Virginia Adopts Uniform COVID Workplace Safety Rules

Virginia made history by becoming the first state to adopt coronavirus-related workplace safety mandates which establish requirements for employers to control, prevent, and mitigate the spread of the coronavirus (COVID-19).

In addition to mandating social distancing, the rules require all employers to:

  • Provide flexible sick-leave policies, telework and staggered shifts when feasible;
  • Provide both handwashing stations and hand sanitizer when feasible;
  • Assess risk levels of employers and suppliers before entry;
  • Notify the Virginia Department of Health of positive COVID-19 tests;
  • Notify VOSH of three or more positive COVID-19 tests within a two-week period;
  • Assess hazard levels of all job tasks;
  • Provide COVID-19 training of all employees within 30 days (except for low-hazard places of employment);
  • Prepare infectious disease preparedness and response plans within 60 days;
  • Post or present agency-prepared COVID-19 information to all employees; and
  • Maintain air handling systems in accordance with manufacturers’ instructions and the American National Standards Institute (ANSI) and American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) standards.

Here is the link with the full text of the order:  https://www.doli.virginia.gov/wp-content/uploads/2020/07/RIS-filed-RTD-Final-ETS-7.24.2020.pdf

Here is the link with all of the templates and forms to allow employers to comply with new regulations:  https://www.doli.virginia.gov/covid-19-outreach-education-and-training/

Maryland Department of Labor Releases Guidance on Employer Correspondence with Employees

The Maryland Department of Labor (hereinafter “MDOL”) recently released guidance regarding how employers should manage correspondence to an employee regarding the availability of unemployment compensation.

MDOL suggests that if an employer is sending a letter or email to an employee about the availability of unemployment compensation, the employer should first advise the employee that unemployment benefits are available to workers who are unemployed and meet the Maryland eligibility requirements. The employer should also explain the MDOL requirements to the employee, including any relevant COVID-19 updates. Additionally, the employer should provide the employee with the Maryland unemployment website and a list of possible documentation the employee will need to file an unemployment claim.

If the employer is sending a text message to an employee about the availability of unemployment compensation, MDOL suggests advising the employee that unemployment benefits are available to workers who are unemployed and provide the employee with the Maryland unemployment website.

To access the full MDOL guidance visit: https://www.dllr.state.md.us/forms/uiavailnotice.pdf

MFEPA the Wrong Way: Townes v Md. Dept. of Juvenile Services

The Family and Medical Leave Act (“FMLA”) protects an employee’s right to return to the same position or an equivalent position. In addition to the FMLA, the Maryland Fair Employment Practices Act (“MFEPA”) provides substantial protections for employees, including the right to a reasonable accommodation for a disability. In a recent decision, a federal court in Maryland found that the MFEPA requires employers to engage in an interactive process to determine whether a disabled employee is able to perform the essential functions of any available job, not just the prior position which he or she held. When an employee takes leave due to disability and later requests an accommodation, employers must carefully consider these overlapping protections upon the employee’s attempt to return.

In this particular case, the plaintiff began working for the Maryland Department of Juvenile Services in 1995 as a case management specialist, and was promoted twice by mid-1999 to a “CMS III.” The plaintiff, who lived in Baltimore City, was transferred from Baltimore City to a region based in Anne Arundel County.

The plaintiff began receiving treatment from a psychiatrist in 2008, however, she received satisfactory job performance evaluations or better through 2011.  In late 2011 she was diagnosed with severe anemia, vitamin D deficiency, and uterine fibroids, causing medical leave beginning in December 2011. The plaintiff provided the employer with notice of her condition and supplied medical documentation, but the employer did not inform her of her FMLA rights. Upon her return in February 2012, she was assigned to a case with a minor and later learned that the minor had stopped attending high school; as per the employer’s protocol, she alerted her supervisor.

