KEY CASES

1stCir: Discharge upheld, industrial double jeopardy doctrine inapplicable

An arbitrator did not manifestly disregard the law by declining to use the doctrine of industrial double jeopardy to overturn an employee's dismissal for falsifying time records, ruled the First Circuit. The employee was suspended for three days after his employer began to suspect that he falsified his time when he requested that his attendance register be altered to reflect that he worked on a certain day. When an investigation confirmed the employer's suspicion, the employee was discharged. The employee argued that by being dismissed after having been suspended without pay, he suffered two distinct disciplinary sanctions for the same conduct. While the employee was correct that an employee should not be penalized twice for the same infraction, the double jeopardy doctrine was not violated in this instance, the appeals court ruled. A second sanction transgresses industrial double jeopardy principles only if the first sanction has become final. When an employer suspends an employee pending an investigation, the doctrine does not bar subsequent discipline (Zayas v Bacardi, 1stCir, April 18, 2008).

1stCir: Misstatement by HR rep did not entitle retiree to greater pension benefits

An employer was not required to pay a retiring employee a pension benefit greater than the amount to which he was actually entitled because a human resources staff member misstated the proper benefit amount to him, the First Circuit ruled. There was no breach of a fiduciary duty under ERISA, since the HR rep was not acting in the capacity as plan fiduciary. The employee could not state a claim based on an estoppel theory either, since the employee had been given the actual plan documents, which clearly stated the proper amount of benefits he stood to receive under the plan. "Nothing in ERISA secures to him a windfall when a ministerial employee makes a mistake in an estimate, a mistake of which the beneficiary is or should be aware because of the company's clear and accurate ERISA disclosures," the appeals court wrote. Nor could he have reasonably relied upon an erroneous estimate on the company's online benefits estimator, where it contained a prominent disclaimer that the tool provided an estimate only and that the plan documents were controlling (Livick v The Gillette Co, 1stCir, April 17, 2008).

7thCir: Bookkeeper raises enough evidence to proceed on FMLA claim

Caring for two terminally ill parents and reeling from the deaths of five other family members or close friends in the same year, a bookkeeper for a school district missed 72 days out of a possible 242 workdays. The school board removed her from her position because "it was determined that [she] missed too much work to meet the essential functions of her present assignment." The bookkeeper was later told she was removed not due to absenteeism, but because her performance was unsatisfactory. Reversing summary judgment to the school board, the Seventh Circuit concluded the bookkeeper presented enough evidence of a discriminatory motive to proceed on her FMLA claim, including conduct which suggests that, "while fully cognizant of their obligations...under the FMLA, [the board] decided not to inform her of those rights and place her on FMLA leave, but instead to build a case for her discharge on the ground of incompetence," and a school board meeting in which board members referred to the requirements of the FMLA as "just ludicrous" and "a fiasco." While there was certainly evidence of performance lapses, the appeals court also noted the employee was being required to complete all of her full-time duties while working and being paid essentially on a part-time basis. "Viewed in this way, a reasonable jury could find that the FMLA leave granted... was illusory." (Lewis v School Dist. #70, 7thCir, April 17, 2008).

8thCir: Employee who is blind suffered no adverse employment actions

A facility providing residential services to individuals with disabilities did not take any adverse actions against an employee who was legally blind under the ADA or Rehab Act, concluded a divided Eighth Circuit, over her contentions that the employer eliminated essential functions of her job, tripled her work hours, and constructively discharged her. The employer's decision to no longer allow her to dispense medication or work alone with residents did not materially disadvantage her pay, benefits or effect her future at the company, held the majority. Nor did a new scheduling requirement that she work every other weekend, despite the increased work hours that resulted, since all other employees in her position worked scheduled weekends. The majority also held that, when read in context, the employee's statement, "I have, like, numerous devices I can use," did not constitute a request for an accommodation, "but instead argued she did not need an accommodation." Judge Bye dissented, stating the case was "laden with disputed material facts" and thus it was erroneous for the district court to have decided the merits—particularly as to whether the job changes she faced constituted adverse employment actions (Buboltz v Residential Advantages, Inc, 8thCir, April 18, 2008).

