so that his wife could attend a “sex toy” party and asked a female coworker whether she had “gotten enough loving” over the weekend. Other employees testified that the supervisor grabbed female crewmembers, that he frequently made inappropriate comments and gestures, and that he stared at them as if he was mentally undressing them.

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Ohio WARN Legislation Proposed

Ohio employers will want to pay close attention to H.B. 434, which was proposed by House Representative Kenny Yuko, D-Richmond Heights, last week. The Bill is similar in nature to the Worker Adjustment and Retraining Notification Act ( “WARN”), but goes further than the federal law in several respects. For example, the Bill would require an employer in Ohio laying off 25 or more employees in any 30-day period to give at least 90-days’ advance written notice of the layoff to affected employees, local workforce policy boards, and certain state departments and local elected officials. The notice period would be expanded to 120 days for employers planning to lay off 250 or more employees. Also, the penalties for violations include double back pay for all affected employees, as well as the full value of their employee benefits.

The Bill does contain exceptions similar to those found in WARN, including exceptions for temporary facilities, layoffs arising from “circumstances that were not reasonably foreseeable,” caused by “physical calamity, natural disaster, or act of war,” or where the employer can show that "notice would have blocked incoming capital which might have prevented the layoff.” 

 

H.B. 434 is still in the very early stages of the legislative process. However, because it would expand employer advance notice obligations in several respects beyond WARN’s requirements, it bears watching – and perhaps warrants a call to your State representative.  We will continue to keep you updated.

Recently Released DOL Budget Makes Worker Misclassification and State Paid Leave Priorities for the Next Fiscal Year

On Monday, February 1, 2010, the U.S. Department of Labor (DOL) released its budget for the 2011 fiscal year. In a 95-page summary of the new budget, the DOL elaborated upon its plans for the approximately $14 billion it seeks in discretionary budget authority. According to the summary, the DOL will focus its efforts in 2011 on supporting reform of the Workforce Investment Act, rebuilding Worker Protection Programs, initiating a multi-agency legislative proposal to establish automatic workplace pensions, and boosting funds for unemployment insurance integrity efforts. From our perspective, however, the two most notable aspects of the 2011 budget are its provisions concerning employer misclassification of workers and paid family leave. 

The DOL proposes to devote $25 million to a joint Labor-Treasury Misclassification Initiative that will enable the agency to better detect, investigate, and prosecute employers who misclassify their workers, and to offer competitive grants to boost states’ incentives to address the problem. In addition, the DOL proposes to further limit the possibility of employer misclassification by:

  1. requiring employers to demonstrate that their employees are classified correctly,
  2. closing the safe harbor created by Section 530 of the Revenue Act of 1978, and
  3. making misclassification of employees an explicit violation of the FLSA.  
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New York Jets Coach Fined for "Off-Duty" Conduct

While attending a Mixed Martial Arts event in Miami, New York Jets head coach, Rex Ryan, apparently made an obscene gesture at some Miami Dolphin fans who were taunting him. Yesterday, the Jets fined Ryan $50,000. Ryan was attending the event, which was neither team nor NFL-sponsored, on his own time, but the team obviously felt that as head coach, Ryan is their representative even when he is "off duty" and that he must conduct himself accordingly.

In the real world, most employees are not celebrities that the general public will try to egg on until they do or say something stupid. Nevertheless, it is important for all of us to remember that the world is now filled with opportunists with camera phones and easy access to YouTube and other media outlets. Though we should not be expecting to see a rash of employers firing factory workers for flipping off a bunch of bar patrons after work, there are real world lessons to be learned from this episode. First, employees need to recognize when they are out in public that there is a significant risk that anything that they do or say that either embarrasses or otherwise reflects poorly on their employer ultimately may get back to the employer. On the other hand, employers should exercise restraint before taking disciplinary action against employees for their off duty conduct to make sure that the conduct truly does negatively impact the company's business or reputation.

Explosion of FLSA Litigation Should Prompt Employers to Review Their Practices

Recent reports have indicated that the number of FLSA collective actions rose sharply in 2009. Many believe this trend will continue in 2010 as employees gain increased awareness of their rights under wage and hour laws and the plaintiffs' bar recognizes the potential value of FLSA collective actions.

Indeed, there has been a recent flurry of activity across the country in the area of wage and hour class actions. Assistant managers at Foot Locker Retail Inc. filed a nationwide collective action in the Southern District of California, alleging that the company misclassified them as exempt and failed to pay them overtime wages. Similarly, Vermont state employees have brought a putative class action under the FLSA, claiming that the state has failed to pay overtime to employees in higher pay grades. 

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EEOC Report On Charge Statistics Provides Lessons For Employers

 Yesterday, the EEOC released its charge statistics report for its 2009 fiscal year, which ended on September 30, 2009. Not surprisingly, during an economically difficult period, the statistics show a near record number of charges filed -- 93,277 -- which is second only to the 2008 fiscal year when 95,402 charges were filed.

As usual, sex and race discrimination charges led the pack, but they also showed a slight decline from the previous fiscal year. Somewhat surprisingly, during a period that saw extensive reductions-in-force, age discrimination charges were significantly down. On the other hand, disability discrimination and retaliation charges showed the sharpest increase, both numerically and statistically.

The increase in disability discrimination charges likely can be tied directly to the enactment of the Americans with Disabilities Act Amendments Act (ADAAA) which makes it significantly easier for applicants and employees to establish that they have a protected disability. Employers can reduce the likelihood of being targeted for a disability discrimination charge by recognizing this new reality and engaging in good faith in the interactive process to determine whether a reasonable accommodation exists for applicants or employees with alleged disabilities. Frequently, the give and take of the interactive process if conducted in good faith will either result in finding an accommodation that both sides can live with or demonstrating to the applicant or employee's satisfaction that no reasonable accommodations actually exist. Remember, the ADA, even as amended by the ADAAA, still does not require the employer to provide applicants or employees with the accommodation they want -- only a reasonable one.

With respect to retaliation charges, as we have preached in previous posts both here and here, employers must be careful to treat employees who have filed discrimination charges or lawsuits as they would treat any other employee -- no better, no worse. In fact, the U.S. Supreme Court's decision in Crawford v. Metro. Gov’t of Nashville and Davidson County early in the 2009 term held that the retaliation protection provided by Title VII extend to employees who speak out about discrimination during the employer’s investigation into another employee’s internal complaint of discrimination. The Crawford decision, therefore, underscores employers' need to protect themselves from potential retaliation cases in this context as well by following up on any employees who claim "me too" in the course of internal discrimination investigations.

