Supreme Court Denies Review of Extended Leave of Absence Decision

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Rina Russo 

The U.S. Supreme Court will not review an appellate court decision which held that a leave of absence from work lasting several months is not a reasonable accommodation under the Americans with Disabilities Act (ADA). That decision came from the Seventh Circuit Court of Appeals, which covers Illinois, Indiana and Wisconsin.

The plaintiff in Severson v. Heartland Woodcraft, Inc. requested that the Supreme Court decide whether there is a per se rule that a finite leave of absence of more than one month is not a reasonable accommodation under the ADA. However, the court declined to hear the case and express its opinion on the issue. Various other circuit courts of appeals have found the opposite – that a finite leave of absence can be a reasonable accommodation under the ADA.

In Severson, the plaintiff took a 12-week leave under the Family and Medical Leave Act (FMLA) to deal with serious back pain. At the end of the 12-week FMLA period, the plaintiff had back surgery, and told his employer that he could not work for an additional two to three months while he recovered from surgery. The employer denied that request and terminated the plaintiff’s employment. The plaintiff brought suit against his employer, alleging that it violated the ADA by failing to grant the additional leave as a reasonable accommodation. The trial court granted the employer’s motion for summary judgment, and the Seventh Circuit affirmed that ruling. In doing so, the Seventh Circuit reasoned that an extended medical leave would not assist him in performing his job but would actually keep him from working. The Seventh Circuit found that while the ADA is not a medical leave statute, it may still require brief periods of medical leave.

Without the Supreme Court’s input, employers will continue to wrestle with how to evaluate whether an extended leave of absence is a reasonable accommodation under the ADA. Outside the Seventh Circuit, multiple courts of appeals and the Equal Employment Opportunity Commission (EEOC) have held that a finite leave of absence can be a reasonable accommodation under the ADA. Further, the EEOC has even indicated that placing a limit on the amount of leave an employee is entitled to is a violation of the ADA. Without clear guidance on the issue, employers should always engage in the ADA interactive process with employees to evaluate possible reasonable accommodations.

Rina Russo is an attorney with Walter | Haverfield’s Labor and Employment Services practice group. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

 

NLRB’s Joint Employer Ruling Put on Hold

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Just when U.S. employers thought they could rely on a tighter, more favorable test for the determination of joint employer liability, the National Labor Relations Board’s joint employer saga lingers on – for now.

In December 2017, the NLRB reversed its prior Browning-Ferris Industries joint employer rule. The old Browning-Ferris rule was perhaps the most controversial decision from the Obama era NLRB. It stood for the proposition that a business could be deemed a “joint employer” and share liability with other entities if that business had even the ability to exert indirect control over those other entities.

The recent reversal of Browning-Ferris came by way of Hy-Brand Industrial Contractors, Ltd. The NLRB’s Hy-Brand ruling in December nullified Browning-Ferris and restored a standard whereby companies must have direct control over contractors, subsidiaries, and the like in order to be considered joint employers.

Employers across the country rejoiced, until a curveball was thrown late last month. On Feb. 26, the NLRB unanimously vacated its decision in Hy-Brand in response to a report from the NLRB’s inspector general (IG). The IG indicated that recently-appointed NLRB board member Bill Emanuel should not have participated in the case. It also concluded that Emanuel should have recused himself from Hy-Brand because Emanuel’s prior law firm represented Browning-Ferris’s contractor in the case before the board. The IG went on to note that Hy-Brand was essentially a continuation of the deliberations that took place in Browning-Ferris.

While the Obama-board joint employer rule may have achieved a reprieve for now, it is highly likely that another case similar to Hy-Brand will emerge which will result in a “clean” reversal of the Browning-Ferris standard. When and how that will occur is far from settled, but it is likely that the current NLRB has its sights set on abrogating the hot-button Browning-Ferris rule. Until then, Browning-Ferris is still the law of the land and employers must take notice to avoid joint employer liability.

Max Rieker is an attorney at Walter |Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

 

Top 10 Tips for Managing Staff Member Use of Social Media

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The numbers are ever-increasing: Facebook currently reports 2.01 billion users; LinkedIn has 500 million members; Twitter comes in at 330 million users; and YouTube reports approximately 5 billion views per day.

Social media is not going away, but instead becoming more prevalent every day. While there can be positive aspects to staff members’ use of social media, there is also a great potential for misuse of this medium – both in and out of the work place.

