Double Double Toil and Trouble: When Workplace Violence, Workers’ Compensation, & Immunities Collide

Last week, the Ohio Court of Appeals issued a decision involving the collision of a violent workplace rape, workers compensation, sovereign immunity and waiver. Vacha v. North Ridgeville, 2011-Ohio-2446. According to the decision, the plaintiff employee was violently raped by a coworker at the defendant city's wastewater treatment plant. Because she suffered both physical and psychological injuries, she applied for and was awarded permanent total disability benefits through Ohio workers' compensation system. She later filed suit for civil damages and asserted claims for negligent and reckless hiring and supervision of the rapist, vicarious liability and an employer intentional tort. The City argued in moving for summary judgment that it could not be liable for civil damages to an employee who prevailed on a workers' compensation claim. It also argued that it was protected by sovereign immunity provided to political subdivisions. Finally, it argued that the plaintiff could not show that it had committed an intentional tort (to avoid workers compensation immunity). The Court agreed with most of the City's arguments, but sent the case back to the trial court because political subdivisions were not immune from all employer intentional tort claims and the City had failed to raise one of its arguments before the trial court.

The City's first argument was that the plaintiff's sole remedy was the workers' compensation system. Although purely psychological injuries are not compensable through workers' compensation, the plaintiff suffered both physical and emotional damages from the rape and was awarded total disability benefits. Therefore, the court decisions permitting plaintiffs to pursue negligent/reckless hiring/supervision claims were distinguishable because the plaintiffs in those cases – unlike the plaintiff in this case -- were not eligible to receive workers compensation benefits and, thus, were not subject to the exclusive workers' compensation remedy. As the Court noted,

R.C. 4123.74 provides that employers who are in full compliance with their obligation to pay workers' compensation premiums "shall not be liable to respond in damages" for "any injury *** received or contracted by any employee in the course of or arising out of his employment[.]" The statute is a codification of the principle set forth in Section 35, Article II of the Ohio Constitution that workers' compensation benefits will be an employee's exclusive remedy against her employer for workplace injuries and provides, in part:

"Such compensation shall be in lieu of all other rights to *** damages, for such *** injuries *** and any employer who pays the premium or compensation provided by law *** shall not be liable to respond in damages at common law or by statute for such *** injuries[.]"

The Court ultimately concluded that "if an employee's "injury" is compensable within the workers' compensation system, the employer is consequently immune from a civil action by the employee for negligently or recklessly causing the injury."

Conversely, if an employee's "injury" does qualify for workers' compensation coverage, that remedy is exclusive and the employer is immune from civil action liability arising out of an allegation that the employer was negligent or reckless in causing the employee's injury. That is the only reasonable interpretation of the language of R.C. 4123.74 and 4123.01(C) and any other interpretation would be unfair to the employer in the overall balance of competing interests in the workers' compensation system.

Nonetheless, the workers' compensation immunity does not apply to employer intentional torts. The trial court found that there were disputed issues of material fact concerning the intentional tort claim which could not be resolved on summary judgment. On appeal, the City argued that the more stringent employer intentional tort standard of R.C. § 2745.01 should apply to bar the plaintiff's claims. However, the City had not raised that argument before the trial court – probably because the statute's constitutionality was being challenged – and, thus, had impliedly waived that argument.

Finally, the City argued that it was entitled to sovereign immunity under R.C. § 2744.02 because none of the plaintiff's claims arose within any of the exceptions to that statute. In response, the plaintiff correctly pointed out that "R.C. 2744.09(B) explicitly provides that R.C. Chapter 2744 political subdivision tort immunity does not apply to "[c]ivil actions by an employee *** against his political subdivision relative to any matter that arises out of the employment relationship between the employee and the political subdivision[.]" However, the city contended that employer intentional tort actions are not "civil actions" within the meaning of the immunity statute. The majority of the Court was not impressed and found that an employer intentional tort claim could come within the political subdivision sovereign immunity statute. (However, one judge dissented and concluded that political subdivisions are immune from employer intentional tort claims).

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.

Supreme Court Upholds Mandatory E-Verify Required by Arizona

This morning, the Supreme Court upheld a controversial Arizona law which requires employers operating in the state – as part of its business licensing law – to comply with the federal 1986 Immigration Reform and Control Act and to utilize the federal E-Verify program to confirm the eligibility of employees to legally work in the United States. Chamber of Commerce of the United States v. Whiting, No. 09-115 (2011). The Chamber of Commerce and civil rights groups had united to oppose the Arizona law, which they contended violated Congressional supremacy to govern immigration and was both explicitly and implicitly preempted. However, the District Court, the Ninth Circuit and the Supreme Court each concluded that the ICRA had left an explicit exception for states to regulate the hiring of immigrants through business licensing laws and that the Arizona statute paralleled the federal statute in its requirements in order to avoid any conflict with federal law.

Prior to the 1986 passage of the IRCA, the Supreme Court had held that immigration control was a federal power, but the states still had the authority under their sovereign policing powers to prohibit the knowing employment of individuals not entitled to reside or work in their state. However, the IRCA explicitly preempts states from imposing any civil or criminal sanctions upon employers for hiring unauthorized aliens, except through licensing and other similar laws. 8 U. S. C. §1324a(h)(2). The "Legal Arizona Workers Act provides that the licenses of state employers that knowingly or intentionally employ unauthorized aliens may be, and in certain circumstances must be, suspended or revoked. The law also requires that all Arizona employers use a federal electronic verification system [i.e., E- verify] to confirm that the workers they employ are legally authorized workers."

The challenged Arizona statute required the state attorney general or county attorney, upon receipt of a complaint, to verify with the federal government the work eligibility status of the challenged employee. Only the federal government could determine work eligibility, not local government. In addition, every employer is required to utilize e-verify upon hiring a new employee. Further, good faith compliance with the I-9 requirements of the IRCA and the e-verify system create an affirmative defense for the employer. Once unauthorized aliens are identified, the statute requires the local government to notify ICE or local police and to bring an enforcement action against the employer. The first violation of the statute can result in a suspension of the employer's business license, an order to terminate all unauthorized aliens, and quarterly reporting requirements. A second violation can lead to revocation of the employer's business license.

The Court easily dismissed the argument that the Arizona statute was not a licensing scheme and that the federal exemption was limited to licensing of migrant workers. The Court also rejected the argument that the Arizona statute conflicted with the federal IRCA because the Arizona statute incorporated IRCA definitions and standards and explicitly provided that determinations of work authorization were to be made exclusively by the federal government. Only when the federal government confirms that the individual is an unauthorized alien can the state government prove its burden that the individual is not authorized to work in Arizona. Finally, the Court rejected the argument that the state law upset the balance struck by the IRCA to avoid over-burdening employers and discouraging employment discrimination. The Arizona law did not impose any material additional burdens on employers and state law already prohibited national origin discrimination.

In 1996, Congress authorized the creation of the pilot e-verify program, but precluded making it mandatory outside the federal government. (However, federal contractors are required to utilize it pursuant to a 2008 Executive Order). Employers who verify the employment eligibility of newly hired employees establish a rebuttable presumption that they have complied with the IRCA. There is no provision in the 1996 enabling statute precluding states from making mandatory the use of e-verify. Indeed, when the 2008 Executive Order was challenged by government contractors and the Chamber of Commerce, the federal government pointed out that its use was already mandatory in Arizona and a few other states. Since that time, the federal government has expanded the e-verify program and encouraged its use. Indeed, the United States, in its amicus brief, disputed that the e-verify system could not handle the use by all employers in all 50 states. The United States also disputed any challenge to the accuracy of the e-verify system.

IRCA expressly reserves to the States the authority to impose sanctions on employers hiring unauthorized workers, through licensing and similar laws. In exercising that authority, Arizona has taken the route least likely to cause tension with federal law. It uses the Federal Government's own definition of "unauthorized alien," it relies solely on the Federal Government's own determination of who is an unauthorized alien, and it requires Arizona employers to use the Federal Government's own system for checking employee status. If even this gives rise to impermissible conflicts with federal law, then there really s no way for the State to implement licensing sanctions, contrary to the express terms of the savings clause.

