Alabama Employment Law Report

HUD Finds Housing Discrimination In Mobile

Daniel Burnick — Tue, 18 Jun 2013 07:48:25 -0600

According to Al.com, the US Department of Housing and Urban Development fined LLB&B, a Mobile real estate company, $29,000 for discriminating against a potential purchaser who is African American. Last year, an unidentified man filed a complaint with HUD after he received a voice mail from Shirley Lane, an agent at LLB&B, where she was overheard saying "Those people will panic when they see a black person drive up and look at it...I called him back. He didn't answer so that was good! If I didn't call him back he could sue me for prejudice." Lane was terminated from LLB&B after the voice message was provided to the owners by HUD. As part of the conciliation agreement between LLB&B and HUD, LLB&B will pay fines totaling $29,000, fair housing training will be provided for its employees, and LLB&B must include the fair housing logo on all of its advertising.

The Dangers of Unpaid Interns: Update

Daniel Burnick — Wed, 12 Jun 2013 13:40:50 -0600

Last week, I wrote about the dangers of using unpaid interns, including claims for wages and benefits. According to the Hollywood Reporter, a judge granted summary judgment IN FAVOR OF 2 INTERNS alleging violations of the FLSA. In 2011, 2 interns, Alex Footman and Eric Glatt, who both worked on Black Swan, claimed the unpaid internship program run by Fox Serachight was ddone in violation of minimum wage and overtime laws. The court found that the Fox Searchlight was their employer, and they failed to meet the 6 criteria set forth by the DOL that are examined to determine whether an internship could be unpaid. These 6 factors were set forth in last week's blog. The judge also certified the case as a class action, and the case will proceed at this point in time.

US Supreme Court Rules On Class Actions In Arbitration

Daniel Burnick — Wed, 12 Jun 2013 08:57:09 -0600

Earlier this week, the US Supreme Court, in a unanimous decision, found that the language in an arbitration agreement permitted the arbitrator to decide on whether or not the agreement authorized a class action. Although not an employment related case, this decision will have an impact on employment related arbitration agreements.

Dr. John Sutter sued Oxford Health Plans alleging they failed to properly pay and reimburse his medical fees. The lawsuit was filed as a class action. Oxford moved to compel arbitration pursuant to the language in the Primary Care Physician Agreement that was signed by Sutter, which provided, in part:

" No civil action concerning any dispute arising under their Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the Rules of the American Arbitration Association with one arbitrator."

The arbitrator found that this arbitration clause did not prohibit a class action arbitration. Oxford challenged the decision in federal court, and the case was ultimately decided by the Supreme Court. The Court found that the review of an arbitrator's decision is extremely limited in federal court, looking only at "whether the arbitrator interpreted the parties' contract, not whether he got its meaning right or wrong." The Court found that the arbitrator interpreted the contract, and thus, whether he got it right or wrong did not present an opportunity for the courts to question his decision.

Practice pointers. This decision both clears and muddies the water for employers who have arbitration agreements with their employees.. The Court stated that "Class arbitration is a matter of consent: An arbitrator may employ class procedures only if the parties have authorized them." However, the NLRB has found that class waivers in arbitration agreements in the employment context may violate Section 7 of the NLRA since employees have a substantive right to litigate employment disputes collectively. In light of the Oxford decision, employers who have arbitration agreements should review them to determine how they are written, and whether they want to include or attempt to exclude class arbitrations.

Internships, Part 2 and Health Care Update

Daniel Burnick — Fri, 07 Jun 2013 08:31:37 -0600

INTERNS. Wednesday, I blogged about the dangers of unpaid interns. The same day, Melissa Korn with the Wall Street Journal published a story about how internships are crucial to getting a job. She reported that 1/3 to 1/2 of MBA students worked for their employer as interns before being hired. That number is expected to rise. Many interns are being offered a full time job a year in advance, a good sign that businesses are positive about their long term hiring needs. Although this story looks at MBA students, the lesson to be learned is that internships today are a proving ground and an extended on the job interview for full time employment post graduation. Employers can benefit greatly from the use of interns: however, they must be sure that they comply with the FLSA.

HEALTH CARE UPDATE. One of Sirote's regular publications is The Counselor. In the current issue, Andy Andrews, who practices with the Corporate and Tax Group and the Health Care Group at Sirote, authored an article entitled "Complying with Health Care Law's Employer Mandate". This is an excellent overview of what is required today, and what may happen in the future.

Unpaid Summer (Or Anytime) Interns May Be Very Expensive

Daniel Burnick — Wed, 05 Jun 2013 08:05:19 -0600

3 years ago, I blogged about the hidden dangers of unpaid summer interns: they may need to be paid. Now that we are in June, the problems associated with unpaid summer interns, or unpaid interns at any time of the year, will be re-examined. There have been a number of high profile FLSA collective action cases filed as the result of unpaid interns, including one against Charlie Rose and his production company that resulted in a settlement in the neighborhood of $250,000. Recently, a former unpaid intern filed a FLSA collective action against the Elite Model Management Company seeking damages in an amount in excess of $50 million. The New York Times answered a question asking what can be done to be compensated for my "slave labor" by stating that he should "take the internship and then call the Labor Department--something you or your colleagues can do confidentially."

In 2010, the Labor Department issued Fact Sheet #71 setting forth 6 criteria to look at to determine if an intern can be unpaid. All 6 of the criteria must be met:

1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment.

2. The internship experience is for the benefit of the intern.

3. The intern does not displace a regular employee, but works under close supervision of the existing staff.

4. The employer receives no immediate advantage from the activities of the intern and, on occasion, the employer's operations by actually be impeded.

