Employment Law Briefs

A Brief Update on COBRA Guidance

2009-06-11T13:25:00.000-07:00

By: Richard T. Kennedy, Esquire rtk@muslaw.com

Background

Under COBRA, most group health plans are required to provide a qualified beneficiary (employee, spouse or dependent) with an opportunity to continue health coverage when a qualifying event would result in the loss of coverage. Qualified beneficiaries have been required to pay the full cost of COBRA coverage.

Beginning generally March 1, 2009, a temporary subsidy is available for COBRA coverage provided because of an involuntary termination of employment from September 1, 2008 through December 31, 2009, but excluding high income individuals. Under the subsidy, an eligible individual pays 35% of the COBRA premium. The employer (in most cases) pays the remaining 65% and is reimbursed by the government for this cost by a payroll tax credit.

The Internal Revenue Service (IRS) has issued guidance in Notice 2009-27, available at www.irs.gov. The Department of Labor (DOL) has issued model notices and guidance, available at www.dol.gov/ebsa/COBRA.html. This update highlights certain key guidance.

Eligibility

The COBRA premium subsidy is available only if the loss of health coverage is due to an involuntary termination of employment. This is generally defined as a severance of employment by the employer, other than at the request of the employee, where the employee is willing and capable of performing services. This seemingly simple definition is subject to much additional guidance in the IRS Notice.

Both the involuntary termination of employment and the loss of coverage must occur during the September 1, 2008 through December 31, 2009 period. Extended health coverage provided by an employer after a termination of employment and continuing after December 31, 2009 may disqualify an individual for the subsidy, depending upon how the coverage is characterized for COBRA purposes.

A spouse or dependent not covered by a group health plan at an employee's termination of employment is not a qualified beneficiary, and if added later to the COBRA coverage, will not be eligible for the subsidy (except for a child born to or placed for adoption with the employee during COBRA coverage).

Amount of Reduced COBRA Premium and Credit

The reduced 35% COBRA premium and the 65% payroll tax credit are based on the COBRA premium otherwise payable. If an employer pays part or all of the COBRA premium, the employer cannot take full advantage of the available payroll tax credit. The employer may increase the COBRA premium in such case and receive a payroll tax credit based on the increased premium. The employer may reimburse the employee for the increased cost by a separate taxable payment.

End of Subsidy

The COBRA premium subsidy is available for 9 months. It will end earlier if the individual becomes eligible for other group health plan coverage or Medicare coverage, even if the individual does not enroll. The individual is not considered to be eligible for other coverage during any waiting period.

The death of an involuntarily terminated employee does not terminate the eligibility of a spouse or dependent child for the subsidy.

Second COBRA Election

A second COBRA election must be given if health coverage is lost due to an involuntary termination of employment from September 1, 2008 through February 17, 2009 and no election of COBRA coverage is in effect on February 17, 2009. A 60-day election period must be provided. If elected, the coverage is generally effective March 1, 2009, but will not extend the otherwise applicable 18-month period.

DOL Model Notices

Notices explaining the premium subsidy and (if applicable) the second COBRA election must be provided to qualified beneficiaries who lost or lose health coverage from September 1, 2008 through December 31, 2009. The DOL has issued model election notices with election and notification forms.

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This update is intended to provide information of general interest to the public and is not intended to offer legal advice. It may be reproduced with the prior permission of Meyer, Unkovic & Scott and acknowledgement of its source and copyright.

Nix Boss-Employee Dating

2009-04-16T10:55:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

Recent studies show that many people meet their significant other in the workplace. But if the dating relationship is between a supervisor and a subordinate, it can be a source of problems in the workplace.

Some thorny issues arise when a supervisor is romantically involved with someone who works for him or her, including:

The reaction of other employees. Other employees may suspect favoritism or resent any advancement the supervisor gives to the “favored” subordinate, even if it was legitimately earned. These feelings could blossom into race, age, gender or other discrimination claims, which could prove costly to the company.
Interference with the supervisor’s ability to manage. A supervisor may feel unable to give a frank performance appraisal to a subordinate with whom he or she is or has ever been personally involved. A supervisor may share confidential or proprietary information about the company with the subordinate.
The fallout when the relationship turns sour. The end of the relationship often puts the supervisor and the company in a no-win situation. For instance, many sexual harassment claims are filed when a relationship ends. Furthermore, the parties involved in the relationship may engage in personal arguments and confrontations in the workplace. A former boyfriend or girlfriend may interpret any subsequent negative action taken against them as retaliatory, which could lead to a claim of discrimination or harassment.

An employer has the right to set a policy that prohibits dating between coworkers, but in this day and age, it may feel reluctant to do so. At the very least, however, employers would be wise to prohibit dating between supervisors and subordinates and remind all employees that professional conduct will be required at all times within the workplace.

EMPLOYMENT AGENCIES AND EMPLOYEE CONFIDENTIALITY POLICIES

2009-04-16T10:44:00.000-07:00

By: Jane Lewis Volk, Esquire jlv@muslaw.com

A federal appeals court recently affirmed an order of the National Labor Relations Board granting reinstatement and back pay to an employee of a temporary employment agency who had been discharged pursuant to an employee confidentiality agreement which was held to be unlawful under the National Labor Relations Act (“NLRA”). (Northeastern Land Service v. NLRB, U.S. Court of Appeals for the First Circuit, decided March 13, 2009.)

The agency required their employees to sign an employment agreement containing a confidentiality clause prohibiting them from disclosing the terms of their employment to “other parties.” In this case, the employee had complained about his wages to the company where he was assigned (the client of the employment agency). He was fired for violation of the confidentiality clause.

The NLRA protects employees’ rights to freely discuss the terms and conditions of their employment among themselves (yes, even in non-union settings). This disclosure was not to a fellow employee as anticipated by the NLRA, but to the client. However, the NLRB and the court of appeals reasoned that the confidentiality agreement would chill those free discussion rights and thus was an unlawful agreement. Any firing under that policy was therefore violative of the NLRA.

While you undoubtedly do not want the individuals whom you place with your clients to be complaining in their workplaces about the terms of their employment, making them sign such a confidentiality agreement is not the way to go. The other important message from this decision is a reminder that the NLRA applies to non-union employers, contrary to conventional wisdom (which is so often wrong).

Employers Not Covered by FMLA May be Obligated to Follow FMLA Based on Handbook Provisions

2009-04-16T10:40:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

Does your company have a Family and Medical Leave Act (“FMLA”) policy when you do not have 50 or more employees? If you do, you may be at risk for giving your employees rights under FMLA that your company would not otherwise be obligated to follow. Typically, FMLA applies only to employers who employ at least 50 employees within a 75 mile radius. An employee can be eligible for FMLA if he or she has worked for a Company for a total of 12 months and for at least 1,250 hours in the previous 12 months.