How Should the Ohio BWC and Industrial Commission Treat Claims for H1N1?

As concerns about the potential scope of the H1N1 flu continue to grow, one question we keep hearing from clients is whether employees who believe they have contracted H1N1 in the workplace may have compensable workers' compensation claims. In the vast majority of cases, we believe the answer will be a resounding "No."

Ohio defines an occupational disease as:

"a disease contracted in the course of employment, which by its causes and the characteristics of its manifestation or the condition of the employment results in a hazard which distinguishes the employment in character from employment generally, and the employment creates a risk of contracting the disease in greater degree and in a different manner from the public in general."

Therefore, for instance, the office worker who contracts H1N1 because somebody in the next cubicle had it does not have a compensable claim. The situation is no different than the seasonal flu from year to year.

One likely exception to my general proposition come to mind:  healthcare workers, who by the nature of their work may be exposed to H1N1 in a greater and different manner than members of the general public. Childcare workers also may have an outside chance at establishing a viable claim. Even then, however, most healthcare and childcare workers will still have a difficult time proving actual causation; that is, that they actually contracted H1N1 as a result of their work rather than from a sick family member, at a restaurant or some other public place.

The H1N1 vaccine may also pose a potential risk if it ever becomes widely available. Workers who experience side effects from getting an H1N1 vaccine may claim they are entitled to workers' compensation benefits. In the absence of evidence that the employer actually required its employees to get vaccinated and demonstrated illness based on any known side effects, these claims should be rejected.

Michael Vick Gets Released From the ERISA Doghouse, But Could You be Next?

Sports fans, you can breath easier about your fantasy football lineups -- Michael Vick is out of the doghouse with the U.S. Department of Labor, presuming he complies with a consent judgment. We had cautioned in an earlier post that Vick’s release from prison did not necessarily mark the end of his government obligations, given DOL allegations of ERISA violations. As explained in the DOL’s press release, the DOL’s complaint alleged that Vick and others improperly removed $1.35 million of pension plan assets to help pay the criminal restitution imposed on Vick after his conviction for unlawful dog fighting, and to help pay his attorney in his bankruptcy cases. Vick and his company, MV7 LLC, agreed to repay at least $416,461.10, pay a fiduciary to manage the plan until its termination, and pay a monetary penalty. The $933,539 difference between the amount alleged in the complaint and the repayment amount is not explained in the press release, though perhaps that is because Vick agreed to forfeit his share of the pension benefits. Vick can play football, but he is permanently barred from being an ERISA plan fiduciary.

Hopefully we don’t need to caution our readers to refrain from participating in unlawful dog fighting, and from “improperly removing” pension plan assets to buy their way out of trouble. But there is one sentence in both this press release and another press release about an Ohio mortgage broker that hits closer to home: “In fiscal year 2008, [DOL] achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.” If someone out there is essentially stealing well over $1.2 billion per year of employee money (since this is just the amount recovered), shouldn’t we be appalled at the systemic flaw that allows this to happen? But is that really what is happening, or do employers need to be more worried about how DOL is getting to this $1.2 billion per year figure? A significant portion of this large dollar figure is related to participant contributions that EBSA argues “were not timely contributed” to a benefit plan.

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Are Financial Institutions Required to Comply with e-Verify?

As a follow up to our recent post on e-Verify, many of our financial institution clients have been asking whether they are required to comply with the new federal e-Verify requirements for federal contractors.

Under federal affirmative action laws, many banks are considered federal contractors because they are issuing and paying agents for U.S. savings bonds or they are insured by FDIC. However, as explained below, issuance and payment of U.S. savings bonds and FDIC insurance do not trigger e-Verify obligations.

 

Clarifying language in the e-Verify regulations states that:

Agreements or activities performed by financial institutions that are not subject to the FAR (Federal Acquisition Regulation) are not required to comply with the e-Verify provisions and clauses of the FAR.

 

This statement in the e-Verify regulations is given in response to a specific question about whether banks and other financial institutions whose federal contracts are limited to serving as issuing and paying agents for U.S. savings bonds or being insured by the FDIC should be excluded from e-Verify requirements. Since issuance of or payment on U.S. savings bonds and FDIC insurance are not covered by FAR, they do not trigger e-Verify obligations. Similarly, the clarification notes that financial agency agreements (FAAs) between banks and the federal government are not subject to FAR and, therefore, do not trigger e-Verify obligations.

 

For all of these reasons, so long as the only federal contracts for your bank are of the sort described above, you can rest assured that you do not have to comply with the federal e-Verify requirements. 

 

The e-Verify regulations do not address specifically federal share insurance of the sort that credit unions have under the National Credit Union Insurance Fund.  However, the rationale for concluding that FDIC insurance does not trigger e-Verify requirements would  apply also to federal share insurance for credit unions. 

 

E-Verify: What Does This Mean For My Company?

You may have noticed a spate of recent articles and announcements indicating that “all federal contractors” will be required to begin using the federal government’s E-Verify system beginning September 8, 2009. Originally set to take effect on January 15, 2009, there have been three prior delays in implementing mandatory use of E-Verify for federal contractors. On August 26, however, a federal district judge rejected a request for further delay, so it appears the E-Verify regulations will actually go into effect on September 8. (See our recent blog post.) In light of this, current contractors should start thinking about how E-Verify will affect them – if at all.  

Even though many of the articles on this topic indicate that “all federal contractors” are required to start using the system on September 8, the reality is that not all contractors will be covered and that even covered contractors have time after September 8 to enroll and start using E-Verify. 

