2010-2011 Legal
Developments in Labor and
Employment Law
Jeffrey S. Stewart, Esq
Tallman Hudders & Sorrentino
1611 Pond Road, Suite 300
Allentown, PA 18104
610-391-1800
[email protected]
EEOC

Increased complaints
 Retaliation– Rose 36.3
percent
• 36,258 filed


Up from 33,613
Race—35,890
• Up from 33,579

Sex discrimination—29,029
• Up from 28,028

Overall complaints– from
93,277 in 2009 to 99,922 in
2010
EEOC

EEOC— Growing “more
assertive”


Class action lawsuit against
AT&T
Increased its staffing to more
than 2,500 employees
 Attacking case backlog
 Will devote resources to
volume of discrimination
Charges, investigating and
litigating systemic cases,
issuing final regulations
under the ADAAA and ADEA
 EEOC recovered record $404
million in monetary relief for
private sector discrimination in
FY 2010
Retaliation
 Pop
quiz hot shot…there’s an employee in
your office that filed a charge of
discrimination for sexual harassment. Her
fiancé also works in your office. You fire
the fiancé for performance related
issues…he then claims retaliation…what
do you do…what do you do?
Retaliation
 What
constitutes “retaliation”
 Who is “protected”
Thompson v. North American
Stainless, LP
Fiancé falls within the “zone of
interest” protected by Title VII
 Court however stated that it
“decline[d] to identify a fixed
class of relationships for which
third-party reprisals are
unlawful. We expect that firing
a close family member will
almost always meet the
Burlington standard, and
inflicting a milder reprisal on a
mere acquaintance will almost
never do so, but beyond that
we are reluctant to generalize”
 Result? More lawsuits!

FMLA Retaliation

Brief lesson on Family Medical Leave Act




Who is covered?
What are covered employees entitled to?
What is protected?
Ayanna v. Dechert




Male employee used FMLA leave to care for his
children and mentally ill wife
Terminated after taking leave
Claimed terminated because of “macho culture” of
law firm
Why is this significant?
Discrimination
 Gender





stereotypes
Lewis v. Heartland Inns of America, LLC
Employee allegedly terminated for
“tomboyish” looks
Can an employer prefer a “midwestern girl
look” for its employees?
According to the 8th Circuit…NO
Grooming and appearance standards are
OK…must be comparable for both males and
females
Burlington v. News Corp.



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
Anchor Tom Burlington, a white male, used a
derogatory term for African-Americans during a
pre-show meeting
Burlington contract was not renewed
Burlington sued for race discrimination
Basis: Other employees used the same word
and were not disciplined
Station argued that “social norm” determined
who could use the word
Court: “Social norm” argument not valid
Also discussed the “cat’s paw”
Cat’s Paw



What is the “cat’s paw”
3rd Circuit opinion?
Staub v. Proctor
Hospital– Pending before
the Supreme Court

7th Circuit: supervisor
has “singular influence”
over decision maker
AND “uses” that
influence to cause the
adverse action.”
Harassment



What laws are
applicable?
What constitutes a
“hostile work
environment”
Reeves v. C.H. Robinson
Worldwide, Inc.

Sex-based profanity,
even if directed at
others, can create
hostile workplace
A Hit to the Harassment Defense

Critical question in harassment: did the employer know or
reasonably should have known of harassment



Did the employer have a “reasonable avenue for complaint”
Take prompt remedial action
Rorrer v. Cleveland Steel Corp. (E.D. Pa. April 28, 2010)
• What happened?
• Complaint made to “employee with apparent managerial authority”
 Company: failed to “avail herself to the reasonable complaint
procedure.”
 Court: Policy was not clear—issue of fact if the individuals had
managerial authority ALSO
• Company did not provide education or training on sexual
harassment to employees

Lesson: CLEAR POLICY AND TRAINING NECESSARY!!!
Employee Rights Poster Required by Federal
Contractors

Mandated as of June 20 a
poster advising employee's
right to join or not join a union
and describing union and
employer misconduct


Federal contractors and
subcontractors: post this
employee rights notice in their
workplaces
Under DOL's final rule,
employees may file complaints
with the Labor Department
about contractors that do not
post the notice, and
contractors who violate the
regulation could have their
federal contracts suspended
or canceled
DOL FY 2011-2016 Strategic
Plan


Wage and Hour Division
and Department of
Treasury joint initiative
regarding
misclassification of
employees as
independent contractors
is Strategic Goal No. 1
What are they doing?


