Monthly Archives: January 2013

January 30, 2013

EEOC Fails to Prove Credit Checks have Discriminatory Impact

By Mark B. Wiletsky

Is checking an applicant’s credit history discriminatory?  According to the Equal Employment Opportunity Commission (EEOC), using credit checks to screen out applicants may be discriminatory if it has a disproportionately significant impact on a protected group.  Although a court recently dismissed an EEOC lawsuit against an organization concerning its use of credit checks, the case should serve as a reminder to review your own policies and procedures with respect to using background and credit checks in the hiring process, as this is likely not the last time the EEOC or the courts will address the issue. 

EEOC Sues Claiming Use of Credit Checks Has Disparate Impact on Black Applicants

In December 2010, the EEOC sued Kaplan Higher Learning Education Corporation (Kaplan), alleging that Kaplan’s practice of using credit history in making hiring decisions has a disparate impact on Black applicants in violation of Title VII.  In other words, the EEOC asserted that Kaplan’s use of credit histories—while not facially discriminatory—had a disproportionate impact in terms of screening out Black applicants.  Kaplan, however, defended its use of credit histories in the hiring process.  It claimed that it used credit reports to assess applicants for financial and operational positions after discovering system breaches that allowed business officers to misappropriate student funds.  Kaplan asserted that it reviewed an applicant’s credit history to determine whether the individual is under “financial stress or burdens” that might compromise his or her ethical obligations. 

In order to provide statistical analysis showing disparate impact on Black applicants, the EEOC relied on its expert, Dr. Kevin Murphy, to analyze the applicant pool and those rejected due to their credit report.  Because the race of each applicant was not known, the EEOC’s expert tried to use other means to make determinations about the applicant’s race, even when it was not known. 

Kaplan asked the Court to exclude Dr. Murphy’s testimony and report and ultimately, dismiss the EEOC’s case, arguing that Dr. Murphy’s method of determining race was scientifically unsound.  The Court agreed. In the absence of any reliable, scientifically sound evidence to link the use of credit reports to race, the Court granted summary judgment to Kaplan.

Use of Credit Reports Going Forward

In the last four or five years, the EEOC has made an issue out of employers’ use of credit reports and criminal history records in hiring decisions, resulting in the filing of a number of lawsuits.  The EEOC’s track record in these cases, however, is mixed.  In an earlier case alleging disparate impact related to the use of criminal history records, the EEOC finally agreed to dismiss the case after more than three years while the federal court ordered sanctions of over $750,000 against the EEOC for continuing to litigate when it knew of fatal flaws in proving disparate impact.  (See EEOC v. Peoplemark, Inc., No. 08-cv-907 (W.D. Mich. 2008)).  On the other hand, the EEOC was able to obtain a $3.1 million settlement and policy revisions from Pepsi when it challenged Pepsi’s use of background checks in 2011.

Despite the EEOC’s spotty results in proving disparate impact in these background check cases, employers need to be careful and deliberate in how they use credit reports for hiring purposes.  Credit reports should be used only where job-related, such as for applicants seeking positions involving financial responsibility, high level managerial decisions or as required by law.  Conduct credit checks only after making a conditional job offer so as not to weed out candidates prematurely on the basis of credit.  Finally, be aware that eight states currently have statutory restrictions on the use of credit history in employment decisions so if you are located or are hiring in California, Oregon, Washington, Illinois, Maryland, Connecticut, Hawaii or Vermont, you will need to comply with those restrictions.

January 28, 2013

Expect More FMLA Requests for Leave to Care for an Adult Child as a Result of New DOL Guidance

By Mark B. Wiletsky

Employers will likely face additional requests by employees seeking leave under the Family and Medical Leave Act (FMLA) to care for an adult child who is unable to care for themselves.  The Department of Labor (DOL) recently issued an Administrator’s Interpretation (AI), No. 2013-1, clarifying the definition of “son or daughter” under the FMLA as it relates to covered leave for an adult child with a serious health condition.  The AI also clarified FMLA leave to care for an adult child injured during military service.  Let’s take a look at what employers need to know.

