2019 CORPORATE LABOR AND EMPLOYMENT COUNSEL EXCLUSIVE

OGLETREE, DEAKINS, NASH, SMOAK & STEWART, P.C. 33-1

POP QUIZ

CORPORATE LABOR AND EMPLOYMENT

LAW EXCLUSIVE STYLE

Joseph L. Beachboard (Moderator) – Ogletree Deakins (Torrance)

Rodolfo R. (Fito) Agraz (Dallas/Raleigh) • Melissa A. Bailey (Washington, D.C.)

Dr. Ulrike Conradi (Berlin) • M. Kimberly Hodges (Memphis/Jackson)

Christopher E. Moore (New Orleans/Houston)

Jimmy F. Robinson, Jr. (Richmond) • Charles L. Thompson, IV (San Francisco)

Vince M. Verde (Orange County)

Employment Law

I Hate My Boss: Sixth Circuit Shuts DownADA Request for Less Stressful Boss

April 11, 2019

T he Sixth Circuit Court of Appeals recently reminded employers that, even

under the more liberal standard for establishing a disabili� under the

Americans with Disabilities Act Amendments Act of ���� (ADAAA), an employee

who claims he or she cannot perform the major life activi� of “working” has to do

more than prove a substantial limitation in working in a single specific job. �e

employee must prove his or her impairment limits the abili� to perform “a class of

jobs or a broad range of jobs.”

Tinsley v. Caterpillar Financial Services, Corp. (� Cir. March ��, ����), was filed by a

worker who was diagnosed with post-traumatic stress disorder (PTSD). She claimed

she was impaired in performing her job as a business system analyst because of her

supervisor’s management s�le. She admi�ed she could remain in her position and

perform her job duties, but only if the company assigned her to another manager.

Background

Cindy Tinsley worked for Caterpillar for �� years. From the record, it appears she

didn’t run into any issues until ����, when she reported experiencing work-related

stress that was impacting her work, sleep, and overall health. Tinsley took leave

under the Family and Medical Leave Act (FMLA) and, when she returned, she met

with her team leader and her manager, who redistributed some of her work to

coworkers and took other measures to reduce Tinsley’s stress level. When Tinsley’s

work still did not improve, management gave her a “not meeting expectations”

performance review and put her on a performance improvement plan. During a

meeting with her manager, Tinsley complained about her coworkers bouncing stress

balls on their o�ce floors, which she called “horseplay.” She claimed that her

manager’s demeanor toward her changed a�er she complained about her coworkers’

activities.

Tinsley took another leave of absence a�er which her doctor approved her to return

to work without restrictions, but “strongly recommended her working in a di�erent

work environment and specifically under a di�erent manager.” Tinsley told human

resources personnel that she could continue to work in the same position as long as

she reported to a di�erent manager with whom she was more familiar. �e company

denied Tinsley’s request for another supervisor but granted her another leave of

absence, which eventually exceeded her FMLA leave allotment. Tinsley filed a

charge of discrimination with the Tennessee Human Rights Commission and

continued to request reassignment to another supervisor. Caterpillar responded that

it did not believe her request for transfer to another supervisor was a reasonable

accommodation and directed her to return to work. She retired and claimed

constructive discharge.

th

Ellen Toth

Cleveland

Author

Sixth Circuit’s Ruling

In a�rming summary judgment in favor of Caterpillar on Tinsley’s ADA claim, the

court relied on the plainti�’s representation that the only reason she could not

perform her job was her manager’s specific management s�le. Relying on case law

and the Equal Employment Opportuni� Commission’s interpretive guide, the court

ruled that a plainti� who argues that he or she is substantially limited in the major

life activi� of working but does not prove he or she was substantially limited in

performing “either a class of jobs or broad range of jobs in various classes” is not

eligible for ADA relief.

�e court reversed the district court’s order granting summary judgment to

Caterpillar on her retaliation claim, which was based on her negative performance

review and performance improvement plan and remanded. Because there was only a

two-month lapse in time between the performance evaluation/improvement plan

and her taking FMLA leave, the court remanded the case for Caterpillar to have an

opportuni� to articulate a legitimate, non-discriminatory reason for its adverse

employment actions against Tinsley.

Employment Law, Leaves of Absence

First Circuit Rules Inconsistent SSDIStatements Doom ADA Claim

August 27, 2019

I n Pena v. Honeywell International, Inc., issued on July ��, ����, the U.S. Court of

Appeals for the First Circuit denied a former employee’s petition for rehearing en

banc of the court’s April ��, ����, decision addressing whether her inconsistent

statements on her Social Securi� Disabili� Insurance (SSDI) benefits application and

complaint precluded her from bringing a claim pursuant to the Americans with

Disabilities Act (ADA). Specifically, in applying for SSDI benefits, Pena, the former

employee, had consistently asserted that she was totally disabled as of the last date

she worked at Honeywell. However, in her complaint against Honeywell, Pena alleged

that she was a qualified individual with a disabili� and thus able to perform the

essential functions of the job, with or without an accommodation. Because Pena

failed to explain these inconsistencies, the court held that her ADA claims against

Honeywell were precluded by the doctrine of judicial estoppel.

Background

Honeywell determined that all of its production and assembly-line employees should

be cross-trained in various departments. Pena, who regularly worked in the

respiratory department, was therea�er required to cross-train in the molding

department, among other areas of the facili�. Prior to and a�er Honeywell’s decision

to have employees cross-train, Pena took several medical leaves due to her depression

and anxie�. A�er the decision, she began working in the molding department for

several hours a week, and spent the remainder of her time working in the respiratory

department. Shortly therea�er, Pena complained that working in the molding

department was “harmful to [her] emotionally.” She also provided a doctor’s note

stating that Pena had reported that working in the molding room had exacerbated

her anxie�. Without more information, Honeywell was unable to substantiate Pena’s

complaint and informed her that if she refused to work in the molding department,

she would have to go home. On March �, ����, Pena le� work and never returned.

A�er she le� work, Pena clarified that the “noise, speed, and overall environment [of

the molding department] gives [her] anxie�, palpitations.” �e company therea�er

exchanged multiple correspondences with her a�orney and received several notes

from her doctor explaining, among other things, that the “noise levels, chemical

odors, and the presence of robotics” in the molding department made it particularly

stressful for Pena. On May ��, ����, Honeywell wrote to Pena’s a�orney again

stating that her doctor’s notes did not explain the connection between her medical

diagnosis and her abili� to work in the molding department, given that the items

identified by her doctor were also true of working conditions in other departments,

including the respiratory department where Pena regularly worked. �e le�er also

explained that the respiratory department would remain Pena’s primary department,

Katherine G. Rigby

Boston

Author

Alexandra R. Hassell

Boston

Author

but that all employees would be rotating among all areas of the facili�, not just the

molding department. Moreover, the rotations would be “as brief as �� minutes, or as

long as one week.” Pena’s a�orney did not respond to this le�er.

On June ��, ����, a�er Pena had been absent for more than three months and used

all of her medical leave, the company terminated her due to job abandonment.

Approximately two months later, she applied for SSDI benefits. On her application,

she claimed that she was totally disabled as of the last date that she worked at

Honeywell by stating, “I became unable to work because of my disabling condition

on March �, ����,” and “I am still disabled.”

�e Court’s Analysis

On April ��, ����, Pena filed a complaint in Rhode Island Superior Court (the civil

action was  subsequently removed to the U.S. District Court for the District of Rhode

Island) alleging that the company had violated the ADA and state law. �e district

court granted the company’s motion for summary judgment, holding that Pena’s

claims were precluded by judicial estoppel due to her inconsistent statements on her

SSDI application. �e doctrine of judicial estoppel prevents a par� from taking a

position in one proceeding that contradicts the position it took in an earlier

proceeding. Pena appealed the district court’s decision to the First Circuit, arguing

that being disabled under the ADA is distinguishable from being disabled for the

purpose of quali�ing for SSDI benefits, as the ADA considers reasonable

accommodations. On April ��, ����, the First Circuit a�rmed the district court’s

decision, noting that Pena had provided “no qualification of any sort to her

statement that she was totally disabled as of March �, ����.” (Pena v. Honeywell

International, Inc., ��� F.�d �� (�st Cir. ����)). Specifically, at her deposition, Pena had

failed to explain the discrepancies between her claims made in the ADA litigation

and in her SSDI application, and instead reinforced the discrepancies. Additionally,

Pena subsequently submi�ed a self-serving a�davit in an a�empt to minimize her

deposition testimony. �e court declined to consider the a�davit, as it was an

improper method of creating a genuine issue of a material fact.

Pena filed a petition for rehearing en banc with the First Circuit, which the court

denied for the aforementioned reasons.

Key Takeaways

�e court expressly stated that its order denying the petition for rehearing en banc

“does not foreclose di�erent successful SSDI beneficiaries from filing ADA claims,

provided they reconcile any di�erences in their positions …” (emphasis added). �e court’s

decision highlights the importance of obtaining all documents and evidence related

to a plainti�’s statements, correspondence, disabili� applications, etc., to determine if

the plainti� has made inconsistent assertions regarding his or her disabili�. At the

same time, employers are wise to engage in the interactive process with employees

who have applied for SSDI benefits regardless of statements made on their SSDI

applications, as they may be entitled to bring ADA claims if they can adequately

explain discrepancies during ensuing litigation.

