Jottings By An Employer's Lawyer

Wednesday, February 27, 2008

Supreme Court in a Deferential Mood in Employment Law Decisions

Yesterday, the Supreme Court gave deference to a trial judge's decision on an evidentiary ruling, see "Me Too Evidence" - A Do Over"; today it's the EEOC's turn as the Court finds that the Commission's decision to treat an unsworn intake questionnaire combined with an affidavit as a "charge" is within their discretion. Federal Express Corp. v. Holowecki (S.Ct 2/27/08) [pdf].

It did take quite a bit more explanation, a suggestion to the EEOC that it could do better, and lost two justices along the way. Justice Thomas dissented and was joined by Justice Scalia. Hopefully there wasn't anything in Justice Thomas background as the former head of the EEOC that made him feel as if the agency was not deserving of deference.

To the extent that any hope remained that an employer could argue it was protected against a lawsuit because the EEOC failed to give it notice, it was extinguished. Here, the company only learned about the charge when a suit was filed, a fact Justice Kennedy described as "unfortunate" but obviously not irreparable.

Although this opinion could have some significance, I again don't see it as a "sea change,*" to use a term recently in play in the current presidential contest, but I suppose time will tell.

*Since the phrase is almost always improperly used and is greatly over-used, it has suffered a swamp change into something dull and tiresome. Avoid the phrase; otherwise you will irritate those who know it and puzzle those who do not.

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Tuesday, February 26, 2008

"Me Too Evidence" - A Do Over

What could have been one of the more important cases actually impacting employment law trials in this Supreme Court term was just handed down with what may appear to be a disappointing thud.

The issue was one that comes up frequently -- so called "me too" evidence about discrimination occurring to employees other than the particular plaintiff. If such evidence is admissible it is a boon for plaintiffs; exclusion is a winner for employers.

Here's the end game of Justice Thomas' opinion for a unanimous Court:
The question whether evidence of discrimination by other supervisors is relevant in an individual ADEA case is fact based and depends on many factors, including how —————— closely related the evidence is to the plaintiff’s circumstances and theory of the case. Applying Rule 403 to determine if evidence is prejudicial also requires a fact-intensive, context-specific inquiry. Because Rules 401 and 403 do not make such evidence per se admissible or per se inadmissible, and because the inquiry required by those Rules is within the province of the District Court in the first instance, we vacate the judgment of the Court ofAppeals and remand the case with instructions to have the District Court clarify the basis for its evidentiary ruling under the applicable Rules.
Sprint United Management Co. v. Mendelsohn (S.Ct 2/26/08) [pdf].

In other words -- the equivalent of a judicial mulligan.

Spinning it (irony intended) another way, although it will depend on the particular judge, for those appearing in front of judges who are concerned about trials spilling out of control, which includes most federal judges, the fact that the Supreme Court today emphasized the discretionary nature of the ruling should favor employers.

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Sunday, February 24, 2008

A New Use of the Internet -- "My EEOC Charge"

Behind this website is a dispute between an employee and a Salvation Army facility in Alaska.

Here's the intention according to the first page of the website:

This website is being used to present evidence in an EEOC complaint.

The complaint was filed in December 2007, and should be resolved by September 2008.

The complaint does not seek any money.

Here's a link to the page describing the EEOC charge itself.

I doubt that this will become the norm, but who knows. If nothing else it is a reminder that there are new dimensions in which it is possible to have employee/employer disputes aired. Particularly where as here, the employee is obviously interested in sharing a lot more than just her personal dispute.

A hat tip to Will Schendel of the Alaska Employment Law blog for Innovative Alaskan EEOC Claimant.

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Wednesday, February 20, 2008

Supreme Court Employment Law Docket -- Decide Two, Add Three

If he wasn't the first with the latest news from the Supreme Court's latest employment and labor law action, Ross Runkel at the LawMemo Employment Law Blog was the first that I saw.

Check here for his summary of Preston v Ferrer (S.Ct. 2/20/08). Short hand version, the Supreme Court found a California statute pre-empted by the Federal Arbitration Act. Probably nothing earth shattering here.

The second case decided today, LaRue v. DeWolff, Boberg & Assoc (S.Ct. 2/20/08) might have more impact as it allows an individual to sue for breach of fiduciary duty in connection with defined contribution ERISA plans. The Supreme Court had to distinguish a prior decision of its own where individuals were not allowed to bring a claim for their own injury in a defined benefit plan. And the differences between the two types of plans was the key distinction.

