For the Week of February 22, 2010

KEY CASES

1stCir: Restaurant manager not a qualified individual after shoulder injury

An assistant restaurant manager was not capable of performing the essential functions of her position with or without reasonable accommodation after injuring her shoulder and so was not a qualified individual covered by the ADA, ruled the First Circuit. After surgery on her shoulder, the employee was released to return to work with a five-pound lifting restriction. Rather than permitting the employee to return, the employer terminated her. The employee sued, claiming the employer violated the ADA by failing to accommodate her disability and by terminating her because of that disability. The employee argued that her sole essential function was to “oversee the operation of the restaurant and ensure that it ran smoothly.” However, it was essential for an assistant manager to assist in the kitchen and to be capable of performing a broad range of manual tasks in order to perform that function, the court observed. Since it was undisputed that the employee could not lift more than five pounds, all of her manual tasks could not be shifted to other employees, and the employee admitted that her disability left her unable to perform a substantial number of manual tasks, no reasonable jury could find that she was capable of performing her essential job functions (Richardson v Friendly Ice Cream Corp, February 5, 2010).

1stCir: Proving breach of noncompete clause is not enough for an injunction

A software company was not entitled to a preliminary injunction against a former employee, a software developer now working for a competitor who, in its view, was in violation of the noncompete clause in his employment agreement, the First Circuit held. The former employer argued it had proven a breach of the noncompete clause, and that such a showing was enough in itself to establish a likelihood of success on the merits and irreparable harm if an injunction is denied. However, the appeals court affirmed the district court’s ruling that the employer did not satisfy these requisite factors for a preliminary injunction. It was not even clear whether the noncompete agreement was enforceable under New Hampshire law, which applied here, the court noted: The state will enforce covenants not to compete only if the restraint is reasonable. Whether the noncompete clause at hand was reasonable involves policy choices that have not been addressed by New Hampshire courts or legislators. Therefore, the First Circuit could not say that the former employer had a likelihood of success or that the district court abused its discretion in denying injunctive relief (Ansys, Inc v Computational Dynamics North America, February 12, 2010).

2ndCir: Employee complained to supervisor; no Faragher/Ellerth defense

The fact that an employee complained of sexual harassment to her supervisor, who was also the harasser, rather than pursuing alternative avenues provided in an employer’s sexual harassment policy did not shield the employer from liability under the Faragher/Ellerth defense, the Second Circuit ruled. The circumstance of each case must be examined to determine whether the employee acted unreasonably by not pursuing avenues provided by the employer’s harassment policy, noted the court. Here, the appeals court concluded that it was not unreasonable for the employee to complain to her harasser where that individual was designated as one of the persons with whom to lodge complaints. Although the employer suggested the employee could have complained to the facility’s general manager, the evidence revealed the general manager was not receptive to receiving complaints from employees. Moreover, another employee who complained about the supervisor was suspended within days of contacting human resources. Since several channels listed in the employer’s policy appeared to be ineffective, a question existed whether it was reasonable for the employee to believe that other avenues would be similarly futile. In addition, the appeals court found the employee provided sufficient evidence to support her hostile work environment claim where the supervisor made numerous sexual comments, grabbed women employees around the waist, tickled them, and stared as if he was mentally undressing them. Thus, the appeals court vacated the district court’s grant of summary judgment in favor of the employer (Gorzynski v Jet Blue Airways Corp, February 19, 2010).

2ndCir: Arbitration agreement enforceable despite problematic provisions

A makeup artist must arbitrate her claims against a film production company and ESPN asserting that she was sexually harassed and then discharged in retaliation for complaining about the harassment, held the Second Circuit, approving the enforcement of an arbitration agreement where the defendants agreed to waive provisions that were potentially unconscionable. The provisions at issue created a ninety-day statute of limitations for filing an arbitration claim and required that attorney’s fees be awarded to the prevailing party. Applying New York law, the Second Circuit rejected the employee’s argument that the arbitration agreement should be considered in its entirety despite the fact that the defendants had waived these provisions. Rather, it held that when a court is faced with a plainly unconscionable provision in an arbitration agreement, the appropriate remedy is to sever the improper provision rather than void the entire agreement. While the court upheld the modified agreement, it emphasized that it was “not at all clear” that it would have reached the same result if the defendants had attempted to enforce the agreement in its entirety (Ragone v Atlantic Video, February 17, 2010).

2ndCir: Contradictions in SSDI application did not estop ADA claim

Statements made by an ADA plaintiff on his SSDI application regarding his limited computer and telephone usage did not judicially estop his reasonable accommodation claim, the Second Circuit ruled. When prompted on the application to describe any changes in his social activities since his condition began, the employee stated he was “no longer able to speak on the phone or work with computer [due] to pain.” The Second Circuit held that because these statements were made in response to questions concerning his social activities—and not his work activities—the statements were reconcilable with his claim that he could perform the essential functions of his job with a reasonable accommodation. With regard to work activities, the employee had stated on the application that the effect of his disabilities was that he could “no longer commute” to work but had to “work from home.” (DeRosa v National Envelope Corp, February 17, 2010).

