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July 2010 Legal & Legislative Update
 

 
 


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 ADMINISTRATIVE ACTION 

Plan/Prevent/Protect Regulations Proposed.  The Department of Labor is proceeding to develop new comprehensive requirements under FLSA, OSHA, Mine Safety & Health Act and Executive Order 11246 (Contracts with the U.S. Government).  The new regulation will require employers to create detailed, comprehensive Compliance Action Plans.  Plan.  Employers will be required to have a formal plan for how to identify, avoid, prevent and remedy safety and environmental hazards, potential workplace violence, wage and hour violations, and other as yet unspecified employment law violations.  Non-management employees must be formally involved in developing the various plans.  Prevent.  The plan must be "activated." There must be a continuous process to monitor, revise the plan, and assure no legal violations.  There must be thorough assessments.  For example, the employer should do a formal analysis of every salaried/exempt position to assure it meets the FLSA requirements.  Protect.  The employer must "assure" all of the different plans' provisions are met on an ongoing basis.  The employer must file all of the plans with the DOL.  

The agencies will begin to take comments soon.  All interested parties should learn more and actually become involved in the commentary process.  Though the Plan/Prevent/Protect is intended to be comprehensive approach, it is spread among several federal agencies, each of which will develop its own regulations in its own time frame.  To find out about the OSHA part of Plan/Prevent/Protect, call 202-693-1950.  For the Mine Safety part, call 202-693-9440.  For the OFCCP part, call 202-993-0102.  For the DOL requirements part, call 202-693-0067.  As yet, there are no websites for more specific information. 

LITIGATION 

The Legal Update includes new developments and matters of interest throughout the United States.  Be aware that our various federal circuit courts reach somewhat differing conclusions.  So a federal court decision in another part of the country, and especially a different state's court decision, may not quite be "the law" in your jurisdiction.  Some courts lead the way; others lag behind.  The Legal Update lets you see the overall trends and compare them with your jurisdiction.  Wisconsin is part of the Federal Seventh Circuit (Wisconsin, Illinois and Indiana). 

U.S. Supreme Court 

Unanimous decision validates disparate impact race discrimination case on Chicago firefighter hiring process.  In an unusually rare unanimous decision, the Supreme Court reversed the 7th Circuit and validated a suit challenging Chicago's firefighter selection test as having a racially discriminatory impact against African American applicants.  Some 6,000 African American applicants are included in the class action as being denied employment due to the test.  The most interesting factor is that Justice Scalia authored the decision, finding that the test had a disparate impact.  Just a year ago, in Ricci v. DeStefano, Justice Scalia issued an individual, concurring opinion in which he opined that disparate impact class action cases are not clearly authorized under Title VII, and he would rule that none should be allowed. 

City of Ontario v. Quon.  The U.S. Supreme Court has reversed lower court rulings which had granted city employees privacy rights in use of their city-provided cell phones, in spite of a policy giving the city the authority to inspect the record of all usage.  The case had been complicated by the Finance Officer's undermining of the policy.  He had told employees that as long as they promptly paid for "overage" use of cell phone minutes, no one would look at the content.  The lower courts found the Finance Officer's representation had created an "expectation of privacy."  The Supreme Court ruled that the employees did not have an expectation of privacy, given the clear city policy.  The court emphasized the importance of having a clear, written policy on right to inspect.  The message from this case:  Have a clear electronic communications policy on rights to monitor and inspect electronic usage.  [See the June 2010 Legal Update at www.boardmanlawfirm.com for the problems of an unclear policy.]  Make sure all employees sign the policy.  Train all managers to support, and not undermine, all policies -- whether they agree with them or not.  [For more information, see the article Use and Abuse of Computers in the Workplace at the above website or request it from Bob Gregg at rgregg@boardmanlawfirm.com.  If you require assistance with your organization's policies, contact Bob Gregg.] 