What can a school district do to combat employees’ potential misuse of it? Here are the top 10 tips for managing staff member use of social media:

  • Review and update (as needed) your district’s Acceptable Use Policy (“AUP”) to ensure the social media policy for staff members is as comprehensive as possible.
  • Ensure that your district is providing training opportunities for staff members detailing the parameters and restrictions within the AUP to allow for staff members to have a full understanding of the policy.
  • Document all training opportunities for staff members (including sign-in sheets, attendance records, signed policy acknowledgement forms, etc.).
  • Ensure that staff members are informed of and understand their obligations to comply with state and federal laws related to maintaining confidential information, which includes the potential dissemination of student information via social media.
  • Ensure that staff members are informed of and understand their professional obligations to ensure that social media and related technology may not be utilized to promote inappropriate communications with students.
  • Ensure that staff members are informed of and understand their mandatory reporting obligations carry over to social media platforms pursuant to statutory obligations and district policies (i.e. issues related to harassment, bullying, hazing, etc.).
  • Ensure that staff members are informed of and understand that their personal social media presence is entirely their responsibility – if they fail to utilize appropriate privacy settings and/or post improper content that is reported to the district, disciplinary consequences may follow.
  • Designate an in-house contact person for staff member questions about the AUP. That person will address questions, comments and concerns about the policy to ensure the district is providing a consistent message relative to all aspects of the policy.
  • Encourage staff member cooperation, not just compliance. If a staff member has a concern or question about the district’s AUP or content he/she has viewed on social media (relative to the district, a staff member/administrator or student), encourage a cooperative atmosphere of raising inquiries and reporting concerns.
  • Ensure that new employees have an opportunity to be fully apprised of your district’s AUP as soon as possible following their hire.

 


Sara Markouc is an attorney at Walter | Haverfield who focuses her practice on education law as well as labor and employment law. She can be reached at smarkouc@walterhav.com and at 216-928-2924.

 

Confidential Settlements of Sexual Harassment Claims are No Longer Tax Deductible

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In response to the recent wave of sexual harassment allegations and the #MeToo movement, the 2017 Tax Cuts and Jobs Act includes a provision some call the “Harvey Weinstein tax.” Specifically, the law amends the Internal Revenue Code to prohibit a business from deducting the costs of a settlement payment (including attorneys’ fees) for a sexual harassment claim, if the settlement agreement contains a nondisclosure (confidentiality) provision. New Section 162(q) was added to the Internal Revenue Code and provides that no deduction shall be allowed for “(1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or (2) attorneys’ fees related to such a settlement or payment.” This provision applies to all such settlements entered into or paid after December 22, 2017, the date President Trump signed the bill into law.

Confidentiality and nondisclosure clauses are commonplace in settlement agreements, especially those involving workplace claims. The new law was motivated by the belief that such nondisclosure provisions played a significant role in allowing alleged harassers to stay in their jobs without scrutiny and continue to harass others. Now, with the law in place, employers have to choose between taking the tax deduction or allowing employees to speak publicly about embarrassing allegations, which may spur additional claims of sexual harassment from other employees. This law may also result in more costly and complicated settlements for businesses unable to take the financially-advantageous deduction, which could discourage the settlement of lawsuits and other claims.

At this point, there is a lot of ambiguity regarding the breadth and overall effect of the new law. For example, it is common practice for a settlement agreement to allocate the settlement amount among several claims or injuries for tax purposes. It’s unclear on the face of the law how the deduction of any settlement claims and corresponding attorneys’ fees not associated with sexual harassment would be treated if there is a nondisclosure provision in the settlement agreement – i.e. is there a proration of the deduction, or does the existence of sexual harassment otherwise override normally deductible amounts? Additionally, a straight read of the new statute suggests that even the plaintiff would be precluded from deducting their attorneys’ fees if there is a nondisclosure provision, which would eliminate a valuable above-the-line deduction and likely complicate settlement discussions.

It is unknown if or when the Internal Revenue Service will issue regulations or guidance on the new provision, or if businesses will just have to wait to see how the courts or Internal Revenue Service interpret the new language in the months to come.

Rina Russo is an attorney with Walter | Haverfield’s Labor and Employment Services practice group. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

Lacie O’Daire is an attorney with Walter | Haverfield’s Tax and Wealth Management Services practice group. She can be reached at 216-928-2901 or at lodaire@walterhav.com.

 

Walter | Haverfield Attorneys Admitted to New York Federal Court

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Mark Fusco

Rina Russo

Mark Fusco and Rina Russo, both Walter | Haverfield attorneys, were recently granted permanent admission to the Federal District Court for the Northern District of New York.

The admission comes after a firm client requested that Walter | Haverfield defend a complex employment matter. The client has significant presence in New York, and the matter involves alleged violations of federal employment law.
Fusco, a partner in the firm’s Litigation group, has extensive experience leading litigation teams and first-chaired jury trials. He has also argued key pretrial motions and managed commercial class action litigation. Recently, Fusco expanded his practice to represent school boards and other educational entities in business disputes.

