Prima Facie Law Blog

When March Madness Visits the Workplace

Brian Molinari — Wed, 10 Mar 2010 10:17:11 -0800

In Shakespeare’s Julius Caesar, a soothsayer warned Caesar to “beware the ides of March,” which he didn’t, and we all know what happened. In modern times, while the ides of March hopefully won’t augur such tragedy, it does kick off two annual events that employers should cautiously beware: The NCAA basketball tournament a/k/a March Madness and St. Patrick’s Day.

The advertising leading up to these events leave no doubt that alcohol consumption often becomes a major component of the festivities. Indeed, the NCAA has been under pressure to bar alcohol advertisements during its widely televised national tournament. And we know that, for some people, beers and pubs tend to be associated with St. Patrick’s Day like turkey and stuffing on Thanksgiving. It should therefore come as no surprise to the modern employer that mid-March means many of their workforce will be imbibing more than usual.

Drug/Alcohol & Business Conduct Policies

In this regard, it is an appropriate time for employers to review their drug/alcohol and business conduct policies. Clearly, bringing or using alcoholic beverages on company property or using alcoholic beverages while engaged in company business, consuming alcohol in the workplace or reporting to work under the influence of alcohol is forbidden and/or deemed inappropriate conduct. Most employers expect their employees to accept certain responsibilities, adhere to acceptable business principles in matters of personal conduct, and exhibit a high degree of personal integrity. This would include the expectation that employees, in their business and personal life, refrain from behavior that might be harmful to the employee, his or her coworkers, and/or the company, or that might be viewed unfavorably by current or potential customers or the public at large. Many employers include policy language that whether the employee is on or off duty, his or her conduct reflects on the company and should therefore observe high standards of integrity at all times. Inherent in these policies is the expectation that employees exercise good judgment.

Impairment by drug or alcohol use can constitute an avoidable workplace hazard under the Occupational Safety & Health Act. Additional guidance is provided by OSHA and the Department of Labor’s Working Partners for an Alcohol-and-Drug-Free Workplace program. While employers are entitled to expect reliable attendance and productivity, when enforcing their drug/alcohol and business conduct policies they should give due consideration to laws such as the Americans With Disabilities Act (ADA), The Family and Medical Leave Act (FMLA), Health Insurance Portability and Accountability Act (HIPAA), and state drug and alcohol testing laws where applicable. When dealing with employee drug/alcohol testing in the private sector, there is neither a constitutional nor statutory prohibition against the activity. In fact, in certain circumstances, such as pre-employment testing and testing based on reasonable suspicion, drug/alcohol testing by private employers is both permissible and common. However, testing should be administered in a non-discriminatory manner and be consistent with any statutory protocol applicable to your state.

The NCAA Brackets

Betting on sports (e.g., the NCAA brackets) for money is illegal in most states except Nevada. See, e.g., New York Penal Law Art. 225 et seq., and New York General Obligations Law § 5-401 et seq. While the likelihood of criminal enforcement of a casual office betting pool is slim, it would nevertheless be wise to avoid promoting or encouraging such conduct. The company should have a no-gambling policy, but be careful to enforce it in a non-discriminatory and consistent fashion. For example, if the company disallows office betting pools, it should not distinguish whether the betting is on a sporting event or American Idol. While much has been written about drops in productivity because of employees following their March Madness brackets at work on the web, the adverse effects on employee morale and camaraderie should be considered before deciding to enforce an outright ban on brackets and following the games on the web.

Erin Go Bragh

If prepared properly, March Madness and St. Patrick’s Day should be a spirited time of year for all, without causing disruption on the job.

Is There A Duty To Have A Green Workplace?

Brian Molinari — Thu, 04 Mar 2010 11:11:11 -0800

With the global spotlight on reducing greenhouse gases and carbon footprints, including the Obama Administration’s unprecedented attention on encouraging environmental conservation and development of renewable energy sources, it’s clear that we’re in a “go green” era.

To cut to the question posed in this blogposts’s title, the answer is “no”. There is no legal duty, at the moment, for a private employer to “go green”. Perhaps at some point in the future, statutory authority such as the federal Occupational Safety & Health Act and state and local counterparts will include “green workplace standards”. For example, with respect to the investment in “green jobs” the Department of Labor and National Institute for Occupational Safety and Health are already focusing on ensuring that OSHA standards are appropriately designed and enforced to protect workers performing that type of work. At present, however, there are no mandates and instead only various governmental and non-governmental incentives for a workplace to go green.

The U.S. Environmental Protection Agency (EPA) and Pew Center on Global Climate Change estimate that commercial buildings account for nearly half of all energy consumption in the U.S., and contribute to nearly half of U.S. greenhouse gas emissions. The Energy Star Program, administered by the EPA and U.S. Department of Energy, attempts to encourage energy efficiency in buildings to meet strict energy performance standards set by EPA and reduce greenhouse gas emissions. Federal buildings are eligible to receive a High Performance Building designation.

In addition, commercial real estate and private companies are leading the green charge through voluntary compliance with standards set by a private, nonprofit membership organization, the U.S. Green Building Council (USGBC). The USGBC’s LEED® (Leadership in Energy and Environmental Design) Green Building Rating System™ awards points for satisfying specified green building criteria. The six major environmental categories of review include:

Sustainable Sites
Water Efficiency
Energy and Atmosphere
Materials and Resources
Indoor Environmental Quality and
Innovation and Design

A building, or unit therein, can be certified as LEED Silver, Gold, or Platinum based on the total number of points earned within each LEED category. For example, our firm’s Miami and Los Angeles offices are in buildings with LEED Gold certification. It was reported two days ago that a high profile commercial property investment company will spend up to $10 million retrofitting its properties for environmental sustainability. LEED can be applied to all building types including new construction, individual unit commercial interiors, core & shell developments, existing buildings, homes, neighborhood developments, schools and retail facilities. In addition, LEED for Healthcare was released in early 2008.

In sum, the green movement has not yet resulted in mandated private employer obligations. Notwithstanding the lack of affirmative duty to do so, however, based on information provided by the USGBC and EPA there are many pragmatic benefits that employers should consider for greening their workplaces:

Monetary: Funding and tax incentives
Energy Efficiency: Using energy more efficiently may save operating costs on utility bills over the life of the building; reduce the cost per unit on manufactured goods and services; and enhance resale and lease value of real estate
Environmental Efficiency: Reducing environmental impact may reduce waste materials and disposal costs, water usage, chemical use and disposal costs; encourage recycling and reuse of materials; develops local markets for locally produced materials, saving on transportation costs and develops economy-of-scale price reductions
Human Efficiency: Improving indoor environment, producing healthier places to work leading to increases productivity; reduction in absenteeism; boosting morale and corporate loyalty (also through creation of corporate “green teams”), and reduction in employee turnover
Goodwill: Green Buildings often receive high profile notoriety and increased public perception of goodwill toward employees and the community.

Is the Department of Labor Considering a Revision to the Domestic Service Exemption for Home Health Care Aides?

Douglas Weiner — Mon, 22 Feb 2010 08:55:29 -0800

We live in a time of change. Last summer fifteen United States senators wrote an open letter to Secretary of Labor Hilda Solis to urge the U.S. Department of Labor ("DOL") to repeal the Domestic Service exemption from the minimum wage and overtime requirements of the ("FLSA") for home health care workers. Secretary Solis has expressed support for the effort to review this exemption, with a view toward closing this "loophole." Citing a $9 an hour industry-wide average wage, the senators argued in favor of extending federal overtime requirements to "thousands of low-wage workers, primarily women, who are doing difficult, dangerous, yet extremely important work." Furthering public debate on the subject, the New York Times on January 28 ran an editorial in support of eliminating the Domestic Service exemption for home care aides.

The Domestic Service Exemption

Under current federal regulations, home health care aides who assist the elderly and infirm are exempt from the minimum wage and overtime requirements of the FLSA pursuant to 29 U.S.C. Section 213(a)(15) (exempting "any employee employed on a casual basis in domestic service employment to provide babysitting services or any employee employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves (as such terms are defined and delimited by regulations of the Secretary)"). In 2007 the United States Supreme Court upheld the current Department of Labor regulation allowing this exemption against a strong legal challenge from organized labor. Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007).

The exemption applies to all workers in domestic service who provide companionship services for individuals unable to care for themselves due to either physical or mental infirmity. Domestic service is work performed within the residence of the family using the services. Companionship services are those that provide fellowship, care and protection to the elderly and infirm. 29 C.F.R. § 552.109(a). Home health care workers, whether employed directly by the family or by an employer or agency other than the household using their services, are currently exempt from the FLSA

Some state laws have already narrowed the federal exemption. Pennsylvania, for example, exempts only home health care aides employed directly by a family for work performed within their home, excluding from the exemption workers employed by a placement agency. New York requires the payment of time-and-one-half the minimum wage for overtime hours worked. Wherever a state law provides greater protection to employees than the FLSA, the state law prevails over federal law.

Potential Effects

Eliminating or modifying this federal exemption may increase the burden to working families who want to care for their loved ones at home. A change in the Domestic Service exemption may also have significant consequences for employers who provide home health care workers to families. Employers of home health aids often conduct background checks and provide training to workers before they arrive in the home to offer care for a family’s loved ones. There is an ever present danger that if costs of home care become prohibitive, economics will operate to push the elderly and infirm out of the home into nursing homes, or other institutionalized setting.

We will continue to monitor and post developments on this significant issue.

Child Labor Penalties Increased for Violations that Cause Death or Serious Injury

Douglas Weiner — Wed, 03 Feb 2010 12:49:12 -0800

Hazardous occupations are no place for employees under the age of 18. Employers must be certain to prohibit minors from operating power driven wood working machines, metal working machines, bakery machines, fork lifts, balers and compactors, meat slicers, and nail guns. The full list of hazardous occupations are set forth in the Code of Federal Regulations, 29 C.F.R. 570, et. seq. Protecting America’s children in the workplace has long been a stated objective of the U.S. Department of Labor, and the civil money penalties for serious violations have recently been strengthened.