The plaintiff then took a second period of medical leave from May 2012 until June 2012 for a surgical procedure.  When she returned to work, the employer accused her of maintaining insufficient contacts with the minor that had left school, conducted a “mitigating conference,” moved the plaintiff ’s office to Annapolis, issued her first unsatisfactory performance evaluation along with a later reprimand, and forbid her from accessing leave from her leave bank or applying to other positions.

In July 2012, the employer reassigned the plaintiff to a new position requiring her to visit youths statewide. During this time, the employer issued her additional negative performance evaluations and her caseload increased substantially, causing her to suffer a panic attack. She then took a third leave of absence beginning in March 2013. In April 2013, the plaintiff ’s psychiatrist contacted the employer and informed them that she was medically disabled from work due to an adjustment disorder which had exacerbated her underlying bipolar disorder.

The psychiatrist later advised that the plaintiff could return to work if the employer made accommodations for her condition, including moving her to a new assignment, limiting her to the day shift, placing her in a position near her home in Baltimore City, and reducing her commute. Internal communications showed that the employer’s Human Resources department and management were unsure of how to accommodate the plaintiff and did not believe that any positions were available that would meet the requested accommodations. A member of management also apparently did not consider the psychiatrist’s contact to resemble a request for reasonable accommodation from the plaintiff.

The employer then sent the plaintiff to the State Medical Director (“SMD”), who referred her for an evaluation with a psychologist. The psychologist also concluded that the plaintiff would probably not be able to return to work without the requested reasonable accommodations. Despite this opinion, the SMD concluded that she could not perform her essential duties, regardless of accommodations. The employer then placed the plaintiff on leave without pay and later removed her from the payroll, and the plaintiff took disability retirement.

The plaintiff then brought suit against the employer, alleging interference and retaliation under the FMLA and failure to make a reasonable accommodation under the MFEPA. The employer responded with a motion to dismiss and a later motion for summary judgment.

The plaintiff first alleged interference for the employer’s failure to notify her of her rights under the FMLA. In order to make a case for interference, an eligible employee protected by the FLMA must show that she was entitled to leave, gave the employer adequate notice, that the employer denied her benefits to which she was entitled, and that this interference with her rights caused her prejudice. The court dismissed this claim, as the plaintiff received much more than the 12 weeks of FMLA leave that she was entitled to, and suffered no prejudice from the employer’s failure to inform her of her rights.

The plaintiff ’s second claim was for retaliation. To raise a claim for retaliation, the employee must show that she engaged in protected activity, the employer took adverse action against her, and that the adverse action was causally connected to her protected activity. The plaintiff alleged that the employer issued her a reprimand due to taking leave, which prevented her from drawing leave from the Leave Bank. However, as the plaintiff was a state employee, she was required to exhaust all other forms of leave prior to drawing on the Leave Bank, and the plaintiff acknowledged that she did not do so. Accordingly, the court found the claim for retaliation meritless.

The third count alleged failure to make a reasonable accommodation for the known disability of an otherwise qualified employee under the MFEPA. Under the Maryland statute, employers are required to “make a reasonable accommodation to the known physical or mental limitations of a qualified individual with a disability” unless the accommodation would impose an “undue hardship.” Employers are also required to make an interactive, individualized assessment to identify a reasonable accommodation for qualified employees.
In order to prevail on a claim for failure to accommodation, the employee must show that she provided the employer notice of her disability, that she could perform the essential functions of the position with a reasonable accommodation, and that the employer failed to make such accommodations. The employer argued that the plaintiff did not provide notice of her disability, and that a reasonable accommodation did not exist for the plaintiff ’s disability.

Upon consideration, the court noted that the plaintiff ’s psychiatrist had reached out to the employer with her request for accommodation. Under Maryland Reasonable Accommodations Policy and Procedure, an employee may make a request for reasonable accommodation to “a supervisor, manager, ADA Coordinator, or Human Resources manager,” the request may be made verbally or in writing, and the request need not use the phrase “reasonable accommodation.”

