Obama’s Proposed Jobs Bill Makes it Unlawful to Consider an Applicant’s Status as Unemployed

By Stearns Weaver Miller on September 19, 2011 Posted in Discrimination & Harassment, Hiring/Termination

On September 8, 2011, President Obama presented to Congress the “American Jobs Act.” Buried in the proposed bill is a section called the “Fair Employment Opportunity Act of 2011,” making it unlawful for employers with 15 or more employees and employment agencies to discriminate against job applicants based on their status as unemployed.

If passed, the law would prohibit employers from refusing to hire individuals based on their unemployed status. It would be unlawful for an employment agency to disqualify individuals for consideration, screening or referral for employment because they are unemployed. It also would prohibit job advertisements or announcements advising unemployed individuals not to apply.

The bill proposes that the Equal Employment Opportunity Commission (“EEOC”) enforce the law. The same pre-suit procedures applicable to a claim for a violation of Title VII would apply, including the filing of an EEOC charge of discrimination by the aggrieved individual. The remedies available for a violation of the proposed law include injunctive relief, reimbursement of costs expended as a result of the unlawful employment practice, liquidated damages of up to $1,000 for each day of the violation, and reasonable attorney’s fees and costs.

Given the state of the economy with 14 million individuals presently unemployed, if this section of the Jobs Act were to pass, employers should expect a dramatic increase in the filing of EEOC charges. An unemployed individual could apply for several jobs per day, and when not hired, assume that the reason for each of the rejections was his unemployed status. An unsuccessful applicant could then file a charge of discrimination against each of the employers who rejected his application.

Violence or the Threat of Violence in the Workplace, Whether by an Employee or Outsider, May Trigger an OSHA Inspection

By Glenn Rissman on September 16, 2011 Posted in Employee Handbooks & Policies, Employment Contracts & Corporate Issues

On September 8, the Occupational Safety and Health Administration (OSHA) issued a Directive with general enforcement policies and procedures for field offices when conducting inspections relating to workplace violence. The Directive focuses not only on the steps to be taken in response to an incident of workplace violence but the factors OSHA will consider when deciding to initiate inspections in industries that OSHA has identified as susceptible to violence in the workplace. The identified industries are susceptible to workplace violence because of the actions of others, such as patients, customers, or ordinary criminals.

Pursuant to the Directive, inspections will generally be conducted in response to complaints and referrals or as part of a fatality and/or catastrophic event involving violence. Inspections will also be conducted if the employer belongs to an industry identified as high risk for employee violence or where a hazard is identified. OSHA has identified high risk industries to include healthcare and social service settings (psychiatric hospitals, emergency rooms, health clinics, pharmacies, long term care facilities, and residential facilities) and late-night retail settings (gas stations, convenience stores, and liquor stores). The following risk factors may also trigger an inspection: working with unstable or volatile people in a healthcare, social service or criminal justice setting, working alone or in small numbers, working late at night or during early morning hours, working in high crime areas, guarding valuable property, exchanging money in certain financial institutions, delivering passengers, goods, or services, and having a mobile workplace such as a taxicab.

Employers with a history of workplace violence or who are in high risk industries should develop comprehensive workplace violence programs with the assistance of qualified counsel. Any workplace violence policy should establish a zero tolerance for violence and identify personnel for monitoring and responding to incidents of violence and caring for victims. The violence prevention program should include engineering controls, such as alarm systems, panic buttons, closed circuit surveillance, security locks, and lighting. At risk employers should adopt administrative controls, such as modifying work practices and policies to reduce risks, requiring employees to report all incidents of workplace violence, and establishing a liaison with local law enforcement. For additional guidance, OSHA offers a website dedicated to workplace violence, http://www.osha.gov/SLTC/workplaceviolence/index.html. The website contains industry specific advice for late-night retail establishments and the healthcare and social services industries.

Microbreweries Are Good; Micro-Bargaining Units Aren’t

By Stearns Weaver Miller on September 15, 2011 Posted in Labor Law

I’m no beer aficionado but every now and then I enjoy a Purple Haze, an American-style wheat beer from a microbrewery just outside of New Orleans. What employers will probably not enjoy is the National Labor Relations Board’s (“Board”) recent ruling, in Specialty Healthcare and Rehabilitation Center of Mobile, making it easier for unions to form “micro-bargaining units.”

