Stoel Rives World of Employment

NLRB Finds Employee Arbitration Agreement Waiving Class Claims Violates Federal Labor Law

Dan Mueller — Tue, 10 Jan 2012 06:00:00 -0800

In DR Horton, a decision issued on January 3 and applicable to most private sector employers, whether unionized or not, the National Labor Relations Board (NLRB) held that federal labor law prevents employers from requiring their employees, as a condition of employment, to agree to broad waivers that would deny their right to pursue employment-related class actions both in court and in arbitration, leaving them no forum for pursuing class or collective claims. As a result, an important tool for managing the risk of employment-related litigation has been taken away (for now).

The facts of the case are straightforward. DR Horton, like many employers, required its employees to sign an arbitration agreement as a condition of employment. The agreement required employees to arbitrate all claims arising out of their employment, and precluded arbitrators from issuing class or group relief. As a result, employees were prevented from bringing class or collective actions in any forum. Relying on this agreement, DR Horton refused to arbitrate a class action alleging that it had misclassified certain employees as exempt from the protections of the Fair Labor Standards Act (FLSA).

Not so fast, according to the NLRB. Tracing federal labor law back to its origins, the NLRB found that the filing of a class action “to redress workplace wrongs or improve working conditions” is activity at “the core” of what Congress intended to protect when it enacted the National Labor Relations Act in 1935. This intent, the NLRB reasoned, is reflected in Section 7 of the Act, which gives employees the right to engage in “concerted activities” for the purposes of “mutual aid or protection.” Relying on Section 7, the NLRB found that Employers cannot compel their employees, as a condition of employment, to entirely waive the right to bring class or collective actions.

The NLRB’s ruling in DR Horton clashes with the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, which held that arbitration clauses that waive the right to bring class claims entirely (in the commercial contract context) may be lawful and enforceable. But unless and until the courts intervene to resolve this tension, requiring your employees to completely waive the right to bring employment-related class or collective actions - a common feature of arbitration agreements - is probably no longer permissible under federal labor law.

If You're Interested In Learning More, Sign Up For Our Webinar

Stoel Rives is hosting a webinar on January 11, 2012, to address employee arbitration agreements generally and the DR Horton decision in particular. Click here if you're interested in learning more or attending.

NLRB's New "Vote Now, Litigate Later" Union Election Rules To Become Effective April 2012

Dan Mueller — Wed, 04 Jan 2012 06:00:14 -0800

The NLRB gave organized labor a meaningful gift just before the holidays by issuing a final rule adopting new election case procedures that will likely result in more and faster union elections, and probably also result in more employers having unionized workforces. The new rule becomes effective on April 30, 2012.

The New Year: Out With The Old Rules...

During union campaigns, the union and the employer may disagree (vigorously) about the proper size ("scope") of the proposed bargaining unit. Such disputes can include whether certain employees are "supervisory" employees and thus ineligible to vote, or whether different classifications of employees share enough of a "community of interest" to be included in the same bargaining unit, and covered by the same contract. How those disputes are resolved often determine the outcome of the election. Under the existing (er, now old) election rules, employers had the opportunity to litigate these types of bargaining unit scope issues before the election.

...In With The New

The NLRB's new rule essentially eliminates the employer's opportunity to litigate, prior to the election, any disputes over the scope of the bargaining unit proposed by the union. Under the rule, such issues will ordinarily be addressed only after the election takes place. Employers should be aware of how this "vote now, litigate later" rule could impact union elections.

Shorter Election Campaigns: Under the old rules, litigating bargaining unit scope issues usually delayed the election, giving employers additional time to discuss the pros and cons of unions with its workers before the vote. That additional campaign period is now lost, depriving employers of valuable time to counter an organizing campaign that may have started months before the union went to the NLRB seeking an election.

Greater Difficulty in Challenging The Union's Proposed Unit: Although employers may technically be able to litigate unit scope and voter eligibility issues after the NLRB conducts the election, in those cases where the vote results in a "yes" vote for the union (which under the old rules happened more than 60% of the time), employers will be in the difficult position of having to contest threshold legal issues after the employees have already "won" the right to representation. This procedure tilts the playing field in favor of unions.

Considered in the context of the NLRB's August 2011 decision in Specialty Healthcare, this rule means that the petitioning union will get a quick election in the unit of employees it has chosen to organize. Specialty Healthcare enables unions to organize small or "micro" units of employees (such as single classifications of employees or individual departments). The Board held that for an employer to add excluded employees to the union's proposed unit, it must demonstrate that the excluded employees share an "overwhelming community of interest" with the employees the union seeks to represent. In a dissenting opinion, NLRB Member Brian Hayes noted that this test makes it “virtually impossible” for the employer to prove the union's proposed unit is not proper. To make matters worse, now the Employer will ordinarily have to make that argument after the union has already "won."

Why Now? Election Year Politics, That's Why.

That the NLRB issued these new rules now probably had less to do with the holiday spirit than with an election of a different sort--the 2012 U.S. Presidential election and the related gridlock in the U.S. Congress. Up until last week, the Board had three members (out of a possible five) which, after the U.S. Supreme Court's 2010 decision in New Process Steel, is the minimum required for the NLRB to decide cases and issue regulations. Last week was when President Obama's controversial recess appointment of Member Craig Becker ended. The NLRB may have wanted to enact the new rules before it was reduced to two members again, as that may be the last opportunity in an election year for the Obama Administration to do something substantial for organized labor, an important constituency. While nominations for the three NLRB Member vacancies are pending, the gridlocked Senate is not expected to act on those nominations any time soon. While the President could make another recess appointment to ensure a functioning, three-member NLRB, that risks (further) alienating Senate Republicans, all 47 of whom recently signed a letter urging the President not to fill NLRB vacancies using recess appointments. The next few weeks, before Congress reconvenes on January 23 from its holiday recess, could be very interesting for NLRB-watchers. Stay tuned...

Update!

