Alabama Employment Law Report

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.

FMLA: New Forms, New Posters

Daniel Burnick — Thu, 28 Feb 2013 10:30:46 -0600

Effective March 8, 2013, the Department of Labor has new updated notice and certification forms and a new poster requirement concerning the FMLA. The notice and certification forms are no longer available as part of the regulations, but rather will be on the DOL website. Also, there are new updated forms concerning serious injury or illness of a covered veteran. The new poster can be found here, and the new forms can be found here. DOL's new regulations also reference the Genetic Information Nondiscrimination Act of 2008 (GINA). Employers can disclose genetic information or family history obtained by the employers as long as it is consistent with the FMLA.

Discrimination Northern Style: 2 Cases from Michigan

Daniel Burnick — Wed, 20 Feb 2013 14:52:02 -0600

Ape placed at black woman’s desk. According to the Detroit Free Press, Crystal Perry, a black woman, works for the Michigan Department of Human Services’ child support services. Her supervisor was a white male. Within days of Ms. Perry meeting with her supervisor to discuss why she was not promoted, a 5 foot stuffed ape was placed on top of her office cubicle. It remained for 3 weeks. In January, Ingham County Circuit Judge Rosemarie Aquilina, after a bench trial, ruled that there was no evidence to prove that racial discrimination prevented her from being promoted. However, the judge expressed outrage and fined DHS $1,000/day for each day the ape was on the workstation, totaling $21,000. The judge also awarded attorney fees to be paid by DHS. Currently, there is a class action suit pending against DHS with almost 600 class members, alleging discrimination based on race and ethnicity. That case is scheduled to go to trial in March.

Practice pointer. This case is a good example of why all employees, including supervisors, should be trained about the various laws that apply in the workplace. The presence of a stuffed ape at a black woman’s’ desk after not getting a promotion can be seen as a sign of discrimination. It appears as if although the judge found that there was no discrimination concerning the lack of promotion, there could have been discrimination and/or a hostile work environment claim that was not made. Training employees about questionable work place activity, including who to report it to, is essential.

Black nurse claims discrimination when patient requests no black nurses care for his baby. In another case out of Michigan, the Christian Science Monitor reports that Tonya Battle, a black nurse at Hurley Medical Center in Flint, sued the hospital after a white male requested that no black nurses care for his newborn baby, and the hospital granted the request. The lawsuit alleges that a note was posted on an assignment clipboard that read “No African American nurse to take care of baby”. Ms. Battle alleges she was in the neonatal intensive care unit, when the father came in and she requested that he show her the wrist band identification provided by the hospital to parents. He allegedly said “I need to see your supervisor”, and the supervisor he saw told Battle that the man did not want African Americans caring for his baby and that he appeared to have a swastika tattoo on his arm. The hospital refused to comment on the situation due to its policy of not commenting on past or current litigation.

Practice pointer. This case raises some interesting questions about tension between customers/patients and employers. What can a customer request/demand as far as which employee provides services? What requests can an employer deny? These questions need to be examined and answered on a case by case basis. As with Ms. Perry’s case, this situation also shows why training must be done for the entire workforce.

State of the Union, EEOC and Lady GaGa

Daniel Burnick — Wed, 13 Feb 2013 07:55:53 -0600

State of the Union. Last night, President Obama gave his State of the Union address. Topics that will have an impact on employers include his proposal to raise the minimum wage to $9.00 an hour, with automatic annual cost of living increases. Although I do not think that this will get through Congress, if it does, it will raise costs dramatically for those employers who have entry level positions. It will also have an upward ripple effect on those who make more than the current minimum wage: if an employee is currently being paid $9.00 an hour, and the minimum wage is raised to $9.00 an hour, the current employee will most likely get an increase to remain above the minimum wage. Also, costs such as FICA, workers' compensation insurance, unemployment compensation and 401(k) contributions will go up. Mr. Obama also proposed comprehensive immigration reform. With a bipartisan committee already working on this, I believe that it has a good chance to pass in some form. It is too early to tell what compromises will be made, but this looks like it will pass. When and if immigration reform is implemented, I will report on it. The Affordable Care Act continues to be implemented over time. I believe that this too will increase costs for businesses, although the true impact may not be felt until 2014. Finally, with his long list of projects, I believe that it will take more money to make them happen, if they get approved. Mentioned were the elimination of tax "loopholes", which may increase the tax burden on corporations and individuals. It will take more money to pay for the other projects proposed during the address: although both democrats and republicans talk about cutting spending, in reality, it is difficult to accomplish. If dramatic cuts are not made, the only way to fund these projects is higher taxes. I will continue to post about these issues as we move forward.