5. The intern is not necessarily entitled to a job at the completion of the internship.

6. The employer and intern understand that the intern is not entitled to wages for the internship.

These guidelines apply to "for profit " employers. No specific guidelines have been issued for non-profit employers. DOL did acknowledge that where the intern "volunteers" in both the for profit and non-profit sectors without the expectation of pay, it is generally permissible not to pay the intern. The DOL does make the distinction that when an individual volunteers in a non-profit commercial setting that serves the public (such as thrift stores), the organization is NOT exempt from FLSA and must pay wages. If a non-profit provides a "stipend", it is important that the stipend equals or exceeds the minimum wage, and the language used in providing the stipend does not preclude raising it as a defense should a FLSA claim be made.

Should an intern be misclassified as an unpaid intern, there are a host of damages that could be incurred: wages, lost employee benefits, meal and rest periods, penalties, and attorney's fees.

Practice pointer. Employers and non-profit organizations must recognize the dangers of the "unpaid intern". It is a complicated area of the FLSA, there are no easy answers, and each case must be examined based on its own facts. Before the decision is made to use unpaid interns, it is important that the employer consult with its legal counsel to make sure it is in compliance with the FLSA.

From Guns To Roses: Can A Florist Refuse To Sell Flowers To A Gay Couple For Their Wedding?

Daniel Burnick — Thu, 23 May 2013 07:44:00 -0600

I have spent a good deal of time this past week following, reading and writing about Alabama's Gun Reform Legislation. Now, I am switching from guns to roses. Earlier this week, the Los Angeles Times reported on a number of lawsuits filed in Washington state which raise a number of interesting questions of civil rights, religious liberty and the refusal to sell flowers for the wedding of a gay couple. Barronelle Stutzman, the owner of Arlene's Flowers, has routinely "designed floral arrangements for gay and lesbian clients, has hired openly gay employees, but draws the line at providing flowers for same-sex weddings because of her religious convictions". In April, Washington filed a consumer protection lawsuit against Arlene's, seeking fines for "failure to provide the same kind of services to a same-sex couple that it provides to everyone else". The ACLU filed a similar lawsuit alleging a violation of the state's anti-discrimination laws. Arlene's filed a counterclaim against Washington alleging that her religious freedoms were being infringed upon: her Christian faith means that "she cannot as a matter of conscience participate in or facilitate a same-sex wedding". The counterclaim also alleges that her First Amendment protections for freedom of speech and freedom of association were being violated.

Practice pointer. Although Alabama has not legalized same-sex marriages, many states have, and more will in the future. Additionally, the U.S. Supreme Court may address this issue when it releases it's decision later this year on a case involving same-sex marriages. This situation is only a preview of the issues that will arise as more states approve same-sex marriages, and it will ultimately have an impact in Alabama.

EEOC To Sign MOU With Mexican Consulate. The Birmingham District Office of the EEOC announced that it will sign a Memorandum of Understanding with the Mexican Consulate to establish an ongoing collaborative relationship to combat discrimination. The MOU, to be signed on May 23, will provide Mexican nationals with information, guidance, and access to resources on the prevention of discrimination in the workplace, REGARDLESS of documentation status. Delner Franklin-Thomas, the director of the Birmingham District, said that "This pact will enhance and carry forward both entities missions-promoting employment justice and protecting people's basic human rights". The EEOC will provide to the Mexican Consulate Spanish-language materials explaining the laws enforced by the EEOC. The EEOC will also provide representatives to meet with Mexican nationals to disseminate the information and conduct counseling regarding employment discrimination matters. The EEOC and Mexican consulate will work together to provide information on workplace discrimination to Spanish language radio stations.

Practice pointer. Any employer who has Mexican nationals working for them, whether documented or undocumented, can expect the employees to be educated about potential EEOC claims. Although this program focuses on Mississippi and Louisiana, I expect there will be an uptick in discrimination claims by Mexican nationals.

Guns In Alabama

Daniel Burnick — Wed, 22 May 2013 13:28:30 -0600

Gun Law Update. Over the past two days, I have posted about the sweeping gun reform law approved by the Alabama Legislature. According to Al.com, Governor Bentley signed the Bill into law today. It will become effective on August 1, 2013.

Guns in the Workplace: Part 2

Daniel Burnick — Tue, 21 May 2013 13:47:15 -0600

Yesterday, I posted an entry about Alabama's new gun legislation, approved by the Legislature, and awaiting Governor Bentley's signature. Here is a more detailed look at the legislation.

On Monday, May 20, 2013, the Alabama House overwhelmingly passed Conference Committee Substitute for SB286, a law reforming gun laws in Alabama. This is a wide reaching law, and will become effective IF Governor Bentley signs it. Due to the wide spread implications and controversial nature of this bill, this summary of the Bill is being published. In the event Governor Bentley does not sign the Bill, we will update you at the appropriate time. SB286 is lengthy, 36 pages, and makes some major revisions to numerous currently existing Alabama laws. You can read SB286 in its entirety here.

Summary of Conference Committee Substitute for SB286

Section 2. This section amends existing criminal statutes, including the following:

1. 13A-11-7, Disorderly Conduct by adding “(c) It shall be a rebuttable presumption that the mere carrying of a visible pistol, holstered or secured, in a public place, in and of itself, is not a violation of this section.

2. 13A-11-52, prohibiting the carrying of a pistol on private property without the owner’s consent, unless the person possesses a valid concealed weapon permit (CWP).

3. A person legally permitted to possess a pistol, but who does not have a CWP, may possess an unloaded pistol in his/her motor vehicle if it is locked in a compartment or container and out of reach of the driver and any passenger.

