Traps for the Unwary

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In Jennifer Trehar v. Brightway Center, Inc., the Seventh District Court of Appeals held that a promissory estoppel claim can lie even without an explicit promise—silence where an ordinary person would make a statement or take action.

Facts

Jennifer Trehar was employed at Brightway Center, a Christian non-profit, since 2010. In June 2012, she claimed she informed Brightway on two different occasions that she planned to move in with her boyfriend. She claimed that, on the first occasion, she was congratulated by her boss on the move. On the second occasion, she was granted permission to miss a work function in order to make arrangements for her boyfriend to move.

In July 2012, Trehar again informed Brightway of her move. However, this time Brightway responded by sending Trehar a letter suspending her for the month of July and providing her one month to determine if she wished to get married, stop living with her boyfriend, or be terminated. The letter cited the organization’s religious ideals as the basis for the decision. Trehar did not change her living situation and was terminated.

Trehar sued, alleging promissory estoppel, claiming that Brightway knew about her living arrangement in advance of her formally moving; approved of it on two different occasions; and assured her that she would remain employed. She claimed that she relied on those promises of continued employment and moved. Brightway claimed in response that it was aware Trehar was moving and that her boyfriend was also moving, but was unaware she would be living with her boyfriend and his children until just prior to sending the suspension letter.

Court Decisions

While Ohio is an at-will employment state, promissory estoppel is an exception to that doctrine. The elements necessary for a promissory estoppel claim are “(1) a clear and unambiguous promise, (2) reasonable and foreseeable reliance by the party to whom the promise is made, and (3) injury by the reliance by the party claiming estoppel.”

In this case, Brightway filed a motion for summary judgment on the basis that there was no specific and explicit promise of continued employment. The trial court agreed and dismissed the case.…

Continue Reading Silence equals acquiesence, equals promissory estoppel claim

For the first time since 1990, the Occupational Safety and Health Administration (OSHA) will increase its fines to reflect inflation. For willful and repeat citations, this will mean an increase in the maximum possible penalty from $70,000 to around $125,000. For serious citations, it will mean an increase in the maximum possible penalty from $7,000…

As we enter football season, workforces should prepare for the estimated 25 million fantasy sports enthusiasts who spend at least an hour of work time managing their teams each week during the 13- to 17-week football season. (See more here.)  Distracted employees can reduce productivity, cause workplace accidents, and potentially impact the bottom line. As such, employers that are concerned with such productivity issues should put proper procedures in place to address these issues head on.

The first question of course, however, is are fantasy football leagues even legal? On the federal level, the Unlawful Internet Gambling Enforcement Act (“UIGEA”) provides that “no person engaged in the business of betting or wagering may knowingly accept” funds “in connection with the participation of another person in unlawful Internet gambling.” It does, however, exempt fantasy sports so long as the outcome of any contest reflects the relative knowledge or skill of the participants rather than chance, has an outcome that is determined predominantly by accumulated statistical results of sporting events, but not solely on a single performance of an individual athlete. In addition, for the exemption to apply, all prizes and awards must be established and made known before the start of the contest.
Continue Reading Fantasy sport issues in the workplace

Following a decision last week by the National Labor Relations Board (NLRB), it is likely that all companies that use temporary staff workers will be considered a “joint employer” with the temporary staffing agency if efforts are made by a union to organize the temporary workers.

The use of temporary staff is a significant part of the business plan for many companies. Although it was in the past a strategy used primarily by manufacturing companies, temporary staffing is now common across many industries, including warehousing, logistics and service. The potential advantages to using temporary staff include off-loading human resource responsibilities, lowering unemployment and workers compensation expenses, tax withholding responsibility, and many of the other attendant costs of the employment relationship.

Companies who use temporary staff (I will call them “user” companies here) often take careful measures to limit the risk of being determined a joint employer with the company providing temporary staff. Those steps include having the temporary staffing company (I will call them “temporary staff providers” here) be responsible for all hiring, discipline, and termination decisions. In some cases, the user company relies on the temporary staff provider for on-site supervision and sometimes even human resources support on-site. In most cases, the user company has an indirect impact on wages of the temporary staff by virtue of the negotiated labor rate but, in almost all cases, all other employment benefits are provided solely by the temporary staff provider.

What if a union targets the temporary workers at a user company’s workplace for organization? If the union is successful, who is the “employer” required to recognize and bargain with the union? Until recently, the answer was pretty easy. As long as the user company was careful not to exert direct control over the terms and conditions of employment of the temporary workers, then the employer required to recognize and bargain with the union was the temporary staff supplier only. Efforts made by unions to argue for a joint employment determination were usually unsuccessful. All that has changed.

What does the case say?

