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Shawe & Rosenthal - E-Update, March 2013

Submitted By Firm: Shawe & Rosenthal, LLP

Contact(s): Elizabeth Torphy-Donzella, Gary L. Simpler

Author(s):

Fiona W. Ong and Teresa D. Teare

Date Published: 3/29/2013

Article Type: Legal Update

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Threats by a Union Member Are Not Protected Activity

In NLRB v. Arkema, Inc., the U.S. Court of Appeals for the Fifth Circuit found that, contrary to an order of the National Labor Relations Board (NLRB), an employer’s discipline of a pro-union employee who threatened a co-worker and the employer’s issuance of an anti-harassment memo did not invalidate an election in which employees voted to decertify the union.

Facts of the Case: The employer’s production and maintenance employees were represented by a union. Some of those union members began a campaign to decertify the union, meaning that they sought to remove the union from representing the production and maintenance employees. During the campaign, a pro-union employee threatened a new female employee that male employees would not come to her aid in an emergency if she did not support the union. The female employee, fearing for her safety, reported the threat to management and the pro-union employee was disciplined. The employer also issued a memo to all employees about its anti-harassment policy, encouraging employees to report harassment, intimidation or threats to management or the NLRB’s regional office.

An election was then held, in which a majority of employees voted to decertify. Management immediately notified employees that the collective bargaining agreement no longer existed, and began implementing changes to the terms and conditions of employment. The union filed an election objection and unfair labor practice charge. An administrative law judge (ALJ) found that the warning and memo were violations of the National Labor Relations Act, and that these illegal actions invalidated the decertification election. The NLRB affirmed the ALJ’s order, and the employer petitioned the federal appellate Court for review.

The Court’s Ruling: Where there is a claim that the employer unlawfully disciplined a union supporter, the employer bears the burden of showing that it had a good-faith belief that the employee engaged in misconduct. The Court, unlike the NLRB, found that the employer had a good faith belief that the pro-union employee sought to threaten and intimidate the other employee. The Court rejected the NLRB’s conclusion that the pro-union employee’s conduct was simply a persistent effort to persuade. As the Court stated, threats are not protected under the NLRA.

The Court also disagreed with the NLRB that the anti-harassment memo could be construed to prohibit protected union activity. It found that the memo was not sent in the context of unfair labor practices, and that instructing employees to alert management if they felt harassed was not reasonably translated into prohibiting protected activity.

Impact of this Case: The line between threats (activity which is not protected by the NLRA) and persistent or aggressive efforts to persuade is often difficult to gauge. The NLRB often rules that activity that is harassing in the eyes of the so-called victim is simply lawful and persistent persuasion. In this case, the Court agreed with the employer that the NLRB went too far.


The Patient Protection and Affordable Care Act Waiting Period

The Departments of Health and Human Services, Labor and Treasury recently issued proposed guidance on the Affordable Care Act’s prohibition on waiting periods in excess of 90 days.

For plan years beginning on or after January 1, 2014, employees and dependents who are otherwise eligible for coverage under an employer’s group health plan cannot be required to satisfy a waiting period (the time that must pass before coverage can become effective) longer than 90 calendar days, including weekends and holidays. Notably, the proposed regulations make clear that a 3 month waiting period is not the same as 90 days.

While coverage will need to be available within 90 days to comply with the rule, the plan will not be penalized if an employee delays his or her election beyond the 90 day waiting period. Also, plans can still have other substantive eligibility criteria as long as they are not designed to avoid compliance with the 90-day limit.

The 90-day clock does not start ticking at an employee’s hire date, but when the employee satisfies those eligibility criteria. For example:

• Coverage can be conditioned on being in a job classification or completing a certain training, and begin within 90 days of satisfying that eligibility requirement.
• Coverage can be conditioned on completing enrollment forms, if the employee has the ability to complete the forms and start coverage within 90 days.

At this point, the Departments have not indicated when final regulations on this topic will issue. They have stated, however, that employers may rely on the proposed regulations and be deemed in compliance with PPACA at least through the end of 2014.