In light of this decision, it can be expected that additional states will adopt their own version of the Arizona statute. This decision does not resolve the additional challenges to other provisions of Arizona's immigration control laws which are still working their way through the courts.

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

Ohio Appeals Court Lowers $46.5M Damage Award to $10.5M In Retaliatory Discharge Case

Last Thursday, the Cuyahoga County Court of Appeals ruled that Ohio's Tort Reform Act required the reduction of $43M in punitive damages to no more than $7M (which was twice the amount of compensatory damages awarded by the jury) in a retaliatory discharge case brought under the Ohio Civil Rights Act. Luri v. Republic Servs., Inc., 2011-Ohio-2389. In that case, the plaintiff general manager alleged that his employer manufactured a reason to fire him in April 2007 in violation of Ohio Revised Code § 4112.02(I) after he refused to fire the company's three oldest employees in November 2006. He had protested that one of the older employees had strong performance evaluations and could sue the company for age and disability discrimination. In addition, the plaintiff presented evidence that the defendants had altered and/or fabricated evidence to support its illegal termination decision and then refused to waive his non-competition agreement after firing him.

The Court held that the trial court did not abuse its discretion in refusing to bifurcate the trial (between liability and damages) because the evidence that proved liability was also relevant to the defendant's bad faith, justifying punitive damages. In particular, evidence that the defendants had manufactured evidence proved not only guilty intent in the termination decision, but also bad faith. The Court refused to find an error in the jury instructions because the defendants had failed to ask in the jury interrogatories or instructions for the economic and non-economic damages to be separately specified. In addition to the $3.5M in compensatory damages awarded by the jury, the trial court also awarded over $1M in attorney fees and prejudgment interest. However, the Court of Appeals found that the Tort Reform Act at Ohio Revised Code § 2315.21(D) limited the punitive damages to twice the amount of compensatory damages and those damages should be imposed collectively, rather than per plaintiff. Otherwise, the amount of the $43M punitive damage award did not shock the Court's conscience or constitute a violation of due process under the circumstances.

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 Two Qualified Immunity Defenses Raised in Southern District of Ohio

As a general rule, government employees are immune under federal law from civil damages for acts conducted in the course of their employment because of a qualified immunity. However, that qualified immunity can be lost if the government official or employee engages in conduct which violates clearly established law. Today, the Sixth Circuit released two opinions which affirmed the denial of qualified immunity to two different employers from Southern Ohio because their alleged actions violated clearly established federal law. In the first decision, the employer fired a police officer after his wife distributed letters which were critical of city government. Sigler v. City of Englewood, No. 09-4223 (6^th Cir. 5/20/11). In the second decision, the Court rejected qualified immunity for school officials who failed to act upon student complaints of sexual harassment by fellow students and found that there was no collateral estoppel or res judicata from the disciplinary appeal hearings held to review the five-day suspension of the complaining female student. Evans v. Board of Education of Southwestern City School District, No. 10-4011 (5/23/11).

According to the Sigler opinion, the wife of the plaintiff police officer distributed a letter which was critical of his city government employer. He says that he never saw or heard about the letter until after she distributed it, but he did not inform his employer about the letter even after he found out. An internal affairs investigation was conducted. When initially asked about it, the plaintiff says he asked the investigating officer for a copy of it, but the officer said the plaintiff denied ever having read it. The plaintiff later admitted to having read it after his wife mailed it. The officer recommended that the plaintiff be terminated because he falsely denied having read the letter, was aware of who circulated the letter and never informed his employer about the letter, thus making him a participant. The officer contended that this violated departmental rules against dishonesty and withholding information. The City Manager accepted and acted upon the recommendation. The plaintiff then filed suit contending that he was terminated in retaliation for his marriage to the woman who distributed the letter pursuant to her First Amendment rights.

The district court denied the city's motion for qualified immunity on the grounds that retaliating against an employee because of the actions of the spouse clearly violates established First Amendment law. The Sixth Circuit affirmed and rejected the City's attempt to get the City Manager dismissed as a defendant:

Defendants finally argue that Sigler's alleged constitutional right should be construed more narrowly in determining whether it is "clearly established law." Defendants characterize the right as "whether a reasonable officer or official, standing in place of City Manager Smith or Chief Brownfield, would conclude that his actions violated Keith Sigler's First Amendment intimate association rights when Keith Sigler was terminated for violating the [City's] lawful rules and regulations." Phrasing it this way turns the qualified-immunity analysis upside down. When deciding whether a constitutional right is "clearly established law," one assumes that the right the plaintiff invokes was actually violated. Qualified immunity then excuses that violation if the right was not "clearly established law" such that the defendant should have known of it. The right Sigler invokes is the right not to be terminated in retaliation for his marital association. Assuming that Sigler was so retaliated against, defendants are only entitled to qualified immunity if it was not clearly established that such retaliation is unconstitutional. Defendants' characterization assumes away any retaliatory motive, which is Sigler's whole complaint, and instead assumes as true their purported motive for Sigler's termination. The court does not decide qualified immunity in so backwards a way.

The Court of Appeals also rejected the argument that there was not enough evidence of a factual dispute to submit the case to a jury:

The district court also implicitly held that the defendants might not be able to prove that they would have terminated Sigler even if he had not been married to Susan. The court dismissed the defendants' only evidence on this point—Smith's declaration that he would still have terminated Sigler—by stating that "[t]his, of course, is mere supposition." While abbreviated, both determinations indicate that the district court concluded that there was enough in the record to get to the jury on the questions of whether the marriage caused the termination and whether Sigler would not have been terminated if, other things being the same, he had not been married to Susan. For purposes of this interlocutory appeal, we must make the same assumptions. The alternative would be to read into the district court's holding a legal determination that Smith could be liable regardless of the extent to which Sigler's being married caused the termination. It is hard to read the court's analysis that way. We therefore lack jurisdiction to consider Smith's arguments to the extent that they challenge the factual assumptions of the district court regarding causation.

However, the Court agreed that there was insufficient evidence that the Chief of Police was sufficiently involved in the termination decision merely because he authorized the internal investigation and was aware of the City Manager's planned conduct.

In Evans, the female students complained repeatedly that they were being sexually harassed by two male students. However, no action was taken by the School. Among other things, there was an incident in the back of a school bus which put one of the plaintiffs in tears, which got the attention of a teacher, who sent the student to the Principal's office. After taking her statement, the Principal then suspended both her and the male student for five days, and called the police about the male student. The female student appealed the suspension, which was upheld because there was insufficient evidence that she resisted his advances. The following year, additional incidents occurred with another male student and the female student was repeatedly teased for having loose morals.

The School argued that the Principal was entitled to qualified immunity because collateral estoppels and res judicata attached to the appeals hearing of the female student's suspension and precluded her from later suing under § 1983 because of those incidents. However, the District Court and the Court of Appeals rejected that argument because the school appeal hearing did not address the same legal issue, could not consider the same relief and did not consider the broader course of conduct at issue in the § 1983 action (which covered the span of a few years).

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.

Court Rejects Public Policy Wrongful Discharge Claim for Lack of Clarity About Employer’s Alleged Legal Violation

Last week, the Ohio Court of Appeals affirmed the dismissal of a wrongful discharge claim brought by a terminated paramedic who alleged that he was fired for opposing the mistreatment of a patient in violation of Ohio public policy. Strodtbeck v. Lake Hosp. Sys., Inc., 2011-Ohio-2327. He questioned the medical treatment of a patient and took a picture of the alleged mistreatment with his cell phone camera and later showed the picture to the nurse manager and human resources while sharing his concerns. The employer chose to focus on his failure to obtain written consent from the patient before taking the picture instead of his complaint and terminated his employment. The Court found that the plaintiff had failed to identify any clear public policy, statute or other law which applied to his actions or which the hospital violated in terminating his employment. Thus, he had failed to satisfy the "clarity" element of a claim for wrongful discharge in violation of public policy.

