Category: Labor & Employment

Telecommuting—No Longer the Way of the Future?

McBrayer NEW logo 1-10-13

Marissa Mayer is making news. She may also be single-handedly changing employer policies across the country.    As Yahoo’s new CEO, Mayer already made headlines as the youngest female CEO in a Fortune 500 company. But now she is becoming known for what she does and not just who she is. Mayer recently instituted a ban on telecommuting for all Yahoo employees.  The decision was a massive shock to company employees who routinely worked from remote locations. After all, it seems paradoxical that a tech giant like Yahoo requires employees to be physically present in the office for work when technology permits otherwise.

The internal memorandum from Yahoo’s human resources department which announced the change cited a “spirit of collaboration” that can only be achieved when employees are physically together. In addition, Mayer wants to increase productivity for the struggling company and this, in her opinion, is best done when employees are in the actual workplace.

To many, flexible work schedules, condensed work weeks, and telecommuting is the way of the future. Such workplace flexibility, though, can leave employers and HR departments wondering if their policies reflect the best practices for these conditions. If your business decides to offer a telecommuting policy, there are some issues that must be addressed.

First, who will be eligible? You should define eligibility based on positions, and not individuals. For example, you may think Bob is too unmotivated to work from home, but Rhonda would have no problem with efficiency.  Yet distinguishing between the two could lead to a discrimination claim. A better policy may read, for example, “Non-support staff that have been with the business for at least two years are qualified to telecommute.”

Establish clear hours as to when the telecommuter should be working and reachable. The Fair Labor Standards Act and similar state laws apply to home-based worker, so employers need a system for tracking employee hours, including overtime.

Consider safety. While OSHA does not hold employers responsible for the safety of home offices, workers’ compensation laws do still apply. Employers will need coverage for employees who may never step foot in the office. There should also be reporting and investigation procedures in place, just as there are for workplace injuries. Claims arising from telecommute employees should be carefully scrutinized to determine if the injury is work-related.

One of the biggest concerns with flexible work schedules is how to achieve effective oversight. For that reason, consider what measurements you will use to measure successbefore allowing for telecommuting. Keep communication open. For instance, require telecommuters to send in a daily email detailing projects or assignments they are tackling for the day. Insist on a consistent schedule. Be certain that you are providing the same compensation, benefits, and opportunities for promotion to telecommuters that you give to non-telecommuters.

Lastly, and perhaps most importantly, consider the needs of your business. Mayer decided telecommuting no longer worked for Yahoo. Start-ups or businesses dependent on customer face time may take the same approach. For others, it can be a valuable program. Either way, it is important to address the issues discussed herein in your company policies and procedures. Regardless of the size of your business, do not just assume your employees understand.

© 2013 by McBrayer, McGinnis, Leslie & Kirkland, PLLC

Supreme Court Ruling Reverses Bad 9th Circuit Precedent on Class Action Fairness Act (CAFA)

The National Law Review recently published an article, Supreme Court Ruling Reverses Bad 9th Circuit Precedent on Class Action Fairness Act (CAFA), written by Thomas R. Kaufman with Sheppard, Mullin, Richter & Hampton LLP:

Sheppard Mullin 2012

On March 19, 2013, the U.S. Supreme Court handed down Standard Fire Insurance v. Knowles, a short, narrow, and unanimous opinion addressing removal of class actions to federal court under the Class Action Fairness Act (“CAFA”).  The central holding of the case is that a district court should “ignore” representations by the plaintiff that the amount in controversy is under $5 million and instead consider the actual evidence concerning the number of class members and potential claims.  Although the Court did not expressly address Lowdermilk v. U. S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007)—a 9th Circuit case that held that the defendant must establish with “legal certainty” that the amount in controversy exceeds $5 million when the plaintiff pleads that the amount in controversy is lower—the Supreme Court’s reasoning effectively reverses the Lowdermilk line of cases.

The Relevant Facts in Standard Fire Insurance

As relevant, the defendant removed a class action and made a showing through an analysis of the allegations in the complaint that the amount in controversy slightly exceeded $5 million.   The district court found no fault with the analysis, but noted that the Plaintiff had made a formal stipulation that the amount in controversy was less than $5 million. Invoking the old adage that the plaintiff is “the master of the complaint,” the district court held that it was bound to remand the case based on the Plaintiff’s purportedly binding representation that the class was seeking less than $5 million.

The Supreme Court’s Holding

The limited question the Supreme Court answered was, assuming the evidence otherwise indicated that the class’s potential recovery exceeds the minimum $5 million, did the formal stipulation defeat federal jurisdiction.  The Court answered this question “no.”  The plaintiff, as a mere potential representative for an uncertified class, had no power to bind the class and to require them to agree to the reduced recovery.  This is to be contrasted from where an individual stipulates that his damages are below the amount in controversy in an individual action, which does bind all relevant parties (i.e., there are no absent contingent parties).  The Court went so far as to say that the district court “should have ignored that stipulation.” Instead, the Court directed district court’s the proper process is simply “to add[] up the value of the claim of each person who falls within the definition of [the] proposed class and determine whether the resulting sum exceeds $5 million. If so, there is jurisdiction and the court may proceed with the case.”  In so concluding, the Court cited with approval Frederick v. Hartford Underwriters, 683 F.3d 1242, 1247 (10th Cir. 2012), where the Tenth Circuit rejected an attempt by a plaintiff to avoid federal jurisdiction by pleading in the prayer that the class was seeking only “a total award for compensatory and punitive damages [that] does not exceed $4,999,999.99.”