4. Sheriff’s SHALL issue, within 30 days of receipt of a completed application and fee, a CWP in 1 to 5 year increments. The Sheriff can refuse to issue a CWP if the person is prohibited from possession of a pistol or firearm pursuant to state or federal law, has a reasonable suspicion that the person may illegally use the weapon, and can consider prior mental health, falsification of any portion of the permit application, or caused justifiable concern for public safety. If denied, the Sheriff SHALL issue a written statement setting forth the reason for denial and the applicant has an opportunity to appeal to the District Court.

5. “A person who is unlawfully present in this state may not be issued a permit under this section.”

6. Any identifying information for those who were issued a CWP shall be kept confidential, and not available to the public.

7. A person licensed to carry a handgun in any state is authorized to carry a handgun in Alabama.

Section 3. This section provides for the payment of a license tax, in the amount of $150 in cities and towns over 35,000 people, and $100 in all other places, for gun shows. If the organizer pays the tax, each dealer at the show does not need to pay any additional tax if they are already licensed under the tax laws.

Section 4. This controversial section deals with guns in the workplace and parking lots.

1. Employers MAY restrict or prohibit employees, including those with a CWP, from carrying firearms while on the employer’s property or while engaged in the duties of the person’s employment.

2. Public and Private employers MAY NOT restrict the transportation or storage of a lawfully possessed firearm or ammunition in an employee’s privately owned motor vehicle while parked or operated in public or private parking area if (a) the employee has a CWP, (b)the weapon is legal for use for hunting and the employee possesses a valid Alabama hunting license, the weapon is unloaded at all times, and is during a season in which hunting is permitted by Alabama law, (c) the employee has not been convicted of a crime of violence, (d) the employee has no documented prior workplace incidents involving the threat of physical injury or which resulted in physical injury, (e) if the vehicle is attended by the employee, kept from ordinary observation within the vehicle, (f) if the vehicle is not attended, the firearm is kept from ordinary observation and locked within a compartment or container.

3. If the employer believes that an employee presents a risk of harm to himself or others, the employer may inquire as to whether the employee possesses a firearm in his vehicle. If the answer is yes, the employer may inquire to make sure it is locked in a compartment or container. If not, the employee is subject to adverse employment action. If the employee is in compliance, no adverse action can be taken.

4. Employers are permitted to report to law enforcement a complaint if the employer has information or belief that there is credible evidence that the firearm is prohibited by state or federal law, or a threat made by an employee to cause bodily harm to themselves or others.

5. If law enforcement officers pursuant to a valid search warrant discover a prohibited firearm, the employer may take adverse action against the employee.

6. If the employee is in full compliance with this law, or does not possess a firearm prohibited by state or federal law, the employee can recover against the employer compensation for lost wages and benefits, and compensation “for other lost remuneration caused by the termination, demotion, or other adverse action.”

7. Except as set forth in the preceding paragraph 6, an employer “SHALL be absolutely immune from any claim, cause of action or lawsuit that may be brought…as a result of any firearm brought onto the property of the employer…” and “the presence of a firearm…on an employer’s property under [this Act] does not, by itself, constitute the failure by the employee to provide a safe workplace.”

Section 6. This section sets forth areas where a person may not possess or carry a firearm, without express permission. These areas include law enforcement buildings, jails, facilities which provide inpatient or custodial care of those with psychiatric, mental or emotional disorders, court houses, inside any facility hosting athletic events not related to firearms sponsored by any private or public school, either elementary, secondary or postsecondary UNLESS the person has a CWP. This also applies to any professional athletic event not related to firearms. The person or entity responsible for the premises shall post a notice alerting those entering that firearms are prohibited.

Section 7.

1. This Act specifically preempts the entire field of regulation in Alabama dealing in any way with firearms, ammunition, or firearm accessories “to the complete exclusion of any order, ordinance, or other rule promulgated or enforced by any political subdivision of this state.”

2. An employer is NOT prevented from “regulating or prohibiting an employee’s carrying or possession of firearms, firearm accessories, or ammunition during and in the course of the employee’s official duties.”

Section 8. This section amends Alabama Code 13A-3-23, dealing with self-defense.

1. A person may use deadly force in self-defense if that person reasonably believes that another person is using or about to use deadly physical force, is using or about to use deadly physical force against the occupant of a dwelling in commission of a burglary, to thwart a kidnapping, assault burglary, robbery, forcible rape or forcible sodomy.

2. This act added the following language permitting the use of deadly force if someone is “using or about to use physical force against an owner, employee, or other person authorized to be on business property when the business is closed to the public…”

3. Deadly force is permitted if a person is in the process of unlawfully and forcefully entering, or has unlawfully and forcefully entered a dwelling, resident, business property, or occupied vehicle…”

Should the Governor sign the bill in May, it will become effective on August 1, 2013.

Alabama Legislature Passes New Gun Law

Daniel Burnick — Mon, 20 May 2013 13:30:24 -0600

Al.com is reporting that the Alabama Legislature has passed a sweeping gun control bill that was approved by a conference committee. Subject to approval by Governor Bentley, the new law will allow legal owners of guns to possess them in company parking lots. This law prohibits employers from barring unloaded guns from personal vehicles if the owner has a valid concealed carry permit, or if it is during hunting season and the owner has a valid hunting license. The employee must not have a prior documented incident of workplace violence, The gun may not be visible from outside the car. The car must be locked or the gun must be kept in a locked area (glove compartment, trunk, etc.). If the employer thinks that the person may present a risk of harm to himself or others, the employer may inquire into whether the employee has a gun in his vehicle. If the employee complies with the requirements of the law, disciplinary action cannot be taken.

If an employee is wrongfully disciplined, an action can be brought seeking damages for lost wages and benefits, or re-numeration caused by the termination, demotion or other adverse action.

