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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 Labor and Employment Law Update is provided for information purposes only, and should not be construed as legal advice on any subject matter, nor should it be construed as creating an attorney client relationship. Do not send confidential information or facts about a legal matter. The opinions of this blog's contributors do not reflect the opinions of SmithAmundsen LLC as a whole. See the disclaimer page for further information.

Multi-State Employers: Do These New State Laws Pertain To You?

Posted on March 26, 2013 by smithamundsen

Contributed by Heather Bailey

Arizona Min. Wage:  Be sure you’ve increased minimum wage to $7.80.

California Criminal Background Checks:  Effective January 1, 2013, if you perform background checks by obtaining state criminal history information, you must start giving applicants  a copy of their state summary criminal history information – promptly – if this information played a part in any adverse action like not hiring them for the job.

Florida Min. Wage:  Minimum wage now equals $7.79 per hour.

Georgia Criminal Records:  In July, arrest and criminal records access is going to change. For example, access will no longer be for any arrest and employers must supply either fingerprints or detailed information regarding the individual, such as full name, address, Social Security number, race, sex, and date of birth, which is accompanied by a signed consent on a form approved by the Georgia Bureau of Investigation’s Crime Information Center.

Illinois Workplace Violence Initiative:  The Illinois Chamber of Commerce is actively working on legislation that will give employers an avenue to get temporary restraining orders when persons cause threat of violence in the workplace.   Stay tuned for this much needed legislation!

Michigan Employee Private Social Media:  In December 2012, Michigan joined the bandwagon of prohibiting employers from requiring employees and applicants to give up their social media logins and passwords and from taking adverse action against them should they not comply with the request.  Effective March 28, 2013, Michigan will become one of our nation’s right to work states.  So, generally, employers cannot require employees to join or remain a member of a union.  Finally, you may now be able to collect a minimal administrative fee (i.e., $1-$2) for child support garnishments each time a deduction is made.

Missouri Min. Wage:  Minimum wage is raised to $7.35 an hour – be sure you’ve made this increase!

New Jersey Posting Requirements:  If you have 50 or more employees, there are new notice and posting requirements in place from the New Jersey Department of Labor and Workforce Development and Department of Law and Public Safety’s Division on Civil Rights for gender equality in the workforce and anti-discrimination.

Vermont Min. Wage: Your minimum wage went up too – $8.60 per hour.

State laws change every day.  Make sure you are aware of them all for the states in which you have employees!

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7th Circuit OSHA Case on Soil Types

Posted on February 22, 2013 by smithamundsen

Contributed by Guest Blogger Matthew Horn

A recent decision issued by the United States Court of Appeals for the Seventh Circuit, KS Energy Services, LLC v. Solis, Case No. 11-2427, greatly impacts how OSHA will determine soil types and enforce trench sloping and benching regulations.  All contractors performing work in trenches should be aware of this decision and its practical implications. 

Under the Court’s ruling in Solis, in order to prevent the possibility of being issued a citation for improper trench protection, a contractor should always downgrade “Type A” soil to “Type B” soil in determining slope when: 1) it is using heavy machinery near the trench; 2) the trench is near a road; or 3) there are existing utilities running through the trench at any point and/or are located within at least ten feet of the trench. 

The Violation

In the case, KS Energy, an underground contractor out of New Berlin, Wisconsin, was installing a natural gas pipeline underground in downtown Madison, Wisconsin.  An OSHA Compliance Officer arrived on site and took several measurements of KS Energy’s trench using a trench pole.  The slope of the trench was measured at 46 degrees in two locations and 50 degrees in one location.  The Compliance Officer also noted that there was water in several footprints near the trench; that there were underground utility lines eight to ten feet from the trench; and that a street was located twelve feet from the trench. 

The soil samples taken by OSHA indicated that the soil was “Type B” at the top and middle of the trench, but the soil sample taken by KS Energy’s expert from the bottom of the trench indicated that the soil was “Type A.” 

KS Energy was issued a repeat citation for failing to provide an adequate trench protection system in “Type B” soil conditions. 

