Confederate Flag Can Contribute to Hostile Work Environment, Says Eleventh Circuit

POSTED BY RICHARD D. TUSCHMAN ON JUNE 27, 2014

Exposure to the Confederate flag in the workplace can support an employee's claim of racial discrimination, according to a recent decision of the United States Court of Appeals for the Eleventh Circuit, Adams v. Austal U.S.A., LLC (11th Cir., June 17, 2014). 

The plaintiffs, 24 African American current and former employees of shipbuilder Austal, U.S.A., alleged that they were subjected to a racially hostile work environment.  The district court granted summary judgment in favor of the company on the claims of 13 of the employees on the grounds that their work environments were not objectively hostile.  On appeal, the Eleventh Circuit affirmed the summary judgments against six of the employees.  The court reasoned that these employees could not rely on evidence of which they were not personally aware to prove that their work environment was objectively hostile. This result makes sense and comports with the decisions of numerous other courts on the same issue.

The Eleventh Circuit reversed the district court's summary judgment against seven of the plaintiffs on the grounds that these employees personally were exposed to numerous incidents of racial slurs, racial graffiti, and, notably, the display of the Confederate flag in the workplace. 

To be clear, the court did not hold that a single instance of an African American employee's exposure to the Confederate flag constitutes actionable discrimination.  Nevertheless, exposure to the Confederate flag was part of the "totality of the circumstances" that may have created a hostile work environment for the seven employees whose cases were reversed. 

Based on the Adams decision, employers may want to consider banning all displays of the Confederate flag in the workplace. 

And in case you were wondering, the display of the Confederate flag is not likely to be deemed protected activity.  In Storey v. Burns International Security Services (3d Cir., December 9, 2004), the plaintiff argued that Title VII's ban on national origin and religious discrimination protected the display of the Confederate flag because being "Confederate Southern-American" is a national origin, and the Confederate flag is a religious symbol because it incorporates the cross of Saint Andrew.  The court rejected this argument, holding that an alleged "personal need to share [one's] heritage cannot be equated with something endemic to national origin or a religiously mandated observance."

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Who is a Whistleblower Under Dodd-Frank? Courts Disagree.

POSTED BY RICHARD D. TUSCHMAN ON JUNE 3, 2014

The Dodd-Frank Wall Street Reform and Consumer Protection Act protects employees who blow the whistle on possible securities law violations.  But the question of who qualifies as a whistleblower continues to divide courts, as illustrated by two recent cases.

In Englehart v. Career Education Corp., Case 8:14-cv-444-T-33EAJ (M.D. Fla., May 12, 2014), the plaintiff, an employee of publicly traded Career Education Corp. ("CEC"), alleged that she was terminated because she voiced concerns internally at CEC regarding proposed budgets and forecasts that misrepresented student enrollment numbers and placements.

In Bussing v. COR Clearing, LLC, Case No. 8:12-cv-238 (D. Neb., May 21, 2014), the plaintiff alleged that she was terminated from Legent Clearing, LLC (a subsidiary of COR Clearing, LLC) after issuing an internal report on Legent's violations of the Bank Secrecy Act, anti-money laundering laws, and deficits in record-keeping, and participating in an investigation of Legent by the Financial Industry Regulatory Authority ("FINRA").

Neither Englehart nor Bussing provided any information to the Securities and Exchange Commission ("SEC").  So were they whistleblowers under Dodd-Frank?

The statute does not provide a clear answer because of a tension between Dodd-Frank's retaliation provision and the Act's definition of "whistleblower."  The statute prohibits retaliation against whistleblowers for: (i) providing information to the SEC, (ii) participating in an SEC investigation, or (iii) "making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter, …. and any other law, rule, or regulation subject to the jurisdiction of the [SEC]."  Read alone, subsection (iii) appears to protect an employee who discloses financial improprieties internally, without reporting them to the SEC, as long as they are disclosures required by a law or rule subject to the jurisdiction of the SEC.  On the other hand, Dodd-Frank only protects whistleblowers, and the Act separately defines "whistleblower" as "any individual …. who provides information relating to a violation of this Act to the [SEC], in a manner established by rule or regulation by the [SEC]."  Under this definition, one seemingly cannot be a whistleblower without providing information to the SEC.

