Welcome to Legal Briefs for HR, an update on employment issues sent to over 4500 HR professionals, in-house counsel and business owners to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in! Back issues are posted on my firm’s website at www.munckcarter.com under E-Newsletter.
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In the spirit of the season, here’s my spin on the Twelve Days of Christmas:
- Twelve (plus four) Co-Workers Snooping– Sixteen employees of Harris County Hospital District (Houston, TX area) were fired for accessing the medical records of a first-year resident who worked at one the District’s hospitals, after the resident was admitted for treatment of gunshot wounds. HIPAA requires “appropriate actions” for violations of the privacy rule and/or privacy rules of a covered entity, which can range from verbal warning to termination of employment. The District chose to send the message that snooping in medical records is naughty, not nice.
- Eleventh Hour Shopping– In November, OSHA issued a fact sheet providing crowd control guidelines for retailers, in hopes of avoiding injury to retail employees during sales events. The guidance may have been prompted by the death of a worker who was trampled when shoppers burst through the doors for a post-Thanksgiving “Black Friday” shopping event in 2008. Before the number of harried last minute shoppers hits critical mass, retail employers might want to review the fact sheet at www.osha.gov/OshDoc/data_General_Facts/Crowd_Control.pdf. And if you’re expecting a huge crowd at your house over the holidays, it couldn’t hurt.
- Ten Million Independently Contracting– A Bureau of Labor Statistics study shows that, in 2005, roughly 10.3 million workers (7.4% of U.S. workforce) were classified as independent contractors. A recent surge in legislation and lawsuits seems destined to trim that number substantially. For years, many have opined that state and federal governments are shortchanged on tax collection, individuals are left without employment statute protection (e.g., wage and hour, discrimination, benefits) and employers who misclassify have a competitive edge in the market over those who incur the additional cost of treating their workers as employees. The tide began to turn at the state level, via new laws and regs that sought to identify the, ahem, misinformed employers and then seek compliance and in some cases, mete out civil and criminal punishment. The trend surfaced at the national level about a year ago, and is most recently reflected in legislation introduced by Sen. John Kerry (D-Mass.) on 12-15-09, to close the Revenue Act of 1978 sec. 530 “safe harbor” (for failure to pay taxes on certain contractors) and require new reporting designed to surface scofflaws. See also H.R. 3408, introduced by Rep. Jim McDermott (D-Wash.) last summer. Makes me wonder what kind of arrangement Santa has with his elves. Hmm.
- Ninth Circuit Opining– Can an employer avoid a Rehabilitation Act claim of disability discrimination when it cancels an employment contract with an independent contractor (as opposed to firing an employee)? Depends on where you live. The Ninth Circuit recently joined the Tenth Circuit, in opining that section 504 of the Rehab Act incorporated the ADA’s standards for what conduct violates the Act, but not the definitions, including the definitions for what’s a covered entity and who’s a protected worker. The ADA applies to the employer-employee relationship and would not apply to a principal-contractor one. The Rehab Act, however, protects “otherwise qualified individuals” and the covered entities are any “program or activity” that receives federal money. The Sixth and Eighth Circuits believe that the ADA’s definitions, including the necessity of an employer-employee relationship, have been incorporated into the Rehab Act. Fleming v. Yuma Regional Medical Center (11-09).
- Eight(een) Legislators Sponsoring– S. 2730, introduced by Sen. Sherrod Brown (D-Ohio), has 18 sponsors and proposes to extend the American Reinvestment and Recovery Act (ARRA) COBRA subsidy, which applies to employees involuntarily terminated between 9-1-08 and 12-13-09. If passed, the bill will change the eligibility period from 9 months to 15, extend the qualifying period through 6-30-10 and increase the subsidy amount from 65% to 75%. For full text and to keep an eye on the bill’s progress, go to http://thomas.loc.gov and plug in the bill number.
