Monthly Archives: January 2011

January 31, 2011

Note to Employers: ADAAA Regulations Moving Toward Final Adoption

by Scott E. Randolph

The new year presents a perfect opportunity for employers to revisit their policies regarding disability leave.  Most employers are aware that former President George W. Bush signed the the ADA Amendments Act (“ADAAA”) into law in September 2008.  The ADAAA was effective on January 1, 2009.  Since that date, however, the EEOC has been working on regulations to implement the sweeping changes contained in the ADAAA.

In December 2010, the U.S. Equal Employment Opportunity Commission (“EEOC”) voted to approve the final set of regulations implementing the ADAAA.  Now, the process moves to the Office of Management and Budget for review.

Even though the regulations are not yet final, employers should not wait to update their handbooks and policies to ensure compliance with the new regulations.  The regulations deviate substantially from those that were previously in effect.  For example, the proposed regulations contain a specific list of types of physical and mental impairments that will “consistently” result in a finding of disability under the ADA.  For example, the proposed regulations list the following conditions, 

  • missing limbs;
  • cancer;
  • cerebral palsy;
  • diabetes;
  • epilepsy;
  • HIV/AIDS;
  • sickle cell disease;
  • multiple sclerosis and muscular dystrophy; and
  • intellectual and developmental disorders. 

The proposed regulations also include other conditions that will typically qualify as a disability under the ADA.  Employers should carefully review these regulations to ensure that they understand the types of conditions that will entitle an employee or applicant to coverage under the ADA.  This is particularly important given that many people can suffer from these conditions to varying degrees.  For example, in some cases, an intellectual disability could result in obvious signs for an employer and it would be relatively simple for an employer to determine whether the ADA covers that particular individual.  However, in other cases, the symptoms of the same condition can be far less apparent.  This will likely result in additional exposure for employers and they attempt to navigate this uncharted landscape.

More to come on this topic.  For now, however, employers should be aware that the proposed regulations are one step closer to becoming final and will soon have the force of law.  Employers should take steps now to ensure compliance with the regulations so that they can avoid a scramble once the regulations take effect.

January 26, 2011

Precedent Regarding the Scope of Workplace Internet Posting Policies Delayed

by A. Dean Bennett

Employers may have to wait for another case for precedent regarding workplace internet posting policies.  In October 2010, the NLRB filed a complaint against the American Medical Response of Connecticut, Inc., after the company fired an employee who made disparaging comments on Facebook about her workplace and boss. 

The Complaint alleged violation of Section 7 of the National Labor Relations Act that protects workers’ rights to “self-organization, to form, join or assist labor organizations, to bargain collectively through representation of their own choosing and to engage in other concerted activities for the purpose of collective bargaining of other mutual aid protection.”

At issue in that case was an employer’s policy, which stated “Employees are prohibited from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, coworkers and/or competitors.” 

Many commentators expected the new, more employee friendly NLRB, to conclude that such a broad policy was unlawful because it prohibits protected speech.  But today, the parties to that case called off a hearing and appear to be engaged in settlement talks. 

It might be time to revisit your workplace internet posting policies.  Is your policy so broad that it prohibits discussion about wages and working conditions?  If so, your policy may be unlawful.  Although a court has not expressly decided the issue, plaintiffs’ counsel are on notice that the argument and legal theory has some traction. 

January 24, 2011

Thompson v. North American: Supreme Court Revives Third-Party Retaliation Claims Under Title VII

by Scott Randolph

The Supreme Court of the United States today entered a notable opinion in Thompson v. North American Stainless, LP.  The slip opinion is available here.  Justice Scalia, writing for a unanimous court, reversed the decisions by the lower courts in favor of North American Stainless, LP ("North American") and held that Title VII's anti-retaliation protections extend beyond the person engaging in protected activity.  The decision will likely expand the reach of retaliation claims under Title VII.  For that reason, we recommend that employers understand the reach of the decision when making employment decisions regarding persons related to those who have engaged in protected activity.

