Employment Law Lookout

NLRB Vastly Expands the Definition of Joint Employer

Posted in Uncategorized

By Richard L. Alfred, Marshall B. Babson, Joshua L. Ditelberg, Bradford L. Livingston, Stuart Newman, and Karla E. Sanchez

In a ruling that will affect most business relationships and extends far beyond either labor law or the concept of employment generally, the National Labor Relations Board issued a much awaited decision today, Browning-Ferris Industries of California (“Browning-Ferris”), 362 NLRB No. 186 (August 27, 2015), found here, that expansively broadened the definition of who is a joint employer — an otherwise unrelated entity that does not hire, fire, supervise or determine the wages and benefits of another employer’s employees but that nevertheless bears responsibilities to those employees under the National Labor Relations Act (“NLRA” or the “Act”).

To view our full discussion of the case, please click on the link below:

http://www.seyfarth.com/publications/MA082715-LE

The post NLRB Vastly Expands the Definition of Joint Employer appeared first on Employer Labor Relations Blog.

OSHA Updates Emphasis Program on Amputations – Cites Employer and Places It on Severe Violators List

Posted in Uncategorized

By Brent I. Clark and Craig B. Simonsen

White Square Button with Arm AmputeeLast week OSHA issued its updated National Emphasis Program on Amputations (NEP). Instruction CPL 03-00-019 (June 30, 2015). Take that juxtaposed against OSHA’s citation in a recent case where on his first day on the job a 21-year-old employee suffered severe burns and the loss of four fingers.

National Emphasis Program on Amputations

The NEP, which was first issued in 2006, was targeted toward industries with high numbers and rates of amputations. In the updated NEP, OSHA has used updated enforcement data and Bureau of Labor Statistics (BLS) injury data to better direct its inspection site selection targeting. According to OSHA, manufacturing employers report that 2,000 workers suffered amputations in 2013. The BLS rate of amputations in the manufacturing sector was “more than twice as much (1.7 per 10,000 full-time employees) as that of all private industry (0.7).”

In the NEP announcement the OSHA Administrator Dr. David Michaels said “this directive will help ensure that employers identify and eliminate serious workplace hazards and provide safe workplaces for all workers.” The NEP applies to general industry workplaces in which any machinery or equipment likely to cause amputations are present. Inspections “will include an evaluation of employee exposures during operations such as: clearing jams; cleaning, oiling or greasing machines or machine pans; and locking out machinery to prevent accidental start-up.”

The NEP lists out the more than ninety 2012 NAICS code industries that will fall under the enhanced inspection regime. The industries fall within a large scope, including those such as dairy, meat processing, bakeries, food manufacturing, wood industries, paperboard, printing, plastics, concrete, metals, arms and munitions, farm implements and equipment, power generation and transmission equipment, laboratory equipment, vehicle manufacturing, and household equipment and furniture.

Recent Case Example

Just last week OSHA issued a citation against a plastics manufacturer where on his first day on the job a 21-year-old employee suffered severe burns and the loss of four fingers. According to OSHA, its “inspectors found the company failed to train the employee about safety requirements that protect workers from machine hazards. [The company] also failed to report the injury to the agency, as required.” In response to the incident, the company was given a proposed penalty of $171,270, and it was placed in the Severe Violator Enforcement Program (SVEP).

While we only have OSHA’s version of the facts, the scenario is illustrative of how OSHA views training for new employees. For instance, the citation claims that the employer failed to train the employee about safety requirements that protect workers from machine hazards. The employee was out on the shop floor, on his first day, attempting to dislodge a jam in a machine. OSHA expects employers to carefully train new employees and take extra caution to ensure they are safe. Employers should consider whether their new employee training and orientation is appropriate given the hazards and complexity of the job.

In addition to the penalty, being placed on OSHA’s SVEP will put the employer in a position where it will be subject to increased inspections over many years. Making the case to have the company removed from the SVEP will be a time consuming and expensive process, and may not be successful under OSHA’s one-sided procedures.

In another teaching moment, once the amputation had occurred, especially now since the adoption and implementation of OSHA’s revised reporting rules, the company allegedly “failed to report the injury to the agency.” Employers need to have reviewed the new OSHA reporting rules and determined the applicability as to their business. Don’t wait for an incident to think about whether or not you need to report. Figure it out now while you are not under a potentially expensive time clock.

College Football Unions: The Refs Call Off the Game

Posted in NLRB

By Bradford L. Livingston, Esq.

On the eve of a new college football season, the referees at the National Labor Relations Board (NLRB) got it right on instant replay: they called off the game. In a ruling yesterday, the NLRB’s five Members unanimously declined to assert jurisdiction over Northwestern’s scholarship football athletes. There will be no union of college football players — at least for now.

