Employees suspended without pay may be entitled to COBRA notice.


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. . . .!

cyber attack

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.

off the clock

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?


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.


Employee cannot claim lack of accommodation after quitting her job during the interactive process.


A diabetic employee who quit her job in response to the employer’s rejection of her suggested “reasonable accommodation” cannot support claims under the Americans with Disabilities Act (ADA), because she failed to participate in the interactive process in good faith, according to the 1st U.S. Circuit Court of Appeals. EEOC v. Kohl’s Dep’t Stores, Inc., 1st Cir., No. 14-1268, December 19 2014.

Pamela Manning, who suffers from Type I diabetes, was hired as a part-time sales associate by Kohl’s Departments Stores in 2006. Two years later, Manning was promoted to a full-time sales associate, working 36 to 40 hours each week on predictable shifts, typically starting no earlier than 9:00 a.m., and ending no later than 7:00 p.m.

In 2010, Kohl’s restructured its staffing system, resulting in a reduction of hours for Manning’s department. After the restructuring, Manning was able to keep her full-time status, because she could perform certain work for other departments. However, because of the varied assignments, Manning was scheduled to work inconsistent shifts and her work hours became less predictable, often including a night shift followed by an early day shift (“swing shift”).

After Manning informed her supervisor that working erratic shifts was aggravating her diabetes, Manning was asked to obtain a doctor’s note to support her request for more predictable work hours. Manning’s doctor provided such a note, supporting Manning’s request to work the day time hours to which Manning had been assigned prior to the restructuring.

Kohl’s met with Manning on March 31, 2010, informing her that it could not provide a consistently steady day-time schedule. Kohl’s informed Manning that while it could not provide her preferred schedule, it was willing to discuss alternatives. In response, Manning stated that she had “no choice but to quit,” and put her store keys on the table and walked out of the meeting, slamming the door.

Manning’s supervisor followed Manning out of the meeting, attempted to calm her down, and asked her to reconsider her resignation, which Manning refused to do, instead cleaning out her locker and departing the building. Kohl’s subsequently called Manning to attempt additional discussion regarding accommodation, but Manning refused to have any further contact with anyone at Kohl’s. Kohl’s then treated Manning’s departure as a voluntary quit, and terminated her employment.

The EEOC brought suit on Manning’s behalf, claiming that Kohl’s failed to accommodate Manning’s disability. The district court entered summary judgment in favor of Kohl’s based on Manning’s failure to engage in the interactive process, and further held that a reasonable person in Manning’s position would not have felt compelled to resign when she did. That decision was upheld by the First Circuit in response to the EEOC’s appeal.

The ADA requires an “interactive process” between a disabled employee and her employer in the search for a reasonable accommodation. That process requires “bilateral cooperation and communication,” and requires both parties to engage in that process “in good faith.” According to the First Circuit, when the employee fails to cooperate, the employer cannot be held liable under the ADA for failure to provide a reasonable accommodation.

Manning’s refusal to participate in the interactive process was the primary reason that the process broke down and, therefore, Manning could not avoid summary judgment on her ADA claim. The key to this decision was the fact that after the employer declined to provide the schedule requested by Manning, the company made concrete and documented efforts to continue the dialogue in order to discuss other reasonable accommodations. Without those additional efforts at an ongoing interactive process, this case may have been decided very differently.

Company’s work-from-home policy did not replace essential function of regular, predictable attendance.


A policy allowing an individual to work from home does not vitiate the fact that punctuality and predictable attendance are essential functions of a position. According to the 7th U.S. Circuit Court of Appeals, an employee’s ongoing tardiness – although numerous modifications had been made to her schedule and workload to allow flexibility in light of the individual’s multiple sclerosis (MS) – supported the employer’s argument that the employee was not “qualified” for the job, and led to summary judgment in the employer’s favor. Taylor-Novotny v. Health Alliance Medical Plans, Inc. 7th Cir., No. 13-3652, November 26, 2014.