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Updated Guidance for Businesses and Employers for the Fall Flu Season

Concerns about H1N1 Influenza are beginning to creep back into everyone's consciousness as summer is drawing to a close. The U.S. Department of Health and Human Services has issued updated guidance for businesses and employers, which can be found at:

CDC Guidance for Businesses, Employers, and Workplaces to Plan and Respond to 2009 H1N1 Influenza

Preparing for the Flu: A Communication Toolkit for Businesses and Employers

Employers should be ready to implement strategies to protect their workforces while ensuring continuity of operations. Most of the recommendations boil down to simple common sense:

 

  1. Encourage workers who are sick to stay home (or go home if they've reported to work);
     
  2. Encourage good hygiene in the workplace;
     
  3. Prepare for increased numbers of employee absences due to illness in employees and their family members, and plan ways for essential business functions to continue;
     
  4. Prepare for the possibility of school and daycare dismissal and closure; and
     
  5. Encourage workers to get vaccinated.

 

 

 

Employee Free Choice Act (EFCA) - Card-Check May Be Out; Arbitration and Election Rules Favoring Unions May Be In

EFCA, as introduced in Congress in February 2009, includes sweeping changes to the rules for union organizing. (Please read our earlier blogs for further discussions on EFCA.)  The two most controversial original EFCA provisions are: (1) card-check recognition, which would allow unions to demand recognition rights based solely on union cards that they can pressure employees to sign through face-to-face interaction; and (2) mandatory binding arbitration to resolve impasse in first labor contract negotiations. The card-check provision has been especially controversial because it would result in unions obtaining bargaining rights without a secret ballot election. No doubt sensing that the general public favors secret-ballot elections, a number of moderate Democratic senators have begun to pull back support for card-check recognition as EFCA nears debate in the Senate.

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Suit Against Philadelphia Police Highlights Importance of Paying Attention to Employee Internet Access

CNN.com is reporting that a group of Philadelphia policemen and women have filed a class action lawsuit in federal court against the Philadelphia police department for race discrimination on the ground that the department allegedly permitted its white officers, including some of supervisory rank, to maintain a private website that allegedly was used as a forum for racially offensive comments. It is alleged that the website created a hostile work environment, in part, because it was both accessed and discussed in the workplace. Although the police department has disavowed any responsibility for the website, which was password protected, questions necessarily will arise regarding whether the department had knowledge of the content on the website and acquiesced to it and whether it permitted the site to be operated during work time. Even if the department can establish it did not sanction or condone the website, the lawsuit still raises a number of interesting issues as to the extent to which an employer can be held liable for discriminatory and/or harassing conduct of its employees by supervisors while they all are off duty.

We don't know whether the police department had a policy regulating its officers' internet access, either on duty or off duty. Such a policy, if it exists and was enforced, might support the department's attempt to distance itself from the racially-charged comments on the website. Similarly, the content and enforcement of its policy against harassment will undoubtedly be scrutinized in the months ahead. As it stands, the department faces what looks to be an arduous legal battle. In addition, the department undoubtedly will need to take action internally to ensure that any future employment decisions, such as promotions and terminations, aren't tainted by the allegations in this complaint.

Here is a link to the CNN article: http://www.cnn.com/2009/CRIME/07/17/police.racism.lawsuit/index.html, which appropriately warns that the complaint -- to which it links -- may be highly offensive to some.

EEOC Publication Summarizes Requirements for Discrimination Waivers

On July 15, 2009, the EEOC published “Understanding Waivers of Discrimination Claims in Employee Severance Agreements,” a document directed to employees facing layoffs. The publication is not apparently intended to change existing regulations, but rather to summarize the legal requirements for severance agreements under the ADA, Title VII, the Equal Pay Act, and, separately, the Age Discrimination in Employment Act.

As noted by the EEOC’s summary, in order to minimize the risk of potential litigation, many employers provide laid-off employees with optional severance agreements, by which employees may obtain certain compensation or benefits in exchange for releasing the employer from liability. The EEOC document specifically addresses the validity of such releases, and it is therefore useful reading for employers as well.

 

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Hockey Firing Raises Age Discrimination Issue

Generally, the firing of a professional sports team's general manager is not going to raise my interest as an employment lawyer, but the comments made by the owner of the Chicago Blackhawks after Dale Tallon was fired certainly piqued my interest. Those hockey fans in the audience may know that Tallon's firing came shortly after the NHLPA filed a grievance claiming that he failed to send out timely qualifying offers to players that were restricted free agents. Rather than risking those players becoming unrestricted free agents, Tallon quickly signed them to long term contracts that probably aggravates the team's salary cap issues in the near term and ultimately may cost the team more money.

In an effort likely designed to deflect attention from this blunder, Rocky Wirtz, the Blackhawks owner, is quoted by MSNBC.com as follows regarding Tallon's replacement: Asked what Bowman, who's in his ninth year with the Blackhawks, brings to the job that Tallon didn't, Wirtz said: "He's 36, Dale is 58. We always want younger people. What he brings is a system in place to get better," Uh oh.

Fortunately for the Blackhawks as it relates to Tallon's situation, the recent Supreme Court decision in Gross v. FBL Financial Services probably saves them from a potential claim of age discrimination. As reported previously, Gross holds that a plaintiff bringing an ADEA disparate-treatment claim must prove, by a preponderance of the evidence, that age was the “but-for” cause of the challenged adverse employment action. Here, John McDonough, the Blackhawks president who appears to have been the driving force behind the termination, acknowledged that Tallon probably would not have been fired if not for the free agent incident. For future reference, however, the Blackhawks may want to keep tabs on Congress, which already has announced that it will hold hearings directed at overturning the Gross decision.

D.C. Circuit Overturns Portion of NLRB Register-Guard Decision

Back in December 2007, we wrote about the NLRB's decision in The Guard Publishing Company, d/b/a The Register-Guard, 351 NLRB No. 70, which held that employees do not have a protected right to use employer email systems for solicitations or communications regarding union-related topics. In addition, the Board applied a new standard for determining when employers discriminatorily enforce email policies and, thus, violate Section 8(a)(3) of the NLRA. Specifically, as to the 8(a)(3) standard, the Board held that, in determining whether a policy had been discriminatorily enforced against the union, it looked to whether there had been "unequal treatment of equals."  Then, the Board upheld Register-Guard's enforcement of its email policy against an employee who was soliciting support for the union because there was no evidence that the company had permitted solicitation on behalf of other non-union groups (even though it had permitted various other personal uses of the email system, including personal solicitations for sports tickets and the like.) 

On July 7, 2009, however, the Court of Appeals for the D.C. Circuit refused to uphold the Board's conclusion as to whether the employer discriminatorily enforced its email policy but did not explicitly overrule the standard announced by the Board in December.   (On appeal, the union did not challenge the lawfulness of the email policy itself).   In short, the court held that the the company's discipline of an employee for using the email system to solicit employees to wear green in support of the union and to seek volunteers to help with the union's entry in a city parade violated 8(a)(3). Calling the distinction between organizational and personal solicitation a "post-hoc invention" that did not actually exist in the company's email policy, the court found that the company policy prohibiting non-work-related solicitations "made no distinction between solicitations for groups and for individuals."  Equally significant, the court noted that the company’s disciplinary warning" did not invoke the organization-versus-individual line drawn by the Board. To the contrary, the company told the employee in question to “refrain from using the Company’s systems for union/personal business.”

