Design patents may provide an avenue to protect important and valuable intellectual property rights. Many products derive significant value from their visual appearance such as product design or ornamental features that can be protected via a design patent.

The United States Patent and Trademark Office (USPTO) defines a protectable design as one that “consists of the visual ornamental characteristics embodied in, or applied to, an article of manufacture.” Thus, a design patent protects only the ornamental appearance of an article, not the article itself or the way it functions. A design that is dictated primarily by the function of the article lacks ornamentality and is not allowed.

In contrast to protection of the ornamental appearance by way of a design patent, a utility patent may be secured to protect the article, how it functions, and/or how it is made. In some cases, both a design and a utility application can be obtained for a given product.

Examples of designs that have received design patent protection include:

• The Coca-Cola bottle (Design Patent No. 48,160)

• Nike sneakers (Design Patent No. 696,853);

• Various features of the iPhone® (Patents which cover the following: a black rectangular front face with rounded corners, a rectangular front face with rounded corners, a grid of 16 colorful icons on a black screen)

 

Since 2012, Apple and Samsung have been embroiled in patent litigation centered on various design patents for smartphones and tablets. On May 24, 2018, a jury awarded Apple $533.3 million for Samsung’s violation of three of Apple’s design patents.

Design patents are typically less expensive and faster to secure than a utility patent. Often, they can be obtained in less than a year. The patent term is limited to 15 years from the date of issuance (compared to 20 years from the filing date for a utility patent), and the protection offered is limited to the appearance of an article. Yet, it’s important to remember that design patents can prevent competitors from creating anything that is considered to be “substantially similar” to the patented design. And such protection is a good way to bolster an existing intellectual property portfolio.

If you need assistance in making an informed business decision about design patents, contact an experienced patent attorney. Walter | Haverfield regularly counsels clients worldwide on patents as well as trademarks, copyrights and trade secrets.

Maria Cedroni is an attorney with Walter | Haverfield and concentrates on intellectual property law. She can be reached at mcedroni@walterhav.com or at 216-619-7846.

 

There has been a great deal of ‘buzz’ lately over the Qualified Business Income Deduction (QBID). The QBID was recently made available to pass through business owners under the Tax Cuts and Jobs Act that the President signed into law in 2017. Under new Internal Revenue Code Section 199A, pass through business owners are eligible to take up to a 20% deduction against their income from a qualified business. However, there is a risk that if the business is not compliant or late in filing its W-2 wage statements, its owners could lose their entire deduction for the year. While reasonable cause penalty abatement is available for late or incorrectly filed W-2 wage statements, there is no such exception in new Section 199A. This makes it an all or nothing proposition to qualify to take the QBID.

Tax practitioners and business owners have begun reviewing their organizations to determine the most advantageous structure in the context of this new law. Depending on the field of the underlying business and the total income of the business owner, the 20% deduction may be reduced or eliminated entirely. This is where the W-2 wage statements come into play. If a business owner is not engaged in a specified service business(1), and his/her total adjusted income is greater than $415,000 for a married taxpayer or $207,500 for a single taxpayer (the threshold amount), then the 20% deduction is limited to the greater of: (a) 50% of W-2 wages or (b) 25% of W-2 wages plus 2.5% of certain capital assets held by the qualified business. This means that for higher income business owners, if the business has zero W-2 wages and no capital assets, then the QBID will be zero. A high-income business owner will want to structure his/her business to pay sufficient wages and/or hold capital assets that will qualify to take the QBID.

Many practitioners are even recommending that sole proprietors and partnerships with few or no employees convert to be taxed as S corporations in order to pay their owners W-2 wages and thus be eligible to take the QBID. The catch is that the wages paid to the employees of the qualified business must be “properly included in a return filed with the Social Security Administration on or before the 60th day after the due date (including extensions) for such return.”(2) This means that if the business’s W-2 statements are not filed correctly, or are filed more than 60 days late, the owners will not qualify for the QBID for the year the wages were paid, if their income is over the threshold amount.

This trap for the unwary could lead to dire consequences for business owners who are relying on the W-2 limitation to qualify them to take the QBID. Furthermore, this loss of the QBID is in addition to the stiff penalties that may be imposed for non-compliance and late filing of the W-2 wage statements.(3) Practitioners have been seeing more and more employers who have missed these filing deadlines and need assistance in requesting penalty abatements. Although reasonable cause penalty abatement is available for the failure to file and failure to deposit penalties, there is no relief available under Code Section 199A for business owners who mistakenly do not file the wage statements on time and need to qualify for the QBID using the W-2 limitation.

High-income pass through business owners should set up procedures with multiple safeguards to ensure they do not miss the W-2 wage statement filing deadline. And if they do, it’s important that it is corrected within 60 days of the due date. Business owners should set up internal procedures and also coordinate with their tax counsel to make sure they are in full compliance with this requirement for Code Section 199A.

Alexis Kim is an attorney at Walter | Haverfield who focuses her practice on federal, state and local tax planning as well as estate and succession planning. She can be reached at akim@walterhav.com or at 216-619-7859.

 

(1) Any business involving the performance of services in the fields of health, law, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners, or which involves the performance of services that consist of investing and investment management.

(2) USC 199A(b)(4)(C).

(3) Failure to file and failure to deposit penalties are imposed on employers who do not timely file wage statements and/or pay the withheld taxes. See 26 USC 6651 and 6656.

 

The United States Supreme Court recently heard oral arguments in two cases that may significantly impact local government. One case pits First Amendment free speech rights against the right of a local legislative body to control its meetings. The second case challenges a rule established in 1977 requiring public employees to pay “fair share” union dues where an employee chooses not to join the union. Both arguments involved very active questioning by the justices and could result in changes in the law in late spring or early summer.

Free speech rights of audience members in public meetings

In Lozman v. City of Riviera Beach, the court is considering whether the arrest of a petitioner at a public meeting in Florida constitutes a retaliatory arrest in violation of his First Amendment rights. Fane Lozman stood before the Riviera Beach City Council during the public comment period of the meeting and began talking about public corruption in Palm Beach County. The council chair instructed Lozman not to address that topic, but Lozman continued. (Video can be seen here).

The chair then told Lozman to leave or be arrested, and when he did not leave, the chair ordered him to be arrested. Lozman was handcuffed and charged with disorderly conduct and resisting arrest. The charges were eventually dropped and Lozman filed suit claiming civil rights violations. A jury for the city and the United States Court of Appeals for the Eleventh Circuit upheld the verdict, finding the police had probable cause to arrest Lozman under the Florida statute. The Supreme Court agreed to hear the case, which is Lozman’s second case before the Supreme Court in five years against the city.

The United States Supreme Court will need to decide the line between a citizen’s right to exercise free speech and a government’s ability to maintain order in a public meeting. The question is — was there probable cause to believe Lozman was disturbing or about to disturb a public meeting, or alternatively, were the actions of the chair retaliatory?

Fair share union dues revisited

The United States Supreme Court also heard oral arguments in Janus v. AFSCME, which challenges a 1977 Supreme Court decision in Abood v. Detroit Board of Education. The Abood case upheld the requirement that public employees pay a portion of union dues known as “fair share” when the public employee chooses not to join the union. The court found in Abood that public employees who choose not to join the union still benefit from the negotiations conducted by the union. Mark Janus, a state employee in Illinois, chose not to join the union and has presented the question of fair share to the United States Supreme Court for reevaluation. Two years ago, the Supreme Court considered the issue of fair share in Friedrichs v. California Teachers Association. However, the sudden death of Justice Antonin Scalia a month after the oral argument resulted in a 4-4 decision, leaving the Abood decision in place. President Trump appointee Justice Neil Gorsuch may be the deciding vote. The financial implications of the decision could be significant.

Sara Fagnilli is an attorney at Walter | Haverfield who focuses her practice on public law and litigation. She can be reached at sfagnilli@walterhav.com and at 216-928-2958.

 

 

While there is no federal law expressly prohibiting sexual orientation and gender identity discrimination in employment, two federal appellate courts have recently expanded the rights of gay and transgender employees.

The Second Circuit Court of Appeals, which presides over New York, Connecticut and Vermont, ruled that employees are protected from discrimination on the basis of sexual orientation under Title VII of the Civil Rights Act of 1964. In Zarda v. Altitude Express, a gay skydiving instructor brought the case after he was fired for telling certain clients about his sexual orientation. The Second Circuit interpreted Title VII’s prohibition on sex discrimination to include sexual orientation discrimination because it is “motivated, at least in part, by sex and is thus a subset of sex discrimination.” The Second Circuit joins the Seventh Circuit Court of Appeals, which in 2017 also found that sexual orientation discrimination is prohibited under Title VII in the case of Hively v. Ivy Tech Community College. The Sixth Circuit Court of Appeals, which governs Ohio, Michigan, Kentucky and Tennessee, ruled the opposite way in 2016 in the case of Clemons v. City of Memphis, Tennessee. It found that sexual orientation discrimination is not protected under Title VII.

However, the Sixth Circuit recently ruled that employers may not discriminate against employees based on their transgender or transitioning status, even if the employer has sincere religious objections. In EEOC v. R.G., the Equal Employment Opportunity Commission (EEOC) filed a lawsuit under Title VII alleging that a funeral home unlawfully discriminated on the basis of sex by firing a transgender employee. That happened after she informed her employer that she would begin presenting herself consistent with her gender identity. At the trial court, the employer asserted a defense under the Religious Freedom Restoration Act (RFRA) based on the employee supervisor’s religious belief that gender transition violates “God’s commands.” The Sixth Circuit ruled that the employer failed to show that keeping the transgender employee employed was a substantial burden on religious exercise to qualify for protection under the RFRA. In doing so, the Sixth Circuit necessarily found that Title VII prohibits employers from discriminating against employees on the basis of gender identity.

While there has been no clear guidance from the United States Supreme Court on whether Title VII protects gay or transgender employees, employers should be cognizant of recent court rulings on these subjects. They should also check state and local laws on the subject. While Ohio does not currently have a state statute that prohibits discrimination based on sexual orientation or gender identity, there is legislation pending. House Bill 160, titled “The Ohio Fairness Act,” would protect individuals from employment and housing discrimination on the basis of sexual orientation and gender identity. Additionally, several local governments in Ohio, such as Cleveland, Akron, Columbus, Cincinnati and Toledo have passed legislation prohibiting sexual orientation and gender identity discrimination by employers within those cities.

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.

 

 

In the wake of national and local school shootings, the Ohio legislature has before it a bill to define and strengthen the use of school resource officers. Introduced in August 2017 by Representatives John Patterson and Sarah LaTourette, House Bill 318 seeks to define the qualifications and responsibilities of a school resource officer (“SRO”), prescribe specific training requirements for them and outline appropriate police powers. The bill looks to fill the void in Ohio law where currently there is no specified training for SROs. That means school districts are left to define the relationship and role which could lead to liability issues.

In its current March 2018 form, HB 318 outlines an SRO’s responsibilities: he/she would provide a safe learning environment, foster positive relationships, develop problem resolution strategies, assist schools in adopting, implementing and amending comprehensive school emergency management plans (including required consultation with local law enforcement and first responders), and provide resources to school staff. However, the bill would still confer school discipline authority to the school district and its administrators. There is also a clear theme throughout the bill, recognizing the developmental needs of students and fostering positive relationships. Additionally, House Bill 318:

  • Requires 40 hours of specific and specialized training offered by the National or Ohio Association for School Resource Officers. The training includes building security, SRO’s role in discipline, psychological and physiological characteristics of students, developmentally appropriate interview, interrogation, de-escalation and behavior management strategies, skills to be a positive role model for youth, classroom management tools for students (including those with special needs), compulsory attendance laws, drug use identification and prevention, and Ohio Peace Officer Training Commission certification.
  • Requires any school district that utilizes SRO services to enter into a Memorandum of Understanding (MOU) with the appropriate law enforcement agency. The MOU should clarify the purpose of the SRO program, define background requirements and expertise for SROs, explain professional development, roles, responsibilities and expectations of the parties, outline a protocol for handling suspected criminal activity in comparison to school discipline, specify requirements for coordination and updating of the school crisis plans, and include student input during the development process. The MOU also needs to be posted in a place that is available to the public.

While this legislation develops, school districts would be wise to clearly define the role of their SROs with local agencies and gain the input of legal counsel. Districts should also proactively seek professional development for SROs to improve their breadth of school knowledge, develop strong positive relationships with students, staff and the community, and implement comprehensive safety and crisis plans.

Lisa Woloszynek is an attorney at Walter | Haverfield who focuses her practice on education law. She can be reached at lwoloszynek@walterhav.com and at 216-619-7835.

 

 

Alexis Kim, an associate in the Tax and Wealth Management group at Walter | Haverfield, is one of 27 graduates of the OnBoard Cleveland class of 2018. OnBoard Cleveland, a program of the Cleveland Leadership Center, helps early-career professionals make a difference in their community and their workplace.

“OnBoard Cleveland gave me the guidance to make tangible connections to new non-profits,” said Kim, who focuses her work on tax-exempt organizations. “Not only is that a great skill as I grow my practice, but I’m also eager for more opportunities to volunteer.”

Kim currently volunteers for the Cleveland Metropolitan Bar Association and Legal Aid at the West Side Catholic Center in Ohio City, helping local homeless women with legal issues.

OnBoard Cleveland is a six-month program that includes a competitive application process. Participants start off by learning about critical community issues and collaborative leadership skills. They then learn how to utilize their individual strengths to become better connected to philanthropic and professional opportunities.

“Alexis came to Walter | Haverfield with a strong skillset in the legal tax field,” said Gary Zwick, chair of the firm’s Tax and Wealth Management group. “Her participation in this program only makes her that much stronger as an attorney and individual who has a passion for non-profit work. We are extremely proud of her accomplishments.”

Kim is the first Walter | Haverfield attorney to complete OnBoard Cleveland.

 

Walter | Haverfield partner Jacob Derenthal offered strategies for buyers and sellers to mitigate risk in mergers and acquisitions (M and A) transactions in the January 22, 2018 issue of Crain’s Cleveland Business.

 

Following the seemingly endless accusations of sexual harassment in Hollywood, on Capitol Hill, and in corporate America, employers may wonder what they can do to get ahead of the next potential headline in 2018. While it may be impossible to eliminate all conceivable claims of harassment, employers can take some steps to help avoid liability by creating or strengthening anti-harassment programs.

First, employers should consider reviewing and updating current sexual harassment policies. In such policies, employers should clearly define what is considered harassment and indicate that it will not be tolerated. These policies should also provide a clear reporting mechanism for employees to report harassment. Employers should attempt to remove potential roadblocks to reporting, by providing several avenues to report harassment, including confidential reporting through a hotline or other means. Employers may also consider promulgating a description of the steps of an investigation when the employer is presented with a sexual harassment complaint.

Additionally, employers should make sure they have strong anti-retaliation policies for the reporting of sexual harassment claims. Having such a policy on the books will likely provide some employees the courage they need to come forward. Additionally, it is the law – retaliation against an employee for making a harassment complaint is a stand-alone violation of both federal and state civil rights laws. Once the policies are updated, employers should distribute the policies to their employees.

While Ohio maintains no law requiring employers to provide training to its employees on sexual harassment, the Ohio Civil Rights Commission’s administrative regulations [Ohio Adm. Code 4112-5-05(J)(6)] indicate that employers should take all necessary steps to prevent sexual harassment, including “raising the issue of, stating disapproval of, developing sanctions against and informing employees of their rights and how to raise the issue of sexual harassment.” Accordingly, employers should also consider implementing training programs for all employees. Managers and supervisors should be trained on what sexual harassment is, how to identify it, and how to handle specific complaints. They should also be trained to identify retaliation, even absent specific complaints. And with regards to rank and file employees, it’s important that they be trained on the definition of sexual harassment and the process in which to report harassment and retaliation in the organization.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.

 

Don’t miss a fast-paced, one-hour seminar given by Walter | Haverfield’s George Asimou titled “A year later…How the Trump administration has changed the LandE landscape.”

Asimou, an attorney in our Labor and Employment group, will speak at the Cleveland Society for Human Resource Management (SHRM) Legal Affairs Conference on December 1, 2017. The conference takes place at Baldwin Wallace University’s Strosacker Union.

Asimou, who represents public and private sector employers on a broad range of issues related to federal and state labor and employment laws, will address the following in his presentation:

    • Formal changes in workplace laws and regulation
    • Subtle shifts in enforcement priorities
    • Broader re-evaluation of the norms of working life in America
    • On-going re-balancing of federal and state regulatory power

 

For more information about the conference and to register, click here.

George can be reached at gasimou@walterhav.com or 216.928.2899

 

In an article published in the October 2017 issue of the Cleveland Metropolitan Bar Journal, Leslie Wolfe discussed a new Ohio law which is meant to encourage legitimate construction and demolition debris (C and DD) recycling while prohibiting the operation of illegal dumps.

 

In an about-face move, the Department of Justice issued a memo this month indicating that its interpretation of Title VII of the Civil Rights Act does not protect individuals on the basis of gender identity. Title VII is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin and religion.

Three years ago, the DOJ maintained the exact opposite policy – that the word “sex” in Title VII encompassed claims of discrimination based on an individual’s gender identity, including transgender status.

However, any assumption that you, as an employer, don’t need to hire a transgender applicant or think twice about an adverse employment action against a transgender employee is incorrect. Even though the DOJ has gone on the record indicating that gender identity is not a protected class, the Equal Employment Opportunity Commission (“EEOC”) continues to maintain that gender identity is a protected class under Title VII based on the inclusion of the word “sex” in the statute. The EEOC is a federal agency that investigates charges of discrimination and tries to settle charges with merit. If the charge is not settled, the EEOC has authority to file a lawsuit against the employer or can give the employee the right to sue the employer individually. In fact, the EEOC just filed suit under Title VII against a company in Colorado for rescinding a job offer to an applicant after the company learned of the applicant’s transgender status.

While some states have laws that prohibit discrimination on the basis of gender identity, Ohio currently does not. Given the uncertainty surrounding whether gender identity is protected under Title VII, employers may still want to consider the EEOC’s position. Since Title VII is unlikely to be amended anytime soon to clarify the issue, coverage of gender identity under Title VII will continue to be debated in the courts, with likely conflicting rulings for the foreseeable future.

Rina Russo is an associate with Walter | Haverfield’s Labor and Employment Services practice group.

Northeast Ohio’s vibrant commercial real estate industry has not only triggered a construction boom, but has resulted in greater volumes of construction and demolition debris (CandDD) that must either be recycled or landfilled. While most of this material is sent to disposal facilities licensed under Ohio law or to recyclers that run responsible, environmentally-friendly operations, some waste finds its way to illegal dump sites. These sites often collect and then abandon large volumes of waste material, creating nuisance conditions and leaving local communities and the state to bear the cost of cleanup.

The six-acre Arco dump in East Cleveland is one such site. It is considered one of the worst illegal dump sites in the state, and it sits in the middle of a residential neighborhood. Throughout this year, the Ohio EPA and Cuyahoga County have worked to clean up the site and hold the property owner accountable. The clean-up effort could cost as much as $6 million in state funds.

Thanks to new legislation signed by Governor Kasich in July, sites like the Arco dump may become less common and their owners easier to prosecute.

Amended Senate Bill 2 (S.B. 2) gives the Director of the Ohio Environmental Protection Agency (EPA) new authority to regulate CandDD recycling in Ohio. State regulators and the CandDD industry alike welcomed the passage of the bill. The new law is designed to encourage legitimate CandDD recycling while preventing the operation of illegal dumps.

As legal counsel to the Construction and Demolition Debris Association of Ohio (CDAO), an industry group representing CandDD landfill operators, Walter | Haverfield LLP played an integral role in drafting S.B. 2. This included submitting written comments and proposed language for the bill itself. We also participated in numerous Ohio EPA working group meetings on behalf of the CDAO and many of its member facilities who are also long-time firm clients.