On the heels of Wilma B. Liebman’s term as chairman ending, the Board ruled that just 53 certified nursing assistants at a nursing home could vote on union representation, without including the nursing home’s 33 other nonprofessional workers (janitors, cooks and file clerks). The Board applied the following standard in determining the appropriateness of the unit of the certified nursing assistants:

We therefore take this opportunity to make clear that, when employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classifications, departments, functions, work locations, skills, or similar factors), and the Board finds that the employees in the group share a community of interest after considering the traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that employees in the unit could be placed in a larger unit which would also be appropriate or even more appropriate, unless the party so contending demonstrates that employees in the larger unit share an overwhelming community of interest with those in the petitioned-for unit.

The Board pronounced that the standard applies to all industries.

Prior to this decision, when a union would try to seek an election in an unrealistically small group, the employer would challenge the unit based on the old standard – a “community of interest.” This would usually mean that a larger unit of employees with similar benefits and similar ultimate supervisors would be more appropriate.

Now, with the new narrower standard, unions will have a greater ability to target smaller groups of employees as appropriate units, “micro-bargaining units” Once the union has successfully formed a micro-bargaining unit within a company, it will be easier for it form other micro-bargaining units through its employee members. In addition to the ease of unionizing, the micro-bargaining units will be more difficult to bargain with and manage with a myriad of wages, benefits, work rules and conditions of employment. Board member Brian Hayes, in dissent, said, “[t]his [standard] would represent an extraordinary fragmentation of the work force for collective-bargaining purposes, a situation that cannot lead itself to the labor relations stability to which my colleges so often dedicate their efforts.”

Cutting of H-1B Employees’ Salary Costs Employer More Than a $1 Million

By Glenn Rissman on September 14, 2011 Posted in Employment Litigation, Immigration

A recent decision from a federal court in Tennessee affirmed an administrative decision awarding more than $1 million in back pay to H-1B physician employees of several clinics owned by Mohan Kutty. The decision is Kutty v. Department of Labor.

Kutty is a physician who operated clinics in Tennessee and Florida. He hired several foreign physicians to work in his clinics. Dr. Kutty sponsored the foreign doctors for H-1B visas. As part of the H-1B process, the employer must complete and file a labor condition application with the U.S. Department of Labor (DOL). The employer represents in the labor condition application that it will pay the H-1B alien the greater of the prevailing wage or the actual wage paid to workers with similar skills, education, and experience. One of the purposes of the labor condition application is to prevent employers from using cheap foreign labor to undercut U.S. workers. The DOL must certify the labor condition application before the employer can file the H-1B petition with the U.S. Citizenship and Immigration Services (USCIS).

Dr. Kutty’s medical clinics began experiencing financial problems, and he reduced the salaries of some of the H-1B doctors. Eight of the foreign doctors hired an attorney, who wrote a letter to Dr. Kutty demanding the unpaid salary. The lawyer also threatened that if Dr. Kutty failed to pay his clients the unpaid wages that they would contact the DOL for noncompliance with the representations made in the labor condition application. The letter also advised Dr. Kutty that the Immigration and Nationality Act (INA) prohibited him from retaliating against the eight complaining doctors. With the exception of one partial payment, Dr. Kutty stopped paying the eight complaining physicians. They filed a complaint with the DOL. On the day the DOL arrived for an on site audit, Dr. Kutty terminated seven of the eight complaining physicians.

The case raises interesting points that any employer of H-1B aliens should keep in mind. Employers cannot “bench” an H-1B employee. In other words, the employer must pay the H-1B alien the required wage for any period of nonproductive activity, such as for lack of work or the employee’s lack of a license or permit. (Exceptions exist for nonproductive time due to non-work related factors, such as the employee’s request for a leave of absence.) Dr. Kutty violated these provisions by failing to pay the H-1B physicians their full required wage. He then exacerbated his problems by stopping all payments to the eight employees. Dr. Kutty also violated the whistleblowing provision of the INA, which protects the H-1B employee who reports a violation of the INA or who cooperates in a government investigation. The court rejected any notion that the adverse employment actions were for a legitimate, non-retaliatory reason.

The Kutty case is an extreme example of what not to do. It illustrates the wisdom of consulting immigration counsel when taking action that could impact an H-1B employee, whether demotion, promotion, termination, cut in pay, or corporate merger, sale or acquisition.

May Change Conforms Florida E-Verify to Federal Standard

By Glenn Rissman on September 9, 2011 Posted in Hiring/Termination, Immigration

On his first day in office as Florida’s governor, Rick Scott signed Executive Order 11-02, mandating that state agencies under the direction of the governor to use the federal government’s E-Verify system to verify the work authorization and identity of all current employees and new hires. The Executive Order also required that all agencies under the direction of the governor require all contractors use the E-Verify system to verify the employment eligibility of (1) all persons employed during the contract term by the contractor to perform employment duties within Florida and (2) all persons (including subcontractors) assigned by the contractor to perform work pursuant to the contract with the state agency. We sent an alert to clients at the time and noted that the Governor’s Executive Order seemed to run afoul of the federal government’s E-Verify rules.