FMLA Leave for Care of a Son or Daughter

The FMLA provides an eligible employee with up to 12 weeks of unpaid, job-protected leave during a 12-month period to care for a son or daughter with a serious health condition.  If the child is age 17 or younger, the employee requesting leave need only show that the child has a serious health condition and the employee is needed to care for the child.  However, if the child is age 18 or older, leave is available only if the child has a mental or physical disability and is incapable of self-care because of that disability. 

Four-part Test to Determine FMLA Leave for an Adult Child with a Disability

To determine whether a parent is entitled to take FMLA leave to care for their adult (age 18 or older) child, four criteria must be met.  The adult son or daughter must:

            1)  have a disability as defined by the Americans with Disabilities Act (ADA);

            2)  be incapable of self-care due to that disability;

            3)  have a serious health condition; and

            4)  be in need of care due to the serious health condition.

Disability Determination.  Because the FMLA regulations rely on the definition of disability found in the ADA, the first criteria will be met if the adult child has a physical or mental impairment that substantially limits one or more of their major life activities.  Because the Americans with Disabilities Act Amendments Act of 2008 (ADAAA) expanded the definition of major life activities that lead to a disability determination, the issue of disability is not likely to require an extensive analysis.

Incapable of Self-Care.  The second criteria specifies that the adult child must require active assistance or supervision to provide daily self-care in three or more of the “activities of daily living” or “instrumental activities of daily living.”  In essence, this means that the individual needs help with daily activities such as bathing, grooming, dressing, eating, cooking, cleaning, shopping, maintaining their home, using a telephone, etc.  Determining whether an adult child is incapable of self-care due to their disability is a fact-specific analysis that must be made based on their condition at the time of the requested leave.

FMLA Serious Health Condition.  If the adult child meets the first two criteria in the test, the analysis turns to whether the child has a serious health condition, as defined by the FMLA.  This means the individual has an illness, injury, impairment or physical or mental condition that involves inpatient care or continuing treatment by a health care provider.  In many cases, the impairments that meet the definition of disability under the ADAAA will also meet the definition of serious health condition under the FMLA.  However, it is important to note that the serious health condition does not have to be associated with the individual’s disability (e.g., a broken leg may be the serious health condition for an individual whose disability is cancer).

Care Needed.  Finally, the parent requesting leave must be needed to care for the adult child with a serious health condition.  This threshold is relatively low as the term “needed to care” can include providing transportation for doctor appointments, preparing food and offering psychological comfort and reassurance.

Age at Onset of Disability Doesn’t Matter

An important clarification made by the DOL is that the disability of the child does not have to have occurred or been diagnosed before the child turned 18 years old.  For purposes of FMLA leave, it does not matter when the disability commenced.  The DOL believes this interpretation is consistent with the legislative history and purpose of the FMLA.

Caring for Adult Children Injured During Military Service

Under the FMLA military caregiver provision, the parent of a covered servicemember who incurred a serious injury or illness during military service may take up to 26 weeks of FMLA leave in a single 12-month period.  Recognizing that the impact of the injury may extend beyond a single 12-month period, the DOL clarified that the servicemember’s parent may take FMLA leave to care for a son or daughter in subsequent years due to the adult child’s serious health condition, provided all other FMLA requirements are met.

What Do I Do Now?

With the potential influx of new FMLA leave requests related to the care of an adult child, review your FMLA policies and procedures now to ensure that they are consistent with the new DOL guidance.  Train your human resource professionals and any supervisors who handle leave requests to recognize the issues associated with leave for the care of an adult child. And finally, given the complexities involved in this four-part test, consult with your legal counsel when faced with a leave request to care for an adult child.

January 25, 2013

President’s Recess Appointments to NLRB Unconstitutional

by Steven M. Gutierrez and Brian M. Mumaugh

The United States Court of Appeals for the District of Columbia issued the long anticipated ruling in the Noel Canning v. National Labor Relations Board case. In this case, Noel Canning ("Canning") asked the Court to review a decision by the National Labor Relations Board ("NLRB"), finding that Canning violated the National Labor Relations Act by refusing to sign a collective bargaining agreement reached with a Teamsters local union. While a review of an NLRB decision is considered by some routine, this case was not. In addition to Canning's arguments that the findings in the case were not supported by the evidence presented at hearing or the law (both arguments rejected by the D.C. Circuit), Canning also questioned the authority of the NLRB to issue its order on two constitutional grounds – (1) that the NLRB lacked authority to act because it did not have a quorum since three members of the five-member board were illegally appointed by the President without Senate confirmation as recess appointments and (2) the vacancies filled by the purported recess appointments did not actually happen during a recess of the Senate, as required under the Recess Appointments Clause of the U.S. Constitution.

