In light of pandemic fears over the past several years, health care facilities have been more aggressive about mandating employee flu vaccinations, on the reasonable basis that such vaccinations are required to protect the health and safety of employees, patients and others.  On March 5, 2012, the EEOC issued an informal discussion letter on this practice.  In its letter, the EEOC reminds employers that practices such as mandatory vaccinations are still subject to the reasonable accommodation requirements under the Americans with Disabilities Act (ADA) and Title VII concerns about religious accommodations.

Under the ADA, an employee can request an exemption to a mandatory vaccination practice based on a disability that prevents him from taking the vaccine.  Similarly under Title VII, an employee may have a sincerely held religious belief, practice or observance that prevents vaccination.  In either case, the employer MUST explore with the employee whether the exemption is reasonable or if it poses an undue hardship for the employer.  The EEOC observes that relevant facts as to whether an undue hardship exists include:

– the assessment of the public risk posed at a particular time

– the availability of effective alternative means of infection control (e.g. masks, gloves, gowns)

– potentially the number of employees who actually request accommodation

The EEOC further reminds employers that the sincerely held religious beliefs do not need to be of an organized religion, and may be moral or ethical beliefs “held with the strength of traditional religious views.”  Non-religious philosophical opposition to vaccination (such as a belief that vaccinations have unwanted side effects), however, are not protected and need not be accommodated.  Employees can be required to provide information about their beliefs, but the EEOC cautions that employer should not request “unnecessary or excessive corroborating evidence” because such actions could lead to claims of denial of reasonable accommodation or discriminatory harassment.

So, if faced with a request to be exempted from a mandatory vaccination requirement, an employer should not automatically deny it based on safety concerns.  There may be other ways of ensuring patient and employee safety that should be considered.

As employers know, the Americans with Disabilities Act (ADA) requires employers to provide “reasonable accommodation” to employees with disabilities to enable them to perform the essential function of their jobs.  What employees demand as a “reasonable accommodation” under the Americans with Disabilities Act, however, may not always be so reasonable.  Fortunately, courts are generally more rational than employees in assessing how “reasonable” an accommodation is.

For example, in the recent federal case, Tomlinson v. Wiggins, an employee who had been diagnosed with depression complained to Human Resources about his supervisor’s management style.  He was subsequently terminated for performance reasons and he sued his employer, asserting an ADA claim for failure to reasonably accommodate his disability, among other things.  Specifically, the employee claimed that his complaint to HR about his supervisor’s management style was a request for accommodation.  The Court found, however, that this so-called accommodation request was essentially a demand for a stress-free environment.  Noting that the law does not require an employer to provide “an aggravation-free environment,” the Court determined that the accommodation was not reasonable and the employer had no duty to provide it.

Workplace stress is normal.  It’s reassuring that courts understand that, and will not set employers the impossible task of providing a stress-free workplace.

When telling a problematic employee that he has been terminated, an employer is sometimes reluctant to share the real reason – or all the reasons – for the termination.  Instead, the employer might pick the explanation that seems the simplest and least subjective – like a position elimination or reduction in force – in order to spare the employee’s feelings or to avoid a more uncomfortable discussion about performance issues.  Taking this “easy” path, however, can lead to trouble for the employer if the employee ends up bringing a discrimination claim based on the termination.  This was the situation in the recent federal case of Tomlinson v. Wiggins.

In this case, an employee had been diagnosed with depression and had requested certain accommodations for his condition.  This employee had performance issues, including failure to comply with his supervisor’s direct instructions and failure to execute certain major job responsibilities.  His supervisor recommended that the employee be terminated because of these performance issues and Human Resources agreed.  In the termination meeting, however, the employee was told that his job was being eliminated through no fault of his own.  The employee subsequently sued under the Americans with Disabilities Act for failure to accommodate his depression and retaliation, in addition to asserting other claims under Family and Medical Leave Act and the state anti-discrimination law.  In defending against the lawsuit, the employer argued that the termination was actually based on significant performance deficiencies.