The Englehart court, citing the Fifth Circuit Court of Appeals' decision in Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013), dismissed the plaintiff's claim, holding that the statutory definition of whistleblower was controlling and that the plaintiff was not protected under Dodd-Frank.  In Bussing, in contrast, the court concluded that the plaintiff's allegations stated a claim for whistleblowing.  The court reasoned that if "whistleblower" means only what the "narrow" definition states, then "subsection (iii) serves no significant purpose, and its aim of broadly protecting whistleblowers is stifled."  According to Bussing, "whistleblower" must also be accorded a broader, "ordinary" meaning to give effect to subsection (iii).

A consensus has yet to emerge on the question of who is a whistleblower under Dodd-Frank.  An amendment to the statute, or a decision by the United States Supreme Court, may be required to resolve this issue.

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Court Grants Deference to Secretary of Labor's Interpretation of OSHA Regulation

POSTED BY RICHARD D. TUSCHMAN ON MAY 27, 2014

When the Secretary of the Department of Labor and the Occupational Safety and Health Review Commission offer competing but reasonable interpretations of a worker safety regulation, the Secretary's interpretation is entitled to deference, according to a recent decision by the Eighth Circuit Court of Appeals, Perez v. Lorenz Cook Co., Case No. 13-1310 (8th Cir., May 9, 2014).

The Lorenz Cook decision is bad news for employers because it gives the interpretive advantage to the DOL's Occupational Safety and Health Administration ("OSHA"), which adopts and enforces safety regulations, rather than to the OSHRC.  The OSHRC ("the Commission") is an independent agency that conducts hearings and renders decisions through its Administrative Law Judges (ALJs) and reviews ALJ decisions through its panel of Commissioners. 

The case involved the interpretation of 29 C.F.R. § 1910.212(a)(1), which sets standards for machine guards.  The Secretary cited Lorenz Cook, a manufacturer of air circulating equipment,  for violating the regulation and imposed $490,000 in fines after a worker was killed when a twelve-pound "workpiece" broke loose from a lathe, shot out, and struck him in the head. A “workpiece” is a metal disc that workers shape into a part.  The Secretary determined that the regulation requires lathes such as those used by Lorenz Cook to have guards to protect workers from ejected workpieces.  Loren Cook challenged this interpretation.  An ALJ ruled in Loren Cook’s favor, holding that the regulation only required guards on the lathes to prevent debris or waste material from being ejected; it was not intended to prevent the ejection of the workpiece, which would entail a malfunction of the machine.  The Commission, which has discretionary authority to review ALJ decisions, declined further review, and the Secretary appealed the case.

The Eighth Circuit reversed the ALJ’s decision, relying on the Supreme Court's decision in Martin v. Occupational Safety & Health Review Commission, 499 U.S. 144 (1991).  In Martin, the Supreme Court held that "a reviewing court may not prefer the reasonable interpretations of the Commission to the reasonable interpretations of the Secretary[.]"  While the Commission has authority to make findings of fact and to apply the Secretary's standards to those facts in making a decision, the Commission has "no more power than this in order to perform its statutory role as 'neutral arbiter.'"  Applying Martin, the Eighth Circuit found that the Secretary's interpretation was reasonable and thus entitled to deference. The regulation, the court noted, "contains no inherent limitation to protections only against ejected debris rather than workpieces and no inherent limitation to situations involving normal machine operation rather than machine malfunctions."  The court rejected Lorenz Cook's argument that the Secretary had for decades acquiesced in a 1982 court decision that had interpreted the regulation more narrowly. The Eighth Circuit reasoned that the Secretary’s "understanding of the effect of an interpretation may develop over time," which itself does not demonstrate unreasonableness.

For employers, the Lorenz Cook decision illustrates one of the fundamental challenges in defending against OSHA violations.  The Secretary of Labor not only adopts and enforces safety regulations, but his interpretation of those regulations is entitled to judicial deference as long as it is reasonable – even when that interpretation departs from the Secretary’s longstanding practice.  Employers seeking to challenge the Secretary's interpretation of a safety regulation therefore face an uphill battle.

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New Rules Would Amend COBRA Notification Requirements to Include ACA Alternatives

POSTED BY RICHARD D. TUSCHMAN ON MAY 7, 2014

The U.S. Department of Labor ("DOL") has proposed new rules that would revise an employer’s notification requirements under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") to align them with Affordable Care Act ("ACA") provisions already in effect.  

