For the Week of October 12, 2009

KEY CASES

2ndCir: Employee's utter failure to show accommodations doomed ADA suit

An employee failed to demonstrate either that she could have performed the essential functions of her job even with an accommodation, or that other positions were available for which she was qualified, held the Second Circuit. The employee worked as a utility operator and was exposed to numerous chemical fumes. The exposure required a medical leave for respiratory and psychological issues. When cleared to return, her doctor instructed that she not be exposed to fumes. The employer offered a respiratory mask as an accommodation, but the employee refused and suggested no alternatives. Ultimately she was terminated. The Second Circuit found that the employee "manifestly failed" to show that she could perform the essential functions of her job with a reasonable accommodation, nor did she identify any potential accommodations, either for the employer, or before the courts. The employee also failed to identify any suitable position to which she could be transferred. Most of the jobs suggested by the employee would have amounted to a promotion, which is prohibited by the ADA. Moreover, the jobs required extensive professional and educational experience, which the employee did not possess. The circuit court also rejected the employee's argument that the employer's failure to engage in an interactive process. While the Second Circuit acknowledged that the ADA envisions such a process, it adopted the reasoning of the courts of appeal that an employer's failure to engage in the process is immaterial if the employee is unable to point to possible accommodations (McBride v BIC Consumer Prods Mfg Co, October 5, 2009).

3rdCir: Res judicata barred employee from pursuing Section 1981 claims

The doctrine of res judicata barred a Muslim employee of Egyptian descent from asserting, among other things, race and national origin bias claims under Section 1981 against his employer, held the Third Circuit, in a matter of first impression. In order to prevail under the doctrine, a defendant must demonstrate: (1) a final judgment on the merits in the prior suit; (2) involving the same parties; and (3) a subsequent suit based on the same cause of action. The employee brought Title VII race and national origin bias claims in an earlier suit filed against his employer. The district court dismissed the Title VII action for failure to comply with the Act's 90-day right-to-sue requirement; the Title VII action was filed two days late. Having not addressed the issue before, the Third Circuit held that the district court's dismissal of the Title VII action for failing to comply with 90-day limitations period constituted a "final judgment on the merits." Wrote the circuit court: "‘a disposition of a Title VII action as untimely filed is a decision on the merits for purposes of res judicata.'" Though a closer question, the circuit court also determined that the employee's Section 1981 claims arose from the "same material facts" as his Title VII claims, as they arose out of a single employment relationship and involved some form of race or national origin bias (Elkadrawy v Vanguard Group, Inc, October 6, 2009).

7thCir: School's refusal to reassign rooms to accommodate teacher violated ADA

A Wisconsin school district that was made aware of the medical necessity of natural light for one of its elementary teachers who was diagnosed with seasonal affective disorder was obligated to accommodate that requirement, unless it would impose an "undue hardship" under the ADA, the Seventh Circuit ruled. Although the district worked with the teacher to remedy other issues such as a lack of ventilation and noise distractions, they did not reassign her to a room with natural light, despite her repeated requests and the availability of alternate rooms. As her symptoms worsened, she took a leave of absence, but was unable to return to her position with the district. While the trial court ruled that no reasonable jury could find in favor of the teacher's failure-to-accommodate claim, the Seventh Circuit disagreed, noting that, in fact, the teacher was a qualified individual who could have performed the job with her requested accommodation and that little hardship would have been involved in providing her with an available classroom. Moreover, the court concluded, she may have remained a qualified individual in light of evidence that the school district was responsible for aggravating her disability. Writing separately in a concurring opinion, Judge Evans, appearing to question the wisdom of allowing someone suffering from depression to teach, wondered if "an accommodation that would be necessary to this teacher's condition would be ‘reasonable.'" (Ekstrand v School District of Somerset, October 6, 2009).

11thCir: Claims dismissed in error, employee not at fault for failure to serve

A district court wrongly dismissed an employee's complaint for failing to timely serve his employer, held the Eleventh Circuit. The employee filed a complaint alleging his discharge violated the ADA and the FLSA. The district court allowed the employee to proceed in forma pauperis and "specifically instructed" the US Marshal to make service, which it did not do. The district court sua sponte ordered the employee to show cause why his case should not be dismissed for failure to make service and the case was ultimately dismissed without prejudice. On appeal, the Eleventh Circuit noted that it had not yet "articulated the proper standard of review for a sua sponte dismissal pursuant to Federal Rule of Civil Procedure 4(m)." After determining an abuse of discretion was the proper standard of review, the circuit court ruled that the district court had abused its discretion in dismissing the employee's claim. The circuit court found nothing in the record to indicate the employee had participated in the failure to timely serve his employer. The US Marshal was directed by the district court to effect timely service, wrote the circuit court, and for some unknown reason, that was not done. Because there was nothing in the record to indicate the employee was part of the US Marshal's failure to effectuate service, the district court abused its discretion in dismissing the employee's complaint. Accordingly, the dismissal was vacated and remanded (Rance v Rocksolid Granit USA, Inc, September 28, 2009).

