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The Labor & Employment Report

Thoughts on Paid Sick Leave from a Management Lawyer

Posted in Employee Benefits, HR Compliance, Laws & Regulations, Legislative Developments, Workplace Trends

So my brilliant partner, Liz Torphy-Donzella (who also serves as General Counsel for the Maryland Chamber of Commerce), was a guest on WYPR’s “Midday with Dan Rodricks” show yesterday.  She was invited to provide the management perspective on paid sick leave laws, while Jason Perkins-Cohen of the Job Opportunities Task Force, a Baltimore-area pro-worker advocacy group, presented the arguments in favor of such legislation.  You can listen to a recording of the show here.

As management lawyers, we do not question the moral underpinnings of paid sick leave laws.  (We’re not that heartless!)  Of course, low-wage employees should not be forced to choose between going to work sick (or sending a sick child to school) and staying at home without pay.  Of course, there are societal benefits to keeping sick employees from spreading infection in the workplace – to co-workers and customers.  Of course, employers who provide such benefits build employee loyalty.  And most of our clients who can afford to give sick leave do so – for the very reasons noted here.

As Liz pointed out during the show, what we object to is making paid sick leave a legal mandate, with all of the consequent results.  It is clear that small employers suffer the most immediate impact as a result of paid sick leave.  Although the economy has improved, many smaller businesses are still struggling and will continue to struggle to make a profit, and any added expenses – even arguably minor ones – can make the difference between making it and breaking it.

Now, I know that proponents of sick pay laws argue that paid sick leave actually reduces costs to employers.  They say, for example, other employees won’t get sick if sick employees stay home, which increases productivity.  They also say that employee turnover will be less, which reduces training costs for new employees.  But the federal Bureau of Labor Statistics has calculated the cost of paid sick leave at $.34 per hour, per employee.  This works out to $707 per year for each full-time employee!  Even for a small employer, this works out to thousands of dollars per year in increased labor costs.

Employers who already provide sick leave, including most larger ones, may not object to proposed sick leave laws – after all, they’re already giving this benefit.  However, they should still be aware that there are negative consequences to laws that mandate sick leave, even for them.  These laws are very specific in the amount of sick leave that must be accrued, how and when it can be used, carryover requirements, and recordkeeping and notice provisions.  They protect the use of sick leave from disciplinary consequences, meaning that an employer cannot implement a no-fault attendance policy that counts any absence – including time off when sick – as an occurrence (of course, not including legally protected leave like FMLA and ADA – and we all know how challenging that can be to manage!).  It is certain that most, if not all, of these employers’ existing sick leave policies do not comply with one or more of these requirements, which will require possibly significant revisions to those policies.  More importantly, these employers will lose the flexibility to develop sick leave policies that best fit their organizations, because the law imposes a one-size-fits-all sick leave policy.  In addition, multi-state employers may end up with difference sick leave policies in different states, which will be an administrative nightmare to manage.

And back to the small employer – many of them do not have a Human Resources staff to manage the process and paperwork associated with sick leave, particularly to ensure compliance with the very technical requirements imposed by these laws.  Moreover, the additional recordkeeping requirements are a new burden that the small employer may not be equipped to assume.

For all employers, these laws also provide a new basis for employees to sue.  And in this litigation-happy society, you can be sure that they will.

So, in light of these costs, what will happen?  We can look to San Franciso’s example (they passed a sick leave law in 2006).  According to a study done by the Institute for Women’s Policy Research, 1/3 of employers increased work demands, reduced hours, or reduced employee compensation as a result of the law.  Thus, this law hurt many of the very employees it was meant to help.  14% of employers reported a negative impact on profitability.  One result of this is that many San Francisco restaurants are adding a 2-4% surcharge to checks to cover paid sick and health benefits, and a survey by San Francisco Gate found that 2/3 of respondents deducted that amount from the server’s tip!

Bottom line – forcing employers to comply with expensive and extensive mandates is damaging to business, and can end up hurting those workers whom the mandates intend to help.