...well you didn't have to stay tuned for long! President Obama has announced three recess appointments to the NLRB. The appointees include two Democrats (Richard Griffin and Sharon Block) and one Republican (Terence Flynn), giving Democrats a 3-2 Board majority. The President’s decision to bypass the Senate confirmation process quickly drew the ire of Senate Republicans, but the President chose that fight over the alternative of allowing the NLRB to go through a prolonged period in which it was unable to issue decisions or adopt regulations. As a result of these appointments, we can expect more pro-labor decisions in 2012.

Update - New Rule Requires Employers to Post Notice of Employee NLRA Rights

Jim Shore — Tue, 27 Dec 2011 09:27:03 -0800

In order to allow more time for legal challenges to its notice-posting rule to be resolved, the National Labor Relations Board has again postponed the rule's effective date, this time to April 30, 2012. Stay tuned.

For additional information regarding the NLRB's new rule and posting requirement, including links to the new rule and the poster employers must post, see our prior post on this topic by following this link.

Seasons' Greetings From The California Legislature--New Laws That Apply To Employers In January 2012

Tony DeCristoforo — Thu, 22 Dec 2011 06:00:00 -0800

The California legislature has done plenty this year to leave in employers' stockings for the holidays--new employment laws that will become effective January 1, 2012. In addition to the new California Transparency in Supply Chains Act we blogged about earlier, after some eggnog and holiday cheer, employers will need to be aware of new legal obligations that will kick in as we kick off 2012. Here are the highlights.

“Anti-Wage Theft” Law (AB 469). The Wage Theft Prevention Act of 2011 requires employers to provide non-exempt employees, at the time of hiring, a notice specifying the employee’s rate or rates of pay and the basis on which the employee’s wages are to be calculated (such as hourly, daily, piece, salary, commission, etc.). The notice must also include applicable overtime rates, allowances (if any) claimed as part of the minimum wage, the employer’s designated regular payday, the name of the employer (including any “doing business as” names), the employer’s physical and mailing addresses, and contact information for the employer’s workers’ compensation carrier. The Act also requires the employer to notify employees in writing of any changes made to any of this information within seven days of the implementation of such changes, unless the changes are reflected on a timely wage statement or other writing required by law. The Act adds an element of criminal liability by providing that any employer who willfully fails to pay wage-related Labor Commissioner orders or court judgments is guilty of a misdemeanor.

Independent Contractors (SB 459). This new law cracks down on employers who misclassify their employees as independent contractors by imposing a fine of between $5,000 and $25,000 for “willfully” misclassifying a worker as an independent contractor. “Willful misclassification” means avoiding employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor. The law also imposes joint and several liability for a non-attorney consultant to advise an employer to willfully misclassify someone as an independent contractor.

Background Checks (AB 22). This law prohibits most employers from obtaining or relying on consumer credit reports regarding employees or job applicants, except in certain specified limited circumstances. The law does not apply to financial institutions or entities required by law to perform credit checks. Under the new law, employers may still obtain and rely upon credit reports for managerial employees covered by the executive exemption.

Pregnancy Disability Leave (AB 592 and SB 299). This law expressly prohibits “interference” with the exercise of any right provided under the California Family Rights Act, or due to disability by pregnancy, childbirth or related medical conditions. In a provision that may prove to be preempted by ERISA, the law also requires employers to maintain and pay for health coverage under a group health plan for any eligible female employee who takes up to four months of leave due to pregnancy, childbirth or a related medical condition in a twelve month period.

Gender Identity and Expression (AB 887). Existing law prohibits discrimination and harassment based on gender. This law expands the definition of “gender” to include both gender identity (how the person sees him or herself) and gender expression (how other people view the person). Under the new law, an employee must be permitted to dress consistent with the employee’s gender identity and expression.

Genetic Information Discrimination (SB 559). Discrimination in hiring or employment based on genetic information is now unlawful under the Fair Employment and Housing Act. Genetic information is defined to include the individual employee’s genetic tests, the genetic tests of the employee’s family members, and the manifestation of a disease or disorder in the employee’s family members.

Commission Agreements (AB 1396). This law requires all contracts for employment involving commissions as a method of payment to be in writing and to set forth a method by which the commissions are required to be computed and paid. The employee must be given a signed copy, and the employer must obtain a signed receipt from each employee. This law does not take effect until January 1, 2013, so employers have a year to prepare for compliance.

Agricultural Labor Relations (SB 126). This law authorizes the California Agricultural Labor Relations Board to certify union elections when employer misconduct affects the outcomes.

Happy Holidays!

It's Time to Ensure Compliance with the California Transparency in Supply Chains Act

Tony DeCristoforo — Wed, 30 Nov 2011 06:00:00 -0800

Under the California Transparency in Supply Chains Act, beginning January 1, 2012, large retailers and manufacturers that do business in California must disclose information on their websites about what they do to eradicate slavery and human trafficking from their supply chains. The new law applies to companies with worldwide gross receipts of over $100 million.

The law provides that if a covered company has a website, it must disclose certain information via a “conspicuous and easily understood link” on the homepage. The company must disclose to what extent, if any, it does each of the following:

Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery, specifying if the verification was not conducted by a third party.
Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains.
Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking.
Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chain of products.

Notably, the law does not require companies to do anything to combat slavery and human trafficking. The law simply requires disclosure of the above information.

Although the law’s exclusive remedy for noncompliance is an action for injunctive relief brought by the Attorney General, the law does not limit remedies available for a violation of any other state or federal law. On an annual basis, the California Franchise Tax Board will submit to the Attorney General a list of companies required to make the disclosure.

Mandatory Paid Sick Leave Law Passed in Seattle

Keelin Curran — Thu, 27 Oct 2011 06:17:44 -0800

Beginning September 1, 2012, the City of Seattle will require that all but the smallest employers provide paid sick leave to their Seattle employees. Sick leave mandates under the new law increase depending on the size of a company’s workforce, and employees must be allowed to use the leave for their own or their family members’ illnesses (“Paid Sick Leave”), as well as for certain safety-related reasons (“Paid Safe Leave”).

