Retroactive Exception to Employer’s Policy Is Not a Reasonable Accommodation Under the ADA 2020-01-16T12:15:06-07:00

Posted on January 16, 2020

The Fifth Circuit recently affirmed summary judgment against an employee caught sleeping at his desk. A personnel manager for a security company suffered from Type II diabetes and had previously requested and received reasonable accommodations, but none involved the employee’s potential loss of consciousness due to diabetes. After two reports of the employee sleeping at his desk, his supervisor took a photograph of him sleeping again. When the employee awoke, his supervisor confronted him. The employee claimed that he may have experienced a diabetic emergency and immediately drove himself to the hospital. While in the emergency room, the company discharged the employee for violating its policy of requiring employees to remain “alert” at work. The employee filed suit alleging claims of disability discrimination, failure to accommodate, harassment, and retaliation. The district court granted summary judgment for the employer on all counts, and the Fifth Circuit affirmed.

The employee alleged, in part, that the company never gave him an opportunity to request a reasonable accommodation for his loss of consciousness because the company discharged him while he was at the hospital. The Fifth Circuit ruled the employee could have (but did not) request an accommodation any time before his discharge, but that “an after-the-fact, retroactive exception to the alertness policy as an accommodation for his underlying disability” would not constitute an accommodation.

Employees’ after-the-fact, disability-related, excuses for misconduct are commonplace. This court’s approach to that tactic…not so much. Kids, don’t try this at home. The optics of firing an employee while she or he is in the ER are, well, awful, and could give rise to other claims even if not under the ADA. However, here, the employer had an express, written “Alertness” policy that it had previously enforced on the same kind of evidence – a photo of the sleeping employee. It doesn’t hurt to have a written policy to rely on when defending an employment decision.

Clark v. Champion National Sec, Inc., No. 18-11613 (5th Cir. Jan. 14, 2020).

(Link to the opinion: http://www.ca5.uscourts.gov/opinions/pub/18/18-11613-CV0.pdf)

Per-Project Payments – Salary or Fee Basis Pay? 2020-01-16T11:26:43-07:00

Posted on January 16, 2020

By Alyssa L. Levy

Certain exemptions from employee rights to overtime premium pay require the employee to be paid on a salary basis or on a fee basis. On January 7, 2020, the U.S. Department of Labor (“DOL”) issued opinion letter FLSA2020-2 discussing a specific pay arrangement – where the total compensation is set by the scope of an assigned project, but the amount paid each week is a set amount. According to the DOL, these payments indicate a salaried employee (and exempt from overtime), so long as the payments do not change too often. The letter responds to the specific inquiry posed to the DOL, but the opinion informs payments generally for project-basis workers.

The DOL inquiry addresses an educational consultant hired to perform a specific project. The consultant was to receive a predetermined amount in 20 equal biweekly installments paid throughout the district’s academic year. The DOL found this qualifies as a salaried employee, assuming the educational consultant meets the duties tests of the administrative or professional exemptions and the weekly pay exceeds the salary threshold for those exemptions. The DOL’s opinion focuses on the pre-determined nature of the consultant’s weekly compensation. The weekly pay is the same regardless of actual hours spent and the quality of work performed during the week—the definition of a salary basis pay.

The DOL then considered whether additional compensation changes an employee’s pay status. For example, what if the same employee works, not only the agreed 40 weeks to develop the literacy curriculum, but also on a side project conducting teacher workshops over an eight week period? Because compensation in addition to the salary can be paid on any basis, such as a flat sum, bonus, or hourly amount, without undermining the salary basis test, the employee is still salaried if the employee receives an additional pre-determined amount for the side project in addition to their pay for the 40 week project.

The opinion letter specifically notes that an employee’s exempt status may be undermined, however, “if there are such frequent revisions to the contract that the amount of the employee’s biweekly compensation for a certain project is rarely the same from pay period to pay period and the circumstances suggest the amount of the payment is, in fact, actually based on the quantity or quality of work performed.”

No New News on Nondiscretionary Bonuses 2020-01-13T16:52:21-07:00

Posted on January 13, 2020

By Beth Ann Lennon

On January 7, 2020, the U.S. Department of Labor (“DOL”) issued a new Opinion Letter on “nondiscretionary” bonuses. When a bonus is offered to employees “to induce them to remain” with the company, the DOL considers the bonus to be “nondiscretionary.” Nondiscretionary bonuses “must be included in the regular rate of pay” for non-exempt employees. Determining how to allocate such bonuses can get a bit more complicated… When employers require that the employee stick around for some set amount of time to get the bonus and the bonus program does not clearly articulate how much of the bonus was earned in which week, the employer may “assume” each week within that period of time “counts equally in fulfilling the criteria for receiving the lump sum bonus.” In short, the employer allocates the bonus equally to each week in the time period covered by the bonus. Then, the employer must calculate overtime – taking into account this added compensation – separately for each workweek in which the employee worked more than 40 hours.

