Retail Employment Law Blog

California Appellate Court Creates New Test for Sabbaticals

Dylan Carp — Tue, 16 Aug 2011 12:03:04 -0500

By Randall J. Hakes

For the first time, a California appellate court has addressed when paid leave offered as a sabbatical is considered “paid vacation.” The distinction is important because, under California law, employers must pay separating employees accrued but unused vacation time, whereas employers need not pay separating employees for accrued but unused sabbatical leave time.

In Paton v. Advanced Micro Devices, Inc. No. H034618 (6^th App. Dist., Aug. 5, 2011), the appellate court emphasized that a sabbatical is more than additional vacation time. To qualify as a sabbatical, the paid leave must be “intended to retain the most experienced or valued employees or to enhance their future service to the employer.” Altering the Labor Commissioner’s test for a sabbatical, Paton found four factors distinguish a sabbatical from regular paid vacation:

1. A sabbatical is granted infrequently (noting that once every seven years is the traditional frequency);

2. The length of the leave is sufficient to achieve the purpose of the sabbatical—and when no conditions are set regarding how an employee spends his or her sabbatical, the length of leave should also be longer than that normally offered as vacation;

3. A sabbatical is granted in addition to regular vacation; and

4. The sabbatical program incorporates a feature that demonstrates the employee is expected to return to work after the leave is over.

Paton makes clear that employers must carefully consider whether sabbatical programs meet the new test. Any employer with a sabbatical program should document the purpose(s)/goals of the program and administer the program consistent with the identified purposes, noting that sabbaticals with no conditions on how the employee uses the leave (similar in nature to vacations) must meet additional standards. While general guidance can be gleaned from the specific facts in Paton, the court noted that the validity of each sabbatical program “will have to be decided on its own facts.” Thus, employers should carefully review all of the circumstances associated with their particular sabbatical programs to ensure they are true sabbaticals.

Court holds California employers not required to reimburse employees for voluntary telecommuting

Dylan Carp — Tue, 09 Aug 2011 10:14:42 -0500

By Julia M. Ebert

A federal court has held that Cal. Labor Code section 2802 does not require employers to reimburse employees for internet and phone expenses when employees voluntarily telecommute. Novak v. The Boeing Company, Case No. 09-01011-CJC-(ANx) (C.D. Cal. July 20, 2011). In Novak, Boeing supplied physical workspaces with computers, phones, and necessary equipment at its offices, and employees were not required to work from home. The plaintiff employee, however, applied for and received permission to participate in Boeing’s virtual worker program. Boeing initially reimbursed virtual workers for phone and internet expenses, but later changed its reimbursement policy and ceased paying for such expenses. An employee sued for reimbursement under section 2802, and the court granted summary judgment to Boeing.

Section 2802 requires employers to reimburse employees for “necessary expenditures or losses incurred by the employee in direct consequences of the discharge of his or her duties.” The court reasoned that, because the employee was telecommuting voluntary, his telecommuting expenses were not “necessary” to the discharge of his duties. Under Novak, a telecommuting program is voluntary, and therefore an employer need not reimburse employees’ expenses in connection with the program, where employees: (1) apply to work from home, (2) receive employer approval, (3) choose to work from home, and (4) as a result, could potentially incur phone and internet expenses, which the employer would pay for if the employee worked at the employer’s offices.

Oklahoma Court Holds Abercrombie Must Permit Employee To Wear Hijab

Dylan Carp — Sun, 24 Jul 2011 08:37:25 -0500

By Heather Panick

A federal judge in Oklahoma held retailer Abercrombie & Fitch violated the law by refusing to hire a Muslim applicant solely because she wanted to wear a hijab while working.

The U.S. Equal Employment Opportunity Commission (“EEOC”) sued Abercrombie for failing to accommodate the applicant’s religious beliefs. Abercrombie’s defense was her hijab would be in conflict with the company’s “Look Policy” and the company would sustain undue hardship if it deviated from that policy, even for a single element. Abercrombie offered expert testimony that this deviation could result in negative customer experiences, damage to the Abercrombie brand, and a decline in sales.

The EEOC, however, provided instances where Abercrombie had deviated from the Look Policy in order to accommodate religious beliefs, for example allowing men to wear yarmulkes. The EEOC argued that Abercrombie had not shown that damage would be done to the Abercrombie brand and that the company could have accommodated the teenager without undue hardship. The Court granted summary judgment to the EEOC, holding Abercrombie could not show that it would sustain undue hardship if it made the accommodation for the applicant.

This case reaffirms the high hurdle an employer must clear to satisfy the “undue hardship” defense, whether to a requested accommodation of a religious belief or of a disability.