In moving for summary judgment, the hospital had pointed out that the plaintiff did not have explicit permission from management to take the picture, failed to obtain written consent from the patient (as required by HIPAA practices), used his personal cell phone during working hours and failed to use the hospital's Polaroid camera in the ER to document his concerns. More importantly, the plaintiff failed to identify any specific public policy which the hospital violated in terminating his employment. Among other things, he failed to identify any required standard of medical care that would cover the amount of tape used to attach a catheter to a patient's leg or reporting possible patient abuse or maltreatment in a hospital setting.

The plaintiff argued that his situation was analogous to other situations where courts have found violations of public policy. However, the court refused to accept analogous situation as sufficient to satisfy the "clarity" element of a public policy wrongful discharge claim. Accordingly, the Court rejected the plaintiff's attempt to analogize his situation to one where an employee is fired for consulting with an attorney. Similarly, the court rejected the argument that his situation was analogous to firing an employee for cooperating with a criminal investigation of the employer because there was never any criminal investigation in this case and the plaintiff never alleged that the alleged mistreatment of the patient was criminal. Likewise, the plaintiff could not analogize to a situation where the employee was fired to testifying against the employer because there was never any legal or administrative proceeding in this case. Finally, the court refused to recognize an applicable public policy from the nursing home patient's bill of rights because the patient was in a hospital, not a nursing home, and there is a statutory remedy in nursing home abuse situations.

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 Race Discrimination Claim of Plaintiff Discharged for False Expense Report

On Friday, the Sixth Circuit Court of Appeals affirmed the dismissal of a race discrimination case by the federal district court in Columbus. David Carson v. Patterson Companies, No. 09-4559 (6^th Cir. 2011). The plaintiff had been fired for falsifying his expense report by obtaining reimbursement for an expense that was direct billed by the supplier. Although the plaintiff claimed that he had earlier informed the company of a problem with the supplier's website and had never spent the funds, the Court concluded that the plaintiff failed to show that the employer's refusal to accept his explanation was a pretext to hide discriminatory animus.

According to the Court's decision, the plaintiff was hired in March 2007. Some of his business expenses were directly billed to the employer and others were billed to his corporate credit card. In December 2007, he attempted to purchase some supplies from a supplier's website and those supplies were supposed to be billed directly to the employer. However, when the website would not cooperate with a direct-bill arrangement, he had the expenses put directly on his corporate credit card. Although these expenses never appeared on his corporate credit card invoice, he still submitted a reimbursement request for these expenses and was reimbursed by the employer for those expenses. His practice was to keep a separate account for reimbursed expenses and he noticed that he still had leftover funds after paying his credit card bill. He assumed that he had never been charged for certain expenses that he had put on the credit card. He claims to have told his supervisor and let the matter go when he was allegedly told not to worry about it.

Of course, the discrepancy was later discovered in February 2008. The supervisor emailed the plaintiff for an explanation and received a response three days later only that the plaintiff was looking into it. A meeting was scheduled for the following Monday. The plaintiff explained that he had sought reimbursement for the direct-billed expenses because he thought his credit card had been charged and asked for more time to investigate. Convinced that the plaintiff had attempted to steal from the employer by falsifying an expense report, the supervisor fired him the following week. Again, the plaintiff failed to explain the discrepancy and only offered to return the disputed funds.

The plaintiff filed suit for race discrimination in his termination and compensation and the employer counterclaimed for the $757 that plaintiff had improperly been reimbursed. The district court granted summary judgment against the plaintiff. On appeal, the plaintiff argued that he was pursuing a mixed-motive theory of discrimination, but the Sixth Circuit found that he had failed to pursue that legal theory by arguing it explicitly below or raising it in his complaint.

The plaintiff argued that he was treated differently than white employees who had submitted incorrect expense reports. However, the Sixth Circuit found these employees not to be similarly situated because (1) they reported to a different supervisor; (2) had technical errors on their reports rather than seeking reimbursement for incorrect amounts or (3) corrected their mistakes (of charging personal expenses on their credit cards) immediately before they were actually reimbursed by the employer. In contrast, the plaintiff waited two months after he had been reimbursed and 13 days after being asked to explain the incorrect reimbursement request and never returned the money. The Court rejected the plaintiff's speculation that the supervisor was not the actual decisionmaker because there was no evidence on the record that he consulted anyone before terminating the plaintiff.

Although the plaintiff claimed that he had raised the issue with his supervisor when he received the credit card bill and realized that he had been reimbursed for more than the charges, he did not remind his supervisor of his when confronted in February, offer an explanation (about the malfunctioning website) or return the money. Accordingly, there was insufficient evidence of a disputed issue of material fact for a jury to consider if the case went to trial.

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.

Mansfield Company Pays $188K to Settle EEOC Sex Discrimination Lawsuit

Yesterday, the EEOC announced that it had settled a lawsuit against a Central Ohio company for $188K which involved retaliation and sex and wage discrimination. In the lawsuit, the EEOC alleged that the defendant employer hired an experienced female drafter to prepare drawings and sketches for batteries and engines, but paid a higher salary to a similarly qualified male engineer hired a few months after her to perform the same tasks. When the female engineer learned of the salary disparity, she complained to the human resources manager and was subsequently fired – allegedly in retaliation for complaining about the discrimination. The EEOC ultimately filed suit on her behalf in 2010, alleging violations of Title VII and the Equal Pay Act.

In addition to monetary damages for the female engineer, the EEOC obtained a two-year consent decree which requires training for the defendant employer's human resources personnel and employees at the Hyundai Ideal Electric Company's home office in Mansfield, Ohio and posting of anti-discrimination notices.

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.

Arbitrator Exceeded Authority By Ignoring Clear Contract Language and Deletion of Holiday Pay Cash-Out Negotiated at Table.

Last week, the Ohio Court of Appeals affirmed the reversal and vacation of an arbitration award in favor of a union's claim for holiday pay. Eastlake v. Fraternal Order of Police/Ohio Labor Council, 2011-Ohio-2201. In that case, the city and union had negotiated to delete a provision which provided employees with the option of (1) taking the holiday off with pay or (2) working the holiday and cashing out holiday pay at the end of the year. Afterwards, the City had the discretion to permit employees to work on holidays and to let the employee take a constructive holiday with pay. However, when the City exercised its rights under the new holiday provision following ratification of the bargaining agreement, the union argued that the employees were still entitled at their option to work the holiday and cash out holiday pay even though the former provision had been deleted. An arbitrator found that the new provision was ambiguous and would create a hardship for the employees if they lost out on the opportunity to receive 96 hours of pay at the end of the year as they had before negotiations. When the City moved to vacate the arbitration award, the trial court found that the arbitrator exceeded his authority by disregarding clear contract language, ignoring the bargain reached at the negotiating table and ignoring other provisions in the bargaining agreement. The Court of Appeals agreed.

According to the Court's opinion, before negotiations, union employees

had the option of either taking their 12 paid holidays as a holiday off with pay or working the holiday and then cashing out some or all of their holidays at the end of the year. Therefore, an employee could potentially cash out 96 hours of holiday pay in December of each year. That section read as follows:

"Employees shall have the option of either taking the time off with pay or to be paid for the holidays at their straight time rate of pay and shall notify the Chief of their election."

After negotiations, this provision was deleted from the bargaining agreement and Section 3 was inserted into the Agreement:

"Section 3. Holiday Work Option. At the discretion of the respective department head with consideration of workloads and department needs, an employee not regularly scheduled may work designated holidays. The employee may then elect to take the additional holiday compensation in the form of
payment.

Section 4. Holiday Time Scheduling. An employee that works on a recognized holiday or whose regular continuous schedule does not include the day of the observed holiday shall designate the days he wishes to take off at a later date, which shall be subject to the advance approval of the employee's supervisor as to when they may be taken. "An employee electing to take time off for holidays, shall be required to take the time during the year it is earned and not be able to carry the time over into the next calendar year.

The arbitrator found Section 3 to be ambiguous and, apparently, the Union testified that it had never been their intention during negotiations to lose the 96 hours of holiday pay. The common pleas court found that the arbitrator exceeded his authority in disregarding clear language in the agreement, finding a non-existent ambiguity, and giving the Union a better bargain than it negotiated.