7th Circuit Ruling

Vibration

The Court found that while there was evidence that the trench consisted, at least partially, of Type A soil, the soil needed to be downgraded to Type B because it was subject to vibration.  There was no evidence provided indicating that the soil actually vibrated, but the Court found there was sufficient evidence to find that the soil was “subject to” vibration, which is all that is required.  Specifically, the Court found that the soil was “subject to vibration” because the trench was twelve feet from a lane of heavy traffic and because KS Energy was using a “large, tracked backhoe” to perform its work near the trench.  The Court specifically noted that it made no determination as to whether use of heavy equipment near the trench was sufficient in and of itself to support a finding that soil was “subject to vibration.” 

Disturbed Soils

The Court also found that the soil near the trench needed to be downgraded because it had been disturbed due to the installation of pre-existing underground utilities in the area of the trench.  While OSHA presented no evidence as to the extent the soil around the trench had been disturbed to install the utilities, the Court found that the fact that there were utilities in the area of the trench—some passing through the trench and some located approximately eight to ten feet away—supported the finding that the soil near the trench had been disturbed at one point in time and had to be downgraded.

What Does this Decision Mean?

While the Court specifically noted that it made no finding as to whether use of heavy equipment near the trench was sufficient in and of itself to support a finding that the soil was “subject to vibration,” the Court also did not find that the use of heavy equipment near the trench was not sufficient in and of itself to support a finding that the soil was “subject to vibration.”  This means that, in the future, OSHA can and, likely will, argue that use of heavy equipment near a trench is sufficient in and of itself to support a finding that “Type A” soil is “subject to vibration,” and must be downgraded. 

With regard to disturbed soils, the Court found that pre-existing utilities running through the trench at various locations and running approximately eight to ten feet from the trench supported a finding that soil had been disturbed, and that the soil needed to be downgraded in order to determine proper slope.  In the future, OSHA can argue that a trench with any existing utilities running through the trench or within eight to ten feet of the trench is sufficient to support a finding that “Type A” soil has been disturbed, and must be downgraded.

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Heads Up California Employers: A New Year Brings New Procedures for Investigating Employment Discrimination Complaints

Posted on February 14, 2013 by smithamundsen

Contributed by Carly Zuba

Beginning January 1, 2013, the California Fair Employment and Housing Act (FEHA) took on an entirely new look, thereby amending, repealing and adding to various provisions of FEHA.  These changes affect any employer with five or more employees working in California.

Notably, the new FEHA differs from the old FEHA in the following respects:

  • Elimination of the Fair Employment and Housing Commission (FEHC).
  • Creation of new authority for the Department of Fair Employment and Housing (DFEH) in enforcing FEHA and promulgating rules.  FEHC’s former regulatory and rulemaking functions were handed over to a seven-member Fair Employment and Housing Council within DFEH.  As such, employers should anticipate possible new regulations coming down the pike sometime this year.  Hopefully, some of these regulations will provide clarification to employers on some of the more complex areas of California employment discrimination law.  In addition, the council will conduct hearings on FEHA regulations and civil rights issues. Employers can participate in the rulemaking process by providing feedback and comments to the council. 
  • Authorization for DFEH to file cases directly in court.  If a discrimination claim before the DFEH is not resolved through mediation, conference, etc., DFEH can now bring a civil action against the employer on behalf of the Complainant, thereby standing in the place of the individual who originally brought the claim.  Employers will need to begin evaluating the differences between defending cases brought by DFEH versus cases brought by private attorneys. And, most significantly, the former caps on damages for claims brought to the FEHC have vanished – in contrast, there are essentially no caps on damages plaintiffs may recover in court.
  • Creation of mandatory dispute resolution procedure, before DFEH can proceed to court.  DFEH has a new Dispute Resolution Division.  Dispute resolution is now mandatory for all cases in which DFEH intends to file a civil action.  These dispute resolution services are provided to the parties free of charge.  The good news for employers and employees alike is that DFEH’s dispute resolution services boast an 80% settlement rate.
  • Ability for DFEH to collect attorneys’ fees and costs when it is the prevailing party in FEHA litigation.  If DFEH prevails in court, it can now obtain reasonable attorneys’ fees and costs, including but not limited to expert witness fees.  These fees and costs will be deposited into a Litigation Fund in the State Treasury. 