CandDD is material resulting from the construction or demolition of man-made structures, such as houses, buildings or roadways. It includes non-hazardous materials such as brick, concrete, stone, glass, wall coverings, plaster, drywall, wood and roofing materials. Because CandDD is generally considered to be inert and poses little threat to the environment as compared to other wastes, Ohio regulates CandDD disposal separately from municipal and household solid waste.

Before S.B. 2 was passed, Ohio EPA had authority to license and regulate CandDD disposal facilities but not CandDD recyclers, even though many disposal facility operators had begun separating valuable recyclables for resale. The existing law did not prevent unlicensed operators from illegally collecting and storing mixed CandDD under the guise of recycling.

Ohio EPA now has the authority to develop regulations for CandDD recyclers (called “processing facilities”) to ensure that they will not create a nuisance, fire hazard, health hazard, or cause or contribute to air or water pollution. The new rules will include permit and licensing programs, plus requirements for the location, design, construction, operation, and closure of CandDD processing facilities. The rules may also cover the type of materials that can be recycled, how long they can be stored, and how much can be accumulated.

Most importantly, the new rules will require recyclers to establish financial assurance in case they go bankrupt or are otherwise unable to close properly. Ohio EPA’s newly-expanded legislative authority will allow greater control and oversight of the recycling industry to prevent future Arcos and safeguard public health, safety and the environment across Ohio.

Leslie can be reached at 216-928-2927 or lwolfe@walterhav.com.

Employers across the nation may have thought they were done with changes to the overtime rule. Not so.

Way back last November, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction barring the Obama Administration’s nationwide implementation of new regulations that would have established a higher salary threshold for certain employees to be considered “exempt” from overtime requirements under the Fair Labor Standards Act (FLSA). Under the proposed regulations, the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the general requirement that employees be paid time and a half for all hours worked over 40 in a week would have been $47,476 per year. The injunction represented a reprieve for employers across the country, as the new salary threshold would have impacted the compensation of approximately four million workers.

Ten months, a decidedly significant sea-change in Washington, D.C., and two nominees for Labor Secretary later, the U.S. Department of Labor (DOL) has issued a Request for Information, asking employers, workers, and interests groups for feedback on what the salary threshold should be. A few things to keep in mind:

  • On August 31st, the federal case down in Texas concluded with Judge Amos Mazzant issuing a final ruling that, while the DOL had the statutory authority to set a salary floor for exempt status, the specific salary floor set by the Obama overtime rule was invalid. The DOL promptly abandoned its prior appeal of Mazzant’s earlier preliminary injunction – and the Texas case is now over.
  • The DOL will be collecting responses to the RFI through late September.
  • At his confirmation hearings in March, Secretary of Labor Alexander Acosta signaled his belief that, while the Obama overtime rule represented an excessive increase, some increase is warranted because the salary threshold was last updated in 2004 and “life does become more expensive over time.”
  • The RFI strongly suggests that the DOL is considering an inflation-based approach to raising the floor. According to the DOL’s CPI inflation calculator, an adjustment to the rule to account for inflation between 2004 and 2017 would result in a new threshold of somewhere between $30,000 and $33,000, depending on regional differences.

So, amidst all this uncertainty, employers are left in a lurch in terms of building and maintaining their compensation models. A few recommendations:

  • Employers are well-advised to determine to what extent they currently pay non-overtime eligible employees less than $33,000 a year.
  • Employers are also well-advised to start considering the impact of either increasing compensation for these employees to a new threshold (say, $33,000) or paying overtime to these employees for all hours over 40 worked in a week.
  • Many of the same considerations weighed by employers at the time of the Obama overtime rule’s introduction will still be relevant this time around; the only difference is that the Trump overtime rule will impact a smaller cohort of employees. A key consideration is the effect of a higher floor on the rest of the business’ compensation model. For example, if Peter, who was making $28,000 a year, receives a $5,000 raise to preserve his exempt status, what happens to Paul, who was making $33,000 a year for more skilled work? Additionally, should an employer decide instead to keep wages level and make a position overtime eligible, what will be the psychic effect on re-classified employees who may be angry that they now have to punch a time clock even though they have always been considered “white collar.”

Employers should realistically expect some increase in the salary floor for the FLSA’s executive, administrative and professional exemptions. Fortunately, given that both judicial and administrative processes will be ongoing until at least late 2017, employers have time to be thoughtful in their planning.

George can be reached at 216-928-2899 or gasimou@walterhav.com.

In an article titled, “PTO Practices,” which appeared in the 2017 Summer Print issue of HR Cleveland (The Newsletter of the Cleveland Society for Human Resource Management), George J. Asimou asserted that employers need to continually review their paid time off (PTO) practices, in order to ensure that they are competitive.

On June 20, 2017, James M. McWeeney II will be the presenter at the Greater Cleveland Partnership’s Internship Central Webinar. In this webinar, Mr. McWeeney will address the topic, “Legal Aspects of Internships.”

In a “Legal Guest Blog,” published in Crain’s Cleveland Business on April 26, 2017 and titled, “Intense competition for state-issued medical marijuana licenses necessitates advance preparation,” Kevin P. Murphy asserted that applicants for medical marijuana licenses must be well-prepared if they hope to secure one of the limited number of licenses available in Ohio.

On March 30-31, 2017, Leslie G. Wolfe co-chaired the 32nd Annual Ohio Environment, Energy and Resources Law Seminar sponsored by the Ohio State Bar Association. The event was held at Nationwide Hotel and Conference Center in Lewis Center, Ohio and was attended by over 200 environmental attorneys and professional consultants. Highlights included a keynote address by Ohio EPA Director Craig Butler, as well as presentations by other speakers on timely environmental issues, including Professor Jonathan Adler of Case Western Reserve University School of Law.


Leslie Wolfe, Professor Jonathan Adler, and event co-chair Christine Rideout Schirra of Bricker and Eckler LLP

In an article published in the February 2017 issue of Properties magazine and titled, “New Tools and Potential Risks in Environmental Due Diligence,” Leslie G. Wolfe and David Ricco encouraged parties to real estate transactions to remain up-to-date on emerging issues in environmental due diligence, in order to increase the chances for the success of their projects.

In an article published in the January 2017 issue of the Cleveland Metropolitan Bar Journal and titled, “Material Adverse Effect – How It ‘Affects’ M and A Transactions,” T. Ted Motheral provided an overview of “Material Adverse Effect” (MAE) in M and A transactions, along with a brief analysis of some important MAE cases.

The Department of Homeland Security’s U.S. Citizenship and Immigration Services introduced a new version of the Form I-9, Employment Eligibility Verification. The new form can be accessed HERE.

Starting January 22, 2017, employers must use this new version of the Form I-9 in connection with all new hires in the United States. Section 3 of the new Form I-9 is also required to be used in the event a current employee authorized to work under a prior version of the Form I-9 must be re-verified after January 21, 2017. In such cases, simply append the new version’s Section 3 to the employee’s previously completed Form I-9.

No action is needed for current employees with properly completed Form I-9s not requiring re-verification of their work authorization.

The new version of the Form I-9 – which includes the marking “11/14/2016 N” in the footer at bottom left corner of the form – replaces a prior version marked at bottom left as “03/18/13 N.” The new and prior versions are in most ways identical. The chief difference is that the new version is intended to be easier to complete on a computer, featuring such “smart” features as drop down menus, hover messages, and real-time error indicators – in essence, all the tools that have long been available to consumers in everyday e-commerce. These innovations aside, the Form I-9 still needs to be printed out and signed in hard copy for recordkeeping purposes.

While technical compliance requires that the new version of the Form I-9 be used as of January 22, 2017, our recommendation is that employers start using the new version immediately.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

George J. Asimou is an associate in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

In its first significant action under the Frank R. Lautenberg Chemical Safety for the 21st Century Act of 2016, the U.S. Environmental Protection Agency (EPA) has issued a proposal to ban the manufacture, import, processing, distribution and commercial use of the chemical trichloroethylene (TCE) for aerosol degreasing and spot cleaning in dry cleaning facilities. The EPA’s proposal, issued December 7, 2016, also seeks to require manufacturers, processors and distributors, (not including retailers) to provide downstream notification of TCE use prohibitions throughout the supply chain and to keep limited records.

TCE, also known as tetrachloroethylene and perchloroethylene, is one of 10 chemicals the EPA has identified for priority risk assessment under the Lautenberg Act, which made significant changes to the Toxic Control Substances Act of 1976 (TSCA) and required the EPA to publish a list of 10 priority chemicals by December 19, 2016. According to the EPA, the 10 chemicals were selected based on multiple factors, including their prevalence as environmental contaminants, their widespread use (especially in consumer products), and their perceived or known hazards.

The finalization of the EPA’s priority list will start the clock running on the agency’s obligation to complete a risk evaluation for each of the 10 chemicals within three years. These evaluations will determine whether the chemicals present an unreasonable risk to humans and the environment. If an unreasonable risk is found, the EPA must take action to mitigate that risk within two years.

In general, TSCA authorizes the EPA to require reporting, record-keeping and testing and to issue restrictions relating to chemical substances and/or mixtures. It does not apply to certain substances, such as food, drugs, cosmetics and pesticides, which are separately regulated. With the Lautenberg Act, the EPA now has the power to require safety reviews of all chemicals in the marketplace. This is a fundamental shift in the requirements and approach for addressing chemical safety under TSCA. The EPA has stated that the amendments to TSCA will allow the government to better protect public health and the environment.

TCE is a liquid volatile organic compound (VOC) that has long been considered a probable human carcinogen. In 2014, the EPA completed a risk assessment for TCE which identified serious risks to workers and consumers associated with certain uses of TCE based on its potential to cause a range of adverse health effects. Because the TCE risk assessment was completed prior to the 2016 amendment of TSCA by the Lautenberg Act, the EPA already has authority to publish proposed and final rules covering certain specific uses of the chemical.

It is estimated that around 250 million pounds of TCE are produced or imported into the U.S. per year. Although the EPA’s current proposal is limited to banning TCE as an aerosol degreaser and spot remover in dry cleaning operations, the agency is evaluating whether TCE should be prohibited, in other uses, such as vapor degreasing. The agency is developing a separate proposed regulatory action to address those risks.

Although TSCA imposes most of its requirements on chemical manufacturers, importers and processors, owners and operators of properties and facilities that conduct aerosol degreasing or dry cleaning operations should pay close attention to the fast-changing regulatory landscape surrounding TCE and other toxic substances. By being aware of the types of risks they are exposed to and of significant developments in regulation and litigation, property owners can make better informed decisions about risk management, including decisions concerning lease provisions and environmental insurance protection.

Leslie Wolfe can be reached at 216-928-2927 or lwolfe@walterhav.com.

On February 1, 2017, Eric J. Johnson will serve as a panelist at the 2017 ACUHO-I State of the Profession Institute in Atlanta, Georgia. The panel will discuss the Fair Labor Standards Act (FLSA) as it applies to higher education and, in particular, campus housing and residence life operations.

As seen in the November 7-13, 2016 issue of Crain’s Cleveland Business.

Of all the unique assets that may be covered in the estate planning process, firearms perhaps present the most unique set of challenges and considerations. Owners of firearms need to make sure they disclose said ownership upfront in the planning process and seek counsel from an attorney who knows the right questions to ask. Important considerations include the type of firearm involved, its value, background on the beneficiary and location of the beneficiary.

There are multiple types of firearms and firearm accessories–each subject to different rules and regulations on the federal, state and local levels. While many of these issues may not arise until the individual dies and the estate or trust is being administered, they need to be considered when drafting the estate planning documents.

Firearms not subject to the National Firearms Act (NFA) are the most commonly owned and include hunting rifles and pistols, among others. Two primary issues could arise when attempting to transfer ownership of these types of firearms–either the beneficiary is disqualified from owning a firearm because of being a felon or the particular firearm may be illegal in the state where the beneficiary lives. In addition, consideration should be given to whether the firearms should pass through probate or be transferred into a trust upon death because of the laws regarding the transferring of firearms.

Of all firearms, Title II firearms create the most difficult estate planning issues. Title II firearms fall under the authority of NFA and include such firearms as sawed-off shot guns, silencers and machineguns. One strategy for passing on Title II firearms is to have a firearms trust own the firearms. If a firearms trust is not used, a new background check and registration paperwork must be filed for each firearm when it passes to a beneficiary. When an owner of NFA firearms passes away, his or her attorney must inform the trustee or executor as to who can possess the firearms during the administration process and where the firearms can be legally and properly stored. If the firearms are improperly transferred or possessed, an individual can be fined up to $250,000 and receive up to 10 years in prison.

Without a doubt, there are many issues that can arise from passing on firearms. But good communications early in the estate planning process with an attorney knowledgeable about special firearms considerations will help avoid problems later on.

Kevin McKinnis is an attorney in the tax and wealth practice group of Cleveland-based Walter | Haverfield LLP.

Yesterday evening, the Honorable Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas issued a preliminary injunction barring the Obama Administration’s implementation of new regulations regarding overtime eligibility for certain workers making less than $47,476 per year. Under the regulations promulgated by the United States Department of Labor in late May, the minimum salary level for executive, administrative, and professional employees to be treated as exempt from the Fair Labor Standards Act’s overtime requirements was to be increased from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). These regulations were slated to take effect December 1, 2016.

Judge Mazzant’s ruling – which, by its terms, applies nationwide to all employers – is subject to appeal and the Department of Labor released a statement last night that the agency is reviewing its legal options. Regardless, both President-Elect Donald Trump and leadership for the incoming Republican-controlled Congress have previously signaled an intent to modify, or to completely scrap, the new overtime regulations in the coming legislative session.

As a practical matter, Judge Mazzant’s ruling leaves employers who have prepared, or were preparing, to comply with the new overtime rules in a bit of a lurch. In short, employers are best served to maintain the status quo until we have more regulatory certainty. We advise employers that have already re-classified affected employees as non-exempt, or bumped compensation to comply with the increased salary threshold, not to revert to prior practices (at least until legal wrangling over the new overtime regulations comes to a more final resolution). At the same time, we advise employers who have not yet implemented changes complying with the new rules to delay implementation pending the outcome of legal process.

FLSA exemption determinations are often fact-intensive, frequently carry practical implications for workplace dynamics, and are regularly the subject of litigation. Accordingly, we recommend that you consult with legal counsel on any significant change to your business’s or organization’s approach to wage and hour matters.

Walter | Haverfield will issue additional guidance as this story further develops. For more information on this or other employment law issues, please contact one of our Employment lawyers.

George J. Asimou is an associate in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

Ever since Ohio’s Constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and determined that based on the consumer price index (CPI), Ohio’s minimum wage rates will slightly increase in 2017.

Ohio’s minimum wage is currently $8.10 per hour for regular hourly employees. The minimum wage for tipped employees is $4.05 per hour. Ohio’s minimum wage will increase to $8.15 per hour for regular hourly employees. The minimum wage for tipped employees will increase to $4.08 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $299,000 or less per year or to (ii) 14 and 15-year-olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. The federal minimum hourly wage is currently $7.25. In Cleveland, City Council voted to let voters decide in a special election whether or not to increase the minimum wage to $15.00 per hour. The $15.00 amount would be phased in over a period of time. The special election will be held May 2, 2017.

The new Poster is available by clicking here.

Patricia F. Weisberg is a partner in the Labor and Employment Services Group of the Cleveland-based law firm of Walter | Haverfield LLP.

Department of Labor Penalties Increasing with Inflation Adjustments

The Department of Labor (DOL) announced interim final rules on June 30, 2016, to adjust its civil penalties for inflation. Increased penalties became effective on August 1, 2016, and apply to violations that occurred after November 2, 2015.

Increase Aims to Advance the Effectiveness and Deterrent Effect of Civil Penalties

The DOL issued the final rules pursuant to the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. The DOL is required to increase its penalties to keep pace with inflation. The final rules establish initial adjustments to catch-up penalties that have not been adjusted in years or even decades. Starting in 2017, the DOL will adjust its penalties for inflation before January 15 each year.

The adjusted penalties are intended to effectively punish employers who do not comply with federal laws and to deter noncompliance. The DOL estimates the adjusted penalties could result in up to $140 million in additional penalties assessed annually against noncompliant employers.

Penalty Adjustments

The DOL’s final rules do not address every penalty assessed by the DOL. However, the majority of penalties assessed by the Employee Benefits Security Administration (EBSA), Mine Safety and Health Administration (MSHA), Occupational Safety and Health Administration (OSHA), Office of Workers’ Compensation Programs (OWCP), and Wage and Hour Division (WHD) are affected by the final rules.

A complete list of the adjusted penalties can be accessed here.

Among the increased penalties are the following:

  • OSHA Violations. OSHA’s maximum penalties increased by 78%. The penalties for “serious,” “other than serious,” and posting violations increased from $7,000 to $12,471. The minimum penalty for willful or repeated violations increased from $5,000 to $8,908 and the maximum penalty increased from $70,000 to $124,709.
  • Minimum Wage and Overtime. The penalty for willful violations of the Fair Labor Standards Act’s minimum wage and overtime provisions increased from $1,000 to $1,894 per violation.
  • Worker’s Compensation. Maximum penalties for violations of federal workers’ compensation laws more than doubled.
  • H-2B Guest Worker Program. The maximum penalty for violations of the H-2B guest worker program increased from $10,000 to $11,940 per violation.
  • ERISA Form 5500. The maximum penalty for failure to file a Form 5500 increased from $1,100 per day to $2,063 per day.
  • Notice of 401(k) Automatic Contributions. Failure to provide notice to participants of a 401(k) plan with an automatic contribution arrangement increased from a maximum penalty of $1,000 per day to a maximum of $1,632 per day.

Guidance for Employers

Many of the adjusted penalties reflect an increase in the maximum penalty the DOL could assess for a violation. Although the DOL has the discretion to impose penalties less than the maximum, noncompliant employers should expect to face increased penalties for violations occurring after November 2, 2015. Employers should review their wage and hour practices, I-9 verification policies, benefits compliance, and safety protocols to verify that they are following applicable federal laws.

In May the Defend Trade Secrets Act (DTSA) took effect, expanding federal protection of trade secrets that are stolen or exposed by improper means. Trade secrets are defined as valuable, confidential information that provides a competitive advantage by not being generally known in the market. DTSA’s passage was welcomed by U.S. companies, which value their trade secrets in the trillions of dollars.

Sens. Orrin Hatch (R-UT) and Chris Coons (D-DE) co-sponsored the legislation, which passed the Senate unanimously and the House by an overwhelming vote of 410-2. Boeing, Johnson and Johnson, 3M, Google, and General Electric were among the many companies that lobbied for DTSA’s enactment. In signing the legislation, President Obama remarked that DTSA “allows us not only to go after folks who are stealing trade secrets through criminal actions, but also through civil actions, and hurt them where it counts in their pocketbook.” Notably, DTSA is intended to supplement, not displace, existing state laws designed to protect trade secrets.

DTSA authorizes trade secret owners to bring suit in federal court regardless of where the parties reside or how much money is at issue if a trade secret is acquired or exposed by improper means. Victimized trade secret owners may recover their actual loss plus additional damages based on the benefit the other party gained by stealing the secret, as well as attorney’s fees.

Additionally, DTSA provides a unique remedy allowing the court to seize property to prevent the dissemination of a trade secret when the accused is likely to destroy, move, hide, or otherwise make the material inaccessible. Under many state laws, a trade secret owner may recover stolen blueprints or demand the surrender of surreptitious photographs or recordings. But DTSA is unique because it allows a court to seize and hold property without prior notice to the accused party. In the event of a wrongful seizure, DTSA permits an injured party to recover lost profits, cost of materials, loss of good will, reasonable attorney’s fee, and punitive damages arising from a seizure conducted in bad faith.