3rdCir: No agreement to arbitrate access to newly acquired stores

Grievances over a union’s right of access to stores newly acquired by a retail employer were not subject to arbitration since they did not involve the interpretation of a provision of a collective bargaining agreement (CBA). In a 2-1 decision, the Third Circuit ruled that the store access grievances did not fall within the scope of the CBA’s arbitration clause. The union identified three provisions in the contract—a recognition clause, an observation clause, and a privileges clause—that it contended provided it a right of access to the newly acquired stores and their employees. However, the appeals court concluded the recognition clause merely established the union’s position as exclusive bargaining representative. Further, the union could not rely on an observation clause to invoke arbitration since the union could not ensure compliance with the CBA at stores to which it did not apply. Finally, the privileges clause, which stated “[o]nly privileges which have been granted by the present Employer since its acquisition of the establishments covered by this Agreement shall be continued,” did not apply to the union but rather pertained to employees’ working conditions. Judge Ambro, dissenting, argued the recognition clause sufficiently demonstrated that the union’s asserted right of store access fell within the “zone of interests” that received protection under the CBA (Rite Aid of Pennsylvania v Food and Commercial Workers, Local 1776, February 16, 2010).

6thCir: “Additional evidence” required in ADEA RIF cases

Recognizing the heightened evidentiary framework ADEA plaintiffs must face in reduction-in-force cases, the Sixth Circuit held that a 58-year-old bindery worker failed to make out a prima facie case of age bias because she was unable to provide “additional evidence” that her employer singled her out for discharge for impermissible reasons. To show additional evidence in a RIF case, it is not enough for a plaintiff to establish that she was discharged during a RIF while a younger person was retained in the position that the plaintiff was capable of performing; the plaintiff must also show that she possessed superior qualities to the younger retained person. Without more, the bindery worker’s evidence that the two oldest employees in the company were selected for discharge was insufficient to constitute additional evidence because such a small statistical sample was not probative of discrimination, the appeals court found. It also rejected the worker’s argument that the employer’s failure to follow the layoff criteria in its own handbook was sufficient additional evidence because the decisionmaker who discharged her, as a practical matter, followed the layoff criteria. The court further held that even if the prima facie case had been made, the worker could not show the employer’s reason for her discharge was a pretext for age bias because she offered no evidence to support her subjective belief that she was more qualified or productive than the younger retained employee (Schoonmaker v Spartan Graphics Leasing LLC, February 3, 2010).

7thCir: Additional contributions must be collected from all union retirees

A district court correctly concluded a UPS pension plan violated a summary plan description (SPD) by collecting additional contributions from retirees of one union local without collecting additional contributions from other union retirees covered by the plan, concluded the Seventh Circuit. The plan contended it was allowed to collect additional contributions from the local retirees because plan language stating that each retired employee will “share equally” in the cost above the maximum employer contribution referred to how the plan calculated average costs, not how it collected additional contributions. However, the SPD expressly stated that each retired employee will “share equally... by making an additional contribution.” The plan’s interpretation would effectively negate this clause. Further, the appeals court noted the language at issue here was contained in the SPD, which covered almost all union retirees, not the CBA, which was negotiated separately by the local. Thus, the local retirees had a right to rely on the SPD, which unambiguously stated that the plan must collect additional contributions from all union retirees, not just the local retirees (Green v UPS Health and Welfare Package, February 10, 2010).

7thCir: Conduct outside limitations period considered in hostile workplace claim

A male waiter’s claim that he was sexually harassed after ending a nine-month long sexual relationship with his female supervisor should have survived summary judgment, concluded the Seventh Circuit. A district court dismissed the employee’s hostile workplace claim after excluding most of the alleged instances of harassment as time-barred. However, the district court misapplied National Railroad Passenger Corp v Morgan (USSCt 2000, 82 EPD ¶41,042), the appeals court found, noting that in a hostile workplace claim, acts of harassment falling outside the statute of limitations may be considered as long as some act of harassment occurred within the limitations period—as was the case here. Therefore, the district court should have analyzed whether all of the supervisor’s conduct, taken as a whole, created an actionable hostile work environment. Further, it must be determined whether the employee subjectively believed that the harassment was sufficiently severe to create a hostile work environment and the harassment must be sufficiently severe, from the standpoint of a reasonable person, to create a hostile work environment. The employee identified at least five instances of explicit sexual harassment which, taken together, created a genuine issue of material fact on his hostile workplace claim. However, whether the employer was liable for the alleged harassment remained an open question. Because the harasser was the employee’s immediate supervisor, employer liability turned on its ability to assert a Faragher/Ellerth affirmative defense, a matter for the district court to decide (Turner v The Saloon, Ltd, February 8, 2010).

