In a Dramatic Turn, an Arbitrator Finds that the Substitutes Act Does Not Prohibit Municipality from Shutting Down Ambulance Services

Contributed by Julie Proscia and Carlos Arévalo, May 25, 2018

In an unprecedented fashion, an arbitrator recently issued an award limiting the scope of Public Act 095-0490, otherwise known as the Substitutes Act. In doing so, the City of Mattoon successfully fought, through SmithAmundsen attorneys Julie Proscia and Carlos Arévalo, and won the right to close their ambulance service. So why is this award important? This award now serves as a basis for municipalities to be able to have the autonomy to review their scope of services and determine which services are best for their community as opposed to the scope of services being dictated by the union.

ambulance

Ambulance driving on street with lights and sirens on

The case, involving the City of Mattoon and the IAFF, started in July 2017 when after a months’ long internal and comparative evaluation, the city determined that due to rising operational, personnel and pension related costs, its ambulance service was no longer sustainable.  Accordingly, the city adopted a resolution seeking the future elimination of its ambulance service effective May 1, 2018, the expiration of the current contract. Once implemented, ambulance services would be solely performed by area private ambulance companies. Not surprisingly, the union filed a grievance attacking the city’s resolution primarily basing its challenge on the Substitutes Act, which was specifically incorporated into the contract. The city denied the grievance and, to no avail, sought to bargain the impact of its decision with the union.

During arbitration, the union argued that the Substitutes Act specifically prohibited the city from replacing qualified firefighters or paramedics with unqualified persons, and that only those who have gone through the appointment process before the City of Mantoon’s Fire and Police Commissioners are properly qualified. As a result, the union claimed, the ambulance service could only be performed by full-time firefighters belonging to the union. The Substitutes Act has been used as both a veritable sword and a shield by unions attesting that no non-bargaining unit members can ever be given work that is currently or previously performed by the unit. If successful, the union would have made it virtually impossible to ever eliminate a service.

The arbitrator rejected the union’s arguments and found that the “Substitutes Act imposes no limitation on the elimination of ambulance services in any municipality… [but] only prevents municipal fire departments from hiring persons “not qualified” for regular appointment…to be used as a temporary or permanent substitute for a municipality’s fire department.” Further, the arbitrator continued, “the Employer is not planning to hire unqualified or uncertified firefighters to staff the ambulance service. The Employer seeks to completely eliminate the city-operated ambulance service…There is no language in the Substitutes Act preventing private ambulance companies from providing ambulance services to municipalities.”

In rejecting the union’s arguments, the arbitrator weakened unions’ typical stance that they need not engage in bargaining pursuant to the Substitutes Act. This award establishes that municipalities are not as hamstrung by the act as unions suggest, and may pursue discontinuing services if doing so presents a more viable alternative to facing a financial crisis. While impact bargaining and other procedural hurdles associated with discontinuing services will still have to be addressed, municipalities now have the latitude to determine the scope of services that are most appropriate for their community.

 

Supreme Court Rules Class Action Waivers Enforceable Ending Uncertainty for Employers

Contributed by Suzanne Newcomb, May 21, 2018

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The U.S. Supreme Court ruled this morning that employers can enforce class action waivers included in employment-related arbitration agreements. An arbitration agreement is a contract through which an employee and an employer agree in advance to resolve any disputes that may arise through binding arbitration rather than in court. The issue before the Supreme Court was whether an employer could enforce an arbitration agreement provision requiring each employee to arbitrate his or her disputes individually rather than collectively or as part of a class action. The Court ruled that so called “class action waivers” are enforceable.

For several years the general counsel for the National Labor Relations Board (NLRB) has argued that class action waivers violate Section 7 of the National Labor Relations Act which protects employees’ right to engage in “concerted activity.” The Federal Court of Appeals for the Fifth Circuit rejected this argument, but the Seventh and Ninth Circuits agreed with the NLRB prompting the Supreme Court to look at the issue.

The Supreme Court sided with the Fifth Circuit ruling that employees and employers can agree that future disputes arising between them will be resolved only through binding one-on-one arbitration. The decision provides welcome clarity to employers and their counsel and unequivocally returns a useful tool to the employers’ risk-management toolbox.

