KEY CASE LAW

3rdCir: Federal employee's religious accommodation claim must be brought under Title VII

A federal employee's religious discrimination claim was properly dismissed because he filed it under the Religious Freedom Restoration Act when he should have brought the claim under Title VII, ruled the Third Circuit. The RFRA was not meant to be construed as affecting religious accommodation under Title VII; Title VII was still intended as the means to resolve "all claims of employment discrimination whether they are based on religion or another enumerated form of discrimination that may impact a constitutionally protected right." Thus, a security screener who alleged the Transportation Security Administration fired him after he refused to cut his dreadlocks due to his sincerely held religious beliefs failed to state a claim under the RFRA (Francis v Mineta, 3rdCir, October 10, 2007).

6thCir: Ageist comments, lack of RIF plan create fact issue of age bias

A 57-year-old sales manager, whose direct supervisor taunted him as "the old man on the sales force," removed him from a profitable account because he was "too old," and told another employee he "needs to set up a younger sales force" before terminating the employee, could proceed to trial on his age discrimination claim, ruled the Sixth Circuit, reversing a district court's grant of summary judgment. Each of these three statements constituted sufficient circumstantial evidence to create a factual issue as to whether the termination decision was motivated by age bias. The record contained evidence to show that the supervisor had authority regarding personnel matters involving salespeople generally and was a decision maker regarding (or that he otherwise influenced) the employee's termination specifically. In addition, the employer's lack of an objective plan for a purported reduction-in-force created a factual issue as to whether it was a credible explanation for the termination (Blair v Henry Filters Inc, 6thCir, October 15, 2007).

7thCir: Bizarre reaction to stray dog may be notice of need for FMLA leave

The applicability of the "Byrne exception," which states that unusual behavior alone can be enough to notify a reasonable employer that an employee suffers from a FMLA-qualifying serious health condition, split the Seventh Circuit in a case dealing with a former employee's extreme emotional and physical response to a stray dog entering her workspace. The majority found that the previously "model" employee's bizarre behavior, which included calling the police and yelling and swearing at her superiors to such an extent that they locked her out of the building, raised a question of fact as to whether her employer was on constructive notice of a serious mental health condition (Stevenson v Hyre Electric Co, 7thCir, October 16, 2007).

NDInd: Court denies injunction, certifies class in FedEx independent contractor case

After FedEx Ground announced it would not renew the contracts of 1,000 drivers working as independent contractors in California, attorneys for a plaintiff class of drivers sought a temporary restraining order and preliminary injunction to prevent the company from discharging the drivers. FedEx’ announcement had come on the heels of a successful court challenge to the company's independent contractor model in that state, and the plaintiffs' attorneys alleged the move was meant to send a chilling message to class members in the ongoing multi-district litigation. A federal district court in Indiana denied the injunction. "In effect, the plaintiffs' motion... asks that the court to make FedEx Ground continue the business model for which it is being sued and for which the plaintiffs seek damages," the court noted (In re Fed Ex Ground Package System Inc Employment Practices Litigation, NDInd, October 12, 2007).

However, as a part of the same multi-district proceeding, the court issued a separate order on October 15 certifying a nationwide class of 14,000 current and 10,000 former FedEx Ground/Home Delivery drivers who are challenging the company's independent contractor model.

STATE LAW

IA: Employee fired for false injury report can't sue for retaliation

Rejecting the contention that terminating an employee for falsely reporting an injury constitutes retaliation for the exercise of workers' compensation rights protected by Iowa public policy, the Eighth Circuit ruled that a hotel maintenance engineer who was discharged for falsification of company records failed to prove that engaging in protected activity caused his termination. "Without question, reporting a workplace injury to the employer is the first step in pursuing a workers' compensation remedy," the Eighth Circuit stated, but "falsely reporting an injury is not the exercise of a right protected by the workers' compensation statute." However, the court did not need to resolve whether the employee engaged in protected activity when he falsely reported a workplace activity that might give rise to a workers' compensation claim because he failed to prove retaliation or that the legitimate reason given for his discharge was pretextual (Napreljac v John Q. Hammons Hotels, Inc, 8thCir, October 10, 2007).

NY: Evidence of malice supported defamation claim, but not punitive damages

A brokerage firm falsely reported on a NASD Uniform Termination Notice for Securities Industry Registration (Form U-5) that a financial advisor was terminated after the firm concluded that she had engaged in inappropriate bond trading. Although the firm's conduct was sufficient evidence of malice for the purpose of overcoming the conditional privilege accorded the firm's statement, it was not sufficiently outrageous to support an award of punitive damages. The First Circuit upheld a jury award of $850,000 in compensatory damages, but vacated the award of $2,100,000 in punitive damages (Galarneau v Merril Lynch, Pierce, Fenner & Smith Inc, 1stCir, October 12, 2007).

