Supreme Court: Two 5-4 Decisions On FLSA and ERISA

This morning, the United States Supreme Court issued two employment decisions which had two things in common.  They both were both 5-4 decisions and they both reversed the Third Circuit Court of Appeals.  Justice Kennedy was the swing vote.  In the first case, Justice Thomas’ opinion found that a FLSA lawsuit brought by a single plaintiff on behalf of herself other others similarly situated could not proceed after her individual claim was mooted by her failure to accept an offer of judgment from the defendant hospital employer.  In the second lawsuit, Justice Kagan’s opinion found that an employer’s ERISA plan could properly recover in a lawsuit from its employee/beneficiary funds which employee recovered in a personal injury lawsuit from a third-party based on the equitable lien in the ERISA plan to recover funds already paid by the plan to the employee for his injuries.  However, because the ERISA plan was silent on the subject of attorney fees, the common law doctrine concerning a common fund would be applied to reduce the ERISA’s plan’s recovery by the 40% contingency fee that the plaintiff paid his personal injury attorney to recover the funds.

In the FLSA lawsuit, the plaintiff employee alleged that she and other similarly situated employees were not paid in accordance with the FLSA because her hospital employer automatically deducted 30 minutes each day from their paycheck for lunch whether they worked through lunch or not.   Genesis Healthcare Corp. v. Symczyk, No. 11-1059 (4-16-13).  No other employees joined her lawsuit.  Upon filing its answer to her complaint, her savvy employer made an offer of judgment under Civil Rule 68 – i.e., offered her the full requested relief of $7500 of unpaid wages plus any attorney fees, costs and expenses that the court might deem appropriate.  She was given 10 days to accept the offer, which she ignored.  The trial court, however, was impressed.  By offering her full relief, the employer mooted her individual claim (under the law of the Third Circuit – which is not universally accepted on this point), which was dismissed.  Because no one else had joined her lawsuit, and she had no personal interest in the pending lawsuit,  the case was dismissed.  The Third Circuit reversed, objecting to allowing employers to cherry pick cases by paying off the representative plaintiff.  However, the Supreme Court reversed.

While the FLSA authorizes an aggrieved employee to bring an action on behalf of himself and “other employees similarly situated,” 29 U. S. C. §216(b), the mere presence of collective-action allegations in the complaint cannot save the suit from mootness once the individual claim is satisfied.

                . . . . .

The Court of Appeals concluded that respondent’s indi­vidual claim became moot following petitioners’ Rule 68 offer of judgment. We have assumed, without deciding, that this is correct.

Reaching the question on which we granted certiorari, we conclude that respondent has no personal interest in representing putative, unnamed claimants, nor any other continuing interest that would preserve her suit from mootness. Respondent’s suit was, therefore, appropriately dismissed for lack of subject-matter jurisdiction.

The Court distinguished this case for damages from equitable cases where the fleeting nature of the underlying claim (such as the lawfulness of pre-trial detentions) would almost always render a case moot before it could be heard.  Notably, the Court did not address the larger issue of whether a rejected offer of judgment renders the case moot, which is an unsettled issue of law.  The lower courts held that it did and the plaintiff did not appeal that issue to the Supreme Court.

In the second case, an employee was injured in a car accident and his employer’s health plan paid $66,866 in medical costs.  US Airways, Inc. v. McCutchen, No. 11-1285 (4-16-13).   The employee then retained a lawyer to sue the driver of the car which injured him.  That driver had also killed and/or seriously injured 3 other people, had limited insurance coverage and settled for $10,000.  However, the employee’s own insurance carrier paid $100,000.  Of the $110,000  recovered by the employee, 40% of it went to his attorney’s contingency fee.  Although he was left with only $66,000, the employer’s health plan then sued him under §502(a) of ERISA to recover reimbursement of the $66,888 in medical expenses it paid on his behalf. The terms of the health plan provided:

“If [US Airways] pays benefits for any claim you incur as the result of negligence, willful misconduct, or other actions of a  third party, . . . [y]ou will be required to reimburse [US Airways] for amounts paid for claims out of any monies recovered from [the] third party, including, but not limited to, your own insurance company as the result of judgment, settlement, or otherwise.”

The health plan’s right to reimbursement is an equitable lien by agreement on the proceeds of the personal injury litigation.   Nonetheless, it is a contractual right and is not subject to common law rules concerning equitable liens.  Therefore, the plan’s contractual rights could not be defeated by the common law doctrines of unjust enrichment, double recovery, or common fund.  However, because the plan was silent on the allocation of attorney fees, the Court’s majority (and the point on which the minority dissented because the terms of the plan were plain and uncontested), concluded that the silence would be filled by the common law doctrine of the common fund.  The plan did not specify whether its right to recovery went to the first dollar or only to the dollars recovered (i.e., after deduction for attorney fees).  

The majority found that the plan’s contractual right to recovery was reduced by the 40% attorney contingency fee.   Otherwise, the plan would receive a full ride at the employee’s expense.  The employee here would be out of pocket for bringing the lawsuit that the plan failed to bring or contribute towards. To rule otherwise, would also create a disincentive for the employee to have brought the personal injury lawsuit in the first place.    Of course, employers could avoid having to share with personal injury attorneys in the future by revising the terms of their ERISA plans to explicitly avoid responsibility for those fees and/or specify how its recovery would be calculated.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

FLSA Issues Kick Off 2016

This week has brought two developments impacting FLSA compliance and claims.  First, the federal Department of Labor issued an Administrative Interpretation 2016-1 concerning joint employment.  Essentially, the AI describes when two businesses will become liable for wages and overtime worked by a shared employee even if that overtime was earned while working for the other employer.   It describes both horizontal (i.e., related) and vertical (i.e., staffing) relationships that can lead to joint employment.  Second, the U.S. Supreme Court issued a class action decision involving spam text messages, but the holding about offers of judgment and mootness of claims will be important to employers attempting to defend FLSA class actions by making offers of judgment (i.e., complete relief) to the class representatives.   Campbell-Ewald Co. v. Gomez, No. 14-857 (1-20-16).  The Court held that an offer of judgment rejected by the class representative does not moot the pending litigation claim, even if the offer was rejected before the certification of the class.  As discussed here a few years ago, if the rejected offer of judgment mooted the claim, then the FLSA case was left moot and was dismissed.   The Court left open for another day whether the result would be different if the defendant had actually deposited the amount of the offer into an account payable to the plaintiff and then the court entered judgement in that amount in the plaintiff’s favor.