Appointments Were Invalid Because They Were Not Made During "the Recess"

Under the Recess Appointments Clause, the President has the power "to fill up all Vacancies that may happen during the Recess of the Senate, . . . ." In this case, the D.C. Circuit Court concluded that President Obama's January 2012 alleged recess appointments to the NLRB of Board Members Sharon Block, Terence Flynn and Richard Griffin were not made during "the Recess" of the Senate. Instead, the January 4 appointments were made when the Senate was operating pursuant to a unanimous consent agreement that provided the Senate would meet in a pro forma session every three business days from December 20, 2011 through January 23, 2012. Because the Senate acted to convene the 112th Congress on January 3 — fulfilling a constitutional mandate that the Senate convene on that day — under the Appointments Clause of the U.S. Constitution, nominations of Officers of the United States made by the President require the advice and consent of the Senate.

Here, the recess appointments were made by the President on the claim that, although the Senate must give its advice and consent to any appointment, the Senate was not in session (and in a de facto recess) because the Senate's pro forma sessions occurred during the holiday season when the Senators were not actually present in the Senate Chamber. Therefore, the President claimed that the appointments were valid under the Recess Appointments Clause. Rejecting this argument, the D.C. Circuit reasoned that the term "the Recess" of the Recess Appointment Clause is by definition the period of time the Senate is not in session and therefore unavailable to receive and act upon nominations from the President. The Recess Appointments Clause has strict limits and appointments under this clause can be made only when the Senate is between sessions, not during a routine adjournment, a long weekend or a lunch break during regular workings sessions of the Senate and certainly not when the President unilaterally decides that the Senate is unavailable. Thus, the term "the Recess" is limited to intersession recesses. The D.C. Circuit Court pointed out that the Senate's role through advice and consent serves an important function as a check upon the President's power.

Appointments Also Invalid Because They Did Not Arise During the Recess

The D.C. Circuit went on to conclude that the appointments were also invalid because they did not actually "happen" during a recess. The three seats the President attempted to fill had become vacant on August 27, 2010, August 27, 2011 and January 3, 2012. The NLRB argued that these vacancies could be filled under the Recess Appointments Clause because the vacancies existed during the alleged recess. The Court, however, agreed with the employer and ruled that the vacancies must arise during the Recess, not just extend into the recess period. To rule otherwise would mean that a President could fill any vacancies during the Recess regardless of when the vacancy arose, meaning that a President would never have to submit nominees to the Senate for confirmation. The Court found that these three Board member vacancies did not arise during "the Recess" for purposes of the Recess Appointments Clause. Because the vacancies did not happen during an intersession recess and these appointments were made after Congress began a new session on January 3, the recess appointments were invalid. Without the three recess appointments, the NLRB lacked its required quorum of three members when it issued its decision in the Canning matter on February 8; therefore, the decision and order must be vacated.

Consequences of Invalidating the NLRB Appointments

The result of this decision is yet to be determined, but it certainly is a decisive blow to the President who, by appointing members to the NLRB in such a controversial fashion, opened the door to a historic ruling that his appointments were unconstitutional. Because the decision finds the appointments invalid from their inception, the more than 200 decisions issued since January 4, 2012 listed on the NLRB website may also be invalid. 2012 marked a year in which the NLRB made several highly publicized and controversial decisions concerning social media, at-will disclaimers and the reversal of some long-standing labor law. The President is surely going to be disappointed and whether the NLRB's direction is going to change the direction it appeared to go will depend largely on the make-up of the Board in the years to come.

