Employee’s online and obscenity-laced rant viewed as protected activity by the NLRB.

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By a two-to-one vote, a three-member panel of the National Labor Relations Board (NLRB) upheld an administrative law judge’s findings that an employer unlawfully discharged an employee because of social media comments – including strong obscenities – that were personally critical of a company manager. Pier Sixty, LLC and Hernan Perez, et al, NLRB Cases No 02-CA-068612 and 02-CA-070797, March 31, 2015.

Pier Sixty operates a catering service company in Manhattan, NY. In early 2011, the company’s employees expressed interest in union representation, based in part because of concerns that management treated them “disrespectfully and in an undignified manner.” Those efforts resulted in a successful organizing campaign, after which the Union was certified as the exclusive collective bargaining representatives for the servers, captains, bartenders and coat checkers in the company’s banquet department after an October 27, 2011 election.

Two days before that election, Hernan Perez, a long-term employee, was working as a server at an event. During the cocktail service, a company manager, Robert McSweeney, allegedly approached and – in a loud voice and in front of guests – addressed Perez and two other employees, using an unnecessarily harsh tone, and waiving his arms. McSweeney was one of the company managers identified by employees as treating company workers disrespectfully.

Upset with McSweeney’s treatment, Perez took a break and, outside of the banquet facility, posted from his phone a message to his personal Facebook page. The message referred to McSweeney as a “NASTY M***** F***er” and a “LOSER!!!!,” stated “f*** his mother and his entire f***ing family,” and ended with “Vote YES for the UNION!!!!!!!”

After being made aware of that posting, the Company fired Perez for violation of its obscenity policy. Two charges subsequently were filed: one on behalf of Perez for his firing, and one on behalf of the Union stating that Pier Sixty had threatened employees with loss of jobs and benefits if the Union was chosen as a collective bargaining agent.

The case was tried before an administrative law judge (ALJ), who found on behalf of Perez and in favor of the Union on the charges. The decisions were appealed and reviewed jointly, and the NLRB panel that reviewed the cases upheld the ALJ’s decisions. The Union’s complaints were found to be substantiated, based on remarks made by the Company’s general manager interpreted by employees as threatening jobs, benefits, and access to Company managers.

The panel also upheld the ALJ’s determination that Perez’s firing violated the National Labor Relations Act (NLRA) because Perez’ Facebook post was deemed to be protected concerted activity. Although the Company argued that Perez had violated Company policy regarding obscene language, it was determined that since 2005, the Company had issued only five written warnings to employees who had used obscene language, and had discharged no one on that basis.

Further – and importantly – it was found that Perez’ use of obscene language in his posting was not “qualitatively different from profanity regularly tolerated by [the Company].” According to the NLRB, “the overwhelming evidence establishes that, while distasteful, [the Company] tolerated the widespread use of profanity in the workplace, including the words “f***” and “motherf*****.” Considering that setting, the panel held that Perez’ language in his posting should not have cause him to lose the protections allowed under the NLRA for protected speech.

While critics of this decision have focused on the strongly personal nature of the obscenities used by Perez, a broader reading could serve as a warning to employers who institute anti-obscenity and anti-bullying policies, but fail to implement them consistently. In this case, had the Company regularly trained supervisors, managers and employees on appropriate workplace behavior, and had discipline been imposed consistently for violations of policies related to that behavior, this case may have ended differently.

Switch in safety handbooks without collective bargaining could violate CBA.

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An arbitrator’s finding that an employer could not unilaterally switch safety handbooks without bargaining for that switch was upheld by a federal district court. Firstenergy Generation Corp. v. IBEW, WDPA, No. 14-560, March 16, 2015.

The International Brotherhood of Electrical Workers (IBEW) filed a grievance after Firstenergy Generation Corporation attempted to replace the Company’s original safety handbook (“the Red Handbook”) with another manual (“the Green Handbook”).

The Union’s grievance was based on language in the Collective Bargaining Agreement (CBA) which stated that “The Company and the Union agree to cooperate in maintaining safe work practices. In furtherance of this undertaking, it is agreed that the parties will comply with the rules set forth in the [Red] Handbook. Any claim or alleged violation of the rules contained in the [Red] Handbook by either the Company or an employee represented by the Union shall be subject to the grievance procedure [in] this agreement.”