On January 20 the Labor Department’s Wage and Hour Division issued guidelines to enforcement personnel for determining appropriate civil money penalties against employers who violate the child labor provisions of the Fair Labor Standards Act. As stated in Field Assistance Bulletin 2010-1, the guidelines “draw heavily on the child labor civil money penalty process the WHD [Wage Hour Division] has developed over the past 25 years.” In addition, there is new advice resulting from the FLSA amendments that became effective May 21, 2008 with the enactment of the Genetic Information Nondiscrimination Act (GINA).

The DOL has created a Child Labor Enhanced Penalty Program (CLEEP) to incorporate GINA’s stiffer penalties. A “CLEEP serious injury” is defined as one caused by a child labor violation resulting in a permanent loss or substantial impairment of one of the senses, or of the function or movement of specified body parts. The bulletin identifies categories of injuries, and provides higher penalties for more serious injuries.

GINA included an amendment to the FLSA, 29 U.S.C. 216(e), providing a penalty of $50,000 for a violation causing death or serious injury to an employee under the age of 18. The penalty may be doubled to $100,000 if the violation is willful or repeated. Prior to GINA’s amendment, the maximum child labor civil money penalty was $11,000.

For GINA’s enhanced penalties to be applicable there must be evidence to prove the violation of a specific Child Labor Hazardous Order directly caused the death or serious injury of an employee under 18. The January 20 Field Assistance Bulletin sets forth detailed examples of violations that cause injuries as opposed to injuries that occur while employed in violation of a child labor hazardous order.

Of course no one wants an accident to occur to anyone at any time. However, in light of the DOL’s increased enforcement authority in the area of child labor, employers are well advised to verify the ages of their employees. If an employee is under the age 18, it is mandatory to ensure they are not permitted to engage in any prohibited activities.

Sorry Fido, You Won't Qualify Your Owner for FMLA Leave

Brian Molinari — Sat, 30 Jan 2010 20:07:21 -0800

With recent articles such as New York Magazine's “The Rise of Dog Identity Politics” and the New York Times' "Dogs' Life (and Death) Is a Poignant Tale" describing the myriad ways that our pets (particularly dogs) have evolved to become integral members not just of one’s family household, but indeed society at large, the human resource professional may eventually be asked: “Can I take FMLA leave to care for my dog?” For example, an employee whose dog is undergoing major surgery or an intensive treatment regimen such as chemotherapy may try asking for leave to remain home while his or her dog recuperates.

Fortunately for the human resources folks, but perhaps unfortunately for Fido, there is a really easy answer to this question. “No.” The Family and Medical Leave Act applies exclusively to humans. Dogs and other pets are not covered.

If eligible for leave, an employee is entitled up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:

for the birth and care of a newborn child of the employee;
for placement with the employee of a son or daughter for adoption or foster care;
to care for a spouse, son, daughter, or parent with a serious health condition;
to take medical leave when the employee is unable to work because of a serious health condition; or
for qualifying exigencies arising out of the fact that the employee’s spouse, son, daughter, or parent is on active duty or call to active duty status as a member of the National Guard or Reserves in support of a contingency operation.

In addition, the National Defense Authorization Act for FY 2008, which amended the FMLA, provides that an eligible employee who is a spouse, son, daughter, parent, or next of kin of a current member of the Armed Forces, including a member of the National Guard or Reserves, with a serious injury or illness, is entitled up to a total of 26 workweeks of unpaid leave during a “single 12-month period” to care for the service member.

In sum, while employees should explore alternative leave options such as use of personal or vacation time, the FMLA (or any state version of the FMLA that we are aware of) will not apply.

Is The Job So Easy a Caveman Could Do It?

Douglas Weiner — Wed, 20 Jan 2010 14:52:45 -0800

In a decision dated January 5, 2010 the D.C. Circuit raised that question in a case involving the administrative exemption in a Fair Labor Standards Act class action. Jerome Robinson-Smith v. Geico, case number 08-7146, and Christine Lindsay et. al. v. Geico, case number 08-7147, in the U.S. Court of Appeals for the District of Columbia Circuit.

Stating the District Court had no occasion to decide whether the job of a GEICO auto damage adjuster is so easy a caveman could do it, (referring to GEICO’s well known ad campaign in a light hearted footnote) the appellate court held that GEICO satisfied its burden of proof that its employees performed exempt administrative duties. The appellate court reversed the district court’s summary judgment for plaintiffs, and in a lengthy and well reasoned decision, upheld the exempt classification. Reversing the lower court, the appellate court directed judgment be entered for the employer.

Exemptions to the FLSA are generally narrowly construed. The administrative exemption applies only to employees paid on a salary basis of at least $455 a week whose “primary duty consists of …the performance of office or non-manual work directly related to management policies or general business operations of his employer…which includes work requiring the exercise of discretion and independent judgment with respect to matters of significance.” 29 C.F.R. 541.200 et. seq. The court noted the question of whether an employee comes within an FLSA exemption is a question of law, and the appellate court reviewed de novo the district court’s grant of summary judgment to the plaintiffs.

Plaintiffs did not dispute that they were paid the requisite salary and performed non-manual work directly related to GEICO’s business operation. However the plaintiffs argued, and the district court found, that the amount of discretion they exercised was “insufficient” for exemption because the vast majority of their work consisted of using their training and skills to assess the value of the damage to customers’ vehicles in accordance with the employer’s directions, “limited in scope by both the information and standards contained in the computer software and the guidelines and limits on negotiating authority laid out by GEICO”.

The appellate court found that although the parties disputed how much discretion the plaintiffs exercised, there was no dispute that plaintiffs work “includes some discretion” to perform their duties. The court then held that because it was undisputed that the plaintiffs’ job “includes” work requiring the exercise of discretion and independent judgment, the employer had met its burden of proof, and directed the district court to enter judgment for the employer.

The court, citing decisions from “sister” circuits finding auto damage adjusters exempt from overtime requirements by virtue of the administrative exemption, held that the defining regulation merely required the employees’ primary duty to “include” discretion and independent judgment, but does not specify how frequently the discretion must be exercised. The court held that because it was undisputed that the plaintiff exercised “some discretion and independent judgment during the course of his job” the employer had satisfied the final test to support the exempt classification.

What Does This Mean?

How broadly will the D. C. Circuit’s analysis of the auto damage adjusters’ duties be applied to other employment circumstances? Because each worker’s classification of exemption depends upon a detailed factual analysis, and employers are required to bear the burden to prove an exemption is applicable, employers should proceed cautiously before reaching a determination that their employees satisfy all the criteria necessary for exemption. The court noted that in this case GEICO had re-classified their auto damage adjusters as non-exempt during the course of the litigation to limit further exposure in the event the exempt classification was not upheld.

As many employers have learned to their sorrow, the question of properly applying FLSA exemptions is not so easy even a cave man could do it.

Douglas Weiner served for many years as Senior Trial Attorney, United States Department of Labor, New York Regional Solicitor’s Office, before joining EpsteinBeckerGreen. He now counsels and defends employers in wage hour matters.

The Onuses of Bonuses: Issues to Consider for Employers

Brian Molinari — Mon, 21 Dec 2009 12:25:47 -0800

A bonus is “something given or paid in addition to what is usual or expected” according to The American Heritage® Dictionary of the English Language. The Columbia Encyclopedia informs us that the “wage incentive was designed during the late 19th century not only to increase production but to reward the more skillful and more energetic workers.” In other words, a bonus is a premium paid above and beyond standard compensation to reward high-achieving employees and to encourage them to continue such achievement with the company in the future.

All too often, however, despite employment policies explicitly stating otherwise, many employees have come to view year-end bonuses as a usual and expected part of their compensation, viz., an entitlement rather than, well, a bonus. The issue of determining year-end bonuses carries important employment law implications under the Fair Labor Standards Act (“FLSA”), state wage laws, as well as the laws against discrimination and the common law. This may be particularly true for employers whose employees, rightly or wrongly, have come to look at “bonuses” as part of their standard compensation.

The FLSA

The FLSA requires an employer to take certain types of bonuses into account when determining a non-exempt employee’s “regular rate of pay” which, in turn, is used to calculate an employee’s overtime pay. For overtime purposes, the FLSA distinguishes between discretionary and non-discretionary bonuses. Truly discretionary bonuses are not part of a non-exempt employee's “regular rate of pay”, and therefore do not impact the overtime compensation due them. On the other hand, non-discretionary bonus payments must be included in the overtime calculation for all non-exempt employees working more than 40 hours in any workweek covered by the bonus.

In general, application of the following factors will determine whether or not a bonus is part of a non-exempt employee's “regular rate of pay” for purposes of the FLSA:

• Is the payment a productivity bonus? Productivity bonuses based on performance or used to encourage productivity are counted as earnings, and must be included in the employee’s regular rate of pay.

• Is the payment discretionary? Discretionary bonuses are usually not considered part of an employee’s regular rate of pay.

• Is the payment contractually required? Bonuses paid pursuant to contract are included in the regular rate of pay because such bonuses are not “discretionary.”

• Is it a special occasion bonus such that it is in the nature of a gift made at Christmas time or other special occasion? Such a bonus would be excluded from the regular rate calculation so long as it is actually a gift or nature of a gift. Caveat: If the payment is so substantial that it can be assumed that employees consider it a part of the wages for which they work, the bonus cannot be considered to be in the nature of a gift.

• Was the bonus announced in advance? If a bonus is announced in advance, the announcement could be considered a promise to pay, which might increase the likelihood of the bonus being included in the regular rate of pay for FLSA overtime calculations.

