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DOL Expands FMLA Reach to Cover LGBT and Non-nuclear Families

In an Administrator’s Interpretation issued on June 22, 2010, The U.S. Department of Labor (DOL) has "clarified" the definition of “son or daughter” under the Family Medical Leave Act (FMLA) as it applies to an employee standing in loco parentis to a child. The result is to significantly expand the universe of caregivers entitled to FMLA leave. As DOL noted in its press release announcing the Administrator’s Interpretation: “the Labor Department's action today sends a clear message to workers and employers alike: All families, including LGBT families, are protected by the FMLA."

The FMLA entitles an employee up to 12 workweeks of unpaid, job-protected leave for the birth or placement of a ‘son or daughter,’ to bond with a newborn or newly placed ‘son or daughter,’ or to care for a ‘son or daughter’ with a serious health condition. Under the FMLA, the definition of “son or daughter” includes not only a biological or adopted child, but also a “foster child, a stepchild, a legal ward, or a child of a person standing in loco parentis.” Current FMLA regulations define in loco parentis as including those adults with day-to-day responsibilities to care for and financially support a child.

The  Administrator’s Interpretation goes further and provides that in loco parentis status must continue to reflect “the reality that many children in the United States today do not live in traditional ‘nuclear’ families.” The guidance indicates that  in loco parentis status is ultimately a factual issue dependent on multiple considerations, but is not limited at whether the person does stand in the role of a parent with financial responsibility. Rather, merely intending to assume parental responsibility, with or without financial support, may be sufficient.
For example, the DOL noted that neither the statute nor the regulations restrict the number of parents a child may have under the FMLA. And it gives the example of divorced and remarried parents whose child will be the ‘son or daughter’ of both the biological parents and the stepparents -- and all four adults would have equal rights to take FMLA leave to care for the child. Another example offered in the guidance advises that a same-sex partner -- who will share in the care for a child with the partner, but who directly lacks the legal relationship with child -- can still be entitled to leave because the employee stands in loco parentis to the child.

If an employer has questions about whether an employee’s relationship to a child is covered under FMLA, the employer may require the employee to provide reasonable documentation or statement of the family relationship. However, according to the DOL, a simple statement asserting that the requisite family relationship exists is all that is needed in these situations. Although this Administrative Interpretation is not binding law, it represents the agency’s interpretation of the FMLA law and regulations which it is charged with enforcing and is likely to be given substantial deference.

Written by Paula Lyons

Supreme Court Allows Employer to Read Employees' Personal Text Messages

In the long awaited case of City of Ontario v Quon, the Supreme Court has ruled that city officials could search the personal text messages sent on text devices owned by the city and provided to certain employees for business use. As explained here, although the city is a government employer and the Court was able to resolve the case on fairly narrow Fourth Amendment grounds, the decision may well reflect the Court's inclination to give public and private employers alike broad discretion to monitor even personal communications made using a computer, pager or other device supplied by the employer.

New York Employers Beware: Task Force at Work!

The New York State Joine Enforcement Task Force on Employee Misclassification has been hard at work and reports that it has uncovered more than 12,000 instances of misclassification and recovered more than $400 million in unpaid wages. See a discussion of state and federal misclassification enforcement efforts here.

Hospitals and Other Healthcare Providers May be Subject to the OFCCP's Affirmative Action and Other Requirements

Many hospitals and other healthcare providers are government contractors, and must comply with various laws and regulations enforced by the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP), but don't realize it. As a result, they may be failing to satisfy various obligations imposed on government contractors, such as the requirement to have an affirmative action plan. For more on who's covered and what to do about it, see this article.

Supreme Court decides City of Ontario v Quon

See this interesting write-up of the Supreme Court's decision in the text message privacy case, City of Ontario v Quon.

Answers to Employers' Frequently Asked Questions re Health Care Reform's Impact on Employee Benefits.

See this recent Mintz Levin advisory answering some "FAQs" on health care reform's impact on employee benefits.

Health Care Reform Amendments to FLSA Require Break Time and Private Place for Nursing Mothers to Express Milk

Health care reform impacts employers in many significant ways. While the effects of reform on insurance coverage and other requirements have been widely publicized, much less well-understood are various amendments to the Fair Labor Standards Act (FLSA). One such amendment requires employers to provide nursing mothers break time to express milk and, perhaps more significantly for employers, a private and secure place, other than a bathroom, in which to do so. For more on these requirements, which are effective immediately, see Mintz Levin Advisory on Nursing Mothers Break Time and Private and Secure Place to Express Milk .

DOL's "We Can Help" Campaign Bound to Generate Additional Enforcement Activity

On April 1, 2010, the United States Department of Labor launched a new, nationwide marketing campaign, dubbed “We Can Help,” to let workers know how to contact the government with their work-related complaints. The marketing campaign, which is being conducted in several different languages, is intended to connect workers with the Department of Labor. In particular, the campaign seeks to reach employees in low-wage industries perceived as vulnerable to employer exploitation, such as construction, janitorial services, hotel and food services, and home health care.

The “We Can Help” campaign was unleashed with the introduction of a new website (www.dol.gov/wecanhelp), public service announcements featuring actors Esai Morales and Jimmy Smits, public speeches by Secretary of Labor Hilda Solis, and the placement of advertisements using social media such as Facebook, YouTube and twitter. The campaign addresses such topics as workplace rights and how to file a complaint with the DOL’s wage and hour division to recover wages owed. It also enlists the help of worker advocacy groups, including unions, to distribute posters, fact sheets and booklets on how to report complaints. The AFL-CIO announced that it and its affiliates intend to hold forums in union halls, where workers can watch videos about minimum wage and how to track hours worked.