The plaintiff ’s psychiatrist stated that he believed she could return to work once the requested accommodations were made. At the time, internal discussions were made regarding a position near Baltimore City and the employer concluded that no position was available for the plaintiff, however, during the case the employer later conceded that some case managers were hired to locations in Baltimore City and Baltimore County. The plaintiff ’s psychiatrist also later reviewed a list of job vacancies from 2013 and concluded that several of these could have met the requested accommodations. However, the psychiatrist was never contacted by anyone from the employer in order to clarify the requested accommodations and work together to determine a position for the plaintiff.

Based on the foregoing, the court found there was a genuine dispute of material fact as to whether the employer engaged in an “interactive” process to conduct an individualized assessment of the plaintiff ’s ability to perform the duties required of “a” job that met her request for accommodations, not just her prior position.

Under the MFEPA, when an employee requests a reasonable accommodation, an employer should take care to engage in an interactive process to determine whether the employee can return to any open position. Employers who receive any sort of request for accommodation should be aware that there are no “magic words” necessary to invoke an accommodation under the MFEPA and related federal statutes. Upon receiving an apparent request for accommodation, an employer should “interact” with the employee and start a good faith conversation while conducting an “individualized” assessment of whether the request can be met. Furthermore, employers must know that accommodating an employee does not only include searching for that same position, but all jobs within the company to ensure compliance.

For more information about this article, please contact James K. Hetzel at 410.230.2675 or jhetzel@fandpnet. com.

FMLA the Right Way: Waag v. Sotera

Under the Family and Medical Leave Act (FMLA), eligible employees may take leave and return to working in the same job or an equivalent position. However, employees who take FMLA leave are not protected from actions that would have otherwise affected them if they were not on leave, such as necessary layoffs in times of economic difficulty. Distinguishing between a lawful discharge and an unlawful interference with an employee’s protected FMLA rights isn’t always an easy task. In an aid to employers, a recent case from the Fourth Circuit offers a textbook example of a proper reinstatement and later layoff where the employer prevailed.

Gary Waag was working for Sotera Defense Solutions, Inc. as a Director of Operations in Sotera’s Data Fusion Analytics Division. In September 2012, the United States Army selected Sotera as a nonexclusive prime contractor for the army’s NexGen program, giving Sotera the right to bid on contracts. In early October 2012, Waag was asked to become the Program Manager for Sotera’s NexGen work, which was primarily a business development position that involved non-billable work until a contract was obtained, making Waag’s salary overhead.

Shortly afterward, Waag severely injured his hand after falling off the roof of his house. He informed Sotera on the date of the injury and his physician wrote him off work until December 31, 2012. Due to his injury, Waag was unable to perform in his position as the Program Manager, and Sotera placed another employee, Devin Edwards, in Waag’s former position for NexGen work. Shortly afterward, federal budget sequestration went into effect and the army delayed its NexGen program due to a lack of funding. Due to this, Edwards’ position as replacement Program Manager for the NexGen program became a minor role in comparison to Edwards’ other duties for Sotera.

Upon his return, Waag was reassigned to a new position working on a separate bid for a different army contract. Waag’s new position included an identical salary and identical benefits, but was also a non-billable overhead cost to Sotera until they obtained a contract. In late 2012, Waag’s division saw a drastic decrease in work due to sequestration, and overhead costs needed to be cut by laying off employees doing non-billable work, including Waag. Edwards, who was Waag’s replacement in his former position, was not laid off as the company considered Edwards to be important to a number of other revenue-generating programs.

Waag then brought suit against Sotera, alleging that Sotera violated the Family and Medical Leave Act by not restoring Waag to his prior position after his return from over two months of medical leave; by placing him in a new job that was not equivalent to his prior position, and by terminating him from his new job in retaliation for taking medical leave. The district court granted summary judgment in favor of Sotera, and Waag appealed to the Fourth Circuit.

Employees who take leave under the FMLA are entitled, upon their return, either “to be restored by the employer to the position of employment held by the employee when leave commenced” or “to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment.” In addition, employees returning from FMLA leave shall not lose “any right, benefit or position of employment” they would be entitled to, had the employee not taken leave.

