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Latest Rulings & Regulations for Employers

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It’s a been a busy last few months as courts have handed down significant decisions affecting the workplace, and the various alphabet soup agencies that regulate employment have been active as well. Here are some of the highlights that employers need to know about.

Employment Discrimination Cases
Employer liability for stuff supervisors do
Employer liability often hinges on whether the alleged harasser is a supervisor and not merely a co-worker. If the harasser isn’t a supervisor, then the employer is liable if it was negligent; but if the harasser is a supervisor, then the employer may be strictly liable. Therefore, the definition of “supervisor” makes a huge difference. The United States Supreme Court, holds that a supervisor must be able to “take tangible employment action” against subordinates—for example, hiring, firing, failure to promote—even if such actions must be approved by upper management.

In a decision disagreeing with the Equal Employment Opportunity Commission (EEOC), the Supreme Court rejected the notion that unlawful retaliation could be proven if retaliation was a motivating factor in an adverse employment action, rather held that retaliation requires a but-for determination—meaning that retaliation must be the motivating factor in order for the adverse action to be unlawful.

Think you’ve had bad cases?
An African-American man was working on a tugboat was harassed by his white co-workers, repeatedly calling him a derogatory word (the worst). Threats continued, and a white co-worker told him he ought to get his derogatory word a** off the boat. Transferred to a different boat, the harassment continued unabated. The employee complained to the HR director who told him to “lighten up.” His new co-workers then beat him up, stopping only when a passing boat noticed the altercation. He called 911 and fearing for his life, jumped into the Mississippi River and swam to shore. The company fired him for abandoning his post! The case went to court and the court said, no to job abandonment. The court went on to say, not surprisingly, there was evidence of racial antagonism. The company settled out of court to avoid bad publicity. The moral? Act quickly, decisively—, and fairly—to stop bad behavior when it occurs. Otherwise, your case will make it into the media.

“Younger people are the future of the company”
And here’s another case where you shake your head in amazement. What a wonderful sentiment—that young people are our future—except when you’re firing a 65 year old employee! But that’s exactly what an incredibly unenlightened manager said, telling the 65 year old to hit the bricks. Besides which, the company owed him unpaid overtime.

In another age case, the brilliant company fired an older employee for lacking computer skills—there were just a couple of problems. First, the employee was denied computer training. And second…wait for it…people at the company had a habit of calling him “old timer.”
It’s not what you say the employees do, it’s what they actually do

So, do your job descriptions reflect reality? Are those so-called essential functions really essential? Do employees really do the tasks that are their job descriptions? A federal court reached the conclusion that actual job functions determine what’s essential, and not merely what a job description may say.

EEOC fails in suit on background checks
In a major blow to the EEOC, a suit against a convention labor company was thrown out because the EEOC couldn’t show that the employer’s policy of conducting criminal and credit background checks negatively impacted blacks and men. In fact, the court concluded that the EEOC’s expert “in an egregious example of scientific dishonesty, cherry-picked” data to try to support the EEOC’s legal arguments, in addition to which the expert committed a “mind-boggling number of errors.” It’s a 32-page opinion that just blisters the EEOC and its recent guidance on the use of background checks.

Don’t forget the FCRA
Yes, the EEOC has gotten into the business of background checks, but for many years employers have been subject to the Fair Credit Reporting Act when they use a third party to conduct background checks. It’s not enough to have a paragraph in your job application form saying we can check your background. You have to provide an opportunity for rebuttal of negative information and advise an unsuccessful applicant of his rights under the law. A large retailer has learned this lesson the hard way—it’s paying $3 million to settle a class action affecting 64,000 claimants.

The National Labor Relations Board

At-will, at risk
The Labor Board has said in two cases that typical at-will disclaimer clauses in employee handbooks that say employee at-will status cannot be changed except by written directive of senior management chills the right to form and join unions because union-represented employees generally are not at-will and can be terminated only for cause.

What an arbitrary arbitrator
You ought to be able to fire someone who commits safety violations, right? Not if you’re unionized according to one arbitrator as upheld by a federal appeals court. Since the union contract didn’t specifically say that employees would be terminated for safety violations, an arbitrator said a company was wrong (it didn’t have “just cause”) to discharge two employees who took too long to report a chemical spill. Another good reason to avoid unions.

Piercing the corporate veil
In most cases, the owners and shareholders of a corporation can’t be held liable for the actions of the corporation. But that corporate veil isn’t impregnable. In a recent Labor Board case, which went to the courts, a company owed over $1 million in backpay in a 20-year old case involving 200 claimants. One of the owners essentially looted the cash out of the business, and then told the Labor Board, sorry, the company can’t pay. The court called that an abuse of the corporate forms and ordered the owner to pay up.

Confidentiality? What’s that?
The NLRB ruled that confidentiality policies regarding intellectual property and proprietary information are acceptable but not policies prohibiting employees talking about “personnel”—even with a disclaimer in the policies stating that the policies were not intended to interfere with statutory rights—and even though the Board concluded the policies were not in response to union activity.
Fair Labor Standards Act and the DOL

Independent contractors
Roughnecks and crane operators are independent contractors? No, says the United States Department of Labor in recovering $687,000 in unpaid overtime for a group of workers. Even though the workers sometimes work as much as 80 hours in a week, they received only straight time for all the hours worked. As DOL noted, the actual relationship counts, not some label applied by the employer, or giving workers 1099s instead of W-2s.
There’re some things you just can’t do
And one of them is waive your rights under the Fair labor Standards Act. This is not new law but a recent case reminds us that employees cannot agree to forgo overtime if they are entitled to overtime. It cost a sandwich franchisee $25,000 in backpay to 53 employees to find out the hard way. That’s a lot more than it would have cost to, say, get legal advice on how to correctly pay your people.

Family and Medical Leave Act

How many times has this happened to you?
You ask an employee to justify a request for FMLA leave with a letter from the employee’s doctor, and you get back a scribbled note that just says the employee is being treated for some ailment but with no further information about the need for leave, duration, etc. Well, finally, a federal court has said that such a merely “conclusory” letter from a doctor doesn’t satisfy the employee’s obligation to provide specific information an employer legitimately needs for certification of the leave request.

FMLA is never easy
According to the U.S. Department of Labor, a child under 18 is a “son or daughter” under the FMLA regardless of whether the child has a disability. An employee can get FMLA leave for a child under 18 just by demonstrating a serious health condition. But for FMLA leave to care for an adult child—over 18—the employee has to also show that the child is incapable of caring for himself or herself because of a physical or mental disability as defined by the ADA and a serious health condition as defined by the FMLA which requires care—all four criteria must be met.

Hiring individuals with disabilities and hiring veterans—new rules for federal contractors
New rules have been issued for government contractors with affirmative action plans requiring efforts to hire veterans and the disabled. More information can be found at but employers should consult their attorneys.

Brooke Duncan

Posted In: Government, Legal, Management

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