A “grievance” was defined in the CBA as “any compliant or dispute that may arise between the Company, the Union or bargaining unit employee(s) as to the meaning, application or claimed violation of the terms of [the CBA].”

An arbitrator issued an award finding that substitution of the safety handbook would require collective bargaining. The Company appealed that finding to federal court, arguing that the arbitrator exceeded the scope of his authority (which was limited to interpreting the CBA) by deciding whether the Company had “unilateral right to replace the safety handbook.”

The district court disagreed, finding that the arbitrator’s holding that collective bargaining was required before replacing the handbook flowed directly from an interpretation of the CBA, and “easily” withstood the court’s scope of review.

The take-away from this decision is the Court’s explanatory footnote regarding its limited scope of review of the arbitrator’s decision. The Court points out that whether or not it agrees with an arbitrator’s decision is immaterial, because a court may not overrule an arbitrator simply because it disagrees with the arbitrator’s interpretation of the CBA. So long as the arbitrator is “even arguably construing or applying the contract,” even a court’s finding that the arbitrator “committed serious error” or made an “improvident, even silly, factfinding” does not allow that court to refuse to enforce the award.

EEOC has defined “ability to interact with others” as a major life activity, making social anxiety disorder a disability under the ADA.

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An employee fired after asking to be reassigned to a role with less direct personal interaction as an accommodation for her “social anxiety disorder” is being allowed by the 4th U.S. Circuit Court of Appeals to take her case to a jury. Jacobs v. N.C. Administrative Office of the Courts, 4th Circ., No. 13-2212, March 12, 2015.

Christina Jacobs was hired in January 2009 as an office assistant to the criminal division of the North Carolina Administrative Office of the Courts (AOC). In that role, Jacobs’ job consisted largely of microfilming and filing.

Less than a month after being hired in the office assistant role, Jacobs was promoted to a position as one of 30 deputy clerks in the criminal division of the AOC. While all deputy clerks held the same title and job description, four or five also provided customer service at the division’s front counter. The remaining clerks performed jobs that did not require face-to-face interaction with the public, including filing and record-keeping tasks.

In March 2009, Jacobs began training to work at the front counter, but soon began to experience extreme stress and panic attacks. On or about May 5, 2009, Jacobs informed one of her supervisors that she previously had been treated for mental health issues and had been diagnosed with social anxiety disorder. The supervisor relayed that information to the clerk of courts (Tucker).

On September 8, 2009, Jacobs sent an e-mail to her three immediate supervisors, again disclosing her diagnosis and requesting, as an accommodation, that she be “trained to fill a different role in the Clerk’s Office and perhaps work at the front counter only once a week.” Jacobs was told that Tucker was the decision-maker on the issue, but was on vacation for three weeks, and that nothing could change until her return.

During the three-week period, Jacobs made a request to use accrued leave. Even though Jacobs’ prior requests for leave had been granted, this request was denied.

Upon Tucker’s return from vacation on September 29, 2009, Jacobs was called into a meeting with Tucker and Jacobs’ three supervisors. At that meeting – which included no discussion of Jacobs’ request for accommodation – Jacob’s was fired, and was told that she was not “getting it.” Jacobs also was told that Tucker had no position in which she could use Jacobs’ services; nothing further was said about Jacobs’ performance or any other work-related issue. During her employment, Jacobs had not been written up for any performance or disciplinary issue.

Jacobs then filed an EEOC charge, in response to which she received a favorable determination, and after which she filed a federal court lawsuit.

The federal district court granted summary judgment in favor of the AOC, finding that Jacobs’ social anxiety disorder was not a disability as a matter of law under the ADA.

On appeal, however, the Fourth Circuit reversed that dismissal, agreeing with the EEOC’s view that interacting with others is a major life activity, and pointing out that the Diagnostic and Statistical Manual’s fourth edition (DSM-IV) describes social anxiety disorder as a condition that “interferes significantly with the person’s normal routine, occupational . . . functioning, or social activities or relationships.” Therefore, under the ADA, social anxiety disorder would be viewed as a disability.

The court’s opinion includes a detailed explanation of the mistaken analysis of the district court. While the opinion includes numerous important analytical points – specifically including the analysis of social anxiety disorder as a per se disability under the ADA – the court raised two additional issues of which employers should take particular note.