California, State Developments

California Bill Would Expand Definition ofRace to Include Hairs�le

April 8, 2019

C alifornia Senate Bill (SB) ��� seeks to provide a broader definition of “race”

in California’s anti-discrimination law. �e bill defines “race” as “inclusive of

traits historically associated with race, including, but not limited to, hair texture and

protective hairs�les.” �e bill is expected to become law, and employers may want to

plan accordingly.

�e Equal Employment Opportuni� Commission (EEOC) has long held that the

meaning of “race” is not limited to skin color. Color discrimination is itself a

protected category, which can be defined as discrimination based on pigmentation,

complexion, or skin shade or tone. “Race” has a broader meaning and can include

physical characteristics associated with race (such as a person’s hair, facial features,

and height and weight), as well as cultural characteristics related to race (including a

person’s name, cultural dress and grooming practices, or accent or manner of

speech).

Recently, the New York Ci� Commission on Human Rights released new guidance

regarding the application of the New York Ci� Human Rights Law to situations

involving characteristics and cultural practices closely associated with race. �e

commission focused in particular on discrimination against hair texture and

hairs�les associated with being Black because of the frequency of such

discrimination. �e commission explained that “[r]ace discrimination based on hair

and hairs�les most closely associated with Black people has caused significant

physical and psychological harm to those who wish to maintain natural hair or

specific hairs�les but are forced to choose between their livelihood or education and

their cultural identi� and/or hair health.” California’s SB ��� further reflects this

development in civil rights law.

SB ��� makes a series of findings and declarations, including that discrimination

against “‘blackness,’ and the associated physical traits” is pervasive in socie� and has

“permeated societal understanding of professionalism.” �e bill states that this

“Eurocentric image of professionalism . . . disparately impact[s] Black individuals.”

Accordingly, the bill expressly includes protections of traits historically associated

with race, including protective hairs�les such as braids, locks, and twists.

Key Takeaways for Employers

California employers are likely to see this new standard become law, so they may

want to consider taking steps to ensure that their discrimination and harassment

prevention programs, as well as their grooming policies, comply with this new

standard. For example, companies could train management that the following

policies and practices would likely violate the standards set forth in SB ���:

Michael J. Nader

Sacramento

Author

Having a grooming policy that prohibits twists, locks, braids, cornrows, Afros,

Bantu knots, or fades—all of which are commonly associated with Black people

Having a grooming policy that requires employees to alter the state of their hair

to conform to the company’s appearance standards, including a policy that

requires employees to straighten or relax hair (which involves the use of

chemicals or heat)

Having a grooming policy that bans hair that extends a certain number of

inches from the scalp, thereby limiting Afros

Having a grooming policy that requires “professional hair” or “clean and tidy

hair” but is applied to mean that employees cannot wear Afros, locks, twists, or

braids

Forcing Black people to obtain management approval prior to changing

hairs�les but not imposing the same requirement on other people

Requiring only Black employees to alter or cut their hair or risk losing their jobs

Telling Black employees with locks that they cannot be in a customer facing

role unless they change their hairs�le

Refusing to hire a Black applicant with cornrows because his or her hairs�le

does not fit the image the company is trying to project to customers

Mandating that Black employees hide their hair or hairs�le with a hat or visor

Instead, employers may want to consider adopting the following policies and

practices:

Adopting a grooming policy based on rules that are valid, nondiscriminatory,

have no disparate impact, and are uniformly applied

For example, the policy may include a race-neutral rule requiring employees

to keep their hair neat and clean.

Similarly, a company could adopt a rule requiring all employees to secure

their hair for bona fide safe� or hygienic reasons.

Revising discrimination and harassment prevention policies to broadly define

race to include physical and cultural characteristics associated with race

Supplementing harassment prevention training programs with hypotheticals

that further illustrate the broad meaning of race-based harassment and

discrimination

�ese examples may include, as the EEOC has explained, unfair height and

weight standards that have an adverse impact on Asian Americans and

hairs�ling rules that have an adverse impact on Black women.

Emphasizing that a respectful workplace does not condone teasing or joking

about traits that have historically been associated with one’s race or ethnic

identi� in harassment prevention trainings

California, Class Action, State Developments, Wage and Hour

California Class Action Highlights How toManage an Overtime Policy

September 4, 2018

H ow can a company manage its overtime policy in compliance with California

law? A recent decision by a federal district court in California certified a

class action involving claims of unpaid overtime, and the court’s reasoning shows

what factors employers may want to consider—and to avoid—when designing an

overtime policy. In Shaw v. AMN Healthcare, Inc., a putative class of traveling nurses

(employed by a labor contractor, AMN Healthcare, Inc., that recruits and places

traveling nurses at healthcare facilities nationwide) claimed that they were not paid

for overtime when they worked at Kaiser hospitals in California. �e court certified

the class action, finding that the plainti�s met the commonali� and predominance

requirements as to their overtime claims. 

�e Court’s Analysis

�e judge emphasized that California law requires employers to compensate

employees for all time they are “su�ered or permi�ed to work, whether or not

required to do so.” As such, it is the du� of management to “make every e�ort” to

enforce a rule against uncompensated work, including “tak[ing] reasonable steps to

investigate” suspected work that is done without compensation. Employers cannot

“sit[] back” or “stand[] idly by” while employees do uncompensated work.   

In reviewing the facts, the judge found that common policies and communications

were sent to traveling nurses that conveyed to them that Kaiser has a “strict policy

against overtime.” Handbook policies at some facilities expressly stated that overtime

is not authorized. Other policies provided an approval process for overtime that the

plainti�s claimed was too burdensome because it required the preapproval and

signatures of two di�erent managers. Some plainti�s testified that they were

exhausted a�er a ��-hour shi� and that “it was o�en an ‘impossible task’ to track

down a manager or charge nurse to authorize overtime.” 

�e court also found that Kaiser requires all of its nurses (its own nurses as well as

the traveling nurses) to perform the same core duties and requires that they uphold

the same ethical and professional obligations with respect to patient care. However,

the court noted that Kaiser’s overtime policy for its own nurses permits them to

work up to two hours of overtime each week without supervisor approval, while

travel nurses must be preauthorized for any overtime. �e court cautioned that this

situation could evidence a “structural problem” of failing to pay overtime to traveling

nurses, giving employers of such nurses something to analyze and consider.

Key Takeaways

�ere are many steps a company may want to consider taking to manage overtime

within the requirements of California law, including the following:   

Michael J. Nader

Sacramento

Author

Instead of designing a policy that prohibits overtime, an employer may want to

consider dra�ing a policy that permits overtime based on the preauthorization

of a supervisor. 

Consider adopting a preauthorization requirement that is less burdensome than

requiring employees to obtain signed forms prior to working overtime, such as

requiring verbal authorization of overtime and then documentation the

following day by the supervisor. 

Employers may want to apply similar overtime policies to similar categories of

employees.

An employer can expressly require employees to record all hours worked,

including overtime that was not approved in advance as required by the policy. 

Employers may want to require employees to sign their time sheets to a�est

that they are accurate and complete and that they include all time worked,

including any overtime, whether or not it was preauthorized. 

Another su�estion is to require employees to a�est that they were provided

their du�-free meal breaks and that they took their breaks. Plainti�s o�en raise

overtime claims based on allegations that they were required to work through

their meal breaks, and thus when they clock out at the end of their regular �-

hour shi�, they claim to have worked �� minutes of overtime. Ensuring the

provision of du�-free meal breaks can prevent such overtime claims.    

Employers may want to noti� employees that the underreporting of time

worked and working o�-the-clock are violations of company policy and may

lead to the termination of employment.

An employer can encourage employees to carefully review their records of time

worked, earnings statements, pay stubs, direct deposit statements, and

paychecks to ensure that they are accurate and correct and to immediately

report any discrepancies to human resources (HR).

Consider reminding employees in writing that no manager or supervisor has

the authori� to require, encourage, su�est, or permit an employee to work o�-

the-clock or underreport their hours worked. Also, remind any employee

experiencing such situations to immediately report them to HR. 

An employer may want to require employees to immediately report to HR any

concerns about their schedules, time worked, records of overtime worked, or

their pay. 

Consider training supervisors that they are prohibited from (a) withholding

overtime pay for any reason, including as a means to enforce a preauthorization

policy; (b) encouraging or coercing employees to misrepresent or underreport

their time worked; or (c) encouraging or coercing employees to work o�-the-

clock.

An employer may want to regularly audit records of overtime paid and any

complaints about the preauthorization process or uncompensated overtime. 

Cross-Border, Employee Benefits and Executive Compensation

Tax Treatment of Employer-Provided FringeBenefits for International Assignees

August 3, 2018

T he Internal Revenue Service (IRS) recently clarified its position on two fringe

benefits provided to employees on global assignments: tax equalization

services and tax return preparation services. Memorandum Number ���������

from the IRS’s O�ce of Chief Counsel (OCC), released on March �, ����, concerned

a large American company employing thousands of employees globally.

