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    Welcome to the Labor and Employment Law Update where attorneys from SmithAmundsen blog about management side labor and employment issues. We cover topics including addressing harassment and discrimination in the workplace, developing labor law, navigating through ADA(AA), FMLA and workers’ compensation issues, avoiding wage and hour landmines, key legislative, case law and regulatory changes and much more!
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It’s Spreading Like the Flu – Massachusetts Becomes the 3rd State to Require Employers to Provide Paid Sick Time

Contributed by John Lynch

On November 4, 2014, Massachusetts voters approved a ballot referendum requiring Massachusetts employers to provide paid sick leave.  The new law will take effect on July 1, 2015.  Massachusetts joins California and Connecticut as states requiring employers to provide paid sick leave, along with cities such as San Francisco, Newark and New York City.StethescopeGavel

Under the new Massachusetts law, employers with 11 or more employees must allow all employees (whether full or part time) to earn and use up to 40 hours of paid sick time per year.  Employees accrue paid sick time at the rate of 1 hour for every 30 hours worked.  (Employers with 10 or fewer employees must allow their employees to use unpaid sick time, accrued at the same rate as paid sick time by employees at companies with 11 or more employees.)

Employees may use sick time for their own physical or mental illness or condition, for a spouse, child, or parent’s (or spouse’s parent’s) illness or condition, or to address the psychological, physical or legal effects of domestic violence.

An employer and employee can mutually agree, but the employer may not require that an employee who takes time off for a covered reason may make up the time by working an equivalent number of hours during the same or next pay period rather than use accrued sick leave.  (Note, however, that if a different workweek is used, there could be overtime implications if those “additional hours” put the employee over 40 hours for that particular workweek.)

When the need for paid sick time is foreseeable, the employee must make a good faith effort to provide advance notice of the leave (e.g., a doctor’s appointment, a court appearance for domestic violence, etc.)  For an absence that covers more than 24 consecutive scheduled work hours, an employer may require certification from a health care provider that the absence was necessary for a covered reason.

An employer may not interfere with, or retaliate against an employee for, the use of sick time under the new law.

Employees begin earning sick time on their first day of employment or July 1, 2015, whichever is later.  But an employer may require a waiting period of 90 calendar days after commencement of employment for an employee to begin using sick time.

Employees may carry over up to 40 hours of accrued but unused sick time, but an employer may place a limit of 40 hours of sick time that may be used per year.  Importantly, employers are not required to pay employees for accrued but unused sick time upon termination of employment.

The law requires the Massachusetts Attorney General to create a Notice, which employers must post in a conspicuous place in the workplace as well as provide a copy to employees.

What Should Employers Do?

Between now and July 1, 2015, Massachusetts employers should update their sick leave, PTO leave, and record-retention policies to ensure compliance and proper record keeping.  Employers should also ensure that all managers and supervisors are trained in the application of the new law and the employer’s revised policies.

Finally, employers should update their new hire packets and Employee Handbooks to reflect compliance with the new law.

Executive Action on Immigration to Affect Millions

Contributed by Jacqueline Lentini McCullough

Did you watch the President address the nation live last week? On November 20, 2014, President Obama announced a series of executive actions, including cracking down on illegal immigration at the border, prioritizing deportation of felons (details of which are still unclear), and requiring certain undocumented immigrants to pass a criminal background check and pay taxes in order to temporarily stay in the U.S. without fear of deportation.

The initiatives include:

- Deferred Action for Parents (DAP). Parents of U.S. citizens and legal permanent residents (LPR’s of any age) who have been continuously present in the U.S. since January 1, 2010, who pass background checks and pay taxes are eligible for deferred action (temporary relief from removal for a specified period of time) for a three year period;

-Deferred Action for Childhood Arrivals (DACA) to be revised to expand the group it encompasses to include young people who came to the U.S. before turning 16 years old, and have been present in the U.S. since January 1, 2010. It will also remove the 31 year old age cap, paving the way for about 270,000 more people to apply. The work authorization permit will also be increased from two to three years;