Under COBRA, group health plans must provide a general notice of COBRA rights to each covered employee and spouse at the time of commencement of coverage under the plan.  In addition, group health plans must provide qualified beneficiaries with an election notice at the time of certain qualifying events, such as termination of employment or reduction in hours that causes loss of coverage under the plan.  The election notice describes a qualified beneficiary’s rights to continuation coverage and how to make an election.  The election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives the notice of a qualifying event.  

The DOL had previously issued a model general notice and a model election notice that were available for download on DOL's website.

On May 8, 2013, the DOL issued technical guidance which explained that some qualified beneficiaries may want to consider and compare health coverage alternatives to COBRA continuation coverage that are available under the ACA through a private health insurance market – the Health Insurance Marketplace ("the Marketplace").  The DOL also noted that some qualified beneficiaries may also be eligible for a premium tax credit to help pay for some or all of the cost of coverage in plans offered through the Marketplace.

The proposed regulations issued on May 1, 2014 eliminate the older version of the model general notice and the model election notice and permit the Department to amend the model notices as necessary and provide the most current versions of the model notices on its website.  While use of the new model notices is not required, using them will ensure compliance with COBRA notice requirements, at least until the new rules are finalized.  The proposed rules note that "[u]ntil rulemaking is finalized and effective, the Department of Labor will consider use of the model notices available on its website, appropriately completed, to be good faith compliance with the notice content requirements of COBRA."

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Do Employers Have to Offer Telecommuting as a Reasonable Accommodation?

POSTED BY RICHARD D. TUSCHMAN ON MAY 2, 2014

Regular attendance is an essential function of most jobs.  Thus, employers generally do not have to accommodate employees whose disability prevents them from regularly attending their job.

But a recent decision by the United States Court of Appeals for the Sixth Circuit sheds new light on what "attendance" may mean.  In Equal Employment Opportunity Commission v. Ford Motor Company (6th Cir., April 22, 2014), the court held that there was a triable issue as to whether an employee's physical presence at the job site was an essential function of the job, in light of the employee's request that she be permitted to work remotely from home.

Jane Harris worked as a resale buyer at Ford Motor Company.  She suffered from irritable bowel syndrome, a condition that worsened over time and resulted in frequent absenteeism.  Harris requested that she be permitted to telecommute on an as-needed basis as an accommodation for her disability.  Ford has a policy that authorizes employees to telecommute up to four days per week, but the policy provides that it is not suitable for all jobs.  Harris's supervisors concluded that her job was not suitable for telecommuting and subsequently terminated her employment.  Harris sued under the ADA, claiming that Ford failed to accommodate her disability.  The district court declined to second-guess Ford's business judgment that telecommuting was inappropriate in Harris's case and granted Ford's motion for summary judgment.

On appeal, the Sixth Circuit reversed, reasoning that attendance does not necessarily require a physical presence at the employer's location:

When we first developed the principle that attendance is an essential requirement of most jobs, technology was such that the workplace and an employer's brick-and-mortar location were synonymous. However, as technology has advanced in the intervening decades, and an ever-greater number of employers and employees utilize remote work arrangements, attendance at the workplace can no longer be assumed to mean attendance at the employer's physical location. Instead, the law must respond to the advance of technology in the employment context, as it has in other areas of modern life, and recognize that the "workplace" is anywhere that an employee can perform her job duties.  Thus, the vital question in this case is not whether "attendance" was an essential job function for a resale buyer, but whether physical presence at the Ford facilities was truly essential.

The court noted that "[d]etermining whether physical presence is essential to a particular job is a 'highly fact specific' question."  Examining the evidence presented, the court concluded that there was a genuine dispute on this issue that precluded summary judgment.

For employers, the Ford Motor Co. case serves as a reminder that there is often no bright-line test for determining what is a reasonable accommodation.  While employers have discretion in defining an employee's essential job functions, courts will not necessarily defer to the employer's judgment, especially where it leads to the termination of a disabled employee.  And as technology advances, courts may increasingly find that telecommuting is a reasonable accommodation for a disabled employee, despite an employer's opinion to the contrary.


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Social Media Policies — ALJ Disregards Guidance From NLRB General Counsel

POSTED BY LAURA E. PRATHER ON APRIL 30, 2014

If you identify yourself as an associate of the Company and publish any work-related information online, you must use this disclaimer: "The postings on this site are my own and don't necessarily represent the positions, strategies or opinions of the Company."


