Hot Topics in Labor and Employment Law for 2013

Hot Topics in Labor and Employment Law for 2013 • Presented By • Shawn R. Lillie, Esq. • Allen, Summers, Simpson, Lillie & Gresham, PLLC • 80 Monroe Avenue, Suite 650 • Memphis, TN 38103 • (901) 763-4200

Overview • Political Environment • Agency Issues • EEOC • DoL • NLRB • Practical Advice/Best Practices

Political Environment • EFCA – dead • Other efforts - dead • Congress – Gridlock!

Political Environment • Gridlock is good. • “In business, it is not a matter of what they can do for us. It is a matter of what they will do to us...”

Political Environment • The sorting out and implementation of Obamacare over the next 2-3 years will likely dominate the discussions. • For business - Great uncertainty; difficult to plan; difficult to budget • What is the overall impact on business?

Political Environment • For the next two years, probably no major efforts in labor and employment law from Congress • Tennessee – different story. • Workers’ compensation reform • Unemployment compensation reform • More business-friendly environment

Focus Shift • Democrats, Labor Unions and Activists can no longer accomplish much through Congress. • Focus now shifts to the Administrative Agencies • EEOC, DoL, Wage & Hour, NLRB, OSHA, EPA, IRS, etc.

Focus Shift • Administrative Agencies have certain authorities granted to them under law: • Rulemaking, • Interpretations, • Agency Opinions, • It is all Agenda-driven • This will be the focus for the next 2 years.

EEOC’s Agenda – Leave of Absence • Leave of Absence Policies - “no fault” or “automatic” termination policy. • In the past, these policies were clear, efficient and believed to be legally sound. • The EEOC now challenges these policies when the individual involved is disabled. (ADA – reasonable accommodation). • EEOC has taken an aggressive enforcement position against employers with automatic termination provisions in their leave of absence policies.

EEOC • FMLA – says a person gets 12 weeks of job-protected leave. • ADA – who knows??? • Never-ending obligation to provide reasonable accommodation…

Best Practices • Have a written policy. • Allow disabled employees who reach maximum period to request extension of leave as a reasonable accommodation. • Have employee meet with HR to engage in the interactive process (discuss the extent and nature of the disability as it relates to their ability to perform the essential job functions). • Consider reasonable accommodations, including an extension of leave. • Review all requests on a case-by-case basis. • Only terminate if you can prove no reasonable accommodation is available. • Key - Indefinite leave is usually not a reasonable accommodation.

EEOC’s Agenda – Prescription Drugs • Can you ask your employees about the medications they are taking? • Hydrocodone, lortab, oxycontin • What if your employees are working in dangerous areas? • Safety-sensitive function? • Driving company vehicles? • Operating equipment?

EEOC’s Agenda – Prescription Drugs • EEOC - employers are not generally allowed to ask employees about their use of prescription medications, unless such inquiry is “job-related and consistent with business necessity.” • EEOC -employers cannot have a blanket policy requiring all employees to self-report their use of prescription medication. The only exception to this rule is if the position affects public safety.

EEOC’s Agenda– Prescription Drugs • EEOC - In “limited circumstances,” “certain” employers may be able to demonstrate that it is job-related and consistent with business necessity to require employees in positions affecting public safetyto report when they are taking medication that may affect their ability to perform essential functions. Under these limited circumstances, an employer may be able to demonstrate that an employee’s inability or impaired ability to perform essential functions will result in a direct threat. • Theonly examples given by the EEOC of public safety positions are those of an armed police officer or an airline pilot. The EEOC does not address potentially safety sensitive positions in construction or manufacturing environments. • What constitutes a “position that affects public safety?”

EEOC’s Agenda– Prescription Drugs • Product Fabricators fired an employee on prescription pain medicine for not notifying his supervisor that he was taking an impairing medication. • They had a policy stating that employees must report when they are taking medication known to cause dizziness or drowsiness or that might affect their ability to perform their job. • EEOC sued. • EEOC v. Product Fabricators, Inc., No. 09-cv-2303 (D. Minn). They said the policy was an unlawful disability-related inquiry that was not job-related and consistent with business necessity. The EEOC took this position despite the fact that a loss control consultant hired by Product Fabricators several years earlier had determined that the jobs at Product Fabricators were safety sensitive positions because they all had “routine exposure to moving machines, equipment parts and electrical current.”

