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The Labor & Employment Report

New Executive Order = New Burdens for Government Contractors

Posted in Affirmative Action, Government Contractors, Laws & Regulations

On July 31, 2014, the President issued an Executive Order entitled, “Fair Pay and Safe Workplaces,” which will make an employer’s record of compliance with federal and state labor laws a criterion for successful bidding on government contracts and subcontracts exceeding $500,000.  In a Fact Sheet accompanying the Executive Order, the White House described it as an effort to prevent contractors who obey the law from being underbid by unscrupulous contractors.  Even for scrupulous contractors, however, the Executive Order will add new burdens.

Reporting of Labor Law Violations.  To permit the government to assess a contractor’s record of compliance, the regulation requires covered contractors to report “administrative merits determinations,” arbitration decisions and court decisions involving certain federal labor laws or their state law counterparts for the three-year period preceding the contract bid. Contractors are required to obtain and report this information for many of their subcontractors as well.  Serious, repeated, willful or pervasive violations of labor law will disqualify a contractor from a bid, under criteria to be set forth by the Federal Acquisition Regulatory Council.  After a federal contract or subcontract has been awarded, the contractor must update the list of violations every six months, for itself and its subcontractors.

The term, “administrative merits determination,” does not appear in federal law and it not clear whether or not it includes EEOC cause findings (we think it does not).  Because settlements do not need to be reported, the Executive Order also puts additional pressure on employers to settle disputes.  Indeed, that is an announced purpose of the Executive Order.  The White House Fact Sheet states, “The new process is structured to encourage companies to settle existing disputes, like paying back wages.”

The 14 federal laws listed in the regulation are The Fair Labor Standards Act, The Occupational Safety and Health Act, The Migrant and Seasonal Agricultural Worker Protection Act, the National Labor Relations Act, the Davis-Bacon Act, The Service Contract Act, Executive Order 11246 (equal employment opportunity and affirmative action plans for government contractors), Section 503 of the Rehabilitation Act, The Vietnam Era Veterans Adjustment Assistance Act, the Family and Medical Leave Act, Title VII of the Civil Rights Act of 1964, The Age Discrimination in Employment Act, and Executive Order 13658 (establishing a minimum wage for contractors).   Notably missing from the list are immigration laws.

Anti-arbitration Provision.  For contracts and subcontracts in excess of one million dollars (apart from commercial items or off-the-shelf items) the Executive Order bars predispute arbitration agreements covering discrimination claims under Title VII and torts arising out of assault and harassment.  This ban on arbitration does not apply to collective bargaining agreements, agreements to arbitrate voluntarily reached after the dispute arises, or arbitration agreements entered into before the contractor bids on a federal contract (except if the contractor has the right to change the arbitration agreement).

Pay Disclosures.  The Executive Order requires contractors and subcontractors to provide employees, in each pay period, a statement of the employee’s hours worked, overtime hours, pay and additions to and deductions from pay.  This requirement appears to be largely duplicative, since state wage payment and collection laws normally require employers to issue pay stubs.  Under the Executive Order, the employer need not provide hours worked to employees who are exempt from overtime, if it informs them of their overtime exempt status.  If an individual is working as an independent contractor, the contractor or subcontractor must inform that individual in writing of his status.

The Executive Order is not effective immediately.  It will become effective when final implementation rules are issued by the Federal Acquisition Regulatory Council, which is expected in 2016.

If previous experience is a guide, implementation of the Executive Order is likely to be problematic.  Currently, various agencies each focus on enforcement of a particular labor law.  Even with specialized enforcement, the government has trouble completing timely and competent investigations of particular claims.  The investigations often suffer from inexperienced investigators, changing legal standards, and political motivations.  The Executive Order ups the ante, by putting an employer’s ability to bid on government contracts in the hands of agency staffers who will be expected to assess the quality of the employer’s compliance with 14 different laws, and their state law counterparts, over a three year period.  Even if the government can properly administer the Executive Order it will impose, at the least, additional data collection and reporting requirements and another level of bureaucracy.

Is There Attorney-Client Privilege in a Facebook Post?

Posted in Uncategorized

Sometimes you read a case, and you just have to laugh.  Kaiser v. Gallup, Inc. was one of those cases for me.

