Category Archives: Colorado

June 1, 2015

Religious Accommodation: Employer Need Not Have Actual Knowledge of Accommodation Need, Says High Court

An employer’s motives, not its actual knowledge, determine whether it has discriminated against an applicant or employee in violation of Title VII, ruled the U.S. Supreme Court today. In an 8-to-1 decision, the Court ruled that an employer that refuses to hire an applicant in order to avoid accommodating a religious practice may be liable for discrimination even though the applicant did not inform the employer of the need for an accommodation. As long the applicant can show that her need for an accommodation was a motivating factor in the employer’s decision to refuse to hire her, the employer can be liable for disparate treatment under Title VII. The Supreme Court reversed the Tenth Circuit’s opinion which held that liability for failure-to-accommodate a religious practice applies only when the applicant directly informs the employer about the need for an accommodation. EEOC v. Abercrombie & Fitch Stores, Inc., 575 U.S. ___ (2015).

Head Scarf Versus “Look Policy”

This case arose when Samantha Elauf, a seventeen-year old applicant, went to an interview for an in-store sales position at an Abercrombie & Fitch store wearing a headscarf. Although the topic of religion did not come up at the interview, the interviewer, assistant store manager Heather Cooke, assumed that Elauf was Muslim and that she wore the headscarf due to her Muslim religion.

Cooke rated Elauf as qualified to be hired but was concerned that the headscarf would conflict with Abercrombie’s strict “Look Policy” which forbids wearing of “caps.” Cooke consulted with her district manager who told Cooke not to hire Elauf because wearing the headscarf would violate the Look Policy, as would all other headwear, religious or otherwise.

The Equal Employment Opportunity Commission (EEOC) sued Abercrombie on Elauf’s behalf. The District Court granted summary judgment to the EEOC, finding Abercrombie liable for failing to accommodate a religious practice in violation of Title VII, with a jury awarding $20,000 in damages. Abercrombie appealed and the Tenth Circuit reversed, concluding that Abercrombie could not be liable for failing to accommodate a religious practice where Elauf never provided Abercrombie with actual knowledge of her need for an accommodation. The EEOC appealed to the Supreme Court.

No Knowledge Requirement in Title VII

“An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions,” stated the Court in an opinion written by Justice Scalia. Intentional discrimination under Title VII looks only to the employer’s motives in making its employment decisions, not its actual knowledge. Consequently, if an employer thinks that a job applicant might need an accommodation, such as time off to attend religious observances, and denies the applicant a job in order to avoid that prospective accommodation, the employer violates Title VII, regardless of whether the employer actually knows of the applicant’s religious practices or need for accommodation.

ADA Has Knowledge Requirement

The Court recognized the difference in the reasonable accommodation duty under Title VII versus under the Americans with Disabilities Act (ADA). Discrimination under the ADA is defined to include an employer’s failure to make reasonable accommodations to the known physical or mental limitations of an applicant. However, Title VII does not include the knowledge requirement. Therefore, failure to accommodate a religious practice will be deemed discrimination under Title VII as long as the employer’s desire to avoid the accommodation was a motivating factor in its employment decision.

Neutral Policies Still Require Religious Accommodation

Abercrombie argued that its Look Policy was neutral and that it did not treat religious practices less favorably than similar secular practices so it could not be liable for intentional discrimination. The Court disagreed, stating that Title VII gives religious practices favored treatment. The Court acknowledged that an employer is entitled to have a neutral dress policy, such as a no headwear policy, but when an applicant or employee requires an accommodation as an aspect of a religious practice, Title VII requires that the employer accommodate that practice, in the absence of an undue hardship.

Lessons on Religious Accommodations

The practical implication of this decision is that you may not make employment decisions based on suspected religious accommodations. In other words, if you think that an applicant has certain religious beliefs which might lead to the need for an accommodation once hired, you cannot reject them – even if you never discussed or confirmed their religious practices. If the applicant’s potential need for an accommodation is a factor in your decision not to hire them, you may be found liable for discrimination under Title VII.

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May 18, 2015

Plan Fiduciaries Beware: Your Ongoing Duty to Monitor Investments Allows Beneficiaries To Claim Breach Within Six-Year Statute of Limitations

By Mike Beaver

In a ruling that will likely raise the anxiety level of plan fiduciaries, the U.S. Supreme Court unanimously ruled today that beneficiaries of a 401(k) plan could pursue their claim against the plan’s fiduciaries related to mutual funds that were added to the plan eight years before the complaint was filed, despite the six-year statute of limitations normally applying to ERISA breach of fiduciary duty claims. The Court concluded that because fiduciaries have a continuing duty to monitor investments and remove those that are imprudent, a claim for breach of that duty is timely so long as the alleged failure to monitor occurred within six years of the filing of the complaint. Tibble v. Edison Int’l, 575 U.S. ___ (2015).

