End of the Year News from the EEOC

The EEOC closed out 2016 with several reports that provide interesting reading for employers heading into the new year.

The first is the EEOC’s annual performance report, which provides a snapshot of how the EEOC views its accomplishments over the last year. These accomplishments, according to the EEOC, include measured gains in three areas of its strategic plan, including strategic law enforcement where the agency claims it secured $347.9 for employees in the private sector through mediation, conciliation, or settlements, and another $52.2 million through agency litigation. Although the report shows the agency well in stride of its goals, it remains to be seen how the incoming administration will affect the EEOC’s agenda.

The second report from the EEOC is its updated enforcement guidance on national origin discrimination, which was last revised in 2002. In announcing the new guidance, the EEOC noted that, in fiscal year 2015, approximately 11 percent of the private sector charges filed with the agency alleged national origin discrimination. As with the old guidance, the new guidance provides information on prohibited employment practices as well as “promising practices” that may minimize the risk of national origin discrimination claims.

Finally, the EEOC issued a resource document that provides information on the rights of job applicants and employees with mental health conditions. Again, in announcing the resource document, the EEOC noted that discrimination claims based on mental health conditions are on the rise and that, in 2016, it resolved almost 5,000 charges based on such conditions. Although the user-friendly resource document is undoubtedly geared toward employees, employers may nonetheless find the information helpful as a reminder of the tricky issues they must navigate in this area of disability discrimination law.

Some Thoughts for Maine Employers on Marijuana Legalization

[The following comments were originally delivered at a breakfast briefing on December 7 in Portland sponsored by Clark Insurance and KMA Human Resources Consulting.]

If we assume that the Question 1 referendum recount does not change the outcome, Maine’s 128th Legislature will begin the process of hammering out a new statutory regime to accompany legalization in 2017.

At the present time, no one can reasonably predict how the post-referendum statute is going to read and whether it is going to provide clear guidance so Maine employers can navigate risk management issues and adequately address legal compliance questions.

It’s a trap to think that here in Maine we can look at how things are being handled in Colorado, for example, and use employers’ experiences there for determining how best to proceed.

Court Finds Airport Cannot Fly Under the Radar on Employee’s Email Privacy Claims

A federal district court in Virginia recently grounded an airport’s attempt to escape liability for accessing an employee’s email account. (Hoofnagle v. Smyth-Wythe Airport Commission.) The decision, which delivered a mixed result for the airport, provides important guidance for both public and private sector employers.

The employee was the airport’s operations manager and was responsible for its day-to-day operations, including responding to email from the public. To this end, the manager created a Yahoo! email account, which he used for both airport and personal business. Although the account became the airport’s official email contact, the airport did not have an email policy or any other technology policy that governed how the account was to be used.

Events came to a head when the manager, an NRA member, used the account to send a strongly worded email to U.S. Senator Tim Kaine regarding gun control. The manager signed the email using his official airport title. After learning of the email, the airport terminated the manager based not on the email’s content, but on the manager’s decision to sign it in his official capacity. The airport then used a password provided by the airport’s secretary to gain access to the account to search for business records. The manager sued and claimed that the airport’s access of the email account without his authorization violated the Fourth Amendment’s protection against unreasonable governmental searches, as well as the Stored Communications Act.

Dealing with the Fourth Amendment claim first, the court applied a two-part test used by the U.S. Supreme Court in another case involving the scope of employee privacy in electronic communications. That test looks first at the “operational realities” of a workplace to determine whether a reasonable expectation of privacy exists, and then examines whether the search was reasonable under all the circumstances.

In this case, the court found that the manager did have a reasonable expectation of privacy in the email account – primarily because the account was not clearly owned by the airport, and because the airport did not have an electronic communications policy that would have limited the manager’s expectation of privacy. Nonetheless, because the airport’s search of the account related to a non-investigatory work-related purpose, and because it was limited in scope, the search was reasonable and therefore did not violate the Fourth Amendment.

Turning to the Stored Communications Act, however, the court found that the airport could not escape liability. The SCA is a federal law that prohibits the unauthorized access to stored email and other electronic communications. But the SCA exempts “providers” of electronic communications services and end “users” of those services – and it was under these two exemptions that the airport sought refuge, arguing that the exemptions applied because the airport had provided the computer through which the manager had used the Yahoo! account. The court found neither exemption applied, though, because it was Yahoo! that provided the electronic communications service where the emails were stored, and it was the manager, who had created the account, that was the “user” of the service.