First, the court points out, more than once in its analysis, the complete lack of documentation related to the performance issues that ultimately were used by AOC as reasons for Jacobs’ firing (Jacobs “never received a negative performance review, evaluation, or written warning”), which discredited AOC’s argument that Jacobs’ sub-par performance was the basis of her firing. That lack doomed AOC’s effort to use any performance or disciplinary issue as a valid reason for the ultimate discharge, and supported Jacobs’ argument that the reasons asserted were simply pretext for disability discrimination.

Second, AOC’s lack of good faith effort to engage with Jacobs in any interactive process to identify a reasonable accommodation for her disorder – especially prior to the termination meeting – could allow a jury to find AOC liable on Jacobs’ claim of disability discrimination. The requirement to engage in the interactive process is an immutable provision of the ADA, and one to which both employers and employees are obligated to adhere.

Supervisor’s alleged remark regarding sick child precludes dismissal of ADA associational claim.

Baby w-medical provider

To establish a claim of “associational discrimination” under the Americans with Disabilities Act (ADA), a plaintiff must demonstrate that she was discriminated against by her employer because of her relationship with a disabled person.

To substantiate a claim of associational discrimination under the ADA, an employee must establish each of the following key elements of a “prima facie” case: (1) the plaintiff was qualified for the position; (2) the plaintiff was subjected to an adverse employment action; (3) the plaintiff was known by his or her employer to have a relative or associate with a disability; and (4) the adverse employment action occurred under circumstances that raise a reasonable inference that the disability of the relative was a determining factor in the employer’s decision.

However, if a plaintiff can produce direct evidence of discrimination, he or she may prevail on the claim without having to separately establish each of the elements of the prima facie case.

Recently, one federal district court used “direct evidence” to preclude dismissal of a plaintiff’s associational disability claim, pointing to an alleged remark from the woman’s supervisor that would have forced the employee to choose between “your job or your daughter.” Manon v. 878 Education, LLC, SDNY, No. 1;13-cv-03476, March 4, 2015.

Elizabeth Manon, the mother of an infant ultimately diagnosed with Reactive Airway Disease, worked as a receptionist with 878 Education, LLC (“the School”) in New York City. Manon asserts that she was a “dedicated and conscientious employee” who was never informed of performance deficiencies.

In the six months during which she worked for the School, Manon took frequent time off for the purpose of caring for her infant daughter, who was hospitalized several times, and taken to the hospital emergency room on multiple others. In fact, during her 132 day tenure at the School, Manon arrived late 27 times, left work early 54 times, and was absent 17 days.

There was, however, no documentation of any actual problems related to Manon’s work performance, other than one verbal warning for arriving at work 6 minutes late, and one verbal reprimand for wearing jogging attire at work.

According to Manon, she informed her supervisor, Alfonso Garcia, who was the Director of Admissions for the School, that her absences were based on the fact that her daughter frequently had breathing problems and, at one point, was suffering from pneumonia. Manon allegedly informed Garcia that had her daughter been an adult, the problems would have been diagnosed as asthma; in children, however, the condition is referred to as Reactive Airway Disease, which was the ultimate diagnosis made regarding the child’s condition.

On November 14, 2012, Manon took time off to care for her daughter, with whom she had gone to the emergency room the night before. She also missed work on November 15, informing Garcia that her child required “asthma treatment every 4 hours” and remained “extremely ill.”

When Manon returned to work on November 16, Garcia terminated her employment. According to Manon, at that meeting, Garcia told her that he was “letting her go” because he wanted to hire a receptionist who had no children. (“I need someone who does not have kids who can be at the front desk at all times.”) Manon alleges that Garcia went on to ask “How can you guarantee me that [] two weeks from now your daughter is not going to be sick again?. . . . So, what is it, your job or your daughter?”

That final statement is the hook on which the court ultimately hung its “direct evidence” analysis, calling it “a ‘smoking gun’ admission that Garcia believed [Manon’s] daughter was disabled and would be frequently ill.” The statement provided evidence that linked Garcia’s hostility toward Manon’s association with her sick child to his decision to fire Manon.