In case you forgot the game being played during the 17 months since the NLRB Regional Director’s original decision that scholarship college football players are employees who may form a union under the National Labor Relations Act (NLRA), the facts are this: In early 2014 the College Athletes Players Association or CAPA, a union affiliated with The United Steelworkers, filed a petition seeking to represent Northwestern University’s scholarship football players. Following a hearing before Region 13 of the NLRB, on March 26, 2014, the Regional Director ordered a representation election, finding that it would “effectuate the purposes of the [National Labor Relations] Act to assert jurisdiction over scholarship athletes.” The NLRB conducted an election in April 2014 and impounded the ballots while Northwestern University appealed the Regional Director’s decision to the full NLRB. Following the filing of multiple briefs by both the parties and various amici curiae, the NLRB issued its ruling today. In this case, all 5 current members of the NLRB joined in the decision by outgoing member Harry Johnson, whose term expires on August 27.

While fans often disagree with both the referees’ and replay booth’s calls, this time the referees got it right. In earlier blog posts, College Football Unions: NLRB to Play the Game, Will the NLRB Tackle the NCAA?, College Football Unions: What Game Is Being Played?College Football Unions: Throw the Flag for a False Start, and in my testimony at a Congressional hearing on the issue, I noted various problems with a finding that college football players could be considered employees under the NLRA.

Although the referees got it right, they did so only by avoiding the central issue in the case. Rather than deciding whether or not scholarship athletes are employees under the NLRA, the Board found an astute and politically correct way for its three-Democrat Member majority to avoid antagonizing their friends in organized labor. Contrary to its Regional Director, the NLRB found that it “would not effectuate the policies of the Act” and therefore — as suggested in our original blog post — declined to asset jurisdiction over Northwestern’s scholarship athlete. In reaching its conclusion, the Board noted that college and professional sports are played not alone but against other teams. And at the professional level, all the teams and their players are typically covered by a common labor agreement. A single team with its own labor agreement would lead to an un-level playing field. Likewise, the NLRB noted that it can only assert jurisdiction over private universities, which represent only 17 of the 125 colleges and universities in the FBS or top level of college football. The vast majority of teams are public colleges and universities beyond the reach of the NLRA and NLRB. Rather than promoting uniformity and stability, the Board recognized that an inherent asymmetry would be created when different teams play by different rules. Therefore, the NLRB decided that a “no call” was the best call. Hedging its bets, however, the NLRB noted that the result might be different if circumstances changed or if a different petition were filed.

Like other instant replay decisions in college football, this decision cannot be appealed any further. Just as the Big Ten or SEC Commissioner cannot overturn referees’ decision on the field or from the instant replay booth, there is no court to which CAPA can now turn. Decisions of the NLRB in representation cases like this are final; so we will never know how Northwestern’s scholarship athletes voted. And while other courts will decide when (and fans can debate) whether college football players should be paid for participating in their sports under other laws and legal theories, it is now clear that college football players cannot unionize and bargain under the National Labor Relations Act (for the foreseeable future). So as we begin a new season of college football, let’s get set to enjoy the game on the gridiron rather than before the NLRB.

Workplace Violence – Putting Employers on the Horns of a Dilemma

Posted in Investigations/Inspections, OSHA Litigation, Workplace Violence

bogBy Mark A. Lies, II and Craig B. Simonsen

Employers today can find themselves in a seemingly untenable dilemma when they have violence threaten to invade their workplaces.  Two recent cases illustrate the competing liabilities that employers face in their decision-making as to how to respond to workplace violence.

In one case, decided by the United States Court of Appeals for the Ninth Circuit, the employer, a superalloys casting company, chose to fire an openly hostile employee making death threats to avoid potential injury to its employees, and face the prospect of costly litigation including an Americans with Disabilities Act (ADA) lawsuit.

In the other case, decided by an Occupational Safety and Health Review Commission (OSHRC) Administrative Law Judge, a healthcare company did not perceive or protect a social service coordinator, who was tragically fatally stabbed outside the client’s home, from the hazard of workplace violence.

Employer Response to Violence Upheld

In the first case the plaintiff appealed from the Federal District Court’s grant of summary judgment in favor of his former employer on his claim of discrimination in violation of Oregon disability law. Mayo v, PCC Structurals, Inc., No. 13-35643 (9th Cir. July 28, 2015) (Mayo).

The District Court concluded that because the plaintiff, Timothy Mayo, had threatened to kill his co-workers, including his supervisor, he was not a “qualified individual” under section 659A.112 of the Oregon Revised Statutes, which is Oregon’s counterpart to the Americans with Disabilities Act (ADA). The District Court indicated that in following the decisions of numerous other Circuit Courts, Mayo was no longer a “qualified individual” once he made his “violent threats.” Because Mayo was not a qualified individual in the eyes of the court, he was not “entitled to protection under the ADA and Oregon’s disability discrimination statute.”

In its discussion affirming the lower court decision, the Circuit Court of Appeals found that even if the plaintiff were disabled (which it assumed was true for the appeal), “he cannot show that he was qualified at the time of his discharge. An essential function of almost every job is the ability to appropriately handle stress and interact with others.” For instance, in a frightening recitation of the court record, the plaintiff told a co-worker that he “‘fe[lt] like coming down [to work] with a shotgun an[d] blowing off’ the heads of the supervisor and another manager. The co-worker need not worry, Mayo explained, because she would not be working the shift when the killing would occur.”

