Labor Days News and analysis from Kelley Drye’s labor and employment practice Wed, 03 Jul 2024 05:29:41 -0400 60 hourly 1 In Order to Avoid Liability, Employers Need to Reevaluate Employee Cell Phone Usage Policies Fri, 11 Nov 2016 16:56:54 -0500 Employers have long understood that what their employees do on company time is directly linked to the company’s own potential liabilities. When employees using mobile electronic devices cause harm, their carelessness isn’t only a problem for them—on company time, it can become a major problem for employers, as courts across the country have made clear in the past few years. Many employers are now reevaluating their cell phone usage policies for precisely this reason.

When a driver is using a cell phone at the time of an accident and the accident happens while the driver is on company business, the phone call is a business one, or the cell phone was provided by the company, companies have been sued along with the driver/employee, under a theory of “vicarious liability” or respondeat superior for the actions of its employee. Under these doctrines, an employer may be responsible for the harm caused by its employee if that employee was acting within the course and scope of his or her employment at the time the accident occurred.

Notably, it may be easy for plaintiff’s attorneys to garner evidence to support this theory because cell phone records can be subpoenaed and used to prove the employee was on the phone at the time of the accident. In addition to arguing that an employer is liable for the harm caused by one of its employees, some plaintiffs have argued that the employer is directly liable for its own negligent conduct in failing to provide adequate training or instructions on safe cell phone use, or failing to restrict usage.

In addition to potential litigation, employers should be aware of potential criminal misdemeanor charges. In 2014, Illinois implemented its Hands Free Act, which bans the use of all hand-held devices while driving in Illinois. According to the law, if one of your employees is using a cell phone and operating his/her vehicle while on company time, then the employer could be held liable for the employee’s non-compliance. The statute (625 ILCS 5/16-202) allows for the imposition of criminal penalties if the employer directs or otherwise knowingly permits an employee to act in violation of the law. Although, we are currently unaware of any employer being prosecuted under this new law, it remains a concern to employers given the ubiquity of employee cell phone use.

The takeaways:

  • The best action for employers is to implement a total ban policy that includes handheld and hands-free devices and prohibits all employees from using cell phones while driving.
  • Employers should have employees sign and acknowledge receipt of the total ban policy discussed above.
  • This policy should be reinforced throughout the year with training and education. Employers should document their training and education efforts.
  • A policy is not a shield to all liability, but it provides an important defense.

What the Seventh Circuit’s Recent Title VII Ruling Means for Sexual Orientation Discrimination in the Workplace Thu, 11 Aug 2016 16:36:57 -0400 On July 28, 2015, the United States Court of Appeals for the Seventh Circuit (“Seventh Circuit”) ruled that Title VII does not protect against sexual orientation discrimination. See, Hively v. Ivy Tech Cmty. Coll., 2016 BL 244172, 7th Cir., No. 15-1720, 7/28/16. The Seventh Circuit ruling is the first by a federal circuit to address the question since the EEOC held in an administrative ruling that bias based on sexual orientation is sex discrimination violating Title VII.

The Seventh Circuit did not discuss the merits of Ms. Hively’s case, who alleged Ivy Tech Community College did not promote her because she is a lesbian. Instead, the Court discussed the “paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.” Judge Rovner wrote:

For although federal law now guarantees anyone the right to marry another person of the same gender, Title VII, to the extent it does not reach sexual orientation discrimination, also allows employers to fire that employee for doing so….Many citizens would be surprised to learn that under federal law any private employer can summon an employee into his office and state, “You are a hard‐working employee and have added much value to my company, but I am firing you because you are gay.” And the employee would have no recourse whatsoever—unless she happens to live in a state or locality with an anti‐discrimination statute that includes sexual orientation. . .

In its decision, the Seventh Circuit explained that since 1994, Congress has “repeatedly rejected legislation that would have extended Title VII to cover sexual orientation” despite growing public support for such protections. The Seventh Circuit suggested it may be time for the Supreme Court to weigh in on whether Title VII should apply to suits alleging discrimination based on sexual orientation especially in light of the Supreme Court’s gay marriage ruling in Obergefell v. Hodges. Ultimately, the judges concluded that they could not deviate from past rulings by the appeals court limiting Title VII's applicability because of the "silence" of the Supreme Court on the issue, and the consistent rejection by Congress of proposed laws to protect employees from discrimination based on their sexual orientation.