Russo, an associate in the firm’s Labor and Employment group, focuses her practice on negotiating collective bargaining agreements and allegations of discrimination and harassment. She works with private and public sector employers in matters involving failure to accommodate, wage/hour violations and enforcement of restrictive covenants before federal and state courts as well as administrative agencies.

Fusco and Russo are the only two Walter | Haverfield attorneys admitted to the Federal District Court for the Northern District of New York.

Immediate Impact – The Janus Effect in the Workplace

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Max RiekerThe Supreme Court’s June 27, 2018 Janus v. AFSCME decision may prove to be the most significant labor law case in half a century. The 5-4 case outlaws mandatory “fair share” fees for public employees who refuse membership in unions.

Early post-Janus analysis indicates that the ruling is having a severe financial impact on public sector labor unions in the 22 states – including Ohio. Prior to this case, the law had permitted the imposition of involuntary agency fee deductions from workers’ payroll.

In July, several state governments stopped collecting tens of millions of dollars in agency fees. For example, the state of New York did not collect between $9 and $10 million in fair share fees on behalf of public unions in that state. This does not even include fees formerly collected by county, local or school governmental entities.

The union membership rate has been falling in the private sector for decades, but has been holding steady at about 35% in the public sector for the past 35 years. Now that the public sector unions are seeing the early effects of dropping revenue and, likely, a drop in membership, they will have to reconsider their priorities and how they do business in order to adapt to these new realities.

The three largest public sector unions are the National Education Association at 3 million members; the American Federation of Teachers at 1.6 million members; and the American Federation of State, County, and Municipal Employees at 1.3 million members. According to the Department of Labor, these three unions collectively spent $119.8 million on “political activities” in 2017. This is a comparatively large sum in light of the $153.9 million these three unions collectively spent on representing their membership and organizing.

As a result of these financial pressures, skirmishes are beginning to crop up among Ohio’s 3,200 public sector bargaining units, and administrators should be prepared to address: (1) questions about how union members are permitted to withdraw membership, (2) whether the union’s withdrawal policy is lawful, and (3) what employers are permitted to say to their employees about withdrawal from the union.

Public employers must familiarize themselves with any withdrawal provisions contained in collective bargaining agreements. Recent cases have held that contractual “window periods” and union membership withdrawal requirements done via certified mail are lawful. More stringent requirements should be carefully analyzed by counsel to determine whether the requirements are arbitrary, discriminatory, misleading, ambiguous, or otherwise impermissibly restrictive. For instance, one recent case held that a withdrawal provision was impermissibly restrictive when it required a resigning union member to appear in person at the union hall with a valid photo ID and declare his intent to withdraw in writing.

Now more than ever, dissatisfied union members are turning to their own employers for help and advice when trying to get out of their union. While Ohio’s State Employment Relations Board has not yet squarely addressed which sorts of communications employers are permitted to have with their employees on the issue of withdrawal, employers should work closely with counsel. Together, they should formulate plans for communication with employees that are permissible within the bounds of the Ohio Public Employee Collective Bargaining Act. Public sector unions are already putting shots across employers’ bow on this topic. Backed into a corner, Ohio unions have already issued blanket written threats of filing unfair labor practice charges against public employers related to communications with employees.

Most importantly, employers should consciously take steps to:

  • Protect their employees from unlawful pressure exerted on them to remain in the union, and
  • Work with labor counsel to form solid proposals that bring collective bargaining agreements in line with current law and address the needs of the employer.

Public employers should work proactively through these considerations before they become potential problems.

Max Rieker is an attorney at Walter |Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

Three steps employers must take when engaging in the interactive ADA process

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Rina RussoAttorney Rina Russo explains the steps employers must take when responding to an employee’s request for an extended leave of absence from work. Her article appears in the Council of Smaller Enterprises’ (COSE) e-newsletter, “Mind Your Business”

NLRB’s New Employee Handbook Guidance

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Rina Russo

  • “Disparaging or offensive language is prohibited.”
  • “Employees may not engage in disrespectful conduct.”

The above rules might seem reasonable to you or perhaps you have seen them in your own company’s employment policies. However, prior to the National Labor Relations Board’s (“NLRB”) ruling in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), these types of work rules would likely have been considered unlawful by the NLRB. That’s because a 2004 NLRB ruling (Lutheran Heritage Village-Livonia) found that employees could “reasonably construe” such policies as restricting their ability to participate in “concerted activity” for “mutual aid and protection” under the National Labor Relations Act (NLRA).

