For the Week of November 9, 2009

KEY CASES

3rdCir: Disqualified union candidate's post-election protest ruled timely

Owing to the ambiguity in a union constitution's election protest provision, a district court erred in holding that a union member's Labor Management Reporting and Disclosure Act administrative complaint was untimely, held the Third Circuit. The Secretary of Labor sought relief on behalf of a candidate for president of Local 234 of the Transit Workers Union (TWU). The candidate had submitted a slate nominating another man for two different positions, recording secretary and secretary treasurer, even though the union forbade multiple candidacies. Consequently, the election committee informed the candidate that he had violated the union's nominating procedures, making him ineligible to run for office and disqualifying his full slate of candidates. Following the LMRDA's statutory protocol, the Secretary investigated the complaint, challenging both the candidate's disqualification and the entire slate. The Third Circuit reversed, finding that in election protest cases, ambiguous union provisions must be construed broadly in favor of complaining union members. Here, the election protest provision did not specify when whether protests must be filed. Therefore, the candidate's interpretation of the TWU constitution was reasonable and his post-election protest constituted a valid exercise of an "available" union remedy under the LMRDA. And, his subsequent administrative complaint to the Secretary was timely and the Secretary's LMRDA enforcement action based on the complaint was jurisdictionally sound (Solis v Local 234, Transport Workers Union, November 2, 2009).

6thCir: Ten-year prison sentence for employing undocumented workers affirmed

Company officers beware…and this includes you managers, supervisors, hiring officials and HR professionals. The Sixth Circuit has upheld a district court's 10-year prison sentence of a company official who employed numerous undocumented workers, paid them in cash and failed to withhold federal income tax, Medicare or social security from their paychecks. He pleaded guilty to conspiracy to defraud the United States and to harboring more than 100 undocumented workers, but not before trying to expatriate his assets and flee the country. All told, the company shortchanged the IRS out of upwards of $16 million. One hundred twenty months represented the statutory maximum sentence possible after the trial court imposed its sentence on the two counts consecutively. While the official may have had a viable argument that a lower sentence was permissible, he failed to show that the trial court's sentence of 10 years was unreasonable or that a lower sentence was required, held the Sixth Circuit. The sentence was within the Federal Sentencing Guidelines range, so it is presumed reasonable, and a review of the sentencing transcript showed that the trial judge considered the official's mitigation arguments (i.e., his age, criminal history, health, family ties and health of son and cooperation with the federal government), so the trial judge's explanations were neither arbitrary nor unreasonable, determined the circuit court (United States v Rosenbaum, November 3, 2009).

EDMo: Employee's religious accommodation claim will go to trial

A retailer that required a female employee to wear clothing similar to its own brand was not entitled to summary judgment on the EEOC's claim that it violated Title VII's religious accommodation requirement, held a federal district court in the Eastern District of Missouri. The employee alleged that the retailer's "look policy" consisted of clothing that was "sexy, form-fitting, and designed to show off body contours and draw attention to the wearer." The policy conflicted with her religious beliefs. She had recently converted to the Apostolic religion, and began to adhere to its regulations regarding dress. Unable to reach an accommodation over how to dress, the employee resigned and the EEOC filed suit on her behalf. The court held that the employer failed to show it would have suffered more than a de minimis hardship had it further accommodated the employee. While it was undisputed that, upon learning of the employee's alleged religious conflict, the retailer immediately engaged in an interactive process designed to understand and attempt to accommodate her religious beliefs, triable issues existed as to whether any of the retailer's proposed solutions (i.e., permitting the employee to wear jeans instead of skirts, wear short skirts with leggings underneath to cover her legs, or to look in other stores for skirts that would both meet her religious requirements and be consistent with the retailer's style) constituted reasonable accommodations. Accordingly, genuine issues remained as to whether the retailer's offers to compromise effectively eliminated the employee's religious conflict, sufficient to trigger her, "correlative duty to make a good faith attempt to satisfy her needs through means offered by the employer." The court also ruled that the EEOC was not entitled partial summary judgment on the issue of liability, finding that that the retailer raised triable issues as to the sincerity of the employee's religious beliefs after she appeared for her deposition wearing "clothing that was potentially inconsistent with her alleged faith" (EEOC v Abercrombie & Fitch Stores, Inc, October 26, 2009).

