KEY CASES

1stCir: Supervisor's witnessing of harassment didn't mean employer had knowledge

A federal trial court properly dismissed the Title VII claim of a female supervisor at a bakery who alleged that her male supervisor sexually harassed her because she failed to complain until after she resigned and the employer promptly investigated and acted upon the one incident she reported, the First Circuit ruled in a 2-1 decision. Although many of the incidents occurred in front of another supervisor, who was a peer of the plaintiff, and the employer had a policy requiring all supervisors to report sexual harassment, those circumstances did not mean that the employer had notice of the harassment as a matter of law, the majority ruled. The court found the employer took reasonable care to prevent harassment. "This is not an instance in which the employer is trying to utilize its sexual harassment reporting chain to immunize itself from knowledge it actually had of the harassment allegations," the court wrote. In dissent, Judge Lipez stated that the majority, unlike other courts, essentially ignored the employer's policy choice to imbue all supervisors with the responsibility for reporting harassment and prevented a jury from determining exactly what conduct the fellow supervisor actually witnessed (Chaloult v Interstate Brands Corp, August 28, 2008).

3rdCir: Removal to federal court waives PA's immunity to ADEA suit, but not from liability

Splitting the concept of sovereign immunity in two, the Third Circuit held that while the State of Pennsylvania waived its immunity from suit in federal court by removing a state worker's age bias litigation to federal court, the State was nonetheless immune from liability for alleged violations of the Age Discrimination in Employment Act (ADEA). "When a State, facing suit in its own courts, purposefully requests a federal forum, it expresses a clear intent to waive immunity from suit," the court said. However, "the removing State retains all defenses it would have enjoyed had the matter been litigated in state court, including immunity from liability." According to the court, a State may establish its own immunity against liability that is distinct from the Eleventh Amendment immunity from suit enjoyed by all the States. Pennsylvania, the court held, has immunity from liability regarding claims under the ADEA and has not waived it (Lombardo v Commonwealth of Pennsylvania, Department of Public Welfare, August 25, 2008).

3rdCir: Lucent could eliminate pensioner death benefit

A lump-sum benefit paid in the event of a pensioner's death was an unvested welfare benefit that neither ERISA nor unilateral contract principles prohibited from being terminated, the Third Circuit ruled. As such, the court affirmed the district court's dismissal of the affected employees' putative class action. The plan at issue could be traced back to a pension and disability benefit plan that AT&T adopted in 1913. When AT&T spun off Lucent in 1996, Lucent assumed the obligation to provide retirement benefits equivalent to those under the AT&T plan to the retirees transferred to Lucent. But in 1997 Lucent amended its plan to eliminate the pensioner death benefit for employees who retired after January 1, 1998, and further amended its plan in February 2003 to eliminate the pensioner death benefit for all management employees then living regardless of the date of retirement. A flurry of litigation followed resulting in a consolidated amended complaint that was dismissed in November 2006 for failure to state a claim upon which relief may be granted. On appeal, the Third Circuit affirmed that that the death benefit was an unvested welfare benefit. "The pensioner death benefit neither provides retirement income to employees nor results in a deferral of income by employees," the court wrote. Nothing in the plan documents suggested that the benefit vested during the life of the pensioner, and the plan documents did not state such vesting in clear and express language (In Re: Lucent Death Benefits ERISA Litigation, August 28, 2008).

6thCir: Deputy sheriff fired for candidacy, not political activity

A sheriff who terminated his deputy immediately after reading in a newspaper article that the deputy planned to run against him in the next election did not violate the deputy's First Amendment right to engage in political activity, the Sixth Circuit ruled. Responding to the deputy's claim that he was fired because he spoke out on a matter of public concern, namely the operation of the sheriff's department, Justice Norris, writing for the court, stated, "While the First Amendment protects the right of public employees to speak out on matters of public concern, it has not been extended to candidacy alone." Although the sheriff, while reading the newspaper article, highlighted statements the deputy made regarding changes he would make to the department if elected, the court emphasized that the termination occurred at the moment the sheriff learned of his deputy's candidacy, noting "In short, 'The First Amendment does not require that an official in [an employer's] situation nourish a viper in the nest'" (Greenwell v Parsley, September 2, 2008).