The employer, under most circumstances, is absolutely immune from any lawsuit or other claim for damages as the result of any damage caused by a firearm on company property pursuant to this law.

Practice pointer. Assuming this law is not vetoed by Governor Bentley, it will become effective on the first day of the third month after becoming law. The entire law can be read on Al.com. It is long and complicated. Before implementing any new polices and procedures, or taking disciplinary action after the law becomes effective, employers should consult with their legal counsel.

Social Media Saves A Life

Daniel Burnick — Thu, 16 May 2013 08:07:01 -0600

USA TODAY reported that the life of a 16 year old New Jersey girl was saved as the result of a concerned woman in California. Jackie Rosas was following the blog of the NJ teenager for about a year, and noticed that her posts were often about depression. Rosas saw a number of hurtful messages being sent to her through Tumblr. On May 6, the 16 year old blogged that she was going to commit suicide. Rosas called a local suicide hot line, who told her to call the police. The police put her in touch with Officer Heather Olsen,a school resource officer at a local high school, but she did not recognize the girl's name. Olsen talked to the school's assistant principal, Karen Dimick. Although they knew the girls name, they did not know where she lived. Olsen and Dimick began researching the girls twitter account, and found a tweet from November where she said ow much she loved the USH marching band. They found Union Township High School in New Jersey, and contacted the police in Union Township. Lt. John Daubner of the Union Township police department confirmed that they sent officers to the girl's address, found her, and determined that she had taken enough pills to put her on a psychiatric hold.

Practice pointer. Although I often blog about the negative consequences of social media, this is a story of how one person can make a difference by using social media, and knowing what to do with the information. Ms. Rosas is a hero for saving the life of a young girl over 3,000 miles away that she did not even know.

DC Circuit Strikes Down NLRB Poster Requirement

Daniel Burnick — Tue, 07 May 2013 12:34:48 -0600

Last month, I posted that a District Court Judge in South Carolina found the NLRB's new poster requirement to be unlawful, but did not ban the NLRB from requiring that it be posted. A I also posted that the DC Circuit Court of Appeals entered an injunction prohibiting the NLRB from requiring the use of the poster. On May 7, 2013, the DC Circuit Court of Appeals issued an opinion finding that the poster requirement is illegal. In a 38 page opinion, the Court wrote that:

Of course we are not faced with a regulation forbidding employers from disseminating information someone else has created. Instead, the Board’s rule requires employers to disseminate such information, upon pain of being held to have committed an unfair labor practice. But that difference hardly ends the matter. The right to disseminate another’s speech necessarily includes the right to decide not to disseminate it. First Amendment law acknowledges this apparent truth: all speech inherently involves choices of what to say and what to leave unsaid." Pac. Gas & Electric Co. v. Pub. Utils. Comm’n, "475 U.S. 1, 11 (1986) (plurality opinion).

Chief Justice Roberts, writing for a unanimous Court, put it this way in Rumsfeld v. Forum for Academic & Institutional Rights, Inc.: "Some of [the] Court’s leading First Amendment precedents have established the principle that freedom of speech prohibits the government from telling people what they must say." 547 U.S. 47, 61 (2006). As examples, the Chief Justice cited West Virginia State Board of Education v. Barnette, 319 U.S. 624 (1943), and Wooley v. Maynard, 430 U.S. 705 (1977).

In Barnette the Court held that "[t]o sustain the compulsory flag salute" and pledge of allegiance in public schools would be to conclude "that a Bill of Rights which guards the individual’s right to speak his own mind, left it open to public authorities to compel him to utter what is not in his mind." 319 U.S. at 634.

Wooley held much the same: the First Amendment freedom of speech "includes both the right to speak freely and the right to refrain from speaking at all." 430 U.S. at 714. New Hampshire therefore could not coerce its citizens to display the State motto "Live Free or Die" on their automobile license plates, although presumably citizens could display it voluntarily. As the Supreme Court put it inUnited States v. United Foods, Inc.: "Just as the First Amendment may prevent governmentfrom prohibiting speech, the Amendment may prevent the government from compelling individuals to express certain views . . .." 533 U.S., 405, 410 (2001); see also Johanns v. Livestock Mktg. Ass’n, 544 U.S. 550, 568 (2005) (Thomas, J., concurring); R.J. Reynolds Tobacco Co. v. Food & Drug Admin., 696 F.3d 1205, 1211 (D.C. Cir. 2012).

The Court concluded that:

We therefore conclude that the Board’s rule violates § 8(c)because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus in cases involving, for example, unlawfully motivated firings or refusals to hire—in other words, because it treats such a failure as evidence of an unfair labor practice.F.3d 628, 637–39 & n.7 (5th Cir. 2003).

Pending an appeal, it is my opinion that the poster, as previously required by the NLRB, does not have to be posted at this time.

New I-9 Form, Record $240 Million EEOC Verdict

Daniel Burnick — Thu, 02 May 2013 09:18:20 -0600

Mandatory Use of New I-9 Form. Beginning May 7, 2013, the use of the new Employment Eligibility Verification Form I-9 will be mandatory for all employers in the United States. This form, and instructions, can be found at USCIS. The USCIS has also published an updated Handbook for Employers, Guidance for Completing Form I-9. Please note that the Spanish I-9 form can only be completed in Puerto Rico. It can be used for reference purposes only in the 50 states and US territories. The Handbook states that "Employers must have a completed Form I-9 on file for each person on their payroll who is required to complete the form. Form I-9 must be retained and stored by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials from the Department of Homeland Security, Department of Labor, or Department of Justice."