Seattle employers should use the coming months to plan how to best structure their paid leave programs to comply with the new law. The law has posting requirements and allows complaints to the Seattle Office for Civil Rights, including recovery of damages where violations are found (but not private lawsuits). Employers have an opportunity to provide comment to the City regarding the law before rules under the law are issued (see below).

Key aspects of the comprehensive new Paid Sick Leave and Paid Safe Leave ordinance include:

Coverage. Employers of five or more full-time equivalent (“FTE”) employees (employees working outside Seattle must be counted) are covered. Employees, including temporary and part-time employees, who work in Seattle at least 240 hours in a calendar year, must be allowed to accrue leave.
Waiting Period. Leave accrues from date of hire, but employees cannot begin to take leave until 180 calendar days after date of hire.
Mandated Leave and Minimum Caps. The amount of required leave increases with the number of FTE employees. Employers in the different tiers are required to allow their employees to accrue leave at the following minimum levels:
- Tier One Employers of 5-49 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 40 hours per year.
- Tier Two Employers of 50-249 FTE employees must provide at least one hour of accrued paid leave time for each 40 hours worked, up to a minimum ceiling of 56 hours per year.
- Tier Three Employers of 250 or more employees must provide at least one hour of accrued paid leave time for each 30 hours worked, up to a minimum ceiling of 72 hours per year.
Basis of Accrual. Non-exempt employees accrue leave time based on hours actually worked. Exempt employees’ leave accrual is based on their regular weekly schedule, up to 40 hours maximum.
Carryover Required; No Payout on Termination. Mandated carryover is required for up to the same amount of leave time employers are required to allow an employee to accrue in any given year. (For instance, for employers of 49 or fewer, up to 40 hours may be carried over.) Payout on termination is not required.
Special PTO Requirement for Largest Employers. Tier Three Employers that use a “universal” paid leave program (usually referred to as “paid time off” or “PTO”), rather than dedicated sick leave, must provide more paid leave under the law than those employers with dedicated sick leave. Tier Three Employers must allow accrual of at least 108 hours of paid leave per year and allow carryover up to the same amount.
Leave Use. Leave can be used for the following purposes:
- Sick Leave. Absence resulting from an employee’s or a qualifying family member’s illness or injury, including diagnosis, treatment and preventative care. (Qualifying family members are the same as under Washington’s Family Care Act: spouse, registered domestic partner, child, parent, parent-in-law or grandparent.)
- Safe Leave. Absence (1) related to domestic violence, stalking or sexual assault of an employee or qualifying family member (amount of leave allowed and qualifying family members are the same as under Washington’s domestic violence leave law), or (2) due to a public health-related closure of the employee’s place of business or a child’s school.
Notice and Certification. An employee must provide at least 10 days’ notice of foreseeable leave, and must generally follow employer notice policies. Certification of leave use is limited to leaves of three or more days. Where the employer does not provide health insurance, the employer must pay at least half of medical costs associated with obtaining the certification.
Considerations and “To-Dos.”
- Opportunity for Comment to the City. Employers have the opportunity to provide comments to and receive updates from the City of Seattle related to the implementation of the law. An FAQ is expected by the end of the year on their website, and draft rules in the spring of 2012. Write to Elliott Bronstein at the Seattle Office for Civil Rights, at elliott.bronstein@seattle.gov, to be included in the notification list, and with any questions or comments you have about the law.
- Collective Bargaining Agreements. The ordinance allows unions to expressly waive their members’ rights under the law. To avoid application of the law, employers should take steps to negotiate with their unions for a “clear and unambiguous” waiver and put it in writing.
- Review Sick and Related Leave Policies, Including Short-Term Disability Policies. Employers must review policies and consider whether changes are needed to meet requirements under the new law.
- Special PTO Requirements. Tier One and Tier Two Employers should make sure their PTO policies meet the requirements of the law to avoid having to provide additional paid sick and safe leave. Tier Three Employers that use a PTO program need to allow accrual and carryover of additional paid leave as described above.

Stoel Rives is here to help employers plan for the implementation of this law on September 1, 2012, and will be providing comments to the City about the law in the near future. Please contact us for assistance.

Stoel Rives World of Employment Voted a Top 25 L&E Law Blog!

Cameron L. Ward — Thu, 29 Sep 2011 06:26:12 -0800

The results are in, and based on the votes from you, our readers, Stoel Rives World of Employment was selected as a LexisNexis Top 25 Labor and Employment Law Blog of 2011! See here. We would like to take this opportunity to thank our readers for the initial nomination and the subsequent votes that made this distinction and honor possible. We hope you will continue to frequently check in on us as we continue to provide up to date and timely information, news items, expert anaylis, and helpful tips for employment and labor law practictioners.

Thanks again!

-Your Stoel Rives World of Employment Bloggers.

Obama Jobs Bill Proposes To Ban Discrimination Against Unemployed

Ryan Gibson — Fri, 16 Sep 2011 08:53:07 -0800

As almost everyone knows, last week President Obama presented a $447 billion jobs bill, called the American Jobs Act, to a joint session of Congress full of proposals designed to stimulate the lagging U.S. economy. What many people probably don't know is that, tucked into the bill, is a provision that would make it unlawful for employers to refuse to hire someone because that person is unemployed. This small part of the stimulus bill would create an entirely new protected class under federal discrimination law—the unemployed person. If enacted it could expose employers to a raft of new employment discrimination lawsuits.

What The Bill Says

Section 375 of the proposed bill actually has several anti-discrimination provisions. First, it prohibits employers and employment agencies from refusing to hire an individual “because of the individual’s status as unemployed,” including prohibiting employers from directing employment agencies to do so. It also contains a broad anti-retaliation provision prohibiting employers from interfering or refusing to hire someone because the person reports a violation of the Act. The Act will provide many of the same remedies available under Title VII of the Civil Rights Act—the same federal law that prohibits discrimination based on race, religion, or sex—including the right to file a charge with the Equal Employment Opportunity Commission (“EEOC”), or file a lawsuit to recover money damages and attorney fees.

