Richmond Labor & Employment PowerPoint

10/14/2013

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3 2 n d A n n u a l L a b o r & E m p l o y m e n t S e m i n a r

w w w. w o od sr o g er s . c o m

What’s Hiding Under Your Bed?

Legal Update

10/14/2013

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“But For” Retaliation

Standard

University of Texas Southwestern Medical Center v. Nassar, 133 S.Ct. 2517 (2013)

Supervisor Must Be

Empowered to Take Tangible

Employment Actions

Vance v. Ball State Univ., 133 S.Ct. 2434 (2013)

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Enforceability of Non-Compete

Agreement Must Be Decided By

Arbitrator, Not Court

Nitro‐Lift Technologies, L.L.C. v. Howard, 133 S.Ct. 500 (2012)

Private Contractor

Whistleblower Protections

Lawson v. FMR, LLC, No. 12‐3, cert. granted, 133 S.Ct. 2387

(2013)

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Labor Management Relations

Act – Neutrality Agreement

Unite Here Local 355 v. Mulhall,No. 12‐99, cert. granted, 133 S.Ct.

2849 (2013)

“Donning and Doffing”

Sandifer v. U. S. Steel Corp., cert. granted 133 S.Ct. 1240 (2013)

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Recess Board Appointments

NLRB v. Noel Canning, No. 12‐1281, cert. granted, 133 S.Ct. 2861

(2013)

Sleepless Lawyer May Not

Recover

Anderson v. Discovery Communications, LLC, 2013 WL 1364345 (4th Cir. April 5, 2013)

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NLRB’s Workers’ Rights Notice

Invalid

Chamber of Commerce v. NLRB, 2013 WL 2678592 (4th Cir. June 14,

2013)

Individual Liability for

Wrongful Discharge Tort

Claims Under Virginia Law

VanBuren v. Grubb, 284 Va. 584, 733 S.E.2d 919 (Va. S.Ct. 2012)

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Jekyllor

Hyde?

Strange case of the NLRB, DOL, and EEOC

DOL

Developments

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• Edith Windsor and Thea Spyer

• Same‐sex couple married in Ontario, residing in NY

• Spyer died in 2009, leaving entire estate to Windsor.

• Windsor sought federal estate tax exemption for surviving spouses

• IRS denied exemption due to DOMA and compelled her to pay $363,053 in estate taxes

U.S. v. Windsor

• Windsor filed suit against U.S. in S.D.N.Y. –claimed DOMA unconstitutional

• District Court and 2nd Circuit agreed with Windsor

U.S. v. Windsor

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• Section 3 of DOMA unconstitutional under 5th

Amendment by restricting federal interpretation of "marriage" and "spouse" to apply only to heterosexual unions

• Requires federal gov’t to recognize same sex marriages if lawful under state law

U.S. v. Windsor

U.S. S.Ct.

Where Are Same-Sex

Marriages Lawful?

• D.C.

• Cal.

• Conn.

• Del.

• Iowa

• Mass.

• N.H.

• Maine

• Md.

• Minn.

• N.Y.

• R.I.

• Vt.

• Wash.

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• Impact on ERISA‐covered benefit plans?

• Impact on FMLA?

U.S. v. Windsor

U.S. S.Ct.

“Guidance to Employee Benefit Plans on the Definition of ‘Spouse’ and ‘Marriage’ under ERISA and the Supreme Court's Decision in U.S. v. Windsor”

“[S]pouse" and "marriage" … in … ERISA and in related department regulations should be read to include same‐sex couples legally married in any state…, regardless of where they currently live."

DOL Technical Release No. 2013-04

September 18th, 2013

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“In general, . . . the term ‘spouse’ will be read to refer to any individuals who are lawfully married under any state law, including individuals married to a person of the same sex who were legally married in a state that recognizes such marriages, but who are domiciled in a state that does not recognize such marriages. Similarly, the term ‘marriage’ will be read to include a same‐sex marriage that is legally recognized as a marriage under any state law.”



“[T]he term ‘state’ means any state of the U.S., the District of Columbia, Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island, the Northern Mariana Islands, any other territory or possession of the United States, and any foreign jurisdiction having the legal authority to sanction marriages.”