SDNY: Manager failed to show hostile work environment against women of childbearing years

A female manager failed to show that her supervisor created a hostile work environment based on sex, particularly in regard to women of childbearing years, or that she was discharged in retaliation for her complaints of sex bias, ruled a federal district court in the Southern District of New York. According to the manager, her female supervisor made numerous comments complaining that women of childbearing age, like the manager, were unreliable. The court found the conduct alleged was insufficient as a matter of law to meet the level of severity or pervasiveness required for a hostile work environment claim under Title VII or the New York law. The comments were infrequent: only eight comments relating to pregnant women were made during a period of just over a year. Moreover, the comments were not severe enough to result in material, adverse changes to the terms and conditions of the manager's employment because they were not physically threatening or directed at the employees in her work group. The court also concluded that a reasonable woman of childbearing years would not have taken the supervisor's comments seriously based on the demographics of the supervisor's work group and her hiring practices, which failed to reflect any bias against women in general and women of childbearing years in particular. In addition, according to the manager's own testimony, she was able to perform her job well despite the alleged harassment. The manager's reprisal claim also failed because the evidence demonstrated that her supervisor made the decision to discharge her based on performance issues before she filed her complaints with human resources (Panzarino v Deloitte & Touche LLP, October 29, 2009).

SDNY: Paramedics, EMTs not entitled to "gap time" pay

An employment contract unambiguously provided compensation for all non-overtime hours, held a federal district court in the Southern District of New York, denying summary judgment to a group of current and former New York City Fire Department paramedics and emergency medical technicians (EMTs) who alleged violations of overtime pay in a collective action filed under the FLSA against the New York Fire Department and the City of New York. The "gap time" claim to recover pay for hours worked between regularly scheduled hours and overtime hours must fail because the employment agreement explicitly provided compensation for those hours, held the court, deferring to DOL interpretations that recognize such claims in situations where the employment contract does not provide compensation for all non-overtime hours. Here, the bargaining agreement plainly stated: "field plaintiffs are provided compensation for all non-overtime hours." The court determined, however, that genuine issues of material fact existed regarding whether the off-the-clock pre- and post-shift activities, involving changing clothing and checking personal equipment, were compensable, why overtime payments were late and whether overpayments made by the city were sufficient to offset the city's liability for the violations (Conzo v City of New York, October 23, 2009).

WDPenn: Discrimination claims dismissed, plaintiff not a Title VII or PHRA employee

A plaintiff's discrimination claims were dismissed after a federal district court in the Western District of Pennsylvania determined she was an employer, not an employee. The plaintiff, an attorney, filed suit under Title VII and the Pennsylvania Human Relations Act alleging sex bias, hostile work environment, and retaliation. As a threshold matter, the court looked at the Supreme Court's decision in Clackamas Gastroenterology Assocs v Wells to determine whether she was an employee. After a thorough review, the court determined that under the circumstances of this case and the Clackamas test, the plaintiff was not an employee under the antidiscrimination laws. Factors relevant to ownership and remuneration provided "powerful indications" she should not be treated as an employee. Namely, she was a Class A Shareholder/Director who shared in the firm's profits, losses and liabilities; she received a "comprehensive and generous fringe benefit package" that Class B shareholders, associate attorneys and other firm employees did not receive; and she meaningfully participated in Board of Directors' meetings, decisions, policy and firm business. While not as heavily weighted for "employer" status on management and control issues, the court's determination still strongly favored the finding that plaintiff was not an "employee." After ruling the plaintiff was a statutory "employer" who could not claim the protection afforded by antidiscrimination laws, summary judgment was granted to the defendants (Kirleis v Dickie, McCamey & Chilcote, P.C., October 28, 2009).

WDTex: General Counsel's Section 10(j) relief warranted

A General Counsel had the authority to seek a Section 10(j) injunction from a federal district court in the Western District of Texas in order to preserve the pos- certification and pre-strike status quo ante by means of reinstating 55 employees who went out on an unfair labor strike pending the NLRB's decision on the matter. The General Counsel had the authority to file the petition because it involved the delegation of the Board's prosecutorial function, under Section 3(d) of the National Labor Relations Act, to ensure an effective remedy and such a delegation remained in tact and did not expire when the Board quorum was reduced to two members, the court ruled. In addition, there was reasonable cause to support the unfair labor charges, held the court, and the chilling effect on union support of 55 employees being replaced for exercising labor rights warranted reinstatement. The court found there was no irreparable harm to the employer since it would be receiving an experienced workforce and the replacement's signed acknowledgements indicating they accepted temporary work. Given that a large nucleus of support for the union was let go, the court was convinced that, without the injunction, all support would dissipate before the Board addressed the merits of the case, so relief was just and proper along with an interim bargaining order to return to the status quo ante of negotiations, and an order rescinding the unilateral changes made upon request by the union (Overstreet v El Paso Disposal, LP, October 30, 2009).