8thCir: Sexual assault was too remote a consequence for failure to train

An Arkansas woman who was sexually assaulted by a sheriff deputy while in custody failed to establish that the sheriff was liable for the assault by his failure to train the deputy, ruled the Eighth Circuit In an action under section 1983. Since no deputies had ever engaged in sexually impermissible conduct and nothing in the deputy’s record indicated a proclivity to engage in improper sexual behavior, the sheriff had no notice of a pattern of unconstitutional acts committed by deputies. While the Arkansas code required that law enforcement officers complete a minimum of 20 hours of training concerning sexual assaults, that statute did not create a duty for the county to train its officers on the laws concerning sexual assault. Further, since the deputy had been employed as a road deputy for only three months, he still had one year to complete the training course. Additionally, the appeals court determined that even if the deputy had been more properly trained on the contents of the law, the sexual assault was too remote a consequence of the failure to train to hold the county liable. Since a reasonable officer would know that sexually assaulting a detainee is impermissible, the plaintiff failed to demonstrate the close relationship necessary to conclude that the sheriff’s failure to train the deputy caused the sexual assault (Parrish v Ball, February 10, 2010).

10thCir: Complaint to state agency was protected First Amendment speech

A speech language pathologist's First Amendment reprisal claim may proceed because when she filed an Individuals with Disabilities Education Act grievance against her employer she was not acting pursuant to her job responsibilities as a public employee but instead as a private citizen, held the Tenth Circuit, reversing the district court. Because she went beyond the internal mechanism of complaining to school administrators and filed a state complaint with an agency outside her direct chain of command, the employee’s speech was not pursuant to official duties, held the court. The appeals court also allowed her claim for retaliation under the Rehab Act to proceed, finding that her complaints about the school board's failure to deliver services to special education students constituted protected activity. Because her workload and salary were reduced when the school board refused to increase her standard contract to an extended contract and by assigning her a smaller amount of students, a material adverse action was taken against her sufficient to allow the claims to proceed (Reinhardt v Albuquerque Public Schs Board of Educ, February 17, 2010).

10thCir: Removal of claim saved employee from limitations bar

While an employee failed to timely serve his employer with a summons and complaint in a state court action after being discharged following an extended absence, he had an extra 120 days to perfect service after his employer removed the case to federal court, held the Tenth Circuit. The employee was injured on a public sidewalk while walking to a company meeting. After an extended leave of absence, the employee was discharged. He filed a petition in state court alleging retaliatory discharge and breach of employment contract, among other claims. The employer removed the suit to federal court. Kansas law allows employees two years in which to commence an action based on discharge. Kansas law also requires that both a petition and a summons be served before an action will be deemed commenced. While the employee filed his state court petition within the two-year period, he failed to serve the summons on his employer. However, once the employer removed the case to federal court prior to the expiration of the 90-day grace period for service under state law, the employee was given an additional 120 days in which to perfect service in federal court. Since the employee served the employer well within the 120 days from the date of removal, the district erred in dismissing the employee’s state tort claims as time-barred (Wallace v Microsoft Corp, February 18, 2010).

10thCir: Multiple sclerosis didn’t impair ability to work; employee not disabled

The fact that an accountant suffered from multiple sclerosis did not establish that she was disabled within the meaning of the ADA, or that she was denied a position as a county’s fiscal officer because she had a physical disability, ruled the Tenth Circuit. After the county’s fiscal officer resigned, the employee was placed in the position on a temporary basis. While the employee was in the pool of final candidates for the permanent position, the county ultimately hired an outside candidate. The employee filed suit, asserting the county discriminated against her based on her multiple sclerosis, which she asserted was a substantially limiting impairment. However, the record contained no evidence that her disease substantially limited the employee’s ability to work. Rather, there was significant evidence that the accountant was a highly competent employee at the time of the hiring decision. Further, the appeals court observed, at the time of the hiring decision there was no dispute that the employee, despite her disease, performed acceptable work, and as long as she maintained a satisfactory level of job performance her working ability could not be said to be so limited that she could fairly be described as disabled under the ADA. Thus, the employee failed to rebut the county’s evidence that at the time of the hiring decision, she was not disabled within the meaning of the Act (Johnson v Weld County, Colorado, February 8, 2010).

10thCir: May nonparty attorneys interview jurors for professional development?

In an apparent case of first impression, the Tenth Circuit has issued a limited writ of mandamus directing a district court to reconsider, through a “meaningful” exercise of discretion, its denial of an application for jury access. The Oklahoma Employment Lawyers Association (OELA) sought permission from the district court to interview jurors after they rendered a verdict in an employment discrimination case. The district court denied the group’s request through a minute order without explanation. The OELA’s direct appeal, analyzed by the appeals court as a request for a writ of mandamus, concerned the issue of whether, under the First Amendment, attorneys who did not participate in the underlying litigation must be given access to jurors to help prepare educational programs for members of a professional organization. The appeals court refused to decide whether the First Amendment required the lower court to issue a narrowly tailored order using the least restrictive means to protect both the jury and the administration of justice while also giving OELA some manner of access. Instead, the court sent the case back to the district court, telling it to exercise discretion on the matter. The fact that none was apparent from the minute order was itself an abuse of discretion and the basis for the issuance of a writ of mandamus, the reviewing court noted (Clyma v Sunoco, Inc, February 3, 2010).