Waag first argued that the employer had interfered with his FMLA rights by failing to restore him to his former position with the company, which had been reassigned to another employee. In response, the court noted that the plain text of the law “does not indicate a preference for restoring covered employees to their pre-leave positions over ‘equivalent’ positions, and it does not require an employer to hold open an employee’s original position while that employee is on leave.”

Waag then argued that Sotera interfered with his FMLA rights by failing to restore him to an equivalent position. The court, however, noted that Waag’s salary and benefits were identical for both positions, that both positions offered him eligibility for bonuses, that his title of Senior Director remained the same, that he worked in the same location, and that his duties and responsibilities were substantially similar to his prior position. As these terms and conditions of employment were nearly identical, the court found Waag’s other complaints about the differences between the positions, which included his claims of a loss of prestige, to be “de minimis.”

Waag’s final argument was that Sotera placed him in a “sham position,” which Sotera had created to make it appear that Waag had been restored to an equivalent position, with the later intention of terminating him from employment. He argued that a reasonably jury could conclude that Sotera had done so based on temporal proximity, i.e., that Waag was placed in a new job that was eliminated six weeks later. The court, however, rejected this argument, noting that there was no other evidence in the record that would permit a jury to conclude, without speculating, that the job was a sham.

The court admitted that a close temporal proximity between protected FMLA activity and an adverse employment action could establish a prima facie case of retaliation, however, Waag was also required to show that Sotera’s proffered explanation was, in fact, a pretext for retaliation. As Sotera offered substantial evidence showing that the government sequestration had a disastrous effect on its business, and Waag could not point to any evidence in the record that would allow a reasonable jury to conclude he was let go due to retaliation, the Fifth Circuit upheld finding of summary judgment for Sotera.

The law often places employers in the position of ensuring that employees’ FMLA rights are protected while also making difficult but important business decisions. The takeaway from this case is to make a complete record of the employee’s proper reinstatement and the business decisions that lead to any later layoff. Although employers are not required to reinstate employees to their former position, employers should ensure that returning employees are placed in an equivalent position with equivalent pay, benefits, and terms and conditions of employment. When put in the position to make the necessary layoff of an employee returning from FMLA leave, employers must take care to thoroughly document the reasons for doing so, and to ensure that no part of the layoff is due to retaliation or interference with an employee’s FMLA rights.

Labor and Employment Law Trend: Equal Pay Laws Ban Employers from Requesting Prior Salary Information

Last April, New York City passed legislation banning employers from asking applicants what they currently earn or what they made in their prior job. The legislation also prohibits employers from conducting public records searches regarding pay history for applicants. Massachusetts became the first state in the nation to ban such inquiries in August of 2016, and Puerto Rico and Philadelphia passed similar legislation earlier this year. Additionally, more than 20 other city and state legislatures have proposed legislation to this effect, reflecting a growing national trend.

The legislation aims to decrease payment inequality issues. The concern is that if an applicant is underpaid at one job, it could lower their earning potential throughout their career. The legislation is specifically intended to improve gender wage inequality issues.

Maryland proposed similar legislation in 2017. The legislation overwhelmingly passed in the House of Representatives, but ultimately received an unfavorable committee report in the Senate. However, in light of this national trend, it is very possible that legislation to this effect may be proposed in the near future. Maryland’s “Equal Pay for Equal Work Act,” which went into effect on October 1, 2016, already prohibits employers from discriminating between employees by paying or promoting employees differently based on sex or gender identity.

The passage of this legislation also may impact regional and national employers if they have employees in New York City, Philadelphia, or Massachusetts. It is possible that many companies who hire in areas that have passed equal pay laws may cut out prior earnings questions from their application process entirely.

Critics of this legislation argue that it impedes business growth and violates a company’s First Amendment rights. Proponents of the legislation argue that it does not ban all discussions of compensation. Therefore, employers could still ask applicants about their compensation expectations for the role they are applying for.

