U.S. Judicial Panel on Multidistrict Litigation Considers Missouri Workers’ Compensation Laws, Rules Against Former NFL Players in Concussion Suit

In the case of Kenney et al. v. Kansas City Chiefs Football Club, Inc., former Chiefs players sued the organization, alleging the club had failed to adequately protect and warn players of the dangers of concussions. As part of their suit, the players cited a specific Missouri workers’ compensation law, one that allows an injured worker to sue their employer for work-related injuries even if the employee had declined workers’ compensation. Most states require an injured worker to seek a remedy exclusively through workers’ compensation. This key difference, in addition to highlighting disparity in the workers’ compensation laws nationwide, also made Missouri an attractive forum for a suit against an NFL team.

The NFL argued that the suit implicated the Labor Management Relations Act, and should be included with the much larger (and headline grabbing) concussion litigation taking place in the Eastern District of Pennsylvania.

The players, fighting to keep the suit in the Western District of Missouri, made several arguments. First, they alleged a lack of federal subject matter jurisdiction. They then asserted that the Chiefs, and not the NFL as a whole, were the named defendants. The players also argued that the claim arose under Missouri workers’ compensation laws and was therefore different from the Pennsylvania suit. Finally, they asserted that the transfer would inconvenience the plaintiffs, delay the action, and “effectively void the plaintiffs’ claims, causing extreme prejudice.”

The Judicial Panel disagreed with plaintiffs, primarily citing the common questions and issues in both cases, previously transferred cases with similar arguments, and the fact that similar claims were filed by the same plaintiffs in the ongoing Pennsylvania claim. Additionally, the Panel ruled that “jurisdictional issues do not present an impediment to transfer.”  Interestingly, the Panel’s decision did not address the Plaintiffs’ workers’ compensation claim, instead glossing over it in favor of the common issues and facts between the two cases.

This ruling represents an important decision in the often overlooked realm of workers’ compensation and the professional athlete. Pro athletes, including NFL players, are covered in some form or another under workers’ compensation statutes in a majority of states. However, the claims these athletes can bring are becoming increasingly restricted, particularly as related to concussions. In that regard, the most attractive workers’ compensation claim would be one based on cumulative trauma. However, few states recognize these types of claims, and the state most often used by players in asserting cumulative trauma, California, drastically reduced the availability of the claim to nonresident players in 2013. These ongoing restrictions can be seen in Kenney as well. The unique Missouri law that allowed the players to bring their suit in the first place expired on December 31, 2013, meaning yet another potential forum for professional athlete workers’ compensation claims has become less attractive. The Kenney decision therefore represents another step in the increasing reduction of legal avenues available to injured professional athletes under state workers’ compensation laws.

Marcus Pringle


An ADA Trap for the Unwary - Noncompliant Websites

Businesses must brace themselves for a tidal wave of accessibility-related lawsuits focused on websites that do not comply with the Americans with Disabilities Act (ADA). While most companies with 15 or more employees that are open to the public know they must provide wheelchair ramps, specific door knobs, and wheelchair accessible bathroom stalls, few realize that their websites must accommodate visually and hearing impaired Internet surfers. In its simplest form, a website meets this accommodation requirement when it can be used by persons with various sight, hearing, and/or other disabilities.

Title III of the ADA requires businesses to make accessibility accommodations that enable disabled people to access the same services as those who are not disabled. This includes electronic media and web sites. Government contractors (and government agencies) have similarly strict compliance requirements. They must follow web accessibility guidelines under Section 508 of the Workforce Rehabilitation Act of 1973, which has different requirements than the ADA.

The U.S. Department of Health and Human Services has published a Web-based Internet and Internet Information and Applications Checklist (the “508 Checklist”) intended to help companies navigate these complex compliance requirements. While the list is long and technical, some examples include:
  • Every image, video file, audio file, plug-in, etc. should have an alt tag
  • Complex graphics should be accompanied by detailed text descriptions
  • When images are also used as a link, the alt tag must describe the graphic and the link destination
  • Make sure the page does not contain repeatedly flashing or “strobing” images
Proactive businesses should conduct their own trial run for compliance with many of the most popular screen readers available, i.e. VoiceOver for Apple, JAWS for Microsoft, Navigator that comes with Windows, and Access Firefox and Fire Vox for Firefox. Checking sites for visibility with Windows Magnifier is also prudent.

