Author: LP

Working From Home May be a Reasonable Accommodation Under ADA, 6th Circuit Rules

LPLeave a comment

ADA LOGOThe Americans with Disabilities Act (ADA) requires that an employer reasonably accommodate an employee with a disability unless the proposed accommodation would impose an undue hardship.  Often, one of the first accommodations requested by employees is the ability to work at home rather than come into the workplace.  Sometimes such requests flow from genuine needs related the employee’s disability, but other times they stem from the employee’s desire to be away from the day-to-day oversight of the employer.

Courts that have looked at this issue usually have determined that working from home is not a reasonable accommodation, recognizing (rightly, we think) that working at home makes supervision and interaction with coworkers more difficult.  Over the years, the fact that so many courts reached the same conclusion about working from home gave a certain amount of comfort to employers that denied such requests.  They could be reasonably certain that their decisions either would not be subject to challenge under the ADA or, if challenged, would not be second guessed.

On April 22nd, however, the Sixth Circuit Court of Appeals (which hears appeals from federal district courts in Kentucky, Michigan, Ohio, and Tennessee) departed from this trend and held in Equal Employment Opportunity Commission v. Ford Motor Company that working from home may be a reasonable accommodation in some situations.  The court distinguished earlier cases by explaining that technology has extended the workplace beyond the office’s brick and mortar walls and made telecommuting more viable.

The decision in the Ford Motor case likely opens the door to more accommodation requests from employees involving working at home, and ensures greater scrutiny by courts of an employer’s reasons for denying such requests.  Going forward, employers will need to closely examine the pros and cons of any bid to telecommute, as an automatic denial will be more risky under the ADA.  In addition, employers should reassess their job descriptions and determine whether a physical presence in the office is an essential job function. Furthermore, employers need to consider that if they allow some employees to telecommute, courts may assume that telecommuting would be a reasonable accommodation for other employees.

 

Supreme Court Rules on Affirmative Action

LPLeave a comment

iStock_000006056297SmallYesterday’s Supreme Court decision in Schuette v. Coalition to Defend Affirmative Action is attracting a fair amount of attention in the news media. From an employment law perspective, the case likely will have little impact. In a decision drafted by Justice Kennedy, the Court held that states are free (in this circumstance, through a ballot referendum) to decide that they will not take race or gender into consideration in making admissions decisions to public universities.  The Court’s decision did not affect the legality of voluntary affirmative action programs maintained by private employers or the federal government’s affirmative action rules. Indeed, coverage of the decision often treats all “affirmative action” as meaning either explicit quotas or overt consideration of race or gender in decision-making. However, the type of affirmative action carried out by private employers (except in cases where the affirmative action is ordered as a remedy for past discrimination) typically involves only increased efforts to reach out to underrepresented minorities and eliminate obstacles to their hiring and advancement. This type of affirmative action is likely to continue regardless of the increasing number of decisions and state laws limiting the use of quotas and preferences.  The full Supreme Court’s decision in Schuette can be read here.

EEOC Dealt Setback on Credit Check Claim

LPLeave a comment

gavelpictureOver the last couple years, the EEOC has been taking aim at companies that use credit checks as part of the application process, arguing that excluding applicants based on credit checks has a disparate impact on minority applicants.

However, on Wednesday, the U.S. Court of Appeals sitting in Ohio dealt the EEOC a significant setback. In its decision in EEOC v. Kaplan Higher Education Corp., the 6th Circuit Court of Appeals found that the EEOC’s expert witness could not be relied upon to establish discrimination because his analysis was “unreliable”.  As such, the appellate court upheld the lower court’s ruling in favor of Kaplan.  The appellate court’s opinion closes with a damning statement regarding the EEOC’s credit check cases: “The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding [the expert’s] testimony.”

It remains to be seen whether the EEOC will heed the court’s admonition or continue to push forward.  Regardless, unless and until the EEOC finds an alternate way to establish that credit checks have a disparate impact on minority applicants, the Kaplan decision gives employers a strong response to any claim that relying on credit checks constitutes discrimination.

Chicago Extinguishes E-Cigarette Use in Enclosed Places

LPLeave a comment

ecigsbannedThe city of Chicago has decided that electronic cigarettes (e-cigarettes) should be treated the same way as more conventional cigarettes.  Effective April 29, 2014, e-cigarettes will be banned in enclosed public places and enclosed places of employment in the city of Chicago as a part of the Smoke Free Illinois Act and the Clean Indoor Air Ordinance.

Promoted by some as a healthier alternative to smoking cigarettes, e-cigarettes use a heating element to vaporize a liquid solution that contains nicotine and flavorings, or a flavored vapor without nicotine. Chemicals are emitted from e-cigarettes when the vapors are exhaled. With no guidance from the Food and Drug Administration about e-cigarette safety, city councils across the country are making their own decisions. Chicago joins New York City and a handful of cities and states to include e-cigarettes in their indoor smoking regulations.

Chicago’s Clean Indoor Air Ordinance, effective since 1988, prohibits smoking in virtually all enclosed public places and enclosed places of employment, and within 15 feet of the entrance of these establishments.