Eighth Circuit Holds Unprofessional Conduct Does Not Amount To Retaliation

Dylan Carp — Wed, 22 Jun 2011 18:05:45 -0500

By Lisa Baiocchi

The U.S. Court of Appeals for the Eighth Circuit upheld summary judgment for Wal-Mart on a manager’s claim for retaliation, holding the arguably unprofessional conduct she allegedly received while working at the retailer did not amount to adverse action. Chestine Clay was manager of the Vision Center at a Bloomington, Minnesota Wal-Mart. Clay alleged that, after she complained of racial discrimination against her, the store manager showed her disrespect and engaged in conduct that Clay perceived as demeaning toward her. For example, the store manager allegedly failed to provide certain assistance she requested, and excluded her from management meetings. The Court held this alleged conduct did not meet the legal standard of an adverse employment action, which is “action that would deter a reasonable employee from making a charge of employment discrimination or harassment.” The Court noted that, while the store manager’s conduct may not have made Clay happy, “not everything that makes an employee unhappy is an actionable adverse action.”

Additionally, the court held, even assuming Clay suffered an adverse action, Clay could not show a causal connection between the adverse action and her complaints of discrimination. Some of the store manager’s conduct occurred before Clay had complained of discrimination, so of course her complains could not have caused the adverse conduct. Further, the rest of the store manager’s objectionable conduct occurred well after her discrimination complaints: she complained of discrimination in August 2005, but the store manager’s objectionable conduct occurred in July 2006. The court held that lengthy time period was insufficient evidence of causation to establish a prima facie case of retaliation.

Lessons to Take Away: Employers should investigate and document every incident of alleged wrongful conduct brought to their attention. It is equally important to document performance issues of every employee. Objective evidence that an employee was not performing up to standards prior to engaging in protected activity undercuts the significance of any temporal proximity between that protected activity and a subsequent adverse action.

Court Applies Equitable Tolling to Disability Claim as Delay was Caused by EEOC's Inaction

Dylan Carp — Wed, 22 Jun 2011 16:48:17 -0500

By Heather Panick

In Morris v. Lowe’s Home Ctrs. Inc., 2011 U.S. Dist. LEXIS 63008 (M.D. N.C. 2011), the United States District Court in North Carolina held that equitable tolling applies to Plaintiff’s disability claim because the delay caused by the EEOC in scheduling the claimant’s interview after the deadline to file a lawsuit was an “extraordinary circumstance” beyond Plaintiff’s control that made it impossible for her to file her claims on time.

Plaintiff resigned her position as live nursery specialist with Lowe’s Home Centers Inc. on May 1, 2007 after allegedly being harassed about her breast cancer and hospitalization due to injuries that she sustained while working. Ms. Morris visited the EEOC on October 10, 2007 and completed an intake questionnaire and an ADA disability questionnaire. She indicated on these forms that the deadline to file a lawsuit was October 28, 2007. The EEOC did not interview Ms. Morris then, but rather scheduled her interview for November 5, 2007 and then rescheduled the interview for November 27, 2007. The EEOC was aware that both of these dates were passed the required filing deadline.

Plaintiff then filed her lawsuit beyond the deadline to do so. The district court denied Lowe’s subsequent motion to dismiss for filing beyond the deadline, however, on the ground the deadline was equitably tolled. The district court followed Fourth Circuit precedent holding equitable tolling may apply when the untimely filing resulted from processing delays at the EEOC or from misleading statements by EEOC officials. The district court further found that there was no harm in the delay, given that Ms. Morris first took action three weeks prior to the filing deadline. The district court reasoned that because the delay was caused by the EEOC, that delay was an “extraordinary circumstance” that was out of Ms. Morris’ control and left her incapable of filing the charge on time.

Court holds conclusory allegations of retailer's wage and hour violations do not belong in federal court

Dylan Carp — Thu, 28 Apr 2011 08:36:59 -0500

A federal court in Pennsylvania has held conclusory allegations that a retailer required a putative class of non-exempt store managers to work off the clock and failed to pay them overtime, in violation of the Fair Labor Standards Act (“FLSA”), are insufficient to state a claim under the relatively new pleading standard the Supreme Court set forth in Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). Mell v. GNC Corporation, 2010 U.S. Dist. LEXIS 118938 (2010). Because the plaintiffs had already amended their complaint once, the court dismissed their first amended complaint without leave to amend.

Plaintiffs alleged the putative class of Store Managers each worked more than 40 hours a week and were “eligible to be paid overtime under GNC’s uniform compensation system for calculating overtime due salaried employees.” However, GNC allegedly “failed to credit and pay overtime hours properly for all of the overtime hours worked by Plaintiffs and other workers in the asserted class, due in part to a policy or practice by [GNC] of requiring or suffering Plaintiffs and such workers to work through lunch while off the clock, to work scheduled overtime hours while off the clock, and to work additional hours or shifts while off the clock, all as part of a pervasive system to control overtime expense.” Plaintiffs alleged they “cannot precisely allege with specificity” the number of uncompensated hours or the extent of the inaccuracies in Defendants’ records without discovery.” Finally, they alleged, “[b]ecause the pay system at issue calculates overtime at a different rate for each workweek with varying hours and varying regular pay (including incentives that are part of regular pay), Plaintiffs cannot precisely allege with specificity the overtime pay rates applicable to each workweek at issue without further discovery of the regular pay made to Plaintiffs each week, including varying incentive payments included in regular wages from time to time, and the extent of uncompensated hours.”