After being terminated from employment, the plaintiff sued her employer for discrimination.  During the case proceedings, the employer discovered that the plaintiff had communicated with her cousin, who was an attorney, about events leading up to and occurring around the time of the termination.  The employer also discovered that the plaintiff had told others about her communications with her cousin. According to the judge, “These communications occurred, in part, through postings on Plaintiff’s Facebook page.”  (?!!!)  When the employer requested copies of these communications, the plaintiff refused to produce them on the grounds that they were protected by the attorney-client privilege.  (Apparently, the cousin had represented the plaintiff in her claim for unemployment benefits.)

So, to be protected by the attorney-client privilege, the communication must be made:

  • In confidence
  • In connection with the provision of legal services
  • To an attorney
  • In the context of an attorney-client relationship

The employer then asked the judge to compel the plaintiff to turn over the communications, arguing that (1) there was no evidence that those communications were made in the context of an attorney-client relationship, and (2) even if there were such a relationship, the plaintiff waived the privilege by disclosing the communications to others. (From watching various legal shows – my current favorite is “The Good Wife” – most of us know that the privilege is waived if the communication is shared with a third party.  I think they covered that in law school as well…)

In this case, the judge found that there was no evidence as to the scope of the plaintiff’s attorney-client relationship with her cousin and no information from which the judge could determine if the communications were being made in the connection with providing legal services in the context of an attorney-client relationship.  So the judge ordered the plaintiff to produce the communications.

Sadly, the judge didn’t reach the really entertaining Facebook postings issue.  It’s a little unclear what the judge meant in saying,  ”These communications occurred, in part, through postings on Plaintiff’s Facebook page.”  Did the actual conversation between the plaintiff and her cousin take place on Facebook?  If so, were the postings visible to the plaintiff’s Facebook friends?  Or did the judge mean that the plaintiff talked about her conversations with her cousin in Facebook postings with her Facebook friends?  Either way, it seems like a no-brainer – putting the conversation on Facebook or talking about the “privileged” conversation on Facebook means that there is no confidential communication!  And, therefore, there is no attorney-client privilege!

Lesson for the day – don’t use Facebook to talk to your attorney and don’t talk about conversations with your attorney on Facebook!  (I think even my crazy teenagers would get that!)

Employers Get to Set the Schedule – Really!

Posted in Employment Discrimination, Laws & Regulations, Litigation

Sometimes it feels like employees have so many rights, they get to choose what they will do and when they will do it.  This may be true to some extent if the employee is entitled to a schedule adjustment as a reasonable accommodation for medical needs (American with Disabilities Act) or religious needs (Title VII), or if they need a reduced or intermittent work schedule for medical/military family reasons (Family and Medical Leave Act).   But in the normal course of events, it is actually the employer’s decision to determine what needs to be done and on what schedule – and that these determinations can change, depending on business needs.  A recent case, Huang v. Continental Casualty Co., provides a reminder to employers that you are, in fact, in charge (well, most of the time, anyway).

After working eight years for the employer, a system and software engineer was reassigned to a new team and given new duties, which included once-a-month pager duty on a weekend.  The engineer (and the other members of his team) would have to carry a pager and be available 24 hours a day during the assigned monthly weekend on duty.  The engineer refused to work weekends because of family reasons, even though his supervisor and Human Resources told him it was a work requirement and that he could be fired for his refusal.  He offered to come into the office on Sundays instead of Mondays, but would not be on pager duty otherwise during the weekend.  The engineer was subsequently fired for his continuing refusal of weekend pager duty.

The engineer then sued, alleging race and national origin discrimination, along with retaliation.  He argued that he was meeting the employer’s legitimate job expectations because: (1) he offered a suitable alternative to the pager duty requirement by offering to come in on Sundays rather than Mondays; (2) he had a good reason to refuse pager duty – he wanted to spend more time with his family; and (3) the pager duty was not legitimate because it wasn’t in his job description.

