LEGAL AND LEGISLATIVE UPDATE
ON EMPLOYMENT LAW
March 2008
by
Bob Gregg
rgregg@boardmanlawfirm.com
Jennifer Mirus
jmirus@boardmanlawfirm.com
Boardman Law Firm
www.boardmanlawfirm.com
LEGISLATION AND ADMINISTRATIVE ACTION
Proposed FMLA revisions. The Department of Labor has released the long-awaited FMLA regulation revisions [at http://www.dol.gov/esa/whd/FMLANPRM.htm]. These are proposals and are currently open for commentary until April 11, 2008 before final rules are published. So, now is the time, if you have any concerns. The proposals are lengthy and too detailed for synopsis. Interestingly, the DOL chose not to address the biggest single issue of concern, complaint and commentary: sporadic use of intermittent leave. [Also see the section on military FMLA later in the Update.]
Congress considers major revamp of employment liability.Congress is now considering the single biggest revisions of employment laws since the early 1990s (House Bill 5129/Senate Bill 2554) and the proposed ADA Restoration Act. The changes would affect Title VI, Title VII, Title IX, Equal Pay Act, ADA, Rehabilitation Act, ADEA, USERRA, Federal Arbitration Act, the Fair Labor Standards Act and National Labor Relations Act. Among the proposals under consideration are (1) expanding the statute of limitations for claims of sex discrimination in pay, (2) lifting the caps on damages in discrimination cases, (3) redefining “disability” to be more inclusive and require accommodation of more and shorter term conditions, (4) lifting the 11th Amendment immunity state agencies now enjoy, and subjecting them to suit under all federal employment laws, (5) providing more private rights to sue under Title VI and IX of the Civil Rights Act, and (6) severely limiting agreements to arbitrate discrimination issues. These are major change categories; the proposals also include many more details. Some proposals are supported by both Republicans and Democrats. Changes will have dramatic impacts on employers and employees. Those who wish to have more information and input should contact their Congressional representatives now.
Wisconsin Legislators propose Constitutional Amendment to ban affirmative action. Two senators in the Wisconsin Legislature have proposed a State Constitutional Amendment banning affirmative action. The news release announcing the proposal appears to be inaccurate. The news release states, “The Legislative Council Special Study Committee on Affirmative Action determined both the State of Wisconsin and cities such as Madison and Milwaukee have policies that discriminate against both men and Caucasians.” However, the Committee did not reach that conclusion. In fact, the Committee’s vote was to continue the current AA practices with a modification that AA statistics and considerations apply only to U.S. citizens. Unlike the common stereotype about AA, Wisconsin does not now have quotas or give “bonus points” or “preferences” for sex or race in hiring or University admissions.. (The only people receiving “points” or getting AA hiring “preferences” are Veterans.) The evidence before the Committee showed that Wisconsin AA plans, which focus on expanding opportunity in hiring and admissions, expand opportunity for all, including White males. The University figures showed that rather than “consideration factors” serving to bump any White or male students, they operated to admit mostly White/males who scored lower than the automatic admission by “test scores,” and a number of minority applicants were “bumped” in favor of admitting White freshmen who had lower test scores. There was not evidence of discrimination against Whites or males in these processes. In almost a year of study, the evidence before the Committee was overwhelmingly in favor of AA as practiced in Wisconsin. The news release does not accurately reflect the Committee’s actual determinations and recommendations to the Legislature. The news release also states that “the cost to the taxpayer is huge” for AA. Again, there was no such evidence presented to the Committee, and the Committee made no such finding. The cost to the taxpayers of a Constitutional Amendment process and election is likely to be greater than the cost of AA plans and efforts in Wisconsin. The Constitutional Amendment seems to be a costly “solution” for something that does not appear to be a problem in this state. [Bob Gregg served as a member of the Legislative Council Special Study Committee on Affirmative Action.]
LITIGATION
The Legal Update includes new developments and matters of interest throughout the United States. Be aware that our various federal circuit courts reach somewhat differing conclusions. So a decision in another part of the country, and especially in a different state, may not be quite “the law” in your jurisdiction. Some courts lead the way; others lag behind. The Legal Update lets you see the overall trends and compare them with your jurisdiction. Wisconsin is part of the Federal 7th Circuit (Wisconsin, Illinois and Indiana). In this month’s Legal Update, the most relevant cases for Wisconsin are Darst v. Interstate Brands Corp. and Breneisen v. Motorola (both in the FMLA section).
Fair Labor Standards Act
“Dual” operator does not qualify for seasonal recreational exception from overtime rules. The FLSA has a special exception from overtime pay requirements for “seasonal workers” in seasonal recreational and amusement businesses. This is usually for outdoor operators dependent on weather or on a vacation season (ski resorts, water parks, etc.). The season may not exceed seven months. Two companies in Florida leased a dog race track, seasonally. One operated the track from May to October; the other from October to May. However, the two companies were owned by the same shareholders. The track employees were the same people year round, just paid through different companies every six months. The officers, management and supervisors were all the same, all 12 months of the year. The Department of Labor and the court found this was one entity operating a year-round business and closed the loophole, awarding overtime pay to the track workers. Perez v. Sanford-Orlando Kennel Club, Inc. (11th Cir., 2008).