EEOC Record Verdict. In Davenport, Iowa, a jury returned a verdict in favor of the EEOC and against Hill County Farms, dba Henry's Turkey Service, in the amount of $240 Million as the result of long term abuse of workers with intellectual disabilities. The jury found that 32 men with intellectual disabilities were subjected to severe abuse and discrimination between 2007 and 2009. Each man was awarded $5.5 million in compensatory damages, and $2 million in punitive damages. The court had previously awarded each man $1.3 million for unlawful wage discrimination. This award resulted from the Court finding that the monthly pay of $65 was discriminatory, and they should have been paid between $11 & $12/an hour. The EEOC presented evidence that the owners and staffers of Henry's Turkey "subjected the workers to abusive verbal and physical harassment; restricted their freedom of movement; and imposed other harsh terms and condition of employment such as requiring them to live in deplorable and sub-standard living conditions, and failing to provide adequate medical care when needed....Verbal abuses included frequently referring to the workers as "retarded," "dumb ass" and "stupid." Class members reported acts of physical abuse including hitting, kicking, at least one case of handcuffing, and forcing the disabled workers to carry heavy weights as punishment".

Law Firm Sued For Pregnancy Discrimination

Daniel Burnick — Wed, 24 Apr 2013 09:01:46 -0600

Yesterday, I posted about two New York firms being sued for sexual harassment. Today, I am posting about a Washington, D.C. firm being sued for pregnancy discrimination. On April 22, 2013, Demetria Peart filed her lawsuit against Latham & Watkins in federal court in Washington. Peart alleges that she was hired by Latham in April, 2007 as a legal secretary. She found out she was pregnant in October, 2007, and notified her supervisor that she was working through her sickness related to the pregnancy. In November, her physician placed her on bed rest. She immediately notified her supervisor, and both she and her husband corresponded with her supervisor, the benefits coordinator, and the four attorneys she supported. Her short term disability was approved, and the attorneys she supported assured her that her duties were being taken care of by supporting secretarial floaters and co-secretaries. Peart provided the required medical verification forms to Latham's medical insurance carrier as required. Peart alleges that on January 24, 2008, the HR manager called her and advised her that he was terminating her employment because "she was no longer needed" and "her pregnancy complications were not his problem". Peart reached to others at the office, and was advised that the HR manager told other personnel that she was terminated because of "damn thirteen weeks of morning sickness" and her pregnancy complications were "not [their] concern." When contacted by the Legal Times, a spokesperson for Latham "declined to comment". A copy of her complaint can be read here.

Practice pointer. Please keep in mind that this lawsuit was just filed and these are merely allegations made by Ms. Peart. However, the lawsuit has resulted in bad publicity against a well known, well respected international law firm. If the allegations are true, it demonstrates a lack of understanding of the law by the HR manager, which may result in a monetary settlement or verdict, as well as attorney's fees. Also, at least four attorneys will be deposed, which takes time away from their day to day activities and creates an unnecessary distraction in the workplace.

Lawyers On The Wrong Side Of The Lawsuit

Daniel Burnick — Tue, 23 Apr 2013 12:19:01 -0600

Sexual harassment can happen in any workplace, with any profession, including lawyers. Recently, there have been two law firms/attorneys sued for sexual harassment by employees. Both arose in New York.

Sabrina Rafi, who is 27, worked as a paralegal for James R. Ray, 50, whose office is located on Park Avenue. The New York Post reports that Rafi filed a lawsuit alleging that Ray asked her to be his third wife in a polygamous relationship, forced her to feed him with chopsticks at a Korean restaurant, bragged about having sex with several partners and being married to multiple women, and talked about lesbian pornography with her. Rafi claims that she wore several layers of clothes in an attempt to thwart his sexual advances, but that only irked Ray. She said that she felt sick working for him. Ray ultimately fired Rafi in February, after she joined the firm in December. She filed the lawsuit shortly after she was terminated.

In March, Alexandra Marchuk, a junior lawyer at the New York firm of Faruqi & Faruqi, filed a sexual harassment suit against the firm and a partner, Juan Monteverde. The lawsuit alleges that Monteverdi made numerous improper comments and unwanted sexual advances toward her, and he forcibly had sex with her in the office on one occasion. In response to the lawsuit, Monteverde and the firm filed counterclaims against Marchuk, alleging defamation and damage to their reputation. The New York Times reports that after they appeared at a court hearing in Delaware, where Monteverde asked Marchuk to "dress alluringly", they went to a local bar and engaged in kissing and fondling. She alleges it was not consensual, he says it was. She claims that after the firm's Christmas party in 2011, they went to a bar and were kissing and fondling each other, and that they went to the offices where he "quickly and forcefully had sex with her". He alleges that the sexual contact fell short of intercourse, and was consensual. Monteverde's counterclaim alleges that when the suit was filed, she sent it to the media, Faruqi clients and Mr. Monteverde's wife.

Practice pointers. Bad publicity is something that no employer wants, especially when it is as sensational as these two stories. When a senior level employee/partner, such as Mr. Monteverde, who is married, admits to kissing, fondling and having sexual contact with a subordinate, it will be difficult for anything good to happen. And there will be attorneys fees, expenses, time away from work, marital issues, and the stress of litigation. Train all employees, including owners and senior level management, as the dangers and ramifications of sexual harassment.

EEOC Busy Settling Cases

Daniel Burnick — Wed, 17 Apr 2013 11:48:25 -0600

Over the past week, the EEOC announced settlements in 3 separate cases. These cases involved racial harassment, pregnancy discrimination, and disability discrimination. They also announced that a defendant that settled a case was held in contempt of court for not complying with the order signed by the court.