SDInd: Motor Carrier Act overtime exemptions apply to for-hire truck drivers

Allegations by former truck drivers and driver's assistants that a for-hire carrier did not pay them overtime wages in violation of the FLSA and the Indiana Wage Payment statute were dismissed by a federal district court in Indiana. Also at issue was the company's policy of deducting a 20-minute lunch break from the time and pay of all drivers, regardless if the break was actually taken. While also noting that at no time in their employment did any of the drivers file either a complaint with the company's HR department about the lunch breaks or a wage claim with the state, the court agreed with the company's argument that the drivers' participation in interstate commerce within the scope of their employment put them within the Motor Carrier Act exemption to FLSA requirements (Craft v Ray's LLC, September 29, 2009).

STATE LAW CASES

CT: Promotion to captain within employer's discretion, not governed by CBA

A collective bargaining agreement (CBA) between an employer and a police union (union) did not encompass a past practice that governed the promotion of test takers to the position of captain, the Connecticut Supreme Court ruled 4-3. A promotional test was given, and the top two testers were then interviewed for the captain position, with the promotion given to the tester that had the second-highest score. The union argued that the CBA and its past practice provision stipulated that the candidate with the highest score was to get the promotion, and that although the position of captain was not a bargaining unit position, at the time the employee with the highest score took the test, he was still a lieutenant—a bargaining unit position. The trial court agreed with the union. On appeal, the employer argued that because the position of captain was outside the bargaining unit, it could promote any candidate from the promotional list. Reversing, the supreme court agreed that the CBA governed the promotional process, but it did not require promotion of the highest-scoring candidate for a position that was outside the bargaining unit. The employer only agreed to select a candidate for these outside positions from the bargaining unit, not to select a candidate ranked first on the promotional list. Therefore, the past practice provision, concluded the court, only protected positions covered under the CBA, and the position of captain was outside the CBA. Justices Katz, Rogers and Vertefeuille dissented (Honulik v Town of Greenwich, officially released October 13, 2009).

MA: $2 million jury verdict against Wal-Mart upheld, punitive damages standard outlined

A $2 million jury verdict against Wal-Mart for sex bias gave Massachusetts' highest court the forum to fashion a standard describing the considerations necessary for an award of punitive damages in the specific context of an employment bias claim. A jury found that a female pharmacist working for Wal-Mart was paid less than her male counterparts and fired because of her sex. They awarded her $972,774 in compensatory damages and $1 million in punitive damages. Although a motion judge upheld the compensatory damages award, he determined that the punitive damages award was not warranted. According to the supreme court, the judge's decision was "confusing because it suggests, at least in part, and contrary to his proper instruction to the jury, that punitive damages could not be awarded unless it was proved that Wal-Mart acted with the specific knowledge that it was deliberately violating the antidiscrimination statute." At the other end of the spectrum, the pharmacist argued that a showing of intentional bias alone suffices for an award of punitive damages because intentional bias by itself establishes "evil motive." Rejecting both extremes, the supreme court said that in determining whether a defendant's conduct was so outrageous or egregious that punitive damages are warranted, the factfinder should consider the following factors: (1) whether there was a conscious or purposeful effort to demean or diminish the class of which the plaintiff is a part; (2) whether the defendant was aware the discriminatory conduct would likely cause serious harm, or recklessly disregarded the likelihood that serious harm would arise; (3) the actual harm to the plaintiff; (4) the defendant's conduct after learning that the initial conduct would likely cause harm; (5) the duration of the wrongful conduct and any concealment of that conduct by the defendant. The court's new definition of outrageous conduct applies to all claims for punitive damages under the Massachusetts Fair Employment Practices Law commenced after the date of the rescript in the opinion, and all pending claims that have not gone to judgment in the trial court by that date (Haddad v Wal-Mart Stores, Inc, October 5, 2009).

MA: Former CEO must repay company $6.7 million for breach of fiduciary obligations

The Massachusetts Supreme Judicial Court ruled that the former president/CEO of a pharmaceutical company, Astra USA, Inc, must repay the company $6.7 million in salary and bonuses he collected from 1990 through 1996, when he was fired for harassing female employees and misappropriating company funds. Those charges led to civil lawsuits against the former CEO and Astra, including a $9.8 million settlement in February 1998 with the EEOC to compensate the harassment victims, and a 35-count criminal indictment the CEO and others. A jury found the CEO liable to Astra for fraud, conversion, waste of corporate assets, breach of fiduciary duty and sexual harassment, awarding Astra damages in the aggregate amount of $1,040,812. The same jury found Astra not liable to the CEO for breach of a 1993 employment agreement between the parties, but awarded him $203,691 in damages related to a March 1996 supplemental stock grant. Following a post-trial evidentiary hearing, the trial court judge ruled that Astra could not recover by forfeiture the compensation it paid to the CEO from his discharge to when he breached his fiduciary obligations to Astra. The supreme court, on its own initiative, transferred the case from the appeals court, and overturned the lower court's decision regarding forfeiture of the salary and bonuses, finding that New York's "faithless servant'' doctrine allowed the company, which was incorporated in New York but had it principal place of business in Massachusetts, to go after $5.6 million in salary and $1.2 million in bonuses paid to the CEO. It also affirmed the trial court's pre-trial judgments that Astra could not recovery its costs for the sexual harassment investigation. The court also affirmed the ruling awarding the CEO the $203,691 in damages related to the supplemental stock grant, finding that, on appeal, Astra waived any claim of forfeiture of that award (Astra USA, Inc v Bildman, October 5, 2009).