Relying on similar cases such as Deleon v. Time Warner Cable LLC, 2009 U.S. Dist. LEXIS 74345 (C.D. Cal. 2009), the court held the plaintiffs’ factual allegations were insufficient to state a claim. The court reasoned it “cannot even infer from the Amended Complaint that there was a ‘mere possibility of misconduct’ unless [it] accept[s] as a ‘fact’ that Defendants had a policy or practice of requiring their employees to work ‘off the clock.’” Plaintiffs, however, “failed to provide any factual allegations to support this claim. For example, they provide no information about who advised them of this policy, when they were told they were required to work ‘off the clock’ or what the work consisted of, how the policy was imposed, approximately how many hours each week they worked without being paid, and whether either Plaintiff or any other GNC employee complained to a supervisor about the practice and, if so, what GNC’s response was. Plaintiffs provide no facts about the timekeeping practices of GNC, for instance, was there literally a time clock that employees used to record their time or was it simply understood that regular working hours would be from, say, 10 a.m. to 6 p.m.?”

Further, the court noted that “although Plaintiffs allege that they are unable to state ‘with specificity’ the number of uncompensated hours they worked, they do not offer an approximation of such hours or a vague description of the ‘uniform compensation system for calculating overtime’ for salaried employees. For example, neither Plaintiff alleges that he or she kept a personal diary of the hours actually worked that could be used to refute the hours recorded by Defendants. There is no explanation of what is meant by the pay system allegedly used by Defendants that ‘calculates overtime at a different rate for each workweek with varying hours and varying regular pay (including incentives that are part of regular pay).’” While the Court agreed that discovery might be necessary in order for former employees to get copies of the alleged uniform compensation system policy, “surely they would be able to estimate the time periods in which they worked without proper overtime compensation.”

Next, although plaintiffs alleged that defendants adopted “a pervasive system to control overtime expense” by “requiring or suffering” its employees to work off the clock, they “fail[ed] to provide any details about this ‘system.’” Finally, plaintiffs’ allegations that defendants’ actions were “knowing” and “willful,” to try to take advantage of the FLSA’s three-year statute of limitations for willful violations, were similarly inadequate. The court held that to satisfy Iqbal, “it is insufficient to merely assert that the employer’s conduct was willful; the Court must look at the underlying factual allegations in the complaint to see if they could support more than an ordinary FLSA violation.” Here, however, “there are no factual allegations which would support a claim that the violations were willful, for example, reports of complaints to supervisors about having to work off the clock which were rebuffed or ignored.”

Finally, because plaintiffs filed an amended complaint after the defendants had pointed out similar shortcomings in their original complaint, the court concluded plaintiffs were unable to cure the deficiencies, and dismissed their claims with prejudice.

The Mell decision and the cases it cited are a very useful tool for retailers fighting frivolous actions alleging wage and hour violations. Rather than being required to engage in costly discovery and then either settling to avoid defense costs or filing an expensive motion for summary judgment, retailers can use decisions such as Mell to dispose of these cases at the much earlier pleading stage.

Ninth Circuit Clarifies Successor Liability Under the FMLA

Mark Askanas — Wed, 20 Apr 2011 22:35:31 -0500

As more mergers and acquisitions take place in the retail industry, acquiring companies need to be mindful of whether they are successor employers for determining liability under the FMLA. In Sullivan v. Dollar Tree Stores, 623 F.3d 770 (9th Cir. 2010), the Ninth Circuit articulated eight factors which are critical to determining whether a company is a successor employer under FMLA, including: (1) substantial continuity of the same business operations, (2) use of the same plant, (3) continuity of the workforce, (4) similarity of jobs and working conditions, (5) similarly of supervisory personnel, (6) similarity of machinery, equipment and production methods, (7) similarity of products or services, and (8) the ability of the predecessor to provide relief.

In the case, the Ninth Circuit found that although both employers were in the retail business operations, this was too general to demonstrate a substantial continuity giving rise to liability.

DOL to Revisit Rules for Delivering Summary Plan Descriptions and Other ERISA Documents

Mark Askanas — Fri, 08 Apr 2011 13:22:32 -0500

The Department of Labor (DOL) announced it is reviewing the use of electronic media by employee benefit plans subject to ERISA to furnish information to participants and beneficiaries, following and in response to Executive Order 13563 issued by President Obama to address and improve current regulations. If you have concerns about the current process, now is a good time to voice those concerns to the Department.