Racial Harassment. Utah construction company, Holmes & Holmes Industrial, Inc. agreed to pay 3 employees a total of $230,000, the maximum allowed by law, as well as several affirmative steps to prevent and address race-based conduct on the work site. In September, 2010, the EEOC filed its suit against Holmes, alleging racial harassment and retaliation. The court, in a ruling issued last year, found that 3 workers were subjected to an objectively hostile work environment based on race. The court observed that the site superintendent, Paul E. Facer, referred to the African-American employees as "n----rs" or a variation of that word almost every time he spoke to them. Other Holmes employees used the term "n----r-rigging" while working there, and racist graffiti was evident both inside and outside portable toilets on the work site. Finally, the EEOC alleged that Holmes fired one of the harassment victims for complaining about it. Holmes also agreed to implement a comprehensive training program on discrimination, discussions of harassment in work site meetings on a monthly basis, and a review and revision of the policies and procedures concerning protected-class discrimination and retaliation.

Pregnancy Discrimination. In Las Vegas, where things that happen in Vegas don't always stay in Vegas, a female employee at Engineering Documentation Systems, Inc., became pregnant. Upon learning of her pregnancy, a management official allegedly made derogatory remarks about her condition and denied her request to move her office closer to the restroom to accommodate her severe nausea and vomiting. When she was absent due to her pregnancy leave, her job description was changed, adding the requirement that she be certified to carry live ammunition and explosives. EDSI failed to engage in the interactive process or to accommodate her, and terminated her while she was on a leave of absence. Her husband, who also worked for EDSI, was demoted and eventually terminated after complaining about his wife's treatment and participating in the EEOC investigation. EDSI agreed to pay her and her husband a total of $70,000, and entered into a 4 year consent decree.

Disability Discrimination. In Minneapolis, Applied Vacuum Technology will pay $50,000 to settle a disability discrimination lawsuit filed by the EEOC. Larry Kating, an employee of AVT, was fired after he sought to return to work after being hospitalized for a week. AVT knew about the hospitalization, but fired him for failing to call in every day during the hospitalization. The EEOC alleged that AVT regarded him as having a disability. In addition to the $50,000 paid to Kating, AVT agreed to a consent decree covering 5 years. AVT must train employees as to workplace policies and to laws against discrimination, with the training session being introduced by AVT's president or chief executive officer.

Practice pointers. Having successfully litigated against the EEOC several years ago in a lawsuit alleging pregnancy discrimination, I can personally attest to damage done to a company that is involved in an EEOC lawsuit. The time, expense, bad publicity and stress are all great. Although lawsuits cannot always be avoided, it is better for companies to have up to date policies and procedures, and proper programs for educating and training all employees, from top to bottom, on them.

Dairy Queen Franchisee Held in Contempt. YS&J Enterprises, a Dairy Queen franchisee in North Carolina, entered into a settlement agreement with the EEOC after the EEOC initiated a lawsuit alleging that the company subjected Chastity Hill-Cox, an 18 year old employee, to a sexually hostile work environment. The settlement was approved in October, 2012 and required YS&J to pay Hill-Cox $17,500. Further remedial relief was approved, including an injunction against YS&Y from further subjecting employees to discrimination based on their sex or from retaliating against employees for opposing such discrimination. YS&J was also required to redistribute its sexual harassment and retaliation policy to managers and supervisors, and conduct anti-discrimination training for managers and supervisors. YS&J failed to meet any of the terms of the settlement agreement, including failing to pay $17,500 to Hill-Cox. In January 2013, the EEOC filed a motion to require YS&J to show cause why it should not be held in contempt: After a hearing on the matter, the court entered an order on April 10 holding YS&J in civil contempt, and required the company to immediately comply with all the terms and conditions of the decree. The court also imposed a fine of $1,000 a day until the decree was fully complied with.

Practice pointer. When an agreement is entered into by the parties, and a court order is signed, all parties must comply with the order. Failure to do so can result in fines, and, on rare occasions, incarceration.

1.2 Million More Reasons Not To Be Foolish At Work And More Horror Stories

Daniel Burnick — Wed, 10 Apr 2013 09:03:49 -0600

Race and Gender Discrimination. WSBTV in Atlanta reported on an award of $1.18 million against Fulton County as the result of discrimination based on race and gender. Doug Carl worked for Fulton County's Department of Human Services. He was working as the interim director, when he was denied a promotion to director. He claimed that former County Manager Thomas Andrews and Commissioner Emma Darnell wanted "to replace the African-American female who left the position with another "African-American female and that Darnell had stated 'there were too many white boys on staff'". Last year, after a jury trial, Carl was awarded $300,000 in back pay. Last week, the judge's order awarded additional amounts as a result of Carl losing his pension and 5 years of future pay. The court has yet to rule on Carl's claims for attorney's fees and expenses.

Practice pointer. The jury decided this case in favor of Carl. It is currently on appeal, so the legal fee meter is still running. Employers must be careful about what they say: it can be very costly, in dollars, time, and bad publicity.

ADA Lawsuit Against Hooters. In St. Louis, Sandra Lupo worked as a waitress at a local Hooters. Last summer, she had brain surgery, and she returned to work with a buzz hair cut and a healing scar. She alleges that her boss manager visited her in the hospital and told her she could return to work wearing a "chemo cap" or jewelry to distract attention away from her hair and scar. Although she was promised she could return to work following her surgery, the regional manager told her that she could not work unless she was wearing a wig. According to Lupo, wearing a wig would impair her healing. She refused to wear a wig, and her hours were cut until she was forced to quit. Her lawyer claims that she was humiliated by the way Hooters treated her, but that the surgery did not cause any long term problems. She recently filed suit alleging that she was terminated in violation of the Americans With Disabilities Act, which prohibits discrimination based on an actual physical or mental impairment, a history of having an impairment, or being regarded as having an impairment.