AGENCY RULINGS

DOL ARB: OFCCP's Bank of America on-site review did not violate Fourth Amendment

The DOL's Administrative Review Board (ARB) ruled that the Office of Federal Contract Compliance Program's (OFCCP) on-site records inspection and employee interviews at a Bank of America (BOA) branch location did not violate the Fourth Amendment's prohibition against unreasonable searches. The ARB agreed with an administrative law judge (ALJ) that the agency had administrative probable cause for its on-site visit. During OFCCP's desk audit stage, BOA turned over its Affirmative Action Plan and supporting documents to OFCCP knowingly and voluntarily, and OFCCP did not coerce or mislead the bank to obtain its consent. Further, the ARB ruled that an OFCCP letter to BOA, which contained salary tables based on data from the desk audit, created a reasonable suspicion of a violation. Like the ALJ, the ARB found that there was no evidence in the record disputing these tables. Thus, the OFCCP established sufficient evidence to justify its on-site review and conformed its activities to Fourth Amendment requirements (OFCCP v Bank of America, September 30, 2009).

DOL ARB: Attorney may use privileged information to support SOX whistleblower claim

The DOL's Administrative Review Board (ARB) ruled that an attorney-complainant may rely on statements or documents covered by the attorney-client privilege in support of his Sarbanes-Oxley Act (SOX) whistleblower complaint. The attorney worked as in-house counsel for a telephone company's corporate secretary and corporate governance group. His responsibilities included providing legal advice to ensure that the company's public and corporate filings complied with relevant securities laws and regulations and he provided advice regarding the administration of company's ethics policies. He asserted that in retaliation for a number of SOX-protected activities, which included reporting those concerns to the company's general counsel, CEO and board of directors pursuant to SOX's mandatory reporting requirement for attorneys, his supervisor threatened to fire him and denied him a raise and promotion. An administrative law judge (ALJ) granted the company's motion to certify to the ARB for interlocutory review the issue of whether the attorney could rely, in whole or in part, on information covered by the attorney-client privilege to prove his case. After granting the company's petition, the ARB, affirming the ALJ, ruled that the attorney could rely on such information, as an exception to the privilege, in support of his SOX whistleblower complaint. The ARB reasoned that the fact that the mandatory reporting requirement (Section 307) and the whistleblower protection provision (Section 806) were both part of the SOX statute was "strong evidence of congressional intent that attorneys alleging retaliation for reporting violations under Section 307 can use otherwise privileged materials in a Section 806 whistleblower proceeding, subject to protective, in camera, or other orders the ALJ may issue with the objective of protecting privileged communications." (Jordan v Sprint Nextel Corp, September 30, 2009).

NLRB: Successor employer unlawfully refused to hire unionized employees

A building materials wholesaler unlawfully refused to hire back the unionized drivers and warehouse workers of a predecessor employer after terminating the predecessor's outsourcing contract at the company's eight facilities, the NLRB held. In 2005, the wholesaler outsourced the on-site driver and warehouse jobs at its terminals to a contractor; in taking over these functions, the contractor hired most of the workers employed by the company in those roles. In 2006, the contract workers at one facility voted to unionize and signed a CBA with the contractor. In 2007, the wholesaler decided to bring the driving and warehousing functions back in-house, deeming it more cost-efficient. The wholesaler hired back a majority of the workers employed by the contractor when it re-staffed the in-house function, but it rejected most of the incumbent workers at the unionized facility. The NLRB concluded the employer refused to hire the workers in order to avoid a bargaining obligation with the union as a successor employer. The Board cited evidence that: the company showed a strong preference for incumbent workers at its other sites but not the unionized site; it offered a $1000 signing bonus for new job applicants at the unionized facility only; the incumbent workers who were denied jobs were active union supporters; and at least six of the successful new job applicants were deemed unemployable by the outside consultant who was hired to conduct the interviews. The Board also cited, as evidence of animus, the fact that the company refused to bargain even though the new bargaining unit had a majority of former employees of the predecessor (conduct which had prompted the regional director to seek—and obtain—injunctive relief in January). As for the proper remedy, the Board rejected the employer's contention that, at worst, it had unlawfully refused to consider the applicants, a violation that warranted only an opportunity to apply for future openings. The Board found an unlawful refusal to hire; as such, reinstatement and backpay were appropriate (The Parksite Group, 354 NLRB No 90, September 30 2009 [released October 2, 2009]).

