Monthly Archives: October 2015

October 29, 2015

NLRB To Revisit Whether Graduate Teaching Assistants May Collectively Bargain

Gutierrez_SBy Steve Gutierrez 

Seeking to overturn long-standing precedent, the National Labor Relations Board (NLRB or Board) recently agreed to review whether graduate students who work as teaching or research assistants at universities are “employees” for purposes of voting for a union. The United Auto Workers (UAW) is seeking to represent student employees at The New School, a not-for-profit operator of higher education institutions in New York. Like a dog with a bone, the current NLRB is unwilling to give up on finding coverage for grad student assistants, despite two rejections of the representation petition by the Regional Director. 

Is It Work or Educational? 

The UAW petitioned to represent all student employees who provide teaching or research services at The New School. The proposed bargaining unit includes teaching assistants, fellows and tutors, as well as research assistants and associates. 

The facts related to these positions are as follows: 

  • About 350 individuals work in the proposed bargaining unit
  • The positions typically require between 10 and 20 hours of work per week
  • Each graduate assistant position typically lasts for one 15-week semester, but many graduate assistants are renewed for multiple semesters
  • The New School provides approximately $5 million annually to grad students in these positions
  • Each faculty member is allotted up to $5,100 per year to be used for student assistants
  • Teaching assistants are paid $4,500 per semester; teaching fellows receive $5,500 per semester, and tutors are paid an hourly rate, typically $17.00 per hour
  • Research associates can receive stipends of up to $40,000 per year due to grants from the federal government
  • Graduate assistants must provide I-9 forms to be eligible for the positions
  • Payments to the graduate assistants are made through a payroll account and taxes are withheld
  • Payments are disbursed biweekly but do not vary based on the number of hours worked (except for tutors)
  • Graduate assistants are not required to track, and the university does not monitor the amount of time spent on their duties
  • Applicants for these positions must maintain a minimum GPA
  • Some are selected using a formal process of interviews and appointment letters from the Human Resources department while others are offered positions more informally directly from a professor
  • Selection for the position is not dependent on financial need 

When the UAW first petitioned to represent this group of student employees in December 2014, the Regional Director for the New York region dismissed the petition based on the NLRB’s 2004 decision in Brown University, which held that graduate student assistants were not “employees” under the National Labor Relations Act, and therefore, could not be unionized. The 2004 Board had decided that the graduate assistants had a primarily academic relationship with their school, not an economic, work-related one. Case closed, right? Wrong. 

Will Graduate Assistant Precedent Be Overturned? 

In March 2015, the Board reviewed the initial dismissal of the petition and sent it back to the region for a hearing. The Hearing Officer heard testimony and received evidence during a seven-day hearing, but in late July, the Regional Director found that Brown University still controlled, and dismissed the petition again. 

The UAW requested (again) that the Board review the dismissal of its representation petition. On October 21, 2015, on a 3-1 vote, the Board granted the request for review, finding that it “raises substantial issues warranting review.” 

The vote goes along political lines, with the three democratic members voting to review the graduate assistant issue and the sole republican member dissenting. (Note: the Board is currently short one member.) In his dissent, member Philip Miscimarra wrote that the sole basis for the UAW to seek review is its desire to have the Board overrule Brown University. Miscimarra believes there is no reason to overturn Brown University, pointing, in part, to the prevailing view for more than 40 years that graduate student assistants are not statutory employees, except for a four-year period from 2000-2004 when the ruling flip-flopped in favor of finding they were employees. 

Is another flip-flop likely? It very well could be, given that the current majority of the Board continues to look to expand the reach of the NLRA. But even if the Board should find that graduate student assistants are statutory employees, it will need to address an argument by The New School that they are “casual” or “temporary” employees which would still deny them union representation. 

We will continue to follow this case and pass along any developments as they occur.