STATE LAW CASES

CA: Former stockbroker may not receive cash compensation in lieu of restricted stock

Citigroup's voluntary employee incentive plan's forfeiture provision did not violate California's Labor Code because no earned, unpaid wages remain outstanding upon termination according to the terms of the plan, the California Supreme Court ruled. The company's incentive compensation plan provides employees with shares of restricted company stock at a reduced price in lieu of a portion of that employee's annual cash compensation. Should employees resign or be terminated for cause before their restricted shares of stock vest, they would forfeit the stock and the portion of cash compensation they directed be paid in the form of restricted stock. Although a stockbroker, who had voluntarily terminated his employment before his restricted stock fully vested, asserted that he should have been paid in cash the portion of his compensation he elected to receive as restricted stock, the supreme court noted that he should have been aware that such election carried risk as well as the potential for reward. Agreeing with the company's persuasive argument that the stockbroker received all of his promised cash compensation, received immediately exercisable voting and dividend rights in the restricted stock, and was awarded contingent rights of full ownership in that stock, the court concluded that the only thing that was not paid was something he never "earned"—fully vested stock (Schachter v Citigroup, Inc, November 2, 2009).

CA: Trade secret identification statement found to be insufficient

A therapeutics company failed to identify with "reasonable particularity" what trade secrets were misappropriated, held the California Court of Appeal, affirming a trial court's order precluding the company from pursuing discovery on the matter. The company, which develops protein-based therapeutics for the treatment of diseases caused by viral infection and diagnostic products, asserted that two employees, a married couple who previously served as directors and officers for varying periods of time, secretly formed a new company "to wrongfully exploit and misappropriate" the company's technology, inventions and other proprietary information. California law requires a plaintiff suing for misappropriation of its trade secrets to identify with "reasonable particularity" the purported trade secrets that allegedly have been misappropriated "before commencing discovery relating to the trade secret[s]." Finding that the trial court did not abuse its discretion, the appellate court noted that the company's trade secret statement lacked clarity, did not segregate its alleged trade secrets and did not clearly explain how its secrets differed from publicly available knowledge. Wrote the court: "[The company] is not entitled to include broad, catch-all language as a tactic to preserve an unrestricted, unilateral right to subsequently amend its trade secret statement. If [the company] does not know what its own trade secrets are, it has no basis for suggesting defendants misappropriated them. Nor is [the company] entitled to hide its trade secrets in plain sight by including surplusage and voluminous attachments in its trade secret statement" (Perlan Therapeutics, Inc v Superior Court of San Diego County, November 4, 2009).

MT: Statute stopping disability benefits at "retirement" did not violate equal protection rights

The divided Montana Supreme Court held that a former employee's equal protection rights were not violated when her permanent total disability (PTD) benefits were terminated when she became eligible for Social Security Retirement Insurance (SSRI). The employee argued that her equal protection rights were violated because the statute (§39-71-710, MCA) that terminated PTD benefits did so based solely on one's age. The employee further argued that because permanent partial disability (PPD) benefits did not terminate at a specific age, neither should PTD benefits. After determining that a "rational basis" test applied, the supreme court determined that PPD and PTD benefits were legally distinguishable (PPD is for a limited time, PTD assists a claimant for his/her work life). The court concluded that because PTD benefits were designed to assist a claimant for a "work life," it was "rational" to terminate benefits at retirement, because "when an individual is considered retired, they have, by definition, ended their work life." As such, it was sufficiently rational that these wages would terminate upon retirement, and the fact that retirement is statutorily defined at a given age did not make §39-71-710, MCA, per se irrational, as this was rationally related to ensuring that PTD benefits did not become lifetime benefits (Satterlee v Lumberman's Mutual Casualty Co, November 3, 2009).

TN: Officer's false statements to supervisor constituted "oral report of an official nature"

A police officer who was pulled over for traveling 85 miles per hour at the same time he was explaining to his supervisor that he would be late for work because he was stuck in "heavy traffic" was properly discharged for making a false oral report of an official nature in violation of police department policy, a Tennessee appeals court ruled. Pursuant to department policy, employees must not knowingly "make or allow or cause to be made a false or inaccurate oral or written report of an official nature." When placing the phone call to his supervisor to advise him that he would be late, the officer knew he might be disciplined because he had been late for work fives times prior, and had recently been reprimanded once for being tardy. Thus, when he falsely reported to his supervisor that he would be late due to "heavy traffic," it was to avoid further discipline, determined the appeals court. To aggravate the matter, he repeatedly provided false reports to his supervisor during three more phone calls to avoid discipline and he continued to falsely answer questions asked by his supervisor during the ensuing investigation. Such evidence supported the Civil Service Commission's finding that the officer violated department policy by making "false reports to his supervisor in a failed attempt to avoid disciplinary action and that the false statements were of an official nature," held the appeals court (Garner v Civil Serv Comm'n Nashville, November 2, 2009).

