News and Information

NLRB Obtained $70 Million and Reinstated 1,564

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

The National Labor Relations Board (NLRB) recovered over $70 million on behalf of employees as backpay or reimbursement of fees, dues and fines in fiscal year 2008, and a total of 1,564 employees were offered reinstatement, according to an October 29, 2008 agency report.

The NLRB – The processes of the NLRB can be invoked only by the filing of an unfair labor practice charge or a representation petition by a member of the public. The agency has no authority to initiate proceedings on its own.

Unfair Labor Practice Changes – Unfair labor practice charges (22,501) increased slightly (1.6%) in FY 2008. Only 36.1 percent of such charges were determined to have merit. Since 1980, the merit factor has fluctuated between 32 and 40 percent.

Settlements – The NLRB settled 96.8 percent of the charges that were determined to have merit in FY 2008. Over the last 10 years the settlement rate has ranged between 91.5 percent and 99.5 percent.

Complaints – In FY 2008 the Regional Offices of the NLRB issued 1,149 complaints as compared to 1,182 in FY 2007. The median time to issue complaints was 98 days.

Litigation Results - The NLRB Regional Offices won (in whole or in part) 90.8 percent of Board and Administrative Law Judge decisions.

Stinson Morrison Hecker LLP is one of the country's largest law firms with more than 360 attorneys in more than 45-industry-focused areas. If you would like more information regarding this summary, please contact one of our Employment & Labor Law and Employee Benefits attorneys.

Law at Work is designed to give general information and is not intended to be a comprehensive summary or to treat exhaustively the subjects and matters covered. The information appearing herein does not constitute legal advice or opinions. Such advice and opinions are provided only upon engagement with respect to specific factual situations. Nothing contained herein shall be considered as an admission in any matter or controversy.

Impact of ADA on Job Performance and Conduct

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Employers can apply the same performance standards to all employees, including those with disabilities, and the Americans with Disabilities Act (ADA) does not affect an employer’s right to hold all employees to basic conduct standards, according to new guidance issued September 3, 2008 by the Equal Employment Opportunity Commission.

Performance Standards – "An employee with a disability must meet the same production standards, whether quantitative or qualitative, as a non-disabled employee in the same job. Lowering or changing a production standard because an employee cannot meet it due to a disability is not considered a reasonable accommodation. However, a reasonable accommodation may be required to assist an employee in meeting a specific production standard."

If Employee Reveals Disability – "When an employee does not give notice of the need for accommodation until after a performance problem has occurred, reasonable accommodation does not require that the employer: tolerate or excuse the poor performance; withhold disciplinary action (including termination) warranted by poor performance; raise a performance rating; or give an evaluation that does not reflect the employee’s actual performance." However, the employer "should begin the interactive reasonable accommodation process by discussing with the employee how the disability may be affecting performance and what accommodation the employee believes may help to improve it."

Discipline for Misconduct – An employer may discipline an employee for violation of a conduct rule if the rule is job-related and consistent with business necessity and other employees are held to the same standard. "The ADA does not protect employees from the consequences of violating conduct requirements even where the conduct is cause by the disability."

If Disability is Cause of Conduct – "If an employee states that her disability is the cause of the conduct problem or requests accommodation, the employer may still discipline the employee for the misconduct. If the appropriate disciplinary action is termination, the ADA would not require further discussion about the employee’s disability or request for reasonable accommodation."

Requesting Medical Information – "An employer must have objective evidence suggesting that a medical reason is a likely cause of the problem to justify seeking medical information or ordering a medical examination. In limited circumstances, the nature of an employee’s performance problems or unacceptable conduct may provide objective evidence that leads an employer to a reasonable belief that a medical condition may be the cause."

Attendance Requirements – "Although the ADA may require an employer to modify its time and attendance requirements as a reasonable accommodation (absent undue hardship), employers need not completely exempt an employee from time and attendance requirements, grant open-ended schedules (e.g. the ability to arrive or leave whenever the employee’s disability necessitates), or accept irregular, unreliable attendance. Employers generally do not have to accommodate repeated instances of tardiness or absenteeism that occur with some frequency, over an extended period of time and often without advance notice."

Indefinite Leave – "Although employers may have to grant extended medical leave as a reasonable accommodation, they have no obligation to provide leave of indefinite duration."

Alcohol and Drugs – "The ADA specifically provides that employers may require an employee who is an alcoholic or who engages in the illegal use of drugs to meet the same standards of performance and behavior as other employees. This means that poor job performance or unsatisfactory behavior – such as absenteeism, tardiness, insubordination, or on-the-job accidents – related to an employee’s alcoholism or illegal use of drugs need not be tolerated if similar performance or conduct would not be acceptable for other employees."

Bottom Line - The EEOC also reiterated in its most recent guidance that the ADA’s confidentiality provisions "do not permit employers to tell coworkers that an employee with a disability is receiving a reasonable accommodation."

Employment Discrimination Lawsuits Decline

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

The number of employment discrimination lawsuits filed in federal court continues to decline – with only 3.2 percent of them proceeding to trial – but plaintiffs win over a third of the cases tried and the median damage award is $158,460, according to an August 2008 study by the U.S. Department of Justice.