The U.S. Court of Appeals for the 7th Circuit rejected all of his arguments, however.  First, the Court noted that “employers are entitled to determine their scheduling needs.”  The offer to work Sundays did not meet the employer’s need to have an employee available 24 hours a day the whole weekend long.  Second, although the Court observed that “although a longing to spend more time with family is understandable” (the Court has never met my teenagers!), it went on to state that this longing “does not undermine the legitimacy of a work schedule that cuts into family time.”  Basically, his “preference for home life” could not trump the employer’s work expectations.  Finally, the Court noted that pager duty did not need to be memorialized in a job description in order to be a valid employment expectation.

Bottom line – an employee’s personal preference, or even their family needs (e.g. childcare, school, etc.) should not control the schedule that the employer sets.  As a matter of employee morale, an employer might try to accommodate the personal scheduling preferences of employees, although there is no legal requirement to do so.  But if the employer determines that a particular work schedule is required by business needs, employees must comply with that requirement.

And Now a Slap for the DOL

Posted in Laws & Regulations, Litigation

Employers are on a roll lately!  All too frequently they are unfairly targeted by others – whether a plaintiff or a government agency – and vindication is all too rare.  As many of you sadly know, it is usually cheaper to settle a (meritless) claim than to fight.  So I hope you enjoy it as much as I do when an employer emerges victorious, as I discussed in my last two blog posts ( against a lying plaintiff and an unreasonable General Counsel of the National Labor Relations Board) and now against the U.S. Department of Labor.

In Gate Guard L.P. v. Perez, a federal Court in Texas awarded more than a half-million dollars ($$$$!) in attorneys’ fees and expenses to an employer that was accused of violating the Fair Labor Standards Act by the DOL.  The DOL claimed that the employer had misclassified gate guards as independent contractors, rather than employees.  The case against the employer was dismissed by the Court, and the employer then asked for its fees and costs as the prevailing party under the Equal Access to Justice Act.

The EAJA was enacted because of concerns that persons might be deterred from defending themselves against unreasonable government action because of the expense.  It provides two different avenues for the award of fees and costs.  Interestingly, the employer in this case requested fees under one avenue.  The Court denied recovery on that basis, but then suggested the employer should request fees under the other avenue.  (Clearly, the Court really wanted to award the fees…)

In order to be entitled to the award of fees and costs under the EAJA provision in question, the employer had to show that the DOL’s position was “not substantially justified.”  As the Court noted, there were many problems with the DOL’s investigation and prosecution of this matter, including the following:

  • The investigator was friends with one of the gate guards in question and, in his investigation, he interviewed only three – including his friend – of the approximately 400 guards.
  • In internal emails, it appeared that the investigator had “made up his mind before the investigation was even underway,” calculating damages immediately after the opening conference for the investigation.
  • The investigator destroyed all of his interview notes, contrary to protocol.
  • In presenting the $6 million damage calculation, the investigator failed to follow proper procedures, deviating from the DOL’s Fields Operations Handbook without permission.
  • The DOL subsequently reduced the initial demand by 2/3, conceding that the initial demand was erroneous by including damages it should not have included (and the DOL should have realized that should not have been included)
  • The DOL “chose to ignore, hide, or mischaracterize facts contrary to its position, or to present only those fact that it found helpful.”
  • (And of particular import) the DOL continued to prosecute the case even after learning that the Army Corps of Engineers – part of the federal government, like the DOL – treats gate guards as independent contractors.

The Court chastised the DOL: “Once discovery revealed the facts cited [] above, the DOL should have abandoned this litigation.”  (Emphasis added).  The Court also went on to say, “The DOL failed to act in a reasonable manner both before and during the course of this litigation…”  (Ouch!)

I really hope that this causes the DOL (and the NLRB and lying employee plaintiffs) to be more thoughtful in bringing claims against employers.


Another Slap on the Wrist – for the Plaintiff

Posted in Litigation

It’s pretty clear I love a good comeuppance.  In my last blog post, I reveled in an Administrative Law Judge’s reprimand of the General Counsel of the National Labor Relations Board for bringing a frivolous complaint against an employer.  In an earlier post, I discussed with glee a federal judge’s upbraiding of the Equal Employment Opportunity Commission for the same type of thing.  In this one, I am enjoying a judge’s slapping (metaphorically, not literally) of a lying plaintiff.