New York State Labor Law

Regardless of FLSA issues, employers are obligated under various state labor laws to pay the earned wages for all employees (and in New York "executives" are deemed to be employees covered under the statute). In New York, it is often litigated whether a bonus is considered a wage under New York’s Labor Law (defining wages as “earnings of an employee for labor or services rendered, regardless of whether the amount of earnings is determined on a time, piece, commission or other basis”) and thus must be paid unconditionally as remuneration for the employee’s labor.

New York courts hold that a bonus plan is excluded from the Labor Law’s definition of wages if: (1) payment of the bonus was “entirely discretionary”, and (2) payment was not predicated on the employee’s “own personal productivity” but “solely upon his employer’s financial success.” Where a bonus fails to constitute a wage under the statute, any forfeiture of bonus as a result of the employee’s termination of employment, will not be deemed a violation of New York Labor Law. The same has been applied to equity-based bonus compensation plans, which were unvested, deferred, and dependent on the firm’s “overall success” and not simply on the employee’s “personal productivity”, and held to be outside the scope of statutory wages.

Common Law and Statutory Claims

Outside of unique instances where the terms of a bonus plan are expressed as “contractual” or based on a specific formula (e.g., linked to individual targets achieved), bonus plans are otherwise likely to be “discretionary”. As a general rule, an employee has no legally enforceable right to receive bonus compensation, or a specific sum as a bonus, if the incentive plan is discretionary. However, employers still need to be aware of potential claims under contract and discrimination laws arising from the payment or non-payment of bonuses.

Being cognizant of whether a bonus determination implicates discriminatory treatment proscribed by such statutes as Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), and their state and local counterparts, therefore, should be an important component of the process. Although typically a claim may involve female employees performing substantially equal work as male employees but purportedly receiving lower bonus awards, claims may also arise where the employer prorates a bonus because of absences or decreased productivity due to protected leave of absence. In order to avoid any discrimination claims with respect to bonuses, employers should:

• Base employee bonuses on objective business criteria such as productivity or pre-set performance standards. Employers who wish to prorate an employee’s bonus due to his or her absences or decreased productivity would be prudent to clearly describe the specific productivity standards upon which the bonus is based.

• Document the reasons supporting a person’s discretionary bonus and ensure that it is consistent with that employee’s performance evaluations.

• Provide discrimination avoidance training for those supervisors and managers who are involved in the bonus-determination process.

• The employer should review any bonus award plan to see if there were any unintended discriminatory effects (such as African American employees receiving less than Caucasian employees or female employees receiving less than male employees) and take the necessary steps to review the process and either rectify any disparities or revise the system to avoid these effects the following year.

You've probably observed somewhat of a tension after reading the above: For FLSA purposes, the greater the unfettered discretion, the greater likelihood the bonus will be excludable from the regular rate of pay. However, for Title VII purposes, the greater the unfettered discretion, the greater the potential for being accused of discriminatory intent (e.g., because of less reliance on objective benchmarks). Employers should weigh the costs/benefits and determine how important it is for the company to exclude bonus payments from the regular rate of pay for non-exempt employees.

Various decisions by the courts and arbitrators have also determined that an employer must exercise its discretion in good faith and on reasonable grounds. If an employee meets his bonus criteria an employer should be prepared to establish reasonable grounds for not paying the bonus if it is to show that it has exercised its discretion in good faith. An employee may also try to assert a claim under an “implied” contract theory if the employer has by custom and practice paid bonuses to other employees who have similarly performed over the year. Although past practices alone do not imply an agreement to continue such practices indefinitely into the future, this type of claim is common in the financial services industry where some employees attempt to argue that their year-end bonuses comprise an integral component of their annual compensation.

Even where the employer retains absolute discretion, it is always good practice to be able to support a decision to withhold a bonus based on rational and legitimate business reasons. As with the potential for discrimination claims, such claims can be avoided by reinforcing the discretionary nature of the bonus (making it clear in all written bonus documents), attaching certain criteria to receipt of a bonus (such as continued employment) and basing these decisions on objective business standards such as employee and employer performance.

Considerations for Employers

During this recession involving personnel and labor expense reduction, employers should be aware of the ways in which current and former employees may seek to recover bonus compensation even where the employer had expressly retained a discretionary policy. At the outset, the company should review what, if any, contractual obligations it has under employment agreements and workplace policies, if applicable. If the company has retained and exercised a discretionary policy, employers should nevertheless be able to articulate an objective and reasonable decision, while also being cognizant of employment laws concerning wage, hour, discrimination, and potential common law claims.

* I would like to thank my EBG colleague, Doug Weiner, Esq., who formerly served as Senior Trial Attorney for the New York Regional Solicitor's Office of the U.S. Department of Labor, for his keen insight and invaluable contributions to this blogpost.

Will Paid Sick Leave Be Mandated By Law?

Brian Molinari — Wed, 02 Dec 2009 08:22:36 -0800

The H1N1 swine flu pandemic, which has infected as many as 22 million Americans, hospitalizing 98,000 and killing roughly 3,900 since it first broke out in April, has prompted legislative discussion about mandating paid sick leave at the federal and state level and in some cities such as New York City. In spite of admonitions from the Centers for Disease Control and Prevention (CDC) to workers to stay at home if they are sick, some say that the lack of paid sick leave has created an obstacle. CDC statistics show that a sick employee in the workplace risks infecting 10 percent of their colleagues – the so-called “presenteeism” paradox of causing more economic loss than absenteeism. However, approximately 39 percent of all workers in private industry do not get paid sick leave, according to the Bureau of Labor Statistics. Of course, the statistics differ as to full-time versus part-time workers: 73 percent of full-time workers receive paid sick leave benefits compared to only 26 percent of part-time workers in private industry.

Currently, there are no federal legal requirements for paid sick leave. For companies subject to the Family and Medical Leave Act (FMLA), the Act does require unpaid sick leave. The FMLA provides for up to 12 weeks of unpaid leave for a “serious health condition” of either the employee or the employee’s spouse, son, daughter, or parent. In many instances, paid leave may be substituted for unpaid FMLA leave. Employees are eligible to take FMLA leave if they have worked for their employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a worksite where at least 50 employees are employed by the employer within 75 miles of that worksite.

Federal Legislative Proposals

Several bills have been proposed at the federal level to mandate paid sick leave, and warrant your close attention during this pandemic. The Emergency Influenza Containment Act (H.R. 3991) proposed by Reps. George Miller and Lynn Woolsey of California on November 3, would require employers to provide at least five paid sick days to workers who are sent home from work ill or told to stay home because of symptoms related to contagious illnesses such as the H1N1 flu virus. Under this bill, employees could only take time off for their own illness.

The Pandemic Protection for Workers, Families and Businesses Act (S. 2790/H.R. 4092), proposed by Sen. Christopher Dodd and Rep. Rosa DeLauro of Connecticut on November 17, would require seven days paid sick leave they fall ill with swine flu or seasonal flu and would include parents who stay home with sick children. (The Dodd-DeLauro bill is packaged as an emergency measure but is largely based on The Healthy Families Act, which was introduced last May in the House (H.R. 2460) by Rep. DeLauro and in the Senate (S. 1152) by the late Sen. Ted Kennedy.)

Another key difference between the two is that under the Miller-Woolsey bill, the sick days would go into effect if an employer tells a worker to go home or stay home. Under the Dodd-DeLauro bill, an employee would decide when to use the days. Under both bills, businesses with fewer than 15 employees would be exempt, and both bills would sunset after two years.

Some senators have announced opposition to such legislation, arguing it would hurt the already aching economy by imposing inflexible policies and new financial burdens on small businesses. In addition, many employers already offer paid sick leave, or make other arrangements, such as telework, to mitigate outbreaks of contagious illnesses. Counter-arguments in favor of the legislation are that workers should not have to choose between getting paid or staying home ill, and employers might end up with dozens of unproductive, sick workers making their co-workers unproductive.

State Laws

At least a dozen states reportedly have considered or are considering whether to mandate a certain amount of paid sick leave per year. New York is not one of them. For an update on those campaigns, see the National Partnership for Women & Families and the Healthy Families Act Coalition website.

New York City

In New York City, the Paid Sick Time Act (Int. No. 1059) was introduced in August and is currently pending in hearings before the Committee on Civil Service and Labor. That bill would require employers in New York City with 10 or more employees to give employees one hour of sick leave for every thirty hours worked -- up to 9 paid sick days per year. Small businesses (fewer than 10 employees) would be required to give up to 5 paid sick days per year. Under the bill, sick days could be used when the employee is sick or to allow the employee to care for sick children or other sick relatives. The bill also has a provision allowing sick days to be used to care for children whose schools have been closed by city officials for public health reasons, even if the children are not themselves sick.

Considerations For Employers

The passage of such legislation will require those employers subject to the laws to revisit their existing paid time off (PTO) policies to ensure compliance. And for those employers without PTO policies, such legislation will require immediate implementation of policies compliant with the mandated minimum amount of sick leave. In the meantime, employers should continue to monitor guidance provided by the CDC and the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA). These agencies have issued fact sheets designed to help employers and workers promote safety during the H1N1 pandemic, and minimize proliferation of H1N1 in the workplace. According to OSHA, all employers should be implementing a combination of control methods to protect workers and reduce the transmission of the H1N1 virus in the workplace, including:

encouraging sick workers to stay home
promoting hand hygiene and cough etiquette
keeping the workplace clean
promoting vaccination and addressing travel and
planning for additional actions if the severity of the pandemic increases.

Virtual Harassment: When Online Behavior Becomes a Real-World Problem

Brian Molinari — Thu, 19 Nov 2009 06:46:42 -0800

Web-based social networking sites have become part of the mainstream, and companies should consider enhancing their existing electronic communications policies to account for sites like Facebook and Twitter. Undoubtedly, one important part of such a policy should address the issue of coworker harassment in the online or "virtual" world.