-Permit Employment Authorization for H-4 Visa Holders. Currently dependents of H-1B visa holders are not permitted to work. Regulations will be finalized in early 2015;

-Optional Practical Training. The length of time in OPT for Science, Technology, Engineering and Mathematics (“STEM”) graduates will be expanded, although no set time frame for this increase and associated regulations have been outlined;

-Pre-registration for Adjustment of Status. Individuals with an approved employment immigrant petition who are caught in the quota backlogs will be able to pre-register for adjustment of status to obtain the benefits of a pending adjustment. This change is expected to impact approximately 410,000 people;

-I-601A Waivers. Waivers will be expanded to include spouses and children of LPRs;

-Modernization and improvement of immigrant and nonimmigrant programs. Details on this are unclear;

-Enhancements to the Naturalization process; and

-U and T Visas. Three more types of offenses will be added to the list of offenses that can be certified by the Department of Labor.

Preliminary estimates show that approximately 4.9 million individuals may be eligible for the initiatives announced by the President, although there is no way of knowing how many individuals will apply. USCIS won’t begin accepting applications until approximately May 2015, and the new protections could be reversed by a new President. The bottom line is that the only certain provisions will have an immediate impact early next year, such as the DAP and DACA changes. Other proposed changes should be considered more along the lines of “Coming Attractions,” because they require regulations to be implemented. Limited details were offered during the President’s address to the nation, and in his subsequent Memoranda of November 21st.  Since the President’s briefing included business employment immigration reform, there is a reasonable expectation for improvements outside of the undocumented community as well.


“Right-to-Work” Upheld in Indiana, Challenged in Michigan, But What Does It Really Mean?

Contributed by Suzanne Newcomb

On November 6, Indiana’s right-to-work law cleared its most recent major hurdle. The Indiana Supreme Court upheld the law overturning a Lake County decision declaring the law unconstitutional. The Seventh Circuit upheld the law in September. Meanwhile the Michigan Supreme Court announced it will hear argument in January on whether its state’s right-to-work laws properly apply to state employees.

So, Indiana and Michigan and twenty-two other states (the entire south plus several states in the west) now have right-to-work laws on the books and several others have considered similar legislation. But what does “right-to-work” really mean for employers?

Contrary to popular belief, right-to-work laws do not ban unions, displace employment-at-will or guarantee employees a “right” to continued employment. Rather, they prohibit “union security clauses” – provisions in union contracts and collective bargaining agreements that require union membership as a condition of employment. Indiana’s right-to-work law, for example, which is fairly typical, makes it unlawful to require an employee to: (1) join or remain a member of a union; (2) pay union dues, fees or assessments; or (3) make a charitable donation in lieu of paying union dues. The law also invalidates union agreements that violate the law and makes knowing violations a misdemeanor criminal offense.

The bottom line: In a right-to-work state, employees in union shops cannot be forced to join the union, but must be afforded the same wages and receive the same benefits and terms and conditions of employment as their union-member co-workers. Under federal law, once a union is recognized as a unit’s exclusive bargaining agent, the union must bargain on behalf of all employees in that unit, even those who choose not to join the union.

Another Supreme Court Challenge to Health Care Reform? Why It May Matter to an Employer…

By Rebecca Dobbs Bush

I know, I know.  You may have seen the headlines indicating that the Supreme Court is going to be reviewing another case challenging the Affordable Care Act and not even bothered to read the articles this time.  After all, who hasn’t become a little tired of hearing about challenges and changes to the Affordable Care Act with constant updates occurring over the now almost five years since the act was signed into law by President Obama? Or perhaps it isn’t that you are tired of hearing about the ACA; you were just distracted when Kim Kardashian broke the internet.  In any event, the Supreme Court has recently decided to hear King v. Burwell, and their somewhat surprising decision to do so could affect employer ACA compliance strategies in as many as 36 states.

