July 2016 HL Quarterly Update

Introduction

We at Hanba Lazar know that our clients need to be kept up to date with regard to changes in the law that affect risk management. Hanba Lazar presents this Quarterly as our remaining commitment to provide you with up to date legal opinions and professional best practices.

Bicycling and baseball remain all-time favorites. We would invite all of you to attend this year’s annual Lugnuts baseball outing. This will take place on Saturday, August 20th. Please join us for an event of dinner, baseball and fireworks. To reserve your place, please RSVP to Amy at amy@hanbalazar.com. Additionally, we are again sponsors of the Ability Tour this year (July 16, 2016). The Ability Tour is an inclusive, bicycle ride dedicated to raising awareness of people of ALL abilities. Proceeds from the Ability Tour will go toward equipping other recreational events with the resources and accommodations to make events more accessible to all individuals. Enter our official clients and friends promo code HANBALAZAR to receive a 100% registration discount.

We are privileged to enjoy the partnership that we have and continue to form with our clients.

Indefinite Light Duty

Plaintiff Frazier-White worked as a community service officer. She was injured in a work-related accident and was placed on light duty. Defendant employer’s policy was to reserve such light duty assignments for people with temporary disabilities however, and the employer required re-certification of light duty status every 270 days. Near the end of the 270 day term, Plaintiff simply asked for a light duty extension, but would not consider applying for another position, and would not estimate when she could return to full duty. As a result, she was terminated.

Plaintiff sued Defendant for failure to accommodate her disability under the ADA. The case, Frazier-White v. Gee, No. 15-12119 (11th Cir. April 7, 2016), eventually made its way up to the 11th Circuit. There, the court held that indefinite light duty is not a reasonable accommodation. Further, the court indicated that the Defendant had engaged in the ADA’s mandated process of interaction with their employee, but because the only accommodation Plaintiff sought was unreasonable, her claim for discrimination must fail.

When an employee requests a light duty assignment, it’s important to remember:
·       The ADA does not require employers to create light duty jobs if they do not already exist.
·       The ADA does not require employers to allow workers with a disability to remain in light duty position indefinitely.
·       Employers may need to provide reasonable accommodations to enable an employee to perform the essential functions of a light duty position.
·       An employer may not force an employee into a light duty position.

Source: ADA Compliance Guide, June 2016
Submitted by Jonathan T. Rea

Attendance Found to be Essential Function

Plaintiff in Boileau v. Capital Bank Financial Corp., No 15-5820 (6th Cir. April 25, 2016) was the head teller at one of Defendant’s bank locations. As the result of recurrent lupus, Plaintiff took leave under the Family Medical Leave Act in 2011 and 2012. Eventually, Plaintiff submitted a medical certification stating that because of her impairment, she would need 8 to 12 weeks off, taken every 1 to 2 months, for the rest of her life. However, when Plaintiff used all of her FMLA leave for the year of 2012, she was fired. Plaintiff sued, alleging disability discrimination and retaliation under the FMLA, and the case made its way to the 6th Circuit.

According to the 6th Circuit, the ADA prohibits discrimination against “qualified” individuals. In order to be qualified however, an individual has to be able to perform the essential functions of their job, with or without a reasonable accommodation. Based on Plaintiff’s inability to regularly attend work, she could not perform the essential functions of her job, which includes actually being present. Therefore, Plaintiff was not “qualified” under the ADA and was not entitled to its protections. Once again however, this ruling directly contradicts the EEOC’s own published guidance, in which the EEOC states that attendance policies should be adjusted for employees with a disability. Despite this general policy, the EEOC does not indicate how much additional leave they want an employer to provide in these types of circumstances.

Source: ADA Compliance Guide, June 2016
Submitted by Jonathan T. Rea

Consistency is Key in Defending Retaliatory Discharge Claims (Update)

Last quarter, I wrote an article explaining how employers can enforce work rule violations while minimizing exposure to retaliation claims. That article focused on McCoy v Laurel Health Care, a case where an employee filed a retaliation claim after he was fired for excessive absenteeism during workers’ compensation litigation. In McCoy, the Michigan Court of Appeals applied the prevailing legal test, requiring a plaintiff to demonstrate a causal connection between his termination and his workers’ compensation case, to uphold a motion for summary judgment in favor of the employer.