So – what guidance does this case provide for employers? First, it demonstrates that employers must be careful when using, or allowing employees to use, a third-party email provider (e.g., Yahoo!, Gmail, etc.) for company business. In those situations, employers must be sure to have clear policies in place that address the scope of employee privacy in electronic communications and the monitoring of email on workplace computers, and the policies should also clarify who it is – employer or employee – that owns the account and is authorized to access it. Had the airport in this case maintained such a policy, it would have been in a far better position. Second, this case demonstrates that an employee’s use of a work computer does not entitle an employer to access virtually any account used by the employee on the computer – even if the account is used for work purposes. Finally, the case serves as an important reminder for employers to keep abreast of changes in technology and how that technology is used in the workplace.

Maine DOL Proposes Rulemaking to Incorporate New Federal Overtime Rule

Earlier this month, the Maine Department of Labor announced proposed changes to its regulations that would align them to be consistent with changes being made to federal overtime regulations. The new federal overtime rule, which goes into effect on December 1, 2016, updates the salary threshold needed to qualify for the so-called “white collar” exemption under the federal Fair Labor Standards Act. That exemption applies to employees employed in a bona fide executive, administrative, or professional capacity.

In its notice of rulemaking, Maine DOL proposes to incorporate the changes in the federal overtime rule into its own rules so as to make them consistent with each other. The Maine DOL notes that these changes would include increasing the salary threshold to $913.00 a week for qualifying executive, administrative and professional exempt employees. The current salary threshold is $455 a week.

A public hearing on the proposed changes is scheduled for November 3, 2016, and the public may submit comments until noon on November 14, 2016. 

As noted in Maine DOL’s announcement, the new federal overtime rule will apply to employers throughout Maine beginning on December 1. Consequently, employers should not take Maine DOL’s recent rulemaking notice as a reason to delay implementing changes that may be required as a result of the new federal overtime rule.

Governor’s Panel Supports Maine Human Rights Commission

In response to concerns about the Human Rights Commission, Governor LePage, by Executive Order, established the Maine Human Rights Commission Review Panel on October 14, 2015. The Panel issued its Findings on September 27, 2016. The Review Panel consisted of eight members including an attorney who represents respondents before the MHRC, an attorney who represents complainants before the MHRC, a person recommended by the National Federation of Independent Businesses, a person recommended by the Maine Apartment Owners and Managers, a person recommended by Pine Tree Legal, a person with working knowledge of and familiarity with best administrative investigative practices and one person recommended by the Maine Human Rights Commission. The purpose of the Review Panel was to conduct a review of the structure and operation of the Maine Human Rights Commission to identify factors which may cause the perception of prejudice against respondents and bias in favor of complainants and to identify rules and practices that are unduly burdensome or unfair and to issue a report with recommendations.

After the Review Panel met thirteen times and did an extensive review of the Commission itself, its rules and regulations and interviewed Commissioners and staff, the Panel “unanimously agreed that the MHRC, its Commissioners and its staff are not actually prejudiced, biased or unfair towards respondents of complainants”. It went on to find that the vast majority of cases were heard or decided in favor of respondents and that there is no evidence that there is a bias or prejudice against either complainants or respondents. The Panel found that the MHRC was “devoted to its mission and desired to be fair and unbiased to all its parties”. The Panel agreed that the powers and duties of the Maine Human Rights Commission under the Maine Human Rights Act should be sufficient, well-staffed, well-funded and well-trained. The Panel made a series of recommendations including:

1. Hire a management consultant/efficiency expert. 
2. Hire more investigators to investigate. 
3. Use intake specialists. 
4. Increase education and training for MHRC staff and Commissioners. 
5. Increase number of administrative staff. 
6. Modernize computer and technology systems. 
7. Expand mediation program. 
8. Establish a dual track system and consider changing state law to require 180 days before right to sue letter issued. 
9. Improve and streamline requests from the MHRC for information, discovery and document requests. 
10. Increase and improve public relations and outreach. 
11. Commissioners should be appointed in a timely fashion. 
12. Filing fees. 
13. Increase the MHRC’s budget. 