The Plaintiff's fiance in North American filed a charge of discrimination with the EEOC.  Shortly thereafter, North American fired him.  Thereafter, the Plaintiff sued under Title VII, contending that he was a victim of retaliatory discharge for engaging in protected activity.  The district court entered summary judgment in favor of North American and, on appeal, the en banc Sixth Circuit affirmed.  Those lower courts reasoned that the Plaintiff did not engage in protected activity and did not fall within the reach of Title VII.

The Supreme Court reversed, stating that it was "obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiance would be fired."  The Court rejected a categorical rule that third-party reprisals do not violate Title VII.  And the Court rejected the creation of a fixed class of relationships for which third-party reprisals are unlawful.  Instead, the Court cited Burlington and observed that  "the significance of any given act of retaliation will depend often upon the particular circumstances." 

 The Supreme Court also addressed the proper meaning of the "party aggrieved" language of TItle VII.  According to the Court, the "aggrieved" language allows suit by those "with an interest arguably [sought] to be protected by the statutes,'" but excludes "plaintiffs who might technically be injured in an Article III sense but whose interests are unrelated to the statutory prohibitions in Title VII.'"  Ultimately, the Court concluded that the Plaintiff was a party aggrieved by Thompson's unlawful act because "[h]urting him was the unlawful act by which the employer punished her." 

The Thompson decision is sure to increase the number of retaliation claims against employers, at least in the short term.  Employers should be aware of this decision when making employment decisions to ensure that they do not run afoul of the expansive reach of Title VII's anti-retaliation provisions.

January 24, 2011

HIRING AND FIRING: SEVEN TIPS ON HOW TO IMPROVE YOUR PROCEDURES AND INSULATE AGAINST LIABILITY

By Pamela S. Howland

           The hiring and firing decisions you make on a regular basis impact your business in a wide range of ways.  Hire the ideal employee and watch as customer satisfaction rises and operations improve.  Hire someone who interviewed well, but whose post-interview performance leaves something to be desired, and watch as employee morale dips and overall efficiency suffers.  Indeed, the challenge of finding the right employees for your business – especially when you have limited time and resources – frustrates even the most experienced human resource specialist.  Couple that with the legal issues and potential exposure that accompany these decisions and the hiring and firing process can seem downright overwhelming at best. 

          This article is designed to provide you with some basic tips to consider as you maneuver through the hiring and firing process; sprinkled throughout are also some legal pitfalls to watch out for, as well as the documentation that can help to insulate your business from legal liability.

           1. Keep Your Job Descriptions Up To Date.

          A well-crafted job description contains information such as the title of the job, the essential functions, the salary range, physical requirements, written/verbal requirements, general job duties, and minimum job qualifications.  Unfortunately, many employers ignore job descriptions as positions, and the duties that accompany them, change.  Don’t count yourself as one of them.  Instead, keep your job descriptions up to date and utilize them throughout both the hiring and the firing process.  Use them during the interview process to make sure that applicants are confident they can perform the job, that they are aware of different functions that will be expected of them, and that they satisfy the minimum qualifications.  If used properly, job descriptions can eliminate employee complaints, at a later date, that they did not know what was expected of them.  In the event of performance problems, a job description is a handy, and objective, tool to demonstrate that certain minimal functions are required and that, when measured against them, the employee’s performance is lacking.

           2. Don’t Under-Utilize Employee Applications.

          Requiring perspective employees to submit a completed job application tailored to your business is critical.  Unlike a resume, which can omit critical information such as previous supervisors and reasons for leaving previous jobs, an application can be tailored to ensure that applicants detail information regarding the special skills, traits, personality, and experience you are looking for.  It can also require applicants to verify and agree to the terms of the application and to other important policies, such as employment at will (when appropriate).  Use the completed application to get to know, and understand, the candidate and utilize it during the interview process to question applicants about any unusual responses or unexplained gaps.  Watch out for misuse of words, poor spelling, and improper grammar, and consider how it reflects on the candidate, and whether that impacts your hiring decision.  The completed application should become part of the employee’s personnel file and ensures that, if problems arise later, you have a written document, signed by the employee, representing that they meet the essential requirements of the job and that all of the information contained within it is truthful.