Still, the larger question of whether an arbitration agreement is right for your particular business remains. The fact that you can require employees to sign arbitration agreements does not always mean that you should. Employers who are considering asking their employees to sign arbitration agreements should seek the advice of experienced legal counsel and carefully evaluate the pros and cons of submitting various types of employment-related disputes to binding arbitration.

Arbitration agreements – like all contracts – can be challenged on other grounds. If an employer decides, after careful consideration, that an arbitration agreement best fits its needs, care must be taken in drafting and implementing the agreement to guard against allegations that the agreement is unfair or unconscionable, or that the employee’s acceptance of the agreement was the result of fraud or duress.

Can Employees Voluntarily Work During FMLA Leave?

Contributed by Allison P. Sues, May 15, 2018

66028068 - fmla family medical leave act ,fmla

“FMLA Family Medical Leave Act” with doctor in background

Last month, the United States Court of Appeals for the Fifth Circuit issued an opinion that provides a helpful reminder about the extent to which an employer may ask an employee to work during a leave taken under the Family Medical Leave Act (FMLA). In D’Onofrio v. Vacation Publications, Inc., a sales representative requested FMLA leave to care for her husband, who had suffered a major back injury. Her employer gave her two options – she could either go on unpaid leave or she could log on remotely a few times per week during her leave in order to service her existing accounts and keep her commissions. The sales representative opted to continue servicing her accounts during her leave. Later, the sales representative sued her employer and alleged, among other claims, that her employer denied her entitlements under the FMLA by requesting that she work during her leave. The court quickly dismissed this claim because the sales representative had voluntarily agreed to the work. The employer had not coerced this work and had not conditioned the sales representative’s continued employment on completing the work during her leave. The court stated that “[g]iving employees the option to work while on leave does not constitute an interference with FMLA rights so long as working while on leave is not a condition of employment.”

This case serves as an example of a black and white rule – an employer may not condition continued employment on completing work while on FMLA leave or otherwise coerce or require an employee to work while out on FMLA leave. However, there is a lot of gray area surrounding this clear rule. While an employer may not require an employee to complete full assignments or regular work during leave, nothing in the FMLA statute or regulations prohibits an employer from contacting an employee during leave with de minimis requests or short and simple questions. For example, an employer may contact an employee on FMLA leave to request a password to access a file, to locate paperwork, or to obtain a quick update on where a particular matter was left.

To best avoid interference claims under FMLA, employers should limit contact with employees who are on leave. Any communication about work assignments should be short and not require the employee to travel to the workplace or otherwise require the employee to expend significant time or effort. Should an employee voluntarily agree to work during leave, the employer should communicate that the work is not required and document the nature of the voluntary agreement. And, if the employee is out on unpaid FMLA and has agreed to complete some assignments, the employer should ensure the employee is compensated to avoid any wage and hour issues.

 

Revival of Age Discrimination Lawsuit a Warning to Employers

Contributed by Jonathon Hoag, May 8, 2018

At age 58, Dale Kleber was an out of work experienced attorney searching for full-time employment. He applied for a position as a “Senior Counsel, Procedural Solutions” that required the ability to assume complex business projects. The position description also stated that applicants must have at least 3 years but no more than 7 years of relevant legal experience. Kleber had more than 7 years of experience and he was not selected for the position. The employer filled the position with a 29-year-old applicant.

68565758 - book with chapter age discrimination and a gavel.

Book chapter opened to age discrimination and a gavel

Kleber sued under the Age Discrimination in Employment Act (ADEA) alleging the 7-year experience cap had a disparate impact on qualified applicants over the age of 40. The district court dismissed the claim finding that the ADEA’s disparate impact provision does not cover job applicants, relying on the Seventh Circuit’s holding in E.E.O.C. v. Francis W. Parker School, 41 F.3d 1073 (7th Cir. 1994). However, a divided three-judge panel of the Seventh Circuit reversed the dismissal finding that its decision in Francis Parker School had been abrogated by the Supreme Court in Smith v. City of Jackson, 544 U.S. 228 (2005). Circuit Judge William J. Bauer dissented finding the plain language of the ADEA made it clear the disparate impact provision did not apply to outside job applicants.