7thCir: Ex-trooper may challenge whether rehire refusal was pursuant to hiring plan

A 42-year-old former state trooper was entitled to present evidence as to whether the Indiana State Police were acting pursuant to a bona fide hiring plan when they refused to reemploy him two months after he quit his position to take another job, the Seventh Circuit held. Indiana's rules require that ex-troopers seeking reinstatement meet all of the requirements for police employees, including that they be at least 21 and under 40 when hired. Although the trooper questioned why a two-month break in employment at age 42 should make him a pariah when he would have been acceptable at age 43, 45, 50, 55, and 60 had he just stayed put, the Seventh Circuit said that was not a question for the federal judiciary. All the law requires is that the plan be "bona fide" (not a "subterfuge" to evade the Age Discrimination in Employment Act) and that the plan be applied to yield the contested decision. Because in dismissing the trooper's complaint the district court asked only whether Indiana has a bona fide plan, the Seventh Circuit sent the case back to allow the trooper to contend that if the Indiana State Police sometimes rehires people at age 40 and above the decision not to rehire him was not made pursuant to a bona fide plan (Davis v Indiana State Police, September 3, 2008).

7thCir: Keeping 24 unauthorized absences on employee's record was not adverse action

The mere fact that an employer recorded and preserved 24 unauthorized absences (UAs) on the employment record of a registered nurse who, after exhausting her sick leave, continued to call in sick for months without disclosing the nature of her illness did not support her Title VII race and national origin bias claims, the Seventh Circuit ruled. At a grievance hearing, management and the nurse's union representatives had agreed that the absences would remain on her record but would never be used in any disciplinary proceedings against her. Thus, the court held that, the UAs did not in and of themselves constitute a materially adverse action necessary to sustain the nurse's bias claims. "We discern no reason to treat the UAs in this case differently than we have treated negative performance evaluations or the inclusion of a letter of concern in an employee's personnel file," the court wrote. The court also affirmed the dismissal of the nurse's Family and Medical Leave Act claim because she failed to provide notice of her intent to take FMLA leave. The court went on to say: "in light of the fact that [the plaintiff] was permitted to take seventeen weeks of leave—five weeks more than the twelve weeks the [employer] was required to give her under the FMLA—we find it difficult to see how the [employer] interfered with her entitlement to leave at all" (Delarama v Illinois Dept of Human Services, September 2, 2008).

7thCir: Ninety-day window to elect cash distribution or annuity did not violate ERISA

An employer's 1997 amendment to its pension plan, which gave participants leaving the company 90 days to choose between taking an immediate lump sum distribution or an annuity payable upon reaching retirement age, did not violate ERISA, the Seventh Circuit held. The amendment came under attack by plan participants who exercised the lump-sum option and then argued that their consent to the cash distribution was void because they did not have enough time to choose. Writing that "Plaintiffs believe that they are entitled to choose again—and, even if they have dissipated the money they received, that they remain entitled to an annuity once they reach retirement age," the court rejected the argument that the need to make a prompt choice was a "significant detriment" prohibited pursuant to 26 C.F.R. Sec. 1.411(c)(2)(i). That regulation, the court stated, was a tax regulation that defines whether a pension plan is qualified for favorable tax treatment. Moreover, the court found, having a limited time to choose does not diminish the value of a pension. "Adding a lump-sum option to an existing (and entirely lawful) pension annuity does not create a `detriment' of any kind; it bestows a benefit by making the package of options more valuable," the court wrote (McCarter v Retirement Plan for the District Managers of the American Family Insurance Group, September 2, 2008).