This statement was found to be unlawful in an April 22, 2014 decision by an Administrative Law Judge.  The ALJ reasoned that the word "publish" when using "online communications" would cover employees posting online even when using their own computers on their own time.  The employer's requirement to include the disclaimer in conjunction with these communications was considered unduly burdensome.

A core activity protected by the National Labor Relations Act is the right of employees to discuss, debate, and communicate with each other regarding their terms and conditions of employment.

The ALJ conceded that an employer has a legitimate interest in stopping unauthorized employees from speaking on behalf of a company.  However, the ALJ found that it was not reasonable to believe that all communications by employees would be confused for employer-sanctioned speech.

The ALJ also rejected the opinion from the General Counsel of the NLRB that approved the following Social Media Policy language,   

Any comments directly or indirectly relating to [Employer] must include the following disclaimer: The postings on this site are my own and do not represent [Employer's] positions, strategies or opinions.

It remains to be seen whether the Employer will appeal this decision.  In any event, employers need to keep a close watch on how social media policies are being interpreted.

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Whistleblower Claims The Wave Continues

POSTED BY MATTHEW A. STEINBERG ON APRIL 1, 2014

"The cover-up is often worse than the crime" – an apt mantra for employers who are being increasingly forced to defend retaliation and/or whistleblower claims brought in myriad industries under a broad spectrum of federal and state laws.

The United States Supreme Court's recent (and landmark) decision in Lawson v. FMR LLC, broadly expanding the scope of potential whistle-blower claims under the Sarbanes-Oxley Act of 2012 (SOX), highlights employers' enlarged whistle-blower-related exposure.  The Lawson decision meaningfully enhances the number of employees who may seek to bring suit under the SOX whistle-blower provision.  Passed in 2002 on the heels of the Enron scandal, SOX prohibits retaliation against employees who report specific violations of SEC regulations and/or other forms of shareholder fraud.  Based on statutory language, up until Lawson, employers generally operated under the belief that it applied only to employees of publicly-traded companies. 

Not so.  In Lawson, writing for a 6-3 majority, Justice Ginsburg held that the SOX anti-retaliation provision applies not only to employees of publicly-traded companies, but also to employees of non-public companies that provide work for public companies.  Justice Ginsburg reasoned that prohibiting retaliation under SOX against non-public company employees furthered Congress' overarching "aim" of SOX, which was to "safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corp."  

By so holding, the United States Supreme Court unquestionably expanded SOX whistle-blower coverage and stoked fears that a new wave of SOX whistle-blower litigation is imminent.

In addition to expanded SOX whistle-blower coverage, employers throughout the country face whistle-blower-related exposure under various federal statutes such as the Dodd-Frank Act (in the financial services sector), OSHA, the Fair Labor Standards Act, and the Family and Medical Leave Act, as well as numerous state and local civil rights, discrimination and/or public safety statutes.  In this evolving area of law, it is incumbent upon employers to carefully analyze their internal compliance practices for receiving and investigating all types of whistle-blower complaints.  Human Resources representatives and key members of management – in publicly- and privately-held companies – must be trained regarding the broad range of whistle-blower laws and how to recognize and respond to the various forms of protected whistle-blower complaints, which might arise in the workplace.  

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.

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Can Employers Regulate Employees' Off-Duty Conduct?

POSTED BY RICHARD D. TUSCHMAN ON MARCH 27, 2014

Employees' off-duty conduct is their own business – until it affects your business.  But where should the line be drawn?  When should an employer attempt to regulate employees' off-duty conduct?  Can an employer regulate off-duty conduct without running afoul of employment laws? 

Employees' outside relationships, political activism, use of social media, drug and alcohol use, and other off-duty behaviors can present vexing questions for legal and human resources professionals.  For example:

  • Does an employer have cause to be concerned if  co-workers are engaged in a romantic or sexual relationship outside of work?  If so, can an employer take action against the employees?
  • If an employee espouses radical political views, can the employer fire the employee?  What if the employee simply supports a candidate or political cause that the employer opposes?
  • Can employers take action against employees who use social media such as Facebook or Twitter to complain about their boss or protest their employer’s policies?
  • Can employers refuse to employ workers who use tobacco?  What about an employee who is suspected of being an alcoholic? 
  • Can an employer terminate an employee who has been arrested for a crime?  What if the employee was convicted? 
  • Can an employer take action against an employee for expressing controversial religious opinions outside the workplace? 