NY: Law firm did not waive right to arbitrate pursuant to employment agreement

A law firm did not waive its contractual right to compel arbitration of a former firm member's employment-related claims by participating in an unrelated special proceeding and two plenary actions, New York's high court ruled. The lower court actions had involved pending lawsuits that the attorney sought to retain upon leaving the firm—suits that were being actively litigated at the time. "There is no waiver of arbitration where urgent need justifies resort to the courts," the Court of Appeals noted. These "foray[s] into the courthouse" did not constitute "affirmative acceptance of the judicial forum." Moreover, a reservation-of-rights provision in a stipulation reached by the parties preserved the firm's right under the agreement to demand arbitration in the event the plaintiff later elected to pursue employment-related claims (Stark v Molod Spitz DeSantis & Stark, PC, NYCtApp, October 16, 2007).

NLRB RULINGS

Ceasing dues check-off upon expiration of contract did not breach bargaining duty

On remand from the Ninth Circuit Court of Appeals, which instructed the Board to explain its ruling allowing an employer to unilaterally dishonor dues check-off provisions in an expired bargaining agreement, a 3-2 Board majority concluded the contract language specifically stated that the check-off duty would be in effect "for the duration of the agreement," and that deductions would occur "during the term of the agreement." Members Liebman and Walsh, dissenting, would find unlawful refusal to bargain notwithstanding the specific contract language; they argued there was a statutory duty under the NLRA to continue the dues check-off. Chairman Battista, concurring with the majority, argued an employer should not be required to continue to assist the union in collecting dues at a time when the parties are engaged in a bargaining dispute. The "economic lockout" of dishonoring check-off was just another tool available upon expiration of a contract to be used to induce agreement, he reasoned (Hacienda Hotel, Inc Gaming Corp, 2006-07 CCH NLRB ¶17,408).

"Wish for a vote to remove" the union satisfies Levitz standard

The language of a petition expressing employees' "wish for a vote to remove [the union]" submitted to the employer and the NLRB clearly expressed employees' desire to remove the union as their representative, a 2-1 majority of an NLRB panel held. Therefore, it met the Levitz standard of "actual loss of majority support" and the employer's subsequent withdrawal of recognition following expiration of the collective bargaining agreement was lawful. Ironically, Member Walsh pointed out in dissent, had the employer not withdrawn recognition, there would have been no basis for an 8(a)(5) blocking charge, and an election could have been held pursuant to the employee's RD petition. "In any event, we would have learned—through a secret ballot election—the employees' true sentiments," Walsh stated (Diversicare Leasing Corp dba Wurtland Nursing & Rehab Ctr, 351 NLRB No 50, September 30, 2007).

Hospital's suit against union was not baseless, retaliatory

A hospital's LMRA Section 301 suit against the California Nurses Association for violating the no-strike clause of a bargaining agreement, although dismissed by a district court in a ruling that was affirmed on appeal, was not cause for an unfair labor practice finding against the employer, a three-member Board panel held. Citing its recent decision in BE&K Construction Co, 351 NLRB 29 (2007), which held that a lawsuit that has a reasonable basis does not violate the Act regardless of the motive behind it, the Board reversed a law judge's finding that the lawsuit was baseless and retaliatory (Children's Hospital Medical Center of Northern California, 351 NLRB 36, September 29, 2007).

OTHER AGENCY DEVELOPMENTS

EEOC reaches $4.3 million settlement in national origin bias case

A Title VII national origin discrimination case against one of the largest retail sellers of photographic, computer and electronic equipment in the New York metropolitan area was resolved the same day the lawsuit was filed, according to the EEOC. The EEOC's suit alleged that B & H Foto and Electronics Corp paid Hispanics in its warehouses less than non-Hispanic workers and failed to promote them or provide them health benefits based on their national origin. The agency filed the complaint, and entered into a consent decree with the company, on October 16. Under the settlement, B & H will pay $4.3 million in monetary relief.

OLMS reports September indictments, convictions; decries budget cuts

The Office of Labor-Management Standards obtained 13 indictments and seven convictions in September, 2007, for a total of 97 indictments and 115 convictions during the fiscal year. These indictments and convictions primarily involve union officers and employees who have embezzled union funds, resulting in court-ordered restitution back to the unions of more than $31.5 million. Meanwhile, the Senate on October 18 narrowly voted to cut OLMS’ budget, rejecting an amendment to the Labor appropriations bill that would have restored funding to the agency charged with ensuring union financial transparency.