11thCir: False Claims Act retaliation claim not dependent upon fraud claim

An office manager’s repeated internal complaints fell within the protections of the False Claims Act, the Eleventh Circuit ruled, and her retaliation claim in a qui tam suit did not depend upon her related claims of Medicare billing fraud, which were properly dismissed for failure to state a claim with particularity. Thus, the appeals court held the employee’s False Claims Act retaliation claim was dismissed in error. The manager’s internal complaints to her employer of “unlawful actions” and warnings of “significant criminal and civil liability” were enough to make the employer aware of a possibility of litigation, sufficient to fulfill the law’s requirement that an employee engage in conduct “in furtherance of an action filed or to be filed” in order to state a claim for retaliatory discharge under the Act. (A 2009 amendment, which did not apply here, broadens the Act’s protections to those discharged “in furtherance of other efforts to stop 1 or more violations,” the appeals court noted) (Sanchez v Lymphatx, Inc, February 18, 2010).

DCCir: Ledbetter Act did not revive untimely ADEA nonpromotion claims

An accounting firm employee who alleged he was twice not promoted to partner because of his age could not rely on the Lilly Ledbetter Fair Pay Act to revive his untimely filed ADEA charge because his promotion denials did not constitute a “discriminatory compensation decision or other practice” under the Act, held the DC Circuit. The circuit court rejected the employee’s argument that the Fair Pay Act applied because his nonpromotions resulted in his receiving significantly less compensation than he would have made as a partner in the firm. “Discrimination in compensation” means paying different wages or providing different benefits to similarly situated employees, not promoting one employee but not another to a more remunerative position, the court concluded. The DC Circuit added that its decision was in line with Congress’ “patent intent” to overrule the Supreme Court’s 2007 decision in Ledbetter v Goodyear Tire & Rubber Co, reasoning that the facts alleged in Ledbetter clarified that “other practice” refers to giving an employee a poor performance evaluation based on her sex (or any other unlawful criterion) and then using that evaluation to determine her rate of pay, not failure-to-promote decisions. The circuit court did, however, revive the New York state law age bias claims of the employee and his coworker (Schuler v PricewaterhouseCoopers, LLP, February 16, 2010).

SDCal: Motion to amend class certification of bus drivers too late

A federal district court declined to exercise its discretion to amend a prior class certification, or to certify a new class, to cover bus drivers who worked for a predecessor transit company, in an action to recover for unpaid work during meal and rest periods. No new facts were discovered and there was no change in the applicable law that would justify a late amendment of the class certification. The drivers had all the information needed to proceed with class certification at the time a deadline for such motions came, but their attorney mistakenly failed to file the motion on time. Moreover, since 14 months had passed between the deadline for filing a class certification motion and their actual filing, the substantial delay weighed against exercising the court’s discretion. Because more than a year had passed with the company relying on the lack of class certification against it, the company would suffer undue prejudice if the class certification was amended at this late stage. Thus, the court denied the drivers’ motion for class certification against the predecessor company (Amalgamated Transit Union, Local 1309 v Laidlaw Transit Services, Inc, February 11, 2010.)

NDIowa: EEOC must pay $4.5 million in fees for failed Title VII case

The EEOC must pay $4.5 million in attorneys’ fees, expenses and costs to a prevailing defendant in a meritless Title VII pattern or practice sex harassment suit. A federal district court in Iowa found an award of fees was warranted because the EEOC’s failure to investigate or attempt to conciliate the individual harassment claims constituted an unreasonable failure to satisfy Title VII’s prerequisites to suit. Characterizing the EEOC’s litigation strategy as “sue first, ask questions later,” the court stated the “EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII and imposed an unnecessary burden upon [the employer] and the court.” (EEOC v CRST Van Expedited Inc, February 9, 2010).

SDIowa: Governor’s appointment of arbitration panel barred by NLRA

A proposal by Iowa’s governor to appoint a board of arbitration and conciliation to help resolve a labor dispute between a grain processor and a union representing its workers was preempted by federal law, held a federal district court in Iowa, which permanently enjoined the governor from appointing a board. The primary purpose of the board was to investigate the cause of the labor dispute, suggest how it should be resolved and make its “decision” public. The obvious purpose was to coerce an agreement by invoking official action to mold public opinion and bring public pressure to bear to force a settlement, the court found. Such state action would conflict with the national policy of free and unfettered collective bargaining, held the court. The governor’s contention that he was entitled to take action pursuant to the “local interest” exception to NLRA preemption also was rejected. The local interest exception applies only when the conduct of the dispute is marked by violence and imminent threats to public order, and there was no violence associated with this dispute. Thus, application of state law to this labor dispute was preempted by the NLRA (Grain Processing Corp v Culver, February 17, 2010).