Racketeering Influenced and Corrupt Organizations Act 

Employees can sue restaurant chain for immigration violation.  A group of restaurant employees can sue their employer under RICO over allegations that it hired illegal aliens in order to drive down wages and to replace higher paid U.S. citizens and legal workers.  The allegations include that the company knowingly hired illegal workers and provided them with fraudulent IDs and social security numbers.  The plaintiffs also allege retaliation and harassment when they complained to management about these practices.  Edwards v. Prime, Inc. d/b/a Ruth's Chris Steak House (11th Cir., 2010).  

DISCRIMINATION 

Age 

VP validly fired for giving company expense account credit cards to his mistress.  A 50+ year old insurance company vice president gave credit cards for his company expense account to his wife and to his mistress, both of whom then made personal purchases.  The company discovered this, demanded $15,000 repayment for unauthorized personal use, and then fired the VP.  The VP's replacement was 28 years old.  The fired VP sued for age discrimination.  The court dismissed the case, finding that the credit card misuse was a valid reason for the discharge.  McLain v. Liberty National Ins. (11th Cir., 2010). 

Refusal to participate in investigation nixes case.  An employee had filed several internal complaints of age discrimination.  He was subsequently believed to have violated a security rule, spending excessive unexplained time in the secured computer room.  He repeatedly refused to attend meetings or answer questions in the investigation of the matter and was fired.  He sued for age discrimination and retaliation.  The court found that his refusal to participate in the investigation was insubordination and a valid reason for discharge.  Whether or not the security charges were motivated by retaliation for his earlier age discrimination complaints, he had a duty to follow the employer's investigation policy.  A plaintiff can challenge unfair discipline or discharge but must usually follow the process through to the end in order to preserve the right to sue.  Wood v. Summit County Fiscal Office (6th Cir., 2010). 

National Origin/Religion 

Settlement conditions include permanent job ban and negative references for supervisor.  The EEOC has settled a religion, race and national origin case.  The case alleged that the supervisor of a Muslim employee of East Indian origin repeatedly called him "terrorist, "Osama" and "Al Qaeda."  The supervisor also used, and allowed other workers to use, racial slurs toward African American and Hispanic workers.  The Muslim worker complained, to no avail, and was fired after he complained.  The settlement provides $123,000 to the affected workers.  It also provides that the supervisor will be barred from employment by the company and will never receive a positive reference for any other jobs.  The EEOC will monitor the company for two years.  EEOC v. Pace Services LP (S.D. Texas, 2010). 

Sex 

Two "Largest Evers" 

Largest ever verdict in sex discrimination case.  In Velez, et al. v. Novartis Pharmaceuticals Corp. (S.C. NY, 2010), a jury found sex discrimination in pay, promotion and pregnancy leave in a class action Title VII case.  The $250 million in back pay and punitive damages amounts to approximately 3% of the company's annual revenue.  

Largest class action ever.  The 9th Circuit Court of Appeals has certified for trial the largest employment discrimination case in history, against Wal-Mart.  This authorizes a class of some 1.5 million women to proceed in claims covering sex discrimination in all of Wal-Mart's 3,400 stores.  Dukes v. Wal-Mart Stores, Inc. (9th Cir., 2010). 

Hospital and union pay $1 million due to union president's alleged sexual harassment of employee.  A hospital worker and union member alleged that she was sexually harassed by her supervisor, who also happened to be president of the State Employees Union.  She alleged that the harassment progressed from sexual propositions, to physical touching, to coerced sex.  She sued both the hospital and the union under the state anti-discrimination law.  An independent investigator was hired by the hospital and found evidence that the union president had harassed 15 other female employees, as well.  The hospital and union have agreed to settle, each paying part of the settlement.  The hospital also issued a statement of "regret for the ordeal" the worker endured.  Doe v. Washington Dept. of Social & Health Services and Washington Federation of State Employees (Washington Supreme Court, 2010). 