The Seventh Circuit recognized its holding could be seen as creating a circuit split, but a majority of the judges in active service declined to rehear the case en banc.  For now, the case has been directed back to the district court for Kleber to pursue the merits of his case.

Employers frequently use hiring programs that cater to “recent graduates” to fill entry level positions.  These programs have been addressed by the courts as generally permissible under the ADEA provided there is no implication that persons older than the normal “recent graduate” are disfavored. In other words, “recent graduate” programs are not, alone, evidence of discriminatory treatment based on age.  However, under a disparate impact theory, “recent graduate” hiring programs are risky, as there is likely a disparate impact on older applicants.  Moreover, some states frown upon such job ads and make it discriminatory under state comparable ADEA laws (e.g., New York Human Rights Law).

Employers should use caution with hiring programs that might disparately favor younger applicants – at least until the Supreme Court or Congress determines job applicants are not protected by the disparate impact provision of the ADEA.

 

Gun Violence and Changing Laws: What Employers Need to Know

Contributed by Michael Wong, May 3, 2018

YouTube’s experience on April 3, 2018, in which a non-employee with no direct link to the company entered the workplace and started shooting a firearm at employees, highlighted concern for an “active shooter” scenario in the workplace.

gavelAs a result of increased gun violence, state legislatures have been pushing gun control legislation, including laws that would ban bump stocks and high capacity magazines, raise the minimum age to buy a gun to 21, or even ban people from carrying, keeping, bearing, transporting or possessing an assault weapon. Some proposed legislation is not prohibitive, but rather increases the cost to sell guns by requiring a gun dealer licenses, requires certain security protections for gun shops, or increases the waiting time for semi-automatic firearms.

For the most part these proposed laws and ordinances regulate an individual’s access to guns and do not directly change or impact the employer-employer relationship.  However many state laws regarding concealed and/or open carry of firearms in public do implicate employer and employee rights regarding firearms. Many of these laws allow employers to prohibit firearms from being carried in buildings and on the property and premises of employers. Some of those laws also allow employers under certain circumstances to prohibit firearms in parking lots. A majority of the laws though, like Illinois’ Concealed Carry Act, require employers to allow firearms to be stored in vehicles in the parking lot, but allow employers to prohibit employees from displaying and brandishing a firearm in the parking lot, unless for the sole purpose of storing the firearm.

So, what should employers be paying attention to and doing? First and foremost, they should review their policies and procedures, as well as state and local laws, to determine how and what they want to do with regard to firearms. Regardless of whether an employer allows concealed carry in the workplace or prohibits concealed carry, there are certain policies and procedures that they should put into place. This includes specifically addressing workplace violence and prohibited uses of firearms in the workplace. Employers that allow employees to conceal and carry should also consider how firearms are stored in the workplace, limitations on carrying, and whether an application process is needed so the company knows who may be carrying a concealed weapon. For employers that wish to prohibit concealed carry or firearms in the workplace, they should consider whether any carve outs are needed to allow certain positions, such as security guards, to carry a firearm. Additionally, all employers should consider a plan to address what would occur if a weapon is brought into the workplace.  Much like a fire plan, the hope is that you never have to use it, but for safety purposes, employers should consider an “active shooter” plan and provide training or walkthroughs for employees. Likewise, employers should consider what kind of potential liability and insurance coverage they have for these situations. In some cases, workers’ compensation insurance may cover injuries related to workplace violence and in others commercial general liability insurance or other plans may be needed.

The underlining message is that employers should consider and take actions to address this issue and the possibility of workplace violence involving a firearm.

 

DOL Opinion Letter: Excessive 15-Minute Breaks Are Not Compensable

Contributed by JT Charron, April 25, 2018

On April 12, 2018, the Department of Labor (DOL) issued an opinion letter addressing the intersection between the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA) when an employee needs multiple rest breaks throughout the day due to an FMLA covered serious health condition.

employee with clock in background

Employee working with clock in background

Background

The FLSA generally requires employers to compensate employees for all time spent working. Although the Act does not require employers to provide rest or meal breaks, it does regulate whether such breaks—if provided by the employer—must be paid as compensable working time. Specifically, breaks of up to 20 minutes are generally considered primarily for the benefit of the employer and must be paid.