In June 2018, the NLRB’s General Counsel Peter Robb issued a memo titled “Handbook Rules Post-Boeing,” which provides helpful guidance in an area where there was once not much reliable guidance at all. Following Boeing, the Board has indicated that it will approve the use of rules that promote “harmonious interactions and relationships” or “civility” in the workplace. Handbook rules are now split into the following groups: (1) rules that are generally lawful to maintain; (2) rules which will warrant individualized scrutiny and review by the General Counsel’s Office; and (3) rules that are clearly unlawful to maintain. Below are the types of rules that fall into each category:

(1) Rules That Are Generally Lawful

Civility rules, no-photography and no-recording rules, rules against insubordination, disruptive behavior rules, rules against defamation or misrepresentation; rules protecting confidential or proprietary information; rules against using employer logos and/or intellectual property; rules requiring employees to receive authorization to speak for their employer; and rules banning disloyalty.

(2) Rules Which Require Greater Scrutiny

Broad conflict of interest rules; broad confidentiality rules; rules regulating disparagement or criticism of the employer; rules regulating use of the employer’s name; rules restricting speaking to the media; rules banning off-duty conduct that might harm the employer; and rules against making false or inaccurate statements.

(3) Clearly Unlawful Rules

Confidentiality rules that specifically mention wages, benefits or working conditions; and rules against joining outside organizations.

Although the Board’s guidance is certainly helpful, careful crafting of employment policies is still necessary.

 

Supreme Court Clarifies Age Discrimination Law for Public Employers

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Max RiekerOn November 6, 2018, the U.S. Supreme Court unanimously ruled that the Age Discrimination in Employment Act (ADEA) applies to all government employers, regardless of the number of people they employ. In issuing its decision (Mt. Lemmon Fire District v. Guido), the court eliminated this longstanding area of confusion for smaller public employers.

When the ADEA was originally enacted, it did not cover state or local government employers. In 1974, Congress amended both the ADEA and the Fair Labor Standards Act (FLSA) to include state and local governments.

However, while the FLSA amendment clearly defined a covered employer to include any “public agency,” the ADEA amendment was far from clear. Under the ADEA,

The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees…. The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State….

Federal appellate courts have interpreted this definition differently when determining whether the ADEA applies to a public employer, based on its number of employees. The question has turned on what “[t]he term also means” means.

Writing for the court, Justice Ginsburg drilled down into the essence of the questionable words and reasoned that the definition of a covered employer includes all political subdivisions, regardless of the preceding words in the statute.

While the question of whether the ADEA applies to all governmental employers was resolved this month, questions related to ADEA liability will always remain. Employers must always be mindful of potential age discrimination issues when dealing with older employees in the workplace. All employers – public or private – should be cognizant that age discrimination cases have led to enormous verdicts in recent years when employment decisions are fumbled. Employment counsel should be consulted prior to any workplace decision that may adversely affect an older worker.

Max Rieker is an attorney at Walter | Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

OSHA Clarifies Its Final Rule Regarding Employer Drug Testing Policies

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Rina RussoThis fall, the Occupational Safety and Health Administration (OSHA) issued a memorandum clarifying its position on post-incident drug testing.

In the memorandum, OSHA noted that drug testing used to evaluate the underlying cause of a workplace incident that harmed or could have harmed an employee is lawful. However, OSHA cautioned that if an employer does utilize such drug testing, the employer should be careful to test all employees that contributed or could have contributed to the workplace incident, not just the individuals who reported injuries. Similarly, OSHA does not allow post-accident testing done solely to penalize an employee for reporting a workplace injury or illness.

In 2016, OSHA published a final rule that prohibited employers from retaliating against employees for reporting work-related injuries and illnesses. In the preamble to the May 2016 final rule, OSHA noted that a blanket employer rule or policy that required drug and/or alcohol testing after every accident, injury or illness could be considered retaliatory. Some employers interpreted this to mean that they should almost never drug test an employee after an accident or they would risk exposing themselves to an OSHA retaliation claim.

OSHA acknowledged that many employers conducting post-accident testing “do so to promote workplace safety and health.” While OSHA still maintains that blanket post-accident policies are not permitted, the agency indicated that post-accident testing policy would only violate the Occupational Safety and Health Act “if the employer took the action to penalize an employee for reporting a work-related injury or illness rather than for the legitimate purpose of promoting workplace safety and health.”

Contact us if you have further questions on this topic or other labor and employment matters.