The unequivocal language of the Agreement must be followed. Nowhere in Article 34 does it state that the Union would be entitled to cash out ten holidays in December of each year. In fact, as previously mentioned, the part of the Agreement that conferred such a benefit was deleted during negotiations. Under Sections 3 and 4, an employee may fall into only one of three categories: (1) an employee who is not regularly scheduled, but who is called into work by the respective department head; (2) an employee who is scheduled to work on a recognized holiday; and (3) an employee who is not scheduled to work on a recognized holiday. Only under the first scenario, i.e., Article 34, Section 3, may an employee cash out holiday compensation in the form of payment.

Further, the arbitrator's decision makes note of the fact that if the employees were not entitled to cash out the ten holidays for payment in December, it would be a harsh or unreasonable result and would have a substantial impact on the bargaining unit. However, the Union agreed both to the deletion of the provision, which granted them the holiday cash-out option, and to the addition of Section 3, which unequivocally limits the circumstance in which an employee may cash out holiday compensation in the form of payment.

Again, "'[a collective bargaining agreement] is limited to the provision bargained for and *** an arbitrator may not apply extraneous rules to the agreement, where those rules were not bargained for and are contrary to the plain terms of the agreement itself.' *** Because a valid arbitrator's award draws its essence from a [collective bargaining agreement], *** an arbitrator exceeds his powers when the award conflicts with the express terms of the agreement or cannot be derived rationally from the terms of the agreement. ***" (Internal citations omitted.) Summit Cty. Children Serv. Bd. v. Communication Workers of Am., Local 4546, 113 Ohio St.3d 291, 294, 2007-Ohio-1949.

Therefore, the Court of Appeals affirmed the common pleas court and ruled in favor of the employer.

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’s Cleveland Office Announces $300K Settlement of Sexual Harassment Lawsuit

On Friday, the EEOC announced that its Cleveland, Ohio district office had settled for $300,000 a sexual harassment lawsuit brought in federal court against Dave's Supermarket, a 13-store grocery chain with 1500 employees. According to the EEOC's press release, a former meat department manager made repeated and unwanted sexual advances to female employees, "and that upper management, aware of his behavior, failed to stop it." In addition, the EEOC alleged that "the sexual harassment included an incident during" where the manager "exposed himself to a newly hired female employee," who complained to upper management "about the incident, but that management did not investigate or discipline" the manager. However, according to the EEOC, the market finally fired the manager after another female employee also complained that he sexually harassed her as well.

In addition to the monetary relief for four female employees, "the two-year consent decree settling the suit provides for mandatory training of all staff on sexual harassment and the company's obligations under Title VII, with an emphasis on the definition of sexual harassment, maintaining a harassment-free workplace, and the laws prohibiting unlawful retaliation. The decree also requires management and/or supervisor accountability concerning sexual harassment and posting of a notice to inform employees about the lawsuit and provide the EEOC's contact information."

Insomniacs may read the full EEOC press release on its website.

In a similar announcement, the Chicago regional office of the EEOC announced a $195,000 settlement of a national origin harassment federal lawsuit (EEOC v. Fireside West, LLC d/b/a Hilton Lisle/Naperville, No. 09-cv-5979) involving an executive chef’s derogatory references to two Hispanic members of the kitchen staff. Like the Cleveland lawsuit, there was also a three-year consent decree.

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.

Same Time Next Year: Different Court Different Result on Disability Discrimination

Last month, the Eighth District Court of Appeals in Cuyahoga County reversed summary judgment in favor of a school district on a disability discrimination and retaliation claim brought by a terminated teacher. Johnson v. Cleveland City School Dist., 2011-Ohio-1917. In that case, the plaintiff teacher brought suit for a failure to accommodate her cervical myelopathy. In fact, she initially brought suit in federal court, which dismissed her federal claims on summary judgment . . . . . .twice . . . . after the Sixth Circuit once reversed. However, the federal court had declined to exercise jurisdiction over the state law claims (disability discrimination, breach of contract and infliction of emotional distress) and she filed those in state court while her federal appeal proceeded. When the district court granted summary judgment again, the school attempted to dismiss the state court action based on res judicata, but the appellate court was not having any of that.

According to the Court's opinion, the teacher's physician recommended certain accommodations of her disability so that she would not get worn out. These medical restrictions were honored by the school for a number of years. Then, according to the teacher, a new administrator decided that they would not be accommodated any longer and she had to return to teaching a regular class, which the teacher said she could not do. When a stalemate ensued, the teacher took a medical leave of absence and filed a Charge of Discrimination. When the Charge was dismissed, the school denied to continue her leave and she returned to work, but still would not perform regular teaching duties. Instead, she requested a fitness for duty examination, which resulted in the same medical limitations as before.

At this point, the parties do not agree on what happened next. The plaintiff asserted that she produced a guidance counselor certificate and said she could perform those duties. The school denied that she ever applied for a counselor position. The school refused to accommodate all of her restrictions, but offered her three teaching positions. The teacher said that she agreed to accept one, but the school said that she denied all three positions. The school then fired her.

The Court of Appeals found that there were disputed issues of material facts as to whether the teacher had a covered disability and been accommodated and whether her termination was in retaliation for exercising protected rights in seeking a reasonable accommodation and filing a Charge of Discrimination. Therefore the case was remanded for a jury trial.

The trial court determined that the physician's conclusory diagnosis that the teacher had a "disability" did not create a disputed issue of fact about substantial limitations of major life activities, but the Court of Appeals disagreed. Moreover, two other physicians agreed that plaintiff was disabled.

The trial court had found that the plaintiff was not qualified because her restrictions on speaking prevented her from maintaining control over a classroom. However, again, the Court of Appeals disagreed because, among other things, she had received "excellent" performance evaluations since the restrictions were put in place years earlier.

Finally, the retaliation claim was revived because there was evidence that the school provided knowingly false information in the termination letter when it claimed that the teacher had declined an offered position, but the human resources' employees notes stated otherwise (as did the plaintiff teacher).

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: Students Who Are Actually Learning Are Not Employees Under the FLSA

This morning, the Sixth Circuit Court of Appeals issued a rather rare child-labor decision. In it, the Court was required to decide whether students at a vocational school were student-learners or employees due minimum wage for the "work" they performed at the school (in a nursing, farming, maintenance or other workplace setting). The Court rejected the Department of Labor employee-trainee test in favor of one that determines whether the individual or the school primarily benefits from the services performed. In other words, "the proper approach for determining whether an employment relationship exists in the context of a training or learning situation is to ascertain which party derives the primary benefit from the relationship." In particular, the Court agreed that the students primarily benefitted from the work because the students were not displacing regular employees in performing essential services. Indeed, all of the work could be performed by the instructors without the assistance of the students if that were the defendant school's aim. Moreover, the education received by the students was effective at teaching necessary skills. Solis v. Laurelbrook Sanitarium and School, Inc., No. 09-6128.

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.

OHIO’S MILITARY FAMILY LEAVE ACT BECOMES EFFECTIVE TODAY

Ohio's new Military Family Leave Act becomes effective today at Ohio Revised Code § 5906.01 et seq. It applies to employers, defined as "a person who employs fifty or more employees" and includes the state, and other political entities, schools, townships, counties, etc. In other words, it covers not just employers already subject to the FMLA, but also all other employers who have 50 employees – regardless of whether those employees are located at a worksite within a 75 mile radius.

Under the Act, employers must provide employees with unpaid " leave up to ten days or eighty hours, whichever is less," once per calendar year when:

• The employee has worked at least 1250 hours in the preceding twelve months and has worked for the employer for at least 12 consecutive months. (Unlike the FMLA, the employee needs to work for 12 consecutive months instead of any twelve months strung together over a number of years).
  
• The employee is the parent, spouse, or person who has had legal custody of a person
  
  • who is a member of the uniformed services and
    
  • who is called to "active duty" in the uniformed services for a period longer than 30 days OR is injured, wounded, or hospitalized while serving on active duty in the uniformed services.
    