- Seven Factors Applying– With broader definitions and heightened enforcement of the ADA, employers may want to review their hiring and reinstatement tests to see if they are medical exams, as defined by the ADA, or not. One employer refused to reinstate an employee who tried to return from knee surgery and said it was because she could not satisfy the lifting requirement for two open jobs. The magistrate judge and district court agreed that this was a physical agility test, not a medical exam, so there was no violation of the ADA. The Appeals Court vacated the decision and remanded, by noting that the occupational therapist who conducted the physical capacity exam (PCE) took the plaintiff’s blood pressure before and after a treadmill test, and noted her breathing. Applying the seven factors used in EEOC’s ADA enforcement guidance to define a “medical exam,” the Court noted that the exam was administered by a health care professional, interpreted by a health care professional, designed to reveal an impairment and measured a physiological response to a task rather than measuring the task itself. The ADA requires that exams given to current employees be both job-related and consistent with business necessity, but becoming winded on the treadmill had nothing to do with the job requirement/essential function of lifting 65 or 75 pounds. The Court summed up their position by saying that the purpose of the PCE may have been to determine whether the plaintiff was capable of returning to work, but the substance of the PCE sought information on her impairments or health. Indergard. v. Georgia Pacific (9th Cir. 6-09).
- Six Thousand Companies Sweating – The Internal Revenue Service announced that it will examine roughly 6000 companies for compliance with employment tax obligations, including payroll taxes, employee vs. independent contractor classifications, executives rehired as consultants, dual-status employees, employee leasing arrangements, fringe benefits including expense reimbursement, executive compensation and benefits issues like stock options, golden parachutes, retirement contacts and use of the company plane. The audits will include for- profit and nonprofit entities and both public and private sector entities. A similar audit done in the 80s identified noncompliance and increased revenue collection significantly. That’s not sleigh bills you hear jingling . . . it’s your piggy bank.
- Five Golden Rings – FLSA nonexempt workers who are responding to the boss or customers via their ringing cellphones and smartphones while not scheduled to work are the latest focus of those who pursue “off the clock” wage and hour litigation. An employer who wants 24/7 connectivity and responsiveness needs to first consider if the wage cost will be too high. And don’t forget those State laws which mandate a day of rest each week.
- Four Days of Partying– When one is on paid sick leave for depression, it’s generally not a good idea to post pictures of yourself partying at Chippendales. A 29-year old Canadian woman had her sick leave insurance benefits revoked, but the carrier denies the claim was invalidated solely due to the party pics. The employee argued that her psychiatrist had prescribed vacation and she took this to mean three four-day trips when she was feeling low. It’s worth repeating, individuals generally have no expectation of privacy for what goes on a public website and unfortunate posts can affect employment.
- Three Pages of Warning– If you’re wondering what amount of employer remedial action in the face of a claim of supervisory sexual harassment is sufficient to trigger the U.S. Supreme Court’s Faragher/Ellerth affirmative defense, read on. Plaintiff was a cashier in a small store who claimed her supervisor made sexually suggestive remarks to her. As soon as the employer heard, it [a] promptly investigated; [b] tried to rework scheduling to minimize shift overlap between the accuser and accused and made sure at least one other manager was in the store when accuser was on duty; [c] determined the accused’s actions were not unlawful, but were contra to policy and issued a three-page written warning and required the accused to attend anti-harassment training; and [d] put the accuser on leave when she refused to work if scheduled at the same time of the accused (which was not possible due to small size of the staff) and left her on leave status for months. In analyzing applicability of the defense, the Court detailed these reasonable measures to prevent and correct harassment and compared them to plaintiff’s failure to reasonably avail herself of the protective measures (e.g., aware of policy, did not report harassment for at least five months, made no attempt to return to work). Faced with these undisputable facts, summary judgment for the employer was upheld. Roby v. CWI, Inc. (7th Cir. 2009). Get out that fresh calendar and let’s pencil in some harassment avoidance training sessions for your management team in the new year!
- Two Spouses Job Hunting– Can an employer discharge an employee whose spouse had been let go previously by the same employer? At least in CT, an employer’s assumption that the remaining spouse will be unmotivated to work (or worse) is not unlawful discrimination based on marital status, since the same could be said of individuals who are single, divorced or widowed. Pleau v. Centrix, Inc. (2nd Cir. 8-09).
- And a Holiday Wish From Me! Let’s put 2009 to bed and wake up to a brand new year and all the possibilities it will bring . . . . Fa la la la la, la la la la! J
- For the Birds– If you like being “tweeted” and want breaking news on employment law changes, follow me on Twitter. I’m at @amross.
Until next time,
Audrey E. Mross
Labor & Employment Attorney
Munck Carter LLP
600 Banner Place
12770 Coit Road
Dallas, TX 75251
972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckcarter.com
www.munckcarter.com
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