After these statements were reported to company management a timely investigation was conducted. Written statements were obtained from co-employees regarding the threats. When the plaintiff was asked by management if he planned to carry out these threats, the plaintiff responded that “he couldn’t guarantee he wouldn’t do that.” The company management immediately suspended the plaintiff’s employment, barred him from company property, and notified the police.

After the plaintiff’s suspension and being interviewed by the police, he was voluntarily admitted to the hospital because he was deemed to pose a danger to himself and to others. He remained in custody for six days, and then took a leave under the Oregon Family Leave Act (OFLA) and the Family and Medical Leave Act (FMLA) for two months. Near the end of his leave period, a treating psychologist cleared him to return to work, writing that he was not a “violent person,” but recommended a new supervisor assignment. While the parties dispute the timing, the employer decided to terminate the plaintiff during his medical leave. The company determined that his threats were of such severity that he was unqualified to work with any supervisors or co-employees and that it could not expose its employees to potential workplace injury.

In response the plaintiff brought this case, seeking damages. The District Court granted the employer’s motion for summary judgment, and the Circuit Court of Appeals affirmed.

Employer Response to Threatening Conduct Found Inadequate

In the second case, an Occupational Safety and Health Review Commission (OSHRC) Administrative Law Judge, Dennis L. Phillips, issued an opinion that a healthcare company did not protect a social service coordinator, who was fatally stabbed outside her client’s home in December 2012. Secretary of Labor v. Integra Health Management, Inc., OSHRC No. 13-1124 (June 22, 2015) (Integra).

The employer in this case, Integra Health Management, Inc. (Integra), provided mental and physical health assessments and coordinated healthcare/case management services for insureds of insurance companies. One of its employees was a 25 year old newly- hired Service Coordinator (SC) with about three months on the job. The employee had no prior experience in the community health or social worker industries. The employee did not have an office at the company but instead worked out of her home. She also used her computer, a phone, and car to travel to client’s homes.

In October 2012, the employee planned to drive out into the field to a client’s apartment, to make an unscheduled visit. The client was a diagnosed schizophrenic, who was on the employee’s list of clients, known as “members,” for which she was responsible. The client had a history of violent behavior, and had been convicted of violent crimes and incarcerated for many years. The employee was not advised about the client’s history of mental illness or violent behavior when he was assigned to her. The employee had made several attempts to contact the client by telephone, which were unsuccessful.

As planned, the employee visited the client in October 2012 by going to his house unannounced. She introduced herself and the company and arranged a return visit to conduct an initial assessment. The employee reported in her progress note report for that day that during their conversation, the client “said a few things that made [her] uncomfortable, [she] asked [the client] to be respectful or she would not be able to work with him.” She also documented in her progress note report that “[b]ecause of this situation, [she] is not comfortable being inside alone with [the client] and will either sit outside to complete assessment or ask another SC to accompany her.”

A number of subsequent meetings and conversations occurred between the employee and the client including further notes in the employee’s progress note report regarding her concerns. In December 2012, the employee was fatally stabbed by the client during her visit to his home.

Following the incident the Occupational Safety and Health Administration (OSHA) issued two citations to Integra Health Management, Inc., claiming a violation of the General Duty Clause, section 5(a)(1), of the OSH Act, and a violation of OSHA’s injury reporting standard. Specifically, the General Duty Clause citation alleged that the employer did not furnish employment and a place of employment which were free from recognized hazards that were causing or likely to cause death or serious physical harm to employees, in that employees were exposed to the hazard of being physically assaulted by clients with a history of violent behavior.

The Judge determined that the employer’s workplace violence policy was inadequate, that the employee training was insufficient, that the employer failed to provide the employee with information about the medical background of the client, as well as the criminal history. More importantly, the Judge determined that the employer did not monitor the employee’s progress notes which identified her concerns about the client and did not take affirmative action to assist her when she indicated her continuing anxiety about their interactions.

What are the Legal Ramifications that Employers Should Consider?

In Mayo the employer took steps to protect its employees from threatened harm by conducting a timely investigation, suspending and eventually terminating the aggressive and threatening employee. The company’s actions forced it to respond to discrimination claims under the ADA that initially were filed in state court, and removed to federal court. While the employer prevailed in the District Court and Circuit Court, the company undoubtedly spent considerable sums defending the suits. While this litigation was very time consuming and expensive, the employer avoided a tragic outcome.

Unfortunately in Integra the employer did not respond to or take any actions to address any sense of fear or anxiety mentioned in the employee’s client visit notes. A serious OSHA violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known. The Judge found that the healthcare company’s approach to safety was inadequate, and that the company should have taken precautions to prevent injury by developing a meaningful written policy, hiring and training its employees appropriately and responding to complaints in a timely manner. While the company only faced an OSHA fine of $7,000 in proposed penalties for the General Duty Clause violation, it sustained the tragic loss of an employee, as well as a worker’s compensation death suit.