Employers in the city of Chicago should update their policies, handbooks, and workplace postings to reflect this new ordinance.

Supreme Court Rules Severance Payments Are Wages Subject to Payroll Taxes

LPLeave a comment

gavelpictureOn March 25, 2014, the U.S. Supreme Court ruled that severance payments made to workers who were terminated as part of a Chapter 11 bankruptcy were “wages” subject to Federal Insurance Contributions Act (FICA) taxes (United States v. Quality Stores).

This ruling likely will not be news to most employers that have been paying FICA on severance payments for years.  However, the issue was thrown into doubt by various rulings in connection with the Quality Stores bankruptcy.  The lawyers involved in that case hit on a theory, based on a close reading of the statutory language, that severance payments are not “wages” for purposes of FICA.  They then sought a refund of FICA taxes that had been paid in connection with various layoffs.

Somewhat surprisingly, the bankruptcy court, the district court, and the 6th Circuit all agreed with Quality Stores’ arguments. Though a legally narrow issue, it is one with substantial revenue implications. If the lower court decisions had stood, the IRS would have been flooded with refund filings (to the tune of $1 billion according to court documents).  However, the Supreme Court shot the theory down 8-0.

For most employers, this decision won’t change anything about the way they handle severance payments and FICA.  For those that were hoping they could piggyback off of Quality Stores and seek their own FICA refunds, that hope is now over.

NLRB Rules Football Players are Employees. Really?

LPLeave a comment

In a decision that has been attracting a great deal of attention, the Region 13 Regional Director of the National Labor Relations Board (“NLRB”) ruled yesterday that football players at Northwestern are “employees” within the meaning of the National Labor Relations Act (“NLRA”), and directed that an election take place to determine whether the players should be represented by a union.  (See decision here)  The ruling is irrelevant to most employers in the private sector, but nevertheless we thought we would add our two cents to the dNU Football Helmetiscussion because it is an interesting subject.

First, it is important to keep in mind that the ruling is, at this stage, simply the view of a Regional Office whose job duty is basically to expand the jurisdiction of the NLRB and attract attention for its enforcement activities.  The decision will inevitably be appealed, and the legal fight relating to the classification of these players is likely to go on for years.

Second, the decision is a good example of how the most ridiculous conclusions can sometimes be dressed up to look reasonable through references to a hearing record and the use of case citations.  There is an old saying that “to a man with a hammer, everything looks like a nail.”  In this situation, everyone looks like an employee to a Regional Office applying the NLRA.  The fact of the matter is that the NLRB does a particularly poor job of applying its law and precedent to students in educational institutions.  It has struggled for years with what to do about graduate students, and now it has “dropped the ball” (sorry, couldn’t avoid the pun) with college athletes.  The NLRB only understands relationships in terms of an employer-employee dynamic.  It cannot conceive of individuals (or institutions) pursuing something for anything other than monetary reasons.  If you ask college athletes whether they would still play their sports and compete if they did not get a scholarship, odds are most would say “absolutely” (assuming they could still afford to do so).  Yet Region 13 seems to think they are simply assembly line workers punching the clock.

The other problem with the decision from the Regional Office is that it hinges on the assertion that college athletes are not “primarily students” because they spend most of their time training or playing football.  What does this mean for those who are getting debate scholarships and who can put in as much time as student athletes?  Are they employees as well?  If not, what is the difference?  What about football players at Division III schools who put in as much time as Division I players but who don’t make as much (any?) money for their schools?  What about high school athletes?  In addition, if football players at Northwestern are not “primarily students,” then why are they accepting a college scholarship as the only return for their efforts?  Most players at Northwestern are not going to the next level and turning pro in their sport.  Apparently, they see some value in attending a prestigious university and getting a degree after four years.

Although the NLRB is addressing only the scope of the NLRA in the Northwestern case, is it fair to ask (based on the Regional Office’s reasoning) whether football players are also employees for purposes of other laws, such as wage and hour and tax laws?  If not, why not?  Many more questions of this kind can and should be asked about the Regional Director’s decision.  Our own view is that there may be many things wrong with the way college athletics works in America today, but applying employment laws to the relationship between the student athlete and the university is not the right answer.  We also believe that Region 13’s rush to extend its jurisdiction ultimately will be beaten back, if not by higher ups at NLRB, then by the Supreme Court or Congress.

Another Court Rules in Favor of Class Action Waivers

LPLeave a comment

gavelpictureOn March 21, 2014, the Eleventh Circuit Court of Appeals (which covers Alabama, Florida, and Georgia) became the fifth federal circuit court to reject arguments against arbitration agreements containing class waivers, joining the Eighth, Second, Fifth, and Ninth circuits in enforcing such agreements.

In the Eleventh Circuit case (Walthour v. Chipio Windshield Repair), employees brought a class action alleging their employer violated the Fair Labor Standards Act by not paying them required minimum and overtime wages. The defendants moved to compel arbitration, citing agreements the plaintiffs had signed which stipulated that all employment disputes were to be resolved through individual arbitration. In the end, the court sided with the employer and the lower court, ruling that the arbitration agreements were enforceable and that the class action could not move forward.