The bill would also prohibit employers and employment agencies from expressly advertising in written job posts that unemployed persons are automatically disqualified from applying.

The Rub: Full Employment...For Employment Lawyers

While the bill expressly states that it is not intended to preclude employers from considering an individual’s employment history or even from “examining the reasons underlying an individual’s status as unemployed,” that subtle distinction will be a small comfort to employers. Employers routinely scrutinize employment history, and employment “gaps” on a resume have always been a red flag to hiring managers. Under this new law, however, employers would need to walk a very fine line between scrutinizing only the “reasons underlying” unemployment, while avoiding letting the fact the person is unemployed to begin with affect a hiring decision.

Those types of mental gymnastics are not only difficult for hiring managers to keep straight while reviewing job applicants, the distinction will be even harder to prove in court if the employer is later sued. As a practical matter, any unemployed person rejected from a job could demonstrate a prima facie claim for discrimination simply by showing he or she was unemployed and then didn’t get the job. Further, the cases will invariably turn on "yes you did, no I didn't" factual disputes about the hiring decision: did the employer make the decision because of reasons underlying the person's unemployment (lawful) or simply because the person was unemployed (unlawful)? Because of those subtle factual nuances, and procedural rules that presume the truth of a plaintiff's allegations until trial, it could be virtually impossible to get even baseless claims dismissed before trial, such as at summary judgment. That makes defending those cases much more difficult and expensive.

While much remains unsettled about the state of the U.S. economy, including whether Congress will even pass the American Jobs Act, one thing is very certain. If the current anti-discrimination provision in the American Jobs Act passes, employers will be seeing a lot more discrimination claims from a whole new protected class of protected people--the unhired unemployed.

New Rule Requires Employers to Post Notice of Employee NLRA Rights

Jim Shore — Wed, 07 Sep 2011 06:00:00 -0800

Your bulletin board full of required workplace postings just got more crowded. The National Labor Relations Board (“NLRB”) has issued a final rule that will require nearly all private sector employers, whether unionized or not, to post a notice to their employees about certain employee rights under the National Labor Relations Act (“NLRA”). The notice must be posted by no later than November 14, 2011 (now postponed until January 31, 2012, see update below). The new rule is one of many new developments arising from the current NLRB’s implementation of the Obama administration’s labor policy.

This new notice is a form designed by the NLRB. Among other things, it contains:

· A summary of employee rights under the NLRA, including the right to discuss wages and working conditions with co-workers or a union, form or join a union, take collective action to improve working conditions, and engage in other protected activities.

· Examples of violations of those rights, and an affirmation that unlawful conduct will not be permitted.

· Information about the NLRB, the NLRB’s contact information, and details on how to file an unfair labor practice charge with the NLRB.

· A statement about the employer's obligation to bargain in good faith if a union has been selected by employees.

This new rule applies to almost all employers except public sector employers, very small employers below the NLRB’s jurisdictional standard for impacting interstate commerce, and other limited classes of employers outside of the NLRA’s jurisdiction. The NLRB may find that an employer’s failure to post the notice constitutes an unfair labor practice. The remedy for a violation may not be severe because the NLRB cannot impose fines – but much worse, a violation can be evidence of unlawful motive and prevent the running of the statute of limitations.

The full text of the actual required notice is available here. Private sector employers will be required to post this notice in conspicuous places, including where they customarily post other workplace notices. In addition, employers who customarily post personnel policies and rules on an internet or intranet site must include this new notice there or provide a link to the NLRB’s website section containing the notice. If an employer has employees working at another employer’s site, it will also need to determine whether it can post notices at that site if the other employer does not already have the notice posted. If 20 percent or more of an employer’s employees are not proficient in English and speak the same foreign language, the notice must also be posted in that language. The NLRB will provide translations in such circumstances. Copies of the required 11x17 posters will be available at no cost from the NLRB upon request, and will also be downloadable from the NLRB’s website, www.nlrb.gov. A federal contractor will be regarded as complying with the NLRB’s new posting requirement if it already posts the notice required of federal contractors by the U.S. Department of Labor. See our earlier discussion of those posting requirements here.

The NLRB fact sheet with further information about the rule is available here. There are likely to be legal challenges to the NLRB’s new notice posting rule, and at least one bill has already been introduced in Congress seeking to invalidate it. For now, employers will need to be prepared to comply with the new posting requirement. While already unionized employers will likely see little impact from the new rule other than the actual posting requirement itself, non-unionized employers may be faced with employees raising questions about their rights under the NLRA. Because such questions will invariably be directed toward their immediate supervisors, it is important for non-unionized employers to make sure that supervisors are properly trained regarding how to maintain a union-free environment without violating the NLRA. Non-unionized employers might also be tempted to post their own notice alongside the new NLRB poster, advising employees why a union is not needed. As with all such efforts, missteps can lead to challenges before the NLRB, so employers should consult with their Stoel Rives labor attorney.

UPDATE: On September 14, 2011, the NLRB made available the poster that employers must post. The link to that poster is here. The NLRB recently postponed the implementation date for its new notice-posting rule by more than two months in order to allow for enhanced education and outreach to employers. See here. The new effective date of the rule, and the date by which the new notice must be posted, is January 31, 2012.

The EEOC Reiterates the Importance of the Interactive Process

Melanie Osborne — Thu, 25 Aug 2011 11:51:28 -0800

A recent decision from the federal Equal Employment Opportunity Commission (EEOC) reminds employers of their affirmative duty to engage in an interactive process once an employee raises a medical condition and requests some change to their work environment to accommodate it. The Americans with Disabilities Act (ADA), and the Rehabilitation Act at issue in Harden v. Social Security Administration, protect an employee from discrimination based on a disability, where the employee can otherwise perform his or her job with a reasonable accommodation. Tips for the interactive process are provided below, and next week we will go through a “hypothetical.”