On April 4, as part of the 19th Annual Akerman Labor & Employment Law Seminar, I will answer these and other questions raised by a range of off-duty behaviors that can affect an employer's business.  I look forward to seeing you there!

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The Art of Employee Termination and Severance Agreements

POSTED BY CHRISTOPHER S. DUKE ON MARCH 25, 2014

The process of employee termination is fraught with pitfalls for the unwary employer.  Not only can emotions run high during this time, but failure to comply with all applicable state and federal laws can lead to legal liability for your company.  One wrong step in this process, even if it is unintentional and made with the employee's best interests in mind, can mean big troubles for an employer.  Now more than ever, employers need to make sure they handle the termination of employees the right way.  

However, conducting the termination properly is only the first step in protecting the company from liability.  In today's increasingly litigious society, employers are required to take additional steps to ensure they are protected from claims by former employees.  The best way to achieve this is to enter into a separation agreement with the departing employee.  Only by entering into a valid, binding separation agreement where the employee waives his or her rights to sue can an employer sleep well at night knowing the company is protected from exposure.  Yet like many aspects of workplace laws and compliance, there is no "one size fits all" separation agreement to cover all scenarios.  How much severance is enough?  What claims are released?  Do I have to give the employee a reference?  What if they apply to be rehired?  These are all important questions that must be addressed when preparing the separation agreement and tailoring it to fit the circumstances of the termination.

In addition, today's electronic and digitized workplace makes it easier than ever for disgruntled employees to walk out the door with your valuable confidential information.  Unless steps are taken at or before the termination stage, your company's most valuable assets can walk right out the door with the terminated employee. 

On April 4, as part of the 19th Annual Akerman Labor & Employment Law Seminar, I will be discussing these and other important issues relating to proper employee termination and the drafting of severance agreements.  We will cover each step of the termination process, from the crucial step of documenting early the reasons for termination, to conducting the termination meeting and following through with post-termination follow-up.  We will also cover how to draft and use post-termination severance agreements and releases to limit legal liability and protect your company's valuable business information from being misappropriated.  I look forward to seeing you there.

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The NLRB Invades The Non-Union Workplace

POSTED BY SCOTT T. SILVERMAN ON MARCH 19, 2014

Employers beware!  Although the Board's attempt to require employers to post a notice of employees' federal rights has been defeated, the agency remains active in its regulation of the non-union workplace.  The Board now has a full complement of members, with a Democratic majority, and is posed to continue to render decisions that will impact all places of work.

Too many organizations believe they have no responsibility to employees under federal labor law, simply because they are not unionized.  Unfortunately, nothing could be further from the truth.

Employees who are not represented by a union still have rights under federal labor law, including the right to engage in concerted actions regarding terms and conditions of employment.  Such "protected activity" may not be the basis of an adverse action against an employee.  The Board has found employers to have violated "protected activity" guarantees in a myriad of seemingly irrelevant situations, including taking action on the basis of derogatory social media posts. 

Further, employer confidentiality, non-disparagement and at-will employment policies may also run afoul of labor law protections. An unwitting employer may find itself subject to burdensome and protracted proceedings before the Board.

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where I will discuss how an employer can implement necessary employee policies and regulate employee conduct without running afoul of federal labor law.

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Managing Employees Who File Claims

POSTED BY KAREN M. BUESING ON MARCH 17, 2014

Dealing with an employee who has filed a claim places an employer in a precarious position – the employer needs to properly manage the employee, but avoid a retaliation claim in the process. It's like walking a tightrope.

Employers have seen it many times – a troublesome employee is about to be disciplined, sees the handwriting on the wall, and files a charge as a preemptive measure. The employee believes the filing of a charge is tantamount to job protection – and oftentimes, so do employers.

But that should not be the case. While retaliation is the most common claim filed today – and the most likely to survive in litigation — employers can take affirmative steps to manage employees and avoid retaliation claims. Further, while the courts have broadened who can bring claims and expanded the scope of the conduct that can support them, at least in some contexts, the courts have heightened the standard of proof required of employees.