Recent OSHA Guidance

The Mayo decision may give some sense of security to those employers that make hard choices for what it believes are the right reasons, that is, for employee safety. But choices are not always easy, and the resulting actions can be costly.

The Integra decision is timely in view of another recent OSHA action relating to the healthcare industry. Recently OSHA released an “Inspection Guidance for Inpatient Healthcare Settings,” that will focus its inspectors attention to workplace violence, musculoskeletal disorders, bloodborne pathogens, tuberculosis, and slips, trips, and falls. The Guidance focuses on hazards that were included in OSHA’s recently-concluded National Emphasis Program on Nursing and Residential Care Facilities, CPL 03-00-016.

Particularly, the Guidance indicates that workplace violence is defined as violent acts (including physical assaults and threats of assaults) directed toward persons at work or on duty. OSHA notes that workplace violence is a recognized hazard in hospitals, and in nursing and residential care facilities. According to OSHA, in the healthcare and social assistance sector, 13 percent of the injuries and illnesses were the result of violence. “Fifteen percent of the days-away-from-work cases for nursing assistants were the result of violence.” Accordingly, workplace violence will be evaluated in every inpatient healthcare OSHA inspection.

While the inspection Guidance is for “inpatient” healthcare settings, employers in other industries can be certain that they will also be inspected by the same OSHA inspectors as healthcare workplace violence incidents occur, regardless of the setting, including non-healthcare workplaces as well. The Guidance was effective immediately. The Guidance noted that “because these hazards are nationwide, State Plans are expected to follow the guidance.”

Healthcare employers should take heed of this healthcare industry OSHA decision and the related Guidance. Special attention should be taken to update your policies, procedures, and training systems to include these topics in order to be inspection ready.

Recommendations

Against this potential liability scenario, an employer must develop an effective written workplace violence policy which must be communicated to all employees if it hopes to have any defense against these potential claims and to prevent a tragic incident. At a minimum, the written workplace violence prevention policy should include the following elements:

  • Stated management commitment to protecting employees against the hazards of workplace violence, including both physical acts and verbal threats;
  • Statement that the employer has a “zero tolerance” policy toward threats or acts of violence and will take appropriate disciplinary action against employees who engage in such conduct;
  • Identify means and methods for employees to notify the employer of perceived threats of violent acts in a confidential manner;
  • Establish a means to promptly investigate all such threats or violent acts;
  • Develop consistent, firm discipline for violations of the policy;
  • Provide training for managers and employees to identify signs and symptoms of employee behavior which may predict potential violence (erratic behavior; employee comments regarding homicide or suicide; provocative communications; disobedience of policies and procedures; presence of alcohol, drugs or weapons on the worksite; physical evidence of employee abuse of alcohol or drug use) which should be reported immediately to the employer;
  • Establish a team of qualified individuals (e.g., human resources; risk managers; legal; medical; security) either within the company or readily available third parties, to respond to a potential or actual incident; and
  • Consider establishing an Employee Assistance Plan (EAP) to provide assistance to employees who may be experiencing mental or emotional stress before an act of violence occurs.

If you have any questions regarding this article, please contact any of the authors, or your Seyfarth attorney.

Spokeo, Inc. v. Robins: Petitioner Argues If There Is No Actual Injury-in-Fact, Plaintiff Lacks Standing to Sue

Posted in Hiring, Testing & Selection, Workplace Policies and Processes

By Pamela Q. Devata, Robert T. Szyba, and Ephraim J. Pierre

SCOTUSFollowing the U.S. Supreme Court’s grant of certiorari on April 27, 2015 in Spokeo, Inc. v. Robins, No. 13-1339 (which we reported here), the Petitioner has weighed in with their brief.

As you may recall, the question before the Court has the potential to determine the future scope of congressional power, as well as consumer and workplace-related class actions: Does a plaintiff who suffers no concrete harm, but who instead alleges only a statutory violation, have standing to bring a claim on behalf of himself or a class of individuals?

Recall that the Plaintiff, Thomas Robins, brought a purported class action against Spokeo, Inc., accusing the company of violating the Fair Credit Reporting Act (“FCRA”) by presenting inaccurate information about him on the Internet. The Plaintiff sued because the company over-reported his earnings and education level, and reported that he was married with children, even though he was not married and had no children, alleging this information might have a negative impact on his employment prospects. However, the Plaintiff did not allege any actual injury or harm, and thus no actual damages, instead seeking statutory damages.

The U.S. Court of Appeals for the Ninth Circuit reversed the district court’s dismissal, and held that the “violation of a statutory right is usually a sufficient injury in fact to confer standing” and that “a plaintiff can suffer a violation of the statutory right without suffering actual damages.” 742 F.3d 409, 413. After briefing by the parties and various amici curiae, the Supreme Court sought the Solicitor General’s input, who opined that review by the Court was not warranted. The Court disagreed, and granted certiorari anyway.