Because it is so fact-specific, the court's decision should not cause employers much concern.   In fact, the email policy at issue, which prohibited use of the company's communications systems “to solicit or proselytize for commercial ventures, religious or political causes, outside organizations, or other non-job-related solicitations,” would seem to be equally applicable to personal solicitations of a non-work nature as it is to organizational solicitations.   The good news here is that the court's decision does not disturb the underlying premise that employers may prohibit union access to its email system so long as it does so in a nondiscriminatory manner.  

My Summer Camp Adventure

It's hard to believe that fewer than 10 years ago, there was widespread concern that our computers were all going to blow up and there would be anarchy in the streets. Since the clock struck midnight on January 1, 2000, we have seen an unprecedented technology boom that has had a widespread impact on the workplace. Remember the anxiety caused by cameras on our cell phones due to their impact on protecting trade secrets and our privacy in the locker rooms? Since then, we have grown comfortable with workers using laptops offsite though we still need to concentrate better on keeping track of them and what is on them!

Now, the social media craze -- Facebook, Linked-In, Twitter, etc. -- seems to be causing employers the most recent concern. As editor of employerlawreport.com, I have come to achieve a certain comfort level with social media, but I think that what primarily is keeping many employers up at night is fear of the unknown. That is why I'm going to summer camp! Starting this past Tuesday and running through the second Tuesday in August, I will be attending Social Media Summer Camp, a Columbus Business First initiative. The first session, "Social Media 101," provided a nice overview of everything that is out there and how businesses have been and could be using social media to market their services and products. The attractiveness of social media from a marketing perspective is often easy to see and hopefully we will be able to use some of what we learn at camp to improve our blog and to otherwise better communicate with our clients and friends.

In addition, I'm keeping my employment lawyer hat on to identify potential issues for employers that are encouraging their employees to "friend" others or to "tweet" or are attempting to regulate how and when they do it. This past Tuesday's session left me with one particular impression: Whether or not companies choose to use social media to foster their business, they would be wise to monitor the various social media outlets to make sure that others, including disgruntled and former employees, are not messing with their messages or creating unwanted ones.

So that's why I'm going to summer camp. I'm taking my laptop with me, but fortunately for all involved, I'm leaving my bathing suit at home.

Supreme Court Rules for White Firefighters

On June 29, 2009, the Supreme Court addressed a provocative question about the current state of workplace diversity in the United States. In the controversial Ricci v. DeStefano decision, the Court determined by a vote of 5-4 that only in very narrow circumstances can public employers engage in disparate-treatment discrimination to avoid violating the disparate impact provision of Title VII of the Civil Rights Act. In order to make a race-conscious preventative decision, an employer must have a strong basis in evidence that a given selection method was deficient and that discarding that method’s results is necessary to avoid creating a disparate racial impact.

Title VII protects employees from two types of discrimination based upon race, color, religion, sex, and national origin: intentional acts of discrimination (disparate treatment), and facially neutral policies and practices that have a disproportionate adverse effect on minorities (disparate impact).   If an employee makes a prima facie showing of disparate impact discrimination, the burden then shifts to the employer to prove that the practice in question is job related and consistent with business necessity. Even if the employer meets this burden, a plaintiff may still succeed by showing that the employer refuses to adopt an available alternative employment practice that has a lesser disparate impact and serves the employer’s legitimate needs. Ricci posed the question of under what circumstances an employer may take race-conscious action to avoid disparate-impact liability given this statutory scheme.

 

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Missed Our Recent Employment Relations Seminar? Download the Materials

If you missed our recent Employment Relations Seminar:  The Changing Landscape of Labor and Employment Law, that was held on Monday, May 4, 2009 in Columbus, we invite you to download a copy of our materials from the program here.

EEOC Issues Technical Guidance on ADA-Compliant Employer Preparedness for the H1N1 Flu Virus

We have been receiving more and more questions from human resources professionals asking how the ADA might impact their preparation for a potential pandemic flu. Now the EEOC has issued technical guidance on the topic, focused primarily on employers’ rights to make medical inquiries and require medical examinations of applicants and employees.  With respect to applicants, the EEOC notes that the ADA operates normally to preclude all disability-related questions and medical exams until after a conditional offer has been made.  With respect to current employees, who can be required to respond to medical inquiries or undergo medical exams only if they are job-related and consistent with business necessity, however, the EEOC recommended a model survey of employees that could be issued to all employees in preparation for a pandemic. The model survey is reprinted below:

ADA-Compliant Pre-Pandemic Employee Survey:

 

Directions:   Answer “yes” to the whole question without specifying the reason or reasons that apply to you.  Simply check “yes” or “no” at the bottom.

 

In the event of a pandemic, would you be unable to come to work because of any of the following reasons:
 

*    If schools or day-care centers were closed, you would need to care for a child; 

*    If other services were unavailable, you would need to care for other dependents;

*    If public transport were sporadic or unavailable, you would be unable to travel to work,  and/or:

*      If you or a member of your household fall into one of the categories identified by CDC as being at high risk for serious complications from the pandemic influenza virus, you would be advised by public health authorities not to come to work (e.g., pregnant women; persons with compromised immune systems due to cancer, HIV, history of organ transplant or other medical conditions; persons less than 65 years of age with underlying chronic conditions; or persons over 65).

Answer:   YES __________   NO __________
 

The EEOC’s guidance also clarifies its position that employers may enforce rules requiring employees to behave in a hygienically appropriate manner to avoid the spread of the flu, to wear personal protective gear such as face masks, and to require employees to work from home.
 

In a separate release cryptically titled “Employment Discrimination and the 2009 H1N1 Flu Virus (Swine Flu),” the EEOC reminds us that Title VII “prohibits employment discrimination on the basis of national origin, for example, discrimination against Mexicans.” The “guidance” states nothing else as it relates to Title VII. Presumably, the EEOC wants to remind employers not to direct any employment actions at workers of Mexican descent out of a fear or concern that they may be more likely to carry the H1N1 flu virus.