Ross also was the first to report on yesterday's Supreme Court action where they added three more labor and employment law cases to their docket. See Three new Supreme Court cases . Two deal with unions and the third is an ERISA case.

None of those three jump out at me as presenting burning issues which are begging to be decided, which raises a question for which I have been, so far unsatisfactorily, seeking an answer. Why has the Roberts Court become so interested in labor and employment law issues?

It seems to me that there have been an inordinately high number of cases where they have granted cert and/or asked for the government's view on whether cert should be granted. It's just a feeling, nothing "scientific" like the tea leaf reading that goes on over at SCOTUS Blog or Howard Bashman's How Appealing.

My best guess -- maybe there were two or three justices who were interested in employment law cases but didn't regularly attract enough votes to grant cert and maybe Roberts and/or Alito have supplied the missing link. Maybe one of the Supreme Court scholars in the blogosphere will enlighten us.

Update: The LaRue case is the more significant of the two decisions handed down yesterday. See some in depth analysis from Paul Secunda at Workplace Prof Blog, Reflections on the LaRue Decision. Stephen Rosenberg at the Boston ERISA and Insurance Blog has a preliminary first take at The Supreme Court Decides LaRue, In Probably Predictable Fashion. He has promised a more in depth look once he gets through with some court appearances, which I am sure will be worth checking back for.

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I don't claim to be a Supreme Court scholar, just a lawyer who practices in this area. I think you are right on the money that Alito has a greater interest in employment law than O'Connor did, and Roberts has a greater interest than Rehnquist did. This interest probably comes from their backgrounds as federal appellate judges, who have to face employment law cases on a daily basis.
I agree with anonymous. As appeals judges (and, in Chief Justice Roberts' case, as an attorney who represented private parties in appeals), Justice Alito and Chief Justice Roberts have seen firsthand the proliferation of employment cases in the lower courts, and the myriad issues that bedevil employment lawyers. They are thus much more familiar than their colleagues on the Court with how labor and employment cases work in practice, and likely more interested in having the Court resolve many of those issues.
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Monday, February 11, 2008

Empirical Research and Arbitration

Turn the academics loose and the next thing you know they want to do something crazy -- like rely on research! I hope they realize how disconcerting that can be in the non-academic legal world.

First, from the ADR Prof Blog comes Empirical Arbitration Analysis Reveals Companies Prefer Litigation. Although the subject is Fortune 100 companies use of consumer, not employment, arbitration, the conclusion seems to be that for non-consumer agreements, the companies prefer litigation not arbitration. The conclusion drawn by Professor Cole is:

Firms’ use of arbitration for consumer contracts but not for nonconsumer contracts suggests that, ex ante, many firms prefer litigation over arbitration, at least for disputes with other repeat players. Moreover, the authors suggest, the use of arbitration clauses in consumer contracts may be an effort to preclude class actions — either in arbitration or court — rather than an effort to promote a fair and efficient dispute resolution mechanism for consumer disputes.

Although going back to employment arbitrations, I can suggest another reason for making sure that arbitration agreements exclude class actions, the 4th Circuit's decision in Long John Silver's Rests. Inc. v. Cole, No. 06-1259 (4th Cir., Jan. 28, 2008). The short version -- in an FLSA "class action" arbitration rather than requiring potential plaintiffs to opt-in, the arbitrator held it should be an opt out class action, and the 4th Circuit upheld the action. See Bryan Peterson's "Long John Silver's Says Arrrbitrator Disregarrrrded the Law" for the long version.

And not to be trumped, the academics over at Workplace Prof Blog have quoted the abstract from an article by Alexander Colvin of Penn State, Empirical Research on Employment Arbitration: Clarity Amidst the Sound and Fury?

Whereas past research often concluded based on more limited datasets that outcomes from employment arbitration were generally similar to those from litigation, results of the present study, which is based on a larger dataset focused on cases involving employer promulgated agreements, indicate that both employee win rates and damage awards in employment arbitration are significantly lower than in litigation. By contrast, results of the present study confirm previous research findings that time to hearing is generally shorter in employment arbitration than in litigation. As with past research, the present study finds evidence of a repeat player effect, though with some uncertainty as to the causal explanation for this effect. Self-representation of employees is found to be associated with significantly worse employee win rates and damage awards, particularly where the case involves by a repeat employer-arbitrator pairing. Lastly, the article reviews research indicating some positive impacts of employment arbitration on the adoption and operation of internal organizational dispute resolution procedures.