TX: FMLA leave wrongly included in calculating discharged bus driver's absences

A public transportation bus system and its management company breached a collective bargaining agreement when it terminated the employment of a bus driver who injured his back and was unable to work for an extended period of time, a Texas Court of Appeals ruled. The driver had requested and received 12 weeks' leave under the FMLA, but after his leave ended, calculations of his total absences mistakenly included the time taken under FMLA, leading to his discharge. Although the bargaining agreement indicated that cause for immediate dismissal would include "absence from work for any reason other than military leave for a period of more than one year," there was no specific provision made for FMLA leave. However, an employee-issued operator handbook did include the companies' FMLA and attendance control policies, which stipulated that the FMLA "is not counted as absenteeism." Based on that, the court found the bargaining agreement must be interpreted to exclude FMLA leave when calculating the driver's absences. Accordingly, since evidence showed that he was actually "absent" from work for less than one year when he was terminated, the court granted summary judgment to the driver on his breach of contract claim (Ft. Worth Transp Authority v Thomas, October 29, 2009).

AGENCY RULINGS

DOL ARB: Complaints about leaking confidential information to competitors were not protected under SOX

An employee who complained to company executives that her supervisor was providing confidential information to competitors did not engage in an activity protected under the whistleblower provisions of the Sarbanes-Oxley Act of 2002 (SOX), DOL's Administrative Review Board (ARB) ruled. As a story editor for Paramount, the employee was responsible for reading books and attending theatre productions and then advising company executives through memoranda about the books or productions potential for development into motion pictures. She sent an email to company executives reporting her concern that her supervisor was leaking these memos to competitors and the media. Two days later, she met with an in-house attorney and raised concerns that her supervisor's alleged conduct breached corporate standards. About two weeks later, the employee was terminated. An administrative law judge ruled that the employee's complaints did not constitute an allegation of wire or securities fraud, and thus, were not protected under SOX. Affirming, the ARB explained that "complaints to management of racial and employment discrimination, personnel actions, and executive decisions and corporate expenditures with which the complainant disagrees are not protected activity under the SOX because they do not directly implicate the categories of fraud listed in the statute or securities violations." The mere possibility that the supervisor's alleged disclosure of confidential information to competitors could affect the value of company stock to investors was too attenuated to constitute a SOX-protected activity, the ARB concluded (Lewandowski v Viacom Inc, No 08-026, October 30, 2009 [released Nov. 4, 2009]).

DOL ARB: Concerns about violations of US export laws not SOX-protected activity

Concerns voiced by a company's internal audit director to senior management that the company had not implemented an export compliance management program and may have violated US export laws, did not constitute activities protected under the whistleblower provision of SOX, the DOL's Administrative Review Board (ARB) ruled. The ARB, affirming an administrative law judge's dismissal of the director's SOX claim, found that the concerns expressed did not definitively and specifically relate to violations of the fraud statutes, Securities and Exchange Commission (SEC) rules, or laws concerning fraud against shareholders. Thus, the director's statements were not protected by SOX. Likewise, the director's concerns about someone else complaining to the SEC about export compliance did not "definitively and specifically implicate those statutes, rules, and laws or convey his own reasonable belief of a violation of those laws or regulations," the ARB found (Joy v Robbins & Myers, Inc, No 08-049, October 29, 2009 [released Nov. 4, 2009]).

NLRB: Starbucks violated the NLRA, reinstatement of two employees ordered

The NLRB affirmed an administrative law judge's (ALJ) finding that Starbucks Corp violated the National Labor Relations Act (NLRA) when it discharged two employees and enforced a rule prohibiting employees from wearing more than one pro-union button, but reversed the ALJ's finding that Starbucks violated the Act when it discharged an employee over her participation in a union protest directed at one of its executives. During the protest, the employee taunted fellow coworkers, encouraged people to spit on the executive and followed him home, causing him to feel threatened, request assistance and change his route. The panel found that the employee lost the Act's protections and that her discharge, therefore, did not violate the Act; other employees witnessed her action, a reasonable person would have felt intimidated, and the executive did not provoke the conduct. As for the prohibition on wearing more than one pro-union button, the panel found that it violated the Act, as the employer encouraged the use of nonunion buttons and the pro-union buttons were unobtrusive. The panel adopted the ALJ's findings that Starbuck's termination of the other employees violated the Act, and ordered their reinstatement (Starbucks Corp, 354 NLRB No 99, October 30 2009 [released Nov. 4, 2009]).