CTPAT Program Includes Employee Security Provisions to Consider

More and more federal non-employment statutes, regulations and programs are coming with strings attached for human resources professionals to grapple with. For instance, who would have expected that the federal plan for rescuing troubled financial institutions would have anything to do with immigration, that the federal stimulus statute would include whistleblower provisions and changes to COBRA benefits laws, or that consumer protection laws would contain whistleblower provisions? Now comes the Customs and Border Protection's (CBP's) Customs Trade Partnership Against Terrorism (CTPAT) program, which grew out of September 11 to help improve supply-chain security, and its employment-related provisions. CTPAT is a voluntary partnership program between the private sector and CBP to secure the supply chain for products entering commerce in the United States. Many view CTPAT certification as the equivalent of an ISO certification, and it can be a significant marketing tool. Companies that want to obtain CTPAT certification, in addition to implementing various security measures, must meet certain minimum criteria for personnel security including background checks, reference checks, exit interviews, procedures for providing employee ID, keys and fobs etc. If you are a human resources professional in the transportation and logistics industry, you should check with the business or operations side of your organization to find out whether your company is planning to participate in the CTPAT program so that you can get a jump on aligning your employee security procedures with the program's requirements.

It's Not Too Soon to Prepare for Swine Flu Pandemic

Now that we have the first confirmed case of swine flu here in Ohio, it makes sense to dust off the guidance we received from the U.S. Department of Labor and the Center for Disease Control when the avian flu was prompting concerns about a pandemic flu in the United States. Thus far, the confirmed cases of swine flu in the United States appear to have been relatively mild, but employers nevertheless should prepare to do their part to reduce the threat of pandemic flu and to respond should their workplaces be hard hit.

Those employers who want to be ahead of the game if the outbreak becomes more widespread should review the attached handbook entitled Guidance for Preparing Workplaces for an Influenza Pandemic, which was prepared by OSHA back in 2007. The handbook contains common sense advice for all employers to help reduce the risk of spreading the disease. For most employers, the recommendations are not rocket science nor difficult to implement. They mostly involve encouraging sick employees to stay home, encouraging basic hygiene practices in the workplace, and encouraging "social distancing" (i.e. avoiding close contact and crowds of people). The handbook also sets forth more extreme recommendations for employers with a medium exposure risk because of frequent close employee contact with the general public and for employers with high exposure risk due to frequent close employee contact with infected individuals. For healthcare workers and employees, OSHA also issued a handbook in 2007, which can be accessed here.  If the CDC and/or OSHA issue any further guidance in light of this most recent flu outbreak, we will let you know.

 

Though, the risks of pandemic flu still are being downplayed at this point, employers may also want to revisit their disaster plans for continuing operations in case of widespread employee absences.

Missed Our Recent COBRA Webinar? Listen to the Recording

Webinar Recording: 
COBRA Premium Subsidy: Action Steps Required to Avoid Problems

Under the recent economic stimulus act, virtually every employer that maintains a health plan, including small employers that are not subject to federal COBRA rules but are subject to a state law continuation of medical coverage requirement, must comply with new COBRA premium subsidy rules. Potentially eligible individuals must be identified and notices must be distributed by April 18, 2009.

It is critical that employers understand the requirements and steps that are needed given the following:

  • the immediate cash flow demand on many employers;
  • the discretion that has been granted to the Department of Labor to hear appeals;
  • the ongoing and extensive documentation requirements and risk of audit; and
  • the substantial penalties for failure to comply.

Ann Caresani, Mike Underwood and Jim Prior from Porter Wright, along with Sean Kelley from BGS Associates discussed the impact of the stimulus on COBRA on April 1, 2009. 

If you were unable to participate in the webinar, we invite you to listen to the recording by clicking on the link below.  We hope you find it helpful.

Webinar Recording: 
COBRA Premium Subsidy: Action Steps Required to Avoid Problems

 

IRS COBRA Guidance: What is an "Involuntary Termination?" Potential Disputes Lurk in Definitions

On Tuesday, March 31, 2009, the IRS issued its Notice 2009-27 providing additional guidance under the American Recovery & Reinvestment Act of 2009 (“ARRA”) relating to premium subsidies for COBRA coverage. The Notice addresses a number of issues, including the question of who is eligible for the subsidy, the method for calculating the premium reduction, and the length of the entitlement to the subsidy. [View the notice here.]

Of particular interest to employers is the guidance concerning what will be considered an “involuntary termination” entitling persons to the premium subsidy. The IRS gives this broad definition: “An involuntary termination means a severance from employment due to the independent exercise of the unilateral authority of the employer to terminate the employment, other than due to the employee’s implicit or explicit request, where the employee was willing and able to continue performing services.” Although it is a mouthful, that sounds simple enough. But, further language in the guidance and some of the specific examples show that there is plenty of room for disagreement about what is an involuntary termination. Of particular interest is language saying that the government will consider a resignation to be an involuntary termination if the resignation is “due to employer action that causes a material negative change in the employment relationship for the employee.”

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Model COBRA Notices From the Department of Labor

The U.S. Department of Labor (DOL) has released four model notices for use by employers in connection with requirements of the American Recovery and Reinvestment Act (ARRA) (see Employment Law Alert – “Broad COBRA Changes in 2009 Stimulus Bill – What Should You Be Doing Now?” – March, 2009). The model notices are available on the DOL web site: http://www.dol.gov/ebsa/COBRAmodelnotice.html. Employers and plan administrators should use the model notices as a guide, but those notices will require customization to meet the circumstances of particular employers and plans. Also, in the Model election forms there is a technical error in the way the election period is described. The Model election forms state that an election must be made within 60 days of notice. In fact, COBRA regulations allow for elections within 60 days of the date of notice or the date that coverage will end due to the qualifying event, whichever is later. Employers and plans using the Model Notices as a guide should correct that error.

The DOL and Internal Revenue Service have posted on their websites answers to common questions regarding the COBRA changes: http://www.dol.gov/ebsa/faqs/faq-cobra-premiumreductionER.html and http://www.irs.gov/newsroom/article/0,,id=204708,00.html.