In the Administrative Interpretation, the DOL summarized its position on when two or more employers may be held jointly liable for the FLSA obligations regarding an employee who works for each of the employers.  It describes one situation as horizontal joint employment when the two or more technically separate businesses are associated or related (through common ownership, management, contracts to share employees, etc.)  The focus of the analysis is on the relationship of the businesses with each other (because it is already clear that the worker is an employee of each entity)   This can happen, for instance, with restaurants and home health care, property management, etc. When joint employment is identified, each employer becomes jointly and severally liable for the employee’s wages for each week worked, including overtime wages, regardless of how many hours the employee worked for that particular entity.  See 29 C.F.R. §791.2(a).

The following facts may be relevant when analyzing the degree of association between, and sharing of control by, potential horizontal joint employers:

·        who owns the potential joint employers (i.e., does one employer own part or all of the other or do they have any common owners);

·        do the potential joint employers have any overlapping officers, directors, executives, or managers;

·        do the potential joint employers share control over operations (e.g., hiring, firing, payroll, advertising, overhead costs);

·        are the potential joint employers’ operations inter-mingled (for example, is there one administrative operation for both employers, or does the same person schedule and pay the employees regardless of which employer they work for);

·        does one potential joint employer supervise the work of the other;

·        do the potential joint employers share supervisory authority for the employee;

·        do the potential joint employers treat the employees as a pool of employees available to both of them;

·        do the potential joint employers share clients or customers; and

·        are there any agreements between the potential joint employers.

Of course, merely because an employee holds more than one job does not make his or her employers joint employers. “Joint employment does not exist, however, if the employers “are acting entirely independently of each other and are completely disassociated” with respect to an employee who works for both of them. 29 C.F.R. 791.2(a).”

The AI describes a second situation  -- called vertical joint employment -- where there is an intermediary employer which supplies workers to a client and the economic realities show that the client exercises sufficient control over the worker to make that worker economically dependent on it and, thus, its employee for purposes of the FLSA.   Unlike horizontal relationships, the analysis in vertical relationships is on the economic realities of the relationship between the worker and the client to determine whether the employee is economically dependent on the client.   These situations arise for instance in construction (when a subcontractor supplies employees to the general contractor), in agriculture (when laborers are supplied to a grower) and in warehouses (when workers are supplied to the operator or owner of the warehouse) and medical (where nurses are placed by a staffing agency). 

The AI lists the following factors are relevant in determining the economic realities and economic dependence:

A.     Directing, Controlling, or Supervising the Work Performed. To the extent that the work performed by the employee is controlled or supervised by the potential joint employer beyond a reasonable degree of contract performance oversight, such control suggests that the employee is economically dependent on the potential joint employer. The potential joint employer’s control can be indirect (for example, exercised through the intermediary employer) and still be sufficient to indicate economic dependence by the employee. See Torres-Lopez, 111 F.3d at 643 (“indirect control as well as direct control can demonstrate a joint employment relationship”) (citing pre-1997 MSPA regulation); Antenor, 88 F.3d at 932, 934; 29 C.F.R. 500.20(h)(5)(iv). Additionally, the potential joint employer need not exercise more control than, or the same control as, the intermediary employer to exercise sufficient control to indicate economic dependence by the employee.¹⁷

B.     Controlling Employment Conditions. To the extent that the potential joint employer has the power to hire or fire the employee, modify employment conditions, or determine the rate or method of pay, such control indicates that the employee is economically dependent on the potential joint employer. Again, the potential joint employer may exercise such control indirectly and need not exclusively exercise such control for there to be an indication of joint employment.

C.     Permanency and Duration of Relationship. An indefinite, permanent, full-time, or long-term relationship by the employee with the potential joint employer suggests economic dependence. This factor should be considered in the context of the particular industry at issue. For example, if the work in the industry is by its nature seasonal, intermittent, or part-time, such industry condition should be considered when analyzing the permanency and duration of the employee’s relationship with the potential joint employer.

D.     Repetitive and Rote Nature of Work. To the extent that the employee’s work for the potential joint employer is repetitive and rote, is relatively unskilled, and/or requires little or no training, those facts indicate that the employee is economically dependent on the potential joint employer.

E.      Integral to Business. If the employee’s work is an integral part of the potential joint employer’s business, that fact indicates that the employee is economically dependent on the potential joint employer. Whether the work is integral to the employer’s business has long been a hallmark of determining whether an employment relationship exists as a matter of economic reality. See, e.g., Rutherford Food Corp. v. McComb, 331 U.S. 722, 729-30 (1947).

F.      Work Performed on Premises. The employee’s performance of the work on premises owned or controlled by the potential joint employer indicates that the employee is economically dependent on the potential joint employer. The potential joint employer’s leasing as opposed to owning the premises where the work is performed is immaterial because the potential joint employer, as the lessee, controls the premises.

G.     Performing Administrative Functions Commonly Performed by Employers. To the extent that the potential joint employer performs administrative functions for the employee, such as handling payroll, providing workers’ compensation insurance, providing necessary facilities and safety equipment, housing, or transportation, or providing tools and materials required for the work, those facts indicate economic dependence by the employee on the potential joint employer.

See 29 C.F.R. 500.20(h)(5)(iv).

 

In Gomez, the Court addressed the issue which is passed on in 2013 in Genesis HealthCare Corp., 569 U. S., at ___, and adopted Justice Kagan’s dissenting opinion from that case:

We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.