In a recent decision issued on March 10, 2009, Reaux v. Infohealth Management filed in the Northern District of Illinois, the Court denied an employer’s motion to dismiss an employee’s FMLA claim because of promises that were made to its employees in a handbook. In the case, both parties admitted that the employer did not have 50 or more employees in a 75 mile radius. However, the Plaintiff argued that the employer was estopped from denying her FMLA leave based on provisions contained in the handbook. The handbook contained a FMLA policy that defined "eligible employees" as those having worked for the company for at least 12 months and 1,250 hours during the 12 months preceding the leave. The policy promised that eligible employees "shall be entitled" to FMLA leave for the birth of a child. In addition, the employee’s supervisor told her that she would be “entitled” to leave if she filled out the FMLA paperwork. The employee completed the necessary paperwork, took leave for the birth of her child and was fired a few days prior to the expiration of her 12 weeks of approved leave. The policy did not contain a provision that stated that FMLA coverage was only applicable to those employees who worked at a location with 50 or more employees in a 75 mile radius. The court permitted the employee to proceed on her FMLA claim.

Although this case is not precedential in Pennsylvania, employers should be very cautious in how they draft their handbooks and policies. Giving employees rights under FMLA means that the company may be obligated to hold open the employee’s position for 12 weeks while the employee is on leave and be obligated to restore an employee to his or her original job, or to an equivalent job with equivalent pay, benefits, and other terms and conditions of employment. Furthermore, employers could bind themselves to other provisions of FMLA such as providing intermittent leave in accordance with the Act and providing group health plan insurance to employees on leave. Employers should review their handbooks to ensure that their policies are not creating unintended consequences and are in compliance with current changes to employment laws.

Stimulus Law Provides Cobra Subsidy

2009-03-25T16:03:00.000-07:00

By: Richard T. Kennedy, Esquire - rtk@muslaw.com

The American Recovery and Reinvestment Act of 2009 was signed into law on February 17, 2009. Among other things, the Act provides a subsidy for COBRA premiums. The subsidy generally takes effect on March 1, 2009 and requires immediate action by employers and COBRA administrators. Some key points follow.

Subsidy

The subsidy is a 65% reduction in the amount of the premium an eligible individual is required to pay for up to 9 months of COBRA continuation coverage. An eligible individual will pay 35% of the COBRA premium to the employer, health plan or insurer. The employer, health plan or insurer pays the remaining 65% of the COBRA premium and is reimbursed in the form of a credit against the payroll taxes (income tax withholding and FICA taxes) the employer, health plan or insurer is required to pay to the Treasury Department.

Eligible Individuals

An eligible individual is an employee whose employment involuntarily terminates from September 1, 2008 through December 31, 2009 with eligibility for COBRA coverage along with that employee's spouse and dependents eligible for COBRA coverage. Under a means test, an individual with adjusted gross income of more than $145,000 ($290,000 for joint filers) is not eligible for the subsidy, and an individual with adjusted gross income between $125,000 and $145,000 ($250,000 to $290,000 for joint filers) is eligible for a reduced subsidy. An individual is permitted to permanently waive the subsidy.

Second Election

An eligible individual whose employment involuntarily terminated on or after September 1, 2008 and before February 17, 2009 and who declined to elect COBRA coverage is required to be provided with another COBRA election. Any COBRA coverage elected will be effective with the first coverage period after February 17, 2009, which typically would be March 1, 2009. This election would not extend the total period of otherwise available COBRA coverage.

New Notice Requirements

Notices explaining the new subsidy provisions and other COBRA provisions in the Act will have to be provided to qualified beneficiaries who lose coverage on or after September 1, 2008 and before 2010. Individuals who became entitled to elect COBRA coverage before the February 17, 2009 enactment date must be provided with new notices within 60 days of the enactment date. The Department of Labor has been directed to issue a model notice within 30 days of the enactment date.

Quick Action

- The Act provides little time for implementation. Employers and health plans should consider the following steps:

- Developing the procedures to identify eligible individuals whose COBRA qualifying event was an involuntary termination of employment.

- Identifying COBRA qualified beneficiaries who lost coverage from and after September 1, 2008 so that they may be properly notified of the new COBRA provisions.

- Working with COBRA administrators/vendors to review capabilities and modify existing COBRA notices and procedures and with payroll administrators/vendors to develop reporting and reimbursement mechanisms.

- Reviewing existing documents and plan descriptions for necessary revisions.

Please contact Richard T. Kennedy at (412) 456-2880 or rtk@muslaw.com for additional information.

This Meyer, Unkovic & Scott update is intended to provide information of general interest to the public and is not intended to offer legal advice. Meyer, Unkovic & Scott does not intend to create an attorney-client relationship by providing this information. Readers should consult with counsel before acting upon this information.

Two Recent Laws Relating to Employee Health Care: The New Mental Health Parity Act and Michelle’s Law

2009-03-25T15:49:00.000-07:00

By: Antoinette C. Oliver, Esquire aco@muslaw.com and Quinn A. Johnson, Esquire qaj@muslaw.com

Employers should be aware of two recently enacted federal laws which relate to to employee health care. First, the new federal Mental Health Parity Act (the “Act”) was passed by Congress as part of the economic bail-out plan on October 3, 2008. The law seeks to bring parity to insurance coverage for treatment of mental health and mental illness (including substance abuse), as compared to that of physical aliments. The Act applies only to those enrolled in a group health plan of 50 of more employees that already provides benefits for both physical and mental health disorders. Under the new law, such insurance plans are prohibited from providing different deductibles, copayments, or limiting frequency of treatment and days of coverage for mental health care, as compared to physical ailment care. Mental health or substance use benefit coverage is not required, but if such coverage is offered it must be provided at parity. For most employers affected by the Act, the new law took effect on January 1, 2009.

Second, Congress has finally closed a health insurance loophole on whether dependent college students can lose medical coverage for taking time off from school for medical reasons. While most employee health plans only cover dependents over age 18 if they are full-time students (and under a certain age), a new federal law will protect dependent college students from losing their health insurance in the event of serious medical illness. “Michelle’s Law,” signed by President Bush on October 9, 2008, amends the Employee Retirement Income Security Act of 1974, the Public Health Service Act and the Internal Revenue Code of 1986 to allow full-time college students to take a year of medical leave without the risk of losing their insurance. The law will become effective in October 2009. The law does not compel insurance companies to cover any new individuals, but prevents them from dropping coverage under these circumstances.

Common Mistakes To Avoid in Layoffs and Terminations

2009-03-25T15:44:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

In these tough economic times, many employers are looking for methods to cut costs to keep their businesses viable. Unfortunately, cost cutting often involves terminating or laying off workers. A business that is considering reducing its workforce needs to take preventative measures to reduce liability. Employers should avoid the following pitfalls when performing layoffs:

1. Not Analyzing the Demographics of Employees Selected.

During layoffs, employers must consider the impact that the reduction will have on employees in protected classifications such as age (40 and over), gender, race, color, religion, national origin, disability or other protected classification. For example, an employer selects a female age 55 with 15 years of service for termination but retains a white male age 25 with two years of service in the same position. Without good documentation of performance issues for the female selected, she may have a claim against the company for age and gender discrimination.