           3. Obtain and Check References.

          Although most employers require references, many make the mistake of failing to check them.  This step is an important one: can there be a bigger red flag than one that arises in the event gaps and inconsistencies exist between the information provided by the applicant and that confirmed by the reference?  References can also provide interesting insight on such issues as why the employee left their job, how the employee handled pressure, and what type of duties their prior employment covered.  At the time the employee submits their application, obtain a release from them enabling you to inquire into past job performance and to verify references. *Note: Although somewhat of a different issue, your business should have a policy in place regarding the manner in which it gives out references for former employees since Title VII liability can arise from negative employment references.

           4. Maintain and Utilize an Employment Handbook

          It is essential that your employees understand your company’s employment policies and procedures.  This is why the employee handbook is a must.  Your handbook should include policies such as an at-will disclaimer (when appropriate), a policy noting that “honesty is essential,” policies regarding discrimination in the workplace, your policy on paid time off and other types of leave, your FMLA policy (assuming FMLA is applicable based on the number of employees) and the termination procedure.  Require your employees to read the handbook, follow it, and sign an acknowledgment that they understand and have done so.  In the event changes are made, get signed forms from all existing employees acknowledging that they have reviewed and are aware of the changes.  This documentation should all be kept in the employees’ personnel files.  Although it seems simplistic, following this procedure can save your business time and money down the road if legal issues arise.  For situations where employment is at will, a signed acknowledgement can prevent an employee from later arguing that they were guaranteed employment or that a different employment relationship existed.  Likewise, it is difficult for an employee to argue that they were subjected to unlawful discrimination if they never reported it and otherwise failed to follow your written policies on what to do if discrimination arises. 

           5. Review Performance on a Regular Basis.

          Employee reviews provide an opportunity for both you and your employees to explore performance, goals, challenges and overall satisfaction.  An effective review should include input from both the employer and the employee and should measure areas such as strengths, areas of improvement, areas of concern, and accomplishments against objective criteria.  This input should take the form of a written document, acknowledged by both the employer and the employee.  Performance reviews are frequently analyzed with scrutiny when a disciplinary or termination decision morphs into a lawsuit.  Accordingly, it is critical that the employer reviews performance on a regular basis and documents problems or concerns, especially if termination is likely in the future.  

           6. Document Disciplinary Action. 

          Undocumented disciplinary actions provide unnecessary legal exposure for your business.  Conversely, documentation of disciplinary action can be an invaluable tool for the employer to show that the employee was on notice of their inadequate performance, that they were given the chance to remedy it, and that they failed to do so.  Such action can take the form of a simple document detailing the reason for discipline, the plan of action, the desired behavior, a timetable for improvement, the employee’s side of the story, and the employee’s acknowledgement that they have reviewed the written document.  Your document should stick to the facts, rely on first-hand knowledge, and should relay all of this word for word.  If all else fails, even an oral warning, which can subsequently be documented in a confirming email sent to the employee, is better than nothing.  Regardless of the form, take the time to make sure that some documentation of the disciplinary action and the opportunity that you gave the employee to cure their inadequacies has ultimately landed in the employee’s personnel file.