In addition to various civil remedies, DTSA increases the criminal fine from a maximum of $5 million to the greater of $5 million or three times the value of the stolen trade secret. It also establishes trade secret theft as a predicate offense supporting a claim under the Racketeer Influenced and Corrupt Organizations (RICO) law. A successful RICO claim could result in an award of up to triple damages and 20 years in prison.

Like preexisting state laws, DTSA obligates the owner of a trade secret to take “reasonable measures” intended to guard the confidentiality of the trade secret. “Reasonable measures” is not defined in the statute but includes items such as a locked room, security guards, confidentiality agreements, and the like.

Lastly, under DTSA, individuals who report trade secret theft to a government official, or who disclose a trade secret in a complaint filed under seal, may be protected from civil and criminal liability. DTSA imposes an obligation on employers to notify employees, including contractors and consultants, of the immunity. The employer may provide the required notice in an agreement with the employee or by cross-referencing a policy that explains the immunity. If an employer fails to give notice of the immunity, then the employer may not recover punitive damages or attorney’s fees from the employee whistleblower in an action brought under DTSA.

Questions and concerns relative to trade secrets and their protection should be discussed with legal counsel experienced in trade secret law.

Darrell can be reached at 216-928-2896 or e-mail dclay@walterhav.com.

“When Free Speech Collides with Policies,” also appeared in the September/October 2016 issue of Cities and Villages magazine.

Is a government employer permitted to discipline an employee for behavior it believes an employee has engaged in? What if that employer is mistaken about said behavior? And what happens when the behavior is potentially constitutionally protected political activity? Unfortunately, these are scenarios that occur more often than many people might believe.

A recent United States Supreme Court case—Heffernan v. City of Paterson, New Jersey—sheds some light on how the courts view these issues.

In 2005, Heffernan was a detective reporting to the Police Chief in the Paterson Police Department. The Chief and Heffernan’s direct supervisor were appointed to their positions by the incumbent Mayor who was facing a challenge for his reelection from Lawrence Spagnola. Although Spagnola and Heffernan were “good friends”, Heffernan was not involved with the re-election campaign.

As a favor to his bedridden mother, Heffernan went to a distribution point to pick up a larger Spagnola sign to replace a smaller one stolen from her yard. While there, Heffernan spoke with Spagnola’s campaign manager and staff. Other members of the Paterson police force saw Heffernan with the sign in hand and observed him talking with the campaign staff and, of course, the word spread quickly throughout the department.

Heffernan was demoted from detective to patrol officer the next day and assigned a “walking post,” clearly as punishment for what appeared to be “overt involvement” in Spagnola’s campaign. Since Heffernan was not involved in the campaign, but rather was picking up the sign for his mother, his supervisors made a factual mistake.

Heffernan sued the City in federal court claiming that his demotion was a violation of his First Amendment right to free speech and was in response to mistaken conduct. This raises multiple legal issues.

Generally, an employee cannot be subject to adverse employment action for supporting a particular political candidate. However, both the U.S. District Court and the Third Circuit Court of Appeals found that Heffernan was not deprived of his First Amendment right to free speech because he had not claimed to have engaged in any speech that could be protected and such action must be based on an “actual, rather than perceived exercise of constitutional rights.” Heffernan appealed the decision to the United States Supreme Court.

In reversing the Third Circuit Court of Appeals and remanding the case, the Supreme Court focused on the City’s reason for demoting Heffernan – the belief that he engaged “in political activity that the First Amendment protects.” The Court looked at the employer’s reason for the demotion, not the fact that the employer was wrong about the type of activity being engaged in by the employee. The employee’s unassailable assertion that he was not involved in the campaign and not actually exercising speech did not matter. Of importance to the Court was the fact that the employer thought the employee was engaged in protected political activity stating “the government’s reason for demoting Heffernan is what counts here.” The Court found that the demotion did deprive Heffernan of a right “secured by the Constitution.”

Justice Breyer, writing for the majority, noted that “[T]he discharge of one tells the others that they engage in protected activity at their peril.” The Court found that, if an employer thinks the employee has engaged in protected activity, whether or not the employer is correct or mistaken, can cause “the same kind, and degree, of constitutional harm.”

Since there was some evidence that the adverse employment action against Heffernan was based upon a “different and neutral policy prohibiting police officers from overt involvement in any political campaign,” the case was sent back to the lower court to decide the constitutionality of that policy and the employer’s actions.

As this case demonstrates, government employers should exercise caution in taking action against employees where First Amendment issues may be involved. Consultation with legal counsel prior to taking action where an employee’s First Amendment rights may be involved could avoid costly litigation down the road.

Sara Fagnilli can be reached at 216-928-2958 or e-mail sfagnilli@walterhav.com.

The Equal Employment Opportunity Commission (EEOC) raised the penalty for employers who fail to properly post required workplace notices under Title VII, the Americans with Disabilities Act (ADA), and Genetic Information Non-Discrimination Act (GINA) from $210 per violation to $525 per violation, effective July 5, 2016.

Employers Must Post Notices Under Title VII, ADA, and GINA

Employers are required to post notices describing the relevant provisions of Title VII, the ADA, and GINA in a prominent and accessible place where notices to employees are usually posted. The notice requirement applies to employers with 15 or more employees, including educational institutions and state and local governments, as well as all federal contractors and subcontractors.

Increased Penalty Intended to Promote Compliance with Notice Requirement

The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires the EEOC to adjust penalties consistent with inflation. Adjusting the 1964 penalty of $100 for inflation would result in an inflation-adjusted penalty of $765 for 2016. However, the EEOC may not increase the penalty by more than 150% in a year, which means the EEOC could only raise the penalty from $210 to $525 this year.

Expectations and Guidance for Employers

The new fee took effect on July 5, 2016 and the penalty does not apply to violations issued before July 5. Because the current penalty is lower than the inflation-adjusted penalty, employers can expect another significant penalty increase in 2017, and minor adjustments to the penalty each year following.

Employers should regularly review their postings to check that the postings are both current and properly placed to ensure compliance with the notice requirement.

In a Crain’s “Legal Guest Blog,” posted on June 27, 2016 and titled, “After Ohio legalizes medical marijuana, do employers still have final say on use in the workplace?,” Patricia F. Weisberg discussed House Bill 523, which legalizes marijuana in Ohio, and addressed its implications for Ohio employers.

House Bill 523 legalizes medical marijuana in Ohio, but the substantial policy change has minor implications for Ohio employers, for now.

The legislation, signed by Governor Kasich on June 8, authorizes a licensed physician to recommend medical marijuana to an individual diagnosed with one or more of 20 qualifying conditions or diseases. An individual with a valid recommendation may legally consume medical marijuana dispensed as oil, edibles, and patches. Smoking and growing marijuana are prohibited under House Bill 523. Starting on September 6, 2016, the possession and authorized consumption of medical marijuana will not be prosecuted.

House Bill 523 establishes a Medical Marijuana Control Commission to regulate medical marijuana dispensaries, training and qualification of physicians, and the licensing of growers. Until Ohio’s dispensaries are up and running, Ohioans must travel to other states to obtain medical marijuana.

Effect on Employers

House Bill 523 minimally impacts Ohio employers. The legislation sets forth clear safeguards that allow employers to maintain drug-free workplace programs and reasonable human resources policies. The law does not distinguish between public or private employers. Ohio employers are protected by the following provisions of the law:

  • Employers are not required to permit or accommodate an employee’s use, possession, or distribution of medical marijuana;
  • House Bill 523 does not authorize an employee to sue his or her employer for an adverse employment action taken related to medical marijuana. Additionally, employers may refuse to hire, discharge, discipline, or otherwise take adverse employment action against an individual due to his or her use, possession, or distribution of medical marijuana;
  • Employers may establish or maintain a formal drug-free workplace program. An employer may still discharge an employee for just cause if the employee uses medical marijuana in violation of the employer’s drug-free workplace policy. Moreover, the employee will be ineligible for unemployment compensation if the termination resulted from a violation of the employer’s drug-free workplace policy;
  • The Administrator of Workers’ Compensation may still grant rebates and discounts on premium rates to employers that participate in a drug-free workplace program; and
  • An employer maintains the right to defend against workers’ compensation claims where use of medical marijuana contributes to or results in injury.

As employees begin to more openly use marijuana under Ohio’s medical marijuana law, issues arising under state and federal disability discrimination laws are likely to complicate decisions involving hiring, discipline, and discharge regarding use of marijuana under policies prohibiting drug use in the workplace. Consequently, employers may at some time in the future be required to accommodate the medical condition that underlies the medical marijuana use under the Americans with Disabilities Act (ADA) and Ohio’s anti-discrimination laws by allowing an employee to use medical marijuana in certain cases.

What should employers do now?

Employers should review and update their formal drug-free workplace programs and their human resources policies to specifically address medical marijuana. Employers now have the option, however, to treat medical marijuana similar to the way they treat the use of legally prescribed drugs.

Individuals may legally use medical marijuana in a few months. Employers should aim to revise their policies, or to at the very least contemplate how to manage employees’ medical marijuana use, before House Bill 523 takes effect. If you have any questions about revising your employment policies or about how the new legislation might affect you, please contact one of our employment attorneys for additional guidance.

In an article published online by Crain’s Cleveland Business, Patricia F. Weisberg discussed recent events concerning bathroom access rights for transgender employees. In this piece, titled, “Are your company’s bathroom policies compliant?,” Patti also encouraged employers to resolve restroom issues at their places of business, in order to preclude their impact upon productivity and employee morale.

The U.S. Department of Labor Wage and Hour Division (DOL) published the highly anticipated final rule revising the overtime regulations today. The rule revises the regulations defining which white collar workers are eligible to receive overtime pay for hours worked over 40 in a workweek under the Fair Labor Standards Act (FLSA). The final rule, which increases the annual salary threshold for white collar workers from $23,660 to $47,476 or from $455 to $913 per week, is more than double the current minimum salary for the overtime exemption but is less than the anticipated increase, which was proposed to be $50,440 per year or $970 per week. As expected, the rule includes, for the first time, an automatic-escalator for the salary threshold to keep pace with inflation.

The final rule also sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to $134,004 – the annual equivalent of the 90th percentile of full-time salaried workers nationally. The DOL explained that this threshold “was designed to ease the burden on employers in identifying overtime eligible employees since it is more likely that workers earning above this high salary perform the types of job duties that would exempt them from overtime requirements.”

The final rule also establishes an “automatic-escalator,” which is a mechanism for the DOL to automatically update the salary and compensation levels of the rule every three years to maintain the levels at the 40th percentile of full-time salaried workers in the lowest income region of the country. The DOL states that the purpose of the escalator is to ensure that the rule continues to provide useful and effective tests for exemption. The three-year adjustments will occur on January 1, beginning in 2020.

The DOL, however, offered some relief for employers. The final rule does not include any changes to the duties test. The DOL also made it clear that employers may count bonuses and commissions toward as much as 10% of the salary threshold.

As we reported earlier, this is all part of President Obama’s agenda to raise wages and increase the number of employees eligible for overtime pay. It will surely have a considerable impact on employers and employees.

While it is expected that business groups will urge their legislators to defund or otherwise block the rule, employers should begin preparing now for the new rule if they haven’t already. The clock is ticking – employers will have until December 1, 2016 to comply with the new rule.

The DOL Fact Sheet addressing the new rule can be viewed here.

On May 11, 2016, nearly two hundred public employees and members of the business community gathered at Lorain County Community College to help the Ohio EPA explore ways to repurpose material dredged from Lake Erie’s harbors. The “Dredged Material: Make It Your Business – Digging up Ideas Workshop” included brainstorming sessions where participants debated new ideas for using dredged material and overcoming the financial, technical, and regulatory obstacles to such use.

Each year, 1.5 million cubic yards of material is dredged from the federal navigation channels along Ohio’s Lake Erie shoreline to allow the movement of commodities and vessels. Historically, dredged material, which is typically comprised of loose sand, clay, silt and soil particles, was treated as a waste and either disposed of in a specialized landfill or dumped in the open waters of Lake Erie. Due to the passage of Ohio Senate Bill 1 in 2015, however, open-lake disposal will be prohibited after July 1, 2020. This gives the Ohio EPA less than five years to find alternative environmentally-friendly ways to use, recycle, or otherwise dispose of the material.

At the May 11, 2016 workshop, Ohio EPA Director Craig Butler’s opening remarks made clear that protecting Lake Erie from contamination and over-sedimentation is a priority, but that finding alternate uses for dredged sediment poses a unique challenge. Governments and businesses already use the material for beach/near shore nourishment, habitat creation or restoration, landscaping, road construction, landfill cover, and brownfield and other land reclamation. Other industrial uses include making useful products such as topsoil, concrete and concrete-based goods, brick, block and other construction materials. The challenge is to find additional productive and economically beneficial ways to use the material.

The Ohio EPA is developing a regulatory program which is expected to include a business-friendly permitting process and incentives to encourage the use of dredged material. Once issued, the proposed rules will be subject to formal public comments and a hearing before being finalized. Interested parties are encouraged to participate in the rulemaking process.

As part of the State’s push to develop innovative uses for dredged sediment, grant money is being offered by the Ohio Lake Erie Commission for projects that develop business models for utilizing dredged material, removing economic barriers to such use, increasing public awareness and acceptance of the value and/or potential uses of dredged material, or developing processes for intercepting and capturing sediment to minimize the need for dredging. Grant applications must be submitted by June 10, 2016. If you would like further information regarding this funding opportunity or the use of dredged materials as a potential low cost substitute for fill material in construction projects or other applications, please contact Leslie G. Wolfe at (216) 928-2927 or lwolfe@walterhav.com.

You can read more about the Ohio EPA’s Lake Erie Dredged Material Program here.

On April 26, 2016, the United States Department of Labor (DOL) issued a guide to assist employers required to comply with the Family and Medical Leave Act (FMLA). This guide is similar to the guide issued several years ago for employees. The guide is 76 pages long and is quite comprehensive. A copy of the guide is available here.

The guide is a good tool for employers and serves as notice as to how the DOL views certain issues arising under the FMLA. The guide includes seven chapters:

  1. Covered employers under the FMLA and their general notice obligations;
  2. When an employee needs FMLA leave;
  3. Qualifying reasons for leave;
  4. The certification process;
  5. Military family leave;
  6. During an employee’s FMLA leave; and
  7. FMLA prohibitions.

The guide also includes a section titled “Did you know?,” which addresses some of the more technical provisions of the FMLA.

While the guide may assist employers in understanding some of the complexities of the FMLA, it does not have the force of law. Rather, the guide is a reflection of the DOL’s position on particular issues. Accordingly, it is important to seek assistance from legal counsel to distinguish between the DOL’s position and the law.

The DOL also published a new FMLA poster which is available here. The new poster contains most of the same information published on the previous poster, although it is organized differently. Employers should post the new poster in a conspicuous place where employees and applicants for employment can see it.

On May 2, 2016, the U.S. Equal Employment Opportunity Commission issued a new “Fact Sheet” on bathroom access rights for transgender employees. The agency warned employers that discrimination based on an employee’s transgender status is sex discrimination under federal law. The Fact Sheet reflects the EEOC’s position that employers are prohibited from preventing an employee from using a bathroom corresponding to the employee’s gender identity. The Fact Sheet further reflects the EEOC’s position that an employer may not condition the right to use a restroom corresponding to the employee’s gender identity on the employee undergoing, or providing proof of, surgery or any other medical procedure to demonstrate the employee’s gender. The EEOC also takes the position that an employer cannot restrict a transgender employee to a single-user bathroom unless the employer makes a single-user restroom available to all employees who might choose to use it.

While the EEOC’s Fact Sheet is not the law, it does provide employers with the EEOC’s position on this issue. As such, employers should be mindful when making decisions regarding use of restrooms and locker rooms.

You can read the EEOC Fact Sheet here.

In a Crain’s “Legal Guest Blog,” posted on April 5, 2016 and titled, “Latest EEOC action likely to increase retaliation lawsuits against employers,” Lisa H. Woloszynek indicated that recent proposed guidance from the EEOC essentially redefines retaliation and leaves open the door for increased retaliation lawsuits and unfavorable decisions for employers.

On March 28, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a 30-day notice in the Federal Register seeking public comment on proposed changes to Form I-9, Employment Eligibility Verification. The public may comment on the proposed changes for 30 days, until April 27, 2016. After the 30-day comment period ends, USCIS will consider public comments and make changes to Form I-9 which it deems appropriate. The Office of Management and Budget (OMB) will then review and approve the information collection. The revised I-9 Form will be posted on the USCIS website along with instructions.

USCIS further directed employers to continue using the current version of Form I-9 until USCIS posts the new form on its website.

According to USCIS, many of the proposed changes to Form I-9 were designed to reduce technical errors and help customers complete the form on their computers after they have downloaded it from the USCIS website. USCIS made revisions to the original proposed form after receiving comments during the 60-day notice period.

USCIS reports that key changes to the form include:

  • Validations on certain fields to ensure information is entered correctly
  • Additional spaces to enter multiple preparers and translators
  • Drop-down lists and calendars
  • Embedded instructions for completing each field
  • Buttons that will allow users to access the instructions electronically, print the form, and clear the form to start over
  • A dedicated area to enter additional information that employers are currently required to notate in the margins of the form
  • A quick-response matrix barcode, or QR code, which generates once the form is printed and can be used to streamline audit processes
  • A requirement that employees provide only other last names used in Section 1, rather than all other names used
  • Removal of the requirement that aliens authorized to work must provide both their Form I-94 number and foreign passport information in Section 1
  • The separation of instructions from the form, in keeping with USCIS practice
  • The addition of a Supplement in cases where more than one preparer or translator is used to complete Section 1

What employers should do now: Continue to use the I-9 Form on the USCIS website and watch for updates on the release of the revised I-9 Form in the coming months.

On March 14, 2016, the U.S. Department of Labor’s Wage and Hour Division sent its proposed final rule revising the overtime regulations to the Office of Management and Budget (OMB). This review typically takes between 30 and 90 days. Once the final rule clears OMB review, it will be published in the Federal Register. Based on this new timetable, it’s possible that the Final Rule could be effective as early as June 2016.

Earlier this month, the Internal Revenue Service (IRS) issued an alert to payroll and human resources professionals to be aware of a phishing email scheme that purports to be from company executives and requests personal information on employees. Several of our clients have been victimized by this scam.

Payroll and Human Resource Professionals should ensure the request for information is valid before sending any information via electronic mail. You can review the IRS alert here.

In a Crain’s “Legal Guest Blog,” issued on March 2, 2016 and titled, “U.S. Department of Labor issues guidance on joint employers,” Patricia F. Weisberg advised employers to take note of the recent guidance issued by the U.S. Department of Labor’s Wage and Hour Division, which focused on businesses where two or more separate entities each have relationships with the same workers.

For the first time since 1998, the EEOC released proposed guidance regarding workplace retaliation that would supersede the EEOC Compliance Manual, Volume II, Section 8: Retaliation. The guidance is intended to educate the public on how the EEOC approaches charges, determinations, and litigation considerations involving the most frequently alleged EEOC violation – retaliation. However, the guidance, which was published for public opinion on January 21, 2016, does not simply apply and explain current law. Rather, it essentially redefines retaliation and leaves open the door for increased retaliation lawsuits and unfavorable decisions for employers.

Workplace retaliation has historically revolved around adverse actions taken by an employer (or employment agency, or labor organization) against a covered individual because of the individual’s engagement in a protected activity. The proposed guidance continues to require protected activity and adverse action as two elements of a retaliation claim; however, the proposal expands the definition of protected activity, redefines adverse action, and virtually rewrites the standard for a causal connection between the two.