The campaign has already spurred controversy. Specifically, some question the appropriateness of deputizing special interest groups such as unions and other advocacy groups to solicit or initiate complaints. Further, Secretary Solis has clearly stated that the program is intended to cover all workers in the United States, even those who are working here illegally. This does not sit well with those who would prefer that government resources are spent to protect American jobs and those who work in this country legally. Regardless of these criticisms, however, the “We Can Help” campaign seems destined to generate additional enforcement activity.
 
Written by Martha Zackin

2d Circuit Ruling Gives Employers Additional Incentive to Ensure Their Complaint Channels Remain Open and Are Effective in Fact

The Second Circuit Court of Appeals recently reversed an order of summary judgment for JetBlue Airways Corp. on a former employee’s sexual harassment claim in Gorzynski v. JetBlue Airways Corp. This decision underscores the importance of employers ensuring that the avenues available to employees to complain about discrimination and harassment are not only set forth in a policy, but are effective, in fact.

JetBlue’s former employee asserted, among other claims, that her supervisor sexually harassed her by subjecting her to a hostile work environment. JetBlue defended the claim by introducing its written sex harassment policy and invoking the Faragher/Ellerth affirmative defense, contending that it could not be held liable because the employee failed to use its complaint procedure. The employee argued that JetBlue wasn’t entitled to this defense because she did complain about the conduct, albeit to her supervisor who was also the alleged harasser, and because JetBlue didn’t take any remedial action to stop the unwelcome conduct. JetBlue countered by claiming that it was unreasonable to complain only to her harasser when she also could have complained to the human resources department or any member of management, as provided for in the written policy. The court of appeals rejected JetBlue’s argument, stating that each case must be reviewed individually and that summary judgment may not be warranted where “there may be reasons why [a] plaintiff fail[s] to complain to those other than the harasser, who are listed as available.” In this case, for example, the supervisor of the plaintiff’s alleged harasser was apparently “not receptive to receiving employee complaints,” and actually admonished the plaintiff previously for complaining about age discrimination. Thus, it might not have been unreasonable for the plaintiff to complain only to the harasser.

The Second Circuit’s decision in Gorzynski should serve as a wake-up call to employers to ensure that their channels for resolving complaints of discrimination and harassment remain open and effective. In addition, employers that intend to assert the Faragher/Ellerth defense should fully explore the circumstances surrounding the plaintiff’s complaint, particularly, where applicable, a plaintiff’s rationale for not bringing his or her complaint to a particular person, to ensure there are no open issues before moving for summary judgment.

Written by Gregory Bennett

"High Road Contracting Policy" Could Change How Government Contractors Compensate Their Employees

According to an article posted on the DC Crawler website, the “Obama administration is considering a proposal that would heavily favor government contractors that implement policies designed by organized labor.” 
Under current policy, government contracts are awarded based on an analysis of price, past performance, and the ability to meet the contract’s specific requirements.  The proposal, dubbed the “High Road Contracting Policy,” would give preference to labor-friendly contractors that provide its workers with wages and benefits over and above what is required under existing laws.  Specifically, a procurement preference would be given to employers that provide its workers with a “living” wage, to include, at a minimum, health insurance, employer-funded retirement plan, and paid sick days.  Contractors found to have violated labor laws would be restricted, and possibly barred, from being awarded federal contracts.
The Department of Labor would be responsible for examining the labor records of federal contractors, giving it unprecedented power and influence over the federal procurement process.
Critics contend that the proposal would introduce an arbitrary variable into the procurement process and raise the price tag on federal contracts.  Stay tuned.

Written by Martha Zackin

Time running Out for Massachusetts Employers to Comply with Data Security Regs

If you own, license, maintain, store or process the “personal information” of a Massachusetts resident – including that of your own employees – time is getting short for compliance with the Massachusetts data security regulations.  Our colleagues in our Privacy and Security group have published a Privacy and Security Alert regarding the upcoming March 1 deadline.  Also, check the link in the right navigation column of Mintz Levin's Privacy and Security Topics Blog for updates and additional compliance information.

Do the FedEx Cases Portend a Different Approach to Employee/Independent Contractor Analysis?

Here's a link to a short article I wrote for Employment Law 360 discussing the success FedEx has had in establishing that drivers for its FedEx Home subsidiary are independent contractors, not employees, including the D.C. Circuit's favorable decision which focused on the fact that the drivers have an "entrepreneurial interest" in their routes, militating in favor of independent contractor status.

Written by David Barmak

Increased Federal Enforcement of Employment Laws is On the Way

Anyone still listening at the end of President Obama’s first State of the Union Address heard him say the following: “We're going to crack down on violations of equal pay laws, so that women get equal pay for an equal day's work. "

He was serious, and the "crack down," likely won't be limited to equal pay law violations. Significant budget increases have been apportioned to the Department of Labor, the Equal Employment Opportunity Commission, the Occupational Health and Safety Agency, Immigration and Customs Enforcement, and the like, so that these agencies may step up their workplace audit and enforcement efforts.  Be warned.

