EMPLOYMENT LAW ALERT

 

EMPLOYMENT LAW ALERT

DOL ADDRESSES MISCLASSIFICATION OF EMPLOYEES AS INDEPENDENT CONTRACTORS

 

Classifying workers as independent contractors has several advantages for employers. For example, independent contractors are not entitled to minimum wage or overtime compensation under the Fair Labor Standards Act. Employers are not required to provide benefits such an unemployment insurance, worker's compensation coverage, or health insurance to independent contractors. Nor are companies required to pay employment taxes on independent contractors. Given these advantages, many employers may be tempted to simply label workers as independent contractors, without giving much thought as to whether they truly meet the standard for such classification.

 

Over the past several years, both the federal Department of Labor (DOL) and Internal Revenue Service (IRS) have ramped up efforts to investigate the misclassification of employees as independent contractors. As a consequence, the number of employers misclassifying their workers has steadily increased - - as has the amount of damages recovered on behalf of those workers.

 

On July 15, 2015, David Weil, the Administrator for the DOL, Wage and Hour Division, issued his Administrator's Opinion* concerning the misclassification of employees as independent contractors. Moving forward, the DOL will consider six "economic realities factors" to determine whether an individual should properly be classified as an employee or independent contractor. These factors include the following:

 

1. The extent to which the work performed is an integral part of the Employer's business.

 

2. The worker's opportunity for profit or loss depending on his or her managerial skill.

 

3. The extent of the relative investments of the Employer and the worker.

 

4. Whether the work performed requires special skills and initiative.

 

5. The permanency of the relationship.

 

6. The degree of control exercised or retained by the Employer.

 

No single factor is to be given greater weight than any other factor. Rather, these six factors are to be evaluated as a whole in determining the economic independence (or lack thereof) of the worker.

 

The core factors that this six-factor test evaluates are very similar to the 11-factor test utilized by the IRS. In the end, Administrator Weil explained, this test is intended to determine whether a particular worker is truly independent or, on the other hand, is economically dependent upon the Employer (and thus an employee).

 

The misclassification of employees as independent contractors is a hot-button topic which continues to be of keen interest to both the DOL and IRS. As such, Employers are cautioned to carefully examine each job position before determining whether it should be classified as an employee or independent contractor. Also note that documents such as job descriptions and independent contractor agreements may serve as valuable evidence in assessing how a particular job should be classified.

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

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* In March 2015, the U. S. Supreme Court ruled that federal agencies are allowed to issue interpretative guidelines addressing rules, without the need to engage in formal notice-and-comment procedures.

 

 

EMPLOYMENT LAW ALERT

DOL ISSUES PROPOSED NEW OVERTIME REGULATIONS

 

On June 30, 2015, the U.S. Department of Labor (DOL) issued its proposal for revisions to Fair Labor Standards Act (FLSA) regulations addressing overtime compensation. These proposed regulations come on the heels of comments made on Monday (June 29) by President Obama regarding proposed changes to overtime regulations.

 

Under the FLSA, non-exempt employees are entitled to time-and-a-half compensation for all hours over 40 worked in a particular work week. One threshold for determining whether employees may be considered exempt from overtime compensation is the "salary basis" test. As it currently stands, an individual must make more than $455 per week ($23,660 per year) in order to be considered exempt under the FLSA.* The new DOL proposal would instead set this threshold at the 40th percentile of earnings for all full-time salaried employees in the United States. By way of example, in 2013 that figure would have been $921 per week ($47,842 per year). It is estimated that, when these new regulations go into effect in 2016, that number will be $970 per week ($50,440 per year).

 

In addition, the new DOL regulations propose to alter the exemption for highly compensated employees (HCE), which is currently set at a threshold of $100,000. Moving forward, the HCE threshold would be set at the 90th percentile of earnings for all full-time salaried workers. For 2016, it is estimated that this figure will be $122,148.