Kiersten Taylor-Novotny, an African-American woman, began working for Health Alliance Medical Plans in November 2005 in the salaried position of Contract Specialist I. In that role, Novotny’s responsibilities included “document preparation, negotiating and reviewing contract terms with medical providers, planning proactively for contract renewals, and documenting activities related to medical provider contracts in a contracting management system.”

Taylor-Novotny had punctuality and attendance problems almost immediately and was rated as a “marginal” employee in that category during her first performance evaluation in January 2007. Subsequently, Novotny’s schedule was adjusted to allow her to report to work later, but her tardiness and absenteeism continued.

In April 2007, Novotny was diagnosed with MS. Although her start time again was adjusted to a later time, Novotny continued to be late for work. In October 2007, she was put on a corrective action plan.

In May 2008, Novotny’s doctor suggested that Novotny should work from home two days a week. At that point, and again for an additional FMLA leave in 2009, Health Alliance approved FMLA “intermittent time off as needed to manage [Novotny’s] condition as specified by [her] physician.” The company noted, however, that it remained Novotny’s “responsibility to let [her] manager know each time an absence from work will be necessary, as well as whether or not [her] absence should be charged to this approved Family Leave.”

In March and April 2010, Novotny’s neurologist provided doctor notes that limited Novotny to two, one-half days per week in the office. Although the company informed Novotny that she would have to use FMLA leave for the non-worked half days, she refused to do so.

Health Alliance also attempted to further accommodate Novotny’s MS by implementing several changes in Novotny’s physical work arrangement. For example, another employee was allowed to retrieve documents from the printer and deliver mail for Novotny. Also, the number of files and other items that Novotny needed to carry between her home and the office was reduced.

Novotny also requested that she be allowed to use her badge scans to document her arrival times, instead of being required to inform her supervisor directly when she was late and the reason for her tardiness. Because the badge scans only recorded only arrival time, but did not provide advance notice of or a reason for, the late arrival (as required of Novotny by the company), Health Alliance refused this request.

On May 21, 2010, Health Alliance issued a Final Written Warning to Novotny for arriving late eight times between April 13 and May 7 without notifying her supervisor about her tardiness, as required. In response, Novotny filed a grievance, stating that her job could ““clearly be done from home full time.”

Novotny’s employment was terminated on July 30, 2010. In its termination letter, Health Alliance informed her that it was removing her because of her “continued tardiness and failure to report accurately her work time.”

Novotny filed a five-count federal court complaint in which she alleged that Health Alliance had failed to reasonably accommodate her MS and had retaliated against her for seeking accommodation, in violation of the ADA; that it had terminated her employment on the basis of her race and disability, in violation of Title VII and the ADA; and that it had interfered with her rights under the FMLA. The district court granted summary judgment on all of Novotny’s claims, and she appealed to the Seventh Circuit, which ultimately upheld the dismissal of her claims.

On the FMLA claim, the Seventh Circuit upheld the dismissal, noting that Novotny’s admission that she never had been denied the opportunity to take FMLA leave was fatal to her FMLA interference claim.

To prevail on any of her ADA claims—disparate treatment, failure-to-accommodate, and retaliation—Novotny had to establish that “she was a qualified individual who, with or without reasonable accommodation, could perform the essential functions of the employment position.” The Seventh Circuit agreed with the lower court that Novotny could not do so.

The critical issue is that while the parties did not dispute that Novotny’s MS is a “disability” within the meaning of the ADA, they disagreed on whether Novotny is a “qualified individual” with a disability—“an individual who, with or without reasonable accommodation, can perform the essential functions of the employment position.”

Novotny argued that Health Alliance’s work-from-home policy, which allowed for flexible arrangements, meant that Health Alliance did not consider attendance to be an essential function of her job.

The Court disagreed, pointing out that the ADA provides that “consideration shall be given to the employer’s judgment as to what functions of a job are essential.” It also held that an employer may treat regular attendance as an essential job requirement and need not accommodate “erratic or unreliable attendance.”