�is taxpayer and the OCC agreed that tax equalization services were nontaxable

fringe benefits and that the tax preparation services received were taxable benefits.

However, there was disagreement over how to value tax preparation services, as the

returns are o�en complex and such services are not �pically paid for by individual

taxpayers but rather through sizeable agreements that reflect economies of scale. �e

IRS chief counsel’s memo provided guidance on how to ascertain the fair market

value of the services provided to employees by large multinational accounting firms.

A myriad of fringe benefits are o�ered to employees by employers during

international assignments. �ough some benefits are o�ered to enhance the

compensation of today’s global workforce, others are o�ered to ensure that

employees are not detrimentally impacted from a financial perspective due to their

assignments. Other benefits are o�ered to ensure that individual employees’

minimum legal requirements in the home and host locations are satisfied. Two such

fringe benefits are

tax equalization services, which seek to ensure that an employee’s tax burden

due to an assignment is “equal” to what it would have been absent the global

assignment; and

tax preparation services, which seek to ensure that an individual’s tax return

filing obligations are satisfied in both the home and host locations.

�e IRS chief counsel’s memo addressed the following issues:

�. Whether the value of tax equalization services is included in employee income

�. Whether the value of tax preparation services is included in employee income

�. Whether such taxable benefits are subject to income tax withholding

�. Whether such taxable benefits are subject to Federal Insurance Contributions Act

(FICA) tax withholding

�. How taxable benefits are valued

Michael K. Mahoney

Morristown

Author

It should be noted that the main focus of this article is on the United States tax

consequences of fringe benefits received as part of an employee’s global assignment

—particularly the treatment and valuation of tax preparation services. However,

employers should also be aware that there may be tax obligations in the non-United

States jurisdiction.

Tax Equalization and Tax Preparation Process

�e goal of a tax equalization process is to place a global assignee in the same

financial position from a tax perspective that he or she would have been in had the

global assignment not occurred. �at is to say, the assignee should be neither be�er

o� nor worse o� due to the global assignment. In order to ensure such pari�, a

series of calculations are required at di�erent times during the life cycle of a global

assignment.

�e first step requires the calculation of an approximate hypothetical tax at the

beginning of a global assignment based on the assignee’s home country tax

obligations. �is calculation approximates the anticipated taxes an assignee would

face in his or her home country absent the assignment. �is baseline calculation is

then used to reduce the agreed-upon remuneration of the assignee. �at is to say, the

take-home or net pay of the employee is adjusted to account for the taxes that he or

she would have paid if he or she worked exclusively from the home jurisdiction.

Meanwhile, on a per-pay-period basis for the duration of the assignment, the

employer pays actual taxes in home and host locations according to local laws and

regulations. �is results in additional income being imputed to the employee. To

ensure that the additional imputed income does not result in the employee facing

additional outlays for income taxes on his or her personal income tax return, such

amounts are subject to a gross-up, which results in the employer paying taxes on the

taxes paid on the employee’s behalf. If done correctly, the tax impact to the employee

is neutral, neither benefiting nor harming the employee’s finances.

At the end of the tax year, the hypothetical tax is recalculated based on actual

compensation data and personal income tax details. �e actual tax is then subtracted

from the approximate hypothetical tax that was calculated at the beginning of the

year. If the result is positive, the employer will pay the di�erence to the employee

because the net compensation paid over the course of the year was understated. If

the result is negative, the employee will pay the employer because the net pay was

overstated over the course of the year. �is se�lement payment results in the

employee being “equalized” from a tax perspective—that is, neither be�er o� nor

worse o� because of the global assignment. Rather, the net pay impact from taxes is

the same as if the employee had not been stationed away from home.

Separately, tax returns for assignees are prepared according to local requirements in

the home and host locations, accounting for local di�erences in compensation

definitions and the timing of recognition. �is service is beneficial to global

assignees, particularly in host locations where there may be language barriers and a

lack of connections to local tax return preparers. Tax return preparation services

o�en include services to address inquiries from taxing authorities relating to

positions taken on personal tax returns.

�ough the provision of tax equalization services and tax preparation services to

employees on international assignments is undeniably beneficial, the question

remains whether the value of such services is includable in employee income and

subject to wage withholding and reporting.

Working Condition Fringe Benefits

“Gross income” is broadly defined by the Internal Revenue Code (IRC) to include “all

income from whatever sources derived,” including fringe benefits. �us, absent a

statutory exclusion, any fringe benefit provided to an employee by an employer is

considered gross income.

One such statutory exclusion applies to “working condition” fringe benefits, defined

as “any proper� or services provided to an employee of [an] employer to the extent

that, if the employee paid for such proper� or services, [the] payment would be

allowable as a deduction under [Code] section ��� or ���.” In order to be excludable as

a working condition fringe benefit, the employer must derive a substantial business

benefit from the provision of the proper� or services that is distinct from the

benefit that it would derive from the mere payment of additional compensation.

Tax Preparation

�e IRS chief counsel’s memo found that the provision of tax preparation services

confers a direct and personal benefit on the employee, rather than a benefit to the

employer. �at is to say, an employer does not receive a su�cient benefit from

ensuring that an employee completes a tax return for the provision of such services

to be considered ordinary and necessary business expenses. �e IRS chief counsel’s

memo concluded that personal income tax preparation expenses are not excludable

as a working condition fringe benefit because they are not IRC Section ���

expenses.

Tax preparation costs still may be deductible under IRC Section ���, which applies to

expenses incurred for the determination, collection, or refund of any tax. However,

IRC Section ��� expenses are not eligible for exclusion from an employee’s income as

a working condition fringe benefit.

Tax Equalization

On the other hand, the IRS chief counsel’s memo stated that any additional benefit

provided to the assignees in connection with the tax equalization process was

primarily provided for the employer’s benefit and was therefore excludable from the

assignees’ incomes. Employers receive significant benefits from sending employees

on global assignments (such as gaining access to new markets, among other

advantages). Tax equalization is a tool used by employers to ensure that employees

are willing to take global assignments by removing concerns over adverse tax

consequences from an employee’s decision-making process.

�erefore, the IRS chief counsel’s memo concluded that tax equalization services

paid for by employers are excludable from employees’ income as working condition

fringe benefits.

Federal Income Tax Withholding

Every employer is generally required to deduct and withhold federal income tax

from wages. “Wages” are broadly defined to include all remuneration for services

performed by an employee for his or her employer, including cash and benefits paid

in any medium other than cash. However, wages do not include amounts that are

reasonably believed to be excluded as a working condition fringe benefit;

reasonably believed to be excluded as foreign earned income under IRC Section

���; or

paid for services performed outside of the United States and subject to

mandatory foreign income tax withholding.

�e result of these provisions is that amounts paid by an employer for tax return

preparation services for an assignee are subject to United States federal income tax

withholding.

IRC Section ��� provides for the exclusion of foreign earned income and housing

costs for qualified individuals, subject to an exclusion cap. For this provision, a

qualified individual is one with a tax home outside the United States who is either (�)

a United States citizen that is a resident of a di�erent country for a full year or (�) a

citizen or resident present in a di�erent country for at least ��� days in any ��-

month period. �e exclusion cap is pro-rated on a daily basis based on the earning

period for amounts received from sources within a foreign country, subject to an

annual limit. �e annual limit adjusts for cost-of-living factors, with the ���� limit

being $���,���.

Federal Insurance Contributions Act Withholding

Every employer paying wages is required to withhold and pay FICA taxes. �e IRC

broadly defines “wages” for FICA purposes to include all remuneration for

employment, including both cash and benefits paid in a medium other than cash.

However, one exception from the wages definition exists for benefits provided if

there is a reasonable belief that the employee will be able to exclude such benefits as

a working condition fringe benefit (among several other inapplicable exceptions).

�ough “employment” generally is defined to include all service performed by an

employee within the United States, the term also includes services performed by a

United States citizen outside the United States for an American employer, which is

essentially an enti� organized or residing in the United States.

�us, unless an amount is reasonably believed to be excludable as a working

condition fringe benefit, a United States citizen working outside of the United States

for an American employer will be subject to FICA withholding on nonexcludable

fringe benefits. �is includes costs associated with tax return preparation services

paid for by an employer.

An additional caveat worth mentioning relates to “totalization agreements” that the

United States has entered into with many countries for the purpose of avoiding

double taxation of income with respect to social taxes. Totalization agreements

provide that employees are subject to social taxes in the countries where the work is

performed. Under the “detached worker” exception, employees who work in a host

country for a temporary period are subject to social taxes only in their home

countries. A “temporary period” is �pically defined as one that is not expected to

exceed five years. In the event that an employee is sent to work in a di�erent country

for more than five years, the employee would be subject to the social taxes in the

host country.

Totalization agreements should be considered prior to the start of an assignment to

ensure the opportuni� to engineer and structure an assignment in an optimal

design.

Determining the Value of Tax Preparation Services

In determining how much income to impute to its assignee, the taxpayer in the IRS

chief counsel’s memo based its valuation of the tax return preparation services on a

survey conducted by the National Socie� of Accountants regarding average tax

preparation fees, and a U.S. Department of the Treasury notice that estimated the

average time burden and average cost of preparing a tax return.