Written by Martha Zackin

Supreme Court to Hear Case re Employer's Access to Employee's Text Messages

On Monday, December 14, 2009, the United States Supreme Court announced that it will hear arguments in USA Mobility Wireless Inc. v. Quon, a case that may have a significant impact on employers’ rights to monitor employees’ electronic communications. The important facts of Quon may be summarized as follows:

The city of Ontario, California, issued text messaging pagers to members of its SWAT-team. Despite a clearly worded "Computer Usage, Internet and E-mail Policy" (the “Policy”) that prohibited the use of city-issued equipment for personal use, and despite the fact that Jeff Quon and his fellow SWAT-team officers signed statements acknowledging that users “should have no expectation of privacy or confidentiality when using these [city-owned] resources," Quon and his co-workers used their pagers to send and receive both personal and work-related text messages.

The city’s contract with its communications provider, Arch Wireless (now USA Mobility Wireless) allowed for 25,000 characters per month, per device, before overage charges were incurred. After some officers consistently exceeded the 25,000 character limit, the city obtained transcripts of the messages sent and received by the two officers with the highest usage, one of whom was Quon, ostensibly for the purpose of establishing whether the overage was attributable to business or personal use. The city found that Quon sent and received 456 personal and three work-related messages while on duty in a single month. Many of the personal messages, which included messages to his wife, his girlfriend, and a fellow officer, were sexually explicit.

Claiming that they were unaware that the city’s Policy applied to their department and believed there was an informal policy whereby the officers could maintain their privacy in their text messages as long as they paid any charges incurred by excessive usage, Quon and several of his fellow officers sued USA Mobility and the city for invasion of privacy. The United States Court of Appeals for the 9th Circuit ruled in favor of Quon, finding that the review of the contents of the messages without Quon’s consent was “excessively intrusive” and, therefore, constituted an invasion of privacy.

The Supreme Court will now decide whether Quon had a reasonable expectation that his messages would be kept private, in light of the city’s official no-privacy Policy and the existence of an informal policy allowing limited personal use of the pager. Although the case may turn on the fact that Quon’s employer is a government entity, rather than a private employer, the Court’s decision may provide significant direction to private employers on how far they can go in monitoring employees’ electronic communications.

Written by Martha.

The Other Duty to Accommodate: Employees’ Religious Beliefs, Observances & Practices

Most employers are familiar with federal and state laws requiring them to reasonably accommodate an applicant or employee with a disability, unless the accommodation would result in an undue hardship. But federal law, and certain state counterparts, similarly require employers to make accommodations in other situations, such as in response to an employee’s religious beliefs, observances and practices,when requested, unless it would impose an undue hardship. Some recent cases highlight the unique circumstances in which this duty might arise. 

On November 19^th, the U.S. Court of Appeals for the Second Circuit reversed a district court’s ruling that denied the Equal Employment Opportunity Commission’s (EEOC) application to enforce a subpoena against United Parcel Service, Inc. (UPS). In EEOC v. United Parcel Srvc., Inc., a UPS employee sought an accommodation from enforcing UPS’ rule that prohibited him from having a beard because of his Muslim religion. Additionally, an applicant claimed he was not hired because of the same policy. Both of the individuals filed charges with the EEOC alleging that UPS’ rule discriminated against them in violation of Title VII because of their Muslim religion. One of the complainants further alleged that UPS had a pattern or practice of refusing religious accommodations. Consequently, the EEOC sought nationwide information from UPS related to its rule prohibiting beards. The Second Circuit held that the EEOC was entitled to the nationwide information, in part, because it was trying to determine whether UPS has a pattern or practice of refusing religious accommodations.

Another national employer recently had to confront a similar issue. On October 23^rd, The Home Depot (HD) terminated a cashier for violating its dress code because he wore a button that said “One nation under God, indivisible.”  HD claimed that it had a blanket policy prohibiting all employees from wearing any pins or badges on their aprons that were not company-provided. The employee, through his counsel, perceives this as religious discrimination and plans on filing a discrimination charge against HD.

As these cases demonstrate, employers must exercise caution before taking any adverse action in response to any matter that is related to an employee’s religion, lest they fall into one of the legal pitfalls of Title VII or related state laws.

Written by Greg Bennett

2nd Circuit: Executive's Non-compete not Enforceable where Contract was Not Properly Signed

In an interesting case out of New York, the Second Circuit affirmed the District Court's refusal to enjoin an executive from working for his ex-employer's competitor where he had signed the contract in the wrong place an indicated an intention not to be bound by the Agreement. See Mintz Levin's Alert on the subject for more information on this case.

NY DOL Mandates Use of its Form to Notify Employees of Terms and Conditions of Employment

Amendments to New York Labor Law §195 obligate New York employers to notify new employees, in writing and at the time of hire, about certain terms and conditions of employment. Amended §195 also requires employers to obtain from each new employee a written acknowledgment confirming that he or she received the specified information. New York's Department of Labor has now mandated use of its form of notice and acknowledgment. See our alert here for more information.

What’s up with the Employee Free Choice Act?

What's up with the Employee Free Choice Act?  The short answer is… not much.
Most recently, in September, Sen. Arlen Specter described his work on a revised version of the Employee Free Choice Act (EFCA).  Specifically, Sen. Specter stated that the revised version of the bill would drop the controversial card-check provision, which would allow workers to circumvent the secret ballot election process by getting their co-workers simply to sign pro-union cards.  Instead, the bill would shorten the time between the announcement that an election would be held and the election itself.  Union organizers would also be granted more access to employees during this period.
The revised bill would also modify the mandatory arbitration provision of the original bill, which provides that arbitrators would set the terms of the initial collective bargaining agreement if employers and new unions fail to reach agreement on a new contract within a few months following certification of a union as the bargaining representative.  Under the revised bill, there would be “last best offer arbitration,” whereby the arbitrator would impose the last offer made by either the employer or the union, in its entirety.
Since September, there has been little press concerning the EFCA and little public debate about the law. Unless, of course, you count a print ad, run by the AFL-CIO, featuring Mark Teixeira and other members of the Major League Baseball Players Association pitching the benefits of strong labor organization, or a rap song critical of the EFCA which is published on a site sponsored by the Associated Builders and Contractors and the Free Enterprise Alliance … 
Presumably Congressional and public attention will return to the EFCA when Congress finishes dealing with health care reform legislation.