Employment Litigation – "In 1990, 8,413 employment discrimination cases were filed in federal court with the number peaking at 23,796 in 1997. Employment discrimination filings stabilized between 1997 and 2004, and declined to 14,353 in 2006."

Emp. Lawsuits
1990 8,413
1995 19,059
2000 21,032
2001 21,157
2002 20,955
2003 20,507
2004 19,746
2005 16,930
2006 14,353

Government Filing Fewer Lawsuits – The federal government filed fewer employment discrimination lawsuits against employers each year, from 2001 (516 cases) through 2006 (373 cases).

Few Cases Go to Trial – There were 15,950 employment discrimination lawsuits that were resolved by the federal courts in 2006, and only 3.2 percent of them went to trial. The remainder were dismissed, settled or otherwise resolved.

Plaintiffs Won Over a Third – Between 2000 and 2006, there were 3,809 employment discrimination lawsuits in federal court that were concluded by trial (including jury trials, bench trials and directed verdicts). Plaintiffs won over a third (36.7 percent) of those cases.

Damages Awarded – Employment discrimination cases received a median award of $158,460 for cases concluded by federal court trials between 2000 and 2006. "The 25th percentile for employment discrimination cases was $52,065 and the 75th percentile was $374,265."

It Takes About a Year – The median amount of time it takes to resolve an employment discrimination lawsuit – from filing in federal district court to termination – is 11 to 13 months, a case processing time which has remained fairly constant for the past 17 years.

Bottom Line - Employers are increasing using a number of litigation avoidance strategies to lessen their risk of being sued, including the development of sound Human Resource policies, improved supervisory training, pre-decision review of significant discipline and discharge cases, internal complaint procedures, separation agreements and releases, mediation and other forms of alternative dispute resolution.

New AAP Guidance on Race and Ethnic Categories

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

The Office of Federal Contract Compliance Programs (OFCCP) on August 1, 2008 issued updated interim guidance on federal contractors’ use of the revised race and ethnic categories in their affirmative action plans.

New Racial and Ethnic Categories – Beginning in 2007, employers, including Federal contractors, were required to report data about racial, ethnic, and gender composition of their workforces on a revised Employer Information (EEO-1) Report. Those changes included: (1) renaming the former "Hispanic" category "Hispanic or Latino"; (2) creating a new category for individuals who identify as belonging to "two or more races"; and (3) splitting the former "Asian and Pacific Islander" category into two separate categories of "Asian" and "Native Hawaiian or other Pacific Islander."

May, but Not Required, to Use New Categories in AAPs – Until final rules and guidance are provided by OFCCP, the agency will not cite a contractor for non-compliance solely because it utilizes the race and ethnic categories required by the revised EEO-1 Report when preparing its affirmative action plans (AAPs). Contractors also are permitted to prepare their AAP using the racial and ethnic categories provided under OFCCP’s current regulations.

"Two or More Races" Should be Counted as "Minorities" – In addition, pending further guidance, contractors should consider all individuals identified as belonging to two or more races as minorities when comparing the percentage of women and minorities in each of their job groups to the available workforce or when examining whether their employment practices result in disparities in the employment or advancement of minorities.

Bottom Line - The OFCCP updated guidance will not affect how the agency will examine a contractor's overall good faith efforts, or its compliance with recordkeeping, nondiscrimination or affirmative action requirements.

New U.S. Passport Card May be Used in I-9 Form Process

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

The new U.S. Passport Card may be used in the employment eligibility verification process – in completing the I-9 Form and in the E-Verify program – according to an August 8, 2008 announcement by the U.S. Citizenship and Immigration Services.

Passport Card – The new passport card, which has been offered by the U.S. State Department since July 2008, provides a less expensive and more portable alternative to the traditional passport book. It is intended to expedite document processing at United States land and sea ports-of-entry for U.S. citizens traveling to Canada, Mexico, the Caribbean, and Bermuda.

I-9 Form List A Document – The passport card is considered a "List A" document that may be presented by newly hired employees during the employment eligibility verification process to show they are authorized to work in the United States. "List A" documents are those used by employees to prove both identity and work authorization when completing the I-9 Form.

E-Verify Program – The new passport card attests to the U.S. citizenship and identity of the bearer. Accordingly, the card may be used for the Form I-9 process and can also be accepted by employers participating in E-Verify.

Bottom Line - Employers should advise their HR personnel or managers who complete I-9 forms of this newly authorized List A document, which employees can now use to establish their identity and employment eligibility.

New EEOC Guidance on Religious Discrimination

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Applicants and employees should "enjoy the freedom to compete, advance and succeed in the workplace irrespective of their religious beliefs," according to new guidance on religious discrimination issued by the U.S. Equal Employment Opportunity Commission (EEOC) on July 22, 2008.

The EEOC’s guidance includes a new Compliance Manual Section regarding workplace discrimination on the basis of religion, a Best Practices booklet, and a companion Question-and-Answer fact sheet. While the agency’s advice creates no new law, it provides a helpful summary of the EEOC’s views on the scope of protection of religious practices and required accommodations.