10thCir: Three-year statute of limitations did not apply; "willfulness" not shown

An employee failed to show that his employer's alleged actions were "willful," thus his FMLA claim did not fall within the three-year limitations period for "willful" violations of the Act, the Tenth Circuit ruled. In March 2002 the employee requested FMLA leave, but was informed his medical certification was incomplete. The employee later submitted a second certification, but again it was incomplete, and he was given 15 days to correct the problem. The employee missed that deadline and was later terminated in 2002 for unexcused absences. In 2005, he filed suit, but the FMLA's two-year statute of limitations barred the employee's complaint. The three-year limitations period applied only if the employee could show that the employer "knew or showed reckless disregard" for whether its conduct was prohibited. Here, the employer tried to comply with the FMLA's certification process on several occasions, and it adhered to FMLA guidelines. Thus, the employee failed to present evidence that any material issue of fact remained on the question of willfulness (Bass v Potter, 10thCir, April 15, 2008).

DCCir: EMT on disability leave is eligible to vote in election

An emergency medical technician on disability leave was eligible to vote in a union election even though she had been laid off from her light-duty position four months earlier and, three days before the election, she was permanently restricted to lifting no more than 30 pounds with her injured arm. Prior to the election the employer had not informed the EMT that she had been fired or laid off, and she had not resigned. Thus, she was an employee on medical leave and, under NLRB precedent, was eligible to cast the deciding vote in the election, the DC Circuit held. In doing so, the appeals court joined other circuits in upholding the Board's Red Arrow standard, which presumes that employees on sick leave are eligible to vote, over the employer's claims that the use of the test is "irrational" as applied to workers on medical leave who have no reasonable expectation of returning to the unit and thus have been effectively laid off. "To require a determination of their likelihood of returning to the unit would require the Board to evaluate medical evidence, a subject on which the Board has no expertise," the court wrote (Abbott Ambulance of Illinois v NLRB, DCCir, April 18, 2008).

DCCir: Union organizing expenses are not chargeable to objecting nonmembers

In a series of decisions spanning a decade, the NLRB has struggled with the issue of whether nonmembers of unions can be charged for expenditures unrelated to collective bargaining, such as organizing and litigation. In fact, the chargeability of litigation expenses attributable to the parent of a public sector union will soon be decided by the Supreme Court (Locke v Karass, Dkt No 07-610). In the case at hand, the DC Circuit upheld a Board ruling that a union unlawfully charged objecting nonmembers for expenses incurred in organizing other employers. In the absence of empirical evidence showing a positive correlation between the wages of union-represented employees and union density in the dairy processing industry, the union failed to demonstrate that organizing expenses were germane to its role as bargaining agent for the affected employees (Pirlott v NLRB, DCCir, April 18, 2008).

STATE LAW CASES

CA: "Same actor" evidence is given no special weight when reviewing judgment

The "same actor" inference, which creates a strong inference against a finding of discrimination when the same individual who hires or promotes an employee is the decision-maker in an adverse action against that employee, does not alter the standard of review when determining whether a trial court has erred in denying judgment as a matter of law to an employer in a suit under California's Fair Employment and Housing Act (FEHA). Applying a "substantial evidence" standard, a state appeals court upheld a jury verdict in favor of a human resources administrator who alleged she was terminated and denied rehire based on her race or gender by the same person who hired her, recruited her to another employer, and repeatedly promoted her, but who began to state a preference for hiring white males after higher-ups said the HR department "looked too much like the airport." (Harvey v Sybase, Inc, CalAppCt, April 18, 2008).