For example, what happens when one of your employees complains that a comment, picture, or video posted online by a colleague is offensive or disparaging? Or that she is being subjected to unwelcome flirtatious comments and messages through a website? Although Internet networking for business or social purposes has many upsides and benefits, it's important that your antiharassment policy proactively address the spectrum of possibilities that can play out in the virtual world and make it clear that employees will be protected in the real world.

Friends Online

Quite often, coworkers and colleagues become "connected" on social networking websites and therefore have access to each other's personal profile pages. By connecting through a website, people are essentially "consenting" to not only sharing their own postings but also being subjected to the musings of their "friends." While this networking platform serves many positive and productive uses, you need to be cognizant that it can be a fertile ground for harassment issues.

Basic social networking platform

The common thread of most social networking sites is users' ability to post real-time comments describing what they are doing or thinking at a particular moment. For example, Facebook asks its users, "What's on your mind?" and Twitter asks, "What are you doing?" In the case of Twitter, a user may "tweet" what he's doing using 140 characters or less, and his "followers" will receive his message instantaneously via e-mail, online through their Twitter page, or in a text message to a mobile device. In addition, if the Tweeter has set his profile to be public, his tweets are available globally for the world to see and are even viewable on Google searches.

In the case of Facebook, a user's post, called a "status update," becomes publicly viewable only among her circle of "friends" ― other users she has approved to have access to her Facebook page. Even among her "friends," however, the Facebook user can select who will be privy to her status updates and who will not. On the flip side, Facebook users can employ looser privacy settings so that their status updates are available for all to see.

In addition to status updates, each Facebook user's page has a "Wall" on which she, or her friends, can post comments, pictures, music, videos, and links to websites. A Facebook user has the ability to control who can post to or view her Wall. A "News Feed" provides up-to-the-minute posts of all the comments and updates posted by her friends. Similarly, a Tweeter's "Home Page" provides a running, real-time list of the tweets of all the other Tweeters he is following. These "feeds" are issued 24 hours a day, seven days a week. Facebook and Twitter also have direct messaging capabilities allowing users to privately e-mail each other.

Because employees inevitably socialize in the real world, they may eventually find themselves becoming mutual friends in the virtual world on Facebook and followers on Twitter. That means that "friends" and "followers" of users on those sites will be receiving real-time tweets, status updates, and posts whether they like it or not. Of course, if they don't like it, they can simply "unfriend" or "block" a Facebook friend or change their settings so posts from that user won't be viewable. Similarly, a Tweeter can "un-follow" or "block" another person and prevent people from following his tweets. In sum, social networking sites generally have various mechanisms in place for users to control not only what they want others to see but also what they will be exposed to when something is posted by someone in their network.

Virtual harassment

In the employment law context, workplace harassment is not limited to conduct of a sexual nature because harassment may involve race, religion, age, and national origin, to name a few possible grounds. Generally, unlawful workplace harassment (based on protected characteristics) occurs when unwelcome conduct unreasonably interferes with an employee's work performance, or creates an intimidating, hostile, or offensive work environment. Isolated and stray remarks generally don't suffice; the conduct must be "severe or pervasive."

Sexual harassment, perhaps the most common type of harassment, can occur in a variety of circumstances, including:

The victim and the harasser may be a woman or a man. The victim doesn't have to be of the opposite sex of the harasser.
The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a coworker, or a nonemployee.
The victim doesn't have to be the person harassed but could be anyone affected by the offensive conduct.

Unlawful sexual harassment may occur without the victim suffering economic injury or being terminated.

For example, consider two co-workers who become friends online. Tweedledum posts flirtatious and sexually suggestive tweets and posts. Tweedledee then complains to HR that she's feeling harassed by Tweedledum. When asked for details about her complaint, she explains that the harassment is happening strictly in the virtual world, online through Facebook and Twitter, and that she has no complaints about any inappropriate behavior in the real-world workplace.

Suggestions for policies and enforcement

This example is for illustrative purposes only. However, it highlights how social media platforms can unwittingly become an avenue for harassing behavior that triggers your company's antiharassment policy. Although Tweedledee admits that she hasn't suffered any harassing conduct in the real-world workplace, she claims to have suffered sexual harassment by a coworker, and she has the "tweets" and "Wall posts" to prove it. So what should you do in response?

Determine the time and place of the conduct. Your company rightly wants to maintain a healthy, safe, and productive workplace free from discrimination, harassment, sexual advances, or any other comments or conduct that creates an offensive, intimidating, or inappropriate work environment. Even though Tweedledee hasn't reported any physical workplace harassment, she has complained about being harassed by a coworker. The company should therefore take her complaint seriously and investigate it in accordance with its antiharassment policy.

Preliminarily, your investigation should include whether the "virtual harassment" occurred during work hours or through the company's computer system ― employers are generally not expected to be responsible for employees' off-duty or off-premises conduct, especially when virtual harassment is completely unconnected to the workplace. Of course, even if the purported harassment is wholly off-duty and off-premises, the investigation should examine whether the conduct, or its effects, have spilled over into the workplace ― much like investigating a complaint of off-duty harassment at a social happy hour that later causes interference in an employee's working environment. Indeed, even if the harasser's online behavior occurred strictly off-duty and off-premises, it's feasible that the alleged victim received and viewed the offensive posts during her work hours on your computer.

Should you simply block access to sites? While your logical reaction may be to simply block access to social networking websites on the company's computers to mitigate your exposure to liability, such a tactic isn't completely effective. The fact remains that online content is likely viewable from another mobile device like a smartphone as well as other Web sources. In addition to losing out on networking and business development opportunities, employee morale may suffer when you punish the entire workforce by blocking access because of the misbehavior of a few Tweedledums. However, this course of action is at least worthy of consideration.

Policy content. Accordingly, your company should have policies establishing that in the virtual world, just like in the physical workplace, employees should follow business conduct guidelines, good judgment and etiquette including avoiding discrimination against, harassment of, and other inappropriate actions toward their coworkers. Social website policies can combine aspects of your existing rules for employee e-mail and Internet use and your policies governing communication and confidentiality. Make it clear that employees who are found to have engaged in harassment or discrimination of another employee will be subject to disciplinary measures, including termination. Depending on your type of business and publicity issues, you may also inform employees that if their profile refers to their employment, you expect them to clarify that they speak only for themselves, not on behalf of the company.

Your policy should advise employees that if they encounter behavior by a coworker that wouldn't be acceptable inside the company, they should simply remove their connection from that user ― e .g. , by "unfriending," "blocking," or "un-following" the person or changing their settings so they're no longer exposed to the offensive comments. Even those approaches may be insufficient, however, because postings on the profiles of mutual friends or followers might still be viewable, and the harasser may set up alter-ego profiles or try direct messaging, "re-friending," or "re- following." If cutting all connections doesn't prove sufficient or if the behavior persists, the employee should report the abuse to the relevant service provider. Most social networking websites have their own conduct and antiharassment policies that can result in disqualification of a user.

Be mindful of off-duty lawful activity laws. Many states, including New York, have laws prohibiting employers from taking adverse employment action against an employee because of his lawful off-duty conduct, such as political or recreational activities. New York Labor Law § 201-d, which makes it unlawful to terminate an employee because of his "recreational activities outside work hours, off of the employer's premises," may be an issue to consider. Under the statute, recreational activities are defined as "lawful, leisure-time activity . . . [that] is generally engaged in for recreational purposes, including but not limited to sports, games, hobbies, exercise, reading and the viewing of television, movies and similar material." The statute affords no protection to an employee whose off-duty conduct "creates a material conflict of interest related to the employer's trade secrets, proprietary information or other proprietary or business interest."

Whether an employee's conduct in the virtual world constitutes "harassment" or is unlawful depends on various factors. You will have to make an appropriate inquiry, perhaps with the aid of legal counsel, into whether the conduct at issue fits the statutory definition of recreational activity. Even if the conduct is protected by the law, however, the poor judgment exhibited by the employee's conduct may likely conflict with your business interests in having a diligent, efficient, intelligent, and productive workforce. Given the lack of clear case law and regulation in this area, any incidents will likely require a case-by-case approach.

As part of your efforts to establish policies governing your employees' use of social Web media, you should recognize that harassment issues may arise in the virtual world off your "premises" and spill over into the real world. Just like harassment that may occur at happy hour or a holiday party, these incidents should be dealt with swiftly and effectively. The best guideline is to approach virtual worlds the same way you deal with problems in the physical world ― by using sound judgment and being guided by your relevant values and business conduct rules.

Swine Flu: Another Reason to Telecommute? Some Relevant Legal Issues & Guidance

Brian Molinari — Fri, 16 Oct 2009 10:00:00 -0800

I am also a contributing author to the New York Employment Law Letter. In its September 2009 issue I wrote about the resurgence of telecommuting for various reasons, including efforts to reduce company overhead while increasing productivity during the recession. See Telecommuting: What employers need to know about managing offsite workers.

Now an official pandemic, the H1N1 Swine Flu is forecasted to have a resurgence this fall and winter which may be another reason to offer a telecommuting option to employees. The U.S. Centers for Disease Control (CDC) has published useful guidance for businesses on managing the workplace in relation to this pandemic. Indeed, one of the CDC's recommendations includes: "Establish policies for flexible worksite (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), if needed." And yes, even the U.S. Occupational Safety &

Health Administration has published helpful guidance in ensuring a safe workplace in the face of this global pandemic.

While telecommuting is easily justified, there are myriad legal issues involved that warrant review of the resources cited here.

Some of those include: (i) Telecommuting as a "Reasonable Accommodation" of a Disability; (ii) Discrimination/ Eligibility Issues; (iii) Wage and Hour Issues (travel, standby time, downtime); (iv) Workplace Safety (ergonomics, OSHA compliance, workers compensation, third party liability); (v) Commercial, General Liability, Homeowners Insurance; and (vi) Protection of Confidential and Proprietary Data; (vii) Telecommuting Policies and Agreements.