State of the EEOC. The EEOC recently released statistics for fiscal year ending September 30, 2012. The EEOC received 99,412 private sector discrimination charges, down slightly from 2011. The most frequently filed charges were retaliation (37,836), race (33,512) and sex discrimination (30,356). The inventory of charges pending was reduced 10% for the second year in a row. There were 70,312 pending charges and the end of the FY. The EEOC recovered $365.4 million through the administrative process. Only 122 lawsuits were filed in 2012, while 254 lawsuits were resolved for a total of $44.2 million. In total, the EEOC recovered over $400 million for the 2012 FY.

State of Lady Gaga. On January 5, 2012, I posted an entry addressing an overtime lawsuit filed against Lady Gaga. Ms. O'Neill, her personal assistant, who was paid an annual salary of $75,000, claimed that she was entitled to an additional $380,000 in overtime because she was on call 24/7. The New York Post got a hold of Ms. Gaga's deposition, and the ABA Journal published an article about what she said. Among other things, Ms. Gaga testified that: "This whole case is bull---t and you know it"; She thinks she's just like the queen of the universe...And, you what, she didn't want to be a slave to one, because in my work and what I do, I'm the queen of the universe every day"; and "You don't get a schedule that is like you punch in and you can play f---ing Tetris at your desk for four hours and then you punch out at the end of the day...This is--when I need you, you're available". Her testimony has made it difficult for her to win the case. And as much as I would like to, I am glad I am not representing her in this matter.

Practice Pointer. Whether you are an employee or employer, it is important to listen to your legal counsel when preparing for your deposition. Oftentimes, the deposition can determine the outcome of a case. Here, Ms. Gaga comes across as a conceited, pompous, spoiled rich brat, and the jury, if it ever gets that far, will probably view it that way too.

Back To The Future: NLRB Style

Daniel Burnick — Fri, 25 Jan 2013 13:42:49 -0600

According to Yahoo! News, the NLRB suffered a big setback when the U.S. Court of Appeals for the D.C. Circuit held that President Obama's "recess" appointments to the NLRB were invalid. The Court found that because the Senate was officially in session, and not in recess, Obama did not have the authority to make 3 "recess" appointments to the Board. As Chief Judge Sentelle wrote: "Either the Senate is in session, or it is in recess...If it has broken for three days within an ongoing session, it is not in 'the Recess' described in the Constitution. The ruling invalidated hundreds of decisions issued last year, and would leave only one valid member on the Board. With only one member, the NLRB cannot conduct any business, since it needs to have 3 sitting members to do so. It is expected that the decision will be appealed to the US Supreme Court, while several other circuits are considering the same issue. This ruling may also impact other federal agencies, such as the Consumer Financial Protection Bureau, whose chairman was appointed through a "recess" appointment.

Practice pointer. If the ruling stands, an entire year of NLRB actions will be wiped off the books, and the issues may be addressed by a properly appointed board. However, from a practical standpoint, if the majority of properly appointed members act consistent with last year's decisions, nothing much will change.

It Is Not The End Of The World As We Know It: But Some Things Are Changing

Daniel Burnick — Fri, 21 Dec 2012 09:59:23 -0600

As we approach the end of 2012, but not the end of the world according to some interpretations of the Mayan calendar, some things are changing and some things are staying the same. The changes include:

IRS Mileage Rates for 2013. For 2013, the IRS has established new mileage rates for use of a car: 56.5 cents per mile for business miles, 24 cents per mile for medical or moving, and 14 cents per mile in service of charitable organizations.