    
    

    Active duty means full-time duty in the active federal military services or pursuant to an executive order of the U.S. President, an act of Congress or proclamation of the governor. It does NOT include active duty for training, initial active duty for training, or the period of time for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the person to perform any duty unless such period is contemporaneous with an active duty period.
    

    
    

• The employee gives the required advance notice:
  
  • When the employee is taking leave because of a call to active duty, the employee must give at least 14 days advance notice to the employer that the employee intends to take leave under this Act;
    
  • When the employee is taking leave because of an injury, wound or hospitalization, the employee must give the employer at least 2 days advance notice;
    
  • No notice must be given to an employer if the employee receives notice from a representative of the uniformed service that the injury, would, or hospitalization is of a critical or life-threatening nature.
    
• The leave takes place no more than two weeks prior to or one week after the deployment date of the employee's spouse, child or ward or former ward. (I would have to assume that leave for an injured family member is not subject to this requirement).
  
• The employee does not have any other leave available to use (other than sick or disability leave).
  

  
  

Employers may require the employee requesting leave to provide certification from the appropriate military authority to verify that the employee satisfies the above criteria.

Covered employers are required to continue providing benefits to the employee during the leave of absence, but the employee shall be responsible for the same proportion of the cost of the benefits as the employee regularly pays during non-leave periods. Employers are also required to restore the employee to the position the employee held before taking that leave with equivalent seniority, benefits, pay and other terms and conditions of employment. Employers are also prohibited from discharging, fining, suspending, expelling, disciplining or discriminating against an employee regarding any term or condition of employment because of the employee's actual or potential exercise (or support for another employee's exercise) of any right under this Act. Nonetheless, employers are not otherwise prevented from taking employment action that is independent of the employee's exercise of rights under this Act.

Employees may not be required to waive their rights under this Act.

No collective bargaining agreements or benefit plans may be executed after today which limit or require an employee to waive his or her rights under this Act. However, employer must still comply with any collective bargaining agreement or benefit plan which provides leave benefits similar to those established by this Act which are greater than the leave rights provided by this Act. Indeed, an employer may provide better leave benefits than are required by this Act.

Finally, employers may be subject to a civil action for injunctive "or any other" relief that a court finds necessary to secure an employee's rights under this Act. I hear a public policy tort action coming . . . . . .

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.

Supreme Court: When the Contract Was Formed is Disputable and Not Arbitrable Even If It Seems Inconsistent

There's nothing like inconsistency to keep lawyers employed. On Friday, the Supreme Court issued yet another arbitration decision in which it reversed the Ninth Circuit (which uncharacteristically found the dispute to be subject to the arbitration clause). Granite Rock Co. v. International Brotherhood of Teamsters, No. 08-1214 (6/24/10). However, despite what the Court harped on last week in Rent-a-Center (that objections to the contract as a whole cannot prevent arbitration), in this case, the Court found that a dispute involving when the contract was formed had to be decided by the trial court instead of the arbitrator because the dispute was not arbitrable under the union's theory, but was arbitrable under the employer's. In other words, disputes over the formation of the arbitration clause (and the contract as a whole) may be decided by the trial court instead of the arbitrator. Moreover, the scope the arbitration clause did not include disputes over whether a contract was even formed. Finally, the Court rejected the employer's attempt to create a federal cause of action for tortious interference with contract under § 301.

According to the Court's opinion, the employer's CBA with the local union expired on April 30 and, following an impasse in negotiations, the union went on strike in June until July 2 when the members ratified a new CBA. The new CBA contained arbitration and no-strike provisions and required the employees to return to work on July 5. Prior to the ratification vote, the local's business manager requested the employer to consider a return-to-work agreement which would hold harmless any union member who was responsible for any damages incurred during the strike and picketing. The employer refused. The international union had advised the local union during negotiations and the strike and had objected to the members' returning to work without a back to work agreement protecting the members and the local union from damages caused during the strike. Thus, the international union convinced the local union to continue the strike beyond July 5, expanded the strike beyond the single facility at issue and informed the employer that it would permit the employees to return to work only after the employer agreed to the requested return-to-work agreement. On July 9, the employer filed a lawsuit in federal court under § 301 of the LMRA to enjoin the strike (as a violation of the parties' CBA) and for strike-related damages. In its defense, the union contended that the CBA had never been ratified (and, thus, could not be breached) and the trial court refused to enjoin the strike. Subsequently, 12 union members testified to the July 2 ratification vote and the employer moved for a new trial. The union then held another ratification vote on August 22 (when the members again voted to approve the new CBA) and announced the vote and the cessation of the strike on September 12 in order to render the employer's motion moot as the trial court was preparing to hear it. Although the employer's request for the injunction was now moot, the court agreed to hold a new trial on the employer's motion for strike damages. The unions then demanded arbitration of the dispute and moved the court for an order compelling arbitration. The employer then amended its complaint to add a claim against the international union for tortiously interfering with its contract by convincing the local union to breach the new CBA by extending the strike beyond July 5.

The trial court refused to recognize a new federal claim under § 301 for tortious interference and dismissed that claim. It also refused the unions' request to refer the question about when the CBA was ratified to the arbitrator. Instead, a jury concluded that the CBA was ratified on July 2 (instead of August 22) and the breach of contract claim was sent to the arbitrator to determine damages. On appeal, the Ninth Circuit affirmed dismissal of the tortious interference claim, but held that the ratification dispute should have been resolved in arbitration because any ambiguity in the scope of the arbitration clause was to be resolved in favor of arbitration and because the employer conceded the applicability of the arbitration clause by filing suit for breach of the arbitration clause in the parties' contract. The Supreme Court reversed.

The primary dispute in this case centered on whether the arbitrator or the trial court should have determined the date when the CBA was ultimately ratified: Was it July 2 or August 22? The Court held that the trial court was correct to determine the date when the CBA was ratified instead of permitting an arbitrator to do so. "[W]here, as here, the date on which an agreement was ratified determines the date the agreement was formed, and thus determines whether the agreement's provisions were enforceable during the period relevant to the parties' dispute."

The Court made little attempt to harmonize its primary analysis with the Prima Paint line of cases (as typified by last week's Rent-a-Center decision). As a general rule, the trial court determines the arbitrability of a dispute, not the arbitrator (unless, of course, the parties' clearly and unmistakably delegate the decision to the arbitrator). Once a dispute is found to be within the scope of an arbitration clause by a court, then it is referred to arbitration. To succeed in avoiding arbitration, the opposing party must challenge the validity and/or scope of the arbitration clause itself. Just last week, the Court reaffirmed that when a party raises a defense that goes to the validity of the contract as a whole, but not to the validity of only the arbitration clause, then the arbitrator decides the dispute instead of the court. That being said, the Court still rejected the Ninth Circuit's application of these rules in this case:

The second principle the Court of Appeals invoked is that this presumption of arbitrability applies even to disputes about the enforceability of the entire contract containing the arbitration clause, because at least in cases governed by the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq.,
courts must treat the arbitration clause as severable from the contract in which it appears, and thus apply the clause to all disputes within its scope "'[u]nless the [validity] challenge is to the arbitration clause itself'" or the party "disputes the formation of [the] contract." (emphasis added).

According to the Court: "These principles would neatly dispose of this case if the formation dispute here were typical. But it is not." This was supposedly because the plaintiff both conceded the formation and validity of the arbitration clause. Moreover, the Court concluded that the unions,

like the Court of Appeals, over-reads our precedents. The language and holdings on which Local and the Court of Appeals rely cannot be divorced from the first principle that underscores all of our arbitration decisions: Arbitration is strictly "a matter of consent . . . ., our precedents hold that courts should order arbitration of a dispute only where the court is satisfied that neither the formation of the parties' arbitration agreement nor (absent a valid provision specifically committing such disputes to an arbitrator) its enforceability or applicability to the dispute is in issue. Ibid. Where a party contests either or both matters, "the court" must resolve the disagreement.

To start, the Court said it was the trial court's duty to determine whether the particular dispute at issue was subject to the parties' arbitration clause. Interestingly, it states that "[t]o satisfy itself that such agreement exists, the court must resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce . . . . these issues typically concern the scope of the arbitration clause and its enforceability. In addition, these issues always include whether the clause was agreed to, and may include when that agreement was formed." (emphasis added).