While the 508 Checklist is still a good resource, a new and more robust set of guidelines has been developed by a private industry group called the Web Content Accessibility Guidelines (WCAG) 2.0. However, the Department of Transportation adopted WCAG 2.0 Level AA as its legal standard. The Department of Justice signaled in 2010 that it would likely adopt these guidelines as the standard for public accommodation websites, but has not yet issued a proposed rule. Despite all the different standards, WCAG 2.0 AA is the accessibility standard cited in virtually all settlements involving website accessibility. The WCAG 2.0 is an ISO International Standard (ISO/IEC 40500:2012). Many countries are now adopting these guidelines as their standards for accessibility and the U.S. is looking to do the same to harmonize with the rest of the world.

One of the troubling aspects of these new lawsuits is how easily plaintiffs can find websites that violate the ADA and/or Section 508. Traditional ADA claims arise from a plaintiff physically having to go to a place of business and noticing the violation. Recently, “drive by” claims have emerged where plaintiffs do not have to exit their car, but just see a violation of the ADA in order to qualify as a claimant and receive a monetary settlement after suing, or threatening to sue, a company. Now, claimants can simply sit at home, surf the web, and find hundreds of companies to sue each day. This increased ease of finding violations, along with plaintiff lawyers willing to send demand letters seeking settlement dollars for non-compliance with the ADA, could create a monsoon of “surf-by” lawsuits. Given this possibility, more and more businesses are taking steps right now to make their websites accessible—before a claim can be made.

Matt Austin


IRS Issues Draft Forms for 2015 ACA Reporting

On July 24, 2014, the Internal Revenue Service released drafts of the forms that large employers will be required to file in order to show that the health coverage they offer to their employees complies with the Affordable Care Act (ACA) “shared responsibility” mandate, sometimes referred to as “play or pay.”

The issuance of these forms has been much anticipated since the Treasury Department issued tax regulations on the reporting requirements for both the individual mandate and the employer mandate in March. The reporting requirements are designed to notify the federal government about whether individuals and employers are meeting their obligations concerning health coverage under the ACA and to provide relevant information to individuals about their coverage and qualification for a subsidy through a health insurance exchange.

Companies with 100 or more full-time equivalent employees must begin complying with the ACA coverage requirements in 2015, although they will have two years to phase up to the requirement that they cover 95 percent of their workers. Companies with 50 to 99 full-time equivalent employees will have another year—until 2016—to start complying. Smaller businesses are exempt.

The IRS announced that the draft forms are being provided to help employers, tax professionals and other stakeholders prepare for the new reporting provisions under tax code sections 6055 and 6056. Under these requirements, employers must compile monthly and report annually numerous data points to the IRS and their own employees. This data will be used to verify the individual and employer mandates under the law.

Expected to be final later in the year, the draft forms were released now to help companies prepare for the new reporting provisions, which will require monthly compilation of data on the employees. The IRS is currently inviting comments on the draft forms.

The forms aim to fulfill the reporting requirements as follows:

6055 Compliance
6056 Compliance
Health insurance issuers, sponsors of self-funded health plans, and other entities that provide minimum essential coverage (MEC) must file:
Applicable large employers that employed an average of at least 50 full-time employees (including full-time equivalents) on business days during the preceding year must file:
Form 1095-B
Form 1095-C
Form 1094-B transmittal page
Form 1094-C transmittal page

Employers will need to update their recordkeeping systems to gather efficiently the month-by-month information required under the shared responsibility reporting requirements for the 2015 calendar.

Anne Prenner Schmidt


President Obama Orders Federal Contractors to Disclose Labor Violations

On July 31, 2014, President Obama signed an executive order requiring businesses to disclose labor law violations for the preceding three years before they can obtain a federal contract. The order—The Fair Pay and Safe Workplaces Executive Order—will cover federal and state laws governing civil rights, family and medical leave, collective bargaining, workplace health and safety, and wage and hour requirements. Each federal agency will be required to designate a labor compliance advisor, who will review the disclosures and consult with the Department of Labor.