As discussed in our earlier post Tide Continues in Favor of Class Action Waivers in Arbitration Agreements, more employers are using these types of agreements to reduce the risk of class claims. The Walthour decision continues a trend of court cases in favor of the agreements.

There are advantages and disadvantages to arbitrating disputes with employees, but for employers that fear class claims, either because of the nature of their workforce or their industry, arbitration agreements can make a great deal of sense.

When a Work Made for Hire Isn’t a Work Made for Hire

LPLeave a comment

From time to time, other attorneys with our firm will contribute blog posts on items that may be of interest to members of the labor and employment law community.  Today, we are fortunate to have a post contributed by Marc Fineman, a partner in Levenfeld Pearlstein’s Intellectual Property Group.  Marc’s post discusses an issue that frequently comes up when companies retain independent contractors.  As Marc explains, if you don’t document the relationship correctly you may not own what you think you own when the project is complete . . .

intellectual-propertyIt is a widely held belief that if you retain an independent contractor to create something (a logo, software, a website, marketing collateral, etc.), and you pay the outside contractor, then you “own” what the independent contractor creates. However, this is a common misconception that can lead to disastrous results. For most works created by an independent contractor, the independent contractor owns the copyrights to the works, even if the independent contractor is paid, unless the independent contractor signs a written copyright assignment.

The phrase “work made for hire” is a term of art under the U.S. Copyright Act and refers to two categories of works. The first category is relatively straightforward—the copyright to any work prepared by an employee within the scope of his or her employment is owned by the employer. However, the second category of works made for hire, which covers works created by independent contractors, applies only to nine somewhat unusual types of works (and requires a signed agreement with the independent contractor in which the parties agree that the work is a “work for hire”). For works created by independent contractors that fall outside of those nine specific types of works (as many works commonly created for businesses do), the independent contractor owns the copyright to the work unless the independent contractor signs a written copyright assignment.

Think about the situations in which you have retained, or in the future may retain, an independent contractor to create something for you or your business. Then, think about what would happen if you found out that your independent contractor owns the copyright to what he or she created for you. Could you still stop somebody else from infringing the work? Could the independent contractor sue you for infringement? Would a potential buyer of your business be concerned?

The bottom line—if you use an independent contractor, be sure to obtain a written copyright assignment.

A Big (Bad?) Week for Employers Under the FLSA

LP1 Comment

overtimeIt was a big week for the Fair Labor Standards Act.

On March 7th, the Supreme Court let stand a decision that the owner, president and CEO of a supermarket chain in New York is personally liable for his company’s failure to make required payments on a FLSA settlement agreement.  The owner argued that to be held personally liable he had to be responsible for the violations (rather than just have general control over corporate operations). However, the Supreme Court refused to hear his arguments against the court of appeals’ decision, which can be interpreted broadly to suggest that an individual may be held personally liable for FLSA violations by virtue of general control of over corporate affairs.

On March 10th, the Supreme Court declined to review an appeals court decision finding that undocumented workers can sue — and recover wages owed — under the FLSA.

Then, on March 13th, President Obama directed the Secretary of Labor to update the FLSA’s overtime exemptions to provide more employees with overtime pay.  Some have speculated that the change will be to significantly raise the minimum weekly salary for an employee to be considered exempt under most exemptions (currently $455/week), but changes could also include rewrites of the job duties tests for the frequently used “white collar exemptions” or other limitations on current exemptions.  It remains to be seen what changes will be proposed by the administration and whether they can be implemented before the end of the President’s term.  We will keep you posted as we learn more.

EEOC and FTC Offer Joint Tips on Use of Employment Background Checks

LPLeave a comment

UntitledOn Monday, the Federal Trade Commission and the Equal Employment Opportunity Commission issued joint publications offering informal guidance on conducting background checks that comply with the Fair Credit Reporting Act and anti-discrimination laws. The overlapping rules and jurisdiction of these two agencies in this area of the law can sometimes be confusing for employers.

The first brochure, Background Checks: What Employers Need to Know, offers nuts-and-bolts guidance for employers to consider when investigating the backgrounds of applicants and employees for use in hiring, retention, promotion, and reassignment decisions. The publication also reminds employers to review local laws regarding background reports and information because some states and municipalities regulate the use of that information for employment purposes in addition to what federal law requires. The brochure also has many helpful links to other EEOC and FTC guidance in this area.

The second brochure, Background Checks: What Job Applicants and Employees Should Know is geared toward job applicants and employees.

The EEOC press release describes the joint guidance as “a unique opportunity for the agencies to work together to provide user-friendly technical assistance to our stakeholders.” Given that the EEOC has not been particularly successful in the cases it has brought against companies for allegedly using background checks improperly, it is likely that the agency also has decided that getting employers to voluntarily alter their practices by providing additional guidance to them may be a better enforcement strategy.