Higher Administrative Fees Prompted Lawsuit

In 2007, several beneficiaries of the Edison International 401(k) Savings Plan (Plan) filed a class action lawsuit against the Plan fiduciaries to recover alleged losses incurred as a result of excessive mutual fund fees. According to the beneficiaries, in selecting the investment choices available to Plan participants, the Plan fiduciaries had chosen six “retail-class” mutual funds, instead of identical “institutional class” funds. The retail-class funds carried higher administrative and management fees than the institutional-class offerings. Three of the funds were chosen in 1999, and the others in 2002.

As to the funds selected in 2002, the lower courts found that the Plan fiduciaries offered “no credible explanation” for selecting the higher-cost retail funds. However, as to the 1999 funds, the Plan fiduciaries argued that the ERISA statute of limitations applicable to fiduciary breaches would bar the beneficiaries’ claims involving the 1999 funds, because they were selected more than six years before the lawsuit was commenced. The statute, 29 U.S.C. § 1113, bars a fiduciary breach claim brought more than six years “after the date of the last action which constituted part of the breach or violation,” or “in the case of an omission the latest date on which the fiduciary could have cured the breach or violation” (emphasis added). The Ninth Circuit Court of Appeals agreed with the fiduciaries, and dismissed all claims relating to the 1999 funds.

A unanimous Supreme Court, however, reinstated the beneficiaries’ claims pertaining to the 1999 funds. The Court found that, although the funds may have been chosen previous to the fiduciaries’ action in selecting the 1999 funds, the statute did not bar claims relating to the fiduciaries’ alleged omissions since that time. Specifically, the Court held that ERISA fiduciaries have a “continuing duty to monitor trust investments and remove imprudent ones.” This duty imposes a “continuing responsibility for oversight of the suitability of the investments already made.” Since such continuing reviews by the Plan fiduciaries might have been required within the six-year limitation period, a claim that the fiduciaries breached their oversight and review responsibilities could not be summarily dismissed.

No Guidance on Oversight Duty

Having held that Plan fiduciaries have a duty to oversee and monitor investment decisions previously made, the Court provided little guidance as to what that duty entails. The Court articulated the fiduciaries’ oversight and monitoring responsibilities only in a broad, theoretical way, holding that “a fiduciary normally has a continuing duty of some kind to monitor investments, and that “the nature and timing of the review [are] contingent on the circumstances.” Because these circumstances had not been fully developed by the lower courts, the Supreme Court remanded the case for further consideration, noting that it did not necessarily find that the Plan fiduciaries had violated any of their duties.

Lesson for Fiduciaries

The Supreme Court has made clear that benefit plan fiduciaries have a continuing responsibility to monitor the suitability and prudence of a plan’s investment choices, and that the six-year statute of limitations runs from the alleged breach of this ongoing responsibility, not from the date a particular investment was initially selected. However, the Court provided essentially no guidance concerning how fiduciaries can fulfill this ongoing responsibility. The parameters of a fiduciaries’ ongoing responsibility to monitor and evaluate investment choices will, in all likelihood, be developed only by extensive future litigation.

Because the Court provided little specific guidance concerning the ongoing duty to monitor investment choices, plan fiduciaries will need to increase their focus on what little regulatory guidance is provided by the U.S. Department of Labor, and many fiduciaries will likely increase their reliance on objective, professional investment advisors. Of course, the choice of an investment advisor is, itself, a fiduciary act, and under the guidance of the Tibble decision, it is likely the fiduciaries’ ongoing responsibility to monitor the suitability and performance of advisors as well. In short, the Tibble decision expands the potential for fiduciary liability without providing much guidance on how that liability might be minimized.

May 11, 2015

Recruiting Employees By Making False Promises Can Cost You

By Mark Wiletsky

You desperately want to hire a competitor’s top sales person, so to lure her away, you promise that she can expand the scope of her sales while continuing to serve her existing customers nationwide. What’s the harm if after she joins your team, you limit her territory and the type of products she can sell? For one computer company, it cost over $370,000 in damages and interest to the disgruntled, former employee. Add in the time and expense of defending the lawsuit and those seemingly innocuous recruiting statements can really come back to bite you.

Misleading Statements Meant to Entice

Hiring experienced executives, managers and sales persons can be tricky because the best performers are in high demand. In order to entice a quality person away from his or her existing company, you likely have to sweeten the compensation package, offer a promotion or growth potential, provide a better cultural fit, or some combination of these conditions of employment. You wine and dine your candidate and make assurances that things will be better if they leave their current, lucrative job and join your company.

But what if your promises don’t come to pass? What if your regional sales structure does not allow the sales executive to continue to service their national clients? What if the growth you promised isn’t in the cards? You could face a lawsuit alleging negligent misrepresentation, fraudulent inducement, promissory estoppel or other claims.