Petitioner’s Argument

On July 2, 2015, the company filed its Brief for Petitioner, arguing the merits of the appeal now before the Court. The company first argued that Congress may not override requirement of an actual injury under Article III of the Constitution and established Supreme Court precedent. For instance, the brief pointed out that Warth v. Seldin, 422 U.S. 490 (1975), which the Ninth Circuit relied on below, dealt with Congress’s ability to legislate in light of principles of prudential standing, not Article III standing. Prudential standing, which is comprised of judicially-created principles, places limitations such as prohibiting a party’s ability to sue on behalf of a third party, prohibiting generalized grievances (e.g., there is no “taxpayer standing”), and limiting standing to those who are within the zone of protectable interests. The Petitioner explained that even if Congress can override these principles, it cannot override the Constitution.

This understanding comports with the past several hundred years of legal history, as the Petitioner looked back to medieval England and the evolution of the common law’s causes of action, all of which required an actual harm or injury to redress. With that backdrop, the Petitioner explained, the Framers designed Article III to permit the federal judiciary to hear “Cases” and “Controversies,” thereby limiting the courts’ authority to hear cases lacking a concrete harm, consistent with centuries of the English legal tradition upon which the limitation was based, and dovetailed with the powers of the other branches of the U.S. government. Even with these historical roots, the Petitioner pointed out that the standing requirement is a critical limitation on the modern class action device, which is commonly employed to bring cases seeking “hundreds of millions or billions of dollars” (indeed, Robins is brought on behalf of “millions” of putative class members, for up to $1,000 each — or, “billions” of dollars).

The Petitioner went on to argue that the technical violation of a statute is not the same as an actual harm to a plaintiff, and therefore cannot meet the Article III requirement. Otherwise, the body of law on Constitutional standing would be replaced by the simple inquiry into whether a statute was violated, with a corresponding fine that the private plaintiff could recover. Indeed, even compared to copyright law, where a statutory violation is actionable, the underlying injury is based in a plaintiff’s property right, well-established in the common law. Similarly, the law of defamation recognizes actual harm as a pre-requisite to suit, even if it is difficult to assess the extent of actual damages.

Last, the Petitioner argued that even if a mere statutory violation satisfies the injury-in-fact requirement, the Supreme Court should hold that the FCRA does not recognize a cause of action for plaintiffs who are unable to demonstrate concrete harm because Congress did not specifically express its intent to do so.

Supreme Court’s Decision May Have Wide-Ranging Effects

The Supreme Court’s decision in Spokeo is likely to dramatically affect employers, consumer reporting agencies, and other corporate defendants as well as class actions brought under various federal statutes, such as the FCRA, and potentially the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, and the Employee Retirement Income Security Act, as well as data breach claims. Notably, the Supreme Court first appeared ready to decide this issue several years ago in First American Financial Corp. v. Edwards, No. 10-708 (2010). Nevertheless, after briefing and oral argument, the Supreme Court dismissed action as “improvidently granted.” It appears that the Supreme Court may be ready to tackle the question in Spokeo, as indicated by its rejection of the Solicitor General’s recommendation to deny certiorari or simply avoid the broader question of Congressional power.

Now that the issue is before the Court, a broad Article III ruling could have a significant impact if it addresses whether Article III limits Congressional power to create statutory rights enforceable through a private right of action, without the plaintiff having to first personally suffer a concrete harm. If this Congressional power were limited, the number of viable class actions under the FCRA and other federal statutes (often those seeking millions or billions in damages) may be similarly and substantially limited.

Of course, the Supreme Court may also affirm the Ninth Circuit under a broad Article III ruling, and establish that Congress may create a private right of action based on a mere statutory violation and not a concrete, actual injury. A decision allowing individual and class claims to go forward alleging only statutory damages would embolden potential plaintiffs and encourage more complex class actions. Indeed, private plaintiffs and their counsel would have the ability to find, and potentially recover for, a number of legal violations they might find regardless of whether any actual harm occurred.

Presently, the Respondent is scheduled to file his brief on August 24. As Spokeo unfolds, employers should continue to closely monitor the developments in the case in light of the potential impact on prospective and current workplace and consumer litigation across a variety of federal statutes.

If you have any questions regarding this article, please contact any of the authors, or your Seyfarth attorney.

Employment Law Lookout Readers: Cast Your Vote in the ABA’s 100 Best Legal Blogs Competition!

Posted in Employment Law Lookout

Votingvote is open for the American Bar Association’s annual 100 Best Legal Blogs competition, and we hope you will cast your vote today to help Seyfarth’s Employment Law Lookout blog get on the ABA’s list for 2015.

The Employment Law Lookout Blog is a resource for employers seeking intelligent discourse and updates on the today’s most pressing workplace issues. Our mission is two-fold: to provide critical, real-time updates on employment law matters to in-house counsel and HR executives, and to keep our audience apprised of new trends and developments on the horizon.