Manon filed a lawsuit alleging ADA associational disability, as well as both caregiver discrimination and gender discrimination under the New York City Human Rights Law (NYCHRL). The School filed a motion for summary judgment, asking that the claims be dismissed. Although the court dismissed the NYCHRL gender claim – finding that there was no evidence in the record to suggest that the School’s decision would have been different had Manon been a man or a father – it refused to dismiss the caregiver discrimination claim or the ADA associational disability claim. Those claims will go forward to a jury unless otherwise resolved.

While there has not been a recent upsurge of associational discrimination claims, those claims are not infrequently filed. Employers should be aware of associational claims, and supervisors and managers should be regularly informed and trained on those issues. A lack of information and training could easily lead to remarks like the one alleged here, which can subject an employer to substantial legal risk.

Evidence of “color bias” may lead to jury trial under Title VII.

Colors in words of different colors

Title VII of the Civil Rights Act prohibits employment discrimination against an individual because of that person’s “race, color, religion, sex, or national origin.” While courts routinely address claims of race discrimination, claims of discrimination on the basis of color alone are far less frequently reviewed.

Recently, in a case of first impression, the 5th U.S. Circuit Court of Appeals reversed a lower court’s dismissal of a case in which a plaintiff claimed that she was passed over for a managerial position because she was a “dark skinned black person.” The Fifth Circuit based that reversal on statements that it deemed to be “direct evidence” of color discrimination. Etienne v. Spanish Lake Truck & Casino Plaza, LLC, 5th Cir., No. 14-30026, February 2, 2015.

Esma Etienne was a waitress and bartender at Spanish Lake Truck & Casino Plaza (“Spanish Lake”) in New Iberia, Louisiana, and routinely was rated as an excellent performer who exceeded the requirements for her position. After working at Spanish Lake for three years, Etienne was passed over for a promotion to a managerial position. The position ultimately was filled by a white female waitress trained by Etienne.

Etienne filed a lawsuit, alleging failure to promote based on race and color. To support those allegations, Etienne submitted an affidavit from a former manager, who testified that Bernard Terradot, Spanish Lake’s general manager, allocated responsibilities to employees based upon skin color. According to the affidavit, Terradot and his wife had stated on multiple occasions that he would not let a “dark skinned black person handle any money” and that he believe that Etienne was “too black” to do various tasks.

The lower court granted summary judgment in favor of Spanish Lake, relying heavily on the fact that most of the managers at Spanish Lake were of the black race. On appeal, however, the Fifth Circuit stated that although it “never recognized ‘color’ as a separate unlawful basis for discrimination by employers,” the text of Title VII was “unequivocal” on the issue, and precluded color discrimination.

To prevail at the summary judgment stage of litigation – which allows a judge to dismiss a matter prior to the jury’s review – Spanish Lake had to show that a reasonable jury would have concluded that the same promotional decision would have been made absent the alleged discrimination. The Fifth Circuit held that evidence of Etienne’s qualifications, coupled with the direct evidence regarding Tarradot’s statements, were sufficient to allow the case to go to a jury. The dismissal was vacated, and the case was remanded for trial.

In this case, “color” discrimination was reviewed by the appellate court as a stand-alone discrimination claim – something not frequently seen to this point. Employers should recognize the two issues touched upon in the Fifth Circuit’s decision: (1) that “color” is referenced under Title VII as a separate basis for discrimination and, therefore, should not be discounted when complained of by an employee; and (2) that evidence of statements related to skin color as a basis of job assignment is likely to be viewed by the courts as direct evidence of discrimination, and not simply as “stray remarks.”

Employees suspended without pay may be entitled to COBRA notice.

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The Comprehensive Omnibus Budget Reconciliation Act of 1986 (COBRA) – part of the Employee Retirement Income Security Act (ERISA) – imposes an obligation on a healthcare coverage plan administrator to notify any employee covered by the administrator’s plan of that employee’s right to continue health insurance coverage for up to 18 months after a “qualifying event.”

One federal district court has determined that the Baltimore City School Board breached its duties under COBRA when it failed to provide the required notice to two individual employees suspended by the school system, without pay. Green v. Balt. City Bd. of Sch. Commissioners, Dist. Md., No. WMN-14-3132, January 22, 2015.