The order also requires federal contractors to provide their employees with information necessary to verify the accuracy of their paycheck, including their hours worked, overtime, and paycheck deductions. Finally, it prohibits contractors from requiring their employees to enter into mandatory arbitration agreements for discrimination and harassment suits
According to the Obama administration, the goal of the executive order is to help contractors come into compliance with workplace protections. However, the White House also emphasized that the order is meant to protect contractors that comply with the law from competing with those who violate it. Businesses that repeatedly violate labor laws will not be awarded federal contracts. “Taxpayer dollars should not reward corporations that break the law,” the White House stated in a press release, “so today President Obama is cracking down on federal contractors who put workers’ safety and hard-earned pay at risk.”

The order will cover new federal contracts valued at more than $500,000 and will be implemented beginning in 2016. The ban on arbitration agreements for discrimination and harassment suits will only apply to federal contracts of $1 million or more, however. According to the Department of Labor, there are approximately 24,000 federal contractors employing 28 million workers.

The latest order comes on the heels of executive orders requiring federal contractors to pay their workers a minimum wage of $10.10 an hour, and most recently, barring contractors from discriminating against gay and transsexual workers. Frustrated with his attempts to pass legislation through Congress, President Obama has increasingly relied on executive orders to accomplish his agenda. House Republicans recently voted to sue President Obama for allegedly exceeding his presidential powers.

We will keep you updated regarding developments on this order and any other policy initiatives from the Obama administration.

Nathan Pangrace


NLRB Lessens Burden to Prove Franchisor and Franchisee are Joint Employers

What the Board Said

The General Counsel of the National Labor Relations Board made good on his threat to seek to expand the traditional joint employer test. If followed by the Board, which is probable, the new test will find McDonald’s corporation and many of its franchisees are joint employers and co-liable for the unlawful acts of the other. The Board will likely disregard franchise agreements when ruling on unfair labor practice charges pertaining to union organizing and interference with rights protected by Section 7 of the National Labor Relations Act, as well as collective bargaining and myriad other allegations of unlawful employer conduct.
The General Counsel urged the Board to adopt a new standard that would result in finding a joint employer relationship “under the totality of the circumstances, including the way the separate entities have structured their commercial relationship, the putative joint employer wields sufficient influence over the working conditions of the other entity’s employees such that meaningful bargaining could not occur in its absence.” The General Counsel recently argued, “the broader standard would allow employees to use traditional economic weapons to exert lawful economic pressure on those parties who realistically control the economics of the relationship – even if they do not ‘directly’ control working conditions.”
McDonald’s has more than 3,000 franchisees that operate 90% of its 14,000 U.S. restaurants.

Ruling Applies to Many Industries, Not Just Fast Food

Although McDonald’s and the fast food industry as a whole are dominating the headlines, this ruling has much broader implications. Candidly, this decision changes the rules for thousands of small businesses and goes against decades of established law regarding the franchise model in the United States.
This decision extends the new joint employer standard to other industries and companies besides McDonald’s and fast food chains. Manufacturers, real estate management firms, cleaning companies, any employer using temporary agencies or professional employment organizations, car dealerships, hotels, and subcontractors – to name a few – are subject to the more lenient joint employer test.

SEIU May Now Successfully Organize Fast Food Restaurants

Fast Food Forward, a group backed by the Service Employees International Union (SEIU), has been staging demonstrations for two years in which McDonald’s and other fast food workers have called for higher wages and the right to organize. Most notably, there have been five one-day strikes demanding $15 wages that fast food workers conducted against McDonald’s and other fast food restaurants since 2012. The SEIU has filed nearly 200 unfair labor practice charges with the NLRB on behalf of McDonald’s workers alleging that employees were laid off, terminated, or had their hours cut in retaliation for engaging in such activity.
The Board’s General Counsel has ruled that at least 43 of these unfair labor practice charges have merit. At least some of these charges allege that McDonald’s corporation, as the franchisor, is liable for the alleged unlawful acts of its franchisees. McDonald’s says the NLRB’s decision was wrong because the company does not determine or help determine decisions on hiring, wages, or other employment matters. Yet, the SEIU claims that McDonald’s orders its franchise owners to strictly follow its rules on food, cleanliness, and employment practices including the size of the staff at different times of the day, and that McDonald’s often owns the restaurants that franchisees use.
If these charges are not settled to the Board’s satisfaction, i.e. consenting that McDonald’s and its franchisees are joint employers, the Board will issue a Complaint on the charges and they will be litigated.