At the end of the day, this new Opinion Letter is not “new” news – it’s just a reminder that employers must carefully analyze what period of time a bonus is intended to cover and fairly and equally allocate the bonus across that period. DO NOT attempt to game the system and allocate a bonus in a manner inconsistent with this directive or you could find yourself in trouble. Another reminder – not covered in the Opinion Letter but still worth noting – don’t forget that state laws, including Colorado’s, often establish overtime requirements in addition to those set by the federal law. Make sure you are doing all of your overtime calculations in accordance with all applicable laws.

Lethal Danger Needed to Invoke Wrongful Discharge Claim 2019-12-03T12:09:22-07:00

Posted on December 3, 2019

By Joseph Hunt

Zero tolerance against workplace violence is a laudable policy. So too is encouraging employees to withdraw to safety when encountering workplace violence. Thus, when two employees get into a fight, a rational response (and one consistent with these policies) may be to fire both employees. There is an ongoing debate in courts across the country, however, whether an employer may fire an employee for defending himself against serious bodily harm because self-defense is a legally protected right.

The West Virginia Supreme Court recently clarified that self-defense supporting a wrongful discharge claim must be in response to “lethal imminent danger,” not just any physical attack. The court does not explain why self-defense, if justified, should not protect an employee against an adverse employment action in all circumstances, no matter how serious the threat of violence may be. In any event, the court implicitly accepts that an employee does not have immunity in all cases merely by claiming, “He started it!”

This decision represents a significant limitation to the claim of wrongful discharge in violation of public policy in the context of self-defense. Employers would still be wise to evaluate instances of workplace violence on a case-by-case basis. There may be instances when an employee has no choice but to defend himself, and where the right to self-defense may be more compelling than an employer’s zero tolerance policy.

The decision is Newton v. Morgantown Machine & Hydraulics of West Virginia, Inc., Case No. 18-0653 (W.V. Nov. 11, 2019).

OFCCP Renews Focus on Disabled Individuals, Veterans, and Military Spouses 2019-11-15T12:36:14-07:00

Posted on November 15, 2019

By Matt Morrison

Last week was busy for the Office of Federal Contract Compliance Programs (“OFCCP”), the anti-discrimination watchdog that oversees the nation’s federal contractors and subcontractors. On November 8, OFCCP Director Craig Leen announced that the agency will soon begin selecting contractors for “focused reviews” of their compliance with Section 503 of the Rehabilitation Act. Section 503 bars contractors from discriminating against individuals with disabilities. The same day, the agency released a list of 500 contractors selected for an initial round of focused reviews under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”), and it issued a new directive highlighting VEVRAA’s protection of military spouses.

A “focused review” is an OFCCP compliance evaluation that is narrowly tailored and focused on specific issues. Here, OFCCP’s focused reviews will evaluate whether contractors are complying with nondiscrimination and affirmative action rules for disabled individuals and protected veterans. According to OFCCP, these reviews will include onsite visits to contractors and interviews with managers responsible for compliance – such as, for example, Human Resources personnel or ADA coordinators. OFCCP will also seek “to evaluate hiring and compensation data,” and for disability reviews, “the handling of accommodation requests.” The agency’s new directive also mandates that, during broader compliance reviews, compliance officers must evaluate contractors’ treatment of spouses of protected veterans.

Federal contractors and subcontractors should review their compliance with the agency’s affirmative action regulations for disabled individuals and protected veterans. The regulations, which OFCCP significantly revised in 2013, set specific “aspirational” benchmarks for the recruitment and hiring of disabled individuals and protected veterans, and impose an array of additional requirements on contractors. For example, under the revised regulations, which went into effect in March 2014, contractors must invite their employees to self-identify as disabled or as veterans at least every five years. It may be time for contractors to re-survey their workforce.

Employee of Private Contractor a Public Employee?? 2019-10-28T13:44:55-06:00

Posted on October 28, 2019

By Patrick Scully

The United States Court of Appeals for the Second Circuit has held that an employee of a private contractor enjoys the rights of a public employee with a “property interest” in his employment.