Anna Green and Carolyn Richards both were recommended for termination, but initially were suspended by the School Board of the Baltimore City Public School System (“the System”) without pay. Working hours for both employees were adjusted to zero, but both remained eligible for coverage under the System’s health care plan and were automatically enrolled without further action from either of them.

System employees generally are removed from coverage only if there is a final termination of employment, the employee fails to pay the premiums due, or the employee specifically requests removal from coverage. Here, health care benefit coverage continued for both Green and Richards, but the System stopped paying any share of the premiums.

Green learned of the continued coverage when medical care she received was mistakenly billed through the System plan rather than her new employer’s plan. At that time, Green submitted a written request to be removed from the System’s plan, but was asked to pay the outstanding premiums for the period in which she had (unknowingly) been covered by the System’s plan.

Richards’ coverage also was continued with her knowledge. However, Richards chose to forego needed medical treatments, believing she had no health insurance coverage. However, once Richards officially resigned her employment, she received a bill for $4,076.59 for unpaid contributions to the plan.

Green and Richards brought a legal action in federal court under ERISA/COBRA. The School Board moved to dismiss, to which the plaintiffs responded with a motion for summary judgment.

The System argued that a “reduction in hours alone is not a qualifying event triggering the notice requirement,” and further argued that such reduction in hours must be accompanied by a “loss in coverage” to trigger COBRA notice.

The plaintiffs argued that their reduction in hours actually triggered a loss in coverage (when they became responsible for all premiums) and, therefore, was a qualifying event.

The court agreed with the plaintiffs, pointing out that the System’s interpretation of “loss in coverage” – going from eligible to ineligible for coverage only – was overly narrow. The applicable regulations, according to the court, define “loss of coverage” more broadly, as “to cease to be covered under the same terms and conditions as in effect immediately before the qualifying event.” According to the court, under that definition, the increase in premiums expected to have been paid by Green and Richards constituted a “loss in coverage” which resulted directly from their reduction in work hours. The reduction of hours that occurred when they were suspended therefore constituted a “qualifying event” that required COBRA notice.

In reviewing the competing motions, the district court denied the System’s motion to dismiss, and granted the plaintiffs’ motion for summary judgment.

The court then issued a declaration that each of the two plaintiffs suffered a qualifying event on the date of her suspension, triggering the employer’s obligations under COBRA. The court held that all invoices and bills issued to Green and Richards after the qualifying event were null and void.

Employers should be aware of this case and its implications. To act without being fully aware of the nuances of the COBRA regulations can lead to unintended legal liability under that Act.

Once more into the (data privacy) breach. . . .!

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This post is excerpted from an article Honored in the Breach: Employer Action Items for an Insurer Data Breach, written by Timothy G. Verrall (Houston), Stephen A. Riga (Indianapolis), and Danielle Vanderzanden (Boston), which appeared on Ogletree Deakins Blog.

On February 5, 2015, Anthem Blue Cross and Blue Shield, one of the largest health insurers in the country, notified its policyholders, members, and business partners that it recently had been the target of an external cyber attack. The attack appears to have comprised the confidentiality of medical and other personal information maintained on Anthem’s information technology (IT) system.

The information at issue includes names, birthdays, medical identification numbers, Social Security numbers, addresses, employment information, and other similar information of over 80 million current and former members. The notices that Anthem delivered to those potentially affected by the attack indicate that this attack did not compromise medical or credit card information.

An employer facing news that its insurer or third-party administrator (TPA) has experienced a data breach may find such news both confusing and alarming. Even if no medical information was compromised, identifying information associated with a means of paying for medical services—such as current or former members’ enrollment in health insurance, or information about members’ health claims from a TPA—qualifies as protected health information (PHI) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This is true even if neither diagnostic codes nor other sensitive information is included among the identifying information.

If a plan participant’s name, Social Security number, address, or other identifying information were to be compromised while held by an insurer or TPA, such disclosure would constitute a breach for purposes of the Health Information Technology for Economic and Clinical Health (HITECH) Act and HIPAA. In that situation, state-level breach notification laws also are likely to be implicated.

Employers’ Obligations

As companies consider how to respond on behalf of their health plans, employers’ obligations will depend on the relationship between that employer and its health plan and the insurer or TPA.