Interestingly, amidst this national trend, the Ninth U.S. Circuit Court of Appeals just ruled that employers can legally pay women less than men if the basis for the salary is the woman’s prior wage history. The underlying case that was presented before the Ninth Circuit was not related to specific legislation attempting to prevent such hiring practices. Therefore, the ruling does not necessarily serve to overturn legislation that has passed since the case arose.

 

Maryland Sick Leave Bill Vetoed

On April 5, 2017, the Healthy Working Families Act (HB1) was approved by the Maryland House of Delegates. The bill previously passed the Maryland Senate on March 16, 2017. On May 25, 2017, Governor Hogan vetoed the bill, although the bill passed with the necessary support to override a veto.

The bill requires Maryland employers with 15 or more employees to provide five paid sick leave days per year for their employees and requires employers with less than 15 employees to provide up to five unpaid sick leave days per year. The bill excludes employees who regularly work less than 12 hours per week, employees in the construction industry, employees covered by a collective bargaining agreement that expressly waives the requirements of the bill and certain “as-needed” employees in the health and human services industry.

Proponents of the bill describe it as an important protection for employees who cannot afford to miss work when they are sick. However, critics of the bill have expressed concern that the measure will hurt small businesses and ultimately lead to employee cut-backs. Governor Hogan stated through his spokesperson when the bill passed the Senate that he supports “common-sense paid sick leave,” but the proposed legislation is “not common sense and will directly threaten Maryland small businesses and jobs.”

Governor Hogan supports an alternative that would require paid sick leave for businesses with at least 50 employees and provide tax incentives to smaller businesses that offered paid sick leave. However, this proposed alternative bill never moved out of committee. Upon his veto of HB1, Governor Hogan issued three related executive orders, which provided paid benefits to contractual employees in the executive branch, allowed state procurement authorities to give preference to contractors who offer paid sick leave to their employees, and created a task force to conduct a comprehensive study on the issue of paid sick leave for Maryland workers and businesses.

The legislature will not have the opportunity to override the veto until next year’s legislative session, which begins on January 10, 2018. If the Health Working Families Act is eventually enacted into law, Maryland would join approximately 40 states, cities and counties across the nation, including Montgomery County, which have already implemented mandatory paid sick leave laws. Michigan, Nevada, and New Jersey are also currently considering proposed paid sick leave legislation.

For more information about this article, please contact Sarah S. Lemmert at 410.230.3075 or slemmert@fandpnet.com.

 

“The Mark of the Beast” – Fourth Circuit Considers an Employee’s Religious Beliefs in EEOC v. Consol Energy, Inc.

Under Title VII, employers are required to make reasonable accommodations for the religious observances of employees, unless doing so presents an undue hardship. But what types of religious beliefs require an accommodation? A recent case from the Fourth Circuit offers a surprising definition of a “religious belief,” and illustrates the need for employers to approach a request for accommodation with care.

The plaintiff in this case worked as a coal miner for the employer, Consol Energy, Inc., since 1975 without incident. In 2012, the employer implemented a biometric hand-scanner in order to track the attendance of employees. Use of the hand-scanner required that each employee scan his or her right hand while checking in or out of a shift.

The plaintiff, a life-long evangelical Christian, informed the employer that his religious beliefs prevented him from using the hand-scanner. Specifically, he believed that use of the hand-scanner would brand him with the “Mark of the Beast.” The employer requested a letter from a pastor explaining the need for an accommodation, which the plaintiff provided, along with his own letter explaining his beliefs. In a later meeting with the mine’s superintendent in June of 2012, the plaintiff offered to check in with his shift supervisor or punch in on a time clock, as he had done prior to implementation of the hand-scanner.

The employer responded with a letter from the hand-scanner manufacturer showing that the scanner did not detect or place a mark on the body of a person, and also contending that, because the “Mark of the Beast” was associated with the right hand, use of the plaintiff ’s left hand would be sufficient to satisfy his religious concerns. The employer then requested that the plaintiff provide another letter showing his church’s opposition to the use of the hand-scanner with his alternate hand. The plaintiff did not provide the letter.