TAKE NOTE

ADA and FMLA. A federal court in Alabama held that an employer had no duty under the Family and Medical Leave Act (FMLA) to restore the employee to her job with an accommodation under the Americans with Disabilities Act (ADA). In Brown v. Montgomery Surgical Center, the employee sought to return to work after FMLA leave and provided a doctor’s note with lifting and standing restrictions. The employer refused to reinstate her without a full release. She then sued under the FMLA and ADA. The employee’s ADA claims were dismissed as untimely filed. With regard to her FMLA claims, the Court observed that the right to reinstatement under the FMLA is not absolute, and held that an employee who is unable to perform an essential job function is not entitled to reinstatement. The FMLA does not require an employer to provide a reasonable accommodation to enable the employee to return to work at the end of FMLA leave. The reasonable accommodation obligation arises from the ADA, not the FMLA.

More on the ADA and FMLA. In another case exploring the interaction of the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA), a federal court in Pennsylvania held that an employee was not entitled to reinstatement under the FMLA to a pre-leave position that had been given her as an accommodation for a temporary disability under the ADA and to better accommodate her need for intermittent leave under the FMLA. In Karaffa v. Montgomery Township, a pregnant employee who was usually assigned rotating morning, evening and overnight shifts was reassigned only to morning shifts as an accommodation for her gestational diabetes. Following her FMLA leave, the employee sought to return to the morning shift assignment. The Court noted that she had been assigned the shift in connection with her need for intermittent FMLA, and thus it was not a position she held “when leave commenced.” Moreover, under the ADA, this morning shift assignment was an accommodation for her temporary disability of gestational diabetes, which no longer existed following the birth of her child. Thus, under both laws, the employer was required only to reinstate her to the original rotating shift assignment.

Maryland Anti-Discrimination Law. The Maryland Court of Special Appeals recently held that the University of Baltimore School of Law articulated legitimate, non-discriminatory reasons for not hiring an older applicant and selecting a younger individual for a professorship position instead. In Dobkin v. Univ. of Baltimore School of Law, a 56-year old man applied for an immigration law professor position, along with more than 800 others. He was not granted an interview. A 32-year old female was selected, and he then sued for age discrimination, alleging that he was a more experienced and more qualified for the position. The University moved for summary judgment, arguing that he had no evidence of discrimination, and the trial court agreed. On appeal, the state Court of Special Appeals upheld the dismissal of the case. The Court noted that the University offered legitimate, non-discriminatory reasons for its decision to not even interview the applicant, in that “he had no clinical teaching experience, and his academic credentials did not compare favorably to other applicants. He did not graduate from a top ten U.S. law school and had no judicial clerkship experience.” The Court further noted that “a disgruntled employee’s self-serving statements about his [or her] qualifications and abilities generally are insufficient to raise a question of fact about an employer’s honest assessment of that ability.” The Court determined that an employer should be able to choose the particular qualifications to best suit its needs.


TOP TIP

Generally, deductions from an exempt employee’s pay will cause the loss of the exemption, rendering the employee non-exempt and therefore entitled to overtime pay. One exception to this general rule, however, is a deduction due to a disciplinary suspension, as illustrated in the case of Watkins v. City of Montgomery.

The Fair Labor Standards Act requires that, in order to be deemed “exempt” from the obligation to pay overtime compensation, an employee must receive a salary and meet certain duties tests. Of relevance here, the salary cannot be “subject to reduction because of variations in the quality or quantity of work performed.” There are a number of exceptions to this general no-deduction rule, however, including unpaid disciplinary suspensions for violations of safety rules of major significance or workplace conduct rules. The FLSA regulations provide that “safety rules of major significance” include rules relating to the prevention of serious danger in the workplace or to other employees. As for “workplace conduct rules,” while that term is undefined, the regulations provide that the employer have a written policy, applicable to all employees, that sets forth unpaid suspensions as a consequence for violations of such rules.

Thus, in the Watkins case, a federal court in Alabama found that the City had implemented the requisite disciplinary policy providing for unpaid suspensions. The City’s disciplinary suspensions of 12 fire suppression lieutenants (for violations such as driving to the wrong address, leaving early without permission, disrespecting a superior officer, violating the weight policy, and violations of state and federal law) in accordance with that policy were legally permissible and did not destroy their exempt status.

Thus, in order to ensure that this exception is available, employers should include as part of a written disciplinary or corrective action policy the provision that unpaid disciplinary suspensions may be imposed for violations of company policies or workplace safety rules. This policy can and must be equally applicable to all employees, exempt and non-exempt alike. Without this written policy, an employer that imposes a disciplinary suspension of less than a full week on an exempt employee, and makes a deduction from that exempt employee’s pay based on the suspension, runs the very real risk of having that employee lose the exemption. This would result the employer becoming liable for overtime pay for that employee.

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Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

As an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

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Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel  

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