Broad Scope of Religion – Under Title VII of the Civil Rights Act of 1964, religion includes not only traditional, organized religions, but also religious beliefs that are new, uncommon, not part of a formal church or sect, only subscribed to by a small number of people, or that seem illogical or unreasonable to others. Title VII’s protections also extend to those who are discriminated against or need accommodation because they profess no religious beliefs.

Prohibition on Disparate Treatment and Harassment - Title VII’s prohibition against disparate treatment and harassment based on religion is generally the same for other protected categories. "Disparate treatment violates the statute whether the difference is motivated by bias against or preference toward an applicant or employee due to his religious beliefs, practices, or observances – or lack thereof."

Reasonable Accommodations Required - Title VII requires an employer, once on notice that a religious accommodation is needed, to reasonably accommodate an employee whose sincerely held religious belief, practice, or observance conflicts with a work requirement, unless doing so would pose an "undue hardship."

Undue Hardship is a Lower Standard - Under Title VII, the undue hardship defense to providing religious accommodation requires a showing that the proposed accommodation in a particular case poses a "more than de minimus" cost or burden. This is a lower standard for an employer to meet than undue hardship under the Americans with Disabilities Act (ADA) which is defined in that statute as "significant difficulty or expense." Examples of more than de minimus costs or burdens are:

The regular payment of premium wages,
The hiring of additional employees,
A diminishment in efficiency,
An interference with employee job rights and benefits,
An impairment to workplace safety, and
An inconsistency with a bona fide seniority system or collective-bargaining agreement.

Common Accommodations – Depending on whether they represent an undue hardship under the circumstances, employers have accommodated employee’s religious beliefs and practices in these common ways:

Schedule Changes, Voluntary Substitutes and Shift Swaps – If a swap or substitution would result in the payment of premium wages, the frequency of the arrangement will be relevant to determining if it poses an undue hardship.

Changing Job Tasks or Providing a Lateral Transfer – If an accommodation in an employee’s current job is not possible, the employer “needs to consider whether lateral transfer is a possible accommodation.” Whether such accommodations pose an undue hardship will depend on factors such as the nature or importance of the duty at issue, the availability of others to perform the function, the availability of other positions, and the applicability of a collective-bargaining agreement or seniority system.

Making an Exception to Dress and Grooming Codes – The EEOC notes that there may be limited situations in which the need for uniformity of appearance is so important that modifying the dress code would pose an undue hardship and a case-by-case determination is advisable.

Use of Work Facility for Observance – The EEOC notes that if the employer allows employees to use the facilities at issue for non-religious activities not related to work, it may be difficult for the employer to demonstrate that allowing the facilities to be used in the same manner for religious activities is not a reasonable accommodation or poses an undue hardship.

Accommodations Related to Union Dues and Agency Fees – Employees objecting to joining or financially supporting a labor union on religious grounds can be accommodated by allowing the equivalent of the union dues or agency fees to be paid to a charity agreeable to the employee, the union, and the employer.

Accommodating Prayer, Proselytizing and Other Expression - In determining whether permitting an employee to pray, proselytize, or engage in other forms of religiously oriented expression in the workplace would pose an undue hardship, relevant considerations may include the effect such expression has on co-workers, customers, or business operations.

Bottom Line - Religious discrimination charge filings with the EEOC nationwide have risen substantially over the past 15 years, doubling from 1,388 in fiscal year 1992 to a record level of 2,880 in fiscal year 2007.

Americans with Disabilites Act Likely to be Amended

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Significant changes to the Americans with Disabilities Act (ADA) – that would provide a broader scope of protection, modify the definition of disabilities and impairments, and reject several U.S. Supreme Court decisions interpreting disability discrimination – will likely take effect on January 1, 2009 as a result of bipartisan legislation (H.R. 3195) moving through Congress. Among the key changes:

Disability Construed Broadly – The bill would require that the definition of "disability" be construed broadly, and would redefine the term disability to include a physical or mental impairment that "materially restricts" one or more major life activities of an individual.

Major Life Activities – The term "major life activities" would be expanded, and would include "major bodily functions" (including but not limited to digestive, bowel, bladder, circulatory and reproductive functions).

Impairments – An impairment that is episodic or in remission would still be a disability if it would substantially limit a major life activity when active.

Mitigating Measures – The bill would reject a requirement enunciated by the U.S. Supreme Court and instead state that the determination of whether an impairment materially restricts a major life activity is to be made without regard to the ameliorative effects of mitigating measures (including medication, medical supplies, equipment, etc.).

Regarded As Having an Impairment – Under the bill, an individual would meet the requirement of "being regarded as having an impairment" if the individual can establish that he or she has been subjected to an action prohibited by the ADA because of an actual or perceived physical or mental impairment – whether or not the impairment limits or is perceived to limit a major life activity. This would not apply to impairments that are transitory and minor. A transitory impairment is an impairment with an actual or expected duration of 6 months or less.