If the guidance is finalized unchanged, according to the EEOC, protected activity would encompass any activity that the employee subjectively believes is unlawful, as long as the employee’s belief is not “patently specious.” The definition also expands oppositional activity to include an individual who accompanies a coworker to make a complaint. The EEOC would also include participation activity, regardless of its truth or validity, as protected. For example, an employee would not have to have a reasonable, valid allegation, nor tell the truth during an EEOC investigation, to still retain protection and thus remain secure from employer disciplinary actions. The guidance even goes on to acknowledge its contradiction with many courts (including that of the Sixth Circuit, which covers Ohio), which do not include internal EEO investigations and harassment complaints as covered protected activity unless an EEOC charge is filed.

Reinforcing its historic opinion, the EEOC expands “adverse action” to include “any action that might well deter a reasonable person from engaging in protected activity.” This goes beyond work-related activities to encompass actions that have “no tangible effect on employment, or even an action that takes place exclusively outside of work.” Therefore, a retaliation claim could be made for employer action that, in fact, results in no harm whatsoever. The EEOC also adopts the “zone of interest” concept to allow for third parties to bring claims (i.e. an adverse action against an individual for a family member’s protected activity).

Perhaps most troubling for employers, this EEOC guidance goes beyond mere suggestion that direct evidence of a causal nexus between a protected activity and adverse action is no longer necessary. The guidance states that “a ‘convincing mosaic’ of circumstantial evidence that would support the inference of retaliatory animus” would be sufficient to demonstrate causal connection. For example, retaliatory conduct could be found years after protected complaint participation based on suspicious timing of the employer’s action, and even comparative evidence regarding treatment of other employees could be used to support an inference of retaliatory conduct. Also, retaliation would not have to be the sole cause of an adverse action, rendering a mixed motive defense useless.

The EEOC guidance also includes what it considers “best practices” for reduction of retaliatory conduct in the workplace.

If the EEOC guidance is finalized, employers should be attentive to its content and mindful in dealings with individuals who are involved in any “protected activity,” keeping in mind that “protected activity” will be construed broadly.

It has been reported that on February 17, 2016, U.S. Solicitor of Labor, Patricia Smith, announced at an American Bar Association conference that the white-collar exemption regulations will be published in July 2016, with an effective date 60 days after publication. When the U.S. Department of Labor last revised the exemptions, which was in 2004, the regulations became effective 120 days after publication.

For more information on the proposed rule, see “Changes to Exemptions from Overtime Rules Expected in July 2016.”

On February 1, 2016, as employers wrapped up employee W-2s for the year, the U.S. Equal Employment Opportunity Commission (EEOC) published proposed additions to EEO-1 data reporting for employers. In a joint effort with the Department of Labor and Office of Federal Contract Compliance Program (OFCCP), the EEOC seeks to gather employee wage data to assist with prevention of pay discrimination and enforcement of anti-discrimination laws. According to the EEOC, the proposal is based on its work with the President’s National Equal Pay Task Force and recommendations from various studies, including a National Academy of Sciences report, an EEOC Pilot Study, and work groups.

Under federal law, the EEOC and OFCCP require data collection by many private employers and federal contractors, submitted annually through the EEO-1. Currently, certain employers are required to report employee data based on sex, seven race and ethnicity categories, and ten job categories. Among other things, the proposal seeks to require private employers, with 100 or more employees, to collect and report data on employee W-2 earnings and hours worked. Under the proposed rule, Employers would need to identify the number of employees by ethnicity, race and gender whose earnings fall within the twelve specific pay bands. This information would then be used for aggregated data for statistical analysis by the EEOC and OFCCP. The EEOC and OFCCP are hopeful that the data will aide in employer self-monitoring and voluntary compliance in addressing pay inequities.

The OFCCP previously sought to collect wage data from federal contractors under a 2014 proposal. Public comments on the 2014 proposal flagged a lack of agency coordination, the burden of compensation data reporting, as well as privacy and confidentiality concerns.

The EEOC and OFCCP claim that the proposed reporting would pose minimal burden on employers because the requested data is “pay data that employers maintain in the normal course of business,” referencing employees’ W-2s and hours worked. Employers, however, will likely view the proposed requirements in a different light. The EEOC claims that this new data collection should be relatively easy for employers to retrieve due to the availability of software, but that’s yet to be seen. And, employers typically do not keep track of hours worked for non-exempt employees. As such, it is not clear how such information would be reported. The proposal will also likely be viewed as excessively intrusive into private employers’ business information. Finally, employers may also have concerns about confidentiality.

Should the proposal result in a final enforceable rule, it would not go into effect until the 2017 EEO-1 reporting cycle. The proposal is available here for review and public comments until April 1, 2016.

At the Cleveland Internship Summit on February 10, 2016, co-hosted by the Greater Cleveland Partnership and Cleveland State University, James M. McWeeney II appeared as one of the program’s featured speakers. James spoke on the topic, “Legal Aspects of Internships: Legal issues Employers Should Know.”

In an online article posted on February 3, 2016 by Crain’s Cleveland Business and titled, “New Department of Labor overtime rule is expected to cost businesses a bundle,” Patricia F. Weisberg warned employers to stay abreast of all Department of Labor changes, including anticipated overtime rule changes later this year, in order to avoid financial penalties and/or criminal charges.

The overtime rule is one of the more highly anticipated and contentious regulations to come out from the United States Department of Labor (DOL) in some time, and it is now expected to be released by July of this year. Once released, employers will likely have about 60 days to comply.

Between now and then, the DOL’s Wage and Hour Division is reviewing the nearly 300,000 comments that it received on its proposed rule. The tremendous outpouring of comments is reflective of the potential impact that the rule could have in its proposed form. At stake is an update of the Fair Labor Standards Act (FLSA) that would more than double the minimum salary for the overtime exemption from $23,660 to $50,440 per year. In addition, the salary threshold will be tied to an automatic escalator to keep pace with inflation for the first time.

The DOL is also considering whether to make changes to the duties tests for exempt employees. While it didn’t address those changes in the proposed rules, it did ask for comments on whether the tests should be changed. This is all part of President Obama’s agenda – one strongly supported by labor unions – to raise wages by making more people eligible for overtime pay.

Bottom line implications for employers will be significant, not only from a dollar perspective but also with regard to personal liability. As the government has continued to crack down on violations relative to the FLSA, employers that don’t comply with various rules, including the overtime rule, face increased risk of personal liability and criminal responsibility, including jail time. While the regulations have not changed in this regard, the government’s willingness to enforce the regulations has.

In our own backyard in Akron in 2015, for example, an owner of a restaurant and his wife were sentenced to jail for hiring undocumented workers, paying them in cash, paying them less than minimum wage, failing to pay overtime, and excluding them from payroll to avoid detection. The owner was ultimately sentenced to 33 months in federal prison and had to pay $100,000.

Farther east in New York City, the owner of several Papa John’s franchises was sentenced to serve 60 days in jail last year for creating fictitious employees in an attempt to hide the overtime and for failing to pay his workers minimum wage and overtime. In addition to jail time, the owner agreed to pay $230,000 in restitution to the workers. In another case, the attorney general’s office secured a judgement of nearly $3 million against two other Papa John’s franchisees.

Yet another restaurant owner in New York pleaded guilty to charges of failing to pay minimum wage and overtime to employees who sometimes worked in excess of 70 hours a week. She will pay $47,000 for unpaid wages to six former employees. She and her corporation are scheduled to be sentenced in March 2016.

Equally noteworthy is that personal liability can extend beyond the owners and go farther down the management chain. In 2013 the Eleventh Circuit Court of Appeals (covering Georgia, Florida and Alabama) held that any individual with control over an employer’s financial affairs who could potentially cause an employer to violate FLSA regulations may be liable. The court even found that two minority shareholders had sufficient control over the company’s financial affairs to be personally liable even though they were not present at the company more than a few days or weeks each month. There was another court case several years ago in Texas where an owner, plant manager and office manager were all convicted on felony charges related to FLSA violations and had to serve time. These cases however, are often complicated by, or arise in conjunction with, immigration and other legal issues.

Without a doubt, FLSA regulations should not be taken lightly, especially in cases where multiple employees routinely work more than the standard 40-hour work week. Given the DOL’s current strategy to seek enforcement of even unintentional violations against businesses and their owners and managers, employers need to stay abreast of all DOL changes, including the anticipated overtime rule changes later this year. Employers should consult with legal counsel experienced in labor and employment issues to ensure they comply in order to avoid financial penalties and/or criminal charges.

The U.S. Department of Labor’s (DOL) new overtime rule for white collar exemptions is now expected to be published around July 2016, according to the DOL’s Fall 2015 Semi-Annual Regulatory Agenda. On June 30, 2015, the DOL issued its proposed overtime rule for white collar exemptions. Once the final rule is published, the compliance timeline for employers will begin.

The DOL’s proposed rule almost doubled the minimum salary amount required for employees to be exempt as an executive, administrative, or professional employee. The proposed rule recommended the salary threshold for the exemption be increased from the current $455/week or $23,660/year to $970/week or $50,440/year. Further, while the DOL did not propose any changes to the “duties” test in June, it did invite comments on that topic. As such, it would not be much of a surprise if changes are made in the final rule to the “duties” test as well.

It is expected that employers will have at least 60 days to comply once the final rule is published.

Ever since the Ohio constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and determined that based on the consumer price index (CPI), Ohio’s minimum wage rates will stay the same in 2016.

Ohio’s minimum wage is currently $8.10 per hour for regular hourly employees. The minimum wage for tipped employees is $4.05 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $297,000 or less per year or (ii) 14- and 15-year-olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. The federal minimum hourly wage is currently $7.25.

The new poster is available by clicking here.

For more information on this or other employment law issues, please contact one of our employment lawyers.

In an article in a special “Legal Guidebook” section in the November 16, 2015 issue of Crain’s Cleveland Business, titled, “Government cracks down on misclassification of independent contractors,” Patricia F. Weisberg urged employers to be proactive in re-evaluating their independent contractor relationships to ensure that these workers are not misclassified employees.

In a Crain’s “Legal Guest Blog,” published on November 3, 2015 and titled, “State of the union: What to expect from the NLRB and how to respond,” Marc J. Bloch noted that the NLRB, in the months leading up to the 2016 general election, can be expected to continue its practice of issuing pro-union decisions.

On August 27th, the National Labor Relations Board (NLRB) dramatically reinterpreted the “joint-employer” doctrine. Under the National Labor Relations Act (NLRA), “joint employers” are two separate employers that both control the terms and conditions of shared employees-shared in the sense that the employees are employed by an entity that provides temporary labor to work for another employer or with whom that employer subcontracts. Previously, the NLRB’s definition of “joint employer” required both employers to have direct and immediate control over the employee(s) in question. The NLRB has expanded the definition to include any employer that has the right of “actual control whether direct or indirect.”

In Browning-Ferris Industries of California, Inc., (“BFI”), BFI engaged a subcontractor to perform “sorting” work at a recycling facility. The employees were employed by another company, Leadpoint, but were indirectly governed by BFI’s rules and pay structures. The NLRB cited two examples in which BFI asked Leadpoint to terminate an employee for BFI rules violations. BFI did not participate in day-to-day labor relations with the Leadpoint employees, and did not participate in the hiring or general retention of those employees. Nevertheless, the NLRB held that BFI had overarching indirect control over Leadpoint’s employees and consequently should be required to participate in collective bargaining negotiations with a union representing the Leadpoint employees.

We expect this case to be appealed to a United States Circuit Court of Appeals and ultimately to the Supreme Court. We also expect Congress to attempt to amend the NLRA to make this definition unlawful. Nevertheless, unless and until this case is reversed, employers, whether currently organized or not, must be aware that the hiring of contingent workers to augment a regular work force will put them at risk of being found an “employer” of the temporary employees or the subcontractor’s employees. The consequences of that finding may include placing the employer under a duty to bargain and may impose shared liability for any unfair labor practice charges that are filed on behalf of those employees.

The NLRB made it quite clear that this new definition of “joint employer” will replace the prior definition immediately and each case will be decided on its own facts. Consequently, it is necessary that employers that subcontract any work or hire contingent/temporary employees review existing rules and policies regarding such employees.

This case does not directly apply to franchisor/franchisee relationships. However, in a case involving McDonald’s fast food restaurants the NLRB is currently considering whether or not franchisors and their franchisees should be considered joint employers. Browning-Ferris could portend the outcome of this case as well.

Contact: Marc J. Bloch

In an article published in the 2015 Summer Print Issue of HR Cleveland and titled, “LGBT Rights in the Workplace,” Susan Keating Anderson advised employers to review and revise their policies regarding LGBT employees to ensure that they comply with any laws governing their workplaces.

In
an article published in Fine Print, a
publication of The Ohio State Bar Association, and titled, “DOL Updates
FMLA Model Forms
,” Patricia F. Weisberg advised employers to use the U.S.
Department of Labor’s new FMLA model notices, which now include a reference to
the Genetic Information Nondiscrimination Act (GINA).

As a service to our clients in the Education Law Group, Walter | Haverfield is offering,andnbsp;without charge, a variety of brief presentations geared toward educating district personnel on timely topics facing public school districts. Conducted on-site at the district, each continuing education presentation is designed to assist district representatives in identifying and addressing legal issues before they cause significant financial liability, operational harm or negative publicity. Each session will run approximately one hour and will provide sufficient time for any questions that may arise.

The Education Law Group has identified the following topics:

What Administrators Need to Know

This session will provide a comprehensive update on the status of various recent school law developments. Specific topics of discussion will include: (1) reduction in force and layoff concerns; (2) recent amendments to the Americans with Disabilities Act and Family Medical Leave Act; (3) recent FERPA amendments; and (4) an update on other timely legislative and judicial developments.

School Law Awareness for New Teachers

This session will provide a basic overview to new teachers designed to assist them in spotting legal issues as they arise and handling those issues properly. The session will highlight a variety of areas including bullying, harassment and discrimination, privacy concerns, child abuse reporting obligations and other common legal issues teachers may encounter.

Regulating and Managing Student Use of Cell Phones

This session will discuss issues faced by schools related to student use of cellular phones and electronic devices including: (1) the ability to regulate the possession and use of such devices; (2) how to lawfully address inappropriate content and use such as transmitting sexually explicit material, cyber bullying and cheating; (3) under what circumstances district personnel may conduct a lawful search and/or confiscate devices; and (4) other related topics such as videotaping teachers and other students. Learn how to address these situations to avoid liability by going too far … or not going far enough.

Responding to Student and Employee Misuse of Internet Web Sites

MySpace, Facebook and YouTube – the possibilitiesandnbsp;and problemsandnbsp;are endless. Can you discipline students or employees for posting material to a Website that attacks teachers, administrators or board members? What about teachers posting provocative pictures or discussing intimate details of their personal lives over the Internet? How do you address students posting pictures to the Internet of themselves drinking beer at a party? What about students recording teachers in the classroom and posting it to the Internet? We’ll discuss how to address these and other scenarios that are becoming all too commonplace.

How to Minimize Special Education Disputes and Successfully Defend Them When They Occur

Without getting into the more intricate complexities of the IDEIA, this session provides an overview of simple procedures which should be followed in order to minimize special education disputes and successfully defend them. The focus will be on practical advice regarding steps that should be taken: (1) at the initial evaluation stage; (2) during creation of an individualized education plan; and (3) during ongoing implementation of the IEP. We also will discuss common pitfalls school districts face in the special education context and how to avoid them.

Student Discipline 101

Students have many constitutional, statutory and contractual rights when it comes to discipline which exposes the district to potential liability if they run afoul of those rights. This session will walk you through the discipline process and provide practical tips on how to: (1) comply with notice and other procedural requirements; (2) ensure that student discipline policies and handbooks are consistently applied and enforced; (3) avoid infringing students’ rights; (4) properly document the disciplinary incident; and (5) successfully prosecute the proposed discipline and/or defend legal challenges to the proposed discipline.

How to Properly Discipline Employees

This session will provide practical advice on how to: (1) properly discipline employees, even when faced with the most difficult employees and challenging situations; (2) maintain control of the disciplinary process; and (3) properly document and investigate the disciplinary action so that the Board is best positioned to defeat challenges to the disciplinary action in arbitration or court.

Grievance Processing and Preparing for Arbitration

In this session, we will discuss how to properly handle grievances at each stage of the process, from the initial notice of the grievance through arbitration. We will focus on practical advice on how to defeat grievances brought by both teaching and non-teaching staff. We will discuss the essential steps that must be taken at the first stage, how to best respond to grievances throughout the process and what administrators need to do in order to be successful at arbitration.

Evaluations and Non-Renewal

Don’t get stuck with a bad employee for decades because of one missed procedural step! During this session, we will discuss the procedural and substantive requirements required to non-renew both teaching and non-teaching staff. We will also provide practical tips on how to (1) avoid common pitfalls; (2) ensure a non-renewal decision is supported by adequate documentation; and (3) handle any apparent flaws that may have occurred.

A Roadmap for Navigating the Family Medical Leave Act

Recent revisions to the FMLA have complicated what was already a complex set of regulations. In this session, we will discuss the recent changes to the FMLA and the impact of those changes upon school districts. Among the items for discussion are the revisions to the eligibility, medical certification, notice, and other provisions of the FMLA, including the military leave amendments. We will also discuss the application of these provisions in evaluating and addressing requests for FMLA leave from both certificated and non-certificated staff members.

If you are interested in scheduling one or more of these sessions for your district, please contact one of ourandnbsp;Education Law Group attorneys.

Byandnbsp;Stephen L. Byronandnbsp;andandnbsp;Aimee W. Lane.

As we informed you earlier thisandnbsp;summer, the State of Ohio reached an $11.5 million settlement in its price-fixing lawsuit against road salt providers Cargill, Inc. and Morton Salt, Inc.

Under the terms of the settlement, public entities that purchased road salt from Cargill and/or Morton between July 1, 2008 and June 30, 2011 may be entitled to receive compensation for overpayment because of artificially high prices.

In order to determine eligibility, local governments must submit a claim form, found on the Ohio Attorney General’s website, on or beforeandnbsp;August 21, 2015.andnbsp;

If you have any questions about the settlement, the claim process, or any other public law issues, please contact one of the attorneys in Walter | Haverfield’sandnbsp;Public Law Services group.

With the enduring popularity of social media sites such as Facebook, Twitter, and Instagram, companies large and small are looking to connect with the social media market and use it to their marketing advantage. However, with social media marketing can come employment-related headaches that aren’t always anticipated.

So, here’s the scenario. You’ve assigned an employee the task of managing your company’s social media presence. The employee works to promote the company’s brand and products/services via company-owned and maintained blogs and websites as well as through third-party applications such as Twitter and Facebook. The social media campaign successfully garners numerous “friends” and “followers.” Everything is going gang busters… until the employee resigns unexpectedly or is terminated and you realize you are unable to access the social media sites managed by the employee.

So what exactly are the issues you need to think about when rolling out a social media campaign?

A significant issue a company could encounter when placing its social media marketing in the hands of an employee is lack of access. In too many situations, only one employee has the log-in information or the administrative rights to access and update social media content. Now, suddenly that employee is gone and so is access to the accounts, leaving the company vulnerable, at least until the IT department can re-route access (which may be no easy task if you are dealing with a third-party social media site such as Twitter). In addition to losing access, a disgruntled employee can cause a lot of damage while the company scrambles to take down a page, block access, or gain control of the account. In the meantime, the company’s reputation and valuable marketing asset–its “friends” and “followers”–may have been compromised.

It is imperative that, in any social media marketing campaign, senior managers or company owners have the log-in and passwords associated with all accounts. In addition to ensuring that someone in management has the necessary information to maintain and control the account, employers may be able to implement system settings that provide alert notifications when a password has been changed. Employee handbooks and policies also should carefully detail requirements for employees to disclose passwords and provide advance notification before changing any login information.