The FMLA, on the other hand, provides eligible employees with up to 12 weeks of unpaid job-protected leave for employees with a serious health condition. FMLA leave may be taken incrementally and, in certain circumstances, in periods of less than one hour.

Employers are not required to pay for excessive breaks

What if an employee needs to take multiple breaks during the work day due to his/her serious health condition? According to Opinion Letter FLSA 2018-19, such breaks are not compensable because they are not “primarily for the benefit of the employer.” Importantly, however, the DOL noted that an employer must still compensate the employee for breaks she would have received regardless of her serious health condition. To illustrate this point, the DOL provided the following example:

[I]f an employer generally allows all of its employees to take two paid 15-minute rest breaks during an 8-hour shift, an employee needing 15-minute rest breaks every hour due to a serious health condition should likewise receive compensation for two 15-minute rest breaks during his or her 8-hour shift.

Employer takeaway

Employers can rest easy knowing that they do not have to pay employees for unlimited rest breaks simply because they are necessitated by an FMLA-approved serious health condition. Employers should carefully administer and track any such breaks to ensure compliance with both the FMLA and FLSA—along with any applicable state or local laws (e.g., local paid sick leave laws and required paid rest breaks).

 

So Here’s What I Think About That Former Employee…

Contributed by Carlos Arévalo, April 23, 2018

Unless we have been living under a rock for the last few weeks, it is likely that we may have wondered if former FBI Director James Comey could sue President Trump for defamation. Indeed, President Obama’s former Ethics Chief, Norm Eisen, recently tweeted that the president’s “false, malicious accusation of criminal conduct is libel [published defamation] per se by Trump. @Comey could sue-& might win…”  Without weighing in on the viability of such a claim, however, it is prudent to review a few defamation principles to keep in mind.

gavelAcknowledging that laws vary from state to state, to establish a claim for defamation a plaintiff must show the following: 1) that the defendant made a false statement about the plaintiff; 2) that the defendant “published” the statement to a third party; 3) that the defendant either knew the statement was false or lacked reasonable basis to believe the statement was true; 4)  that the statement was not “privileged”; and 5) that the plaintiff was harmed by the publication of the false statement. In a per se defamation case, the plaintiff may not have to show harm because the statement is so damaging on its face, e.g. the individual is said to have “committed many crimes.”

In the context of employment, such claims typically arise in connection with an employee reference check. These kinds of claims are difficult to prove and laws generally provide certain defenses and privileges or immunities. For instance, truth is an absolute defense – if the statement is true, the claim would fail. In addition, statements of opinion will not be sufficient, even if they are negative and unkind (“slippery…not smart”). An individual making the statement may also have the protection of an “absolute privilege” or immunity, such as the president or other high ranking public officials who enjoy absolute immunity for statements made “in the course of their official acts.” Other types of statements fall under a “qualified privilege,” where the individual has a right to make the statement, such as might be found in the context of an employment relationship where a supervisor is engaged in evaluating an employee. Here, the plaintiff would have to show that the individual acted with malice to establish liability.

Of course, most employers and their agents will not enjoy “absolute immunity.” Depending on your home state, certain immunities in providing references may apply under a specific statutory framework. To minimize the incidence of such claims, however, it will be critical to establish specific guidelines to ensure consistency in handling reference requests. Designate certain individuals to respond to reference requests. Additionally, employers may want to maintain a database of how to address specific reference requests as there may be, in addition to written guidelines, specific separation agreements that will govern how references will be provided. Finally, managers and supervisors ought to be trained in proper evaluation and performance review methodology to avoid making statements that may be deemed defamatory by a disgruntled employee (e.g., sticking to the handbook policy the employee violated in a write up, as opposed to the opinion of the employee being a criminal or thief). And finally, do not use Twitter or other social media vehicles to address an employee’s performance or separation.