Category Archives: employment law

Court: Employers Must Honor Employees’ Self-Described Disabilities

AutoZone Inc. just had a case remanded back to district court in favor of an employee who claimed the company failed to accommodate his severe back pain and related physical limitations. The real stickler of the case — involving a former salesman in the chain’s Macomb, Ill., store — is the appeal court’s ruling that Memphis, Tenn.-based AutoZone should have accepted his personal testimony that he was “substantially limited in the major life activity of caring for himself,” even without any medical documentation to back that particular claim up.

As this account on the site lays it out, the salesman was so debilitated by his back pain that certain kinds of activities — including just mopping the floor — could lead to swelling, spasms and sometimes even vomiting. The story’s a bit complicated, with two different medical leaves and requested medical restrictions involved, the worker’s threatened firing and then ultimate firing, and appellate judges’ rejections of many facets of the salesman’s claims — including the fact that the ADA Amendments Act that became effective in 2009 did not apply to his claims of 2003 through 2005. In fact, to understand the case fully, it’s probably best to read the appellate judges’ entire ruling.

Bottom line, though, the case is heading back to court because appeals court judges ruled AutoZone should have accepted the salesman’s testimony that he was “substantially limited” and should have accommodated him, even though no medical documentation was submitted about his specific limitations. (Both the employee and his wife testified that she had to help him dress and bathe four or five days a week.)

As the hr.blr site points out, “employees need not submit medical documentation of substantial limitations; employers must accept what the employees themselves say about their limits.”

DOL Delays Complicated ERISA Disclosure Requirements

You’re probably all aware of this, but just in case, here’s a legal alert I received Monday from the K&L Gates law firm reminding employers about the U.S. Department of Labor’s deadline extension — from July 16, 2011, to Jan. 1, 2012 — for achieving complete compliance with the new disclosure requirements under the Employee Retirement Income Security Act.

It’s not hard to discern, reading between the lines of this alert — specifically the quotes of DOL Assistant Secretary Phyllis C. Borzi — that the disclosure rule was far more complicated (dare I say confusing, overwhelming and of grave concern) for fiduciaries and HR and benefits professionals than the DOL probably imagined.

As Borzi puts it in the K&L release, the DOL “intended to have final rules in place sufficiently in advance of the July 16 applicability date to avoid compliance problems for both plans and their service providers.” But given the numerous comments the DOL received about the newly required disclosures, the DOL “now believe[s] plans and plan-service providers would benefit,” she says, “from an extension of the rule’s applicability date.”

At least it sounds like both sides are working together on this. Or at least it sounds like that’s the goal!

Just to refresh, here’s the earlier alert — from July 28 — from K&L Gates about the new disclosure requirements on service providers. The new rules make dramatic changes to an existing regulation that allows for a commonly used exemption from ERISA’s prohibited transaction rules for a broad variety of retirement-plan service arrangements. 

As K&L puts it, the amended rule makes it so the exemption “is not available unless the service provider makes detailed disclosures that describe, among other things, the services to be provided, the compensation — direct and indirect — that the service provider will receive and the service provider’s possible status as an ERISA fiduciary.”

Hopefully, the DOL will be providing much-needed additional guidance on this between now and the first day of 2012. Hopefully, service providers, fiduciaries, and HR and benefits professionals will be taking advantage of it.

Top Stories on HREOnline Last Week

These were the most-read stories on HREOnline™ last week, in case you missed any:

1. Technological Revolution: Sue Meisinger’s latest HR Leadership column:

The ease of using social-media tools, combined with recent indications that the Democratic-controlled National Labor Relations Board will be examining acceptable uses of technology by employees — and not just union employees — means that HR leaders should be taking a hard look at the issue as well.

2. Bridging the Credibility Gap: a contributed article by Sarita Bhakuni and Michelle Johnston, both with CPP.

To retain top talent, organizations need to start talking to their employees. When left in the dark, people draw conclusions which tend to be worse than reality. HR leaders should also be aware of uncharacteristic behavior by their managers, which often indicates high levels of stress.

3. Court Rules for Third-Party Retaliation Claims, by Tom Starner

A decision by the U.S. Supreme Court to reactivate a lawsuit — based on a claim that a company retaliated against one employee by firing her fiancee — should result in more lawsuits being filed by spouses and significant others. But the unanimous decision did not define just how expansive the “zone of interests” is, leaving HR leaders in the dark about where to draw the line.

4. Marketing HR Messages, by Kristen B. Frasch

Should HR leaders turn over their internal communications and engagement efforts to marketing professionals? No, say HR experts, but their organizations sure could benefit by HR learning more about the marketing mind-set.

5. Temp Salaries Rising, By Michael O’Brien

Wages for skilled, temporary workers are beginning to inch up from their low points, according to new benchmarking information. And since demand for temps — which historically precedes the demand for permanent workers — is increasing, does this mean the job market is finally improving?

Supreme Court Upholds Background Screening

In a unanimous decision issued today, the U.S. Supreme Court reversed the U.S. 9th Circuit Court of Appeals (something they seem to do a lot) and rejected an attempt to set a stricter standard for employee background screening.

