NLRB Rules that Graduate Assistants at Private Universities May Unionize

Contributed by Julie Proscia, August 23, 2016

Today, August 23, 2016, the National Labor Relations Board issued a 3-1 decision ruling that graduate students, who work as teaching and research assistants at private universities, are entitled to collectively bargain.

The NLRB did so by expanding its interpretation of the definition of statutory employees to include student assistants working at private colleges and universities. The decision reversed a 2004 decision involving a similar campaign at Brown University. While many graduate students at public universities are already unionized, their right to do so was covered by various state laws and not federal law.

classroomThe controversy in question involved a bid by the United Auto Workers to organize graduate students at Columbia University. The University argued that collective bargaining would intrude on the educational relationship between graduate students and their universities. While this argument was successful in the past it did not sway the current Board. Rather the Board countered that the argument “is unsupported by legal authority, by empirical evidence or by the board’s actual experience.” Moreover, the Board noted that the Act contained no clear language prohibiting student assistants from its coverage and further found no compelling reason to exclude student assistants from its protections.

Although it is not clear whether or not the expansion will adversely impact the educational experience it is clear that the NLRB is progressively gaining ground in their goal to expand labor rights one step, or in this case, student at a time.

SEC’s One-Two Punch Aims at Severance Agreements

Contributed by Beverly Alfon, August 19, 2016

In the past week, the Securities and Exchange Commission (SEC) twice flexed its muscle in the arena of employee rights – taking specific aim at severance agreements that require departing employees to waive their rights to collect whistleblower awards.


Severance Agreements: For many companies, it is standard practice to present departing employees with voluntary severance agreements that set out the terms of the termination of the employment relationship.  Often, these include a monetary payment from the employer in exchange for a waiver and release of various potential claims that may stem from the course of the individual’s employment.

whistleSEC Whistleblower Award Program:  Whistleblowers may be eligible for an award when they voluntarily provide the SEC with unique and useful information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. The purpose for the program is “to encourage whistleblowers to report possible violations of the securities laws by providing financial incentives, prohibiting employment-related retaliation, and providing various confidentiality guarantees.” See, SEC Release No. 34-64545, at p.197 (Aug. 12, 2011). The whistleblower program has awarded more than $85 million to 32 whistleblowers since the program’s inception in 2011.

SEC Rule 21F-17 provides in part that:  “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.”

Punch #1:  Blue Linx Holdings, Inc. (August 10, 2016)

The severance agreements at issue here contained the standard prohibition on the sharing of any confidential information acquired during the course of employment with the company, unless required to do so by law or court order.  The agreement also required employees either to provide written notice to the company or obtain written consent from the company’s legal department prior to providing confidential information pursuant to legal process. In addition, some of the agreements specifically required the employees to waive their right to receive whistleblower awards.

In line with prior orders, the SEC found that the confidentiality provisions violated Rule 21F-17, by impeding participation in the whistleblower program by “forc[ing] … employees to choose between identifying themselves to the company as whistleblowers or potentially losing their severance pay and benefits.” Most notably, however, the SEC also found that the waiver provision undermined the purpose of encouraging communications to the SEC, and also violated Rule 21F-17.

Punch #2:  Health Net, Inc. (August 16, 2016) 

The Health Net severance agreements explicitly stated that they did not prohibit the departing employee from participating in any government investigation – but in the same paragraph, specifically prohibited the employee from applying for or accepting a whistleblower award. The SEC found that the waiver language “directly targeted the SEC’s whistleblower program” by removing the ability of the departing employee from seeking financial incentives from the SEC and as a result, undermined the purpose of the Exchange Act and whistleblower program.


Both companies settled the SEC’s charges by agreeing to pay a monetary penalty (BlueLinx – $265,000; Health Net – $340,000). The SEC also required them to contact all former employees who were a party to the settlement agreements in order to provide a copy of the SEC order and confirm no restriction on their ability to seek and obtain a whistleblower award.