DISCRIMINATION
Age
Comment is direct evidence of age discrimination. A 50-year-old helicopter pilot applied for a county job doing aerial mosquito spraying. The 50-year-old looked like the most qualified of nine candidates. The hiring supervisor cancelled the process and interviewed no one. The job was later re-announced. However, the supervisor was heard to say he didn’t want to hire “any old pilots” before canceling the process. The court decided there was direct evidence of discrimination against the most qualified older candidate. Van Voorhis v. Hillsborough County Board (11th Cir., 2008).
Disability
Stereotyped perception wins case. A company stereotyped and overreacted to a supervisor’s diagnosis of Parkinson’s Disease. The supervisor’s mild symptoms did not impair his work and were not severe enough to qualify as a disability under the ADA. However, the company “perceived him disabled.” It denied him training on and use of new technology out of misplaced fear that he could not handle the requirements and would make errors. Executives avoided him and bypassed him in the company communication. He was eventually “laid off” and told there were no other positions to which he could demote. However, “within minutes of the termination,” the company promoted another person to the supervisory job. The court found discrimination on the basis of perceived disability with an award of $197,783 plus attorney fees. Wilson v. Phoenix Specialties (4th Cir., 2008).
Accommodation is not “consideration” for settlement agreement. An agreement requires “consideration”—something of new value—to be enforceable. An employee with the disability of ADHD agreed to settle a claim and give a release of liability in exchange for the employer placing him into an open alternative position until his retirement date. The employee then recalculated and realized he could not retire as soon as he had agreed, and rescinded the retirement. The employer relied on the agreement and enforced the now-involuntary retirement. The employee sued. The court ruled the Settlement and Release was invalid because there was no new consideration. Under the ADA, the disabled employee would be entitled to the reasonable accommodation of an alternative assignment already, without having to enter an agreement. The settlement gave him nothing that he was not already due and was not a release to any liability. West v. Ill. State Bd. of Education (N.D. Ill., 2007).
Confidentiality breach gets supervisor fired and company sued. The ADA requires that all medical information is confidential, to be kept in separate secured files. In EEOC v. Ford Motor Credit Co. (M.D. Tenn., 2008), an employee had a mixed FMLA-ADA issue. He needed a reduced work schedule due to HIV, and a company nurse validated a serious medical condition which warranted one day a week FMLA leave. This also qualified as an “accommodation” under the ADA. The supervisor insisted on knowing the specific diagnosis before granting the accommodation (not necessary for an FMLA leave validated by a medical professional). Then when the diagnosis was given, the supervisor blabbed it to other employees, creating reputational damages and depression for the employee. The supervisor was fired for the breach of confidentiality, but the court allowed suit against the company for the ADA violation.
Race
Union agrees to $6.2 million settlement. A Sheet Metal Workers Union has agreed to place $6.2 million into a back-pay fund to remedy discrimination against African American and Hispanic workers in building construction. The union was alleged to have kept its minority members under-employed, giving White members preference in its hiring hall practices. EEOC v. Local 638 (S.D. NY, 2008).
Complaint results in layoff. In Brown v. Metro Atlantic Rapid Transit Auth. (11th Cir., 2008), the court found evidence of race discrimination and retaliation. Those who fit the criteria for a layoff were White. Managers discussed the perception that laying off too many Whites in a unit headed by an African American would “look bad.” It might create a public appearance of racial favoritism or reverse discrimination. Then the Whites were exempted from layoff and the African American employees were laid off instead. Another African American employee complained about the apparent discrimination. The next day his name was added to the layoff list. He then complained a second time, to a higher official. The next day a manager changed his personnel record from “eligible for re-hire” to “ineligible” and changed his performance record from “satisfactory” to “unsatisfactory.” The court found this to be “blatant” direct evidence of discrimination and retaliation.
Half-million dollar award: Discharge for refusal to sign arbitration agreement was retaliation for existing harassment case. An African American mechanic was called overt racial names and referred to with “the N-word” by his supervisor. He filed an EEOC complaint for racial harassment. The company then instituted a policy mandating arbitration of all claims. The mechanic was willing to sign off to arbitrate future claims, but not the existing EEOC complaint. The company fired him for refusal to sign the agreement. A jury awarded $550,000 plus $160,000 in legal fees for racial harassment and retaliation. On appeal, the court validated the award, finding the harassment “overt and evil” and the attempt to get the employee to dismiss an already-filed claim from the EEOC jurisdiction as “reprehensible.” Goldsmith v. Bagby Elevator Co. (11th Cir., 2008).
