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