In Harden, a claims assistant who was frequently late notified the SSA about her depression and general anxiety which were causing her problems sleeping and functioning early in the morning. She requested approval to arrive between 9:00 and 9:30 a.m., rather than between 7:00 and 9:00 a.m. like other employees, or else to use leave rather than leave without pay or discipline. The claims assistant supplied the SSA some medical documentation, but the SSA found that the documentation did not show that her medical condition kept her from getting to work before 9:00 a.m. The SSA denied the employee’s request for a modified schedule, and disciplined her when she was again tardy.

Based on information about the employee’s medical condition that came out during the EEOC complaint process, the EEOC found that the SSA engaged in discrimination. The claims assistant had a disability that could have been reasonably accommodated with a modified schedule. The EEOC disagreed with the SSA’s argument that medical documentation provided during the complaint process was irrelevant to the SSA’s decision to deny the modified schedule and discipline the employee.

What does Harden teach us? Disability discrimination laws place affirmative duties on employers to engage in a meaningful process after an employee raises a medical condition. Do not cut short the interactive process because the facts will come out eventually. This 4-step process provides a helpful framework for an ADA request.

1. Get the facts: What is the medical condition? Get documentation from the employee’s doctor if necessary (with an appropriate release), including any limitations and potential accommodations. Allow the employee or doctor to provide additional information if you are not satisfied. What is this employee’s job? Identify the essential functions of her position. Is the employee performing the job, except for reasons related to her disability?

2. Decide whether the employee is eligible for an accommodation: Based on the facts, is the employee qualified for the job? Can he or she perform the essential functions of the job, with or without an accommodation? Determine whether the individual has a physical or mental impairment that substantially limits a major life activity. Is the employee regarded as having such impairment?

3. Have an interactive dialogue with the employee about an accommodation: Ask the employee what he or she wants. Quite frequently, this simple communication can result in a practical, cost-effective solution that works for everyone involved. Can the employee do the essential functions of the job with the employee’s proposed accommodation? Identify other accommodations that may work, and consider the effectiveness of each proposed accommodation. Discuss the cost and burden of each effective accommodation and assess whether it would be an “undue hardship.”

4. Put the accommodation into action: Document the dialogue with employee. Choose and implement an accommodation. Document the expectations on all sides. Inform others of the accommodation, only to the limited extent they must know (such as a supervisor). Ensure confidentiality at all times, and maintain a separate confidential file for the employee’s medical documentation. Reassess the effectiveness of the accommodation after a time.

Thanks For Nominating Stoel Rives World of Employment As A Top 25 L&E Law Blog!

Ryan Gibson — Mon, 22 Aug 2011 12:22:34 -0800

Based on feedback from you, our readers, LexisNexis has nominated the Stoel Rives World of Employment as a "Top 25" law blog in the Labor and Employment category! Thanks to those of you who nominated us to this elite group. Readers now have until September 12 to vote for their favorite blog. After voting is completed LexisNexis will announce which of the nominated blogs are selected to the final top 25.

Please Cast Your Vote For Us

At this point we'd like to engage in a bit of shameless self-promotion, and urge you to cast your vote for us before September 12. To do that, simply click here to vote, scroll to the very bottom of the page to the Add a Comment section, and add a comment. In the comment field, type something like "I vote for the Stoel Rives World of Employment blog." You can also view information about the competition and see the other nominated blogs on this page too. If you haven't already used the LexisNexis Communities feature, you may need to create an account to be able to vote.

Again, thanks for the nomination and support! (Here ends the shameless self-promotion...now we'll get back to blogging.)

- Your Stoel Rives World of Employment Bloggers

Why Should Employers be Fair?

Melanie Osborne — Mon, 01 Aug 2011 07:30:32 -0800

Martha walks into your office and says she wants to fire her assistant, Roy, because he keeps sending emails with typos and it is embarrassing. Martha says, “We are at-will and I want him gone by the end of the day.” Like most others, Alaska is an “employment-at-will” state, which means that the employee and employer are free to end the employment relationship at any time and for almost any reason. But is there more to consider in terminating Roy?

Every employment relationship in Alaska contains an implied covenant of good faith and fair dealing. An employer can violate the covenant by acting with an improper motive, like firing an employee two weeks before he is tenured. The covenant also requires employers to treat employees in a way that a reasonable person would consider fair.

Violation of the covenant of good faith requires a very fact intensive inquiry, which often requires going through a trial with witnesses rather than resolving issues through a motion for summary judgment. Trial is incredibly expensive for employers, not only in court costs but also in terms of stress on staff and distraction from business. However, two Alaska Supreme Court cases issued in early July of this year, that you can see here and here, show that summary judgment is alive and well if an employer can adequately demonstrate it acted fairly and without improper motives in its termination process. The application of the implied covenant of good faith and fair dealing to the employment context varies from state to state, and clearly does not apply in some states, like Washington. Nonetheless these recent cases are a good reminder that fair and equitable treatment in discharging employees can help employers avoid costly and disruptive claims.

So what do we do about Roy? Here are five suggestions to help ensure compliance with the implied covenant of good faith and fair dealing:

Follow a process. Require supervisors to provide good faith, fair reasons for discipline. Provide the employee an opportunity to respond to any allegations. Hear facts from Roy now, rather than for the first time in an EEOC proceeding or in court.
Be fair. Enforce personnel policies in a way that a reasonable person would regard as fair. Follow personnel policies when disciplining employees. What policy is Roy violating? Is termination an appropriate response to Roy’s violations?
Be consistent. Treat like employee alike, and justify any reasons for inconsistency in treatment. What type of conduct has resulted in other terminations? Have other employees received progressive discipline under similar circumstances, instead of termination? Treat Roy like other employees in similar situations.
Act in good faith. Do not manufacture reasons to justify a termination. Is Martha frustrated with Roy for some other reason? Better to learn about it now.
Document your process, fairness, consistency, and good faith.