The federal court in Colorado recently handled such a case in which a successful computer sales person with national accounts left her lucrative position to join another computer company who had promised that she could keep her current accounts and expand the scope of her sales beyond mainframe computer systems. After her new employer assigned many of her lucrative accounts to other sales representatives and told her that she would not be able to sell outside of the mainframe area, she sued. Although her new employer claimed that its recruiting statements were nothing more than predictions or statements of future intent, a jury found in favor of the sales person on her claim of negligent misrepresentation. The jury awarded her damages in the amount of $231,665 and, after an appeal, an additional $139,625 in prejudgment interest. David v. Sirius Computer Solutions, Inc., 779 F.3d 1209 (10th Cir. 2015).

Don’t Make Promises You Can’t Keep

Tempting as it may be, refrain from making guarantees or promises to job candidates that you can’t fulfill. Executives and high-level sales persons typically have a lot at stake when switching companies, which consequently leads to significant damages should they sue.

In addition, be careful when putting any terms, such as pay, bonuses, commissions and benefits, in writing. If the terms can be changed or will be reviewed periodically, be sure to include that in the written document. If the employment relationship is “at-will,” be sure to specify that so there is no misrepresentation about a guaranteed period of employment. In short, when seeking to induce high performers to leave their current positions, talk up the attributes of your organization but be careful about making promises that you may not be able to keep.

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May 6, 2015

Colorado Legislators Fail to Pass New Employment Laws in 2015

By Emily Hobbs-Wright

The 2015 Colorado legislative session is ready to adjourn and few substantive bills related to labor and employment were passed by both chambers this session. Numerous bills on topics such as minimum wage, overtime and discrimination were introduced but with Republicans controlling the Colorado Senate and Democrats controlling the House of Representatives, it’s no surprise that little was enacted. Here's a look at employment-related bills that were considered this session.

Raise Colorado’s Minimum Wage – Concurrent resolutions in both the House and Senate sought to put Colorado’s minimum wage on the November 2016 ballot to allow voters to decide whether to amend the Colorado Constitution to increase the minimum wage to $9.50 an hour on January 1, 2017 with annual increases of $1.00 per hour until 2020, which would see a $12.50 minimum wage. In years thereafter, the minimum wage would be increased annually for inflation (which is the current adjustment provided in Colorado’s Constitution). Both bills failed. (HCR15-1001 and SCR15-003)

Overtime Fairness Act – This bill would have set a minimum salary requirement for administrative, executive, supervisor and professional exemptions at 120 times the state minimum hourly wage rate. At the current $8.23 minimum wage, the salary threshold would be $987.60 per week. This bill failed to pass. (HB15-1331)

Repeal of the Job Protection and Civil Rights Enforcement Act of 2013 – The 2013 law that established compensatory and punitive damage remedies for unfair employment practices under Colorado law was under attack in two bills. The Senate passed a bill that would have repealed all components of the 2013 law except for the expansion of age-based discrimination to individuals age 70 or older. (SB15-069) The House killed that bill. A separate bill introduced in the House sought to eliminate the punitive damage provision of the 2013 law. (HB15-1172) That bill never got out of the House.

Expand and Extend Parental Involvement in K-12 Education Act – The current Colorado law that entitles parents to take time off of work to attend their child’s academic activities is set to expire on September 1, 2015. This bill sought to extend the law indefinitely and to expand the types of academic activities for which parents could take this leave. The bill passed in the House but never got out of the Senate committee to which it was assigned. (HB15-1221)

Limit on Audits Performed by the Department of Labor and Employment – This bill sought to amend Colorado’s employment verification law by limiting audits by the Department of Labor and Employment (CDLE). Under this provision, the CDLE would be permitted to investigate only an employer’s compliance with the employment verification and examination requirements. This bill never got out of the House committee to which it was assigned. (HB15-1176)

Right of Private-Sector Employees to Inspect Their Personnel Files – This proposal would have created a right for employees and former employees to inspect or request copies of their personnel file within 30 days of a written request. This bill failed to pass the House. (HB15-1342)

Independent Contractor Determinations – Two bills sought to change the determination of independent contractor status under Colorado’s unemployment insurance law. The first sought to eliminate the requirement that the individual’s freedom from control and direction of the company must be shown “to the satisfaction of the division.” (SB15-107) This bill never got out of committee. The second bill before the Senate sought to create a bright-line test for whether an individual is an employee or an independent contractor. That bill proposed to establish a numerical standard so that an independent contractor relationship would be recognized if at least six of eleven factors listed in the proposed provision were found to exist. This bill, SB15-269, was introduced rather late in the session and at the time of writing (and with just one week before the session adjourns), was still in committee.

Additional bills were introduced that would have affected some Colorado employers, including a bill to require that youth sports organizations conduct criminal history checks on persons who work with children and a bill that would create an income tax credit for employers who assist employees in repaying their student loans for degrees in certain fields, such as science, technology and math. These bill also failed to make it to the Governor’s desk.

Wrap-Up: A Quiet Session for Colorado Employers

Colorado's legislative session adjourns for the year today, May 6th, and it concludes without Colorado employers having to learn new employment-related laws. Accordingly, on the state level, most of our labor laws are remaining status quo for another year. However, with so many recent changes related to federal employment laws, most Colorado employers will consider the lack of any new state employee protections good news.