7thCir: Dispute over retiree health benefits was arbitrable, consent of all not needed

A broad arbitration provision in a collective bargaining agreement covering "any dispute . . . as to the interpretation or application of any of the provisions of this Agreement" was sufficient to include disputes between the employer and the union over retiree medical benefits, the Seventh Circuit ruled, applying the presumption of arbitrability to disputes involving retirees. According to the court, not only did the bargaining agreement fail to specifically exclude retiree grievances from the arbitration agreement, but the retiree medical benefits at issue were created in memorandums that supplemented and became part of the bargaining agreement. The court also found that although the union had the consent of only seven of the more than 5,800 bargaining unit retirees, it could arbitrate the dispute on behalf of those seven. The union did not need the consent of each and every affected retiree, the court stated, in order to give effect to a single retiree's agreement to arbitrate his or her claim (Exelon Generation Company, LLC v Local 15, International Brotherhood of Electrical Workers, AFL-CIO, September 2, 2008).

9thCir: States immune from USERRA suits brought by individuals in federal court

The Ninth Circuit joined the Fifth and Seventh Circuits in holding that federal district courts do not have jurisdiction over claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA) brought by individuals against their state employers. Here, a member of the Alaska Air National Guard claimed that the University of Alaska, Fairbanks, fired him because of his military status. The district court dismissed the action for lack of jurisdiction and the Ninth Circuit affirmed. Congress has not unequivocally expressed an intent to abrogate the states' sovereign immunity in USERRA, the court wrote. "The best [the plaintiff] can point to is the language in the Act that claims against a state 'may' be brought in state court." But the permissive "may" does not evince an intent to grant federal jurisdiction over actions brought by individuals against states, and it certainly does not evince an intent to abrogate the states' sovereign immunity. Quoting from the Seventh Circuit's decision in Velasquez v Frapwell, the court said "Indeed, not only has Congress failed to evince an intent to abrogate the states' sovereign immunity, 'Congress's intent to limit USERRA suits against states to state courts is unmistakable'" (Townsend v University of Alaska, September 5, 2008).

FedCir: Returning service member entitled to premium pay for irregular hours worked in wrong job

A US Postal Service employee who had successfully grieved his placement upon return from military service in a part-time clerk position with irregular work hours instead of a full-time custodian position with regular hours was entitled to compensation under the Uniformed Services Employment and Reemployment Rights Act for working the irregular hours, the Federal Circuit ruled. The Merit Systems Protection Board had denied the compensation, reasoning that the employee would not have had an irregular work schedule if he had been timely appointed to the full-time position, and that no employee holding the custodian position received out-of-schedule premium pay while the plaintiff was working in the clerk position. The Federal Circuit, however, said that it was irrelevant that none of the full-time custodians received out-of-schedule premium pay. Shift assignment and regular hours are benefits of employment. "Unlike the full-time custodians, [the plaintiff] worked irregular shifts without compensation and thus did not enjoy the benefit that they enjoyed (and that he would have enjoyed if he had been placed directly into the custodial position). The deprivation of that benefit is compensable as a loss of a 'shift assignment benefit'" (Smith v United States Postal Service, September 4, 2008).

STATE LAW CASES

TX: Arbitration provisions limiting workers' comp remedies were void, but severable

Provisions in an arbitration agreement that stripped an arbitrator of the authority to award punitive damages to, or order the reinstatement of, an employee who alleged that he was retaliatorily discharged in violation of the state's Workers' Compensation Act were substantively unconscionable and thus void, the Texas Supreme Court held. According to the court, "Because we view the anti-retaliation provisions of the WCA as a non-waivable legislative system for deterrence necessary to the nondiscriminatory and effective operation of the Texas Workers' Compensation system as a whole, we agree with [the employee] that the provisions eliminating key remedies under the statute are unenforceable." Nonetheless, noting the agreement's severability clause, the court found that the provisions could be "easily excised from the contract without defeating" the parties underlying purpose to arbitrate their disputes. Addressing the employee's objections to other provisions in the agreement that required the employee to split arbitration costs up to a capped amount and limited discovery, the court found that the trial court did not abuse its discretion in allowing the arbitrator to assess the unconscionability of those provisions as applied in the course of arbitration (In re Poly-America, LP, Ind, (Dissent), August 29, 2008).