Pursuant to the Memorandum of Understanding that an employer must sign to participate in the federal government’s E-Verify system, companies participating in E-Verify may only verify new hires and not existing employees. The only exception to this prohibition applies to federal government contractors mandated to use E-Verify as a term of their federal government contract. Federal contractors must use E-Verify to verify the employment eligibility of (1) all persons the contractor hires during the contract term of the federal contract to work in the U.S. and (2) all persons assigned by the federal contractor to work on the contract in the United States, whether a current employee or a new hire. Federal contractors may opt to use E-Verify to verify the employment eligibility of all employees.

Presumably because of the conflict between Executive Order 11-02 and the federal government’s E-Verify rules, in late May, Governor Scott issued Executive Order No. 11-116, superseding Executive Order 11-02. The new Executive Order limits the E-Verify requirement to new hires, only. Section 1 of the Executive Order requires agencies under the governor’s direction to verify employment eligibility of all new employees through the federal government’s E-Verify system. Section 2 requires state agencies under the governor’s direction to require contractors for goods and services to use E-Verify to verify the employment eligibility of all new hires during the term of the contract. Section 2 also includes a “flow down” requirement, whereby the covered state contractor must require its subcontractors to use E-Verify for all new hires during the term of the contract.

The NLRB Extends Its “Runaway Shop” Doctrine to Companies Expanding Operations in Right-to-Work States

By Stearns Weaver Miller on September 6, 2011 Posted in Labor Law

The National Labor Relations Board (“NLRB”) filed a complaint against the Boeing Company in April based on Boeing’s decision to open a second assembly line to build its Dreamliner airplanes in a non union plant in South Carolina instead of expanding its current assembly line in a union plant in Washington State (see NLRB v. Boeing). This is a novel issue with roots in classic labor law.

The labor law, the “runaway shop” doctrine, says that it is unlawful for an employer to relocate to a non union facility solely to avoid its employees’ decision to unionize. The question everyone is talking about is whether the NLRB is overreaching or if Boeing violated the doctrine.

In a typical “runaway shop” case, the employer moves the work presently being performed in its union facility to a non union facility without giving the union an opportunity to bargain about labor costs. The union plant is usually shut down (or some of its operations are eliminated) and employees at the union facility lose their jobs.

Boeing actually bargained with the union in Washington before deciding to open the second assembly line in South Carolina. The employees in its union plant in Washington are not losing their jobs.

Boeing admits that one of the factors in its expansion decision was that there would be fewer work stoppages in South Carolina. South Carolina, like Florida, is a right-to-work state (meaning that workers cannot be forced to join a union). The union in Boeing’s Seattle, Washington plant has gone on strike five times since 1977, including a 58-day strike in 2008, which Boeing says cost it approximately $1.8 billion in losses.

The NLRB argues that the reason for Boeing’s expansion to South Carolina is illegal because it discourages the union workers from exercising their right to future strikes. The NLRB seeks to shut down Boeing’s plant in South Carolina and move the second assembly line to Washington. Boeing has already spent $750 million to build the new plant in South Carolina, which has so far created approximately 2,000 new jobs in the state.

Currently, the lawsuit is pending before an administrative law judge who will make a recommendation to the NLRB. The next step is a hearing before the NLRB and then a path through the federal court system, which may include a trip to the United States Supreme Court.

The precedent that the NLRB is attempting to establish would have serious implications for businesses making decisions to expand production to right-to-work states for lower labor costs. For a good overview of the case and the ensuing political debate, check out NPR’s On Point with Tom Ashbrook, Boeing and the National Labor Relations Board.

Polygraphing Employees – A Recent Eleventh Circuit Case Serves as a Refresher

By Glenn Rissman on September 2, 2011 Posted in Employment Contracts & Corporate Issues, Employment Litigation

The Eleventh Circuit Court of Appeals recently issued a decision addressing an employer’s requirements under the Employee Polygraph Protection Act of 1988 (EPPA). The decision, Cummings v. Washington Mutual, is the first in recent memory from a court with jurisdiction over Florida.