  • Insured Plan—If the plan is insured, the insurer is the covered entity responsible for investigating the situation, undertaking appropriate mitigating measures, and providing all required notices to plan participants, regulators, and, sometimes, the media.
  • Self-Funded Plan—If the plan is self-insured, the responsibility for investigating a breach and providing any required notice, by default, falls on the plan and the employer as its sponsor. If, however, the employer has outsourced the claims administration role (as is typically the case), the TPA may have the contractual obligation for assessing and responding to the breach. At a minimum, the TPA will have a notice obligation to the plan/employer and a responsibility to provide details surrounding the breach.

In all cases, under state breach notification laws the party that held the data when the breach occurred is responsible for issuing the notice. State laws govern who must provide notice and define the contents and recipients of such notices. Employers should identify the implicated states and comply with their obligations in the relevant jurisdictions.

Action Items for Employers Regarding Anthem

Initial action items for employers include:

  • Define the relationship between the employer’s health plan and Anthem. Is Anthem acting as an insurer or as a TPA for the plan?
  • If the plan is insured, the notification obligation resides primarily with Anthem, and based on Anthem’s public communications thus far, it appears that Anthem is proceeding with the mitigation and notice process.
  • Besides notifying the affected individuals, employers should review their insurance contract documents and evaluate their provisions regarding data privacy and security. Ultimately, if the plan is fully insured, Anthem should be responsible for HIPAA and HITECH compliance and the proper issuer of notices under state data breach laws.
  • If the plan is self-insured and Anthem serves as TPA, the employer should closely examine its service contract and “business associate agreement.” In particular, the employer should focus on the breach assessment and notice provisions and determine who is responsible for evaluating possible breaches and issuing required notifications to the affected individuals.
  • Examine the information that Anthem has provided regarding its handling of the breach and make sure that those actions coincide with the contractual provisions, HIPAA, HITECH, and applicable state breach notification laws.
  • If the employer retains responsibility to provide the required notice, determine whose data was compromised, identify the actions required to protect the data and mitigate harm, and prepare the notices necessary to comply with the plan’s obligations under HIPAA and state law.
  • The employer must likely work with Anthem to collect the detailed information to prepare the required notices, and Anthem has an obligation to provide the employer with the information to prepare that notice. Additional information about breach response under HIPAA and HITECH, is available in a prior article on this subject, No Harm, No Foul, No More—New HIPAA “Breach” Standards Seek to Provide Consistency, Objectivity.”
  • Consider additional steps the employer should take to mitigate any harm caused by the breach. Review the service agreement and business associate agreement for any provisions governing mitigation obligations and indemnification clauses for the employer’s ability to recover for costs related to the breach.

Although Anthem was the victim of this cyber attack, recent large-scale data breaches with major retailers and financial institutions demonstrate that all forms of sensitive personal information can be vulnerable to exploitation, and the employee benefits world is not immune from these challenges. Other major health insurers and benefits consultants, insurance brokers, and third-party administrators are likely vulnerable to similar attacks in the future, and employers should be prepared to respond quickly if their plans or business partners are affected.

 

Supervisor’s knowledge of unreported overtime may lead to liability under the FLSA.

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The Fair Labor Standards Act (FLSA) requires employers to pay to non-exempt employees at least one and one-half times the employees’ regular hourly wage for every hour worked in excess of 40 in a week. Courts regularly have held that the goal of the FLSA is to counteract the inequality of bargaining power between employees and employers.

Recognizing that goal, the 11th U.S. Circuit Court of Appeals recently held that if an employer knew – or had reason to know – that an employee has under-reported work hours, that employer cannot escape liability under the FLSA by asserting, as a defense, that the employee inaccurately and purposely reported his or her work hours incorrectly and therefore has “unclean hands.” Bailey v. TitleMax of Ga., Inc., 11th Cir., No. 14-11747, January 15, 2015.

Santonias Bailey worked at a TitleMax store in Jonesboro, Georgia, for under a year. Bailey alleges that during that time, he worked overtime hours which he did not report, and for which he was not paid. Bailey asserts that he worked “off the clock” because his supervisor told him that TitleMax “does not allow overtime pay,” and that he was encouraged not to report overtime hours when recording his work time. Bailey further alleges that his supervisor changed his hours, at one point adding an unpaid lunch hour when, in fact, Bailey claims to have worked through lunch.