 

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Employee Free Choice Act Introduced in Congress; Potential Compromise Legislation Also Introduced

The Employee Free Choice Act, or EFCA, was introduced in Congress on March 10, 2009. The bill, introduced as H.R. 1409 and S. 560, is identical to last year’s bill. On February 26, we discussed the Secret Ballot Protection Act (see post here), which was proposed by Republicans as a preemptive strike against EFCA and which would prohibit employers from recognizing or bargaining with a union that had not won a secret-ballot election of employees. Democrat Joe Sestak, Congressman from Pennsylvania, has also introduced legislation targeting the relationship between unions, employees, and employers. Rep. Sestak introduced the National Labor Relations Modernization Act (NLRMA) (H.R. 1355) on March 5, 2009. 

The NLRMA mirrors many of the provisions of EFCA but does not include one key provision: the NLRMA does not contain the card-check provision that would eliminate employees' right to choose a union through a secret-ballot election. The NLRMA does, however, contain EFCA’s increase of damages for employers who commit unfair labor practices, a provision similar to EFCA’s regulating the timeline for negotiating the terms of an initial collective bargaining agreement, and a requirement that the parties submit to binding arbitration if they are unable to reach agreement. The NLRMA also contains a novel section—not included or addressed in EFCA or SBPA—which requires employers, following the setting of an election date, to notify unions of any campaign activity they intend to undertake and to allow unions equal access to employees.

 

Although EFCA is currently in the nation’s spotlight, there is considerable discourse among the public and Congress about the appropriateness of its card-check provision. If Congress becomes convinced that a card-check provision is not the right way to go, NLRMA or some other compromise bill might provide the consensus necessary to pass some sort of labor reform legislation. One thing seems clear. In order for any compromise to get the support or organized labor, it will have to include some means to make it easier for unions to organize workers and some provision for binding dispute resolution when bargaining a first labor contract. These are the things considered by unions to be key to their goal of increased union representation, a goal supported by the White House, by union supporters in Congress, and by the newly appointed Secretary of Labor. Employers should begin now to plan and take steps to prepare for what is certain to be a very concerted increase in union organizing activity.

 

Among the essential steps are manager training, designed to make managers especially aware of the likely changes in the law, but more important to make them aware of the specific arguments that are used by union organizers to get cards signed and the sort of manager behavior that will make it more likely those union arguments fail. Employers should also undertake a concerted review of policies and practices to be sure that they have in place those rules that make it more difficult for union organizing to succeed and more important, those policies that demonstrate to employees a commitment to effective communication, fundamental fairness, and genuine worker involvement.

Increased Scrutiny Following EEOC Charge May Pose Retaliation Risk

A termination within three months of an employee’s EEOC charge, combined with a claim that the employer increased its scrutiny of that employee after his charge was filed was enough to prevent summary judgment--even where the employer had refrained from terminating the employee at its first opportunity following his charge. Hamilton v. GE.

Jarrett Hamilton sued GE alleging that he was terminated in retaliation for filing an age-discrimination charge with the EEOC approximately three months earlier. He claimed that after he filed the charge, the company intensified its scrutiny of his work.  Of course, he filed the charge while on a 30-day suspension that had been agreed to after he had been terminated while under a Last Chance Agreement (LCA). The Company did not fire him when the first opportunity to do so arose after he filed the charge but later terminated him for what it said was unacceptable conduct, including refusing work directions from a supervisor and using “unacceptable foul and abusive language.”

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EEOC Experiences Sharp Rise In Discrimination Charges: How to Lessen Your Risk of Being Part of This Trend

In a press release issued yesterday, the Equal Employment Opportunity Commission (EEOC) reports that, in its fiscal year 2008 (October 1, 2007 – September 30, 2008), there was a 15 percent increase in the number of employment discrimination charges filed against employers. The 95,402 charges filed are more than the number of charges filed in any other one-year period in the history of the agency. The greatest percentage increase was in age discrimination charges, up 28.7 percent from the previous year. Sex discrimination charges were up 14 percent, and race charges were up 11.2 percent. There was a smaller percentage increase in disability charges (9.7 percent), but with the recently-passed amendments to the Americans with Disabilities Act, employers will likely see a significant increase in disability charges in fiscal year 2009. 

 

The steep increase in discrimination charges was no doubt fueled, in part, by job losses in the beginning stages of the economic recession. The continued down-turn of the economy in the last quarter of 2008 and early months of 2009 makes it almost certain that the number of discrimination charges will continue to increase.

 

So what does all of this mean for you as an employer? To begin, it is far more likely that employers will be sued or will face discrimination charges as employees are laid off or face other adverse employment actions. An economic reduction-in-force will, very possibly, generate charges or lawsuits. All too often, employers do not exercise the care needed with the decision-making leading up to a reduction-in-force. Careful attention to the process and documentation in the early stages, however, can make legal challenges less likely to occur and can make those that are filed more easy to defend. 

 

As we’ve discussed before, employers should develop and document a sequential approach from the very earliest stages of the decision-making leading up to a reduction-in-force. Key steps in that approach include:

  • Reorganizing or eliminating job duties; 
  • Selecting the employees best-qualified to perform remaining job duties;
  • Establishing criteria for termination or lay-off decisions that are based on legitimate business reasons;
  • Documenting the selection criteria, procedure, and decisions;
  • Conducting a statistical review to identify any disproportionate impact on protected class employees and, if a disproportionate impact is shown, carefully reviewing decisions to assure that they are supported by legitimate business considerations.

After these steps have been taken, the company should consider payment of severance to and securing signed release agreements from those who are terminated. It is a mistake, though, to presume that all terminated employees offered severance will sign release agreements and therefore give short shrift to the initial decision-making and documentation steps. All it takes is one terminated employee who refuses to sign a release and, instead, files a charge or a lawsuit to negate the savings of the reduction-in-force through the cost of defense, settlement, or an adverse judgment.

 

Even if your company is not currently in a reduction-in-force mode, careful attention to all employment decisions is essential to reduce the risk of discrimination charges. Things like frank and candid communication in performance reviews and active involvement by human resource personnel in all adverse employment actions can make it far easier to defend later decisions to terminate in a reduction-in-force. 

Broad COBRA Changes in 2009 Stimulus Bill

The American Recovery and Reinvestment Act of 2009 (the “Act”) was signed by President Obama on February 17, 2009. This Act includes several significant changes to COBRA that employers will quickly need to address. 

The most immediate and notable impact will be a significant reduction in the COBRA premiums paid by certain employees whose employment is involuntarily terminated (and their spouses and dependents who are COBRA-entitled). These individuals can get a 65 percent government-paid subsidy toward their COBRA premiums. Employers are required to “front” the subsidy by paying the full premium and obtaining a reimbursement via a later payroll tax offset. The subsidy takes effect for COBRA coverage periods beginning after the February 17, 2009 enactment date (March 1, 2009 for most plans). 