Bottom Line

Severance agreements are on the SEC’s radar. While the SEC only monitors the activities of publicly traded companies, privately held companies should also consider reviewing their severance agreements.  The attention given to these recent SEC orders has highlighted waiver and release language that employers commonly include in their severance agreements.  In this pro-employee/pro-labor climate, it would not be a difficult leap for other government agencies (e.g., IRS, DOL, EEOC and NLRB) to adopt the same logic and construe such language as an attempt to interfere with the rights that they seek to enforce.

New Employment Posters That Should Have Been Hanging Since August 1!

Contributed by Heather Bailey, August 17, 2016

Without much notice or fuss, the U.S. Department of Labor updated two employment posters late July 2016:Legal Rules

  • The Federal Minimum Wage poster applies to employers subject to the federal minimum wage.

While there was no change to the actual Federal Minimum Wage, some of the additions and revisions included nursing mothers’ rights; consequence for misclassifying an employee as an independent contractor; DOL enforcement; and tip credits.

  • The Employee Polygraph Protection Act Poster applies to most private employers.

Minor changes included updating the DOL contact information and any reference to the penalty amount for violating the Act has been removed.

If you have not posted these at your offices in locations where employees can easily see them, we recommend you do so immediately if you are subject to either of these laws. As always, check with your counsel for any state posters that may have been updated as well.

Anti-Discrimination in the Workplace: Why You Need More Than Written Policies

Contributed by Steven Jados, August 11, 2016

One of the most recent illustrations of the need for written anti-discrimination policies and training comes from a case out of a federal trial court in Michigan. In the case, McCrary v. Oakwood Healthcare, Inc., No. 14-14053 (E.D. Mich. Mar. 16, 2016), a hospital patient stated that he did not want to be treated by African-American hospital employees.

Cutting to the chase: such a request is unacceptable; the customer (or patient, in this instance) is not always right. Nevertheless, the patient’s request was noted in his chart—and the hospital did not immediately reject the request.

41403359 - diverse people and training conceptsThe Plaintiff in the case, an African-American nurse, alleged that the patient told the nurse to leave the patient’s room because of the nurse’s race. Shortly thereafter, the patient was moved to a different floor of the hospital, which was outside of the Plaintiff’s assigned coverage area.

Addressing those facts, the court ruled that the Plaintiff’s claim that she was the victim of unlawful race discrimination based on the hospital’s alleged response to the patient’s discriminatory request should proceed to trial. The court’s decision in that regard was based heavily on the absence of any written hospital policy instructing employees to reject discriminatory patient requests, along with the lack of any training to advise employees on the proper response to such requests.

Employers must be aware that the actions of patients, customers, clients, etc., can expose employers to liability for employment discrimination claims. To limit that exposure before problems arise, employers must have written anti-discrimination policies—and those policies must include specific language prohibiting discrimination by customers.

As always, having written policies is not enough. The policies must be backed up by training—and that training should specifically instruct employees how to respond to and resolve improper customer requests based on racial preferences or other characteristics protected by anti-discrimination laws. There is no better time than the present for employers to review their policies and training to ensure they are updated to address this important issue.

Illinois Mandates Providing Leave to Grieving Parents

Contributed by Nick Kourvetaris, August 5, 2016

14465190 - business man leaving the seatOn Friday, July 29, 2016, Governor Rauner approved Public Act 99-0703, the Child Bereavement Leave Act (likely to be codified at 820 ILCS 154). Without a lot of fanfare or notice, this law became effective immediately upon signature. This law requires employers with 50 or more employees (those subject to the Family and Medical Leave Act) to provide two weeks (10 business days) of unpaid bereavement leave to employees so that they can:

(1) attend the funeral or alternative to a funeral of a child;

(2) make arrangements necessitated by the death of the child; or

(3) grieve the death of the child.

Under the Act, “child” includes a biological, adopted or foster child, a stepchild, a legal ward or a child of a person standing in loco parentis.