           7. Follow A Thoughtful and Deliberate Process When Terminating Employees.

          Gone are the days of split-second firing decisions based on emotion or suspicion.  Instead, today’s business must undertake various considerations when terminating an employee and must do so in a manner that minimizes liability.  This process involves many of the issues previously discussed.  For example, following termination policies and procedures, as outlined within the employment handbook, is important and can show consistency with past practice.  Ensuring that evaluations are up-to-date and that inadequate or unacceptable performance has been documented is critical.  Disciplinary actions, such as written warnings, further documenting the complained-of conduct and demonstrating that the employee has had the chance to remedy their deficiency – but has failed to do so – should now be contained within the personnel file.  Considerations of actual or apparent unlawful discrimination must be made.  Would the company be able to justify its decision if a claim of discrimination or unjust dismissal is brought?  Is the decision based on facts from a credible source? Does the business fully understand the employee’s perspective and have personal difficulties or special circumstances been taken into account?  Once everything is in order, proceed with the termination through a face-to-face private meeting with the employee.  Do not sugarcoat termination explanations out of sympathy – failure to state the true reason behind the termination could be later used to suggest pretext.  Only cite to terminable, provable, behavior.  Finally, document the termination through a written memorandum detailing the termination decision, all related facts, and the procedures which lead up to the termination decision.

January 24, 2011

Diabetes: A Basic Overview for Employers About What This Disease Is and How it is Regarded by the Law

by Pamela Howland

Over 23 million Americans (one in ten U.S. adults) suffer from some form of diabetes.[1]  Fast forward to 2050, and as many as 1 in 3 adults are predicted to suffer from Type II diabetes alone.[2]  As an employer, if you have not taken the time to familiarize yourself with this chronic disease and the impacts it may have on your employees (and your business), then now is the time.

In order to gain a basic understanding of diabetes, it is essential to understand the differences between Type I and Type II diabetes and the basic implications that follow from each.  Although Type I and Type II vary significantly from each other, both relate to the body’s production and use of insulin, a hormone needed to convert sugar, starches and other food into energy needed for daily life. 

Ninety to ninety-five percent of diabetes cases are Type 2.[3]  Type 2 results from insulin resistance where the body fails to use insulin combined with a relative insulin deficiency.  Obesity is considered to be a major risk factor for Type 2, although many people who suffer from Type 2 are not overweight.  Exercise, diet and medication can help prevent the condition and, in some cases, can treat it once it develops.[4]  Although some type 2 diabetics require insulin, many do not and are able to treat their condition with diet and oral medications.

Type I, on the other hand, results from the body’s failure to produce any insulin at all.  This condition is an autoimmune disorder, resulting when the body attacks itself and destroys the insulin-creating cells in the pancreas.  Type I, which is sometimes referred to juvenile diabetes, is frequently present from childhood and people who suffer from it need insulin to live.[5]  People with Type I receive insulin by injection or through an insulin pump attached to their body.  There is currently no cure or oral medication available for people who suffer from Type I diabetes.

With both Type I and Type II diabetes, there is an increased risk for life-threatening complications such as heart disease, stroke, high blood pressure, blindness, kidney disease, nervous system disease, amputations, dental disease, complications of pregnancy, and sexual dysfunction.  On top of these long-term risks, those diabetics who are insulin-dependent must engage in a daily battle to keep their blood sugar levels balanced.  Failure to do so can result in loss of consciousness, stroke, or seizure.

With every diabetic, their lifestyle is impacted to a certain degree.  For Type I diabetics, their blood sugar must be monitored at various points during the day by poking their finger with a lancet.  In addition, insulin must be taken with meals (and throughout other times of the day) in order to avoid high blood sugar levels.  Snacks must also be eaten at certain intervals in order to keep insulin levels balanced and to avoid low blood sugar levels. 

Obviously, the continual treatment and monitoring required of diabetics must be performed regardless of whether the diabetic is at home or at work, which leads us to the issue of how diabetes is regarded in the law and how it can affect you, as an employer.  In 2009, the Ninth Circuit decided Rohr v. Salt River Project Agricultural Improvement & Power District, 555 F.3d 850 (9th Cir. 2009), and in the process provided some valuable insight on how this disease is viewed by this circuit.

In Rohr, the court considered the claim of an insulin-dependent Type II diabetic, Larry Rohr, who filed suit after he was asked to pursue another position within his company, apply for disability or seek early retirement after he requested medical accommodations due to his diabetes.  Most of Rohr’s accommodations related to travel assignments and how they impacted his ability to keep his blood sugar controlled.  He primarily sought to avoid out-of-town trips that would require him to drive long distances, engage in strenuous activities, work in extreme heat or perform other tasks that would impact his ability to keep his blood sugar levels controlled.