The Court then held that because Novotny’s impairment prevented her from coming to work regularly, she was unable to perform the essential functions of her job, and therefore was not a “qualified individual” for ADA purposes.

Further, even had Novotny been “qualified” under the ADA, she would not have shown that she was meeting Health Alliance’s legitimate expectations related to her job – another element of her case. Novotny’s failures both to arrive at work on time and to alert her supervisor before those late arrivals were noted on every performance evaluation received by Novotny during her employment, and doomed her ability to show she was performing up to the company’s expectations.

Although the Court found that Novotny’s case failed because she could not support her prima facie case, it went on to provide a detailed and well-reasoned analysis of each of her claims, explaining how Novotny also was unable to carry her burden to prove the elements of the claims.

While the holding in this case was supportive of the employer’s work-from-home policy, the company’s success on the issue hinged largely on the fact that the policy included provisions for how and when the employee was to inform her supervisor of the time and reason for her absence. Absent those detailed instructions, the case may have been decided differently.

Latest NLRB decision has employers seeing . . . Purple!

Purple computer

On December 11, 2014, the National Labor Relations Board (NLRB) stoked the fire that has been building around issues related to employees’ use of company e-mail for non-work-related issues. It did so when it held that the National Labor Relations Act (NLRA) supports an employee’s right to use an employer’s e-mail system for non-business purposes, including discussions about union organizing. Purple Communications, Inc. and Communications Workers, AFL-CIO, 361 N.L.R.B. No. 126 (December 11, 2014).

Section 7 of the National Labor Relations Act (NLRA) protects the right of employees to engage in “concerted activities” with each other for collective bargaining or in efforts to improve working conditions and terms of employment. These concerted activities can be done in person, or by other methods of communication, including electronic media.

An employer’s discipline or termination of an employee, if found to violate Section 7, can lead to legal liability that may result in the imposition of financial damages, and lead to reinstatement of the employee. That fact has created interest, consternation, and varying levels of panic among employers trying to balance the rights of employees to protected concerted activity with a company’s right to expect compliance with its policies and with attempts to protect confidential information and electronic media.

While employer policies and handbooks continue to attempt limitations on the use of company resources and property – including e-mail – for non-work-related reasons and communications, employees and employee rights groups argue that such limitations could restrict Section 7 rights. The Purple Communications decision fits squarely within the position supported by employee groups.

The December 11 decision by the NLRB centers on a charge by the Communication Workers of America, AFL-CIO, that a company’s electronic communications policy, which prohibited the use of company equipment – including “email systems” – for activities “on behalf of organizations or persons with no professional or business affiliation with the Company,” was an unfair labor practice. The decision has raised concern because it overrules a 2007 decision (Register Guard, 351 NLRB 1110) by an earlier Board which held that employees had no statutory right to use employer e-mail for activities covered by Section 7.

The difference between the recent case and the 2007 matter, according to the current Board, is that the 2007 decision focused “too much on employers’ property rights and too little on the importance of email as a means of workplace communication.”

This recent decision specifically holds that the use of e-mail by employees for “protected communication on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems.”

Stating that its decision is “carefully limited,” the Board outlines exceptions to that holding. First, the decision applies only to employers who currently grant access to the company’s e-mail system – it does not require employees to be allowed to access such systems. Second, it allows a total ban on non-work use of e-mail, if a company can demonstrate “special circumstances” that make such a ban necessary. As an alternative to a complete ban, the decision allows for “uniform and consistently applied controls” over e-mail, if such controls are “necessary to maintain production and discipline.”

However, the Board’s decision may cause more confusion than it resolves, and the subjective nature of the exceptions (“special circumstances” is undefined in the decision, as is the nature of acceptable “controls” to maintain production/discipline) may create unanticipated litigation for companies who attempt to take advantage of them.