What is the case about?  Well, at the surface it appears to be a case that wouldn’t interest employers at all.  Specifically, King v. Burwell is about the ability of the federal government to provide tax subsidies for health insurance coverage purchased through federally-facilitated health insurance marketplaces.  The crux of the issue is that the ACA states that subsidies are to be provided to qualifying taxpayers and their dependents when they purchase coverage “through an Exchange established by the State.”  The question is whether Congress intended for a federally-facilitated marketplace to be included in the phrase “an Exchange established by the State.”

Why does this matter to employers in as many as 36 states?  Currently, there are 27 states that declined the opportunity to establish their own marketplace and elected to only make the federally-facilitated marketplace available to their residents.  In addition to those 27 states, other states currently partake in what is referred to as a “partnership” with the federally-facilitated marketplace.  Those states have also not technically established their own Exchange.  King v. Burwell could implicate employers in as many as 36 states as the shared responsibility penalties under the ACA are only triggered when a qualified individual purchases coverage and receives a subsidy.  If none of the individuals in a state are able to access the subsidies, employers would not have the potential risk for penalty exposure from employees residing in those states.

While no employer should use the Supreme Court’s pending review as a reason to procrastinate their ACA compliance planning, King v. Burwell will be a Supreme Court opinion that all employers should be watching and waiting for.

Eleventh Circuit Strikes a Blow to the EEOC’s Broad Subpoena Power

Contributed by Jill Cheskes

As most employers are aware, the EEOC has been on a multi-year campaign aimed at ferreting out alleged systemic discrimination by using an individual charge of discrimination as a springboard to investigating company-wide practices.  The EEOC has been doing this by issuing broad requests for information, and then subpoenas, that seek company-wide information even though there is only an individual charge.  Employers often balk at producing this information articulating a lack of relevance to the individual charge.

By and large, the federal courts have enforced the EEOC subpoenas and required employers to produce company-wide information citing the broad relevance standard articulated by the U.S. Supreme Court in the case of EEOC v. Shell Oil Co. (1984). That case found that “relevant” was to be broadly construed and the commission was entitled to “virtually any material that might cast light on the allegations against the employer.”

However, the Eleventh Circuit recently reversed that trend by upholding a district court opinion that found that the EEOC’s company-wide subpoena was not relevant to the individual charge and that it was unduly burdensome to produce the information in the case of EEOC v. Royal Caribbean Cruises, Ltd.

The Eleventh Circuit noted that the EEOC essentially relied on the Shell Oil case and language to argue relevancy (which has been a winning argument for it) but the court noted that the disputed portions of the subpoena were aimed at discovering members of a potential class of employees who suffered from a pattern of discrimination rather than fleshing out the individual charge.  The court held that while statistical information could demonstrate that discrimination occurred, the EEOC was “required to make some showing that the requested information ‘bears on the subject matter of the individual complainant.’’

The EEOC focused much of its briefs on an argument that it is entitled to expand the investigation to uncover other potential violations and victims of discrimination – again there has been a great deal of support for this type of argument – but the Eleventh Circuit held that it did “not construe the relevancy standard so broadly.”  Further the court found that the EEOC could issue a commissioner’s charge alleging a pattern and practice and attempt to obtain the information there but the Eleventh Circuit found that “the EEOC may not enforce a subpoena in the investigation of an individual charge merely as an expedient bypass of the mechanisms required to file a Commissioner’s Charge.”

This case did present some facts that could have made the court’s opinion easier such as the information sought was primarily about foreign nationals rather than U.S. citizens and the employer admitted that they terminated due to the complainant’s medical condition (pursuant to certain international standards for cruise ships that prohibit certain conditions) but nonetheless an employer faced with an overbroad EEOC investigation or a subpoena, especially if within the Eleventh Circuit, should look to this case for support in objecting to the requests and subpoena.

Beyond Talking Smack — NLRB Draws the Line at Advocating Insubordination

Contributed by Beverly Alfon

Six months ago, the NLRB held (on remand from the Ninth Circuit) that an employer violated the National Labor Relations Act by firing an employee even though he called his supervisor a “[multiple expletives deleted]“  and even threatened that if he was fired, the boss would “regret it.”  Plaza Auto Center, Inc., 360 NLRB No. 117 (2014).  That decision left many employers exasperated, and still does.  Recently however, the board issued a decision that confirms that even this pro-labor board recognizes that some employee conduct falls outside the protections of the National Labor Relations Act (NLRA).  Richmond District Neighborhood Center, Case 20-CA-091748 (Oct. 28, 2014).