On appeal, the Ninth Circuit concluded that Rohr raised a genuine issue of material fact as to whether his diabetes substantially limited his life activity of eating.  The court noted that Rohr was required to strictly monitor what, and when, he eats.  It addressed the complications that follow when his diet regimen was not followed.  It noted, “While it may seem easy to take a pill or shot of insulin, the reality of diabetes, a chronic and incurable disease, is not so simple.  For people like Rohr, who must treat their diabetes with insulin, the failure to take insulin will result in severe problems and eventually death.” 

The court also addressed the American with Disabilities Act Amendments Act of 2008 (“ADAAA”) and how it “significantly expand[ed] the scope of the term ‘disability’ under the ADA.”  Under the ADAAA “disability” is to be construed broadly and “coverage will apply to the ‘maximum extent’ permitted by the ADA and the ADAAA.”  

Rohrmakes it clear that a determination of whether a diabetic has a disability is an individualized, fact-specific inquiry.  In other words, not every diabetic is disabled under the ADAAA, which makes sense when you consider the differences between Type I and Type II diabetes and the vast differences in treatment, monitoring, and control that can apply to each.  Facts concerning each diabetic’s condition, such as how they control the disease, when they are required to eat, and the symptoms they experience if their blood sugar becomes uncontrolled are all part of this inquiry.

Based on the escalating numbers of people diagnosed with diabetes, every employer at some point will undoubtedly be faced with the implications of employing diabetics in the workplace.  Under Rohr, such employees may well be entitled to protection under the ADAAA and appropriate accommodations should be given serious consideration if requested.  We will continue to monitor decisions in this circuit regarding the scope and effect of the ADAAA and look for additional decisions in our state and federal courts on this issue.


[1]Julia Deardoff, Sufferers of Type I diabetes don’t want to be lumped in with Type 2, The Spokesman-Review, December 7, 2010.

[2] Id.

[3] Id.

[4] Id.

[5] Id.

January 22, 2011

Understanding the Idaho Trade Secrets Act and its Relevance to Former Employees

by Nicole C. Snyder

It is often concerning when an employee is discharged or quits her job and goes to work for a competitor.  In the absence of a non-competition agreement, the former employer may claim that the employee has stolen trade secrets and used them in her new job.

Idaho has adopted the Uniform Trade Secrets Act, codified under Idaho Code § 48-801, et seq.  The Act prohibits the misappropriation of “trade secrets,” defined as:

[I]nformation, including a formula, pattern, compilation, program, computer program, device, method, technique, or process, that:

(a) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy… .

If an employer claims a former employee has violated the Trade Secrets Act, is the claim likely to succeed?

Maybe. It is important for employers to recognize that there are significant limitations on the protections against former employers under the Trade Secrets Act.  In a very recent case, Wesco Autobody Supply, Inc. v Ernest, the Idaho Supreme Court recited this language from a prior decision:

[T]he legislature did not intend the [Idaho Trade Secrets Act] to be read so broadly as to preclude the hiring of an employee from a competitor; the legislature also did not intend that merely hiring a competitor's employee constitutes acquiring a trade secret.”  Instead, “[a]n employee will naturally take with her to a new company the skills, training, and knowledge she has acquired from her time with her previous employer. This basic transfer of information cannot be stopped, unless an employee is not allowed to pursue her livelihood by changing employers.

In the Wesco case, the Court found it was possible that one employee violated the Trade Secrets Act when the employee took and used the former employee’s customer lists, lists showing customer buying preferences, history of customer purchases, and custom paint formulas.  The Court, however, was unwilling to say that other employees had violated the Trade Secrets Act based merely on the fact that their customer relationships caused the customers to follow the former employees to a new employer.

In sum, if a company’s leadership is worried about the risk of employees working for a competitor and using the knowledge and relationships they built for a competitor’s advantage, then reliance on the Idaho Trade Secrets Act may be inadequate.  In such cases, it is important to utilize carefully-crafted noncompetition agreements.