However, the IRS disagreed with that valuation methodology and instead asked for

details regarding the actual fees paid to the employer’s service provider, a large

multinational accounting firm. �e position taken by the IRS in the chief counsel’s

memo is that the fair market value of the tax preparation services is the amount that

an individual would have to pay for such services in an arm’s length transaction.

�ough the employer’s cost is generally not determinative of the fair market value

because it may be lower than the amount an individual would have to pay for a

benefit due to bulk purchasing and economies of scale, in this instance the IRS did

focus on the actual fees paid by the employer. Based on this case’s facts and

circumstances—including the fact that individuals generally do not contract directly

with large multinational accounting firms—the IRS found that in this instance the

employer’s cost was the best indicator of the fair market value of the benefits

received.

Conclusion

On these two common fringe benefits—tax equalization services and tax preparation

services—the IRS chief counsel’s memo provides welcome guidance, albeit in a form

that may not be cited or used as precedent. With the increased prevalence of global

assignments, assignees’ heightened awareness of the plethora of available benefits,

and taxing authorities’ sophisticated means of identi�ing the tax obligations of

assignees, proactive and enhanced global tax compliance is recommended. As

employers contemplate how such global tax compliance will impact operational

budgets, consideration should be given to the tax treatment of fringe benefits

o�ered through global mobili� programs.

�is article was prepared for publication in the July ���� issue of BLR’s newsle�er, �e

Employer’s Guide to Fringe Benefit Rules.

Connecticut, New York, State Developments, Vermont

�e Americans with Disabilities Act Prohibits

Hostile Work Environments, Second Circuit

Rules

March 25, 2019

O n March �, ����, the U.S. Court of Appeals for the Second Circuit decided

Fox v. Costco Wholesale Corporation, eliminating any uncertain� concerning

whether an employee can assert a hostile work environment claim under the

Americans with Disabilities Act (ADA). �e court’s ruling is clear: “hostile work

environment claims are cognizable under the ADA.”

Background

Christopher Fox began working for Costco in ����. He has Toure�e syndrome.

According to Fox, a�er a new store manager was hired in ����, he began receiving

reprimands for various performance issues—such as leaving the store’s entrance

una�ended and leaving a shopping cart in front of freezers. Costco also received

customer complaints concerning Fox. On one occasion, a customer complained that

Fox told her that she “looked beautiful with her pocketbook.” On another occasion, a

customer complained that Fox stated she was “the love of [his] life.” Fox did not deny

the comments, claiming, “I can’t always help what I say.” As a result, the manager

suspended Fox for three days and transferred him to an assistant cashier position,

where he would have less customer contact.

According to Fox, one symptom of his Toure�e syndrome is that “he would o�en

touch the floor before moving.” He also has a verbal tic, which manifests itself in Fox

swearing. Fox stated that he would cough “in order to prevent others from hearing

him swear.”

Following his transfer to the assistant cashier position, Fox alleged Costco employees

started mimicking his verbal and physical tics, which resembled a football player

touching the ground. For example, they would state “hut-hut-hike” in his presence.

Fox claimed his managers frequently witnessed these comments and that the

comments persisted for “months and months.”

In March ����, Fox emailed Costco’s chief executive o�cer, claiming his work

environment was a�ravating his Toure�e syndrome. Fox did not mention the “hut-

hut-hike” comments. Costco investigated the ma�er and took remedial action.

Nevertheless, Fox alleged the mistreatment continued. Among other things, Fox

claims he was denied time sheets, was “reprimanded for leaving his work station to

drink water,” and was subject to ridicule from his coworkers concerning his work

performance. Once again, Costco investigated the ma�er and took remedial action.

William C. Ru�iero

Stamford

Author

John G. Stre�on

Stamford

Author

In November of ����, Fox had a panic a�ack at work. He was escorted from the

building by emergency medical technicians. From that date forward, Fox was on an

indefinite medical leave.

Fox commenced a lawsuit in the U.S. District Court for the Eastern District of New

York. In his complaint, Fox claimed disabili� discrimination, hostile work

environment, retaliation, and failure to accommodate his disabilities—all in violation

of the ADA and New York law. �e district court granted Costco’s motion for

summary judgment and dismissed Fox’s complaint in its entire�.

Second Circuit Revives the ADA Hostile Work Environment Claim

On appeal, the Second Circuit a�rmed the district court’s dismissal of Fox’s disabili�

discrimination, retaliation, and failure to accommodate claims. However, the Second

Circuit held that Fox created an issue of fact concerning whether he was subject to a

disabili�-based hostile work environment. In doing so, the Second Circuit, for the

first time, decided that a hostile work environment claim is cognizable under the

ADA.

In reaching its conclusion, the court was guided by the plain language of the ADA,

which states covered employers “shall [not] discriminate against a qualified

individual on the basis of disabili� in regard to . . . terms, conditions, and privileges

of employment.” �e ADA borrowed this language from Title VII of the Civil Rights

Act of ����, which the Supreme Court of the United States already held provides for

hostile work environment claims. According to the Second Circuit, “it follows that

disabled Americans should be able to assert hostile work environment claims under

the ADA, as can those protected by Title VII . . . and we here so recognize.” �e court

also noted that many other circuit courts recognize ADA hostile work environment

claims.

Having concluded the ADA prohibits hostile work environments, the court

proceeded to analyze whether Fox presented evidence that the harassment in his

case “was su�ciently severe or pervasive to alter the conditions of [his] employment

and create an [objectively hostile or] abusive working environment.” �e court

concluded that several of Fox’s allegations fell short. For example, his reprimands for

leaving the entranceway una�ended and leaving his register to get water did not

meet the standard. Furthermore, his suspension for making inappropriate comments

to customers failed to quali� as “objectively hostile or abusive” treatment.

In contrast, the court found the “‘hut-hut-hike’ allegations . . . raise a material issue

of fact as to whether Costco employees engaged in ongoing and pervasive

discriminatory conduct.” �e court also found “crucial” the fact that his supervisors

allegedly witnessed the comments for “months and months” and did nothing to stop

it, which served to impute the conduct to Costco.

Key Takeaways

�e Fox decision establishes that the ADA prohibits hostile work environments—at

least in the Second Circuit. Employers may want to regularly update and distribute

policies prohibiting discrimination, retaliation, and harassment based on any

protected characteristic, and providing a mechanism for employees to complain

about violations. Proper implementation of these policies, including promptly

investigating complaints and taking remedial action as appropriate, can serve as a

defense to liabili� in relation to hostile work environment claims.

Fox also serves as a reminder for employers to encourage managers who witness

possible harassment to take action. �eir failure to do so can result in liabili� for

their employers. Employers may want to train managers on policies prohibiting

discrimination, harassment, and retaliation, emphasizing the need to report—and

respond to—possible violations.

Delaware, Employment Law, New Jersey, Pennsylvania, State Developments, U.S. Virgin Islands

Reexamining Reasonableness: WhatEmployers Should Know About the �irdCircuit’s Take on the Faragher-Ellerth Defense

July 10, 2018

T he �ird Circuit Court of Appeals recently issued an opinion in Minars� v.

Susquehanna Coun�, No. ��-���� (July �, ����). �e decision, which vacated the

entry of summary judgment in favor of an employer that had asserted the Faragher-

Ellerth defense to a sexual harassment claim based upon a hostile work environment,

provides some important lessons for employers.

Background

Sheri Minars� began working as a secretary in Susquehanna Coun�’s Department

of Veteran’s A�airs in September ����. Minars� alleged that shortly therea�er, the

department’s former director, to whom she reported, began to engage in unwelcome

physical contact with her, including a�empting to kiss her on the lips, massage her

shoulders, or touch her face. Accordingly to Minars�, the former director also sent

her sexually explicit email messages, called her at home on non-work days and

questioned her about personal ma�ers during those discussions, interrogated her

about her activities during lunch hours, and engaged in other unpredictable

behavior. Minars� asked the director to discontinue the behavior soon a�er it

started, but he did not do so. At the su�estion of her physician, Minars� eventually

wrote an email to him in July ����, advising him that his behavior of hu�ing,

touching, and kissing her made her uncomfortable and asking him to stop. Although

the director responded that he would do so, the coun� learned of his conduct from a

coworker and friend in whom Minars� had confided; soon therea�er, the director

admi�ed to the allegations and his employment was terminated.

Minars� resigned several years later, and she filed a lawsuit in the U.S. District

Court for the Middle District of Pennsylvania against the coun� and the former

director. Following discovery, the coun� moved for summary judgment. �e district

court entered judgment in favor of the coun� on Minars�’s Title VII and state law

discrimination claims.

�e �ird Circuit’s Decision

�e �ird Circuit vacated the district court’s entry of summary judgment. Examining

the first prong of the Faragher-Ellerth defense (whether the employer exercised

reasonable care to prevent and correct promptly any sexually harassing behavior),

the court concluded that although the coun� had adopted a wri�en anti-

harassment policy which was provided to Minars�—and although the coun� had

reprimanded the director twice for inappropriate conduct towards other female

employees and later terminated his employment—a jury could find that the coun�

had not exercised reasonable care to prevent the director’s harassing behavior based

Simone R.D. Francis

St. �omas

New York Ci�

Author

upon the existence of a pa�ern of unwelcome advances towards other women and

the placement of Minars� in a se�ing where she worked alone with the former

director once a week.