Written by Martha

Sometimes, less really is more … and more is just too darn much!

Workplace Prof blog posted an interesting commentary on a recent California case, Nazir v. United Airlines, Inc., No. A121651 (Cal. App. Ct. October 8, 2009), in which the appellate court overturned the trial court’s decision granting summary judgment to the employer in a routine employment discrimination case.

Summary judgment is a means for the courts to dispose of cases truly lacking in merit, where there is no genuine issue of material fact that could justify a verdict for the party opposing the summary judgment motion.  According to the Nazir court, “many employment cases fit that description, with some counsel too often willing to file suit whenever an employee in a protected class suffers some adverse employment decision.”  Critics disagree, however, claiming that many employment cases present issues of intent, and motive, and other issues not determinable on paper.  Addressing that point of view, the Nazir court stated that: “Here we confront the poster child for such criticism, in a case involving what may well be the most oppressive motion ever presented to a superior court.” (emphasis added).

After the plaintiff was fired from his job with United Airlines, and after having allegedly endured years abuse based on his Pakistani heritage, he filed a routine employment discrimination lawsuit against his employer and his supervisor. In due course, Defendants filed a motion for summary judgment.  There was nothing routine about the motion, or about what happened next.

Defendants’ motion sought summary adjudication of 44 issues.  The moving papers were comprised of 1056 pages, including a 196-page statement of facts and a 174-page request for judicial notice.  Plaintiff’s opposition was nearly three times as long, and included a 1894-page separate statement of facts.  Defendants’ reply, which included a 297-page separate statement and 325 pages of evidentiary objections, totaled 1150 pages.

In all, the trial court had before it 5415 pages of paper upon which to make its decision.  It did so, after oral argument, finding in favor of Defendants.  The plaintiff appealed. 

Finding that the case presented a myriad of material facts that should be decided by a jury, the appellate court overturned the trial court’s decision.  Opining that the trial court would not have found in Defendants’ favor had it read the underlying papers, the court stated:

While not reading the papers cannot be condoned, it can perhaps be understood, as we hesitate to speculate how long it would take a trial court to meaningfully digest over 2200 pages of separate statements, analyze and rule on 764 objections set out in 325 pages, review it all in light of the applicable law, and then write a proper order.

The incredible volume of material here simply has no place in a system where overburdened trial courts labor long and hard. …

I have been practicing law for 20 years, nearly 14 of which were spent in-house for a large public company.  During that time, I never, ever would have allowed my outside counsel to submit a motion for summary judgment or a reply, each of which totaled more than 1000 pages, for at least two reasons.  First, I never would have authorized the extraordinary costs that must have been billed.  Second, and perhaps more importantly, the best way to show that there is no material issue of fact to be decided is to lay out the evidence concisely, make your argument, and stop.  Just stop.  If it takes thousands of pages to show that summary judgment is appropriate, somewhere in all these reams of paper there has to be at least one material issue of disputed fact.

Written by Martha Zackin

ADEA Plaintiffs Must Show that Age was a Determinative “But For” Reason for Adverse Employment Action, But For How Long?

A recent decision by the U.S. Court of Appeals for the Third Circuit illustrates how the Supreme Court’s opinion in Gross v. FBL Financial Services, Inc. serves to prevent previously-viable claims under the Age Discrimination in Employment Act (the “ADEA”) from reaching trial. In Kelly v. Moser, Patterson & Sheridan, LLP, No. 08-3318, the Third Circuit affirmed the District Court’s entry of summary judgment in favor of the employer because the employee failed to show that age was a “determinative ‘but for’ factor” in its decision to terminate his employment. Plaintiff John Kelly, a former fifty-two year-old “of counsel” attorney with the defendant law firm, Moser, Patterson & Sheridan, LLP (“Moser”), claimed the firm terminated his employment because of his age in violation of the ADEA. He relied on a handwritten note by the firm’s human resources director, written after his termination meeting, which referred to “older & better paid/younger & cheaper” lawyers. Moser said those words had been spoken by Kelly, but Kelly denied that and claimed that the note was direct evidence of discrimination.

The firm contended that it terminated Kelly’s employment because (i) he failed to meet the minimum annual billable hour requirement; (ii) he sued the firm; (iii) he had a disruptive relationship with his secretary; and (iv) one of the firm’s major clients complained about the plaintiff’s work and refused to let him perform further work on its behalf, causing the firm to write-off approximately $73,000 of his prior work. Relying on Gross, the Third Circuit held that the handwritten noted showed, at most, “that age was one of multiple motivations,” which was insufficient to prevail on an ADEA claim.

This opinion is a good example of how the Gross case favors employers. Before Gross, the handwritten note at issue in Kelly likely would have warranted the denial of summary judgment as some evidence of an unlawful age-based motive for terminating Kelly’s employment. Of course, as we discussed in an earlier post, legislation before Congress may spell the death knell for Gross, returning to the earlier and more employee friendly “mixed motive” standard of proof under which an employee need only show that age was a factor in the employer’s decision.