At least two other federal appeals courts have pending cases raising the same issue. If these courts reach different decisions, it is possible a circuit split could force the Supreme Court to rule on this issue. Notably, on Wednesday, August 3, 2016, in a bathroom access case brought under Title IX, the U.S. Supreme Court stayed a Fourth Circuit ruling requiring schools to allow transgender students to use the bathroom that fits their gender identity. The case is stayed while the Gloucester County School Board petitions the high court to consider its appeal of the Title IX decision. The case is Gloucester County School Board v. G.G., By His Next Friend and Mother, Deirdre Grimm, case number 16A52. The student’s rights in this case may turn on whether or not the definition of “sex” in Title IX refers to gender identity and the deference granted to the Department of Education’s interpretation of Title IX. What is clear is that courts, including the country’s highest court, are addressing landmark cases involving the rights of LGBTQ citizens and there is a trend towards greater recognition of LGBTQ rights.

Furthermore, there is the possibility that this issue will be addressed through new legislation. The Equality Act currently has 218 congressional co-sponsors. The Equality Act would explicitly add sexual orientation and gender identity as protected categories under the federal civil rights laws, barring discrimination on those grounds in public accommodations, education and housing as well as employment. This would codify into federal law regulations that already exist in many states.

While the Seventh Circuit ruled Title VII does not protect gays and lesbians who face discrimination at the job, many states have anti-discrimination laws in employment. The Seventh Circuit has appellate jurisdiction over Illinois, Indiana, and Wisconsin. Illinois prohibits discrimination based on sexual orientation and gender identity. Wisconsin prohibits discrimination based on sexual orientation (not gender identity); however, some counties and cities ban discrimination based on gender identity. Indiana provides no statewide protections; however, some cities and counties have enacted anti-discrimination laws. In light of this uncertainty, employers should consider doing three things:

  • Sexual orientation may be a protected characteristic in employment under state, county, local law, or executive order depending on where a business operates;
  • Develop policies and procedures to prevent sexual orientation discrimination in the workplace, even in jurisdictions where it is not a protected characteristic; and
  • Ask legal counsel questions about additional legal developments.

What You Need to Know About Recent Amendments to Illinois’s Equal Pay Act Tue, 09 Aug 2016 16:02:12 -0400 As of January 1, 2016, Illinois’s Equal Pay Act (the “Act”) expanded to prohibit all employers, regardless of size, from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or factors other than gender. The previous version of the Act only applied to employers with four or more employees.

The recent amendments to the Act also increase the civil penalties for violation of the law as follows:

  1. For employers with four or more employees: For a first offense, a fine not to exceed $2,500; for a second offense, a fine not to exceed $3,000; and for a third or subsequent offense, a fine not to exceed $5,000; and
  2. For employers with fewer than four employees: For a first offense, a fine not to exceed $500; for a second offense, a fine not to exceed $2,500; and for a third or subsequent offense, a fine not to exceed $5,000.

The expansion of the Act to cover all employers is not the only recent amendment of note. As of 2013, officers of a corporation or agents of a company can be held individually liable to pay owed wages for violations of the law by the employer. Although the concept of individual liability has not been litigated, the threat of individual liability certainly provides an important leverage point for plaintiffs bringing claims under the Act.

Otherwise, the law remains the same since its enactment in 2003. In summary, the Act applies to both men and women. Male and female employees must receive equal pay for the same or substantially similar work when they work for the same employer as long as they are both working in the same county. Job titles are not considered determinative of whether or not male and female employees actually perform the same or substantially similar work. If the Illinois Department of Labor commences an investigation, it can investigate up to three years prior to the date the Illinois Equal Pay Act complaint was actually filed. If an employer is found guilty of pay discrimination, the employer, officers of a corporation, or agents of a company will be required to make up the wage difference to the employee (and may be subject to pay legal costs and civil fines discussed above).