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October 20, 2015

Colorado Vacation Policies: Use-It-Or-Lose-It Policy Hinges On When Vacation Is “Earned”

In recent weeks, the Colorado Division of Labor indicated that it was taking a new position when enforcing wage claims based on an employer’s vacation policy. The specific issue has revolved around whether a use-it-or-lose-it vacation policy—i.e., a policy where an employee cannot roll-over some or all earned vacation from year to year—is lawful in Colorado. 

In response to inquiries about its position on such policies, the Division recently posted FAQs on its website stating that a use-it-or-lose-it vacation policy does not necessarily run afoul of the Colorado Wage Protection Act. But if an employee challenges the validity of the policy, the determining factor will focus on when the vacation pay is earned. 

Division of Labor Leaves Many Questions Unanswered

 According to Colorado’s Wage Protection Act, vacation pay “earned in accordance with the terms of any agreement” are “wages.” As a result, many Colorado employers have in place use-it-or-lose-it vacation policies, in which an employee may accrue a certain amount of vacation or paid time off (PTO) each year, but some or all of that vacation time will not roll-over into the following calendar year. The reason for such policies is simple: it avoids employees banking large sums of vacation or PTO, which is typically paid out upon separation from employment. Until recently, the Division had not taken a formal position on such policies. 

However, given the recent changes to the Wage Protection Act, the Division is responsible for adjudicating wage claims, albeit the jurisdiction is limited to claims for $7,500 or less. In light of that change, and as many people likely saw, the Division issued guidance informally in recent weeks concerning use-it-or-lose-it vacation policies. After numerous legal alerts were sent out, the Division took a step back, as reflected in a Denver Post article.  

Earlier this week, in an effort to clear up the confusion, the Division issued two FAQ’s, as noted above. Those FAQs specifically address whether Colorado employers may have use-it-or-lose-it provisions in their vacation policies. The Division answered that question yes, as long as any such policy is included in the terms of an agreement between the employer and employee. That clarification seems helpful, as it states that use-it-or-lose-it vacation policies are permissible under the Wage Protection Act. 

The first FAQ, however, goes on to state that a use-it-or-lose-it policy may not deprive an employee of earned vacation time and/or the wages associated with that time. It also states that any vacation pay that is “earned and determinable” must be paid upon separation of employment. The terms of an agreement between the employer and employee will determine when vacation pay is earned. 

This part of the FAQ is less helpful. It raises many questions about how an employer may structure a use-it-or-lose-it vacation policy in a way that will not deprive employees of any earned vacation. The Division’s position appears to be that once vacation is “earned,” it cannot be lost. 

The second FAQ addresses what factors the Division will use to determine whether a specific use-it-or-lose-it policy is permissible. The Division first will look to whether the policy states when vacation pay is earned. If the policy does not state or is ambiguous as to when vacation pay is earned, the Division will consider the following factors in determining whether the use-it-or-lose-it policy is permissible: 

  • The employer’s historical practices
  • Industry norms and standards
  • The subjective understandings of the employer and employee
  • Any other factual considerations which may shed light on when vacation time becomes “earned” under the agreement in question. 

Take Aways For Use-It-Or-Lose-It Vacation Policies 

Because of the many unanswered questions related to the validity of use-it-or-lose-it vacation policies, Colorado employers should exercise caution. Points to consider include: 

  • The Division’s jurisdiction is limited to claims of $7,500 or less
  • The Division’s interpretation of the Wage Protection Act and vacation policies may or may not be accepted by courts, and
  • To avoid any potential challenge, consider a maximum accrual policy instead of a use-it-or-lose-it policy (e.g., once an employee hits a certain accrual, the employee will not earn more vacation or PTO until the employee falls below the maximum) 

The best practice if you want to maintain a use-it-or-lose-it vacation or PTO policy is to review your policy with experienced employment counsel to determine if/how to revise your policies in light of the new guidance from the Division.