The easy take away is that arbitration is not good for employees, but the last two sentences make it sound as if the findings are much more nuanced.

The fact that the Workplace Prof guys posted about the article means it will be seen, as I can personally attest from the increase in hits on my blog each time they happen to link to one of my posts.

One of the reasons all of this research is significant is that under consideration in Congress is legislation that would ban the use of pre-dispute arbitration agreements in consumer and employment situations. Which, not to put too fine a point on it, basically would mean the end of both employment law and consumer arbitration. See the Arbitration Fairness Act of 2007. [pdf].


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Initial Reactions to the New (Proposed) FMLA Regs

Apparently some folks did some reading over the weekend, as the first reactions to the Bush proposed FMLA regulations are beginning to trickle in. In early comments, two business trade organizations were tentatively pleased --

  • The National Retail Federation:

    The proposed changes to the current FMLA regulations provide additional clarity to a law that has helped millions of workers and their families," NRF Vice President for Government and Political Affairs Rob Green said. "Pending a thorough review of the proposed regulations, our initial analysis indicates that the new rules will help modernize a confusing and contradictory FMLA regulatory system that is often challenging for employees to understand and difficult for employers to administer. This long-overdue update will help restore FMLA regulations to the intent Congress had when it passed the original law 15 years ago.

  • The National Association of Manufacturers:

    We welcome the Department of Labor’s decision to address the way the Family and Medical Leave Act is applied in the workplace. Today’s action is the result of tens of thousands of comments to the federal government from both employers and employees, and it builds on a decade-long record of congressional testimony and legal decisions that reached the Supreme Court, all pointing to the practical challenges involved in granting family and medical leave. Over the course of the regulatory process, the NAM looks forward to reviewing the proposal thoroughly to ensure it upholds the benefits outlined in the law, while addressing critical administrative problems.

Not unexpectedly, Senator Hillary Clinton's campaign was not :

The Bush Administration is seeking to make it more difficult for employees to claim paid leave when it is available to them by requiring the employers leave policies to take precedent over the FMLA; requiring employees with chronic health conditions to obtain an annual certification that they are able to do their job or risk being transferred to a different job; allowing employers to communicate directly with medical providers, which raises privacy concerns; and much more. The proposed regulation is 500 pages long.

The Family and Medical Leave Act makes it possible for people to meet their responsibilities at work and at home. I have advanced a positive agenda to move our nation towards this goal. The President's proposed regulations, unfortunately, are a harmful step back.

Daniel Schwartz at the Connecticut Employment Law Report not only has a new job, but also has an initial survey of how this issue is being treated among the blogging community in his Wrapup.

And one of my Washington colleagues, Al Robinson who has long been monitoring developments in this area has pointed out that we may get some initial congressional reactions in hearings that were already scheduled to commemorate the 15th anniversary of the FMLA's passage:

  • The Children and Families Subcommittee of the Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing on Wednesday, February 13, at 3:00pm; and

  • the Workforce Protections Subcommittee of the House Education and Labor Committee will hold its hearing on Thursday, February 14, at 10:00am.

For those who prefer a pdf link to the new regulations as opposed to the text link that was available in my Saturday posting (where you can see some early thoughts on the regs) go here. And yet another link -- an e-alert from my firm with more thoughts can be found here.

Based on the early returns, it's too early to project a winner, but I think you are safe in saying that there will be a contested battle.


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Friday, February 08, 2008

Waiting with Bated Breath - the Proposed New FMLA Regulations Coming Monday

It probably won't quite stack up with the drama of the Patriots v. Giants classic of a week ago, but the suspense this week end waiting for the release of the proposed FMLA regulations may be intense. U.S. Department of Labor proposal will clarify FMLA rules for workers, employers and military families. Or maybe not.

Just in case you wondered how much anticipation you should have, the typed version apparently comes in just under 500 pages.

Update Saturday morning: For those who just can't wait until Monday morning, here's the link to the new regulations. Happy reading.

Some brief highlights:

  • The definition of "serious health condition" would be modified to require that the 2 or more treatments must occur within a 30 day calendar period and for chronic conditions the employee would have to see a physician for the condition at least twice a year;

  • There is no change in the time increments in which intermittent leave can be taken, which is something the employer community really would have liked. The proposed regulations would require that an employee using intermittent leave utilize the employer's regular call in procedure except under "emergency" situations, which is a plus.