To ensure compliance with the law, Illinois employers should consider auditing their payroll practices. Such audits require gathering information necessary to group “similar” jobs, determine whether legitimate factors are responsible for any pay disparity, and analyze whether any disparity is based on gender. Small Illinois employers should also be aware that they are now covered by the Act and may face wage discrimination litigation under state law.

For more information on this topic, register for Kelley Drye and Welch Consulting’s CLE, “Equal Pay for Equal Work? The State of Pay Equity in the U.S.,” on September 14, 2016 that will be live in New York and by webinar.

Illinois Medical Marijuana Law: What Employers Should Know Wed, 02 Mar 2016 10:23:05 -0500 Currently, 23 states have enacted laws to legalize medical marijuana. Medical marijuana laws are challenging for all employers, but particularly multistate employers, as employers must reconcile federal and varying state laws.

In November 2015, medical marijuana dispensaries in Illinois began treating patients under Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act (“Compassionate Use Act”). Illinois’s medical marijuana law is one of the most restrictive in the nation. First, it is a four-year experiment. At the end of 2017, government officials in Illinois will evaluate whether to restrict, expand, or modify the approved uses of cannabis. Second, patients must be diagnosed with one of the specific, debilitating medical conditions enumerated in the Compassionate Use Act to be prescribed medical marijuana (chronic pain did not make the list). Third, the prescribing physician must have a prior and ongoing medical relationship with the patient. Finally, the law prohibits patients from growing their own marijuana.

In addition to the legal uncertainty, marijuana is not like other drugs. An individual could test “positive” for cannabis a month or more after usage, and a positive test does not mean the person was under the influence of marijuana at the time of the positive test.

Employers, at a minimum, should understand the following:

  • The Compassionate Use Act specifically prohibits employers from discriminating against or penalizing a person based solely on his or her status as a patient qualified and register to receive medical marijuana. Employers should not fire an employee or refuse to hire an applicant solely because of their use of medical marijuana or their status as a registered user.
  • The Compassionate Use Act does not have specific language that employers must offer the use of medical marijuana as a reasonable accommodation under the ADA. Although the underlying debilitating medical condition may qualify an individual for protections under the ADA, whether an employer decides to allow an employee to use medical marijuana as a reasonable accommodation under the ADA will be an individualized determination for the employer to undertake.
  • The Compassionate Use Act specifically states that employers may still enforce a “policy concerning drug testing, zero-tolerance, or a drug free workplace provided the policy is applied in a non-discriminatory manner.”
  • The Compassionate Use Act includes an exception to its nondiscrimination provision by permitting employers to discriminate against or penalize registered users if failing to do so would put the employer in violation of federal law or cause it to lose a monetary or licensing related benefit under the federal law (e.g. owners of nuclear power plants, gas or oil pipelines, airlines and railroad, school bus drivers).
Employers in safety-sensitive industries may want to tighten the language of their zero-tolerance policies, while those in lower risk environments may take a less rigid approach if they believe marijuana usage by a registered user only takes place outside of work hours and the employee is not impaired at work. Now is an ideal time to review personnel polices involving drug testing and protocols for responding to employee drug use. Employers should carefully consider the company’s approach to drug testing of employees and develop a consistent and transparent plan for responding to drug test results.

The Seventh Circuit Further Clarifies FLSA Overtime Exceptions…For Window Washers Tue, 07 Apr 2015 15:12:48 -0400 A recent Seventh Circuit decision may provide ammunition for employers defending FLSA claims brought by commission-based employees or employees who work irregular hours.

In Ramon Alvarado, et al. v. Corporate Cleaning Services, Inc., et al., No. 13-3818 (7th Cir. April 1, 2015), the plaintiffs were 24 window washers employed currently or formerly by Corporate Cleaning Services (“CCS”), one of Chicago’s largest providers of window-washing services to high-rises. They filed a lawsuit against CCS for failure to pay overtime wages under the FLSA, alleging they worked in excess of 40 hours in individual work weeks for CCS but were not paid at a rate of one and a half times their regular hourly rate of pay for all the time they worked in excess of 40 hours per week.