Rina Russo is an attorney with Walter | Haverfield’s Labor and Employment Services practice group. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

Medical Marijuana in the Workplace – An Employer’s Dilemma

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Max RiekerAlthough the implementation of Ohio’s medical marijuana enterprise continues to advance at a steady pace, Ohio case law lags behind. New rules that address medical marijuana in the workplace are in their infancy. That puts extra burden on employers, particularly in safety-sensitive industries, to establish or revise policies as needed and before problems occur.

Because marijuana in all forms is still illegal at the federal level, Ohio employers can enforce drug-free workplace policies and so-called “zero-tolerance” policies. Even employers who may not wish to completely prohibit the use of medically-sanctioned marijuana should promptly consider an impairment-free policy in which employees are strictly prohibited from being impaired by marijuana while engaging in work activities. Post-accident and reasonable suspicion testing should all be contemplated in any policy.

Ohio’s employers should also note that the recent state law renders an employee ineligible for unemployment compensation benefits if the employee is discharged for his or her use of medical marijuana and the employer’s policy prohibits the use of medical marijuana. Further, under the medical marijuana statute, Ohio employers are not required to accommodate an applicant or an employee’s use, possession or distribution of medical marijuana. Despite this language, the medical marijuana statute’s direct interplay with Ohio’s anti-disability discrimination statute remains to be seen if challenged in court. Likewise, although the federal Controlled Substances Act still classifies marijuana as a Schedule 1 drug with no legal medical use, it remains to be seen how courts will continue to interpret federal laws such as the Americans with Disabilities Act with respect to whether they require employers to accommodate medical marijuana use as a reasonable accommodation.

While 31 states currently have some form of legalized medical marijuana, many are less business-friendly than Ohio’s statute. If an employer has locations in multiple states, it is important to navigate the respective requirements of each state, as well as local laws on the subject. Employers should take extreme caution to comply with applicable rules if they receive any federal funds or drug-free workplace rebates from the Ohio Bureau of Workers’ Compensation.

Employers should consult with knowledgeable labor and employment counsel before taking action in this evolving area of the law.

Max Rieker is an attorney at Walter | Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

Return of the Final Overtime Rule

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Rina Russo2019 will likely be the return of the Overtime Rule, which was initially issued by the Obama-era Department of Labor (DOL) and later blocked by a federal district court judge in late 2016. That was after many employers spent considerable time and effort preparing to comply with the requirements of the Overtime Rule.

The rule was set to increase the minimum salary for employees to qualify for particular exemptions to the duty to pay overtime compensation under the Fair Labor Standards Act (FLSA), also known as “white-collar exemptions.” The rule would have raised the salary level for executive, administrative or professional exemptions from $455 per week ($23,660 per year) to $913 per week ($47,476 per year).

In January, the DOL issued a Notice of Proposed Rulemaking, indicating that it plans to issue a new rule regarding overtime pay soon. It is expected that some increase to the salary level threshold for the white-collar exemptions will be required. Experts believe the minimum salary requirement will be around $33,000, which is based on Secretary of Labor Alexander Acosta’s public comments on the subject. However, no increased salary level has been set yet.

Although some uncertainty remains, employers should be prepared for some increase in the salary level for the white-collar exemptions in the next year.

 

Department of Labor Issues New Overtime Rule

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Rina RussoOn March 7, 2019, the Department of Labor (DOL) issued its new overtime rule, which proposes raising the minimum salary threshold to qualify for the white-collar exemptions from minimum wage and overtime pay requirements from $455 per week ($23,660 per year) to $679 per week ($35,308 per year). With this rule, the DOL has not sought to change the “duties” tests for any of the applicable white-collar exemptions.

The DOL claims that the new proposed overtime rule will result in approximately one million additional American employees being eligible for overtime compensation. Just like with the DOL’s 2016 final overtime rule, some legal challenges to the proposed overtime rule are expected. Some may argue that the DOL has focused too heavily on salary level and not on actual job duties to qualify for the exemption; this is the argument that ultimately won in 2017 when the 2016 final overtime rule was invalidated by a federal court in Texas. Since the new rule remains focused on salary level, and does not alter the duties test, it remains susceptible to a similar legal challenge. The rule has also been criticized because the minimum salary threshold is universal in nature, meaning, it does not provide for salary threshold differences for varying localities, geographic regions or industries.

Once published in the Federal Register, the public will have 60 days to submit comments on the new rule. Currently, the DOL anticipates the new overtime rule going into effect in January 2020.

Rina Russo is an attorney with Walter | Haverfield’s Labor and Employment Services practice group. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

New Cuyahoga County Anti-Discrimination Commission May Cause Legal Issues for Employers

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Mark FuscoJames McWeeny

 

A recent Cuyahoga County ordinance establishes a new and different forum for employees to seek redress for workplace discrimination claims.