Unfortunately for the employer, the Court found that the employer’s “shifting explanation” as to the reason for the termination could be evidence that the real reason was disability discrimination – that it was certainly possible the HR director did not want to continue to deal with the accommodation issues associated with the employee’s depression.

What does this mean to employers?  The lesson is honesty is the best policy.  When terminating an employee, it is better to let them know 1) all the reasons for the termination, if there are more than one, and 2) the actual reasons for the termination (assuming they are valid reasons – if they are not, you shouldn’t be terminating the employee!).  This doesn’t mean that an employer needs to go into excruciating detail about the performance issues or engage in an argument with the employee about those issues.  It is best, however, to be factual, be concrete, and above all, be truthful.

The topic of misclassification of employees as independent contractors is one that is getting a lot of attention from government agencies at the state and federal level.  Some commentators have suggested that as long as an individual has set up a corporation, through which he/she is paid for his/her services, that individual will safely be considered an independent contractor.  Unfortunately, that is not necessarily true under state law – certainly not in Maryland, as I have been assured by the Maryland Department of Licensing and Labor Regulation (DLLR).

Under the Maryland Workplace Fraud Act (which applies only to the construction and landscape industries) and state Unemployment Insurance law, an “ABC” test is used to determine whether the individual is truly an independent contractor.  Under the test,

A = The individual is free from control and direction;

B = The individual customarily is engaged in an independent business of the same nature; and

C =  The work is outside of the usual course of business of the employer or performed outside of any place of business of the employer.

The individual must meet all parts of the ABC test to be properly classified as an independent contractor.

Corporate status is a factor that is considered in the “B” part of the test.  However, the DLLR will look at many factors relevant to this part of the test, and I have been informed by the DLLR that corporate status is not determinative – although it is certainly strong and helpful evidence of an independent business.  For example, if an individual has incorporated a catering business, but is providing word processing services to Company X, the fact that the word processing services are being invoiced through and paid to the catering corporation will not prevent the DLLR from finding that the individual should have been classified as an employee of Company X.  If the individual is providing those word processing services under the control and direction of Company X, and/or his work is an integral part of Company X’s operations, then he will be considered an employee, regardless of the existence of his corporation.

Bottom line – Companies should take a hard look at the relationship with potential (and current) independent contractors, and not rely on an individual’s “corporation” as a quick answer to the question of proper classification.  If the work being performed is subject to even minimal direction and control by company employees, if the individual is performing work similar to work being performed by employees, if the work being performed is an integral part of the Company’s business – any of these things will likely trigger a finding of employee status.  Under those circumstances, companies should strongly consider hiring the individual as an employee – perhaps on a contract or temporary basis, under which the appropriate taxes are paid (the State’s interest).

If an employee asks for time off from work rather than pay for overtime hours worked, can a company grant this request?

It depends.  Generally, overtime is due whenever an employee who is not overtime exempt works more than 40 hours in a workweek.  (A few states require the payment of overtime if an employee works more than 8 hours in a workday).  Overtime is paid at one-and-one-half time the employee’s regular hourly rate (i.e., an hourly employee who is paid $10 per hour would be entitled to $15 for each hour worked in excess of 40).

Because Federal law and most states base the right to overtime pay on the workweek rather than the workday, an employer could give an employee time off during the same workweek (such as a late arrival or early departure) to ensure that the employee does not work more than 40 hours in the workweek.  This doesn’t apply, however, to those states requiring payment of overtime based on the workday.

But if the employee wants to take off time in a different workweek, the answer is “no.”  Private sector employers are not permitted to give employees compensatory or “comp time” in lieu of overtime pay.  (This is unlike in the government employment context where comp time is permitted under certain conditions.)

 

Yesterday, the U.S. Court of the Appeals for the Third Circuit held that the NLRB lacked jurisdiction to take action where it lacked three Board Members who had been properly appointed.  In NLRB v. New Vista Rehabilitation and Nursing, a majority of the panel held that President Obama’s appointment of Craig Becker to the Board during an “intra-session recess” (i.e., a break during a session of the Senate) violated the Constitution and thus, the Board lacked the necessary three-member panel to act. The Court construed the Recess Appointments Clause to the Constitution as permitting appointments by the President unilaterally only during recesses “between sessions” of the Senate (i.e., the formal break when a Session ends before another begins). 