All in all, this report established what the attorneys practicing in this area know to be the case. The Human Rights Commission does the best that it can on a very limited budget and is fair to the parties that appear before it, even though the process takes far too long.

Supreme Court Begins New Term with Few Employment Cases

The Supreme Court of the United States will begin its new term on October 3rd with a quiet slate of cases for employers. Among the few employment-related cases set for review include one involving whether the acting general counsel of the NLRB was validly appointed by President Obama under a federal vacancy statute (NLRB v. SW General, Inc.) and another involving the judicial standard of review for enforcing EEOC investigative subpoenas (McLane v. EEOC). Although these cases are not likely to set employers’ hearts afire, it is possible that the Court will add to its docket as it considers other pending petitions for review.

In terms of its composition, the Supreme Court will begin its new term as it ended its last one: with a vacancy. Although President Obama nominated Judge Merrick Garland from the D.C. Circuit Court of Appeals last March to replace Justice Scalia, the Senate has not acted on the nomination. As a result, the eight-member Court continues to risk deadlocking in some cases, as it did last term when considering the constitutionality of compulsory union dues in Friedrichs v. California Teachers Association. In that case – just as it does whenever it deadlocks – the Court affirmed the judgment below, which had held that mandatory “fair share” fees did not violate public employees’ First Amendment rights.

Whether the Court’s composition has played a role in its selection of cases this term is an open question. In this election year, it is also a question that is likely to persist until after November.

Employees Find “Cat’s Paw” Theory to be the Cat’s Meow

Employees are continuing to find success with the “cat’s paw” theory to prove employment discrimination, evidenced by two recent federal court decisions.

The “cat’s paw” theory references an old Aesop’s fable in which a monkey tricks a cat into doing work for his own benefit: the monkey puts the cat to work pulling chestnuts from a fire, which rewards the monkey with a hot meal, but which rewards the cat with only burnt paws. In the employment law context, the theory holds that an employer may get its paws burnt – i.e. be liable for discrimination – where it is manipulated into taking adverse action against an employee based on information from a supervisor who harbors discriminatory animus towards the employee. The theory, which the Supreme Court addressed in 2011 in a USERRA case, Staub v. Proctor Hospital, therefore gives employees a tool to show that discrimination was a proximate cause for an adverse action—even where the ultimate decision-maker was not aware of a supervisor’s discriminatory intent and the supervisor did not participate in the decision.

For example, in a recent case from the federal district court in Kansas, Canfield v. Rucker, an employee escaped summary judgment on her Title VII discrimination claim where there was conflicting evidence as to whether a superior influenced her termination. The employee had alleged that the superior – who was the assistant secretary of state for the State of Kansas – showed discriminatory animus by telling the employee’s relative that she was being fired for not going to church. The Secretary of State’s Office argued, however, that the assistant secretary had merely rubber-stamped the employee’s termination and that the decision had actually been made by one of the employee’s direct supervisors, who had allegedly conducted an independent investigation into the employee’s conduct and was therefore unbiased. Echoing Staub, the court found that there was sufficient evidence in the record to show that the assistant secretary was a proximate cause for the termination – including evidence that the assistant secretary had discussed the termination with the employee’s supervisor – and rejected the notion that the alleged independent investigation by the supervisor necessarily precluded a cat’s paw claim, particularly where there was a question as to whether the assistant secretary had influenced the termination in some way.

Similarly, the Second Circuit Court of Appeals recently held in Vasquez v. Empress Ambulance Service, Inc. that an employer may be liable under a cat’s paw theory if it negligently gives effect to the retaliatory intent of a non-supervisory co-worker. In this case, the plaintiff filed an internal complaint about sexually graphic text messages that she had received from a co-worker. After the complaint was filed, the co-worker manipulated certain text messages to make it appear as though he and the plaintiff had been involved in a consensual sexual relationship, and he provided the manipulated texts to management. The committee investigating the complaint relied on the doctored messages to conclude that it was the plaintiff who was engaging in sexual harassment and terminated her employment – notwithstanding the plaintiff’s insistence that the co-worker was lying and her offer to show her own cell phone as proof, which the committee declined to view. Vacating the judgment of the district court, which had held that the co-worker’s retaliatory intent could not be attributed to the employer, the Second Circuit held that liability may be imputed to the employer if it “negligently allows itself to be used as a conduit for even a low-level employee’s discriminatory or retaliatory prejudice.” 