IN: State high court upholds jury verdict against "workplace bully"

In what looks to be the first "workplace bullying" litigation of its kind, the Indiana Supreme Court, in a 4-1 decision, reinstated a verdict of $325,000 in favor of an employee who was the victim of an assault at the hands of a surgeon during a verbal altercation at the hospital. The high court rejected the surgeon's assertions that the damages award was excessive and that the ultimate finding of assault was based on insufficient evidence, as well as his challenges to the testimony of the plaintiff's expert witness (a "bullying expert") and the admission of testimony regarding the surgeon's prior bad acts in order to paint him as a workplace bully. The supreme court also rejected the surgeon's challenge to the trial court's refusal to give jury instructions that there was no basis in the law for a "workplace bullying" claim. "Without any context, the `workplace bullying' label is nothing more than highly prejudicial name-calling of no help to the jury," wrote Justice Boehm, dissenting (Raess v Doescher, IndSupCt, April 8, 2008).

OH: Financial advisor must arbitrate all but his discrimination claims

A state trial court did not err when it denied a motion by securities firm Morgan Stanley to compel arbitration of all of a financial advisor's employment-related claims, including breach of contract, promissory estoppel, unjust enrichment, intentional infliction of emotional distress, and other claims, an Ohio appeals court ruled. Under the terms of his signed employment agreement, the employee agreed only to arbitrate disputes related to the substantive issues therein: unfair competition and confidential information. Nonetheless, because he was a registered broker with the NASD while he was employed at Morgan Stanley, he had no choice but to arbitrate all of his claims against the firm pursuant to NASD's arbitration provisions with the exception of his employment discrimination claim, since the NASD in 1999 amended its code of arbitration to exclude such claims from mandatory arbitration unless the parties expressly agreed to arbitrate them (Marks v Morgan Stanley Dean Witter Commercial Financial Services, Inc, OhioCtApp, April 17, 2008).

PA: Arbitration pact signed by highly educated employee was not unconscionable

An arbitration agreement embodied in an employment contract that reserved judicial remedies exclusively for the employer was not unconscionable as applied to a 15-year professional in the financial industry who held a Ph.D. in economics from Harvard University and who signed on to the employment agreement despite other job offers, the Third Circuit held. The appeals court also noted the employee, before signing the contract, had expressed concerns about a clause related to intellectual property but he remained silent on the arbitration provision. In vacating the district court's order denying the employer's motion to compel arbitration, the appeals court distinguished the employee in the case at hand from "minimally educated" crane operators who had been forced into arbitration in a case on which the district court had relied (Zimmer v Cooperneff Advisors, Inc, 3rdCir, April 14, 2008).

WA: Employee's "discharge" violated public policy against gender discrimination

A dental assistant who quit her job a week after her employer allegedly masturbated in front of her was entitled to damages on her claim that she was wrongfully discharged in violation of the state's public policy against gender discrimination, a Washington appeals court held. The employee, who maintained that her employer had been making sexually inappropriate comments for months prior to the masturbation incident, could not bring a claim under Washington's anti-discrimination law because the clinic where she worked had fewer than eight employees. Nevertheless, the law clearly established a public policy against sex discrimination. Moreover, a hostile work environment that leads to a constructive discharge is a subset of gender discrimination, the court noted. Thus, the trial court reasonably concluded that the dentist violated Washington's public policy against gender discrimination when he sexually harassed his assistant, that the harassment led to the assistant's constructive discharge, and that she was wrongfully discharged in violation of public policy (Wahl v Dash Point Family Dental Clinic, Inc, WashCtApp, April 15, 2008).

SUPREME COURT NEWS

High Court considers whether "class-of-one" theory applies to public employment

The Supreme Court heard oral arguments last week in Engquist v Oregon Dep't of Agriculture (Dkt No 07-474), a case that will decide whether the "class-of-one" theory of equal protection is applicable to public employment cases. The theory recognizes liability for equal protection violations where a plaintiff has been intentionally treated differently than similarly situated individuals and there is no rational basis for that treatment.