Of course, it is a bit too early to predict how these changes will truly affect the substance and volume of FEHA employment discrimination litigation.  Stay tuned, California employers…

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Updated Fair Credit Reporting Act – What Does That Mean For Employers Who Perform Background Checks?

Posted on January 31, 2013 by smithamundsen

Contributed by Heather Bailey

Not too much.  However, effective July 2011 pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, there is a new sheriff in town and its name is the Consumer Financial Protection Bureau, which will now have the rulemaking and enforcement powers over the FCRA instead of the Federal Trade Commission. 

Effective January 1, 2013, the Bureau implemented an interim FCRA rule.  The good news is, there were no substantive changes in the way employers notify applicants and employees about background checks (i.e., the consent form, pre-adverse action notice, and post-adverse action notices if any such actions are taken).   The only change employers need to worry themselves with is the new “Summary of Your Rights Under the Fair Credit Reporting Act” notice that is given to applicable applicants and employees. The revised notice can be found at http://www.gpo.gov/fdsys/pkg/FR-2012-11-14/pdf/2012-27581.pdf, page 67748 (or page 5 of the actual document).

The only other significant change for employers is they will start receiving a “Notice to Users of Consumer Reports of their Obligations” from their vendors who perform the background checks as this is now required of them.  Be on the look-out for future updates to this existing law by the Consumer Financial Protection Bureau as it does not seem like it is done with its new authority.

If you do background checks on applicants and/or employees for any reason and you do not currently have a system in place for properly getting consent or notifying employees appropriately under the requirements of the FCRA, it is imperative you speak with counsel immediately to institute a practice for compliance.

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Guidance Issued for Use of FMLA to Care for an Adult Child

Posted on January 30, 2013 by smithamundsen

Contributed by Jon Hoag

This month, the U.S. Department of Labor (USDOL) issued an Administrator’s Interpretation and Fact Sheet to clarify when an employee may take FMLA leave to care for an adult child.  In order for a parent to take FMLA leave to care for a child age 18 or older, the parent must establish that:  (1) the child has a disability as defined by the Americans with Disabilities Act; and (2) the child must be incapable of self-care.  The USDOL issued guidance to clarify the age requirement, the impact of the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) as related to the definition of a disability, and the guidance explains the FMLA leave available to parents whose son or daughter becomes disabled during military service.

The Age of Child at Onset of the Disability is Irrelevant

The guidance clarifies that the onset of a disability may occur at any age for purposes of the definition of a “son or daughter” under the FMLA.  There is no requirement for the disability to have occurred or been diagnosed prior to the age of 18.

ADAAA’ s Broader Definition of Disability Applies

The USDOL confirmed that the ADAAA broadened the scope of coverage and expanded the ADA’s definition of “disability.”  This expanded definition of “disability” is the one that applies to determine if an adult child has a “disability” for purposes of the FMLA.  The USDOL’s conclusion states very simply that the ADAAA’s expanded definition of the term “disability” will enable more parents to take FMLA-protected leave to care for their adult sons and daughters with disabilities and that are incapable of self-care.  The guidance also notes that the child’s condition must also be a “serious health condition” under the FMLA, which will almost always be the case if the condition is a disability under the ADAAA.