 

These changes will have a substantial impact upon overtime compensation for U.S. workers. Think about the number of individuals who are currently considered exempt employees but who earn less than $50,000 per year; by and large, those individuals will now be considered non-exempt and will be entitled to overtime compensation under the FLSA. In fact, it is estimated that the salary basis modification will affect 4.6 million U.S. employees in 2016 alone, and that the HCE modifications will affect 36,000 employees.

 

Finally, note that the new DOL proposal would not constitute a single, one-time change. Instead, the DOL is proposing a mechanism by which these figures are readjusted annually to reflect the 40th percentile and 90th percentile of all full-time salaried earnings, respectively. As such, this figure would continue to increase automatically each year.

 

It was also anticipated that the DOL would also propose changes to the way in which the "duties test" is evaluated for purposes of determining whether an employee meets the administrative, executive, or professional exemptions under the FLSA. As of this date, however, no such proposal has been made. Instead, the DOL is seeking comments as to whether the current "duties test" is working effectively; comments will be accepted from the public for the period ending 60 days after the proposed changes are published in the Federal Register (which has not happened yet). Employers wishing to evaluate whether to comment on the current effectiveness of the duties test may contact Evans Harrison Hackett PLLC for additional guidance.

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

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* Note: An employee who meets this standard is not automatically considered exempt. The employee must also meet the requirements set forth under the "duties test" to determine whether the job duties performed by the employee constitute exempt functions.

 

EMPLOYMENT LAW ALERT

WHITE HOUSE PROPOSES CHANGES TO OVERTIME RULES

 

On Monday, June 29, 2015, the Huffington Post published an op-ed by President Barack Obama in which, among other things, he proposed to update overtime regulations to expand the number of workers eligible for overtime compensation.

 

Under current Fair Labor Standards Act (FLSA) regulations, only workers who earn less than $455 per week are automatically deemed to be non-exempt and therefore entitled to overtime compensation.* This equates to roughly $23,660 per year.

 

Under the newly-proposed regulations, this bar would be raised to $50,400 ($970 per week) in 2016, meaning that anyone who earns less than that amount could not be considered exempt from overtime compensation under the FLSA. According to President Obama, this change would impact approximately 5 million U.S. workers.

 

Importantly, this new rule would not require Congressional approval, although some question exists as to whether the new regulation might be challenged, either in court or in Congress. Business groups are opposed to the proposal; the National Retail Federation, for example, points out that these changes will "add to employers' costs, undermine customer service, hinder productivity, generate more litigation opportunities for trial lawyers, and ultimately harm job creation."

 

The Huffington Post article offers merely the first hint of the White House's proposals for overhauling FLSA regulations. Over the next few weeks, we may be provided with additional details, as well as additional proposals for changes to the U.S. wage-and-hour system. We will keep you apprised as this matter continues to develop.

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it. .

 

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* Note: Where an employee earns more than $455 per week, that does not automatically mean that he/she is exempt from overtime compensation. It must also be determined that the employee meets the "duties test" by showing that the job duties performed in his/her position are exempt in nature.

 

 

EMPLOYMENT LAW ALERT

COMMENTS ABOUT EMPLOYEE "FITTING IN" TREATED AS EVIDENCE OF RACIAL BIAS

 

Not all employment-related decisions are objective and quantifiable. When making decisions involving performance evaluations, raises, bonuses, promotions, and even terminations, employers are often required to make subjective decisions as to the performance and/or abilities of their employees. Often, employers explain a difficult termination decision by noting that it "just didn’t work out," "the employee wasn't the right fit for the position," or "we are just going in a different direction."

 

Obviously, decisions based on subjective criteria can become problematic for employers. It is often easier for disgruntled employees to argue with subjective decisions, which by their very nature are not supported by hard data or statistics. When reasonably minds can differ as to a subjective decision, in turn, it makes it all that harder to predict how a jury might view the situation.