Bailey sued, claiming violation of the FLSA, and TitleMax moved for summary judgment. That motion was granted by a district court that pointed to Bailey’s violation of company policies requiring accurate time entries by employees.

However, on appeal, the Eleventh Circuit reversed that decision, holding that once an employee has established that he or she has worked overtime without pay, and that the employer knew (or should have known) that overtime was worked, no “equitable” defenses can be asserted to defend against the FLSA claim.

An equitable defense shifts most or all of the responsibility to the employee. Here, TitleMax claimed that Bailey did not follow the company’s policy for reporting accurate time records, and/or should have complained about his supervisor’s directives about working unpaid overtime.

The Eleventh Circuit rejected those equitable defenses, finding that the evidence indicating that Bailey’s supervisor knew of the underreporting precluded the assertion of the equitable defenses. To do otherwise, said the Court, would contravene the purpose of the FLSA, and would allow an employer to rely on written policies regarding accurate reporting, while allowing supervisors to undermine those policies by encouraging, or even requiring, under-reporting.

This case was remanded back to the lower court to allow Bailey’s claim to go forward to trial. While the Eleventh Circuit’s ruling does not assure that the employee will succeed at trial, it seems to impose another level of diligence on employers.

This holding goes beyond the FLSA’s requirement that employers should have policies and procedures for assuring accurate reporting of work hours, and imposes an affirmative duty on employers to assure that supervisors and managers are not making statements contradictory to those policies, with or without the company’s imprimatur.

Will California’s recent law on anti-bullying training begin a nationwide move toward passage of the Healthy Workplace Bill?

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The Healthy Workplace Bill (HWB) has been discussed by state and federal legislators for nearly 15 years, and has been the subject of substantial debate and interest. During that time, 26 states have introduced the HWB, or one modeled on it. No state has yet passed the bill (although Tennessee has passed a bill limited to public-sector employees), and several state legislatures have vetoed it.

According to proponents of the HWB, workplace bullying is “repeated, health-harming mistreatment of one or more persons (the targets) by one or more perpetrators” that takes one or more of the following forms:

  • Verbal abuse;
  • Offensive conduct/behaviors (including nonverbal) which are threatening, humiliating or intimidating; and/or
  • Work interference – sabotage – which prevents work from getting done.

California was the first state to introduce the HWB (in 2003), but has not yet passed it. However, in the final quarter of 2014, Governor Jerry Brown signed AB 2053 into law. That law is not the equivalent of the HWB, but specifically adds “abusive conduct” to the required biannual 2-hour “classroom or other effective interactive training and education” for supervisors of all employers in California with over 50 employees.

“Abusive conduct” is defined in the California law as:

. . . conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.

That definition, as further spelled out in the law, tracks the definition of “bullying” under the HWB by including repeated verbal abuse (derogatory remarks, insults, and epithets), conduct that a reasonable person would find threatening, intimidating, or humiliating, and “the gratuitous sabotage or undermining of a person’s work performance.” Under California’s legislation, a single act “shall not constitute abusive conduct, unless especially severe and egregious.”

Under the new California law, an initial training session must be attended by supervisors within 6 months of assuming supervisory duties, and then must be repeated at least once every two years. The requirement went into effect on January 1, 2015, meaning that California employers with over 50 employees now must review and revise training procedures to specifically include anti-bullying measures in existing training programs.

While there does not seem to be overwhelming legislative support for the HWB on a national level, the bill has developed substantial grassroots support over the years. If other states replicate this California effort and introduce/pass bills to add training requirements, the grassroots effort that has sustained the HWB may continue to gain traction.

To stay ahead of the curve on this issue, knowledgeable and conscientious employers should consider including anti-bullying training in existing programs, and should ensure that supervisors are sufficiently trained on and aware of the risks inherent in a lack of knowledge on this subject.

Company violates NLRA by firing employee based solely on belief that concerted activity occurred.

Foot through ceiling

Most employers are aware that under the National Labor Relations Act (NLRA), it is unlawful for an employer to prohibit employees from discussing wages among themselves, or to threaten an employee with discharge if they engage in such discussions.