Refresher on Tax Treatment of Employment-Related Judgments & Settlements

Brian Molinari — Wed, 29 Jul 2009 07:30:41 -0800

Tax lawyers are a separate species from the rest of us, so pardon my foolish attempt at entering the no-man's land otherwise known as the Internal Revenue Code (IRC). Frankly, the safest course for all of us is to read the fairly recent 20-page Income and Employment Tax Consequences and Proper Reporting of Employment-Related Judgments and Settlements (download) memorandum published by the Office of Chief Counsel, Internal Revenue Service.

As thoroughly examined and explained in that memo, the correct treatment of employment-related settlement payments is a four-step process:

1. Character of the Payment. Determine the character of the payment and the nature of the claim that gave rise to the payment. For example, a payment could be for a lost wages claim brought under Title VII of the Civil Rights Act of 1964.

2. Is Payment Included in Gross Income? Determine whether the payment constitutes an item of gross income.

3. Is Payment Considered Wages? Determine whether the payment is wages for employment tax purposes (Federal Insurance Contributions Act (FICA), and income tax withholding).

4. Reporting. Determine the appropriate reporting for the payment and any attorneys’ fees (Form 1099 or Form W-2).

Answers and guidance on practically all of the scenarios that usually arise are contained in charts at pages 15 through 20 of the memo.

Compensatory Damages Due to Physical Injuries or Sickness

Perhaps one of the more frequently arising questions is the tax treatment of judgments or settlements for compensatory damages associated with emotional distress and pain and suffering that are often claimed by plaintiffs in employment discrimination cases.

Section 104(a)(2) of the IRC, which excludes compensatory damages received “on account of personal physical injuries or physical sickness” from the definition of taxable gross income, expressly states that “emotional distress shall not be treated as a physical injury or physical sickness” for purposes of this exclusion. Therefore, the IRS and many courts interpreting the IRC have taken the position that a settlement payment (or judgment) for the intangible value of an emotional distress claim (i.e. claims unrelated to a physical injury or physical sickness) is taxable income.

In addition to pages 5 and 6 of the memo, a user-friendly overview of when distress related to a physical injury is excludable under IRC 104(a)(2) is cogently explained by the U.S. Tax Court in Moulton v. Commissioner, No. 4552-06, T.C. 2009-38 (Feb. 18, 2009) (download).

In Moulton, the Tax Court ruled that a $65,000 settlement payment to an employee claiming wrongful termination was includable in gross income even though the claimant alleged mental injuries as a result of the job loss. The Court held:

To the extent petitioner may have suffered depression, sleep disorders, or elevated blood sugar levels that he attributed to heightened stress from his job termination and its aftermath, those conditions fall within the category of 'emotional distress' that 'shall not be treated as a physical injury or physical sickness' for purposes of the exclusion provided in section 104(a)(2).

It would be interesting to see how the Tax Court would have ruled had the claim of distress been more severe and associated with a neurophysiologic disorder of the brain and more akin to a biological disease with inherent physical manifestations. According to the memo, however, the IRS's "administrative position is that observable or documented bodily harm, such as bruising, cuts, swelling or bleeding is evidence of personal physical injury. . . . Damages recovered from an employment-related dispute generally are not recoveries for a personal physical injury. Thus, employment-related judgment/settlement amounts will generally be included in the employee’s gross income."

All of this, of course, means that the tax aspects of settlements need to be carefully addressed with combined advice of tax counsel and employment law counsel during negotiations between the parties.

Airport-to-Seaport Shuttle Bus Drivers Exempt From FLSA Under Motor Carrier Act Exemption: 11th Circuit

Brian Molinari — Fri, 24 Jul 2009 08:53:53 -0800

In a per curiam decision yesterday by the Eleventh Circuit Court of Appeals in Walters et al. v. American Coach Lines of Miami, Inc. No. 08-15636 (11th Cir. July 23, 2009) (download), the Court affirmed the district court's summary judgment in favor of American Coach Lines of Miami, Inc. (ACLM) with respect to 45 of 63 Plaintiffs who claimed that ACLM had violated the FLSA’s minimum wage and overtime provisions. ACLM was entitled to summary judgment on the ground that the group of plaintiffs who were reasonably expected to drive airport-to-seaport shuttle routes are exempt from the FLSA by virtue of the Motor Carrier Act (MCA).

Specifically, the relevant plaintiffs would shuttle cruise ship passengers of Costa Cruises, Princess Cruises, and Royal Caribbean Cruise Lines between the Miami and Fort Lauderdale airports and local hotels and cruise ship ports. In addition, ACLM provided passengers of Royal Caribbean with ground transportation for passengers who booked vacation packages through travel agents or Royal Caribbean as part of their overall cruise package.

The MCA act specifically exempts from the FLSA “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of” the MCA. The Secretary of Transportation has authority under the MCA “to regulate the maximum hours of service of employees who are employed (1) by a common carrier by motor vehicle; (2) engaged in interstate commerce; and (3) whose activities directly affect the safety of operations of such motor vehicles."

The Eleventh Circuit concluded:

". . . ACLM’s airport-to-seaport routes would come under the Secretary’s MCA jurisdiction. Its shuttle trips share a practical continuity of movement with the interstate or international travel of the cruise lines and their passengers . . . For cruise ship passengers arriving at the airport or seaport, ACLM’s shuttle rides would be part of the continuous stream of interstate travel that is their cruise vacation. The Royal Caribbean patrons in particular would have no reason to have any alternate view since the fee for the shuttle ride would either be bundled as part of their cruise vacation package or would be included on the bill for their Royal Caribbean shipboard account. . . . [F]rom the perspective of the cruise passengers, ACLM’s trips were an essential and intrinsic component of the overall stream of interstate travel transporting the passengers from their points of departure to the cruise ships (and exotic foreign and out-of-state ports of call) and back home again."

The Eleventh Circuit's sagacious opinion is an excellent opportunity to refresh your knowledge of the requirements and applicability of the MCA particularly in the context of interstate commerce continuity. My colleagues, Richard D. Tuschman and Kevin E. Vance, did an admirable job in representing ACLM and handling the complexity of the MCA in this case. For further analysis of this case and the MCA, the Florida Employment Law Blog is a great source.

NYC's Entry-Level Firefighter Exams Unlawfully Discriminated Against Hispanics and African-Americans

Brian Molinari — Thu, 23 Jul 2009 01:15:17 -0800

In USA v. City of New York, 07-cv-2067 (NGG)(RLM) (E.D.N.Y. July 22, 2009) (download), Judge Nicholas Garaufis of the Eastern District of New York issued a 93-page decision endorsing in wholesale fashion the statistical analysis of two experts on behalf of Plaintiffs to hold that entry-level firefighter exams used by the City of New York from 1999 to 2007 had an unlawful discriminatory impact due to the disproportionate failure rates of African-American and Hispanic test takers in violation of Title VII. The court held that the statistical conclusions of experts Bernard R. Siskin, Ph.D. and Joel P. Wiesen, Ph.D, relied upon by the Plaintiffs, were sufficient to set forth a prima facie case of disparate impact.

The hiring of entry-level firefighters was based on Exams 7029 and 2043 each of which were 85-question multiple choice tests. (Exam 7029 was administered from 1999 through 2002, and Exam 2043 was administered from 2002 through 2007). Candidates who passed the written examination were allowed to take the physical performance test (“PPT”). The PPT consisted of eight physical tasks, and a candidate had to pass a minimum of six tasks to achieve a passing score overall. Candidates who passed both the written examination and the PPT were placed on a “rank-order” eligibility list. The ordering of the eligibility list was based upon an elaborate process of “standardizing,” “combining,” and “transforming” the raw scores.

Exam 7029

The cutoff passing score for Written Examination 7029 was 84.705%. Based on that cutoff score, the pass rate of white candidates for Exam 7029 was 89.9%, while the pass rate of black candidates was 60.3%. In other words, out of 12,915 white test takers, 11,613 received a passing score of at least 84.705, whereas out of 1,749 black test takers, only 1,054 received a passing score. The pass rate of black candidates was, therefore, 67% of the pass rate of white candidates.

Both Dr. Siskin’s and Dr. Wiesen’s standard deviation analysis found that this disparity is equivalent to 33.9 units of standard deviation, meaning that the likelihood it occurred by chance is less than 1 in 4.5 million-billion. The practical effect of this disparity, according to Dr. Siskin, is that 519 black candidates who failed the examination—74.7% of the black applicants who failed—were eliminated from consideration. Dr. Wiesen estimated that 457 black candidates would have passed the examination but for the effect of this disparity. Based on Dr. Siskin’s calculation, 114 additional black firefighters would have been appointed absent the disparity.

The pass rate for Hispanic candidates taking Exam 7029 was 76.7%, compared with a pass rate of 89.9% for white candidates. Accordingly, the pass rate of Hispanic candidates was 85.3% of the pass rate of white candidates. Dr. Siskin’s standard deviation analysis found that this disparity is equivalent to 17.4 units of standard deviation, meaning that the likelihood it occurred by chance is less than 1 in 4.5 million-billion. The practical effect of this deviation, according to Dr. Siskin, is that 282 Hispanic candidates who failed the examination—56.9% of the Hispanic applicants who failed—were eliminated from consideration. Based on Dr. Siskin’s calculation, 62 additional Hispanic firefighters would have been appointed absent the disparity.

Exam 2043

The cutoff passing score for Written Examination 2043 was 70%. Based on this cutoff score, the pass rate of white candidates taking Exam 2043 was 97.2%, while the pass rate of black candidates was 85.4%. In other words, out of 13,877 white test takers, 13,495 received a passing score of at least 70, whereas, out of 1,393 black test takers, 1,190 received a passing score. The pass rate of black candidates was, therefore, 87.8% of the pass rate of white candidates. Both Dr. Siskin’s and Dr. Wiesen’s standard deviation analysis found that this disparity is equivalent to 21.8 units of standard deviation, meaning that the likelihood that it occurred by chance is less than 1 in 4.5 million-billion. The practical effect of this deviation, according to Dr. Siskin, is that 165 black candidates who failed the examination—81.3% of the black applicants who failed—were eliminated from consideration.