Seyfarth’s bloggers draw upon their own first-hand experiences counseling businesses large and small to provide you with their insights about the most cutting-edge issues on new regulations, guidance, and court decisions.

Help us gain some extra recognition by casting your vote in the ABA’s annual 100 best legal blogs competition!

The deadline to nominate the blog is Sunday, August 16, 2015, so don’t delay. Polls are open!

Click the link here to vote. Simply provide a short explanation of why you like this blog.

New Jersey Court Affirms $192,000 Fee Award Against Whistleblower Plaintiff

Posted in Whistleblower

By Ada W. Dolph and Robert T. Szyba

Earlier this week, employers in the Garden State saw another glimmer of hope for defending against frivolous claims brought under New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (“CEPA”), N.J.S.A. 34:19-1 et seq.

As you may recall, much of our CEPA reporting lately has focused on recent court decisions affirming the expansive whistleblower protections under CEPA. (See one recent blog article here).  However, on Monday, in Fulton v. Sunhillo Corp., No. A-3950-13T2 (N.J. Super. Ct. App. Div., filed July 20, 2015), New Jersey’s Appellate Division upheld an award of $191,652 in attorneys’ fees against the plaintiff, holding that the award was justified given the “frivolous” and “harassing” nature of the plaintiff’s CEPA (and other) claims and litigation.

The plaintiff, Ronald Fulton, had been employed as Director of Business Development for Sunhillo Corporation since December 2007, a position that he explained later in deposition entailed developing new business for the company, which designs and manufactures data-communications products for the aviation industry.  Consistent with his role, his compensation was partly based on commissions for sales to new customers.  As he conceded during his deposition, however, he generated no new business in 2008 or 2009, and was laid off in September 2009.

Within a month of his termination, in October 2009, Fulton filed his first case (of two), representing himself pro se, against the employer in New Jersey Superior Court in Camden County, alleging that his employment was terminated because he was a whistleblower, and seeking $5 million in damages.  He accused the company and several executives of unlawful sales and business dealings with China and Thailand, and of an “unethical and illegal plan” to bribe foreign government officials.  In the complaint filed with the court, he detailed the objections he made while employed to the conduct he identified as unlawful, including the company’s response: hiring outside counsel, at Fulton’s suggestion, to conduct an investigation and audit. During the litigation, the plaintiff filed amended pleadings and discovery entailed “substantial and highly-contested motion practice,” which included motions regarding the plaintiff’s use and disclosure of the employer’s attorney-client communications and legal advice from the outside counsel who performed the investigation.

In the end, the trial court granted the company’s motion for summary judgment, finding that the plaintiff could not establish a CEPA violation because he could not connect the termination of his employment to his purported whistleblowing activity.  The court noted that the company had taken a variety of affirmative steps to address the plaintiff’s concerns, and that other employees who raised similar concerns (including an employee that the plaintiff conceded was the known driving force behind the alleged whistleblowing) remained employed.  The court also found that the plaintiff proffered no evidence that the company’s reason for the termination—the plaintiff’s failure to generate any new sales in 2008 and 2009—was a pretext for retaliating against him.  The timing of the two events, by itself, was not enough.

Over the course of two appeals (the first in 2013) and the trial court’s determination based on an evidentiary hearing, the Court found the plaintiff’s claims were frivolous, and that the plaintiff’s conduct during the litigation revealed “harassing, if not outright extortive[,] motivation” and awarded fees under the New Jersey Frivolous Litigation Statute, N.J.S.A. 2A:15-59.1, and Court Rule 1:4-8 (the state court rule addressing frivolous litigation).  The Court noted that this was the third time the plaintiff sued a former employer with a similar theory and was unable to explain several non-CEPA claims even though he persisted in pursuing them.  Further, the plaintiff admitted during his deposition that despite having no supporting facts, he nevertheless pursued a claim that the company breached a covenant of good faith and fair dealing, and initially misrepresented that his employment was not “at will,” forcing litigation over the issue.  The Court also found that his settlement demand of $5 million had no relation to any actual damages and indicated the plaintiff’s intention to harass the company.  Even when asked by the trial court to provide a factual basis for his allegations of judicial bias and misconduct—allegations which the plaintiff argued led to the dismissal of his case and the award of counsel fees—the plaintiff refused.

With the $191,652 award affirmed, the trial court is tasked with determining how much more the plaintiff will be ordered to pay for the two trips to the Appellate Division in this frivolous lawsuit.  While perhaps an unusual ruling, Fulton makes clear that litigants seeking to exploit CEPA’s expansive protections to harass and extort former employers can be ordered to reimburse the company for defending claims that are frivolous and brought in bad faith.

Ada W. Dolph is Co-Lead of Seyfarth’s National Whistleblower Team and a partner in the firm’s Chicago office.  Robert T. Szyba is an associate in the firm’s New York office and is a member of both the National Whistleblower Team and the New Jersey practice group. If you would like further information, please contact a member of the Whistleblower Team, your Seyfarth Shaw LLP attorney, Ada W. Dolph at adolph@seyfarth.com, or Robert T. Szyba at rszyba@seyfarth.com.