Stupid People Do Stupid Things On Social Media. In the aftermath of the tragic murders in Newtown, Al.com reported that Dakota Kent, a 21 year old Blount County man, was jailed for posting terrorist threats on his Facebook account. What did he say? "I am so irritated I could shoot up an elementary school", "I can't be the only one who thought that was @#%! funny", "[a]nd if you want to help the families get through this, send them a #@(ing 'I'm sorry your kid got shot card,' ", and "[h]e used over 100 rounds and only killed 26. They should just be lucky he was a bad shot." What an idiot.

To prove that even lawyers do stupid things, in New Orleans, the United States Attorney, Jim Letten recently resigned his post. Mr. Letten was the well respected, long standing U.S. Attorney who served through several presidencies, which is unusual. What happened? Main Justice reported that Sal Perricone, a Senior Assistant U.S. Attorney resigned earlier this year. 1st Assistant U.S. Attorney Jan Mann resigned earlier this week. Why? They were both caught editorializing, under pseudonyms, on NOLA.com about pending cases they were working on. Both are possibly facing ethics charges and perjury charges as the result of testimony they gave to the court while investigating the allegations. I would recommend reading this article so see how dangerous it can be to post on social media and/or blogs.

Trouble for the NLRB. The U.S House of Representatives Committee on Oversight and Governmental Reform issued a report on December 13 entitled "President Obama's Pre-Union Board: The NLRB's Metamorphosis from Independent Regulator to Dysfunctional Union Advocate." This 33 page report finds that "...[T]he NLRB appears to be sacrificing fairness to 'job creators' in order to promote pre-union polices. To make matters worse, its leadership disregarded ethics and internal rules along the way." Very strong language. The report levels multiple charges against the NLRB, including internal communications deemed to have a pro-union bias, allegations of financial conflict of interest with former board member Terence Flynn and acting General Counsel Lafe Solomon, and rushing to issue 2 substantive rules in 2011 that ignored past precedent. These rules required employers to post a notice of employee's rights under the NLRA and changing the procedures for union organizing elections. To make matters even worse for the NLRB, on December 12, just one day before this report was released, the Board overturned 50 years of precedence when it ruled, in a 3-1 decision, that a dues checkoff provision will survive the termination of a collective bargaining agreement.

EEOC Approves Strategic Enforcement Plan. As part of it's overall strategic plan for 2012-2016, the EEOC recently approved it's Strategic Enforcement Plan (SEP). According to it's press release, the SEP identifies 6 national priorities as the focus of this integrated enforcement effort:

1. Eliminating barriers in recruitment and hiring.

2. Protecting immigrant, migrant and other vulnerable workers.

3. Addressing emerging and developing employment discrimination issues.

4. Enforcing equal pay laws.

5. Preserving access to the legal system.

6. Preventing harassment through systemic enforcement and targeted outreach.

It will be interesting to see how the EEOC follows up with their SEP.

I hope everyone has a Joyous Holiday Season and a Happy New Year! I will be back next year with more.

Social Media Horror Stories: More to Come In 2013

Daniel Burnick — Tue, 11 Dec 2012 12:35:37 -0600

TWEETING AND ALCOHOL DO NOT GO TOGETHER. According to USA Today, Kimesha Jackson is the promoter/event coordinator at Privae, a high end, popular nightclub located in Dallas. This past Friday, she tweeted that there were 12 Dallas Cowboy football players in the club, and that alcohol was flowing. "I have 12 Cowboys in the theeee building!!!!". According to another tweet, "These fools are buying Ace on top of Ace!!!!" Ace is believed to be Ace of Spades, a champagne that is often consumed by celebrities and is popular on the night club circuit. One of the players present was Jerry Brown, who died when the car he was riding in crashed. That car was driven by teammate Josh Brent. Brent has been arrested and charged with intoxication manslaughter. Earlier this year, Jackson tweeted "And the special orders these NBA players are *STILL* putting in for tomorrow...craziness! ACE.ACE.ACE. #PRIVAE SOLD OUT since Monday!" She also tweeted earlier this year that "The bottle requests that are flooding my texts rgt now...Glad we keep a crazy stock of Everything! Ace on deck! #NFLtakeover #PRIVAE". Now, the state is investigating whether alcohol was "served to somebody who was intoxicated, which is illegal in Texas," a spokeswoman for the Texas ABC Board said.