Meghan M. Kelly also contributed to this post.

California: "Suitable Seating" Class Actions on the Rise

Tony DeCristoforo — Thu, 21 Jul 2011 06:00:00 -0800

California employers need to be mindful of a new kind of wage-hour class action – class claims arising from the “suitable seating” requirements of the California Industrial Welfare Commission’s wage orders.

The wage orders set forth what employers must do with respect to employees’ wages, hours and working conditions. There are 17 wage orders, applying to every industry and occupation. Most of the wage orders provide that “all working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of such seats.” Unfortunately, the wage orders do not define “suitable seats” or “reasonably permits.”

In Bright v. 99 Cents Only Stores, a cashier at a discount retail chain filed a class action against her employer alleging that the company did not provide cashiers with “suitable seating.” Unlike the typical wage-hour class action, this case does not involve a claim that employees were underpaid. Instead, the plaintiff seeks to use the alleged wage order violation to trigger the penalty provisions of the California Private Attorney General Act (PAGA), which amount to $100 for each aggrieved employee for the first violation and $200 per pay period for each aggrieved employee for subsequent violations. The Court of Appeal recently ruled that the plaintiff can proceed with her case and, if she proves the employer did not provide suitable seating, recover PAGA penalties.

The retail industry is the first industry in the cross-hairs of the plaintiffs’ bar for seating violation class actions, but employers in the hospitality and manufacturing industries should expect to be targeted soon. The decision of the Bright court permitting PAGA penalties for seating violations may lead to class actions for violations of other obscure provisions of the wage orders, such as requirements relating to changing rooms, resting facilities and workplace temperatures. California employers should take immediate measures to ensure they are in compliance with the seating requirements and other provisions of the California wage orders.

2011 Update: Compliance and regulatory considerations in implementing your value based interventions

Victor Kisch — Fri, 15 Jul 2011 15:02:13 -0800

Please join Stoel Rives Partners Ed Reeves and Bob Thompson as they present "2011 Update: Compliance and regulatory considerations in implementing your value based interventions" an Oregon Coalition of Health Care Purchasers educational seminar and national webcast.

This seminar focuses on understanding the federal law traps and pitfalls associated with the use of incentives and penalties when implementing value-based employee benefit plan design as well as, the use of a 'HIPAA-based' safe harbor wellness program.

August 4, 2011
9:00 – 10:30 a.m. (Pacific)
Stoel Rives, Portland Office
Webcast available

For more details or to register please contact Linda Dixon (staff@ochcp.org) by Friday, July 29, 2011.

Idaho Supreme Court Rejects Lawsuit over Intra-Office Romance

Jennifer Reinhardt — Thu, 14 Jul 2011 06:00:00 -0800

On June 29, 2011, the Idaho Supreme Court unanimously upheld a district court ruling that a state worker could not maintain an action against her employer for wrongful discharge based on allegations that her supervisor’s intra-office romance and consequent favoritism toward his paramour created a hostile work environment. See Patterson v. State of Idaho Dep’t of Health & Welfare. In the first Idaho case of its kind, the Court found that paramour favoritism did not violate Title VII and therefore opposition to such activity is not “protected activity” under the Idaho Human Rights Act (“IHRA”).

The longtime Idaho Health & Welfare employee who initiated the action, Lynette Patterson, asserted that her boss’s affair with another worker resulted in favoritism toward the other worker and created a hostile work environment for her and others in her unit. Following Patterson’s initial complaints of her supervisor’s misconduct, the department launched an investigation into her allegations and found that although Patterson’s supervisor did in fact have an inappropriate relationship with another employee in violation of the department’s internal policy, there was no evidence to support preferential treatment. Thereafter, Patterson claims she was the victim of retaliation. Upon receiving a performance evaluation stating that she had failed to achieve performance standards, she quit her job, alleging that she was constructively discharged.

Patterson’s complaint against the department asserted constructive discharge under the IHRA and violation of the Idaho Protection of Public Employees Act. Following an unfavorable summary judgment ruling, she appealed both issues to the Supreme Court.

In its analysis of Patterson’s retaliation claim under the IHRA, the Court used the Ninth Circuit’s three-prong test for a retaliation claim, which requires a plaintiff to demonstrate: 1) that she engaged in protected activity; 2) that she suffered an adverse employment action; and 3) there was a causal link between her activity and the adverse employment action. See EEOC v. Luce, Forward, Hamilton & Scripps. Courts have found the first prong satisfied when an employee demonstrates he or she subjectively and reasonably believed that he or she was opposing activity that violates Title VII. See Little v. United Technologies, Carrier Transicold Division.

The Court found that Patterson subjectively believed she engaged in protected activity when she opposed the paramour relationship allegedly resulting in favoritism, but it concluded that such a belief was not objectively reasonable. The Court noted that a critical element of the inquiry regarding objective reasonableness of an employee’s belief that he or she is engaging in protected activity is the existing case law at the time of the incident. The case law at the time of Patterson’s resignation did not support her position. Moreover, the Court found that the favoritism, even if true, affected all concerned on a gender-neutral basis.

This decision aligns Idaho with other jurisdictions that have confronted the specific issue of paramour favoritism and ruled that paramour favoritism does not constitute gender discrimination because it affects both men and women equally. The Court’s ruling is useful to Idaho employers to the extent that it requires employees to demonstrate the reasonableness of their belief that they are engaging in protected activity under the IHRA. Notwithstanding these holdings, employers must continue to be careful about the prospect of retaliation claims, which constituted 25% of all complaints filed with the Idaho Human Rights Commission in 2010.