 

In Abrams v. Department of Public Safety (August 26, 2014), the U.S. Court of Appeals for the Second Circuit examined how a decision based upon subjective criteria can backfire on an employee. In the Abrams case, the plaintiff, a black male, was employed as a detective with the Connecticut Department of Safety.  Over a period of several years, he sought a promotion to an elite unit that investigated serious crimes, suspicious deaths, and homicides.  Although 8 individuals were selected for promotion to that unit, however, each of those individuals was white.

 

In explaining the plaintiff's failure to obtain a promotion to the elite unit, his supervisor explained that one of the white candidates had been a "better fit" for the unit than the plaintiff. In addition, a detective who had been consulted during the selection process had remarked that the plaintiff "did not fit in" to the unit. 

 

The employer filed a motion to dismiss the plaintiff’s race discrimination claims; specifically, with regard to the above comments, the employer argued that there was insufficient evidence to find that the “fitting in” comments referred to the plaintiff’s race.  The Court of Appeals, however, disagreed and denied the employer’s motion.  As the court noted, “after all, a hiring official’s subjective belief that an individual would not ‘fit in’ or was ‘not sufficiently suited’ for a job is at least as consistent with the discriminatory intent as it is with non-discriminatory intent.”  Although the Court pointed out that this was a “very close case,” therefore, the plaintiff’s racial discrimination claims were allowed to proceed to a jury. 

 

So…what can employers learn from the Abrams case?  Most fundamentally, employers should be careful to ensure that subjective decisions are well thought-out and do not create an inference of discriminatory bias.  Here, the employer should have been aware that the selection of 8 white candidates for its elite unit – and the repeated bypassing of a black applicant for the position – could have created a perception of discrimination.  When informed that at least part of the reason for these decisions were that the black candidate “did not fit in,” then, the employer should have delved more deeply into what was meant by that statement.  The employer should have ensured that these comments did not reflect a discriminatory bias on the part of its decision-makers.  If, on the other hand, these comments related to the fact that the plaintiff’s job skills, aptitudes, or qualifications were not up to par with the requirements of the elite unit, then the employer would have some specific details to back up its decision.  In the Abrams case, however, the employer had no such information to support its decision, leaving it up to a jury to decide whether the “better fit” comments reflected a discriminatory bias. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

CAN FRANCHISOR BE HELD LIABLE FOR EMPLOYMENT CLAIMS BROUGHT AGAINST FRANCHISEE?

 

In Patterson v. Domino’s Pizza, LLC (August 28, 2014), the California Supreme Court examined the extent to which a franchisor may be held liable for unlawful employment activities occurring at a franchisee location.  In that case, it was alleged that a male supervisor at the franchisee location sexually harassed a female subordinate.  She then sued the supervisor, the franchisee, and the franchisor for sexual harassment under the California Fair Employment and Housing Act (FEHA).  The question raised in the Patterson case was whether a franchisor is considered an “employer” for purposes of anti-discrimination law. 

 

The key piece of evidence in the Patterson case was the franchise agreement between Domino’s Pizza and its franchisees.  That contract specifically stated that there was no principal-agent relationship between Domino’s and its franchisees, and that the franchisee was an “independent contractor.”  The contract also specified that persons working for the franchisee were the employees of the franchisee, and that no employment/agency relationship existed between those employees and Domino’s.  In addition, the contract noted that the franchisee was solely responsible for managing its employees. 

 

As a practical matter, moreover, the court found that the franchisee was solely responsible for hiring individuals who worked in its store, and that Domino’s was not involved in the application, interview, or hiring processes.  While Domino’s did provide some supplemental training materials for use by the franchisee, the franchisee implemented its own harassment policy and training program for its employees, and Domino’s did not provide materials or training related to workplace harassment.”  Employees were also advised to report any workplace concerns directly to the franchisee, and “Domino’s had no procedure for monitoring or reporting sexual harassment complaints between the employees of franchisees.” 

 

In light of these findings, the court held that the franchisor (Domino’s) was not an employer and could not, therefore, be subject to liability for workplace harassment occurring at franchisee locations. 