Meanwhile, unbeknownst to the plaintiff, in July 2012, the employer provided an alternative to the handscanner to two other employees. Both of the employees were unable to scan either hand due to hand injuries. They were instead allowed to enter their personnel numbers on a keypad attached to the hand-scanner. In an email sent on July 25, 2012, the employer both simultaneously authorized use of the alternative system for the injured employees, and denied the accommodation to the plaintiff, stating that they would “make our religious objector use his left hand.”

In a later meeting in August, the plaintiff reiterated to the employer that he could not, “in good conscience,” use the hand-scanner. The employer then provided a copy of their disciplinary procedures, which provided for eventual discharge for failure to use the hand-scanner, and stated that the procedures would be enforced if the plaintiff refused to use the hand-scanner with his left hand. In response, the plaintiff retired under protest.

The Equal Employment Opportunity Commission (“EEOC”) brought suit on behalf of the plaintiff, alleging a failure to accommodate religious beliefs, resulting in the claimants’ constructive discharge, and seeking compensatory damages and injunctive relief. The jury returned a verdict for the plaintiff, and the lower court denied punitive damages, but awarded compensatory damages and an injunction against the employer to refrain from future failures to make reasonable accommodations. The parties appealed to the Fourth Circuit.

To show a violation of the duty to provide a reasonable accommodation, an employee must prove that (1) he or she has a bona fide religious belief that conflicts with an employment requirement, (2) he or she informed the employer of this belief, and (3) he or she was disciplined for failure to comply with the conflicting employment requirement.

In considering the first two elements of the plaintiff ’s claim, the Fourth Circuit found that the plaintiff had clearly laid out his religious objection to use of the scanner system in his dealings with the employer, and that there was ample evidence to show that he had a sincere belief that use of the hand-scanner was inconsistent with his religious beliefs. The employer did not attempt to dispute that the plaintiff ’s beliefs were sincere, but rather attempted to make an argument on the religious merits of the plaintiff ’s beliefs, contending, among other things, that scripture showed that “the Mark of the Beast can only be imprinted on the right hand.” The Court, however, noted that the law only requires a finding that an employee’s religious beliefs are sincerely held, and does not require a finding that the beliefs are correct, plausible, reasonable, or even that the religious views are commonly shared by the employee’s religious sect.

The employer then argued that the plaintiff was not disciplined, but instead had voluntarily resigned. The Court noted that, under the law, a plaintiff is constructively discharged when an employer deliberately makes the working condition of the employee intolerable. The Court reasoned that the employer put the plaintiff in an intolerable position when the employer completely failed to accommodate the plaintiff, knew of a costless option but refused to allow the option to the plaintiff, and required him to use the hand-scanner, which the plaintiff sincerely believed would make him a follower of the Antichrist.

On this basis, the Court found that the employer discriminated against the employee, and allowed compensatory damages to the plaintiff, but refused to allow punitive damages. In order to state a claim for punitive damages, an employee must show that the employer (1) intentionally discriminated against the employee, and (2) acted with malice or reckless indifference to the plaintiff ’s federally protected rights. The Court noted that “reckless indifference” requires that an employer discriminate while knowing or perceiving that the discrimination would violate Title VII. In this case, despite the actual violation of Title VII, there was not sufficient evidence presented to show that the employer appreciated that its efforts were inadequate, or risked inadequacy, under Title VII. In considering the issue, the Court noted that the employer engaged in long negotiations with the plaintiff and also offered him an alternative that did not require the scanning of his right hand.

Employers should be aware that an employee’s “bona fide religious belief ” does not need to be plausible, reasonable, religiously correct, or commonly shared by the employee’s religious sect. An inquiry into an employee’s religious beliefs should therefore be limited to determining whether they are “sincere.”