Lawyers – particularly wonky Constitutional scholars – will in the coming months extensively analyze the majority and dissenting judge’s scholarly decisions.  But, I will give you the “bottom line” on this.  The majority’s holding is of great significance for three main reasons. 

·        First, the majority concluded that the long presumed power of the President to make recess appointments during an intra-session break of 10 or more days was not supported by the Constitution.  Thus, only appointments made when the Senate recesses between sessions are valid “recess appointments.”   This is consistent with the decision by the D.C. Circuit in Noel Canning (which was discussed in our January 2103 Eupdate).  As such, actions taken by this or any prior President that were taken by an improperly constituted agency could conceivably be challenged, although NLRB cases involve litigated matters rather than rulemaking so the time limits for challenges will limit the impact to current labor cases.  Notably, President Obama had made 26 recess appointments as of January 2013; George W. Bush made 141 in his eight years in office.

·        Second, in finding that the recess appointment of Craig Becker in March of 2010 to be invalid, the panel majority’s decision opens the door to challenges to far more decisions than did that of the D.C. Circuit. Noel Canning concerned only the appointments made by President Obama in January of 2011 during the weeks between Christmas and New Year’s when certain members of the Senate continued to hold pro forma sessions in order to avoid a recess.

·        Third, the conclusion that the improper appointments deprived the Board of jurisdiction to act means that any employer or union at any stage of a case – whether before the NLRB or on appeal — can now raise the defect as a reason to vacate Board action. Jurisdiction can be challenged at any stage without being raised earlier as it goes to the fundamental power of a tribunal to act. The D.C. Circuit did not analyze the issue as jurisdictional (the panel majority of the Third Circuit noted that its sister circuit had “conflated” the analysis; that is, missed this step.)

Finally, I will share a couple of observations that are less “practical” (I do get to be a little “wonky” now and then).  The majority’s decision focused on the principle that separation of powers was of paramount importance to the framers of the Constitution.  The NLRB’s extreme position – that the President had the power to make appointments without the advice and consent of the Senate during any break during a Senate session regardless of duration – would permit the exception (recess appointments without Senate approval) to swallow the rule (the President must obtain Senate approval for appointments).  The intermediate position – that breaks of a not-insignificant duration constitute “recesses” – was not in the text of the Constitution or supported by surrounding evidence from the time of its drafting. 

In addition, the Court –quite properly in my view – rejected the position taken by the Board and its supporting “friends of the court” briefs that the issue was “nonjusticiable,” meaning that only the President could decide what the power entailed and that the judiciary’s respect for the Executive Branch required it to stay out of the matter.  The notion that one branch of government (here the Executive) should have unreviewable discretion to decide the scope of its power simply is not tenable.  As the majority stated, “Defining ‘recess’ in the Recess Appointments Clause does not express a lack of respect for coordinate branches of government because defining the word is merely an exercise of our judicial authority  ―to say what the law is, which sometimes requires an evaluation of whether one branch is aggrandizing its power at another’s expense.”

 

A departing employee accesses the company’s computer system on his way out without authorization and takes data.  What remedies can the company pursue?

The company can contact law enforcement officials, as that conduct likely constitutes a crime.  In addition, the company can file a civil complaint in court against the ex-employee, asserting claims such as trespass, conversion, or even a breach of the duty of loyalty.

The company can also take advantage of the civil remedies available under the Computer Fraud and Abuse Act.  This law has been found to apply where an employee continues to access a company’s computer system without authorization or for an illicit purpose after the employee accepts a job with another employer. For example, where an employee sends confidential information to his new employer before leaving the current position, the employer can bring an action in federal court against the disloyal employee and the new employer for losses caused by the unauthorized access, as well as consequential damages that include costs associated with security updates or enhancements to the company’s computer systems.  Because companies that knowingly receive another firm’s data may be held liable under this law, new hires should be instructed not to take any information from their former employers without express written permission from that employer.