DMass: Nationwide class certified in skycap $2 bag fee case

In an ongoing dispute between skycaps and their airline employer over a $2 per bag fee for curbside check-in the airline imposed at airports in 34 states, a federal district court in Massachusetts certified a nationwide class in their common-law tort claims for tortious interference with a contractual or advantageous relationship. Most passengers thought the baggage fee was actually a tip, so they did not tip the skycap on top of paying the fee. However, the airline did not pass on the bag fee to the skycaps, so their compensation was cut significantly. The judge presided over an earlier case brought by 10 skycaps in Boston, finding liability but refusing to certify a class action. His analysis of the requirements of FedRCivPro 23 now came down in favor of certification. However, because the calculation of individual damages would be very complex, he certified the class as to liability only (Overka v American Airlines, February 4, 2010).

EDPa: Court stops executive from taking job at rival baking company

A high-level executive at Bimbo Bakeries who was knowledgeable of business trade secrets and proprietary information was enjoined from starting work for a competitor after a federal district court in Pennsylvania found Bimbo had a good chance of prevailing on its misappropriation case against him. The “nooks and crannies” secrets of Thomas’ English Muffins are at stake as the executive accumulated and copied financials, production, marketing, strategy and sales information for three months after he accepted the new job, even downloading key documents onto a flash drive minutes after revealing his departure and before his access was blocked. Under the Pennsylvania Uniform Trade Secrets Act, employment or certain aspects of it could be prevented under the inevitable disclosure doctrine. Here there was a substantial threat that the executive would disclose what he knew. The facts that he was taking a similar position at Hostess and that his flash drive was missing, among other things, showed that he would probably be disclosing trade secrets, either intentionally or inadvertently, giving his former employer a strong chance of prevailing on the merits. Moreover, knowing Bimbo’s trade secrets would give Hostess the competitive edge and Bimbo would be irreparably harmed as its losses couldn’t be quantified and remedied by damages. Also, Bimbo’s harm outweighed the executive’s—he will be drawing vacation compensation during the two months the court will be considering the case—and the public interest is served by upholding trade secrets. A narrowly drawn injunction allowing the executive to start his new job would not protect Bimbo’s interests in this case, the court also found. The executive last week filed an interlocutory appeal (Bimbo Bakeries USA, Inc v Botticella, February 9, 2010).

EDPa: Health care “independent contractors” were not similarly situated

A health care worker who claimed his employer, a temporary staffing agency that hired health care workers and placed them in various health care facilities, maliciously misclassified him and other plaintiffs as independent contractors in order to evade having to pay overtime compensation was denied conditional class certification of his FLSA suit. A federal district court in Pennsylvania found that plaintiff had not shown the putative class was similarly situated, as the record showed that the health care workers had a “wide array of skills responsibilities and experiences” with the employer and its clients. These differences would make it too difficult for the court to determine whether the plaintiffs were independent contractors or employees, as it would require an examination of each plaintiffs’ distinct relationship with each client (Bamgbose v Delta-T Group, Inc, February 8, 2010).

MDPa: Court stays race bias case, granting EEOC time to conciliate

On the heels of getting slammed with a $4.5 million judgment for attorneys’ fees in what a federal district court in Iowa deemed was a meritless sex harassment suit (see EEOC v CRST Van Expedited Inc above), the EEOC suffered the consequences of its “sue first” mentality again last week when a federal district court in Pennsylvania halted the agency’s constructive discharge claim in a race bias action for not having conciliated the dispute in good faith. This time the court was more forgiving, staying the proceedings to allow the EEOC to fulfill its statutory obligation (EEOC v Bimbo Bakeries USA, Inc, February 16, 2010).

WDWash: Whistleblowing to media not protected activity under SOX

The whistleblower provisions of the Sarbanes-Oxley Act (SOX) do not prohibit termination for disclosures to the media, a federal district court in Washington state ruled, granting summary judgment to Boeing in a suit filed by IT auditors who released information about alleged auditing deficiencies to a local newspaper. The auditors made several complaints to supervisors about their concerns, but eventually concluded that Boeing's auditing culture was unethical and the work environment was hostile to those who sought change. Believing the situation was sufficiently serious, the auditors provided information and documents to a reporter at the Seattle Post-Intelligencer. As a result, they were terminated. The auditors alleged their disclosures to the media were protected under the whistleblower provisions at Section 806 of SOX. However, Section 806(1)(a) of SOX protects employees against retaliation from employers when the employees provide information or assistance only to groups of individuals specifically designated in the statute, and members of the media were not among them. “Congress has made clear that while SOX was intended to protect whistleblowers, only certain types of whistleblowing would be afforded protection,” the court wrote. “Leaking documents to the media is not one of them.” Nor were the auditors protected by employer policies permitting the release of information on working conditions to the extent privileged by Section 7 of the NLRA, as they did not show their disclosures of fraud and a hostile work environment should be protected by the NLRA (Tides v Boeing Co, February 9, 2010).