The Board has remanded the matter back to the Administrative Law Judge (ALJ) who originally heard the case in 2013 (and whose decision that Purple’s policy did not violate Section 7 also was overturned by this Board’s holding) to allow him to reopen the record in light of these exceptions and to allow the parties to “present evidence relevant to the standard we adopt today.” The ALJ’s upcoming decision may provide instruction that can help to create more concrete parameters for the exceptions.

Employers that currently have a business-use-only policy for social media and e-mail systems should review that policy in light of this decision. Regardless of whether the Purple Communications decision holds up to subsequent appellate review, a wave of new unfair labor practice (ULP) charges challenging existing e-mail policies seems likely.

It seems clear also that employers providing employees with e-mail access at work but prohibiting employee e-mail use during a union representation campaign are likely to have the results of the election challenged by the union and overturned by the Board, consistent with this decision.


Ebola outbreak prompts HHS Bulletin on application of HIPAA during emergencies.


The Health Insurance Portability and Accountability Act (HIPAA) was enacted by Congress and signed by President Bill Clinton in 1996. According to the U.S. Department of Health and Human Services (HHS), the HIPAA Privacy Rule establishes nation-wide standards “to protect individuals’ medical records and other personal health information and applies to health plans, health care clearinghouses, and those health care providers that conduct certain health care transactions electronically.” HIPAA also provides to patients the right to examine and obtain a copy of health records, and to request corrections.

The HIPAA Privacy Rule places restrictions on the use and disclosure of patients’ protected health information, but also ensures that appropriate uses and disclosures of the information may occur for critical purposes, including when necessary to treat a patient, to protect the nation’s public health, and for other critical purposes.

Prompted in part by the recent Ebola outbreak, the HHS’ Office for Civil Rights (OCR), issued a November 10, 2014 bulletin to ensure that HIPAA covered entities and their business associates are aware of the ways in which patient information may be shared under the HIPAA Privacy Rule in an emergency situation. The bulletin also was issued to “serve as a reminder that the protections of the Privacy Rule are not set aside during an emergency.”

The bulletin, which can be accessed through a link on the HHS’ Health Information Privacy page, addresses both “Sharing Patient Information” and “Safeguarding Patient Information,” and describes basic restrictions for sharing protected health information during treatment, public health activities, for notification to family and friends, and to media and business associates.

While the HHS Bulletin specifically mentions that the HIPAA Privacy Rule is not suspended during a public health or other emergency, the Bulletin goes on to say that the Secretary of HHS (Secretary) may waive certain provisions of the Privacy Rule under certain circumstances. Those circumstances include declaration by the President of an emergency or disaster, or by the Secretary of a public health emergency.

In those instances, the Secretary may waive sanctions and penalties against a covered hospital that does not comply with provisions of the Privacy Rule to obtain a patient’s agreement before speaking to family members about the patient’s care – however, that waiver would apply only to hospitals that have instituted a disaster protocol, and only would apply for 72 hours after that protocol begins.

The Bulletin states that a hospital may release limited “facility directory information to acknowledge an individual is a patient at the facility and to provide basic information about the patient’s condition in general terms (e.g., critical or stable, deceased, or treated and released) if the patient has not objected to or restricted the release of such information or, if the patient is incapacitated, if the disclosure is believed to be in the best interest of the patient and is consistent with any prior expressed preferences of the patient.”

The Privacy Rule applies to disclosures made by employees, volunteers, and other members of a “covered entity” or its “business associates.”

Covered entities comprise “health plans, health care clearinghouses, and those health care providers that conduct one or more covered health care transactions electronically, such as transmitting health care claims to a health plan.”

Business associates are defined in the Bulletin as “persons or entities (other than members of the workforce of a covered entity) that perform functions or activities on behalf of, or provide certain services to, a covered entity that involve creating, receiving, maintaining, or transmitting protected health information. Business associates also include subcontractors that create, receive, maintain, or transmit protected health information on behalf of another business associate.”