Practice pointer. Employers should train all employees, including management, about what is required, and what is prohibited, under state and federal laws. At the very least, management should be made aware of when to ask questions concerning employment issues, especially if their conduct results in termination, whether voluntary or involuntary.

EEOC Sues Bojangles' For Religious Discrimination. In North Carolina, the EEOC filed suit against Bo-Cherry, a NC corporation that operates a number of Bojangles' restaurants in the Charlotte area. A male employee, who was a practicing Muslim for 14 years, applied for a job at Bojangles'. After he was interviewed, the manager told him that he might have to cut his beard. The employee advised the manager that he was a Muslim, and could not cut his beard. He was hired and began work the following it. The next day, the manager allegedly told him that he had to shave his beard if he wanted to continue working for Bojangles. He refused, telling his manager that he could not shave it due to religious reasons. He refused to shave, and he was fired. The EEOC filed suit, and is seeking back pay, compensatory and punitive damages, reinstatement and injunctive relief.

Practice pointer. I feel that I need to emphasize what I wrote above: Employers should train all employees, including management, about what is required, and what is prohibited, under state and federal laws. At the very least, management should be made aware of when to ask questions concerning employment issues, especially if their conduct results in termination, whether voluntary or involuntary.

April 1 Is Over, Or Is It? There Are Fools Everywhere

Daniel Burnick — Wed, 03 Apr 2013 13:40:01 -0600

April 1 is over. It was my birthday. It was also April Fools' Day. The problem is, there are fools everywhere in the workplace, and it is a daily problem. In this entry, I am going to pick some of my most recent favorite news stories demonstrating that stupid people do stupid things.

Facebook posts get tenured teacher fired. According to Michael Dell, with HRHero, Ms. O'Brien taught for 12 years without a single problem in a school system in New Jersey. In 2010, she was assigned to teach a first grade class of 23 students, most of whom were 6 and all were either Latino or African-American. On March 28, 2011, she published on her Facebook page: "I'm not a teacher-I am a warden for future criminals!" and "They had a scared straight program in school--why couldn't I bring [first] graders?" 2 days later, 2 parents appeared in the principals office, and numerous calls were made to the principal. Later that day, about 20 protesters appeared at the school. The following day, a number of media representatives appeared at school. During an administrative hearing, before an Administrative Law Judge, O'Brien testified that "she posted the comments because of her students' behavior, which included stealing from her and other students, striking other students, and, in one instance, striking her." The ALJ removed her from teaching. On appeal, the Superior Court of New Jersey, Appellate Division, held that her posts were not protected by the First Amendment, and that her "conduct had a tendency to destroy public respect of government employees and damage public confidence in the school system", and upheld her removal from her tenured position.

Single mom fired for selling Girl Scout cookies at work. 2 weeks ago, Fox news reported that Tracy Lewis, a single mother and a 28 year employee at American University in D.C. for food service provider, Bon Appetit, stacked GS cookies on a cart in the school's on-campus convenience store. She was fired. She said she was trying to sell cookies for her 12 year old daughter, and had done so for 3 years without any problems. Her manager sent a letter to Lewis claiming that she committed "gross misconduct by soliciting...[and] operating a personal cash business selling Girl Scout cookies over the counter which violates company policy."

Bi-Racial marriage leads to harassment. Michael Myers, a white man, claims that he was fired by his employer after being subject to racial discrimination and harassment that began after he disclosed to a co-worker that his wife is black. The lawsuit, filed in Oklahoma City, claims that after he told a co-worker that his wife is black, he was subjected to "racial slurs and offensive racial remarks regarding African-Americans approximately every one to two days" by the co-worker. When Myers complained to management, he was terminated.

April Fools' Day and more April celebrations. According to Manpowergroupblogs, there are numerous celebrations scheduled throughout April that may impact the workplace. Some of the more interesting ones are: National Karaoke Week, Administrative Professionals Week, Don't Go to Work Unless it's Fun Day, National Be Kind to Lawyers Day and National Wear Your Pajamas to Work Day. Of course, one of the days listed was made up, but the rest are real. Please read them to believe them.

Whenever I give a speech on Social Media, I begin by saying that sometimes truth is stranger than fiction, and I cannot make these stories up. The above are just some of the more recent examples of, as Forest Gump would say, "Stupid is as stupid does". Enjoy.

Cullman Car Dealer Indicted For Violation of Servicemembers Civil Relief Act

Daniel Burnick — Thu, 28 Mar 2013 15:16:07 -0600

Kelsey Stein, with Al.com, reported this afternoon that Carl Ralph Nuss, of Cullman, owns North Alabama Wholesale Autos. Apparently, he sold a 2002 Ford Sport-Trac to a 22 year old man in February, 2011 for $9,746, at an interest rate of 25% annually. The man was called to active duty in May, 2012 and was stationed in Afghanistan. In July, 2012, pursuant to the Servicemembers Civil Relief Act, he requested a reduction in the interest rate to 6%. Nuss refused to reduce the rate, and hired two men to repossess the vehicle, without a court order, two days after receiving the letter. The two count Indictment was returned by the Grand Jury on Wednesday, March 27. Nuss faces a maximum penalty of up to one year in prison and a fine of $100,000 for each count.

Practice pointer. Alabama continues to have a large number of troops, active duty, reservists and National Guard members, on active duty around the world. It is important that all businesses and employers respect their legal rights: not doing so can lead to arrests, indictments, convictions and civil penalties.

EEOC: Too Much Money or Not Enough?