However, the Court left open the possibility that a claim could be mooted by the offer of complete relief:

We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff ’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Appeals Court: Incomplete Promises from Offer Letter Formed Binding Contract

Last week, the Franklin County Court of Appeals reversed a summary judgment previously entered on behalf of an employer on a breach of contract claim involving stock options promised in an offer letter. McGonagle v. Somerset Gas Transm. Co., L.L.C., 2011-Ohio-5768. The offer letter discussed the intent for the parties to enter into a later, more detailed employment agreement specifying the terms, but no such agreement was ever drafted, exchanged or signed. The trial court had found that the offer letter only constituted an agreement to later enter into a binding agreement, but the Court of Appeals disagreed.

According to the Court’s opinion, following negotiations, the plaintiff’s offer letter specified his salary, paid vacation, severance pay, eligibility for various bonuses and stock options, a portion of which would vest every six months within the next two years at a certain price and would immediately vest if he were fired without cause or if there were a change in control of the company. The offer letter provided that a more detailed employment agreement would later be provided specifying what could constitute termination “without cause,” or “with cause.” Both the employer and the plaintiff employee signed the offer letter. However, no detailed employment agreement was ever signed by the parties. The plaintiff was later provided with a management grant agreement concerning stock options in 2006, but he never signed it. He later resigned in 2007 and filed suit in 2008 for the stock options which he had been promised in 2002.

The employer argued that the offer letter was too vague to constitute an enforceable contract and left open a number of significant conditions, including the excise period and whether the plaintiff had ever vested in the options. The trial court concluded that the offer letter only constituted an offer to negotiate and later make a contract and, in the alternative, was too vague to be enforceable. The Court of Appeals reversed.

The Court found that the letter covered the essential terms of the parties’ agreement and could be enforced. "[I]f a term cannot be determined from the four corners of a contract, factual
determination of intent or reasonableness may be necessary to supply the missing term." The parties may rely on extrinsic evidence – such as the negotiations and later discussions -- to explain their intent. The introduction of such extrinsic evidence is permitted by the parol evidence rule, which only prohibits the admission of extrinsic evidence to explain the terms of an integrated (or complete) agreement after it has been reduced to writing. Where the parties have an incomplete agreement – or partially integrated agreement, extrinsic evidence is admissible to explain the missing terms.

A contract is partially integrated if the parties adopt it as a final expression of only one portion of a larger agreement, making the contract incomplete. Id. at ¶37. A party may introduce extrinsic evidence to supplement, but not vary or contradict, the written terms of a partially integrated contract. Id. at ¶38; Williams at ¶28, 30.

The fact that not all of the details (such as the affect of a resignation or duration of the options) had been explained in the offer letter does not mean that a contract was not formed.

The parties may have agreed that appellant's voluntary resignation would have no effect on his vested option to acquire stock or perhaps the parties did not reach an agreement on this issue because it was not contemplated by the parties. Similarly, the parties may have intended an option of unlimited duration or failed to contemplate a specified duration for the option. Regardless, we cannot conclude the letter lacks such enforceable clarity such that a factual determination of reasonableness or intent cannot be utilized to supply the relevant terms that are allegedly omitted from the letter.

In addition, it was not clear when the right to the options was triggered. “Thus, there is a genuine issue of material fact remaining as to whether or not the triggering event, equity financing, has occurred so as to entitle appellant to the stock option.” Therefore summary judgment was not appropriate for either party and the case was remanded “to the trial court for factual determinations of the relevant missing terms and, also, whether equity financing has occurred.”

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

EEOC Updates Technical Assistance Guidance on COVID Returning to Work with Proof of Vaccination and Reasonable Accommodations.

 

This morning, the EEOC finally updated its Technical Assistance Guidance for the first time since December to address the new CDC guidelines about masking and vaccinations.  Happily, it is consistent with the prior guidance from December.  It also provides examples of how to reasonably accommodate those unvaccinated employees under the ADA and Title VII.  Employers may require proof of vaccination, should be prepared to reasonably accommodate employees who cannot get vaccinated (by permitting them, for instance, to wear masks, social distance, telework, relocate work space, etc.) and can provide incentives to employees who get vaccinated as long as the employer remembers that an employee’s vaccination status remains confidential under the ADA.   In short, the EEOC’s press release explained the following key points:

·        Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA and Title VII of the Civil Rights Act of 1964 and other EEO considerations.  Other laws, not in EEOC’s jurisdiction, may place additional restrictions on employers.  From an EEO perspective, employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.

·        Federal EEO laws do not prevent or limit employers from offering incentives to employees to voluntarily provide documentation or other confirmation of vaccination obtained from a third party (not the employer) in the community, such as a pharmacy, personal health care provider, or public clinic. If employers choose to obtain vaccination information from their employees, employers must keep vaccination information confidential pursuant to the ADA.

·        Employers that are administering vaccines to their employees may offer incentives for employees to be vaccinated, as long as the incentives are not coercive. Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information.

·        Employers may provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance highlights federal government resources available to those seeking more information about how to get vaccinated.

 

The updated Q&As on the vaccine and return to work protocols are as follows:

COVID-19 Vaccinations:  EEO Overview

K.1.   Under the ADA, Title VII, and other federal employment nondiscrimination laws, may an employer require all employees physically entering the workplace to be vaccinated for COVID-19?    (5/28/21)

The federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, subject to the reasonable accommodation provisions of Title VII and the ADA and other EEO considerations discussed below.  These principles apply if an employee gets the vaccine in the community or from the employer.   

In some circumstances, Title VII and the ADA require an employer to provide reasonable accommodations for employees who, because of a disability or a sincerely held religious belief, practice, or observance, do not get vaccinated for COVID-19, unless providing an accommodation would pose an undue hardship on the operation of the employer’s business.  The analysis for undue hardship depends on whether the accommodation is for a disability (including pregnancy-related conditions that constitute a disability) (see K.6) or for religion (see K.12). 