Practice pointers. So, what are the potential ramifications of the tweets? Will Ms. Jackson lose her job? Will Privae lose their liquor license? Will Privae be sued by Brown's estate for serving alcohol to an intoxicated patron, resulting in his death? If employees are tweeting, or using other social media to promote a company, the company should be aware of what is being said and make sure that it is not detrimental to the very existence of the company itself.

DEFAMATION LAWSUIT FILED FOR BAD REVIEW. The Pittsburgh Post Gazette reports that Christopher Diaz, a Washington, D.C. home contractor has filed a suit against Jane Perez as a result of Perez posting negative comments on Yelp. Perez "listed a number of accusations , including damage to her home, an invoice for work the contractor did not perform and jewelry that disappeared." One post ended "Bottom line do not put yourself through this nightmare of a contractor." Dietz filed a $750,000 lawsuit, as well as a request for an injunction prohibiting Perez from posting any more reviews of his business. He alleges that customers fled from him, and he lost over $300,000 of business. Perez, a retired captain from the military, is now facing a large of amount in legal expenses in defending the lawsuit. Although she removed the posts because they came up first on a google search, she is standing by her reviews. According to the article, there was a $1.6 million verdict in California against a blogger who accused a company of stealing money from business associates. Also, a woman in Florida obtained a $11.3 million verdict against a woman who called her a "crook' and "con artist" in an internet forum. I am also familiar with other verdicts in the the hundreds of thousands of dollars in Georgia and Texas.

Practice pointer. Be careful what you post on line. Even if posted anonymously, there are ways to determine who posted it. Defamation is defamation, whether it is spread by word of mouth, in the newspaper, or on the internet. I expect to see more of these cases being filed in the future.

DON'T SURF THE WEB AND WALK AT THE SAME TIME. Closer to home, AL.com reported that UAB, using part of a $1.3 million NIH grant, found that crossing the street while surfing the web made it twice as likely that you would be hit or have a close call as when you crossed the street without a distraction. Using a virtual cross-walk in a UAB laboratory, students crossed with no distractions, and then crossed using their cell phones while surfing the web. With 92 participants, the study found that when surfing the web, their eyes were off the road 60% of the time, while their eyes were off the road less than 1% of the time when they weren't distracted. I would imagine that similar results could be found when surfing the web while driving, riding a bike, or other activities that need your attention. Be careful when using your phones when you shouldn't be.

Kravitz/PhoneDog Case Settles: Ownership of Twitter Account in Dispute

Daniel Burnick — Thu, 06 Dec 2012 09:41:07 -0600

Over the past several years, I have often mentioned the Kravitz case when I have spoken about Social Media, Policies, and the ownership of Social Networking sites. A brief history: Kravitz worked for PhoneDog, and his twitter account was @phonedog. He left, and changed the account to @noahkravitz. He took the 17,000 followers with him. PhoneDog had no policy about ownership of the Twitter account. After Kravitz left, PhoneDog sued him, seeking damages of $2.50 per follower, per month, or $34,000 per month. According to Daily Dot, the case recently settled, with the terms not being disclosed. The Daily Dot speculated that the reason for the settlement may be that a year ago, PhoneDog had 15,000 followers, and this has increased by 12,000 over the past year. During the same time, Kravitzs' followers have grown from 22,000 to 23,000. Kravitz did tweet that "We have reached an agreement" and "I'm like a honey badger in a hurricane". Although the details of the settlement could not be confirmed, Daily Dot quoted Mashable that noted "it sounds like no money is changing hands for Twitter followers."

Practice pointers. It is important for companies to have policies in place about who owns social networking accounts when they are used on behalf of the company. PhoneDog did not have any, and the result was an extended legal battle. Although no money may have changed hands as the result of the settlement, it is safe to say that the real winners were the attorneys, who were probably paid a large sum for fighting the fight. A simple policy that the Twitter account was owned by PhoneDog would probably have prevented the need for litigation. As we approach the new year, now is a good time for companies to review and revise their policies and procedures, to bring them current with the existing business and legal environment.