The Privacy Rule does not apply to disclosures made by entities or other persons not covered entities or business associates. Therefore, HIPAA prevents no manager, supervisor, or HR person from asking for a doctor’s note if the note is needed to implement or administer sick leave, workers’ compensation, or health insurance. However, a health care provider cannot give such information directly to an employer without an authorization from the employee.


Credible threats of insubordinate activity could override NLRA protections for employees’ Facebook postings.

No profanity please

A few months ago, the National Labor Relations Board (the Board) determined that an employee’s profanity-laced tirade did not lose the protection of the National Labor Relations Act (NLRA), because the tirade followed the employer’s statement that if the employee didn’t like his job, he could quit.

Recently, however, the Board found that a Facebook conversation containing numerous profane words was outside of the protection of the NLRA, even though the postings took place after a year-end staff meeting at which numerous concerns were expressed by employees about their working conditions. Richmond District Neighborhood Center and Ian Callaghan, Case 20-CA-091748, October 28, 2014.

Beacon Teen Center, operated by Richmond District Neighbor Center (RDNC) in San Francisco, provides afterschool activities to students. Ian Callaghan and Kenya Moore both were employed at Beacon. In May 2012, a year-end staff meeting was held in which employees were asked to write down the “pros and cons” of working at Beacon. Employees anonymously submitted 8 pros and 23 cons. After that meeting, some employees felt that managers had taken the comments personally, and were giving employees the “cold shoulder.”

Before each school year begins, RDNC sends offer letters to those employees whom it wants to return for another school year. Callaghan and Moore each received offer letters for the 2012-2013 school year at Beacon.

On the evening of August 2, 2012, Callaghan and Moore engaged in postings to each other on Facebook. That exchange included a number of statements related to their anticipated return to the Beacon, and referenced plans for disruptive and insubordinate behavior.

Callaghan stated: “. . . we’ll take advantage, play music loud, get artists to come in and teach the kids how to graffiti up the walls. . . . I don’t feel like being their bitch and making it all happy-friendly-middle school campy. Let’s do some cool shit, and let them figure out the money. . . . Let’s f*** it up. . . .”

Moore responded: “. . . sO we just gobe have fuN dOin activities and the best part is WE CAN LEAVE NOW hahaha I AIN’T GOBE NEVER BE THERE. . . .”

The day after the postings, a Beacon employee sent screenshots of the conversation to management. On August 13, on the basis of the postings, RDNC rescinded Callaghan and Moore’s rehire offers, stating that “These statements gave us great concern about you not following the directions of your managers in accordance with RDNC program goals . . . We have great concerns that your intentions and apparent refusal to work with management could endanger our youth participants.”

A charge was filed on behalf of the two employees, and an Administrative Law Judge presided at trial in July 2013. He determined that the Facebook conversation was not protected under the Act, and that the withdrawal of the hiring letters was not unlawful. On October 28, 2014, that decision was upheld by the Board.

Of note is the fact that the Board specifically mentioned that its decision was not based on the profanity used by the employees in their postings but instead, was based on the specificity of the actions threatened by the two employees, which included neglecting their duties (“I AIN’T GOBE NEVER BE THERE”), undermining leadership (“we’ll take advantage”), disregard of rules (“play music loud” and “teach kids to graffiti up the walls”), and jeopardizing the future of Beacon (“Let’s f*** it up”).

In summary, the Board found that the “pervasive advocacy of insubordination in the Facebook posts, comprised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the Act’s protection and render Callaghan and Moore unfit for further service.”

In response to the argument that the two employees had no history of insubordination and that, therefore, the postings could not reasonably have been understood at as serious threat of such conduct, the Board pointed to the magnitude and detail of the proposed behavior advocated in the posts. Such postings, it said, “reasonably gave [Beacon] concern that Callaghan and Moore would act on their plans, a risk a reasonable employer would refuse to take.”

The teaching point here is clear: not every profane or unpleasant posting is outside of the protection of the NLRA; but postings that reasonably evidence an actual risk of insubordinate, dangerous, or threatening behavior that would adversely affect a business may take the writer outside of that protection.