The WIB Legal Line is our new regular feature. Employment laws are confusing. The WIB LEGAL LINE updates members on developments that could impact your business. Robert E. Gregg is a partner in the Boardman Law Firm of Madison and has long been associated with WIB. Want to read even more employment law legal updates? Visit the WIB website, WWW.WIBIZ.ORG and click on LEGAL LINE.

LEGISLATION and ADMINISTRATION ACTION

Congress passes minimum wage increase. Congress approved a $2.10 increase in the minimum wage to $7.25 per hour. The House and Senate must conform their different versions of their bills before they can be forwarded to the President.

FMLA comment period extended. The Department of Labor has extended its deadline to February 15, 2007 for submitting comments and recommendations on the FMLA regulations. Address your comments to Richard M. Brennan, Senior Regulatory Officer, Wage & Hour Division, U.S. Department of Labor, Room 5-3502, 200 Constitution Avenue, Washington, D.C. 20210 or whdcomments@dol.gov.

New EEOC guidance on EEOC-1 data. The EEOC will further clarify its new EEOC-1 form requirements. It is issuing guidance stating that “self identification” is the preferred method for gathering the required demographic data.

OFCCP has another record enforcement year. The Office of Federal Contract Compliance had a 14% increase in assessments and collections for violations of the government’s Affirmative Action/Equal Opportunity requirements. In 2006, it collected $51.5 million from federal contractors. The agency also increased its compliance audit/evaluations from 2,700 in 2005 to 4,000 last year. Government contractors should take heed.

Bureau of Labor Statistics predicts more older workers on the way. All young workers grow old, but the older employees are also staying, instead of retiring. The U.S. Bureau of Labor Statistics predicts that in another decade, 25% of the labor force will be age 55 or older (compared with a present 16.4%). The increase has several causes. The “baby boomers” population swell of the mid-1940s to mid-1950s is now age 50 to 63. People now stay healthy and active much longer. Many people cannot afford to retire.

LITIGATION

Case of the Month

The law continues to develop regarding the growing number of workers provided by temporary or leasing agencies working in someone else’s company. Sometimes they need not be counted as employees, while under some circumstances they are “joint employees.” The following case raises a new area of liability: when a company has workers from more than one leasing agency.

The clash of the temporary agencies. Workers Compensation (WC) insurance is generally the exclusive remedy for workplace injuries. One cannot sue the employer or co-workers. One can, however, sue a third party for additional damages. Most state WC laws also cover temporary or leased employees, providing that an injured leased or temporary worker cannot sue the company (or its workers) at which the injured person was “placed” or “leased.” What happens when a company uses more than one placement service and the employee of one agency injures the temporary employee of the other? The Wisconsin court decided that the WC preclusion did not apply! In Warr v. QPS Staffing Services (Wis. Ct. App., Dec. 2006), both Agency A and Agency B provided leased workers to a baking company. An employee of Agency A got his hand stuck in an industrial cake mixing machine. An employee of Agency B tried to hit “stop” but, in a panic, hit the wrong switch, speeding up the machine and causing the whole arm to get sucked in and crushed.
The injured person could only file for WC regarding the baking company and his own employer (Agency A), but he filed a standard civil suit for negligence against Agency B for its employee’s negligence. The court ruled that the WC law did not extend to third parties who also happen to have employees working at the same company; Agency B can be fully liable for anything a jury will award. So, placement agencies should take heed when a customer mixes people leased from several agencies into one workplace. [This may not only be a WC issue. Employees from one placement agency may sue other placement agencies for sexual harassment or a variety of other wrongs done by lessees from those other agencies.]

Contracts

Ambiguous agreement language nails employer. The standard rule in contract law is that any vagueness or ambiguous language will result in a decision against the drafter. Employment contracts, commissions, pay plans and a variety of other policies are often full of industry jargon, abbreviations, loose terms and ambiguity. Cases are decided by state agencies, juries and judges who never worked in your industry and have no understanding of the jargon or industry-specific terms. So employers lose lots of cases due to lack of clarity. Wookey v. Kaplan, Inc. (Wis. Ct. App., Dec. 2006) is a recent example. A company was ordered to pay six more months of salary to a departed employee because its no-compete agreement was not clear on how long it would continue to pay salary if the ex-employee refrained from working for a competitor.