Before discussing the case, we provide a quick refresher on EPPA. Generally, the statute prohibits employers from requesting, requiring, suggesting or causing any employee to take or submit to any lie detector test. One of the few exceptions to EPPA permits an employer to request an employee to submit to a polygraph test if:

The test is administered in connection with an ongoing investigation involving economic loss or injury to the employer’s business, such as theft, embezzlement, misappropriation, or an act of unlawful industrial espionage or sabotage;

The employee had access to the property that is the subject of the investigation;

The employer has a reasonable suspicion that the employee was involved in the incident or activity under investigation; and

The employer executes a statement, provided to the examinee before the test, that among other things, sets forth with particularity the specific incident or activity being investigated and the basis for testing particular employees, including identification of the specific economic loss or injury, a statement that the employee had access to the property, and a statement describing the basis for the employer’s reasonable suspicion.

Under the ongoing investigation exemption, the employer may use the results of the polygraph test (or the refusal to take the polygraph examination) to discipline, discharge or otherwise adversely impact the employee only if additional supporting evidence exists. Additional supporting evidence may consist of evidence indicating that the employee had access to the missing or damaged property that is the subject of the ongoing investigation, evidence leading to the employer’s reasonable suspicion that the employee was involved in the incident or activity under investigation, or admissions or statements made by an employee before, during or following a polygraph examination.

In the Cummings case, the banking center where the plaintiff had been the manager suffered a $58,000 shortage. The money was missing from two teller drawers, both of which the plaintiff had access to during his stint as branch manager. Video surveillance footage suggested that the plaintiff and other employees repeatedly violated the bank’s dual control policy, which required two people to be present when cash was handled or certain secure areas were accessed. Several bank employees told the bank that the plaintiff had repeatedly violated the dual control policy. The bank asked the plaintiff to take a polygraph examination and, when he refused, the bank terminated his employment. The plaintiff sued under EPPA, claiming that there was no ongoing investigation and that the bank had no reasonable suspicion that he was involved in the missing $58,000.

The court rejected the plaintiff’s arguments. The video surveillance and testimony from employees that the plaintiff had violated the dual control policy provided sufficient additional evidence that the shortage of money was the result of intentional wrongdoing and that the plaintiff was involved in the loss to justify the polygraph test. Under the totality of circumstances, the bank was reasonable in suspecting the plaintiff’s involvement in the loss. The bank therefore complied with EPPA and the trial court was correct to enter summary judgment for the employer.

Although the employer prevailed in Cummings, employers should very carefully consider whether, in an at-will state such as Florida, it is worth administrating a polygraph test, both because of the difficulty in complying with the technical requirements of the EPPA and the added legal liability for failing to do so.

NLRB Issues Final Rule Requiring Posting of Notice to Employees

By Lisa Berg on August 26, 2011 Posted in Labor Law

On August 25, 2011, the National Labor Relations Board (NLRB) issued a Final Rule that requires employers subject to the NLRB’s jurisdiction (union and nonunion) to post a notice notifying employees of their rights under the National Labor Relations Act. The notice, which must be posted by November 14, 2011, will inform employees of their right to organize a union, form, join or assist a union, bargain collectively, discuss wages, benefits and other conditions of employment, raise complaints, strike or picket and choose not to do any of these activities. For more information about the notice see the Firm’s Labor & Employment Law Alert .

Florida Employers Get Immediate Unemployment Compensation Relief

By Stearns Weaver Miller on August 24, 2011 Posted in Employee Benefits & Compensation

Florida’s unemployment compensation law was substantially changed this summer. This is good news for Florida employers. So what are the changes employers should cheer?

(1) Misconduct has been redefined.

It is harder for terminated employees to get unemployment compensation. Under the new law, misconduct is now defined as any action that demonstrates “conscious disregard of an employer’s interests and is found to be a deliberate disregard or violation of reasonable standards of behavior,” and may include activities that did not occur at the workplace or during working hours. For example, benefits may be denied if an employer can show chronic absenteeism or tardiness, or a violation of an employer’s rule. That’s unless the employee “can demonstrate that he or she did not know and could not reasonably know of the rule’s requirements” or “the rule is not fairly or consistently enforced.”

(2) Unemployment insurance has been reduced.

The amount employers are charged will be reduced on January 1, 2012. The Agency for Workforce Innovation (Florida’s agency that handles unemployment compensation) estimates that employers will save approximately $33 per employee.

(3) Severance pay can now be off-set.

If an employer’s severance pay per week is equal to or greater than the weekly benefit amount, the eligible employee is not entitled to benefits for that week. However, severance pay will not impact the total amount of benefits that can be paid on the claim.

(4) Unemployment benefits have been reduced.

Eligible employees will receive fewer benefits. Currently Florida pays up to 26 weeks. Come January 1, 2012, Florida will only pay between 12-23 weeks based on the state’s unemployment rate. The higher the rate, the more weeks will be paid.