Written by Greg

Massachusetts SJC, Applying NY Law, Requires CEO to Return $7 Million in Salary and Bonuses Paid to him while Harrassing Female Employees

This alert talks about a recent decision by the Supreme Judicial Court of Massachusetts, which awarded Astra Zeneca about $7 million in salary and bonuses paid to its former CEO. The CEO had engaged in a long standing pattern of harassing female employees. The Court applied New York law. The full decision can be found here. Mintz Levin handled the case for Astra, led by partners Jeff Robbins, Henry Sullivan, Chip Phinney, and Joe Lipshitz.

Personnel Polices and Social Networking Sites

See this recent Mintz Levin client Alert urging employers to consider the adoption of a policy addressing employees' use of social networking sites such as Facebook.

Is Congress About to Reverse Another Supreme Court Decision?

Both before and after the November 2008 Presidential and Congressional elections, legal pundits issued dire warnings that an Obama Presidency and a filibuster-proof Democratic Congress would result in a flurry of new, employee-friendly legislation.  As if to prove the pundits right, the first bill passed by Congress and signed into law by President Obama was the Lilly Ledbetter Fair Pay Act of 2009 (the “Ledbetter Act”), which overturned the 2007 Supreme Court decision of Ledbetter v. Goodyear Tire & Rubber Co., Inc.,  to provide that the statute of limitations applicable to claims of compensation discrimination is reset each and every time a paycheck issues.

The move to overturn the Supreme Court’s Ledbetter decision began with Lilly Ledbetter’s testimony before the Senate Committee on the Judiciary at a hearing titled “Barriers to Justice: Examining Equal Pay for Equal Work.”  Now, the Senate Judiciary Committee has scheduled a hearing on "Workplace Fairness: Has the Supreme Court Been Misinterpreting Laws Designed to Protect American Workers from Discrimination?"  for Wednesday, October 7, 2009.  One of the witnesses testifying at that hearing is Jack Gross, the plaintiff in Gross v. FLB Financial Services, Inc., decided by the Supreme Court in June 2009. Almost certainly, Mr, Gross’s appearance before the Committee, foretells an effort to legislatively reverse the legal principles established by the Supreme Court in his case, just as Lily Ledbetter’s appearance before the Committee presaged the enactment of the Ledbetter Act.

The Gross case arose from Mr. Gross’s claim under the Age Discrimination in Employment Act that his employer had taken adverse employment action against him because of his age, among other reasons.  In similar “mixed motive” cases under Title VII, a plaintiff need only show that discrimination was a “motivating factor” in the adverse employment action.  At that point, the employer can only prevail if it can prove it would have taken the same action regardless of the impermissible discriminatory motive. However, in Gross, the Supreme Court declined to apply the same standard to Mr. Gross’s ADEA claims, holding that under the ADEA a plaintiff in a “mixed motive” case cannot win unless he shows that the employer would not have taken the adverse employment action “but for” the age discrimination, even if he can show that age was a “motivating factor” in taking the action.  That is a much tougher standard for plaintiff’s to meet, of course. But will it survive?  If history is a guide, probably not.  


Written by Martha and David

Where is That Non-Compete Agreement that the Former Vice President Signed?

In a surprising number of cases, we’ve come across a situation where an employment agreement with original signatures, or some other important document, has gone missing. While a copy will sometimes suffice, a recent New York case highlights the importance of having an effective system for maintaining critical employment-related documents.

In Dreyfuss v. eTelecare Global Solutions-US Inc., 08-5903-CV, plaintiff James Dreyfuss filed suit in federal court against his prior employer, eTelecare Global Solutions-US Inc. (“eTelecare”), alleging that it owed him unpaid commissions. eTelecare filed a motion to compel arbitration on the basis of an arbitration agreement the plaintiff signed as a condition of his employment. But, all eTelecare had been able to find and produce for the Court was an agreement containing two of the three or more pages of the original agreement. The first page contained a broad arbitration clause which expressly covered any claims relating to the plaintiff’s employment or the termination of his employment. The agreement also stated that “[e]xcept as otherwise provided,” the parties would not initiate any lawsuit or administrative claim related to any claims covered by the agreement. However, because eTelecare couldn’t produce the entire second page of the agreement, the trial court held that it did not demonstrate that the parties had an agreement to arbitrate, and denied its motion to compel arbitration.

On appeal, eTelecare argued that the first and last pages of the arbitration agreement, by themselves, demonstrated that the parties agreed that the plaintiff’s claims for unpaid commissions should be submitted to arbitration, and that the missing pages contained only non-essential terms to that agreement. The Second Circuit disagreed, reasoning that eTelecare without being able to produce the entire agreement, eTelecare could not show that it and its employee had a meeting of the minds concerning arbitration. Therefore, it ruled, there was no binding arbitration agreement, and eTelecare’s motion to compel arbitration was properly denied.

The Second Circuit’s decision in Dreyfuss is contained in a Summary Order which does not constitute binding precedent. Nonetheless, the case illustrates what can go wrong when an employer cannot produce the original, or at least a complete copy, of an employment agreement. It serves as an important reminder that employers and employees must ensure that copies of important agreements and other documents are safely secured. HR should make sure that it receives complete originals of employment agreements and other necessary employment documents upon commencement of employment. Those documents should then be maintained securely, under lock and key in a secure file cabinet to which only a few designated individuals have access.

written by Greg and David

Labor Secretary Solis: DOL is Back in the Enforcement Business

From the time she was confirmed as Secretary of Labor, Hilda Solis has stressed that the Department of Labor (“DOL”) will reverse the trend set by the previous administration and focus on enforcing workplace laws and regulations. By the end of March 2009, less than two months after Solis was confirmed as Secretary, she announced that the DOL’s Wage and Hour Division (“WHD”) was in the process of hiring 150 new investigators to its field offices. In addition, she announced, the DOL would be hiring 100 investigators to ensure that contractors awarded funds under the American Recovery and Reinvestment Act would be in compliance with applicable workplace laws.