NLRB: Successor unlawfully refused to bargain, hire unionized workers

A Massey Energy subsidiary unlawfully refused to bargain with and hire 85 unionized employees of a bankrupt predecessor in order to avoid incurring a bargaining obligation with the United Mine Workers, the NLRB found. Shortly before the sale of the operation to Massey, a bankruptcy judge authorized the predecessor to reject the CBA (including its successorship clause, which forbade sale of the operation to any buyer that would not agree to assume the contract). Massey purchased the mine and created a subsidiary to operate the facility. The subsidiary refused to recognize the union, which had represented employees at the mine since 1969 under a succession of owners. The subsidiary then imposed new terms and conditions of employment, including lower wages. The Board found the subsidiary was a statutory successor, and as such, its refusal to recognize and bargain with the union was unlawful. It further found the company unlawfully refused to hire the predecessor's unionized employees. In so ruling, the Board rejected the company's contention that the evidentiary burden set forth in Toering Electric should apply. (In Toering, a case unrelated to successor employers, a divided Board held the General Counsel had the burden, in refusal-to-hire cases, of showing that a job applicant had a "genuine interest" in becoming employed.) Yet the General Counsel would have met his burden here even if Toering did apply, the Board concluded. The applicants had been performing the very jobs at the same location for which the company was hiring. Moreover, both union officials and individual applicants told the company the applicants were "ready, able, and willing" to fill the positions. The fact that the union had submitted 53 job applications in bulk did not indicate that the applicants lacked a genuine interest in employment—a holding reached in Toering as well—since the job applicants had expressly authorized the union to do so. Accordingly, the Board affirmed a law judge's finding that the subsidiary violated the Act. It left for another day, however, the issue of whether Massey itself was liable for the unlawful conduct (Massey Energy Co, 354 NLRB No 83, September 30, 2009 [released October 2, 2009]).

NLRB: Employer's unilateral changes to insurance benefits were lawful

In a reversal of its prior decision, a two-member panel of the NLRB ruled that an employer did not violate federal labor law when it unilaterally changed its health insurance carrier and plan. The Board in a Decision and Order entered in 2005, found that the employer and union, by entering into negotiations for a successor CBA, prevented the automatic renewal of their existing agreement despite the fact that neither party gave notice of their intent to terminate the contract as required under the agreement. Thus, because the management's rights clause, which gave the employer the right to unilaterally make changes in insurance benefits, did not survive the expiration of the contract, the employer's unilateral changes were unlawful, the Board concluded. On review, the Second Circuit remanded the case back to the Board ruling that the precedent upon which the Board relied held only that contract negotiations prevented automatic renewal when the contractual notice was untimely or improper in form. According to the circuit court, this precedent did not apply when the required notice was lacking entirely. Thus, accepting the court's decision as the law of the case, the Board on remand found that the bargaining agreement remained in effect while the parties engaged in further negotiations. Therefore, pursuant to the contract's management rights clause, the employer acted lawfully when it unilaterally made changes to its health insurance benefits (Long Island Head Start Child Development Servs, Inc, 354 NLRB No 82, September 25, 2009 [released September 28, 2009]).

OBAMA ADMINISTRATION

Administration announces new initiatives during National Disability Employment Awareness Month

The Obama Administration is taking several steps to ensure there is fair and equal access to employment for all Americans with disabilities, announced the President on October 5. Among the steps: a federal government-wide job fair for workers with disabilities and town hall meetings on the EEOC's proposed ADA Amendments Act regulations. The announcement coincides with October's National Disability Employment Awareness Month. "Across this country, millions of people with disabilities are working or want to work, and they should have access to the support and services they need to succeed," said the President. "As the nation's largest employer, the federal government and its contractors can lead the way by implementing effective employment policies and practices that increase opportunities and help workers achieve their full potential."

Thomas Perez confirmed to head DOJ's Civil Rights Division

On October 6, the Senate confirmed Thomas Perez to head the DOJ's Civil Rights Division in a 72-22 vote. Perez returns to the Civil Rights Division, where he worked from 1988 to 1999. He began as a career prosecutor in the Division's Criminal Section and rose to become Deputy Assistant Attorney General. He served on detail from the DOJ as special counsel to the late Sen. Edward M. Kennedy (D-Mass) from 1995 to 1998. Perez was director of the US Department of Health and Human Services Office of Civil Rights from 1999 to 2001. Since 2007, Perez was the state of Maryland's Secretary of Labor, Licensing and Regulation. From 2002 until 2006, he was a member of the Montgomery County, Md., Council. He was a professor at the University of Maryland School of Law from 2001 to 2007. The Civil Rights Division's work addresses discrimination in education, employment, credit, housing, public accommodations, voting, state and local government programs, and certain federally funded and conducted programs.