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Pennsylvania Court Rules Payroll Cards Aren’t “Lawful Money,” Says Employers Must Pay Using Checks Or Dead Presidents

Posted in Diversity, Retention & Pay Equity, Wage & Hour Compliance, Workplace Policies and Processes

By Jacob Oslick

iStock_000023258402MediumWe have previously reported and blogged about challenges to paying employees through debit card-like “paycards.” A recent Pennsylvania decision has amplified those concerns.

In a case of first impression, the trial court in Luzerne County, Pennsylvania found that paying employees through mandatory payroll cards does not comply with a Pennsylvania law, the Wage Payment and Collection Law, which requires “wages” to be paid through either “lawful money of the United States” or a “check.” Siciliano v. Mueller, Case No. 2013-07010 (Pa. Com. Pl., Luzerne Cnty. 2015) (citing 43 P.S. § 260.3). Pennsylvania adopted this statutory language decades ago, principally to bar employers from paying employees in scrip (i.e., worthless Monopoly-style company money). But, if the Court’s ruling stands, Pennsylvania employers may now face liability if they pay their employees through a debit card instead of cash, check, or — upon the employee’s written consent — direct deposit. See 7 P.S. § 6121 (defining “check” to include direct deposit, if an employee requests direct deposit in writing).

Citing Black’s Law Dictionary, the Siciliano Court reasoned that payroll cards are not “lawful money of the United States,” because they are not “bills and coins” that have been approved “in a country for the payment of debts, the purchase of goods, and other exchanges of value.” Nor are they a check, because they are not “an unconditional written order” to “pay certain sum of money on demand.” Rather, the Court opined, payroll debit cards can only be turned into “lawful money” after a visit to the bank or ATM. Thus, the Court determined, the WPCL’s “plain language” compelled finding that payroll cards did not comply with the WPCL’s “lawful money” or “check” requirements. As a result, the Court effectively held that the employer’s practice of paying employees through paycards constituted a per se WPCL violation.

To its credit, the Court recognized that reasonable minds can differ, and certified the case for an immediate appeal to Pennsylvania’s Superior Court (intermediate appellate court). And the Court’s opinion might not hold up on appeal. For instance, despite the WPCL’s literal language, Pennsylvania courts have typically interpreted “wages” broadly, to encompass various forms of compensation — such as stock options and free rent — that are clearly neither “lawful money of the United States” nor “check[s].” See generally Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 954 (2011) aff’d, 106 A.3d 656 (Pa. 2014); Walker v. Washbasket Wash & Dry, 2001 WL 770804, at *15 (E.D. Pa. 2001). Moreover, the Court’s opinion – if upheld – could have bizarre consequences. It could, for instance, potentially forbid a Pennsylvania employers from offering their workers various non-monetary perks that do not fit within the WPCL’s relatively narrow definition of “fringe benefits and wage supplements.” As an example, using the Siciliano court’s logic, a brewer who gives his employees a free case of beer a week might get slapped with a WPCL suit, on the grounds that beer – though delicious – is sadly not “lawful money of the United States.”

Still, the prospect exists that the Superior Court will affirm the trial court’s ruling. If it does, plaintiffs will likely argue that, because they did not receive “lawful money of the United States,” they received no “wages” at all. Accordingly, plaintiffs will likely contend that their employer owes them full back wages, plus liquidated damages, even though they already received their pay on paycards. The statutory text, and the sheer equities, render such a result unlikely. Indeed, the WPCL expressly permits employers to claim a right of “set-off” that would may eliminate most of the plaintiffs’ claimed damages. And the WPCL, similarly, also permits employers to assert counterclaims. Thus, there is a good chance that the Court will permit the employer to use the original paycard payments to set-off any claimed damages or, alternatively, permit the employer to recover the original paycard payments to prevent unjust enrichment. In either circumstance, Plaintiff’s damages would be minimal (other than, perhaps, statutory attorneys’ fees). That being said, courts do sometimes reach results that seem irrational and unfair. And, in this case, permitting any recovery is likely irrational and unfair, given the nitpicky “gotcha” nature of plaintiff’s claims.

In any event, Pennsylvania employers should consider this decision carefully in deciding whether to revise existing paycard policies.

Jacob Oslick is an Associate in Seyfarth’s New York office. He is an experienced New York and Pennsylvania litigator. He has served as counsel of record in over 60 Pennsylvania matters. If you would like further information on this topic, please contact your Seyfarth attorney or Jacob Oslick at JOslick@seyfarth.com.

25 Easy Ways to Make Your Business More Accessible to Customers with Disabilities

Posted in Title III Access

By Kevin A. Fritz

Photo-Bush-300x199Signed into law today, 25 years ago, on July 26, 1990, the Americans with Disabilities Act is the most comprehensive civil rights law designed to prohibit discrimination against people with disabilities.