EEOC’s Agenda– Prescription Drugs • The EEOC said that an employer cannot ask about prescription pain killer usage unless it has “objective” evidence that an employee is impaired on the job. • EEOC further stated that “Requiring all employees to report their legal use of prescription drugs – and even over-the-counter medication – amounts to an unreasonable invasion of privacy, whether an employee is disabled or not.”

Best Practices • Have a written policy. (Do not require disclosure of medical condition) • apply only to those employees actually working in designated safety-sensitive positions • require reporting only when the employee is taking a medication that may affect their ability to safely perform the essential functions of his/her position or may make the employee a danger to himself or others in performing his/her essential functions. • Conduct individualized assessments of an employee's ability to perform his or her specific job even when s/he is taking legally prescribed narcotic medication. • Don’t assume that every person taking a narcotic drug will suffer side effects. • Go slow in termination for not reporting!

EEOC’s Agenda – Criminal Checks • On April 25, 2012, EEOC issued Enforcement Guidance No. 915.002 regarding employers' use of criminal background information of employees and job applicants. • “An arrest record standing alone may not be used to deny an employment opportunity.“ • Criminal convictions – subject to some rules

EEOC’s Agenda – Criminal Checks • Employer must prove that the policy or practice is "job-related for the position in question and consistent with business necessity." • Employer must show that any criminal-conduct exclusion "operates to effectively link specific criminal conduct, and its dangers, with the risks inherent in the duties of a particular position." • Employer should utilize a targeted screen based on the three factors set forth in Green v. Missouri Pacific Railroad, 523 F.2d 1290 (8th Cir. 1975), followed by an individualized assessment for persons excluded by the screen. • The so-called Green factors are (i) the nature of the crime, (ii) the time elapsed since the crime, and (iii) the nature of the job in question.

EEOC’s Agenda – Criminal Checks • The subsequent individualized assessment requires: • (i) notice to the excluded person that he or she was excluded because of a criminal conviction; • (ii) an opportunity for the person to show why the exclusion should not be applied in this case; and • (iii) consideration by the employer as to whether the information supplied by the excluded person warrants an exception to the policy.

Best Practices • “Best practices" when considering arrest and conviction records in making employment decisions: • Develop a written policy for screening applicants and employees regarding criminal conduct; • Focus on convictions – not arrests; • Consider 3 factors (the nature of the crime, the time elapsed since the crime, and the nature of the job in question.; • Conduct individualized assessments; and • Train managers, hiring officials, and decision makers regarding these procedures.

EEOC’s Agenda – Transgender Employees • Sexual orientation is not a protected category under TN or federal law, but discrimination based on sexual stereotyping is being litigated. • The U.S. Equal Employment Opportunity Commission (EEOC) held, in Macy v. Holder (April 20, 2012), that discrimination based on gender identity, change of sex, and/or transgender status is discrimination on the basis of sex, prohibited by Title VII (public employment context). • In Vickers v. Fairfield – 6th Circuit Court held discrimination may be unlawful where “gender non-conformance is demonstrable through plaintiff’s appearance or behavior.” • Don’t be the test case in this area – Be careful!

EEOC – Final Point • We are still seeing a lot of charges and litigation in these areas: • Race discrimination • Sex discrimination (sexual harassment) • Age discrimination • ADA • Retaliation of all sorts, including workers’ comp retaliatory discharge

Wage & Hour Division - FLSA • Misclassification of Exempt Status – Still a Hot topic! • Class Action lawsuits – on the rise • WHD is expected to issue new regulations on “Right to Know” • This would mandate employer‑provided notice concerning an employee’s pay computation and a FLSA classification analysis for each worker excluded from FLSA coverage. This would have to be provided to the employee and be subject to inspection by the DOL.