January 21, 2011

DRI 2011 Employment and Labor Law Seminar

I am member of DRI and will be speaking at the 2011 DRI Employment and Labor Law Seminar.  Anyone that may have interest in attending can link to http://events.linkedin.com/DRI-2011-Employment-Labor-Law-Seminar/pub/538168 for more information.  The seminar will be held at the Westin Kierland in Scottsdale, AZ from Wed, May 18 to Fri, May 20.

Steven M. Gutierrez–http://www.hollandhart.com/peopleprofile.cfm?IDName=PersonID&ID=5174.

January 17, 2011

How to Properly Withhold from Employees’ Final Paychecks in Nevada

Dora Lane

In Gordon v. City of Oakland, Case No. 09-16167 (9th Cir., Nov. 19, 2010), the United States Court of Appeals for the Ninth Circuit (which includes Nevada) held that the City could properly require an employee who had left a job within a specified period of time to reimburse the City for training costs that the City had paid in anticipation that the employee would remain employed with the City for that period of time, without violating the Fair Labor Standards Act ("FLSA").  An important part of the Gordon decision was the fact that the City actually paid the employee's full final paycheck, but later sent her a reimbursement request for the training costs she had previously agreed to repay.  The employee unsuccessfully argued that the City's repayment request violated the FLSA and California wage and hour laws because, had she had to pay for the training, her wage rate would have fallen below the applicable minimum wage for the final pay period.  In affirming the lower court's decision to throw out the employee's case, the Ninth Circuit noted that, by advancing the training costs to the employee, the City had essentially given her a loan, and that there was a difference between withholding earned wages and asking for a loan repayment. 

The Gordon decision brings to the forefront a frequent practice by Nevada private employers which, unfortunately, also frequently runs afoul of Nevada law.  For example, it is not uncommon for Nevada employers to issue credit cards to employees, or entrust them with expensive equipment or materials, or permit them to use a company vehicle in the course of their employment.  In those circumstances, employers also often require the employee to execute an authorization, allowing the employer to deduct any related costs for which the employee is responsible, from the employee's final paycheck (e.g., any outstanding credit card charges for personal expenses, loss of materials or equipment, etc.)  Employers should be mindful, however, that Section 608.160 of the Nevada Administrative Code provides that, with very limited exceptions, an employer may not deduct any amount from the wages due an employee unless:

(a) The employer has a reasonable basis to believe that the employee is responsible for the amount being deducted by the employer;

(b) The deduction is for a specific purpose, pay period and amount; and

(c) The employee voluntarily authorizes the employer, in writing, to deduct the amount from the wages. 

NAC 608.160 specifically provides that "[a]n employer may not use a blanket authorization that was made in advance by the employee to withhold any amount from the wages due the employee." Rather, as stated in NAC 608.160, the employer must secure the employee's written authorization for the deduction "for a specific purpose, pay period and amount."  In other words, the authorization which the employee made before actually incurring the expense (and on which employers often rely) is likely insufficient to support the deduction from wages under Nevada law.  

 Employers often find this requirement troublesome because employees may refuse to execute the authorization or may be otherwise unavailable to do so, or both (as in cases of terminated employees).  Many employers feel that withholding money from the employee's final paycheck is the only way they could ever recoup the losses that the employee caused the employer to suffer. While in reality that may sometimes be the case in reality, the proper way to recoup these losses (absent a written authorization consistent with NAC 608.160) is to bring a separate action against the employee to recover the losses.   Ordinarily, the disputed amount is under $5,000.00, which allows an employer to file a lawsuit against the employee in Small Claims Court, even without an attorney.  If the amount exceeds $5,000.00, but is less than $10,000.00, an employer can file a lawsuit in Justice Court..  

On a final note, even where the employee properly authorized the wage deduction, employers should be mindful of whether the total wages paid to the employee for the respective pay period fall under the applicable federal and Nevada minimum wage rates.  If this is the case, the full deduction may still be inappropriate.