Discrimination – The bill also would broaden the prohibition against discrimination by stating that employers (or other covered entities) shall not discriminate against a qualified individual "on the basis of disability" instead of "because of the disability of such individual").

House Overwhelming Passes Bill – The U.S. House of Representatives on June 25, 2008 overwhelmingly approved the bill by a vote of 402-17. The legislation moves to the Senate where it has been championed by Sen. Edward Kennedy (D-Mass.). Business and civil rights groups are supporting the bill and, despite some reservations, President Bush is expected to sign the final measure.

Bottom Line - The stated purpose of the amendments is to provide a "clear, strong, consistent, enforceable standards addressing discrimination by reinstating a broad scope of protection to be available under the ADA."

Federal Contractors Will be Required to Use E-Verify

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Nearly all federal contractors and subcontractors will be required to use the U.S. Department of Homeland Security’s (DHS) electronic employment eligibility verification (E-Verify) system as a condition of their government contracts, under a sweeping new Executive Order signed by President Bush on June 9, 2008 and a proposed Federal Acquisition Regulation issued on June 12, 2008.

E-Verify Program – The E-Verify program (formerly known as Basic Pilot) is a web-based system that electronically verifies the employment eligibility of newly hired employees. The system verifies an employee’s name, social security number, date of birth, and immigration status through Social Security Administration (SSA) and DHS databases.

New Requirements – The proposed regulation would require the insertion of a clause in most federal contracts requiring the contractor to: (1) enroll in the E-Verify program within 30 days of contract award; (2) begin verifying the employment eligibility of all new employees of the contractor or subcontractor that are hired after enrollment in E-Verify, and continue to use the E-Verify program for the life of the contract; and (3) use E-Verify to confirm the employment eligibility of all existing employees who are directly engaged in the performance of work under the covered contract.

Covered Contracts – The proposed regulation would require the insertion of the E-Verify requirements in all prime contracts that include work in the United States except those that: (1) are less than $3,000; or (2) are for commercially available off-the-shelf items.

Subcontractor Flow Down – The proposed regulation would require a covered prime contractor to "flow down" the E-Verify requirement to all subcontracts that are for commercial or noncommercial services or construction.

Exceptions – The proposed regulation does not apply to any employment outside the United States or to any employee hired prior to November 6, 1986 (as such employees are not subject to employment verification under the Immigration and Nationality Act).

Must Enter Into MOU – Before a contractor can participate in the E-Verify program, the contractor must enter into a Memorandum of Understanding (MOU) with DHS and SSA. This MOU requires employers to agree to abide by current legal hiring procedures and to ensure that no employee will be unfairly discriminated against as a result of the E-Verify program.

Significant Difference – The proposed regulation differs in one significant respect from the requirements generally applicable to employers participating in E-Verify; that is, current employees of federal contractors that are assigned to work in the United States on a covered contract, as well as the contractor’s new hires in the United States, must be verified under this rule. The DHS is in the process of revising its MOU to reflect these new requirements.

Time Limits – In the initial contract start-up phase, employees assigned to the contract must be verified within 30 days; thereafter, the proposed regulation requires newly hired and newly assigned employees to be verified within 3 days.

Must Still Complete I-9 Form – Employers participating in E-Verify must still complete an Employment Eligibility Verification Form (Form I-9) for each newly hired employee, as required under current law. Following completion of the Form I-9, the employer must enter the worker’s information into the E-Verify website, and that information is then checked against information contained in SSA and DHS databases.

Effective Date – The E-Verify requirement would be required to be included in covered solicitations issued and contracts awarded after the effective date of any subsequent final regulation. Indefinite delivery and indefinite-quantity contracts would be amended to include the E-Verify requirement if the remaining period of performance exceeds at least 6 months beyond the date of the final rule and the amount of work or orders expected under the remaining performance period is substantial.

Bottom Line - The U.S. General Services Administration estimates that over 168,000 federal government contractors and subcontractors will be required to enroll in E-Verify, and that there will be an additional 3.8 million employees vetted through E-Verify as a result of the new requirement.

Employees Have New Avenue to Sue for Retaliation

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

In a case with potentially far reaching implications, the U.S. Supreme Court on May 27, 2008 held that an employee may bring a claim for retaliation under the Civil Rights Act of 1866 (42 U.S.C. § 1981) – which does not cap punitive damages – instead of having to rely on Title VII of the 1964 Civil Rights Act. CBOCS West Inc. v. Humphries.

Facts – A former African-American assistant restaurant manager brought a claim that he was discharged both because of his race and in retaliation for complaining that another assistant manager discharged an employee because of his race. The plaintiff brought his claims under both Title VII of the 1964 Civil Rights Act and Section 1981.

Procedural History – The District Court dismissed the plaintiff’s Title VII claims on procedural grounds, dismissed his direct discrimination claim under Section 1981 on the merits, and dismissed his Section 1981 retaliation claims as beyond the scope of the statute. The U.S. Court of Appeals reinstated the plaintiff’s Section 1981 retaliation claims finding them cognizable under the statute and the U.S. Supreme Court agreed to hear the case.

