KEY CASES

1stCir: Question remains as to whether employer ever implemented accommodation

Although "an extremely close question," a fact issue remained as to whether the Department of Veterans Affairs provided reasonable accommodations to a nurse with juvenile poliomyelitis, a condition which limited her ability to walk, the First Circuit ruled. The nurse could not engage in excessive walking without facing an inordinate amount of pain and worsening her condition. Although the VA did take part in the interactive process and "made some effort to work with [the plaintiff]," agreeing to limit duties that required her to walk, in reality the nurse was walking one or two miles a day on rounds after being pressured by her supervisors to do so. Upon returning from leave, she was asked to perform tasks she was physically incapable of doing, "and in direct contravention of her submitted medical certificates." While an employer is not required to provide an employee with an accommodation of her choice, the appeals court noted, "once an employer agrees to provide a particular accommodation, it must act reasonably in implementing said accommodation." Here, there was evidence that the VA never took action to implement the accommodations in the first place, and failed to respond appropriately when it became evident that the accommodations provided to her were insufficient, the appeals court found. Summary judgment to the federal employer on the nurse's Rehab Act claim thus was reversed (Enica v Principi, October 6, 2008).

2ndCir: SOX whistleblower claims are arbitrable

Claims brought under the whistleblower protection provisions of the Sarbanes-Oxley Act are arbitrable, the Second Circuit has held, affirming a lower court's dismissal of a suit by the former director of internal audit for an insurance company in deference to an enforceable arbitration agreement between the parties. The former employee sued, alleging the company fired her in an attempt to prevent her from bringing attention to deficiencies in the company's internal controls over financial reporting. The appeals court rejected the employee's assertion that arbitration is inconsistent with the Act's purpose of public disclosure of corporate fraud, citing the strong public policy in favor of arbitration and concluding that, although the broad purpose of SOX is to strengthen the integrity of capital markets, the purpose of the whistleblower provisions of the statute is to provide a private remedy for an aggrieved employee. Given that a whistleblower need not prove the corporate defendant committed fraud in order to prevail on her retaliation claim, the loss of a public forum in which to air such allegations does not undermine the purpose of the whistleblower provisions. Moreover, the court noted, "both Houses of Congress, acting separately, rejected versions of SOX that would have prohibited mandatory arbitration of whistleblower claims." (Guyden v Aetna, October 2, 2008)

7thCir: EEOC pleads wrong disability, loses case against restaurant

The EEOC failed to show that a restaurant violated the ADA when it refused to hire a job applicant for a waitstaff position because she was HIV-positive, held a divided Seventh Circuit. Without addressing whether HIV and AIDS were the same under the ADA or whether being HIV-positive (as distinct from having AIDS) was a disability under the Act, the Seventh Circuit held the district court did not abuse its discretion when it disregarded the EEOC's affidavits claiming that the applicant had AIDS, rather than HIV, as the pertinent disability. The EEOC waited until its response to summary judgment, one month before trial, to disclose that the applicant had AIDS. "Given the symptomatic variances in the different stages of this disease, whether an ADA claimant was HIV-positive or had full-blown AIDS at the time of the alleged discrimination is highly relevant to this foundational aspect of the claim," wrote the Seventh Circuit, affirming the district court's holding that the applicant's HIV-positive status was not a disability under the Act (EEOC v Lee's Log Cabin, Inc, October 6, 2008).

7thCir: Appeals court affirms grant of 10(j) injunction to NLRB

The Seventh Circuit has affirmed a district court's grant of a Section 10(j) injunction against a construction materials supplier pending resolution of unfair labor practice charges against it, including allegations that the employer unlawfully discriminated against union supporters, unilaterally changed preexisting policies granting work assignments based on seniority, and implemented an evaluation procedure for assigning certain work without bargaining with the union. The appeals court concluded the lower court did not clearly err in finding an award of damages years down the line would be an inadequate remedy in the case at hand, and that employees would likely "suffer substantial and irreparable harm if [the employer] is allowed to continue its effort to subvert the Union until the case is resolved by the NLRB." Nor was the injunction at issue here overbroad. It prohibited only those actions that are similar to the violations already allegedly committed by the employer, and it does not encompass unrelated violations of the Act (Lineback v Spurlino Materials, LLC, October 8, 2008).