Dr. Wiesen estimated that 150 black candidates would have passed the examination absent the disparity. Based on Dr. Siskin’s calculation, 30 additional black firefighters would have been appointed absent the disparity. This last calculation was based on the assumption that the black applicants who failed Exam 2043 would have passed the PPT at the same rate as other similarly situated passers, and would have met the other qualifications and been appointed at the same rate as other passers.

The pass rate for Hispanic candidates taking Exam 2043 was 92.8%, compared with a pass rate of 97.2% for white candidates. The pass rate of Hispanic candidates was, therefore, 95.5% of the pass rate of white candidates. Dr. Siskin’s standard deviation analysis found that this disparity is equivalent to 10.5 units of standard deviation, meaning that the likelihood it occurred by chance is less than 1 in 4.5 million-billion.

The practical effect of this deviation, according to Dr. Siskin, is that 94 Hispanic candidates who failed the examination—61.8% of the Hispanic applicants who failed—were eliminated from consideration. Based on Dr. Siskin’s calculation, 17 additional Hispanic firefighters would have been appointed absent the disparity.

Prima Facie Disparate Impact Based on Statistical Significance Testing

Noting that "standard deviations of more than 2 or 3 units can give rise to a prima facie case of disparate impact because of the low likelihood that such disparities have resulted from chance," the court held:

"Plaintiffs have presented analyses from two experts that thoroughly demonstrate the statistical significance of the disparities between groups of candidates. For each of the pass/fail uses of the examinations, these analyses demonstrate that the disparities between the pass rates of whites and minority candidates were between 10.5 and 33.9 units of standard deviation. For each of the rank-ordering uses of the examinations, the analyses demonstrate that the disparities between the rankings of whites and minority candidates were between 4.6 and 9.7 units of standard deviation. These statistical disparities show that black and Hispanic candidates disproportionately failed Written Exams 7029 and 2043, and were placed disproportionately lower on the eligibility lists created from those examinations."

Notably, the court declined to apply the "80% Rule". (The 'four-fifths rule' provides that a selection tool that yields a selection rate for any race, sex, or ethnic group which is less than four-fifths (4/5) (or 80%) of the rate for the group with the highest rate will generally be regarded by the EEOC as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded as evidence of adverse impact). The 80% Rule would have resulted in a finding of no disparate impact on some of the Plaintiffs' challenges, specifically: the pass/fail uses of Exam 2043 with respect to black candidates, and the pass/fail uses of Exam 7029 and 2043 with respect to Hispanic candidates. The court was unpersuaded that it must rely on the 80% Rule to the exclusion of statistical significance testing. Citing case law, the court held that "[c]ontrolling precedent holds that the 80% Rule is not an exclusive means of proof, and that alternative statistical tests should be considered."

City Failed to Show Business Necessity

Assessing the validity of the City's tests under Guardians Association of the New York City Police Department, Inc. v. Civil Service Commission, 630 F.2d 79, 82 (2d Cir. 1980), the court applied the Guardians five-part test:

(1) the test-makers must have conducted a suitable job analysis;
(2) they must have used reasonable competence in constructing the test itself;
(3) the content of the test must be related to the content of the job;
(4) the content of the test must be representative of the content of the job; and
(5) there must be a scoring system that usefully selects from among the applicants those who can better perform the job.

The court considered each seriatim and concluded that the City "has made an inadequate showing that the tests contained appropriate content and were properly constructed pursuant to the EEOC Guidelines and Guardians. . . . [and] has not justified its ranking of thousands of candidates for the job of entry-level firefighter."

In the court's opinion, the City failed to demonstrate a sufficient relationship between the tasks of a firefighter and the abilities it intended to test on Exams 7029 and 2043, and the City also failed to:

take measures to ensure the reliability of those examinations;
take steps to ensure that that the reading level of the examinations was appropriate;
test for various recognized important abilities of a firefighter;
test for abilities needed upon entry into the Fire Academy, rather than abilities to be learned on the job;
retain testing professionals to devise the examination questions;
demonstrate that the examinations it administered actually tested the abilities it intended to test.

Relying on Guardians, the court held that the City "improperly relied upon these poorly constructed examinations in the face of a disparate impact upon minority candidates."

Ricci v. DeStefano - Irrelevant

Judge Garaufis, cognizant of the media hype surrounding Ricci v. DeStefano, 129 S. Ct. 2658 (June 29, 2009), properly observed that Ricci has no application in this case:

"In Ricci, the City of New Haven had set aside the results of a promotional examination, and the Supreme Court confronted the narrow issue of whether New Haven could defend a violation of Title VII’s disparate treatment provision by asserting that its challenged employment action was an attempt to comply with Title VII’s disparate impact provision. The Court held that such a defense is only available when 'the employer can demonstrate a strong basis in evidence that, had it not taken the action, it would have been liable under the disparate-impact statute.' Id. at 2664. In contrast, this case presents the entirely separate question of whether Plaintiffs have shown that the City’s use of Exams 7029 and 2043 has actually had a disparate impact upon black and Hispanic applicants for positions as entry-level firefighters. Ricci did not confront that issue."

Aftermath

The media, always sensitive to legal news touching on matters of race especially on the heels of the Hon. Sonia Sotomayor confirmation hearings which provided wide exposure of Ricci, is rapidly reporting on this case. It will take patience and perhaps a primer in statistical analysis to really get your hands around this decision; however, what stands out as most significant is the court's adoption, essentially wholesale, of the findings and conclusions of two experts on behalf of the plaintiffs in this case to solidify their prima facie case. The court had broad discretion to rule on the admissibility of the experts' evidence in the summary judgment context, and its ruling will be sustained unless manifestly erroneous and/or whether the court abused its discretion.

So You Want To Be An Exempt Learned Professional?

Brian Molinari — Wed, 22 Jul 2009 07:46:22 -0800

According to the New York State Department of Labor median wage statistics (download), the top five highest paying jobs in New York State are: Physicians/Surgeons ($150,000); Dentists ($138,000); Lawyers ($132,000); Judges, Magistrate Judges and Magistrates ($126,700); and Podiatrists ($123,800). Four of the five require a professional degree; and even judges and magistrates require education beyond a bachelors degree. (Yes, podiatrists are doctors, too.)

Being a "Learned Professional" also means that you are exempt from the minimum wage and overtime pay requirements of the federal Fair Labor Standards Act (FLSA).

So what does it take to be inducted into the club of Learned Professionals, perhaps the most dignified of all of the FLSA’s exemptions?

To qualify for the Learned Professional Exemption:

the primary duty must be work that requires advanced knowledge
in a field of science or learning
that is customarily acquired by a prolonged course of specialized intellectual instruction.

Under the federal regulations, "work requiring advanced knowledge'' means work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment, as distinguished from performance of routine mental, manual, mechanical or physical work. Advanced knowledge cannot be attained at the high school level.

A "field of science or learning'' includes the traditional professions of law, medicine, theology, accounting, actuarial computation, engineering, architecture, teaching, various types of physical, chemical and biological sciences, pharmacy and other similar occupations that have a recognized professional status. The "mechanical arts" or skilled trades where in some instances the knowledge is of a fairly advanced type are generally not considered fields of science or learning.

The phrase "customarily acquired by a prolonged course of specialized intellectual instruction'' restricts the exemption to professions where specialized academic training is a standard
prerequisite for entrance into the profession. Possession of the appropriate academic degree is the best prima facie evidence that an employee meets this requirement. However, the word "customarily'' may also cover employees who attained the advanced knowledge through a combination of work experience and intellectual instruction. However, the learned professional exemption is not available for occupations that customarily may be performed with only the general knowledge acquired by an academic degree in any field, with knowledge acquired through an apprenticeship, or with training in the performance of routine mental, manual, mechanical or physical processes. The exemption also does not apply to occupations in which most employees have acquired their skill by experience rather than by advanced specialized intellectual instruction.

While the regulations have identified various professions typically included within the exemption (e.g., accountants, chefs, physician assistants et al.), and those excluded (e.g., paralegals, accounting clerks, bookkeepers, cooks et al.), the courts have, of course, varied in their approach to determining whether a particular job constitutes a learned profession. For example, a California federal court, in Campbell v. Pricewaterhousecoopers, LLP, 602 F. Supp. 2d 1163 (E.D. Cal. 2009) (download), has recently interpreted the California wage orders and labor code to be ambiguous and thus held that accountants must be CPA licensed in order to meet that state's learned professions exemption. The federal regulations have no such ambiguity, however, and do not have a license requirement for accountants. See 29 C.F.R. § 541.301(e)(5).

Wisely, the regulations have left the door wide open to the exemption being flexible enough to accommodate the progressively intellectual character of the 21st Century workplace:

The areas in which the professional exemption may be available are expanding. As knowledge is developed, academic training is broadened and specialized degrees are offered in new and diverse fields, thus creating new specialists in particular fields of science or learning. When an advanced specialized degree has become a standard requirement for a particular occupation, that occupation may have acquired the characteristics of a learned profession. Accrediting and certifying organizations . . . also may be created in the future. Such organizations may develop similar specialized curriculums and certification programs which, if a standard requirement for a particular occupation, may indicate that the occupation has acquired the characteristics of a learned profession.

29 C.F.R. § 541.301(f).

Caveat: As the number of computer-related jobs and advanced computer certifications grow, so will the number of issues as to whether the employee is a "Learned Professional" and/or a "Computer Employee" -- a separate and highly technical exemption that deserves to, and will be, addressed separately. Stay tuned.

