2010-2011 Legal Developments in Labor and Employment Law

Jeffrey S. Stewart, EsqTallman Hudders & Sorrentino1611 Pond Road, Suite 300Allentown, PA 18104610-391-1800jstewart@thslaw.com

EEOCEEOC Increased complaints Increased complaints

Retaliation– Rose 36.3 Retaliation– Rose 36.3 percentpercent

• 36,258 filed36,258 filed Up from 33,613Up from 33,613

Race—35,890Race—35,890• Up from 33,579Up from 33,579

Sex discrimination—29,029Sex discrimination—29,029• Up from 28,028Up from 28,028

Overall complaints– from Overall complaints– from 93,277 in 2009 to 99,922 in 93,277 in 2009 to 99,922 in 2010 2010

EEOCEEOC EEOC— Growing “more EEOC— Growing “more

assertive”assertive” Class action lawsuit against Class action lawsuit against

AT&TAT&T Increased its staffing to more Increased its staffing to more

than 2,500 employeesthan 2,500 employees Attacking case backlogAttacking case backlog

Will devote resources to Will devote resources to volume of discrimination volume of discrimination Charges, investigating and Charges, investigating and litigating systemic cases, litigating systemic cases, issuing final regulations issuing final regulations under the ADAAA and under the ADAAA and ADEAADEA

EEOC recovered record $404 EEOC recovered record $404 million in monetary relief for million in monetary relief for private sector discrimination in private sector discrimination in FY 2010FY 2010

RetaliationRetaliation

Pop quiz hot shot…there’s an employee in Pop quiz hot shot…there’s an employee in your office that filed a charge of your office that filed a charge of discrimination for sexual harassment. Her discrimination for sexual harassment. Her fiancé also works in your office. You fire fiancé also works in your office. You fire the fiancé for performance related the fiancé for performance related issues…he then claims retaliation…what issues…he then claims retaliation…what do you do…what do you do? do you do…what do you do?

RetaliationRetaliation

What constitutes “retaliation”What constitutes “retaliation” Who is “protected”Who is “protected”

Thompson v. North American Thompson v. North American Stainless, LPStainless, LP

Fiancé falls within the “zone of Fiancé falls within the “zone of interest” protected by Title VIIinterest” protected by Title VII

Court however stated that it Court however stated that it “decline[d] to identify a fixed “decline[d] to identify a fixed class of relationships for which class of relationships for which third-party reprisals are third-party reprisals are unlawful. We expect that firing unlawful. We expect that firing a close family member will a close family member will almost always meet the almost always meet the BurlingtonBurlington standard, and standard, and inflicting a milder reprisal on a inflicting a milder reprisal on a mere acquaintance will almost mere acquaintance will almost never do so, but beyond that never do so, but beyond that we are reluctant to generalize”we are reluctant to generalize”

Result? More lawsuits! Result? More lawsuits!

FMLA RetaliationFMLA Retaliation

Brief lesson on Family Medical Leave ActBrief lesson on Family Medical Leave Act Who is covered?Who is covered? What are covered employees entitled to?What are covered employees entitled to? What is protected?What is protected?

Ayanna v. DechertAyanna v. Dechert Male employee used FMLA leave to care for his Male employee used FMLA leave to care for his

children and mentally ill wifechildren and mentally ill wife Terminated after taking leaveTerminated after taking leave Claimed terminated because of “macho culture” of law Claimed terminated because of “macho culture” of law

firmfirm Why is this significant? Why is this significant?

DiscriminationDiscrimination

Gender stereotypesGender stereotypes Lewis v. Heartland Inns of America, LLCLewis v. Heartland Inns of America, LLC Employee allegedly terminated for Employee allegedly terminated for

“tomboyish” looks“tomboyish” looks Can an employer prefer a “midwestern girl Can an employer prefer a “midwestern girl

look” for its employees?look” for its employees? According to the 8According to the 8thth Circuit…NO Circuit…NO Grooming and appearance standards are Grooming and appearance standards are

OK…must be comparable for both males and OK…must be comparable for both males and femalesfemales

Burlington v. News Corp.Burlington v. News Corp. Anchor Tom Burlington, a white male, used a Anchor Tom Burlington, a white male, used a

derogatory term for African-Americans during a derogatory term for African-Americans during a pre-show meetingpre-show meeting

Burlington contract was not renewedBurlington contract was not renewed Burlington sued for race discriminationBurlington sued for race discrimination Basis: Other employees used the same word Basis: Other employees used the same word

and were not disciplined and were not disciplined Station argued that “social norm” determined Station argued that “social norm” determined

who could use the wordwho could use the word Court: “Social norm” argument not validCourt: “Social norm” argument not valid Also discussed the “cat’s paw”Also discussed the “cat’s paw”

Cat’s PawCat’s Paw

What is the “cat’s paw”What is the “cat’s paw” 33rdrd Circuit opinion? Circuit opinion? Staub v. Proctor Staub v. Proctor

Hospital– Pending before Hospital– Pending before the Supreme Courtthe Supreme Court 77thth Circuit: supervisor Circuit: supervisor

has “singular influence” has “singular influence” over decision maker over decision maker AND “uses” that AND “uses” that influence to cause the influence to cause the adverse action.” adverse action.”