Last Thursday, in Browning-Ferris Industries of California, Inc., the NLRB decided that the user company and the temporary staff supplier are a joint employer. The user company was Browning-Ferris (BFI), which operates a recycling facility. The temporary staff supplier was Leadpoint. The Teamsters Union tried to organize a group of 240 Leadpoint employees working at the BFI facility. The temporary staff performed work different than that performed by the BFI regular workforce. The BFI regular workforce was already unionized. Leadpoint provided on-site supervision and an on-site human resource representative. Leadpoint also kept control of hiring decisions, subject to certain broad criteria imposed by BFI. When there were on-site misconduct issues involving temporary staff people, BFI made Leadpoint aware and Leadpoint was responsible to investigate and take action, though BFI retained the right to discontinue the assignment of any of the temporary staffers. In other words, Browning-Ferris did all “right” things in its effort to remain separate from Leadpoint.
Continue Reading Are you a “joint employer” with your temporary staff supplier? The National Labor Relations Board says “Yes.”

The Second Circuit Court of Appeals in Glatt et al. v. Fox Searchlight Pictures, Inc. recently rejected the Department of Labor (“DOL”) six factor test for determining whether an individual has been properly classified as an unpaid intern in favor of another test that looks at whether the intern or the employer is the primary beneficiary of the relationship.

The DOL’s six factors are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the end conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship. Rejecting the DOL test, the court (as discussed below) elected to adopt a test that it believed aligned more closely with common law and the underlying purpose of an unpaid internship.

In Glatt, the Second Circuit reversed a district court decision that held, in part, that three individuals working for either Fox Searchlight or Fox Entertainment Group were improperly classified as “unpaid interns” in accordance with the FLSA and the New York Labor Law (“NYLL”). In doing so, the Second Circuit rejected the district court’s analysis that relied on the DOL test. The six factors came directly from a 1947 Supreme Court decision in which the Supreme Court refused to recognize unpaid railroad brake trainees as employees under FLSA. The Glatt court rejected the DOL test because it relied on what it considered to be an outdated Supreme Court decision that failed to reflect the purpose of the modern internship.
Continue Reading Second Circuit rejects DOL test for unpaid internships

Caitlyn Jenner has dominated the national public interest stories and social media of late. However sensational the news has made this particular story, the issues surrounding transgender individuals are increasingly impacting employers.

Recently, the Eastern District of Michigan permitted one of the first sex-discrimination cases over a transgender employee’s firing to proceed. The Court refused to dismiss the case despite the fact that transgender persons are not a protected class under Title VII, finding instead that transgender employees are like other employees who are permitted to sue their employers over sex stereotypes. The Eastern District of Michigan is part of the Sixth Circuit and should this case proceed to the Sixth Circuit upon appeal, its decision would be binding upon Ohio employers as well as Michigan employers.

In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc, the U.S. District Court Eastern District of Michigan Southern Division, Amiee Stephens, a transgender woman, had been employed with R.G. & G.R. Harris Funeral Homes, Inc. in Michigan since October 2007 as a Funeral Director. She was hired and proceeded to work identifying as a male employee. On July 31, 2013, Stephens informed her employer and co-workers in a letter that she was undergoing a gender transition from male to female and would begin dressing in appropriate female business attire at the workplace.  According to the Complaint, on August 15, 2013, her employer fired her, telling her that what she was “proposing to do” was unacceptable.

On behalf of Stephens, the EEOC brought an employment discrimination lawsuit against the Funeral Home, asserting the that the Funeral Home’s decision to fire Stephens was motivated by sex-based considerations and violated Title VII. Specifically, the Complaint alleged that the Funeral Home fired Stephens because of Stephens’ transition from male to female and/or because Stephens did not conform to the Funeral Home’s sex or gender based preferences, expectations or stereotypes. The key allegation was that the termination was based on gender stereotypes. The EEOC also alleged that the Funeral Home engaged in an unlawful employment practice in violation of Title VII by providing a clothing allowance to male employees and failing to provide a similar allowance to female employees because of their sex.
Continue Reading Transgender status may not be a protected class, but lawsuits involving transgender employees are permitted to proceed

We all pretty much know the drill at this point. Organization announces data breach, sends out notices as required under state and/or federal law to those individuals that are affected, offers some kind of identity theft protection or credit monitoring service, awaits public criticism and backlash. The NLRB and the American Postal Workers Union (“AWPU”)…

In December, 2014, Jamie LaPlante wrote here about expanded obligations under the affirmative action laws that cover federal contractors and subcontractors. Among the changes she mentioned was the April 8th effective date for the inclusion of sexual orientation and gender identity among the classes protected under affirmative action laws. The expanded protections apply to…

The U.S. Securities and Exchange Commission (SEC) has now brought its first whistleblower enforcement action against a publicly traded company under the Dodd-Frank Act of 2010 for utilizing an overly broad employee confidentiality agreement. Specifically, the SEC alleges that KBR, Inc., has violated the Act by implementing employee confidentiality agreements that “potentially discouraged” employees from…