�e �ird Circuit then turned to the second prong of the Faragher-Ellerth defense:

whether the harassed employee unreasonably failed to take advantage of any

preventative or corrective opportunities provided by the employer or to avoid harm

otherwise. �e court concluded that disputed issues of fact also existed with respect

to whether Minars� had acted reasonably in failing to take advantage of

preventative or corrective opportunities or to avoid harm otherwise. Although it was

undisputed that Minars� had not reported the harassment, the court concluded

that a jury could find her silence to be objectively reasonable in light of the specific

evidence of circumstances that contributed to Minars�’s subjective fear of

retaliation.

Key Takeaways

�e �ird Circuit’s decision highlights the increasing challenges that employers face

in defending sexual harassment claims. Although the district court found that the

coun� had satisfied the elements of the Faragher-Ellerth defense as a ma�er of law,

the �ird Circuit considered a broad range of factors relating to the director’s history

of interactions with Minars� and other women, the employer’s response to reports

it received concerning his unwelcome conduct towards other women, and the

circumstances that may have influenced Minars� to remain silent for several years.

�e court held that disputed issues of fact existed concerning the reasonableness of

the coun�’s e�orts to prevent such behavior and the reasonableness of Minars�’s

silence about the former director’s unwelcome conduct.

Beyond the potential impact of this decision in the litigation arena, employers

operating within the states that comprise the �ird Circuit (Delaware, Pennsylvania,

New Jersey, and the U.S. Virgin Islands), as well as those elsewhere, may wish to

consider measures that they can take to develop and maintain a workplace culture

that promotes reporting, avoids discouraging or prematurely discounting “late”

reports, and that includes su�cient safeguards to detect and prevent or otherwise

address pa�erns of unwelcome physical and non-physical behavior. In undergoing an

evaluation, employers may consider the following instructive points from the �ird

Circuit’s decision:

Dissemination of a wri�en policy may not be enough.

Like many employers, the coun� had adopted a wri�en policy that prohibited

workplace harassment, instructed employees to report harassment to a supervisor,

and identified alternate channels if the supervisor was the harasser. �e coun� had

also distributed its policy to employees—including Minars�—and obtained a record

of receipt.

Reprimanding a supervisor for harassment may not be enough.

Although an appropriate response will depend upon an examination of the relevant

circumstances, a reprimand may not be enough. On the two occasions when the

coun� learned that Minars�’s supervisor had engaged in inappropriate physical

contact with other female employees, it verbally reprimanded him. However, these

verbal warnings were not documented in his personnel file and there was no follow-

up by the coun�.

Pa�erns of unwelcome behavior may merit additional a�ention.

In vacating the entry of judgment in favor of the coun�, the �ird Circuit noted

that other women (including individuals designated in the policy as alternate

reporting contacts) had been recipients of unwelcome behavior from the supervisor.

Although the �ird Circuit’s decision does not make clear whether the coun� knew

of all the instances of unwelcome behavior prior to the lawsuit, the court highlighted

evidence that the supervisor’s behavior extended to individuals other than Minars�.

Physically isolated work areas may constitute a risk factor.

One factor that the court considered in assessing the reasonableness of the coun�’s

e�orts to prevent harassment and the reasonableness of Minars�’s extended silence

(for nearly four years) was the fact that Minars� and her boss generally worked in

an area situated away from other employees. Although the logistics of some

operations may make similar circumstances inevitable, certain work arrangements

may also tri�er a need to implement additional methods to prevent or detect

potential violations of company policy or the law.

Non-physical conduct may be relevant to the reasonableness of a response to harassment.

Policies and training e�orts understandably focus on unwelcome conduct based upon

an employee’s sex, and it can be more challenging to identi� and prevent non-

physical interactions that are not of a sexual nature but which impact workplace

dynamics. However, in concluding that the reasonableness of Minars�’s extended

silence was an issue for a trier of fact, the �ird Circuit took into account her

testimony that her supervisor’s behavior was unpredictable and at times “nas�,” that

he cautioned her that she could not trust his superiors, and that he told her that her

position could be eliminated if she did not appear busy. Although the court stated

that a fear of retaliation that is “generalized and unsupported by evidence” does not

excuse a failure to report, the �ird Circuit’s willingness to consider specific

explanations for non-reporting presents a practical challenge for employers that

may not know about or appreciate the impact of these interpersonal interactions

until a�er a legal claim is filed.

�e public discourse about #MeToo may be influential.

Although acknowledging that “our case precedent has routinely found the passage of

time coupled with the failure to take advantage of the employer’s anti-harassment

policy to be unreasonable,” the �ird Circuit cited media reports highlighting the

frequency of sexual harassment and the reasons victims do not report harassment to

support its conclusion that “a mere failure to report one’s harassment is not per se

unreasonable” and that the “passage of time is just one factor in the analysis.”

PERSPECTIVES

COMPASS April 2019 Edition

P4

TOP TIPS FOR EFFECTIVE INVESTIGATORY INTERVIEWS by Bernard J. (Bud) Bobber (Milwaukee)

Employers often need to conduct investigatory interviews with employees, and doing these interviews effectively is critical to getting all the facts required to make good decisions. In this article, Milwaukee shareholder Bud Bobber provides practical tips and considerations to help interviewers be more effective. To listen to podcasts on this topic, click here and here.

The goal of every investigatory interview is to get to the truth, and careful planning can help reach that goal. A thoughtfully planned interview can include these steps:

• Be circumspect when notifying the employee about the interview so as to not bring attention to it with fellow employees. Consider not scheduling the interview too far in advance because the employee may coordinate his or her story with others in advance of the interview.

• Schedule the interview at a time that works well for the employee. For example, hourly employees may be short- spoken in an interview held after hours so they can get done quickly. Also consider conducting interviews during the workday while employees are on paid time.

• Choose a conducive place for the interview. The employee will be more comfortable in a professional setting not in view of his or her coworkers. Make the interview room comfortable and not overly formal.

At the outset of the interview, the interviewer should develop a rapport with the employee, set the appropriate tone, and go over some basic points that will lead to obtaining thorough information. Consider these steps:

• Facilitate communication by thanking the employee for his or her time. Perhaps ask the employee how everything is going for him or her.

• Tell the employee why he or she is there, without providing specific details about the investigation, as that could limit the information that the employee may provide.

• Review these points and get the employee’s commitment to them:

It is crucial that the employee give truthful answers. The employee should not withhold information—his or

her answers must be complete. The employee must let the interviewer know if he or she

does not understand a question. • Remind the employee that he or she is protected from

retaliation or backlash for participating in the investigation in good faith.

Before the Investigatory Interview Beginning the Investigatory Interview

These are all simple steps, but working these into your standard interview routine can help obtain moreinformation and reliable facts—all of which go toward resolving the workplace issue being investigated.

Create a checklist of steps to take when concluding the interview. Once you have completed the substantive portion of the interview, go through that checklist. • Ask the employee: At the beginning of the interview, you committed to give truthful and complete answers; were your answers truthful and complete? Do you have notes, text messages, or anything else related to this subject? Have you talked with anyone else about this? Is there anything else you would like to add?

Concluding the Investigatory Interview

• If applicable, remind the employee to keep things confidential. Note, though, that rules about confidentiality vary based on the type of investigation, whether the workplace is unionized, and the employee’s status as a manager or supervisor. Some employees may have the right to speak with union representatives or counsel. Don’t have a blanket policy that all things are confidential in all circumstances.

• If you plan to prepare a written statement, tell the employee that the interviewer will be doing so and that the employee will be asked to sign off on its accuracy. Prepare the statement as soon after the interview as possible.

• Remind the employee that he or she will not be retaliated against for participating in the investigation, and that he or she should not engage in activities that can be viewed as retaliation against others who are involved in or the subject of the investigation.

Healthcare, Traditional Labor Relations

NLRB Orders Hospital to Reinstate FormerEmployee Who Shared Sta�ng ConcernsWith Media

December 10, 2018

A recent decision by a National Labor Relations Board (NLRB) administrative

law judge (ALJ) serves as a good reminder that even nonunion employees in

healthcare se�ings are protected by Section � of the National Labor Relations Act

(NLRA). On November �, ����, ALJ Paul Bogas held that a former nonunion

employee of Maine Coast Memorial Hospital had engaged in protected activi� when

she sent a le�er to a local newspaper.

Background

Karen-Jo Young, who was the hospital’s activities coordinator, sent a le�er to a

Hancock Coun�, Maine newspaper, the Ellsworth American, raising concerns on

behalf of fellow employees regarding employee dissatisfaction and nurse sta�ng

levels at the hospital. �e same day that her le�er to the editor was printed in the

newspaper, the hospital discharged Young for violating its media policy, which

barred workers from speaking to the press without permission. 

Young subsequently filed an unfair labor practice charge with the NLRB on October

��, ����, alleging that the hospital terminated her employment for engaging in

protected concerted activi� under Section � of the NLRA. Section � of the NLRA

guarantees employees “the right to self-organization, to form, join, or assist labor

organizations, to bargain collectively through representatives of their own choosing,

and to engage in other concerted activities for the purpose of collective bargaining

or other mutual aid or protection,” as well as the right “to refrain from any or all

such activities.”