Immigration

Enslavement of legal aliens. The furor over the influx of illegal alien workers has overshadowed the all-too-frequent trafficking and abuse of both illegal and legal alien workers. EEOC v. Trans Bay Steel, Inc. (C.D. Cal., Dec. 2006) is the most recent example. Skilled welders were recruited from Thailand. The workers paid large fees to a recruiting company. They received all the legal entry papers. When they got here, however, there were fewer than expected jobs. So the company that contracted to bring them in, and was responsible for their employment, released them to work for the employment agency that had arranged the recruitment. The employment agency seized their passports, kept them confined in cramped quarters with no heat, electricity or water and worked them 10 to 12 hours, seven days a week with little or no pay. One escaped and got the attention of the authorities. The “responsible” company has agreed to settle claims by paying $1 million to the enslaved workers. It claims to have had no knowledge of what the recruiting agency did, but admits it was responsible for employment of the people it signed for. The recruiting agency has ceased business and the owner is now unable to be located. Authorities are seeking him for additional charges and liability.

Discrimination

Disability

$2.2 million for failure to do individual assessment. JP Morgan Chase Company (Bank One) has settled an ADA complaint for $2.2 million. The company automatically terminated over 200 disabled employees after each had been on medical leave for six months without doing the “individual assessment” required by the ADA. The individual assessment includes communicating with the employee before discharging, a further study of whether there are any reasonable accommodations that would enable the person to return to work, a study of the specific job to see whether it would be unreasonable to continue the leave longer, and solid evidence of why continued leave is not reasonable, if that is the decision. In re Bank One (2007).

Sex

Rumor mill results in harassment suit. A female corrections officer’s sexual harassment suit has been validated to proceed to trial. Co-workers found a porn site depicting a person who resembled the female officer and then spread rumors that she was the person on the porn videos. Over a period of 19 months, staff and inmates used state computers to visit the site. They printed pictures of the look-alike and posted them in the workplace. Emails about her as a “porn star” circulated on the state system to other institutions. The state defended the lawsuit by claiming it could not be held responsible for “idle gossip” about non-employment matters spread by non-managers. However, the court saw things otherwise, finding the employer failed to effectively address the female officer’s complaints, including the fact that it failed to effectively block state employees’ computer access to the porn site for 19 months. Brandewie v. Del. Dept. of Corrections (D. Del., Dec. 2006).

$1.25 million against company and $1 million against CEO, personally, for harassment and retaliation. The CEO of a restaurant chain engaged in prolonged, severe sexual/racial harassment of the company’s comptroller, with many “graphic and unprintable remarks.” She was then fired after walking out of a meeting in reaction to some of those comments. A jury awarded damages against the company under Title VII for discrimination, and under state law for “negligent retention,” the continued employment of an executive it knew had “propensities or tendencies which could cause the type of harm sustained by the plaintiff.” The CEO was found personally liable for $1 million for intentional infliction of emotional harm. Tomczyk v. Jacks and Jills Restaurants (N.D. Ga., 2006).

FMLA

One year and 1,250 hours. Rucker v. Lee Holdon Co. (1st Cir., 2006) is a good reminder that the one year of employment and 1,250 hours in-a-year requirements for FMLA eligibility are separate. The one year does not have to be consecutive. A car salesman worked for over a year, then left and had a five-year break in employment. He was rehired and worked seven months, with over 1,250 hours. The company denied him FMLA leave because he had not yet worked a year. The FMLA’s “one year of employment” rule was met during the car salesman’s first period of service. If a person is rehired at any time in the future, the prior service counts; they then just have to put in the minimum annual hours to become FMLA-eligible.

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