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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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The NLRB Issued Employee Handbook Guidance With All You Need To Know In A Single Source?

Contributed by Steven Jados

Not exactly—but it is quite useful, nonetheless.

Recently, the Office of the General Counsel for the National Labor Relations Board issued a report on lawful and unlawful employee handbook rules.  And while the information provided in the report does not have the force of law, the guidance is quite detailed and it provides insight into what, for the moment, is the board’s approach to enforcement on employee handbooks.

What the report makes clear is that context is key to determining whether an employee handbook provision will be considered lawful or not.  For instance, it is perfectly acceptable to have a policy that states: “Do not make negative comments about our customers in any social media.”  However, if an employer prohibited “negative” comments about the employer, itself, or its management personnel, that would almost certainly be considered unlawful.

Similarly, while a policy that generally prohibits “derogatory comments” is likely to be found unlawful, a ban on derogatory comments that is included within a policy prohibiting sexual harassment is likely to be acceptable.  The report includes guidance like this on several categories of employee handbook policies, including: treatment of customers, competitors, and the public; treatment of confidential and proprietary business information; harassment in the workplace and online; and employee communication with the media.

The report also provides specific examples of actual employee handbook language that the NLRB considers unlawful, along with a brief explanation of why the language is considered unlawful.  Following that, the report then provides examples and explanations of similar policies that are facially acceptable.

As one would expect, the report is not perfect, and it does not have the force of law—which is to say that reliance on the report will not be an absolute defense to an unfair labor practice charge.  This is especially so in light of the fact that the acceptable policies included in the report are considered “facially” lawful, which means, essentially, that the board believes those policies can and should be interpreted in a way that does not unlawfully restrict employee rights.

However, if an employer enforces what would be a facially valid policy in a way that is unlawful (e.g., enforcing a facially valid confidentiality policy by terminating employees who discuss their pay rates), the employer should not be surprised to find itself charged with an unfair labor practice.

That said, despite any flaws the report may have, the report is the most comprehensive and extensive guidance issued by the NLRB on this subject, and it is a good starting point for employers who have not yet revised their policies in response to the NLRB’s increased enforcement in this area over the past several years.

OSHA Emphasizes Whistleblower Protection for Temporary Workers

Contributed by Jonathon Hoag

Last month OSHA published another bulletin as part of its series for providing guidance on safety and health compliance with respect to temporary workers.  This particular bulletin reiterated OSHA’s position that temporary employees have the same rights and protections as all other covered employees, including protection against retaliation for engaging in protected activity.  OSHA stressed that a temporary employee who believes he or she is retaliated against for reporting injuries, participating in OSHA inspection, raising safety concerns or complaints, or engaging in any other conduct protected by the act may file a complaint with OSHA against the host employer, staffing agency, or both.

OSHA has been expressly targeting enforcement efforts related to temporary workers and separately ramping up whistleblower protections.  This recent bulletin merges these two initiatives and sends a cautionary reminder to employers that use of temporary staff will not shield it from potential whistleblower liability under OSHA.  As the bulletin states, a simple request from the host company to remove or replace a temporary worker can put both the host employer and staffing agency on the hook for a retaliation claim if the employee alleges he or she engaged in protected activity before being removed – this is true even if the staffing agency places the worker at another location.  Retaliation claims of all types continue to rise and this is yet another area where employers that host temporary workers must proceed with caution.

OSHA is expected to continue issuing bulletins and guidance related to host employer and staffing agency responsibilities for compliance with safety and health compliance.  OSHA’s temporary worker initiative is updated periodically and is located at:  https://www.osha.gov/temp_workers/.

IRS Begins Implementation of the ACA “Cadillac Tax” for High-Cost Health Plans

Contributed by Kelly Haab-Tallitsch

The IRS and Treasury Department recently issued Notice 2015-16 discussing initial approaches to implementing the 40% excise tax imposed on high-cost health plans under the Affordable Care Act (ACA).  This notice is the first step in the process leading to final regulations.