CalSCt: Kin care law inapplicable to uncapped sick leave policies

In a highly anticipated decision, the California Supreme Court has ruled that the state’s kin care law, Labor Code §233, does not apply to paid sick leave policies that provide for an uncapped number of compensated days off. The law allows employees to use one-half of their accrued annual paid sick leave to care for the illness of a close family member or domestic partner. At issue was a sick leave policy contained in a collective bargaining agreement that permitted employees to take successive five-day periods off for their own illness, if they worked in between. The state high court said the kin care could not sensibly be applied to the sick leave plan because it is impossible to determine the amount of compensated time off for illness an employee may be entitled to when the leave is not banked and cannot be calculated with certainty in six-month periods. This reasoning also was supported by §234, which prohibits employers from disciplining employees for taking kin care, and by the legislative history, which shows that the law was not intended to broadly apply to all types of sick leave policies. Employers may refuse to allow employees to use uncapped sick leave to care for relatives, although they are not required to do so. They may, like these employers, offer compensated personal days off which may be used to care for relatives, the state high court said (McCarther v Pacific Telesis, February 18, 2010).

CalCtApp: Appeals court reverses $6.2M verdict against city in bias suit

In an unpublished ruling, a California court of appeals last week reversed a $6.2 million jury verdict in favor of a black lesbian firefighter in her race, gender, and sexual orientation discrimination and retaliation suit against the city of Los Angeles. The appeals court reversed the judgment because, among other reasons, the plaintiff failed to exhaust her administrative remedies with respect to her claim that she was not permitted to return to work. The case was reversed and remanded for a new trial, limited to the issues over which the trial court has jurisdiction (Lee v City of Los Angeles, February 18, 2010).

MissSCt: One-year limitations period applies to IIED claims

A one-year limitations period applies to claims for intentional infliction of emotional distress (IIED), the Mississippi Supreme Court held, resolving its prior inconsistency in determining whether a one-year period or a three-year period applied to such claims. Observing that IIED is a tort against a person and is analogous to actions for assault, libel and slanderous words that were specifically enumerated in Section 15-1-35 of the Mississippi code, which provides for a one-year limitations period, the supreme court determined that a one-year period applies to IIED claims as well. Therefore, a state trial court did not err in applying a one-year statute of limitations to dismiss with prejudice the IIED claims asserted by six employees who filed suit more than one year after they were laid off from their employer. A supreme court majority also held the employer did not waive the statute of limitations defense by having waited too long to raise the issue (Jones v Fluor Daniel Servs, February 18, 2010).

AGENCY DEVELOPMENTS

Proposed rule addresses scope of RFOA defense to disparate impact age bias

The EEOC’s long-awaited proposed rule on the definition of "reasonable factors other than age" (RFOA) under the ADEA was published in the Federal Register on February 18. The EEOC published a notice in March 2008 proposing to amend its regulations to reflect the Supreme Court's decision in Smith v City of Jackson (USSCt 2005, 86 EPD ¶41,882). That proposed rule would revise 29 CFR 1625.7(d) to state that an employment practice that has an adverse impact on individuals within the protected age group on the basis of older age is discriminatory unless the practice is justified by a "reasonable factor other than age." The revision also would require that the individual challenging the allegedly unlawful employment practice bear the burden of isolating and identifying the specific employment practice responsible for the adverse impact. Additionally, the EEOC proposed to revise 29 CFR 1625.7(e) to state that, when the RFOA exception is raised, the employer has the burden of showing that a reasonable factor other than age exists factually.

EEOC letter discusses accommodation of employee's refusal to shake hands with women due to Muslim religious belief

The determination of whether accommodating a new employee's refusal to shake hands with women due to his Muslim religious beliefs would pose an undue hardship on an employer because of coworkers' or customers' reactions should be fact-specific and not based merely on speculation, according to an informal discussion letter signed by EEOC associate legal counsel Peggy Mastroianni and released by the EEOC on February 16. Further, in reaching an effective religious accommodation, the employer should avoid any accommodation that would foster sex discrimination.

DOL issues final H-2A rule, reverses Bush-era changes

In a move closely watched by the agricultural industry, labor and immigrant rights groups, the Department of Labor released a final rule on February 12 reversing changes made by the Bush administration to the labor certification process and enforcement mechanisms governing the H-2A temporary agricultural worker program. The DOL found there were insufficient worker protections in the Bush administration rule's attestation-based model in which employers merely confirm, and do not actually demonstrate to the satisfaction of an objective government observer, that they have performed an adequate test of the US labor market. The final rule includes stronger mechanisms for enforcement of the worker protection provisions required by the H-2A program, said the DOL. The rule takes effect March 15.