2. Not Being Truthful With Employees About the Reasons for Selection.

Employers must be honest with employees regarding the reasons for termination. If an employee is selected because he/she has performance issues, the company should tell the employee about the issues. Often those making the termination decisions want to spare the employee any hard feelings and do not address the performance problems as the reason for termination. This approach can harm the company if the employee files a claim. A good defense to a discrimination claim is that the decision to terminate the employee was not based on a protected classification, but rather was based on the employee’s poor performance. If the company does not tell the employee about the performance issues then the company may be viewed as not being truthful and this undercuts the company’s defense.

3. Offering Severance Payments Without Getting a Release of Claims.

Another mistake that companies often make is to offer severance payments without getting a release of claims. If a company is terminating an employee and pays money for which the employee is not otherwise entitled, it is wise to get a proper release of claims when the employee is in a protected classification or may have claim against the company. Securing a release in exchange for a monetary payment will reduce the potential for future claims.

4. Failing to Give the Statutorily Required Time Periods for Consideration and Revocation of Releases.

Employers who offer severance to employees in exchange for a release of claims must adhere to all employment laws in order to properly secure a release of claims. For example, under the Age Discrimination in Employment Act, in order to properly release an age discrimination claim, the release must give the employee 21 days to review the agreement and 7 days to revoke the agreement after the employee signs. In other situations where there are multiple layoffs with a severance payment, the release must provide the employee 45 days to review the agreement with 7 days to revoke after signing. Furthermore, when an company has multiple layoffs involving a release agreement, the employer must provide employees a list of the job titles and ages of all individuals selected for termination and the ages of all individuals in the same job classification or organizational unit who are not selected.

5. Not Properly Paying Out Wages Upon Termination

Finally, when employees are terminated, the employer must pay out all wages, vacation pay and commissions that are considered earned. Failure to properly pay earned wages can result in a claim under Pennsylvania Wage Payment and Collection Law and other employment laws.

Please contact Elaina A. Smiley at (412) 456-2821 or es@muslaw.com for additional information.

This Meyer, Unkovic & Scott update is intended to provide information of general interest to the public and is not intended to offer legal advice. Meyer, Unkovic & Scott does not intend to create an attorney-client relationship by providing this information. Readers should consult with counsel before acting upon this information.

LaRue v. DeWolff, Boberg & Associates, Inc.

2009-02-02T11:19:00.000-08:00

By: Richard T. Kennedy, Esquire rtk@muslaw.com

James LaRue was a participant in a 401(k) Plan sponsored and administrated by DeWolff, Boberg & Associates, Inc. The DeWolff 401(k) Plan permitted participants to direct the investment of their individual accounts by selecting from a menu of investment options.

In LaRue, the Supreme Court considered LaRue’s claim that DeWolff breached its fiduciary duties under ERISA when it failed to implement LaRue’s investment directions under the 401(k) Plan. LaRue claimed that this breach caused his individual account under the 401(k) Plan to be “depleted” by $150,000.

In a unanimous decision issued on February 20, 2008, the Supreme Court reversed the Fourth Circuit and held that ERISA authorizes an individual participant in a defined contribution plan to bring an ERISA action in federal court for “recovery for fiduciary breaches that impair the value of plan assets in a participant’s individual account.”

By giving a “green light” to an ERISA breach of fiduciary claim for losses in an individual account under a defined contribution plan, LaRue may result in an increased number of lawsuits against defined contribution plans and their fiduciaries. However, a number of litigation issues remain, including whether there is a requirement for a participant to exhaust administrative remedies before proceeding to court and the extent to which a deferential standard of review may apply to a fiduciary’s decision in a court proceeding.

While the courts address these issues, there are precautionary steps that plan fiduciaries can take to minimize the potential liability presented by LaRue. The plan's administrative procedures and potential for administrative errors affecting the participant's account values should be reviewed. This should include the procedures for implementing a participant’s investment directions, and the related terms in the service provider agreements. Also, for investment liability generally, the plan's investment policy statement and the procedures for selecting and monitoring investment options should be reviewed, along with the plan’s compliance with ERISA § 404(c) providing limited fiduciary relief for participant-directed investments and investments in the default investment fund. Fiduciary insurance should be reviewed to confirm coverage for litigation costs.

FMLA Eligibility Changes

2009-01-28T11:50:00.000-08:00

By: Jane Lewis Volk, Esquire jlv@muslaw.com

A recent case in a Pennsylvania federal district court should remind employers that even employees who don't meet the eligibility requirements for leave under the Family and Medical Leave Act are still eligible for protection under that law.

The Act entitles employees with a minimum of 12 months on the job to take unpaid leave of up to 12 weeks for the care of a newborn or adopted child or an immediate family member with a serious health condition, or for the employee's own serious health condition. The Act only covers employers with more than 50 employees.

In the case in question, an employee who had been working for only 6 months informed her employer that she planned to take maternity leave in 6 months' time. Although she was not yet eligible for leave at the time of her notice, she would be eligible by the time of the requested leave.

Shortly after she announced her pregnancy, the employer fired her. She filed a lawsuit claiming that the firing was unlawful retaliation under the Act. A district court agreed that the anti-retaliation provision of the Act protects employees who give notice, as long as they will be eligible for the leave by the time it starts.

FMLA News

2009-01-13T12:16:00.000-08:00

By: Antoinette C. Oliver, Esquire aco@muslaw.com

On January 28, 2007 the Family and Medical Leave Act (FMLA) was expanded for the first time in 15 years, with the enactment of the National Defense Authorization Act.

Employees who need time off to care for a recovering family member who served in the military are eligible for up to 26 weeks, rather than the standard 12 weeks of FMLA leave within a 12 month period. A recovering service member is defined as a Member of the armed services who falls ill or is injured during active duty and, as a result, is unable to perform his or her duties. To qualify for leave, the employee must be the spouse, parent, child or nearest blood relative of the injured service member.

An employee is also qualified for leave due to “any qualifying exigency” that arises out of a family member’s service in the Armed Forces or because a family member is called to duty. A family member under this provision is limited to spouse, parent or child. Notably, the term “any qualifying exigency” is yet to be defined by the Secretary of Labor, and therefore is not yet effective. In the meantime, the Department of Labor (DOL) is encouraging employers to provide this type of leave for employees until the act is effective. Employees who take leave under “qualifying exigency” will be entitled to 12 weeks of FMLA leave.

Employers should be sure to update their handbooks in order to comply with these amendments. Because the DOL has not yet promulgated regulations for the expansion, there is little guidance to assist employers. In the meantime, employers are expected to act in good faith in complying with the new law.

Employee Right of Privacy in Text Messages

2008-12-29T08:19:00.000-08:00

By: Melissa M. Hall, Esquire mmh@muslaw.com and Jane Lewis Volk, Esquire jlv@muslaw.com

In June 2008, the Ninth Circuit Court of Appeals issued a decision regarding an employee’s right of privacy in text messages. Although the decision is not binding in Pennsylvania, the case presents an interesting issue of which employers should be aware.