Discovery of Employment Discrimination Plaintiff's Psychotherapist Records - Court Looks Beyond Face of Complaint

Brian Molinari — Sat, 18 Jul 2009 07:42:17 -0800

It is generally the rule that an employment discrimination plaintiff opens the door to discovery of his otherwise privileged psychotherapy records when he alleges that he suffered emotional distress as a result of the alleged discrimination. The federal district court in Connecticut recently issued a decision that gives the practitioner an excellent overview of an exception to this rule – that such privileged records are sometimes not discoverable where the claims of distress are no more than “garden-variety” conventional pain and suffering. The case is Jacobs v. Connecticut Community Technical Colleges, No. 03:08civ0868 (CFD) (TPS) (July 15, 2009) (download).

However, in Jacobs, the court also discussed an important point about applicability of this exception: That is, even where a Complaint alleges on its face mere garden-variety distress, it is important for defendants to carefully examine not just the pleadings, but the plaintiff’s written discovery responses which are often used by plaintiffs to amplify their claims for damages. It is entirely possible and common that plaintiff's discovery responses will indicate that the distress allegedly at issue is much more than garden variety.

Indeed, as Jacobs indicates, many plaintiffs' attorneys, in an attempt to shield disclosure of their clients’ sensitive (and potentially damaging) psychotherapy records will artfully plead mere garden variety distress while in reality, shooting for the moon when it comes to seeking compensatory damages for the distress allegedly suffered.

Plaintiff's discovery responses in Jacobs included interrogatory answers which identified psychotherapists who have treated Plaintiff for depression and anxiety in relation to the alleged discrimination (on the basis of his sex and sexual orientation) that he claims to have suffered by his employer. In addition, Plaintiff produced as part of his document production two letters from psychotherapists discussing treatment and diagnosis of Plaintiff's severe depression which was linked to his work environment. As Plaintiff's discovery indicated diagnosis of a specific psychiatric disorder allegedly attributed in part to his work environment, the court ordered full production of the psychotherapy records.

This case, in addition to giving a concise and useful overview of the state of the law, should serve as a reminder that looking beyond the face of the Complaint is extremely important when getting to the bottom of what type of distress is really at issue.

Employee Compelled to Arbitrate Discrimination Claims Where He Failed to "Opt-Out" of Employer's Arbitration Program

Brian Molinari — Mon, 13 Jul 2009 19:44:14 -0800

The U.S. District Court of the Southern District of New York recently compelled an employee-plaintiff to arbitrate his discrimination and tort claims against his employer, the Four Seasons Hotel, because he failed to affirmatively "opt-out" of the Four Seasons' internal mediation/arbitration program. See Rodriguez v. Four Seasons Hotels, Ltd., No. 09-2864 (DLC) (S.D.N.Y. July 10, 2009) (download).

Rodriguez, who is still employed as an Assistant Manager for the Four Seasons Hotel in New York, claims that Four Seasons discriminated against him on the basis of his race, color, sex, and national origin when he was denied promotions and was required to train white, female employees who were then promoted over him. Under the Four Seasons' "Complaint, Arbitration & Review for Employees" (C.A.R.E.) program, however, Rodriguez agreed that if he was ever dissatisfied with the general manager's written decision at a previous step in the C.A.R.E. process, and the complaint was based on, inter alia, employment discrimination or harassment then he "must submit [his] complaint to be heard by an independent mediator/arbitrator unless [the employee] has chosen to opt out of the mediation/arbitration provisions by following the opt-out procedure."

Rodriguez admittedly declined to opt-out of C.A.R.E., and attempted to argue that the C.A.R.E. program was unenforceable.

District Judge Denise Cote held that C.A.R.E., contained in the parties' employment "contract" called EmPact, was enforceable pursuant to the Federal Arbitration Act (FAA) because it was unambiguously a private agreement to arbitrate the claims asserted by Rodriguez. Noting that the FAA "was designed to ensure judicial enforcement of privately made agreements to arbitrate," unless Rodriguez opted-out, the court held that he remained contractually bound to arbitrate:

[Rodriguez was] not required to submit to the offending mediation/arbitration provisions as a condition of employment, but was provided with the choice of opting-out. Having declined to opt out, Rodriguez is required by the terms of his signed and valid employment contract to arbitrate his claims.

As Rodriguez's federal discrimination claims were plainly arbitrable, 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456, 1469 (2009), and courts regularly enforce arbitration agreements in the employment discrimination context, Judge Cote held that the FAA compelled arbitration. The state discrimination and tort claims were also arbitrable as they were covered by the scope of arbitrable claims under C.A.R.E. and arose from the same set of facts as the federal discrimination claims.

I find it interesting that Judge Cote repeatedly emphasized that the agreement to arbitrate in this case was in the form of a specific "contract" agreed to by Rodriguez (the "EmPact" document) and that he was free to opt-out; however, as the court implicitly recognized by citing Nunez v. Citibank, 2009 Lexis 7783 (S.D.N.Y. Feb. 3, 2009) (download), and Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), mandatory agreements to arbitrate may properly be contained in other documents that are perhaps not expressly denominated as a "contract" but carry binding obligations, e.g., employment applications, other employment agreements, and employee handbooks so long as the document is a valid agreement that wasn't procured by fraud or some other unlawful conduct.

Interestingly, by opting out, Four Seasons employees would automatically become ineligible for "No-Fault Separation Pay" associated with a permanent layoff or no-fault termination. However, it does not appear that Rodriguez ever argued that such a penalty operated to make the agreement unconscionable on the ground that he might unfairly be left with a Hobson's choice. Judge Cote seemed to preempt any unconscionability argument by noting that Rodriguez was not unsophisticated as he held a Bachelors and Masters degree and freely and knowingly signed the agreement.

In sum, with a strong imprimatur of enforceability by a highly respected federal judge, Four Seasons' EmPact/C.A.R.E. opt-out themed arbitration provisions may provide useful guidance for employers and their counsel in reviewing their employee arbitration agreements.

Caveat: keep your eyes on the progress of the Arbitration Fairness Act of 2009 (H.R. 1020 and S.931) introduced by U.S. Congressman Hank Johnson and also by U.S. Senator Russ Feingold. If enacted into law, the AFA would amend the FAA to declare unenforceable and void any pre-dispute agreement that requires arbitration of employment, consumer, or franchise disputes, or a dispute arising under any statute intended to protect civil rights. Collective bargaining agreements are exempt. A prior, virtually similar version of this Act, the AFA of 2007, died in committee during the last congressional session.

ADA Claims Dismissed Because of Implausibility on Face of Complaint

Brian Molinari — Fri, 10 Jul 2009 15:33:00 -0800

In recently dismissing claims under the Americans With Disabilities Act (ADA) based on the sheer "implausibility" of the factual allegations on the face of the complaint, Judge Vanessa Bryant of the U.S. District Court for the District of Connecticut correctly applied the much-discussed stringent pleading standards described by the Supreme Court in Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The case is Logan v. SecTek, Inc., No. 3:08cv00209 (July 8, 2009) (download).

You may recall that in Iqbal and Twombly, the Court set forth pleading standards for complaints to survive a motion to dismiss:

The complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged

The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully

Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief

The court need not accept as true all of the allegations that are legal conclusions

Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice

Only a complaint that states a plausible claim for relief survives a motion to dismiss

Determining whether a complaint states a plausible claim for relief will be a context-specific task that requires the court to draw on its judicial experience and common sense

Iqbal, 129 S. Ct. at 1949-50 (reiterating Twombly and clarifying that Twombly is not limited to antitrust claims only).

In Logan, two of the three defendants moved to dismiss Logan's disability claims against them based on Logan's failure to plead sufficient facts to support the second element of a prima facie case under the ADA, viz., that he was disabled or that defendants perceived him to be disabled. Judge Bryant reviewed the complaint's allegations and found Logan's allegation that defendants regarded him as being "disabled" because of their awareness that Logan had missed work due to a back injury was insufficient to meet the Iqbal pleading standard.

The only "factual enhancement" alleged by plaintiff was a statement that defendant "decided not to hire [Logan] because he had been out of work due to an injury and had not completed the required 40-hour classroom training." Noting that "an injury is not necessarily a disability as defined in the ADA," the court found the allegations to indicate only that it was "merely possible, but not plausible, that [defendant] perceived Logan to be disabled in accordance with the ADA definition." The court suggested that Logan "could have alleged, but does not allege, other facts that would have taken his ADA claim from the realm of possibility to plausibility."

Reading the Logan decision is a chance to see Iqbal in action. It provides comfort to those of us in the trenches representing employers accused of discriminatory conduct -- which turns largely on intent and state of mind -- and often spending years in tedious factual discovery to obtain dismissal at the summary judgment stage. With courts now requiring a factual enhancement of plausibility at the initial pleading stage, Rule 12(b)(6) is finally becoming a reliable mechanism for early disposition of factually deficient claims.

New York Appellate Division Upholds Dismissal of Sexual Orientation Discrimination Complaint

Brian Molinari — Fri, 10 Jul 2009 14:14:51 -0800

The Appellate Division (First Dept.) of the Supreme Court of the State of New York recently upheld the outright dismissal of a plaintiff's complaint alleging that he was not hired by a prospective employer due to his sexual orientation. The Appellate Division's pithy decision in Matz v. Prospect Energy Corp. 2009 NY Slip Op 05373 affirms the trial court's dismissal of the complaint because of Plaintiff's failure to "establish a prima facie case of discrimination inasmuch as he failed to show that he was denied employment under circumstances giving rise to an inference of discrimination."

The case is very interesting from a procedural standpoint since, generally, courts tend to accept factual allegations in the complaint as true when reviewing a motion to dismiss. Citing precedent, however, the court noted that it "is not required to accept factual allegations, or accord favorable inferences, where the factual assertions are plainly contradicted by documentary evidence."