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April 29, 2015

EEOC Conciliation Efforts Are Reviewable, Says Supreme Court

By Dustin Berger

Employers have a narrow right to seek judicial review of the Equal Employment Opportunity Commission’s (EEOC’s) statutory obligation to give an employer adequate notice of the charges against them, including the identity of the employees (or class of employees) claiming discrimination, and to engage in informal resolution of the charges. In a unanimous decision, the U.S. Supreme Court ruled that courts have the authority to review whether the EEOC has met its duty under Title VII to attempt informal resolution of alleged discriminatory practices prior to filing suit. Mach Mining, LLC v. EEOC, 575 U.S. ___ (2015).

While the scope of review is limited, it is good news for employers as it limits the EEOC’s ability to take high priority cases to court without first engaging in any discussion with the employer to remedy the alleged unlawful practices. Unfortunately, however, under the Supreme Court’s decision, the courts’ review of the EEOC’s conciliation efforts will be too limited to ensure that the EEOC makes a genuine and meaningful attempt to reach a voluntary resolution of a charge before the EEOC sues.

Title VII Mandates Informal Methods of Conciliation

Title VII, the primary federal law that prohibits employers from discriminating against individuals on the basis of race, color, sex, religion, or national origin, sets forth a procedure to be followed by the EEOC when handling a complaint of employment discrimination. In part, the law requires that when the EEOC finds reasonable cause to believe discrimination occurred, it must first attempt to eliminate the alleged unlawful practice through “informal methods of conference, conciliation, and persuasion.” The EEOC may choose which informal method it chooses to attempt resolution of the charge, and the agency ultimately retains the right to accept any proposed settlement or to sue the employer.

Letter From EEOC Without Follow-Up Was Insufficient Conciliation Effort

In the case before the Court, a female applicant filed a charge alleging that Mach Mining, LLC had refused to hire her as a coal miner because of her sex. The EEOC investigated her charge and found reasonable cause to believe that Mach Mining had discriminated against not only that applicant, but also a class of women who had similarly applied for mining jobs.

The EEOC sent Mach Mining a letter inviting both the company and the female applicant to participate in informal conciliation and stated that an EEOC representative would contact them soon. That never happened. Instead, about a year later, the EEOC sent Mach Mining a second letter stating that “such conciliation efforts as are required by law have occurred and have been unsuccessful” and further stated that any further efforts would be “futile.” The EEOC proceeded to sue Mach Mining in federal court alleging sex discrimination in hiring.

Mach Mining asserted that the EEOC had failed to conciliate in good faith prior to filing suit, as was required by Title VII. Although the federal district court agreed with Mach Mining that it should review whether the EEOC had met its conciliation duty, the Seventh Circuit Court of Appeals overruled that decision and held that a party could not assert as a defense that the EEOC had failed to conciliate the claim as Title VII required. The Seventh Circuit explained that conciliation was solely within the EEOC’s expert judgment and that there was no workable standard that would allow judges to review that process. Furthermore, the Seventh Circuit believed that court review of conciliation would complicate Title VII lawsuits by allowing the focus of the litigation to drift from the merits of the Title VII claim to the sufficiency of the EEOC’s conciliation effort.

Although other federal appellate courts, however, have held that Title VII does allow a court to review the EEOC’s conciliation effort, there was no uniformity among the other appellate courts in what that review should entail. The Supreme Court agreed to take the Mach Mining case to resolve whether and to what extent courts may review the EEOC’s conciliation attempts.

Notice to Employer and Discussion Required

Justice Kagan, writing for a unanimous Court, first explained that courts routinely enforce compulsory prerequisites to suit in Title VII cases. Although Congress had given the EEOC wide latitude over the conciliation process, the Court refused to allow the EEOC to police itself on whether it had complied with its conciliation duty. Accordingly, it overruled the Seventh Circuit’s decision and held that courts have the authority to review whether the EEOC has fulfilled its Title VII duty to attempt conciliation of discrimination charges.

The Court then turned to the proper standard of judicial review. In other words, it considered what the EEOC must show in order to meet its conciliation duty as a precondition to filing suit. The agency argued for minimal review, suggesting that its letters to Mach Mining were a sufficient attempt at conciliation. Mach Mining argued for a much deeper review, urging that the Court adopt a standard from the National Labor Relations Act that would require a negotiation in good faith over discrimination claims. The Court rejected both approaches and took a middle line.

The Court explained that judicial review was available but was limited to ensuring that the EEOC provided the employer with notice and an opportunity to discuss the matter tailored to achieving voluntary compliance. The Court stated that the EEOC must inform the employer not only about the specific allegations of discrimination, but also about which employees (or what class of employees) have suffered as a result. Ordinarily, the Court noted, the EEOC’s “reasonable cause” letter will provide this notice. Then, the EEOC must attempt to engage in some form of discussion with the employer to give the employer a chance to remedy the allegedly discriminatory practices prior to being sued. That discussion may be in written or oral form and the EEOC will retain a great deal of discretion about how to conduct its conciliation efforts and when to end them.