HarassmentHarassment

What laws are What laws are applicable?applicable?

What constitutes a What constitutes a “hostile work “hostile work environment”environment”

Reeves v. C.H. Robinson Reeves v. C.H. Robinson Worldwide, Inc.Worldwide, Inc. Sex-based profanity, Sex-based profanity,

even if directed at even if directed at others, can create others, can create hostile workplacehostile workplace

A Hit to the Harassment DefenseA Hit to the Harassment Defense Critical question in harassment: did the employer know or Critical question in harassment: did the employer know or

reasonably should have known of harassmentreasonably should have known of harassment Did the employer have a “reasonable avenue for complaint”Did the employer have a “reasonable avenue for complaint” Take prompt remedial actionTake prompt remedial action Rorrer v. Cleveland Steel Corp.Rorrer v. Cleveland Steel Corp. (E.D. Pa. April 28, 2010) (E.D. Pa. April 28, 2010)

• What happened?What happened?• Complaint made to “employee with apparent managerial authority”Complaint made to “employee with apparent managerial authority”

Company: failed to “avail herself to the reasonable complaint Company: failed to “avail herself to the reasonable complaint procedure.”procedure.”

Court: Policy was not clear—issue of fact if the individuals had Court: Policy was not clear—issue of fact if the individuals had managerial authority ALSOmanagerial authority ALSO

• Company did not provide education or training on sexual Company did not provide education or training on sexual harassment to employeesharassment to employees

Lesson: CLEAR POLICY AND TRAINING NECESSARY!!!Lesson: CLEAR POLICY AND TRAINING NECESSARY!!!

Employee Rights Poster Required by Federal Employee Rights Poster Required by Federal ContractorsContractors

Mandated as of June 20 a Mandated as of June 20 a poster advising employee's poster advising employee's right to join or not join a union right to join or not join a union and describing union and and describing union and employer misconductemployer misconduct

Federal contractors and Federal contractors and subcontractors: post this subcontractors: post this employee rights notice in their employee rights notice in their workplaces workplaces

Under DOL's final rule, Under DOL's final rule, employees may file complaints employees may file complaints with the Labor Department with the Labor Department about contractors that do not about contractors that do not post the notice, and post the notice, and contractors who violate the contractors who violate the regulation could have their regulation could have their federal contracts suspended federal contracts suspended or canceledor canceled

DOL FY 2011-2016 Strategic DOL FY 2011-2016 Strategic PlanPlan

Wage and Hour Division Wage and Hour Division and Department of and Department of Treasury joint initiative Treasury joint initiative regarding regarding misclassification of misclassification of employees as employees as independent contractors independent contractors is Strategic Goal No. 1is Strategic Goal No. 1

What are they doing?What are they doing? InspectorsInspectors Lawyers Lawyers

Construction Workplace Construction Workplace Misclassification ActMisclassification Act

Signed into law October 13, Signed into law October 13, 20102010

Effective February 10, 2011Effective February 10, 2011 Need:Need:

Written contractWritten contract Free from control and Free from control and

directiondirection Customarily engaged in an Customarily engaged in an

independently established independently established trade, occupation, trade, occupation, profession or businessprofession or business

Health Care Reform:Health Care Reform:Patient Protection & Affordable Care Act (Patient Protection & Affordable Care Act (as as

amended by Reconciliation Actamended by Reconciliation Act))

On March 23, 2010, President Obama signed the Patient On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law ("PPACA")Protection and Affordable Care Act into law ("PPACA")

Shortly thereafter, on March 30, 2010, a modified version Shortly thereafter, on March 30, 2010, a modified version of the House's Reconciliation Bill was signed into law, of the House's Reconciliation Bill was signed into law, making changes to the broader heath care reform law making changes to the broader heath care reform law enacted on March 23enacted on March 23

Nursing Mother’s Amendment to Nursing Mother’s Amendment to the Fair Labor Standards Actthe Fair Labor Standards Act