OBAMA ADMINISTRATION

President intends to nominate Victoria A. Lipnic as EEOC Commissioner

On November 3, President Obama announced his intent to nominate Victoria A. Lipnic as Commissioner of the EEOC. There are two vacancies on the five-member Commission, and Acting Chair Christine M. Griffin has been confirmed as Deputy Director of the Office of Personnel Management. Lipnic is of counsel in the Washington, DC office of Seyfarth Shaw LLP. She was the US Assistant Secretary of Labor for Employment Standards from 2002 until 2009. Her experience in Washington, DC also includes service as Workforce Policy Counsel to the Republican members of the House Education and Labor Committee. Before her work for Congress, Lipnic acted as in-house counsel for labor and employment matters to the US Postal Service for six years. She also served as a special assistant for business liaison to the US Secretary of Commerce, the Honorable Malcolm Baldrige. She earned a Bachelor of Arts degree in Political Science and History from Allegheny College and a JD from George Mason University School of Law. In July, Obama nominated Jacqueline A. Berrien to serve as EEOC Chair, but her nomination has not yet been confirmed. Also pending is the President's nomination in September of Chai R. Feldblum to serve as Commissioner.

AGENCY DEVELOPMENTS

Lawry's Restaurants to pay $1 million to settle EEOC class sex-bias suit

Lawry's Restaurants will pay more than $1 million to settle a sex-bias class action alleging that the California-based restaurant operator failed to hire men for food server positions, announced the EEOC on November 2. Lawry's maintained a longstanding companywide policy of hiring only women for server positions in violation of Title VII, which prohibits sex-based discrimination, according to the agency's lawsuit. The settlement also requires the company to change its longstanding policies and practices, and to actively promote the hiring of men for server positions.

October unemployment rate rose above 10 percent, highest rate since April 1983

The nationwide unemployment rate hit double digits for the first time since 1983, climbing to 10.2 percent in October from 9.8 percent in September, as nonfarm payroll employment continued to decline, reported the DOL's Bureau of Labor Statistics November 6. It is only the second double-digit rate since World War II when the jobless rate peaked at 10.8 percent at the end of 1982. In October, the number of unemployed persons increased by 558,000 to 15.7 million and the largest job losses over the month were in construction, manufacturing and retail trade. Since the start of the recession in December 2007, the number of unemployed persons has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points. There are signs of hope, as temporary help services have added 44,000 jobs since July, including 34,000 in October. From January 2008 through July 2009, temporary help services had lost an average of 44,000 jobs per month.

Employers jailed for failing to comply with court order to pay back wages to workers

The owners of a Southland, California residential cleaning service were taken into custody and later released after failing to comply with a court order directing payment of $3.5 million in back wages, plus interest, fines and liquidated damages to at least 385 workers, announced the DOL on November 4. The owners of Southern California Maid Service and Carpet Cleaning Inc were taken into custody October 30 and released November 3 after appearing before Judge Andrew J. Guilford of the US District Court for the Central District of California. At the hearing, they promised to pay $30,000 by November 5. The owners have until November 12 to pay the balance of the $3.5 million. The court had previously sided with the DOL in finding that the company had wrongly classified its home and carpet cleaners as independent contractors and failed to pay them the federally required minimum wage or overtime for hours worked over 40 per week.

DOL obtains court judgment to restore more than $1.2 million to union employee retirement plan

Caribbean International News Corp has been ordered by the US District Court for the District of Puerto Rico to restore more than $1.2 million to the El Vocero de Puerto Rico Union Employees Savings and Investment Plan, a retirement plan established for the benefit of the company's unionized employees. The corporation does business as El Vocero de Puerto Rico, a newspaper based in San Juan, Puerto Rico. A lawsuit filed by the DOL simultaneously with the judgment alleged that El Vocero violated ERISA by failing to deposit into the plan contributions withheld from employees' wages and to collect matching employer contributions during the period from 2003 to 2006.

Poultry-processing plant will pay $1.5 million, change hiring practices, to resolve illegal hiring charges

South Carolina poultry-processing plant Columbia Farms, and its affiliated companies, have agreed to pay $1.5 million to the federal government and make various hiring changes to resolve pending criminal charges, as well as any civil and administrative violations, for the companies' alleged hiring of undocumented workers, announced United States Attorney W. Walter Wilkins November 3. Under the terms of the settlement agreement, the criminal case will be continued for 24 months, allowing the plant and its affiliates to continue with ongoing efforts to institute internal hiring procedures and controls at each of its eight poultry-processing facilities in South Carolina, North Carolina and Louisiana. The companies will adopt and maintain a compliance program during the 24-month period to ensure that its hiring practices comport with federal law. The companies' efforts will be subject to review by the court, the US Attorney's Office, and US Immigration and Customs Enforcement.