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“The terms ‘spouse’ and ‘marriage’ . . . do not include individuals in a formal relationship recognized by a state that is not denominated a marriage under state law, such as a domestic partnership or a civil union, regardless of whether the individuals who are in these relationships have the same rights and responsibilities as those individuals who are married under state law. The foregoing sentence applies to individuals who are in these relationships with an individual of the opposite sex or same sex.”



“A rule that recognizes marriages that are valid in the state in which they were celebrated, regardless of the married couple's state of domicile, provides a uniform rule of recognition that can be applied with certainty by stakeholders, including employers, plan administrators, participants, and beneficiaries.”



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“A rule for employee benefit plans based on state of domicile would raise significant challenges for employers that operate or have employees (or former employees) in more than one state or whose employees move to another state while entitled to benefits.”



• What about the FMLA?

State of domicile or celebration?

• DOL’s guidance speaks to ERISA and benefit plans.

• Does not speak to FMLA leave to care for “spouses”

Windsor/DOMA/DOL Guidance &

FMLA

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“Spouse means a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including common law marriage in states where it is recognized.”

Windsor/DOMA

FMLA Regs (29 C.F.R. 825-122)

• Prior to Windsor, FMLA also controlled by DOMA.

• Therefore, even in states that recognized same‐sex marriage, employers could deny employees FMLA leave to care for their same‐sex spouse

Pre-Windsor FMLA Leave

for Same-Sex Spouses

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• Clarifies that employee who resides in state that allows same‐sex marriage is entitled to take FMLAleave to care for same‐sex spouse

• Note ‐ law of state of residence applies, not the law of the state where the employee works or where marriage celebrated. (29 C.F.R. § 825.102).

• This could mean that employer could have employees in same company location where one employee could be eligible for FMLA and the other not eligible based on state of residence.

• And, separate issue as to ERISA benefits eligibility

Fact Sheet #28F: Qualifying Reasons

for Leave Under FMLA

Updated Guidance – August 9th, 2013

In response to Windsor, visa petitions filed on behalf ofsame‐sex spouses reviewed in same manner as those filed on behalf of opposite sex spouses

• Virginia woman and British woman• Couple for 16 years• Lived together in England for 10 years• Married in April in Maryland• Lawful permanent resident status

approved by U.S. Citizenship and Immigration Services on October 10th

Windsor Leads to Green Card

October 10th, 2013

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• Minimum wage, overtime extended to direct care workers

• workers who provide essential home care assistance to elderly people and people with illnesses, injuries or disabilities

• nearly two million workers — i.e., home health and personal care aides, CNAs

Direct Care Workers

(New Directive 9/17/13)

• Misclassification Initiativeo IRS and DOL are teaming up on misclassification issue.

o Kicked off in 2011

o Focus on interns/independent contractors and employees.

• Focus for Virginia (2012‐present)o Construction Industry

o Overtime / use of Independent contractors

Misclassification of Workers

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IRS has 20 Factor Test for Independent Contractor (a few highlights):

• Does company provide instructions on how to do the work, when it should be performed and where it should be performed?

• Training provided by Company?

• Clerical/admin support provided by Company?

• Exclusive arrangement?

• Tools and equipment provided by Company?

20 Factor Test

• Is the internship similar to training which would be given in an educ. environment?

• Is internship for benefit of Intern?

• Does intern displace regular employees?

• Employer derives no immediate advantage from the intern activities and on occasion operations may be impeded.

• Intern is not necessarily entitle to a job at end.

• Employer and intern understand that no wages are to be paid for internship.

6 Factor Test

for “Interns”

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EEOC

Developments

• Nature of crime

• Date of offense

• Duties of position

• Case‐by‐case

• NC and VA Statutes on Expungement

New Criminal Background Check

Guidance

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• Sexual orientation, transsexualism, gender identity not expressly prohibited.

• Same sex harassment

Title VII Protection?

• At least 32 states, including D.C., have implemented protections.