TWITTER UPDATES

SUPREME COURT

High Court considers when clock starts ticking in disparate impact case

The Supreme Court hears oral argument on Monday in Lewis v City of Chicago (Dkt No 08-974). The question presented: When an employer adopts an employment practice that discriminates against African-Americans in violation of Title VII’s disparate impact provision, must a plaintiff file an EEOC charge within 300 days after the announcement of the practice, or may a plaintiff file a charge within 300 days after the employer’s use of the discriminatory practice? The case involves minority applicants for city firefighter jobs who claimed the written test had a disparate impact on black applicants by disproportionately classifying them as “qualified” rather than “well qualified,” the category from which all those hired would be chosen. The charge was filed more than 300 days after the plaintiffs were notified of their classification, but within 300 days of the city's beginning to hire applicants. The trial court ruled that each hiring was a fresh violation of Title VII, so the plaintiffs' suit was timely. The Seventh Circuit reversed, holding the limitations clock starts ticking at the disparate test results, not the hiring date.

CONFERENCE NEWS

Internet use poses risk for employers, provides litigation tool for attorneys

When employees use the Internet, employers face potential liability both for their employees' behavior and statements and from monitoring their employees' behavior and statements, advised Katheleen Ehrhart, partner at Kirkland & Ellis LLP in Chicago. Plaintiffs' lawyer Suzanne E. Bish of Stowell & Friedman in Chicago discussed the many uses of the Internet as a litigation tool. Ehrhart and Bish presented a discussion entitled, Policing the Workforce and Litigating Employment Cases in the High Tech Era of Social Networking, Blogging, and Texting, to members of Chicago Bar Association's Labor and Employment Law Committee.

HEALTH CARE REFORM

Obama unveils reform proposal

President Obama unveiled his health care reform proposal on Monday, in advance of Thursday’s bipartisan health care summit, a plan the White House says “puts American families and small business owners in control of their own health care.”

Agenda set for Feb. 25 meeting

White house Chief of Staff Rahm Emanuel and Health and Human Services Secretary Kathleen Sebelius outlined the format of the scheduled February 25 health care reform meeting requested by President Obama in a letter addressed to the four top Congressional leaders. The discussion will focus on four topics: insurance reforms; cost containment; expanding coverage; and the impact of health reform legislation on deficit reduction.

Senators urge public option

A group of senators sent a letter to majority leader Harry Reid (D-Nev) asking him to bring for a vote before the full Senate a public health insurance option under budget reconciliation rules. The letter lists four rationales: its potential for billions of dollars in cost savings; the growing need to increase competition and lower costs for the consumer; the history of using reconciliation for significant pieces of health care legislation; and the continued public support for a public option. Nearly 120 House members have indicated renewed support for a public option as well.

Tax on "cadillac" plans affects more nonunion workers

Union members are a relatively small fraction of the total population that would ultimately be affected by the excise tax on high-cost employer provided health insurance plans proposed in the Senate health reform bill, according to a recent briefing by the University of California, Berkeley’s Center for Labor Research and Education.

Insurance exchange good for workers

Workers generally would gain from shifting from employer-sponsored health insurance to the individual market through a national health insurance exchange, a major element of most health care reform proposals, according to a study published in January by the National Bureau of Economic Research.

States continue reform efforts

For the last few years, states have been leading the way toward more comprehensive health care coverage to ensure that more people have or can obtain health insurance. This ongoing activity potentially impacts employer-provided health insurance benefits. Here, an update on developments through the first week of February.

COMPLIANCE

DOL slow to update FMLA military leave materials

The DOL has not yet updated its website, mandatory FMLA poster, or forms to comply with the October 2009 FMLA military leave amendments, according to law firm Constangy, Brooks & Smith, LLP. The firm warns that the "new" regulations, effective in January 2009, are already out of date and not in compliance with the latest amendments concerning military leave. The agency’s recommended certification forms for military caregiver or qualifying exigency leave have not been updated to conform with the latest amendments, so reliance on the forms could cause an employer to unknowingly violate the law.

IN OTHER NEWS

Schools sued for spying via laptops

Employers that furnish employees with laptops for home use would do well to heed the lessons to be learned in a recently filed class action suit before contemplating deployment of these laptops to monitor their workforce. According to Law.com, the suit alleges that 1,800 students were provided by their schools with laptop computers equipped with webcams which, unbeknown to the students or their parents, could be activated at any time by teachers and school administrators to spy on the students and their families in their homes. Their suit alleges claims under the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act and the Stored Communications Act, among others.

Wal-Mart digs itself deeper

A law firm's newspaper ad seeking witnesses to sexual harassment at a local Wal-Mart store has triggered a second lawsuit against the retailer for age discrimination, according to Law.com. After putting an ad in a local paper seeking information about alleged sexual harassment at the store, the plaintiffs’ lawyers received "call after call from older people" claiming that Wal-Mart was trying to make work unbearable for them so that they'd either quit or be fired for refusing to perform certain duties. The age bias suit came just weeks after a sexual harassment lawsuit was filed against the same store by the same law firm. Add retaliation charges to the mix: last week, Wal-Mart fired the lead plaintiff in the sexual harassment suit, along with the woman's husband, Law.com reports.