Of note, the law provides that:

  • Bereavement leave must be completed within 60 days after the date on which the employee receives notice of the death of the child.
  • An employee is required to provide the employer with at least 48 hours’ advance notice of the employee’s intention to take bereavement leave, unless providing such notice is not reasonable and practicable.
  • An employer has the right to request “reasonable” documentation to substantiate the request (e.g., a death certificate).
  • In the event of the death of more than one child in a 12-month period, an employee is entitled to a total of 6 weeks of bereavement leave during the 12- month period.

Fortunately, there is a short window for an employee to file a claim under this Act: 60 days to file a complaint with the Department of Labor or to file a civil action for any violation.  Similarly, an employee may also file a civil action against the employer to enforce the Act. Of course, public outcry to an employer failing to give leave to a grieving parent would likely far outweigh any fine issued by the Department of Labor: (I) up to $500 for a first offense; and (II) up to $1,000 for a second or subsequent offense.

The key takeaway here is that while there is no mandatory notice or posting requirement, employers must nevertheless be aware of this law’s existence should a request be made for such leave and also to prevent unnecessary lawsuits coupled with negative publicity of failing to abide by the law’s mandates. To this end, employers may want to consider drafting a short policy pertaining to this new mandated leave and incorporating it into their Employee Handbooks to alert employees and their supervisors of their responsibilities under company policy and the law.

Additional insights on this new law:

  1. Not only must the Employer be a covered “Employer” under the FMLA, but the Employee must be an “Eligible Employee” under the FMLA to take advantage of this new leave entitlement.
  2. Employee must provide 48 hours advance notice (unless not practicable/reasonable — and it will hardly ever be, realistically, practicable/reasonable).
  3. Employer may require documentation. We advise that the Employer first search online for information relating to the death. If the Employer cannot find anything, then documentation can be requested.
  4. Vacation or paid time off benefits during this unpaid leave of absence shall not be forced on the Employee —  rather, like IL’s VESSA law, electing to use PTO benefits is something the Employee ultimately must decide. NOTE: We usually explain in policies that such PTO will run concurrently with the leave unless the Employee contacts HR or some other contact internally to say otherwise.
  5. We believe the leave can and likely should run concurrently with the FMLA when possible — it’s just good practice. NOTE:  Like IL’s VESSA law, leave taken is NOT in addition to FMLA leave (so if someone uses 12 weeks of FMLA leave for the birth of a child and if the child dies, the Employee is no longer eligible to use the 2 weeks of leave under this new law. Of course, we know of no employer who would take adverse action against an employee who loses a child and needs time away for a week or two. We also know that an employee impacted here would likely have a solid case under the ADA (the emotional pain, anxiety and/or depression that follows in these cases is overwhelming). Also, if an employee uses 2 weeks of leave under this law and the employer did NOT administer FMLA leave concurrently for those 2 weeks, and that employee later adopts a child in the same 12 month time period, then the 12 weeks of leave under the FMLA would still be available.
  6. As with IL’s VESSA law, the employer should define the 12 month period.We advise this period to be defined similar to how the employer defines it under VESSA and the FMLA — a 12 month rolling look back period of time.
  7. There is no posting requirement (yet). We are sure we’ll see one shortly from the IL Department of Labor.
  8. Finally, the IL Department of Labor will be issuing guidance on this through regulations.

Sixth Circuit Decision Reminds Us That ADA Plaintiffs Must Reconcile Social Security Benefits Finding of Total Disability to Establish ADA Failure to Accommodate Claim

Contributed by Allison Sues, August 2, 2016

On July 28, 2016, the Sixth Circuit Court of Appeals issued an unpublished decision that analyzed an Americans with Disabilities Act (ADA) failure to accommodate a claim involving an employee who had applied for and received social security benefits for her disability. This case provides a helpful reminder on how employers should handle ADA plaintiffs who allege that they can return to work with accommodation but elsewhere represent that they are totally disabled from working.