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October 12, 2015

FMLA Leave Is Not The Time To Reevaluate Employee’s Position

Vilos_JBy Joanna Vilos 

An employee’s extended FMLA leave can often reveal interesting business realities. Perhaps the employee wasn’t performing as well as you previously thought. Or maybe the work can easily be done by others. Despite what you learn, reevaluating the employee’s position while he or she is out on leave is risky business. 

When Leave Opens Your Eyes 

A well-performing employee is severely injured in a car accident. You provide time off for his serious health condition under the Family and Medical Leave Act (FMLA). However, while he is out on leave, you decide that his department functions just fine (or better!) without him. Perhaps you realize that his position really isn’t needed at all. What can you do? May you eliminate his position? Does it matter that you had considered restructuring his position prior to his leave? The Tenth Circuit Court of Appeals (whose decisions apply to Wyoming, Colorado, Utah, New Mexico, Kansas and Oklahoma) addressed this scenario, offering insight into how to address these difficult business decisions. Janczak v. Tulsa Winch, Inc., No. 14-5071 (10th Cir. July 20, 2015). 

FMLA Job Restoration 

The FMLA provides unpaid, job-protected leave for certain qualifying reasons, including a serious health condition that makes the employee unable to perform the functions of his or her position. When an employee returns from FMLA leave, he or she must be returned to the same job or an equivalent job that is virtually identical to the original job in terms of pay, benefits, shift, location and other conditions. 

Employers can find themselves liable for violating the FMLA if they interfere with an employee’s exercise of his or her FMLA rights or otherwise deny the rights, benefits or protections provided under the FMLA. Employers also risk an FMLA claim if they retaliate against an employee who has taken FMLA leave. 

Interference Claims 

Does the FMLA prevent you from taking any adverse employment actions that affect an employee who went out on FMLA leave? What if the employee was earmarked for a demotion or termination prior to going out on leave? Or perhaps your company loses a big contract while the employee is out on leave, necessitating a reduction in force. Will you be liable then? 

To establish an FMLA interference claim, the employee must show three things: (1) the employee was entitled to FMLA leave; (2) that the employer took some adverse action that interfered with the employee’s right to take FMLA leave; and (3) the employer’s action was related to the exercise or attempted exercise of the employee’s FMLA rights. An employer defending against an interference claim has the burden of proving that it would have taken the adverse employment action regardless of the employee’s FMLA leave. 

Case In Point 

In the recent Tenth Circuit case, Paul Janczak had served as Tulsa Winch’s General Manager of its Canadian operation for two years before he needed to use FMLA leave to recover from a vehicle accident. At the start of his leave, company leadership did not tell Janczak that his position might be eliminated and in fact, had recently indicated that it was looking forward to seeing him demonstrate his leadership skills after the departure of Janczak’s boss. Tulsa Winch’s president wrote an email stating that he planned to “further evaluate Paul’s ability to provide the necessary leadership” after his return from FMLA leave. He also announced that two new hires would report directly to the General Manager in Canada (suggesting the GM position would continue to exist) and that Janczak would likely return to work and be able to travel that September. 

The company claimed, however, that it had already begun discussing whether there was a need for a General Manager in Canada prior to Janczak’s leave and that it came to the decision to eliminate the position and terminate his employment while he was still out on leave. It pointed to its development of a matrix reporting structure that allowed most of the Canadian department heads to report directly to the executives at corporate headquarters in Oklahoma. Though an email from the company’s director of human resources identified “supporting Paul (upon his return)” as an agenda item, other meeting notes included entries such as “Rowland as next GM,” “Spurgeon vs Janczak,” “phase PZ out,” and “what is plan for Paul – eliminate position.” 

Tulsa Winch terminated Janczak immediately upon his return from FMLA leave. It also fired its longtime Canadian Controller, due to the matrix restructuring. 