The court’s opinion (PDF) in NASA vs. Nelson is here.

“The Court rejects the argument that the Government has a constitutional burden to demonstrate that its employment background questions are “necessary” or the least restrictive means of furthering its interests. So exacting a standard runs directly contrary to [previous case law], writes Justice Samuel Alito, in the opinion joined by Chief Justice John Roberts, and  Justices Anthony Kennedy, Stephen Breyer, Ruth Bader Ginsburg and Sonia Sotomayor.

Justice Antonin Scalia wrote a concurring opinion, joined by Justice Clarence Thomas. Justice Elena Kagan recused herself from the case.

Here’s HREOnline’s round-up of the cases the High Court agreed to hear this year, including this one.

Here’s some analysis from Eugene Volokh, a law professor at UCLA, who blogs at The Volokh Conspiracy.

And Soon It Will be 3-2 Decisions …

President Obama announced he will nominate (PDF) Terence F. Flynn to be a member of the National Labor Relations Board.

Flynn, now is chief counsel to NLRB member Brian Hayes, the sole Republican on the board. Previously, Flynn was chief counsel to former NLRB member Peter Schaumber and before that was in the labor and employment group at Crowell & Moring.

Bill Adams, a a labor-relations consultant with Adams, Nash, Haskell and Sheridan in Erlanger, Ky., says the appointment, should it be confirmed, will have no impact on the board or its decisions.

“Now, you will get 3-2 decisions instead of 3-1 decisions,” he says, warning that the NLRB “will reverse every decision that has been made during the eight years of the Bush administration — and then some.”

James Redeker, named by HRE as one of the top employment attorneys in the nation, recently wrote about some past and pending decisions by the NLRB for HREOnlineTM: “EFCA By the Back Door,” noting that, while the Employee Free Choice Act appears totally dead, employers should not rest easy — with the NLRB being controlled by pro-union members.

The board will be making it easier and easier for unions, Redeker writes.

Unions should take what they can — while they can, Adams says. He believes the next two years under the Obama administration could be the beginning of the end of union power.

“I think they are desperate,” he says. “Unions are so weak right now, financially and otherwise, because of their bad decisions.”

The growing outcry against the cost of public-union pensions only adds to that desperation.

Employers shouldn’t rest easy, though, Adams says. “It doesn’t mean there won’t be organizing because those are always local issues,” such as workers who “hate their employer” due to unfair treatment or poor working conditions.

A Look at 2010 Employment-Law Cases

Probably way more than you ever wanted to know about employment-based lawsuits that were decided last year is in the 676-page Seyfarth Shaw 2011 Annual Workplace Class Action Litigation Report (PDF) that was just released.

Among the tidbits:

* The top 10 private-plaintiff class-action settlements totaled more than $1.16 billion (up from $1.05 billion the year before) — and included four race-bias suits, three age-discrimination cases, two gender-bias and one disability-related class action.

* The top two: $175 million paid by Novartis (a class-action bias suit filed by 5,600 current and former female sales reps) and $70 million paid to TV writers over age 40 by TV networks, studios and talent agencies.

* The top private-plaintiff wage-and-hour class-action settlement was $86 million paid by Wal-Mart Stores — which also ranked fourth on the list, paying another $40 million.

Must be getting harder to keep those prices low when they’re paying those kinds of legal costs … and this doesn’t even include the Dukes vs. Wal-Mart employment-discrimination class-action case that was accepted by the U.S. Supreme Court. A ruling on that will probably come in the spring.

The report notes the “economic challenges and low hiring rates” fueled more lawsuits. Should the economy stay stagnant, employers can probably expect to see more litigation.

And they may see more from federal agencies as well.

Even though the Republicans (who generally are more business-friendly than the Democrats) gained many seats in the U.S. House, that probably won’t have a great deal of impact on the Obama administration’s efforts to ramp up enforcement through the Equal Employment Opportunity Commission and the Department of Labor.

Want your employment-law verdicts and settlements on a more continuous basis? Consider subscribing to Jury Verdict Research, it’s one of our sister publications from LRP.

DOL Gets Taste of Its Own Medicine

As part of its strategic plan issued in late September, the Department of Labor listed the misclassification of workers as a major agenda item. But as the agency picks up its pace in pursuing wage-and-hour violators, a short but interesting piece recently posted on the HR Policy Association website, entitled “DOL Embroiled in Its Own FLSA Overtime Dispute,” suggests that it hasn’t always set the best of examples.

In 2006, the American Federation of Government Employees Local 12 filed a grievance against the Department of Labor, accusing it of misclassifying certain federal workers. It took years of legal briefs and delays, but the parties eventually were able to come to an agreement as to what positions were incorrectly classified. Still remaining to be decided, though, are the amount of damages.

“This case shows the difficulty that any employer has when it comes to classifying workers as either exempt or nonexempt under the Fair Labor Standards Act,” says D. Mark Wilson, principal of Applied Economic Strategies in Washington and a former deputy assistant secretary of the Employment Standards Administration during the Bush administration. “It really does illustrate that even the agency charged with enforcing the law has a very difficult time making these determinations.”