All too often in our practice, we deal with employees who lie.  I am certainly not saying that all employees lie, but there are definitely some bad actors out there.  It makes me crazy when my manager clients, who really are trying to do the right thing, are being falsely accused of wrongdoing by one of these malcontent, ethically-challenged employees.  And, again all too often, there is no real recourse against these lying plaintiffs.

So it was with great pleasure that I read a June 16, 2014 Maryland Daily Record article by Danny Jacobs, discussing a covenant-not-to-compete case in which the plaintiff lied about his whereabouts on the night he copied his employer’s digital  files.  The plaintiff subsequently left the firm and starting competing with his old employer.  Using cell-phone analysis, the employer was able to prove that the plaintiff had been less than truthful.  The employer then asked for its expert costs and attorneys’ fees associated with the cell phone analysis.

Employers often ask for this type of relief, but, realistically, it is rarely awarded.  But in this case, the (wise and rational) judge found that the plaintiff “acted in bad faith … by committing perjury” and ordered him to pay the employer $11,098.  On behalf of all beleaguered employers, rejoice!

A Slap on the Wrist for the NLRB

Posted in Labor Law & NLRB

As an attorney in a management-side labor and employment firm, I am frequently frustrated by the outrageously unfair positions taken by the National Labor Relations Board with regard to completely reasonable employer policies and actions.  My partners down the hall often hear me screaming when the NLRB issues a new work rules opinion that finds the employer, once again, to have violated the National Labor Relations Act over some nitpicky word choice (e.g. “negative” is a problem and “disrespectful” is sometimes OK and sometimes not, “professional manner” is illegal but “ethical manner” is acceptable, etc.).  So I really enjoyed the Administrative Law Judge’s opinion in Central States Southeast and Southwest Areas, Health & Welfare and Pension Funds, in which he chastised the NLRB’s General Counsel by stating, “This is a case that should never have been litigated.”

So what was this case?  Well, an employee was playing with a tablet computer during a meeting.  His supervisor told him to stop, but he refused to do so.  (Sounds like my teenagers).  So, unsurprisingly, she wrote him up for insubordination.  The union then filed a grievance on behalf of the employee.  (Seriously? Does anyone really think this teenage-type of behavior is acceptable in the workplace?).  The employee then laminated the warning and posted it in his cubicle where it could be seen by his fellow employees.  His supervisor was upset by the posting, believing it to be disrespectful and insubordinate.  The employee was told to take down the posting, or he would be suspended for three days.  He complied, but the Union brought an unfair labor practice charge and the NLRB’s General Counsel then filed a complaint claiming that this instruction was a violation of employees’ rights under Section 8(a)(1) of the NLRA to engage in protected concerted activity regarding their terms and conditions of employment.

Fortunately, the ALJ, who appears to be a rational person, shot that down.  He noted that, by posting the warning, the employee was not enlisting the support of his fellow employees or trying to induce group action – either to use electronic devices in business meetings or to protest unfair disciplinary practices generally.  The posting did not advance his grievance “in any way,” according to the ALJ, and did not support any union activity.  The fact that co-workers may have asked the employee about his discipline was idle curiosity, and not a matter of common concern.

The General Counsel argued that management’s threat to impose a three day suspension if the employee did not remove the posting “inhibited other employees to obtain information that could prove useful in challenging discipline they may fac[e].”  The ALJ, easily seeing through the flimsy nature of this argument, noted that the posting itself could not have helped other employees defend themselves in future disciplinary situations.

The ALJ did state that the Company overreacted to the posting, noting that the warning reflected poorly on the employee, not the manager.  It was the ALJ’s opinion that the threat of the suspension was unwarranted.  But, nonetheless, the ALJ found this conduct was so remotely connected to Section 8(a)(1) rights that “the Union should not have filed the charge and the General Counsel should not have issued the complaint.”  The ALJ then quoted the Board’s own language from another case, “The Board’s rising case load and the problems involved in handling it could be alleviated if cases of this type were not processed.”

So there.

Harassment for Not Being Sexually Loose, Promiscuous and Predatory?