NLRB unveils improved e-filing system

The NLRB has unveiled a web-based system via its website that significantly improves the agency's e-filing process, announced the agency November 2. The system allows parties in cases pending before the NLRB to electronically file their documents, track case updates, receive decisions electronically and manage their profile online. New features include an improved, intuitive user interface that dynamically assists users in filing, based on the type of case selected. Users will also now have expanded filing options, including using the system to request an extension of time to file an appeal. An interactive video guides users through the new system, and expanded help options are available throughout the system.

NLRB issues memo on rejecting deference to arbitration awards

NLRB regional office personnel must submit to the agency's Division of Advice all cases in which the regional office recommend that a general counsel "reject deference" to an arbitration award and instead issue an unfair labor practice charge, instructed NLRB Associate General Counsel Richard A. Siegel in a November 3 memo (OM 10-13(CH)). Under current Spielberg/Olin standards, the Board examines four factors when deciding to defer to an arbitration award: Those factors are whether: (1) the arbitration proceedings are fair and regular; (2) all parties agreed to be bound; (3) the contractual issue considered by the arbitrator is factually parallel to the unfair labor practice issue; and (4) the resulting decision is not "clearly repugnant" to the National Labor Relations Act. However, the DC Circuit "has questioned the Board's standards" and the US Supreme Court's decision in 14 Penn Plaza LLC v Pyett "has potential implications for the Board's deferral policy," confirmed Siegel. Accordingly, while those decisions "do not compel a change to the traditional Spielberg/Olin standards of review…they raise questions that the Board must answer as it decides whether to defer to an arbitral award."

NMB proposes change in representation voting rule

On November 3, the National Mediation Board proposed a rule in the Federal Register to amend its Railway Labor Act (RLA) regulations to provide that, in representation disputes in the airline and railroad industries, a majority of valid ballots cast will determine the craft or class representative. The NMB stated that the change to its election procedures "will provide a more reliable measure/indicator of employee sentiment in representation disputes and provide employees with clear choices in representation matters." In addition to accepting written comments on the proposal until January 4, 2010, the NMB will hold a hearing December 7 to hear oral comments from interested parties. However, in a letter sent to Senate Republicans, NMB Chair Elizabeth Dougherty said the process used by her colleagues to draft the proposal was "flawed" and that she had been frozen out of deliberations, reports the Wall Street Journal. Dougherty. the only Republican on the three-member panel, dissented from the proposed change, which was favored by Linda Puchala, a former president of the Association of Flight Attendants, and Harry Hoglander, a former airline pilot, both Democrats.

LEGISLATION

President signs unemployment extension bill

On November 6, President Obama signed legislation extending unemployment benefits for jobless Americans and providing tax incentives for homebuyers and businesses. Called the Worker, Homeownership and Business Assistance Act of 2009 (H.R. 3548), the law will extend unemployment benefits by up to 14 additional weeks for jobless workers in all 50 states and up to 20 weeks in states with a three-month average unemployment rate of at least 8.5 percent. "It will give immediate help to 700,000 people who have already exhausted their benefits but still cannot finding a job," according to a fact sheet released by the White House. The law also extends the $8,000 first-time homebuyers tax credit, while also instituting new measures to combat tax fraud, and builds on the American Recovery and Reinvestment Act in creating jobs, said the Administration, by expanding tax cuts for businesses.

H1N1 flu emergency sick leave bill introduced in the House

Emergency temporary legislation, which would guarantee a maximum of five paid sick days for employees sent home or directed to stay home because their employer believes they have symptoms of a contagious illness, or have been in close contact with an individual who has symptoms of a contagious illness, such as the H1N1 flu virus, was introduced in the House November 3 by Representative George Miller (D-Cal), chairman of the House Education and Labor Committee, and Representative Lynn Woolsey (D-Cal), chair of the Workforce Protections Subcommittee. The House Education and Labor Committee will hold a hearing on the legislation, called the Emergency Influenza Containment Act (H.R.3991), the week of November 16.

Senate HELP Committee holds hearing on ENDA

On November 5, the Senate Health, Education, Labor and Pensions Committee held a hearing on the Employment Non-Discrimination Act (S. 1584/H.R. 3017), legislation that would prohibit employment discrimination against individuals based on their sexual orientation or gender identity. Testifying before the committee, Thomas Perez, the DOJ's Assistant Attorney General for Civil Rights, voiced "the Administration's strong support for fully-inclusive legislation that prohibits discrimination on the basis of sexual orientation and gender identity," adding that the bill remains a "top legislative priority" for the Administration. To underscore the need for a federal law, Perez said that 21 states prohibit employment discrimination based on sexual orientation and another 12 prohibit discrimination based on sexual orientation and gender identity. Committee Chair Sen. Tom Harkin (D-Iowa) said: "We're going to move this bill next year."