Given that the ADAAA’s definition of disability is broad in scope and will be met in most cases, employers should review FMLA requests to care for an adult child with special attention given to the requirement that the parent be needed to care for the child because the child is incapable of self-care.  For FMLA leave purposes, an adult child will be considered “incapable of self-care” if he or she requires active assistance or supervision in three or more activities of daily living (ADLs) or instrumental activities of daily living (IADLs).  Examples of ADLs and IADLs are:

ADLs

  • Caring appropriately for one’s grooming and hygiene
  • Bathing
  • Dressing
  • Eating

IADLs

  • Cooking
  • Cleaning
  • Shopping
  • Taking public transportation
  • Paying bills
  • Maintaining a residence
  • Using telephones and directories
  • Using a post office

FMLA Leave when Adult Child is Disabled During Military Service

The guidance also clarified that a parent of an adult child disabled during military service may be entitled to take more than the 26 workweeks within a 12-month period currently provided in the FMLA as military caregiver leave.  If the disability lasts longer than the single 12-month period, the parent may qualify for additional FMLA leave in subsequent FMLA periods to care for an adult child with a disability that is incapable of self-care.

Conclusion

As the USDOL guidance makes clear, the changes to the ADA definition of “disability” will undoubtedly allow more parents to take protected FMLA leave.  In addition to the increase in volume of FMLA leave requests, the other issue we expect to trouble employers is whether an impairment of short-term duration is a disability.  We will continue to monitor and report on these types of ADAAA cases because the EEOC’s regulations do not make it clear when impairments of short-term duration qualify as a disability.

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NLRB Recess Appointments Held Unconstitutional- NLRB EFFECTIVELY SHUT DOWN

Posted on January 25, 2013 by smithamundsen

Contributed by Julie Proscia

A three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ruled today that President Obama did not have the constitutional authority to make three recess appointments to the National Labor Relations Board (NLRB) last January. Specifically, the court held that President Obama did not have the power to bypass the Senate and make the recess appointments since the Senate was not technically in recess.

On January 4, 2012, President Obama appointed three members to the five-member Board while the Senate was away during a 20-day holiday recess. Deputy Labor Secretary Sharon Block, union lawyer Richard Griffin, and NLRB counsel Terence Flynn were appointed to fill vacancies on the NLRB during the recess.

The Obama administration has repeatedly asserted that the appointments to the NLRB were proper because of the vacation recess; however, the appeals court disagreed with this characterization, and ruled that the Senate was technically in session because it was gaveled in and out every few days as part of a tactic that created “pro forma” sessions.

If this decision is upheld, the Board would be left with just one validly appointed member, Chairman Mark Gaston Pearce — who was confirmed by the Senate. Under a 2010 Supreme Court decision, the NLRB, which has five seats, is authorized to issue decisions only when it has three or more sitting members.  If this appellate court decision stands, it could invalidate hundreds of Board decisions and would effectively shut down the NLRB.

The Obama Administration is certain to appeal the court’s decision to the United States Supreme Court and this determination will impact hundreds of cases. In the meantime, every matter that the NLRB rules on is in question and the only thing that is certain is that labor took a big hit today and the NLRB just got a little less scary…

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U.S. Supreme Court Decision Bolsters the Fact That Arbitration Provisions Are Here to Stay… For Now

Posted on December 18, 2012 by smithamundsen

Contributed by Carly Zuba

On November 26, 2012, the U.S. Supreme Court once again endorsed the arbitration of employment-related agreements.  The Court held that if a contract contains an arbitration provision and there is a subsequent challenge to the validity of the contract, the arbitrator – not a court – must hear that challenge.  In so holding, the Court reaffirmed its earlier precedent that when a contract contains an arbitration provision, the Federal Arbitration Act (“FAA”) trumps state law.

Specifically, the Court vacated an Oklahoma Supreme Court decision that voided the noncompetition provisions in two employment contracts on the grounds that they were against state public policy.  Both employment contracts contained the following arbitration clause:

Any dispute, difference or unresolved question between Nitro-Lift and the Employee (collectively the “Disputing Parties”) shall be settled by arbitration by a single arbitrator mutually agreeable to the Disputing Parties in an arbitration proceeding conducted in Houston, Texas in accordance with the rules existing at the date hereof of the American Arbitration Association.