Another concern is content. Specific review protocols should be in place to ensure that inappropriate or confidential information is not posted or disseminated through social media. For instance, for employees who blog or post about company products, the Federal Trade Commission mandates that employees must disclose that they work for the company and cannot appear to be regular customers. Review procedures should also be in place to ensure that postings and content made on behalf of the company are in line with the company’s image, do not violate workplace policies such as confidentiality or discrimination policies, and do not open the door to potential company liability.

The bigger, potentially more expensive, issue is ownership. If ownership terms are not specifically spelled out in the employment contract, a dispute could arise as to whether or not the accounts and, more importantly, the “friends” and “followers” belong to the company or the person who cultivated them. The ownership issue is particularly blurred if the employee launches the company accounts using a database that he/she already cultivated prior to joining the company, or if, for instance, employees use personal Twitter handles–exclusively or in addition to the company handle–when communicating on behalf of the company.

Some general tips for employers looking to protect their social media assets include:

  • Specifically outline in the employment contract and policies who owns what.
  • Establish accounts using the company name in the handle or account name.
  • Require ongoing disclosure of all passwords and log-in information.
  • Review the terms of service of all third-party social media sites to ensure your ownership and access protocol is adequate to protect your interests.
  • Develop guidelines for social media content and oversight.
  • Implement internal technology systems and controls favorable to protecting your access and control of such sites.
  • Train your employees and supervisors who have social media-related responsibilities on the applicable policies and protocol.

As previously mentioned, this is a new area for many companies, as well as for the courts; however, the existence of clear policies and agreements setting forth the parties’ rights relative to social media often go a long way in resolving such disputes. In addition, it is always good to consult with experienced legal counsel to ensure such policies meet legal, as well as operational, concerns.

To reach Susan, call 216-928-2936 or e-mail sanderson@walterhav.com.

School administrators today are challenged in creating policies and responding to an array of issues that few people would have anticipated as little as five years ago. Consider the challenge of dealing with transgender students.

Transgender is the term that legally describes students whose current gender identities are different from their assigned sex at birth. Although the number of cases involving transgender students is still low, our education law team receives a steady stream of inquiries from schools that are faced with an array of sensitive policy-making decisions around this topic.

The highly charged issue is characterized by strong emotions on both sides. Consider the student who was born male but who is now transitioning to become a female. The student and his parents insist he should be able to use the girls’ restroom. Legally, the United States Department of Education’s Office of Civil Rights has opined that this student has equal rights and access to the girls’ restroom and locker room. But imagine the reaction of the other parents who argue that the student, who still has male body parts and is, biologically speaking, still a boy, should, therefore, continue to use the boys’ restrooms and changing facilities.

Such issues are complex enough when encountered in the adult workforce, especially since there is currently no objective legal definition as to when someone has officially transitioned. They are complicated at the high school level by the high emotions that characterize most teens who are exploring sexuality issues.

The transgender debate has received so much attention that it forced the Ohio High School Athletic Association (OHSAA) to adopt a formal policy specific to it this past November. The issue has major implications for sports teams which could benefit from or be accused of cheating by having a transitioned boy on the girls’ team, for example.

The OHSAA policy states that transgender student athletes should have equal opportunity to participate in sports. It further reports that policies governing sports should be based on sound medical knowledge and scientific validity and developed in a way that preserves the medical privacy of transgender students. Under the policy, all requests from parents indicating a transgender student’s desire to participate on a sports team that is inconsistent with that student’s gender at birth must be submitted to the school in writing and approved by the Commissioner’s Office. In order to qualify, students must have completed a minimum period of hormone treatments and be able to prove by way of “sound medical evidence” that their physical characteristics, including muscle mass, do not dramatically differ from other teammates. All medical treatments must be monitored by a physician and regularly reviewed by the Commissioner’s Office. There is also an appeals process parents can follow if they disagree with the school’s decision.

But the headaches caused by the issue of transgender students don’t end on the sports field.

Since the issue is still relatively new, most school districts are handling these types of situations on-the-fly and on a case-by-case basis. Yet, it is important that policies be created and enforced consistently and uniformly so as to minimize negative media publicity and parent outrage, as well as the risk for discrimination or harassment lawsuits. As can be easily imagined, transgender students can often be the target of bullying by other students. As is true of any other case involving bullying, the school needs to respond quickly and consistently as part of its overall zero-tolerance policy.

It is difficult to address all of the potential discrimination issues in this one article. An especially sensitive issue involves uniform policies and dress codes. Consider the case of a boy wearing nail polish to school. Can he be disciplined by the school for such behavior? It depends on what’s written in the student handbook. Many schools have policies that generically “prohibit dress that interferes with or disrupts the educational environment.” But if nail polish is acceptable for some students and is not specifically prohibited by school policy, it would be ill-advised to proceed with any punitive action in this case. Remember that, even if an action appears unconventional and highly controversial, schools need to be careful in applying rules uniformly.

And how should name changes be handled? If a student who was called James all his life now wants to be called Jane, do you allow it or not? Currently, Ohio law does not expressly address this issue for schools. Thus, there is no one simple answer, because it all depends on what has been allowed in the past. If the school has allowed other kids to change their names–first or last name– for any reason, it is risky to deny a similar request from a transgender student. Other tricky name change issues involve students who have graduated and wish to have official student records changed to reflect a new name that matches their gender identity. Whether a district grants or denies these requests hinges on a number of factors, including past practice and whether the former student has legally changed his/her name. If a district elects not to allow a change to the former student’s records, it can still assist a former transgender student by providing a letter or other documentation that the name on the student’s transcript matches the name he/she was using while in high school.

In our constantly evolving world, it’s difficult for school districts to always anticipate the next big challenge. But the one rule you can rely on to help minimize risk is be consistent.

andnbsp;a Crain’s “Legal Guest Blog,” published on May 20, 2015 and titled, “Social media marketing accounts can create tangled employment-related issues,” Susan Keating Anderson provided guidance for employers looking to protect their social media assets.

In a Crain’s “Legal Guest Blog,” published on May 5, 2015 and titled, “Recent Supreme Court decision leaves employers wondering about obligations to accommodate pregnant workers,” Patricia F. Weisberg assessed the U.S. Supreme Court’s recent decision in Young v. United Parcel Service, Inc., which addressed the issue of pregnancy discrimination in the workplace.

Time magazine’s recent cover, depicting a mother nursing her almost 4-year-old son, brought the subject of breastfeeding into the spotlight as water cooler debate across the globe.

The age-old issue of nursing mothers in the workplace, however, has long presented legal challenges and debate for both employers and employees alike.

Much of this debate, and the ensuing confusion, stems from the fact that very few employment regulations directly address nursing mothers. The increased focus on the benefits of breastfeeding in general, however, has spurred a move toward clearly defining the legal rights and obligations of breastfeeding mothers and their employers, including what accommodations need to be made for nursing mothers so that they can express their breast milk privately when they are at work.

Provisions in federal law

At the federal level, the 2010 Patient Protection and Affordable Care Act (PPACA) contains a provision that requires employers covered by the Fair Labor Standards Act (FLSA) to provide both “reasonable breaks to mothers to express breast milk” and an appropriate, private area for them to do so. The reasonableness of the breaks is a fact specific question that will vary depending on the employer and employment context. As to the location for these breaks, Fact Sheet #73, issued by the U.S. Department of Labor, confirms that a restroom is not a permissible break location.

Instead, the DOL fact sheet notes that employers must provide nursing mothers with a “space temporarily created or converted into a space for expressing milk or made available when needed” and that the space must be sufficiently “…shielded from view and free from any intrusion from co-workers and the public.”

Additionally, as long as the employee has been completely relieved of her employment duties, employers are not required to compensate an employee for these breaks, regardless of the break’s duration. But, if the employee wishes to use a compensated break already available to her and other employees for the purpose of pumping, the employer must compensate her the same way it compensates other employees.

Despite its clearly spelled out protections, the PPACA provision has one glaring omission: Only employees who are not exempt from the FLSA’s overtime pay requirements, typically hourly employees, are legally entitled to breaks to pump. Employers should consider other factors, such as employee morale and retention, when considering extending the same opportunities to pump in the workplace to exempt employees.

The 50 employee hardship exemption

Also note that there is a hardship exemption from this provision for employers with fewer than 50 employees, if the employer can demonstrate that compliance would “impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business.”

Caution is suggested when employers are determining that they are unable to comply with the PPACA’s requirements. A careful analysis as to whether the reasons they believe they cannot comply the requirements will meet the undue hardship standard is recommended before they make any final decision.

Additionally, bear in mind that employees must notify employers of their intent to take a break for the purpose of expressing milk and that there have been cases decided in favor of the employer’s right to terminate workers for taking such a pumping break without notification. The Ohio Supreme Court, for example, has previously upheld an employer’s right to terminate in such a case.

Before deciding to terminate a lactating employee for taking unscheduled breaks, employers need to review their break policy as a whole. Do they permit other employees to take unscheduled breaks? And, if so, for what reasons? A neutral and consistent disciplinary policy should be implemented and enforced company-wide. Employers also generally may require their breastfeeding employees to follow other rules applicable to all employees.

Proposed Breastfeeding Promotion Act

Employers need to be careful, however, and be aware of the laws surrounding lactating employees in their states because the Ohio Supreme Court implied in that case that, if the issue was placed before it, it could find that Ohio law prohibits discrimination against nursing mothers.

In fact, along that same line of thinking, the proposed Breastfeeding Promotion Act of 2011 (BPA), a proposed amendment of the Civil Rights Act of 1964, seeks to protect breastfeeding women from workplace discrimination. It also is designed to provide employees who are exempt from the Fair Labor Standards Act and who are not protected under the PPACA with the right to a have a break to pump breast milk in an appropriate location during working hours.

If passed, the BPA would broaden the category of employees entitled to federal protection for pumping in the workplace and would also broaden the protection afforded employees by specifically prohibiting discrimination, including discharge, based on pumping or otherwise expressing milk in the workplace.

Simply put, both of these federal measures clearly indicate that employers should have clearly defined policies and protocols in place for objectively and fairly dealing with breastfeeding employees. Always check with legal counsel before implementing or enforcing any policies that affect an employee who is breastfeeding or expressing milk during work hours or on work premises.

Susan Keating Anderson is a labor and employment attorney at Walter | Haverfield LLP in Cleveland. She provides general counsel to employers on a variety of workplace matters and HR issues, and has conducted numerous in-services to train employees and employers on best employment practices and procedures. In her practice, Susan has successfully defended employers against charges of discrimination, sexual harassment, wrongful discharge, defamation, and workplace privacy violations. Contact her at sanderson@walterhav.com.

Although Time made breastfeeding a hotly debated issue with its recent cover photo of a mom nursing her almost 4-year-old son, breastfeeding in the workplace has long presented a legal stumbling block for employers and employees alike. The dearth of laws directly applicable to the situation has fueled confusion; however, the increased focus on breastfeeding in general has spurred a move towards defining the legal rights and obligations related to breastfeeding in the workplace.andnbsp;

This is evidenced at the federal level by the 2010 Patient Protection and Affordable Care Act (PPACA), which contains a provision that requires employers covered by the Fair Labor Standards Act (FLSA) to provide both “reasonable breaks to mothers to express breast milk” and an appropriate area for the process. More recently, the proposed Breastfeeding Promotion Act of 2011 (BPA) seeks to protect breastfeeding women from being discriminated against in the workplace and to afford employees exempt from the FLSA, who are not protected under the PPACA, the right to a break and appropriate area to pump in the workplace.

Under the PPACA, breastfeeding employees must be provided “reasonable” breaks to pump. The reasonableness of the breaks is a question that will vary depending on the employer and employment context. As to the location for these breaks, Fact Sheet No. 73, issued by the Department of Labor, confirms that a bathroom is not a permissible break location. Rather, a functional space must be provided for the employee’s use; it need not be dedicated solely for that purpose, but it must be available to the employee when she needs it. According to the fact sheet, “A space temporarily created or converted into a space for expressing milk or made available when needed by the nursing mother is sufficient provided that the space is shielded from view and free from any intrusion from co-workers and the public.”andnbsp;

As long as the employee has been completely relieved of her employment duties, employers are not required to compensate an employee for these breaks, regardless of the break’s duration. However, if the employee wishes to utilize a compensated break that was already available to her and other employees for the purpose of pumping, the employer must compensate her the same way it compensates other employees.

One glaring omission under the PPACA, however, is that only employees who are not exempt from the FLSA’s overtime pay requirements (typically, hourly employees) are legally entitled to breaks to pump. An employer should consider whether other factors, such as employee morale and retention, might dictate that it extend the same opportunities to pump in the workplace to exempt employees.

It’s important to note that there is a hardship exemption from this provision for employers with fewer than 50 employees, if the employer can demonstrate that compliance would “impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature or structure of the employer’s business.” Employers should be cautious in determining that they are unable to comply with the PPACA’s requirements, however; they need to undertake a careful analysis as to whether the reasons they believe they cannot comply with the requirements will meet the undue hardship standard.andnbsp;

It is also important to note that employees must notify employers of their intent to take a break for the purpose of expressing milk. The Ohio Supreme Court has previously upheld an employer’s right to terminate an employee for taking an unauthorized break to pump because she failed to notify said employer of her intentions. Be careful, however, because the Supreme Court implied in that case that, if the issue was placed before it, it could find that Ohio law prohibits discrimination against lactating employees.andnbsp;

Before deciding to terminate a lactating employee for taking unscheduled breaks, employers should consider whether they permit other employees to take unscheduled breaks and, if so, for what reasons. A neutral and consistent disciplinary policy should be implemented and enforced. In addition, employers generally may require their breastfeeding employees to follow other rules applicable to all employees.

With the number of union workers at an all-time low in this country, it should really come as no surprise that unions have resorted to more drastic, unconventional methods of recruitment. The use of worker centers to help recruit traditionally unorganized sectors of the workforce has caught the attention of not only the media, but also business leaders and even politicians across the country. As a result, the House Subcommittee on Health, Employment, Labor and Pensions has scheduled a hearing titled “The Future of Union Organizing”. The focus of the hearing is to discuss the impact of worker centers on the union movement.

If you haven’t already read one of the more than dozens of national newspaper stories focused on the latest union escapades, it’s good to start with an explanation: Worker centers are non-profit organizations that “provide” services for workers in construction, restaurants, retail, food processing, agricultural, landscaping and domestic professions. Although these worker centers are not officially affiliated with unions and, on the surface, appear to not have a lot in common with them, they have been in the spotlight recently and are credited with focusing attention on workers’ rights through such tactics as the highly publicized national one-day strike in the fast food industry in mid-September.

A primary advantage of worker centers is that they fall outside the scope of the National Labor Relations Act’s provisions that regulate, among other things, how and when unions can picket and can interact with employees and management. Clearly, the move by organized unions to work with worker centers signifies a willingness on the part of unions to utilize bold, new and strategic tactics to re-energize the union movement. However, by reaching out to such non-organized groups, it can also be seen as a last-ditch effort to breathe life into a languishing ideology.

Whether or not the “partnership” of unions and worker centers can truly be successful relies largely on economic realities. Traditionally, worker centers represent the bottom rung of the American labor force—the unskilled and minimum wage earners. Therefore, it is unrealistic to expect that their employers can absorb the type of wage increases being sought. Take the fast food industry, for example. While it is true that it is difficult, if not impossible, to support a family while making minimum wage, the companies employing these workers do not have the type of margins to support a major wage increase. In response to worker demands to make more money, these companies are more likely to automate their operations which, in the end, will actually decrease the number of workers employed.andnbsp;

Nevertheless, the work center approach is not intended to be just a labor union issue. Rather, it is part of a grander strategy to highlight perceived economic and social inequities in the American work force. The backdrop to this strategy is “raising” social awareness and, therefore, general worker disenchantment with their current working conditions—hence, call your local union organizer for help.

It is worth noting, however, that the union movement first got its start with a group of employees who had issues with their employers and continued to grow until they forced political and business leaders to focus on an underserved population. This, in many ways, is how and why worker centers operate.

Up until this point, however, the impact of the worker centers and their one-day strikes appears to have been minimal (although somewhat disruptive, as is typical for any group trying to start a “revolution”). But it is still very early to try to predict any end results. It is very likely, however, that tactics and initiatives will become less peaceful as time goes on.

While most legal and labor professionals are currently taking a wait-and-see approach, this is a good time to revisit hiring and employment practices and procedures. The best way for keeping the union away from your doors is to hire the right people, treat them fairly, allow them to move forward and, overall, give them dignity.andnbsp;

Without a doubt, these are certainly interesting and unprecedented times for labor.

The Obama administration, after having basically ignored its labor constituency for five years, is now in a position to implement some broader pro-union strategies.

While the administration is using a multi-pronged approach in its attack on business, I want to concentrate on the more controversial initiatives that are being pursued by the U.S. Department of Labor (DOL) and the National Labor Relations Board (NLRB).

Let’s start with the DOL’s increased focus on and investigation of “inequality of wages based on sex in the workplace” by the Office of Federal Contract Compliance Programs (OFCCP). While such alleged inequality bears investigation, it appears that the DOL has reached a predetermined conclusion, which, if successfully applied, will cost employers untold billions of dollars.

The second area of interest is the DOL’s rulemaking as it relates to two timely issues.

On the one hand, the DOL has signaled its intention to implement the controversial “persuader” rule in March. If this draconian rule is implemented in its current form, it will significantly diminish the types of union resistance activities by employers that normally occur during NLRB- sponsored union elections. Any pro-employer activity by lawyers in a union representation campaign would trigger DOL reporting requirements, which lawyers and their clients are loathe to follow and would amount to a “game changer” during union resistance campaigns.

Similarly, the DOL is refusing to issue any guidance regarding union-sponsored “work centers,” finding that they are not governed under current applicable National Labor Relations Act guidelines since a work center does not constitute a labor union because it is not “the employees’ bargaining representative and does not negotiate employment terms with employers.”andnbsp;

Finally, the third leg of the administration’s attack on business is found at the NLRB, which has recently taken a number of strongly pro-labor, anti-business actions. A case in point is its recent complaint against Wal-Mart for disciplining employees who are members of work centers for engaging in “partial” strike activity.andnbsp;

The case of national homebuilder D.R. Horton is another great example, as the NLRB is trying to come to grips with the rights of companies to enforce non-union employee arbitration agreements. Generally, the courts of appeal believe such activity by non-union companies is permitted but the NLRB believes that such clauses act to inhibit permitted union activity. The Fifth Circuit Court found against the NLRB’s position regarding its stand on non-union arbitration agreements. Nevertheless, the court granted the NLRB an additional time to decide if it wants to pursue this matter further. It seems likely that the current NLRB will try to get the Horton decision in front of the Supreme Court.

These efforts are on top of what the NLRB did last year when it determined that a smaller bargaining unit may be “carved out” from a larger overall employee unit in some instances. For example, employees in a cosmetic department of a large department store may, in fact, be considered a bargaining unit in and of itself to help facilitate organizing efforts.

In an additional move to support the languishing efforts of unions to organize, the NLRB also is expected to re-introduce its “ambush election rule.” The action, which met with resistance in 2013, will likely be resurrected in 2014 to expedite union elections in a manner that will arguably increase union victories by not giving employers sufficient time to present their side of the issue.