Grand jury indicts seven for hiring/harboring undocumented workers

Seven individuals who were involved in hiring or supervising employees at George's Processing Inc in Butterfield, Missouri, were indicted on October 17 by a federal grand jury on charges related to harboring and hiring undocumented workers in separate but related cases investigated by US Immigration and Customs Enforcement. "These indictments demonstrate ICE's aggressive, ongoing pursuit of employers who egregiously violate the law," said Elissa A. Brown, special agent in charge of the ICE Office of Investigations in Chicago.

2006 workplace injury/illness rate lowest ever recorded, OSHA reports

The rate of workplace injuries and illnesses in private industry declined in 2006 for the fourth consecutive year, the Bureau of Labor Statistics reported on October 16. Nonfatal workplace injuries and illnesses reported by private industry employers declined from 4.6 cases per 100 workers in 2005 to 4.4 cases in 2006.

LEGISLATION

House Education and Labor Committee passes ENDA

The House Education and Labor Committee approved legislation protecting employees against workplace discrimination on the basis of sexual orientation last week, voting 27-21 to approve the Employment Non-Discrimination Act (ENDA) (H.R. 3685). "Today marks the first vote ever taken on this important legislation in the House of Representatives since it was first introduced in 1975," said Rep. George Miller (D-Cal), House labor committee chair. As originally introduced, ENDA would have extended protections to employees based on their actual or perceived gender identity, but sponsors of the legislation, including its drafter, Rep. Barney Frank (D-Mass), struck the gender identity provision in order to ensure passage—a move that outraged gay rights organization Lambda Legal and other supporters.

Employment Non-Discrimination Act

House fails to override Bush SCHIP veto

The House of Representatives failed to override President Bush's veto of a bill to reauthorize and expand the State Children's Health Insurance Program (SCHIP) (H.R. 976), voting 273-156 to override the veto, which fell well short of the 286 votes required, on October 18. The bill would have amended the FMLA to allow up to six months of leave for primary caregivers of servicemembers injured in combat and provide 52 workweeks of job protection for those caregivers. However, President Bush has indicated his administration will negotiate with congressional leaders on a possible compromise.

House Education and Labor Committee approves changes to WARN Act

The Early Warning and Health Care for Workers Affected by Globalization Act (H.R. 3796), a bill designed to reduce the impact of plant closures and mass layoffs caused by trade, was passed by the House education and labor committee on October 18 by a 26-18 vote. The bill would amend the Worker Adjustment and Retraining Notification (WARN) Act and require employers to notify full-time and part-time workers 90 days in advance of a plant closing or layoff.

Early Warning and Health Care for Workers Act

Rail safety bill clears House

The Federal Railroad Safety Improvement Act of 2007 (H.R. 2095) has passed in the House, with a 377-38 vote to approve the measure. H.R. 2095 imposes new work rules that require longer rest periods and work shifts for rail workers that generally cannot exceed 12 hours.

In California, it could have been worse

California employers need to keep a watchful eye whenever a state legislative session draws to a close. Sure enough, as WorkWeek reported last week, Governor Arnold Schwarzenegger signed a measure requiring California employers to allow military spouses up to 10 days of unpaid leave while their spouses are home from deployment. But a sigh of relief is in order. Ford and Harrison's Helene Wasserman notes the employment-related measures that did not make it past the Governor's desk.

Oklahoma immigration law under legal challenge

A DC-based coalition of Latino clergy and religious leaders have filed suit in a federal district court in Oklahoma challenging the constitutionality of the state's Taxpayer and Citizen Protection Act of 2007. Enacted in May, H.B. 1804 compels private sector businesses that contract with Oklahoma public entities to use a status verification system under the law. The law also provides a private right of action for discrimination for any US citizen or permanent resident alien who is discharged from employment if the employer retains an undocumented worker.

CONSIDER THIS

Labor, employment matters top source of lawsuits, corporate counsel report

U.S. businesses reported a distinct drop in the number of lawsuits filed against them in the past year, according to the latest survey of corporate counsel conducted by law firm Fulbright & Jaworski. As in previous surveys, in-house counsel identified labor and employment matters as the most frequent source of lawsuits that were filed against them during the past year—an area that reflects risk factors universal to all companies, the firm noted.

Survey: Instant messaging, voice mail use present litigation challenges

In its fourth annual survey of corporate counsel at U.S. companies, Fulbright & Jaworski surveyed respondents on their policies on retaining employee voice messages and instant messages. These technologies are playing an ever-growing role in discovery and disclosure during so-called litigation hold periods, according to the law firm.

IN OTHER NEWS

UAW finding Chrysler pact a tough sell among rank and file

Despite the UAW Chrysler Council's giving "overwhelming approval" to the pact reached by union negotiators with the automaker on October 10, the union is finding its tentative contract to be a hard sell among the rank and file, particularly in the midwest. Some 80 percent of Chrysler workers in suburban St. Louis rejected the four-year deal, followed by a no vote among workers in Ohio this past weekend. On the other hand, a plant of 800 workers in Kenosha, Wisconsin approved the tentative agreement, and workers at plants in New York state have voted solidly in favor of the deal. All of Chrysler's 45,000 UAW members will vote by week's end whether to ratify the tentative agreement or send negotiators back to the bargaining table.