Senate Committee approves Obama nominee for DOL Solicitor, faces GOP hold

On October 7, the Senate Health, Education, Labor and Pensions Committee approved current New York Labor Commissioner M. Patricia Smith to serve as DOL Solicitor in a 13-10 vote. However, Sen. Mike Enzi (R-Wy) will place a hold on Smith's nomination as it heads to the Senate floor for a confirmation vote, asserting that Smith made inaccurate statements about her role overseeing New York Wage Watch, a pilot program that recruits unions and consumer groups to help uncover wage and hour violations in the work place. Therefore, Smith's confirmation vote will be delayed in the full chamber until 60 senators agree to take up her nomination. The Office of the Solicitor's mission is to meet the legal service demands of the entire DOL, representing the agency in litigation, alternative dispute resolution, the development of regulations and providing legal opinions and advice concerning all the DOL's activities.

White House announces Federal Register 2.0

The Federal Register – the 73-year-old official chronicle of White House and executive agency activities, and the public's window on proposed changes to federal regulations – has emerged in a new 21st Century format that for the first time will allow readers to sift through, reorganize and electronically customize its daily contents. Launched on October 5, 2009, Federal Register 2.0, which can be accessed at http://www.gpo.gov or http://www.data.gov, supplements the official publishing formats with "XML," a machine readable form of text that can be manipulated in virtually limitless ways with digital applications that make it easier for people to access and analyze its contents. The transformation was undertaken by the Government Printing Office and the National Archives and Records Administration in collaboration with the White House.

AGENCY DEVELOPMENTS

DOL withdraws union reporting Form LM-2 and LM-3 final rule

The DOL's Office of Labor-Management Standards (OLMS) will withdraw its union reporting final rule published on January 21, according to a final rule scheduled for published in the October 13, Federal Register. The January final rule revised the Form LM-2, an annual financial report required by the Labor-Management Reporting and Disclosure Act (LMRDA), and established standards and procedures by which the Department can revoke, when warranted, the authorization for smaller labor organizations to file the Form LM-3, a less detailed annual financial report also required pursuant to the LMRDA. OLMS proposed to withdraw the Bush Administration's LM-2 rule on April 21, concluding it had been promulgated "without adequate review of experience under the Department's 2003 Form LM-2 rule."

DHS issues final rule rescinding controversial no-match regulation

The Department of Homeland Security will rescind its controversial no-match regulation, according a final rule to rescind published in the October 7 Federal Register. After careful review, DHS has decided to focus its worksite enforcement efforts on "increased compliance through improved employment verification, via participation in E-Verify, ICE's Mutual Agreement Between Government and Employers (IMAGE) and other programs," said the agency. As it stands, implementation of the no-match rule, which was originally issued in 2007, has been enjoined by Judge Charles Breyer of the Northern District of California since October 2007 (AFL-CIO v Chertoff, NDCal, No 3:07-cv-04472-CRB). The rule to rescind takes effect November 6.

EEOC updates TAD on ADA-compliant employer pandemic preparedness

In light of the H1N1 virus, the EEOC has updated its technical assistance document (TAD), which addresses basic information and frequently asked questions about pandemic preparedness in the context of employer obligations under the ADA. Called Pandemic Preparedness in the Workplace and the Americans with Disabilities Act, the TAD helps employers draw the line as to when questions regarding employees' health conditions are disability-related, and therefore, implicates the ADA, and when an inquiry falls outside the ADA's prohibitions.

EEOC letter discusses mandatory health-risk assessments and ADA compliance

The ADA prohibits employers from asking disability-related questions in a health-risk assessment that employees are required to complete as a prerequisite to receiving monies from an employer-funded health reimbursement arrangement, according to an informal discussion letter released by the EEOC on October 6.

NLRB memo provides guidance on the "skip counsel" rule

On October 9, NLRB Associate General Counsel Richard A. Siegel issued a revised memo (OM 10-05) to regional office personnel outlining the agency's rules when it is known that a party and/or witness is represented by an attorney. Called the "skip counsel" rule, the rule "prohibits ex parte contacts with a represented person about the subject matter of the representation absent either consent from adverse counsel or legal authorization to engage in the contacts," said Siegel. The agency's policies regarding contacts with parties and witnesses represented by counsel have been formulated consistent with the ethical standards applicable to NLRB attorneys as members of the bar, particularly the American Bar Association's Model Rule of Professional Conduct, noted Siegel. The NLRB's skip counsel policies apply to all Board agents whether or not they are attorneys.

NLRB memo discusses creation of video portraying representation case processing

Employing narrators and actors, the NLRB has produced a digital video presentation in English and Spanish that chronologically depicts representation case processing (i.e., an organizing campaign, the filing of a petition and an election), Associate General Counsel Richard A. Siegel said in an October 8 memo (OM 10-07) to regional office personnel. The video "also contains a general description of the pre-election hearing and post-election objection process, as well as a description of [the NLRB's] Information Officer program that explains the various ways the Agency can be contacted," said Siegel. The Office of Employee Development will be sending copies of the video on DVD to each field office for distribution to interested parties. In addition, it will be posted as a streaming video on the NLRB's website.