FLSA Class Action Lawsuits • 3-31-2009 - 5,644 class action cases filed • 3-31-2010 - 6,081 class action cases filed • 3-31-2011 - 7,008 class action cases filed • 3-31-2012 - 7,064 class action cases filed

Recent Victory – Genesis Healthcare • U.S. Supreme Court – 4-16-2013 • Former employee filed collective action FLSA lawsuit. Employer filed an answer gave an “Offer of Judgment.” ($7500 plus costs and attorney fees). • Employee continued the litigation. • U.S. Supreme Court said Offer of Judgment made her collective action claim “moot” and that she had no personal interest in representing the class. • Lesson: Most every employer in an FLSA collective action case will now file an Offer of Judgment, in order to kill the class action lawsuit.

Best Practices • Audit your salaried exempt positions – make sure your classifications are correct. • The burden of proof is on you to prove an exemption. • The exemptions are narrowly construed. • Make sure no employee is working off the clock. • Consider ways to pay OT that is due. • Have a policy that says in the event of a mistake, please let us know so we can fix it – shows good faith. • Don’t mess with people’s pay!

National Labor Relations Board • Mass Confusion • On June 17, 2010, the Supreme Court ruled in New Process Steel vs. the NLRBthat the two-member Board lacked the authority to decide cases. • May 14, 2012, the United States District Court for the District of Columbia ruled that the NLRB’s new representation case procedures, which had become effective on April 30, 2012, were invalid due to an insufficient quorum when the final rule related to those procedures was voted. (Rules now suspended). • The DC Circuit Court of Appeals temporarily enjoined the NLRB’s rule requiring the posting of employee rights under the National Labor Relations Act. The rule, which had been scheduled to take effect on April 30, 2012, will not take effect until the legal issues are resolved. There is no new deadline for the posting requirement at this time.

NLRB – Mass Confusion • Noel Canning Case - January 25, 2013, a unanimous panel of the D.C. Circuit ruled that President Obama had unconstitutionally appointed three board members to the National Labor Relations Board (NLRB). (Recess appointments) • The NLRB is appealing this case to the U.S. Supreme Court. • The decisions and rules of the NLRB during this time are potentially invalid (estimated 550 decisions).

NLRB – Mass Confusion • April 9, 2013 – President Obama nominated the following individuals to the NLRB (subject to Senate Confirmation) • Republican Harry I. Johnson, III – management-side labor attorney. • Republican Philip A. Miscimarra – management-side labor attorney. • Democrat Mark Gaston Pearce is currently Chairman of the NLRB, a position he has held since August 2011. (Re-nominated) • Current members of the NLRB – Democrats Sharon Block and Richard Griffin, Jr. • 3 to 2 (Unions vs. Management)

NLRB – Mass Confusion • What do we make of all of this? • This is insanity. • The NLRB will be several years untangling this mess. • For non-union employers – • Focus on maintaining positive employee relations • Get good, competent labor counsel to help you with any NLRB issues • Stay out of trouble with the NLRB • For unionized employers – raise the lack of the Board’s authority in any proceeding, and good luck.

Other Practical Tips

Electronic Communications • This is the major way employers get in legal trouble! • We document what is happening. • Example – someone is going to be terminated, and what do we do: • Send emails/texts • Copy people • Forward emails/texts, etc. • Our front-line supervisors and managers do this. • They unwittingly say things that don’t sound good. • “He’s needs to retire.” • “I hope she quits.” • “He just had another workers’ comp claim. We need to get rid of this guy.” • “This is her third FMLA leave. Can we get someone who is going to be here and get the work done?”

Electronic Communications - Reminders • E-mail/Texts are forever… • In the event of a lawsuit, everything on work computers and phones is subject to public disclosure. • Delete does not mean delete…. • Electronic Discovery is the way many cases are won or lost. • “Litigation hold” required

Electronic Communications - Suggestions • If you have a termination issue, and you suspect potential litigation or risks, either don’t use email/text or use it wisely • Consider the differences below (in the context of a lawsuit)– • Option 1 – “John Doe has been missing a lot of work due to being sick. He’s taking too much FMLA. We need to get someone who is more dependable.” • Option 2 - “We need to do our best to help employee John Doe understand the attendance expectations for his position. But, John must meet the expectations, since everyone else who works here has to do so. When John is absent, it places a great burden on his co-workers, Shirley, Amber and Mike. They have to pick up his slack. They are frustrated by John’s frequent absences, especially on Fridays and Mondays. They have reported seeing him out over the weekend partying at a local bar, but then he calls in sick on the following Monday. Many feel he is taking advantage of his co-workers. We need to address this with him.” • Do email right or don’t do it at all!