Beginning in 2018, the excise tax, also called the “Cadillac Tax,” will impose a 40% tax on the cost of employer-sponsored health plans that exceeds certain thresholds. The tax may affect few plans initially, but is expected to affect many more over time as the cost of health care grows faster than inflation.

Notice 2015 -16 addresses three key areas, including:

  • The definition of “applicable coverage”;
  • The determination of the cost of applicable coverage; and
  • The application of the annual statutory limits.

Benefits considered “applicable coverage” will be subject to the excise tax. The notice addresses several areas that were previously unclear.  Most notably, the agencies anticipate that pretax salary reduction contributions made by employees to health savings accounts (HSAs) will be subject to the tax. The ACA statute provides that employer contributions to an HSA are subject to the excise tax, but did not address employee pretax contributions.  Retiree coverage, multiemployer plan coverage, executive physicals and health reimbursement arrangements are also expected to be included as applicable coverage.

Notice 2015-16 anticipates excluding from applicable coverage onsite medical clinics that offer only de minimis care to employees, provided the care consists primarily of first aid during work hours for treatment of an illness or injury that occurs during work hours. Still undetermined is the treatment of onsite clinics that provide additional services such as immunizations, allergy injections, nonprescription pain relievers, and treatment of work injuries beyond first aid.

Self-insured dental and vision plans (consistent with the exclusion of fully insured dental and vision plans in the statute), employee after tax contributions to HSAs, accident or disability insurance, workers’ compensation, long-term care insurance and possibly employee assistance programs are also expected to be excluded.

What This Means for Employers

The cost of applicable coverage that exceeds the thresholds (currently $10,200 for self-only and $27,500 for family coverage) will be subject to a 40% non-deductible excise tax imposed on the employer. To avoid the tax, employers must continue to analyze health plan costs and explore strategies now to manage future costs.

The anticipated treatment of employee pretax contributions to HSAs will likely have a significant impact on HSA programs. As described, many employer plans that provide for HSA contributions will be subject to the tax as early as 2018, unless an employer limits the amount an employee can contribute on a pretax basis.

How Can Employers Reconcile the Federal Motor Carrier Safety Regulations with Growing “Ban the Box” Laws?

Contributed by Jeffrey Risch and Sara Zorich

The Federal Motor Carrier Safety Administration Regulations (FMCSR) set forth rules and regulations for employment applications involving applicants applying to drive commercial motor vehicles. (See 49 C.F.R. § 391.21).  Section 391.21 has been adopted in most states (for example, Illinois law recognizes Section 391.21 pursuant to Title 92 of the Illinois Administrative Code).

FMCSR specifically requires applicants completing a commercial driver application to (1) list all violations of motor vehicle laws or ordinances (other than parking) of which the applicant was convicted for in the prior 3 years and (2) provide a statement setting forth the details and facts of any denial, revocation or suspension of their driver’s license.

In recent years, a growing number of states, in addition to local municipalities, are passing “Ban the Box” laws that prohibit employers from inquiring into criminal convictions on their written applications for employment or at any time prior to a conditional job offer.  In fact, as of January 1, 2015, the Illinois Job Opportunities for Qualified Applicants Act (a.k.a. “Ban the Box”) bars private employers with 15 or more employees from asking about, requiring disclosure of, or considering an applicant’s criminal history, until the employer has notified the applicant of his or her selection for an interview or until a conditional job offer has been made.

So how are employers supposed to reconcile Section 391.21 requirements with the limitations of inquiry into criminal conduct under local or state “Ban the Box” laws?  Employers who have job positions governed by Section 391.21 should recognize and rely on any expressed exceptions under such local or state laws.  For instance, Illinois’ “Ban the Box” law permits employers to ask about convictions on an application if “employers are required to exclude applicants with certain criminal convictions from employment due to federal or State law.” (820 ILCS 75/15(b)(1)).  However, employers must be very careful to only request information on the initial application that is specifically required under Section 391.21.