Current DOL rules, issued in 2002, provide standards for the electronic distribution of plan disclosures required under ERISA. There generally are two categories of participants to whom electronic disclosures of plan information under DOL authority could be made:

those who can effectively access documents furnished in electronic form at any location where the participant is reasonably expected to perform his or her duties as an employee and with respect to whom access to the employer’s or plan sponsor’s electronic information system is an integral part of those duties; and
those who affirmatively consent.

So, for example, a nationwide retailer who has hundreds of employees at the store level and for whom computer access is not an integral part of their duties, electronic disclosure of plan information is not available, absent affirmative consent which is in most cases not practical. The DOL opined some years ago that kiosks made available to employees for this purpose would not be sufficient to satisfy the “furnish” requirement.

Thus, the Department’s earlier guidance, while helpful, made it difficult for some employers to utilize technology for certain groups of employees. That guidance also does not reflect some of the more recent advancements in technology that may facilitate the furnishing of plan information. In fact, a stated purpose of the DOL’s current review:

is to explore whether, and possibly how, to expand or modify these standards taking into account current technology, best practices and the need to protect the rights and interests of participants and beneficiaries

The DOL is specifically looking for comments (due no later than June 6) on how to make these rules better. Its announcement sets forth 30 specific questions on a broad range of topics related to electronic distribution of benefit plan information. Examples include:

What are the most significant impediments to increasing the use of electronic media (e.g., regulatory impediments, lack of interest by participants, lack of interest by plan sponsors, access issues, technological illiteracy, privacy concerns, etc.)? What steps can be taken by employers, and others, to overcome these impediments?
Are there any new or evolving technologies that might impact electronic disclosure in the foreseeable future?
Who, as between plan sponsors and participants, should decide whether disclosures are furnished electronically? For example, should participants have to opt into or out of electronic disclosures?
If a plan furnishes disclosures through electronic media, under what circumstances should participants and beneficiaries have a right to opt out and receive only paper disclosures?

The Department hopes to hear from plan participants and beneficiaries, employers and other plan sponsors, plan administrators, plan service providers, health insurance issuers, members of the financial community, and the general public. Plan sponsors (and service providers who assist them with plan administration) will be paying close attention to future guidance which could provide significant cost savings relating to the manner in which plan communications may be made going forward.

Court Holds That Right to Reinstatement Following Leave is Not Absolute

Mark Askanas — Mon, 21 Mar 2011 10:52:18 -0500

In Washington v. Arby’s Restaurant Group, Inc., 2010 U.S. Dist. LEXIS 42471 (Md. Tenn., 2010), the United States District Court in Tennessee held an employer need not reinstate an employee returning from disability leave who would have lost his job even if he had not taken leave. Moreover, the court held an employer is not required to reinstate an employee returning from disability leave if application of a uniformly-applied policy would have resulted in his discharge. The Court noted the company’s decisional process is not required to be optimal or that it leave no stone unturned.

This case continues in a line of cases reaffirming that while an employee on leave is entitled to certain protections under the applicable laws (e.g., the FMLA), those laws do not confer on the employee a greater entitlement to reinstatement as compared to other employees not on leave.

The Fourth Circuit Expands Definition of Supervisor In Determining Liability For Harassment

Mark Askanas — Fri, 11 Mar 2011 13:44:45 -0500

In Whitten v. Fred’s Inc. 601 F.3d 231 (4th Cir. 2010), the company argued in a sexual harassment lawsuit that a store manager lacked the authority to fire, promote, demote or otherwise make decisions that had an economic impact on the plaintiff. The Fourth Circuit held the ability to take tangible employment actions is not dispositive of supervisory status. Rather, the critical question is whether the particular conduct was aided by the agency relationship. In this case, the court concluded the store manager was a supervisor because he was the highest ranking employee at the store and there was typically no one superior to him to provide a check on his behavior.

In many jurisdictions, the issue of supervisory status of store managers is key to determining employer liability for the manager’s acts and exposure to punitive damages. For many retailers, store managers are given autonomy but not necessarily discretion and judgment in terms of how their stores operate. Therefore, cases such as Whitten may have a large impact given the organizational structure of many retailers. Here the court focused not on the actual conduct and authority of the manager, but rather on the fact that no other employee was as high ranking in the store as him, thus leaving a vacuum as to who is on site to monitor his actions.

Breaks Required under Maryland's "Healthy Retail Employee Act," Effective March 1

Dylan Carp — Tue, 08 Mar 2011 13:24:33 -0500

By Joel J. Borovski, Larry R. Seegull, and Teresa Burke Wright

Under Maryland’s Healthy Retail Employee Act, Maryland employers who operate “retail establishments” must provide non-exempt retail employees with break periods based on the length of the shifts the employees work. Employers in violation of the Act will face a fine.