As with any employment policy, employers that have a vaccine requirement may need to respond to allegations that the requirement has a disparate impact on—or disproportionately excludes—employees based on their race, color, religion, sex, or national origin under Title VII (or age under the Age Discrimination in Employment Act (40+)).  Employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.

It would also be unlawful to apply a vaccination requirement to employees in a way that treats employees differently based on disability, race, color, religion, sex (including pregnancy, sexual orientation and gender identity), national origin, age, or genetic information, unless there is a legitimate non-discriminatory reason.

K.2.   What are some examples of reasonable accommodations or modifications that employers may have to provide to employees who do not get vaccinated due to disability; religious beliefs, practices, or observance; or pregnancy?  (5/28/21)

An employee who does not get vaccinated due to a disability (covered by the ADA) or a sincerely held religious belief, practice, or observance (covered by Title VII) may be entitled to a reasonable accommodation that does not pose an undue hardship on the operation of the employer’s business.  For example, as a reasonable accommodation, an unvaccinated employee entering the workplace might wear a face mask, work at a social distance from coworkers or non-employees, work a modified shift, get periodic tests for COVID-19, be given the opportunity to telework, or finally, accept a reassignment. 

Employees who are not vaccinated because of pregnancy may be entitled (under Title VII) to adjustments to keep working, if the employer makes modifications or exceptions for other employees.  These modifications may be the same as the accommodations made for an employee based on disability or religion.

K.3.  How can employers encourage employees and their family members to be vaccinated without violating the EEO laws, especially the ADA and GINA? (5/28/21)

Employers may provide employees and their family members with information to educate them about COVID-19 vaccines, raise awareness about the benefits of vaccination, and address common questions and concerns.  Also, under certain circumstances employers may offer incentives to employees who receive COVID-19 vaccines, as discussed in K.16 – K. 21.  As of May 2021, the federal government is providing vaccines at no cost to everyone ages 12 and older.

There are many resources available to employees seeking more information about how to get vaccinated:

·        The federal government’s online vaccines.gov site can identify vaccination sites anywhere in the country (or https://www.vacunas.gov for Spanish).  Individuals also can text their zip code to “GETVAX” (438829) – or “VACUNA” (822862) for Spanish – to find three vaccination locations near them.

·        CDC’s website offers a link to a listing of local health departments, which can provide more information about local vaccination efforts.

·        In addition, the CDC offers background information for employers about workplace vaccination programs. The CDC provides a complete communication “tool kit” for employers to use with their workforce to educate people about getting the COVID-19 vaccine.  (Although originally written for essential workers, it is useful for all workers.)   See CDC’s Essential Workers COVID-19 Toolkit.  Employers should provide the contact information of a management representative for employees who need to request a reasonable accommodation for a disability or religious belief, practice, or observance or to ensure nondiscrimination for an employee who is pregnant.

·        Some employees may not have reliable access to the internet to identify nearby vaccination locations or may speak no or limited English and find it difficult to make an appointment for a vaccine over the phone. The CDC operates a toll-free telephone line that can provide assistance in many languages for individuals seeking more information about vaccinations: 800-232-4636; TTY 888-232-6348. 

·        Some employees also may require assistance with transportation to vaccination sites. Employers may gather and disseminate information to their employees on low-cost and no-cost transportation resources available in their community serving vaccination sites and offer time-off for vaccination, particularly if transportation is not readily available outside regular work hours.

General

K.4.  Is information about an employee’s COVID-19 vaccination confidential medical information under the ADA?  (5/28/21)

Yes.  The ADA requires an employer to maintain the confidentiality of employee medical information, such as documentation or other confirmation of COVID-19 vaccination.  This ADA confidentiality requirement applies regardless of where the employee gets the vaccination.  Although the EEO laws themselves do not prevent employers from requiring employees to bring in documentation or other confirmation of vaccination, this information, like all medical information, must be kept confidential and stored separately from the employee’s personnel files under the ADA.

Mandatory Employer Vaccination Programs

K.5.  Under the ADA, may an employer require a COVID-19 vaccination for all employees entering the workplace, even though it knows that some employees may not get a vaccine because of a disability? (12/16/20, updated 5/28/21)

Yes, provided certain requirements are met.  Under the ADA, an employer may require all employees to meet a qualification standard that is job-related and consistent with business necessity, such as a safety-related standard requiring COVID-19 vaccination.  However, if a  particular employee cannot meet such a safety-related qualification standard because of a disability, the employer may not require compliance for that employee unless it can demonstrate that the individual would pose a “direct threat” to the health or safety of the employee or others in the workplace.  A “direct threat” is a “significant risk of substantial harm” that cannot be eliminated or reduced by reasonable accommodation.  29 C.F.R. 1630.2(r).  This determination can be broken down into two steps: determining if there is a direct threat and, if there is, assessing whether a reasonable accommodation would reduce or eliminate the threat.

To determine if an employee who is not vaccinated due to a disability poses a “direct threat” in the workplace, an employer first must make an individualized assessment of the employee’s present ability to safely perform the essential functions of the job.  The factors that make up this assessment are: (1) the duration of the risk; (2) the nature and severity of the potential harm; (3) the likelihood that the potential harm will occur; and (4) the imminence of the potential harm.  The determination that a particular employee poses a direct threat should be based on a reasonable medical judgment that relies on the most current medical knowledge about COVID-19.  Such medical knowledge may include, for example, the level of community spread at the time of the assessment.   Statements from the CDC provide an important source of current medical knowledge about COVID-19, and the employee’s health care provider, with the employee’s consent, also may provide useful information about the employee.   Additionally, the assessment of direct threat should take account of the type of work environment, such as: whether the employee works alone or with others or works inside or outside; the available ventilation; the frequency and duration of direct interaction the employee typically will have with other employees and/or non-employees; the number of partially or fully vaccinated individuals already in the workplace; whether other employees are wearing masks or undergoing routine screening testing; and the space available for social distancing.