In this case, Mr. Matz applied for a job in senior management, and alleged that defendants refused to hire him after inquiring and learning of his sexual orientation during a reference check. Defendants were able to produce documents showing that during the application process, they were interested in evaluating plaintiff's capabilities by having him work on various projects. The documents convincingly demonstrated that prior to learning of plaintiff's sexual orientation, defendants had already become concerned about plaintiff's skills, and had rejected his aggressive style and attempts to accelerate the hiring process.

Although Mr. Matz's complaint was likely brought under New York State or City Human Rights Laws, which prohibit sexual orientation discrimination, it could not have been brought under federal discrimination laws such as Title VII since sexual orientation is currently not a protected class. However, keep your eyes on the Employment Non-Discrimination Act (ENDA) that is now pending in Congress before the House Judiciary Committee which would provide a federal right of action for employees discriminated against on the basis of their sexual orientation or gender identity.

Keep Your Employment Law Issues Cool During Dog Days of Summer

Brian Molinari — Fri, 03 Jul 2009 16:03:00 -0800

In July 2006 New York City Mayor Michael R. Bloomberg issued an Executive Order declaring a State of Emergency "because of the extreme temperatures and humidity being experienced by the City." Mayor Bloomberg advised that "extreme conditions can cause heat exhaustion and heat stroke in residents [and] the increased demand for electricity for residents and businesses to run air conditioners and other cooling devices can cause power disruptions. These conditions imperil public safety and health."

That summer, 140 deaths in New York City were attributed to heat stroke or medical conditions exacerbated by extreme heat. Unfortunately, some weather experts expect this summer to be hotter and/or more humid than average.

From an employment law perspective, there are practical ways for you to keep your cool during a heat wave by planning ahead for such conditions, developing appropriate policies and procedures, maintaining safe and comfortable working conditions, maintaining employee productivity, preventing workplace heat-related illnesses or injuries, and complying with relevant employment and safety laws and regulations.

What is extreme heat?

The Federal Emergency Management Agency (FEMA) defines a "heat wave" as a "prolonged period of excessive heat, often combined with excessive humidity." FEMA advises that extreme heat pushes the human body beyond its limits by slowing body evaporation and causing it to work extra hard to maintain a normal temperature. The public health hazard is serious enough for the U.S. Department of Commerce, National Oceanic and Atmospheric Administration, to publish a safety brochure titled Heat Wave: A Major Summer Killer.

Even greater hazards in cities

The potential for heat-related problems in urban areas like New York City is even greater. Asphalt and concrete store heat longer and gradually release it at night, producing higher nighttime temperatures, known as the "urban heat island effect." My dogs Dublin and Gepetto, pictured above, enjoy getting out of Manhattan every weekend in the summer for this very reason. Indeed, the New York City Office of Emergency Management (NYCOEM) has issued a brochure, Ready New York: Beat The Heat, which warns that "on warm summer days, the City can be as much as 10 degrees warmer than surrounding areas . . . [as] [t]he City's infrastructure -- largely made up of asphalt, concrete and metal -- traps the heat, leading to higher temperatures."

Issues and recommendations for the private employer

While employers have no control over Mother Nature, they can and should take appropriate steps to protect the health, safety, and welfare of their employees in anticipation of and during heat-wave conditions. Private- sector employees in New York are covered by the federal Occupational Safety and Health Act of 1970 (OSH Act). Neither the OSH Act nor the Occupational Safety and Health Administration (OSHA) has a specific provision or regulation regarding heat stress. The OSH Act's General Duty Clause, however, requires employers to "furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees." OSHA has used the General Duty Clause in citing employers that have allowed employees to be exposed to potential serious harm from excessively hot work environments.

OSHA guidance for employers

OSHA offers some guidance for "acceptable methods for employers to reduce heat stress hazards in the workplace," including, but not limited to:

1. permitting workers to drink water at liberty;
2. establishing provisions for a work/rest regimen so that exposure time to high temperatures and/or the work rate is decreased; and
3. developing a heat stress program that incorporates the following:

a training program informing employees about the effects of heat stress and how to recognize heat-related illness symptoms and prevent heat- induced illnesses;
a screening program to identify health conditions aggravated by elevated environmental temperatures;
an acclimation program for new employees or employees returning to work from absences of three or more days;
specific procedures to be followed for heat-related emergency situations; and
provisions that first aid be administered immediately to employees displaying symptoms of heat-related illness.

OSHA also has published a Heat Stress Card (OSHA Publication 3154), which is a concise summary of factors causing heat stress, symptoms of heat stress, heat exhaustion, and heat stroke and recommendations for employees. It might be a particularly useful workplace poster this summer.

Thermal comfort policy

You should also consider adopting a thermal comfort policy demonstrating your commitment toward protecting the health and safety of your employees during periods of high heat and humidity. Obviously, adjustments should be tailored to the type of industry, standard uniform or attire required, location of work (outdoor vs. indoor), and requisite physicality of labor. Below are some measures under a thermal comfort policy that could be taken when the heat index approaches a dangerous level:

• Maintain effective air conditioning or other cooling devices. Although OSHA has set no boundaries on office temperature, a thermally comfortable work environment not only helps protect employee health and safety but also is simply good business to optimize employee productivity and workplace morale. When appropriate, you should consider distributing portable air-cooling devices, moving desks away from windows, installing effective window shades and ceiling fans, and ensuring cross ventilation.

• Provide an optional relaxed dress code. Allow employees to wear light, well-ventilated, but appropriate attire. FEMA and NYCOEM advise people to wear lightweight, light-colored, loose-fitting clothing that covers as much skin as possible during extreme heat conditions. Note, however, that casual attire allowances raise issues relating to gender discrimination (e.g., permitting women but not men to wear flip-flops or tank tops). It's recommended that such optional, casual attire policies be gender-neutral and require professional and appropriate clothing.

• Allow flexible work schedules. When possible, allow employees to arrive earlier or stay later to avoid the often sweltering rush-hour commute and maximum heat period during middle and late afternoon. FEMA and NYCOEM advise people to avoid strenuous outdoor activities during the sun's peak hours -- 11:00 a.m. to 4:00 p.m.

• Allow more frequent rest periods/breaks and provide a ready supply of cold water and cool drinks. Give your employees plenty of opportunities to rest, and provide them with cold water to help them cool down and recharge.

In addition to implementing such mitigating measures, you should have in place a comprehensive emergency preparedness plan that addresses extreme heat and utility/power disruptions. The plan should address preventive measures, test runs, employee education, and emergency response in the event of a heat advisory or warning.

Other potential employment law issues

Extreme heat conditions that cause attendance failures or office closures also raise wage payment and deduction issues under the Fair Labor Standards Act (FLSA) as well as disability accommodation issues under the Americans with Disabilities Act (ADA) and state and local disability discrimination laws. While you generally can't reduce an exempt employee's compensation under the FLSA, there are limited exceptions. You should review your policies and practices to ensure compliance with those laws.

For example, in a 2005 opinion letter, the U.S. Department of Labor noted in a specific factual context that when an employee is absent because of inclement weather, such as heavy snow that prevents him from getting to work because of transportation difficulties, he is absent for personal reasons and you may deduct one full day's absence from his salary. Partial- day absences (late arrival or early departure because of weather), however, require a full day's pay for exempt employees. You should consult with your labor counsel before any deductions are made from an exempt employee's salary to avoid jeopardizing his exempt status. The most important thing is to plan ahead for such attendance issues and communicate clear, understandable policies that apply during a heat or other weather emergency.

The ADA or state and local disability discrimination laws may require accommodations to heat-sensitive, qualified, disabled employees. Accommodations could be:

• maintenance of a specific work site temperature;
• use of a cool vest or other cooling clothing;
• use of a personal fan/air conditioner at the workstation;
• allowing flexible scheduling and flexible use of leave time; and
• allowing work from home during hot weather (also pertinent for employees with mobility impairments).

Finally, you should be aware that the National Labor Relations Act (NLRA) may afford employees certain protections when they band together to protest extreme weather conditions. In one such case, the U.S. Supreme Court found that seven nonunion employees who walked out to protest the company's failure to provide adequate heat were protected under the NLRA.

Plan for The Dog Days

This summer is and will continue to be hot. Protecting your workforce during periods of extreme heat is essential not only for their safety and welfare but also for your company's ability to function. It's important to understand how hot is "too hot" in accordance with heat indexes and OSHA standards and to educate your workforce on the dangers of excessive heat and heat-related illnesses. Developing contingency plans, policies, and procedures to cope with extreme heat conditions that are compliant with labor and employment laws is the first step to avoid being bitten by the dog days of summer.

Ricci v. DeStefano: Supreme Court Requires Employers to Show a "Strong-Basis-In-Evidence" That It Will Suffer Disparate Impact Liability

Brian Molinari — Mon, 29 Jun 2009 09:52:00 -0800

One much-anticipated decision in the employment law arena handed down on June 29 was Ricci, et al. v. DeStefano, et al. (07-1428 and 08-328), which I previously blogged about here.

From the SCOTUS LiveBlog:

10:01 a.m. Ricci result: Kennedy finds a violation of Title VII. An outright reversal 5-4.
10:02 a.m. Ricci is decided 5-4 on ideological lines. The middle ground suggestion of remanding for further proceedings is rejected.

Text of the full decision is here and a practical discussion written by my colleague is here. Attempting to reconcile the inevitable tension between disparate treatment and disparate impact, Justice Kennedy adopts the "strong-basis-in-evidence" standard. Writing for the Court (5-4) Kennedy noted: "We consider, therefore, whether the purpose to avoid disparate-impact liability excuses what otherwise would be prohibited disparate-treatment discrimination. . . . Our task is to provide guidance to employers and courts for situations when these two prohibitions could be in conflict absent a rule to reconcile them." Reconciling the two, the Court held: "[U]nder Title VII, before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action."

Side Bar: While cameras are still prohibited from the hallowed chambers of the U.S. Supreme Court, it has wholly embraced the blogosphere with LiveBlog feeds on the Court's release of decisions and other matters.