In the First Circuit, the cat’s paw theory has met with mixed success. For example, in 2004, the Court held in Cariglia v. Hertz Equipment Rental Corporation that an employer may be liable when a neutral decision-maker takes adverse action against an employee based on information that is manipulated by a supervisor with discriminatory animus. More recently, however, the Court held in Ameen v. Amphenol Printed Circuits, Inc. that an employee’s retaliation claim under a cat’s paw theory was “effectively declawed” where the employee failed to demonstrate any evidence of discriminatory animus.

For employers, these decisions highlight the importance of conducting thorough internal investigations and ensuring that such investigations take into account possible retaliatory or discriminatory motives of supervisors and co-workers who provide information, especially if the investigation results in an adverse action against an employee. As the above cases make clear, an employer’s failure to do so may result in it being the moral of a very unpleasant story.

EEOC Issues New Enforcement Guidance on Retaliation

Earlier this week, the EEOC issued its final Enforcement Guidance on Retaliation and Related Issues.  The new guidance is the first update to the EEOC’s compliance guide on retaliation since 1998, and it marks the end of the process that began in January 2016 when the EEOC first proposed the new guidance.  The new guidance covers retaliation under each law enforced by the EEOC, including Title VII of the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Rehabilitation Act, the Genetic Information Nondiscrimination Act, and the Equal Pay Act.

The final guidance reflects the growing trend in retaliation claims – indeed, according to the EEOC, retaliation is the most frequently alleged basis of discrimination and is asserted in nearly 45% of all charges received by the agency.  The new guidance is not likely to slow this trend.  This is because it takes a broader view – and therefore a more employee-friendly view – on each of the three elements that an employee must prove to prevail on a retaliation claim: (1) protected activity; (2) an adverse action by the employer; and (3) a causal connection between the protected activity and the adverse action.

For example, with respect to “protected activity,” the EEOC notes that this can include either “participating” in a complaint process under one of the laws enforced by the EEOC (such as by filing a complaint or serving as a witness), or reasonably “opposing” discrimination made unlawful by one of the laws (such as by complaining about allegedly discriminatory conduct or otherwise communicating a reasonable belief of a perceived violation).  The guidance, however, further clarifies that although protection for “opposition” is limited to those individuals who act with a reasonable belief that the alleged conduct is unlawful, “participation” in an EEO process – including the filing of an internal complaint – is protected regardless of whether the underlying allegation is based on a reasonable belief that discrimination has occurred or is likely to occur.  The EEOC does point out in the guidance that its interpretation does not give employees free rein to file baseless complaints without consequence, but it also cautions that employers who dole out those consequences unilaterally, rather than bringing evidence of bad faith to light in the context of the EEO process, will face greater scrutiny.

The guidance also sets a low bar for what can constitute a materially adverse action.  According to the guidance, a materially adverse action is any action that would reasonably be likely to deter protected activity, which includes not just obvious work-related employment actions like discharge, suspension, refusal to promote or hire, or work-related threats, warnings, and reprimands, but also actions that have no tangible effect on employment or that take place entirely outside of work.  This would include, for example, threatening reassignment, scrutinizing work or attendance more closely than for other employees, or making disparaging remarks about the person to others or the media.

The EEOC guidance offers some “promising practices” for employers to use to reduce the likelihood of a retaliation claim. Chief among those is a clearly written anti-retaliation policy that provides specific examples of what actions may constitute retaliation, as well as a clear explanation that retaliation can be subject to discipline, including termination. Clearly, though, none of these practices will insulate an employer from liability or the obligation to analyze potential retaliation issues on a case-by-case basis.

Social Media and the FMLA

Imagine for a moment: you are the administrator for a skilled nursing facility and your activities director has just informed you of a need to take FMLA leave for shoulder surgery.  You grant the FMLA request and your activities director takes the full twelve weeks he is allowed.  You then learn from his physician that he will need to extend his leave by an additional thirty days to complete physical therapy, which, of course, you oblige as non-FMLA leave.  Everything is fine – until you learn at some point during the director’s non-FMLA leave that he has been quite active and merry during his entire leave, evidenced by numerous Facebook posts showing him visiting Busch Gardens theme park in Tampa (twice), visiting St. Martin for several days, and posing by shipwrecks and cavorting in the ocean.  You learn he also may have been texting pictures of holiday decorations at Busch Gardens to his co-workers, ostensibly to share with them ideas for decorating the facility for the holiday season.  What do you do…what can you do?