The Court rejected any argument that the LMRA's rules concerning the arbitration of labor disputes differs materially from the FAA's rules concerning arbitration of commercial and other disputes. "We, like the Court of Appeals, discuss precedents applying the FAA because they employ the same rules of arbitrability that govern labor cases. "[E]ven in LMRA cases, "courts" must construe arbitration clauses because "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."

Our cases invoking the federal "policy favoring arbitration" of commercial and labor disputes apply the same framework. They recognize that, except where "the parties clearly and unmistakably provide otherwise," . . . , it is "the court's duty to interpret the agreement and to determine whether the parties intended to arbitrate grievances concerning" a particular matter, id., at 651. They then discharge this duty by: (1) applying the presumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand; and (2) adhering to the presumption and ordering arbitration only where the presumption is not rebutted.

Interestingly, this case is not materially different from any other case where one party disputes that a contract was ever formed – and by extension – an arbitration clause. One could argue that this decision will apply with equal force to future disputes under the FAA. Nonetheless, the Court concedes that not every case will require the same conclusion:

In reaching this conclusion [about the arbitrability of the formation date dispute] we need not, and do not, decide whether every dispute over a CBA's ratification date would require judicial resolution. We recognize that ratification disputes in labor cases may often qualify as "formation disputes" for contract law purposes because contract law defines formation as acceptance of an offer on specified terms, and in many labor cases ratification of a CBA is necessary to satisfy this formation requirement. See App. 349−351. But it is not the mere labeling of a dispute for contract law purposes that determines whether an issue is arbitrable. The test for arbitrability remains whether the parties consented to arbitrate the dispute in question.

In its essence, the Court refused to let the unions speak out of both sides of their mouth and be too cute by half: The unions were contending that they could not be liable for breach of the no-strike clause because the CBA was not ratified until August 22, but the unions were still seeking to compel the dispute to arbitration even though the arbitration clause likewise would not have been ratified (or enforceable) until August 22. On the other hand, if the CBA were ratified on July 2, then the unions breached the no-strike clause and the dispute would be subject to arbitration. It was this central question-- that there was no valid arbitration clause unless the CBA were ratified on July 2 -- that prompted the Court to rule in favor of the trial court's jurisdiction. When the unions attempted to fix their "cute" argument by pointing out that the CBA became effective on May 1 after it was ratified (regardless of the date), the majority rejected the argument on the grounds that it had not been raised below or to contest certiorari.

The Court's secondary analysis makes more sense: a dispute about the ratification dates did not "arise under" the CBA or fit neatly within the CBA's arbitration clause. "Section 20 of the CBA provides in relevant part that '[a]ll disputes arising under this agreement shall be resolved in accordance with the [Grievance] procedure,' which includes arbitration."

First, we do not think the question whether the CBA was validly ratified on July 2, 2004—a question that concerns the CBA's very existence—can fairly be said to "arise under" the CBA. Second, even if the "arising under" language could in isolation be construed to cover this dispute, Section 20's remaining provisions all but foreclose such a reading by describing that section's arbitration requirement as applicable to labor disagreements that are addressed in the CBA and are subject to its requirement of mandatory mediation.

The Court of Appeals erred in examining only whether the parties' dispute about the no-strike clause arose under the CBA instead of examining whether the ratification date dispute "arose under" the CBA:

The issue is whether the formation-date defense that Local raised in response to [the employer]'s no-strike suit can be characterized as "arising under" the CBA. It cannot for the reasons we have explained, namely, the CBA provision requiring arbitration of disputes "arising under" the CBA is not fairly read to include a dispute about when the CBA came into existence.

Finally, the unions argued that the employer waived its objection to arbitration when it filed suit seeking to enforce the CBA which requires the dispute to be compelled to arbitration. Although I generally do not like it when parties get too cute, this argument is at least appealing on its face. However, the Court still neatly disposed of it because it hadn't forgotten that the unions were being "too cute:"

We do not agree that by seeking an injunction against the strike so the parties could arbitrate the labor grievance that gave rise to it, [the employer] also consented to arbitrate the ratification (formation) date dispute we address above. . . . [The employer's] decision to sue for compliance with the CBA's grievance procedures on strike-related matters does not establish an agreement, "implicit" or otherwise, to arbitrate an issue (the CBA's formation date) that [the employer] did not raise, and that [the employer] has always (and rightly, . . . ) characterized as beyond the scope of the CBA's arbitration clause. The mere fact that Local raised the formation date dispute as a defense to [the employer's] suit does not make that dispute attributable to [the employer] in the waiver or estoppel sense the Court of Appeals suggested, see 546 F. 3d, at 1178, much less establish that [the employer] agreed to arbitrate it by suing to enforce the CBA as to other matters.

Justices Sotomayor and Stevens dissented from the arbitrability discussion on the grounds that when the CBA was finally executed in December, it was explicitly retroactive to May 1. (This argument had been rejected by the majority on the grounds it had not been raised before the Ninth Circuit or when challenging certiorari). It also seems a little weird to me that it would matter since the same language would typically have been present in the CBA when it was ratified – either in July or August. Any "constructive" effective date would not seem to cover the unions' defense to the breach of contract claim being asserted by the employer when that defense concerned the actual effective dates based on the actual ratification date.

The secondary holding of the Court was to reject the employer's attempt to bring a tortious interference claim under § 301. This argument was unanimously rejected by the Court. Section 301 grants the federal courts jurisdiction over difficult-to-prove breach of contract claims between employers and unions and pre-empts many (even most) state law claims. The employer sought to expand federal jurisdiction so that it could reach the international union's immoral conduct in inducing the local union to breach the CBA when it could not sue the international union for full relief under § 301 because it was not a party to the CBA. However, all of the courts of appeals have refused to expand § 301 to encompass federal tort rights. The Court was also unconvinced that alternative remedies were unavailable.

In reaching this conclusion, we emphasize that the question before us is a narrow one. It is not whether the conduct [the employer] challenges is remediable, but whether we should augment the claims already available to [The employer] by creating a new federal common-law cause of action under §301(a). That we decline to do so does not mean that we approve of IBT's alleged actions. [The employer] describes a course of conduct that does indeed seem to strike at the heart of the collective bargaining process federal labor laws were designed to protect. As the record in this case demonstrates, however, a new federal tort claim is not the only possible remedy for this conduct. [The employer]'s allegations have prompted favorable judgments not only from a federal jury, but also from the NLRB. In proceedings that predated those in which the District Court entered judgment for [the employer] on the CBA's formation date,¹⁷ the NLRB concluded that a "complete agreement" was reached on July 2, and that Local and the [ international union] violated federal labor laws by attempting to delay the CBA's ratification pending execution of a separate agreement favorable to [the international union].

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.

DOL: It Takes a Village to Raise a Child, so the Village Gets FMLA Leave

Yesterday, the Department of Labor issued its third Administrative Interpretation since jettisoning the decades-long practice of issuing Administrator Opinion Letters based on specific facts. This time, the Interpretation concerns the FMLA instead of the FLSA. In it, the DOL reminds the public that the FMLA is available not only to parents due to the birth, adoption or serious medical condition of their own biological, adopted , step, or foster children (as well as their legal wards), but also to individuals who stand "in loco parentis" to the child. Then, the DOL informs the public that "in loco parentis" can include an unlimited number of unmarried heterosexual and same sex roommates, significant others, partners and other relatives of the biological parents. Administrator's Interpretation No. 2010-3. There has already been a significant amount of litigation of whether grandparents can take FMLA leave to care for grandchildren within their care (when the FMLA does not provide grandparent leave). The DOL states that additional guidance was needed "regarding whether employees who do not have a biological or legal relationship with a child may take FMLA leave for birth, bonding, and to care for the child." However, the determination remains dependent upon all the facts and circumstances and the new Administrative Interpretation does little to clarify the situation and could conceivably cover family babysitters under the loose standard announced yesterday. Yet, while the specific recognition that the FMLA can extend to unmarried partners who care for children has generated significant media attention, the real legal controversy involved with the DOL's new interpretation is that it disregards the regulatory standard for "in loco parentis" in order to expand who is covered by the FMLA.

