5.20.2015

Fourth Circuit Loosens Restrictions on Title VII Harassment and Retaliation Claims

The Fourth Circuit Court of Appeals in Boyer-Liberto v. Fontainebleau has held that a single incident of harassment can be sufficient to create a hostile work environment. The Court further noted that an employee is protected from retaliation “when she reports an isolated incident of harassment that is physically threatening or humiliating, even if a hostile work environment is not engendered by that incident alone.”

Reya C. Boyer-Liberto, an African-American, was an employee of the Clarion Resort Fontainebleau Hotel in Ocean City, Maryland. While employed at Fontainebleau she performed a variety of duties. One day, while working as a cocktail waitress, she was twice called a “porch monkey” within a 24-hour period by her Caucasian supervisor. This same supervisor also threatened her with the loss of her job. Boyer-Liberato reported the incident to higher ups at the hotel, only to later be fired by the resort’s owner, Dr. Leonard P. Berger. She subsequently sued, asserting claims of a hostile work environment and retaliation under Title VII. Initially, both the District Court and the Fourth Circuit ruled in favor of the defendants, noting that the conduct in question was not severe or persuasive enough to create either a hostile work environment or a reasonable belief that harassment occurred (as is necessary for a retaliation claim). The Fourth Circuit then granted a rehearing en banc.

On the issue of harassment, the Fourth Circuit placed particular emphasis on the seriousness of the slur in question, finding it sufficiently severe to support a harassment claim. This was further heightened by the fact that it originated with Boyer-Liberto’s superior in conjunction with threats against her job. This led the Court to hold that the single incident of harassment can be enough to create a hostile work environment. 

On the issue of the retaliation complaint, the Court further held that a single incident, if threatening or humiliating is enough to create a reasonable belief that a hostile work environment exists. Under Title VII, an employee is protected against retaliation if they report unlawful employment actions, or employment actions that they reasonably believe to be unlawful. The Fourth Circuit held that the use of the term “ porch monkey” was threatening and humiliating enough to make Boyer-Liberto believe that a hostile work environment existed, and therefore, that an unlawful employment action occurred.

Based on these holdings, the Fourth Circuit vacated the District Court’s judgment and remanded the case. The decision by the Court in Boyer-Liberto could mark the beginning of an expansion of single incident Title VII litigation moving forward.




Marcus Pringle
216.696.7077
mpringle@ralaw.com

5.06.2015

OSHA Intends to Make Workplace Injury Reports Public by the End of This Year

Assistant Secretary of Labor for OSHA David Michaels spoke to the City Club of Cleveland last week about recent trends in workplace safety. One remark that caught the audience’s attention was that, by the end of this year, OSHA will begin making accident reports filed by employers available to the general public.

Back in 2013, OSHA released a proposed rule to “Improve Tracking of Workplace Injuries and Illnesses.” The rule would amend OSHA’s current recordkeeping regulations to require the electronic submission of injury and illness information that employers are required to keep under existing OSHA standards (Part 104). This includes information the employer enters in injury and illness logs (OSHA Form 300), incident reports (OSHA Form 301) and annual injury and illnesses summary forms (Form 300A). Employers with 250 or more workers would need to submit information from OSHA Forms 300 and 301 on a quarterly basis and information from OSHA Form 300A annually. Employers in “high hazard” industries with 20 or more workers would also be required to submit information from their OSHA Form 300A once a year.

The most controversial aspect of this rule is OSHA’s intent to make this information available online to the public. OSHA would redact employees’ personal information, but the accident histories of individual employers would be available. OSHA claims that publicizing workplace injuries “will nudge employees to better identify and eliminate hazards.” The proposed rule has met strong opposition from employers, who argue that the accident information will be misused and misinterpreted when taken out of context. Safety advocates have also opposed the rule because public disclosure of injury and illness information may chill voluntary reporting by employers.
 
Despite opposition to the rule, it appears OSHA intends to move forward with publication by the end of the year. We will keep you updated on its status over the next few months.