California Overtime Rules Apply To Work Performed In California By Out-Of-State Employees

Tony DeCristoforo — Wed, 06 Jul 2011 11:57:35 -0800

The California Supreme Court has ruled that California’s daily overtime requirements apply to work performed in California by non-residents. In Sullivan v. Oracle Corp., three employees of Oracle who were not residents of California worked as “instructors” and trained Oracle’s customers in the use of the company’s products. Required by Oracle to travel, the plaintiffs worked primarily in their home states but also in California and several other states. California is one of the few states that requires payment of daily overtime for hours worked in excess of eight in a day. At issue in the case was whether these non-residents of California were entitled to daily overtime for days they worked in California.

In a unanimous decision, California Supreme Court held that the California Labor Code does apply to overtime work performed in California for a California-based employer by out-of-state employees, such that overtime pay is required for work in excess of eight hours in a day. In reaching this conclusion, the Court noted California’s strong interest in applying its overtime law to all non-exempt workers, and all work performed, within the state’s borders. The Court stated that to permit non-residents to work in California without the protection of the state’s overtime law would completely sacrifice, as to those employees, California’s important public policy goals of protecting health and safety and preventing the evils associated with overwork. Additionally, not applying California law would encourage employers to substitute lower paid temporary employees from other states for California employees, thus threatening California’s legitimate interest in expanding the job market.

While not great news for employers, this decision provides guidance to multi-state employers about how to pay non-exempt employees who work occasionally in California. However, the Court left some important questions unanswered. First, the decision does not directly apply to employers that are based outside of California. The Court specifically limited its holding to out-of-state employees working for California-based employers. The question remains whether an employer based outside of California must comply with California’s overtime rules for those days its non-California employees work in California. Even though the ruling does not specifically address this scenario, the reasoning the Court employed in reaching its decision leaves the door open for an argument that its holding applies to employers based outside of California. Also, the Court was not asked to address, and did not address, whether other provisions of California’s wage law -- such as the contents of pay stubs, meal period requirements, the compensability of travel time, the accrual and forfeiture of vacation time, and the timing of payment to employees who quit or are discharged -- apply to work performed in California by non-resident employees.

California-based employers with non-exempt employees in other states who occasionally work in California should immediately confirm that all such employees are paid overtime in conformity with California law when working in California.

Lawmakers Aim to Take the "Spice" out of Synthetic Drug Use.

Melanie Osborne — Tue, 05 Jul 2011 07:02:20 -0800

Meghan M. Kelly also contributed to this post.

Alaska has joined the growing list of states that have outlawed the sale or possession of “synthetic cannabinoids.” These so-called designer drugs are sold under trade names like “Spice” and “K2”, and are essentially chemicals sprayed on dried weeds then rolled and smoked like marijuana.

Alaska’s new law, that you can see here, criminalizes certain chemical combinations used to create synthetic cannabinoids, in effect banning the substance. Possession of these chemicals is punishable as a Class C felony down to a misdemeanor, depending on quantity. The ban became effective July 1, 2011.

At least thirty states have banned synthetic cannabinoids and several others are currently considering such legislation. In March, the federal government issued an “emergency listing” under the Controlled Substances Act of five compounds used to produce synthetic cannabinoids.

What does this mean for employers?

Synthetic cannabiniods may look like marijuana, but their affect on users more closely resembles methamphetamine or PCP. It is reported that the drug can cause paranoia and severe anxiety, hallucinations, nausea, suicidal thoughts, and combative behavior, among other symptoms. Poison centers across the country had nearly 5400 calls related to synthetic cannabinoid use between January 2010 and May 2011. Employers need to understand these symptoms and their impact on productivity and workplace safety.

Drug Free Workplace policies that ban use of illegal substances or “controlled substances” as defined by the Controlled Substance Act now have the backing of Alaska’s law and the federal government’s listing. Designer drugs are a rapidly evolving market, and employer drug testing programs must continue to evolve as well. While drug testing companies can test for synthetic cannabiniods, few employers in Alaska have taken this step. Presently, testing for synthetic drugs requires a separate test from the ordinary panel and it is expensive.

Certain workforces may be more prone to use of synthetic cannabinoids, and it is important for employers to determine the needs of their company and workforce. The Air Force began using urinalysis to screen for Spice in February 2011 and other branches of the armed services, some of the largest employers in the country, have started moving in the same direction.

Why Employers Should Exercise Restraint and Objectivity

Melanie Osborne — Thu, 16 Jun 2011 06:26:58 -0800

Retaliation claims are increasing at an alarming pace. Not only have these claims tripled in number within the last two decades, they now exceed race discrimination as the leading claim filed with the U.S. Equal Employment Opportunity Commission. Click here to see EEOC statistics.

Why the startling trend? First, Congress has gone to great lengths to protect employees’ rights to speak out against unlawful employment practices. Protections are regularly included in new laws, such as the American Recovery and Reinvestment Act of 2009, the Patient Protection and Affordable Health Care Act of 2010, and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Second, courts have adopted a broad definition of what constitutes retaliation and who should be protected. An employee must prove she engaged in a protected activity (like reporting harassment) and suffered an adverse employment action as a result (like being passed over for a promotion). An employer may ultimately defeat the harassment claim, but still face liability for retaliation. Third parties also may be protected from retaliation. For instance, in a recent United States Supreme Court decision the court found that the fiance of an employee who files a discrimination complaint is protected from retaliation under Title VII.

Third, jurors understand retaliation claims because they involve natural reactions to being accused of something awful, like sexual harassment. Jurors know how natural it is for the accused to have negative feelings after such an accusation, and at the same time jurors will sympathize with an employee who allegedly suffers for rocking the boat by making a complaint.

So what’s an employer to do?

Start with a clear anti-retaliation policy and train employees on it. Include an outlet for employees to raise retaliation concerns.
Counsel supervisors to be vigilant in their efforts to be objective, to exercise restraint, and to avoid knee-jerk reactions, and educate supervisors on how to spot situations where retaliation among co-workers is a risk.
Limit retaliatory behavior between employees by limiting the number of people who know about employee complaints.
Establish consistent processes that will catch subtle or unintended retaliation, so that employment decisions are based on legitimate business-related factors.
Timely investigate and address any appearance or allegation of retaliation.