 

The Patterson case provides some good guidance for franchisors who wish to involve being dragged into employment issues arising at franchisee locations.  Obviously, the careful drafting of the franchise agreement can go a long way to clarifying that the franchisor is not an employer of franchisee employees.  As a practical matter, moreover, where the franchisor does not exert day-to-day involvement in employment-related matters, it can avoid potential legal exposure under federal and state discrimination laws. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

NLRB REISSUES GUIDANCE ON DAMAGES IN UNLAWFUL TERMINATION CASES

 

In Don Chavas (August 8, 2014), the National Labor Relations Board (NLRB) determined that an employee had been unlawfully discharged as a result of her pro-union activities.  Finding that “her make-whole remedy should also take into account any loss of earnings and benefits she suffered as a result of both of those instances of discrimination,” the NLRB addressed two additional categories of damages available to the plaintiff under the circumstances. 

 

The NLRB had previously addressed this same issue in a 2012 decision (Latino Express Inc.), but because the Board did not have a proper quorum at that time, it was necessary for it to reiterate these rules in Don Chavas

 

In a case in which the NLRB orders make-whole relief to a terminated employee, the employer will now be required to “submit the appropriate documentation to the Social Security Administration (SSA) so that when back pay is paid, it will be allocated to the appropriate calendar quarters.” 

 

In addition, the employer is now required to “reimburse the discriminatee(s) for any additional federal and state income taxes the discriminatee(s) may owe as a consequence of receiving a lump-sum back pay award in a calendar year other than the year in which the income would have been earned had he Act not been violated.” 

 

To a degree, this is a small, technical point.  Nevertheless, it is worth noting these additional requirements which will exist in future unlawful termination cases before the NLRB.

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

DO UNDOCUMENTED ALIENS HAVE STANDING TO BRING CLAIMS FOR RETALIATORY DISCHARGE AGAINST THEIR EMPLOYERS?

 

In Precision Industries, P.I., Inc. (August 5, 2014), the Tennessee Court of Appeals addressed the question whether an undocumented alien can file a claim for retaliatory discharge against his/her employer.  In that case, the employee filed a retaliatory discharge complaint alleging that he had been unlawfully terminated for filing a workers’ compensation claim.  The trial court dismissed the case, finding that the plaintiff was an undocumented worker incapable of lawful employment and, as a result, incapable of filing a claim for retaliatory discharge. 

 

The plaintiff then appealed the case to the Tennessee Court of Appeals.  On appeal, the employer insisted that the plaintiff was “denied something he had no legal right to in the first place.”  The Court of Appeals, however, disagreed, reinstating the plaintiff’s claim. 

 

As the Tennessee Court of Appeals noted, a retaliatory discharge action does not protect a person’s “legal claim to [a] job,” but rather seeks to protect the employee’s right to file a workers’ compensation claim.  Moreover, for the purpose of a workers’ compensation claim, an “employee” is defined as “every person, including a minor, whether lawfully or unlawfully employed.”  On that basis, therefore, the Court found that it was irrelevant whether the plaintiff was an undocumented alien, and that he had the right to pursue a retaliatory discharge claim against his former employer. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

NLRB STRIKES DOWN COMPANY’S CONFIDENTIALITY POLICY

 

In prior Employment Law Alerts, we have addressed efforts by the current National Labor Relations Board (NLRB) to carefully scrutinize the provisions of company’s employee handbooks.  One of the areas that it scrutinized most heavily by the NLRB is the use of confidentiality provisions limiting information which can be shared by employees. 

 

In Fresh & Easy Neighborhood Market (July 31, 2014), the NLRB evaluated a 20-page “Code of Business Conduct” policy which included the following provision: 

 

Keep customer and employee information secure.  Information must be used fairly, lawfully and only for the purpose for which it was obtained. 

 

In evaluating this provision, the NLRB concluded that “employees would reasonably construe the admonition to keep employee information secure to prohibit discussion and disclosure of information about other employees, such as wages and terms and conditions of employment.”  The NLRB has steadfastly held that employees have a right to discuss their wages, benefits, and other terms and conditions of employment with one another.  In essence, the above rule was inartfully drafted in a manner in which it could be interpreted to prohibit employees from sharing information about their wages, etc. 