Posted in Laws & Regulations, Sexual Harassment

Courts have recognized same-sex harassment claims based on a failure to conform to gender stereotypes – such as when a male plaintiff is harassed for being effeminate or exhibiting traditionally feminine characteristics (see my prior blog post on harassment of a male ironworker because of his use of Wet Ones instead of toilet paper!).  In an interesting variation on this claim in Rachuna v. Best Fitness Corp., a male fitness instructor sued his employer for harassment because he didn’t fit the stereotype of being “sexually loose, promiscuous and predatory,” like his harassing male supervisor.  (Well, there is definitely a stereotype of studly, oversexed male trainers…something to do with all those muscles and sweat…)

The employer asked the Court to dismiss the claim.  The employer argued that same-sex harassment claims required that the employee not only allege that the harasser believed the employee  didn’t confirm to the stereotype of a heterosexual male, but specifically allege that he was harassed for being effeminate.  In support of its argument, the employer cited a number of cases about the harassment of effeminate males.

The Court rejected the employer’s argument, however, stating that these cases do “not mean that these are the only circumstances that can support a claim of same-sex harassment based on gender stereotyping.”  Here, the employee alleged that his supervisor expected men, including the employee, to join in the “lewd, promiscuous and predatory talk” and that the supervisor targeted the employee for refusing to join in.  The Court found these allegations were sufficient to state a claim of same-sex harassment.

So, a same-sex harassment claim isn’t just a claim that the employee is too gay, but can also be a claim that he isn’t enough of a male chauvinist pig – how’s that for a sexual stereotype?  (I keep imagining the supervisor singing that #1 song from a few years back, “I’m too sexy…”).



Attorney’s Fees Awarded for Maryland Wage Case Appeal

Posted in Wage & Hour

On May 19, 2014, Maryland’s highest court (the Court of Appeals) issued a significant decision setting forth the rights of prevailing plaintiffs’ attorneys to recover their fees in successful wage claim litigation against employers.

In Friolo v. Frankel, the Court of Appeals heard this case for the third time, following two previous visits to the Maryland Court of Specials Appeals, and appearances in the Circuit Court for Montgomery County on three other occasions.  (In its opening paragraph, the Decision written by the seven judge panel, stated:  “Like Kaufman and Hart’s man who came to dinner, it [this case] is wearing out its welcome.”)

Most significantly, the new ruling permits recovery of fees for appellate work, which in this case consumed more than 80 percent of the litigation.

The Court, in apparent irritation or exasperation, stated (via Judge Wilner, who authored the Decision):  “This simple case, which has been in litigation for more than 14 years, should have ended years ago.  Instead we have the spectacle of the demand for attorneys’ fees of nearly $400,000 (without regard to fees that surely will be claimed for this appeal) to win a judgment of less than $12,000 – a judgment that was paid more than 11 years ago.” 

The court noted that a party should not be permitted to increase its fee award by prolonging litigation, such as by making an unreasonable settlement demand, or rejecting reasonable settlement offers.  However, these circumstances do not apply here.

At the trial court level, the circuit court considered the plaintiff’s petition for $63,000 in attorneys’ fees, but that court awarded her 40 percent only of the jury’s award, or $4,711 in attorneys’ fees.

On appeal, the Court of Appeals noted that this case presented the “judicial equivalent of the perfect storm,” containing not only inflated demands by plaintiff’s counsel, but also “a scorched earth policy by defense counsel.”

Aside from technical discussions beyond the scope of this Blog, the important bottom line is that the Maryland Court of Appeals established several principles regarding the proper method for awarding fees in this type of litigation.  That is, lower courts should use the so-called “lodestar approach”, which starts with the formula of multiplying a reasonable hourly fee by the number of hours reasonably expended in the litigation.  Further, the Court of Appeals established that when a plaintiff obtains relief under wage statutes, obtaining an award of attorneys’ fees at the trial court level and, on appeal, is successful, “attorneys’ fees incurred during the appeal should be considered as part of the lodestar analysis”.  Therefore, recovery of fees for successful appellate advocacy is appropriate and proper.

The trial court should not restrict fees to those that may have been set forth in a retainer agreement.  Nor should it limit the fees based upon the size of the underlying judgment.  The trial court had (erroneously) awarded only a $4,700 fee, based on approximately 40 percent of an $11,788 judgment.  (The attorneys, however, at that stage of the litigation had claimed $69,637, based upon 275 hours’ work.)