Effective March 1, 2011, the Act defines a retail establishment as “a place of business with the primary purpose of selling goods to a consumer who is present at the place of business at the time of sale.” A “retail establishment” does not include a restaurant or wholesaler.

Breaks According to Length of Working Shift

The Act provides that:

a shift of 4 to 6 consecutive hours requires a nonworking shift break of at least 15 minutes;
a shift of 6 or more consecutive hour requires a nonworking shift break of at least 30 minutes; and
a single shift of 8 or more consecutive hours requires a second nonworking shift break of at least 15 minutes for every 4 consecutive hours. For example, if an employee works 16 hours, the employee would get one 30-minute break plus two 15-minute breaks.

However, if an employee works fewer than 6 consecutive hours, the nonworking shift break requirement may be waived by a written agreement between the employer and the employee.

The Act also allows for a “working shift break” in lieu of a nonworking break so long as the employer and employee agree to that arrangement in writing and (1) the type of work prevents employees from being relieved of their duties, or (2) employees are allowed to consume a meal while working and the working shift break is counted towards the employee’s work hours.

Paid or Unpaid?

The Act does not address whether an employee is paid during the break time. However, under the federal Fair Labor Standards Act and Maryland law, short breaks of less than 20 minutes are considered work time that must be included in the sum of all hours worked in a week and are compensable.

Retail Establishments Affected

According to the Maryland Department of Labor, Licensing and Regulation (“DLLR”), the Act only applies to an employer who has at least 50 retail employees in Maryland.

DLLR guidance defines “retail employees” as those who are “engaged in actual sales, in a store.” Employees who are not working in a “retail establishment,” such as those at a corporate or other office, are not covered by the Act and do not count towards the 50 employees required to trigger the protections under the Act.

In applying the 50-retail-employee rule to a company that owns several franchises, the Act requires that the company include the total number of retail employees it has throughout the state.

The Act does not apply employees who are covered by collective bargaining agreements or employer policies that already provide shift breaks that meet or are more generous than the Act’s requirements. The Act also provides an exception where there are fewer than 5 employees at a particular retail location.

Complaints

If an employee believes that the Act has been violated, he or she may file a complaint with the Maryland Department of Labor. If the DLLR determines that the Act has been violated, it may fine the retailer up to $300 for each employee for whom the employer is not in compliance. Continued non-compliance by an employer may result in higher fines.

An employer that does not comply with the DLLR decision risk a suit by either the Commissioner or the employee in Maryland Circuit Court seeking to enforce the finding.

What Employers Should Do

Maryland retail employers should analyze their policies immediately, whether written and unwritten, to determine whether they comply with the new break requirements of the Act. Noncompliant written policies should be amended, and unwritten practices should be reduced to writing so that compliance can be demonstrated if necessary.

Jackson Lewis attorneys are available to review policies and discuss how to best comply with new requirements of the Act.

United States District Court Holds ADA Does Not Require Reasonable Accommodation of Relatives

Mark Askanas — Wed, 23 Feb 2011 13:24:24 -0500

In Sanford v. Slade’s County Stores, 2010 U.S. Dist. LEXIS 34094 (N.D. Ala., 2010), the plaintiff claimed the company discriminated against her on the basis of her son’s disability when she was informed that health insurance was available after 90 days, and also when she was discharged. The District Court recognized a claim for associational discrimination under the Americans with Disability Act but found that employers are not required to make reasonable accommodations for disabilities of relatives or associates of a non-disabled employee.

This case underscores that as more plaintiffs are able to prove they have a “disability” under the amended ADA, the focus of litigation will turn to whether employers have complied with their obligation to provide “reasonable accommodation” and equal employment opportunities to qualified individuals with disabilities.

EEOC Meeting Explored Use of Credit Histories as Employee Selection Criteria

Mark Askanas — Tue, 15 Feb 2011 21:02:26 -0500

On October 20, 2010,the EEOC held a meeting to hear testimony from representatives of various stakeholder groups as well as social scientists and the Federal Trade Commission on the growing use of credit histories as selection criteria in employment. It is somewhat unclear what the commission intended to have come out of the hearing, but it is significant that in her first meeting as chair, Jackie Berrien wanted to cover this issue.

In her opening remarks, Chairwoman Berrien noted that this will be the first in a series of hearings that will focus on neutral employment tools that may have a discriminatory effect in the employment marketplace. The EEOC will likely move to issue guidance on this issue in the near future.

Consumer reports remain a critical tool to minimize legal liability and help gather the best pool of job applicants. However, federal and state laws make lawfully utilizing background checks difficult. Employers should consider the relationship between the competencies of the position and how the information obtained in the report fits with those competencies.