Janczak filed both interference and retaliation claims against Tulsa Winch. The company argued that it would have fired Janczak even if he had not taken FMLA leave so Janczak’s claims must fail. The district court in Oklahoma agreed, granting summary judgment to Tulsa Winch. Janczak appealed to the Tenth Circuit Court of Appeals which reversed on his interference claim, finding that a reasonable jury could find that Tulsa Winch interfered with Janczak’s FMLA leave. 

Contemplating Adverse Action Not Enough  

The Tenth Circuit made it clear that simply considering the elimination of Janczak’s GM position before he took FMLA leave was not sufficient to permit summary judgment. Instead, to avoid a trial on the interference claim, the employer needs to show that termination would certainly have occurred regardless of the leave. 

Circumstances where employers have successfully established that the company would have definitively taken the adverse employment action regardless of the employee’s request for FMLA leave include: 

  • employee failed to comply with a direct and legitimate order from her supervisors;
  • overwhelming evidence of performance issues that predated the leave;
  • employee who had repeatedly been tardy and did not comply with absence policy on the date she was terminated;
  • employee who, prior to leave, had been tardy, absent from her desk and failed to timely pay invoices or update a list of services received from vendors; and
  • the decision to institute a reduction in force had already been made before the employee took leave. 

Proving that these decisions were unrelated to the employee’s leave requires that the evidence be well documented and undisputed. As stated in the court’s opinion, the question is not whether a reasonable jury could find in favor of the employer, “but rather whether the evidence is so one-sided that submission to a jury is not required.” That means that if the evidence supporting the employer’s claim that the employee was fired for reasons unrelated to the leave is disputed or shows that the company was merely uncertain about the employee’s future, the interference claim will not be dismissed at the summary judgment stage and instead, will go to a jury to decide. 

In Janczak’s case, the Tenth Circuit found that there was conflicting evidence as to when the decision was made to terminate him, concluding that a jury could determine that the decision to eliminate Janczak’s position was related to his medical condition and his exercise of FMLA leave. The court stated: 

Though taking advantage of Janczak’s absence to reevaluate the value of his contributions to the company might appear a prudent economic decision in the abstract, protecting ill or caregiving employees from the effects of such a decision is precisely the purpose of the FMLA. 

Retaliation Claim Failed Where Employee Not Restored to Job 

The Tenth Circuit rejected Janczak’s retaliation claim, finding that he failed to show that Tulsa Winch’s reasons for terminating him (i.e., the general reorganization of managerial responsibilities) was pretext for retaliation based on his taking FMLA leave. The court noted that in a typical FMLA retaliation claim, the employee has been restored to his or her prior employment status and then suffers an adverse employment action based on incidents after the return to work. Here, Janczak was never restored to his prior employment status, leaving the court to conclude that it fits into an interference theory rather than a retaliation theory. 

To further explain the difference between FMLA interference and retaliation claims, the court said this: 

Resolving the interference claim involves a fundamentally causal inquiry: whether Janczak’s taking FMLA leave was causally connected to his termination. In contrast, resolving the retaliation claim involves an inquiry into motivation: whether [Tulsa Winch’s] proffered rationale for terminating Janczak was mere pretext for its true, retaliatory motivation. Though causation and motivation frequently align, the difference between interference and retaliation claims illustrates that such alignment is not always necessary. 

Practical Lessons Learned 

Deciding to impose an adverse employment action on an employee who has exercised their FMLA rights is fraught with potential risk of liability. But you should not feel hamstrung to keep an employee who would have been terminated had he or she not taken FMLA leave. 

Before taking such action, talk to the decision-makers to ensure everyone is on the same page about the reasons for the termination. Ask the tough questions, including whether you would indeed make the same decision if the employee had not gone out on leave. Make sure you are treating this employee the same as other similarly situated employees who have not taken FMLA leave. And review your documentation to make sure it supports your decision. Remember, merely contemplating an action, such as eliminating the employee’s position or terminating for poor performance, prior to the employee’s leave will not be sufficient to establish that you did not interfere with the employee’s FMLA rights, sending the claim to a jury.