Recently, the National Labor Relations Board (NLRB) took that premise one step further, finding that an employer violated the NLRA when management fired an employee because it believed he may have discussed wages with other employees. Alternative Energy Applications, Inc. and David Rivera-Chapman, Case 12-CA-072037 (December 16, 2014).

In that case, David Rivera-Chapman (“Rivera”) was hired in 2011 by Alternative Energy Applications, Inc., as a driver/installer at wage of $9.00 per hour. Although the company typically gave each employee a $1.00/hour raise after six weeks, Rivera was given an early raise after only a few weeks. At the time of that raise, however, Rivera was told by his supervisor “I do not want you talking to anyone else about this because we have fired employees in the past for talking about their wages.”

During his brief period of employment – less than two months – Rivera frequently complained about pay and working conditions. During that same period, however, Rivera’s supervisors and co-workers expressed their opinions that Rivera was not a good employee. As an example, during his employment, and while improperly installing insulation in apartment attics, Rivera’s foot went through the ceiling of an apartment on two different occasions, creating cost to the company for repairs.

At a meeting on a date after the first ceiling incident but before the second, company management made the decision to terminate Rivera’s employment. Notes from that meeting indicate that Rivera would be fired because he did not fit the company “philosophy” and because fellow employees complained about working with him. Rivera was fired after the second ceiling incident was reported.

Rivera filed an OSHA complaint with respect to the first ceiling incident. In response to that complaint, the company – through its attorney – sent a letter to the OSHA stating that Rivera was not fired for filing an OSHA complaint, but instead was fired for reasons including the fact that he “undercut morale” among the company’s employees by disclosing his rate of pay to other employees, which the company learned when it received a call from the mother of another employee who called to complain.

An Administrative Law Judge (ALJ) determined that the company violated the NLRA by instructing Rivera not to discuss wages, and by threatening to fire him if he did so. But the ALJ found that the NLRB’s General Counsel had failed to show that the company discharged Rivera because of its belief that he had discussed wages with other employees. While the ALJ acknowledged that the company essentially admitted as much in its letter to the OSHA, he also found that such statement was not supported by other evidence or testimony, and recommended that the discharge allegation be dismissed.

Upon review, a 3-member panel of the NLRB upheld the ALJ’s determination that the company violated the Act through its instruction and threats related to wage discussions, but reversed the remainder of the ALJ’s decision, finding instead that the company unlawfully fired Rivera on the belief that he had discussed wages with other employees. The decision was 2-1, with Member Miscimarra filing a lengthy and thorough dissent to the second portion of the decision.

The Board’s decision hinged largely on the facts that: the company, through its letter to the OSHA, had made an admission about its reason for firing Rivera; one employee stated that Rivera had complained that wages were too low; and the supervisor’s earlier threat to Rivera regarding termination was evidence of the actual reason for the firing.

In order to defend itself against allegations that it had violated the NLRA, the company was required to prove that it would have taken the adverse action even absent the fact of any protected activity. According to the Board panel in this case, “the same principles apply where, as here, the complaint alleges that an employer has retaliated against an employee in the belief that the employee engaged in protected activity.”

On that basis, the NLRB determined that the company’s proffered reason for the firing – that Rivera “had a bad attitude and a poor work ethic” – was insufficient to show that the company would have fired Rivera absent its belief that he had been discussing wages with other employees, and therefore, Rivera’s firing violated the NLRA.

The Board went further to state specifically that the NLRA “protects all employees, not just exemplary employees” from adverse action against protected activity, and reinstated Rivera with back pay and benefits, interest, and payment for adverse tax consequences of the award. It also directed that the company remove from its files any reference to the firing.

The difficulty in this case, and the primary basis for the dissent, is that the negative decision was based largely on the circumstantial evidence created by the company’s letter to OSHA asserting its belief that Rivera had discussed wages with others, and not on any evidentiary support of concerted activity which, pursuant to previous NLRB decisions, requires “initiating, inducing or preparing for group action.” Such an interpretation seems to create new ground for the Board’s decision.

Employers must be aware of the broad interpretation given by the NLRB to the question of what constitutes concerted activity, and should recognize that in this case, the company’s belief that the employee was engaged in such conduct, even without more, was sufficient basis for a violation of the NLRA.

 

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