Supreme Court hears arguments in ADEA burden of proof case

The High Court also heard arguments last week in Meacham v Knolls Atomic Power Lab (Dkt No 06-1505), regarding whether an employee alleging a claim under the Age Discrimination in Employment Act must bear the burden of persuasion as to the employer's defense that an employment practice with a disparate impact on older workers is permissibly based on a "reasonable factor other than age." Assistant solicitor general Daryl Joseffer presented the US government's arguments in favor of the plaintiff employees but also commented that, as a policy matter, one could place the burden of persuasion on either party and "the sky is not going to fall either way."

Nineteen states, Puerto Rico urge High Court to protect employees from retaliation

The attorneys general of 19 states and Puerto Rico have filed an amicus brief in a pending Supreme Court case in support of an employee who was discharged after participating in a company investigation of sexual harassment. The case at issue, Crawford v Metro Government of Nashville & Davidson County, Tenn (Dkt No 06-1595), addresses whether Title VII's anti-retaliation provision protects employees from being discharged for voluntarily cooperating in their employer's internal investigations of sexual harassment. The Supreme Court granted cert in the case in January.

Supreme Court will not disturb DC Circuit's ruling on taxation of damage awards

The Supreme Court denied cert last week in Murphy v IRS (Dkt No 07-802), a case that has been closely watched by plaintiffs' lawyers, including attorneys for employees. The case involved a whistleblower who was awarded $70,000 in compensatory damages for emotional distress, physical injuries related to that stress, and damage to reputation after she was blacklisted for complaining about environmental hazards at the New York Air National Guard base where she worked. The DC Circuit first ruled the compensatory damages were not subject to income tax, but later ruled the damages were taxable. With the Supreme Court declining to hear the case, the appeals court's latter ruling that compensatory damages are taxable will stand.

AGENCY DEVELOPMENTS

EEOC sues seafood restaurant for refusing to hire, segregating black workers

The EEOC has filed a Title VII class action lawsuit against an operator of two seafood restaurants at Baltimore's Inner Harbor for engaging in a pattern or practice of race discrimination against African-American applicants and employees at its facilities. The agency alleges the employer refused to hire African-American applicants for front-of-house positions, instead assigning them to less visible positions, segregated black applicants by disproportionately assigning them to one of the two restaurants, and made table assignments based on race, assigning black employees to less lucrative tables with smaller parties or to tables with customers of the same race.

DOL sues for $1 mil in back wages due truckers paid by load rather than by hour

The Department of Labor has filed a lawsuit to recover $1,094,486 in back wages for 302 Denver-area employees of Aggregate Industries, a producer of aggregated-based construction materials, after a Wage and Hour Division investigation found the company paid truck drivers on a per load basis, without regard to the number of hours they worked, violating the FLSA's overtime provisions. The company agreed to come into compliance for the future but has refused to pay the computed amount of back wages due the affected workers.

IRS: Settlements in lieu of retiree health coverage are subject to FICA

The IRS has stated in two information letters that settlement amounts paid by an employer directly to an employee in lieu of retiree health care coverage are subject to FICA tax. Generally, the IRS Code and regulations exclude from the definition of wages payments made by an employer under a plan or system that provides for sickness or accident disability benefits. In these cases, the IRS used the "origin of the claim" doctrine to determine the proper tax treatment of the court settlements. The doctrine focuses on the nature of the claim that led to the award or settlement. According to the IRS, economic recoveries of back pay arising out of an employment relationship are includable in income and subject to FICA withholding, even if the amounts recovered are paid in lieu of nontaxable fringe benefits (IRS Information Letter, INFO 2008-0001, March 28, 2008; IRS Information Letter INFO 2008-2006, March 28, 2008).