LEGISLATION

Bicameral legislation would overturn High Court's decision in Gross, protect older workers from age bias

On October 6, Senator Tom Harkin (D-Iowa), Chairman of the Health, Education, Labor and Pensions Committee, Senator Patrick Leahy (D-Vt), Chairman of the Senate Judiciary Committee and Representative George Miller (D-Cal), Chairman of the House Education and Labor Committee introduced the Protecting Older Workers Against Discrimination Act (S. 1756/H.R. 3721), legislation that would restore civil rights protections for older workers in the face of the US Supreme Court's holding in Gross v FBL Fin Servs, Inc. In Gross, the High Court held that plaintiffs bringing ADEA disparate treatment claims must establish by preponderance of evidence that age was the "but for" cause of the adverse employment action; age cannot simply be a "motivating factor" in the adverse action. Consequently, the Court's holding means that victims of age bias face a higher burden of proof than those alleging race, sex, national origin or religious bias since they must prove that age is, in fact, the reason for the adverse decision. Mirroring Title VII's mixed-motives burden-shifting rubric, the bill's provisions clarify that a plaintiff can establish an adverse action by demonstrating by a preponderance of the evidence that age was a "motivating factor" for the action, even if other factors also contributed to the decision. Alternatively, the plaintiff can establish by a preponderance of the evidence that the challenged action would not have occurred absent the employee's age.

One day later, the Senate Judiciary Committee held a hearing on Gross. For more on the hearing, check out CCH blogger Pamela Wolf's take on the proceedings in CCH WorkDay.

Senate passes amendment barring contractors' use of mandatory arbitration agreements

On October 6, the Senate passed an amendment (S.A. 2588) to the Department of Defense Appropriations Act of 20l0 (H.R. 3326) barring federal contractors from using any funds made available under the Act for any "existing or new" federal contract if the contractor or subcontractor "at any tier" requires employees or independent contractors, as a condition of employment, to sign a contract agreeing to resolve through arbitration any Title VII claim "or any tort related to or arising out of sexual assault or harassment, including assault and battery, intentional infliction of emotional distress, false imprisonment, or negligent hiring, supervision, or retention." The amendment, which was introduced on October 1 by Senators Al Franken (D-Minn) and Mary Landrieu (D-La), passed by a vote of 68-30. The Department of Defense Authorization Act passed the House on July 30 by a vote of 400 to 30. It passed the Senate on October 6 by a vote of 93-7. The bill now heads to conference committee, so it remains to be seen if the amendment is included in the final appropriation.

Conferees approve FY 2010 Homeland Security Appropriations bill, would extend E-Verify for three years

On October 7, legislators approved the conference report for the $42.8 billion FY 2010 Homeland Security Appropriations bill, which includes various immigration measures, among them a three-year extension of the federal government's E-Verify program. The conferees also agreed to $137 million to operate the program and further improve its accuracy and compliance rates. Provisions to permanently reauthorize the E-Verify program, require employers to use the program to verify not just new hires, but current employees, and require federal contractors and subcontractors to use the program in order to verify that all new hires and existing employees directly performing work under the terms of the contract be authorized to work in the United States were all dropped in favor of the three-year extension. The conferees also agreed to extend the Special Immigrant Nonminister Religious Worker Visa Program, the Conrad 30 J-1 program and the EB-5 Regional Center Pilot Program for three years. The bill now heads to both chambers for a vote on final passage.

Senators introduce unemployment compensation extension bill

After stalling in the Senate, on October 8, Senators Harry Reid (D-Nev), Max Baucus (D-Mont), Jack Reed (D-RI) and Jeanne Shaheen (D-NH) have introduced a comprehensive proposal that would extend unemployment insurance benefits for jobless workers in all 50 states. Called the Emergency Unemployment Compensation Extension Act (S.A. 2668 to H.R. 3548), the bill would provide unemployed workers with up to 14 weeks of additional benefits. The legislation would also extend benefits for six additional weeks in states with unemployment rates above 8.5 percent. The proposal is fully paid for by extending, through June 30, 2011, the Federal Unemployment Tax, which is assessed on employers. The bill would also update the Unemployment Insurance Modernization provision in the American Recovery and Reinvestment Act to allow victims of sexual assault who have left their job to be eligible for benefits under the "compelling family reasons" clause. Additionally, the legislation specifies railroad workers facing expiring unemployment benefits would be eligible for additional weeks. The measure is a substitute for the Unemployment Compensation Extension Act (H.R. 3548), passed by the House last month, which would have extended unemployment insurance benefits by 13 weeks only in states that have jobless rates above 8.5 percent. The substitute is expected to pass in both houses of Congress.