"Well, you know you are hot" was not proper supervisory response to sexual harassment complaint.  In West v. Tyson Foods, Inc. (6th Cir., 2010), an appeals court upheld a $1.2 million verdict for a female employee at a Kentucky chicken processing plant.  When she complained to her supervisor about sexual harassing comments from male co-workers, her supervisor responded, "Well, you know you are hot."  He took no action to correct the co-workers and did not report the complaint to Human Resources.  She left after five weeks.  The court found this "woefully insufficient" and that a reasonable jury could conclude the supervisor "failed to take a number of steps that would clearly be necessary to establish a base level of reasonably appropriate corrective action under the circumstances, such as speaking with the specific individuals identified, following up with West regarding whether the harassment was continuing, and reporting the harassment to others in management."   

City found liable for trying to appease sexist male workers; women win bridge painter case.  A trial court ruled that New York City "engaged in a pattern and practice of gender discrimination" by hiring only men for bridge painting jobs.  Among the judge's findings were that the City Department of Transportation lacked consistent hiring standards in the Bridge Painter Section, that less qualified men were given preference over more qualified women, and that the disparate treatment was intentional appeasement of DOT's existing all-male workforce. . . . supervisors were "well aware" of a workplace culture hostile to women, the sexually hostile environment discouraged DOT from meeting its Title VII obligation of sex-neutral hiring. . . . The city hired painters "without meaningful objective standards or consistent guidelines" and "departed from procedural regularity in multiple respects."  The case on behalf of the rejected female applicants was pursued by the U.S. Department of Justice.  United States v. N.Y. City Dept. of Transportation (S.D. NY, 2010).

Disability 

Employee's two hours per shift in bathroom is not reasonable for accommodation.  An employee prescribed medication for morbid obesity, sleep apnea and gastro-intestinal conditions had the side effect of causing him to spend an average of two hours of every eight hour shift in the bathroom.  The employer requested medical information as to whether there was an alternate medication with lesser side effects.  Once informed of the side effects, his physician advised him to stop taking the medications and consider available alternatives.  The employee continued to take the medications, with the continuing lengthy bathroom time.  He was eventually laid off, and then he sued under the Rehabilitation Act for disability discrimination.  The court ruled that an employee has a duty to explore "an equally efficacious course of treatment" which does not create significant workplace complications.  The court dismissed the case on summary judgment.  Sulima v. Dept. of the Army (3rd Cir., 2010).   

Inability to bathe is major life activity under the ADA.  A hospital nurse had a chronic back condition.  She had many absences due to the condition.  Though the hospital tried changes in her duties, she still suffered pain and absence due to the work duties.  She resigned, and then sued for "constructive discharge," alleging that the hospital did not accommodate her enough.  The hospital challenged whether she was "disabled" under the law.  However, she showed the conditions impacted the activity of being unable to bathe due to pain and limited mobility.  The court ruled this was a "major life activity", and the nurse was qualified to sue under the ADA.  Boston v. Memorial Medical Center (7th Cir., 2010).  [The court later ruled that the Medical Center did accommodate the nurse by altering her duties as reasonably as possible, given the information provided by the nurse.] 

FAMILY AND MEDICAL LEAVE ACT 

Case on FMLA for adult daughter proceeds to jury.  The FMLA has more stringent standards when an employee takes family leave for an adult child who lives independently.  One must show the adult child is "incapable of self-care."  An employee requested FMLA to care for her adult daughter's gynecological surgery that would keep her bedridden for several weeks.  The request was denied.  The employee quit in order to care for her daughter, then sued for denial of the FMLA rights.  The company's defense claimed that since the daughter was self-sufficient, living on her own with a job, she did not qualify.  The court did not agree.  The FMLA covers leave for adult family members who are temporarily disabled and cannot care for themselves for short periods.  The overall condition and pre-operation status of the adult child is irrelevant.  The case will proceed to a jury trial.  Smallcomb v. Geiginger System Services (M.D. Penn., 2010).   

 

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