 

Obviously, employers have a right to protect against the disclosure of confidential and proprietary information.  Most confidentiality policies were drafted for the express purpose of preventing employees from improperly disclosing confidential or private information to third parties.  As a practical matter, however, employers have to be careful to avoid overreaching and creating the impression that they are trying to stifle employee discussions about their own terms and conditions of employment. 

 

With the above in mind, this is a good time to review your confidentiality policies, whether contained in an employee handbook, code of conduct, or other document.  By focusing on the protection of confidential and proprietary business information – while avoiding creating the impression that employees are not free to discuss their own wages, benefits, and terms and conditions of employment – employers can avoid potential challenge to their employee rules in the future. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

EMPLOYER ACTED UNLAWFULLY IN TERMINATING EMPLOYEE FOR REQUESTING REPRESENTATION PRIOR TO TAKING DRUG TEST

 

When an employer requests that an employee take a drug and/or alcohol test, time may often be of the essence.  Anxious to avoid losing evidence of an employee’s inebriation, most employers will want to move quickly, without delay, to ensure that the drug/alcohol test is taken properly. 

 

What happens, then, when an employee asks to have a representative present before taking a drug or alcohol test? 

 

In Ralphs Grocery Company (July 31, 2014), the National Labor Relations Board (NLRB) held that an employer acted unlawfully by refusing such a request and instead terminating the employee.  In that case, the employee was required to submit to a drug test.  Rather than immediately submit to the test, he requested the right to have a representative present.  Concluding that the employee had engaged in insubordination in the refusal to submit to a required test, the company immediately terminated his employment. 

 

So what is the problem with this? 

 

Well, here it is.  Under the National Labor Relation Act (NLRA), an employee’s Weingarten rights provide the employee with the right to have a representative – often a union steward – present at any investigation or other meeting that might result in disciplinary action against the employee.  To a degree, the concept of Weingarten rights is a bit of a political football; when conservative members predominate on the NLRB, it has often been held that non-union employees have no Weingarten rights, while an NLRB made up of more liberal members has held the opposite.  At the present time, the NLRB is quite union- and employee-friendly, and as a result, they have held that non-union employees have the same Weingarten rights as do unionized employees. 

 

Under these circumstances, and because the drug test required under those circumstances may have led to disciplinary action, the employer violated the NLRA by terminating the employee for his refusal to immediately submit to testing without a representative. 

 

So…how can an employer avoid this sort of situation in the future? 

 

Simply put, the easiest thing for the employer to do in this situation would have been to allow the employee to have a coworker present (along with management), as was his request.  That is not to say that the employee could have requested someone who would have unduly delayed the taking of the test.  However, by allowing the employee to have a requested representative present, the employer avoided the possibility of legal exposure under the NLRA. 

 

The NLRB also hinted that, had the employer taken disciplinary action against the employee based “on the information it already had,” i.e., observations of the employee’s inebriation by supervisory personnel, it would not have created a legal issue under the NLRA.  I do not find this reasoning particularly persuasive.  By taking disciplinary action without first confirming the employee had, in fact, violated the company’s drug & alcohol policy, the company would have likely opened itself up to other legal challenges and questions concerning the basis for its termination decision. 

 

As we have seen in other recent Employment Law Alerts, the current NLRB is pretty far out on the limb in many of its decisions.  With that in mind, many courts might not agree with the reasoning of this case.  Nevertheless, employers– even non-union employers – should be well aware that an employee’s request for the presence of a representative in a potential disciplinary situation is a red flag which should put the company on notice of a potential issue if the employee’s request is denied or ignored. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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EMPLOYMENT LAW ALERT

SIXTH CIRCUIT: WAIVER OF RIGHT TO PARTICIPATE IN FLSA COLLECTIVE ACTION IN SEVERANCE AGREEMENT INVALID

 

It goes without saying that, when providing terminated employees with severance payments, it is advisable and desirable to obtain a signed separation agreement by which the employee releases the company from liability for any and all employment claims that the employee might have.  After all, it would be frustrating to provide an employee with severance payments, only to find out later that the employee used that money to fund his or her lawsuit against you! 