Jefferson County Department of Health A State Entity, Immune From Damages Claim Under FMLA

Daniel Burnick — Fri, 30 Nov 2012 11:15:31 -0600

In Ross v. Jefferson County Department of Health, 2012 WL 5519095 (11th Cir. Nov.2012) Ross, a former dental assistant with the Jefferson County Health Department (the “health department”) filed a complaint of discrimination based on her alleged disability of fibromyalgia and based on her race. Ross alleged that the health department approved her request to take medical leave under the Family and Medical Leave Act, 29 U.S.C. §2612, but that the health department later refused her a reasonable accommodation when it denied her light duty and allegedly fired her for using leave under the Act. Ross further alleged that a similarly-situated dental assistant who is white was not terminated after exhausting her leave under the Act.

The health department moved for summary judgment arguing that it, as a state entity, enjoyed immunity under the Eleventh Amendment from Ross’ disability discrimination complaint. Alternatively, the health department argued that Ross had withdrawn her complaint of racial discrimination by admitting during her deposition that race was not related to her termination.

Ross argued that the health department is not immune from a complaint for monetary damages under the Americans with Disabilities Act because the health department serves as an agent of Jefferson County, instead of the State, in its performance of personnel functions.

The District Court disagreed and granted the health department’s motion for summary judgment holding that it was a state agency immune from Ross’ complaint. The Eleventh Circuit Court of Appeals affirmed the lower court’s decision reasoning “the Eleventh Amendment protects the immunity of not only the state, but of the state agencies and entities that function as an arm of the state.” Whether an entity functions as an “arm of the state” is a federal question that the Eleventh Circuit resolves by reviewing how the state courts treat that entity. The Supreme Court of Alabama issued a decision that the Board of Dental Examiners “is in fact an arm of the state and is entitled to immunity from suits in Alabama state courts.” Versigliov Bd. of Dental Exam’rs of Ala., 686 F. 3d 1290, 1291 (11th Cir. 2012). The Eleventh Circuit went on to further explain that Alabama courts have uniformly treated county boards of health as state agencies.

The Eleventh Circuit further explained that the Court uses the following four factors to determine whether an entity is a state agent in carrying out a particular function in Eleventh Amendment cases: (1) how state law defines the entity; (2) what degree of control the state maintains over the entity; (3) where the entity derives its funds; and (4) who is responsible for judgments against the entity. Because Ross sued about her allegedly wrongful termination, the “function” at issue is the termination of employees, and state law establishes that the state controls that function.

As to the first factor, the Eleventh Circuit held that Alabama state statutory law assigns to county boards of health the exclusive authority to perform “public health work” that is subject to the “supervision and control of the State Board of Health.” Ala. Code §§22-1-3, 22-2-2(7), 22-3-1, and 22-3-4. As to the second factor, the state controls the personnel decisions within the health department, including terminations. The State Board of Health supervises and controls the county boards of health, each county officer, and all public health work. With respect to the third factor, the source of funding for the Health Department does not “tip the balance” against immunity because state law requires the county to supply those funds. Finally, regarding the fourth factor, although the health department is responsible for paying any monetary judgment out of its budget, Eleventh Circuit precedent holds that liability by the state treasury is not determinative of whether a governmental entity should enjoy Eleventh Amendment immunity. The Eleventh Circuit does not limit Eleventh Amendment immunity to “who foots the bill.”

Based on the foregoing, the Eleventh Circuit determined that the district court correctly granted summary judgment in favor of the health department and against Ross’ complaint of discrimination based on her disability because the health department is a state agency entitled to immunity under the Eleventh Amendment. Specifically, the health department is immune from a complaint of employment discrimination under Title I of the Americans with Disabilities Act. Further, the Eleventh Circuit agreed with the lower court’s determination that Ross waived her Title VII race discrimination claim. Specifically, when asked during her deposition whether she “[felt] like [her] termination had anything to do [with] … [her] race,” Ross responded, “no.” Based on this unequivocal concession, the district court was entitled to grant summary judgment in favor of the health department.

Special thanks to Beth Liles with Sirote & Permutt for this summary.