AGENCY DEVELOPMENTS

NLRB: Employer's altered sample ballot failed to include new disclaimer language

An employer's altered sample ballot failed to comply with the Board's recent decision in Ryder Memorial Hospital, ruled a two-member panel of the NLRB. In Ryder, the Board altered its official ballot as part of its effort to conclusively end case-by-case analysis of whether voters might be misled by partisan use of official ballots during pre-election campaigns. Here, the parties stipulated that the election should be conducted in Spanish, Laotian, and English. The employer then distributed multiple copies of a campaign leaflet written in English and Spanish with an altered sample ballot in English, when the official sample ballot contained in the notices of election was also drafted in Spanish and Laotian. The altered sample ballot was not an actual reproduction of the Board's official sample ballot on the notices of election and did not include the Board's complete disclaimer language, i.e., the Spanish and Laotian disclaimers as well as the English disclaimer shown on the Board's official sample ballot. Accordingly, a second election was ordered (Foster Poultry Farms, August 28, 2008).

NLRB: Withdrawal of recognition after just six hours of bargaining was unlawful

Six hours of negotiating was not a "reasonable period of time" for first contract bargaining before withdrawing recognition, ruled a two-member panel of the NLRB. The employer, a plumbing contractor, withdrew recognition based on its receipt of a petition signed by a majority of its unit employees indicating that they no longer wished to be represented by their union. When the petition arrived, the parties were in agreement on most of the terms of a contract, and were not at an impasse. The Board commented that the period of bargaining prior to the employer's withdrawal lasted five and one-half months, at most. During that period, the parties held just three negotiating sessions, each lasting just two hours. There was also one brief exchange by fax and mail, with the employer answering that it would sign an agreement with certain exceptions. "By any standard, this amounts to only a small amount of actual bargaining time." Thus, the Board entered an affirmative bargaining order (Town & Country Plumbing & Heating, Inc, August 29, 2008).

NLRB: Employer's policy change lawful, attendance at union meetings no longer excused

An employer lawfully discontinued its practice of excusing employees from work to attend monthly union meetings, ruled a two-member panel of the NLRB. For a number of years, the employer permitted unit employees working on the first shift to clock out up to two hours early to attend a monthly union meeting. Employees who attended were not paid for their time off from work, but the employer considered the time off to be an excused absence. The employer subsequently posted a notice to employees stating that attendance at union meetings would no longer be excused. In reversing an administrative law judge, the Board ruled that the employer met its obligation to timely notify the union of its desire to change the policy and to offer the union an opportunity to bargain. Here, through a series of communications well in advance of the change, the employer clearly signaled to the union that the current leave policy could not continue due to the loss of valuable man hours (Alcoa, Inc, August 29, 2008).

EEOC answers questions about the ADA's impact on performance and conduct issues

Responding to a "critical need" for compliance information on how the Americans with Disabilities Act applies to a wide variety of performance and conduct issues, the Equal Employment Opportunity Commission released a comprehensive question-and-answer guide entitled The Americans with Disabilities Act: Applying Performance and Conduct Standards to Employees with Disabilities. The guide discusses relevant ADA requirements, provides practical guidance, and offers examples to demonstrate the responsibilities of both employees and employers when performance and conduct issues arise.

EEOC attacks pregnancy bias with two new lawsuits

The EEOC filed two separate lawsuits in Chicago against employers in two different industries, asserting that both of them violated Title VII of the Civil Rights Act of 1964 by discriminating against pregnant women. One case alleges that Crick Pictures, LLC and Mandate Pictures, LLC refused to hire a woman as an extras casting assistant on the film "Stranger Than Fiction" after learning she was pregnant. In the other case, the federal agency alleges that Wildwood Industries, a manufacturer and distributor of home filtration and floor care products, discharged an employee because of her pregnancy.