Employers Can Designate Leave As FMLA

Posted in Employee Leave (FMLA and ADA), HR Compliance, Laws & Regulations, Litigation

So this is a follow up to my post, Employee Held to Choice Not to Invoke FMLA.  A bright reader pointed out that the U.S. Court of Appeals for the 9th Circuit made a statement in its decision, which I quoted, that was quite confusing when applied in a broader context.  So let’s discuss:

In the underlying case, Escriba v. Foster Poultry Farms, Inc., the employee requested vacation leave to take care of her father, and was informed that FMLA might apply.  She declined to apply for FMLA, took her vacation leave and then some (without approval) and failed to return to work when she was expected to do so.  She was terminated for violating the no-call, no-show policy.  She then sued, arguing that the Company should have designated the leave as protected FMLA leave, for which she could not be terminated. The 9th Circuit held that the employee could be held to her choice not to invoke the FMLA to cover leave.  In its written decision, as I noted in the blog, the 9th Circuit stated that an employer could actually be held liable “for forcing FMLA leave on an unwilling employee.”

As the bright reader wondered, does this statement mean that an employee who is out on workers’ compensation can choose not to use FMLA during that WC leave?  My immediate reaction was, “Of course not – that’s just ridiculous!”, but it’s true that the statement suggests that the employee could do so.  To the extent it does, I think the 9th Circuit is not really correct (I could say “wrong,” but “not really correct” seems less, well, confrontational – and the 9th Circuit is a federal court while I am simply a lowly attorney.  So let me be somewhat tactful…).  There are several reasons why I think the 9th Circuit is less than right.

First, the FMLA regulations at 825.702(d)(2) do state,

“An employee may be on a workers’ compensation absence due to an on-the-job injury or illness which also qualifies as a serious health condition under FMLA.  The workers’ compensation absence and FMLA leave may run concurrently (subject to proper notice and designation by the employer).”

So, the regulations themselves clearly contemplate that FMLA and WC can run at the same time, and they do not require that the employee ask for the FMLA leave in conjunction with WC leave.  It’s up to the employer to provide notice and to designate the WC leave as FMLA leave.

Next, as employers know, a workers’ comp injury or illness frequently qualifies as a disability under the Americans with Disabilities Act.  The FMLA regulations at 825.702(c)(2) also contemplate that FMLA leave will run concurrently with any leave provided as a reasonable accommodation under the ADA.  The regulations provide a specific example of this:

“A qualified individual with a disability who is also an “eligible employee” entitled to FMLA leave requests 10 weeks of medical leave as a reasonable accommodation, which the employer grants because it is not an undue hardship.  The employer advises the employee that the 10 weeks of leave is also being designated as FMLA leave and will count towards the employee’s FMLA leave entitlement.”

Thus, as with WC leave, the regulations give the authority and responsibility of designating ADA leave as FMLA leave to the employer.

Moreover, I think all employers and courts would agree, it would not be any kind of reasonable accommodation for an employee to decline FMLA coverage while taking ADA-covered leave, and then invoke another 12 weeks of FMLA leave after the ADA leave is finished.  And even then, if the second FMLA-eligible event is also an ADA-covered disability, the employee could again decline the FMLA leave and take ADA leave.  When would FMLA ever apply?  That’s simply nonsensical, and inconsistent with the purpose of these laws.

Finally, as my colleague Jeff Nowak (both of our firms are members of Worklaw, a network of firms that specialize in employment and labor law) points out in his excellent blog post, “Can an Employee Decline FMLA Leave Even Though the Absence Is Covered by the Act?“, on his excellent, award-winning blog, FMLAInsights.com:

“At 29 C.F.R. 825.301(a), the DOL tells us, ‘Once the employer has acquired knowledge that the leave is being taken for an FMLA-qualifying reason, the employer must [designate the absence as FMLA leave].’ There is nothing in this regulatory provision to suggest that the employee can influence this process. To the contrary, the regulation states that the employer designates once it knows the absence is for an FMLA-qualifying reason.”

So, I agree with Jeff, who says that you should ignore the 9th Circuit and designate the leave as FMLA if it qualifies for coverage.

Employee’s “Husband” Didn’t Sexually Harass Her

Posted in Employment Discrimination, Litigation, Sexual Harassment

This one raised my eyebrows – definitely not your typical sexual harassment case.