Colorado governor directs state agencies to develop a universal policy addressing workplace violence

On October 7, Colorado Governor Bill Ritter (D) issued an Executive Order (EO) requiring the establishment of a universal policy to protect state employees from workplace and domestic violence. As an employer, the state of Colorado is affected by workplace violence, which can compromise the safety of both victims and coworkers and result in lost productivity and increased healthcare costs, absenteeism, and employee turnover, said the governor. The EO directs the Colorado Department of Personnel and Administration to work with the Department of Human Services, the Colorado Attorney General's Office and other state agencies to develop a universal policy addressing workplace violence, including domestic violence affecting the workplace, by March 2010.

LATEST TWITTER UPDATES

SUPREME COURT

Supreme Court opens 2009-2010 term with oral arguments in discovery, arbitration cases

In an offshoot of a RICO suit that has already been to the Supreme Court, the High Court, on October 5, heard oral arguments in Mohawk Industries, Inc v Carpenter (Dkt No 08-678) addressing whether a party may immediately appeal a discovery order disclosing materials that are purportedly covered by attorney-client privilege in the case of an employee who was discharged when he refused to recant claims that his employer hired undocumented workers. On October 7, the Court heard arguments in Union Pacific Railroad v B'hood of Locomotive Eng'rs (Dkt No 08-604) addressing whether the Railway Labor Act authorizes courts to set aside final National Railroad Adjustment Board arbitration awards for alleged due process violations.

Solicitor General's views invited on legality of San Francisco's "play or pay" ordinance

On October 6, the Supreme Court asked Solicitor General Elena Kagan for her views on Golden Gate Restaurant Ass'n v San Francisco (Dkt No 08-1515), a case that involves San Francisco's efforts to require employers to pay a minimum amount for employee health care. San Francisco's Health Care Security Ordinance requires employers with at least 20 employees worldwide (and at least one employee in San Francisco) to make a specified level of healthcare expenditures on behalf of its San Francisco employees or pay into a city fund that supports San Francisco city health clinics and healthcare spending accounts for San Francisco employees who are ineligible for the clinics. The Ninth Circuit held that the ordinance was not preempted by ERISA.

HEALTH CARE REFORM

CBO projects reduced deficit from enactment of Senate Finance Committee's proposal…

Called America's Healthy Future's Act, the Senate Finance Committee's amended health care reform proposal would cost $829 billion over the next ten years and result in a net reduction in federal budget deficits of $81 billion over the same time period, while ensuring that the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent, according to the Congressional Budget Office.

…as the Committee set to vote on proposal October 13

Bowing to pressures from several members of the Senate Finance Committee who requested ample time to read the CBO cost estimates of the panel's revised health reform package, Committee Chair Max Baucus (D-Mont) put off a final vote on the measure until October 13, 2009. The delay serves to fend off criticism from Republican leaders that the vetting process is being rushed and perhaps more significantly, provides Senator Olympia J. Snowe (R-Maine), who might be the only Republican to vote for the bill, ample time to review the estimates.

Costs of health reform failure would be felt in every state, Urban Institute says

Failure to enact federal health reform would place a tremendous economic strain on individuals and businesses in all 50 states and the District of Columbia, according to a study by the Urban Institute. Over the next decade, in every state, the percentage of the population that is uninsured would increase; employer-sponsored coverage would continue to erode; spending on public programs would balloon; and individual and family out-of-pocket costs could increase by more than 35 percent.

Employer-sponsored health benefit costs to increase by seven percent in 2010, according to study

Against a backdrop of prolonged recession, US employers will see an increase in their health benefit expenditures of seven percent in 2010, according to new data from professional services firm Towers Perrin. The cumulative effect of ongoing cost increases, combined with the current economic climate, are creating significant affordability challenges for both employers and employees.

REPORTS

GAO issues report on sexual orientation, gender identity state statutes

Twenty-one states and the District of Columbia have statutes prohibiting employment discrimination based on sexual orientation, and twelve states and the District of Columbia have statutes prohibiting employment discrimination based on gender identity, according to a Government Accountability Office (GAO) report on Sexual Orientation and Gender Identity Employment Discrimination: Overview of State Statutes and Complaint Data. The GAO reviewed these state statutes, including their characteristics, coverage and exclusions and gathered information concerning the number of administrative employment discrimination complaints filed in each state (both the total number and the number of complaints listing sexual orientation or gender identity as one of the claimed bases for discrimination). The administrative complaint data reported showed relatively few employment discrimination complaints based on sexual orientation and gender identity, according to the report. However, in some states, where the laws proscribing sexual orientation and gender identity employment discrimination were enacted relatively recently, the complaint data was incomplete.