USCIS: Application for employment authorization is modified

US Citizenship and Immigration Services has revised its Form I-765, Application for Employment Authorization to include additional eligibility codes. USCIS will accept the July 30, 2007 edition of the form through July 8, 2008. The agency will only accepted the revised Form I-765, dated April 4, 2008, after that date, and will reject all requests using previous editions of the form. The main purpose of Form I-765 is to allow certain aliens in the US to request employment authorization and an Employment Authorization Document (EAD).

LEGISLATION

Senate passes genetic nondiscrimination bill

The Genetic Information Nondiscrimination Act (GINA), a bill designed to protect personal genetic information from misuse by employers and insurance companies, passed in the Senate last week by a vote of 95-0. The Bush Administration has previously stated it "strongly supports" the legislation (H.R. 493), but at press time, the President had not yet issued a statement on the Senate's passage of the bill.

Senate fails to advance Ledbetter fair pay bill

By a vote of 56 to 42 against, the Senate fell four votes shy of the 60 required to invoke cloture and proceed to floor debate and a vote on final passage of legislation to overturn the Supreme Court's controversial decision in Ledbetter v Goodyear Tire & Rubber Co, Inc, in which the Supreme Court limited the time in which employees can bring disparate pay claims under Title VII.

States introduce 179 employment-related immigration bills in first quarter of 2008

Without the enactment of comprehensive immigration reform at the federal level, legislators in 31 states have introduced 179 employment-related immigration bills during the first quarter of 2008, according to the National Conference of State Legislatures (NCSL).

Florida "guns at work" law faces quick constitutional challenge

The Florida Chamber of Commerce and Florida Retail Federation filed suit in federal court last week, seeking to enjoin enforcement of the state's "guns at work" law. The "Preservation and Protection of the Right to Keep and Bear Arms in Motor Vehicles Act of 2008," set to take effect July 1, would prohibit public and private employers from barring customers, employees, and invitees from possessing a legally owned firearm that is lawfully possessed and locked inside or locked to private motor vehicles in parking lots. The suit alleges the law violates the US Constitution and is in direct conflict with the federal Occupational Safety and Health Act.

Oklahoma expands protection from religious discrimination for health care workers

Oklahoma's Freedom of Conscience Act, which takes effect November 1, requires employers to reasonably accommodate employees' religious observance or practice with regard to experiments or medical procedures involving in vitro human embryos or cells or tissue derived from the embryo; a fetus in an artificial womb; fetal tissue or organs that come from a source other than a stillbirth or miscarriage; or with regard to acts that intentionally cause or assist in causing the death of an individual by assisted suicide, euthanasia, or mercy killing. An exception is provided where an employer can show the accommodation would pose an undue hardship on its program, enterprise, or business.

Colorado protects employee discussions about wages

An employee in Colorado will be free to discuss his or her own wage information under a new provision enacted April 17 and scheduled to take effect in August. Unless otherwise permitted by federal law, employers will be prohibited from firing an employee or from using other forms of discipline because the employee inquires about, discloses, compares or otherwise discusses the employee's wages. An employer will not be able to require nondisclosure of the employee's own wage information as a condition of employment or require the employee to sign a waiver or other document that purports to deny the employee the right to disclose such information. The provision will not apply to employers who are exempt under provisions of the NLRA.

FMLA DEVELOPMENTS

Conference discusses family military leave, FMLA proposed rules

Expansion of the FMLA to include protections for military families was a key topic discussed at a recent ADA & FMLA Compliance Update by the National Employment Law Institute (NELI). Speakers discussed the finer points of FMLA and ADA issues, explaining both practical and legal ways to handle these issues in the workplace, and offering in-depth insights into how they have handled the issues in the past.

Experts discuss military family leave expansion of the FMLA

All indications are that the Department of Labor will issue final revisions to the FMLA regulations simultaneously with final regulations implementing the military family leave amendments to the Act, leaving stakeholders without a chance to comment on the actual military family leave provisions. Although employers would like the chance to comment, they are very anxious to have the finalized FMLA rules and will take their chances on the military family leave regulations, according to management attorney and FMLA expert Sue Willman. Willman, along with representatives of the National Partnership for Women and Families and the National Military Family Association, discuss the proposed changes in the March and April issues of CCH Labor Law Reports: Insight.