Nathan Pangrace
216.615.4825
npangrace@ralaw.com

4.30.2015

Equal Employment Opportunity Commission Issues Proposed Regulations on Wellness Programs and the Americans with Disabilities Act

Corporate wellness programs,which typically use financial or other incentives to encourage workers to participate in wellness programs, have surged in popularity over the last several years, spurred on by companies seeking ways to lower healthcare costs. However, these programs can cause legal headaches for employers if not administered properly. The Equal Employment Opportunity Commission (EEOC), likely reacting to what it perceives as improper administration, has issued proposed regulations addressing how the Americans with Disabilities Act (ADA) applies to these wellness program. Two of the hallmarks – goal of the program and voluntariness – are described below.

Any employee health program, including a wellness program, must comply with the ADA, which restricts the medical information that employers may obtain from employees and which makes it illegal to discriminate against an employee based on a disability. The proposed rule requires that any employee health program, must be “reasonably designed” to promote health or prevent disease; indeed, the proposed rule states that “the program must have a reasonable chance of improving the health of, or preventing disease in, participating employees, and must not be overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease.” For instance, an employer who uses the program to identify employees with certain health conditions and to take action based on that knowledge would be violating the ADA.

The wellness plan must be truly voluntary, that is, the employer may not require an employee to participate, may not deny coverage under a group health plan, may not limit the extent of coverage, and may not take any other adverse action against employees who refuse to participate or who do not achieve certain outcomes. While an employer may offer incentives to participate in a wellness program, the total allowable incentive may not exceed 30% of the total cost of employee-only coverage, whether that comes in the form of a reward or a penalty.

The employer must also provide notice explaining what medical information will be obtained, who will receive it, how it will be used, the restrictions on its disclosure, and the methods the employer will use to protect the medical information.

The Notice of Proposed Rulemaking was published in the Federal Registered on April 20, 2015, triggering a sixty-day public comment period.





Karen Adinolfi
330.849.6773
kadinolfi@ralaw.com

4.21.2015

Sixth Circuit Addresses Telecommuting as a Reasonable Accommodation

Jane Harris was a Ford steel resale buyer. In this capacity, she served as an intermediary between steel suppliers and parts suppliers, a job description that required a large amount of “good, old-fashioned interpersonal skills” as the court put it.

She also suffered from irritable bowel syndrome, which at best caused her to take frequent trips to the restroom, and at worst caused her to miss whole days of work due to incontinence. Initially, Ford adjusted her schedule to allow for occasionally telecommuting and flexible schedules, but neither option was sufficient. While Ford allowed some employees to work from home one day a week, Harris sought to do so up to four days a week.

It is worth noting that while employed at Ford, Harris’ performance was, as the court put it, “subpar.” She ranked in the bottom 10% of her peers repeatedly, averaged 1.5 missed days of work per week, and was noted as lacking interpersonal and communication skills. In fact, in 2009 she was absent more than she was present.

Following attempts to accommodate her condition and repeated poor reviews, Harris was eventually terminated on September 10, 2009. Four months later, the EEOC sued Ford under the ADA, alleging that Ford failed to reasonably accommodate Harris’ disability and terminated her in retaliation. The district court found that working from home for up to four days a week was not a reasonable accommodation and that Harris’ poor performance was a valid reason for terminating her. The EEOC appealed, and a divided Sixth Circuit panel reversed on both claims in 2014. The Sixth Circuit then granted an en banc review.

Ultimately, the Sixth Circuit Court held that Ford acted reasonably and did not violate the ADA by denying the requested accommodations. The court noted that regular and predicable attendance at the workplace was an essential function of her job, and was a prerequisite to other essential functions. Furthermore, Ford had made attempts to accommodate Harris previously, without success. Finally, the court stated that the EEOC failed to show that Harris’ termination was due to retaliation and not due to her poor workplace performance.