This was the actual situation that faced the employer in a recent case from a federal district court in Florida, Jones v. Gulf Coast Health Care of Delaware, LLC.  Ultimately, the facility decided to terminate the activities director, believing that his Facebook and texting activity showed poor judgment as a supervisor and negatively impacted his co-workers.  The facility also claimed that the director’s conduct was prohibited by the facility’s social media policy, which prohibited any “social media usage that adversely affects job performance of fellow associates,” among other things.  The activities director – who later sued alleging FMLA retaliation – claimed that no specific violation of the social media policy was ever given to him as a reason for his termination and that, instead, he was told his was being terminated for abusing the FMLA.

In the end, the court found that the director failed to show causation – i.e. that he was retaliated because of his request to take FMLA leave – and that his retaliation claim therefore failed as a matter of law.  On this point, the court explained that the facility terminated the director for actions while on his FMLA and non-FMLA leave, not for requesting and taking the leave in the first instance, and that courts are generally not in the business of determining whether an employer’s personnel decisions are prudent or fair – as long as they comply with the law.

In this case, the court did not opine in detail on whether the facility’s social media policy tended to make its termination decision more fair than not – nor did it address the interesting question of how the facility actually obtained the director’s social media posts.  On summary judgment, the facts must be construed in the plaintiff’s favor and, in this case, the director disputed that he was told his termination was related to a violation of the social media policy.  Nonetheless, it is more likely than not that the facility’s social media policy would have substantiated its legitimate termination decision – just as it would tend to do for any other employer facing a similar situation.

DOL’s Persuader Rule Enjoined

Earlier this week, a federal district court in Texas granted a nationwide preliminary injunction that halts the Department of Labor's implementation of its Persuader Final Rule: Nat'l Fed'n of Indep. Bus. v. Perez (N.D. Tex. June 27, 2016). The development was welcome news for employers, who would have been required to comply with the Final Rule beginning July 1, 2016.

The Final Rule represents DOL's new interpretation of the so-called "advice exemption" under the Labor-Management Reporting and Disclosure Act (LMRDA). Under the LMRDA, employers are required to report relationships with labor consultants who are engaged to persuade employees on union activities. However, the LMRDA does not require employers to file reports when a consultant has been engaged to give "advice," which has been interpreted to include "indirect" persuasion activities. As a result, the advice exemption has historically limited an employer's reporting obligations to those situations when a consultant has been engaged to have direct contact with employees.

The Final Rule significantly narrows the advice exemption by requiring employers to report not only "direct" persuader activities, such as when a consultant is hired to speak with employees in the midst of a union campaign, but also "indirect" persuader activities, such as when a consultant is hired to prepare scripts for managers or otherwise coach supervisors on communications to employees.

The concern of many employers - and their consultants - has been that the Final Rule will stifle the ability of employers to obtain timely advice and will discourage consultants from providing many services, such as trainings and seminars on union matters, which could become subject to reporting requirements under the rule. The federal district court in Texas agreed. In addition to finding that the Final Rule likely infringes on employers' free speech and exceeds the DOL's rule-making authority, the court found that the rule essentially eliminates the advice exemption under the LMRDA and is therefore "defective to its core."

Under the court's ruling, the DOL is only preliminarily enjoined from implementing the Final Rule pending final resolution of the case, which could include any appeals by DOL. Consequently, although the Final Rule's implementation may no longer be imminent, it remains an issue that employers and their consultants must continue to monitor.

EEOC on Workplace Wellness Programs: Final Rules Announced

Earlier this month, the Equal Employment Opportunity Commission issued its final rules on employer wellness programs.  The final rules, which go into effect in January 2017, provide guidance on how workplace wellness programs can comply with the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA).

The final rules address a number of issues, including the amount of incentives that an employer may offer to employees for participating in a wellness program.  Prior to the final rules, for example, the ADA regulations provided that employers could ask health-related questions and conduct medical examinations as part of a “voluntary” wellness program.  The regulations did not, however, define the term “voluntary” or address whether the offer of an incentive made a program involuntary.