California Court of Appeal Holds Meal Breaks Need Only Be Made Available to Employees

Mark Askanas — Mon, 07 Feb 2011 12:38:38 -0500

In Hernandez v. Chipotle Mexican Grill, Inc., 2010 Cal. App. LEXIS 1853 (2010), the California Court of Appeal issued a decision addressing the issue currently before the California Supreme Court: whether employers must ensure that employees take required meal and rest breaks, as opposed to simply providing the opportunity to take required breaks. California employers, especially retailers, have been waiting anxiously for the Supreme Court to address this issue in Brinker v. Superior Court of San Diego. While there are many outstanding cases waiting for this ruling, many judges have been reluctant to issue a decision while Brinker is pending.

However, in Hernandez, the Court of Appeal sided with federal precedent in holding the employers need only provide the opportunity to take required breaks. This opinion remains good law, at present. Of course, the Supreme Court’s ruling in Brinker will either affirm or strike down this ruling.

Brinker remains the “case to watch,” for at least two reasons. First, retailers will likely be saddled with more onerous monitoring and liability if they are required to ensure breaks are taken rather than merely provide break time. Second, however, an “ensure” rather than “provide” standard may make class action treatment more appropriate in multi-plaintiff break cases. Courts may be more likely to find whether an employer simply provided break time presents a common question of fact for all plaintiffs, as opposed to the question whether the employer required each individual employee to take all required breaks, which may present individual factual issues.

Jackson Lewis Files Amicus Brief with NLRB

Dylan Carp — Tue, 18 Jan 2011 19:08:20 -0500

Jackson Lewis LLP, on behalf of the Retail Litigation Center, Inc., the legal arm of the Retail Industry Leaders Association (“RILA”), has filed with the National Labor Relations Board a “friend-of-the-court” brief urging the Board to limit non-employee union agents’ right of access to store property to communicate to shoppers the union's disagreement with the way the retailer is operating. The brief asks the NLRB to limit such access only to cases where the employer has allowed like conduct by other individuals and groups, so that the union has been singled out for adverse treatment.

The action came in a case involving Roundy’s, Inc., a supermarket operator in Wisconsin and Minnesota. The retail chain had sought to prevent a carpenters union from handbilling shoppers on store grounds to protest the supermarket’s use of a non-un ion contractor paying less than “area-standard” wages to perform renovations and asking the public not to shop at the store. The Board had invited interested parties to submit briefs in the matter.

Almost two decades ago, the Supreme Court reaffirmed a retailer’s right to exclude unwanted intruders from its property, subject only to certain limited exceptions. Jackson Lewis’ amicus curiae brief for the retail industry advocates argues that the 2007 Board decision in Register-Guard presents the best way to analyze the "discrimination exception" raised in Roundy's. The brief says the Board’s earlier decision enables retail employers to control over access to their property by non-employee union agents. It also may have the best chance of assuring protection for employers in contexts other than "area standards" protests, such as union organizing.

RILA is an association of America’s retail leaders, including nine of the nation’s ten top retailers. Members collaborate to achieve excellence within their own enterprises and to pursue positive change for the industry at large. Among other things, RILA serves the retail industry as an advocate in legislative and other matters. The Retail Litigation Center engages in legal proceedings affecting the retail industry. By participating in selected federal and state cases, the Center gives the retail industry an opportunity to be heard on important legal questions and help inform the courts and administrative agencies of the potential effects of their decisions on the industry.

Michael J. Lotito, a partner in Jackson Lewis and one of the authors of the Firm’s brief said, “We are indeed gratified that the Retail Litigation Center has given us the chance to present the views of our country’s leading retailers on the important questions raised in this case. Retailers should not be made to choose between allowing groups onto their property that help attract customers to the stores, build strong community ties, and assist worthwhile charities, and suffering the presence of groups that seek to discredit them and drive customers to competitors. We hope our brief helps the Board reach a decision that gives proper regard to retailers’ property rights.”

The Board’s decision is expected this Spring.

Ninth Circuit Finds That Vision Impairment That Affects Commuting Is A Disability

Dylan Carp — Mon, 10 Jan 2011 23:55:05 -0500

In Livingston v. Fred Meyer Stores, Inc., 2010 U.S. App. LEXIS 15044 (9th Cir. 2010), the plaintiff was discharged after she refused to work her scheduled shift, claiming her vision impairment affected her ability to commute to and from work and therefore required accommodation under the Americans with Disabilities Act ("ADA"). The District Court found that the plaintiff did not have a disability because her vision impairment did not limit any major life activity. The District Court also held that the company was not obligated to grant her request for a modified work schedule because the duty to accommodate does not extend to limitations related to commuting.

The Ninth Circuit disagreed. In concluding that the plaintiff did have a disability, the Ninth Circuit cited the EEOC’s Regulations and case law holding that seeing is a major life activity.. In addition, even though plaintiff’s disability did not affect her ability to function effectively, the Ninth Circuit found that the company still had a duty to accommodate her inability to finish her scheduled shift.