After the employer served a demand for arbitration on two former employees, claiming that they had violated the noncompetition provisions, the former employees filed a lawsuit in Oklahoma state court seeking a declaration that the noncompetition provisions were void.  The trial court dismissed the case, finding that the arbitration provisions were valid and controlling and thus it was an arbitrator’s job to resolve the parties’ dispute.  On appeal, the Oklahoma Supreme Court rejected the trial court’s position, stating that “the existence of an arbitration agreement in an employment contract does not prohibit judicial review of the underlying agreement.”  Subsequently, the Oklahoma Supreme Court held that the noncompetition provisions were void and unenforceable under state law.

Well, the U.S. Supreme Court did not like this particular move by the state supreme court, holding that the decision ignored the U.S. Supreme Court’s precedent on the FAA.  The Court asserted that its string of decisions on the FAA forecloses this type of “judicial hostility towards arbitration.”  A pillar of the FAA’s substantive law is that allegations regarding the validity of a contract containing an arbitration provision must be resolved by an arbitrator – not by a federal or state court. 

Take-Away for Employers:  This U.S. Supreme Court decision cements the fact that when employment contracts contain arbitration provisions, employees cannot evade arbitration by seeking a judicial declaration that the contract is somehow void.  Arbitration clauses are alive, well and enforceable, folks – at least for the time being.

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Election 2012 Fallout

Posted on December 5, 2012 by smithamundsen

Contributed by Jeff Risch

Elections have consequences. Indeed, there is no question that over the course of 2013, what certain employee-side advocacy groups may not be able to accomplish through federal legislation, will likely be achieved through administrative rulemaking and judicial activism. Of significance, the National Labor Relations Board (NLRB), a 5-member administrative agency comprised of the President’s hand-picked appointees, is set to continue the push for more of a presence in the day-to-day operations of the non-union workforce; regardless of industry. For example, the NLRB is set on pushing through a mandated “Employee Rights Poster.” Although this mandate is currently enjoined by a federal court’s preliminary injunction, the legal battle is far from over. It is anticipated that the NLRB will continue to fight for this mandate which would essentially require most employers to conspicuously post to its workforce their ability to effectively form a labor union.

Additionally, the NLRB will continue to seek a quicker process to administer and hold a union election. Under current administrative processing and legal precedent, a secret ballot union election is typically commenced within 42 days from the time a labor union petitions for recognition. The NLRB seeks to dramatically reduce this time period by as much as 30 days thereby providing employers with a shorter window by which to effectively campaign against the labor organization in the run up to the election. Finally, the NLRB will continue the onslaught attack on an employer’s policies. From “employment at-will disclaimers” to “union access rules” to “social media restrictions,” the NLRB is proactively targeting employers and reviewing any policy that would have any tendency to “chill” the employees’ rights to form a labor union or complain about terms and conditions of employment. Now is the time to review handbooks and all policies with an eye on labor law even in non-union work environments.

The U.S. Department of Labor (DOL) will continue to be well-funded. The DOL has been consistently hiring auditors and investigators to crack down on:

  • The utilization of independent contractors;
  • Failure to pay overtime (especially in the context of exempt vs. non-exempt classification);
  • Non-compliance with mandated affirmative action for employers doing business with the federal government; and
  • Construction contractors’ failure to comply with federal prevailing wage requirements (Davis-Bacon & Related Acts).

Health care reform is here to stay! Mandatory compliance is already underway. Although the specifics will continue to trickle in as time passes and in the run up to January 1, 2014, employers must take note of new mandates. Of particular short-term and long-term significance is that the new full-time employee will be deemed anyone who regularly works thirty (30) hours or more per week. Employers may want to evaluate how they have defined full-time vs. part-time employment and the varying benefit plans that involve the full-time vs. part-time distinction.

The U.S. Supreme Court is set to weigh in on critical issues that will have a profound impact on harassment/discrimination issues as well as wage/hour controversies. The Supreme Court will also likely weigh in on continuous legal challenges and issues dealing with immigration and health care reform for the foreseeable future.

Be assured that SmithAmundsen’s labor and employment practice group will continue to be engaged on the frontline of such developments. In fact, our partners will soon be meeting with NLRB Chairman, Mark Pearce in Washington D.C. to gather additional perspective, and we will continue to participate in local, regional and national initiatives involving key administrative agencies.