• To date, not VA

Laws & Administrative Policies to Protect

Gay/Transgender Employees

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• Transgender‐inclusive versions of ENDA introduced in U.S. Congress for many years

• Proposed legislation prohibits private employers with more than 15 employees from discriminating on the basis of sexual orientation or gender identity

Employment Non-Discrimination Act

(ENDA)

Employer who discriminates against transgender employee or applicant on basis of gender identity, change of sex, and/or transgender status violates Title VII’s gender discrimination prohibition.

EEOC Decision

Macy v Holder

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• Be aware of expanding definition of “sex discrimination” in workplace

• Be mindful of new legal protections (both state and federal) afforded to transgender employees and applicants

Lessons from Macy

• Applies to all employers with at least 15 employees

• Became effective November 21, 2009

• EEOC responsible for enforcement

Genetic Information

Nondiscrimination Act of 2008

“GINA”

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• EEOC on 5/17/13 filed and settled its first complaint alleging genetic discrimination

• Suit accused Fabricut Inc. of unlawfully asking job applicant for family medical history in post‐job offer medical examination

EEOC Settles 1st-Ever Genetic

Bias Lawsuit

• Title VII prohibits religious discrimination and harassment

• Employers required to “reasonably accommodate” religious practices of employees if no “undue hardship” to employer

Religious Discrimination &

Harassment

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May include:

• Schedule changes

• Voluntary shift swaps

• Lateral transfers

• Other workplace policy/practice modifications

Reasonable Accommodations

NLRB

Developments

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• Employee Rights Notice

• Protected Concerted Activities

• Social Media Issues

• First proposed in December 2010

• Board received 7,000 comments

• Final rule published on August 30, 2011

• Initial effective date was Nov. 14, 2011

• Postponed to January 31, 2012

• D.C. Circuit struck down as violating 1st Amendment May 2013

• 4th Circuit struck down the notice in June 2013

• "There is no general grant of power to the NLRB outside the roles of addressing [unfair labor practice] charges and conducting representation elections…” Judge Allyson Duncan

Employee Rights Notice

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• Aggressive administrative enforcement

• Expanding legal protections

• Imperative to:o Ensure HR is up to date

o Review, revise and update policies and procedures

o Train supervisors

Conclusions

How to Tame

Troublesome

Employees

The Beast

Is Lurking

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Guard Against Hiring the Beast

Top 10 General Tips

1. Prepare for the interview beforehand by establishing job requirements for the vacant position. Define the skills needed to meet these job requirements.

2. Do not write comments on original applications, as these applications and any comments thereon may be discoverable and could subsequently be used against you should litigation arise down the road.

3. Look for gaps in employment history, educational background, etc.


top 10 General Tips

4. Take notes, but be careful as to the content of your comments.

5. Explain to the applicant the duties and responsibilities of the available position and ask if the applicant can meet these job requirements.

6. Avoid improper questions regarding an applicant's race, sex, religion, marital status, national origin or disability.

7. Don’t ask questions which seem neutral but can garner illegal information.

8. Advise applicants of the next step in the selection process and follow up with each applicant interviewed, where possible.

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General Tips

9. In order to protect the at‐will employment relationship, avoid making any recruitment statements about job security.

10. Beware of the EEOC’s position on an employer’s consideration of criminal background record information in employment screening.

Progressive Discipline

General

In order to manage effectively and efficiently, supervisors should: • Discuss deficiencies during the year as they occur.

• Keep proper documentation.

• Provide specific goals and recommendations as to what is expected and what is needed for acceptable performance.

• Just as poor performance must be communicated throughout the year, so should exceptional performance. In other words, do not be afraid to pat an employee on the back for a job well done.

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Get Rid of the Beast Without Getting Bitten

Evaluation of adverse Employment Decisions

1. Termination usually requires us to avoid bad facts.

2. Beware of the following danger signals:»Long Service

»History of Satisfactory/Good Performance

»Lack of Documentation

»Sudden Changes in Performance Evaluations

»Departure from Personnel Policies

»Disparate Treatment

BREAK

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The ACA Is Here!

Face Your Fears

The Affordable Care Act

What Is It?