Changes to the Joint Employer Test are Imminent

As stated above and covered in a recent Roetzel Recap: Labor Relations (linked here), General Counsel Richard Griffin, Jr. announced his intent to ask the Board to revisit the standards for determining when and in what circumstances two or more employers could be found to be joint employers. The General Counsel invited amicus briefs on the issue and asked interested parties to share their views on the following questions:
         1. Should the Board adhere to its existing joint-employer standard or adopt a new standard?
         2. What considerations should influence the Board’s decision in this regard?
         3. If the Board adopts a new standard for determining joint-employer status, what should that       standard be?
         4. If the standard is multi-factored, what factors should be examined?
The amicus briefs were due in late June and it now appears that the General Counsel has reached his decision that a new standard should be adopted and that it should be a much broader one than has been applied in the past. Amicus briefs have not been requested in the McDonald’s case, yet.
The General Counsel seeks to overturn 30 years of established law regarding the U.S. franchise model. Prior to 1982, a company was considered a joint employer when two or more employers exerted “significant control” over the same employees. Since then, the Board has adopted a narrower standard, holding that a company could be deemed a joint employer only when it directly controlled, for example, a franchisee’s or a temporary employment agency’s employment practices. In other words, whether two entities constitute a joint employer under the National Labor Relations Act requires an analysis of whether they share the ability to directly and immediately control or co-determine essential terms and conditions of employment, including matters such as hiring, firing, discipline, supervision, and direction.
With the decision on Tuesday, the General Counsel appears to be embracing the earlier “significant control” standard. This more lenient standard will dramatically assist labor unions in organizing franchisees, franchisors, temporary employment agencies, and staffing companies. To be clear, undermining franchise and staffing relationships are key to organizing significantly sized swaths of employees. Large corporate entities could see a domino effect where the actions of a small group of employees open the doors to unionization among millions of workers under the corporate umbrella.

Perfect Storm: Joint Employer Test, Micro Units, Ambush Elections

The NLRB’s trifecta of recent anti-employer rule changes is creating a perfect storm against companies wishing to remain union free. The Board and courts have consistently upheld unions organizing very small subsets of employees, called micro-units, instead of the traditional wall-to-wall bargaining units. Likewise, the NLRB has steadfastly moved forward with unleashing ambush (or “quickie”) elections on companies later this year.
Under ambush elections, the time between when a union files a petition with the NLRB seeking an election to the time when the election is held averages between 35-40 days. Ambush elections will decrease this time to as few as 11-15 days. This decrease is a monumental hurdle employers must overcome since statistical evidence provides that the longer an employer has to campaign against a labor union the higher the likelihood the company will prevail in a union election.
Traditionally, unions were required to organize most, if not all, employees in a company’s facility. For example, in a grocery store, all cashiers, produce, bakery, frozen food, etc. workers would vote collectively whether to be in a union. The recent approval of micro-units allows just the cashiers or just the bakery employees to form and join a union. Effectively, a single grocery store could have as many as 10 different unions with their own collective bargaining agreements covering 10 different departments.
Now with a more lenient joint employer test, the following scenario is a reality: Three of the six cashiers of a McDonald’s franchisee meet for a drink after work and complain about working conditions. They decide to file a petition for a union election the next day. An election is held 13 days later and four of the six cashiers vote to be in a union. Their union then files a unit clarification petition with the NLRB seeking to add cashiers from the franchisee’s other stores as well as corporate McDonald’s employees to the bargaining unit under the more lenient joint employer test; the union wins. Hundreds of cashiers are now union members because of the perfect storm. The drive-thru employees are next, followed by the cooks, followed by the temporary employment agency that supplies the workers – different unions, different collective bargaining agreement, different terms and conditions of employment.
Companies, whether non-union or partially union must proactively learn how the perfect storm can occur at their workplaces, how to recognize the signs of the storm brewing, how to stave off the storm, and how to remain union-free. These laws are not going away; make sure your freedom and flexibility in running your company doesn’t go away, either.

Matt Austin