Statutory Language – Section 1981, enacted just after the end of the Civil War, provides that "[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts . . . as is enjoyed by white citizens..." The 1991 Civil Rights Act amended Section 1981 and defined "make and enforce contracts” to include “the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship."

Court Finds Implied Retaliation Claim – Despite the absence of specific reference to retaliation claims in either the original statutory text or the 1991 amendments, the Court concluded that "the view that §1981 encompasses retaliation claims is indeed well embedded in the law."

Employer’s Arguments Rejected – In finding an implied retaliation claim, the Court rejected the employer’s arguments that a Section 1981 retaliation claim was contrary to the statutory language and created unnecessary overlap between Title VII and Section 1981. Relying on a long line of cases interpreting both Section 1981 and Section 1982, the Court found that the employer’s arguments were insufficient to depart from the Court’s prior holdings in other cases.

Bottom Line - The Court’s holding is expected to increase the number of retaliation claims as plaintiffs take advantage of the uncapped damages available under Section 1981 and the extended statute of limitations.

Anti-Discrimination Guidance on SSA "No-Match" Letters

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

The Department of Justice’s Office of Special Counsel (OSC) recently issued important anti-discrimination guidance for employers who follow the Department of Homeland Security’s (DHS) safe harbor procedures after receiving a Social Security no-match letter.

DHS "Safe Harbor" – The DHS’ “safe-harbor” procedures, issued in August 2007 (and enjoined by a federal court) and modified by a proposed supplemental rule announced by DHS on March 21, 2008, offers employers who receive no-match letters from the Social Security Administration (SSA) a safe-harbor in a related immigration enforcement action if those employers follow the series of steps set forth in the no-match rule to ensure that the information provided by affected employees to confirm their work eligibility is genuine. The no-match rule provides that an employer may terminate an employee whose work eligibility could not be confirmed after the employer has followed the procedures that the rule sets forth.

Office of Special Counsel – The OSC enforces the anti-discrimination provisions of the Immigration and Nationality Act (INA). The law protects United States citizens and certain work-authorized persons from intentional employment discrimination based upon citizenship or immigration status, national origin, and unfair documentary practices relating to the employment eligibility verification process. The law further prohibits retaliation against individuals who file charges with the OSC, who cooperate with an investigation, or who otherwise assert their rights under the INA.

Investigations – OSC is required to investigate charges of discrimination alleging a violation of the INA. OSC may, on its own initiative, also conduct investigations of unfair immigration-related employment practices.

Alleged Victim Must be an Authorized Worker – As a threshold matter, if OFC receives an allegation of discrimination by an employer in applying the safe harbor procedures, it will first ascertain whether the alleged victim is an authorized worker who is protected from discrimination under the INA. If it concludes that the alleged victim is protected, OSC will initiate an investigation to determine whether there is reasonable cause to believe that the employer has engaged in unlawful discrimination.

Totality of Circumstances – It is OSC’s practice to examine the totality of relevant circumstances in determining whether there is reasonable cause to believe that an employer has engaged in unlawful discrimination.

Complaints, Penalties and Private Right of Action – Based upon the outcome of its investigation, OSC may bring a complaint before an administrative law judge seeking remedial relief for victims, injunctive relief to prevent future violations, and/or civil penalties. The INA also provides a private right of action

Discharge Without Attempting to Resolve Mismatch – "An employer that receives a SSA no-match letter and terminates employees without attempting to resolve the mismatches, or who treats employees differently or otherwise acts with the purpose or intent to discriminate based upon national origin or other prohibited characteristics, may be found by OSC to have engaged in unlawful discrimination."

Employers that Follow Safe Harbor Procedures – "However, if an employer follows all of the safe harbor procedures outlined in DHS’s no-match rule but cannot determine that an employee is authorized to work in the United States, and therefore terminates that employee, and if that employer applied the same procedures to all employees referenced in the no-match letter(s) uniformly and without the purpose or intent to discriminate on the basis of actual or perceived citizenship status or national origin, then OSC will not find reasonable cause to believe that the employer has violated [the] anti-discrimination provision, and that employer will not be subject to suit by the United States under that provision."

Sharp Rise in Discrimination Charges

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Nearly 83,000 private sector discrimination charges were filed with the U.S. Equal Employment Opportunity Commission (EEOC) in fiscal 2007 – a nine percent jump over the previous year and the highest number of charges in five years, according to data released by the agency on March 5, 2008.

Numbers of Charges – In fiscal 2007, 82,792 discrimination charges were filed with the EEOC, up from 75,768 in the previous year. It was the second largest number of charges filed with the agency in the past decade.

Allegations – Nationwide, race discrimination (37.0%) was the most frequent allegation asserted in EEOC charges, followed by retaliation (32.3%), sex discrimination (30.1%), age (23.2%), disability (21.4%), national origin (11.4%), religious discrimination (3.5%), and equal pay (1.0%).

Race, Age and Disability – The EEOC received 30,510 charges of race discrimination, up 12 percent from fiscal 2006, and the most since 1994. Age discrimination charges totaled 19,103, up 15 percent from the previous year and the largest number in five years. The number of disability discrimination charges soared to 17,734, a 14 percent increase over fiscal year 2006 and the highest level since 1998.