If the assessment demonstrates that an employee with a disability who is not vaccinated would pose a direct threat to self or others, the employer must consider whether providing a reasonable accommodation, absent undue hardship, would reduce or eliminate that threat.  Potential reasonable accommodations could include requiring the employee to wear a mask, work a staggered shift, making changes in the work environment (such as improving ventilation systems or limiting contact with other employees and non-employees ), permitting telework if feasible, or reassigning the employee to a vacant position in a different workspace. 

As a best practice, an employer introducing a COVID-19 vaccination policy and requiring documentation or other confirmation of vaccination should notify all employees that the employer will consider requests for reasonable accommodation based on disability on an individualized basis.  (See also K.12 recommending the same best practice for religious accommodations.)

K.6. Under the ADA, if an employer requires COVID-19 vaccinations for employees physically entering the workplace, how should an employee who does not get a COVID-19 vaccination because of a disability inform the employer, and what should the employer do?   (12/16/20, updated 5/28/21)

An employee with a disability who does not get vaccinated for COVID-19 because of a disability must let the employer know that he or she needs an exemption from the requirement or a change at work, known as a reasonable accommodation.  To request an accommodation, an individual does not need to mention the ADA or use the phrase “reasonable accommodation.” 

Managers and supervisors responsible for communicating with employees about compliance with the employer’s vaccination requirement should know how to recognize an accommodation request from an employee with a disability and know to whom to refer the request for full consideration. As a best practice, before instituting a mandatory vaccination policy, employers should provide managers, supervisors, and those responsible for implementing the policy with clear information about how to handle accommodation requests related to the policy.

Employers and employees typically engage in a flexible, interactive process to identify workplace accommodation options that do not impose an undue hardship (significant difficulty or expense) on the employer.  This process may include determining whether it is necessary to obtain supporting medical documentation about the employee’s disability.

In discussing accommodation requests, employers and employees may find it helpful to consult the Job Accommodation Network (JAN) website as a resource for different types of accommodations.  JAN’s materials about COVID-19 are available at https://askjan.org/topics/COVID-19.cfm.  Employers also may consult applicable Occupational Safety and Health Administration (OSHA) COVID-specific resources.  Even if there is no reasonable accommodation that will allow the unvaccinated employee to be physically present to perform his or her current job without posing a direct threat, the employer must consider if telework is an option for that particular job as an accommodation and, as a last resort, whether reassignment to another position is possible. 

The ADA requires that employers offer an available accommodation if one exists that does not pose an undue hardship, meaning a significant difficulty or expense. See 29 C.F.R. 1630.2(p).  Employers are advised to consider all the options before denying an accommodation request.  The proportion of employees in the workplace who already are partially or fully vaccinated against COVID-19 and the extent of employee contact with non-employees, who may be ineligible for a vaccination or whose vaccination status may be unknown, can impact the ADA undue hardship consideration.  Employers may rely on CDC recommendations when deciding whether an effective accommodation is available that would not pose an undue hardship.

Under the ADA, it is unlawful for an employer to disclose that an employee is receiving a reasonable accommodation or to retaliate against an employee for requesting an accommodation.

K.7.  If an employer requires employees to get a COVID-19 vaccination from the employer or its agent, do the ADA’s restrictions on an employer making disability-related inquiries or medical examinations of its employees apply to any part of the vaccination process? (12/16/20, updated 5/28/21)

Yes. The ADA’s restrictions apply to the screening questions that must be asked immediately prior to administering the vaccine if the vaccine is administered by the employer or its agent.  An employer’s agent is an individual or entity having the authority to act on behalf of, or at the direction of, the employer.  

The ADA generally restricts when employers may require medical examinations (procedures or tests that seek information about an individual’s physical or mental impairments or health) or make disability-related inquiries (questions that are likely to elicit information about an individual’s disability).  The act of administering the vaccine is not a “medical examination” under the ADA because it does not seek information about the employee’s physical or mental health.  

However, because the pre-vaccination screening questions are likely to elicit information about a disability, the ADA requires that they must be “job related and consistent with business necessity” when an employer or its agent administers the COVID-19 vaccine.  To meet this standard, an employer would need to have a reasonable belief, based on objective evidence, that an employee who does not answer the questions and, therefore, cannot be vaccinated, will pose a direct threat to the employee’s own health or safety or to the health and safety of others in the workplace.  (See general discussion in Question K.5.)  Therefore, when an employer requires that employees be vaccinated by the employer or its agent, the employer should be aware that an employee may challenge the mandatory pre-vaccination inquiries, and an employer would have to justify them under the ADA.

The ADA also requires employers to keep any employee medical information obtained in the course of an employer vaccination program confidential.

Voluntary Employer Vaccination Programs

K.8.  Under the ADA, are there circumstances in which an employer or its agent may ask disability-related screening questions before administering a COVID-19 vaccine without needing to satisfy the “job-related and consistent with business necessity” standard?  (12/16/20, updated 5/28/21)

Yes.  If the employer offers to vaccinate its employees on a voluntary basis, meaning that employees can choose whether or not to get the COVID-19 vaccine from the employer or its agent, the employer does not have to show that the pre-vaccination screening questions are job-related and consistent with business necessity.  However, the employee’s decision to answer the questions must be voluntary.  (See also Questions K.16 – 17.)  The ADA prohibits taking an adverse action against an employee, including harassing the employee, for refusing to participate in a voluntary employer-administered vaccination program.  An employer also must keep any medical information it obtains from any voluntary vaccination program confidential. 

K.9.  Under the ADA, is it a “disability-related inquiry” for an employer to inquire about or request documentation or other confirmation that an employee obtained the COVID-19 vaccine from a third party in the community, such as a pharmacy, personal health care provider, or public clinic?   (12/16/20, updated 5/28/21)

No.  When an employer asks employees whether they obtained a COVID-19 vaccine from a third party in the community, such as a pharmacy, personal health care provider, or public clinic, the employer is not asking a question that is likely to disclose the existence of a disability; there are many reasons an employee may not show documentation or other confirmation of vaccination in the community besides having a disability.  Therefore, requesting documentation or other confirmation of vaccination by a third party in the community is not a disability-related inquiry under the ADA, and the ADA’s rules about such inquiries do not apply.

