Labor and Employment Law Blog

Kick Back(s) & Relax No More

By Glenn Schlabs and Joe Hunt

Must federal construction contractors pay for employees’ lodging near a job site? In Weeks Marine, the Department of Labor took the position that a contractor’s failure to reimburse employees for lodging – where the employees travelled away from their homes and lived near the job site – was a de facto kick back of Davis-Bacon Act wages and was prohibited if the lodging primarily benefitted the contractor. Click here for the full advisory.

NLRB Sticks To D.R. Horton

By Lori Phillips

Recently in Chesapeake Energy Corp., 362 NLRB No. 80 (Apr. 30, 2015), the NLRB held fast to its ruling in D.R. Horton, Inc., 357 NLRB No. 184 (2012). The employer required its employees to sign an arbitration agreement as a condition of employment. The agreement required “binding arbitration to resolve all disputes” between employees and the company, and specifically identified claims under the NLRA, among other statutes. The agreement also prohibited employees from bringing class or collective actions. The Board ruled the agreement violated Section 8(a)(1) of the Act for two reasons—first, the all-encompassing language would lead employees to believe they could not file unfair labor practice charges with the Board, and second, the total proscription of class or collective actions would take away “the core substantive right” of collective legal action protected by the Act. The Board’s decision does not change the current state of the law. Rather, it shows the Board has dug in its heels where mandatory arbitration and class action waivers are concerned. For other entries on D.R. Horton, click here.

Supreme Benchslap for EEOC

By John Alan Doran

Title VII requires the EEOC to engage in “conciliation” once it issues a cause determination. The EEOC’s unique approach to conciliation, which typically is totally divorced from anything conciliatory, is the subject of this morning’s decision from the U.S. Supreme Court in Mach Mining, LLC v. EEOC, No. 13-1019 (U.S. April 29, 2015). The EEOC issued a cause determination against Mach Mining on behalf of a woman and a class of similarly situated women. The EEOC informed the parties that it would begin the conciliation process, but nothing happened for an entire year. Then the EEOC informed Mach Mining that conciliation efforts had proven unsuccessful. This came as no small surprise to Mach Mining, since it had not been invited to participate in any conciliation of any kind. When the EEOC sued, Mach Mining defended, in part, by arguing that the EEOC was barred from suit because it did not conciliate the claim before bringing suit. The trial court agreed, but the Seventh Circuit reversed.

Before the Supreme Court, the EEOC argued that its conciliation efforts are not subject to scrutiny by courts. Funny thing about our Supreme Court—more times than not, when you tell the Court it can’t review an agency action, it will do precisely that in resounding fashion. Such is the case in Mach Mining. The Court unanimously held that EEOC conciliation efforts are subject to judicial review, albeit narrow. At the very least now, the EEOC’s conciliation duty will require it to disclose the specific allegation and the person or class of persons who have allegedly suffered. This is a sea-change from the EEOC’s typical hide-the-ball (or hide-the-class-members) approach to conciliation and should promote more informal resolutions of cause determinations. Unfortunately, the remedy if the EEOC drags you into court without conciliating, is that the court sends the case back to the EEOC for the full conciliation treatment.

Will EEOC’s New Wellness Regs Make You Sick?

By Just John

The EEOC has broadcast proposed regulations on wellness programs. For all the details, visit https://www.federalregister.gov/articles/2015/04/20/2015-08827/regulations-under-the-americans-with-disabilities-act-amendments. In short, the proposed regs attempt to reconcile (a) Obamacare provisions encouraging wellness programs, (b) the ADA’s approval of medical examinations that are truly voluntary, and (c) the EEOC’s ongoing crusade against wellness programs. Much of the EEOC’s attempt to square this triangle of contradictions boils down to determining when wellness programs that require medical examinations are really, truly voluntary. Part of the regs will require new communications from our employer-sponsored welfare plans; in language “employees are reasonably likely to understand,” the plans have to describe medical information to be obtained as part of the wellness plan, the purposes for its use, the restrictions on disclosure of the employee’s medical information, the entities with whom it will be shared, and the methods used to protect the information. The EEOC is accepting (and rejecting) commentary on the proposed regulations through mid-June before moving forward to convert them into final rules. The EEOC also approved a 30% incentive/penalty framework for incentivizing participation in wellness programs.

Don’t Go Break-rooming My Heart

By Just John

Being a hospital maintenance worker is grueling. Just ask Darrell Allen, who worked for Atrium Medical Center. His job was so taxing that he created a secret break-room for himself in one of the hospital’s air handling rooms. The break-room included a desk and chair; a refrigerator that contained raw eggs, pickles, orange juice, milk, bread, lunch meat, peanut butter, pistachio nuts, cooking oil, and cooking spray; a toaster; a griddle; a hot plate; and a skillet. When Atrium discovered the secret hiding place, Mr. Allen defended himself by explaining that he always removed his stuff before state hospital inspections. But Atrium had a rule against cooking in areas other than the kitchen (they really needed a “rule” for that?), and also banned food in any mechanical rooms. Add to this the fact that Mr. Allen was exercising his gourmet talents in a hospital air handling room, jeopardizing patient and worker safety, and you have all the ingredients for a sad end to Mr. Allen’s tale. He was fired. He sued for disability discrimination as a former heart attack victim and for age discrimination. The court burnt Mr. Allen’s claims to a crisp, awarding summary judgment to the hospital. Allen v. Atrium Med. Center, Case No. 1:13-CV-811 (S.D. Ohio April 14, 2015).