Unemployment claims - Why fight? • Everything said is tape-recorded and can be used in later proceedings (EEOC charges, lawsuits, etc.). • Claimants might not bring an attorney (they have a right to counsel, but many don’t do that). • They often make admissions against their own interests. • Many disputes can be won or lost at this stage (before a Complaint is ever filed). • This is a two-way street – Everything you say in an unemployment hearing can be used against you in court…

TN Unemployment – Misconduct • Conscious disregard of the rights or interests of the employer; • Deliberate violations or disregard of reasonable standards of behavior that the employer expects of an employee; • Carelessness or negligence of such a degree or recurrence to show an intentional or substantial disregard of the employer's interest or to manifest equal culpability, wrongful intent or shows an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to the employee's employer; • Deliberate disregard of a written attendance policy and the discharge is in compliance with such policy; • A knowing violation of a regulation of this state by an employee of an employer licensed by this state, which violation would cause the employer to be sanctioned or have the employer's license revoked or suspended by this state; or • A violation of an employer's rule, unless the claimant can demonstrate that: • The claimant did not know, and could not reasonably know, of the rule's requirements; or • The rule is unlawful or not reasonably related to the job environment and performance.

TN Dept. of Labor - Discharge for absenteeism/tardiness: • What were the dates of the last incident of the absenteeism or tardiness? • Did the claimant provide medical evidence of illness during the absence/tardy? • Did the claimant notify anyone that he would be absent/tardy? If so, when were you notified? • Were there any prior warnings of absences/tardiness? If yes, please give dates, types of warnings, and who issued the warnings. Please provide a copy of these warnings and a copy of your absenteeism/tardiness policy. • Was the claimant aware of the absenteeism/tardiness policy? If so, how was the claimant made aware of this policy? • Describe in detail the final incident which prompted you to terminate this individual.

TN Dept. of Labor - Discharge for violation of company policy: • Provide a copy of the company policy that was violated. • What did the claimant do that violated this policy. • How was the claimant made aware of this policy? • Were there any prior violations and warnings? If so, please provide a copy. • Were there any violations of this policy by other employees that did not result in discharge? • Was the claimant discharged at the time the infraction occurred? If not, please explain the time delay.

TN Dept. of Labor - Discharge for poor work performance: • Describe the final incident that led to the discharge. • What were the standards expected of the claimant? • Did the claimant ever meet these standards? • Did the claimant make an attempt to conform to the standards? • Were there previous warnings for failure to meet the standards? If yes, provide copies of the warnings.

TN Dept. of Labor - Discharge for insubordination: • Describe the insubordinate act. • When and where was the act committed? • Had the claimant previously shown insubordinate behavior? If yes, please describe these incidents. • Was the claimant warned that such behavior was not permitted? If yes, provide copies of these warnings.

BEWARE OF THIS PERSON • •Attendance problems • • Chronic complainer • • Always looking to get out of work • • Not trustworthy • • Looking for a free ride • • Poor work habits • • Not dependable • • History of dysfunctional relationships • • Blames others for disappointments • • Does easy tasks/avoids difficult tasks • • Problems in their personal life that impact them at work • • Strained relationship with co-workers • • If injured, will play the game to delay returning to work • • Does not view themselves as part of the Company team

A Final Thought on Termination Procedures • 1. How do you terminate a person? • Phone call? • Personal meeting? • Letter of termination? • 2. Each has pros and cons, but it is hard to argue with what is said in a letter. • 3. Sometimes, suspension or administrative leave, followed by a letter is a good option – the employee cannot misquote the letter.

Questions?Thank you for allowing me to be here with you. It is an honor.-Shawn

Hot Topics in Labor and Employment Law for 2013