Each year since its passage, more people with disabilities are entering the workforce, earning income, and spending and consuming goods. Good access makes good business sense. By reaching customers with disabilities, businesses obtain more customers and improve their image.

In the spirit of anniversary of this legislation, here are 25 easy ways to make your business more accessible to customers with disabilities:

  1. If the main entrance of your business is not wheelchair accessible but there is an alternate accessible entrance, post clear signage by the main entrance giving directions. Also add the International Symbol of Accessibility at the accessible entrance and include key accessibility information about access, parking, or other services on your website (g., the rooftop bar is only accessible via stairs).
  2. Keep your lowered accessible counter clear at all times. Do not store or display items on this counter.
  3. Where there are corners, steps, and edges, mark these with high visibility contrasting colored material so that they can be easily seen.
  4. If your business provides table or bar seating, make sure you have accessible seating for wheelchair users. A table that provides space underneath the top that is 30” wide, 17” deep, and 27” high, with a top that is between 28” and 34” from the ground is accessible.
  5. Keep walkways and accessible parking access aisles clear and free from clutter or snow, and make sure your premises are well lit. Keep any bushes, trees, or flower arrangements near your business clipped so there are no low hanging hazards for persons who are blind or have low vision, or overgrown bushes obstructing the path of travel for those using wheelchairs or other mobility aides.
  6. Signage for permanent rooms, such as restrooms, must have braille and raised lettering. The background and foreground must contrast.
  7. Doors that are heavy and hard to open can be very difficult to use for the elderly or people who use wheelchairs or mobility aids. Adjust closers so that the doors require less force to open.
  8. In bathrooms, make sure wastebaskets or other moveable objects do not obstruct clear spaces next to the doors. Similarly, in accessible wheelchair stalls, keep the area around the toilet and under the sink clear. Doing so ensures that persons using wheelchairs can safely operate the door and navigate.
  9. If your place of business is not accessible for wheelchair users because there are steps at the entrance, consider how you can provide the goods and services to such customers in an alternative fashion (g., personal shopper, home delivery, or home visit service).
  10. Welcome service animals into your establishment. If you don’t know if it’s a service animal, you can ask two questions: (1) Do you need this animal because of a disability? (2) What work or tasks has this animal been trained to perform?
  11. When choosing signage, language matters. Instead of signs that use the word “handicapped” –which is considered offensive by many people with disabilities – opt for signs that use the word “accessible.”
  12. Consider how persons with disabilities will be evacuated from your facility in an emergency, and include that procedure in your emergency evacuation plan. Make sure your employees know the procedure.
  13. Use people first language when referring to someone with a disability. Refer to a person as an individual with a disability rather than a “disabled person,” or a “handicapped person.” In that vein, refer to a person as one who uses a wheelchair (rather than one “confined” to one) or one who is blind (rather than one who “suffers” from blindness).
  14. When speaking with a person with a disability who has a companion, direct your comments to the person with a disability to that person, not the companion – unless specifically instructed otherwise by the person with a disability.
  15. With all written information, structure content in a logical order using plain English and avoiding long sentences.
  16. People who are deaf make phone calls using a telecommunications relay service (TRS). Accept calls made through such services and treat them the same as other calls.
  17. Be prepared to read menus to customers who are blind or have low vision. Posting menus online provides such customers another way of reviewing the menu (using assistive technology such as screen readers) before they visit the restaurant.
  18. Make sure your employees are prepared to interact with customers who are blind or deaf. They should be ready to read written documents to customers who are blind or have low vision and to exchange notes with customers who are deaf, hard of hearing, or have difficulty speaking. Have a pad of paper handy for this purpose.
  19. People with hearing, speech, or sight disabilities may require extra time or a quiet area to talk with staff. Be patient with the extra attention that might be necessary to understand what is being said and how to assist.
  20. Make sure that your accessible register or checkout lane is always open when the store is open.
  21. Always ask first if a person with a disability needs assistance, never assume.
  22. If a customer who is blind needs to be led to a location in your business, offer the person your arm. Wait for them to accept the assistance.
  23. If a person with a disability requests that you modify a policy or provide additional assistance, consider the request meaningfully. There may be a legal requirement to do it. For example, if your business requires a driver’s license to rent an item, consider accepting another form of state-issued identification for an individual who is blind or physically unable to drive a vehicle.
  24. If you have a pool lift, make sure it is out and ready to be used (e., battery charged and lift uncovered) at all times when the pool is open.
  25. Customer feedback is a great opportunity to learn about your customers and their thoughts on how accessible your business actually is. Be open to receiving feedback and act on it. You may be preventing a lawsuit in the process.

Businesses can make it easier for people with disabilities – as well as other customers – to access and purchase the services or products they have to offer. In short, accessibility pays dividends and makes good business sense.

Kevin Fritz is an associate in the Chicago office of Seyfarth Shaw LLP where he focuses his practice on complex discrimination litigation, workplace counseling and solutions, and access defense.