The plaintiff was employed as a court security officer (CSO) for a private company that contracted with the United States Marshals Service (USMS) to guard a federal courthouse. The plaintiff was covered by a collective bargaining agreement (CBA) between the private employer and the union. The CBA provided CSOs could only be terminated for “just cause”. However, under the contract between the USMS and the employer, the USMS had an unqualified right to remove any CSO from providing service at the federal courthouse.

When the plaintiff left his post early and his employer decided to retain him regardless, the USMS exercised its right to remove the plaintiff from working at the courthouse. The plaintiff sued in federal court, arguing that the “just cause” provision in the CBA gave the plaintiff a property interest in his employment entitling him to “due process” prior to removal by the USMS.

The Court of Appeals agreed with the plaintiff’s argument, effectively concluding the plaintiff is a “public employee”.

This decision is a troubling development insofar as it suggests that a private contractor must comply with all private sector employment laws while the government entity must simultaneously treat unionized employees of private contractors as public employees. The result appears to be de facto joint employment of such employees, which eliminates most benefits to the government of a contracting arrangement in the first place. It will be interesting to see if other courts adopt the Second Circuit’s analysis.

Atterbury v. United States Marshals Service, Docket Nos. 18-1713-cv(L); 18-2378-cv(Con)

On A “Need to Know” Basis 2019-08-15T13:40:24-06:00

Posted on August 15, 2019

By Alyssa Levy

Can you get sued for defamation because you conduct an internal investigation? It depends on who you tell and what you say. In Warren v. Federal National Mortgage Assoc., a Texas court ruled in favor of the employer on a former employee’s defamation claim, based, in part, on the employer’s qualified immunity privilege. The investigation was conducted without malice and the results were shared only with persons who had a valid interest in the investigation.

The former employee alleged the company made two types of defamatory statements about her: the investigative report itself (looking into her violations of company policy) and comments allegedly made by other employees. Under Texas law, qualified privilege protects employers from defamation liability for communications made while investigating alleged wrongdoings, so long as the communications are made only to persons with a “valid interest.” To overcome the employer’s qualified privilege, this employee had the burden of establishing by clear and convincing evidence that statements made during the investigation were made with malice or were distributed to persons who lacked a valid interest. The employee attempted to establish malice by pointing to things the investigator left out of the report, rather than evidence in the report, but the court said lack of investigation is insufficient to show actual malice. The employee then speculated that the company shared its investigation with other employees and their spouses – but there was no actual evidence that any of these third parties received the information. The evidence showed that only persons with a “valid interest” in the information received the report or were made aware of its findings. Thus, the employer was safeguarded by the qualified privilege defense.

The takeaway? Including only evidentiary findings and truthful statements in an investigative report and sharing it among only those on a need to know basis provides a backup defense to a defamation claim in many states.

Is “Employee” Written in the Cards? 2019-07-26T13:45:55-06:00

Posted on July 26, 2019

By Alyssa Levy

A federal jury will decide whether a tarot card reader who performed at the Colorado Renaissance Festival for thirty years is a Title VII employee for purposes of her retaliation claim. Plaintiff claims that she was not invited back for the 2016 season in retaliation for her complaint of sexual harassment.

Plaintiff’s lease agreement with the Colorado Renaissance Festival, through which she leased a space for her palm and tarot carding reading booth, contained a provision titled “Independent Contractor Status,” where she acknowledged she was not an employee of the Festival. The Colorado District Court, however, looked at the actions of her engagement with the Festival and found that her employee status is a question for a jury. In deciding to deny the Festival’s summary judgment motion, the court first looked at whether the Festival was an employer and then whether the Plaintiff was considered an employee, both under Title VII.

Festival as an employer: Title VII defines “employer” as “a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” Although the Colorado Renaissance Festival alone may not have the requisite fifteen employees, it is an integrated enterprise with the Pittsburgh Renaissance Festival, and the two combine to likely meet the requirement of a Title VII employer. The court noted the two festivals shared a payroll software license, website and ticket design, employment applications, vehicles, and employees, from which a jury could find the companies to be an integrated enterprise.

Plaintiff as an employee: To determine an individual’s status as a Title VII employee, the court used the Tenth Circuit’s “hybrid test,” to determine whether Plaintiff was truly an independent contractor, with the main focus on “the employer’s right to control the ‘means and manner’ of the worker’s performance.” The court first found it undisputed that the festival did not pay Plaintiff any direct compensation (no salary or hourly wage), and so, the court looked to the “threshold-remuneration test” for other direct or indirect benefits Plaintiff received from the Festival. The court found that the Festival was the ultimate source of her income because the Festival controlled Plaintiff’s access to customers who paid a fee for her services at the booth, which was evidence of direct or indirect benefits received by a Title VII employee.