 

One complication arises when dealing with the Fair Labor Standards Act (FLSA), the federal statute which requires employers to (1) pay their employees at least the minimum wage and the (2) pay overtime compensation to non-exempt employees who work more than 40 hours in a particular work week.  Courts have consistently held that an employee cannot waive his/her rights under the FLSA in a separation agreement, and any language to that effect will be held invalid.  For that reason, most well-written separation agreements will contain language to the effect that the employee “hereby acknowledges that he/she had received from the employer all wages and compensation which he/she is owed or to which he/she is entitled by law as of his/her last pay period.” 

 

Even if an employee cannot waive all claims under the FLSA, could the separation agreement contain language limiting those rights?  As the U.S. Court of Appeals for the Sixth Circuit* recently held in Killion v. KeHe Distributors, LLC (July 30, 2014), the answer to that question is generally no. 

 

In a 2013 decision, the Sixth Circuit Appeals Court held that a provision contained in an employment contract which limited the time period within which an employee could bring an FLSA claim to 6 months was invalid.  Otherwise, the Court had held, “an employer could circumvent the Act’s requirements – and thus gain an advantage over its competitors – by having its employees waive their rights under the Act.” 

 

In the recent Killion case, the Court evaluated a separation agreement in which the employee had waived the right to participate in a collective action under the FLSA.  Relying upon its prior precedent in this area, the Court held that such a clause contained in a separation agreement would be invalid. 

 

The basic take-away from the Killion case is that an employer cannot limit an employee’s rights under the FLSA through language contained in an employment contract or separation agreement.  But how about an arbitration agreement, by which the employee agrees to bring any claims against the employer through arbitration (as opposed to litigation in court)?  Basically, the court distinguished arbitration agreements from employment/separation agreements, and for that reason, arbitration agreements may still contain class waivers.  Outside of the arbitration context, however, FLSA waivers (however limited or complete) will be deemed invalid. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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*  The Sixth Circuit is the federal appeals court for the states of Kentucky, Michigan, Ohio, and Tennessee.

 

 

EMPLOYMENT LAW ALERT

IS IT FMLA INTERFERENCE FOR AN EMPLOYER TO REQUIRE WORK FROM AN EMPLOYEE WHILE ON MATERNITY LEAVE?

 

Often, an employer can be placed in a difficult position when a key employee finds it necessary to take a leave of absence under the Family & Medical Leave Act (FMLA).  Someone at the office may need to contact the employee in order to locate a file, ask about the status of a matter, or seek advice on a pending issue.  By so doing, does the employer open itself up to potential legal exposure under the FMLA?  In Evans v. Books-A-Million (August 8, 2014), the U.S. Court of Appeals for the Eleventh Circuit* evaluated this question in the context of an employee’s maternity leave. 

 

In the Evans case, the plaintiff served as the Payroll and Insurance Manager for her employer.  At the time that she began her maternity leave, she was involved in the implementation of a new payroll system which would “go live” during her maternity leave. 

 

Even prior to beginning her leave of absence, the plaintiff was provided with a new laptop computer which would enable her to work from home after the delivery.  Her supervisor, moreover, told her that she “really needed” the plaintiff to continue to work on the new payroll program, the success of which would account for 50% of the plaintiff’s annual bonus.  Almost immediately after giving birth, the plaintiff began answering work-related calls and e-mails from the company, and she was provided with additional work assignments during her leave of absence.  In the end, the plaintiff stated, she felt that she had “no choice” but to continue to work from home after the birth of her child. 