�e case was tried on July �� and ��, ���� before ALJ Paul Bogas.

�e ALJ’s Decision

Judge Bogas ruled in favor of Young, finding that, because her le�er to the editor

complaining about sta�ng levels constituted protected concerted activi�, the

hospital had improperly discharged her in violation of Section �. In his opinion,

Judge Bogas wrote that “the board has repeatedly held that health care facili�

employees engage in concerted activi� protected by Section � of the NLRA when,

like Young did here, they use a le�er to the editor or another �rd-par� channel to

protest deficiencies in sta�ng levels or other working conditions that have an e�ect

on patient care.”

Jana S. Baker

Dallas

Author

James T. McBride

Dallas

Author

Bogas thus ordered the hospital to fully and immediately reinstate Young and “make

her whole for any loss of earnings and other benefits.”

Key Takeaways

�e ALJ’s opinion reinforces that sta�ng levels and overall employee satisfaction are

considered terms and conditions of employment, about which an employee’s public

dissemination of concerns would fall within the protections of Section �. 

Because sta�ng complaints are common in healthcare, particularly in busy hospital

se�ings, the ruling is an important reminder that employees may not be disciplined

or discharged for expressing these �pes of concerns, whether they are discussing

sta�ng internally or sharing their views with a third par�. �ird parties include the

public domain, which encompasses not only printed newspaper editorials, as in this

case, but also online blogs and social media.

As a result, healthcare employers may want to use caution when investigating and

taking potential employment actions where an employee has spoken out on behalf of

coworkers regarding the terms and conditions of their employment, whatever the

medium. In addition, healthcare employers may want to revisit and consider

modi�ing their social media, Internet use, and public relations policies; codes of

conduct; and any other policy that could potentially discourage or chill this �pe of

protected activi�.

Traditional Labor Relations

NLRB Narrows the Scope of NLRA Section �Protection for Employee Complaints

January 22, 2019

O n January ��, ����, the National Labor Relations Board issued an employer-

friendly decision in Alstate Maintenance LLC, ��� NLRB �� (����), narrowing

the scope of protection for employee complaints. In doing so, it reversed an Obama-

era Board decision that had expanded employee protections, and clarified that even if

an employee states a gripe referencing coworkers through the plural pronoun “we,” it

is not necessarily protected and may be a valid basis for discipline or discharge. �e

Board also declared that an individual complaint is not elevated to protected status

simply because it is made to a manager and in the presence of other employees. �is

decision narrows the Board’s definition of “protected concerted activi�” and

distinguishes group complaints from individual gripes in the workplace. �e three

Board members appointed by President Trump joined in the ruling, while the one

member appointed by President Obama penned a very critical dissent.

Background

Alstate Maintenance provides ground services at John F. Kennedy International

Airport. Employee Trevor Greenidge was employed as a s�cap. S�caps assist the

arriving airline passengers with their lu�age outside the terminal and generally

accept tips, which constitute the largest part of their compensation.

In July ����, Greenidge was working with three other s�caps when a manager

directed them to assist with a soccer team’s equipment. Greenidge remarked, “We did

a similar job a year prior and we didn’t receive a tip for it.” When the van with the

team’s equipment arrived, a manager waved the s�caps over to the van to assist, but

Greenidge and the other s�caps walked away. Ba�age handlers from inside the

terminal began assisting with the equipment before Greenidge and the other

s�caps helped finish the job. Following this incident, a manager informed the

s�caps’ supervisor of the subpar customer service, and the employer fired Greenidge

and the other three s�caps.

A regional o�ce of the Board issued a complaint on behalf of Greenidge, alleging

that he had been discharged for engaging in protected concerted activi� in violation

of the National Labor Relations Act (NLRA). An administrative law judge (ALJ)

dismissed the complaint, finding that the gripe regarding the tipping habits of the

soccer team was neither concerted activi� nor undertaken for mutual aid or

protection, and was thus a valid basis for the firing. �e general counsel appealed to

Board.

�e Decision

Bernard J. Bobber

Milwaukee

Author

Kayla A. McCann

Milwaukee

Author

�e �–� Board majori� a�rmed the ALJ and upheld the firing. In doing so, the

Board overruled Wyndham Vacation Ownership dba WorldMark by Wyndham, ��� NLRB

��� (����), and reconfirmed Board precedent from the ����s in the Meyers Industries

line of cases. In WorldMark, the Obama-era Board concluded that an employee had

engaged in concerted activi� when he protested publicly in a group se�ing, even

though he had not previously consorted with coworkers regarding workplace issues.

�is ruling conflicted with the holdings in the Meyers Industries cases, in which the

Board held that an employee’s activi� is concerted only if he is engaged with other

employees and does not solely act on behalf of himself. Unable to reconcile the two

cases, the Board in the present case overruled WorldMark and proceeded with the

standard set forth in the Meyers Industries cases.

In Alstate Maintenance, the Board explained that “to be concerted activi�, an

individual employee’s statement to a supervisor or manager must either bring a truly

group complaint regarding a workplace issue to management’s a�ention, or the

totali� of the circumstances must support a reasonable inference that in making the

statement, the employee was seeking to initiate, induce or prepare for group action.”

Applying the standard to the issue presented, the Board a�rmed the ALJ’s ruling

that Greenidge had not engaged in concerted activi� and, even if he had, Greenidge

did not make his remark about the soccer team’s tipping habits for the purpose of

mutual aid or protection of the collective group of employees. �e Board expressly

rejected the general counsel’s argument that Greenidge’s use of the plural pronoun

“we” in his gripe necessarily made his complaint protected activi�.

�e decision spells out relevant factors to consider in deciding whether an employee’s

statement made in a group context is protected concerted activi�:

whether “the statement was made in an employee meeting called by the

employer to announce a decision a�ecting wages, hours, or some other term or

condition of employment”;

whether “the decision a�ects multiple employees a�ending the meeting”;

whether “the employee who speaks up at the meeting did so to protest or

complain about the decision, not merely . . . to ask questions about how the

decision has been or will be implemented”;

whether “the speaker protested or complained about the decision’s e�ect on the

work force generally or some portion of the work force, not solely about its

e�ect on the speaker him- or herself”; and

whether “the meeting presented the first opportuni� employees had to address

the decision, so that the speaker had no opportuni� to discuss it with other

employees beforehand.”

Although not all of these factors must be present to support a reasonable inference

that an employee is seeking to initiate a group action, they can help employers

understand when employees who speak out have engaged in protected concerted

activi�.

Key Takeaways

�e decision in Alstate Maintenance narrowed the definition of “concerted activi�”

under the NLRA. In doing so, the Board clarified the di�erence between group

actions and individual complaints, even if made in the group context—two ideas that

were easily conflated under the overturned WorldMark holding. As a result of Alstate

Maintenance, employers generally have more leeway to use discipline to regulate an

individual employee’s statement, even if that statement is a work-related complaint

that references “we” or “us.” Unions and individuals alike may find it more di�cult to

assert that an individual employee’s statement is concerted activi� that is protected

by Section � of the NLRA.

�e Board may not be done reshaping Section � analysis yet. It also indicated

interest in reconsidering other cases that “arguably conflict” with the standard set

out in the Meyers Industries cases.

PERSPECTIVES

COMPASS July 2019 Edition

P4

TOP TIPS: SERVICE AND EMOTIONAL SUPPORT ANIMALS AS ACCOMMODATIONS

Many employers have been experiencing an increase in the number of requests to bring service and emotional support animals to work as a reasonable accommodation under the Americans with Disabilities Act (ADA). Although Title I of the ADA, which governs the employment relationship, does not specifically reference animals as an accommodation, they may be required in a number of circumstances. In addition to animals that actually perform active tasks, Title I may require employers to allow animals that perform no specific task, such as emotional support animals, as an accommodation.

by David Raizman (Los Angeles) and James M. Paul (St. Louis)

Animals as Workplace Accommodations

Service Animals in Private Businesses or Organizations

When an employee requests to bring an animal into the workplace as an accommodation, employers should engage in the interactive process just as they would do for other accommodation requests, and should follow the same standards and practices that they would otherwise use during the interactive process, including:

• requiring documentation from a healthcare provider that a disability exists, if it is not obvious;

• requiring documentation on how the animal will help the individual perform the job (again, unless it is obvious);

• objectively evaluating the request for undue hardship regardless of the employee’s claimed disability or the type of animal requested;

• if the initial request would present an undue hardship, exploring whether there are other options that will accommodate the employee’s disability;

• considering safety and health concerns or threats, including those that affect other employees, customers, and guests in the workplace; and

• documenting all stages of the interactive process.

If it is determined that the animal should be allowed as an accommodation, the employer may set standards and expectations about the animal’s presence in the workplace. These standards should be documented and agreed upon in writing by the employee, and may include:

• the areas of the workplace that the animal may be present; • expectations about odor and potty-training; • appropriate behavior, including the expectation that the animal not engage in menacing or

disruptive behavior or otherwise endanger the health or safety of anyone in the workplace; and • employee supervision and control of the animal at all times.