Marcus Pringle
216.696.7077
mpringle@ralaw.com

3.30.2015

Cuyahoga County Judge Strikes Down Workers' Comp Statute as Unconstitutional, Hinders Employers Challenging Claims in Court

The Cuyahoga County Court of Common Pleas recently made it more difficult for Ohio employers to challenge workers’ compensation claims in court. In Shannon Ferguson v. State of Ohio, the court ruled the Ohio statute prohibiting a claimant from voluntarily dismissing his or her complaint without the employer’s consent when the employer filed the appeal was unconstitutional.

Generally, Revised Code 4123.512 permits an employer or claimant to appeal the allowance or disallowance of a workers’ compensation claim to a court of common pleas. Either party may initiate the appeal by filing a notice within 60 days of an order of the Industrial Commission. The claimant must then file his or her complaint within 30 days of the notice, and the court will conduct a trial under the Ohio Rules of Civil Procedure.

Following the enactment of R.C. 4123.512 and in keeping with the Civil Rules, courts held that a claimant had the right to voluntarily dismiss his or her complaint under Rule 41(A) and refile the complaint within Ohio’s one-year savings statute. Employers subsequently challenged the right of a claimant to dismiss the complaint when the employer filed the appeal, arguing they suffered prejudice because they were required to pay benefits while the appeal was pending. As a result, in 2006, R.C. 4123.512 was amended to provide that a claimant may only dismiss his or her complaint in an employer-initiated appeal with the employer’s consent. The purpose of the amendment was to prevent the ability of claimants to continue receiving benefits during the one-year hiatus from litigation available through the savings statute.

In Shannon Ferguson v. State of Ohio, the plaintiff brought a declaratory judgment action asking the court to declare this portion of R.C. 4123.512 unconstitutional. Judge McClelland agreed with the plaintiff and held that Rule 41(A) takes precedence over the language contained in R.C. 4123.512. Because the Civil Rules apply to workers’ compensation court appeals, a claimant may voluntarily dismiss his or her complaint under Rule 41(A), regardless of which party appealed the claim to court.

The court further held that R.C. 4123.512 violates a claimant’s due process rights because it restricts the rights of only one party to the litigation. It noted that the employer could challenge benefits during the pendency of the appeal through the Industrial Commission or by filing a writ of mandamus in Franklin County. And in the event the employer is ultimately successful in having the claim denied at trial, recovery of the benefits paid is available. Finally, the court also struck down R.C. 4123.512 on the grounds of equal protection and separation of powers. It held that the statute arbitrarily treats the employer and claimant as two different classes and usurps judicial powers in violation of the authority and jurisdiction of the court regarding civil matters.

The court’s decision will place a significant burden on employers challenging workers’ compensation claims in court. If an employer appeals to court, there can be up to one year before a trial is held. If the claimant dismisses the complaint before trial, there can be another year before the case is re-filed and yet another year before the trial arrives. A claimant can thus extend benefits for up three years before being forced to litigate a case that could result in a complete disallowance of the claim. Even if the employer is ultimately successful, in reality it may be difficult to recover the payment of all those benefits. The net result is either a significant direct cost to self-insured employers or increased premiums to state-funded employers.

In the case of a state funded employer, while they can receive “credit” from the Bureau for the impact to their previous experience, and ultimately a credit/refund of increased premiums, there is no credit paid if the employer was removed from a Group Rating program other than a credit to their experience modifier.

With self-insured employers, they too can recoup what was paid out from the claimant pursuant to the Revised Code as well as deducting payments from their SI 40 annual reports. Pursuant to the Sysco decision, they can also receive reimbursement from the Surplus Fund if they have not opted out of the Sysco Fund for which they must pay assessments.

So, while the Court has stated that reimbursement options exist for employers it is, technically, correct, however, it is doubtful an employer will receive dollar for dollar reimbursement and/or reimbursement for premiums paid when a state fund employer is removed from a group program.