An additional hurdle for employers is that some states have anti-discrimination laws that limit otherwise permissible inquiries.  As an example, the Illinois Human Rights Act (IHRA) prohibits private employers with 15 or more employees from asking applicants about any sealed or expunged criminal record of conviction.  However, once again there is an exception to the IHRA when the request is “otherwise authorized by law.”  Since 49 C.F.R. 391.21 requires an employer to inquire about ALL violations of motor vehicle laws of which the employee was convicted in the past three years on an application, this is an exception to the IHRA and no qualifying language regarding sealed or expunged records is required.  But again, any inquiry into other types of convictions not covered by FMCSR (after selection for interview or conditional offer is made) must have the qualifying language required under the IHRA.

Bottom Line: Employers cannot follow a one size fits all approach with employment applications.  Trucking companies throughout the United States, and particularly in the Midwest, must review their applications for drivers of commercial vehicles to ensure they are complying with the requirements under federal, state and local laws.

Reasonable Accommodation for Pregnant Employees

Contributed by Noah A. Frank

On March 25, 2015, the U.S. Supreme Court issued the highly anticipated Pregnancy Discrimination Act (PDA) and Americans with Disabilities Act (ADA) decision, Young v. UPS, no. 12-1226.

The Court found a genuine issue of facts as to whether UPS failed to accommodate in 2006 a part-time delivery driver, restricted from 70 to 20 pounds lifting during her pregnancy, even though it accommodated other drivers injured on the job or otherwise disabled, as well as drivers who temporarily lost DOT certification.  As a result, the Court remanded the case to the appellate court to determine whether pregnancy-blind policies tended to discriminate against pregnant workers despite their similar abilities (or inabilities) to work as non-pregnant workers.

The Court specially noted that 2008 ADA amendments expanded the definition and interpretation of “disability,” likely requiring an employer to provide accommodations to an employee with temporary lifting restrictions originating off the job (e.g., such as pregnancy and related conditions).

What This Means For Employers:

Frustration continues for U.S. companies as there is no “one size fits all” application of law to formation of employment policy and practices.

  • As we previously reported, as of January 1, 2015, Illinois Human Rights Act amendments require all Illinois employers to provide accommodations to pregnant employees, and those affected by conditions related to pregnancy (775 ILCS 5/2, et seq.).  Because federal employment discrimination law is instructive to Illinois’ administrative agencies, the Court’s ruling means that employers should evaluate their neutral leave and accommodation policies for potential of pregnancy discrimination.
  •  In all states, employers should ensure that they use a case-by-case evaluation of an employee’s medical- and pregnancy-related leave and accommodation requests.
  • Employers should engage in the ongoing, individualized interactive process with the employee to determine what, if any, accommodation can or must be made with the goal of reducing barriers to performing work.
  • Employers should also carefully evaluate their Workers Compensation Light Duty Programs immediately.


OFCCP: Affirmative Action Contractors Update on Compliance with Sexual Orientation and Gender Identity Obligations

Contributed by Heather Bailey

This is the first time since 1974 that the protected classes for affirmative action contractors have been modified.  The effective date for compliance is April 8, 2015 for any new or modified contracts (more than $10,000). At this time, you must begin implementing the new requirements related to sexual orientation and gender identity applicants and employees. The OFCCP held webinars in March to give contractors guidance on what they are expecting out of these new requirements.  Here is what we learned:

  • It is encouraged that all affirmative action contractors should follow these adjustments and incorporate these two protected classes in their affirmative action efforts (even if you don’t fall under the new regulations).
  • Job Advertisement Tag Lines – if it currently lists all protected statuses (e., race, national origin, sex, religion), then you must include sexual orientation and gender identity with the full list.  Alternatively, if you do not list the specific classes it is appropriate to just have Equal Employment Opportunity Employer.  One exception is if you are covered by the veteran and individuals with disabilities regulations.  If so, the OFCCP opined a sufficient tag line is “Equal Employment Opportunity Employer/Veterans/Disabled.”  Please note that the OFCCP warned that the abbreviation “LGBT” should not be used since the abbreviation does not cover all individuals identified under sexual orientation and gender identity.
  • EEO is the Law Poster – they are creating a supplement in the near future, soon after the effective date.  In the meantime, ensure the current version is posted.
  • Offered Benefits – the basic rule of thumb is if you offer the benefit to opposite sex married couples, you must offer the same to same sex married couples who are married in a state or territory that recognizes those marriages.  You are not, however, required to give those benefits to individuals in civil unions or domestic partnerships unless of course you offer the benefits to similar opposite sex unmarried couples.