However, documentation or other confirmation of vaccination provided by the employee to the employer is medical information about the employee and must be kept confidential.

K.10.  May an employer offer voluntary vaccinations only to certain groups of employees?  (5/28/21)

If an employer or its agent offers voluntary vaccinations to employees, the employer must comply with federal employment nondiscrimination laws.  For example, not offering voluntary vaccinations to certain employees based on national origin or another protected basis under the EEO laws would not be permissible.   

K.11. What should an employer do if an employee who is fully vaccinated for COVID-19 requests accommodation for an underlying disability because of a continuing concern that he or she faces a heightened risk of severe illness from a COVID-19 infection, despite being vaccinated? (5/28/21)

Employers who receive a reasonable accommodation request from an employee should process the request in accordance with applicable ADA standards. 

When an employee asks for a reasonable accommodation, whether the employee is fully vaccinated or not, the employer should engage in an interactive process to determine if there is a disability-related need for reasonable accommodation.  This process typically includes seeking information from the employee's health care provider with the employee’s consent explaining why an accommodation is needed. 

For example, some individuals who are immunocompromised might still need reasonable accommodations because their conditions may mean that the vaccines may not offer them the same measure of protection as other vaccinated individuals.  If there is a disability-related need for accommodation, an employer must explore potential reasonable accommodations that may be provided absent undue hardship.

Title VII and COVID-19 Vaccinations

K.12.  Under Title VII, how should an employer respond to an employee who communicates that he or she is unable to be vaccinated for COVID-19 (or provide documentation or other confirmation of vaccination) because of a sincerely held religious belief, practice, or observance? (12/16/20, updated 5/28/21)

Once an employer is on notice that an employee’s sincerely held religious belief, practice, or observance prevents the employee from getting a COVID-19 vaccine, the employer must provide a reasonable accommodation unless it would pose an undue hardship.  Employers also may receive religious accommodation requests from individuals who wish to wait until an alternative version or specific brand of COVID-19 vaccine is available to the employee.  Such requests should be processed according to the same standards that apply to other accommodation requests.

EEOC guidance explains that the definition of religion is broad and protects beliefs, practices, and observances with which the employer may be unfamiliar.  Therefore, the employer should ordinarily assume that an employee’s request for religious accommodation is based on a sincerely held religious belief, practice, or observance.  However, if an employee requests a religious accommodation, and an employer is aware of facts that provide an objective basis for questioning either the religious nature or the sincerity of a particular belief, practice, or observance, the employer would be justified in requesting additional supporting information. See also 29 CFR 1605.

Under Title VII, an employer should thoroughly consider all possible reasonable accommodations, including telework and reassignment.  For suggestions about types of reasonable accommodation for unvaccinated employees, see question and answer K.6., above.  In many circumstances, it may be possible to accommodate those seeking reasonable accommodations for their religious beliefs, practices, or observances.

Under Title VII, courts define “undue hardship” as having more than minimal cost or burden on the employer.  This is an easier standard for employers to meet than the ADA’s undue hardship standard, which applies to requests for accommodations due to a disability.  Considerations relevant to undue hardship can include, among other things, the proportion of employees in the workplace who already are partially or fully vaccinated against COVID-19 and the extent of employee contact with non-employees, whose vaccination status could be unknown or who may be ineligible for the vaccine.  Ultimately, if an employee cannot be accommodated, employers should determine if any other rights apply under the EEO laws or other federal, state, and local authorities before taking adverse employment action against an unvaccinated employee

K.13.  Under Title VII, what should an employer do if an employee chooses not to receive a COVID-19 vaccination due to pregnancy?   (12/16/20, updated 5/28/21)

Under Title VII, some employees may seek job adjustments or may request exemptions from a COVID-19 vaccination requirement due to pregnancy. 

If an employee seeks an exemption from a vaccine requirement due to pregnancy, the employer must ensure that the employee is not being discriminated against compared to other employees similar in their ability or inability to work.  This means that a pregnant employee may be entitled to job modifications, including telework, changes to work schedules or assignments, and leave to the extent such modifications are provided for other employees who are similar in their ability or inability to work. Employers should ensure that supervisors, managers, and human resources personnel know how to handle such requests to avoid disparate treatment in violation of Title VII. 

 

GINA And COVID-19 Vaccinations

Title II of GINA prohibits covered employers from using the genetic information of employees to make employment decisions.  It also restricts employers from requesting, requiring, purchasing, or disclosing genetic information of employees. Under Title II of GINA, genetic information includes information about the manifestation of disease or disorder in a family member (which is referred to as “family medical history”) and information from genetic tests of the individual employee or a family member, among other things. 

K.14.  Is Title II of GINA implicated if an employer requires an employee to receive a COVID-19 vaccine administered by the employer or its agent? (12/16/20, updated 5/28/21)

No.  Requiring an employee to receive a COVID-19 vaccination administered by the employer or its agent would not implicate Title II of GINA unless the pre-vaccination medical screening questions include questions about the employee’s genetic information, such as asking about the employee’s family medical history.   As of May 27, 2021, the pre-vaccination medical screening questions for the first three COVID-19 vaccines to receive Emergency Use Authorization (EUA) from the FDA do not seek family medical history or any other type of genetic information.  See CDC’s Pre-vaccination Checklist (last visited May 27, 2021).  Therefore, an employer or its agent may ask these questions without violating Title II of GINA.

The act of administering a COVID-19 vaccine does not involve the use of the employee’s genetic information to make employment decisions or the acquisition or disclosure of genetic information and, therefore, does not implicate Title II of GINA.