California law would protect discounts for unemployed workers

On November 2, Governor Arnold Schwarzenegger signed legislation (S.B. 367) amending California's Unruh Civil Rights Act to provide that any discount or other benefit offered to, or conferred on, a consumer or prospective consumer by a business because that consumer suffered the loss or reduction of employment, or reduction of wages, is not considered arbitrary discrimination in violation of the Act. "Businesses should be able to confer these types of benefits without the fear of provoking litigation," said Senator Negrete McLeod (D-Dist 32), the bill's chief author. For more on why the bill was introduced, please read CCH blogger David Stephanides' blog: Live in California, unemployed, need a discount?

TWITTER UPDATES

HEALTH CARE REFORM

House narrowly passes Affordable Health Care for America Act

Making good on its promise to pass a sweeping overhaul of the nation's health insurance system, the House narrowly approved the Affordable Health Care for America Act (H.R. 3962) by a vote of 220 to 215. The historical vote came late November 7 after lawmakers from both parties spent the day debating the merits of the legislation. A Republican alternative was rejected in a vote of 258-176 against. One day earlier, the White House issued a statement of administrative policy offering strong support for the legislation. "H.R. 3962 will provide needed insurance reforms for Americans with insurance, expand coverage for those who do not have insurance, lower costs for families and businesses, and begin to reduce the Nation's deficit," said the statement. Estimates from the Congressional Budget Office and the Joint Committee on Taxation reveal that the bill would cut the federal budget deficit by $109 billion over the 2010-2019 period. The JCT estimated a net cost of $891 billion over 10 years for the health reform legislation. Meanwhile, Bloomberg reports the debate is far from over in the Senate.

CBO projects premiums in House health reform bill slightly higher than Senate plan

The average premiums and cost-sharing payments for enrollees in health exchanges under House's Affordable Health Care for America Act (H.R. 3962) would be slightly higher than those for enrollees in exchanges under the Senate Finance Committee's America's Healthy Future Act, according to a November 2 letter to Rep. Charles Rangel (NY) from Congressional Budget Office Director Douglas W. Elmendorf.

Employer contributions shifting in consumer driven health plans, according to survey

Among the roughly four percent of covered Americans who have so-called "consumer-driven" health plans, contributions to those plans by their employers are shifting: Workers with employee-only coverage have seen their annual employer contributions decrease, while those with family coverage have seen their annual employer contributions increase, according to a survey released November 3 by the Employee Benefit Research Institute. The survey findings examined the availability of HRAs and HSA-eligible plans as well as employer and individual contribution behavior, time enrolled in such plans, account balances and rollover behavior.

REPORTS

CRS report examines the relationship between the ADA and the H1N1 influenza

The application of the ADA's nondiscrimination mandates during an influenza pandemic is "uncharted territory" since the last influenza pandemic was in 1969, well before the 1990 enactment of the ADA, the Congressional Research Service said in a recent report. Currently, an individual infected with the H1N1 virus "would most likely not be considered an individual with a disability;" however, if the virus were to mutate to cause a more severe illness, such an infection might be considered a disability. The ADA prohibits employers from making certain disability-related inquiries and, currently, such a prohibition might be interpreted to apply to inquiries about whether an employee would be in a high-risk group for pandemic influenza, notes the report. The ADA also requires that employers provide reasonable accommodations to individuals with disabilities, and during a pandemic, these accommodations would continue to be applicable unless they constitute an undue hardship.

Report shows green technologies will revitalize US manufacturing

With the US having lost more than 2 million manufacturing jobs since the beginning of the recession, Senator Sherrod Brown (D-Ohio) joined the Blue Green Alliance (BGA) November 4, to discuss policy recommendations made in a report aimed at creating hundreds of thousands of manufacturing jobs through development of a clean energy economy in the United States. The recommendations included in the BGA's report by, Building a Clean Energy Assembly Line: How Renewable Energy Can Revitalize US Manufacturing and the American Middle Class, outline policies for market building, market reforms, financing, innovation and capacity building to create clean energy jobs. Renewable energy technologies provide three to six times as many jobs as equivalent investments in fossil fuels when manufacturing, installation, operation and maintenance jobs are taken into account, according to the report.

IN OTHER NEWS

Employers are under siege by the EEOC

From 2007—the recession first started in December of that year—to the end of 2008, overall claims filed with the EEOC increased by 28%, from 83,000 to 95,000. Discrimination claims jumped by 28%, and retaliation charges—what lawyers call the hottest charge these days—jumped by 22% last year, from 27,000 to 33,000 claims. While the EEOC does not have numbers yet for 2009, lawyers anticipate even more claims against employers this year, as job losses grow from a bad economy, reports the National Law Journal (via Law.com).