Section 4207 of the Section 4207 of the Patient Protection and Patient Protection and Affordable Care Act of Affordable Care Act of 20102010

Employers must provide Employers must provide a “reasonable break time”a “reasonable break time”

Employer must provide a Employer must provide a place “shielded from view place “shielded from view and free from intrusion and free from intrusion from coworkers and the from coworkers and the public”public”

Breast Feeding RegulationsBreast Feeding Regulations

The DOL on December The DOL on December 21, 2010, announced that 21, 2010, announced that it is seeking comments on it is seeking comments on provisions of the Fair provisions of the Fair Labor Standards Act Labor Standards Act (FLSA) that require (FLSA) that require employers to provide employers to provide nursing mothers with nursing mothers with reasonable break time reasonable break time and a private space for and a private space for expressing breast milk expressing breast milk while at workwhile at work

Nursing Mothers Entitled Reasonable Breaks - Nursing Mothers Entitled Reasonable Breaks - Fact Sheet #73Fact Sheet #73

Fact sheet issued by DOL - Wage and Hour Division Fact sheet issued by DOL - Wage and Hour Division explains employers' obligations under the PPACAexplains employers' obligations under the PPACA

Employers must provide reasonable unpaid break time Employers must provide reasonable unpaid break time and a private place for breast-feeding employees, titled and a private place for breast-feeding employees, titled "Break Time for Nursing Mothers under the FLSA""Break Time for Nursing Mothers under the FLSA"

Applies only to non-exempt employeesApplies only to non-exempt employees Federal law does Federal law does notnot require employers to require employers to

compensate nursing mothers for the breaks while compensate nursing mothers for the breaks while nursingnursing

Employer with less than 50 employees at all work Employer with less than 50 employees at all work sites exempt if undue hardshipsites exempt if undue hardship

Payment of Interns! Payment of Interns!

QuizQuiz

Question 1:Question 1: If a student receives college credit for the If a student receives college credit for the

internship he/she does not need to be paid.internship he/she does not need to be paid. TRUE OR FALSE? TRUE OR FALSE?

Paid Or UnpaidPaid Or Unpaid

Determine the “relationship”Determine the “relationship” Fair Labor Standards ActFair Labor Standards Act

Sets for the standards for payment of Sets for the standards for payment of “employees” “employees”

State law requirementsState law requirements

Fair Labor Standard ActFair Labor Standard Act

Who is covered?Who is covered? Two employees; Two employees; Directly engaged in interstate commerce or in the Directly engaged in interstate commerce or in the

production of goods for commerce and gross annual production of goods for commerce and gross annual revenues of at least $500,000revenues of at least $500,000

““Suffer or permit to work”Suffer or permit to work”

What is an “employee”What is an “employee”

What’s the Big Deal?What’s the Big Deal?

““Greed is good” Greed is good”

Test for InternsTest for Interns

Six-Part Test for Payment of Interns Six-Part Test for Payment of Interns (generally in the for-profit area):(generally in the for-profit area): Internship, even though it includes actual Internship, even though it includes actual

operation of the facilities of the employer, is operation of the facilities of the employer, is similar to training which would be given in the similar to training which would be given in the educational environment;educational environment;

Internship experience is for the benefit of the Internship experience is for the benefit of the intern;intern;

Intern does not displace regular employees;Intern does not displace regular employees;

Test for InternsTest for Interns

Six-Part Test for Payment of Interns:Six-Part Test for Payment of Interns: Employer that provides the training derives no Employer that provides the training derives no

immediate advantage from the activities of the immediate advantage from the activities of the intern, and on occasion its operations may be intern, and on occasion its operations may be impeded; impeded;

The intern is not necessarily entitled to a job The intern is not necessarily entitled to a job at the conclusion of the internship; andat the conclusion of the internship; and

The employer and the intern understand that The employer and the intern understand that the intern is not entitled to wages. the intern is not entitled to wages.

Key FactorsKey Factors

““Similar to education environment”Similar to education environment” Structured around educational experienceStructured around educational experience Multiple employer settingsMultiple employer settings No “routine” workNo “routine” work

““Displace regular employees”Displace regular employees” Not substitute employeesNot substitute employees ShadowingShadowing SupervisionSupervision

““Job entitlement”Job entitlement” Set time period for internshipSet time period for internship Not a “trial period” Not a “trial period”

FLSA LiabilityFLSA Liability

Civil action by DOL for back pay and damagesCivil action by DOL for back pay and damages InjunctionInjunction Criminal actionCriminal action Civil actions by employeesCivil actions by employees If no violation found, “right to sue” letter under If no violation found, “right to sue” letter under

216(b) of FLSA216(b) of FLSA

Privacy ConcernsPrivacy Concerns

Who is this…?Who is this…?