The nexus of all these matters is that the Obama administration, through its various departments and agencies, has taken it upon itself to go after some of the most successful companies in the country for purely philosophical reasons — i.e. success brings about inequality, whereas mediocrity does not. This argument, although not as bluntly stated, appeals to the media and the small group of uneducated employees that, for a variety of reasons, has not been able to participate in the tech revolution.andnbsp;

Consequently, it is clear that employers are in for a rough several years, unless the make-up of the Senate and the House changes, in which case there will be some pushback on a congressional level. With a gridlocked Congress unlikely to make much progress, however, it is obvious that the Obama Administration is seeking to accomplish its pro-labor agenda through the various government agencies that will be operating with a clear anti-employer bias.andnbsp;

The purpose of this blog is not to provide advice to employers struggling to deal with the changes or lack of changes in the various employment-related government agencies. Rather, it is to complain that the National Labor Relations Board (NLRB) and the Department of Labor (DOL), specifically, the Fair Labor Standards Act (FLSA), are historic anachronisms.andnbsp;

The world and, more specifically, the workplace have changed so much since these government entities and their various regulations came into being. Consider the FLSA, for example.

Created in 1938, the Act was, at its most basic level, established to provide rules governing overtime pay in an industrial world. Today, this act covers more than 75 million workers who perform jobs that only existed in science fiction in the 1930s.andnbsp;

To say that the FLSA is a bit outdated is a serious understatement.

In March of this year, President Obama proposed changes to the FLSA that, among other things, would require overtime for several million currently exempt employees. While it is commendable that the President recognized the need to update the Act, the proposed changes fall abysmally short of bringing the Act in line with today’s workplace. In order for our nation to be competitive in a global market, we need workplace policies that are flexible and responsive. American businesses would greatly benefit from the elimination of vast segments of the outdated Act. Or, at minimum, numerous sections need to be brought up to 21st century standards and demands.

In contrast to the DOL, which has changed little since its inception, is the NLRB, an agency in search of a mission. Clearly, with unionization at a historic low point, the NLRB’s original mission has been eviscerated. It is beyond debate that private sector unionization has eroded from 35% to around 7% since WWII and that that erosion is a direct result of unions not properly responding to changes in the post-industrial workplace and workforce. Like the DOL, the NLRB mirrors that ostrich-like obliviousness.andnbsp;

On the one hand, management at most companies is much better in responding to employee needs and wants than it was 70-80 years ago. That means fewer disgruntled employees and less need for nanny-agencies like the DOL and NLRB. Adding to this reality is that the union movement and its workplace brethren have, for the most part, been unable to “live up” to expectations of workers. Anyone who expected the DOL and NLRB to have noted the changing workplace, workforce and unionization rates and respond appropriately is sorely disappointed.andnbsp;

Indeed, under the Obama Administration, the NLRB actually strengthened its hold over the workplace through a more expansive reading of workers’ rights as provided under Section 7 of the National Labor Relations Act (NLRA), which permits employees to engage in “protected and concerted” activities. As part of this expansion, the NLRB is now taking some very controversial actions related to employee handbooks and workplace rules — including its recent holdings that an employer has no right to expect its workers to act courteously and with civility.andnbsp;

For example, in a recent case the NLRB found that handbook provisions that prohibited “negativity and gossip” and required employees to act in a “positive and professional manner” were deemed illegal because they were somehow construed to be “limiting” employees’ rights (to act badly and unprofessional, I assume). In another recent case, a handbook provision that prohibited “discourteous or impolite” behavior was also found to violate employee rights.

The result of all this over-regulation is that employers need to be more careful than before and involve legal counsel to a greater degree when crafting nearly any employee policy or employee handbook, spending money that could be used to grow the business. Does the NLRB really have so little to do these days that it is spending its time and efforts in striking down policies that discourage disruptive employee behavior? And should such disruptive behavior occur, how then would this irrelevant agency deal with it?

Without a doubt, the mid-1930s are long gone. And it’s time that our various government agencies and governing bodies get a grasp on what is needed today to help American businesses thrive instead of crippling them with this sort of nonsense.

On March 26, 2015, the U.S. District Court for the Northern District of Texas preliminarily enjoined the same-sex spouse rule promulgated under the Family and Medical Leave Act (“FMLA”), as a result of Texas, Arkansas, Louisiana, and Nebraska filing a lawsuit to enjoin enforcement of the Department of Labor’s (“DOL”) rule. The rule, effective March 27, 2015, allows legally married couples – including same-sex couples – to enjoy the rights provided by the FMLA, regardless of the laws in the state in which the employee currently resides. These states argued that the DOL exceeded its jurisdiction by forcing employers to look to the law in the state in which the marriage took place, rather than the law of the state in which the employee who is seeking FMLA leave resides.

The Court found that the final rule would require Texas agencies to recognize out-of-state same-sex marriages in violation of state law. The Court’s ruling essentially puts the rule on hold in these four states and, for now, prevents employees in same-sex marriages from receiving the benefits afforded heterosexual married couples under the FMLA. Employers in other states need to comply with the DOL’s rule unless or until a court in their jurisdiction rules likewise. One possible outcome of the Texas court’s ruling is that the DOL may opt not to enforce the new rule in other states until the issue is resolved by the courts. The DOL has requested that the court reconsider its decision. Oral argument is currently scheduled for later this month.

On March 25, 2015, the U.S. Supreme Court issued its decision in the Young v. United Parcel Service, Inc.andnbsp;case. Employers and employees alike were hopeful that the Court would provide much-needed guidance about when and how employers are required to accommodate pregnant workers, particularly with respect to providing light duty. While the Court provided some guidance, it did not resolve the issue directly and employers are still left with a difficult decision.

In theandnbsp;Young v. UPSandnbsp;case, Young, the female plaintiff, was a delivery truck driver for UPS when she became pregnant. Young’s physician placed her on light duty early on in her pregnancy due to a lifting restriction. UPS denied Young’s request to work light duty because the requirement that she be able to lift more than 20 lbs. was an essential function of her job. Young was, therefore, forced to remain on an unpaid leave of absence during her pregnancy. UPS, however, did have a policy that allowed employees who had work-related injuries to work light duty. UPS also provided light duty to other types of employees, such as those who have disabilities. Employees who did not fall into any of the exceptions were not eligible for light duty assignments. The lower courts concluded that UPS’s policy was lawful because the policy treated pregnant workers and non-pregnant workers alike.

Young’s lawyers argued that UPS’s policy providing light duty work for certain employees, but not for pregnant employees, violated the Pregnancy Discrimination Act (“PDA”). UPS argued that an employer may have a facially neutral policy so long as pregnant employees and non-pregnant employees are treated the same.

In deciding the case, the U.S. Supreme Court did not agree with either party. The Court confined its ruling to the issue of whether UPS’s actions constituted a violation of the PDA, which states in part that “women affected by pregnancy, child birth or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability to work.” The Court then created a new standard. Under the new standard, in order to establish a pregnancy discrimination claim, a pregnant worker needs to offer evidence that: (1) she is in a protected group (pregnant); (2) she requested an accommodation because of her pregnancy; (3) the employer refused the request for accommodation; and (4) the employer provided accommodations for others who are temporarily similarly unable to do their work. If the pregnant worker is able to provide this proof, the employer is obligated to show that it has a legitimate, non-discriminatory reason for denying accommodation. Legitimate reasons do not generally include cost or convenience. If the employer is able to produce such evidence, the employee has the obligation to demonstrate that the employer’s reason was a pretext for discrimination. What’s new is that, in proving pretext, the employee can argue that the workplace policy puts a “significant burden” on pregnant workers and that the employer’s legitimate, non-discriminatory reasons are not “sufficiently strong” to justify the burden. The Court further explained that a pregnant worker can “create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of non-pregnant workers while failing to accommodate a large percentage of pregnant workers.”

The Court ultimately found that there was a genuine dispute as to whether UPS provided more favorable treatment to at least some employees whose situation could not be reasonably distinguished from Young’s. The Court sent the case back to the lower court to consider the evidence, consistent with the Court’s new standard. And, while the Court did not give employers a definitive answer, the Court did reject the idea that an employer isandnbsp;necessarily requiredandnbsp;to provide light duty to a pregnant employee simply because it provides light duty to one set of employees, such as those injured on the job.

What should employers do now?andnbsp;Employers that have policies allowing for light duty for some employees should consider whether light duty should be made available for pregnant workers in similar circumstances. If an employer is not inclined to go this route, the employer should consider whether its policies impose a “significant burden” on pregnant workers and whether its legitimate, non-discriminatory reasons are sufficient to justify the burden. When making these decisions, employers should consider whether they are willing to litigate these issues to trial, as summary judgment will likely be more difficult to obtain under the Court’s new standard.

Another concern that complicates this issue for employers is the definition of disability under the Americans with Disabilities Act (“ADA”). Employers must be mindful that the definition of disability under the ADA may now be interpreted in many circumstances to include short-term impairments when related to what we otherwise consider healthy pregnancies. Many employers will have a duty toreasonablyandnbsp;accommodate pregnant employees under the ADA (as opposed to the PDA) by providing light duty. The bottom line is that, before employers refuse to provide pregnant employees with an accommodation such as light duty, they should consult with legal counsel.

In a Crain’s “Legal Guest Blog,” published on April 17, 2015 and titled, “Be aware of special legal restrictions when hiring teens this summer,” Patricia F. Weisberg advised employers about federal and state regulations which govern teen summer employment.

The United States Department of Labor issued a Final Rule in February, revising the definition of a “spouse” under the Family and Medical Leave Act (“FMLA”), which extended the FMLA’s protections to married, same-sex couples. The rule is designed to implement changes required as a result of the United States Supreme Court decision inandnbsp;United States v. Windsor. In that case, the court struck down the Federal Defense of Marriage Act provision which restricted the definitions of “marriage” and “spouse” to opposite-sex marriages for purposes of federal law.

The new regulation allows legally married couples, opposite-sex and same-sex, to enjoy the rights provided by the FMLAandnbsp;regardless of the laws in the state in which the employee currently resides.andnbsp;Accordingly, as long as the employee is legally married in a location that allows for same-sex or common law marriages, the employee is married for purposes of the FMLA, even if the state in which the employee resides does not recognize same-sex marriages. The Final Rule also includes those employees in lawfully recognized same-sex and common law marriages which were entered into outside of the United States, as long as they could have been entered into in at least one state. The FMLA still does not apply to civil unions or domestic partnerships.

The Rule will become effective on March 27, 2015. Employers will therefore want to update their FMLA policies or at least notify decision-makers regarding this change. The new regulations will not only impact a spouse’s right to take care of his/her spouse, but a spouse’s right to take care of a child or “stepchild.”

Employers may request reasonable documentation of the marriage, which can be a statement from the employee or documentation from a court, but any such request should not interfere with an employee’s exercise of his or her FMLA rights. Generally, employers will already have such information in the personnel file along with an employee’s emergency contact, healthcare benefits or beneficiaries issues with respect to employee benefit plans. Employers should, however, be consistent in requesting documentation for same-sex and opposite-sex marriages.

WHAT EMPLOYERS SHOULD DO NOW:

  • Revise FMLA policies and FMLA forms to reflect that leave for legal, same-sex spouses is covered under the FMLA.
  • Ensure those administering FMLA leave are aware of and understand the change in the law.
  • Understand how the new definition may impact other benefit plans related to FMLA leave.

In a Crain’s “Legal Guest Blog,” published on March 27, 2015 and titled, “Family and Medical Leave Act rights have been expanded to same-sex couples,” Patricia F. Weisberg discussed the recent enactment of a “Final Rule” by the U. S. Department of Labor, which extended the Family and Medical Leave Act’s protections to married, same-sex couples.

byandnbsp;William R. Hannaandnbsp;andandnbsp;Benjamin G. Chojnacki

On Wednesday, January 14, 2015, the United States Supreme Court issued a decision clarifying what information must be provided when denying an application for cell phone tower siting under the Telecommunications Act.andnbsp;T-Mobile South, LLC v. City of Roswell, Georgia, 574 U.S. ____ (2015).

The City Council of Roswell, Georgia held a public hearing to consider an application to build a cell phone tower on residential property, filed by T-Mobile South. During the hearing, several members of Council voiced concerns about the impacts of the proposed tower on the area. At the conclusion of the hearing, Council passed unanimously a motion to deny the application. Two days later, the City notified T-Mobile that the application was denied, and told T-Mobile that there would be minutes from the hearing. The minutes were published 26 days later. T-Mobile sued, alleging that the denial wasn’t supported by substantial evidence in the record. The District Court agreed with T-Mobile, but the Eleventh Circuit Court of Appeals reversed, finding that the City complied with law, because T-Mobile had received a written denial letter and had a transcript of the hearing (for which it had arranged). T-Mobile appealed this decision to the Supreme Court.

The Supreme Court held that the Telecommunications Act requires a municipality to provide written reasons for denying an application for cell phone tower siting. Although the municipality does not have to include its reasons in the letter notifying the applicant of the denial,andnbsp;T-Mobile Southandnbsp;requires the municipality to make such reasons available in writing “at essentially the same time” the denial is communicated to the applicant. The significance of the requirement for contemporaneous availability of the written reasons for denial is that an entity whose application is denied has 30 days from the date of denial to decide whether to seek judicial review, such that the 26 days between the denial in this case and the availability of the minutes explaining the reasons for the denial put the applicant in a difficult position.

Municipalities considering applications for cell phone tower siting need to review this opinion to ensure they are processing applications in compliance with Supreme Court precedent. If you have questions about the decision, or any other telecommunications issues, please contact one the attorneys in Walter | Haverfield LLP’sandnbsp;Telecommunications and Right-Of-Way Group.

With more women in the workplace, pregnancy-related issues are an ever-growing reality for most employers. Whether a woman is already pregnant or is actively taking steps to become pregnant, she is protected by numerous federal laws, as well as differing state and local laws – all of which are constantly changing.

In 2014 the Equal Employment Opportunity Commission (EEOC) released new enforcement guidance under the Pregnancy Discrimination Act (PDA) addressing pregnancy discrimination in the workplace. Although these are guidelines only, they carry considerable weight since courts often defer to the EEOC’s interpretation of the law when deciding cases. As a result, it’s important that employers be aware of their new “obligations.”

Among other things, the EEOC guidelines state that employers must offer light duty to pregnant employees if they make light duty available to non-pregnant employees whose ability or inability to work is similar. That means that if employees who have been injured on the job have the right to work light duty, then light-duty work must also be offered to pregnant employees who are unable to perform their jobs for similar reasons. This issue is expected to be decided by the U.S. Supreme Court during the summer but, until then, it may be subject to varying interpretation.

The definition of pregnancy-related disability has also been expanded such that almost any condition related to a pregnancy could be considered a disability. Specific examples include: pelvic inflammation (may substantially limit ability to walk); pregnancy-related carpal tunnel syndrome (may affect ability to lift or perform manual tasks); disorders of the uterus or cervix (may necessitate certain physical restrictions to enable full-term pregnancy); pregnancy-related sciatica (may limit musculoskeletal functions); gestational diabetes (may limit endocrine functions); and preeclampsia (may affect cardiovascular/circulatory functions).

The new guidance further extends protection to employees who are still in the planning stages of becoming pregnant, including those who are undergoing fertility treatments or who have announced plans of becoming pregnant.

Like most things in this world, the EEOC’s guidelines are constantly changing. Savvy employers recognize that it is difficult to stay abreast of the most current guidelines without the added assistance from legal counsel who focus on employment issues. Before creating any new policies or enforcing existing policies that relate to a pregnant or would-be pregnant employee, employers should consult with counsel to ensure they are in line with the most current laws, guidelines and court decisions.

To contact Attorney Weisberg, call 216-928-2928 or e-mail pweisberg@walterhav.com.

In an article published in the January 19, 2015 issue of Crain’s Cleveland Business and titled, “Early planning yields best results when selling a business,” Jacob B. Derenthal outlined the steps which a seller should take in order to facilitate the sale of his/her business.

Amazon warehouse workers will not be compensated for
time standing in security check lines

Should an employee be compensated for time spent on before- or after-work-related activities such as standing in a security line or waiting to punch in? This has been the subject of intense debate throughout the court system for some time.

However, a unanimous Supreme Court decision issued December 9 affecting workers at two Amazon.com warehouses in Nevada may have put to rest questions regarding what work-related activities are classified as “integral and indispensable” to the job function and, therefore, considered compensable under the Fair Labor Standards Act (FLSA).

In overturning a previous decision by the Court of Appeals for the Ninth Circuit Court of Appeals, the Supreme Court established that “an act is integral and indispensable to the principal activities that an employee is employed to perform – and thus compensable under the FLSA – if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

In the specific case of the Amazon warehouse employees who must stand in line after their shifts to undergo security screening designed to deter employee theft, it was determined that this task was neither a principal activity nor an integral part of their work assignments and, therefore, did not qualify for compensation under the FLSA. In making this decision, the Supreme Court confirmed that such security screenings are not different than many other after-hours tasks that employees must do, such as walking from the parking lot or waiting to punch in for work.

The ruling has been hailed as a major success for business as it may well have set a new standard for employers not having to pay employees for every activity they require them to do. It effectively sets a precedent that may help employers more effectively defend themselves against certain FLSA work-time claims. Employers, however, need to be mindful of state laws that regulate payment for these types of activities.

Had the Supreme Court decided in favor of the employees in this specific case, it could have set in motion numerous claims that would have required back pay for as many 400,00 workers amounting to more than $100 million.

It is interesting to note that the Amazon case was one of the few examples where the Department of Labor (DOL) even argued in favor of the employer.

While the Supreme Court ruling effectively limits the amount of compensable activities before and after working hours, employers should still consult with their legal counsel regarding fact-specific situations as they arise.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

In a Crain’s “Legal Guest Blog,” published on December 9, 2014 and titled, “Beware of pouring another cup of cheer at holiday office parties,” Patricia F. Weisberg provided tips on how companies can minimize their liability while ensuring that their holiday office parties remain enjoyable for all who attend.

Ever since Ohio’s Constitution was amended in 2006, Ohio’s minimum wage correlates with the rate of inflation for the twelve months prior to September. The Ohio Department of Commerce has calculated the rate of inflation and has adjusted the Ohio minimum wage for 2015.

Effective January 1, 2015, Ohio’s minimum wage will increase $0.15 from $7.95 per hour toandnbsp;$8.10 per hourandnbsp;forandnbsp;regular hourly employees. The minimum wage forandnbsp;tipped employeesandnbsp;will increase $0.07 from $3.98 per hour toandnbsp;$4.05 per hour.

Ohio’s minimum wage law does not apply to (i) employees at smaller companies whose annual gross receipts are $297,000 or less per year after January 1, 2015 or to (ii) 14 and 15 year olds. The Ohio minimum wage for these employees is $7.25 per hour because the Ohio wage for these employees is tied to the federal minimum wage. Theandnbsp;federal minimum hourly wageandnbsp;is currentlyandnbsp;$7.25.

The new Poster is available byandnbsp;clicking here.

For more information on this or other employment law issues, please contact one of our Employment lawyers.

On November 10, 2014,andnbsp;Stephen L. Byronandnbsp;andandnbsp;Eric J. Johnsonandnbsp;gave a presentation on the topic, “Playing Well With Others,” at the 2014 OSBA Capital Conference and Trade Show, in Columbus, Ohio.

In an online article published in the Fall 2014 issue of HR Cleveland and titled, “Facebook, YouTube, Twitter…Oh My!!,” Sara M. Markouc asserted that employers should adopt comprehensive social media policies in order to protect their interests and reputation when employees choose to use social media channels outside of the workplace.

In an article published on November 17, 2014 in a special “Legal Guidebook” section of Crain’s Cleveland Business, titled “Managing Pregnancy-Related Workplace Issues,” Patricia F. Weisberg discussed the significance of the EEOC’s recently-released enforcement guidance under the Pregnancy Discrimination Act (PDA).