"Black's Law Dictionary defines the term in loco parentis as "in the place of a parent." The DOL recognizes that "[w]hether an employee stands in loco parentis to a child is a fact issue dependent on multiple factors" which can include "the age of the child; the degree to which the child is dependent on the person claiming to be standing in loco parentis; the amount of support, if any, provided; and the extent to which duties commonly associated with parenthood are exercised." The FMLA regulations provide that "in loco parentis" means someone "with day-to-day responsibilities to care for and financially support a child, or, in the case of an employee, who had such responsibility for the employee when the employee was a child. A biological or legal relationship is not necessary." 29 C.F.R. § 825.122(c)(3) (emphasis added). However, in yesterday's Interpretation, the DOL chose to deliberately ignore the regulation's minimal standard:

It is the Administrator's interpretation that the regulations do not require an employee who intends to assume the responsibilities of a parent to establish that he or she provides both day-to-day care and financial support in order to be found to stand in loco parentis to a child. For example, where an employee provides day-to-day care for his or her unmarried partner's child (with whom there is no legal or biological relationship) but does not financially support the child, the employee could be considered to stand in loco parentis to the child and therefore be entitled to FMLA leave to care for the child if the child had a serious health condition. The same principles apply to leave for the birth of a child and to bond with a child within the first 12 months following birth or placement. For instance, an employee who will share equally in the raising of a child with the child's biological parent would be entitled to leave for the child's birth because he or she will stand in loco parentis to the child. Similarly, an employee who will share equally in the raising of an adopted child with a same sex partner, but who does not have a legal relationship with the child, would be entitled to leave to bond with the child following placement, or to care for the child if the child had a serious health condition, because the employee stands in loco parentis to the child. (emphasis added).

In other words, even though the FMLA regulations provide that an employee cannot be "in loco parentis" unless they have daily responsibilities to both care for AND financially support the child, the DOL believes that the a person is sufficiently "in loco parentis" as long as they provide daily care for the child even though they are NOT also financially supportive.

Moreover, the DOL finds that there is no restriction on how many individuals could qualify for "in loco parentis" with respect to a single child:

It should be noted that the fact that a child has a biological parent in the home, or has both a mother and a father, does not prevent a finding that the child is the "son or daughter" of an employee who lacks a biological or legal relationship with the child for purposes of taking FMLA leave. Neither the statute nor the regulations restrict the number of parents a child may have under the FMLA. For example, where a child's biological parents divorce, and each parent remarries, the child will be the "son or daughter" of both the biological parents and the stepparents and all four adults would have equal rights to take FMLA leave to care for the child. (emphasis added).

The DOL seems to confuse the fact that the regulation specifically covers step-parents (of which there can only be a maximum of four at any given time) with the concept that there is no numerical limitation under the new DOL standard for how many "in loco parentis" a child could now have. This is particularly troubling when a person's "in loco parentis" status can change weekly and requires little proof:

Where an employer has questions about whether an employee's relationship to a child is covered under FMLA, the employer may require the employee to provide reasonable documentation or statement of the family relationship. A simple statement asserting that the requisite family relationship exists is all that is needed in situations such as in loco parentis where there is no legal or biological relationship. . . .

While the DOL indicates that the "in loco parentis" should live with the child, that requirement is not made explicit – and thus – could include babysitters who provide daily care (albeit not babysitters who only periodically take care of the child while the parents are travelling). The DOL is specifically silent of the status of grandparents and other relatives where an extended family lives together and all family members share child-raising responsibilities. Are all grandparents, aunts, uncles, cousins, girlfriends, boyfriends, etc. included in the "in loco parentis" when they are all sharing in the daily care of the children?

Examples of situations in which an in loco parentis relationship may be found include where a grandparent takes in a grandchild and assumes ongoing responsibility for raising the child because the parents are incapable of providing care, or where an aunt assumes responsibility for raising a child after the death of the child's parents. Such situations may, or may not, ultimately lead to a legal relationship with the child (adoption or legal ward), but no such relationship is required to find in loco parentis status. In contrast, an employee who cares for a child while the child's parents are on vacation would not be considered to be in loco parentis to the child.

While the DOL rushed to expand FMLA coverage to political allies, it unnecessarily jettisoned controlling regulatory language in issuing the Interpretation by expanding FMLA coverage to any regular caregiver with only minimal responsibilities for the child. A more focused interpretation of the existing regulation could have achieved the same political result without violence to the minimal regulatory requirements.

The cynical readers among you may wonder why the DOL thinks that it can overrule a regulation passed through the formal comment and rulemaking process under the Administrative Procedures Act – and contained in the Code of Federal Regulations – with a mere Administrative Interpretation. The Interpretation seems oblivious to Christensen v. Harris County, 529 U.S. 576 (2000) where the Supreme Court found that a similar administrative interpretation by the DOL was not entitled to judicial deference because there had been no formal prerequisites to its issuance.

In any event, the DOL contends that its Administrative Interpretations are entitled to the same judicial deference as Administrative Opinion Letters rulings (issued for decades) and may be the basis of an employer’s good faith defense under 29 U.S.C. § 259 to an allegation that it has violated the FLSA. The FLSA comes into play because employers may deduct periods of FMLA leave which are less than a full day as long as the employee qualifies for FMLA leave. If the employee does not qualify for FMLA leave, the employer must pay exempt/salaried employees for the full day even if the employee took some time off for covered purposes. If, for instance, an exempt employee is granted “in loco parentis” leave under this Interpretation, but then later challenges the deductions from his or her paycheck as violating the FLSA – and maybe even the employee’s exempt status – then the employer could avoid liquidated damages, longer limitations period and liability altogether by citing reliance on this Interpretation.

Of course, the more salient issue for employers is how this new Interpretation will be abused by chronic malingerers who have found ingenious ways to avoid ever working overtime or on weekends or on holidays by creative manipulation of the FMLA. (No conscientious or reasonable employer has any particular interest in denying FMLA leave to a genuine in loco parentis employee who needs it; it is only a genuine need to control FMLA abuse which prompts dismay at Interpretations with no enforceable standards to control their abuse). In my deep, dark past, I had an FMLA question arise about what an employer was to do when two potential fathers sought time off for the birth of the same child. Both thought that they were the biological father and one was the current boyfriend of the mother, while the other was not. I have even had situations arise where the biological parents both lived with different significant others as well as their parents – creating a situation where there were the possibility of two parents and six other people simultaneously claiming in loco parentis. If the child has asthma or even the flu, this extended family could force their employers to grant them time off work under this Interpretation for every major family celebration and holiday as long as they could claim that the child was sick (intermittently, of course) and required their care. This could be true even if the employer had heard their employee state any number of times that s/he disliked the child, refused to spend money on the child or wanted to send the child to boarding school for the indefinite future.

Thus, conservative and weary employers may elect to rely instead on the clear language of the FMLA regulation and put it on the plaintiff to convince a judge to give more weight to the Interpretation than the regulation despite the Supreme Court’s instruction in Christensen. While Interpretations may be persuasive authority and create the basis of a good faith defense for certain employers, Interpretations still do not carry the force of law like statutes, regulations passed under the APA or court decisions as far as the Christensen Supreme Court is concerned:

Here, however, we confront an interpretation contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking. Interpretations such as those in opinion letters–like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law–do not warrant Chevron-style deference. See, e.g., Reno v. Koray, 515 U.S. 50, 61 (1995) (internal agency guideline, which is not “subject to the rigors of the Administrative Procedur[e] Act, including public notice and comment,” entitled only to “some deference” (internal quotation marks omitted)); EEOC v. Arabian American Oil Co., 499 U.S. 244, 256—258 (1991) (interpretative guidelines do not receive Chevron deference); Martin v. Occupational Safety and Health Review Comm’n, 499 U.S. 144, 157 (1991) (interpretative rules and enforcement guidelines are “not entitled to the same deference as norms that derive from the exercise of the Secretary’s delegated lawmaking powers”). See generally 1 K. Davis & R. Pierce, Administrative Law Treatise §3.5 (3d ed. 1994). Instead, interpretations contained in formats such as opinion letters are “entitled to respect” under our decision in Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), but only to the extent that those interpretations have the “power to persuade,” ibid. See
Arabian American Oil Co., supra, at 256—258. As explained above, we find unpersuasive the agency’s interpretation of the statute at issue in this case.
. . . .
Seeking to overcome the regulation’s obvious meaning, the United States asserts that the agency’s opinion letter interpreting the regulation should be given deference under our decision in Auer v. Robbins, 519 U.S. 452 (1997). In Auer, we held that an agency’s interpretation of its own regulation is entitled to deference. Id., at 461. See also Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). But Auer deference is warranted only when the language of the regulation is ambiguous. The regulation in this case, however, is not ambiguous–it is plainly permissive. To defer to the agency’s position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation. Because the regulation is not ambiguous on the issue of compelled compensatory time, Auer deference is unwarranted.