The lesson from this bizarre tale? Secret forts are super keen when you’re 6 years old and using an old blanket between dining room chairs. Not so much when you’re 60 and cooking in a hospital air handling room.

Unreasonably Sporadic Telecommuting

By Bryan Stillwagon

One year ago, we reported on the Sixth Circuit’s ruling that telecommuting could be a reasonable accommodation for a resale steel buyer at Ford suffering from irritable bowel syndrome. There, the employee requested to telecommute as many as four days a week. Ford denied the request because the position, at least according to Ford, required an employee’s physical presence and was unsuitable for telecommuting.

After a rehearing by the full Sixth Circuit, a majority (8-5) has changed course and ruled in Ford’s favor. EEOC v. Ford Motor Co., No. 12-2484 (6th Cir. Apr. 10, 2015). First, there was evidence that a resale buyer could not work unpredictable at-home schedules without lowering production standards. Second, other employees’ telecommuting arrangements were scheduled and predictable, but plaintiff’s proposed arrangement (up to 4 days per week at home, unscheduled in advance, refusal to come in if needed) was not. Third, though technology (e-mail, teleconferencing, etc.) had undoubtedly advanced, technology was not a complete substitute for a resale buyer’s physical presence.

Might telecommuting still be an accommodation that is reasonable for some positions? Absolutely, but not if the job can be best performed only by the employee actually being there, as opposed to a disembodied voice over the phone, or an e-mail or text message.

A Court Abandons Horton

By Bill Wright

In February 2013, we reported on a federal court in Idaho that followed the NLRB’s D.R. Horton decision and ruled that agreements to arbitrate all claims solely on an individual basis were unenforceable. (Click here to read the post.) Here’s the rest of the story. After failing to compel arbitration, the employer appealed the arbitration issue. Before the appeal briefs were even filed, the appellate court dropped a footnote in another case, noting that the Brown court got it wrong. The employer asked the federal court in Idaho to reconsider, and now it has. Now, the court has agreed with the Supreme Court and multiple appellate courts: an agreement to arbitrate claims on an individual basis may be enforced, even at the expense of workers’ right to engage in protected concerted activities. Brown v. Citicorp Credit Services, Inc., Case No. 1:12-cv-00062-BLW (D. Id.). Of course, in the meantime, the battle over conditional certification of a plaintiff class had been continuing. The employer won that too, but, we assume, paid its attorneys for what turns out to have been unnecessary work.

Exempt or Not? Service Advisors

By Andy Volin

The Fair Labor Standards Act (“FLSA”) requires payment of a minimum hourly wage and overtime, unless an employee fits within one of many exemptions. In some parts of the United States, courts had ruled that automobile service advisors – the people at the dealership who you speak with about your car’s repair needs – were exempt. This conclusion was based on a reading of the statutory text in the FLSA, the accompanying regulations, and even Department of Labor opinion letters and its field handbook. This week, however, the Ninth Circuit, which has jurisdiction over California, Arizona, and other western states, looked at this issue for the first time and reached the opposite conclusion. Navarro v. Encino Motorcars LLC, No. 13-55323 (9th Cir. Mar. 24, 2015).

According to the Ninth Circuit, service advisors do not fit within the exemption. That court read the exemption narrowly, and limited it to automobile dealership employees who sell cars, work in parts, or work as mechanics – in effect, all the major positions other than service advisors. The Ninth Circuit reasoned that because the exemption analysis could go either way, it should respect the current judgment of the DOL, which now narrowly interprets this exemption.

Pregnancy Not So Favored

By Bryan Stillwagon

Are pregnant employees entitled to workplace accommodations under Title VII? Does it matter whether you offer light duty work to employees injured on the job? The Supreme Court has ruled on Young v. UPS and we still don’t know. Young v. UPS, Inc., No. 12-1226 (Mar. 25, 2015).

In this case, the pregnant employee had a medical restriction; she could not lift more than 20 lbs. Her job required her to lift 70 pounds. UPS told her she was not eligible for a light duty accommodation; UPS only offered light or alternative duty to employees injured on the job, to employees who lost their commercial drivers’ licenses, or as required by the Americans with Disabilities Act. She sued, and argued that, if an employer accommodates anyone with a 20 lb. lifting restriction, it also has to accommodate pregnant employees with that restriction. The Court said this gave pregnancy “most-favored-nation” status and rejected the argument. Ultimately, the Supreme Court held only that the employee might win a disparate treatment claim over even a pregnancy-neutral policy, if she could show the policy created an unjustified substantial burden on pregnant employees or if the neutral policy caused UPS to accommodate so many people that excluding pregnant employees demonstrated intentional discrimination. In short, if you make enough exceptions to your “no light duty” policy, you’ll have to give pregnant employees an exception too.

Perceived Threat

By Andy Volin

The Americans With Disabilities Act permits an employer to deny employment to a person who would create a “direct threat” to the safety of himself or others in the workplace. A company with a warehouse operation refused to place a blind employee into its warehouse, asserting this defense, and the EEOC persuaded a jury to rule against the warehouse. The Tenth Circuit just reversed the outcome, because the direct threat jury instruction was wrong. EEOC v. Beverage Distributors Co., No. 14-1012 (10th Cir. Mar.16, 2015). The jury instruction required the warehouse to prove that the employee created a direct threat and that there was no reasonable accommodation possible. That was more than the law required, according to the court. The warehouse only had to prove it had a reasonable belief that the worker would create a direct threat, not that he actually did so. That distinction could have affected the outcome, and so the case was sent back for another trial.