In May, Secretary Solis publicized her budget request for FY 2010, allocating $1.7 billion for worker protection programs, a 10 percent increase over the prior year’s budget. Under this budget, the DOL plans to hire an additional 670 investigators, including an additional 160 investigators for the Occupational Health and Safety Administration (“OSHA”) and 200 new WHD investigators. Reiterating this commitment in recent remarks made to the AFL-CIO Constitutional Convention, Secretary Solis promised that the DOL “is once again back in the enforcement business.” This pronouncement signals enforcement across virtually all of DOL’s divisions, including the Office of Federal Contract Compliance Programs, Office of Workers’ Compensation Programs, Office of Labor-Management Standards, Pension Benefit Guaranty Corporation, Employment Standards Administration, Women’s Bureau, OSHA, and WHD.

What does this mean? Businesses should expect more (and more comprehensive) audits, involving all aspects of the workplace. While it used to be a safe assumption for any business that the chances of it being hit with a DOL were remote, that is no longer a safe assumption. Many businesses will be identified for audit. Now is the time to “clean house,” taking reasonable steps to ensure compliance by conducting a self-audit, fixing any problems that are uncovered. Those steps will go a long way towards minimizing the disruption (and potential penalties) associated with increased enforcement.

Written by Martha

Disagreeing with the 7th Circuit, the 9th Circuit Rules that an Employee Who Emailed Company Documents to a Personal Email Account Did Not Violate the Computer Fraud and Abuse Act

The Ninth Circuit’s opinion in LVRC Holdings LLC, v. Brekka et al. calls into question the utility of the Computer Fraud and Abuse Act (CFAA) for employers seeking to redress employee theft or misuse of company information. In LVRC Holdings, the Ninth Circuit affirmed a district court opinion finding that Christopher Brekka, a former employee of LVRC, did not violate the CFAA when he emailed company documents to his and his wife’s personal email account during his employment with LVRC.

LVRC operates a residential treatment center for addicted persons in Nevada and hired Brekka to oversee internet marketing programs and interact with LRVC’s internet provider, LOAD, Inc. While at LVRC, Brekka requested and received an administrative user name and password to access LRVC and LOAD websites. Near the end of his employment with LVRC, Brekka emailed multiple LVRC documents to his and his wife’s personal email account, including the company’s financial statement, marketing budget, admissions report for patients, and names of past and current patients. Brekka then left LVRC, which later discovered that someone using Brekka’s user name was accessing company websites.

LVRC brought suit in district court alleging that Brekka violated the CFAA, 18 U.S.C. § 1030, by accessing LVRC’s computer “without authorization” during and after his employment with LVRC. However, the Ninth Circuit concluded that an “employer gives an employee ‘authorization’ to access a company computer when the employer gives the employee permission to use it.” Here, the Court held, Brekka did not act “without authorization” because LVRC had given Brekka permission to use the computer during his employment. Importantly, the Court rejected LVRC’s argument relying on the Seventh Circuit decision in International Airport Centers, LLC v. Citrin, that an employee’s authorized use ends when he violates his duty of loyalty to the employer. In International Airport Centers, the Seventh Circuit, relying heavily on general principles of agency law, held that an employee’s breach of his duty of loyalty terminated any right he otherwise had to authorized access of his employer’s laptop. It concluded, therefore, that the employee’s deletion of data from the employer’s computer - - after the employee had already breached his duty of loyalty by deciding to, and taking steps in furtherance of, competing with his employer - - constituted unauthorized access of the employer’s computers in violation of the CFAA.

While the Ninth Circuit’s LVRC Holdings decision seemingly rejects reliance on general agency principles, it does expressly note that LVRC had neither an employment agreement with the employee, nor any policies or guidelines which expressly prohibited an employee from sending company documents to his personal email account. While it is not clear that the Ninth Circuit would have reached a different result had LVRC had such an employment agreement or policies, it is clear that the absence of an agreement and/or policies can be fatal to an employer’s CFAA claim, at least in the Ninth Circuit. This case serves as yet another reminder, then, that every employer is well served by having in place good computer and business systems policies which make clear the limits of each employee’s rights with respect to authorized access to and use of the employer’s systems.
The LVRC Holdings decision can be found at:
http://www.ca9.uscourts.gov/opinions/view_subpage.php?pk_id=0000009960

written by David and Crystal

Second Circuit rules that an Employer may be liable under the ADEA for the actions of an Independent Contractor Hiring on the Employer’s Behalf

The recent decision of the United States Court of Appeals for the Second Circuit in Halpert v. Manhattan Apartments, Inc. illustrates yet another risk for employers who engage independent contractors to work for them and provides a reminder that an employer may be liable for the discriminatory conduct of independent contractors. In Halpert, an applicant who was refused a job at Manhattan Apartments, Inc. (MAI), sued MAI alleging discrimination under the Age Discrimination in Employment Act of 1967 (the “ADEA”). The applicant, Mr. Halpert, alleged that the person who interviewed him, a Mr. Brooks, declined to offer Halpert the position showing apartments to potential renters because “they were looking for someone younger.”