Sexual Harassment and Pregnancy Discrimination – The EEOC received a record-high 5,587 pregnancy discrimination charges in fiscal 2007. In addition, 12,510 sexual harassment charges were filed with the agency, including a record 16 percent from men.

Disposition of Charges – As in past years, only about 1 in 5 discrimination charges (22.9%) were closed with a favorable outcome for the charging party (merit resolution), including through settlement (12.2%), withdrawal of the charge with benefits (5.7%) and by a finding of reasonable cause (5.0%). In contrast, nearly six in ten (59.3%), charges were deemed to have “no reasonable cause,” and one in six (17.8%) were administratively closed.

Monetary Benefits – The EEOC recovered a record $290.6 million in monetary relief for charging parties through administrative enforcement, including mediation.

EEOC Litigation – The EEOC filed 336 merit lawsuits (including direct suits, intervention, and other enforcement actions), and recovered $54.8 million through litigation.

Bottom Line – According to the EEOC, “possible factors for the increase in discrimination charges include: changes in the economy, employees’ increased awareness of their rights under Title VII and other anti-discrimination laws, and greater access to EEOC through the agency’s outreach efforts, its enhanced Web site and other public education tools.”

Labor Department Proposes New, Sweeping Changes to Family and Medical Leave Act Rules

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

After years of delay, the U.S. Department of Labor (DOL) on February 11, 2008 finally proposed a number of significant and wide-ranging changes to the Family and Medical Leave Act (FMLA) regulations, many of which could substantially alter the procedures employers utilize in complying with the 15-year-old law.

The DOL’s proposed changes are not yet in effect. Instead, the DOL has invited comments on its proposed changes and intends to issue revised regulations later this year. Some of the key changes proposed by the DOL include:

Employee Notice of Foreseeable Leave – Under the proposed rules, when an employee gives less than 30 days’ advance notice of FMLA leave, the employee would be required to respond to a request from the employer and explain why it was not practicable to give 30 days’ notice. For example, if an employee could have provided two weeks notice of a doctor’s appointment for treatment of a serious health condition, but instead provided only one week’s notice of the appointment, the employer could delay FMLA-protected leave for one week. If the employee does not delay the taking of the leave, the absence would be unprotected and the employer could treat the absence in the same manner as any unexcused absence.

Employee Notice of Unforeseen Leave – Under the proposed rules, employees – in all but the most extraordinary circumstances – would be required to: (1) provide notice to their employer of the need for leave at least prior to the start of their shift; (2) comply with the employer’s usual procedures for calling in and requesting unforeseeable leave (e.g. to call a designated call-in number instead of leaving a message on the supervisor’s voicemail); and (3) provide the employer with "sufficient information" to put the employer on notice that the absence may be FMLA-protected. Significantly, calling in with the simple statement that the employee or the employee’s family member is "sick" – without providing more information – would not be considered sufficient notice.

Serious Health Condition – The definition of "serious health condition" largely remains unchanged in the proposed rules, except in a few important respects. The “continuing treatment” requirement would be broadened to specify that the required "two visits" to a health care provider could occur within a 30-day period, instead of during the 3-day period of incapacity required by a Tenth Circuit decision. Also, an employee seeking FMLA leave due to a "chronic" condition would be required to visit their health care provider at least twice a year. The DOL also emphasized that "incapacity due to pregnancy or prenatal care" includes time spent with a health care provider for prenatal care purposes, and includes periods where a male employee is needed to care for his pregnant spouse who has severe morning sickness.

Intermittent Leave – Despite urging from employers, the DOL did not propose any change with respect to the minimum increment of intermittent leave that can be requested or used by employees. The DOL did clarify that an employee who takes intermittent leave when medically necessary has a statutory obligation to make a "reasonable effort" as opposed to an “attempt” to schedule leave so as not to disrupt unduly the employer’s operations.

Employer Notices – The DOL has proposed a number of new "notice" obligations on employers, including: (1) a "General Notice" that must be posted and included in employee handbooks or distributed to employees annually; (2) an "Eligibility Notice" that must be issued within five business days after an employee requests leave (and which notifies the employee of his or her FMLA eligibility and whether he or she still has leave available in the applicable 12-month period); and (3) a "Designation Notice" that must be issued within five business days (instead of the current two) and which designates the leave as either FMLA or non-FMLA leave. The DOL has developed draft prototype forms for each of these notices.

Medical Certification – The DOL has proposed a number of changes to the medical certification form, including a new provision that would require a health care provider to "certify" that intermittent or reduced schedule leave is "medically necessary." The DOL is still considering whether to require employers to notify the employee if the certification has not been returned in the 15-day time period, and to give the employee another seven calendar days to provide the certification.

Recertifications – Generally, an employer could continue to request a recertification no more often than every 30 days and only in connection with the absence of the employee. However, proposed changes would permit recertifications in less than 30 days, or twice a year, in certain circumstances. Also, the proposed regulations would specifically permit an employer to provide the health care provider with a record of the employee’s absence pattern and ask the health care provider if the serious health condition and need for leave is consistent with such a pattern.