House bill would grant FMLA rights to victims of violent crime, domestic violence

The Crime Victims Employment Leave Act (H.R. 5845), introduced by Rep. Rahm Emanuel (D-IL) on April 17, would extend the FMLA to protect victims of violent crime and domestic violence. Specifically, the legislation would protect such individuals and their families from being terminated or demoted by offering them time off under the FMLA to attend court proceedings.

Abuse of leave, lack of notice, leave tracking are employers' top FMLA concerns

Human resource practitioners strongly support most of the Department of Labor's proposed modifications to the FMLA regulations, according to a survey of members of WorldatWork, an association of HR professionals from FORTUNE 500 and other organizations worldwide. "Our members have frequently asked for guidance on how to implement and administer FMLA under the current rules," said Cara Welch, WorldatWork director of public policy. "The proposed new regulations go a long way towards clarifying key issues."

IN OTHER NEWS

Workers say next president should focus more on healthcare, saving US jobs, less on immigration reform

American workers overwhelmingly want their next president to focus more on improving their standard of living, providing universal healthcare, and stemming the outsourcing of jobs overseas than making it easier for immigrants to live and work in the US, according to the latest "America At Work" national opinion survey by the Employment Law Alliance.

US workplaces are increasingly dangerous, AFL-CIO reports

The nation's workplace safety laws and penalties are too weak to effectively protect workers, according to "Death on the Job: The Toll of Neglect," the AFL-CIO's annual workplace safety report, released last week. This year's report examined job safety enforcement in cases of worker deaths, finding the average national total penalty in fatality investigations was just $10,133.

Whirlpool suspends employees for lying about smoking

In a story that has sparked considerable interest among HR professionals, 39 employees at a Whirlpool factory in Evansville, Indiana have been suspended, and may face discharge, after they were seen smoking or chewing tobacco on company property despite claiming on health insurance forms that they did not use tobacco, the Associated Press reports. Like a growing number of employers, Whirlpool charges higher health insurance premiums to smokers in an effort to reign in healthcare costs and as an incentive to encourage employee wellness.

Law firm launches preemptive strike against employee's harassment claims

A New York law firm has filed a preemptive lawsuit in state court against an employee who it claims has made false allegations against the firm and a senior partner. Bivona & Cohen, PC, claims the employee, a former secretary, lied on her job application to conceal a previous felony drug conviction (thus giving the firm a lawful justification for discharging her) and has falsely asserted claims of sexual harassment and rape, demanding $9 million. The firm is seeking a declaratory judgment that the employee's threatened claims are without merit under state and local law. But is the firm simply opening itself up to added liability for retaliation? The New York Law Journal takes a closer look at the case.

IBM shareholders to face pickets at this week's annual meeting

IBM employees and union members from the Communications Workers of America will hold a rally and conduct informational picketing outside IBM's annual meeting this week in Charlotte, NC, according to Alliance@IBM, a union subgroup of IBM workers. The Alliance has submitted a shareholder proposal on executive compensation that asks the board of directors to determine that pension income from any defined benefit plan will not be used as a factor in setting executive compensation. The group also is calling on IBM to stop shifting US jobs to low-cost countries, and is seeking greater transparency from the company about the number of IBM jobs being sent offshore.

Employer's Guide to Union Organizing Campaigns

In this environment every employer may find themselves subject to organizing efforts. Aspen Publishers' ALL-NEW manual Employer's Guide to Union Organizing Campaigns helps you guide your company through every stage of union organizing campaigns, so that you can react quickly, effectively, and legally even before organizing begins.

State Employment Law Compare

Quickly & easily compare state employment laws side-by-side

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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 Work Week offers timely coverage of breaking legislative developments, regulatory activity, state law changes, key case law and expert commentary by CCH editors.