The final rules clarify that a wellness program that requires employees to answer disability-related questions or to undergo medical examinations may offer incentives of up to 30 percent of the total cost for self-only coverage.  The 30 percent incentive limit brings the regulations in line with HIPAA, which applies the same incentive limit to health-contingent programs that require employees to achieve certain outcomes.

 
The final rules also set out a number of other requirements that must be met for a wellness program to be considered voluntary.  For example, employers may not deny an employee access to health coverage if the employee chooses not to participate in a wellness program.  Employers must also provide a notice that clearly explains what medical information will be obtained from employees in the wellness program.  The final rules also require that wellness programs be “reasonably designed to promote health or prevent disease” – in other words, a wellness program must actually promote health and cannot include burdensome time requirements for participation, involve unreasonably intrusive procedures, or be used to shift insurance costs or to gain sensitive medical information that would otherwise be in violation of the law.  In addition, the final rules include two confidentiality provisions.  The first generally provides that information from wellness programs may be disclosed to employers only in an aggregate form that does not disclose specific individuals.  The second provision prohibits employers from requiring employees to agree to the sale of health information or the waiver of confidentiality as a condition for participating in a wellness program or receiving an incentive

The Beat Goes On: D.C. Circuit Upholds NLRB View That Orchestra Musicians Are Employees

Last week, a federal appeals court enforced a ruling by the NLRB that orchestra musicians are employees, not independent contractors. The import of the decision in Lancaster Symphony Orchestra v. NLRB is sure to reverberate in concert halls throughout the country – particularly those with small to medium-sized orchestras, which often rely on contracted players – but it also holds lessons for employers outside the music industry.

The case began in 2007, when a local chapter of the American Federation of Musicians filed a petition seeking to represent the musicians of the Lancaster (Pennsylvania) Symphony Orchestra. The Orchestra challenged the petition on the grounds that its musicians were independent contractors, not employees covered under the NLRA, but the Board disagreed. Applying a multi-factor test derived from the common law of agency, the Board found the balance of factors pointed toward employee status.

On appeal, the U.S. Court of Appeals for the District of Columbia noted that it would adopt a “middle course” in reviewing the Board’s decision and uphold it as long as it was supported by substantial evidence. In other words, the Court did not decide how it would “classify the musicians in the first instance, but only whether the Board confronted two fairly conflicting views.”

After reviewing the evidence, the Court found that several factors pointed toward employee status. For example, the Court agreed that the Orchestra exerted extensive control over the means and manner of the musicians’ performance, including controlling the musicians’ posture and limiting their conversations during rehearsals and performances. The Court also found that the Orchestra’s conductor exercised “virtually dictatorial authority” over the manner in which the musicians performed and circumscribed their independent discretion. Further pointing toward employee status, the Court noted that the musicians were in the business of performing music and their work therefore comprised a part of the Orchestra’s regular business. Although the musicians were free to perform with other symphonies, the Court found that provided only limited entrepreneurial opportunity, as the musicians could increase their income only by taking a job with another orchestra.

At the same time, the musicians’ high degree of skill, coupled with the short amount of time they were engaged by the Orchestra (approximately 140 – 150 hours per year), pointed toward the musicians’ status as independent contractors. The Court also noted that the musicians provided most of their critical tools, i.e. their instruments, but it also noted, as the Board had found, that the Orchestra supplied other necessary tools, such as music stands, chairs, and the concert hall.

Faced with these “two fairly conflicting views,” the Court deferred to the Board’s conclusion that the musicians were employees, not independent contractors. Because of the Court’s standard of review – and because the outcome of the case rested on standards that the Court admitted were “decidedly unharmonious” – the Lancaster decision is by no means a coda on the issue of employee classification. Other courts and agencies, for example, have found orchestra members to be independent contractors for purposes of anti-discrimination laws (Lerohl v. Friends of Minnesota Sinfonia), state unemployment laws (Portland Columbia Symphony v. Oregon Employment Department), and state labor laws (Waterbury Symphony Orchestra v. AFM, Local 400). Still, the Lancaster decision shows that the NLRB does not intend to slow the tempo of its pro-employee agenda.