Thus, the even more cynical readers may ask if the Obama Administration were sincere about wanting to make this Intepretation stick and survive judicial challenge, why not open the rule to revision through the formal (albeit expensive and lengthy) APA rulemaking process? Couldn’t this new Interpretation be changed as easily as it was implemented if there is not a formal regulation adopted? Is it not more likely that a court will refuse to defer to the Interpretation in that it contradicts the clear requirements of the regulation without any explanation of an ambiguity or need for clarification?

The DOL indicates that this Interpretation addresses only FMLA leave and not military caregiver or military exigency leave which are governed by a different regulatory standard.

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.

Ohio Supreme Court: Ohio Law Does Not Require Mandatory Maternity Leave

This morning, the Ohio Supreme Court (in a 5-1 decision) held in a highly anticipated decision that the Ohio Revised Code does not require mandatory maternity leave. In particular, the Court held that an employment policy which imposes a uniform minimum-length-of-service requirement for leave eligibility with no exception for maternity leave cannot constitute direct evidence of sex discrimination under R.C. Chapter 4112. Thus, the fact that an employer relied upon a uniformly applied policy denying any leave of absence to any employee with less than one year of seniority could not constitute direct evidence of sex discrimination under Ohio law when that policy was used to deny maternity leave to an employee who gave birth eight months after being hired. McFee v. Nursing Care Mgt. of Am., Inc., Slip Opinion No. 2010-Ohio-2744. If the Court had held otherwise, the possibility existed that employers would refuse to hire pregnant or other women in order to avoid providing them with maternity leave.

According to the Court's opinion, a woman applied for employment in a nursing home in Pataskala and received an employee handbook upon being hired. The Handbook provided that employees would not be eligible for a leave of absence for any purpose until they had worked for at least one year. Eight months later, the woman's doctor provided a note saying that she was physically unable to work until after giving birth. Shortly thereafter, she gave birth and she was fired three days later for taking a leave of absence before she was eligible under the employer's policy. She filed a Charge of Discrimination with the Ohio Civil Rights Commission, where an investigator found probable cause of discrimination. An Administrative Law Judge disagreed and recommended dismissal of the complaint, but the OCRC disagreed and imposed liability. The employer appealed to the Licking County Common Pleas Court, which reversed the OCRC, which appealed. The Court of Appeals reversed again, finding that Ohio law required employers to provide all woman with a reasonable amount of maternity leave and that the employer's policy constituted direct evidence of discrimination (which relieved the woman of having to produce other evidence of sex or pregnancy discrimination). The employer again appealed and the Supreme Court reversed.

Ohio Revised Code § 4112.02(A) precludes employment discrimination on account of sex. Revised Code § 4112.01(B) provides in relevant part that:

the terms "because of sex" and "on the basis of sex" include, but are not limited to, because of or on the basis of pregnancy, any illness arising out of and occurring during the course of a pregnancy, childbirth, or related medical conditions. Women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in division (B) of section 4111.17 of the Revised Code shall be interpreted to permit otherwise. This division shall not be construed to require an employer to pay for health insurance benefits for abortion, except where the life of the mother would be endangered if the fetus were carried to term or except where medical complications have arisen from the abortion, provided that nothing in this division precludes an employer from providing abortion benefits or otherwise affects bargaining agreements in regard to abortion.

First, the Court summarily rejected the appellate court's contention that the employer's policy could constitute "direct" evidence. Therefore, the employer was entitled to the McDonnell-Douglas burden shifting requirement of proving discriminatory intent and the opportunity to articulate a legitimate and non-discriminatory basis for its action.

Second, the Court found that it was not always illegal to discharge a pregnant employee. The statute simply required that pregnant employees not be fired without just cause or treated differently than other employees. "Thus, the statute does not provide greater protections for pregnant employees than nonpregnant employees." The Ohio statute mirrors the federal statute, which has generally been applied to not require preferential treatment for pregnant employees. In this case, the employer's policy was pregnancy-blind: it applied equally to all employees. "Thus, a pregnant employee may be terminated for unauthorized absence just as any other employee who has not yet met the minimum-length-of-service requirement but takes leave based upon a similar inability to work. Unless there is other evidence of discrimination or pretext, R.C. Chapter 4112 does not prohibit termination of an employee affected by pregnancy under these circumstances."

The Court rejected the OCRC's argument that the prohibition on discrimination "because of pregnancy" was separate from the "treated the same" requirement and required employers to provide maternity leave so that pregnant employees could not jobs to the same extent as non-pregnant employees because the United States Supreme Court had already earlier rejected that argument when interpreting the federal statute.

It would be contrary to this interpretation of the federal statute to hold that the first and second sentences of the state statute, which mirrors the federal statute, serve different purposes. Although the scope of the second sentence is narrower than that of the first sentence, both serve the same goal—to ensure that employees who are pregnant are not discriminated against on the basis of pregnancy. To hold otherwise would be to require that employers treat pregnant employees more favorably than other employees. The statutes do not support such a result.

The Court also refused to characterize the woman's termination as "because of pregnancy" when it was really "because of an unauthorized leave of absence." Only if she satisfied the McDonnell-Douglas burden of proof (or introduced other direct evidence of discrimination) would she be able to show that her termination was "because of pregnancy."

Finally, the Court chose to interpret the OCRC's Administrative Rule 4112-5-05(G) as consistent with the Court's interpretation of the Ohio Revised Code.

Ohio Adm. Code 4112-5-05(G)(2), the administrative regulation at issue, provides: "Where termination of employment of an employee who is temporarily disabled due to pregnancy or a related medical condition is caused by an employment policy under which insufficient or no maternity leave is available, such termination shall constitute unlawful sex discrimination."

Still later, however, OAC 4112-5-05(G)(5) provides:

Women shall not be penalized in their conditions of employment because they require time away from work on account of childbearing. When, under the employer's leave policy the female employee would qualify for leave, then childbearing must be considered by the employer to be a justification for leave of absence for female employees for a reasonable period of time. For example, if the female meets the equally applied minimum length of service requirements for leave time, she must be granted a reasonable leave on account of childbearing. Conditions applicable to her leave (other than its length) and to her return to employment shall be in accordance with the employer's leave policy." (emphasis added)

In light of these two apparently conflicting rules by the OCRC, the Court found the first rule to be ambiguous. If the Rule requires mandatory maternity leave even when similar leaves were not offered to other employees, then the Rule would require preferential treatment for pregnant employees in violation of the Ohio statute and, thus, would be unconstitutional. However, the Court found the Rule to be vague and ambiguous on this point and, thus, chose to harmonize it with the second part of the Rule and interpret it as being constituent with the Ohio statute. Without such an interpretation, the second part of the Rule would be rendered meaningless. According to the Court, the OCRC rule provides in effect that:

Ohio Adm. Code 4112-5-05(G)(2) must mean that when an employee is otherwise eligible for leave, the employer cannot lawfully terminate that employee for violating a policy that provides no leave or insufficient leave for temporary disability due to pregnancy or a related condition.

Because the woman offered no other proof of discrimination on account of sex or pregnancy, the Court affirmed the dismissal of her case by the trial court.

Justice Pfeifer dissented.

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.