10thCir: Fact issue exists as to whether two pharmacists were paid on salary basis

Sufficient evidence was presented to establish a fact issue as to whether the base hours of two Wal-Mart pharmacists—and correspondingly, their pay—had been changed so frequently that they were, in effect, being paid as hourly employees, and thus failed to satisfy the salary-basis test in order for the FLSA's professional exemption to apply to them. Accordingly, the Tenth Circuit reversed summary judgment to the retailer on the two pharmacists' overtime claims. However, the appeals court affirmed summary judgment as to the remaining 571 pharmacists in the plaintiff class, since evidence showed these pharmacists experienced very few, if any, changes in their base hours (and thus pay) and so did not defeat the FLSA exemption for salaried professionals (Archuleta v Wal-Mart Stores, Inc, October 6, 2008).

11thCir: Consent decree barred successor from imposing health insurance contribution

A 1993 consent decree that obligated a successor employer to provide retirees of a predecessor company lifetime health care coverage—the "same benefits" provided by the predecessor—precluded the successor employer from imposing a $50 per month contribution requirement from retirees, the Eleventh Circuit ruled. The term "benefits" in the consent agreement refers to the total economic value of the benefits plan, and imposing a contribution requirement would effect a reduction in benefits, in violation of the agreement. The appeals court rejected the employer's alternate characterization of the contribution requirement as merely a "funding decision" that did not modify or reduce the benefits provided. "Because the level or existence of an employee contribution... directly affects the value of the benefits received, we hold that not having to pay a contribution is a benefit of a health care plan," wrote the appeals court. Thus, a district court abused its discretion in denying a retiree's request for a declaratory judgment that he was entitled to the contractually provided healthcare benefits without having to make a monthly contribution (Frulla v CRA Holdings, September 30, 2008).

NDAla: $1 mil punitive damages nixed, manager's conduct not imputed to employer

Setting aside a jury's million dollar punitive damages award, a federal district court in Alabama refused to impute to an employer a plant manager's racially discriminatory conduct in passing over an African-American employee for promotion. For the question of punitive damages to reach a jury, a plaintiff must show that a defendant employer acted with "actual malice or reckless indifference" to the plaintiff's federally protected rights. Here, there was enough evidence to sustain a finding of race bias on the part of the manager. The evidence was also sufficient for the jury to conclude that the manager's actions were "malicious or recklessly indifferent" to the employee's known federally protected rights, since the manager received federal antidiscrimination training from his employer. But the manager, who was just one of many plant managers, was not far enough up the corporate hierarchy to impute his actions to his employer, which had plants in 80 countries around the world. Moreover, members of higher management were never informed of the manager's discriminatory conduct, nor did they approve his behavior in any way. Additionally, the employer had a "good faith" defense since the manager's conduct violated the employer's several discrimination policies (Hithon v Tyson Foods, Inc, September 30, 2008).

STATE LAW CASES

CT: State's high court overrules ban on same-sex marriages

"Gay persons are entitled to marry the otherwise qualified same sex partner of their choice," a sharply divided Connecticut Supreme Court ruled last week, finding the state's statutory prohibition against same sex marriage violates the Connecticut constitution. Applying heightened scrutiny to sexual orientation as a quasi-suspect classification for equal protection purposes, the high court found the state "has failed to provide sufficient justification for excluding same sex couples from the institution of marriage." The trial court erred in determining that the distinction between civil unions and marriage in Connecticut was merely a difference in labels, the high court found. Rather, in consigning same sex couples to civil unions, the legislature had "relegated them to an inferior status, in essence, declaring them to be unworthy of the institution of marriage." Three separate dissents rejected the majority's application of intermediate scrutiny to sexual orientation as a classification (Kerrigan v Commissioner of Public Health, ConnSCt, released October 10, 2008).

OH: No wrongful discharge claim based on unverified breath alcohol test

A purchasing agent who was terminated after a work-related breath alcohol test rendered a positive result could not sue for wrongful discharge in violation of public policy, even though his employer failed to verify the positive result through confirmatory testing, an Ohio appeals court ruled. The employee based his public policy claim on the fact that drug-testing procedures specified by administrative rules under a workers compensation program required verification testing in order to "ensure the integrity of the testing." Acknowledging that the rules do require a confirmatory evidential breath test, the court found that this requirement merely specifies the procedure employers must follow to accomplish the goals of the drug-free workplace program. The prescribed method of testing, in and of itself, manifests no clear public policy, the court stated (Hout v Jess Howard Electric Co, OhioCtApp, September 30, 2008).

PA: No private action for damages exists against private employer under state's ERA

An employee could not pursue her damages claim for sex discrimination because the Pennsylvania Equal Rights Amendment (ERA) does not provide for a private right of action for damages against a private employer. Deciding this issue of first impression, the court concluded the state supreme court defined the ERA's scope of application to "gender-based discrimination by state or local entities or officials, including through statutes, official policies and the rulings of its courts and administrative agencies" (court's emphasis). Finding nothing in the text of the ERA to suggest that it was intended to regulate the private conduct of citizens, the court concluded it had no basis on which to "fabricate a new cause of action" for sex discrimination. Even if it were "so inclined" to create such a cause of action, continued the court, "we do not believe that an intermediate appellate court is best situated to analyze the diverse policy considerations" that would be involved. Because the employer was a private entity and the alleged discriminatory conduct was not "perpetrated by either a state or local government entity or official or under the auspices of a discriminatory statute, rule or regulation," the employee had not stated a claim cognizable under the ERA of the Pennsylvania Constitution (Dillon v Homeowner's Select, Affinity Insurance Services, Inc, PaSuprCt, September 29, 2008).

WA: Public policy protects domestic violence survivors and their families

The state of Washington has a clear public policy of protecting domestic violence survivors and their children and holding domestic violence perpetrators accountable, a divided Washington supreme court ruled, sending a domestic violence victim's lawsuit against her employer back to a federal trial court to determine if the victim was wrongfully discharged when she took time off to move her children out of an abusive home and into a shelter. Noting that domestic violence has been treated as a serious crime against society and that public policy need not specifically reference employment, the court determined that "Washington has unequivocally established, through legislative, judicial, constitutional, and executive expressions, a clear mandate of public policy of protecting domestic violence survivors and holding abusers accountable." Although the court's decision was in response to a certified question from the trial court, which asked whether the state had a clear policy forbidding employers from firing employees for missing work due to domestic violence, the lead opinion reformulated the question. Writing in dissent, Justice Johnson noted that "The fact that four opinions have been issued—and that we have decided to reformulate the question to avoid the issue entirely—dictates the answer that no such `clear' mandate exists." According to the dissent, "This court must conduct its analysis within the boundaries of the specific federal inquiry, deciding if a clear public policy currently exists and not whether a clear public policy should exist" (Danny v Laidlaw Transit Services, Inc, WashSCt, October 2, 2008).

AGENCY DEVELOPMENTS

NLRB: GC advises regions on handling "reasonable search for work" evidence

NLRB General Counsel Ronald Meisburg issued GC Memorandum 09-01 on October 3, addressing the changed burden of producing evidence regarding employees' efforts to find interim employment following an unlawful discharge in light of the agency's ruling in St. George Warehouse. Where a discriminatee has conducted a reasonable search for work, Meisburg stated, the region should be prepared to rebut the adequacy of any evidence submitted by the respondent in meeting its burden that substantially equivalent jobs were available and to produce evidence demonstrating that the discriminatee conducted a reasonable job search.

EEO-1 report filing deadline extended to October 15

The filing deadline for the 2008 EEO-1 report, otherwise known as the employer information report, has been extended from September 30 to October 15, according to a notice posted on the EEOC website. The extension was necessary due to periodic problems with the server that hosts the online filing application.

EEOC: Legal counsel, two commissioners weigh in on proposed HHS rule

In separate written comments, the EEOC's legal counsel and two of the agency's commissioners have expressed concerns about the relationship between the Department of Health and Human Service's proposed provider conscience regulation and Title VII's protection against religious discrimination in employment and the potential confusion resulting from the imposition of a second religious bias standard for healthcare workers. The proposed HHS rule overlaps with Title VII, wrote EEOC legal counsel Reed L. Russell. "Because of this overlap, the employment discrimination aspect of the proposed Provider Conscience Regulation is unnecessary for protection of employees and applicants, is potentially confusing to the regulated community, and will impose a burden on covered employers, particularly small employers," Russell advised.

EEOC: Aaron Rents, Inc faces agency suit alleging sexual assault by manager

Aaron Rents, Inc. violated Title VII by subjecting a 20-year-old female employee to a sexually hostile workplace, including physical and verbal harassment, the EEOC alleges in a recently filed lawsuit. The agency claims the general manager of the company's Fairview Heights, Illinois store made sexually explicit comments and requests for sex on a daily basis to a young customer service representative and repeatedly attempted to force her to perform sexual acts with him. Ultimately, the manager sexually assaulted the employee when the two were alone in a warehouse, and resigned after the police were called, according to the EEOC. The suit seeks backpay and compensatory and punitive damages, as well as other injunctive relief.

EEOC: St. Louis Rams sued for disability bias in discharge of assistant trainer

The St. Louis Rams NFL team is on the receiving end of a disability discrimination lawsuit filed by the EEOC. The agency alleges that Ron DuBuque, an assistant trainer with the team for 11 years, was fired in violation of the ADA. DuBuque had epilepsy during his entire employment tenure with the Rams, and successfully performed his job until the Rams' management, in June 2006, claimed he was a medical liability and posed a threat to his own safety and that of coworkers, the EEOC asserts. "It is unlawful for employers to fire workers because of disability-based myths, fears and stereotypes," said James R. Neely, Jr., the EEOC's St. Louis district director.

USCIS: H1-B visa fraud found, according to USCIS report

The H1-B visa program is fraught with fraudulent activity, according to a report released by US Citizenship and Immigration Services to members of the Senate Judiciary Committee. Fraudulent activity was identified ranging from forged documents, "shell" companies providing nonexistent addresses, and beneficiaries misrepresenting their H1-B status. The report indicated that violations are so commonplace that one in five visas are affected by fraud or a "technical" violation.

LEGISLATION

Federal statutes of limitations are inapplicable to USERRA claims, new law clarifies

President Bush last week signed into law the Veterans' Benefits Improvement Act of 2008, which clarifies that there is "no limit on the period for filing" a complaint or claim under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The new law, S. 3023, also reforms the USERRA complaint process and modifies and expands the reporting requirements with respect to enforcement of the statute. The Department of Labor has long taken the position that no federal statute of limitations applied to actions under USERRA. However, there have been federal court decisions ruling that the four-year uniform and general statute of limitations (for federal causes of action not governed by an explicit statute of limitations) applies to USERRA claims. To resolve this apparent discrepancy, the new law clarifies that federal statutes of limitations are inapplicable to USERRA.

Pennsylvania passes mandatory overtime law for health care workers

Pennsylvania Gov. Edward G. Rendell signed into law on October 9 legislation that prohibits mandatory overtime for health care workers except in certain circumstances. H.B. 834, the "Prohibition of Excessive Overtime in Health Care Act," provides that, except in certain circumstances, a healthcare facility cannot require an employee to work in excess of an agreed to, predetermined and regularly scheduled shift. Overtime can be mandated when an unforeseeable emergent circumstance occurs and the assignment of additional hours is a last resort; the employer has exhausted reasonable efforts to obtain other staffing; and the employer gives the employee an hour to arrange for child or elder care or care of a disabled family member. The law is to take effect July 1, 2009.

ELECTION ‘08

Election outcome will impact employment law, corporate counsel say

Six out of ten corporate counsel expect this year's presidential elections to have an impact on labor and employment laws at their companies, according to a survey of workplace issues by the Association of Corporate Counsel, with the assistance of Jackson Lewis LLP.

ERISA, the states, and the candidates

No vitally important employee benefits issue is as hidden in the presidential candidates' health reform proposals as is ERISA preemption, says CCH benefits analyst Ross Spencer, in our second installment of Spencer's closer look at the benefits platforms of Sens. John McCain (R) and Barack Obama (D).

IN OTHER NEWS

Boeing, Machinists to pursue mediated talks

Senior officials from Boeing Co and the International Association of Machinists met last week to review the unresolved issues between the company and the union that have led to failed contract negotiations and a prolonged walkout by some 27,000 workers that has entered its second month. The parties will call for federal mediators to step in to help resolve the dispute.

Anheuser-Busch, Teamsters reach tentative agreement

Anheuser-Busch, Inc. and the International Brotherhood of Teamsters have reached a tentative agreement on a five-year contract covering more than 5,000 full-time employees at the company's 12 US breweries. The tentative deal includes wage increases in each year of the contract, and renewal of the company's contractual commitment to keep its US breweries open for the life of the contract.

Auto workers ratify contract with Mitsubishi, trade wages for job security

Members of the United Auto Workers have approved a new bargaining agreement with Mitsubishi Motors North America after two days of voting and months of negotiations between the union and company. The contract, which covers 1,200 workers and runs through August of 2012, calls for wage cuts for current employees and a two-tier wage structure for new hires. The automaker in turn pledged job security, agreeing it would not lay off any current workers for the life of the deal.

Starbucks settles third unfair labor practice complaint with NLRB

Starbucks Corp has settled a NLRB complaint with an employee who alleged he was fired for promoting union activity, the Minneapolis-St. Paul Star Tribune reports.

World Trade Center rescue workers face chronic mental health impairments

Workers who participated in the rescue, recovery, and cleanup of the September 11, 2001 World Trade Center attacks have chronic impairment of mental health and social functioning, as well as psychological distress levels that substantially exceed the population norms, according to a recent study of 10,132 workers which found post-traumatic stress disorder in World Trade Center workers similar to those encountered in US war veterans returning from Afghanistan.

Employers fail to measure return on investment for international assignments

Employers are failing to measure comprehensively their costs and return on investment for staff sent on international assignments, according to international benefits consultant Mercer, which found, based on data from more than 200 multinational firms, that companies have only a fair estimation of the cost of their international assignments.

SHARE YOUR THOUGHTS

WorkWeek welcomes your feedback. Share your thoughts with our editor: Lisa.Milam-Perez@wolterskluwer.com.

Corporate Counsel Suite™

Fast answers, trusted analysis and time-saving resources.

This new online platform is designed exclusively for corporate counsel to provide fast answers and time-saving resources.

State Employment Law Compare

Quickly & easily compare state employment laws side-by-side

This new innovative tool uses "Smart Chart" functionality to instantly compare multiple state laws, all at the same time on the same chart.

Editor

Lisa Milam-Perez, JD

Dedicated to the memory of J. Jeffrey Reinholtz, J.D.

Director of Editorial and Content Development

Business Compliance, CCH Incorporated & Aspen Publishers

1957—2008

About CCH WorkWeek

This weekly newsletter provides corporate counsel and law firm practitioners with need-to-know employment and labor law information in a timely, yet manageable manner. Benefit from news and information in a broader context, with deeper analysis of recent developments and corresponding trends. Delivered to you every Monday, CCH WorkWeek offers timely coverage of breaking legislative developments, regulatory activity, state law changes, key case law and expert commentary by CCH editors.