Labor & Employment Law: Determining the Accrual Date of a Wrongful Discharge Action

Preti Flaherty's Peter G. Callaghan and Gregory L. Silverman recently authored an article in the April 20th, 2016 edition of the New Hampshire Bar Association's Bar News. 

An employee has three years to bring a common law wrongful discharge claim in New Hampshire. Determining the exact date a wrongful discharge claim accrues remains an area of uncertainty under New Hampshire law.

Resolving the date after which a wrongful discharge claim is time-barred depends on the nature of the claim and whether the employee is alleging wrongful termination, a constructive discharge, or that the employer wrongfully failed to renew or offer a new contract....

Read more here.

Legislative Update on Maine’s Substance Abuse Testing Law

In legislative news, a bill that would have implemented new changes to Maine’s substance abuse testing law has died after the House and Senate failed to agree on amendments to the bill from the Committee on Labor, Commerce, Research and Economic Development.

As originally drafted, LD 1384 proposed a number of changes to the current law, including a revision to the probable cause standard that would have permitted an employer to find probable cause based on a single work-related accident that results in personal injury or significant damage to property. The current law prohibits a single work-related accident from forming the basis of probable cause to believe an employee may be under the influence of a substance of abuse.

In February, the Maine Department of Labor issued a lengthy report recommending other changes to the current statute, including the development of a uniform drug testing policy to be used by employers in the state.  The report followed a workgroup convened by the Department to study issues related to the impairment of workers due to the use of medical marijuana, opiates, prescription drugs, and other legal and illegal substances.

The Department’s report included a draft amendment to LD 1384 that was presented to the LCRED committee.  However, the amendment did not receive unanimous approval from the committee, which issued a divided report largely along party lines, and the House and Senate subsequently voted to pass competing amendments to the bill, resulting in the bill dying between houses.  This means that the Department’s recommended changes to the current law will remain just that—recommendations—for now.

Update on Publication of the New FLSA Overtime Regulations

The final overtime rule is edging closer to release: the U.S. Department of Labor (USDOL) has sent its final changes for determining which workers are eligible for overtime pay to the Office of Management and Budget (OMB) for an administrative review.  Procedurally, this is the final step before a new regulation is published as a final rule.  OMB’s final review could take several months or just a few weeks.  Once complete, the final rule will be published in the Federal Register and take effect within 60 days of publication.

Commentators believe that the final rule will work its way quickly through OMB and most likely be published by July 7, meaning it would take effect on Labor Day, Sept. 5.  That has obvious symbolic meaning.  Alternatively, considering other significant events taking place this fall, if the rule is published on September 2 -- the Friday before Labor Day -- it will take effect on November 1, the day prior to Election Day.

Although the proposed regulations were issued in July 2015, the differences between those proposed regulations and the final rule won't be made public until the final rule is actually issued.

According to the Unified Agenda and Regulatory Plan, published in November 2015 by OMB, the earliest the final rule could be released would be in July. Timing is important. Under the Congressional Review Act, a joint resolution from both houses of Congress and the President can undo laws and rules passed during the final 60 legislative days of the previous Congress.  In other words, the Obama Administration must work quickly so that the regulations take effect before President Obama leaves office and to protect the new regulations from being overridden, if a Republican wins the White House.

Employers ought to be planning now for implementation of the new regulations.  Among the changes likely to be reflected in the new regulations when they are published include:

• The salary threshold under which employees would be required to receive overtime pay (regular hourly rate x 1.5 for all hours worked beyond 40 hours in a given workweek) would be the 40th percentile of average weekly earnings in the U.S. The USDOL has projected that the 40th percentile weekly wage in the final rule will be $970, or $50,440 per year for a full-time employee.  This represents a significant jump from where it currently stands -- $23,660.
  
• This new salary-level threshold will be annually updated, based either on the percentile or indexed to inflation.
  
• For highly compensated employees (considered exempt without regard to any duties test), the new annual salary threshold will be $122,148, which is up from the current level of $100,000.

It remains to be seen whether changes in the applicable duties test will be incorporated into the new regulations.  No proposed changes to the duties test were reflected in the proposed rule published in 2015.

To avoid paying overtime to employees who would need to be reclassified as nonexempt, employers might consider increasing the employees’ salaries to a level above $50,440.   Alternatively, employers might considering reducing the hours of employees who would be newly non-exempt and eligible to receive overtime.  A third option is to adjust the hourly rates of newly non-exempt employees downward so that, when their additional overtime pay is considered, their overall weekly compensation remains unchanged.  Most employers will implement some combination of these tactical options in order to control the financial implications of the new regulations.