Social Securty Disability BenefitsIn Stallings v. Detroit Public Schools, Case No. 15-2428, the court affirmed the district court’s grant of summary judgment in favor of the school district on a former teacher’s failure to accommodate claim. A classroom teacher suffered from an arthritic knee and requested various, and sometimes conflicting, accommodations seeking to avoid classroom work. The school district did not accommodate her by removing classroom work from her duties and the teacher felt compelled to resign. She then applied for and received social security benefits. In her social security benefits application, the plaintiff asserted that she was completely incapable of working.

By following the United States Supreme Court’s decision in Cleveland v. Policy Management Systems Corp., the Sixth Circuit determined that a statement of total disability in a social security benefits proceeding does not foreclose a plaintiff’s ability to show that she is a qualified individual under the ADA, meaning that she can perform the essential functions of her job with or without an accommodation. The Cleveland case instructs that plaintiffs must be given an opportunity to offer a sufficient explanation for the apparent contradiction. Cleveland reasoned that an employee can both be deemed totally disabled under social security law, which does not take reasonable accommodations into consideration, and a qualified individual under the ADA, where an employee who is totally disabled from working without an accommodation may be able to return to work with accommodation.

In Stallings, the plaintiff was unable to reconcile the contradiction between the finding of total disability in her social security proceedings and her assertion that she was a qualified individual under the ADA. The plaintiff argued that she could have completed the essential functions of her job with a reasonable accommodation – a four-month leave – but she had represented to the Social Security Administration that her disability was an ongoing condition and would prevent her from working for a period of no less than twelve months.

This case serves as a helpful reminder to employers that an employee’s statement of total disability – whether in social security proceedings, a Family and Medical Leave Act request, or even a doctor’s note – may not be considered the final word on whether that employee is a qualified individual under the ADA. However, the contradiction must be overcome by the employee’s ability to return to work with an accommodation.

Penalty for Failure to File Form 5500 Almost Doubles

Contributed by Kelly Haab-Tallitsch, July 29, 2016

On July 1, 2016, the DOL issued an interim final rule that significantly increases the penalty amounts that may be imposed on plan sponsors for certain ERISA violations. The final rule ups the penalties for certain failures including failure to file an annual Form 5500 and failure to provide the Summary of Benefits and Coverage, as required by the Affordable Care Act.

calendarThese increases are the result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 whereby federal agencies were directed to adjust their civil monetary penalties for inflation each year. The increased penalty amounts will become effective Aug. 1, 2016, and may apply for any violations occurring after Nov. 2, 2015.

The new penalty amounts will affect both retirement and health and welfare plans, and some increases are substantial. Examples of increased maximum penalty amounts are below:

  • Failure to file a Form 5500: $2,063 per day (from $1,100 per day)
  • Failure of a multiple employer welfare arrangement to file a Form M-1: $1,502 per day (from $1,100 per day)
  • Failure to furnish plan-related information requested by the DOL: $147 per day, up to $1,472 per request (from $110 per day, up to $1,100 per request)
  • Willful failure by a health plan sponsor to provide a Summary of Benefits and Coverage: $1,087 per failure (from $1,000 per failure)
  • Failure of a defined contribution plan to provide participants with blackout notices or notice of the right to divest employer securities: $131 per day (from $100 per day)
  • Payment by a pension plan in violation of benefit restrictions and limitations: $15,909 per distribution (from $10,000 per distribution)
  • Failure of a pension plan to:
    • notify participants of certain benefit restrictions and/or benefit limitations
    • furnish certain multiemployer plan financial and actuarial reports upon request
    • furnish an estimate of withdrawal liability
    • furnish automatic contribution arrangement notices: $1,632 per day (from $1,000 per day)

Beginning in 2017, ERISA penalties will be adjusted on an annual basis no later than Jan. 15 of each year.

The increased penalty amounts are a reminder that it’s important for employers to understand the requirements imposed on them by ERISA and make sure they are in compliance with those requirements to avoid potential penalties at the newly increased rates.