In Waltz v. Dunning, the plaintiff began working for a company, BHC, in 2001. She reported directly to the CEO.  They began a sexual relationship in 2003, which the plaintiff claimed was initially non-consensual (she said she only had sex with the CEO to avoid his becoming upset or physically abusive). However, she and the CEO began referring to each other as “husband and wife” (even though he was already married, the dog!), and had two children together, in 2005 and 2007. In 2008, the plaintiff resigned from BHC to work at another company, Synergy, which was also started by the CEO and had close ties to BHC. By 2009, the plaintiff was wearing a wedding ring that had been given to her by the CEO. They spent holidays together, went on family vacations, and took videos to commemorate special occasions. He joined in birthday and holiday celebrations with the plaintiff’s parents. He helped pay for the medical expenses of the plaintiff’s mother, who had cancer. He also bought the plaintiff and their children a home. The plaintiff sent him affectionate texts and emails, as well as cards, and bought him expensive gifts including a $7,000 watch (garnished with diamonds!).

In 2012, the plaintiff ended the relationship and quit her job at Synergy. The CEO filed for custody rights for their two children, and the plaintiff then sued him and his companies for sexual harassment and other state law tort claims, including invasion of privacy, and assault and battery.

The court, however, threw out her claims. In order for the plaintiff’s claims to be valid, the CEO’s conduct had to be “unwelcome.” As the court noted, although the conduct might have been unwelcome at the outset and for some time thereafter, the relationship clearly became consensual, when taking into consideration all of the circumstances described above and the fact that it lasted for ten years! The court also particularly marked the fact that the plaintiff filed suit only after the CEO sought custody of their children. (That was definitely some suspicious timing).

Sexual harassment? Clearly that’s hard to prove when the alleged harasser is the same person you called your “husband” for many years!

The EEOC’s (Informal?) Thoughts on Workers’ Comp and the ADA

Posted in Employee Leave (FMLA and ADA), Reasonable Accommodation

In perusing the EEOC’s tweets (yes, I do that for all of you), I came across a shout-out for a memo on workers’ compensation and the ADA that was co-written by one of the EEOC’s attorneys, Aaron Konopasky, and an outside medical professional . The memo raised some interesting points regarding the ADA’s coverage of employees on workers’ compensation that I thought should be brought to employers’ attention.

  • The employer can’t wait until an employee reaches maximum medical improvement (MMI) before starting the reasonable accommodation process. According to the memo, there are multiple points at which an employer should engage in the required interactive discussion with an employee to determine if there is a reasonable accommodation that would enable the employee to perform his/her essential job functions. This includes: (1) at the time of injury, (2) while out of work in recovery, and (3) when leave and benefits are exhausted but the employee still cannot return (reasonable accommodations here might include additional leave or reassignment to a vacant position).
  • Employers may choose to reduce job demands or productivity expectations on a short-term basis, but this is not required under the ADA – in other words, it’s not a reasonable accommodation that an employer would be obligated to provide. (Note that this apparently is different than light duty, which an employer may be required to provide as a reasonable accommodation).
  • As part of the ADA reasonable accommodations process, injured workers must be included in the workers’ comp decision-making process about transitional work assignments and leave.
  • Employees can’t be forced to take leave if they can do the essential functions of the job with a reasonable accommodation.
  • If treating physicians and the employer’s vendors (e.g. benefits claims administrators, managed care companies) fail to properly provide information about an employee’s limitation or possible accommodations, the employer can still be held liable for failing to provide a necessary accommodation even if it didn’t receive this information.
  • Unless an employee has legal leave rights, such as FMLA, he/she can’t choose to take leave if there is an accommodation available that would enable him/her to return to work.
  • Giving an employee paid leave benefits, such as Temporary Total Disability (TTD) benefits, Temporary Partial Benefits, Permanent Partial Benefits, and Permanent Total Benefits, isn’t a reasonable accommodation.
  • Even when an employee has been released to work with restrictions but a collective bargaining agreement or applicable laws require a full unrestricted release before returning to work, employers must still engage in the interactive discussion about reasonable accommodations with the employee.
  • Employers must consider extending limited-length transitional work assignments in individual situations as a reasonable accommodation.

Now, there’s a disclaimer in the memo that it is an “informal discussion and does not constitute an official opinion or interpretation of the EEOC.” Well, ok, but when one of the EEOC’s own attorneys is a co-author and the EEOC chooses to tweet about it, I think we can look to this as a reasonably reliable recitation of the EEOC’s position on these issues.