Evidence of the conciliation efforts may be supported or challenged through written affidavits. Ordinarily, the EEOC’s affidavit will show it has met its conciliation duty, but employers may create a factual issue through affidavits or other credible evidence that indicates that the EEOC did not provide the requisite information about the charge or attempt to engage the employer in discussion prior to filing suit. If a reviewing court finds in the employer’s favor on such a challenge, the appropriate remedy is for the court to order the EEOC to engage in conciliation.

Confidentiality of Conciliation

In reaching its decision, the Court focused in part on Title VII’s non-disclosure provision. This provision states that “[n]othing said or done during and as a part of such informal endeavors may be made public by the [EEOC], its officers or employees, or used as evidence in a subsequent proceeding without the written consent of the persons concerned.” Mach Mining argued that this confidentiality provision meant only that the actions taken and statements made taken during conciliation could not be used as evidence of the merits of the claim. The Court rejected that argument and reiterated that the non-disclosure provision protects actions and statements made during conciliation from disclosure for any evidentiary purpose. And, the Court explained, the non-disclosure provision alone precluded the courts from engaging in any deeper inquiry into the EEOC’s actions during conciliation.

What This Means For You

As the EEOC has been aggressively pursuing employers on novel theories of discrimination, it is beneficial to have the ability to ask a court to review whether the EEOC provided proper notice of the allegedly discriminatory practice and the employees allegedly affected by it and offered the employer an effort to discuss the matter for the purpose of achieving voluntary compliance. Although this review is narrow, it is an improvement over the Seventh Circuit’s view because it gives employers a limited opportunity to hold the EEOC accountable for satisfying its statutory obligation to conciliate claims. If your organization receives a “reasonable cause” finding, be sure to track what efforts the EEOC makes to engage you in discussions to pursue voluntary compliance. If those efforts do not meet the standard announced by the Court, you can seek to compel the EEOC to make an effort compliant with its statutory obligations before it proceeds with its suit.

What the Mach Mining decision will not do, however, is allow an employer to seek the aid of a court in requiring the EEOC to make a genuine effort to achieve a voluntary resolution of a charge. For instance, the Mach Mining decision does not require the EEOC to negotiate in good faith, apprise an employer of “the smallest remedial award the EEOC would accept,” lay out the legal and factual basis for its position or any request for a remedial award, refrain from “take-it-or-leave-it” offers, or provide any particular amount of time for an employer to consider and respond to the EEOC’s position or offers. Accordingly, you are well advised to set expectations of the conciliation process at a low threshold and, to the extent you believe voluntary resolution is desirable, take the initiative in working with the EEOC after receiving a reasonable cause determination letter.

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April 14, 2015

EEOC Fails to Show Telecommuting Would Be A Reasonable Accommodation

By Mark Wiletsky

The Americans With Disabilities Act (ADA) “does not endow all disabled persons with a job—or job schedule—of their choosing,” according to the majority of judges on the full Sixth Circuit Court of Appeals. In an 8 to 5 decision, the Sixth Circuit Court ruled en banc that Ford Motor Company did not violate the ADA when it denied an employee’s request to telecommute up to four days per week in order to accommodate her irritable bowel syndrome. EEOC v. Ford Motor Co., No. 12-2484 (6th Cir. Apr. 10, 2015).

“Good, Old-Fashioned Interpersonal Skills” Made In-Person Attendance Essential

The Equal Employment Opportunity Commission (EEOC) argued that a resale buyer for Ford, Jane Harris, who had irritable bowel syndrome that made it difficult for her to be far from a restroom, should be allowed to work from home up to four days per week. The agency cited Ford’s telecommuting policy that allowed other workers, including some resale buyers, to telecommute as evidence that Harris’ telecommuting request was a reasonable accommodation under the ADA.

The Court disagreed. It ruled that regular and predictable on-site attendance was an essential function of the resale-buyer position at Ford. Resale buyers needed to purchase raw steel from steel suppliers and then resell it to parts manufacturers to make parts used in Ford vehicles. Although some interactions could be done by email and telephone, the Court found that many required “good, old-fashioned interpersonal skills,” and resale buyers needed to be able to meet face to face with suppliers, parts manufacturers and Ford employees during core business hours.

Importantly, the Court reiterated the general rule is that regular attendance at work is essential to most jobs, especially interactive ones. It pointed to past court opinions as well as to EEOC regulations that support the premise that regular and predictable on-site attendance is an essential job function. The Court even relied on that “sometimes-forgotten guide” – common sense, stating that non-lawyers (as well as judges in other appellate circuits) recognize that regular in-person attendance is an essential function, and a prerequisite to other essential functions, of most jobs.