Although it was apparently uncontested that Brooks was an independent contractor of MAI, not an employee, the Court stated that the prohibition against age discrimination “applies regardless of whether an employer uses its employees to interview applicants for open positions, or whether it uses intermediaries, such as independent contractors, to fill that role.” The Court also stated that “[i]f a company gives an individual authority to interview job applicants and make hiring decisions on the company’s behalf, then the company may be held liable if that individual improperly discriminates against applicants on the basis of age.” The Court said that common law agency principles should be applied to determine whether or not an independent contractor was acting within the scope of his agency when making hiring decisions for the employer. The Court held, therefore, that the district court’s grant of summary judgment for MAI was inappropriate and remanded the case to the district court to determine whether MAI’s degree of control over the interview and hiring process rendered Brooks MAI’s agent, exposing MAI to liability for Brooks’s discriminatory conduct. The decision can be found at http://bit.ly/GJYPf

The moral of the story: when it comes to discrimination and other employment law claims, employers may be liable for the actions of their independent contractors. This should be taken into account when considering and structuring an independent contractor relationship. And, of course, employers would be wise to ensure that an independent contractor engaged in recruiting, hiring, or supervising employees for the employer is well trained and attentive to following the law.

WRITTEN BY DAVID AND GREG

Employment Alert: H1N1 Flu Readiness: A Summary of Employment-Related Concerns

The H1N1 Flu or Swine Flu is a respiratory disease caused by type A influenza. While its symptoms are similar to symptoms of the seasonal flu (fever, cough, body aches, chills, fatigue, etc.), H1N1 flu is more problematic than seasonal flu because people have not developed natural antibodies to H1N1 and vaccines are not readily available. Accordingly, employers will need to be prepared to address legal issues that may arise regarding employees who become sick with, or need to care for, family members with H1N1. This alert describes many of these issues, and provides a summary of an employer’s rights and obligations regarding them.

Employees Who Request Leave

Employees who are exposed to H1N1 flu, or who have a family member who has been exposed to it, may seek a leave of absence from work. Accordingly, employers should review their policies and procedures to assess the scope of company-sponsored leave rights. For instance, an employee handbook, human resource policy, employment contract, or collective bargaining agreement may entitle employees to certain leave opportunities. In addition, while an employer is not required by federal law and most state laws to pay an employee who is absent from work for such a reason, an employer’s paid leave policies or employment/labor contracts may create such an obligation.

Additionally, and importantly, H1N1 flu may qualify as a serious health condition for purposes of the federal Family and Medical Leave Act (FMLA) or analogous state law. Employees may be eligible to take FMLA leave for their own, or a family member’s, health condition caused by the H1N1 flu. Similarly, an employer may designate such leave as FMLA leave—even in advance of confirmatory information from the employee’s health care provider. Leave taken by an employee for the purpose of avoiding exposure to the flu, however, would not be protected under the FMLA.

Employees Who Refuse to Come to Work

An influenza pandemic affecting employees in the workplace also may implicate the Occupational Safety and Health Act of 1970 (the OSH Act), which requires employers to provide healthy and safe working conditions for employees. Employees may have a right to refuse to report to work if they believe in good faith that they are exposed to an imminent danger. Employees also have certain rights to refuse an assignment if they believe that working conditions are unsafe. Such employees are protected under the OSH Act if:

• where possible, the employee has asked the employer to eliminate the danger, and the employer failed to do so;
• the employee refused to work in “good faith” (i.e., the employee genuinely believed that an imminent danger exists); and
• a reasonable person would agree that there is a real danger of death.

But, as a general rule, employees do not have the right to walk off the job because of unsafe or unhealthy conditions. Further, employment agreements and collective bargaining contracts may provide additional rights to refuse work.

Decisions on how to respond to an employee’s refusal to work must be made on a case-by-case basis. Importantly, if an employee’s refusal is due to a disability or condition that makes the employee vulnerable to the H1N1 flu, employers must consider the legality of their response under the Americans with Disabilities Act (ADA) and, in particular, must determine whether a reasonable accommodation may be required in the circumstances (see the section below regarding the ADA for more information).

Similar considerations arise where an employee refuses to travel out of fear of exposure to the H1N1 flu. Again, employers should consider each employee’s concern individually, and should be particularly mindful of any travel restrictions or advisories published by the United States Centers for Disease Control and Prevention.

Alternative Work Arrangements

Employers may consider addressing employee attendance issues through alternative work arrangements. For instance, telecommuting or flexible work schedules can allow employees to care for themselves and their families in light of H1N1 flu, while still performing their jobs. Employers should clearly document the terms and conditions of any such arrangement prior to offering it, including but not limited to hour requirements, reporting requirements, arrangement length, and responsibility for costs/expenses associated with the arrangement. Notably, unless a telecommuting option is provided as an accommodation under the ADA, an employer generally is not responsible for telecommuting costs. Additionally, an employer may require an employee to pay a portion of such costs, so long as these expenses do not reduce the employee’s earnings below the required minimum wage or overtime compensation under the Fair Labor Standards Act. Decisions regarding costs—in addition to other terms and conditions of an alternative work arrangement—should be made in light of existing employer policies, guidelines, contracts, and applicable collective bargaining agreements. Importantly, employers must remember that they are required to pay employees for all “hours worked,” whether such work is performed at the office, at home, or elsewhere.