Privacy ConcernsPrivacy Concerns City of Ontario v. QuonCity of Ontario v. Quon

Police department reviewed Police department reviewed text messages sent to and from text messages sent to and from a city-issued pagera city-issued pager

Many were sexually explicit Many were sexually explicit and officer disciplined and officer disciplined

Officer did not have right to Officer did not have right to privacy privacy

• Legitimate interest in ensuring Legitimate interest in ensuring that city was not paying for that city was not paying for excessive personal excessive personal communications and search communications and search was reasonable in scope…was reasonable in scope…AND…AND…

• City had a policy in placeCity had a policy in place COMPARE TO…COMPARE TO…

Stengart v. Loving Care AgencyStengart v. Loving Care Agency, , 201 N.J. 300 (2010) 201 N.J. 300 (2010)

Stengart made a hostile Stengart made a hostile

work environment claimwork environment claim Used company-issued Used company-issued

laptop to communicate laptop to communicate with her employment with her employment lawyerlawyer

E-mails stored and E-mails stored and accessible on accessible on company’s servercompany’s server

Loving Care retrieved Loving Care retrieved e-mails and used in e-mails and used in litigationlitigation

The Issue: The Issue:

The extent to which an The extent to which an employee can expect employee can expect privacy and privacy and confidentiality in confidentiality in personal e-mails with personal e-mails with her attorney which she her attorney which she accessed through her accessed through her personal, password personal, password protected e-mail protected e-mail account on a company-account on a company-issued laptop.issued laptop.

The AnswerThe Answer Stengart had a reasonable Stengart had a reasonable

expectation of privacy in the expectation of privacy in the e-mails exchanged with her e-mails exchanged with her lawyer through her personal lawyer through her personal e-mail accounte-mail account

Sending and receiving them Sending and receiving them via a company-issued via a company-issued laptop did not eliminate the laptop did not eliminate the attorney-client privilege that attorney-client privilege that protected themprotected them

Lawyers for Loving Care Lawyers for Loving Care violated the Rules of violated the Rules of Professional Conduct by Professional Conduct by failing to notify Stengart failing to notify Stengart promptly of the privileged promptly of the privileged documentsdocuments

PointersPointersYour company policy should:Your company policy should:

Be tailoredBe tailored

Address legitimate business Address legitimate business needsneeds

Be clear and unambiguousBe clear and unambiguous

Address use of personal Address use of personal websiteswebsites

Warn employees if e-mails on Warn employees if e-mails on personal accounts are saved on personal accounts are saved on company servercompany server

Restrictive CovenantsRestrictive Covenants Brief lesson:Brief lesson:

ValidValid• Limited scopeLimited scope• Business reasonBusiness reason

Issue: to terminate or not to terminate…Issue: to terminate or not to terminate…that is the question…that is the question…

Insulation Corp. of America v. BrobstonInsulation Corp. of America v. Brobston Employee discharged for poor performance Employee discharged for poor performance

cannot reasonably be perceived to pose the cannot reasonably be perceived to pose the same competitive threat to employer’s same competitive threat to employer’s business interests as one whose performance business interests as one whose performance is not questioned and who voluntarily resignsis not questioned and who voluntarily resigns

Non-compete therefore not enforceableNon-compete therefore not enforceable

All-Pak, Inc. v. JohnstonAll-Pak, Inc. v. Johnston Appeared to extend Appeared to extend BrobstonBrobston to all forms of to all forms of

terminationsterminations

Missett v. Hub International Missett v. Hub International Pennsylvania LLCPennsylvania LLC

Superior Court—September 23, 2010Superior Court—September 23, 2010 Rejected narrow reading in Rejected narrow reading in All-PakAll-Pak and and

BrobstonBrobston Must look at several factors to determine Must look at several factors to determine

enforceability of non-competeenforceability of non-compete Position held by employee and access to Position held by employee and access to

confidential and proprietary informationconfidential and proprietary information Reasonableness of duration and geographic Reasonableness of duration and geographic

scopescope Consideration providedConsideration provided Adverse effects on the company if the Adverse effects on the company if the

agreement were not enforced and effects on agreement were not enforced and effects on employee’s ability to earn a living it if wereemployee’s ability to earn a living it if were

Whether restrictive covenants are standard and Whether restrictive covenants are standard and customary in the industrycustomary in the industry

““Circumstances of termination are but one of Circumstances of termination are but one of many factors to be considered by the court”many factors to be considered by the court”

Issue is “case by case”Issue is “case by case”

UnemploymentUnemployment

Temporary Extension Temporary Extension of Unemployment of Unemployment Insurance and Insurance and Related Matters - Related Matters - Postponed the Postponed the termination of the termination of the program until June 9, program until June 9, 2012. 2012.