 

Upon returning from maternity leave, the plaintiff felt that her supervisor’s attitude toward her had grown cold and hostile.  Less than a month after her return, moreover, the plaintiff was informed that she was being reassigned from her position as Payroll and Insurance Manager to the position of Risk Manager.  Having spent her entire career in the payroll field, plaintiff made it known that she was not interested in assuming a risk management position, as she had never worked in that area previously.  However, she was told to either accept the new position or to resign from employment, and when she indicated that she would not accept the Risk Manager position, she was terminated from employment. 

 

The plaintiff then filed a number of claims, including one for FMLA interference. 

 

The company pointed out that, because the plaintiff was paid her full salary while she was on FMLA leave, she had suffered no “legal damages.”  As a result, the trial court dismissed her claim for FMLA interference. 

 

On appeal, however, the U.S. Court of Appeals for the Eleventh Circuit disagreed, reinstating the plaintiff’s claim and allowing the case to proceed to trial.  In addition to actual damages for lost pay, the court noted, the FMLA provides for “such equitable relief as may be appropriate, including employment, reinstatement, and promotion.”  As such, it was necessary to evaluate whether the plaintiff was otherwise prejudiced by FMLA interference in this case.  As the court noted, “it seems plain to us that if an employer coerces an employee to work during her intended FMLA leave period and, subsequently, reassigns her based upon her allegedly poor performance during that period, the employee may well have been harmed by the employee’s FMLA violation.”  In such a circumstance, the court concluded, the plaintiff might be entitled to reinstatement, front pay, or other damages. 

 

Admittedly, the Evans case presented an egregious example of abusing an employee’s time while away from work on maternity leave.  Here, it appears clear that the company wanted the employee to continue working as much as possible, notwithstanding her need for a leave of absence under the FMLA.  In such a circumstance, it appears clear that the company interfered with her right to an FMLA-related leave of absence; if anything, the Evans case simply stands for the proposition that paying an employee for his/her time away from work will not save the employer from a claim for FMLA interference. 

 

Obviously, this situation is far different from the more routine case in which, during an employee’s leave of absence, a handful of unobtrusive calls are made to the employee to ask quick questions about the location of files, etc.  In all such cases, however, employers should be careful not to overstep their bounds and improperly intrude on an employee’s leave of absence.  In addition, employers should be savvy in evaluating whether a particular employee might object to even a few contacts from the company during his/her absence. 

 

Finally, it should be noted that the Evans case should have also included a claim for FMLA retaliation, noting that the plaintiff was almost immediately upon her return to work subjected to cold and hostile treatment, transferred to a less desirable position, and ultimately terminated from employment.  Under the circumstances presented here, one would think that Books-A-Million would have had a difficult time defending against such a claim. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

If you do not wish to receive future Employment Law Alerts from Evans Harrison Hackett PLLC, please notify our administrator at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

*  The Eleventh Circuit is the federal appeals court for the states of Alabama, Florida, and Georgia.

 

 

EMPLOYMENT LAW ALERT

AFFORDABLE CARE ACT: EMPLOYER MANDATE DELAYED UNTIL 2015

 

Many employers have expressed concern regarding the looming requirement – set forth in the Affordable Care Act – that all employers with more than 50 employees provide health insurance coverage to their workers.  If you are one of those employers, then I have good news for you!

 

On July 2, 2013, the Obama administration announced that enforcement of the employer mandate will be delayed for one year, until 2015.  This delay should serve to provide employers with additional time to effectively implement the employer mandate requirement, and it should serve to alleviate concerns about the complexity of these new regulations. 

 

This move has resulted in some criticism of the Obama administration, with commentators questioning whether the administration is up to the task of implementing what is proving to be an extremely large, complex piece of legislation.  For employers, however, this delay should prove to be welcome news. 

 

If you have questions about this Employment Law Alert or wish to discuss the impact of this decision upon your business, please do not hesitate to contact Maury Nicely at Evans Harrison Hackett PLLC, 423/648-7851 or This email address is being protected from spambots. You need JavaScript enabled to view it.

 

If you do not wish to receive future Employment Law Alerts from Evans Harrison Hackett PLLC, please notify our administrator at This email address is being protected from spambots. You need JavaScript enabled to view it. .