There is a commission-related exception to the FLSA that requires satisfaction of three conditions: (i) the worker’s regular pay exceeds one and a half times the federal minimum wage; (ii) more than half of the worker’s compensation represents commissions on goods or services; and (iii) the worker must be employed by a retail or service establishment. See 29 U.S.C. § 207(i). CCS conceded that it did not pay the window washers for work in excess of 40 hours a week; and the window washers conceded that their regular pay exceeds one and a half times the federal minimum wage (under the exception’s first required condition).

Examining the “commission” issue, Circuit Judge Richard Posner reviewed certain facts, including CCS’s assignment of “points” to jobs based on complexity and the number of hours that the window washers took to complete the job, as well as how each worker usually received the same amount of points allocated to the job. CCS then used the number of points assigned to the job to determine the amount it charged the customer and often made price adjustments for the costs of permits, equipment rentals, competition, or the desire to maintain good relations with customers. Because the plaintiffs’ compensation was based on the points assigned to each job on which they worked, their compensation would vary from job to job.

Posner analyzed the differences between two compensation systems - commission based and piecework based compensation. In a piece-rate system the worker is paid by the item produced by him; but in a commission system, a worker is paid by the sale. Varying compensation does not invalidate the compensation system as a commission system. See Yi v. Sterling Collision Centers, Inc., 480 F.3d 505, 509-10 (7th Cir. 2007). Another important consideration is that commission-compensated work involves irregular hours of work. See Id. at 510. Furthermore, if sales are made at a uniform rate, so that the hours worked-to-pay ratio is constant, then an employee who is paid by the sale is not a commission worker. Piece-rate workers are not within the FLSA commission exception because they keep producing even when no sale is imminent – the hours-to-output tend to be constant.

Here, however, the plaintiffs could only work when CCS was hired (or sold its services), and therefore, their employment was irregular because of the peculiar conditions of the window-washing business. In addition, Posner listed other reasons why their work was irregular, such as: weather, unable to amass an inventory, delays due to other work being done on the buildings or failure to notify residents, slowdown in demand, and, oddly enough, peregrine falcon attacks. Posner concluded that the plaintiffs’ compensation represented commission because they were paid only if there had been a sale of window washing services.

With respect to whether CCS was a “retail or service” establishment, Posner stated that the terms are not defined in the statute, and concluded that the CCS met the “retail or service establishment” requirement under the FLSA (section 207(i)), and was probably best described as a “retail services establishment.” The Court found that CCS was a retailer as opposed to a wholesaler, and that it sold its services by the building – which is a unit of sale recognized in the industry. Posner then discredited the plaintiffs’ and The Department of Labor’s (which filed an amicus curiae brief), attempts to establish that CCS “lacks a retail concept” and that the building managers “resell” CCS’s services to the occupants. According to the Department of Labor regulation, 29 C.F.R. § 779.317, although it is impossible to give a complete list of the types of establishments that have no “retail concept,” it is possible to give a partial list of establishments to which the retail concept does not apply. The partial list does not reference window washers. Moreover, The Department of Labor cited to definitions from regulations that come from a section of the statute that pertains to the intrastate business exemption – which has no connection to this case.

This opinion is a management-side victory and will likely be cited by FLSA defendants in industries whose business models are substantially similar to CCS’s, including those with commission-based compensation systems and employees who work irregular hours. Companies and their counsel, however, are well advised to carefully review the regulations listing the establishments to which the “retail concept” does not apply.

No Such Thing as “No Harm, No Foul”? Thu, 19 Mar 2015 13:06:06 -0400 Everybody knows that an activist National Labor Relations Board (NLRB) expects a lot of all employers nowadays, union and non-union. One of the areas under the greatest NLRB scrutiny are time-honored, well-worn policies that have existed in employee handbooks for years: don’t disparage your employer; don’t say anything damaging about the company; don’t harm the business’s reputation or goodwill in the marketplace.

The reason for these kinds of policies is obvious and intuitive: if you work here, you owe your employer a common law duty of loyalty. And loyalty means, in part, not publicly slamming your employer.