Regis Corp tactic draws NLRB scrutiny

Regis Corp, a hair salon chain that operates nearly 8,000 stores, has drawn the scrutiny of NLRB investigators after asking workers to sign a form in which they agree to revoke their future right to form a union by using an authorization card, according to the Minneapolis Star Tribune. Jackson Lewis has been tapped to represent the company in what Regis CEO Paul Finkelstein says is a “potential Supreme Court case.”

Milwaukee paid sick leave ordinance referred to state supreme court

The Wisconsin Court of Appeals has asked the Wisconsin Supreme Court to take up the constitutionality of Milwaukee's paid sick leave mandate. In June 2009, a lower court ruled the paid sick leave ordinance, which provides up to nine paid sick days per year, was "invalidly enacted and unconstitutional." While the court did not find the ordinance was preempted by state or federal law, it held the reach of the ordinance "exceed[ed] its grasp." 9to5, the National Association of Working Women, appealed the ruling. The supreme court has been asked to decide whether the ballot question put before the city’s voters complied with the statutory requirement that it contain "a concise statement of its nature." Nearly 70 percent of voters approved the paid sick leave referendum in the November 2008 election.

Former VP sues for bad-mouthing

A former vice president of Dunkin’ Donuts is suing his ex-employer for $5 million, alleging the fast food chain has spoken so ill of him that he can't find another job, according to Law.com. The plaintiff claims Dunkin' officials have defamed him with allegations of "excessive drinking, inappropriate conduct with female employees, chronic inability to meet deadlines, and a misleading and dishonest character."

American Airlines workers may strike

Transport Workers Union leaders who represent more than 28,000 workers at American Airlines and American Eagle announced that unless all outstanding contract issues are settled by the end of mediated discussion on March 8, union members will seek an immediate release from federal mediation. TWU would be the first union representing a major carrier to request such action from the National Mediation Board since the Obama administration took office. "Four years is time enough to settle a contract," said James C. Little, TWU international president.

Costco workers ratify contract

Teamsters from the six local unions that represent 12,000 Costco workers in California ratified a new three-year agreement that included annual wage increases and annual guaranteed bonuses. The wage and bonus increases will maintain the members' distinction as the highest paid retail workers in the country. "The officers and officials did not recommend a 'yes' vote, but rather encouraged the membership to vote their conscience due to the fact that the company refused to increase pension contributions," said negotiations chairman and international vice president Rome Aloise.

Union labor to build high-speed train

The Nevada state agency charged with building the nation's first Maglev train and its private partner, the American Magline Group, have signed a letter of commitment with the Nevada Building Trades Council, ensuring that as many as 90,000 union workers will be put to work building America's first super speed train. The two sides have committed to negotiate a project labor agreement that insures union workers will build the system.

Continental workers join Teamsters

Nearly 8,000 fleet service workers at Continental Airlines have voted to join the Teamsters by an overwhelming margin The National Mediation Board announced the election results on February 12.

$1.5 mil in back wages to workers at NJ computer firm

The Department of Labor has found Peri Software Solutions Inc in violation of the H-1B provisions of the Immigration and Nationality Act, uncovering nearly $1.5 million in back wages to 163 workers. An investigation by the Wage and Hour Division found that the Newark-based company failed to pay the required prevailing wage to workers hired as computer analysts under the H-1B program. Investigators also found the company forced employees to sign employment contracts and then sued them when those contracts were broken. The company was also assessed a civil penalty of $439,000 and faces a potential two-year debarment from the H-1B program.

EPI urges overhaul of skilled guest worker programs

Employers often claim they use the H-1B and other skilled guest worker visa programs to attract talented foreign workers and help them remain permanently in the US. But a new Economic Policy Institute report claims these programs are mainly a means to help outsource US jobs or recruit cheap temporary labor.

Employers restoring 401(k) matches

Many US employers are increasingly losing confidence in their workers' ability to save for retirement and, as a result, plan to step up their efforts this year to help workers maximize their 401(k) savings and to restore employer matches that were suspended or reduced during the market downfall, according to a survey by Hewitt Associates.

Benefits vary with earnings

Workers in low-paid jobs have less access to employer-provided benefits than workers in high-paid jobs, according to a BLS analysis of National Compensation Survey data. The BLS examines the difference between low-wage and high-wage earners for several individual benefits.

State pension funds have $1 trillion shortfall

States have promised at least $2.73 trillion in pension, health care and other retirement benefits for public employees over the next three decades, but have saved enough to cover only about 85% of their long-term pension costs and only three percent of the funds needed for promised retiree health care and other nonpension benefits, according to a recent report by the Pew Charitable Trusts. And the news may actually be worse than the study demonstrates.

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Editor

Lisa Milam-Perez, JD

About CCH WorkWeek

This weekly newsletter provides corporate counsel and law firm practitioners with need-to-know employment and labor law information in a timely, yet manageable manner. Benefit from news and information in a broader context, with deeper analysis of recent developments and corresponding trends. Delivered to you every Monday, CCH WorkWeek offers timely coverage of breaking legislative developments, regulatory activity, state law changes, key case law and expert commentary by CCH editors.