In addition, under the OSH Act’s “General Duty Clause,” an employer must provide a place of employment that is free from recognized hazards that cause or are likely to cause death or serious physical harm. If employers do not take reasonable steps to prevent or abate recognized hazards, they may violate the General Duty Clause and face citations from OSHA. Allowing alternative work arrangements may be considered a reasonable step in preventing or abating any serious dangers arising from an outbreak of H1N1 flu in the workplace.

Employees Showing Symptoms

Employers may direct an employee exhibiting symptoms of H1N1 flu to leave the workplace and remain absent until a health care provider certifies their fitness to return to work. Alternatively, the employer may require that the employee remain symptom-free for a specified amount of time before returning to work—a particularly relevant option where access to medical care is scarce. In preparation for this situation, employers should create and distribute a plan of action that states employees will be asked to leave the workplace if they exhibit symptoms of H1N1 flu. If state or local law or the terms of a collective bargaining agreement govern an employee’s return to work, the employer’s plan should comply with such terms. Further, employers should communicate any decisions about employee attendance made under this policy to any affected employees as soon as possible after a decision is made. Notably, depending on whether such leave implicates particular state or federal leave laws (for instance, the federal FMLA), an employer may be required to pay for required medical visits or testing, or to notify an employee in advance if the employer requires a fitness-for-duty certification to return to work.

Compliance with the Americans With Disabilities Act and Related Employment Discrimination Laws

Importantly, any adverse employment action an employer takes—such as requiring an employee to stay home from work—must comply with federal, state, and local discrimination laws. At a minimum, all such decisions must be made based on objective evidence that the employee poses a direct threat to the workplace, and cannot be made on the basis of any protected category.

The Equal Employment Opportunity Commission (EEOC) recently published guidance for employers on workplace preparation strategies for the H1N1 flu that are compliant with the ADA. The guidance states that during a pandemic, the ADA permits employers to require employees to disclose whether they have or have been exposed to pandemic influenza, and to ask about employees’ family members and associates. Note, however, that treating an employee adversely because of a family member’s or associate’s disability is prohibited by the ADA.

The guidance also states that an employer is allowed to survey its workforce in an effort to gather personal information needed for pandemic flu preparation only if the employer asks broad questions that are not limited to disability-related inquiries. For example, an inquiry would not be disability-related if it identified non-medical reasons for an employee’s absence during a pandemic (e.g., mandatory school closures) on an “equal footing” with medical reasons (e.g., chronic illnesses resulting in a weakened immunity).

In addition, the guidance confirms that the ADA permits an employer to require post-offer medical examinations to entering employees, in order to determine their exposure to the H1N1 flu virus before starting work, provided that all entering employees in the same job category undergo such an examination. The guidance also notes that employers may implement infection control measures in the workplace (such as regular hand washing, coughing and sneezing etiquette, and tissue usage) without running afoul of the ADA.
This guidance contains additional helpful information regarding the ADA, as well as a sample ADA-compliant survey that may be given to all employees in the wake of a pandemic. We are glad to provide you with such guidance upon request, or you can access it on the EEOC’s website at http://www.eeoc.gov/facts/h1n1_flu.html.

Duty of Care, Dissemination of Information, and Privacy Issues

In the event of employee exposure to H1N1 in the workplace, an employer should contact employment counsel immediately to assess the appropriate method for meeting its duty of care, which may require that certain protective measures be taken. For example, an employer has a duty to warn employees if they have been exposed to a co-worker diagnosed with H1N1 flu, and may be required to notify state and/or local health officials regarding the same. In doing so, however, employers cannot violate state privacy laws, which generally require employers to balance an infected employee’s privacy rights with health concerns of the employee’s co-workers. If the risk of contagion in the workplace is high, an employer may have no choice but to immediately notify state and local health officials and inform employees of the infection. Again, however, employers should work with counsel to ensure that they meet their duty of care in this regard, without violating an employee’s privacy rights under state and federal law.
Employers also should communicate with employees to provide education on the H1N1 flu and how to reduce the risk of infection. Such communications should educate employees on the fundamentals of pandemic influenza (such as symptoms of influenza, modes of transmission, etc.); personal and family response strategies (such as hand hygiene, coughing/sneezing etiquette, etc.); and community and workplace mitigation strategies (such as social distancing, provision of infection control supplies, proper hand washing techniques, etc.). Employers also may use these communications as an opportunity to remind employees of the resources available to them via employee assistance programs, benefits counseling, leave policies, and the like. In addition, an individual in management or human resources should be designated as a contact for further questions.

Finally, while workers compensation insurance generally covers claims against an employer for breach of the duty of care, non-employees may sue an employer in tort if they are harmed because an employer knew of health risks and failed to take appropriate action. Accordingly, employers must provide adequate guidance to their workforce about protecting themselves and others from H1NI infection, and warning individuals who may have been exposed to the virus, whether such individuals are employees or not.

Conclusion

Planning for any pandemic disease outbreak in the workplace is essential to minimize its impact on the continued good health of employees and efficient conduct of business operations. As such, employers should consider taking the following steps in order to be prepared should such an outbreak occur:

• Carefully review existing handbooks, policies, and contracts to assess obligations regarding employees who may be affected by the H1N1 flu.
• Implement an H1N1 flu plan, making clear the procedures the organization will take when faced with pandemic flu issues.
• Stay abreast of information regarding the H1N1 flu by visiting the Pandemic Flu website, maintained by the U.S. Department of Health & Human Services, at http://www.pandemicflu.gov.