The ordinance, enacted by the county’s newly formed Commission on Human Rights, impacts employers in Cuyahoga County that have at least four employees. Employers are prohibited from firing, refusing to hire or otherwise discriminating against applicants and employees based on sexual orientation and gender identity. They are also prohibited from inquiring about an applicant’s sexual orientation or gender identity unless there is a reason related to job qualifications. And they’re forbidden from retaliating against any person who has made a complaint; opposed a practice forbidden by; or assisted in any investigation, proceeding, or hearing under the ordinance.

The commission is responsible for receiving and investigating complaints alleging discrimination based on sexual orientation, gender identity or expression, and it shares jurisdiction over these types of claims with the Equal Employment Opportunity Commission (EEOC).

If an employee files a complaint within 150 days of the alleged discrimination, and the commission finds that the employer engaged in discriminatory conduct, it may issue a cease and desist order. If the employer fails to comply, the order is subject to enforcement through a lawsuit brought by the county. The commission may also order civil administrative penalties of up to $1,000 for a first offense and more than double that for subsequent offenses. Attorney fees and costs may also be awarded to the complainant.

The ordinance creates a new forum for employers to recognize and navigate. It establishes rights not currently recognized under state law and imposes penalties rather than damages, which can be a critical distinction. Notably, penalties may not be covered by an employer’s insurance policy, so employers should contact their legal counsel and consult with their insurance broker to determine whether coverage exists.

Mark Fusco is an attorney at Walter | Haverfield who focuses his practice on litigation and labor and employment law. He can be reached at mfusco@walterhav.com or at 216-619-7839.

James McWeeney is an attorney at Walter | Haverfield who focuses his practice on education and labor and employment law. He can be reached at jmcweeney@walterhav.com or at 216-928-2959.

Department of Labor Issues a Trio of Important Opinions for Employers

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Max RiekerOn March 14, 2019, the Department of Labor issued three important new opinion letters that address Family and Medical Leave Act (FMLA) and Fair Labor Standards Act (FLSA) compliance. While not actually law, these letters express the DOL’s official opinion and constitute important guidance on how the law applies to certain circumstances.

The FMLA letter responds to an inquiry on “whether an employer may delay designating paid leave as FMLA leave or permit employees to expand their FMLA leave beyond the statutory 12-week entitlement.” Some employers voluntarily permit employees to exhaust some or all available paid leave prior to designating leave as FMLA-qualifying, even when the leave is clearly FMLA-qualifying. The DOL sharply rebuked this practice. It said that while the FMLA does not prevent employers from adopting leave policies that are more generous than those required by law, employers are forbidden from designating more than 12 weeks of leave as FMLA-protected. Likewise, an employer that is subject to the FMLA may not delay the designation of FMLA-qualifying leave. Any other leave time – paid or unpaid – that an employer opts to grant its employees does not act to expand the statutory FMLA entitlement.

The DOL’s Fair Labor Standards Act letter responds to an inquiry relative to the pay schemes for residential janitors. While narrowly relating to that job classification, the opinion could be extrapolated out to apply to similarly situated employees. Essentially, the DOL said that residential janitors are not exempt from the FLSA’s minimum wage and overtime requirements because the federal statute does not contain a specific exemption for that category of employee. This is true even if state law exempts residential janitors from a state’s wage and hour requirements. The DOL’s Wage and Hour Division “does not believe that relying on a state law exemption from state law minimum wage and overtime requirements is a good faith defense to noncompliance with the FLSA.”

More broadly, the DOL’s third recent letter addresses FLSA compliance relating to the compensability of time spent participating in an employer-sponsored community service program. Here, the employer offered an optional community volunteer program which awarded a bonus to certain participating employees. The employer paid participating employees for time spent working on the volunteer activities during working hours or while they were required to be on the employer’s premises. However, volunteer hours outside of normal working hours were not compensated, except for a discretionary monetary prize awarded by supervisors based on the degree of community impact achieved. While money was clearly involved with this program, the DOL found that because participation was charitable and voluntary, those voluntary hours do not require FLSA compensation. Rather, the employer did not control or direct the volunteer work, and employees did not appear to suffer adverse consequences for non-participation. As a caveat, the DOL did warn employers that if they use a mobile application to track participation for volunteer hours, and that app exerts a degree of direction and control over the employees’ activities (such as giving instructions), that time may be deemed compensable under the statute. In other words, when an employer directs an employee to “volunteer,” that time is compensable.

As always, when in doubt, employers should consult competent counsel prior to instituting changes in the work place that could lead down a path toward a statutory violation.