Smithfield sues UFCW, citing "malicious and exploitative corporate campaign"

Smithfield Foods, Inc and Smithfield Packing Co have brought a civil RICO action against the United Food and Commercial Workers "after more than two years of malicious conduct against the company" in the union's quest to secure voluntary recognition. Smithfield has been engaged in an ongoing dispute with the UFCW for almost a decade over the union's efforts to organize workers at the company's Tar Heel plant.

... as Cintas suit against UNITE HERE heads to trial

Meanwhile, an Ohio Court of Common Pleas has ruled Cintas Corp can proceed to trial on its defamation action against UNITE HERE, denying the union's summary judgment motion last week in a suit arising out of the union's allegedly false press release regarding unfair labor practice complaints made by the union to the NLRB (Cintas Corp v UNITE HERE, Case No. 04CV62477, Court of Common Pleas, State of Ohio, Warren County, Ohio).

VEBAs in spotlight for shedding retiree health care liabilities

Voluntary employee beneficiary associations (VEBAs) have garnered national headlines in the past several weeks as General Motors, Chrysler, and AK Steel have announced they will transfer their retiree health care liabilities to their employees' unions by using a union-operated VEBA. Other companies with large union-based retiree populations have initiated VEBAs in recent years to eliminate their retiree health care obligations. All of these VEBAs apparently have received adequate funding from their parent companies. However, a VEBA established by Caterpillar was not adequately funded, which resulted in its failure in 2004, followed by lawsuits.

Dunkin' Donuts charged with discriminatory practices toward minority franchisees

In response to a suit filed against them alleging breach of contract and trademark infringement, Mahendra Patel and his wife Nita Patel, who own four Dunkin' Donut shops in Goshen, Harriman and Chester, New York, filed a counterclaim alleging the Dunkin' Donuts Franchise Restaurants, LLC and related entities alleging the defendant companies engages in race discrimination against certain minority franchisees. "Dunkin' manufactures pretextual, false and baseless reasons upon which to terminate primarily brown skin, first generation American entrepreneurs-franchisees," the complaint charged. Of note: the Seventh Circuit earlier this year ruled that a Section 1981 and 1982 race bias suit filed by a Palestinian Arab Dunkin Donuts franchisee of Muslim descent, who was denied the chance to relocate his stores or renew his franchise agreements with the chain because he refused to carry products that contained pork, could proceed to trial.

SEIU healthcare locals, Tenet reach tentative agreement at California hospitals

Healthcare workers at 14 California hospitals will weigh in this week on a tentative bargaining agreement with Tenet Healthcare Corp after the employer reached a deal on a new contract with SEIU locals United Healthcare Workers-West and 121RN. The pending agreement includes wage increases for nearly 7,000 hospital workers, guaranteed wage scales, a "no subcontracting" clause, and a "fair election agreement," in which Tenet management agrees not to engage in negative campaigning or other union-busting activities should workers attempt to organize at other Tenet hospitals.

Black & Decker carpal tunnel prediction test faces legal challenge

A job applicant who claims he was denied a job at a Black & Decker plant after failing a test used to predict the likelihood of developing carpal tunnel syndrome has filed a class action suit in Tennessee under the Americans with Disabilities Act, CNN.com reported. The EEOC has also challenged the tests, which are sometimes administered in manufacturing settings.

Illinois, Walgreens reach deal on dispensing 'Plan B' contraceptive

Illinois pharmacists who object to dispensing emergency birth control would be allowed to step aside while someone else fills the prescription under a deal that could settle a lawsuit against the state, according to media reports. The lawsuit, filed by several pharmacists and Walgreen Co, challenged a state rule requiring pharmacies to fill prescriptions for emergency contraception.

Workers expect baby boomers to break social security

The baby boomer retirement era kicked off last week as the very first baby boomer, Kathleen Casey-Kirschling, applied for social security on Monday, October 15. Casey-Kirschling will be eligible for social security benefits when she turns 62 in 2008. And according to the American Payroll Association's recent "Getting Paid in America" survey, 67 percent of Americans don't think social security will survive the baby boomers. Nearly 32,000 of the more than 47,000 survey participants indicated they do not feel social security benefits will still be available for workers when the last baby boomer reaches full retirement age (67 years) in 2031. "Employees can no longer count on social security to fund their retirement. They must take retirement savings into their own hands," said Dan Maddux, executive director of the American Payroll Association.

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

This new innovative tool uses "Smart Chart" functionality to instantly compare multiple state laws, all at the same time on the same chart.

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.