Discharging Employees Who Are Related-New Case-US Supreme Court

January 31, 2011

On January 24, 2011, in a unanimous decision, the US Supreme Court held that a third-party has standing to file suit for retaliation, after he and his fiancé were fired by the same employer.  The Court held that an “aggrieved” person under Title VII included the fiancé, since he had an interest that was intended to be protected by Title VII.  Therefore, Title VII granted the plaintiff a cause of action.

Plaintiff Eric Thompson and his fiancé, Miriam Regalado, were employees of defendant North American Stainless (“NAS”) until February 2003.  That month, Regalado filed a sex discrimination claim against NAS with the Equal Employment Opportunity Commission (“EEOC”).  Only three weeks later, Thompson was fired by NAS.  Thompson sued NAS in the Eastern District of Kentucky for a Title VII claim of retaliation.  His claim that NAS fired him in retaliation for his fiancé’s complaint with the EEOC was rejected by the District Court.  The District Court held that Title VII “does not permit third party retaliation claims.”  The District Court ruling was affirmed by the Sixth Circuit Court of Appeals.  The appeals court held that plaintiff did not “engage in any statutorily protected activity, either on his own behalf or on behalf of Miriam Regalado,” nor is he “included in the class of persons for whom Congress created a retaliation cause of action.”

The Supreme Court reversed and held that Title VII prohibits any “employer action that well might have dissuaded a reasonable worker from making or supporting a discrimination charge.”  The Court concluded that “a reasonable worker obviously might be dissuaded from engaging in protected activity if she knew that her fiancée would be fired.”  Further, the Court refused to establish a “fixed class” of relationships for which retaliation will be considered unlawful.  

This case broadens the scope of potential retaliation claims under Title VII.  California employers should be mindful of discharging employees with family or personal relationships where one of the employees has engaged in a protected activity.

New I-9 Manual Released-Be Ready-ICE is Coming!

January 24, 2011

As I have stated over and over, the U.S. Citizenship & Immigration Services and the Immigration & Customs Enforcement (ICE) has been, and will continue to come after employers who hire undocumented workers.  A large number of employers during 2010 found out the hard way that noncompliance will be dealt with. Now, the U.S. Citizenship & Immigration Services (CIS) released a new I-9 manual on January 5.  The manual is a big improvement from previous versions in that it helps clarify many issues and is easier to navigate through.  It can be found at http://www.uscis.gov/files/form/m-274.pdf.

Also, as noted, Immigration & Customs Enforcement (ICE) has been aggressively fining companies for mere technical I-9 violations.  Even where the company has no unauthorized workers, ICE has recently been coming down hard on mere technical violations.

For example, in September 2010, Abercrombie and Fitch was fined $1 million because it’s digital I-9 software had a glitch which resulted in some I-9’s having blank fields.  Even though all of the employees in question were work authorized and all had I-9’s, ICE still fined the company in order to send a message.  The Officer in Charge of the investigation noted:  “This settlement should serve as a warning to other companies that may not yet take the employment verification process seriously or provide it the attention it warrants.  ” The ICE press release can be seen at http://www.ice.gov/news/releases/1009/100928detroit.htm.

Until Congress creates a digital social security card to help employers through the process, I-9’s that are not compliant will affect the value of your company and expose management to liability.   Employers are encouraged to be proactive in this area and ensure compliant I-9 practices. If you have any questions or want us to review your I-9s please call for an appointment. Don’t ASSUME it is being done correctly! The fines and penalties are stiff.

A Favorable Decision For Employers!

January 18, 2011

We have had many discussions with clients regarding exempt v. nonexempt Misclassification in this area has cost employers millions. Now, California employers litigating wage cases involving alleged misclassification of employees have a new and favorable published case in their arsenal.  In Taylor v. United Parcel Service, Inc., a California Court of Appeal rejected a UPS supervisor’s claims that he was improperly classified as an exempt employee and should have instead been paid overtime and ensured meal and rest breaks.  The court held, as a matter of law, that the employee qualified for both the administrative and executive exemptions from overtime laws.  The court further held that the employee did not have sufficient evidence to support his claims to even warrant a trial on the issues.

The Taylor case contains a lot of good language on issues pertinent to the administrative and executive exemptions, including issues surrounding authority to hire and fire (as pertains to the executive exemption) and the administrative/production worker dichotomy (as pertains to the administrative exemption). 

Although the Taylor case is a positive decision for California employers on exempt/non-exempt issues, employers are still cautioned to carefully review their exempt classifications because the wage and hour litigation flood continues in California.