What Is the EEOC’s Own Policy on Background Checks?

Posted in Background Checks, Employment Discrimination, Litigation

I don’t actually have the answer to that. But someone else will soon – BMW Manufacturing Co., who is being sued by the EEOC regarding BMW’s use of criminal background checks.

As we’ve discussed in prior posts, the EEOC is being exceedingly (and sometimes unreasonably) aggressive in challenging employer’s criminal background check policies, claiming that such policies violate Title VII’s prohibition of discrimination on the basis of race because they have an illegal disparate impact on black applicants, who are more likely to have a criminal background. As we noted in “EEOC Slapdown Over Meritless Criminal Background Check Lawsuit,” a federal judge awarded 3/4 of a million dollars in attorneys’ fees and costs against the EEOC for pursuing a lawsuit against a company for refusing to hire felons, even after learning that the company did, in fact, hire felons. And in EEOC’s Attempt to Prohibit Use of Background Checks Rejected, we noted that the EEOC unsuccessfully went after an employer who, in fact, was utilizing criminal background checks appropriately in accordance with the EEOC’s own Guidance on “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”

In the BMW case, the EEOC claims that BMW’s criminal check policy is not job related or consistent with business necessity. In defending against this claim, BMW has asked the EEOC to produce its own criminal background check policy for those who apply for jobs with the EEOC. The EEOC refused to produce the policy, arguing that it wasn’t relevant to whether BMW’s policy was legal. It stated that the positions for which it used its own policy were not similar to the positions in question at BMW. But the court noted that the EEOC did not identify the positions for which it conducts background checks, and that BMW “is not required to accept [the EEOC]‘s position… that the two practices are dissimilar” without being able to make that determination itself. So the court ordered the EEOC to produce its own criminal background check policy.

I love the fact that the agency that is going after employers for their criminal background check policies is now being required to turn over its own policy. And wouldn’t it be interesting to see what it says and whether it meets the EEOC’s own Guidance? Turnabout is fair play, after all.

Shawe Rosenthal and Seven Attorneys Recognized by Super Lawyers©

Posted in Uncategorized

We are delighted to announce that our firm and SEVEN individual attorneys have been recognized by Super Lawyers©, which is a national rating service of outstanding lawyers in multiple practice areas. Shawe Rosenthal was named the top mid-sized employment firm in Maryland in Super Lawyers’ recently-published 2014 Business Edition, which also recognized our 2014 attorney honorees in the areas of Employment & Labor and Employment Litigation: Defense. Attorneys are selected for recognition based on independent research, peer nominations, and peer evaluations. The honorees are deemed to be in the top 5% of practitioners in the state. Our 2014 honorees in the area of Employment & Labor are:

In addition, two of our attorneys were recognized in the area of Employment Litigation: Defense:

Furthermore, Super Lawyers has just issued its 2015 list of honorees. Fiona W. Ong joins the list above of our attorneys recognized by Super Lawyers, in the area of Employment & Labor.


Tardy While Working From Home?!!

Posted in Laws & Regulations, Litigation, Reasonable Accommodation

As an employer, you might think you’ve heard all the excuses why an employee is late for work.  But what if they’re working from home?  Seriously, how is that even possible?  Well, that’s exactly what happened in Taylor-Novotny v. Health Alliance Medical Plans, Inc.

In this case, an employee had tardiness and attendance issues from the beginning of her employment in late 2005.  She was verbally counseled repeatedly, and placed on a performance plan.  Her start time was pushed back twice to make it easier to arrive on time.  These issues were noted in every performance review.  But the issues continued.

In May 2008, the employee was diagnosed with multiple sclerosis, and she began working at home several days a week at the recommendation of her doctor.  Under her “Work From Home” agreement, she agreed to comply with all Company policies, and to let the Company know if she were ill,  had a doctor’s appointment, or had some other interference with her work.

The employee’s tardiness issues continued, and were raised in her performance review and subject to counseling.  In March 2010, her managers and the VP of Human Resources met with her to discuss her continuing tardiness issues.  She was reminded that she must contact her manager “every time she will be late, her expected arrival time, and the reason for the lateness, regardless of whether she is scheduled in the office or at home.”  (Emphasis added).