In Quon v. Arch Wireless Operating Co., Inc., the Court held that an employee did have a reasonable expectation of privacy in text messages sent via an employer-provided pager. The employer contracted with Arch Wireless to provide text messaging services and distributed pagers to its employees. The contract provided for a certain number of characters per pager, per month after which the employer required the employees to pay for any overages. Quon exceeded his character limit on several occasions and, as required, paid for the overage charges. The employer informed Quon that, so long as he continued to pay for any overages, his text messages would not be audited. Notably, although the employer had a “Computer Usage, Internet and E-mail Policy” in place which put employees on notice that they had no expectation of privacy in the use of those devices, the written Policy did not include the pagers. The employer did, however, verbally inform employees that the text messages sent from the pagers were considered e-mail under the Policy.

Despite the employer’s assurance that it would not review the content of text messages, the employer did audit Quon’s text messages and determined that, aside from being over the allotted number of characters, many of the messages were personal and not business related. Quon subsequently sued the employer for violations of their Fourth Amendment right to privacy. The Court held that the employees had a reasonable expectation of privacy in the content of the text messages because (1) the employer had a practice of not reviewing text messages for content and (2) text messages were not significantly different from email, which had been afforded privacy protections. However, the Court noted that the employees had no privacy interest in the address or phone number used to send the text messages.

This decision is an important reminder to employers to issue and enforce consistent policies reminding employees that, even if personal use of company communication devices is permitted, there should be no expectation of privacy.

For more information about this decision or other employee policy issues, contact Melissa M. Hall at mmh@muslaw.com or Jane Lewis Volk at jlv@muslaw.com.

Business Workshop: Part-time is optional, Cash or accrual?

2008-11-10T13:20:00.000-08:00

By: Tony J. Thompson, Esquire tjt@muslaw.com

A federal appeals court recently confirmed that employers do not have to accommodate employees who want to return from Family and Medical Leave and switch from full-time to part-time work.

In the case in question, the employee requested and received leave from a manufacturer after suffering a nervous breakdown.

After using up her 12 weeks of FMLA leave, the employee said she still could not work full time and asked to go on a part-time schedule.

The company insisted that she could get only her full-time job back and fired her. The employee sued, alleging the company interfered with her FMLA rights and discriminated against her because of her disability.

The district court dismissed the case after the company proved that it did not have any part-time positions that were comparable to the employee's full-time work.

The appeals court agreed, stating that the FMLA does not require accommodation when the employee cannot return to the same or a comparable job.

During FMLA leave, an employer may have to provide reduced schedule leave to eligible employees.

But once employees have exhausted FMLA leave, the law does not require employers either to hold the job open or to change a full-time position into a part-time one.

The FMLA covers employers with 50 or more employees and entitles eligible employees to take unpaid leave of up to 12 weeks for the care of a newborn child or an immediate family member with a serious health condition or to take medical leave when the employee is unable to work because of a serious health condition.

Supreme Court Declines To Make Definitive Ruling on Admissibility of “Me Too” Evidence

2008-11-03T11:11:00.000-08:00

By: Elaina Smiley, Esquire es@muslaw.com

Often in discrimination cases, employees attempt to introduce evidence of alleged discriminatory acts against other employees to bolster their claims. The Supreme Court in Sprint v. Mendelsohn, declined to make a determinative ruling on whether or not this type of evidence is admissible. Mendelsohn was terminated by Sprint as part of an company-wide reduction in force and then sued Sprint for age discrimination. In support of her claim, Mendelsohn sought to introduce the testimony of five other former Sprint employees who claimed that their supervisors had discriminated against them because of their age. None of the five employees worked in the same group as Mendelsohn or under the same supervisors. The District Court ruled that the evidence was not admissible because the five employees were not similarly situated to the plaintiff. The Tenth Circuit found that the District Court abused its discretion. The case was appealed to the U.S. Supreme Court which found that the question of whether evidence of discrimination by other supervisors is relevant to Mendelsohn’s age claims depends on many factors, including “how closely related the evidence is to the plaintiff’s circumstances and theory of the case.” The Supreme Court concluded that such evidence is “neither per se admissible nor per se inadmissible.” The Supreme Court remanded the case to the District Court to clarify its ruling. The Supreme Court’s decision leaves the door open for plaintiffs in all types of discrimination claims to attempt to bring in evidence of discriminatory conduct against employees who are not part of the lawsuit. This ruling leaves much discretion to the trial court in making the determination of the admissibility of “me too” evidence.

Social Network Indiscretions

2008-10-21T11:13:00.000-07:00

By: Beth A. Slagle, Esquire bas@muslaw.com

A new study of Internet social networks finds that there are 120 million profiles on the four most popular social networks.

While many are high school and college students, there are millions of employees, and offensive material or images in these profiles may hurt their employers.

It's more than the embarrassing or graphic photograph.

For example, if an employee makes discriminatory comments about another employee or posts confidential information about the company in a social network profile, the employer could be held liable for the actions, particularly if the employee posts during work hours or through the employer's computer system.

An employer's power to discipline or terminate employees for their private Internet postings is not absolute.

One way that some companies attempt to balance their legitimate business interest against an employee's right to free speech is to provide social networking guidelines in a technology policy.

The guidelines should include:

A disclaimer of employer responsibility for private employee profiles.

A warning that employees making personal comments about the employer's products or services or other employees in a profile (or blog) will be subject to disciplinary action.

A warning not to use company equipment or networks to create or update a profile, except if it is part of company business.

A specific statement that social networkers must abide by company policies on confidential information and trade secrets.

In disciplining an employee for something on a social network profiles, employers should proceed with care to make sure they are not retaliating against a whistle-blower or punishing an employee for engaging in protected activities such as union organizing.

Prevent 401(k) Lawsuits

2008-10-13T07:09:00.000-07:00

By: Joseph A. Vater, Jr., Esquire jav@muslaw.com

When the stock market goes down, so do 401(k) assets.

The result: employees look for someone to blame, and the fiduciaries of their 401(k) plan, which often include the employer, are the target.

While there is no way to make a company's 401(k) plan lawsuit-proof, the United States Department of Labor recommends some basic steps that companies can take to avoid liability when their employee's 401(k) assets go south:

Review or have a consultant review fund performances periodically and consider replacing underperforming funds.
Offer an investment education program for employees who participate in the 401(k) plan, but make sure you follow the guidelines set forth in the Pension Protection Act so you don't inadvertently assume fiduciary responsibility for the information provided by the consultants.
Disclose all direct and indirect fees associated with the 401(k) plan and all investment choices. Most 401(k) plans do not disclose all fees.
Enable employees to select mutual funds from more than one fund family and make sure low-fee funds are included in the choices.

An employer that selects investments and investment advisers judiciously, following all appropriate regulations, usually will not be held responsible for the investment decisions of those participating in its 401(k) plan.