Other Buyers Telecommuted on a Predictable, Limited Basis

But what about the fact that Ford had a telecommuting policy that allowed other employees, including resale buyers like Harris, to work from home? Wouldn’t that make telecommuting a reasonable accommodation for Harris?

The Court said no, because she proposed to telecommute four days per week on a schedule of her choosing. The other resale buyers who telecommuted did so only one established day per week and they agreed in advance that they would come into work that day, if needed. They were also able to perform well and maintain productivity. Harris, on the other hand, wanted to be able to pick and choose which days she would telecommute, up to four days per week, without agreeing to come in those days, if necessary. The Court found that none of these other employees’ more predictable and more limited telecommuting schedules removed regular on-site attendance from the resale buyer’s job.

As a result, the Court ruled that Harris’ proposed telecommuting accommodation unreasonable.

In addition, Ford had allowed Harris to telecommute on an as-needed basis on three separate occasions and her performance suffered. Other attempts to improve Harris’ attendance also failed. The Court found that Harris could not perform the essential functions of her job and was unable to establish regular and consistent work hours. Therefore, it ruled that she was not a “qualified individual” under the ADA.

Technology Did Not Carry the Day

The EEOC argued that advances in technology make on-site attendance less essential. The Court disagreed in this case, stating that there was no evidence presented that specific technology made personal interactions unnecessary for resale buyers.

No Blind Deference to Employer’s Judgment

The Court made a point of stating that its opinion did not open the door for courts to blindly accept as essential whatever an employer says is essential for a particular job. It emphasized that an employer’s words, policies and practices were all important in deciding whether a particular task or requirement is an essential job function.

In Ford’s case, the evidence supported Ford’s judgment that regular and predictable in-person attendance was essential for resale buyers. The Court affirmed the district court’s grant of summary judgment in favor of Ford.

No Retaliation For Termination

The Court also ruled that Ford did not retaliate against Harris when it fired her for poor performance just four months after she had filed a charge of discrimination with the EEOC. Key was Ford’s good documentation of Harris’ performance and interpersonal issues. She had been ranked in the bottom 10% of her peer group before she filed her charge. Documentation showed that she failed to update spreadsheets, complete her paperwork, schedule training sessions, price items correctly and finish her work on time. Despite the closeness in time of the firing to her charge filing, the Court ruled that the EEOC failed to present evidence from which a reasonable jury could find that the real reason that Ford terminated Harris was unlawful retaliation instead of poor performance.

Dissent: Either Physical Presence is Not Essential or Telecommuting is A Reasonable Accommodation

Five judges on the Sixth Circuit dissented, believing that the EEOC had presented enough evidence to send the EEOC’s claims to a jury. Specifically, the dissent stated that the evidence was sufficient to show that there remained genuine disputes over whether Harris was a qualified individual, either because in-person attendance was not an essential function of her job, or because telecommuting would be a reasonable accommodation for her. It pointed to Ford’s telecommuting policy which allowed for “one to four days” of telework each week. It noted that Harris proposed that she be able to work from home up to four days each week, as was arguably allowed under the policy, not that she be permitted to telecommute four days each and every week.

The dissent also asserted that Harris’ past attendance issues that were a result of her disability should not be used against her in deciding whether a telecommuting arrangement during core business hours would be a reasonable accommodation under the ADA. Moreover, the dissent found that Ford should have engaged in a more interactive process to clarify Harris’ telecommuting accommodation request. Finally, the dissent believed that there was a genuine dispute over whether Ford retaliated against Harris for filing her discrimination charge.

Lessons for Employers Facing ADA Telecommuting Accommodation Requests

The majority’s decision finding that regular and predictable in-person attendance is an essential function of most jobs, especially interactive ones, is favorable for employers. But it does not mean that telecommuting can never be a reasonable accommodation. In fact, the dissent in this case demonstrates that telecommuting requests for disabled employees is likely to continue to be an issue with which employers will grapple in coming years.

If face-to-face interactions and in-person attendance at meetings or other work-related functions is essential for certain jobs at your workplace, be certain to include those tasks in your job descriptions. If you generally allow telecommuting, be sure to have a written policy and apply it consistently. If presented with a request to telecommute in order to accommodate a disability, engage in an interactive process to discuss whether telecommuting would be appropriate for that particular position and employee, whether it would constitute an undue hardship for your organization and if alternative accommodations would allow the employee to perform his or her essential functions. And by all means, make sure you have concrete documentation of an employee’s poor performance or policy infractions before taking adverse action against anyone who has filed a discrimination charge.

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April 3, 2015

Presidential Veto Quashes Congressional Attempt to Overturn NLRB “Quickie” Election Rules

By John Husband and Brad Williams

On March 31, 2015, President Obama vetoed a joint resolution passed by both houses of Congress that sought to overturn the National Labor Relations Board’s (NLRB’s) rules designed to speed up the union election process. Scheduled to go into effect on April 14, 2015, these so-called “quickie” or “ambush” election rules significantly shorten the period of time between a petition for a union election and a vote.