Max Rieker is an attorney at Walter | Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

A 1930s Labor Law with 21st-Century Consequences

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Mark FuscoRina Russo

 

One might think that the long-established Fair Labor Standards Act (FLSA), which governs minimum wages and overtime, would be easily understood by employers today. After all, it turned 80 years old in 2018.

However, an uptick over the past few years in FLSA wage and hour lawsuits continues to prove that employers aren’t paying the necessary attention to the FLSA to remain compliant.

While 2018 data are not yet available, United States Courts annual statistics indicate that from 2010 through 2017, the pace of new FLSA cases being filed is increasing, although not always in a strictly linear fashion.

To demonstrate the sheer volume of cases as compared to years past, in 1990, the federal district courts only reported 1,257 FLSA cases filed across all U.S. district courts that year. In 2000, the number increased to 1,935. However, since 2012, that number has been consistently in the range of 7,500 to 8,781 new FLSA cases filed each year, a seven- to eight-fold increase over years past. (Anecdotally, any lawyer who reads the daily case filing reports from local courts knows that rarely does a week go by without several new FLSA cases filed against Northeast Ohio employers.)

As basic background, the FLSA provides for a federal minimum wage for employees and requires overtime premium pay of one and one-half times an employee’s regular rate of pay for all hours worked over 40 hours in a workweek. Additionally, there are certain exemptions to the minimum wage and overtime requirements of the FLSA for employees working in certain kinds of jobs.

In Ohio, the Ohio Minimum Fair Wage Standards Act (OMFWSA) mirrors the FLSA in many ways, but provides for a higher minimum wage than the FLSA: $8.55 per hour in 2019, as compared to the FLSA’s current $7.25 per hour. Additionally, the OMFWSA provides some harsher penalties than the FLSA. While the FLSA provides for “liquidated” or double damages for violations of the statute, certain violations of the OMFWSA, such as the failure to pay the Ohio minimum wage, allow for triple damages. Both the FLSA and OMFWSA permit a prevailing plaintiff to recover his/her attorneys’ fees in bringing an action against an employer.

Although failure to correctly pay overtime and improper classifications of individuals continue to be subjects of FLSA lawsuits, some additional trends have emerged.

For restaurants, one of the more heavily FLSA-regulated industries, employers should be prepared for lawsuits alleging unlawful tip-pooling arrangements, failure to provide a tip credit notice to tipped employees for whom a tip credit is taken against minimum wage, and wage deductions from employees making minimum or below-minimum hourly wage with a tip credit.

In other sectors, lawsuits alleging failure to pay employees for certain preliminary and postliminary activities have been another trend. In the manufacturing setting, this can include donning and doffing personal protective equipment necessary to perform primary job duties. For call-center employees and other office workers, this can include failure to pay for time spent logging into various software programs prior to clocking in for the day.

As new FLSA case filings remain consistently high, employers must not only make sure they are in compliance with all existing laws and regulations, they must also keep up to date with new Department of Labor guidance.

Having clear, compliant policies for employee timekeeping and setting up procedures for employees to voice complaints regarding pay is just the minimum. Employers should have an outside lawyer review wage and hour policies, practices and employee classifications to confirm they are in compliance with all applicable wage and hour laws, including the duty to maintain accurate wage and hour records.

Having an attorney review and provide guidance on wage and hour practices is helpful for several reasons. Employers are not only more likely to be in compliance with applicable laws, but the ability to indicate that an attorney has reviewed and opined on a company’s wage and hour practices is an important factor for courts in determining whether a violation of the FLSA was “willful,” thereby invoking the longer three-year statute of limitations, instead of the standard two-year statute of limitations.

Although some insurance policies cover defense costs, liability coverage for FLSA and related state-law claims is usually excluded from insurance policies. Therefore, employers are often required to pay the above damages and attorneys’ fees out of pocket if a violation is proven or a settlement reached.

Rina Russo is an attorney with Walter | Haverfield who focuses her practice on labor and employment law. She can be reached at 216-928-2928 or at rrusso@walterhav.com.

Mark Fusco is an attorney with Walter | Haverfield who focuses his practice on litigation. He can be reach at 216-619-7839 or at mfusco@walterhav.com.

This article also appeared in Crain’s Cleveland Business.

Supreme Court Weakens Employer Procedural Defenses in Discrimination Claims

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Max RiekerUntil recently, the federal courts of appeals had been deeply split on the question of whether workers’ obligation to file a claim with the Equal Employment Opportunity Commission (EEOC) or similar state agencies prior to suing their employers is a procedural or jurisdictional obligation. As the U.S. Supreme Court explained, this is an important distinction which could impact the viability of an employee’s claim against an employer. On June 3, 2019, the case of Fort Bend County v. Davis decisively resolved the question.