What should a company consider in deciding whether to engage in electronic workplace monitoring of employees?

Companies, concerned with the abuse of workplace technologies, are increasingly considering electronic monitoring programs.  Motivating considerations include the prospect of liability for sexual harassment lawsuits arising from inappropriate emails or web site usage, concerns about employee transfers of proprietary company data to unauthorized recipients, or the loss of productivity from employee web usage.

Before deciding to engage in monitoring, companies should consider whether the cure might be worse than the problem.  For example, undertaking monitoring as a means for avoiding harassment claims may have the opposite effect if an employer becomes aware of a potential problem and fails to act.  The specter of monitoring can also have a negative impact on employee morale.

If an employer decides to proceed with monitoring, it should provide employees with notice that monitoring will take place prior to initiating monitoring.  This is required by law in some states, such as Connecticut, and is a good practice even if not required by law.  Notice should be through a written policy or computer sign-on notification, to avoid legal claims.  Finally, monitoring should not be undertaken without consulting legal counsel.

The IRS has released final regulations on how the new health care law defines “affordable” coverage.    Generally speaking, workers must have access to affordable health care from their employers, or the employer faces a penalty.   The IRS regulations now make clear that the government will deem a plan affordable so long as the individual worker’s premium is not more than 9.5% of the worker’s household income.    The government will not measure affordability against family coverage.

This is an important clarification and gives employers a powerful incentive to make individual coverage very inexpensive, and shifts costs to family coverage.   Of course, as some health care advocates have noted, this defeats the entire purpose of the health care law because these same families cannot afford costly health insurance from their employers and will be ineligible for tax credits and other subsidies to help off-set premiums since those benefits are only available to workers whose employer provided insurance is not “affordable.”  The IRS listened to those concerns through the rule-making process, but still decided that “affordability” would be based on individual coverage.  (For a good background piece on this issue, check out this NY Times story from last August).

As for how an employer should determine “household income,” the IRS has adopted a safe harbor that allows an employer to look at the employee’s W-2 wages and compare 9.5% of the W-2 amount to the employee’s contribution to health care for that year.   This safe harbor will be available through 2014.

The new health care law forces many employers to make practical decisions about what type of coverage, if any, to offer employees (because, for some employers, dropping coverage entirely and paying the associated penalty of $3,000 might make more financial sense).   The new IRS regulations confirm that in designing benefits packages, employers should focus on making individual coverage inexpensive, not necessarily family coverage.

The NLRB has issued a series of decisions in recent months finding various employee handbook provisions unlawful.   The Labor Board’s scrutiny of handbooks continued recently in another case, Direct TV.

In that case, the employer promulgated the following rule:

 If law enforcement wants to interview or obtain information regarding a Direct TV employee, whether in person or by telephone/email, the employee should contact the security department in El Segundo, Calif., who will handle contact with law enforcement agencies and any needed coordination with DIRECTV departments.

This rule probably looks familiar to many of you.  Most employers maintain such a rule for a good reason – if law enforcement is contacting employees about company matters, the employer usually wants to find out what is happening and provide the employee with legal counsel, if appropriate.

The NLRB, however, held that the rule was unlawful.   According to the Labor Board, the rule could be read by reasonable employees as interfering with a NLRB investigation since NLRB Board agents function as “law enforcement.”   Interfering with such an investigation is a violation of Section 8(a)(4) of the NLRA.

I’d imagine that few, if any, employers wrote such a rule with the NLRB in mind – when one says “law enforcement,” they usually mean federal, state, or local police, not the NLRB.   Yet, this case again demonstrates how broadly the NLRB now reads work rules as implicating labor law.

As a reminder, the NLRB is bringing many of these employee handbook cases under the theory that the overly broad handbook language unlawfully infringes on an employees’ right to engage in protected concerted activity or, as in Direct TV, that the rule interferes with an NLRB investigation. The right to engage in protected concerted activity and the NLRB’s right to investigate unfair labor practices extends to non-union workplaces.  Rules that could be “reasonably construed” as prohibiting protected concerted activity or interfering with a Board investigation are unlawful under Section 8(a)(1).