Most everyone also knows that the NLRB has taken aim at these kinds of policies because they arguably discourage employees from exercising their rights under Section 7 of the National Labor Relations Act. Section 7, broadly speaking, protects employees’ rights to organize and to work for their “mutual aid and protection,” which necessarily means being able to talk about working conditions. The NLRB (and administrative law judges applying NLRB rules) has held over and over in the past several years that employment policies prohibiting employee speech that is “damaging” to or “disparaging” of a business are overbroad – sure, the policy would prohibit some things that are clearly unlawful, like true defamation, but it would also prohibit publicizing a legitimate beef. If you don’t like your pay and you want to post “my employer is cheap” on Facebook, that statement is probably damaging to a company’s reputation – but it’s also clearly protected speech under the NLRA.

The fact is, many employers still have these kinds of policies in place. So what happens if you’re one of those employers, you read this blog, and you remove the offending policy from your employee handbook before anybody complains or notices? It’s like a tort suit without damages – no harm, no foul, right?

Wrong, at least according to one NLRB administrative law judge in Chicago a couple of days ago. A private bus company, Latino Express, maintained an employee disciplinary policy from July 2012 through April 2014 that made certain offenses immediate cause for termination. On the “don’ts” list were “[a]ny action that jeopardizes company contracts or loss of revenues” and “[a]ny activity which causes harm to the operations or reputation of Latino Express Bus Company.” The company removed those rules from its handbook in April 2014 “once the rules were brought to [its] attention,” and it even posted the revised policy on employee bulletin boards. A union representing workers at the company filed an unfair labor practice charge over the fact that the company had maintained allegedly unlawful policies (the ones that had already been rescinded), and the case went to an administrative trial.

The judge found that the policies in question could be reasonably read by employees to prohibit lots of legally protected things, like striking, or complaining about wages, or even negotiating a collective bargaining agreement, on the theory that all of these things could have an impact on revenues or affect the employer’s operations or reputation.

But what about the fact that the bus company rescinded the policies and went out of its way to let employees know the policies no longer applied? Not good enough, said the judge: “[M]aintaining unlawful rules for almost two years makes their silent withdrawal untimely.” But the withdrawal wasn’t “silent,” was it? What about posting the new policies on the bulletin boards? Not good enough, said the judge: the bus company “made no assurances to employees that it will not interfere with the exercise of their Section 7 rights under the Act in the future and that at no time did [the company] expressly admit that these rules were unlawful.”

In other words, the company didn’t go out of its way to say, “hey, we think we’re violating the law, and that’s why we’re changing the rules, and we promise we won’t do it again.”

This case doesn’t mean that an employer has to immediately issue a mea culpa to all employees if it still maintains a questionable policy. This is just one administrative judge in one city, and I would never recommend that an employer publicize to employees that it thinks it has been breaking the law. But the decision does stand as a good measure of just how unforgiving the NLRB is prepared to be – so rescind potentially unlawful policies, let employees know about policy changes – and cross your fingers.

The case is Latino Express Inc., NLRB Case No. 13–CA–122006 (Mar. 17, 2015).

Can Employers Require Their Employees to be Vaccinated? Tue, 03 Mar 2015 12:03:30 -0500 From January 1 to February 27, 2015, 170 people from 17 states and the District of Columbia were reported to have measles. On February 25, 2015, health official confirmed Illinois’ 15th measles case in Cook County. Most of the nation’s 125 cases are part of a large, ongoing multi-state outbreak linked to Disneyland in California. The Disneyland outbreak has spurred a national discussion about whether employers should require their employees to be vaccinated.

vaccinationThe federal government does not require vaccinations, but many states have laws requiring health care workers to be vaccinated. Almost no companies outside of the health industry require vaccinations as a condition of employment. Illinois requires: (1) employers to make available the hepatitis B vaccine and vaccine series to all employees who have occupational exposures; (2) each health care setting to ensure that all health care employees are offered the opportunity to receive seasonal, novel, and pandemic influenza vaccine during influenza seasons; (3) rubella vaccinations for nursery personnel; (4) hospitals to establish an employee health program that includes required vaccinations. See Ill. Admin. Code 56 § 350.280; Ill. Admin. Code 77 § 956.30; Ill. Admin. Code 77 §250.1820; Ill. Admin. Code 77 § 250.450.