Daniel Burnick — Thu, 21 Mar 2013 08:11:46 -0600

Yesterday, the EEOC announced that it has launched a twitter account aimed at Hispanic employees and a You Tube channel. Kimberly Smith-Brown, the EEOC's director of communications, stated that "Our Twitter en Espanol handle provides us with another tool to interact with the Spanish-speaking public and share with them helpful information about workplace discrimination....This is another example of the agency's commitment to remain accessible to the public and provide good customer service." Twitter@EEOCespanol is now up and running, together with @EEOCNews for EEOC news in English. The EEOC has also launched the EEOC You Tube Channel, which airs informational and historical videos in both English and Spanish.

While the EEOC is busy launching social media sites, the Washington Post reported today that the sequester, if it continues, will impact EEOC employees by forcing furloughs. The American Federation of Government Employees claims that employees will face furloughs of more than 8 days if the sequester continues through the end of the fiscal year. The union claims that the furloughs will "cause the current backlog of workplace discrimination cases to grow by nearly 40 percent."

Health Care and Employee Manuals

Daniel Burnick — Fri, 08 Mar 2013 09:08:17 -0600

As Obamacare continues to be implemented over time, it is important for employers and employees to understand the changes. With that in mind, my partners at Sirote who are in the Health Care Practice Group publish "Health Care Beat" looking at various provisions of the law. Here is the information from the March 1 edition.

March 1, 2013

Sirote & Permutt Health Care Alert

Sirote & Permutt presents another bulletin in its Health Care Alert series addressing important issues related to health care reform, health insurance reform and health care statutory and regulatory compliance. Some of the bulletins discuss the Patient Protection and Affordable Care Act and the Health Care Education and Affordability Reconciliation Act (together, the ACA) signed into law in March 2010. To see past issues of Health Care Beat, click here.

Key ACA Provisions for Employers to Address Now

The ACA contains many different provisions which become effective over time. Some provisions came into effect when the law was passed in March 2010. Others will not become effective until 2018. Many important provisions requiring affirmative action by employers are currently in effect or will begin to become effective this year and in 2014. It is important to address these requirements proactively to avoid problems and potential penalties for noncompliance. This alert focuses on four key action items for employers to address now:

W-2 reporting - A major function of the ACA is to increase the information available to employees regarding their health care.Employers must disclose the total value of benefits provided for employee health insurance coverage on each employee’s Form W-2. The reporting does not affect whether coverage is included as taxable income. For the 2013 Forms W-2 (to be distributed in 2014), all employers who sponsor health insurance coverage must report this information, even if they use an outside payroll company. However, if, in 2011, an employer was required to file fewer than 250 Forms W-2 (distributed in 2012), the employer would not be subject to the reporting requirement for 2012 Forms W-2 (distributed recently in 2013). Please contact your payroll company to ensure that a mechanism exists to report the value of health care benefits provided to your employees. It will be an administrative headache to wait until next fall to re-format the information for your payroll company. Determine early the necessary format for this information to ensure smooth reporting.
Summaries of Benefits & Coverage (SBCs) - A SBC is a standard informational document that must be provided to employees and is intended to give more health care information to employees. SBC's purpose is to provide a clear explanation of the key health plan benefits and coverage in easy-to-understand language. Employers must ensure that the SBC document is distributed to employees no later than the first open enrollment period after September 2012. Your health insurance provider should produce the SBC document, but it is the employer’s responsibility to ensure that employees receive the document. If your company has not already done so, please contact your insurance company regarding the distribution of SBCs to your employees. If possible, each employee should receive a paper document and an email a copy of the SBC.
Health Insurance Exchange Notice to Employees - For current and new employees, the ACA requires employers to provide written notice to employees regarding health insurance exchanges. The notice must include an explanation of the employee’s potential eligibility for a premium tax credit or cost sharing reduction, as well as information relating to free-choice vouchers and other items. Initially, this notice requirement became effective on March 1, 2013. Because many health insurance exchanges have yet to be fully implemented, the Department of Labor (DOL) delayed compliance with this requirement until additional regulations are issued. The DOL expects implementation by late summer or fall of 2013. Please be aware that this requirement is coming in the next few months, and be sure to not let it slip through the cracks!
Lactation room for nursing mothers - Employers must provide both time and a place for a nursing mother to express breast milk for 1 year after a child’s birth. This rule is currently in effect. An employer must provide a private space that is not a bathroom. The amount of time required is based on the employee’s need and is allowed to be “unpaid time” for the employee. The nursing room need not be a dedicated space that is used solely for nursing, but it must be a space that is “free from intrusion” while being used by a nursing mother. Employers may use a private room with a table, chair, lighting and an accessible electrical outlet. It is important to ensure that the room does not store hazardous chemicals or other dangerous substances, and that there is no danger of falling objects. Employers should notify employees regarding access to the lactation room, potentially by including the information in employee manuals and ensuring managers know and understand the applicable rules. This rule is enforced by the Department of Labor and currently does not provide a private right of action for the employee against the employer.

Please look forward to Sirote’s Health Care Beat next week regarding the impact of sequestration on the health care system.

Sirote & Permutt’s Health Care Practice Group stands ready to assist you with any questions that you may have concerning the ACA. For additional information, please contact Lenora W. Pate at 205-930-5162 (lpate@sirote.com), Cynthia Ransburg-Brown at 205-930-5389 (cransburgbrown@sirote.com), Kelli F. Robinson (krobinson@sirote.com) at 205-930-5158, or Andy Andrews (bandrews@sirote.com) at 205-930-5757.

There was an interesting article in the Nashville Business Journal written by E.J. Boyer. It looked at the need to update employee manuals on a regular basis. Over the last year, there have been numerous changes in the laws and regulations that cover businesses: from social media polices to FMLA and revised I-9 forms. Policy manuals need to be reviewed and updated on a regular basis to ensure compliance with state and federal laws.