Despite this instruction, the employee was tardy twice in the next two weeks.  Both times she failed to notify her manager.  As a result, she received a written warning.  Her tardiness was also noted in her next performance review.  Then in May 2010, the employee received a final written warning because she was tardy on eight occasions in a three week period, and failed to notify her manager every time.  The employee was counseled again in June for two other instances of unreported tardiness.

Finally after two more incidents in which she failed to notify her manager of tardiness (while working at home, by the way), the employee was terminated for her continued tardiness and failure to accurately report her work time (because what she recorded was different than what her computer log on indicated), in addition to poor work performance and falsification of work documents (she falsified records of business calls she was supposed to have made, as well as reporting logs on her work efforts).  She then sued the Company, claiming violations of the Americans with Disabilities Act, among other things.  The district court threw out her lawsuit on summary judgment, and she appealed to the U.S. Court of Appeals for the 7th Circuit.

As the 7th Circuit noted, the ADA protects “qualified” individuals with a disability, meaning that they can perform the essential functions of the job with or without reasonable accommodation.  The employee argued that regular attendance and punctuality were not essential for her position, as evidenced by the fact that she was permitted to work from home.  The 7th Circuit disagreed with her, observing that “[a]n employer is generally permitted to treat regular attendance as an essential job requirement and need not accommodate erratic or unreliable attendance.  A plaintiff whose disability prevents her from coming to work regularly cannot perform the essential functions of her job, and thus cannot be a qualified individual for ADA purposes.”  In this case, allowing the employee to work from home did not mean that punctuality and attendance are not essential functions; she still needed to comply with those requirements.

And really, when you’re working at home, it should not be hard to roll out of bed and start work on time.  Even in your PJs!

The One-Armed Security Guard and the ADA

Posted in Employment Discrimination, Laws & Regulations, Litigation

“Jury Finds In Favor Of EEOC That One-Armed Security Guard Was Fired Because Of His Disability.”  Wow, that’s quite a headline, isn’t it?  A real eye-catcher.  But that was the caption for a recent press release from the EEOC.

In this case, a one-armed man applied for a job as an “unarmed security guard” with a security services company.  (OK, the irony just kills me!)  He had a prosthetic arm that the hiring managers assumed was functional.  He was assigned to patrol a residential community, and was told to call the police if he observed anything suspicious.  The employee understood that there may be times when he had to follow or confront someone suspicious, and may even have been required to physically detain them.

The employee conducted his first shift at the residential community without wearing the prosthetic.  The president of the residential community called the security company and complained that the company “was a joke for sending them a one (1) arm Security Officer.”  The Company President then called the employee, who informed him that the prosthetic was just cosmetic.  At that point, the Company President decided the employee could not perform the job duties for the residential community, and the Company could not place him in any other position.  So the employee was effectively terminated.

The employee filed a charge of discrimination with the EEOC, and the EEOC then brought suit against the security company on his behalf.  A jury found that the security company had discriminated against the employee because of his missing arm, in violation of the Americans with Disabilities Act.  In order to be protected by the ADA, an individual with a disability must be able to perform the essential functions of his job, with or without a reasonable accommodation.  Therefore, the jury must have concluded that the employee was capable of performing the essential job functions – but what those functions were is not clear from the press release, nor is it clear how he would have accomplished them.  (Earlier in the case, the EEOC argued that he could have detained suspects by asking them to wait for the police to arrive (?!!!) or spraying them with pepper spray.  Uh huh.).

The EEOC argued at trial that the company had relied on “discriminatory customer preferences and stereotypes about what individual with disabilities can and cannot do” in violation of the ADA.  Well, I guess I would have violated the ADA as well, since I do think two working arms is pretty essential for a security guard!  Even an unarmed one.

FMLA = “Fraudulent Medical Leave Act”?!!

Posted in Employee Leave (FMLA and ADA), Laws & Regulations, Litigation

This case caught my eye because I love it when aggravated people come up with new and strikingly appropriate interpretations for acronyms – particularly in the employment law area.  For example, instead of the Americans with Disabilities Act Amendments Act, ADAAA can stand for “ADAAAGH!”  or “Assume Disability, Always Attempt Accommodation!”  As for the Family and Medical Leave Act – FMLA – I’ve heard it called the “Friday-Monday Leave Act,” which is sadly apropos for a law that is so frequently abused by bad employees.  Along those lines, I was tickled by a recent reference to the “Fraudulent Medical Leave Act” in the case of Henson v. U.S. Foodservice, Inc.