Can employers require vaccinations? Sometimes. Most employers may institute a mandatory vaccine policy, and fire non-union workers for not complying because most employment is at will (meaning employees can be fired for any reason, at any time). However, mandatory vaccinations are usually not worth the legal ramifications and costs.

If an employer institutes a mandatory vaccination policy, it could be subjecting itself to potential liability under Title VII of the Civil Rights Act (“Title VII”), the Americans with Disabilities Act Amendments Act (“ADAAA”), and various state laws. Title VII may require an employer to provide a reasonable accommodation to an employee with religious beliefs that prevent him or her from taking vaccines. Likewise, individuals with certain disabilities may not be able to have certain vaccinations due to the risk that they will exacerbate their medical conditions. Further, unionized employers may be prohibited from imposing mandatory vaccinations without first bargaining with the union. See VA Mason Hosp. v. WA State Nurses Assn., 511 F. 3d 908 (2007). Additionally, an employee contract may bar mandatory vaccinations.

If mandatory vaccinations are too costly to enforce, what should employers do? Strongly encourage employees to be vaccinated. These steps include educating your staff about how to prevent disease, educating your staff about the benefits of vaccination, instituting policies that encourage employees to remain at home (or that even force them to remain at home) if they aren’t feeling well, incentivizing vaccinations by offering free or low cost vaccines at work, providing refreshments at an employer sponsored vaccine site, providing time-off to obtain vaccinations off-site, and providing them with paid or unpaid sick leave.

The Illinois Supreme Court Clarifies Causation in a Claim for Retaliatory Discharge Wed, 04 Feb 2015 14:55:43 -0500 The Illinois Supreme Court recently clarified the element of causation in its ruling in Michael v. Precision Alliance Group, LLC, 21 N.E.3d 1183 (Ill. 2014). In Michael, employees who reported about certain practices of Precision’s that resulted in an investigation by the Department of Agriculture, and whose employment was subsequently terminated, brought a retaliatory discharge action against the company.

The trial court applied the three part McDonnell Douglas burden of proof analysis, and concluded that the plaintiffs established a prima facie case after being discharged a short time after they reported Precision’s practices, and, therefore, there was “a causal nexus” between the reporting and their firing. Precision, however, articulated legitimate, nondiscriminatory reasons (documented horseplay and a reduction in work force) for their discharge, and argued that the plaintiffs failed to prove the articulated reason for the discharge was pretextual. The trial court concluded that the plaintiffs failed to meet the their burden under the three part burden of proof analysis. The appellate court reversed the trial court decision. On appeal, the Illinois Fifth District Appellate Court reversed, stating that the trial court had erroneously increased the plaintiffs’ burden once it had established a “causal nexus.” The case was remanded to the trial court for further proceedings on the issue of damages, since the trial court found a causal nexus between the protected activities and the discharge. Precision appealed to the Illinois Supreme Court.

The Illinois Supreme Court stated that, although the trial court came to the correct resolution, a finding of a “causal nexus” needed for establishing a prima facie case of discrimination under the three part McDonnell Douglas test is not the equivalent of a finding of causation in retaliatory discharge cases in Illinois. When deciding the element of causation, the ultimate issue is the employer’s motive in discharging the employee; and, if the employer comes forward with a valid, nonpretextual basis for discharging its employees and the trier of fact believes it, then the causation element required to be proven is not met. Furthermore, when the tier of fact believes the employer’s proffered reasons, the Illinois Supreme Court also rejected the argument that more than one proximate cause may exist. The multiple causation concept does not apply in the context of narrowly-defined claims for retaliatory discharge.

In the event an employee is engaged in a protected activity, such as the filing or anticipation of filing a claim under the Workers’ Compensation Act or reporting illegal conduct (whistleblowing), employers in Illinois are well advised to accurately document all employee insubordination. Employers can defeat a claim of retaliatory discharge if it puts forth a legitimate, nondiscriminatory reason, and the trier of fact believes it.