Victory For Employers in Washington Medical Marijuana Case

Jim Shore — Fri, 10 Jun 2011 05:39:27 -0800

In a victory for employers, the Washington Supreme Court has ruled that Washington’s Medical Use of Marijuana Act (“MUMA”) does not protect medical marijuana users from adverse hiring or disciplinary decisions based on an employer’s drug test policy. Click here to download a copy of the decision in Roe v. Teletech Customer Care Management. The lawsuit and all appeals were handled for the employer by Stoel Rives attorneys Jim Shore and Molly Daily.

Jane Roe (who did not use her real name because medical marijuana use is illegal under federal law) sued Teletech for terminating her employment after she failed a drug test required by Teletech’s substance abuse policy. She alleged that she had been wrongfully terminated in violation of public policy and MUMA since her marijuana use was “protected” by MUMA. The trial court granted summary judgment in favor of Teletech, and Roe appealed. As discussed in a previous blog, the Washington Court of Appeals, Division II affirmed the trial court’s dismissal of Roe’s case. Roe then appealed to the Washington Supreme Court.

The Supreme Court ruled 8-1 in favor of in Teletech, holding that MUMA provides an affirmative defense to state criminal prosecutions of qualified medical marijuana users, but “does not provide a private cause of action for discharge of an employee who uses medical marijuana, either expressly or impliedly, nor does MUMA create a clear public policy that would support a claim for wrongful discharge in violation of such a policy.” The Court’s holding applies regardless of whether the employee’s marijuana use was while working or while off-site during non-work time. Adding to a significant victory for employers, the Court’s decision extends to the current version of MUMA as amended by the Legislature in 2007, and not just the original version passed by the voters in 1998 in effect when the facts of the case arose.

The plaintiff in the Teletech case did not raise a disability discrimination or reasonable accommodation claim under Washington’s Law Against Discrimination, and the Supreme Court therefore did not expressly reach that particular issue. But the Court did point out that marijuana remains illegal under federal law regardless of what the State of Washington does, and that it would be incongruous “to allow an employee to engage in illegal activity” in the process of finding a public policy exception to the at-will-employment doctrine. Moreover, the Court noted that the Washington State Human Rights Commission itself acknowledges that “it would not be a reasonable accommodation of a disability for an employer to violate federal law, or allow an employee to violate federal law, by employing a person who uses medical marijuana.”

The workplace implications of medical marijuana continue to be a developing area in many states. California’s Supreme Court has ruled in a manner consistent with Washington. Also previously covered in World of Employment, in Emerald Steel Fabricators, Inc. v. Bureau of Labor & Industries, the Oregon Supreme Court ruled that because federal criminal law preempts Oregon’s medical marijuana law, employers in Oregon do not have to accommodate employees' use of medical marijuana. But some states are more protective of an employee’s medical marijuana use. Given the continued efforts by marijuana advocates and civil rights groups to “push the envelope” of medical marijuana laws into the workplace, it is important for employers to continue to closely monitor legislative and legal developments. A recent effort to include workplace protections for medical marijuana users via amendments to Washington’s medical marijuana laws was defeated, but we anticipate similar efforts may be made in other states in the coming years.

There are many sound reasons why employers have zero tolerance policies and engage in drug testing of applicants and/or employees, including customer requirements, government contracting requirements (e.g.,the federal Drug Free Workplace Act), federal or state laws (including DOT requirements for transportation workers), workplace safety, productivity, health and absenteeism, and liability. To best protect themselves, employers should review their policies to make sure that illegal drug use under both state and federal law is prohibited, and that their policies prohibit any detectable amount of illegal drugs as opposed to an “under the influence” standard. Employers should also ensure that all levels of their human resources personnel know how to handle medical marijuana issues as they arise.

DOL Demonstrates Commitment to Wage and Hour Violations with Launch of New "DOL-Timesheet" App

Cameron L. Ward — Wed, 08 Jun 2011 07:18:37 -0800

In a highly visual public expression of its commitment to wage-and-hour violations, and to encouraging employees to file wage and hour complaints, the Department of Labor’s Wage and Hour Division entered the world of Smartphone apps when it recently launched its own “DOL-Timesheet” app for the iPad and iPhone. At first glance, the DOL-Timesheet App may not appear to be much more than the contemporary technological equivalent of a pad of paper, pencil, and some simple math. But not only does the DOL-Timesheet app track an employee’s hours and wages, it also: (1) contains a glossary of wage and hour terms; (2) informs workers about their rights under the Fair Labor Standards Act (FLSA); (3) contains easy to use links to contact the DOL’s Wage and Hour Division via phone or email; and (4) specifically instructs employees on how to file a wage violation complaint.

With all it does, there are still significant shortcomings and problems with the DOL-Timesheet app. The DOL candidly admits that the app does not address tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest. Additionally, the potential for human error or abuse creates inherent problems with reliability which may call into question the apps utility in a court of law. For example, it is unclear whether the DOL-Timesheet app includes metadata that would allow an employer to determine the time and date employees entered their time which in turn creates the potential that employees might overinflate their hours to seek benefits and compensation to which they may not be entitled.

Despite its shortcomings, the DOL left little question that it hopes and intends to use the information an employee tracks through its new app in its enforcement efforts when it stated the following in its press release announcing the app:

“This new technology is significant because, instead of relying on their employers’ records, worker now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”

For employers, the key phrase in the DOL’s statement is the last. An employee’s personal time records are unlikely to supplant or surpass an employer’s properly maintained time records. But in the absence of a well maintained and effective time-tracking system, an employee’s personal time records will quickly rise in value in the court’s eyes.

It remains to be seen whether the DOL-Timesheet will garner much attention and use from employees. However, regardless of its ultimate popularity, the DOL-Timesheet app serves as a clarion call to employers to get their proverbial wage-and-hour houses in order. If you are uncertain whether your wage and hour practices hold water under the FLSA, now is as good a time as any to take a good hard look at them.