  • There are numerous changes to medical certification provisions which would allow an employer to obtain more information from health care providers;

  • One of the best examples that has been used to bash the FMLA would be changed, the employee on FMLA leave would no longer be entitled to receive a "perfect attendance" or similar bonus as long as all types of leave are treated the same;

  • Employer and employee notification requirements are also changed. Employers would be required to provide annual notice of FMLA rights and responsibilities to employees but would get five days rather than the current two to provide an employee notice of eligibility for FMLA leave and designate a leave as FMLA; and

  • there's a change in the 12 month service rule for eligibility to exclude a break in service of more than 5 years, subject to exceptions for military, authorized educational or childrearing leaves, or where intent to rehire are covered by a collective bargaining agreement.

There is also a request for input on how the DOL should handle the recent expansion of the FMLA related to military leaves.

These proposed rules are not nearly as dramatic as the ones that were originally proposed to the white collar regulations which set off a legislative and political uproar. It will be interesting to see what happens to these. Although there will no doubt be comments from both sides, my initial thoughts are that if anyone should be howling for more, it should be employers.

A good example is intermittent leave. If you have any doubts that it is a real problem in need of a solution, consider what is happening to the Hillsborough Transit Authority in the Tampa area. It is currently faced with a $2.1 million cost because 42% of HART's 364 bus drivers have filed for intermittent medical leave. See, Family medical leave usage bloats HART's overtime.

According to the article,

HART executives are being forced to budget 18 percent more drivers to cover the daily workload. Those extra drivers report to work and wait for assignments to cover workers who call in sick.

Unscheduled absenteeism is on the rise among the drivers, up 34 percent since 2005. Nearly 40 percent of the HART bus driver absenteeism is a result of workers claiming intermittent time off under the Family Medical Leave Act.

It seems unlikely that the proposed changes in the regulations will help address these types of problems.

The new regulations have a 60 day comment period. Although it is not uncommon for those periods to be extended, I wouldn't count on it in this case as no doubt the folks at the DOL are well aware that the sand in the hourglass on the Bush administration is rapidly running out.


"There are numerous changes to medical certification provisions which would allow an employer to obtain more information from health care providers."

So much for HIPAA's privacy laws.
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Thursday, February 07, 2008

Campaign Financial Crunch = Wage and Hour Violations?

The big news in today's political world (at least until Mitt Romney dropped out) was that the Hillary Clinton' campaign was having some financial struggles which resulted not only in her having to loan her campaign $5 million, but according to the article in the Chicago Tribune:
Clinton's campaign also disclosed that several senior staff members, including her campaign manager, were voluntarily working without pay.
Having lately been up to my neck in wage and hour law collective actions, I couldn't help but think beyond the political implications to, you guessed it -- the possibility of a wage and hour problem!

Why? Because as we all know, employees can't waive their rights under the Fair Labor Standards Act unless there is a DOL or court approved settlement, and under the wage and hour law to employ someone is to "suffer or permit" an individual to work, which sounds precisely what could be occurring when senior staffers "voluntarily" work without pay. And if you spun it out far enough, that could easily lead to allegations of possible minimum wage violations, loss of exemptions which would mean failure to pay overtime, and all sorts of other problems that employers are now dealing with every day.

Fortunately for the senior staffers, according to the NYT, a fund raising spurt has apparently bailed the Clinton campaign out, so they won't have to face that issue. See, Clinton Campaign Aides Will be Paid.

But since this issue comes up fairly regularly in political season, from political campaigns of all stripes, see CNN's January 11th story, Top Giuliani staffers to go without pay, this may not be the last time the possibility exists.

Now in fairness, I don't know exactly how either the Clinton or Giuliani campaign are or were structured, whether "voluntary" work would truly be a violation, whether there may be some exception to FLSA coverage for political campaigns, or whether they would even be covered by the FLSA, which is its own arcane subject. Maybe someone who provides campaign legal advice will provide the answer. It might even be a good exam question for one of the triumvirate over at the Workplace Prof blog.

However, regardless of whether there truly is liability, it might not be a bad thing for all politicians to have to think about. It is always helpful for those who pass laws to be covered by them.

Rightly or wrongly, many employers wonder if legislators have any clue about the impact of employment legislation in the real world. Having to come face to face with it, by say having a DOL investigator show up and ask for records or receive a collective action suit for unpaid wages on behalf of all similarly situated individuals might be a good, even startling, education.

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