K.15.  Is Title II of GINA implicated when an employer requires employees to provide documentation or other confirmation that they received a vaccination from a doctor, pharmacy, health agency, or another health care provider in the community? (12/16/20, updated 5/28/21)

No.  An employer requiring an employee to show documentation or other confirmation of vaccination from a doctor, pharmacy, or other third party is not using, acquiring, or disclosing genetic information and, therefore, is not implicating Title II of GINA.  This is the case even if the medical screening questions that must be asked before vaccination include questions about genetic information, because documentation or other confirmation of vaccination would not reveal genetic information.  Title II of GINA does not prohibit an employee’s own health care provider from asking questions about genetic information. This GINA Title II prohibition only applies to the employer or its agent. 

Employer Incentives For COVID-19 Voluntary Vaccinations Under ADA and GINA

ADA:  Employer Incentives for Voluntary COVID-19 Vaccinations

K.16.  Under the ADA, may an employer offer an incentive to employees to voluntarily provide documentation or other confirmation that they received a vaccination on their own from a pharmacy, public health department, or other health care provider in the community?  (5/28/21)

Yes.  Requesting documentation or other confirmation showing that an employee received a COVID-19 vaccination in the community is not a disability-related inquiry covered by the ADA.  Therefore, an employer may offer an incentive to employees to voluntarily provide documentation or other confirmation of a vaccination received in the community.  As noted elsewhere, the employer is required to keep vaccination information confidential pursuant to the ADA.

K.17.  Under the ADA, may an employer offer an incentive to employees for voluntarily receiving a vaccination administered by the employer or its agent?  (5/28/21)

Yes, if any incentive (which includes both rewards and penalties) is not so substantial as to be coercive.  Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information. As explained in K.16., however, this incentive limitation does not apply if an employer offers an incentive to employees to voluntarily provide documentation or other confirmation that they received a COVID-19 vaccination on their own from a third-party provider that is not their employer or an agent of their employer.

GINA:  Employer Incentives for Voluntary COVID-19 Vaccinations

K.18.  Under GINA, may an employer offer an incentive to employees to provide documentation or other confirmation that they or their family members received a vaccination from their own health care provider, such as a doctor, pharmacy, health agency, or another health care provider in the community? (5/28/21)

Yes.  Under GINA, an employer may offer an incentive to employees to provide documentation or other confirmation from a third party not acting on the employer’s behalf, such as a pharmacy or health department, that employees or their family members have been vaccinated.  If employers ask an employee to show documentation or other confirmation that the employee or a family member has been vaccinated, it is not an unlawful request for genetic information under GINA because the fact that someone received a vaccination is not information about the manifestation of a disease or disorder in a family member (known as family medical history under GINA), nor is it any other form of genetic information. GINA’s restrictions on employers acquiring genetic information (including those prohibiting incentives in exchange for genetic information), therefore, do not apply. 

K.19.  Under GINA, may an employer offer an incentive to employees in exchange for the employee getting vaccinated by the employer or its agent? (5/28/21)

Yes.  Under GINA, as long as an employer does not acquire genetic information while administering the vaccines, employers may offer incentives to employees for getting vaccinated.  Because the pre-vaccination medical screening questions for the three COVID-19 vaccines now available do not inquire about genetic information, employers may offer incentives to their employees for getting vaccinated.  See K.14 for more about GINA and pre-vaccination medical screening questions.

K.20. Under GINA, may an employer offer an incentive to an employee in return for an employee’s family member getting vaccinated by the employer or its agent? (5/28/21)

No.  Under GINA’s Title II health and genetic services provision, an employer may not offer any incentives to an employee in exchange for a family member’s receipt of a vaccination from an employer or its agent.   Providing such an incentive to an employee because a family member was vaccinated by the employer or its agent would require the vaccinator to ask the family member the pre-vaccination medical screening questions, which include medical questions about the family member.  Asking these medical questions would lead to the employer’s receipt of genetic information in the form of family medical history of the employee.  The regulations implementing Title II of GINA prohibit employers from providing incentives in exchange for genetic information.  Therefore, the employer may not offer incentives in exchange for the family member getting vaccinated.  However, employers may still offer an employee’s family member the opportunity to be vaccinated by the employer or its agent, if they take certain steps to ensure GINA compliance. 

K.21. Under GINA, may an employer offer an employee’s family member an opportunity to be vaccinated without offering the employee an incentive? (5/28/21)

Yes.  GINA permits an employer to offer vaccinations to an employee’s family members if it takes certain steps to comply with GINA.  Employers must not require employees to have their family members get vaccinated and must not penalize employees if their family members decide not to get vaccinated.  Employers must also ensure that all medical information obtained from family members during the screening process is only used for the purpose of providing the vaccination, is kept confidential, and is not provided to any managers, supervisors, or others who make employment decisions for the employees.  In addition, employers need to ensure that they obtain prior, knowing, voluntary, and written authorization from the family member before the family member is asked any questions about his or her medical conditions.  If these requirements are met, GINA permits the collection of genetic information.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

 

Sixth Circuit Rejects EFMLEA Claim Where Employer's Final Offer of Reinstatement Was Not Shown to Be a Violation and Revocation of Flexible Class Schedule Affected More Than Just the Plaintiff.

On Friday, the Sixth Circuit Court of Appeals affirmed an employer’s summary judgment on claims by a medical assistant that it interfered with her EFMLEA leave by refusing to reinstate her to her former position or on the same terms and conditions by changing her job duties during the COVID pandemic and revoking her prior flexible work schedule.  Clement v. The Surgical Clinic, PLLC, No. 22-5801 (6^th Cir. 4-21-23).  The Court found that reassignment claim lacked merit because, after she objected to the change in job duties, she was offered a suitable transfer which she had accepted and which was willing to accommodate her job schedule.   While the revocation of her flexible schedule (to attend classes) constituted a prima facie violation of the statute, the employer was able to show that it revoked all prior authorizations of flexible schedules to attend classes – regardless of whether the employee had utilized EFMLEA or FMLA – because of the emergency situation created by the pandemic.  This was not only a legitimate and non-discriminatory reason, it applied regardless of whether the employee took EFMLEA or not.  Employees taking EFMLEA are not entitled to greater rights than employees who do not take such leave. 