CBO documents changes in workers' annual earnings during the past three decades

Understanding how the annual earnings of workers have changed over time is integral to projecting possible changes in such earnings, explained the CBO in its report Changes in the Distribution of Workers' Annual Earnings Between 1979 and 2007, which documents changes in annual earnings of workers ages 25 to 54 between 1979 and 2007. In contrast to the median annual earnings of men—which, in inflation-adjusted terms, were the same in 2007 as for their counterparts in 1979—the annual earnings of women at the median of their distribution were 60 percent higher in 2007 than for their counterparts in 1979, according to the report. The median earnings of men "followed the ups and downs of the business cycle," while the inflation adjusted earnings of women at the median distribution rose at a relatively steady pace between 1979 and 2000.

IN OTHER NEWS

Gay rights demonstrators march on Washington, DC

From repealing the Defense of Marriage Act to enacting the Employment Non-Discrimination Act, gay rights supporters, impatient and discouraged by what they are seeing as a lack of action on their issues, took to the streets of the capital on October 11 for the National Equality March, the largest demonstration on gay rights in nearly a decade, reported the New York Times. One day earlier, President Obama, speaking at the Human Rights Campaign National Dinner in Washington, DC, renewed his vow to allow gay men and lesbians to serve openly in the military, but failed to offer a timetable for repealing "Don't Ask Don't Tell."

Support builds for a job creation tax credit

While the Obama Administration and Congress are focused on health care reform legislation, to get the job market back on track before the November 2010 midterm elections, support is building around a tax credit for companies that create new jobs, reports The New York Times. One version of this approach, to be unveiled this week by the Economic Policy Institute, would give employers a two-year tax credit if they increased the size of their work force or added significant hours of work for their employers (i.e., making a part-time worker full time). Employers would receive a credit worth twice the first-year payroll tax for each new hire, amounting to several thousand dollars, depending on the new worker's salary.

And speaking of jobs…

On October 9, the Bureau of Labor Statistics released its August 2009 Job Openings and Labor Turnover Survey, which showed that job openings decreased by 21,000 to 2.4 million in August. During the same period, however, the number of unemployed workers across the nation increased by 466,000 to 14.9 million. According to the Economic Policy Institute's quick take of the figures, there were 12.5 million more unemployed workers than job openings in August, or 6.3 job seekers per available job. This was up from 6.0 in July. Importantly, the ratio of job seekers to job openings does not include job seekers who are currently employed but looking for work due to a lack of job security in their current position, so the ratio actually understates the number of job seekers who are competing for each job opening, said the nonprofit think tank.

Outside counsel spending projected to drop by 4.3 percent next year

A new study projects a 4.3-percent slide in corporate spending on outside counsel next year, on top of this year's 10.8-percent drop, reports the National Law Journal (via Law.com). Outside counsel spending dropped from an average of $20.8 million in 2008 to $18.5 million this year and is projected to dip to $17.7 million in 2010, according to the "BTI Premium Practices Forecast 2010: Survey of Corporate Legal Spending" study by the Wellesley, Mass-based legal consulting shop BTI Consulting Group. According to the study, the corporate counsel strategies likely to drive the legal services market next year include developing cost-effective compliance strategies; resolving litigation; focusing on early case assessment; and crafting new strategies to manage outside counsel.

Patti Blagojevich files defamation lawsuit

Former Illinois First Lady Patti Blagojevich is suing a senior director at the Chicago Christian Industrial League, claiming he defamed her when, less than two weeks ago, he accused her of inappropriately taking the homeless charity's proprietary donor list to promote her husband's book, reports the Chicago Tribune. Blagojevich seeks an apology and unspecified damages from Richard Roberts, the league's senior director of strategy and communications.

South Gate, California settles officers' harassment suits for $18 million

The city of South Gate, California has paid out a total of $18 million to settle lawsuits filed by a group of officers who asserted they faced racially motivated discrimination, harassment and retaliation in the aftermath of the ouster of the city's first-ever Latino police chief, reports the LA Times. The officers alleged they were subjected to racial slurs and false internal affairs investigations, unfairly disciplined and passed up for promotions because of their association with the former police chief. The settlements, the last of which were finalized October 6, include the claims of four officers who won a $10.4-million jury verdict in 2007, and former Assistant Chief Mark Van Holt, who was awarded $4.2 million by a jury in a retaliation suit against the city. Those verdicts had been challenged on appeal by the city and settled for undisclosed amounts that are part of the $18 million.

Delaware law firm hit with sex harassment suit

A recently filed sex harassment suit against a Wilmington, Delaware, law firm is garnering attention not only because it's chock-full of salacious details, but also because both the plaintiff and the alleged harasser are both female lawyers, reports the Legal Intelligencer (via Law.com). In the suit, attorney Jennifer Braude claimed that during the 18 months she spent as an associate at Maron Marvel Bradley & Anderson, she was subjected to a sexually hostile work environment due to conversations initiated by her direct supervisor, Meredith Sossman. Sossman consistently injected sexual topics into the workday banter, often making comments about Braude's body and choice of clothing, according to the suit. And, Sossman would also talk about her own sexual interests, including engaging in "foursomes" and kissing her best female friend.

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Editor

Brett A. Gorovsky, 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.