Executive Education Seminar: Privacy in the Workplace

2008-10-10T07:03:00.000-07:00

November 13, 2008 at the Rivers Club - Pittsburgh, PA

Presented by: Douglas M. Hottle and Quinn A. Johnson

Seminar Description: Privacy in the Workplace: What Employers Need to Know About Getting, Using and Protecting Employee Information

Nearly three-quarters of major U.S. firms report that they record and review their employees’ communications and activities on the job, including their phone calls, e-mail, Internet connections and computer files. While employers have a legitimate business interest in tracking their employees’ workplace activities to protect safety, ensure productivity, and even to comply with anti-discrimination laws, employers need to avoid inappropriate and unreasonable invasions of employees’ privacy interests.

This seminar will help employers who find themselves asking:

Can I monitor my employee’s cell phone conversations throughout the work day?
Can I search an employee’s purse or personal belongings?
Can I access their personal E-mail account during work hours?
Can I censor my employee’s blog?
Can I monitor an employee’s location throughout the day?

Please RSVP by November 7th to Beth Ansell or call 412-456-2552.

Congratulations to our “2009 Best Lawyers in America”

2008-10-10T07:02:00.001-07:00

This year fourteen Meyer, Unkovic & Scott LLP attorneys have been selected for inclusion in The Best Lawyers in America, 2009 edition, published by Woodward/White. Inclusion is widely considered a significant honor because lawyers are selected on the basis of peer evaluations.

Those named include Kevin F. McKeegan, the firm’s Managing Partner, Robert Mauro, W. Grant Scott and Richard G. Kotarba all for their practice of real estate law. Kevin F. McKeegan was also recognized for his work in land use & zoning law. Richard G. Kotarba and James R. Mall were both selected for their work in construction law. Also named were Dennis Unkovic, for his international trade and finance law practice, Joel Pfeffer for his work in immigration law, Joel M. Helmrich for his practice in creditor-debtor rights, Thomas A. Berret for his work in personal injury litigation, Laura A. Candris for her labor and employment law practice, John W. Powell for his work in trusts and estates, David G. Oberdick for his work in commercial litigation and intellectual property law, Patricia L. Dodge and Russell J. Ober for their work in commercial litigation. Patricia L. Dodge was also recognized for her product liability litigation practice.

Independent Contractor Relationship - Seminar

2008-09-10T08:20:00.001-07:00

Please join us on Monday, October 6, 2008 from 11:45 am - 1:30 pm for a seminar on Independent Contractor Relationships: Independent Contractors versus Employees.

Please RSVP to rsvp@muslaw.com by October 1st if you would like to attend.

Additional Seminar Information:

In today’s workplace, there is an ever-increasing trend for employers to consider filling vacancies with independent contractors as opposed to committing to a full time employee. A maze of regulations exist that may or may not make this question easy to answer.

During this roundtable our attorneys will help you answer your questions about independent contractor relationships and discuss the advantages and disadvantages to these relationships. This important roundtable will also outline the pros and cons of completing your workforce with employees and independent contractors as well as the unforeseen circumstances involving benefits for improperly classifying independent contractors.

Religious Discrimination Complaints Up

2008-09-10T08:20:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

The number of complaints to the Equal Employment Opportunity Commission about workplace discrimination against employees because of their religion has doubled in the last 15 years. Filings complaining about religious discrimination jumped to a record 2,880 last year. On July 22, 2008, the EEOC issued a new compliance manual on religious discrimination, which offers a comprehensive review of the EEOC’s policies regarding religious discrimination, harassment and accommodation. The EEOC also offers a “Best Practices” book to assist employers.

The Civil Rights Act of 1964 prohibits employers from discriminating against individuals because of their religion in hiring, firing or conditions of employment. Employers cannot treat employees of one faith more or less fairly than other employees, nor can they force employees to participate in or not participate in any religious activity.

One of the most difficult issues for employees is the concept of “reasonable accommodation.” Employers must reasonably accommodate the sincerely held religious practices of employees unless to do so would proved to be a hardship to the employer. For example, in a recent Pennsylvania lawsuit, a federal court found that asking an employee to find her own replacement for Sunday work may not be a reasonable accommodation if the reason the employee needed to switch shifts is religious.

Employers should make sure that their anti-discrimination policies specifically define and prohibit religious discrimination and harassment and provide an effective procedure for reporting, investigating and correcting such acts. Employers should also establish policies in dealing with religious accommodation requests and train supervisors and managers on how to best handle religious issues in the workplace.

Computer Sabotage

2008-08-26T08:38:00.000-07:00

By: Jane Lewis Volk, Esquire jlv@muslaw.com

Most employers may not know that courts began applying the Computer Fraud and Abuse Act to civil cases a few years ago.

What that means is that employers can now collect damages in court when employees cause damage to a computer system.

Employers typically file civil lawsuits under the act when employees or former employees access computer data to gain a competitive edge at their new place of business.

But the law also enables employers to get restitution for a wide scope of other damages, including for destruction of proprietary information and for knowingly downloading a program that damages computers or computer networks.

To recover damages the employer may sue in federal court, and the damages must be at least $5,000.

Possible damages include:

Time and resources spent to hire a computer expert
Cost of hiring the expert to determine and remedy the damage
Cost of hiring the expert to create a method to prevent future damage
Loss of confidential or trade secret information.

Employers cannot include loss of revenue and good will or interference with customer relations in its calculation of damages.

GINA May Prove Challenging to Employers

2008-08-15T07:17:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

A new law that prevents employers from making employment decisions based on genetic information will place another burden of regulatory compliance on employers.

The Genetic Information Nondiscrimination Act of 2008 (GINA), recently signed into law by President Bush, makes it illegal for employers, unions and insurance providers to discriminate on the basis of an individual’s genetic information and prohibits disclosure of such information except in very limited circumstances.

Called by some “the first major civil rights act of the 21st,” GINA prohibits employers from using genetic information when making decisions regarding hiring, firing, compensation, promotions and other terms and conditions of employment.

GINA prohibits employers from requesting genetic information from employees and their families. GINA provides some limited exceptions, such as information employers obtain under the Family Medical Leave Act. However, GINA does not address genetic information that employers may inadvertently receive under other employment laws. For instance, an employer engaging in discussions with an employee who requests an accommodation under the American with Disabilities Act could acquire genetic information covered by GINA.
The U.S. Department of Labor and the Equal Employment Opportunity Commission are in the process of developing the regulations that will tell employers what they must do to comply with GINA. The GINA provisions related to employers do not go into effect until November 2009.

More Employees Sue Over Pay

2008-07-23T13:22:00.000-07:00

By: Elaina Smiley, Esquire es@muslaw.com

Lawsuits related to wage disputes have increased by 77% over the past four years, according to the National Employment Lawyers’ Association. (NELA), an organization of attorneys who help employees file lawsuits and other actions against employers.

It was about four years ago that the U.S. Department of Labor (DOL) toughened the overtime rules under the Fair Labor Standards Act (FLSA) and since that time, wage-related FLSA lawsuits have ballooned. Besides the dramatic increase in lawsuits, NELA found that DOL has amplified its wage enforcement actions by 11%.