Like all accommodations, the employer should continue to monitor both the effectiveness of the accommodation and the impact on the workplace. After a trial period, if the animal’s presence creates problems for coworkers or office decorum, steps may be taken to modify, refine, or discontinue the accommodation.

There has also been an increase in the number and types of requests by customers or others to bring service animals into public accommodations (private businesses or organizations into which the public is invited). Many states have laws affecting these issues that go beyond what Title III of the ADA requires. Under federal law, the only service animals that may be covered are dogs and miniature horses—and emotional support animals (of any species) are not protected. Where a person seeks to bring a service animal into a public accommodation, the owner may ask only the following questions:

• Is this a service animal that is required because of a disability?• What work or task has the animal been trained to assist with?

Unless required by state law, service animals in public accommodations need not be identified with a vest or other item. As with workplace accommodations, these accommodations can be denied where the animal presents a direct threat to the health or safety of others or the animal fails to maintain behavior appropriate to the setting.

www.ogletree.comP6

N THE RADAR SUMMER IS HERE: ARE YOU PREPARED TO PROTECT

YOUR EMPLOYEES FROM THE HEAT?

On May 31, 2019, National Heat Awareness Day, OSHA and the National Weather Service (NWS) teamed up to encourage employers and workers to recognize the warning signs for heat illness. OSHA also recently kicked off its annual heat illness prevention campaign: “Water. Rest. Shade.” As part of this campaign, OSHA outlines the dangers of working in the heat, details employers’ responsibilities to protect workers, and provides educational and training materials for employers. The campaign’s website also offers instructional videos and graphics that are free for employers to use in their publications and social media campaigns. OSHA and the National Institute for Occupational Safety and Health (NIOSH) have also worked together to create the Heat Safety Tool smartphone app, which provides heat safety information. Learn more about OSHA’s heat illness prevention campaign and the Heat Safety Tool app on the agency’s website at https://www.osha.gov/heat/.

OSHA recommends that heat-related illness prevention include “engineering controls, such as air conditioning and ventilation, that make the work environment cooler, and work practices such as work/rest cycles, drinking water often, and providing an opportunity for workers to build up a level of tolerance to working in the heat.” The agency also places a great deal of emphasis on training so that employers know and look for symptoms of heat-related illness and are prepared for an emergency.

Employers should consider using bottled water, as opposed to a container of potable water—to make it easier to track how much to bring and how much employees consume.

While many affected employers implement mandatory rest periods depending on the temperature (with stop work orders when the temperature becomes dangerously high), each employee acclimates to the heat differently. One employee may only need a few minutes of rest every few hours; another may need 10 to 15 minutes every hour. Employers may want to implement a buddy system to encourage employees who work together to watch for and quickly spot the first signs of heat illness in their coworkers.

When working outside, OSHA seems to favor canvas shades—many of which are easy to assemble and provide plenty of room for employees—or air conditioning, such as in a running vehicle.

OSHA does not have a specific standard for exposure to heat and relies on the General Duty Clause under the Occupational Safety and Health Act to cite employers for heat-related hazards. According to OSHA, courts have interpreted the General Duty Clause to mean that employers are required to provide a workplace free of heat-related hazards that are likely to cause death or serious bodily harm. But California does have a specific heat illness prevention standard with which employers with operations in the state must comply. The California standard contains specific requirements for water, shade, and rest periods.

Water Consumption

Rest Periods

Cool/Shady Area

As the summer heats up, employers should consider implementing the following recommendations:

b

b

b

The heat of summer has arrived, which means potentially dangerous work conditions. Warm and humid weather can increase the risk to workers both indoors and outdoors. As a result, the Occupational Safety and Health Administration (OSHA) has launched a number of initiatives aimed at keeping workers safe.

by Shontell Powell (Atlanta)

Joseph L. BeachboardManaging Director  ||  Torrance, Los Angeles

Joseph (“Joe”) Beachboard is a nationally recognized expert on labor and

employment law issues who joined Ogletree Deakins in ����.  He helps

employers avoid work-related legal exposure, including providing

training to a varie� of high-profile organizations.  He regularly speaks

at large employment law conferences around the country and has been

quoted in a number of prestigious publications, including �e Wall Street

Journal, Los Angeles Times, National Law Journal, and HR Magazine.

Since ����, Joe has served as the chair of Ogletree Deakins’ Client

Services Commi�ee–which oversees the marketing, business

development, publications, events, and other strategic initiatives of the

firm. In this capaci�, he works directly with the firm’s �� o�ces and ���

a�orneys.  Joe and the Client Services Commi�ee also are responsible

for ensuring the firm’s clients receive premier service.

Joe brings a strong business perspective to his practice, formed in part

by the �� years he served as President of �e Labor Le�ers Inc. prior to

joining the firm.  �e Labor Le�ers, Inc. provided information services,

resources, and practical advice to ��,��� employers on labor and

employment law developments in �� states.  Before his decade in the

business world, Joe practiced law at Paul, Hastings, Janofs� & Walker

in Los Angeles.

Rodolfo R. AgrazShareholder  ||  Dallas, Raleigh

*Currently licensed in Georgia and North Carolina only.

Mr. Agraz has experience helping a broad spectrum of clients with labor

and employment challenges.  His practice is limited exclusively to

ma�ers of federal labor law. He represents clients in diverse industries

during union organizing a�empts involving collective bargaining

negotiations pursuant to the National Labor Relations Act and litigation

before the NLRB.  Additionally, he advises clients on best practices in

labor relations and the development of comprehensive labor strategies

to preserve the abili� to maintain direct relationships with employees. 

He works with executive leadership and first-line supervisory sta� to

build a positive working environment. Mr. Agraz is fluent in Spanish,

and serves as a member of the firm’s traditional labor and diversi� and

inclusion steering commi�ees.

Mr. Agraz’s broad base of experience includes:

Representing clients in manufacturing, distribution, teleservices,

chemical, petroleum, medical laboratory, transportation, hospitali�,

healthcare, food production, restaurant, aerospace and automotive

industries throughout the United States during union organizing

a�empts;

Serving as chief negotiator in first contract, subsequent contract,

and post-bankruptcy negotiations;

Training supervisors and managers in a wide varie� of federal labor

relations ma�ers.

Melissa A. BaileyShareholder  ||  Washington D.C.

Melissa Bailey focuses her practice on occupational safe� and health

issues, and also serves on the Firm’s Board of Directors. She litigates

OSHA cases before federal and state agencies and courts, and also

represents employers during government inspections and

investigations. Her practice also includes providing compliance advice

and conducting privileged audits on complex workplace safe� issues.

Melissa represents employers in a wide range of industries, including

electric utilities, chemical manufacturing/refining, retail, food

processing, construction, and drug manufacturing. Melissa also

regularly represents clients before OSHA in connection with

rulemaking and policy formation. She has testified before Congress

regarding OSHA issues, and has advocated for management interests

with regard to OSHA enforcement and compliance policies.

Melissa has practiced occupational safe� and health law for over ��

years and, as a result, she understands the legal issues as well as the

practical issues confronting employers. She routinely assesses both the

current and future liabili� that may result from significant OSHA

citations, and identifies the most e�ective approach – whether that is a

strategic se�lement or litigation – in each case.

Melissa also represents clients in whistleblower ma�ers under a broad

range of statutes, including the Occupational Safe� and Health Act, the

Surface Transportation Assistance Act, the Toxic Substances Control

Act and the Clean Air Act. Her experience ranges from conducting

investigations and developing position statements to litigating

whistleblower cases before Administrative Law Judges and in court.

Melissa is an active speaker on OSHA and whistleblower issues. She

speaks to trade association members and clients regarding a varie� of

OSHA issues, including strategies to use during an OSHA inspection to

minimize liabili�, conducting privileged audits and accident

investigations, and the impact of OSHA’s regulatory and enforcement

agenda on particular industries. Melissa is also the Employer Co-

Chairperson of the American Bar Association Occupational Safe� and

Health Commi�ee.

Dr. Ulrike Conradi

Managing Partner / Certified Specialist for EmploymentLaw  ||  Berlin

Dr. Ulrike Conradi joined the Berlin o�ce of Ogletree Deakins in ����

as a partner. She advises companies and the public sector on all

employment related ma�ers, especially those relating to redundancies,

restructurings, merger and acquisitions and privatizations. Her tasks

include advising on the conclusion of collective agreements with works

councils and unions in particular se�lement of interests agreements and

social plans, mass dismissals and employee benefits.

In addition Ulrike is an expert in pension law as well as in all

compensation and benefit ma�ers. She advises employers with regard to

the implementation, modification, harmonization and closure of

company pension plans as well as pension adjustments, the transfer of

pension commitments and expectancies. Finally, Ulrike is highly

experienced in pension litigation.

She has published several articles on employment law topics and

regularly gives talks and facilitates seminars on employment

issues. Ulrike is a Client Choice Award Winner ���� in the category

“Employment and Benefits” for Germany.

Before joining Ogletree Deakins she worked in the Berlin o�ce of

Baker& McKenzie.

Ulrike Conradi speaks English and French proficiently.