During our presentation at the 19th Annual Akerman Labor & Employment Law Seminar, we will discuss in a practical way how to handle an employee who has filed a claim, including best practices for avoiding retaliation claims.  We hope you will join us on April 4th!

Irregular Attendance May Render An Employee With A Disability "Unqualified"

POSTED BY ARLENE K. KLINE & JENNIFER T. WILLIAMS ON MARCH 13, 2014

In a recent case, Daniel Mecca v. Florida Health Services Center, Inc., Case No. 8:12-cv-02561 (M.D. Fla. February 3, 2014), a federal court in Florida held that where regular attendance is an "essential function" of a position and leave will not allow regular attendance now or in the immediate future, leave is not a "reasonable accommodation."

After resigning his employment, Daniel Mecca ("Mecca") brought claims against Tampa General Hospital ("TGH") for discrimination and retaliation under the Americans with Disabilities Act ("ADA") and the Florida Civil Rights Act ("FCRA") by reason of TGH's failure to grant an accommodation in the form of leave; and for interference and retaliation under the Family and Medical Leave Act ("FMLA").  Mecca, who worked for TGH as a Peripherally Inserted Central Catheter ("PICC") nurse, suffered from panic attacks and anxiety and requested "that he be allowed to go home or be absent from work if he experienced episodic flare-ups."

While TGH did not dispute that Mecca was a person with a disability, it argued, that "(1) he is not a qualified individual with a disability because he is unable to perform the essential functions of a PICC nurse, [which included regular attendance]; [and] (2) his requested accommodation of intermittent and indefinite leave is not a reasonable accommodation."  

In dismissing Mecca's ADA claim, the court held that a nurse's regular attendance at work is an essential function of the job.  The court stated "[a]n employer does not have to wait indefinitely for an employee's medical condition to be corrected, especially when it is uncertain whether the condition will improve . . . .  Despite [Mecca's] having taken leave on numerous occasions, the leave had not improved Mecca's ability to have regular attendance, nor was there any indication that it would do so at any point in the near future.  Therefore, leave was not a reasonable accommodation." With regard to the FMLA claim, the court found that Mecca had not been denied any leave when he had requested it and that Mecca had failed to show that TGH's legitimate non-discriminatory reason for the adverse employment action was pretextual.  

While the determination of whether an employee is a "qualified individual with a disability," and therefore, whether a requested accommodation is reasonable, is an inherently factual inquiry, Mecca provides employers with some guidance in situations where the employee's regular attendance is truly essential and the only accommodation requested involves the employee's irregular absence.  When engaging in the interactive process, employers in these situations should consider: (1) whether the employee's physical presence is essential to the work; (2) whether the work can be distributed in the event of the employee's absence; and, (3) whether the employee's absence will ensure his or her regular attendance in the immediate future.  Where the first question is answered in the affirmative and the latter two questions are answered in the negative, Mecca may provide support for denying a request of intermittent leave under the ADA.

Of course, employers should also be careful not to interfere with FMLA rights if an employee has a serious health condition that renders him unable to work and is otherwise entitled to FMLA leave.  The ADA and FMLA issues often overlap, so human resource professionals should exercise extreme care when considering terminating an employee because the employee cannot currently do the job.  Engaging in the interactive process early on is very important.  Err on the side of providing an accommodation as a part of your normal business practice, rather than immediately denying it.  Here, the fact that TGH already had granted Mecca multiple leaves and its flexibility in scheduling his work was a favorable factor for the employer.  

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.

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The Audit's Done, and We Need to Reclassify – Now What?

POSTED BY SAMANTHA ABEYSEKERA ON MARCH 12, 2014

Let's assume you've done an internal audit, or one required by the Department of Labor, and found – as so many companies do – that certain titles/positions require reclassification from exempt to non-exempt under the Fair Labor Standards Act and state law.  What are the next steps?

The task of making reclassification a reality requires consideration of many factors.  For example, will the company pay backpay for some or all of the period during which employees were misclassified?  If so, will current and former employees be paid, or just current employees?  How far back should the company go in calculating backpay?  How many hours – in the likely absence of time records – should the company pay for?  How is the amount of backpay calculated?

Apart from the issue of repayment, companies also need to think about obtaining acknowledgements from employees to limit liability, "messaging" the reclassification to employees, setting new pay rates, and training supervisors to monitor and, if necessary, prevent off the clock work by those who are now non-exempt.