Upon notice of an employee’s religious belief that conflicts with an employment requirement, an employer should refrain from disciplining the employee or creating “intolerable” working conditions leading to the employee’s resignation. If a reasonable accommodation can be made to alleviate the conflicting employment requirement, the employer should do so. If no feasible changes can be made, the employer should seek legal counsel to determine whether accommodating the religious belief would impose an undue hardship on the business.

For more information on this article, contact Bert Randall at arandall@fandpnet.com.

 

Managers as Employers: Montgomery v. Iron Rooster – Annapolis, LLC, et. al.

In the case of Montgomery v. Iron Rooster- Annapolis, LLC, et. al., the United States District Court for the District of Maryland addressed whether a general manager may be considered an “employer,” and therefore be held liable for claims for unpaid wages and statutory damages under the Fair Labor Standards Act (“FLSA”), the Maryland Wage and Hour Law (“MWHL”) and the Maryland Wage Payment and Collection Law (“MWPCL”).

The plaintiff was a bartender who sued Iron Rooster Annapolis and its three co-owners in the Circuit Court for Baltimore City, seeking to recover unpaid wages and statutory damages. The defendants then removed the case to federal court and subsequently filed a third-party complaint against Iron Rooster’s former general manager. The defendants essentially claimed that the former general manager was also the plaintiff ’s employer, and was therefore jointly and severally liable for any judgment entered under theories of indemnification and contribution.

The manager filed a motion for summary judgment, alleging that he did not control the day-to-day activities of the plaintiff; in support of this, the manager attached a settlement agreement between himself and the defendants in his own prior claim for wage loss against the defendants. The defendants responded by claiming the manager was liable as a “joint employer,” because the plaintiff reported to and worked under the manager, who supervised the plaintiff ’s work, set her schedule, and performed other management functions associated with the plaintiff ’s work for the defendants.

The Court looked to FLSA for guidance. FLSA defines an employer “as any person acting directly or indirectly in the interest of an employer in relation to an employee.” In determining whether someone qualifies as an employer under the FLSA, courts employ what is known as the “economic realities test,” which looks at multiple factors, including whether the alleged employer: “(1) has the authority to hire and fire employees; (2) supervises and controls work schedules or employment conditions; (3) determines the rate and method of payment; and (4) maintains employment records.” None of these factors are dispositive, rather, courts looks to the “totality of the circumstances” in order to determine whether an individual may be held liable as an employer. In considering the totality of the circumstances, courts will also look to “a person’s job description, his or her financial interest in the enterprise, and whether or not the individual exercises control over the employment relationship.”

After reviewing the facts of the case, the Court determined that the manager was not an employer as alleged by the defendants, and granted summary judgment in favor of the manager. Although some of the manager’s duties indicated that he may have met the factors of “economic realities” test, the Court reasoned that under the totality of the circumstances, the manager’s work involved “operational acts,” which did not amount to the type of “managerial control” necessary to establish the manager as an employer. The Court looked to the fact that the manager himself was an employee, as evidenced by the settlement agreement in the manager’s own prior claim for wage loss against the defendants, and, moreover, the manager was still subject to the defendants’ “ultimate managerial control.” Additionally, the Court looked to the fact that the manager had no financial interest in the defendants’ company, other than as an employee.

The Court did not completely rule out the possibility that managers could be potentially held liable for wage loss claims. Any employers seeking to minimize and/or avoid liability for wage loss claims should be aware that managers may be considered “employers” under FLSA in certain circumstances. However, employers who give their managers wide latitude to conduct the “operational acts,” or day-to-day activities of the business, should be aware that unless the manager exercises a large degree of “managerial control,” or has a stake in the business, the manager is unlikely to be held liable as a co-defendant under FLSA. Employers seeking to minimize liability for wage loss claims should make sure to develop and distribute detailed policies for the recording of hours and payment of wages. If a violation is brought about by a manager’s disregard for these policies, this might support a claim against the manager as a third party.