McCoy addressed retaliation in a typical context – attendance. Since our last issue was published, a case addressing this issue under more unique circumstances was decided. This case demonstrates how the legal analysis in McCoy dovetails with a plaintiff’s claim that an employer’s non-discriminatory reason for termination is merely pretextual.

In Jones v. Musashi Auto Parts, unpublished opinion per curiam of the Court of Appeals, issued May 10, 2016 (Docket No. 327304), plaintiff signed an employee handbook that included a respectful workplace policy prohibiting abusive or offense remarks, gossiping, and spreading rumors about other employees. After receiving several write-ups and warnings for previous violations of this rule, plaintiff was terminated when she told the human resources director that she smelled liquor on her supervisor’s breath.

Plaintiff argued that her employer’s decision to terminate was in retaliation to her workers’ compensation claim, and that the non-discriminatory reason for termination cited by her employer was merely pretextual. The Court of Appeals, lumping together its analysis for the workers’ compensation, FMLA, and public policy components of plaintiff’s claim, explained that a party can prove that the employer’s reason for termination is pretextual
(1) by showing that the reasons had no basis in fact, (2) by showing that they were not actual factors motivating the decision, or (3) if the reasons were motivating facts, by showing that they were jointly insufficient to justify the decision. Jones v Musashi Auto Parts Mich, LEXIS 912, *8 (Mich Ct App May 10, 2016), citing Meagher v Wayne State Univ, 222 Mich App 700, 712 (1997). See Cuddington v United Health Servs, Inc, 298 Mich App 264, 276-277 (2013) (applying this test solely to a workers’ compensation case). See also Edgar v JAC Prods, Inc, 443 F3d 501, 508 (CA 6, 2006) (applying this test to an FMLA case).

Plaintiff’s pretext argument invoked the second prong of this test; plaintiff argued that she received disparate treatment based on her workers’ compensation claim. The court explains that:
To create an inference of discrimination on the basis of disparate treatment, a plaintiff must show that all the relevant aspects of employment between the plaintiff and another employee were “nearly identical,” but the plaintiff was treated differently. Jones v Musashi Auto Parts Mich, LEXIS 912, *8 (Mich Ct App May 10, 2016), citing Town v Mich Bell Tel Co, 455 Mich 688, 700 (1997).

The Court of Appeals determined that plaintiff had not been treated differently from other employees. Plaintiff argued that other employees had received more lenient discipline than herself; however, the court noted that those employees were disciplined for different reasons and some had, in fact, been disciplined more severely. As in McCoy, the Jones court discounted the temporal proximity between plaintiff filing and workers’ compensation claim and the termination, requiring proof of a causal connection between plaintiff’s termination and her workers’ compensation claim.

The consistent application of work rules was key in overcoming plaintiff’s argument that her discharge was pretextual. The court determined that the employer’s work rules had been consistently applied to its employees. The employer was able to demonstrate that its employees had not received disparate treatment through thorough record-keeping and consistent application of work rules. Looking ahead, records explaining the reason discipline is being administered and the factors weighed in making a disciplinary determination would be particularly helpful in these instances.

I instances where work violations such as gossiping and abusive language that are not objectively measurable – unlike absenteeism in McCoy – there is a greater likelihood that a plaintiff will pursue a retaliation theory dovetailed with a pretext argument as the plaintiff in Jones did. Employers should make sure to maintain clear disciplinary guidelines and administer consistent discipline.

Submitted by Brian A. Zielinski

New Definition for Nonexempt Employees

On May 18, 2016, President Obama and Labor Secretary Thomas Perez announced the publication of a Final Rule, updating overtime regulations under the Fair Labor Standards Act (FLSA). This rule change, effective December 1, 2016, is estimated by the Department of Labor to affect 732,000 white collar salaried workers and amount in $678,000,000 dollars in total direct costs to employers this year.

In addition to requiring that employees be paid a federal minimum wage, the FLSA requires overtime premium pay of one and one-half times an employee’s regular rate of pay for all hours worked over 40 in a workweek. However, employees employed in an executive, administrative, or professional capacity are exempted from these overtime requirements. The FLSA itself does not define “executive”, “administrative”, or “professional”; however, the Department of Labor has used its rulemaking authority to clarify these exemptions. To qualify as exempt,

1.    the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis    test”),
2.    the amount of salary paid must meet a minimum specified amount (the “salary level test”), and
3.    the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (the “duties test”).