Authenticating and Clarifying Medical Certifications – The proposed rules would remove the requirement that an employee must provide consent prior to the employer seeking to authenticate a medical certification. Moreover, (unlike the current rule) employers would be allowed to directly contact the employee’s health care provider for the purposes of authenticating and clarifying the medical certification. And, while employee consent (due to HIPAA) is required before an employer can contact a health care provider to clarify a medical certification, the proposed rule makes clear that if such consent is not given an employee may jeopardize his or her FMLA rights.

Fitness for Duty – The proposed rules replaces the requirement that employees who take FMLA leave provide a “simple statement” from their health care provider that they are able to resume work, and replaces it with a requirement that the employee obtain a certification from his or her health care provider. An employer may provide a list of the employee’s essential job duties and require the employee’s health care provider to certify that the employee can perform them, prior to allowing the employee to return to work.

Substitution of Paid Leave – The DOL has clarified that the terms and conditions of an employer’s paid leave policies apply (e.g., paid in only full-day increments, two-day notice required, etc.) and must be followed by the employee in order to substitute any form of accrued paid leave – including paid vacation, personal leave, family leave, paid time off, or sick leave.

Perfect Attendance Bonus – In a significant change, the DOL has proposed to change the FMLA rules to allow an employer to disqualify an employee from a bonus or other payment that is based on the achievement or a specified goal such as hours worked, products sold or perfect attendance, if the employee has not met the goal due to FMLA leave.

Holidays, Overtime, Light Duty – The proposed rules also clarify when holidays and overtime count – or do not count – as FMLA leave, and clarify that periods of light duty are not included as FMLA leave.

Settlement of Past FMLA Claims – The DOL explicitly proposed that employees and employers be permitted to voluntarily agree to the settlement of past FMLA claims without having to first obtain the permission of the DOL or a court.

Injured Service Member – The proposed rules also address recently enacted legislation that expands the FMLA entitlement to 26 workweeks for certain military family members caring for a service member with a serious illness.

Bottom Line – According to the DOL, over six million workers take FMLA leave annually (including 1.5 million workers who take intermittent leave), and employers spend over 9.5 million hours to comply with the law, at a total cost of nearly a quarter billion dollars a year.

Unions Stem Decline; Add 331,000 Members

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

"In 2007, the number of workers belonging to a union rose by 311,000 to 15.7 million," according to a January 25, 2008 report by the Bureau of Labor Statistics. The percentage of employees in the private sector who were union members inched up to 7.5 percent in 2007, a slight increase from the prior year (7.4 percent).

Union Members – Overall, "union members accounted for 12.1 percent of employed wage and salary workers, essentially unchanged from 12.0 percent in 2006. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent."

Public Sector vs. Private Sector – "The union membership rate for public sector workers (35.9 percent) was substantially higher than for private industry workers (7.5 percent)."

Industries – Among private industries, utilities (28.4 percent) had the highest union membership rate in 2007, followed by transportation and warehousing (20.9 percent), telecommunications (19.7 percent), construction (13.9 percent), educational services (12.6 percent), motion pictures and sound recording (11.5 percent), and manufacturing (11.3 percent).

Men and Women – "In 2007, the union membership rate was higher for men (13.0 percent) than for women (11.1 percent). The gap between their rates has narrowed considerably since 1983, when the rate for men was about 10 percent points higher than the rate for women. The rates for both men and women declined between 1983 and 2007, but the rate for men declined much more rapidly."

Race of Union Members – "Black workers were more likely to be union members (14.3 percent) than were whites (11.8 percent), Asians (10.9 percent), or Hispanics (9.8 percent). Within these major groups, black men had the highest union membership rate (15.8 percent) while Hispanic women had the lowest rate (9.6 percent)."

Age of Union Members – "Among the age groups, union membership rates were highest among workers 55 to 64 years old (16.1 percent) and 45 to 54 years old (15.7 percent). The lowest union membership rates occurred among those ages 16 to 24 (4.8 percent)."

Full-time vs. Part-time – Full-time workers were about twice as likely as part-time workers to be union members, 13.2 compared with 6.5 percent.”

Non-members – "About 1.6 million wage and salary workers were represented by a union on their main job in 2007, while not being union members themselves. Slightly more than half of those workers were employed in government."

States – Nearly half (7.8 million) of the 15.7 million union members in the U.S. live in just six states: California (2.5 million), New York (2.1 million), Illinois (0.8 million), Pennsylvania (0.8 million), and New Jersey (0.7 million).

Missouri, Kansas, Nebraska, Arizona – In 2007, the percentage of workers represented by a union declined in Kansas (from 9.3 to 8.7 percent), remained the same in Arizona (9.7 percent) and Missouri (11.9 percent), and increased in Nebraska (from 9.5 to 9.7 percent).

Bottom Line – Organized labor is intent on electing a Democrat President and a Democrat-controlled Congress in November 2008 as the first step toward passing the Employee “Free-Choice” Act in 2009. The controversial union organizing bill would no longer require employees to vote for unions in secret ballot elections conducted by the National Labor Relations Board, but instead would require employers to recognize and bargain with a union after a majority of workers signed union authorization cards.