Inspectors
Lawyers
Construction Workplace
Misclassification Act



Signed into law October 13,
2010
Effective February 10, 2011
Need:



Written contract
Free from control and
direction
Customarily engaged in an
independently established
trade, occupation,
profession or business
Health Care Reform:
Patient Protection & Affordable Care Act (as
amended by Reconciliation Act)

On March 23, 2010, President Obama signed the Patient
Protection and Affordable Care Act into law ("PPACA")

Shortly thereafter, on March 30, 2010, a modified version
of the House's Reconciliation Bill was signed into law,
making changes to the broader heath care reform law
enacted on March 23
Nursing Mother’s Amendment to
the Fair Labor Standards Act

Section 4207 of the
Patient Protection and
Affordable Care Act of
2010
 Employers must provide
a “reasonable break
time”
 Employer must provide a
place “shielded from
view and free from
intrusion from coworkers
and the public”
Breast Feeding Regulations

The DOL on December
21, 2010, announced that
it is seeking comments on
provisions of the Fair
Labor Standards Act
(FLSA) that require
employers to provide
nursing mothers with
reasonable break time
and a private space for
expressing breast milk
while at work
Nursing Mothers Entitled Reasonable Breaks Fact Sheet #73

Fact sheet issued by DOL - Wage and Hour Division
explains employers' obligations under the PPACA
 Employers must provide reasonable unpaid break time
and a private place for breast-feeding employees, titled
"Break Time for Nursing Mothers under the FLSA"
 Applies only to non-exempt employees
 Federal law does not require employers to
compensate nursing mothers for the breaks while
nursing
 Employer with less than 50 employees at all work
sites exempt if undue hardship
Payment of Interns!
Quiz
 Question


1:
If a student receives college credit for the
internship he/she does not need to be paid.
TRUE OR FALSE?
Paid Or Unpaid
 Determine
the “relationship”
 Fair Labor Standards Act

Sets for the standards for payment of
“employees”
 State
law requirements
Fair Labor Standard Act

Who is covered?




Two employees;
Directly engaged in interstate commerce or in the
production of goods for commerce and gross annual
revenues of at least $500,000
“Suffer or permit to work”
What is an “employee”
What’s the Big Deal?
 “Greed
is good”
Test for Interns
 Six-Part
Test for Payment of Interns
(generally in the for-profit area):



Internship, even though it includes actual
operation of the facilities of the employer, is
similar to training which would be given in the
educational environment;
Internship experience is for the benefit of the
intern;
Intern does not displace regular employees;
Test for Interns
 Six-Part



Test for Payment of Interns:
Employer that provides the training derives no
immediate advantage from the activities of the
intern, and on occasion its operations may be
impeded;
The intern is not necessarily entitled to a job
at the conclusion of the internship; and
The employer and the intern understand that
the intern is not entitled to wages.
Key Factors

“Similar to education environment”

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“Displace regular employees”
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Structured around educational experience
Multiple employer settings
No “routine” work
Not substitute employees
Shadowing
Supervision
“Job entitlement”


Set time period for internship
Not a “trial period”
FLSA Liability

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Civil action by DOL for back pay and damages
Injunction
Criminal action
Civil actions by employees
If no violation found, “right to sue” letter under
216(b) of FLSA
Privacy Concerns
 Who
is this…?
Privacy Concerns

City of Ontario v. Quon



Police department reviewed
text messages sent to and from
a city-issued pager
Many were sexually explicit
and officer disciplined
Officer did not have right to
privacy
• Legitimate interest in ensuring
that city was not paying for
excessive personal
communications and search
was reasonable in
scope…AND…
• City had a policy in place

COMPARE TO…
Stengart v. Loving Care Agency,
201 N.J. 300 (2010)




Stengart made a hostile
work environment claim
Used company-issued
laptop to communicate
with her employment
lawyer
E-mails stored and
accessible on
company’s server
Loving Care retrieved
e-mails and used in
litigation
The Issue:
The extent to which an
employee can expect
privacy and
confidentiality in
personal e-mails with
her attorney which she
accessed through her
personal, password
protected e-mail
account on a companyissued laptop.
The Answer