Next Issue….Next Issue….

HEEEEERRREE’S JOHNNY….HEEEEERRREE’S JOHNNY….

ADA Amendments Act (ADAAA)ADA Amendments Act (ADAAA) On September 23, 2009, the On September 23, 2009, the

EEOC published its proposed EEOC published its proposed regulations implementing and regulations implementing and interpreting the ADAAA:interpreting the ADAAA:

Public comment period expired Public comment period expired on November 23, 2009on November 23, 2009

EEOC approved a final set of EEOC approved a final set of regulations for ADAAA at the end regulations for ADAAA at the end of December 2010of December 2010

ADAAA final regulations were ADAAA final regulations were released to the Office of released to the Office of Management and Budget (OMB) Management and Budget (OMB) and other federal agencies for and other federal agencies for review and commentreview and comment

Once OMB approves the Once OMB approves the regulations, they will be published regulations, they will be published in the in the Federal RegisterFederal Register

ADA Amendments Act (ADAAA)ADA Amendments Act (ADAAA) Believed that regulations Believed that regulations

would require:would require: Impact on mentally ill Impact on mentally ill

individualsindividuals• Easier to prove disabledEasier to prove disabled

Employers to revise Employers to revise policies, train or re-train HR policies, train or re-train HR personnel and supervisors personnel and supervisors in dealing with disability in dealing with disability issue, and focus on issue, and focus on reasonable reasonable accommodation issues and accommodation issues and the interactive process the interactive process between the employer and between the employer and the disabled employeethe disabled employee

GINA Title II RegulationsGINA Title II Regulations EEOC issued final regulations on EEOC issued final regulations on

November 9, to implement Title II November 9, to implement Title II of the Genetic Information of the Genetic Information Nondiscrimination Act (GINA)Nondiscrimination Act (GINA)

These final regulations became These final regulations became effective on effective on January 10, 2011!January 10, 2011!

The regulations include model The regulations include model safe harbor language safe harbor language

Regulations do not restrict an Regulations do not restrict an employer from receiving genetic employer from receiving genetic information inadvertently after it information inadvertently after it requests health-related requests health-related information if the employer warns information if the employer warns employees not to provide genetic employees not to provide genetic informationinformation

Retaliation issueRetaliation issue

Tax Relief, Unemployment Insurance Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010Reauthorization and Job Creation Act of 2010

The Tax Relief, The Tax Relief, Unemployment Insurance Unemployment Insurance Reauthorization and Job Reauthorization and Job Creation Act of 2010, Creation Act of 2010, enacted December 17, enacted December 17, 2010, included many 2010, included many extensions to tax credits extensions to tax credits and exclusions that affect and exclusions that affect employers and employees.employers and employees.

Included a two-year Included a two-year extension of a tax break for extension of a tax break for employer-provided tuition employer-provided tuition assistanceassistance

FMLA InterpretationFMLA Interpretation

June 2010: DOL of Labor issued a new June 2010: DOL of Labor issued a new InterpretationInterpretation

Clarified FMLA regulation regarding the Clarified FMLA regulation regarding the definition of "son or daughter" under Section definition of "son or daughter" under Section 101(12) of FMLA as it applies to an employee 101(12) of FMLA as it applies to an employee standing "in loco parentis" to a childstanding "in loco parentis" to a child

NOW: Either day-to-day care ORNOW: Either day-to-day care OR• Financial support may establish an in loco Financial support may establish an in loco

parentis relationship where the employee parentis relationship where the employee intends to assume the responsibilities of a intends to assume the responsibilities of a parent with regard to a childparent with regard to a child

"Neither the statute nor the regulation "Neither the statute nor the regulation restrict the number of parents a child restrict the number of parents a child may have under the FMLA"may have under the FMLA"

Electronic I-9 FormsElectronic I-9 Forms On July 22 final rule On July 22 final rule

published by Homeland published by Homeland Security which amended I-9 Security which amended I-9 regulationsregulations

Took effect August 21stTook effect August 21st Regulations clarify:Regulations clarify:

I-9 Form must be completed I-9 Form must be completed within 3 within 3 businessbusiness days of days of the date hiredthe date hired

The use of paper, electronic The use of paper, electronic systems or a combination of systems or a combination of paper and electronic systems paper and electronic systems is acceptableis acceptable

Employers may but are not Employers may but are not required to copy verification required to copy verification documentsdocuments