In an article published by the Ohio State Bar Association in its quarterly newsletter, Fine Print, Patricia F. Weisberg indicated that the EEOC’s recently-released enforcement guidance regarding pregnancy discrimination in the workplace effectively mandates that employers reasonably accommodate most pregnant employees who have job restrictions. The title of this article is, “EEOC Issues Pregnancy Discrimination Enforcement Guidance for Employers.”

On October 30, 2014,andnbsp;Christina Henagen Peerandnbsp;presented at the Cleveland Metropolitan Bar Association’s “8th Annual Special Education Law and Advocacy Update for Parents and Practitioners,” held at the CMBA Offices, in Cleveland, Ohio.

On October 20, 2014,andnbsp;Christina Henagen Peerandnbsp;andandnbsp;Eric J. Johnsonandnbsp;provided legal updates for school district and human resources professionals at a program presented by Walter | Haverfield LLP, in partnership with the Educational Service Center of Cuyahoga County. At this program, held in Independence, Ohio, Christina and Eric spoke on the topic, “Legal Update for NEOASPA.”

On October 10, 2014,andnbsp;Christina Henagen Peerandnbsp;andandnbsp;Sara M. Markoucandnbsp;addressed the topic, “Back by Popular Demand: I’m an Administrator, Not a Human Resources Manager,” at the Starting Point Annual Leadership Conference at Corporate College East (a division of Cuyahoga Community College), in Warrensville Heights, Ohio.

When a union begins to “organize” employees in your workplace, it must first determine which employees it wants in the “bargaining unit”: Production? Maintenance? Sales? Clerical? Shipping? Receiving? Some of the above? All of the above? However, whether or not the bargaining unit the union chooses is “appropriate” ultimately will be determined by the National Labor Relations Board (“NLRB” ).

Historically, the NLRB’s primary concern has been whether or not the employees chosen have substantial mutual interests in wages, hours, supervision and other terms and conditions of employment, known as a community of interest. Thus, in most industries unions have organized using a facility-wide (location specific) model. For example, at a delivery company all couriers on all shifts almost certainly would be in the same unit. Indeed, neither a union nor an employer would have had much chance of prevailing were it to argue that the couriers who handle airfreight packages should be in a separate unit from the couriers who handle ground packages or that each shift should be in a separate bargaining unit.

The underlying policy reason for nonproliferation of bargaining units is that to do otherwise would not make for good labor relations. For example, each separate bargaining unit could have its own contract with different work rules and benefits, its own expiration date, and be organized by any labor union in the land. However, the current activist NLRB has decided that such an arrangement would be a good thing and, in doing so, has demonstrated its pro-union bias yet again. In addition to the chaos mentioned above, organizing a larger group is more difficult for the union than organizing a smaller group. Using the courier company example again, meeting with and persuading 12 couriers, all of whom work the night shift, is less time-consuming than meeting with and persuading 70 couriers that work all three shifts.

The first NLRB decision that approved a “micro” unit was Specialty Healthcare. In that case, the nursing home and rehabilitation center had various employee groups, including nurses, nurse assistants, cafeteria workers, maintenance workers, housekeeping, laundry and social services/rehabilitation staff. Normally, an appropriate unit would have consisted of all of the above except the registered nurses, because professionals are treated differently. But the NLRB approved a micro unit of solely nursing assistants, creating the potential for the other small employee groups to organize separately.

Historically, healthcare cases such as Specialty Healthcare have been used to provide guidance only for other healthcare cases, so there was some sense that this doctrine would not spread beyond healthcare. But that proved not to be the case as just last month a “micro” unit was approved for a cosmetic and fragrance department in a retail store in Macy’s, Inc.

In that case the NLRB approved a micro unit consisting of only the cosmetic and fragrance department employees at the Macy’s store. Macy’s argued to no avail for a unit that included all sales floor personnel. The NLRB held that because the cosmetic department employees did not also work in other departments and their pay structure was substantially different from all other store employees, they alone constituted an appropriate unit. It is certainly possible under the logic of the Macy’s decision that it would be just as easy for the shoe salespersons just across the aisle from cosmetics, the jewelry department workers across the other aisle from fragrances, and any other micro unit in the store to be granted “unique” status with the department store. That means any one of these “micro” units can be separately organized as discussed above, and that anyone could strike and shut down the entire store. Is that good labor policy? Only for a Labor Board that is in thrall to organized labor.

But there is some good news. Only a week after the Macy’s decision, the NLRB dismissed a petition and, in doing so, outlined some useful restrictions that may limit the growth of “micro” units. The dismissal decision involved a petitioned-for unit of women’s shoes employees from the store’s Salon shoes and Contemporary shoes departments. Unlike in Macy’s, the union could not establish a community of interest specific to that group because the employer had not established a clear departmental differentiation as it had in Macy’s. The unit petitioned for in Bergdorf Goodman included some employees from a second department, Contemporary Sportswear, but excluded that department’s other sales associates, which the NLRB viewed as a departure from the Employer’s organizational structure.

However, in making the Bergdorf Goodman decision, the NLRB noted that it would likely have approved the unit had the following factors been present:

  • the petitioned-for employees shared a common supervisor;
  • there was significant personnel interchange between the two departments;
  • contact among the petitioned-for employees was not limited to storewide meeting attendance and incidental contact in the locker room, cafeteria, etc.; and
  • there were shared skills and training for the employees from the different departments.

Therefore, employers may look to the missing Bergdorf Goodman factors for guidance.

Implications for Employers and Employees

In the wake of these NLRB decisions, employers should be aware of “micro” bargaining units, their own employees’ movement to organize, and the potential impact on the work environment. Because it is now clearly possible for a small group of employees to be deemed a “micro” unit under the right conditions, employers may consider reevaluating their workplace structure, with consideration for:

  • cross-training employees
  • increasing interchange of employees among departments
  • integrating functions across job classifications
  • developing comparable or consistent pay structure and policies across departments
  • centralize supervision
  • limiting/eliminating barriers across departments and employees

Employers can take little solace in the fact that Macy’s is a retail industry case or that the Bergdorf case sought to delineate specific needed criteria. Clearly, an NLRB that could make the leap from healthcare to retail without pause will not hesitate under the right facts to expand this logic to all American industries.

Byandnbsp;Leslie G. Wolfe and John A. Heer

Wetlands are a major issue for almost anyone who owns commercial or industrial property – now more than ever thanks to the EPA’s new overly broad definition of what constitutes protected wetlands. A case in point involves a Walter | Haverfield client who owns a small piece of commercial property.

Several months before contacting us, the client had cleared and paved an area to provide more space for a tenant to park trucks on an adjacent parcel. At the time of the work, the client was unaware that there might be wetlands on the property.

Based on information supplied by an anonymous neighbor, the U.S. Army Corps of Engineers issued a violation notice to the client, alleging that material had been placed in the area illegally because it was on regulated wetlands without receiving prior authorization – a violation of federal law. The Corps’ letter presented two options for the client to remedy the violation. Under the first option, the client could remove the fill material, restore the area to pre-disturbance elevations and grades, and re-seed and mulch the disturbed area with an approved wetland seed mix. Alternatively, the client could apply for after-the-fact authorization for the prior filling.

Because the Corps took the position that half of the filled area contained broken asphalt, if the client chose to apply for after-the-fact authorization, it would be required to remove the broken asphalt and submit additional information for the permit, including a wetland delineation, drawings of the proposed project showing the areas to be filled from a top and side view, and a proposal for mitigation to offset wetland impacts.

The client’s objective was to take the path of least resistance and lowest cost to ensure the marketability of the property. Although the client originally sought to obtain a permit for the work that was already done, our environmental legal team advised that the more cost-effective and efficient response would be to remove the fill and restore the property.

Our attorneys worked with the client to reach an agreement with the Corps that the fill would be removed from the wetland areas. The Corps agreed to issue written approval for the proposed restoration plan. Under the plan, the client agreed to re-grade areas to their original depth; seed the area with an approved wetland seed mix; and dispose of the asphalt. About a week after the removal and restoration work was completed, the Corps issued its Acceptance of Restoration letter, confirming that the violation had been resolved.

Just a few of the lessons which can be learned from this case include:

  1. When performing any filling or earth moving, carefully consider the areas being filled or changed. The definitions of wetlands and other terms relevant for environmental regulation are very broad and might encompass areas which you might not think are regulated.
  2. If you are contacted by a regulating authority, especially based upon a citizen’s complaint, consider engaging legal counsel as soon as possible.

To reach Attorney Wolfe, call 216-928-2927 or e-mail lwolfe@walterhav.com.

When a union begins to “organize” employees in your workplace, it must first determine which employees it wants in the “bargaining unit”: Production? Maintenance? Sales? Clerical? Shipping? Receiving? Some of the above? All of the above? However, whether or not the bargaining unit the union chooses is “appropriate” ultimately will be determined by the National Labor Relations Board (“NLRB” ).

Historically, the NLRB’s primary concern has been whether or not the employees chosen have substantial mutual interests in wages, hours, supervision and other terms and conditions of employment, known as a community of interest. Thus, in most industries unions have organized using a facility-wide (location specific) model. For example, at a delivery company all couriers on all shifts almost certainly would be in the same unit. Indeed, neither a union nor an employer would have had much chance of prevailing were it to argue that the couriers who handle airfreight packages should be in a separate unit from the couriers who handle ground packages or that each shift should be in a separate bargaining unit.

The underlying policy reason for nonproliferation of bargaining units is that to do otherwise would not make for good labor relations. For example, each separate bargaining unit could have its own contract with different work rules and benefits, its own expiration date, and be organized by any labor union in the land. However, the current activist NLRB has decided that such an arrangement would be a good thing and, in doing so, has demonstrated its pro-union bias yet again. In addition to the chaos mentioned above, organizing a larger group is more difficult for the union than organizing a smaller group. Using the courier company example again, meeting with and persuading 12 couriers, all of whom work the night shift, is less time-consuming than meeting with and persuading 70 couriers that work all three shifts.

The first NLRB decision that approved a “micro” unit was Specialty Healthcare. In that case, the nursing home and rehabilitation center had various employee groups, including nurses, nurse assistants, cafeteria workers, maintenance workers, housekeeping, laundry and social services/rehabilitation staff. Normally, an appropriate unit would have consisted of all of the above except the registered nurses, because professionals are treated differently. But the NLRB approved a micro unit of solely nursing assistants, creating the potential for the other small employee groups to organize separately.

Historically, healthcare cases such as Specialty Healthcare have been used to provide guidance only for other healthcare cases, so there was some sense that this doctrine would not spread beyond healthcare. But that proved not to be the case as just last month a “micro” unit was approved for a cosmetic and fragrance department in a retail store in Macy’s, Inc.

In that case the NLRB approved a micro unit consisting of only the cosmetic and fragrance department employees at the Macy’s store. Macy’s argued to no avail for a unit that included all sales floor personnel. The NLRB held that because the cosmetic department employees did not also work in other departments and their pay structure was substantially different from all other store employees, they alone constituted an appropriate unit. It is certainly possible under the logic of the Macy’s decision that it would be just as easy for the shoe salespersons just across the aisle from cosmetics, the jewelry department workers across the other aisle from fragrances, and any other micro unit in the store to be granted “unique” status with the department store. That means any one of these “micro” units can be separately organized as discussed above, and that anyone could strike and shut down the entire store. Is that good labor policy? Only for a Labor Board that is in thrall to organized labor.

But there is some good news. Only a week after the Macy’s decision, the NLRB dismissed a petition and, in doing so, outlined some useful restrictions that may limit the growth of “micro” units. The dismissal decision involved a petitioned-for unit of women’s shoes employees from the store’s Salon shoes and Contemporary shoes departments. Unlike in Macy’s, the union could not establish a community of interest specific to that group because the employer had not established a clear departmental differentiation as it had in Macy’s. The unit petitioned for in Bergdorf Goodman included some employees from a second department, Contemporary Sportswear, but excluded that department’s other sales associates, which the NLRB viewed as a departure from the Employer’s organizational structure.

However, in making the Bergdorf Goodman decision, the NLRB noted that it would likely have approved the unit had the following factors been present:

  • the petitioned-for employees shared a common supervisor;
  • there was significant personnel interchange between the two departments;
  • contact among the petitioned-for employees was not limited to storewide meeting attendance and incidental contact in the locker room, cafeteria, etc.; and
  • there were shared skills and training for the employees from the different departments.

Therefore, employers may look to the missing Bergdorf Goodman factors for guidance.

Implications for Employers and Employees

In the wake of these NLRB decisions, employers should be aware of “micro” bargaining units, their own employees’ movement to organize, and the potential impact on the work environment. Because it is now clearly possible for a small group of employees to be deemed a “micro” unit under the right conditions, employers may consider reevaluating their workplace structure, with consideration for:

  • cross-training employees
  • increasing interchange of employees among departments
  • integrating functions across job classifications
  • developing comparable or consistent pay structure and policies across departments
  • centralize supervision
  • limiting/eliminating barriers across departments and employees

Employers can take little solace in the fact that Macy’s is a retail industry case or that the Bergdorf case sought to delineate specific needed criteria. Clearly, an NLRB that could make the leap from healthcare to retail without pause will not hesitate under the right facts to expand this logic to all American industries.

To reach Attorney Englehart, call 216-928-2929 or e-mail fenglehart@walterhav.com.

Everywhere you look lately, LGBT rights are making headlines. States as diverse as Wisconsin, Texas, Kentucky, Arizona and Kansas have been in the news for their legislative attempts to either increase or limit the rights of LGBT citizens.andnbsp;

At a national level, there have been some major changes regarding LGBT rights. Earlier this year, the U.S. government expanded the rights of same-sex spouses in the federal context, and last year a U.S. Supreme Court ruling struck down the 1996 Defense of Marriage Act (DOMA), which had blocked federal recognition of gay marriages. Regarding health insurance benefits, the U.S. Department of Health and Human Services announced on March 14, 2014, that, under the Affordable Care Act, insurance companies which offer benefits to opposite sex spouses must offer such benefits to same-sex spouses by Jan. 1, 2015.andnbsp;

In December 2013, a federal judge in Ohio ordered authorities to recognize gay marriages on death certificates, despite Ohio’s ban against same-sex marriages. In April 2014, another federal judge ruled that Ohio must recognize same-sex marriages performed in other states. Further, state lawmakers in Ohio recently withdrew legislation mimicking a controversial Arizona bill proposing to allow those who assert religious beliefs to refuse service to LGBT community members.andnbsp;

Despite this changing landscape, little has changed, to date, in federal or Ohio employment discrimination laws as it relates to LGBT employees in the private sector, as well as many parts of the public sector. There are signs, however, that this is changing.andnbsp;For instance, an employer with an Equal Employment Opportunity (EEO) statement or policy may consider including a statement prohibiting discrimination based upon sexual orientation or gender identity. Likewise for policies such as sexual harassment, workplace violence and anti-discrimination; andandnbsp;training employees, supervisors and subordinates alike (but in different training sessions) on the revised policies.andnbsp;

The federal government already prohibits employment discrimination against federal government employees based on sexual orientation only. In addition, President Barack Obama recently signed an executive order that prohibits job discrimination by federal contractors on the basis of sexual orientation and gender identity. And Congress has revived its attempt to pass the Employee Non-Discrimination Act, or ENDA, which would protect all employees (private and public sector) from job discrimination based on sexual orientation.andnbsp;

In Ohio, an executive order signed by Gov. John Kasich establishes an anti-discrimination policy in state government employment only. This order prohibits discrimination in the workplace on the basis of sexual orientation, but it does not include language prohibiting discrimination on the basis of gender identity.andnbsp;

In addition, at a municipal level, there are a dozen municipalities (including many of Ohio’s larger cities) that prohibit job discrimination based on sexual orientation and/or general identity in both private and public employment. These include the cities of Athens, Bowling Green, Canton, Cincinnati, Cleveland, Columbus, Coshocton, Dayton, Newark, Oxford and Toledo, as well as the Village of Yellow Springs.

There are five Ohio municipalities that prohibit discrimination based on sexual orientation and/or gender identity in public employment only: Akron, Cleveland Heights, Gahanna, Hamilton and Oberlin.

Legislative change definitely is coming. Regardless of when it comes, Ohio employers may want to start instituting changes in their company policies regarding LGBT employees.

Ways employers can address LGBT rights include:

learning what laws do currently apply. Employers should consult legal counsel to find out what laws apply;

Should you decide to get out in front of this issue and enact policies that exceed what is currently required by law, keep in mind that, by enacting these policies, you provide your employees with enforceable rights. Thus, be certain you are enacting reasonable policies and provide the proper training to managers and supervisors on the implementation and enforcement of the policies. And, as always, consult with legal counsel prior to making any formal changes.

Many Ohio employers have determined that discrimination of any kind can detract from employee morale, recruitment and retention, and, ultimately, productivity. As employers have discovered over time, the best business and employment decisions are based on objective metrics and operational needs.

On September 22, 2014, Walter | Haverfield LLP, in partnership with the Educational Service Center of Cuyahoga County, presented the first session in a two-part series of complimentary legal updates. In Session One of this Special Education/Pupil Services Professional Development Series, titled “Back to School: What Districts Need to Know to Start the 2014-15 School Year,” attorneysandnbsp;Christine T. Cossler,andnbsp;Christina Henagen Peer,andnbsp;Sara M. Markouc, Andrea E.M. Stone and Elise C. Keating covered several topics of interest to Directors of Special Education, Special Education Supervisors, Directors of Pupil Services and Directors of Student Services. This session took place in Independence, Ohio.

On August 13, 2014,andnbsp;Christina Henagen Peerandnbsp;spoke on the topic, “Legal Update for Paraprofessionals Working in School Districts,” at the Geauga County Educational Service Center, in Chardon, Ohio.

Eric J. Johnsonandnbsp;provided school officials with a “School Administrator Legal Update,” on August 8, 2014 at the Lake County Educational Service Center (Lakeland Community College), in Kirtland, Ohio and on August 6, 2014andnbsp;at the Geauga County Administrator Retreat 2014, held at Lakeland Community College – Mooreland Mansion, in Kirtland, Ohio.

In an online article published on August 29, 2014 by Managed Healthcare Executive and titled, “Managing obesity from a legal perspective,” John E. Schiller asserted that the obesity issue in the United States is a public health and budget problem which can’t be ignored.

U.S. Supreme Court May Clarify Employer’s Obligations to Accommodateandnbsp;

Pregnant Workers

On July 1, 2014, the U.S. Supreme Court agreed to review a former United Parcel Service, Inc. employee’s lawsuit alleging pregnancy discrimination and address her employer’s obligations to accommodate her. This case will give the U.S. Supreme Court a chance to clarify what obligations employers have, if any, to accommodate pregnant workers.

The Court agreed to review a decision by the Fourth Circuit Court of Appeals, in January 2013, which held that the Pregnancy Discrimination Act (“PDA”) does not require employers to provide pregnant workers with preferential treatment. Specifically, the Court of Appeals held that the PDA does not require employers to provide more favorable treatment to pregnant workers as compared to other “similarly situated” employees. The Court held that UPS did not have to offer the pregnant employee special accommodations so that she could continue working “light duty” during her pregnancy. As a result, the plaintiff was required to take an unpaid leave of absence. This case is somewhat unique because UPS had a policy that allowed light duty for disabled workers and those who sustained work-related injuries. The Plaintiff, however, did not qualify for light duty work under either of those policies.

Any guidance from the U.S. Supreme Court will be helpful in assisting employers on how to manage pregnant employees who have restrictions on their ability to perform their jobs during their pregnancies.