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401(k) Contribution Limits Increased for 2013

Posted on November 6, 2012 by smithamundsen

Contributed by Rebecca Dobbs

This October, the IRS announced cost of living adjustments increasing 401(k) contribution limits.  The new limits for 2013 are as follows:                             

  2013 2012
Maximum Elective Deferral By Employee                              $17,500 $17,000
Catch-Up Contributions (age 50 and over) $5,500 $5,500
Defined Contribution Maximum Deferral (employer/employee combined) $51,000 $50,000
Employee Annual Compensation Limit for Calculating Contributions $255,000        $250,000

As many employees base their deferral percentages on the maximum elective deferral allotted by the IRS, employers should advise employees of their ability to raise this percentage come 2013. 

For those employers with SIMPLE plans (savings incentive match plan for employees of small employers), permitted employee deferrals increase in 2013 from $11,500 to $12,000.

If participation in your plan is lacking, the raised limits on contribution deferrals also provides a reason for service provider(s) to come in and conduct educational meetings designed to help employees understand the value of a 401(k) plan.  Even if your company is not in a position to provide a match, the value of earning compounded interest on employee contributions cannot be emphasized to participants enough.

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It’s Election Time: What Are the Rules Again?

Posted on October 29, 2012 by smithamundsen

Contributed by Beverly Alfon & Carly Zuba

Election day is around the corner – Tuesday, November 6th.  It is time to dust off and review company policies regarding employee time off for voting. 

The legal requirements – how much time the employer has to give, when the employee must take the time off, and whether that time off is paid or unpaid – depends on what state your company is operating in.  Here is a sampling of state laws:

Illinois (Election Code, 10 ILCS 5/17-15)

  • The employee may have up to 2 hours’ leave if work hours begin less than 2 hours after opening of polls and end less than 2 hours before polls close. 
  • It is illegal to penalize employees who take time off to vote – including any reduction in compensation due to time off for voting.
  • The employee must request time off before election day.
  • The employer may select the time taken for voting.   

California (Elections Code § 14000)

  • The employee may have an amount of leave time that, when added to the voting time available to him or her outside of working hours, will allow the employee sufficient time to vote (unless the employee is able to vote during nonworking time). 
  • The employee must provide notice 2 working days before the election if, on the 3rd working day prior to the election, the employee knows or has reason to believe he or she will need time off in order to vote.  
  • Time must be taken at the beginning or end of the work shift, whichever allows the most time for voting and the least time off from work, unless otherwise mutually agreed. 
  • No more than 2 hours of time taken off for voting shall be without loss of pay.

Florida (Election Code §104.081)

  • It is illegal for an employer to discharge or threaten to discharge an employee who votes in an election or who refuses to vote.
  • Some local ordinances require unpaid time off.

New York (Election Law§3-110)

  • If an employee does not have sufficient time to vote outside of working time, s/he may take off working time so that, when added to the employee’s available time outside of working hours, it will allow the employee time to vote.
  • Up to two (2) hours of that working time taken to vote must be paid. 
  • However, if the employee has four (4) consecutive hours to vote before or after his/her work shift, it is considered sufficient time and the employee is not eligible for such leave. 
  • The employee must provide notice of leave at least two (2) days, but not more than ten (10) days, prior to the election. 
  • The employer can designate the hours available for leave.  Leave must be given at the beginning or end of the work shift, unless otherwise agreed.

Your company policy may be more generous than these state law requirements.  Notably, some state courts recognize wrongful termination claims where an employer discharges an employee for taking time off of work to vote, so it is important for employers to be aware of their requirements under the law.

Ultimately, the goal is to avoid any violations of applicable election laws and minimize disruptions in the workplace.  To that end,  (1) be familiar with poll opening and closing times in your state so that you have the information that you need to manage time off requests for voting; and, (2) as soon as possible, remind employees of your company’s expectations with respect to time off for voting.  This reminder could take the form of a company-wide memorandum or through posting on your company bulletin board. 

If you have employees working in states outside of those mentioned above, you can access state-by-state information about voting time leave laws on this map.

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