The positive outcome of the threshold-remuneration test was in addition to the employment relationship a reasonable jury could conclude existed based on the level of control the Festival exercised over Plaintiff’s work. The Rules of Plaintiff’s lease agreement governed the specific hours to staff her booth; fines for closing without permission during inclement weather; her manner of speech, decorum, hairstyle, covering of tattoos, and performance; goods or services sold; equipment she could use; pre-approval for booth changes; discipline for violating festival Rules; advertising of her booth; and other terms.

The court’s analysis found enough evidence to survive summary judgement for the retaliation claim, but it is still up to a jury to determine whether the tarot reader will be dubbed an employee. Businesses that dictate the terms of a contractor’s independent work need to beware of being found to be an employer. This applies even when the contractor has to fit the theme of the workplace—here a renaissance village.

St. Michael v. Rocky Mt. Festivals, Inc., Civil Action No. 1:16-cv-02969-SKC, 2019 U.S. Dist. LEXIS 114040 (D. Colo. July 10, 2019).

NLRB Says Organizer Access to Public Spaces is Not on the Menu 2019-06-18T14:30:59-06:00

Posted on June 18, 2019

By John Alan Doran

Over thirty-five years ago, the NLRB held that an employer may not prohibit a union organizer’s access to an employer’s privately owned, but publicly accessible areas, such as an employer’s public restaurant or cafeteria, unless the organizer engages in “disruptive” conduct. A long line of subsequent Board decisions confirmed this rule. However, last Friday, the Board unequivocally reversed a slew of its prior decisions on this issue in UPMC, 368 NLRB No. 2 (06-CA-102465, June 14, 2019).

UPMC is a hospital facility that provides a publicly accessible cafeteria. Union organizers held a peaceful lunch meeting with some UPMC employees in the cafeteria. When UPMC Security learned of this, they called the police and had the organizers removed. The union filed unfair labor practice charges, and an Administrative Law Judge found in favor of the union.

On appeal, the Board reversed the ALJ’s decision. The Board reviewed a long line of federal circuit court decisions resoundingly criticizing the Board’s historical approach to organizer access to public spaces, and noted that the Board’s long-standing position directly contravened existing Supreme Court jurisprudence. The Board concluded that organizer access to privately owned, public spaces is governed by the Supreme Court’s decision in NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1965), which held that an employer may lawfully exclude union organizers from its property, except in the very rare instances where either the union has no other reasonable means to communicate with employees or where the employer discriminates against the union by allowing solicitation or distribution by others but not the union. Applying Babcock & Wilcox to these facts, the NLRB held that the employer did not violate the Act by removing the organizers because they were engaged in distribution and solicitation and the employer had consistently excluded other patrons who engaged in such activities for non-union purposes.

While the UPMC decision noted that the ruling should not impact existing employer no-distribution/no-solicitation rules, it likely does impact the application of existing employer rules for employers that have publicly accessible areas on their private property. Regardless, this landmark ruling should prompt all employers to revisit both the language and the enforcement of their no-distribution/no-solicitation rules to ensure that they are legal, robust, up to date, and consistently enforced. Employers are also wise to note that they may not exclude union organizers from public areas merely because they are organizers—it is the conduct of soliciting or distributing that supports their exclusion, not their mere affiliation with a union.

New Paid Leave Law in Nevada 2019-06-18T09:17:46-06:00

Posted on June 18, 2019

By Lindsay H. S. Hesketh

Beginning on January 1, 2020, Nevada will require private employers with 50 or more employees to provide their employees with paid leave. Covered employers must allow employees to accrue paid leave at a rate of .01923 hours for each hour worked. Employees can begin using their accrued paid leave on their 90th calendar day of employment. Employers may allow employees to carry over unused accrued leave from year to year, but also may cap the carry-over amount to 40 hours. Similar to other leave laws, employers must also keep records tracking employees’ accruals and use of paid leave and provide an accounting of available paid leave to each employee on each payday.

Unlike some federal and state leave laws limited to family and sick leave, employees may use paid leave under Nevada’s new law for any reason and do not need to provide a reason for its use to their employer. However, employees must provide notice of their desire to use paid leave as soon as practicable. When employees act in accordance with this law, employers cannot deny employees the right to use paid leave, require an employee to find a replacement worker while on paid leave, or retaliate against an employee for using accrued paid leave. Nevada may collect remedies and penalties, plus a $5000 fine, for each violation.

The law does not apply to otherwise eligible employers during their first two years of operation; temporary, seasonal, or on-call employees; and employers who already provide their employees with the same or a more generous amount of paid leave.

You can read the entire bill as adopted here.

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