LEGISLATION

California pay equity bill awaits governor's signature

Doing what the US Congress has not yet been able to do, the California Assembly on August 29, 2008, passed a bill clarifying that the time period for alleging disparate pay and other illegal discrimination runs from the date of each payment of a discriminatory wage or other unlawful act. Introduced by Assembly member Dave Jones (D-Sacramento), A.B. 437 passed the California Assembly by a vote of 47-30. The State Senate passed the bill earlier in the week by a vote of 22 to 17. It now heads to Governor Schwarzenegger's desk for his signature.

Illinois IT workers must report child porn

A new Illinois law requires certain electronic and information technology workers to report on any child pornography found while installing, repairing, or otherwise servicing an item of electronic and information technology equipment. Workers covered by the law are those who in the scope and course of his or her employment or business install, repair, or services electronic and information technology equipment for a fee. Reporters are immune from any criminal, civil, or administrative liability in connection with making the report, except for willful or wanton misconduct. Those who fail to report face a fine of $1,001.

Employment law proposals to appear on Colorado ballot . . .

Come November, Colorado voters will get to determine the fate of several employment-related ballot initiatives. Among the issues: whether Colorado will become a "right-to-work" state that prohibits required union membership and mandatory union dues as a condition of employment; whether employers will need "just cause" for terminating workers; and whether employers must provide health insurance coverage to their employees. "If approved by Colorado voters in November, these Amendments would require significant changes to the current policies and practices of most Colorado employers, and could entail significant legal risk and financial exposure," notes workplace law firm Jackson Lewis in a recent Legal Update.

. . . but paid sick leave initiative withdrawn in Ohio

After Senator Barack Obama (D-Ill) pledged his support for a federal paid sick leave bill, the Ohioans for Healthy Families notified Ohio Secretary of State Jennifer Brunner that the coalition was withdrawing an initiative scheduled for the November ballot that would have required employers with 25 or more employees to provide not less than seven days of annual paid sick leave for full-time employees. Ohio Governor Ted Strickland (D), who had opposed the Ohio ballot initiative, said he would support the Healthy Families Act. Last month, a proposed bill that would require California employers to provide paid sick days to their employers died in the California Senate Appropriations Committee.

San Franciscans get commuter benefits

San Francisco employers with 20 or more employees will be required to offer commuter benefits to encourage their employees to use public transit or van pools, pursuant to an ordinance signed recently by the city's mayor.

TECHNOLOGY TRENDS

Employers supercharge talent management efforts with social networks

Employers are beginning to embrace corporate social networking and are using it to foster connections between employees, share information quickly across geographically diverse offices, and establish broad recruiting circles by keeping in touch with former employees. The technology is also helping organizations expand their talent management and mentorship programs by giving workers access to a large pool of executives and coworkers, rather than the one or two supervisors they'd otherwise interact with. "At the end of the day, social networks represent one of the most cost effective means of engaging in a two-way conversation with your employees," says Michael Wilson, CEO of Small World Labs. And the trend seems bound to expand: "Online social networks 10 years from now will be so ubiquitous that we will no longer be conscious of them," Wilson predicts.

Multiple generations in the workforce require media choices for communicating benefits information

As summer draws to a close, employers turn their thoughts to open enrollment and the best way to communicate benefits information. These days, everyone is in information overload. This is leading to a "seismic philosophic shift" in the dissemination of benefits information, says Jackie P. Jackson, CEBS, Principal at Jack Consulting, LLC. The trend regarding benefits communication is the wider use of "new media" and the decreasing use of traditional media.

Private browsing — help for the rule breakers?