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October 9, 2015

Idaho Whistleblower Awarded Over $100K in Punitives After Retaliatory Discharge

Howland_PBy Pam Howland 

Firing an employee who reports that your workplace is unsafe is rarely a good idea. Firing that employee within days after the Occupational Safety and Health Administration (OSHA) issues citations and penalties based on the reported safety violations almost guarantees that your termination decision will be deemed retaliatory. An Idaho employer is finding that out the hard way after a federal judge ordered last week that it pay a discharged employee his lost wages plus $100,000 in punitive damages. Perez v. Sandpoint Gas N Go & Lube Ctr., No. 2:14-cv-357 (D. Idaho Sept. 29, 2015). 

Safety Concerns Not Rectified 

Daniel Kramer worked at the Sandpoint Gas N Go & Lube Center, owned and managed by Sydney Oskoui. Kramer informed Oskoui that employees were being exposed to unsafe working conditions that potentially violated OSHA’s safety standards. He reported that employees at the Lube Center faced the following dangerous conditions: 

  • exposed wiring near water leaks which could result in an electrical shock;
  • no nets over open automotive service bays which presented a fall hazard;
  • expired fire extinguishers;
  • no first-aid kit or eyewash station; and
  • no hard hats for employees. 

According to the lawsuit, the Lube Center did not repair or make any changes to alleviate the potentially unsafe conditions reported by Kramer. 

OSHA Investigation Confirms Safety Violations 

On February 12, 2012, Kramer notified OSHA about the unsafe working conditions at the Lube Center. Three days later, a Compliance Safety and Health Officer from OSHA’s Boise Area Office went to the Lube Center to conduct an investigation. The Officer found five violations of mandatory safety and health standards that presented a risk of death or serious bodily injury. An additional two violations that presented an other-than-serious risk were also found. 

On April 12, 2012, OSHA notified the Lube Center and Oskoui that it would be issuing citations and penalties as a result of its findings from the inspection. Just four days later, on April 16, 2012, the Lube Center fired Kramer and another employee who it suspected had also filed an OSHA complaint. 

Whistleblower Complaint Follows 

After being terminated within days of the OSHA notice of citations and penalties, Kramer filed a whistleblower complaint with OSHA alleging that he was discriminated against in retaliation for filing his safety concerns. OSHA investigated his whistleblower complaint and agreed that his termination violated the Occupational Safety and Health Act. In August of 2014, the Secretary of Labor filed a whistleblower lawsuit against the Lube Center and Oskoui in federal court in Idaho on behalf of Kramer. 

Default Judgment Award of Lost Wages and Punitive Damages 

Despite admitting to six violations of mandatory OSHA safety standards and paying a civil penalty as a result of those violations, Oskoui attempted to get the lawsuit dismissed. At times, he tried to represent his company, the Lube Center, himself. Court rules, however, require that a corporation be represented by an attorney. 

After more than a year of legal wrangling, Chief Judge B. Lynn Winmill entered a default judgment against both the Lube Center and Oskoui. His order requires that the Lube Center and Oskoui pay Kramer $979.25 in lost wages, plus pre- and post-judgment interest. More significantly, the defendants are ordered to pay Kramer $100,000 as punitive damages for the OSHA violations. The judgment also must be posted on employee bulletin boards at the Lube Center for 90 days. Both the Lube Center and Oskoui personally are on the hook for these amounts as the Judge held them jointly and severally liable. 

Handling Whistleblowers and Avoiding Retaliation 

Oskoui is appealing the default judgment but regardless of the result of his appeal, a great deal of time and expense could have been avoided had he handled Kramer’s safety concerns differently. Lessons from this case are clear. First, treat an employee’s safety concerns seriously. If Oskoui had investigated Kramer’s concerns when they were raised internally before Kramer went to OSHA, Oskoui may have discovered that conditions did indeed violate mandatory OSHA safety standards and he could have taken steps to rectify them before OSHA became involved. Second, if an employee files a complaint with OSHA, do not discharge them in retaliation for that complaint. Whistleblowers have protections and you add new violations and face additional liability for retaliating against the employee who raised the safety issues. Finally, do not skimp when it comes to safety. Your money is better spent fixing the unsafe conditions than paying a whistleblower $100,000 in punitive damages. 