The State of Ohio has already appealed the court’s decision in Ferguson to the Eighth District Court of Appeals. We will continue to monitor this important case and provide updates as developments occur. For questions or additional information, please contact one of the listed attorneys.



Nathan Pangrace
216.615.4825
npangrace@ralaw.com

3.17.2015

Supreme Court Upholds DOL’s Right to Change FLSA Interpretation without Formal Notice-and-Comment Rulemaking

The United States Supreme Court recently unanimously held that the Administrative Procedure Act (APA) expressly exempts federal agencies, like the Department of Labor (DOL), from formal notice-and-comment rulemaking requirements when they make changes to interpretative rules.

In Perez v. Mortg. Bankers Ass’n, U.S. No. 13-1041, Mar. 9, 2015, the Court examined whether the DOL properly altered its interpretation of the administrative exemption to overtime pay under the Fair Labor Standards Act (FLSA) as applied to mortgage-loan officers. In 1999 and 2001, the DOL’s Wage and Hour Division issued letters opining that mortgage-loan officers did not qualify for the administrative exemption. After issuing new regulations regarding the exemption, the DOL issued an opinion letter in 2006 finding that the officers did fall within the exemption under the new regulations. However, in 2010, the Department altered its interpretation of the administrative exemption and once again concluded that mortgage-loan officers do not qualify for the administrative exemption. The DOL consequently withdrew the 2006 opinion letter without notice or an opportunity for comment.

Without discussing the merits of the underlying interpretation, the U.S. Supreme Court held that the DOL’s process of revising its 2006 interpretation without applying notice-and-comment procedures was proper. The Court explained that the APA specifically exempts interpretative rules from notice-and-comment requirements. As a result, an agency is not required to use notice-and-comment procedures to issue an interpretative rule, and is likewise not required to use those procedures to amend or repeal that rule.

The Court held that such a “straightforward reading” of the APA harmonizes with longstanding principles of administrative law jurisprudence that recognizes that a court lacks authority to impose upon an agency its own notion of which procedures are “best” or most likely to further public good. Rather, the responsibility to impose a notice-and-comment obligation on a federal agency when its changes its interpretation of one of the regulations it enforces, rests with Congress or the administrative agencies. Here, Congress adopted standards that permit agencies to promulgate freely such interpretative rules without such rulemaking requirements.

The Supreme Court further rejected any suggestion of procedural “unfairness” that could arise from an agency opting to issue an interpretative rule, rather than a legislative rule, in order to skirt notice-and-comment provisions. It noted that the APA contains constraints on agency decision-making. Moreover, the Court pointed out that, unlike legislative rules that are subject to the rulemaking procedures, interpretative rules do not have the force and effect of law.

As a result of this decision, we may see the DOL issue more interpretations of its own regulations through administrative interpretations. 


Emily Wilcheck
419.254.5260
ewilcheck@ralaw.com

3.11.2015

NLRB Issues New Complaints against McDonald’s as Potential Change in Joint-Employer Status Looms

The National Labor Relations Board has continued to bear down on McDonald’s, issuing 23 more charges and 6 complaints against the fast food giant. This comes on the heels of a similar December crackdown whereby the NLRB brought some 78 charges against both McDonald’s USA and individual McDonald’s franchises as joint-employers.

In regard to these charges, the NLRB stated, “Our investigation found that McDonald’s, USA, LLC, through its franchise relationship and its use of tools, resources and technology, engages in sufficient control over its franchisees' operations, beyond protection of the brand, to make it a putative joint employer with its franchisees.” Charges brought against McDonald’s include allegations of retaliatory conduct aimed at employees involved in union activity.

As a result of the NLRB’s actions, McDonald’s USA could see itself liable for any illegal practices by any of its 14,000-plus franchises. This approach is a departure from standard NLRB practices, and foreshadows a likely change in the definition of joint-employment. Such a change would likely trigger a wave of nationwide litigation. 



Marcus Pringle
216.696.7077
mpringle@ralaw.com