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When a Penalty is a Tax

2014(Coverage expansions take effect)

2015

2017

2018

2020


Key Effective Dates

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Penalty for no coverage(IRC Section 490H(a))

Penalty for unaffordable coverage (IRC Section 480H(b))

Employer Coverage Requirements

Calculation of Tax Penalties

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Is your company a

large employer?

ACA’s Definition of a

Full-Time Employee

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IRS Safe Harbor Methods

to

Determine Full-Time

Employee Status

Ongoing Employee

and Full-Time

Status Determination

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Newly Hired Variable

Hour, Seasonal

Employees

Are They Full Time?

Optional

Administrative Period

to Determine

Full-Time Status

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Determination of

Full-Time Status

& the Penalty Taxes

90 Day Waiting Period

Limitation

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If your company

offers coverage,

Which employees can

get tax credits?

The

“Affordability”

Standard

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The

“Minimum Value”

Standard

•Play‐or‐Pay proposed regulations

•Set plans that are deemed to meet 60%

actuarial costs

•Minimum value calculator

•Safe‐Harbor checklist

•Actuarial Certification

•HSAs and HRAs

Help Calculating Minimum Value

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•Auto‐enrollment

•Essential Health Benefits (EHBs)

•The ACA described EHBs as consisting of 10 benefit classes

Additional Employer Coverage

Requirements


Part-Time Employees

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•W‐2 Reporting on Health Coverage Value

•Employer Requirements to Provide Notice of Coverage Options (FLSA)

•Employer Reports of Minimum Essential

Coverage (IRC Section 6056)

•Reporting Enrollment in Health Insurance


Employer Reporting

Requirements

•W‐2 Reporting on Health Coverage Value

•Employer Requirements to Provide Notice of Coverage Options (FLSA)

•Employer Reports of Minimum Essential


•Reporting Enrollment in Health Insurance


Application for Exchange

Coverage

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Section 1558 of the PPACA prohibits retaliation against employees who provide

information that the employee believes to be a violation of

PPACA, Title I.

The Occupational Safety and Health Administration (OSHA) will

investigate all reports of retaliation.

OSHA and the Affordable Care Act

Whistleblower Protections

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Protection is available for employees who provide or who are “about to” provide an employer, the federal government or a state attorney general with information

about violations of Title I.

Whistleblower Protection

Retaliation and Discrimination Against Employees

Acts of unlawful retaliation and discrimination may include such actions as:

• Demotion or reassignment to a less desirable position

• Denial of overtime, benefits or promotion

• Harassment, intimidation or threatening behavior

• Reduction in pay or hours

• Wrongful discharge or termination

• Taking adverse action against an employee because he/she received a health care tax credit or cost sharing reduction

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for Employees

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If OSHA finds the evidence supports the retaliation claim, OSHA’s order may require the employer to reinstate the employee, pay back pay, compensatory damages, restore benefits, awards attorney’s fees, and provide other relief

to make the employee whole.

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for Employees

February, 2013

Whistleblower

Fact Sheet

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Burden of proof under Section 1558 favors employees.

an employee must demonstrate, by a preponderance of the evidence, (direct or circumstantial) that the protected activity was a motivating (contributing) factor (not the, but a)in the alleged adverse employer action, while the employer must show, by clear and convincing evidence, that the employer would have taken the same action in the absence of the protected activity.

The employer’s burden of proof is a much higher standard than the employee’s preponderance of the evidence.85


Favors Employees

There is a new smart phone app called, “Whistleblower Laws: Know Your Rights.”Available for free through the Apple iTunes App Store (for iPhone) and the Google play app store (for Android). The app guides aspiring whistleblowers through the requirements (and rewards) for bringing a whistleblower action. The new smart phone app:

provides links to summaries of relevant laws;

offers a checklist to allow a user to determine whether he or she might be a whistleblower; and,

provides links to websites and blogs to allow the prospective litigant to investigate legal firm’s qualifications. 86

There’s an App for That!

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Employers will therefore find it more difficult to defend ACA retaliation claims than the typical

employment discrimination case.