The U.S. Supreme Court ruled that the requirement to file discrimination charges with an administrative agency such as the EEOC is not a jurisdictional issue. In delivering the unanimous decision, Justice Ginsberg explained that employers can lose the ability to get a discrimination lawsuit dismissed based on a worker’s failure to exhaust his or her claim with an administrative agency prior to filing suit against the employer.

Prior to Fort Bend County, some circuit courts of appeals ruled that the exhaustion of pre-suit administrative remedies is a “claim-processing rule” relative to a discrimination claim. Other circuits took the stronger position that completing the administrative agency procedures are a jurisdictional obligation – thus, an employer could assert the improper claim-processing defense at any stage of litigation.

In the Fort Bend case, Lois Davis filed a harassment claim with the EEOC. While her EEOC charge against her employer (Fort Bend) was pending, Davis was told to report to work on an upcoming Sunday.  She told her employer that she had a church commitment that day. Fort Bend told Davis that it would fire her if she did not report for work. She went to church and Fort Bend fired her. Davis attempted to amend her EEOC allegations to include religious discrimination, but did not make any change to the formal charging document. Years into the litigation, Fort Bend raised this procedural defect as a defense for the first time, and in so doing, argued that the court was without jurisdiction to hear the religious discrimination claim.

Both the Fifth Circuit Court of Appeals and the Supreme Court sided with Davis in drawing “the distinction between jurisdictional mandates and non-jurisdictional claim-processing rules, which ‘seek to promote the orderly progress of litigation by requiring that the parties take certain procedural steps at certain specific times.’” Jurisdictional mandates never go away. However, claim-processing rules – even rules that are mandated by statute – can be waived or forfeited by a party if not timely or properly raised.

In light of this recent case, employers should pay particular attention to procedural requirements and defenses from the onset of any discrimination allegation – even before it is filed. Fort Bend does not absolve a plaintiff of his or her obligation to exhaust statutorily-required avenues for a remedy before filing a lawsuit, but it does place more of an onus on employers to raise objections in a timely manner and competently litigate discrimination cases brought against them. As always, the most important preventative step that any employer can do is contact competent counsel as early as possible when a workplace employment issue is suspected.

Max Rieker is an attorney at Walter | Haverfield who focuses his practice on labor and employment law. He can be reached at mrieker@walterhav.com or at 216-928-2972.

Now is the Time to Revisit Your Parental Leave Policies

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Rina RussoAt one time, it was common for employers to offer maternity leave to new mother employees, but not offer any leave to new father employees.  However, in 2015, the Equal Employment Opportunity Commission (EEOC) issued its most recent enforcement guidance for employers on parental leave policies:

“[E]mployers should carefully distinguish between leave related to any physical limitations imposed by pregnancy or childbirth (described in this document as pregnancy-related medical leave) and leave for purposes of bonding with a child and/or providing care for a child (described in this document as parental leave). Leave related to pregnancy, childbirth, or related medical conditions can be limited to women affected by those conditions. However, parental leave must be provided to similarly situated men and women on the same terms. If, for example, an employer extends leave to new mothers beyond the period of recuperation from childbirth (e.g. to provide the mothers time to bond with and/or care for the baby), it cannot lawfully fail to provide an equivalent amount of leave to new fathers for the same purpose.”

Despite this guidance being in place for several years, many employers have not implemented changes to parental leave policies.  In 2017, the EEOC filed suit on behalf of a class of 210 male employees of one of the world’s leading makeup and skincare companies for providing new fathers less paid leave to bond with a newborn, or with a newly adopted or fostered child, than it provided new mothers.  Additionally, the company provided new mothers a period of a temporary modified work schedule upon returning from leave, while not making the same allowance for fathers. The EEOC procured a $1.1 million settlement for the class, as well as a court-imposed requirement that the company revise its parental leave policy to provide all eligible employees (mothers and fathers) with the same amount of paid leave for child bonding and the same period of modified work schedules.  More recently, additional high-profile cases have resulted in similar million dollar plus settlements.

With these types of cases on the rise, and the EEOC making clear that bringing these types of cases is on its enforcement agenda, employers should review their parental leave policies now.  In revising such policies, employers should be aware of certain distinctions that can be made between mothers and fathers.  Employers are free to offer additional leave benefits to mothers as opposed to leave provided to fathers when the leave is related to physical limitations imposed by pregnancy or childbirth.  However, leave time that relates to bonding or caring for the new child must be equal for both mothers and fathers.

Rina Russo is a partner with Walter | Haverfield who focuses her practice on labor and employment law. She can be reached at 216-928-2928 or at rrusso@walterhav.com.