It’s just one more reminder of the need to update the FLSA, Wilson asserts.

Michael Snider, managing member of Snider & Associates, a Baltimore, Md.-based law firm that specializes in pursuing alleged FLSA violations in the federal sector, hopes a dollar figure can be arrived at by next summer. (He told me about 3,000 workers are affected.)

But whatever the final outcome of the case, as it approaches a fifth year, one has to also wonder if the DOL would be showing as much patience were it not the subject of this dispute?

More on What the ABA-DOL Deal Means for Employers

I had interviewed Michael Lotito, a partner with Jackson Lewis in San Francisco, for this recent news analysis  on a new joint effort — by the American Bar Association and the U.S. Department of Labor — to help workers sue their employers.

In that analysis, Lotito was very clear about his distaste for this united front between the two entitites, expressing his concern that the new program “does not seem to include an employer-assistance component.”

“It would be much more efficient and more consistent with the underlying purposes of the statute [under which the DOL was created] to engage in conciliation as opposed to the encouragement of litigation,” he told me then.

Now, I find on the Unions & Labor Law Reform blog published by Jackson Lewis, Lotito and Roger Kaplan, a partner in the firm’s Long Island, N.Y., practice, co-authored a good bit more on this, one day after the ABA and DOL announced their collaboration at a White House ceremony in Washington.

In addition to reinforcing the same concerns from the employment-law sector that I gave voice to in my news piece — that employers are bound to experience more litigation as a result of this — Lotito and Kaplan spell out just what employers, and their HR executives, will now have to stay on top of to withstand the onslaught.

If they don’t already, they’ll have to audit their wage-and-hour practices, “looking at such issues as purported independent contractor status; the proper classification of employees, exempt or nonexempt; overtime calculations; breaks; payroll procedures; donning and doffing; and record-keeping, among others,” they write.

“In the FMLA context, proper notifications to employees, determinations of eligibiility for and duration of leaves, handling of intermittent leave issues, coordination of workers’ compensation leave, leave relating to military service, and refining policies and procedures to address abuse of leave, are among the concerns to be considered.”

There’s more. My favorite is the sign-off, intimating that it would have been nice if their co-horts and colleagues had been consulted before the ABA and DOL formalized their plans.

“The ABA leadership may have been motivated by the most exalted of reasons,” they write. “But we wonder if it consulted its member-corporate counsel, and their clients who face legal attacks all too often, before signing on as the employers’ adversary at the government’s behest.”

Most Read Stories on HREOnline™ Last Week

Here’s what our readers found most interesting on HREOnline™ last week:

 Time to Re-Engage: Top businesses for HR practices — according to an exclusive recalibration of Fortune‘s “Most Admired Companies” list — are taking employee engagement very seriously in this economy.

Pinpointing Leadership Qualities: Susan Meisinger’s latest column on the way social networking is changing the way HR leaders think of legal risks or recruiting opportunities. It also should make them think about the way they select high-potential candidates for leadership-development programs.

Modifying Preconceived Notions: A study suggests millennials are happier with their bosses than many workplace observers thought; happier than baby boomers or Gen Xers. There could be many reasons for the phenomenon, experts say.

Ensuring Parity: The most significant points about complying with the Mental Health Parity Act and an update on the COBRA benefits — as modified by the economic-stimulus act — are summarized in this month’s Legal Clinic.

HR Costs Rebounding? A new report on human-capital effectiveness finds HR costs for organizations are rebounding to pre-recession levels. But does that mean the war for talent is back on? 

Most Read Stories on HREOnline™

Last week’s most popular articles on HREOnline™  — See what you may have missed:

* Bill Kutik’s latest column: When Will They Ever Learn?

The learning management vendors, now solidly selling talent management, are bubbling these days. Cornerstone OnDemand has announced its intention to go public; Plateau has shucked off its heritage of selling installed systems in favor of SaaS; and Saba (already public) is pioneering collaboration tools for corporate use.

* Chilling Worker Speech on Facebook

The NLRB’s case against an ambulance company that fired an employee for a posting on Facebook really boils down to traditional labor law, experts say. Can a worker be fired for bad-mouthing a supervisor who denied them access to union representation? The decision will have implications for company policies on social-media use.

* A New Era for HR Perks?

Increased public scrutiny has probably contributed to the leveling off of executive perquisites, but a recent analysis shows that two-thirds of HR executives receive some form of perk. The larger the company, the more likely HR leaders would receive perks, although there were industry differences.

* HR’s Role in ERISA Regulation

New regulations have been handed down from the U.S. Department of Labor related to fiduciary requirements for fee disclosures in retirement accounts, including 401(k)s. HR can play a key role in compliance by effectively getting the new information out to employees, experts say. 

* Ch-Ch-Ch-Changes in Congress

As the United States braces itself for a Republican-led House of Representatives after the sweeping GOP victories in the midterm elections, experts weigh in on what it all means for HR.