This case underscores the impact of the amendments to the ADA which expand the definition of what is considered to be a major life activity. Although commuting to and from work may seem to be an activity incidental to performing ones’ job functions, the clear trend is to interpret the ADA's protections in an employee-friendly manner.

California Employers Take a Seat -- Employees Can Pursue Penalty Claims Under Private Attorney General Act for their Failure to Provide Suitable Seating, Court of Appeal Rules

Dylan Carp — Mon, 22 Nov 2010 19:08:10 -0500

California employers who fail to provide “suitable seating” to employees as required by Industrial Welfare Commission (“IWC”) Wage Order No. 7-2001(14) could be subjected to significant penalties under the California Labor Code’s Private Attorneys General Act (“PAGA”), according to the California Court of Appeals. Bright v. 99¢ Only Stores, No. 220016 (Cal. Ct. App. Nov. 12, 2010). Reversing the dismissal of a class action by retail cashiers for Labor Code violations and for penalties under the PAGA, the Court ruled that the employees could pursue their claims related to their employers’ failure to provide “suitable seats” to them. The Court’s decision to allow the class action to proceed could trigger a new wave of costly litigation, particularly against retailers, whose sales employees and cashiers rarely sit down – these employees are too busy assisting or approaching customers, merchandising, conducting sales transactions, reviewing inventory and the like. Employers who encourage such activity may inadvertently find themselves faced with substantial liability.

Eugina Bright (“Bright”) filed a class action against 99¢ Only Stores (the “Stores”) where she worked as a cashier. Bright alleged that the Stores violated Section 1198 of the Labor Code and Wage Order No. 7-2001(14) by failing to provide her with a seat, although the nature of her work reasonably permitted the use of a seat. Bright sought civil penalties under the PAGA for the violation of the suitable seating requirement. The Stores asked the trial court to dismiss the complaint and argued that a violation of the suitable seating requirement was not a violation of Section 1198, and, even if it were, Bright could not recover penalties under the PAGA because the applicable Wage Order had its own penalty provision. The trial court agreed with the Stores, dismissed the complaint, and Bright appealed.

On appeal, the Court first reviewed the language of Section 1198 which provides, in relevant part, that “[t]he maximum hours of work and the standard conditions of labor fixed by the commission shall be the maximum hours of work and the standard conditions of labor for employees. The employment of any employee for longer hours than those fixed by the order or under conditions of labor prohibited by the order is unlawful.” Under Section 1198, the IWC adopted Wage Order No. 7-2001 to address, among other things, the “standard conditions of employment for employees in this state.” Specifically, the Wage Order provides that all employees “shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.” IWC Wage Order No. 4-2001(14)(A). Based on the plain meaning of Section 1198, the Court concluded that the suitable seating requirement was a “condition of employment;” thus, the failure to provide suitable seating constituted a violation of Section 1198. In so ruling, the Court rejected the Stores’ contention that violations only occurred where “prohibitory” language was used in the statute, such as the words, “shall not.” The Court found that the Stores’ interpretation was inconsistent with the “the remedial purpose of the statute.” Accordingly, the Court concluded that a violation of the Wage Order’s requirements regarding suitable seating constituted a violation of Section 1198.

The Court then examined whether Bright could recover penalties under the PAGA, Section 2699(f) of the California Labor Code, for the violation under Section 1198. To answer the question, the Court examined the statute’s language which provides a penalty of $100 for each aggrieved employee per pay period for the first violation and $200 per employee per pay period for each subsequent violation, for “all provisions of this code except those for which a civil penalty is specifically provided.” Bright argued that Section 1198 contained no penalty provision; therefore, the PAGA controlled. On the other hand, the Stores argued that the Wage Order included a penalty provision; therefore, the PAGA did not apply. Siding with Bright, the Court observed that “[n]owhere in the Labor Code is a civil penalty specifically provided for violations of the suitable seating requirement incorporated in section 1198.” The Court noted that the penalties provided in the Wage Order were “in addition to other civil penalties,” and thus were not an exclusive remedy. Accordingly, the Court found that Section 2699(f) allowed for a civil penalty for violations of section 1198 based on failure to comply with the suitable seating requirement.

In light of this decision, employers, particularly retailers, should review their procedures concerning the use and availability of seats for employees in the workplace. Employers should analyze employee job duties and make a reasonable business determination as to whether or not seats can be provided to sales personnel and cashiers. In conducting this assessment, employers should remember to include in their assessment any reasonable accommodations offered to disabled employees -- offering seats as a form of reasonable accommodation suggests that they do not interfere with the employees’ performance. Jackson Lewis attorneys are available to answer questions regarding these issues and advise employers regarding strategies for reducing the chances of facing lawsuits over seating requirements and costly penalties.