Steel company will pay $1.2 million in race harassment case

On November 4, Judge Susan Webber Wright of the US District Court for the Eastern District of Arkansas entered a $1.2 million judgment in favor of six African-American current or former employees of Nucor Corp, who alleged that the steel company subjected them to a race-based hostile work environment by their supervisors and coworkers at its Blytheville, Arkansas plant. Based on the jury's verdict, which was reached October 29, the six employees are also entitled to recover $100,000 each in compensatory damages and $100,000 each in punitive damages on their Title VII claims.

Court grants final approval in $85 million Wal-Mart wage and hour settlement…

Over three million Wal-Mart hourly employees who worked in 30 states had their request for final approval of an $85 million dollar settlement approved by Judge Phillip Pro of the US District Court for the District of Nevada on November 2. In the consolidated action, the employees asserted that the retailer forced employees to work off the clock, required workers to skip lunch and rest breaks and manipulated time and wage records. The settlement, which covers two settlement classes—one consisting of class members from 29 states and another just of California workers—also requires Wal-Mart to continue to use various electronic systems and safeguards designed to maintain compliance with its wage and hour policies and applicable law. The settlement class is the largest for wage and hour cases in United States history, said Robert Bonsignore, the employees' national Lead Counsel.

…as the nation's largest retailer starts to pay employees via check cards

The nation's largest retailer is eliminating paper payroll checks in the US, transferring workers' earnings to a debit card if they decline direct deposit to a bank, reports the Wall Street Journal. Wal-Mart is the biggest company yet to make the move that it said will save paper and money. It estimates the move will save 257,572 pounds of paper a year. It declined to specify the savings but said the shift will reduce its payroll costs. Government agencies such as the Social Security Administration have recently begun using similar cards to dispense payments to benefit recipients. Marquette law professor (and CCH Labor and Employment Law Advisory Board member) Paul Secunda, in a post on Workplace Prof Blog, wonders whether such arrangements could violate a state's wage payment and collection law, which requires employees to be paid in cash or check, and not in some other form of payment.

UAW rejects modifications to labor agreement with Ford

The United Auto Workers union overwhelmingly rejected additional modifications to a 2007 labor agreement with Ford Motor that would have granted the auto company concessions similar to those ratified earlier this year for rivals Chrysler and General Motors, reports CNNMoney.com. A Ford representative said the contract would have given the automaker a freeze on entry-level wages that the union had already agreed to at GM and Chrysler. It also would have provided some changes Ford's management sought on skilled job classifications, and set up an arbitration process on wages for the upcoming 2011 labor negotiations. In a November 2 statement, UAW President Ron Gettelfinger and Vice President Bob King said 70% of its membership in production and 75% in skilled trades voted to reject the agreement.

Nurses union reaches deal over H1N1 hospital safety measures

The nation's largest nurses union and California's biggest nonprofit hospital chain announced an agreement the union believes will set a national standard for containing the spread of pandemics such as H1N1. Announced November 2, the settlement between the California Nurses Association and Catholic Healthcare West averted a one-day strike threatened by 13,000 registered nurses at more than 30 hospitals scheduled for October 30. The centerpiece of the agreement is the creation of a new hospital system-wide emergency task force comprised of nurses and hospital representatives that will monitor preparedness of pandemic emergencies.

Businesses are tackling so-called "gripe" sites…

Online objections to a corporation's products or services—posted on "complaint" or "gripe" sites by former employees or consumers or put elsewhere on the Web—have a greater potential to be significantly more damaging to the target's operations than more traditional expressions of unhappiness, reports the New Jersey Law Journal (via Law.com). As a result, companies are bringing court actions in an effort to block negative commentary from being posted on the Web. Less clear, however, are the cases that are or can be brought against the speakers themselves.

…as fired associate launches mimic site to "trash-talk" his law firm

Google "Levinson Axelrod" and you'll find two addresses – www.levinsonaxelrod.com and www.njlawyers.com – that bring you to the Edison, New Jersey, personal injury firm's website. But the query also pulls up www.levinsonaxelrod.net, and clicking that site makes clear that the firm does not run it, reports the New Jersey Law Journal (via Law.com). The first words on the home page are: "The truth behind the lies." The site is the creation of Edward Harrington Heyburn, an associate at Levinson Axelrod from 1998 until he was let go in 2004. An audio clip dedicates it "to all the working class people that get stepped on by their rich bosses."

What to do about work emails and attorney-client privilege

There are several decisions determining whether employees can retain attorney-client privilege for emails sent to their lawyers using their employer-provided email addresses and computers – reaching apparently inconsistent conclusions. In an article for the New York Law Journal (via Law.com), Hinshaw & Culbertson attorney Anthony E. Davis compares and seeks to reconcile these cases, and to assist lawyers in advising clients on how to avoid the risks that such communications pose.

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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.