January 14, 2013

ADA Reasonable Accommodations Require an Interactive Proces

by Mark B. Wiletsky

Although some say talk is cheap, that saying does not apply when evaluating an employee’s request for a job accommodation under the Americans with Disabilities Act (“ADA”).  Instead, it is important to engage in an open discussion with the disabled employee; failing to do so can easily land your organization in court.  A Texas school district recently learned that lesson when a federal judge ruled that discharging a disabled classroom aide without engaging in a good faith interactive process regarding reasonable accommodations could result in liability for the district for a violation of the ADA.  Nelson v. Hitchcock Indep. Sch. Dist., No. 3:11-CV-00311 (S.D. Tex. Dec. 21, 2012).

Disabled employee needed accommodation after exhausting FMLA leave.  Iris Nelson had worked for the Hitchcock Independent School District (“District”) as a teacher’s aide for the Head Start program since 1996.  In February 2009, Nelson learned she needed to have knee replacement surgery on both knees due to severe bilateral knee arthritis.  Nelson soon took leave covered by the Family and Medical Leave Act (“FMLA”) for surgery on her right knee.  In August 2009, shortly before the new school year was to begin, Nelson met with the District’s payroll and benefits supervisor, Theresa Fails, to request another two-and-one-half months off for surgery on her left knee.  Fails informed her that she had exhausted her FMLA leave and would not be eligible for additional leave until the following year. 

Nelson claims that she told Fails that she would work using a cane or a walker until she became eligible for more leave but Fails allegedly responded that she could not use walking aids.  Nelson also stated that she would just have to take pain pills, a suggestion Fails supposedly refused as well.  After the meeting, Fails notified the District’s interim Head Start director and the school superintendent of the conversation and recommended that until a doctor’s note could be obtained and a decision made, Nelson should not be allowed to return to work.

Without hearing anything more on her accommodation request, Nelson returned to work on August 17, 2009 and filed a form requesting leave which would begin on August 20, 2009.  Nelson did not receive a response to her leave request and unilaterally took off to have her surgery on August 23, 2009.  On August 25, 2009, the District’s superintendent sent Nelson a letter denying her leave request, noting that she had exhausted her FMLA entitlement.  Six days later, the superintendent sent Nelson a notice of termination, informing her that her “employment with Hitchcock ISD has been terminated for being unable to perform the essential functions of your job.”  Not surprisingly, Nelson sued, claiming that the District violated the ADA when it terminated her instead of accommodating her disability. 

Court finds evidence that District failed to engage in ADA-required interactive process.  The Court concluded that Nelson’s ADA claim could proceed to trial as Nelson presented sufficient evidence that the District never engaged in the communication and good faith interactive process regarding her accommodation requests that is required under the ADA.  The Court noted that Nelson offered to postpone her surgery had she been allowed the accommodation of using a cane, walker or pain pills.  Although the District argued that it would have been unreasonable to allow Nelson to supervise children while using a walking aid or while under the influence of pain medications, the Court ruled that it need not reach a reasonableness determination because the District had failed to engage in the required interactive process that would have allowed the District to assess the alternate accommodations.  The Court pointed out that had the District discussed the alternatives with Nelson, it could have clarified whether she needed a walking aid or pain pills or both, whether any over-the-counter medications would have been sufficient and what the side effects of any required dosage would be.  Only by engaging in that dialog could the District determine whether Nelson’s requested accommodations would impose an undue hardship on the District. 

Lessons learned.  When faced with an accommodation request, employers should not jump to deciding whether the proposed solution places an undue burden on the company, without first actually talking to the employee and seeking further input from the employee if the proposed solution seems unreasonable or unworkable.  Employers must engage the employee in an interactive dialog to discuss what would allow the employee to perform the essential functions of their job.  Remember, when it comes to reasonable accommodations under the ADA, there is often more than one way to skin a cat.  The first accommodation requested may not be the only, or even the best accommodation for a particular disabled employee.  By including the affected employee in the accommodation process, employers meet their ADA obligation while exploring the options that could allow the employee to stay on the job.  You may not always reach a solution that works for both parties, but as long as you try in good faith—and appropriately document your efforts—it is much harder for the employee to attack your process and actions in a lawsuit down the road.