History of “Quickie” Election Rules

The “quickie” election rules have a tortured history. First proposed in June 2011, the rules faced immediate and severe criticism that led to a watered-down version of the rules being adopted in December 2011. These watered-down rules went briefly into effect in April 2012, but were quickly invalidated by a federal court just two weeks later. The court ruled that the Board had lacked a statutorily mandated quorum when it voted to adopt the rules.

Notably, the federal court also stated that nothing prevented a properly constituted quorum of the Board from voting to re-adopt the rules in the future. That is exactly what the Board did in February 2014. It re-proposed its original rules, and subsequently adopted the rules in December 2014. The new rules are slated to become effective on April 14th.

Legal Challenges Continue

Despite Congress’s ill-fated attempt to block the rules under the Congressional Review Act, the rules still face potential hurdles. For instance, the U.S. Chamber of Commerce filed a lawsuit in the District of Columbia in January 2015 seeking to vacate the rules and enjoin their enforcement. Business groups in Texas filed a similar lawsuit in January 2015. These lawsuits allege numerous reasons why the rules should be invalidated, including alleged violations of the National Labor Relations Act and Congressional intent, alleged violations of the First Amendment and due process protections, and arbitrary and capricious rulemaking under the Administrative Procedure Act. However, the lawsuits will take time to wind through the courts, and their chances of success are uncertain.

Anticipated Effects of Rules

Barring any unexpected injunction before April 14th, employers should anticipate big changes from the new rules. The rules will shorten the period of time between a petition for a union election and a vote to perhaps fifteen or fewer days (as opposed to the five or more weeks under current practice). The rules are expected to boost organizing activity as unions attempt to increase their membership – and dues-generated revenue – through “ambush” elections. The compressed timeline between a petition and vote will limit employers’ ability to fully explain the pros and cons of union representation before an election, and limit employees’ ability to cast an informed vote. To retain flexibility in dealing directly with their employees, employers should be ready at the first hint of union organizing to educate their employees about the desirability of union representation. Advance preparation, and a properly orchestrated counter-organizational campaign, will be key.

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March 30, 2015

Drafting Employee Handbook Policies That Pass NLRB Muster

By Brian Mumaugh

All employers, union and non-union alike, should think about making a thorough review of their employee handbook and policies in light of a recent report on employer workplace rules by the National Labor Relations Board’s (NLRB’s) General Counsel, Richard Griffin. In his report, Griffin describes a variety of employment policies that the Board has found unlawful and offers the Board’s reasoning as to why. He also points out acceptable policies and explains what wording or context made that policy lawful. The bottom line: a single word or phrase can, in this Board’s view, make the difference between an acceptable policy or one that violates the National Labor Relations Act (NLRA).

Overly Broad Handbook Policies Can Chill Employees’ Rights

The Board has long taken the position that even neutrally worded employment policies can violate the NLRA if they have a chilling effect on the right of employees to engage in protected concerted activities. These activities, referred to as Section 7 activities, include discussing wages, benefits, and other terms and conditions of employment with other employees and with outside parties, such as government agencies, union representatives and the news media.

In his March 18th Report, GC Griffin explains that the majority of policies found by the Board to violate the NLRA, were unlawful because employees could reasonably construe the language of the rule as prohibiting or infringing on Section 7 activities. Consequently, many well-intentioned, seemingly common-sense policies prove problematic for employers due to their possible interpretation as limiting an employee’s right to discuss their pay or working conditions with others.

Handbook Policies That Result in Violations

The report sets out eight categories of work rules that frequently violate the NLRA and then distinguishes between unacceptable and acceptable language for such rules. The categories and the unlawful aspects of each may be summarized as follows:

Confidentiality Policies: may not prohibit employees from discussing their wages, hours, workplace complaints or other personal information; prohibiting the disclosure of the company’s confidential information may be acceptable;
Employee Conduct Toward the Company and Supervisors: may not prohibit employees from engaging in negative, disrespectful or rude behavior or other conduct that may harm the company’s business or reputation; prohibiting employees from disparaging the company’s products, or requiring employees to be respectful to customers, vendors and competitors will typically be acceptable;
Conduct Toward Fellow Employees: may not prohibit “all” negative, derogatory, insulting or inappropriate comments between employees as that may interfere with the employees’ right to argue and debate with each other about management, unions and the terms and conditions of their employment; requiring employees to treat each other professionally and with respect as well as banning harassing and discriminatory conduct will typically be lawful;
Interactions with Third Parties: may not completely ban employees from talking to the media or government agencies; a policy noting that employees are not authorized to speak on behalf of the company without authorization may be considered lawful;
Restricting the Use of Company Logos, Copyrights and Trademarks: may not prohibit all use of company logos and intellectual property because the NLRB upholds employees’ right to use company names, logos and trademarks on picket signs, leaflets and other protest materials; policies that require employees to respect all copyright and intellectual property laws is acceptable;
Restricting Photos and Recordings: may not ban employees from taking pictures or making recordings on company property; a policy may limit the scope of such a prohibition depending on a competing protective right (such as a healthcare facility protecting patient privacy by limiting photos of patients);
Restrictions on Leaving Work: because employees have the right to go on strike, a policy that prohibits employees from “walking off the job” will be unlawful; policies stating that failure to report for a scheduled shift or leaving early without permission as grounds for discipline may be acceptable; and
Conflict-of-Interest Policies: policy may not ban any activity “that is not in the company’s best interest;” policies that give examples of what constitutes a conflict-of-interest, such as having a financial or ownership interest in a customer, supplier or competitor, or exploiting one’s position for personal gain will likely be lawful.