The new rule raises the minimum specific amount in the second prong from $23,600 to $47,476, a more than twofold increase, but still slightly less than the $50,440 annual salary level contemplated in the originally proposed rule. The Department of Labor estimates that the new regulations will transfer between $1,178,000,000 and $1,271,000,000 in average annualized income from employers to employees. Importantly, the Final Rule has created a mechanism to reset the exempt employee salary threshold every three years, pegging the minimum salary at the 40th percentile of earnings of full-time salaried workers in the lowest-wage census region.

In the near term, employers should consider tracking the number of hours worked by their employees on a weekly basis who are currently classified as exempt. This preemptive tracking will help employers determine with specificity the extent to which this new rule will affect their operations. In the medium and long term, employers might consider raising salaries to bring employees over the new salary threshold, assuring that employees remain exempted from overtime pay. Alternatively, employers might consider reducing the hours worked of employees who will become non-exempt once this change is effective.

Source: Federal Register, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees. May 23, 2016.
Submitted by Brian A. Zielinski
Sex Discrimination May Include Sexual Orientation

The EEOC has filed the first two sexual orientation discrimination cases. The cases are brought under the Civil Rights Act of 1964 which prohibits employers from discriminating against employees on the basis of certain protected class statuses. Traditionally, these protected classes were race, color, national origin, and religion. However, with the recent throngs of litigation targeting the inequitable treatment of LBGT individuals, the EEOC is seeking to extend that coverage to include sexual orientation. The EEOC is arguing that the CRA’s prohibition against sex discrimination subsumes sexual orientation discrimination.

One of the cases was brought by the EEOC on behalf of Yolanda Boone, a lesbian worker whose supervisor allegedly made numerous inappropriate comments regarding her appearance and sexual orientation. She was subsequently terminated after reporting the harassment up the chain of command.

This past week, the Boone case settled. The employer agreed to pay Boone $202,000 to settle allegations that she was harassed by co-workers due to her sexual orientation and terminated after reporting the harassment. The employer denied any wrongdoing, however.

Going forward, it is imperative that employers have detailed anti-discrimination policies that include sexual orientation and gender identity. Likewise, employers must create effective reporting systems and discipline employees for inappropriate conduct.

Submitted by Stephen A. Cooley

Just for Fun: PGA Tour Lawsuit – Human Billboards

More than 80 caddies have filed a class-action lawsuit against the PGA Tour in federal court for the Northern District of California over unpaid endorsement fees; claiming that by virtue of their tournament bibs, the PGA Tour has turned the caddies into walking billboards with the tournament sponsor’s logo emblazoned on their chests.

The lawsuit is being brought by plaintiff’s attorney, Mark Lanier, of Vioxx fame. Caddies are considered independent contractors for their respective golfers. The Tour gives a health insurance stipend of approximately $2,000 per annum and the caddies are not eligible for Tour pension plans. The complaint alleges that despite the caddies’ contributions to professional golf, the Tour has treated them like second-class citizens.

The caddie bib, bearing the logos of tournament sponsors, it is argued, enjoys significant exposure to live tournament audiences, TV audiences, and webcast audiences; with an approximate advertising value of $50 million annually. Although caddies are covered under the Player Endorsement Policy, which allows for caddies to secure endorsements for their clothing, that potential is significantly restricted by the bibs. Likewise, the plaintiffs argue that the Tour has threatened to prohibit plaintiffs from providing caddie services at tournaments organized and promoted by the Tour if they refuse to wear the bibs.

Plaintiff caddies are seeking injunctive relief to stop the bib practice, money damages, and disgorgement of unlawfully withheld money from the bibs. Causes of action for this case arise under the Sherman Act, the Lanham Act, a tort theory of misappropriation of likeness, breach of contract, quantum meruit, and California’s Unfair Competition Law, amongst others.

This case has the potential to change the way the PGA views caddies and could lead to some interesting changes in tournaments going forward; it is a case to keep any eye on for any golf fan.

Submitted by Stephen A. Cooley

Please leave us comments/questions. If there is a topic that you would like to see discussed in this Quarterly, please let us know. Comments and questions can be directed to Stephen Cooley at scooley@hanbalazar.com.