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October 1, 2015

Non-Exempt Employees Who Check Emails Outside of Normal Hours Can Cause Payroll Nightmares

Vilos_JBy Joanna Vilos

We all know the lure of the ping that alerts us to an incoming email or text message. It’s difficult not to check it, even if we are not required to do so. So what’s the harm if your non-exempt employees voluntarily check their work emails and messages outside of their normal work hours? They are just being ambitious and responsive team players, right? 

Wrong. When non-exempt employees monitor, read and respond to company emails during off hours, and you permit it, those employees are engaged in compensable work. Tracking and paying for such time can create real headaches for your payroll department.   

Compensable Time 

Under the Fair Labor Standards Act (FLSA), you’re required to pay non-exempt employees for all time spent working. Even work that is not requested but is “suffered or permitted” to be performed is work time that must be paid for by the employer. Consequently, even if employees volunteer to check in or continue work after the end of their shift, the time spent doing work-related tasks is compensable. 

With emails and texts, it’s relatively easy to know that employees are working during off-duty time periods due to the time stamps that appear on each message. If you allow workers to engage in such work, you are obligated to pay for their time. If that additional time pushes the employee over 40 hours for the week, you have to pay overtime for hours beyond the first 40. And, if you are in a state that has a daily overtime requirement, you’ll have to pay overtime if the additional work time pushes the employee over that daily threshold. 

Tracking Sporadic Work Time 

But how do you know how much time each employee spends checking and responding to company emails and texts? That is a real problem. If you choose to permit this off-duty work by non-exempt employees, you will need to put in place some kind of time-reporting mechanism to log that time. Perhaps your email system can capture when each employee logs in and logs out. Or perhaps you implement a self-reporting timekeeping procedure. Whatever system you put into place, there is still the risk of unaccountability and potential inaccurate reporting which can lead to pay errors and ultimately, wage claims. It can also result in virtually unlimited overtime pay for those really “ambitious” non-exempt employees who stay logged into your system for hours at a time. 

Implement A Policy To Address Work Outside of Normal Hours 

To help eliminate these risks, adopt a policy to address work hours for non-exempt employees and any work performed outside of that normal work schedule. First, the policy should prohibit non-exempt employees from engaging in any off-the-clock work, meaning work that the employee does not log as work time. Reiterate that all work time must be recorded and will be paid. 

Then, if you don’t want non-exempt employees performing any work-related duties outside of their normal work schedule, make sure your policy explicitly prohibits that. Give examples stating that checking and responding to company emails, text messages and phone calls during off hours is specifically prohibited. 

Train your employees and supervisors on this policy. If an employee fails to comply with the policy, enforce it by imposing discipline. But remember that you cannot withhold pay as a consequence of the policy violation. 

Restrict Access To Company Email and Phones 

Another way to reduce the payroll headaches associated with after-hours work is to restrict non-exempt employees from having access to your company systems outside of the office or workplace. Consider eliminating remote access to your email system for non-exempt employees. You may also decide not to provide electronic devices, such as cell phones, laptops or tablets, to non-exempt employees so there is little opportunity for those employees to engage in job-related duties outside of the workplace. Make sure that supervisors don’t circumvent your efforts by using employees’ personal email addresses and phone numbers to contact employees about work outside of normal work hours. 

The bottom line is that if you allow any work to be done, you must pay the employee for it. If you don’t want to allow any work outside of an employee’s normal work schedule, implement a policy that is consistently enforced and backed up with disciplinary actions, and restrict remote access by non-exempt employees to company systems. Heading off the pay issues in advance will go a long way in eliminating payroll headaches down the road.

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