Few Bright Lines for Lawful Policies

The report goes on to offer analysis of additional policies dealing with topics such as handbook disclosure, social media and employee conduct related to a particular employer who agreed to revise their policies as part of a settlement agreement with the NLRB. You may have similar policies in your handbook, making it worthwhile to read what policy language the Board considers problematic and what may pass muster. The takeaway, however, is that the lawfulness of many policies may turn on a single word or phrase. At the present time, it is unclear whether GC Griffin’s report will withstand legal challenge. The best advice is that given the report and its contents, it is important to take time to review your handbook and compare your wording to the examples provided in the report. Although the report is not a legally binding interpretation of the NLRA, it can help you make an informed decision about the risks involved in including certain provisions in your employee handbook.

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March 26, 2015

Supreme Court: Pregnant Worker With Lifting Restrictions May Continue Lawsuit

By Jude Biggs

In a divided decision, on March 25, 2015, the U.S. Supreme Court released a long-awaited ruling involving a pregnant worker’s claim under the Pregnancy Discrimination Act (PDA). In its ruling, the Court held that the worker could proceed with her lawsuit, because disputes remain as to whether her employer treated more favorably at least some non-pregnant employees whose situation could not reasonably be distinguished from hers.

The majority of the Court forcefully rejected the 2014 guidance of the Equal Employment Opportunity Commission (EEOC) concerning the application of Title VII and the Americans with Disabilities Act (ADA) to the PDA, as it fell short on a number of fronts needed to “give it power to persuade.” Without ruling for either party, the Court adopted a new standard for courts to use when deciding PDA cases brought under a disparate treatment theory. Young v. UPS, 575 U.S. ___ (2015).

Despite the Court’s guidance, employers still will face many questions on what accommodations will be required in the future. The standards for “disparate treatment” and “disparate impact” cases may be more confusing in the future for employers who need to make decisions regarding whether and how to accommodate pregnant employees. As a result, employers are wise to respond carefully to accommodation requests by pregnant workers. Employers should review any policies that might have a disproportionate effect on pregnant workers, such as rules limiting job accommodations. In addition, employers should be careful to review restrictions on use of sick pay/sick time, leave eligibility outside of FMLA, lifting restrictions, and light duty assignments to determine: (1) if they disparately affect pregnant employees while accommodating others; and (2) what “strong” business rationale you can offer to defend the distinction.

For additional analysis of the Court's opinion and what it means for employers, please see our full article here.

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March 23, 2015

FMLA and FLSA Lawsuits Are Increasing

By Mark Wiletsky

The U.S. federal courts saw a whopping 26.3 percent increase in the number of Family and Medical Leave Act (FMLA) lawsuits filed last year over the prior fiscal year, according to statistics recently released by the Administrative Office of the U.S. Courts. Wage and hour lawsuits alleging a violation of the Fair Labor Standards Act (FLSA) were up a significant 8.8 percent. These filings are the highest they’ve been in the past 20 years of annual statistics reported by the courts.

The increasing numbers of lawsuits brought under those two employment laws may reflect how difficult it is to understand and administer wage and hour and leave laws. The increase also may be due to the heightened awareness by workers of their rights and benefits under these laws. Regardless of the cause of the increase, the numbers suggest that it is worthwhile for employers to focus their compliance efforts in these two areas.

Self-Audit Your Pay and Leave Practices

Before you find yourself defending a lawsuit, take the time to review your payroll and FMLA policies and practices, including these often tricky issues:

Classifying workers as exempt versus non-exempt from minimum wage and overtime pay requirements
Calculating each non-exempt employee’s regular rate of pay and overtime rate
Rounding time at the beginning and end of shifts
Automatic deductions for meal periods
Treating workers as independent contractors rather than employees
Tracking time worked remotely or “off-the-clock”
Providing FMLA notices within required time period
Calculating FMLA leave for workers with irregular schedules
Administering intermittent FMLA leave
Not penalizing employees who have taken FMLA leave

If your self-audit reveals any irregularities, take steps to revise your policies and practices to bring them into compliance with the applicable laws. Don’t forget state and local laws that may impose additional requirements related to pay and leave administration. If in doubt, don’t hesitate to consult with your legal counsel so that you don’t become one of next year’s statistics.

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