The Court will Address the Equal Employment Opportunity Commission’s Obligations to Conciliate Prior to Bringing a Lawsuit

The U.S. Supreme Court also agreed to consider “whether and to what extent may a court enforce the EEOC’s mandatory duty to conciliate discrimination claims before filing suit?” In this case, Mach Mining LLC requested the the Supreme Court resolve the conflict among the Circuit Courts of Appeals over whether the EEOC’s conciliation efforts may be reviewed by the courts and, if so, to determine the proper standard of review. Title VII, the federal law prohibiting discrimination based on protected status, requires the EEOC to engage in conciliation efforts before filing a lawsuit. Many employers have argued that the EEOC fails to engage in meaningful conciliation, often making a demand and refusing to negotiate or otherwise engage in discussions with respect to the demand.

The EEOC takes the position that its conciliation efforts during the administrative proceedings are not judicially reviewable and are not an affirmative defense available to employers against the agency when a lawsuit is filed. Employers generally take the position that the EEOC’s conciliation efforts are reviewable by the courts.

Both the EEOC and the employers are supportive of the U.S. Supreme Court’s consideration of this case, because both believe guidance on this issue is necessary.

If you have any questions regarding the issues addressed in this Client Alert, please contact a member of Walter | Haverfield’s Labor and Employment Services group.

In an online article published by Crain’s Cleveland Business on July 26, 2014 and titled, “Employers adjust criminal background check methods,” Patricia F. Weisberg asserted that many employers, when looking to hire new employees, are now following the EEOC’s 2012 guidance regarding the use of criminal background checks. This article was authored by Crain’s reporter Judy Stringer.

In an article published in the June 2014 issue of Properties magazine, John A. Heer and Leslie G. Wolfe discussed the U.S. EPA’s and U.S. Army Corps of Engineers’ proposed new rule defining “waters of the United States” under the federal Clean Water Act. In their article, titled “EPA’s Controversial Rule Clarifying CWA Jurisdiction Could Negatively Impact Most Commercial Property Owners,” John and Leslie asserted that this rule, if enacted, could impact anyone who owns commercial property or who may be contemplating a real estate transaction.

In an article written for the Ohio State Bar Association’s “Law You Can Use” consumer legal information column, which was subsequently published by the Wooster Weekly News, Leslie G. Wolfe provided an overview of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). This law, enacted by the federal government in 1980 in order to address contamination cleanup matters, is titled, “CERCLA makes polluters clean up their own messes.”

On April 7, 2014, Walter | Haverfield LLP, in partnership with the Educational Service Center of Cuyahoga County, presented the third session of its three-part series of complimentary legal updates. In Session Three of this Special Education/Pupil Services Professional Development Series, titled “Spring Is Here – We’re In The Home Stretch,” attorneysandnbsp;Christine T. Cossler,andnbsp;Christina Henagen Peer, Elise C. Keating and Andrea E. M. Stone covered several topics of interest to Directors of Special Education, Special Education Supervisors, Directors of Pupil Services and Directors of Student Services. This session took place at the Essex Place Conference Center in Independence, Ohio.

In an article published on the Ohio State Bar Association’s website, John E. Schiller shared his experiences and advice with other attorneys, in order to help them provide their clients with the best possible service. This article, titled “Ten tips for effective counsel,” was posted under the “News and Publications” section of the OSBA’s website.

In a Crain’s “Legal Guest Blog,” published on April 10, 2014 and titled, “No wonder labor unions are concerned,” Fredrick W. Englehart analyzed the recent union representation election at a Volkswagen plant in Chattanooga, Tennessee and its potential effect upon employer-employee relations in private companies.

In a “Real Estate Guest Blog,” published by Crain’s Cleveland Business on March 10, 2014 and titled, “Wicked winter weather demonstrates need for adequate force majeure clauses,” Joshua E. Hurtuk discussed the topic of force majeure clauses in commercial leases and construction contracts.

On February 6, 2014,andnbsp;Craig A. Marvinney,andnbsp;Leslie G. Wolfeandnbsp;and Lesya K. Melnyk participated in a video program, “Careers in the Law Profession (Attorneys and Paralegals),” which was produced by WVIZ/ideastream, a Cleveland non-profit public broadcasting organization. This program was broadcast live to several Ohio high schools, in an effort to provide students with insight and information concerning the steps which a person would need to take in order to become an attorney or a paralegal.andnbsp;

In a “Legal Guest Blog,” published by Crain’s Cleveland Business and titled, “This could be a year of excessive pro-labor regulation,” Fredrick W. Englehart indicated that government activity could be favorable to unions in 2014.

The Sixth Circuit Court of Appeals, which has jurisdiction over Ohio, Michigan, Kentucky and Tennessee, recently issued an opinion finding that an employer may have discriminated against a pregnant employee who had a 50 pound lifting restriction when it refused to allow her to continue to work in a light duty job during her pregnancy.

The case involved a certified nursing assistant (CNA) who was employed by a nursing home in Michigan. After the employee became pregnant, her doctor imposed a 50 pound lifting restriction. When the employee reported for her scheduled shift one evening, she was escorted off the premises and advised she could apply for Family and Medical Leave. The employee, however, refused to use her Family and Medical Leave Act (FMLA) leave, preferring to save it until after the birth of her child. In response, the employer treated her as if she had “resigned,” explaining that it could not accommodate aandnbsp;non-work-relatedrestriction as part of its policy that provided light duty for employees who hadwork-relatedandnbsp;injuries.

In reversing the lower court’s decision granting summary judgment to the employer, the Sixth Circuit found that the employee had presented evidence that the employer treated other CNAs with similar lifting restrictions more favorably by assigning them to “light duty.” The Court noted that, although these employees differed because they had work-related medical conditions, they were still similarly situated in their ability to work because they were placed under similar lifting restrictions of up to 50 pounds. The Court also noted that supervisors allegedly made statements regarding the employee’s pregnancy and her ability to work. The Court, therefore, found that this employee had presented sufficient evidence to establish aandnbsp;prima facieandnbsp;case of pregnancy discrimination and therefore she could present her case to a jury. The Court, however, did affirm the dismissal of the employee’s claims under the FMLA and Americans With Disabilities Act (ADA).

Interestingly, the Court acknowledged that under ordinary circumstances, employees who were restricted because ofandnbsp;work-related injuriesandnbsp;would be inappropriate comparators under federal discrimination law because they are not similarly situated in all respects. The Court noted, however, that the Pregnancy Discrimination Act (PDA) altered the analysis for pregnancy discrimination claims. The Court held that while federal law “generally requires that a plaintiff demonstrate that an employee who receives more favorable treatment be similarly situated in all respects, the PDA requires only that the employee be similar in his or her ability or inability to work.”

This decision has ramifications for any employer who has a light duty policy for employees who have sustained work-related injuries. Basically, what the Court appears to be saying is that it may find a violation of the PDA if an employer discriminates in its treatment of an employee with a work-related restriction and a pregnant employee who has a similar restriction. The Court says that, as long as the two are similar inandnbsp;their ability or inabilityandnbsp;to work, they are similarly situated for proof purposes under the PDA. The Court did not, however, go so far as to rule that light duty policies for work-related conditions are,andnbsp;per se, unlawful.

While this case involved unique facts (i.e. the employee argued she could perform the essential functions of her job and employee alleged her supervisors made pregnancy related statements), employers should tread carefully when implementing light duty policies for work-related injuries only. As this case demonstrates, the potential for liability under the PDA and Americans with Disabilities Amendments Act (ADAAA) is great.

An article byandnbsp;Patti Weisbergandnbsp;was recently featured in “Room for Debate,”andnbsp;on online opinion forum published byandnbsp;The New York Times.andnbsp;In this piece, titled “Company Party, Company Rules“,andnbsp;Patti offered tips for employers to ensure that their holiday office parties are safe, fun and free from liability.

In an article published inandnbsp;HR Cleveland, titled “After 20 Years, FMLA Still Creates Confusion and Frustration for Employers,”andnbsp;Patricia F. Weisbergandnbsp;provided advice on several items pertaining to FMLA which should be “top-of-mind” for employers.

In a “Legal Guest Blog” forandnbsp;Crain’s Cleveland Business,andnbsp;Leslie G. Wolfeandnbsp;discussed the doctrine of “vicarious liability,” as it applies to an employer’s potential liability for an employee’s risky conduct. In her article, titled “When are employers liable for employee behavior?,” Leslie advised employers to protect themselves by establishing written policies which clearly identify the boundaries of permitted and prohibited employee conduct.

January 2013 – “After a so-so
2012, Cleveland real estate market is poised for big things this year
,” Crain’s Cleveland Business (Real
Estate Blog)

In theandnbsp;Cleveland State Law Review, 61 Clev. St. L. Rev. 1105 (2013), Kevin R. McKinnisandnbsp;wrote an article entitled “The Good, the Bad and a New Kind of Prenuptial: An Analysis of the Ohio Legacy Trust Act and What Asset Protection Trusts Will Mean For Ohio”.

By Marc J. Blochandnbsp;and Elise C. Keating

The current National Labor Relations Board (NLRB) has been waiting for an appropriate case through which it can reverse the Bush-era decision inandnbsp;Register-Guard,andnbsp;which restricted the use of employer email systems for union activities. It appears that the NLRB may have found such a case inandnbsp;Roundy’s Inc. Therefore, sometime before the November presidential election, the NLRB is expected to issue a decision in that matter. While the case arose out of non-employee union members distributing handbills on Roundy’s property to its grocery store customers, we believe that the ruling has the potential to go beyond the distribution of paper bills to the use of employer email systems.

Labor lawyers are looking for the NLRB’s decision inandnbsp;Roundy’sandnbsp;to pick up where the earlier Clinton-era NLRB decision in theandnbsp;Sandusky Mall Co.andnbsp;action left off. Theandnbsp;Sandusky Mallandnbsp;decision held that an employer violated The National Labor Relations Act (Act) when it barred union access to its property while allowing access to non-union groups. This situation is similar to theandnbsp;Roundy’sandnbsp;matter because Roundy’s allowed groups like the Girl Scouts and the Red Cross to conduct activities at its grocery stores, but it ejected the union when the latter handed out pamphlets urging a boycott of Roundy’s store due to use of non-union labor and failure to pay the prevailing wage standard.

Though neitherandnbsp;Roundy’sandnbsp;norandnbsp;Sandusky Mallandnbsp;deal with employer email systems, it appears that the NLRB will use the upcoming decision inandnbsp;Roundy’sandnbsp;to expand the scope of “property” from the physical to the virtual. If the ruling comes down as anticipated, employers who, for example, allow the sale of Girl Scout cookies or publicize Red Cross blood drives through their email systems, must permit that same level of access to unions.

Theandnbsp;Register-Guardandnbsp;decision made a distinction between union and non-union groups, stating that unlawful discrimination meant “unequal treatment of equals” when it came to access of the employer’s email system. So, while employers could not permit one union access but not another, or allow access to only anti-union groups, they could freely permit access to non-union groups (like the aforementioned Red Cross and Girl Scouts) while denying that same access to unions.

Because there are no similar cases in the pipeline, we anticipate that the current NLRB will useandnbsp;Roundy’sandnbsp;as the vehicle to reverseandnbsp;Register-Guard,andnbsp;despite the fact that the case does not deal with email communication. The effect of this decision would be an opening of access to employer intra-office e-mail systems for union activities.

Consequently, if your company’s current policy is based on theandnbsp;Register-Guarddecision, restricting access to the employer’s email system, it would be prudent to take a look at company email policy to determine if revisions will need to be made. An updated client alert will be issued when theandnbsp;Roundy’sandnbsp;decision is published, along with advice on how employers should proceed in light of the decision. If you have any questions regarding the upcoming decision, please contact a member of Walter | Haverfield’s Labor and Employment Law Group.

Byandnbsp;R. Todd Hunt,andnbsp;William R. Hannaandnbsp;and Matthew J. Federico, Legal Extern,andnbsp;Thomas M. Cooley Law School

Last week, President Obama signed House Bill 3630 into law. This law extends payroll tax deductions and unemployment benefits, but there is also a provision that essentially mandates local government approval of applications for modifications of “an existing wireless tower or base station.” This section may put local governments in a difficult position with respect to wireless tower companies which have properties in their jurisdiction.

The law pushes aside a portion of Section 332(c)(7) of the federal Telecommunications Act, which granted local governments authority to control where cellular and wireless towers, antennas, and other related facilities can be located.

The new law states: “Notwithstanding [section 332(c)(7)] or any other provision of law, a state or local government may not deny, and shall approve, any eligible facility’s request for a modification of an existing wireless tower or base station that does not substantially change the physical dimensions of such tower or base station.”

Wireless tower companies will undoubtedly see this language as a green light from the federal government to push local governments into approving applications they have filed to expand or reconfigure their facilities. However, the clarity of the new law leaves much to be desired. It does not forbid a local government from reviewing the application and it contains some ambiguities. It would be prudent, therefore, to review your community’s regulations in light of this federal mandate.

The IRS has recently issued guidance regarding what constitutes an “involuntary termination” under the American Recovery and Reinvestment Act (ARRA). To quickly recap, the ARRA provides for a 65 percent reduction in the premium otherwise payable by certain involuntarily terminated individuals (involuntarily terminated from September 1, 2008, through December 31, 2009) and their families who elect Consolidated Omnibus Budget Reconciliation Act (“COBRA”) continuation health coverage.

The definition of “involuntary termination” for premium reduction purposes, however, had not previously been defined. The IRS guidance, reproduced in relevant part, states the following regarding “involuntary termination”:

  • In general, what circumstances constitute an involuntary termination for purposes of the definition of an assistance eligible individual?

    • In general, 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. In addition, an employee-initiated termination from employment constitutes an involuntary termination from employment for purposes of the premium reduction if the termination from employment constitutes a termination for good reason due to employer action that causes a material negative change in the employment relationship for the employee. Involuntary termination is the involuntary termination of employment, not the involuntary termination of health coverage. Thus, qualifying events other than an involuntary termination, such as divorce or a dependent child ceasing to be a dependent child under the generally applicable requirements of the plan (such as loss of dependent status due to aging out of eligibility), are not involuntary terminations qualifying an individual for the premium reduction. The determination of whether a termination is involuntary is based on all the facts and circumstances.

  • Does an involuntary termination include a situation in which an employment contract expires and is not renewed?

    • An involuntary termination may include the employer’s failure to renew a contract at the time the contract expires, if the employee was willing and able to execute a new contract providing terms and conditions similar to those in the expiring contract and to continue providing the services.

  • Does an involuntary termination include the death of an employee or absence from work based upon illness or disability?

    • Involuntary termination does not include the death of an employee or absence from work due to illness or disability.

  • Does a “forced resignation” constitute an involuntary termination?

    • If a termination is designated as voluntary or as a resignation, but the facts and circumstances indicate that, absent such voluntary termination, the employer would have terminated the employee’s services, and that the employee had knowledge that the employee would be terminated, the termination is involuntary.

  • Does an involuntary termination include a lay-off period with a right of recall or a temporary furlough period?

    • Yes. An involuntary reduction to zero hours, such as a lay-off, furlough, or other suspension of employment, resulting in a loss of health coverage is an involuntary termination for purposes of the premium reduction.

  • Does an involuntary termination include a reduction in hours?

    • Generally no. If the reduction in hours is not a reduction to zero, the mere reduction in hours is not an involuntary termination. However, an employee’s voluntary termination in response to an employer-imposed reduction in hours may be an involuntary termination if the reduction in hours is a material negative change in the employment relationship for the employee.

  • Does an involuntary termination include the death of an employee or absence from work based upon illness or disability?

    • Involuntary termination does not include the death of an employee or absence from work due to illness or disability.

  • Does involuntary termination include an employer’s action to end an individual’s employment while the individual is absent from work due to illness or disability?

    • Yes. Involuntary termination occurs when the employer takes action to end the individual’s employment status (but mere absence from work due to illness or disability before the employer has taken action to end the individual’s employment status is not an involuntary termination).

  • Does an involuntary termination include retirement?

    • If the facts and circumstances indicate that, absent retirement, the employer would have terminated the employee’s services, and the employee had knowledge that the employee would be terminated, the retirement is an involuntary termination.

  • Does involuntary termination include involuntary termination for cause?

    • Yes. However, for purposes of Federal COBRA, if the termination of employment is due to gross misconduct of the employee, the termination is not a qualifying event and the employee and other family members losing health coverage by reason of the employee’s termination of employment are not eligible for COBRA continuation coverage.

  • Does an involuntary termination include a resignation as the result of a material change in the geographic location of employment for the employee?

    • Yes

  • Does an involuntary termination include a work stoppage as the result of a strike initiated by employees or their representatives?

    • No. However, a lockout initiated by the employer is an involuntary termination.

  • Does an involuntary termination include a termination elected by the employee in return for a severance package (a “buy-out”) where the employer indicates that after the offer period for the severance package, a certain number of remaining employees in the employee’s group will be terminated?

    • Yes.

Click hereandnbsp;to access this information directly on the IRS website.

If you have questions regarding this recent guidance or the COBRA provisions of the American Recovery and Reinvestment Act of 2009 in general, please feel free to contact one of theandnbsp;Labor and Employment Lawandnbsp;attorneys at Walter | Haverfield, LLP.

The information in this Client Advisory is a summary of often complex legal issues and may not cover all of the “fine points” of a specific situation or court jurisdiction. Accordingly, it is not intended to be legal advice, which should always be obtained in consultation with an attorney.

1996 – Co-author of “CERCLA Lender Liability Rule Codified”, Lender Counsel Group ALTA Annual Conventionandnbsp;

1990 – Author of “The Pro Bono Debate and Suggestions for a Workable Program” for the Cleveland State Law Review

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A rendering of Akron’s Bowery Project, a $42 million deal led by more than a dozen Walter | Haverfield attorneys. The project is expected to be completed in late 2019 and includes retail, residential and mixed-use space in six redeveloped buildings.

 

A team of more than a dozen Walter | Haverfield attorneys have made a vision for downtown Akron a reality. Acting as lead counsel, the team closed on the $42 million Bowery Project beginning on Nov. 15th, 2018. Construction started the next day. The project includes 40,000 square feet of retail, residential and mixed-use space in six redeveloped buildings.

“Our team is proud to be an integral part of re-vitalizing a historic area of downtown Akron,” said Jack Waldeck, partner and head of Walter | Haverfield’s Real Estate group. “The Bowery Project will be a focal point of the city, and we are honored to help bring a fantastic concept to fruition.”

The Walter | Haverfield team also assisted with completing the $5 million renovation and addition deal for the Akron Civic Theatre, next door to the Bowery Project. The historic landmark will soon boast a small concert venue, an outdoor patio, and a large outdoor electronic screen that will broadcast what’s happening inside outside. New administrative offices and a multi-story box office are also in the plans.

For more than a year, the firm’s real estate attorneys worked on the complex and sophisticated transaction of the Bowery Project, which includes a combination of Historic and New Markets Tax Credits. Nine different financing sources and eight different community and development partners made the deal possible.

“Timing and teamwork were crucial for this deal,” said Waldeck. “It was a balancing act where everything and everyone had to line up just at the right time, and thankfully it did.”

“We are truly grateful for Walter | Haverfield’s Real Estate team,” said Kevin Brokaw, a Cleveland-area developer who is one of the partners behind the Bowery Project.  “There are no words to describe how valuable their counsel is to us. They pitched in to come up with good solutions to very complicated issues while protecting our interests. We wouldn’t be celebrating this milestone today had it not been for their intimate involvement.”

Construction on the Bowery Project and Civic Theatre are expected to be completed by the end of 2019.

Since 1932, Walter | Haverfield attorneys have served as strategic counselors to private businesses, public entities and high net-worth individuals, providing creative and customized solutions that deliver outstanding results at an exceptional value. Our track record has allowed us to sustain year-after-year growth. Walter | Haverfield has doubled its size in the past decade to become one of the top ten Cleveland-based law firms. Today, our team of nearly 80 attorneys is focused primarily in the areas of corporate transactions, real estate, intellectual property, labor and employment, tax and wealth management, liquor control law, litigation, public law and education.