For more information on this article, contact James Hetzel at jhetzel@fandpnet.com.

 

“Good Faith vs. Retaliation” in Sexual Discrimination Retaliation Cases

In Villa v. Cavamezze Grill, LLC, 858 F.3d 896 (2017), the U.S. Court of Appeals for the Fourth Circuit considered whether the an employer’s good faith belief in an employee’s misconduct could serve as a defense to a retaliation claim. In this case, the plaintiff told her employer that employees were offered money in exchange for sex. The employer investigated the specific allegations and came to a good faith determination that the plaintiff was lying, and she was terminated. The plaintiff subsequently filed a complaint alleging retaliation under Title VII.

Title VII’s anti-retaliation provision makes it illegal for an employer to retaliate against employees for opposing or participating in a complaint process against any of its employees. The first part, known as the “opposition clause,” prohibits discrimination when the employee has opposed any employment practice made unlawful by the statute. The second part, known as the “participation clause,” prohibits discrimination when an employee has made a charge, testified, assisted, or participated in an investigation, proceeding, or hearing under Title VII.

The Court noted that Title VII retaliation claims  require proof that the desire to retaliate was the “but-for cause of the challenged employment action,” that is, that the employee was terminated because he or she engaged in protected activity. The Court rationalized its decision, holding that the facts the employer actually perceived matter, and held that if an employer, due to a genuine factual error, never realized that its employee engaged in protected conduct, then the employer did not act out of a desire to retaliate against an employee. The Court noted that evidence of an obviously improper investigation could show that the claimed employee conduct was actually a pretext for terminating an employee for protected activity, but the plaintiff had already conceded that this was not the case. Based on the facts in this case, the Court found that the plaintiff failed to show that her employer was motivated by a desire to retaliate against her for engaging in conduct that was protected.

This case demonstrates the importance of having appropriate policies in place to fully investigate allegations of sexual harassment and discrimination. Employers should thoroughly investigate any allegations of harassment and document both the basis for any conclusions, and the basis for any actions taken subsequent to the investigation. An employer needs to be able to justify its actions in terminating an employee, and ensure that the reason for termination is not actually a pretext for retaliation against the employee.

For more information on this article, contact Antonio Troese at atroese@fandpnet.com.

 

U.S. Department of Labor Reverses “Joint Employer” Standard

The U.S. Department of Labor recently announced its departure from the Obama-era “joint employer” standard.  The joint employment standard relates to an interpretation of the Federal Fair Labor Standards Act (“FLSA”), which dictates the standards and circumstances in which a business could be liable for various wage-law violations.  In 2016, the Department of Labor issued guidelines with a broader interpretation of the term “joint employment” to include a company that had “indirect control” over workers.  The broader interpretation in 2016 caused significant concerns for businesses, particularly those utilizing the franchise business model.

Additionally, the Department of Labor also withdrew guidance related to independent contractor classifications.  In 2015, the Department of Labor issued a statement noting that many workers are improperly identified as independent contractors, when they should be classified as employees and entitled to various protections under the law.  The 2015 guidance was intended to help make more workers eligible for minimum wage coverage, overtime, and other protections.

The current shift away from the 2015 and 2016 guidance is generally favorable to businesses.  Proponents of this change believe that the language implemented in 2015 and 2016 guidance was too ambiguous and opened the door to excessive litigation.  Many business owners believe the prior guidance is easier for companies to understand and comply with.  Specifically, franchisors are pleased with the shift back to “direct control” as the standard for determining whether a franchise is a joint employer.  Franchise owners have argued that the  Obama-era standard made it difficult to create new jobs.

Proponents of the 2105 and 2016 guidelines argued that the broader language of the joint employment benefits for workers, and to prevent employers from avoiding paying for unemployment insurance or payroll taxes.

The guidance issued by the Department of Labor does not have a binding effect, but it provides insight as to the Department’s goals and priorities.  The Department of Labor’s recent guidance changes signal a more employer-friendly approach than the previous administration had taken.