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Stimulus Bill Contains Whistleblower Protections for Employees of State & Local Governments and Private Employers who Receive Stimulus Funds

The “economic stimulus bill”—formally referred to as the American Recovery and Reinvestment Act of 2009—signed into law on February 17, 2009 includes a whistleblower protection provision for employees of private contractors and state and local governments who report gross mismanagement, gross waste, public safety issues, abuse of authority, or violation of law in the implementation or use of the stimulus funds.  See American Recovery & Reinvestment Act of 2009, Pub. L. No. 111-5, § 1553.  These whistleblower protections are often referred to as the “McCaskill Amendment.”

Like other whistleblower protection statutes, the stimulus bill’s whistleblower protections require that an employee satisfy certain requirements in order to be protected.  First, the wrongdoing reported must be one of the following: (1) gross mismanagement of the agency contract or stimulus funds; (2) gross waste of stimulus funds; (3) abuse of authority in implementing or using the stimulus funds; (4) a violation of law, rule, or regulation related to an agency contract or grant using stimulus funds; or (5) a substantial and specific danger to public health or safety in the implementation or use of stimulus funds.  Second, the employee must have a “reasonable belief” that the information he/she possesses is evidence of wrongdoing falling in one of the above-listed categories.  A reasonable belief is likely to be interpreted as an objectively reasonable belief, as it is in other federal whistleblower protections, requiring the belief be one a reasonable person in the same factual circumstances would hold. Third, the employee must disclose the wrongdoing to one of the following individuals or entities: (1) the Board, (2) an inspector general, (3) Comptroller General, (4) a member of Congress, (5) a state or federal regulatory or law enforcement agency, (6) a person with supervisory authority over the employee, (7) a court, (8) a grand jury, or (9) the head of a federal agency. The Act specifically states that the whistleblower protection applies to internal disclosures and disclosures made in the ordinary course of the employee’s duties. If an employee’s actions meet all three requirements, he/she is protected as a whistleblower under the Act.

 

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Google Latitude Launch Creates Potential Employee Privacy Issues

On Wednesday, February 4, 2009, Google launched a new feature called Latitude. Latitude apparently will enable users of smartphones, including most Blackberries, most phones using Microsoft Windows Mobile and, eventually, iPhones, to transmit their locations to another smartphone or desktop computer.

Much like most social networking conventions, Latitude operates on an opt-in basis, which enables smartphone users to share their locations with only certain chosen recipients. Teenagers will undoubtedly find this application "cool" as will the parents of many of those teenagers who may use Latitude to keep tabs on their kids. In addition, many smaller businesses may use the feature to efficiently dispatch delivery and repair crews.

And therein lies the potential privacy problem. Although Latitude is designed to be used only by those who choose to do so, some employers may seek to require their workers to use Latitude so that work activities can be monitored and directed. Requiring employees to put Latitude on their personal cell phones is rife with potential invasions of privacy during nonworking hours. Therefore, employers that choose to use Latitude should plan on issuing company phones to monitored employees and should obtain written employee acknowledgment of and consent to the use of this technology. Furthermore, although Latitude requires an affirmative opt-in, smartphone users must disable the service when they do not wish to be monitored, such as when employees are off the clock. As a result, employers will need to create policies to ensure that appropriate worker privacy is maintained during non-work hours.

Employers should also understand the limitations of location-monitoring services. For instance, Latitude's accuracy is dependent on multiple factors such as whether Google is able to rely on smartphone GPS capabilities or whether Google must rely on cell phone tower triangulation to place the user. Employers must also understand that Latitude and other location-monitoring technology is capable only of identifying a person's location, not what that person is doing. Therefore, employers should be careful about coming to any rush to judgment based on the results of location monitoring.

Obama Signs First Bill Into Law: The Lilly Ledbetter Fair Pay Act

On January 29, the Lilly Ledbetter Fair Pay Restoration Act was the first bill signed into law by President Obama. As discussed in prior blog entries, the new law gives a employee or former employee the right to file a charge of discrimination within 180 days (or 300 days in some states, including Ohio) of their most recent paycheck. The Act overturns a U.S. Supreme Court decision holding that the statute of limitations started to run as soon as an employee received his or her first unfair paycheck. Under the new law, each new paycheck alleged to be discriminatory extends the statute of limitations for an additional 180 (or 300) days. 

The new law will significantly impair the ability of companies to defend claims about old pay decisions in federal court, especially for those employers who have forgotten or have not retained documentation as to why a given pay decision was made in the first place.

 

To read our client alert on this new law, click here.

Address Discrepancy Rules Potentially Enlist Employers In Identity Theft Battle

Back in October, the FTC announced with great fanfare a delay until May 1, 2009 for enforcing the FACTA Red Flag rules. Those rules require financial institutions and creditors to establish written programs for identifying, detecting, and responding to patterns, practices, or specific activities that are warning signs of identity theft. In contrast, the infrequently discussed Address Discrepancy rules that were issued at the same time as the Red Flag rules quietly went into effect as originally scheduled on November 1, 2008. The Address Discrepancy rules, found at 16 C.F.R. §681.1, apply not only to financial institutions and creditors but, potentially, to all employers that use consumer reporting agencies to conduct background checks on applicants and employees.

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Missed our recent EFCA briefing series? Listen to the Webinar Recording

In December, we hosted a series of briefing sessions for our clients and friends on the dramatic changes in store for employers.  We discussed the Employee Free Choice Act (EFCA) and what steps employers should take now to protect themselves from the different playing field that this new law would offer unions.  We discussed other expected changes from President Obama and his administration, including federally mandated paid sick time.  We also discussed the difficult decisions that employers are facing how to effectively manage a reduction-in-force in these difficult economic times.

If you were unable to attend one of these sessions, we invite you to listen to the webinar recording.  We hope you find it helpful.

Webinar Recording: 
Workplace Impact of 2008 Presidential and Congressional Elections:  Dramatic Changes Ahead 

presented by Mike Underwood and Jenni Edwards on December 16, 2008.