In this case, a warehouse employee had requested and been granted FMLA leave on a number of different occasions, returning to work after each instance.  In August 2010, the employee was loading a pallet.  A supervisor noticed the load on the pallet was leaning precariously because the bottom of the pallet was crushed.  The supervisor directed the employee to rebuild the pallet.  Instead, the employee simply replaced the broken pallet with a new one, without the supervisor’s permission.  The next day, the supervisor and the Director of Operations met with the employee and his Union shop steward to discuss the employee’s failure to follow the supervisor’s instruction.  The employee was not remorseful, insisting that his way was better.  He also admitted that he just wanted to get home.  The employee was subsequently terminated for insubordination and lack of remorse.

The employee then sued his employer, claiming that the termination was in retaliation for his use of FMLA leave.  In support of his claim, the employee testified that he heard the Director of Operations tell other employees that they were working more because of their “FMLA buddies” and encourage them to call workers on FMLA leave to tell them to return to work.  The employee also said that he heard his supervisor refer to the FMLA as the “Fraudulent Medical Leave Act.”  The federal district court, however, threw out the employee’s claim of FMLA retaliation, finding that the employer had a legitimate reason for termination.

The employee appealed the dismissal of his claim to the U.S. Court of Appeals for the Third Circuit.  However, that court also rejected his claim, finding that the managers’ statements were not directly related to the decision to  terminate the employee.  Thus, there was no evidence that the employee’s use of FMLA was linked to his termination.  The court further noted that the employee had used FMLA leave numerous times before without any negative consequence.  And the court found that, in any case, the employer had a legitimate, non-discriminatory reason for terminating him – his insubordination and lack of remorse.

So in this case, FMLA – Fortunately, Managers Lawfully Acted!

NLRB Finds Certain Facebook Posts Unprotected – Finally!

Posted in Labor Law & NLRB, Social Media

Once upon a time, the National Labor Relations Board actually found Facebook posts by employees to be unprotected by the National Labor Relations Act…  A fairy tale for employers, you say?  No really, it actually happened, in the case of Richmond District Neighborhood Center.

Over the past several years, it seems that the Board will find almost any kind of employee speech – especially in social media – to be protected by the Act.  Under past Board rulings, employees can seemingly say the most outrageously derogatory things about co-workers and management and drop four-letter words all over the place – all without consequence.  So it’s nice to know that even the Board thinks that there are lines that cannot be crossed.

In this case, two unhappy employees of an afterschool program had a Facebook conversation about their employment.  This is considered concerted activity that is therefore protected by the Act.  So when another employee took a screenshot of the conversation to the employer, and the employer decided not to rehire the employees for the coming school year, one of the employees filed a charge with the Board claiming that his rights under the Act had been violated.

Concerted activity, however, can lose the protection of the Act if its is sufficiently egregious or if it makes the employee unfit for further employment.  That is what the Board determined happened here.  Specifically, the Board found that the employees made statements that:

  • they would refuse to obtain required permission before organizing youth activities (“ordering s***, having crazy events at the [center] all the time. i don’t want to ask permission…”, “Let’s do some cool s***, and let them figure out the money”, “field trips all the time to wherever the f*** we want!”)
  • they would disregard specific school-district rules (“play music loud”, ‘teach the kids how to graffiti up the walls”)
  • they would undermine leadership (“we’ll take advantage”, “I would hate to be the person takin your old job”)
  • they would neglect their duties (“I AINT GOBE NEVER BE THERE”)
  • they would jeopardize the future of the youth center (“they start loosn kids i aint helpn”, “Let’s f*** it up”)

[NOTE: all misspellings are original!]

The Board stated: “We find the pervasive advocacy of insubordination in the Facebook post, comprised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the Act’s protection and render [the employees] unfit for further service.”  The Board found that, given the “magnitude and detail” of the planned insubordinate acts, a reasonable employer would refuse to take the risk that such plans would be carried out if these individuals continued to be employed.

So for once, the employer lived happily ever after.  The End.