M. Kimberly HodgesO�ce Managing Shareholder  ||  Memphis, Jackson

Kim Hodges is the O�ce Managing Shareholder in Ogletree Deakins’

Memphis and Jackson, MS o�ces and has concentrated her practice in

employment law and litigation for over nineteen years.  Prior to joining

Ogletree Deakins, Kim was Lead Counsel in Federal Express

Corporation’s Litigation and Employment group and worked in various

roles in the HR departments of TruGreen ChemLawn, Trailmobile, and

Riceland Foods. In addition to other honors, she is listed in the ����

edition of Best Lawyers in America, and was a ���� Honoree in the

Memphis Business Journal’s ‘Best of the Bar’ Awards.  Kim also has an AV-

Preeminent rating from Martindale-Hubbell in both the Peer Review

and Judicial Review categories, and is licensed in Arkansas, Tennessee,

and Mississippi.

�roughout nineteen years as a litigator, Kim amassed a wealth of

employment and commercial litigation experience and defended

corporate clients as first-chair counsel in state and federal courts across

the United States.  She has extensive appellate experience, and has

represented clients in appeals before the U.S. Court of Appeals for the

� , � , � , � , � , �  and ��  Circuits.  Kim also defends clients in

ma�ers before the EEOC, the Department of Labor, and appeals before

the Administrative Review Board.

Kim’s experience as both a litigator and an advisor runs the gamut of

employment law and related issues, including: discrimination and

harassment, compliance with wage and hour laws, state and federal

disabili� discrimination and accommodation, public access for disabled

individuals, FMLA leave and interference, age discrimination, complex

contracts, non-competition and non-solicitation agreements, trade

secrets, whistleblower claims, torts, and antitrust/unfair competition

issues.

Prior to becoming an a�orney, Kim worked in several HR departments

assisting with wage and benefit surveys, training and employee

development, employee satisfaction surveys, and general HR issues.  In

her practice as an employment a�orney today, Kim combines her HR

experience and legal expertise to provide strategies and education for

employers seeking to best synchronize legal requirements with the

demands of their unique business.  Kim is a frequent invited speaker and

article contributor on employment law and litigation topics for bar

associations and professional associations throughout the country.

rd th th th th th th

Christopher E. MooreO�ce Managing Shareholder  ||  New Orleans

Shareholder  ||  Houston

Chris Moore is an advocate for employers, and has successfully

defended federal and state law claims of race, sex, religious, age and

disabili� discrimination; breach of contract, wrongful termination,

retaliation, defamation, harassment, infliction of emotional distress,

misrepresentation, interference with contract, whistleblower, employee

benefits and abuse of right claims; state and federal wage claims; family

and medical leave claims; unfair labor practices; and labor arbitrations. 

He has also successfully represented employers in disputes involving

non-compete and non-solicitation agreements.

Chris has also represented management in union organizing campaigns,

labor disputes and the defense of unfair labor practice charges.  As an

advisor, Chris has prepared wri�en employment practices, systems,

forms and contracts, and has trained managers on their implementation

and administration.

Jimmy F. Robinson, Jr.O�ce Managing Shareholder  ||  Richmond

Jimmy is a Founding Shareholder of the firm’s Richmond o�ce and

serves as the o�ce’s Managing Shareholder. Jimmy focuses his practice

on traditional labor and employment litigation ma�ers.

In his traditional labor practice, Jimmy handles all aspects of a

traditional labor practice, including litigating labor arbitration cases,

conducting election campaigns, handling proceedings before the

National Labor Relations Board including unfair labor practice charges.

His practice includes representation of national and international

companies with operations across the United States. He also represents

non-unionized employers in the development of strategies designed to

help those employers remain non-union by advising them on labor and

employee relations through issue assessment, supervisory training,

advice and counsel with respect to policy development, and

lawful/positive communications; where necessary, he advises and

counsels employers during union organizing campaigns.

In employment litigation ma�ers, Jimmy represents employers in a wide

varie� of employment litigation ma�ers in regulatory agencies and in

federal and state courts. He defends employers against single par� and

collective/class action cases involving allegations of sex, race, national

origin, religion, gender, age and disabili� discrimination; wrongful

discharge claims; breach of employment contracts; non-compete

litigation. He also defends employers against claims for sexual

harassment; claims for relief under the Family Medical Leave Act and

pay discrimination claims including cases under the Fair Labor

Standards Act; OSHA and whistle blower ma�ers; and defamation,

among other tort claims arising from the employment relationship. He

handles single plainti� claims as well as collective and class action

litigation.

He assists his clients in managing administrative agency investigations,

including systematic initiative, pa�ern and practice and disparate impact

claims involving unequal pay, background checking, promotion, hiring

and pre-employment testing, and reasonable accommodation processes,

among many others. He also counsels employers concerning personnel

policies and workplace issues, including leave, benefits, severance, wage

and hour obligations, employee discipline, a�rmative action plans and

employment discrimination ma�ers.

Jimmy is an adjunct professor at the Universi� of Richmond where he

teaches Employment Law & Policy and Labor Law.  Mr. Robinson has

over sixteen years of experience serving as an advisor and advocate for

both private, and public schools – from communi� colleges to statewide

universi� systems.  Mr. Robinson skillfully advises and defends higher

education clients on virtually every �pe of employment and labor law

ma�er with a full appreciation of the unique challenges that universi�

senior o�cers and general counsel face as they a�empt to manage the

sensitive issues in the higher education environment.  Mr. Robinson

knows how to work within the special constraints and imperatives of

educational institutions. He provides litigation defense, and legal advice

involving tenured facul�, adjunct facul�, administrators, students,

student organizations and sta� members.  His experience includes

representing higher education clients in a varie� of litigation ma�ers,

such as defense of claims brought under Title VII, Title IX, Title III, the

ADA, the ADEA, civil RICO and USERRA, wrongful discharge, breach

of contract, FERPA, the FMLA and other forms of leave, class actions,

wage and hour disputes, individual and o�cial capaci� claims under ��

U.S.C. §§ ����, and related state law tort claims.  He also provides day-

to-day legal advice on a varie� of higher education-related subjects,

including hiring, promotion, tenure disputes, tenure reviews, shared

governance concerns, facul� discipline and misconduct, labor

initiatives involving facul� and graduate students, reductions-in-force,

leaves of absence issues, termination, and student organization

disciplinary ma�ers. His background includes in-depth experience with

public policy, and he has considerable experience responding to EEOC

charges and complaints filed with the U.S. Department of Education

O�ce for Civil Rights.

Jimmy is commi�ed to public service ma�ers. His public interest work

is significant and varied, and includes: representation of the indigent in

custody and other domestic relations ma�ers; providing pro bono

simple wills, advance medical directives and powers of a�orney to First

Responders through the Virginia State Bar Young Lawyers Conference;

and pu�ing on multiple Senior Citizens Seminars over-viewing the

pertinent and changing laws and programs a�ecting senior citizens in

Virginia.

Jimmy is the former President of the Virginia State Bar, Young Lawyers

Conference, and the former President of the Virginia Association of

Defense A�orneys, Young Lawyers Division.

Charles L. �ompson, IVShareholder  ||  San Francisco

Charles L. �ompson IV counsels and defends employers in wrongful

termination, discrimination, and other employment-related ma�ers. 

�ese areas include trade secrets and unfair competition, California and

federal leaves of absence, ADA compliance, and wage and hour

compliance.

Charles also represents employers in traditional labor law ma�ers. He

advises and represents employers in collective bargaining. He also

represents employers in ma�ers before the National Labor Relations

Board, including in unfair labor practice and representation hearings. In

addition, he represents employers in discharge and contract

interpretation arbitrations.

He creates and provides workplace training programs to California

employers on sexual harassment, workplace violence, corrective action

and discipline, workplace investigations, managing the borderline

employee, and avoiding wrongful termination claims.

Charles was a judicial clerk for �e Honorable Patrick E. Hi�inbotham

of the U.S. Court of Appeals for the Fi�h Circuit.  He has been a facul�

member of San Francisco Law School, where he taught constitutional

law and employment discrimination law.

Charles also has served as President of and outside counsel to Mission

Neighborhood Centers, a non-profit organization providing social

services to the Mission District in San Francisco, California.  In

addition, he has served as First Vice President, Secretary and outside

counsel to the NAMES Project Foundation, sponsor of the AIDS

Memorial Quilt.

Vince M. VerdeO�ce Managing Shareholder  ||  Orange Coun�

Vince Verde is the head of the firms Trial Practice Group (“TPG”). He is a

litigator and former prosecutor with extensive jury and non-jury trial

experience. He has tried and won jury trials in multiple jurisdictions and

represents employers in state and federal courts in single and multi-

plainti� actions. His diverse practice includes the representation of

regional and national clients in all phases of litigation involving

employment and labor ma�ers, unfair competition, trade secret and

non-compete ma�ers, work place violence, intellectual proper� rights,

class action lawsuits and complex business disputes. He has extensive

experience in all areas of employment law, including wrongful

termination, retaliation and ����.� claims, discrimination, harassment,

wage and hour issues, family and medical leave, disabili�

discrimination and accommodation and employee privacy.  Mr. Verde

draws on his skills as a trial a�orney in order to successfully resolve

ma�ers early in the litigation or obtain dismissals through summary

judgment.