New Developments in Medical Marijuana and the Workplace

According to the National Conference of State Legislatures, twenty-three states now have medical marijuana laws on the books.  The conventional wisdom is that these laws bring with them greater protections for employees who are users of medical marijuana.  Court rulings over the last several years, however, have shown that this conventional wisdom is not always correct and that not all state medical marijuana laws are created equal.

For example, last summer the Colorado Supreme Court held that although Colorado law allowed for the use of medical marijuana, that law did not prevent an employer from terminating a medical marijuana user who had tested positive for marijuana in violation of the company’s zero-tolerance drug policy.  Reaching a similar conclusion, a federal district court in Washington recently dismissed an employee’s discrimination complaint and found that the law in Washington does not require employers to accommodate the use of medical marijuana where they have a drug-free workplace policy.  Swaw v. Safeway, Inc. (W.D. Wash. 2015).  In Swaw, the court pointed to an earlier 2011 decision from the Washington Supreme Court, which held that Washington’s medical marijuana law “does not regulate the conduct of a private employer or protect an employee from being discharged because of authorized medical marijuana use.”

That courts in Colorado and Washington (and California and Oregon, to name a few others) have construed medical marijuana laws in favor of employers does not mean that employers in other states with medical marijuana laws can assume their courts would reach similar interpretations.  This is because the medical marijuana laws in some states, such as Washington and Colorado, simply de-criminalize medical marijuana without providing any specific employment protections.  Other states, however, such as Maine, include specific protections that prohibit employers from taking adverse action against an employee based on his or her status as a medical marijuana user.  Consequently, court rulings from “de-criminalization” states should not be viewed as indicative of how a court would rule in another jurisdiction, such as Maine, where the applicable law expressly provides for some level of employment protection for medical marijuana users.

Although Maine’s courts have had little opportunity to weigh in on the issue of medical marijuana, Maine’s Department of Labor has recently issued a report that recommends several changes to the state’s drug testing law.  The report is the culmination of a workgroup that was convened by MDOL to explore a number of issues relating to substance use and abuse in the workplace, including the medical use of marijuana. The report, which is available here, recommends two changes.  The first change is directed at streamlining the process to approve drug testing policies and recommends the use of a uniform drug testing policy, which would be prepared by MDOL and used by all employers in the state. The second change involves replacing the “probable cause” standard for drug testing with a program whereby employers would receive training to detect impairments, regardless of their cause, and employers would then have the option to refer the alleged impairment case to a “preferred occupational provider” to confirm the impairment and make recommendations to address or accommodate the cause.

Federal Court Finds Employee’s Explanation for Failed Drug Test Insufficient to Provide Notice of a Disability

Most employers are well aware that, under state and federal disability laws, an employee with a disability is entitled to reasonable accommodations in the workplace.  What can sometimes be less clear for employers is determining at what point the obligation to provide a reasonable accommodation arises.  Not surprisingly, the answer often depends on the facts.

As a case in point, a federal district court recently held that an employee’s disclosure that he was taking oxycodone for his back pain was not sufficient to put the employer on notice that he had a disability or that he required an accommodation.  Angel v. Lisbon Valley Mining Co., LLC (D. Utah, Nov. 23, 2015).  The employee disclosed that he was taking oxycodone after he had failed a drug test. Although the employee told human resources that the medication was for a back impairment and provided them a copy of his prescription along with a physician’s note, the court found neither the prescription nor the doctor’s note was sufficient to notify the employer that he was claiming a disability or asking for an accommodation.  In this case, the court held that the employer’s mere awareness of the employee’s physical condition (i.e. back pain) was insufficient to show that it was aware of an alleged disability or a request for accommodation.

Although it is difficult to generalize from the facts of a particular case, the outcome in Angel nonetheless confirms that the duty to provide a reasonable accommodation is triggered only after an employee has put the employer on notice of a disability and a desire for an accommodation. Although an employee’s accommodation request can be in “plain English” and does not need to use any special words, it must still be sufficient to notify the employer that the employee needs a modification at work and that the modification is related to a medical condition.