In Richmond District Neighborhood Center, the board upheld an administrative law judge’s ruling that Facebook dialogue between two employees of the center was not protected under the NLRA and the employer did not violate the act by considering that dialogue when it revoked their employment offers for the following school year.  The employees’ expressed their intent to have “field trips all of the time to wherever [ ] we want”, “teach the kids how to graffiti up the walls…” and other similar statements expressing their intent to disregard their job duties and undermine the leadership at the center.  The board agreed that the employees’ statements, which included obscenities and statements regarding how they would “raise hell” at the center, went beyond discussion and complaints about work terms and conditions.  The board further stated that the center was “not obligated to wait for the employees to follow through on the misconduct they advocated” before terminating their employment.

How do we reconcile these two decisions?  In Plaza Auto Center, the employee’s profanity and personal attacks were expressed in the context of a discussion regarding commission rates and break times.  The NLRB reasoned that the discharge violated the employee’s right to discuss terms and conditions of employment.  In contrast, the employees in Richmond District Neighborhood Center went beyond expressing their discontent with their work terms and conditions through “pervasive advocacy of insubordination in the Facebook posts, compromised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the act’s protection.”  

Bottom line:  There is no bright-line scope of protected activity versus unprotected activity under the NLRA.  As demonstrated by the board’s decisions, the analysis is very fact-specific.  For both union and non-union employers, before issuing discipline to employees who engage in conduct that involves or is related to an expression of discontent about work terms and conditions, consult counsel to review the particular facts of the case before making a decision.

Court Awards Against National Labor Relations Board for Improper Restriction Regarding E-Verify

Contributed by Michael Hughes and Sara Zorich

On October 30, 2014 in the case of Overstreet v. Farm Fresh Co. Target One LLC, No. 2:13-cv-02358, the Arizona Federal District Court ordered attorney’s fees be paid to Farm Fresh Co. Target One LLC (Farm Fresh) by the National Labor Relations Board (NLRB) due to the NLRB’s demand that Farm Fresh reinstate four employees without following the federal and Arizona state laws governing the use of E-Verify.

In 2013, Farm Fresh was purchased through an asset purchase agreement by a new owner.  The new owner (after receiving advice and guidance from the Dept. of Homeland Security) sought to treat all existing employees as new hires after the company acquisition.  As part of that transition, all employees could be run through E-Verify to confirm their authorization to work in the United States.  On March 1, 2013, it was announced to all employees that due to the acquisition, all employees would be run through E-Verify.  Four days later some employees sought unionization and four employees were terminated.  The employees claimed their termination was in violation of the National Labor Relations Act (NLRA) and an administrative law judge agreed, finding the employees should be reinstated.  Farm Fresh agreed to reinstate the employees but stated that the employees would be required to be run through the Federal E-Verify system which was the process for all other existing and new employees.  The NLRB refused to allow any “conditions” on the reinstatement and sought injunctive relief under Section 10(j) of the NLRA from the Arizona Federal District Court restraining Farm Fresh for the “unconditional” reinstatement of the four employees.  The court, however, sided with the employer and found that the employees, like all other employees of the company, should be treated as “new” employees and processed through E-Verify.  Moreover, the court awarded the company over $55,000 in attorney’s fees under the Equal Access to Justice Act.

Employers should be cautioned that the facts of this case are very fact specific.  In general, employers cannot require employees to go through additional testing or application process when ordered by the NLRB to be reinstated.  It was only because the company through the acquisition was able to treat all employees as “new employees” and process all employees through E-Verify in accordance with federal and Arizona law.  This case shows the important interplay immigration laws can have on both employment and traditional labor disputes.  Further, it highlights that any reinstatement ordered by the NLRB cannot be predicated on terms that are against the law.


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