The next version of Microsoft's Web browser Internet Explorer helps workers break the rules, claims Valerie Helmbreak in FinanceTechNews.com. IE 8 Beta 2 is reported to feature private browsing, allowing users to selectively delete cookies and cover their online tracks. But whether the feature will actually help workers break the rules was the subject of response postings, one of which suggested that the enterprise version of IE 8 will still allow IT departments to monitor employee activity. Another indicated that the company's server logs would still exist to track what an employee is viewing regardless of what they did on their computer locally, but admitted that such a feature could give a false sense of confidence to an employee that chooses to view adult or other inappropriate material at work.

IN OTHER NEWS

Supreme Court says "no" to Solicitor General's request to participate in oral argument

As reported by Tony Mauro on the Blog of the Legal Times the Supreme Court, in a rare move, denied the Solicitor General's request to present oral argument in Locke v Karass, a case out of Maine that deals with whether fees paid by non-union members of a bargaining unit to cover the cost of collective bargaining can be used for litigation that does not directly benefit their bargaining unit. Comments Stephan Gleason of the National Right to Work Foundation, which represents Daniel Locke and 19 other nonunion employees, "This is a well-deserved slap in the face for the Solicitor General's office and the Solicitor of Labor."

Machinists strike Boeing

The International Association of Machinists and Aerospace Workers struck Boeing at 12:01 a.m. Saturday, September 6, after mediated talks and a two-day contract extension failed to produce an agreement for a new collective bargaining agreement covering workers in Washington, Oregon and Kansas. Stressing job security, the union rejected a package that included an 11-percent general pay increase and a ratification bonus. Boeing said its operations will remain open during the work stoppage and, although Boeing does not intend to assemble airplanes during the strike, it will continue to deliver completed planes and provide customers with spare parts.

US workplaces becoming more gay-friendly

The Human Rights Campaign Foundation's seventh annual Corporate Equality Index shows that US businesses continue to improve their treatment of lesbian, gay, bisexual and transgender employees. The Index, which rated 583 businesses on a scale from 0 to 100 percent on their treatment of lesbian, gay, bisexual and transgender employees, consumers and investors, saw the number of businesses that achieved a perfect score increase by a one-third over last year (from 195 to 259). These top-rated businesses collectively employ more than 9 million full-time employees who are protected from employment discrimination based on sexual orientation and gender identity or expression because of their employers' policies on diversity and inclusion, training, health care, and domestic partnership benefits. "In the absence of a federal law that prohibits workplace discrimination based on sexual orientation and gender identity or expression, it is up to employers to take the lead and implement policies that ensure all their employees are protected," said HRC Foundation President Joe Solmonese.

ACLU seeks to block Rhode Island's immigration EO

Rhode Island has become the latest state to face a legal challenge to the mandated use of the federal government's E-Verify program to electronically verify the employment eligibility of newly hired employees. The American Civil Liberties Union (ACLU) filed suit on September 3, 2008, seeking to block Rhode Island Governor Donald Carcieri (R) from enforcing an executive order requiring that all state agencies and persons, businesses and contractors (and their subcontractors) doing business with the state participate in the E-Verify program.

Steelworkers negotiate "best contract ever" for iron ore miners

United Steelworkers (USW) says its tentative new 4-year agreement with Cleveland Cliffs is the best contract they've ever negotiated for iron ore miners. It follows the economic pattern established in recent negotiations with U.S. Steel and ArcelorMittal, and, for the first time, succeeds in removing the cap on retirees' health care. The tentative agreement was reached late Sunday night, August 31, and a contract extension was signed Monday, September 1, pending ratification of the agreement. When ratified, the contract will cover some 2,500 USW members employed at the following Cleveland Cliffs facilities; Hibbing Taconite and United Taconite in Minnesota; Empire and Tilden in Michigan's Upper Peninsula.

Workplace homicides up in 2007, still down from 1994's high

Workplace homicides rose 13 percent to 610 in 2007 after reaching a series low of 540 in 2006, the Bureau of Labor Statistics reported. Even with the increase, workplace homicides have declined 44 percent from the high of 1,080 reported in 1994. Workplace homicides involving police officers and supervisors of retail sales workers both saw substantial increases in 2007.

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