City of Columbus Adds Five New Protected Classes to Employment Discrimination Ordinance

On Monday, December 15, 2008, the City of Columbus modified its ordinances related to discrimination (Chapter 2331 of the Columbus City Codes). The modifications add five new protected classes to the employment discrimination ordinance: age, disability, gender identity or expression, familial status, and military status. 

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National Bank Act May Preempt Certain Bank Officer Employment Claims

National banks may be missing out on a defense available to them against certain state-law employment claims brought by terminated bank officers. In particular, the National Bank Act (NBA) allows national banks to dismiss officers “at pleasure, and appoint others to fill their places.” This provision has been interpreted to mean that state-law tort and contract wrongful discharge claims by terminated bank officers are preempted and, thus, subject to dismissal. See, e.g., Boesch v. Champaign National Bank, Case No. 24014 at 6 (9th App. Summit Cty., June 30, 2008); Schweikert v. Bank of America, Case No. 06-2137 (4th Cir. April 1, 2008).

The NBA preemption defense applies, however, only when a bank’s board of directors makes the termination decision or delegates the authority to do so and then ratifies the decision. The board’s ratification need not occur before or on the termination date, but it needs to occur as promptly afterward as possible.

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Election Results - Immediate Workplace Issues

Of course, no one can be certain of the exact workplace effects of Tuesday’s Presidential election results. But, at least one major change in employment law is pretty certain – and it is a change that all employers, large and small, in all industries, should be planning for now.

President-Elect Obama has stated clearly his support for the proposed Employee Free Choice Act (EFCA). His election, together with additional Democratic seats picked up in the Senate and Congress, make the passage of EFCA in 2009 a very strong likelihood. That will mean the most dramatic change in labor law in this country in decades.

As a reminder, there are two significant provisions of the EFCA: First, unions will be able to demand bargaining rights based solely on cards that they can pressure employees to sign face-to-face. The protection of a secret-ballot election will be taken away. Second, if labor negotiations between a union and employer for a first contract reach impasse, an outside arbitrator will dictate the terms of that key first contract.

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New Consumer Product Safety Whistleblower Law Enacted

On August 14, 2008, President Bush signed into law the Consumer Product Safety Improvement Act of 2008 (CPSIA), which includes, among many extensive changes to consumer safety laws, a whistle-blower provision.

This provision applies to all manufacturers, distributors, retailers and private labelers of children's toys, children’s products and child care articles, regardless of the number of employees. Under the Act, children's toys and children's products are generally defined as being "designed or intended primarily for children 12 years of age or younger."  "Child care articles" are defined as "a consumer product designed or intended by the manufacturer to facilitate sleep or the feeding of children age 3 and younger, or to help such children with sucking or teething."

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Los Angeles Commuter Train Tragedy Suggests Employers Should Review Electronic Device Policies

News confirming that the engineer of the Los Angeles commuter train that crashed last week, killing more than 20 people, engaged in text messaging while on the job underscores the need for employers to consider policies banning employee use of cell phones while driving on company business. Though it remains to be seen whether the engineer was texting at the time of the crash, the proliferation of electronic devices, such as Blackberries, and their potentially addictive use is helping to make "distracted driving" an increasing problem on the road. Simply put, distracted drivers are becoming more dangerous to themselves, their passengers and other motorists. Although distracted driving is a public problem that is not unique to employers, employers must recognize that they likely will be the "deep pockets" should a distracted employee cause a car accident. In fact, if the distracted employee also is injured in the accident, a workers’ compensation claim is also a strong possibility.

Some states have enacted laws restricting cell phone use while driving. Ohio is not one of them. As a result, Ohio law enforcement presumably is not obliged to police distracted driving (except in obvious cases of erratic driving). Therefore, to help manage their potential liability from distracted driving, Ohio employers should strongly consider banning the use of cell phones, Blackberries and similar devices while driving on company business as well as from conducting company business on such devices at anytime while driving. Otherwise, whether as a result of employees texting friends while driving on company business or responding to an urgent e-mail from the boss while driving, employers risk potentially significant liability.

For such policies to work, however, employers and employees will need to work together to ensure that the electronic device policy is enforced in a way that respects the fact that the employee may not be able to instantaneously respond to work issues while they are driving.

Two Supreme Court Decisions Expand Retaliation Claims

On March 27, 2008, the Supreme Court released two opinions addressing discriminatory retaliation in the workplace. In the pair of opinions, the Court broadened the scope of potential claims for retaliatory conduct by holding that: (1) employees may bring a private action for discriminatory retaliation under §1981; and (2) the Age Discrimination in Employment Act (ADEA) prohibits retaliation against federal employees who complain of age discrimination.

In CBOCS West, Inc. v. Humphries, the Supreme Court held 7-2 that under 42 U.S.C. §1981, retaliation itself is a form of prohibited discrimination when contractual rights are at stake, even though §1981 does not include the word “retaliation.” Although this particular issue had been addressed by several appellate courts, the Supreme Court had never addressed the question squarely.

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Dream of GINA Now a Reality

After more than a decade of effort, supporters of the Genetic Information Nondiscrimination Act (GINA) were finally granted their wish. Passed overwhelmingly by the Senate (95-0) and House (414-1), GINA was signed into law today, May 21, 2008, by President Bush. Title I prohibits genetic discrimination in the area of health insurance while Title II ensures nondiscrimination in the employment arena.

Employers have plenty of time to bring their plans and workplaces into compliance. The Act’s group health plan provisions are effective for plan years beginning one year after enactment. The employment provisions become effective 18 months after enactment – November 21, 2009.

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The Hidden Costs of "Independent Contractors"

If your business model includes extensive use of independent contractors, you’re going to want to pay attention to the Ninth Circuit's decision in NLRB v. Friendly Cab Company, Inc., Case No. No. 05-73813 (9th Cir., January 8, 2008). In the latest attack on the independent-contractor business model, the Ninth Circuit upheld an NLRB finding that the taxi drivers who leased cabs from Friendly Cab were not independent contractors but, in fact, were employees. The NLRB reached this conclusion despite the fact that, after making lease payments, the drivers kept all of their fares. Ordinarily, this factor – that the risk of profit or loss falls on the worker -- creates a "strong inference" of independent contractor status because the purported employer would have no incentive to control the means and manner of the drivers' performance. Nevertheless, the court deferred to the NLRB's conclusion that this inference was rebutted by other evidence that Friendly Cab, in fact, exerted significant control over the drivers and, as a result, found that Friendly Cab was obligated to meet and bargain with the drivers’ union.

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