UPS was required to demonstrate the following: (1) his duties and responsibilities involve management of the enterprise or a “customarily recognized department or subdivision thereof; (2) he customarily and regularly directs the work of two or more employees; (3) he has the authority to hire or terminate employees, or his suggestions as to hiring, firing, promotion or other changes in status are given “particular weight”; (4) he customarily and regularly exercises discretion and independent judgment; (5) he is primarily engaged in duties that meet the test of the exemption; and (6) his monthly salary is equivalent to no less than two times the state minimum wage for full-time employment. UPS were able to prove all of the above criteria.

Note: Don’t get confused with terminology. Salaried v. Hourly is the same as Exempt v. Nonexempt. If you have any doubts we can get you a form that has an easy formula to determine if an employee meets the exemption criteria.

More Updates For 2011

January 10, 2011

Meal Breaks

Effective January 1, 2011, Assembly Bill 569 exempts construction workers, commercial drivers, certain security officers and employees of electrical and gas corporations or publicly owned electric utilities from California’s meal break requirements IF those employees are covered by a valid collective bargaining agreement containing specified terms, including meal period provisions.

Don’t forget, California has two court decisions currently on appeal to the California Supreme Court so the current state of affairs regarding breaks is still somewhat up in the air. The California Supreme Court should be making a decision within the next six months (hopefully) so in the meantime PLEASE make sure employees are aware (put up signs) that they are entitled to their ten minute breaks and obviously their 30 minute uninterrupted lunch break no later than the start of the fifth hour.

Heat Illness Regulations

Effective November 4, 2010, the California Labor Commissioner issued new heat regulations that apply to all outdoor places of employment where the temperature exceeds 85 degrees Fahrenheit. The regulations, enforceable by Cal-OSHA, require that employers must provide sufficient shade to accommodate at least 25 percent of the workforce at one time, cool down periods of no less than 5 minutes upon request, as well as a specified amount of drinking water per hour worked. The regulations also include changes to training requirements for both supervisory and nonsupervisory employees. Such training is now required to be given to before employees begin work if the type of work anticipated may result in exposure to the risk of heat illness.

No More COBRA Subsidies

As you are aware, as part of the federal economic stimulus package, the American Recovery Investment Act of 2009 required employers pay 65% of group healthcare insurance plan premiums of COBRA eligible employees who involuntarily terminated from their employment between September 1, 2008 and December 31, 2009. Several subsequent federal laws extended the subsidy eligibility period. At this time, involuntary terminations after MAY 31, 2010, do not qualify for a subsidy, and all subsidy payments will stop by no later than AUGUST 31, 2011.

Paid Leave for Organ and Bone Marrow Donation Takes Effect Next Week

January 2, 2011

Effective this month California private employers with 15 or more employees are required to provide paid leave for any employee who is donating an organ or bone marrow.  The language of the statute does not require that the employee be disabled from working in order to be eligible for the leave.  Employees may take up to five days of paid leave for bone marrow donation, and up to 30 days of paid leave for organ donation.  The statute is far from comprehensive but provides some guidance on the terms and conditions that employers must comply with in granting the leave.  They include:

(a) The employer must maintain the employee’s group health coverage during the leave.

(b) When the leave ends, the employer must restore the employee to the same position or an equivalent (meaning equivalent salary/benefits/promotional opportunities etc.) position.

(c) The leave period is a maximum per year, although the law does not specify whether or not the year should/must be calculated on a calendar year or rolling year basis or whether either method is appropriate.

(d) The leave is in addition to FMLA and CFRA leave and is not to be counted against FMLA or CFRA leave banks.

(e) The leave cannot be considered as a break in service for purposes of the employee’s right to salary adjustments, sick leave, vacation, annual leave, or seniority.  Thus, the employee must continue to accrue sick leave, vacation and seniority during the leave period.

(f) If, at the time the employee takes the leave, the employee had any accrued but unused vacation, sick leave or PTO, the employer can require that this accrued leave be credited against the 5-day bone marrow transplant leave.  The employer may also credit a maximum of two weeks of accrued, unused vacation, sick leave or PTO for any organ donor leave.  The employer can do this unilaterally if there is accrued, unused time in the employee’s leave banks.

(g) Leave under this provision can be taken intermittently.  No specific limits on intermittent leave (e.g. minimum increments) are specified in the statute.

(h) The employer can require the employee to provide written documentation from a medical provider that the employee is donating an organ or bone marrow and that there is a medical necessity for the donation in order to verify the employee’s right to the leave.

(i) The employer is prohibited from discriminating or retaliating against an employee because he or she utilized this leave.  The employer is prohibited from interfering with an employee’s leave rights.

(j) The statute provides the employee with a right to file suit in superior court to seek monetary and injunctive relief for any violation of the leave statute.  The statute will be published as sections 1508-1513 of the California Labor Code.

Covered employers should consider publishing these leave rights in their employee handbooks.