According to the Court’s opinion, the plaintiff was hired for the clinic’s downtown (and busiest) clinic in 2018 where she would assist one physician and sometimes engage in patient triage.  She was allowed to shift her schedule by 30 minutes each day because of childcare responsibilities and to start two hours later when she had class (which required the employer to find replacement coverage for those hours).  When the pandemic began, the plaintiff utilized two months of leave under the Emergency Family and Medical Expansion Act.  When she sought to return to work, she was informed that she would be assigned to engage in triage on a full-time basis and that she could no longer report to work later than the rest of the staff.  When she objected, the employer found that one of its other offices was willing to give her a non-triage position and permit her to start work 30 minutes later each day.  However, around the same time, the employer notified all of its clinics that employees could no longer miss work in order to attend class because of the staffing shortage caused by the pandemic.  The plaintiff and at least one of the employee resigned because of the new policy of no longer accommodating class schedules and the plaintiff filed suit, claiming that these changes violated her rights under the EMFLEA.

The EFMLEA entitles qualified employees to reinstatement to the same position they held prior to taking leave—or, at least, to an “equivalent position.”  . . . An equivalent position is “one that is virtually identical to the employee’s former position in terms of pay, benefits and working conditions, including privileges, perquisites and status” and which “involve[s] the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility, and authority.” 29 C.F.R. § 825.215(a). Among other things, employees are generally entitled to work the same or an equivalent work schedule upon their return from leave. Id. § 825.215(e)(2). That said, “[t]he requirement that an employee be restored to the same or equivalent job with the same or equivalent pay, benefits, and terms and conditions of employment does not extend to de minimis, intangible, or unmeasurable aspects of the job.” Id. § 825.215(f).

The Court refused to find any interference with the plaintiff’s EFMLEA right to reinstatement based on its initial condition of assigning her to full-time triage work and revoking her authorization to start and end work 30 minutes after the rest of the staff because it was not the employer’s final offer.

But we are aware of no authority suggesting that an employer’s offer that it later revises is binding for purposes of establishing interference. On the other hand, it is well-established that plaintiffs must prove they suffered harm from an employer’s interference with their statutory rights. . . . To assess harm, we must evaluate the employer’s action that prompted the employment outcome, and it would seem that early offers would be superseded by the final offer on which the plaintiff was required to act. Notably, we have also consistently held that “the FMLA is not a strict-liability statute.” . . . approach tends toward strict liability in that it would deprive even the most well-meaning employers the opportunity to course-correct from potential EFMLEA violations—for example, by returning to the table with their employees to work out acceptable terms of employment.

 . .. To be considered equivalent, an employee’s new role must be identical in pay, benefits, and working conditions. 29 C.F.R. § 825.215(a). There is no dispute that [her] compensation and benefits would have gone unchanged following a transfer to The Vein Centre. What’s more, [she] would have continued working as a medical assistant at The Vein Centre, which is located a short distance away from TSC. And although she argues that TSC’s first reinstatement offer entailed substantially altered job duties (in that TSC would have assigned her to triage full-time, for example), she makes no effort to establish how or why TSC’s final offer suffered from the same shortcomings. Nor has she developed any argument on appeal that working at The Vein Centre, in and of itself, would deprive her of an equivalent position. Thus, even viewing the facts in the light most favorable to Clement, nothing suggests that the position at The Vein Centre would have involved anything less than “the same or substantially similar duties and responsibilities” as Clement’s previous role. And TSC agreed to accommodate her preferred 8:00 a.m. start time at The Vein Centre—a fact which Clement concedes. Thus, no reasonable factfinder could determine that her pre- and post-leave positions were inequivalent in this regard.

However, the revocation of her two-hour schedule delays when she previously would have attended class presented a different issue and outcome. 

The district court held that this series of events raised a question of fact as to whether TSC restored Clement to the same or an equivalent position at the company. We agree. 29 C.F.R. § 825.215(e)(2) provides that employees are generally entitled to “the same or an equivalent work schedule” following leave. There is no dispute that TSC did not allow Clement to work the same schedule she had before her EFMLEA leave. And TSC’s proposed altered schedule, excluding time away during the workday to attend classes, made it impossible for her to balance her school and work obligations—ultimately leading to her resignation from TSC. We thus cannot say that this schedule change was de minimis as a matter of law. See id. § 825.215(f).

Nonetheless, “interference with an employee’s FMLA rights does not constitute a violation if the employer has a legitimate reason unrelated to the exercise of FMLA rights for engaging in the challenged conduct.”

The FMLA relatedly provides that it “shall [not] be construed to entitle any restored employee to . . . any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken the leave.”  . . .  Thus, employees who request FMLA or EFMLEA leave “have no greater protection against [their] employment being terminated for reasons not related to [their EFMLEA] request than [they] did before submitting that request.” . . . This means a plaintiff has no actionable interference claim if her employer can show that it would have made the same decision at issue even had the employee not exercised her EFMLEA rights.

The employer had no difficulty proving that it would have the same scheduling decision even if the plaintiff had not taken EFMLA leave:

 . . . employees testified that accommodating [her] school schedule “put a hardship on [it]” even before the pandemic. Then, after the COVID-19 outbreak in March 2020, [its] staff had to balance increased demand at their clinics with staffing shortages. Under these circumstances, [it] concluded it could no longer permit staff to leave the office during working hours for school. It therefore enacted a company-wide policy prohibiting flexible school and work schedules. This pandemic-related change was not specific to [her] and would have occurred regardless of her EFMLEA leave. Therefore, [it] proffered a legitimate justification for its decision.

The plaintiff attempted to prove that the policy change was related only to her reinstatement.  However, when the employer initially revoked her authorization to attend class during work hours, it did so in connection with the pandemic scheduling challenges – the same justification for the company-wide policy.  This was not inconsistent with the employer’s explanation for the policy.  While the pandemic cannot be a magic bullet justification for every employment decision, in this case, even the plaintiff acknowledged the challenges facing the medical profession.    It was also undisputed that the employer’s decisions affected (and motivated the resignations) of individuals besides the plaintiff.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.