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Favors Employees

Trick or Treat

Organizational Change

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• Employee Information

• Assemble and Review All Relevant Documentation

• Employment Litigation

Merger/Sale Considerations

Employment-related Documents &

Information

• Union Status

• Non‐Union Status

Merger/Sale Considerations

Labor Relations

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• Necessity for RIF

• Number of affected employees

• Affected departments/jobs

• Selection criteria

• Projected time frame

• Operational/administrative and other costs implementing RIF

• Necessity of retaining employees until RIF date

RIF Considerations

Economic Objectives

• Hiring freeze vs. displacements

• Transfers

• Elimination/consolidation of positions

• Exit incentives

• Exit incentives followed by or concurrent with involuntary layoffs

• Retention bonuses during RIF period

RIF Considerations

Selecting the Method for

Downsizing

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• Who are the decision‐makers

• Forms used/procedural safeguards for selection

• Legitimate basis for selecting particular employees

• Are employees represented by a union?

• Is seniority recognized?

• Bumping rights

• Transfer opportunities

RIF Considerations

Selection of Employees for RIF

• WARN Act

• Breach of Contract

• Union organizing issues

RIF Considerations

Legal Risks

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• Will the RIF affect any whistle‐blowers or give rise to public policy issues?

• Will the RIF affect any person whose pension or retiree benefits are about to vest?

• Will the RIF affect any person on FMLA, workers’ compensation or other form of leave?

• Will the RIF have an adverse impact on any protected group of individuals or could it otherwise be viewed

as discriminatory?

RIF Considerations

Legal Risks

• Severance pay / releases

• Early retirement enhancement

• Social Security supplements

• Special vesting of retirement benefits

• Outplacement services

• Factors to consider when selecting type of benefit

RIF Considerations

Potential Benefits That May Be Offered

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• Designation of RIF decision‐making team and allocation of specific responsibilities

• Implementation and documentation

• Time frame

• Maintaining the secrecy of the program until implementation

• New documentation/administrative forms

• Integrating RIF with existing termination/layoff polices

RIF Considerations

Implementing the RIF

• Communication of the program

• Handling individual terminations

• Securing company property from selected employees

• News release

RIF Considerations

Implementing the RIF

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• Employer coverage

• Employee coverage

WARN ACT Considerations

General Provisions

Plant closing

Mass layoff

What is an “Employment Loss”?

Window period


What Triggers Notice?

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• General principals

• Sale of business where purchaser elects to keep all or most of the employees

• Sale of business where purchaser elects to purchase assets, but does not accept

employees


Special Rules for Sale of Business

• Chief elected officer of the exclusive representative(s) or bargaining agency(s) of

affected employees

• Unrepresented individual workers who may reasonably be expected to experience an

employment loss

• State dislocated worker unit and the chief elected official of local government


Who Must Receive Notice?

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SafeguardingYour Assets

Non-Compete Agreements

• Disfavored in Virginia

• The Virginia Supreme Court Reverses Itself in Home Paramount Pest Control

• The Sixth Time Is The Charm: The Virginia Supreme Court

Finally Enforces a Non‐Compete in Preferred System Solutions

• Preferred System Solutions May Not Represent A Trend

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Scope of Restricted

Activities

Time Restrictions

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Geographic Scope

Non-Competes Outside the

Employment Context

• In connection with sale of business

• Between companies

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Drafting Tips

• Describe the business

• Describe the employee

• Narrowly tailor restrictions

• If non‐compete is incorporated into a general employment agreement, carefully review the

termination provisions

• Require disclosure of and adherence to prior obligations

Drafting Tips

• Include assignability clause

• Include choice of law, jurisdiction and venue provisions, as well as an authorized for

injunctive relief

• Be careful about including arbitration clauses

• Include a provision noting ability of employee to seek legal counsel

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Non-Solicitation Agreements

• Limit the restriction to customers of whom the employee has knowledge

• Ensure the employer can identify its customers

• Be mindful of the passage of time during the restricted period

• Be careful with “prospective customers”

• Prohibit only “competitive” solicitation

Non-Disclosure Agreements

• Limit confidentiality clauses to “confidential” information

• Ensure that NDA gives more protection than the Virginia Uniform Trade Secrets Act

• Expand the Scope of Former Employees’ Obligations

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Richmond Labor & Employment PowerPoint

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