Some common causes for wage-related lawsuits have been:

Unpaid overtime when employers misclassify employees. Employers often incorrectly assume that paying employees a salary means they do not need to pay them overtime pay.
Making employees use their own money to buy uniforms or equipment or for other company purposes.
Not accurately recording time worked or requiring employees to work off the clock.
Not paying employees for putting on (“donning”) and taking off (“doffing”) safety equipment.

The best thing that employers can do to avoid these costly lawsuits is to closely analyze how employees are being paid, confirm that those employees classified as exempt from overtime pay are actually performing job duties that qualify them as exempt under the FLSA. Employers should also conduct regular audits of their policies and procedures to make sure that they are following all FLSA regulations and ensure that all supervisors and managers routinely receive training in what is and is not allowed under FLSA.

Big Change in Employment Eligibility Verification

2008-03-19T16:46:00.000-07:00

By: Joel Pfeffer, Esquire jp@muslaw.com

The U.S. Citizenship and Immigration Services has just made a change that affects every employer in western Pennsylvania and across the country.

In early November, the immigration service changed the list of documents that it will allow employers to accept as proof of legal residency for form I-9, which verifies employment eligibility. The change is noted on a brand new I-9 form. The new regulation removes five documents that were previously on the list as okay to accept as proof of identity and employment eligibility. The new form does add one document to the list of approved proofs of identity, the new form I-766, which is a card issued to aliens who are authorized to work temporarily in the United States. Other approved documents include an expired or unexpired U.S. passport and a permanent residence card, among others.

Every employer must have new employees fill our a I-9 form, and then keep it on file for three years after the employee starts or, if the employee leaves before three years is up, an additional year after employment ends. Failure to have completed I-9 forms on file can lead to stiff penalties.

The new form will become effective as soon as a notice is published in the Federal Register, but the immigration service wants employers to start using the new form and protocol right away.

Time Off to Care for Vets

2008-02-18T10:27:00.000-08:00

By: Antoinette Oliver, Esquire aco@muslaw.com

When President Bush signed the National Defense Authorization Act (NDAA) early this year, it marked the first ever expansion of the Family and Medical Leave Act (FMLA).

NDAA says that employees who need time off to care for a recovering service member are eligible for up to 26 weeks within a single 12-month period, more than twice as long as the standard 12 weeks of FMLA leave.

The new law defines recovering service member as a member of the armed forces who falls ill or is injured during active duty, and as a result is unable perform his or her duties. To qualify for leave, the employee must be the spouse, parent, child or nearest blood relative of the injured service member.

An employee also can get leave because of “any qualifying exigency” that arises out of a family member’s service in the Armed Forces or because a family member is called to duty. A family member under this provision is limited to spouse, parent or child. Employees who take leave for this “qualifying exigency” reason will be entitled to 12 weeks of FMLA leave. The Department of Labor has not yet announced regulations defining “qualifying exigency”, but employers must act in good faith to comply with the provision until the regulations are released.

The amendments are effective immediately, so employers should update their handbooks and company procedures to comply.

10 Ways to Get an Employer Sued

2008-01-31T06:26:00.000-08:00

Join attorney Jane Lewis Volk and paralegal Cherie Mezynski on February 12, 2008 as they present "10 Ways to Get an Employer Sued" at the Pennsylvania Association of Housing and Redevelopment Agencies Legislative Conference. The conference will be held in Harrisburg, Pennsylvania at the Hilton & Towers February 10-13, 2008. To register for the conference please contact the PAHRA at 412-247-0699.

Individual Liability: Under Employment Laws

2008-01-17T07:42:00.000-08:00

Please join us on Thursday, February 21, 2008 for our Executive Education Series Roundtable.

Joseph Vater, Jane Lewis Volk and Quinn Johnson of our Employment Law & Employee Benefits Group will lead this interactive roundtable discussion of individual liability under the Pension Protection Act of 2006, Title VII of the Civil Rights Protection Act, Fair Labor Standards Act, Pennsylvania Wage Payment & Collection Law, Pennsylvania Human Relations Act and Family and Medical Leave Act.

Contact Beth Ansell at eaa@muslaw.com or 412.456.2552 for time and location.

Recent Decision Concerning Health Care Insurance Coverage for Medicare-eligible Retirees

2008-01-16T11:47:00.001-08:00

By: Jane Lewis Volk, Esquire jlv@muslaw.com
Joseph A. Vater, Esquire jav@muslaw.com

In February 2007, the Third Circuit Court of Appeals issued a decision which affects an employer’s options with respect to the providing of health care coverage for retirees. In AARP v. EEOC, the Court upheld an EEOC regulation that permits an employer to coordinate retirement benefits with Medicare (or comparable state plan) or even eliminate such coverage when government coverage becomes available. The AARP argued that the regulation violated the Age Discrimination in Employment Act (“ADEA”) by making benefit distinctions on the basis of age. The Court ruled that this regulation was reasonable and therefore within the EEOC’s rule-making authority. The regulation was promulgated in reaction to the reality that employers were reducing benefits available to all, rather than bearing the expense of maintaining pre-Medicare benefits for retirees. The EEOC argued that employers are more likely to continue offering retiree benefits to employees under age 65 if they are able to reduce or eliminate benefits for Medicare-eligible retirees. The Court recognized “with some dismay” that the new regulation will allow employers to reduce health benefits to retirees over the age of 65, but saw it as a reasonable exemption from the ADEA which will ultimately “likely benefit all retirees.”

This regulation and the decision upholding it represent a reversal of a 2000 Third Circuit decision, Erie County Retirees Ass’n v. County of Erie.

For more information about the impact of this decision on your health care benefits plan, contact Jane Lewis Volk at jlv@muslaw.com or 412-456-2840 and Joseph A. Vater, Jr. at jav@muslaw.com or 412-456-2827.

Pennsylvania Supreme Court Addresses Unwanted Sexual Advances in a Workers’ Compensation Case

2008-01-16T11:47:00.000-08:00

By: Benjamin D. Kerr, Esquire bdk@muslaw.com
Jane Lewis Volk, Esquire jlv@muslaw.com

Under Pennsylvania Workers’ Compensation law, if a claimant is to obtain benefits for a “psychic” injury, he must demonstrate that his injury resulted from abnormal working conditions, not for his subjective reaction to normal working conditions. In January 2007, the Pennsylvania Supreme Court held in RAG (Cyprus) Emerald Resources v. Workers’ Compensation Appeal Board that unwanted sexual advances may constitute abnormal working conditions. The Court held that a western Pennsylvania coal miner who was exposed to unwelcome sexual advances by a same-sex supervisor was entitled to workers’ compensation benefits for psychic harm.

The Supreme Court held that there was no support in the record for the finding that this challenged conduct was “normal in the mining industry.” This decision of the Pennsylvania Supreme Court is significant for, among other principals, reaffirming the need for firm enforcement of an employer’s sexual harassment policy. Workers’ compensation claims may result from failure to prohibit effectively inappropriate sexual activity in the workplace.