Stengart had a reasonable
expectation of privacy in the
e-mails exchanged with her
lawyer through her personal
e-mail account
 Sending and receiving them
via a company-issued
laptop did not eliminate the
attorney-client privilege that
protected them
 Lawyers for Loving Care
violated the Rules of
Professional Conduct by
failing to notify Stengart
promptly of the privileged
documents
Pointers
Your company policy should:

Be tailored

Address legitimate business
needs

Be clear and unambiguous

Address use of personal
websites

Warn employees if e-mails on
personal accounts are saved on
company server
Restrictive Covenants

Brief lesson:

Valid
• Limited scope
• Business reason


Insulation Corp. of America v. Brobston



Issue: to terminate or not to
terminate…that is the question…
Employee discharged for poor performance
cannot reasonably be perceived to pose the
same competitive threat to employer’s
business interests as one whose performance
is not questioned and who voluntarily resigns
Non-compete therefore not enforceable
All-Pak, Inc. v. Johnston

Appeared to extend Brobston to all forms of
terminations
Missett v. Hub International
Pennsylvania LLC



Superior Court—September 23, 2010
Rejected narrow reading in All-Pak and
Brobston
Must look at several factors to determine
enforceability of non-compete

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Position held by employee and access to
confidential and proprietary information
Reasonableness of duration and geographic
scope
Consideration provided
Adverse effects on the company if the
agreement were not enforced and effects on
employee’s ability to earn a living it if were
Whether restrictive covenants are standard and
customary in the industry
“Circumstances of termination are but one of
many factors to be considered by the court”
Issue is “case by case”
Unemployment

Temporary Extension
of Unemployment
Insurance and
Related Matters Postponed the
termination of the
program until June 9,
2012.
Next Issue….
 HEEEEERRREE’S
JOHNNY….
ADA Amendments Act (ADAAA)

On September 23, 2009, the
EEOC published its proposed
regulations implementing and
interpreting the ADAAA:

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Public comment period expired
on November 23, 2009
EEOC approved a final set of
regulations for ADAAA at the end
of December 2010
ADAAA final regulations were
released to the Office of
Management and Budget (OMB)
and other federal agencies for
review and comment
Once OMB approves the
regulations, they will be published
in the Federal Register
ADA Amendments Act (ADAAA)

Believed that regulations
would require:

Impact on mentally ill
individuals
• Easier to prove disabled

Employers to revise
policies, train or re-train HR
personnel and supervisors
in dealing with disability
issue, and focus on
reasonable
accommodation issues and
the interactive process
between the employer and
the disabled employee
GINA Title II Regulations

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EEOC issued final regulations on
November 9, to implement Title II
of the Genetic Information
Nondiscrimination Act (GINA)
These final regulations became
effective on January 10, 2011!
The regulations include model
safe harbor language
Regulations do not restrict an
employer from receiving genetic
information inadvertently after it
requests health-related
information if the employer warns
employees not to provide genetic
information
Retaliation issue
Tax Relief, Unemployment Insurance
Reauthorization and Job Creation Act of 2010

The Tax Relief,
Unemployment Insurance
Reauthorization and Job
Creation Act of 2010,
enacted December 17,
2010, included many
extensions to tax credits
and exclusions that affect
employers and employees.
 Included a two-year
extension of a tax break for
employer-provided tuition
assistance
FMLA Interpretation

June 2010: DOL of Labor issued a
new Interpretation


Clarified FMLA regulation regarding the
definition of "son or daughter" under
Section 101(12) of FMLA as it applies to
an employee standing "in loco parentis"
to a child
NOW: Either day-to-day care OR
• Financial support may establish an in loco
parentis relationship where the employee
intends to assume the responsibilities of a
parent with regard to a child

"Neither the statute nor the regulation
restrict the number of parents a child
may have under the FMLA"
Electronic I-9 Forms

On July 22 final rule
published by Homeland
Security which amended I-9
regulations
 Took effect August 21st
 Regulations clarify:



I-9 Form must be completed
within 3 business days of
the date hired
The use of paper, electronic
systems or a combination of
paper and electronic systems
is acceptable
Employers may but are not
required to copy verification
documents
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