What has not changed with your obligations for the addition of sexual orientation and gender identity individuals:

  • No new placement, outreach and employment goals;
  • No self-identification requirement;
  • No data collection requirement;
  • No Handbook or Affirmative Action Plan update required (OFCCP did opine it was a best practice to include these protected classes in any EEO clause);
  • No mandatory training (but still encouraged); and
  • No change to religious exemption.

Why is this important?  Not only is this a good business practice to incorporate these two classes of individuals in your equal employment opportunity efforts, but the OFCCP will share and coordinate with the EEOC with a joint investigation and/or referral if they notice any type of discriminatory impact, intent, practice, etc. for individuals and even class complaints.

It is recommended you seek counsel advisement on getting started to ensure compliance, but the OFCCP also offers resources for contractors in order to give guidance and FAQs at http://www.dol.gov/ofccp/LGBT/LGBT_resources.html.

Right-to-Work: Who’s Got Next?

Contributed by Beverly Alfon

Despite labor’s historical stronghold in the Midwest – Indiana, Michigan, Iowa, Tennessee and now, Wisconsin – have become Right-to-Work (RTW) states.  Is Illinois next?  What does this mean for employers?

RTW In a Nutshell: Money and Power

In the 25 states that have not passed RTW laws, including Illinois and Missouri, a union security clause in a collective bargaining agreement requires all employees in the bargaining unit to either be a dues/fee-paying union member – or a non-member who pays “fair share” fees.  The battle is over the non-member “fair share” fees which are used to supplement dues cash flow used for, among other things, local and international officer salaries, overhead costs and political lobbying.

In the 25 states that have passed RTW laws, a non-member at a unionized workplace is no longer required to pay any fees to the union – even if s/he is benefitting from union representation.  Financially, RTW is a major blow to unions.  From an organizing standpoint, it is equally damning.  An individual is far less likely to become or remain a union member if s/he can benefit from representation without having to pay.  After all, a union owes a legal duty of fair representation to all individuals in the bargaining unit – regardless of member status.

Proponents of RTW laws argue that they attract new business and promote expansion of existing businesses because of the likely decline of union strength and numbers.  Opponents of RTW laws argue that employee wages, benefits and protections will deteriorate as a result of lower union representation.

The Pulse 

Missouri: Even if the RTW bill before the Missouri legislature fails this year, GOP representatives are celebrating.  Last month, in a 91-64 vote, the House approved a RTW bill.  Despite the possibility of defeat in the Senate and expected veto of Gov. Jay Nixon, the RTW movement has clearly gained significant ground.  It would only take 109 votes in the House to override a veto.

Illinois:  Last month, Gov. Bruce Rauner issued an executive order allowing state employees to opt out of paying union dues.  AFSCME, Illinois AFL-CIO and 25 other unions filed suit last week challenging the executive order.  Meanwhile, Rauner has filed his own lawsuit asking the courts to confirm his position that fair share fees violate workers’ First Amendment rights.

Wisconsin:  Last week, a group of unions filed suit to challenge the recently enacted RTW law.  Notably, union challenges to the constitutionality of RTW laws in Michigan and Indiana have failed.

Kentucky:  Under home rule, in December 2014, Warren County, Ky., adopted a countywide RTW ordinance after it became clear the state legislature was not going to pass a RTW bill.  Since last year, 11 counties have passed local RTW laws, including several along the Tennessee border.

What to Expect Right Now 

Expect an uptick in union activity as unions ramp up “internal organizing” to prove that membership has its benefits.  Frontline management will also likely receive increasing questions from employees about what all of this means.  Now is the time to consider re-training your supervisors and managers about what they can say and do when these discussions arise.  Finally, stay tuned as these legal and legislative battles continue to develop.


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