For more information about this case or other employment law issues, contact Benjamin D. Kerr at bdk@muslaw.com or 412-456-2589 and Jane Lewis Volk at jlv@muslaw.com or 412-456-2840.

Employment Law Decisions from the Supreme Court of the United States

2008-01-16T11:19:00.000-08:00

By: Laura A. Candris, Esquire lac@muslaw.com

Ledbetter v. The Goodyear Tire & Rubber Co., Inc. is one of the most important employment decisions of the U.S. Supreme Court in recent years. In Ledbetter, the Court ruled (5-4) that each decision about an employee’s pay is a “discrete act” and that any Title VII claim based on such a decision must be filed with the EEOC within the same short period (300 days in Pennsylvania, but 180 days in some other states) allowed for filing other Title VII claims. Importantly, the Court rejected Ledbetter’s arguments — and the rulings of a number of federal courts of appeals - that she and other claimants have 180 (or 300) days from any paycheck resulting from a pay-setting decision to file an EEOC charge, even if that decision was made years earlier.

During most of Ledbetter’s career at Goodyear, pay increases were granted or denied based on performance evaluations. Shortly before she retired, Ledbetter filed an EEOC charge alleging that years earlier, her supervisor gave her poor evaluations because of her sex and, consequently, she was paid significantly less than any of the men holding the same job. Thus, Ledbetter claimed intentional gender discrimination. Ledbetter did not claim that Goodyear adopted its performance-based pay system in order to discriminate on the basis of sex or that it applied the system to her discriminatorily during the period allowed for filing EEOC charges or that Goodyear failed to communicate its allegedly discriminatory pay decisions to her at the time.

In its May 29, 2007 opinion, the Court made clear that old acts of intentional discrimination cannot be the basis for new claims under Title VII, even when the effects of such discrimination continue. However, the Court also pointed out that if an employer uses a discriminatory pay structure, then each paycheck based on that structure violates Title VII and triggers a new EEOC filing period. Additionally, the Court observed that the Equal Pay Act (“EPA”) –- which has a much longer claim-filing period - does not require proof that any pay discrimination was intentional or require a filing with the EEOC. Justice Alito, who wrote the majority opinion, observed “[i]f Ledbetter had pursued her EPA claim, she would not face the Title VII obstacles she now confronts.” Justice Ginsberg, writing for the dissenting justices, solicited Congress to overturn the decision legislatively.

While the Ledbetter decision offers employers valuable protection from stale claims of intentional discrimination under Title VII, its benefits are limited because it does not affect other types of Title VII claims or claims under other federal or state statutes, and it may be legislatively overturned. Consequently, employers should continue diligently to monitor the design and administration of their pay systems to prevent intentional and adverse impact discrimination and reduce the incidence of claims.

Other decisions of interest.
In Long Island Care at Home, LTD v. Coke, the Supreme Court upheld a Department of Labor regulation which provides that persons employed to work in private homes providing companionship services for the aged or infirm are exempt from the minimum wage and overtime pay provisions of the federal Fair Labor Standards Act (“FLSA”), even when the employer who pays them is an entity, not the family or household using the services. This ruling means that home healthcare agencies and entity employers of workers providing these services need not comply with the FLSA with respect to workers. Employers must still comply with any state or local laws requiring overtime pay or setting a minimum wage for such workers.

In Davenport v. Washington Education Association the Court ruled that, while unions representing public workers may assess fees against nonmember workers covered by collective bargaining, states may require such unions to obtain authorization from those workers before using their fee money for election purposes.

In Beck v. PACE International Union, the Court reiterated its prior decisions that terminating a single-employer pension plan is a decision of the employer and not subject to the fiduciary obligations under the Employee Retirement Income Security Act (“ERISA”). The Court also ruled that merger with a multi-employer pension plan is not a permitted method of terminating a single-employer defined benefit pension plan. As a result, an employer which is considering terminating a defined benefit pension plan is not required by ERISA to consider a proposal by the union to merge the single employer plan with a multi-employer plan.

For more information about these cases and their impact, contact Laura A. Candris at lac@muslaw.com or 412-456-2891.

Workplace Identity Theft: What Employers Need to Know

2007-12-31T07:42:00.001-08:00

By: Quinn A. Johnson, Esquire qaj@muslaw.com
Douglas M. Hottle, Esquire dmh@muslaw.com

As is evident from recent newspaper headlines, identity theft has become a more common occurrence in the American workplace as thieves have begun to target the treasure trove of information that employers retain in the personnel files of their employees, i.e. social security numbers, names, addresses and bank account numbers. The victims of these workplace identity thefts are seeking restitution and other damages from the companies from which the information was stolen. Employers should be aware of the issues surrounding workplace identity theft, including the methods by which such theft can occur, laws regarding the protection of personal information and what employers can do to both prevent identity theft and mitigate potential liability.

In general, identity theft is defined as the misappropriation and fraudulent use of a person’s personal information. Unfortunately for employers, this kind of information is, of course, exactly the type of information contained in a company’s personnel files. Indeed, many workplace identity thefts occur through the simple photocopying of personnel files or through the downloading of confidential information from a computer. In Bodah v. Lakeville Motor Express, Inc., for example, an employer was sued for faxing a list of employees’ names and social security numbers to different managers within the company.

In light of the possibility of liability, employers should take steps to protect personal employee information and are required to do so under state and federal statutes. In Pennsylvania, recent legislation signed by Governor Rendell on June 29, 2006 prohibits employers, with certain exceptions, from publicly posting social security numbers, printing a social security number on any card, requiring an individual to transmit a social security number over the internet, (unless the transmission is encrypted), requiring an individual to use a social security number to access a website (unless a password or other unique personal identification number is also required), and from printing a social security number on any materials that are mailed to an individual, except where required by federal or state law (such as a W-2 form).

Employers should also be aware of an amendment to the Fair and Accurate Credit and Transactions Act (FACTA), which requires an employer to take reasonable measures to dispose of an employee’s credit report obtained as part of the hiring process. Under the statute, reasonable measures may include implementing policies and procedures that require the destruction of documents containing consumer information, including the destruction of electronic information.

Employers should review their policies and procedures to ensure compliance with the above statutes and to otherwise establish policies prohibiting the distribution of personnel files, limiting access to confidential information and providing for the prompt and proper disposal of confidential information. Although these policies and procedures cannot prevent any and all lawsuits or protect against all identity theft, they are a valuable aid in averting identity theft and limiting an employer’s liability if an identity theft occurs.

For more information on identity theft prevention, contact Quinn A. Johnson at qaj@muslaw.com or 412-456-2524 or Douglas M. Hottle at dmh@muslaw.com or 412-456-2809.