Crowd Management Safety Tips for Retailers

Dylan Carp — Thu, 11 Nov 2010 09:55:14 -0500

With the holiday shopping season fast approaching, OSHA is reminding retail employers of steps to take to prevent employee injuries due to large crowds during Black Friday and other sales events. OSHA has reissued its "Crowd Management Safety Tips for Retailers," which provides guidance to employers to help prevent injuries during the coming months.

Retailers should have Human Resources Managers, not Store Managers, Make Disciplinary Terminations

Dylan Carp — Tue, 09 Nov 2010 13:19:30 -0500

A recent case presents a striking example how retailers may insulate employment decisions from attack for alleged discrimination, retaliation, or similar theories. In Dais v. Lowe’s Home Centers, Inc., No. 09-0008-KD-M (S.D. Ala. Oct. 22, 2010), the court granted summary judgment for Lowe’s on its former employee’s racial discrimination claim, even though the Store Manager allegedly said about the plaintiff, “we got rid of the nigger.” The holding and reasoning present a lesson retailers should follow to maximize their chances of disciplining troublesome employees without having a jury second guess their decision.

Dais was a Loss Prevention Manager at a home improvement store. A female employee complained to the Store Manager that Dais showed her and two others a picture of a sexual nature stored on his cell phone. The Store Human Resources Manager and Area Human Resources Manager investigated the complaint. During their interview of Dais regarding the complaint, Dais admitted the allegation but said he was only joking. The Area HR Manager reported their findings to the Regional HR Manager, who instructed the Area HR Manager to terminate Dais for violating the company’s sexual harassment policy.

The court assumed for purposes of summary judgment that Dais’ supervisor, the Store Manager, uttered the above racial epithet. Nevertheless, the court held no reasonable jury could conclude the decision to terminate Dais was racially motivated because none of the decision makers could be tied to the epithet. There was no evidence that the Store, Area or Regional HR Managers knew about the remark, nor was there evidence that the Store Manager participated in the decision to terminate Dais. In fact, the Store Manager did not allegedly utter the remark until after Dais had been separated.

The takeaway for retailers is to try as much as possible to have human resources handle all decisions regarding disciplinary terminations. Human resources personnel, who are focused solely on personnel management, may be more sensitive to the danger of off-hand remarks than supervisors such as store managers. Further, human resources personnel typically have less day-to-day interaction with employees than supervisors, and therefore present fewer chances for interactions that may be construed by an employee—or a court—as exhibiting bias.

For further information or to answer specific questions about discrimination law, please contact your Jackson Lewis workplace law expert.

Proposition 19 Creates Legal Haze For Employers

Douglas Bria — Mon, 01 Nov 2010 19:29:37 -0500

On November 2, 2010, California voters will decide a ballot measure with sweeping implications for retailers and their human resources professionals in the state. Otherwise known as the “Regulate, Control and Tax Cannabis Act of 2010,” Proposition 19 seeks to legalize the recreational use of marijuana in a private residence or other non-public place by anyone over the age of 21. In addition, the ballot measure states, “no person shall be punished, fined, discriminated against, or denied any right or privilege for lawfully engaging in any conduct permitted by this act.” Notably, the initiative seeks to limit employers’ ability to address marijuana use to situations where job performance is actually impaired.

The language prohibiting employers from discriminating against marijuana users, or denying “any right or privilege” could make it illegal to consider marijuana use in deciding whether to hire an applicant, the same way employers are currently prohibited from considering other protected classifications, such as race, gender, or age. This will impact any California retailer currently conducting pre-employment drug screening. Moreover, for those employment decisions involving current employees, the employer will bear the burden of proving marijuana actually impairs job performance. This presents a special challenge in the absence of a defined standard for determining “actual impairment” due to marijuana use.

Notwithstanding, courts in recent years have generally sided with employers in the medical marijuana debate. For example, in 2008 the California Supreme Court ruled that, because current law states employers aren’t required to accommodate medical marijuana patients who use marijuana in the workplace, an employer doesn’t discriminate if it discharges an employee who uses medical marijuana only outside of work. Proposition 19, if passed, will change how courts decide such issues, since the ballot measure contains special workplace protections for marijuana users. It remains to be seen how the courts will interpret an employer's ability to terminate employees for marijuana use, which is still prohibited by federal law. But the lack of clear standards in Proposition 19 makes further legal challenges inevitable.

Regardless of the outcome of the vote, retailers and their employees should keep in mind that even if something is legal, it may still be disallowed under company rules. But since the ballot measure includes broad language legalizing possession of marijuana and related paraphernalia, employers will need to review their policies. And although the myriad laws regarding workplace drug testing are beyond the scope of this article, maintaining a drug-free workplace is an important risk control, especially for retailers whose employees operate machinery such as forklifts or delivery vehicles.

To become law, a majority of voters must approve Proposition 19 on November 2. Check back for additional updates following Election Day. For further information or to answer specific questions about how Proposition 19 may affect your organization, please contact your Jackson Lewis workplace law expert.

This post is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis LLP and any readers. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances.