KEY CASES

6thCir: ERISA does not preempt state electrician apprenticeship training laws

Provisions of a Michigan law that govern the training of apprentice electricians are not preempted by ERISA, the Sixth Circuit ruled, lifting an injunction preventing the state from enforcing apprenticeship laws. In 1990, the Michigan legislature had required a one-to-one ratio between trained electricians and apprentice electricians at all work sites and established that individuals could be certified in a training program only if the program met requirements established by the US Department of Labor's Bureau of Apprenticeship and Training. Despite challenges in intervening years, a district court in 2006 concluded that ERISA continued to preempt each of the two apprentice-training requirements. On appeal, however, the Sixth Circuit noted that the mandates imposed on apprenticeship training programs by the state did not affect ERISA-regulated concerns. The policies underlying the ratio and equivalency rules are "quite remote from the areas with which ERISA is expressly concerned," the court concluded (Associated Builders v Michigan Dept of Labor and Economic Growth, September 16, 2008).

7thCir: Failure to reinstate striking workers did not violate NLRA

An employer's refusal to immediately reinstate striking workers following an unconditional offer to return to work did not violate the NLRA, the Seventh Circuit held, affirming the NLRB's finding that the employer's hire of permanent replacements justified its refusal to reinstate the strikers. The fact that the employer reserved the right to terminate the permanent replacements, consistent with standard at-will employment principles, did not undermine the replacements' status as full-time, permanent employees, the appeals court concluded. The court rejected the employer's contention that the Supreme Court's decision in Belknap v Hale mandated that workers are deemed permanent replacements only if they are to be employed under "a binding contract under state law." Nor was the employer required to expressly advise the replacement employees that they would not be discharged in favor of returning workers in order to secure their status as permanent employees. Here, the totality of circumstances showed that the employer's offer of permanent employment was not illusory (United Steelworkers v NLRB, September 15, 2008).

7thCir: TRS conversation was not hearsay, admissible in ADA suit

Statements transmitted by a communications assistant (CA) in a telecommunications relay service (TRS) conversation between a job applicant with a severe hearing impairment and an employer's agent were not hearsay, the Seventh Circuit ruled, in a case of first impression for the federal circuit courts. Thus, the statements were admissible in an ADA hiring discrimination case. Using cases dealing with foreign language interpreters as a guide, the Seventh Circuit explained that translated statements are generally presumed admissible, with no need for the interpreter to testify, unless there is a showing of unreliability or a motive to mislead. In this case, the CA, even more so than an interpreter, served as a "language conduit" between the applicant and the employer's agent. The CA's transmitted statements were admissible because the employer failed to offer evidence to undermine the presumption of admissibility. The CA, whose qualifications and language skills were prescribed by federal regulations, was randomly selected by an independent TRS service (which operated under detailed federal regulations) and had no motive to mislead or distort; indeed, federal regulations expressly prohibited such action. "Denying the admissibility of statements made during a TRS conversation would strip those with hearing disabilities of a vital source of evidence available to hearing persons. Such a result is at odds with Congress's intent to make disabled persons full and equal participants in society," the court added (Germano v International Profit Assoc, Inc, September 12, 2008).

7thCir: Complaint about handling of harassment complaint was protected conduct

A hospital employee who alleged she was discharged for complaining to the hospital's general counsel that her boss did not adequately respond to her sexual harassment complaint established a prima facie case of retaliation, ruled a divided Seventh Circuit, reversing summary judgment in the employer's favor. The plaintiff complained to her supervisor about two instances of harassing conduct by her male coworker. The supervisor spoke to the abuser, despite her reluctance to do so because the plaintiff did not want to file a formal complaint. Although the harassment stopped, the plaintiff was never informed of any resolution to her complaint, so two months later, she escalated her concerns to the general counsel's office. The majority rejected the hospital's contention that the plaintiff was merely complaining about her supervisor's complaint-management skills, not engaging in protected Title VII activity, when she escalated her harassment complaint past her supervisor. Judge Posner dissented, noting the plaintiff never followed the hospital's sexual harassment complaint procedures, and the supervisor could have simply insisted that she do so. "But instead she cut the red tape and confronted the alleged harasser without requiring [the plaintiff] to file a complaint." He agreed with the hospital that her complaints to the general counsel were related to the supervisor's handling of the grievance, and not to protected activity. "This is not a case about the sexual harassment of an employee, but about the litigation harassment of an employer," Posner wrote (Magyar v Saint Joseph Reg'l Med Ctr, September 12, 2008).

9thCir: Ninth Circuit upholds Arizona's employer sanctions law

The Ninth Circuit has upheld the legality of Arizona's employer sanctions law, which suspends and revokes the business licenses of employers that intentionally or knowingly employ workers who are unauthorized to work in the United States. The Ninth Circuit is the first federal circuit court of appeals to hear a challenge on a state immigration law sanctioning employers for hiring undocumented workers. As a result, the case could have a major impact on whether these laws, which have been enacted in many other states, will survive judicial scrutiny (CPLC v Napolitano, September 17, 2008).

DDC: Federal court recognizes Title VII cause of action for transgender bias

A male-to-female transgendered job applicant was unlawfully denied a position at the Library of Congress based on sex, a federal district court has ruled, recognizing a Title VII discrimination claim based on transsexuality. The Library claimed it had a number of nondiscriminatory reasons for refusing to hire the applicant, such as concerns about her ability to obtain a security clearance (a 25-year military veteran, she already had security clearance as a male), her trustworthiness, and the potential that her transition would distract her from her job. However, the court found these asserted rationales were either pretextual or facially discriminatory. In an earlier ruling, the court had expressed reservations about the Sixth Circuit's broad reading of Price Waterhouse to mean that discrimination against transsexuals is a form of prohibited sex stereotyping, holding that "such a claim must actually arise from the employee's appearance or conduct and the employer's stereotypical perceptions," and could not be supported by facts showing the adverse job action resulted solely from the disclosure of gender dysphoria. "That was before the development of the factual record that is now before me," the court wrote last week, concluding the applicant was entitled to judgment based on a Price Waterhouse-type claim for sex stereotyping. But the court went further, ruling the applicant was entitled to judgment "based on the language of the statute itself," as the Library's refusal to hire her "was literally discrimination 'because of... sex.'" An individual who changes religions from Christianity to Judaism could not lawfully be fired by an employer that professes to harbor no bias toward Christians or Jews, but only "converts," the court noted. "That would be a clear case of discrimination 'because of religion.' No court would take seriously the notion that 'converts' are not covered by the statute." Such should be the case where a plaintiff has changed her sex and faces discrimination as a result, the court reasoned (Schroer v Billington, September 19, 2008).

STATE LAW CASES

CA: Fact issues remain on failure to accommodate or engage in interactive process

A clothes fitter for Neiman Marcus who took extended FMLA leave for seven months due to carpal tunnel syndrome, osteoarthritis, and severe joint pain raised triable issues in support of her disability discrimination claim under California's Fair Employment and Housing Act (FEHA), a state appeals court ruled, partially reversing summary judgment to the employer. The fact that the employee's physician certified that the employee was "unable to perform work of any kind" for purposes of initially certifying FMLA leave did not permit the employer to later infer that the employee was "not qualified to perform work of any nature, in any capacity, anywhere" into the foreseeable future. Concluding that the legislature intended FEHA to be construed in similar fashion to the ADA, the appeals court ruled an employer may be held liable for failing to engage in the interactive process under state law only if a reasonable accommodation was available. Fact questions remained as to whether the employee was able to perform any available vacant positions, and whether the retailer failed to reasonably accommodate her by assigning her to such a job. Triable issues also remained as to whether the employer was responsible for the breakdown in the interactive process, since it refused to provide information about open positions until the employee's work restrictions were lifted. "The EEOC Interpretive Guidance describes a back-and-forth process of sharing information about available jobs (on the employer's part) and physical limitations (on the employee's part)," the court noted (Nadaf-Rahrov v Neiman Marcus Group, Inc, CalAppCt, September 10, 2008).

MA: Expert testimony properly allowed in stock options case

A trial court properly admitted expert testimony in the case of a former employee of a student loan servicing company who failed to exercise his incentive stock option in a timely manner, the First Circuit ruled. Relying on the company's negligent misrepresentation that the options would be viable for ten years, the employee later found that he was unable to exercise his options due to a provision stipulating a three-month expiration limit in the event of departure from the company. The former employee contended at trial that, had he known of the three-month expiration, he would have exercised his option during that period. However, the employer's expert witness testified that in his opinion, it would not have made sense to exercise options at that time because of the financial risk involved. Although the employee challenged the witness' qualifications as an expert, as well as the substance of his testimony, the First Circuit concluded the district court did not abuse its discretion in admitting the expert testimony and denying the employee's motion for a new trial (First Marblehead Corp v House, 1stCir, September 8, 2008).

NY: Former NBC producer's breach of contract suit dismissed

A breach-of-contract suit brought by a producer who lost her job with NBC after she refused to produce a segment of "To Catch a Predator" because it violated ethical and company standards was dismissed by the Seventh Circuit. Although the producer was told that her contract was terminated as part of a program of layoffs, she charged that the reason given was pretextual. Affirming an Illinois district court's dismissal of the complaint for failure to state a claim, the Seventh Circuit found no breach of contract on NBC's part, concluding that the unambiguous contractual language allowed NBC to fire her in the manner it did so, and did not restrict NBC from firing her for reporting breaches of journalistic ethics (Bartel v NBC Universal, 7thCir, September 11, 2008).

SD: South Dakota recognizes claim for tortious interference against officers

Holding that under limited circumstances a claim of tortious interference with contractual relations may be brought against a corporate officer, director, supervisor or coworker, the South Dakota supreme court nonetheless refused to revive a mortgage underwriter's lawsuit against the chief operating officer of her company in which she alleged the officer unjustifiably promoted the nonrenewal of her employment contract to advance his own personal interests. Although the underwriter claimed that she was terminated because she refused to sign off on fraudulent and misleading mortgages that the officer originated, she failed to allege that the officer acted beyond the scope of his employment, the court concluded—a necessary element of a tortious interference claim. "Corporate officers cannot be considered third parties to contracts between the corporate employer and another if the actions of the officers were even partially motivated to serve employer interests," the court wrote, finding the underwriter's failure to plead that the COO acted "solely" for his personal benefit when he advocated for her dismissal was fatal to her case (Gruhlke v Bednar, SDSCt, September 10, 2008).

LEGISLATION

House passes Senate's version of the ADA Amendments Act, Bush to sign

Under suspension of the rules, the House passed the Americans with Disabilities Amendments Act (S. 3406) on September 17. The proposed legislation to amend the ADA, which passed in Congress with a veto-proof majority, will be sent to President Bush for his signature. The White House has confirmed the President's intention to sign the bill. If enacted, the measure would go into effect on January 1, 2009.

Fram talks ADA Amendments Act at NELI workshop

The ADA Amendments Act will "expand the scope" of the ADA, said David K. Fram, director of ADA & EEO services for the National Employment Law Institute (NELI), at the organization's thirteenth annual Americans With Disabilities Act Workshop, held on September 15 in Chicago. Upon passage, most courts will initially grapple with disability status issues (i.e., whether the employee's limitation affects a major life activity or is substantially limiting), Fram believes. However, he notes the aim of the legislation is for more claims to be litigated not on whether the individual has a disability, but on whether he or she is "qualified" under the Act or failed to received a reasonable accommodation.

Management lawyer advises employers to ready themselves for ADA changes

"Employers need to immediately look at their existing policies, handbooks, procedures and job descriptions to determine whether they may now be at risk for a lawsuit under the ADA Amendments Act," advises Camille A. Olson, chair of the complex discrimination litigation practice group at Seyfarth Shaw LLP. Olson provided testimony on the pending legislation before the House and Senate.

ADA amendments: more than meets the eye?

"Many have pooh-poohed the... impact" of the ADA Amendments Act, notes Michael P. Maslanka, managing partner of the Dallas office of Ford & Harrison. "They are misinformed," he contends. "The business community is hailing and supporting this law as a grand compromise. It isn't."

AGENCY DEVELOPMENTS

NLRB: Board seeks to regularize handling of cases "blocked" under Collyer, Dubo

The Division of Operations-Management has issued a memorandum to NLRB regions regarding the processing of representation cases that have been "blocked" while the blocking unfair labor practice charges were deferred pursuant to Collyer Insulated Wire and Dubo Mfg Corp, agency decisions which required parties to resolve their disputes through their bargained-for arbitration procedures. "In reviewing our processing of these cases, it has come to our attention that Regions deal with them differently," the associate general counsel noted.

ICE: Companies notified of potential debarment for employing unauthorized workers

US Immigration and Customs Enforcement notified seven companies that they will be considered for debarment from federal contracting because each has been found to be unlawfully employing persons without employment authorization. Federal Acquisition Regulations (FAR) provide that contractors may be considered for debarment if they have either knowingly hired an unauthorized worker or continue to employ an alien who is or becomes unauthorized.

LITIGATION TRENDS

Employment discrimination plaintiffs fare poorly in federal courts, study finds

Workers bringing employment discrimination suits increasingly fare poorly in the federal courts, according to a report by the Harvard Law & Policy Review, released last week by the American Constitution Society for Law and Policy. Studying data from the Administrative Office of the United States Courts, the authors conclude that they have "unearthed an anti-plaintiff effect that is troublesome." The findings will also be the subject of a Senate Judiciary Committee hearing on the federal courts scheduled for Tuesday.

IN OTHER NEWS

Executive pay issue throws a wrench in Wall Street bailout talks

A dispute between the Treasury Department and Congressional Democrats over whether to impose restrictions on executive compensation has become a sticking point in the breakneck negotiations for a $700 billion rescue plan for the financial markets, Politico reports today.

NY Governor calls for coordinated response for displaced Wall St. workers

New York Gov. David A. Paterson has directed the state's labor department to reach out to affected workers on Wall Street. The agency will dispatch its rapid response specialists to assist displaced workers in New York City's financial industry to provide workers with basic information on how to file an unemployment claim, possible training opportunities, labor market information, and workshops. "These are unparalleled circumstances that workers in New York's financial industry are facing, and they need to know that government is here to help in every way we can," Paterson said.

Swift Co faces growing dispute in effort to accommodate Muslim employees

An employer has a duty to accommodate its employees' religious practices. But satisfying such a duty can be particularly thorny when your workers must pray at a specific time—and they work on an assembly line. Manufacturer J.B. Swift is facing the thorny issue of providing sunset prayer time for its Muslim production-line employees during the holy month of Ramadan while contending with claims by non-Muslim employees that their co-workers are getting preferential treatment. (The company shuts down the entire assembly line for mid-shift breaks, meaning all workers need to take the hour off at the same time.) As The Rocky Mountain News reports, the dispute prompted some 300 workers to walk off the job at the company's Greeley, CO plant several weeks ago, and the union is grieving the discharge of those who failed to report to work the next day. Last week, the turmoil spread, as 500 workers at a Nebraska Swift plant walked off the job.

Verizon workers ratify contract deal covering more than 50,000 workers

Members of the Communications Workers have overwhelmingly ratified a three-year agreement with Verizon Communications covering more than 50,000 CWA-represented workers at Verizon and another 15,000 International Brotherhood of Electrical Workers members in the Northeast. The union announced the "breakthrough" agreement, approved by more than 90 percent of voters, on September 19. According to CWA, the deal creates more than 2,500 new union jobs, partly through the elimination of subcontracting in many job areas. It also provides for a compounded wage increase of 10.87 percent over the contract term, maintains health care for active and retired workers and increases pension bands. The agreement also extends union recognition to several hundred former MCI technicians at Verizon Business who have been seeking union representation for nearly two years.

Ralphs Grocery execs charged with criminal conduct during 2003-04 labor dispute

A federal grand jury has indicted eight former and current executives and managers of Ralphs Grocery Co, the Los Angeles Times reports, for alleged criminal conduct arising from a months-long labor dispute in Southern California five years ago. Ralphs illegally rehired hundreds of locked-out workers under false names and social security numbers in an effort to undermine the labor action, according to the indictment.

Smithfield's RICO case against UFCW is slated for trial

Smithfield Foods' RICO claims against the United Food and Commercial Workers will go to a jury after a federal district court last week rejected the union's motion to dismiss the claims. The suit is based on corporate campaign activity carried out by the union in its attempt to secure a neutrality and card-check agreement from the employer in its ongoing effort to organize workers at the company's Tar Heel, NC plant. The trial is slated to begin October 20.

Building trades union exterminates its rat

Citing the need to "make a public commitment to a new way of doing business," leaders of Buffalo, NY's 10,000-member Building and Construction Trades Council cut up the huge, gray inflatable rat that had been a regular fixture at picket lines set up by the unions. The gesture was meant to symbolize "a break with tactics of the past and a shift toward more labor-management cooperation," according to The Buffalo News.

Workers highly value paid sick leave, survey finds

Paid sick leave is a ''very important'' employee benefit, according to 82 percent of respondents in a recent survey. Paid leave ranked fourth after equal pay for equal work, a safe workplace and affordable health insurance—and ahead of retirement benefits, paid vacation and flex time. In all, 77 percent of respondents said paid sick days were a ''very important'' worker standard.

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

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.