OWBPA Compliance Necessary For Valid Release of Claims

2007-12-31T07:18:00.001-08:00

By: Joseph A. Vater, Jr., Esquire jav@muslaw.com

In terminating an employee or a group of employees, employers will often provide a severance or separation package in exchange for a release of claims against the employer. A recent case decided by the United States Court of Appeals for the Tenth Circuit reinforces the importance of complying with the Older Workers Benefit Protection Act (“OWBPA”) in such situations. In Ted Kruchow Ski v. Weyerhaeuser Co., the Tenth Circuit reviewed the validity of a release signed by a group of former employees of the Weyerhaeuser Company and determined that the release of the Age Discrimination in Employment Act claims was invalid because the release failed to comply with a certain requirement of the OWBPA.

The failure to comply involved an inaccurate description of the decisional unit. A decisional unit is defined by the rules interpreting OWBPA as “the portion of the employer’s organizational structure from which the employer chose the persons who would be offered consideration for the signing of a waiver and those who would not be offered consideration for the signing of the waiver.”

The group termination in the Weyerhaeuser case defined the decisional unit as all salaried employees at a facility. Weyerhaeuser later responded to interrogatories by indicating the decisional unit was salaried employees reporting to the facility manager. Fifteen employees at that facility who worked in human resources, information technology and accounting did not report to the facility manager. As a result, approximately ten percent of the employees at the facility were not a part of the actual decisional unit.

The Court recognized that the parties did not dispute that the release was written in a manner to be understood by all affected employees, that it specifically mentioned the Age Discrimination in Employment Act and that the employees waived their rights in exchange for consideration in addition to anything of value to which they were already entitled. Nonetheless, the Court held that the absence of even one of the OWBPA’s requirements invalidated the releases. Because Weyerhaeuser failed to show that the strict statutory requirements were met, the Court determined that the releases executed by the employees were invalid and unenforceable with respect to any age discrimination claim. As a result, the former employees who received benefits as a result of signing the releases were able to continue their lawsuit against the defendant on grounds of age discrimination.

Any employer considering obtaining a release from an individual terminated employee, or obtaining releases from a group of employees involved in a lay off, must ensure that its documents comply fully with OWBPA if the employer wishes to have an enforceable release against age discrimination claims.

For more information regarding the requirements of the Older Workers Benefit Protection Act, contact Joseph A. Vater, Jr. at jav@muslaw.com or 412-456-2827.

Recent U.S. Supreme Court And Third Circuit Decisions Expand Employees Rights To Assert Retaliation Claims

2007-12-31T07:18:00.000-08:00

By: Elaina Smiley, Esquire es@muslaw.com

Employers must exercise caution in their interactions with employees who have complained about discriminatory or harassing conduct. Employers may now be liable for actions that are not directly related to employment, for actions that are committed outside of the workplace, for actions that may dissuade an employee from filing a charge, and for those actions committed by other employees.

On June 22, 2006, the U.S. Supreme Court issued a decision upholding an expanded interpretation of what constitutes a retaliation claim. Burlington Northern & Santa Fe Railway Co. v. White involved a claim filed by the only female employee working in the maintenance department with her primary duty to operate the forklift. White complained that her immediate supervisor had engaged in sexually harassing conduct. The supervisor was suspended for 10 days and ordered to attend sexual harassment training. On the same day White was told about the supervisor’s discipline, she was removed from forklift duty and assigned to perform track laborer tasks which were far dirtier and tougher than the forklift position. White filed a charge, claiming that the reassignment of duties was unlawful gender discrimination and retaliation for complaining about her supervisor. Subsequently, White was suspended without pay for allegedly being insubordinate. During an internal grievance process, it was determined that White was not insubordinate and she was reinstated to her position and awarded back-pay for the 37 days she was suspended.

Title VII’s anti-retaliation provision forbids employer actions that discriminate against an employee because she/he has opposed a practice that Title VII forbids. Prior to the Supreme Court’s decision, the federal courts were split on whether the action had to be related to employment and how harmful the action must be to constitute retaliation. The Supreme Court found that an employer can retaliate against an employee “by taking actions not directly related to his employment or by causing him harm outside the workplace.” This means that actions taken outside of employment may be sufficient to support a retaliation claim. The Court also held that the plaintiff must show that the action “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” An employee must show the action was “materially adverse” and not merely trivial harms such as minor annoyances, petty slights, or lack of good manners.

The Supreme Court found that there was sufficient evidentiary basis to support the jury’s verdict on White’s retaliation claim. The Court stated that the jury was not required to find that the actions were related to the terms or conditions of employment. The Court rejected Burlington’s argument that White’s former and present duties both fell within the same job description and therefore, no retaliation occurred. The Court noted that a good way for employer’s to dissuade employees, such as White, from bringing discrimination charges was to insist that she spend more time performing more arduous duties and less time performing those duties that are easier or preferred. The Court also rejected Burlington’s argument that because she was paid back-pay for her 37 day suspension that she did not have a retaliation claim. The Court noted that White had to live for 37 days without income which constituted a serious hardship.

A recent Third Circuit decision finding that a retaliation claim could be predicated upon a hostile work environment may also expand an employer’s liability for workplace harassment. In Jensen v. Potter, Jensen’s supervisor made unwanted sexual propositions, calling her at work, telling her to come to his house because he wanted to “make love to her all day long.” Jensen reported the incident to her manager. After an investigation, the supervisor was fired. Some of the employees were upset that Jensen caused the supervisor to be fired and began to harass her. One employee made insulting remarks to her and came up behind her and clapped two objects together. Another employee threatened Jenson by driving U-Carts towards her at a rapid pace. Furthermore, her car was vandalized on two occasions in her workplace parking lot. Jensen repeatedly complained about the conduct. This conduct continued for approximately 19 months.

Based on these events, Jensen brought claims for sex discrimination and retaliation. The District Court granted summary judgment on both claims. The Third Circuit reversed, finding that a retaliation claim predicated upon a hostile work environment is cognizable under Title VII. The Court found that if retaliatory harassment is severe or pervasive it could constitute an adverse employment action under Title VII. The court found that the employee’s comments were directly connected to Jensen’s report against her former supervisor and therefore were in retaliation for her making a complaint of sexual harassment. The Court also addressed whether the employer should be liable for the co-worker harassment. In order to establish employer negligence, the plaintiff must show that management knew or should have known about the harassment, but failed to take prompt and remedial action. Because Jensen continually reported the harassment and it took the employer 19 months to address her complaints, the court found that the employer could be liable.

These decisions expand employer liability for actions that are not directly related to employment, for actions that are committed outside of the workplace and for employees’ harassing conduct. Based on the expanded view of retaliation claims, employers must exercise caution when taking any action against an employee who has lodged a complaint. Employers should update their handbooks and policies to ensure that their policies prohibit retaliatory harassment and should educate employees about their duty not to engage in any form of unlawful harassment. Finally, employers should promptly investigate reports of retaliatory (or other illegal) harassment and take prompt and effective action to remedy any such harassment.

For more information about these cases or defending retaliation claims, contact Elaina Smiley at es@muslaw.com or 412-456-2821.