An important factor in the case was that the employee had offered early on to settle the case for $36,000, but the employer never made an offer that could be regarded as reasonable.  Therefore, prolonging of the dispute and litigation was not due to churning by the plaintiff’s attorneys.

Previously, the issue had been unresolved in Maryland as to whether attorneys’ fees were awardable for time spent in appealing only the fees, and not the underlying judgment.  The Court of Appeals concluded:  “It is as important to compensate counsel for ensuring that the trial court gets it right, even if to do so requires counsel to appeal, as it is to ensure that counsel is compensated for services rendered at trial”.  The court concluded that to rule otherwise would be a disincentive for competent counsel to pursue successful appellate proceedings.

FMLA, ADA and Fitness for Duty Examinations

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

When an employee comes back from Family and Medical Leave Act leave with a fitness-for-duty (FFD) certification from his health care provider in hand, many employers still require the employee to undergo a separate FFD examination by the employer’s own health care provider or employee health office before allowing the employee to return to work.  Those employers typically say that their own doctors or health offices have a better understanding of what the employee’s job actually involves than the employee’s doctor, so they can better evaluate whether the employee is really able to do the job.  The problem is, even though the employers’ explanation makes sense, this additional pre-return FFD examination violates the FMLA.

This issue was recently addressed in the case of White v. County of Los Angeles.  In that case, an employee on FMLA leave for depression received a FFD certification from her doctor, and was returned to work.  However, she was immediately placed on paid administrative leave due to an investigation into misconduct that was unrelated to her FMLA and that occurred prior to her FMLA leave.  During this paid administrative leave, she was required to get a medical evaluation based on her erratic behavior prior to her FMLA leave (not because of behavior during or after her leave).  The employee refused to undergo the evaluation, arguing that it violated her FMLA rights.

The California Court of Appeals observed that the FMLA “clearly provides that when an employee has completed FMLA leave, that employee is entitled to reinstatement upon certification by the employee’s health care provider.”  This certification cannot be second-guessed by the employer since, as the Court noted, the FMLA regulations do not provide for second and third opinions for FFD certifications.  This changes once an employee actually returns to work, however.  At that point, any concerns about an employee’s ability to do the job based on continuing health issues fall under the Americans with Disabilities Act, which allows examinations that are “job-related and consistent with business necessity.”

In finding the employer’s request for a post-return FFD examination permissible, the Court noted that an employer’s concerns, giving rise to the ADA-covered examination, can be based on conduct that occurred prior to the FMLA leave, and that the health care provider’s FFD certification is not necessarily conclusive.  The Court quoted the Department of Labor’s comments in issuing its revised FMLA regulations, which are extremely specific on this issue:

An employer may not require that an employee submit to a medical exam by the employer’s health care provider as a condition of returning to work.  A medical examination at the employer’s expense by an employer’s health care provider may be required only after the employee has returned from FMLA leave and must be job-related and consistent with business necessity as required by the ADA.  Thus, if an employer is concerned about the health care provider’s fitness-for-duty certification, the employer may, consistent with the ADA, require a medical exam at the employer’s expense after the employee has returned to work from FMLA leave as stated in [the FMLA regulations].  The employer cannot, however, delay the employee’s return to work while arranging for and having the employee undergo a medical examination.

So while an employer cannot reject a doctor’s FFD certification under the FMLA, it does have the ability to require further medical evaluation after the employee is returned to work.  But, countering the employer argument referenced above that its own doctors are better informed about the employee’s job, employers should also seek to educate the employee’s doctor about the job in question, by providing a detailed job description with the request for an FFD certification (which must be made at the time the leave is designated as FMLA leave).  And even though no second and third opinions are permitted, if a certification is incomplete (not fully filled out) or insufficient (vague, ambiguous or non-responsive), the employer can notify the employee in writing of the deficiency and require the employee to fix the deficiency within 7 days.  In addition, the employer can seek authentication and clarification of the certification, if there is suspicion that the certification was not actually provided by the doctor, or if the employer needs assistance understanding the handwriting or the meaning of a response on the certification.