FAMILY AND MEDICAL LEAVE ACT
Recovery ends FMLA protection. An employee used FMLA. She failed to provide medical documentation of her fitness for duty status and was terminated. She sued under the FMLA but lost. The information discovered during litigation showed the employee had recuperated enough to return to work before the date of termination. Thus, she no longer had a serious medical condition and was no longer protected by FMLA. Any leave beyond that which is medically necessary is not protected. Ford-Evans v. United Space Alliance (S.D. Texas, 2007).
FMLA protection limited for alcohol-related absences. The Seventh Circuit Court of Appeals (the federal circuit that governs Wisconsin) recently ruled that an employer did not violate the FMLA for terminating an employee for absences stemming from alcohol abuse where the employee had no proof that he was receiving treatment for all the days of his absence. Darst v. Interstate Brands Corp. The employee in Darst missed several consecutive days of work following a drinking binge. While the FMLA protects absences related to receiving treatment for alcoholism, the employee was only in treatment the latter half of his approximately two-week-long absence. The non-FMLA qualifying days put the employee over the employer’s limit for absenteeism, and he was terminated. The employee sued under the FMLA, but the court rejected the claim, holding that there was no proof that the employee was receiving “treatment” for his entire absence. The fact that the employee was making telephone calls regarding treatment on the days in question did not qualify in and of itself as treatment under the FMLA. One interesting note about this case is that the court specifically admonished the company’s HR person for calling the employee’s doctor to reconcile the dates of absence without the employee’s authorization. Lesson to take away: You must generally have written authorization from the employee to directly contact the health care provider!
Splitting up job may lead to FMLA liability. In another Seventh Circuit decision, Breneisen v. Motorola, the court allowed an employee’s FMLA claim to go to trial where the employer claimed that the employee’s job was eliminated during his FMLA leave, when in actuality, the employer merely divvied up the employee’s duties to other employees. Before taking FMLA leave, the employee had been given increased responsibilities and was told he was being considered for a promotion. When the employee attempted to return from leave, the employer told him that his job had been phased out and that he’d have to take a different job. The employer admitted that the employee’s original position was phased out because it was difficult to hold open the job and thus they split up the employee’s duties and assigned them to others. The court ruled that the employer had no business justification for eliminating the position apart from needing to accommodate the employee’s leave, and that the FMLA requires reinstatement even if the employee has been replaced or his job has been restructured to accommodate his need for leave.
FMLA Changes Require Modifications
On January 28, 2008, President Bush signed into law the National Defense Authorization Act. This new law expands FMLA leave rights for employees with family members serving in the military. First, the law provides an employee up to 26 weeks to care for a family member who has a serious injury or illness if the condition was incurred while the service member was on active duty or in the line of duty. The leave is available only during a single 12-month period and is combined with other FMLA leave entitlements to allow the employee a total of 26 weeks of leave (as opposed to 26+12 weeks of leave). The leave is available to a “family member” of the service member or the nearest blood relative of the service member.
The new law also expands the FMLA to provide an employee up to 12 weeks of leave during any 12-month period due to any “qualifying exigency” arising from the fact that an employee’s spouse, child, or parent is on active duty in support of a “contingency operation.” A contingency operation is a military operation that may involve actions against enemies of the United States or active duty in a war or other national emergency. At this point, because defining the term “qualifying exigency” was left to the Department of Labor, and the Department has yet to issue such a definition, it is unclear what would constitute a “qualifying exigency.” Again, the 12 weeks of leave under this provision is combined with the employee’s overall FMLA leave entitlement, and thus employers will generally not be obligated to provide more than 12 weeks of FMLA leave.
Employers are authorized to require certifications to support these expanded categories of leave and should update their FMLA polices and forms to reflect these changes. Even though there is no clear guidance on specific elements of the new provisions, employers should act in good faith to comply with the new requirements. Please contact Jennifer Mirus (608-283-1799) or Bob Gregg (608-283-1751) if you have any questions or desire assistance with these new requirements.
LABOR ARBITRATION—INSUFFICIENT EVIDENCE
Co-workers’ honest but unfounded suspicion does not justify discharge. Two flight attendants thought a third attendant was acting odd. They surmised he might be drinking on the job. When he left his cup of soda unattended, they tasted it. There was no alcohol taste, so they concluded he must be spiking the soda with vodka, which they believed had no tell-tale taste. After the flight, they reported the “drinking on the job,” and the other attendant was fired. No testing was done. The discharge was based solely on the “eye witnesses” and the employees’ inability to show any reason why they would lie or make up a report against him. An arbitrator reinstated the employee, with back pay. The arbitrator concluded that the two co-workers did honestly believe there had been drinking on the job and properly reported their concerns. However, honestly-held beliefs are often wrong. The company could have confirmed or refuted the report with an alcohol test. The failure to test, and reliance on the non-expert personal opinions of the co-workers, warranted reversal of the decision. In re Southwest Airlines (2008).