During our presentation at the 19th Annual Akerman Labor & Employment Law Seminar, we will discuss how to handle soup-to-nuts reclassification in a practical way, including best practices for limiting legal claims resulting from the reclassification.  We hope you will join us on April 4th!

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Avoiding Misclassification of Workers Under the FLSA

POSTED BY SUSAN N. EISENBERG ON MARCH 10, 2014

The news of late has been filled with articles about employers who are being sued for the misclassification of workers and the failure to pay overtime.  South Florida continues to be a hotbed of this litigation.  While Florida has only 6% of the nation's working population, it also boasts 27% of cases filed nationally under the Fair Labor Standards Act.  We can continue to speculate as to why Florida has such an active practice in this area, but the reality is, as employers, your best defense to these types of claims is bringing the company into compliance with the law.

The latest types of cases filed under the Fair Labor Standards Act deal with the threshold issue of who is an employee.  The FLSA does not give much guidance to that question as it defines an employee as an "individual employed by an employer."  Therefore, most courts employ a myriad of tests to determine whether a worker is an employee.  There has been a significant increase in the number of claims filed regarding the misclassification of independent contractors and the hiring of unpaid interns.  This is a recent new layer of litigation, which accompanies the still strong ongoing litigation over the question of whether employees are misclassified under the White Collar Exemptions.  It is difficult for employers to keep up with the law in the area of misclassification, as the law is ever changing and the Department of Labor is taking positions with regard to White Collar Exemptions that are inconsistent with positions they took 10 years ago.

At Akerman's upcoming 19th Annual Labor & Employment Law Seminar, I will address these very issues.  First, I will discuss the issue of independent contractors and the various tests that are used to determine whether workers are properly classified as independent contractors, along with potential exposure for those who are misclassified.  In addition, we will explore the problem with unpaid interns and review the recent high profile cases that have been brought in the entertainment industries.  We will also examine the general rule, which is strictly construed, to determine who may be an unpaid intern.  I will also review the White Collar Exemptions, which include  executive, administrative and professional, as well as highly compensated, employees.  We will define the salary level, salary basis and duties tests as they apply to the White Collar Exemptions, which, if properly utilized, will exempt employees from the overtime requirements under the Fair Labor Standards Act.

I hope you will join us for this interesting and informative presentation on wage and hour issues at the April 4th seminar. I look forward to seeing you there.

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Should Background Checks Be On Your New Employee Checklist?

POSTED BY DEBORAH A. CATALANO ON MARCH 5, 2014

"Where there's Pepsi, there's music" … is a slogan from a Pepsi marketing campaign.  No doubt the EEOC agrees – in 2012, Pepsi paid over $3 million to settle race discrimination claims and agreed to provide job offers and training because of its former background check policy.  According to a press release on the EEOC's website, the EEOC determined that "more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment."  The EEOC contended that Pepsi’s former policy barred job applicants even where there had been no conviction. 

Also in 2012, Integrity Staffing Solutions reached a settlement involving a black job applicant who had been denied a job based upon a felony conviction occurring 30 years prior to his application.  ISS had a prohibition against hiring individuals with felony convictions.  As part of the settlement, ISS modified this policy to preclude a wholesale ban.

So, does this trend mean that employers should dispense with criminal background checks?  In short, no.  However, the EEOC's position is that employers may not have blanket policies using criminal background checks against applicants or employees. 

The EEOC isn't the only threat to employers when it comes to the use of background checks.  In February, 2014, a class action lawsuit was filed against Whole Foods in California alleging Fair Credit Reporting Act claims stemming from its purported online application process which included forms (to be signed by applicants) which were designed to obtain background check information.  The outcome in the Whole Foods case is likely to impact the plaintiffs' bar and employers.

In light of the EEOC's increasing opposition to the use of criminal records in hiring decisions and the compliance issues arising under the federal Fair Credit Reporting Act, employers must stay current on the law in this area and be able to show that the use of backgrounds checks is either directly related to job performance or justified by a legitimate business necessity.   Additionally, it is imperative that employers have the required disclosure and acknowledgement forms in order to minimize the risk of ending up in the situation in which Whole Foods is now.

I will provide an update on the use of Criminal Background Checks at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.  Hope to see you there!

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