Challenging OSHA Adminstrative Warrants

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Companies have no constitutional right to challenge the validity of an administrative workplace search warrant in federal court before it is executed, according to a December 26, 2007, decision of the U.S. Court of Appeals for the Fifth Circuit. Trinity Marine Products, Inc. v. Chao.

Facts – The case arose after an employer refused to allow OSHA compliance officers to inspect its facility pursuant to an administrative warrant. The employer relented only after a federal marshal threatened that "somebody will be in chains" if the inspection was not allowed to proceed.

Forceful Execution of Administrative Warrants Permitted – The court rejected the employer’s argument that OSHA must resort to civil contempt proceeding when faced with a recalcitrant employer. While "a civil contempt proceeding or a hearing on a motion to quash the warrant are possible options, nothing precludes the use of the U.S. Marshals to enforce a warrant."

Other Remedies for Alleged Constitutional Violations – The court rejected the employer’s argument that a pre-execution civil proceeding is necessary to protect employers from unconstitutional searches that do not result in OSHA citations. The court noted that an employer may bring a civil suit seeking damages for alleged unconstitutional searches under the Supreme Court’s Bivens decision. "There is no danger of an unremedied constitutional wrong."

Lower Probable Cause Standard Does Not Require Pre-Execution Challenge – The court also rejected the employer’s argument that an administrative warrant’s lower probable cause requirement requires a heightened due process review through a pre-execution challenge procedure. In rejecting this argument, the court simply noted that "an administrative warrant is a less protective form of warrant."

Bottom Line – While OSHA will likely continue to seek enforcement through civil contempt proceedings in order to resolve any doubts about the validity of the warrant in question at an early stage, it may in certain cases resort to the forceful execution of its administrative warrants. In any event, employers should contact legal counsel immediately if OSHA requests an inspection or attempts to serve a search warrant.

New EEOC Rule on Retiree Health Benefits

by Employment & Labor Law / Employee Benefits Group
Stinson Morrison Hecker LLP
Copyright © 2008

Employers may create, adopt, and maintain a wide range of retiree health plan designs – such as Medicare bridge plans and Medicare wrap-around (or "carve-out") plans – that alter, reduce or eliminate benefits when the participant is eligible for Medicare (or a comparable State health benefit plan), whether or not the participant actually enrolls in Medicare (or the other benefit program), without violating the Age Discrimination in Employment Act” (ADEA), under a final rule issued December 26, 2007 by the Equal Employment Opportunity Commission (EEOC).

New Rule is in Response to Court Decision – In August 2000, the U.S. Court of Appeals for the Third Circuit had held that an employer violated the ADEA if it reduced or eliminated retiree health benefits when retirees became eligible for Medicare, unless the employer could show that the benefits available to Medicare-eligible retirees were equivalent to the benefits provided to retirees not yet eligible for Medicare, or that it was expending the same costs to both groups of retirees. Making such a showing often required complex comparisons of multiple objective and subjective variables.

Court’s Decision Eroded Retiree Benefits – Employers, however, could avoid the issue created by the Third Circuit’s decision by simply eliminating retiree health benefits entirely or alternatively by reducing the coverage they provided to those retirees who were not yet eligible for Medicare. As a result, the EEOC studied the issue and responded with a new rule designed to slow the further erosion of retiree health benefits.

New Rule Allows Coordination with Medicare – Under the EEOC’s new rule, employers may coordinate their retiree health benefits with Medicare (or a comparable State health benefit plan), whether those benefits are provided for in an existing or newly created employee benefit plan, and regardless of whether the individual participant actually receives benefits under Medicare (or a comparable State health benefit plan).

No Obligation to Provide Retiree Health Benefits – The new rule does not require employers to provide retiree health benefits.

Dependent and Spousal Benefits – The EEOC’s new rule applies to dependent and/or spousal health benefits that are included as part of the health benefits provided for retired participants. “However, dependent and/or spousal benefits need not be identical to the health benefits provided for retired participants. Consequently, dependent and/or spousal benefits may be altered, reduced or eliminated pursuant to the exemption whether or not the health benefits provided for retired participants are similarly altered, reduced or eliminated.”

Does Not Apply to Non-Health Benefits – The EEOC’s new rule applies only to retiree health benefits and not other non-health retiree benefits (such as life insurance or disability programs).

Rule Applies Only to Retirees, Not to Current Employees – The EEOC’s new rule “applies only to retiree health benefits, not to health benefits that are provided to current employees.” Under Medicare, “an employer must offer to current employees who are at or over the age of Medicare eligibility the same health benefits, under the same conditions, that it offers to any current employee under the age of Medicare eligibility.”

Bottom Line – Rising health care costs, larger numbers of workers nearing retirement age, and mandated changes in the way employers must account for the long-term costs of providing retiree health coverage have been substantial factors in contributing to the erosion of retiree health care benefits. The EEOC’s new rule is intended to stem the steady decline of retiree health care as an employee benefit.