How This Impacts Ninth Circuit Precedent

Although I have never encountered a purportedly “binding stipulation” that the amount in controversy is less than $5 million in a class action, it is common in wage/hour cases filed in California for the plaintiff’s counsel simply to plead in an unverified complaint that the amount in controversy is less than $5 million. Under binding 9th Circuit precedent, Lowdermilk v. U. S. Bank Nat’l Ass’n, 479 F.3d 994, 995 (9th Cir. 2007), where a plaintiff includes such a statement in the complaint, the burden on the defendant to establish the $5 million amount in controversy is greatly raised to a “legal certainty” standard, meaning that “the party seeking removal must prove with legal certainty that CAFA’s jurisdictional amount is met.” This is contrasted with the general rule where the complaint is silent on amount in controversy that the employer merely must “prove by a preponderance of the evidence that the amount in controversy requirement has been met.” A key rationale for the Lowdermilk rule was that “it is well established that the plaintiff is ‘master of her complaint’ and can plead to avoid federal jurisdiction.”

There is no way to reconcile this reasoning with the Supreme Court’s in Standard Fire Insurance. Implicit in the Supreme Court’s reasoning is that pronouncements by the plaintiff about the amount in controversy should have no binding effect, but rather the district court should simply consider the claims pleaded, the number of potential class members, and the potential aggregate recovery for this class while “ignoring” the plaintiff’s asserted conclusions on amount in controversy. There is no logical reason why a formal stipulation to limit jurisdiction should have no impact on the CAFA analysis, while a mere statement in an unverified complaint that the amount in controversy falls below $5 million should have the impact of altering the burden of proof and making it harder for the defendant to establish amount in controversy.

Copyright © 2013, Sheppard Mullin Richter & Hampton LLP

Employee Retaliation Claims: Will the Supreme Court Stem the Tide?

Barnes & Thornburg

It was no surprise for practitioners and their clients alike to learn that, statistically, retaliation claims remain the largest number of claims brought before the EEOC (in 2012, almost 38,000 charges alleged retaliation—38.1% of all charges). Worse, retaliation claims are expensive to defend. This point is painfully highlighted in this week’s submissions with the U.S. Supreme Court.

Last week, the U.S. Chamber of Commerce (along with the Retail Litigation Center) filed with the Supreme Court an amici curiae brief in a case in whichretaliation is the central issue. The case, captioned Univ. of Texas Southwestern Medical Center v. Nassar (U.S. No. 12-484), has been appealed from the 5th Circuit.

The underlying case arose when a doctor was not hired after he complained about his treatment at another organization. But, his complaint is of little consequence on the big stage. The central question before the Court—and the one on which the U.S. Chamber focuses—is the standard required to prove retaliation under the Civil Rights Act of Title VII.   Should employees be required to prove that their employers would not have taken an adverse action against them but for an improper motive?  Or, does the standard require employees only to show that an improper motive was one of multiple factors? The latter—a mixed-motive standard—is the one the 5th Circuit applied.

The U.S. Chamber’s brief argues that the “mixed-motive standard” lowers the bar for retaliation claims, resulting in increased costs for employers. The Chamber’s brief is boldly specific—it cites research estimating that in 1988, the cost of defending a wrongful discharge claim averaged more than $80,000.  The brief cites research supporting that today, it costs employers “possibly over $500,000 to defend a case at trial.”

As businesses on the front line, we, of course, already knew that.

Oral argument is scheduled for April 24, 2013.

You can follow the case and read the U.S. Chamber of Commerce’s brief at the SCOTUS Blog by clicking on the following link: University of Texas Southwestern Medical Center v. Nassar.

© 2013 BARNES & THORNBURG LLP

New Family and Medical Leave Act (FMLA) Regulations Effective: New Notice Poster and Model Forms Available

Poyner Spruill

As of March 8, 2013, employers with 50 or more employees are required to post the Department of Labor’s (DOL) new Family and Medical Leave Act (FMLA) notice poster incorporating the recently issued final regulations, which incorporate amendments made by the National Defense Authorization Act (NDAA) and the Airline Flight Crew Technical Corrections Act (AFCTCA).  The new notice poster can be found at the DOL’s website here.  Federal law requires that all covered employers post the FMLA notice in a conspicuous place, even if no employees are eligible for FMLA leave.  The deadline for employers to begin posting the new notice poster was March 8, 2013, so any employer who has not already done so should act now.

In addition to the new poster, the DOL has issued revised model forms that reflect the final regulations.  Most notably, the DOL has issued an all-new certification form: Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave (WH-385-V).  This form reflects the FMLA’s expanded provisions that allow eligible employees to use Military Caregiver Leave to care for a veteran who was (not dishonorably) discharged from the military within the past five years.

While there are several new provisions of the FMLA that relate to job–protected leave for airline personnel and flight crews, there have been significant changes made that apply to all employees.  Specifically, there have been significant changes made to Qualifying Exigency Leave which include the following: expanding the number of days that an eligible employee may take for rest and recuperation qualifying exigency leave, revising the definition of  “military member” for purposes of leave, changing the type of duty required for coverage, and granting certain employees leave rights to care for the parents of a military member.

In addition, Military Caregiver Leave under the FMLA has been expanded.  Under the new regulations, the definition of “covered servicemember” has been expanded to include covered veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness.  Under the final regulations, a “covered veteran” is an individual who was discharged or released under conditions other than dishonorable at any time during the five-year period prior to the first date the eligible employee takes FMLA leave to care for the covered veteran.  Moreover, the definition of a “serious injury or illness” for a current servicemember has been expanded to include injuries or illnesses that existed before the beginning of the member’s active duty that were aggravated by service in the line of duty while on active duty in the Armed Forces.

For more detailed information, the DOL’s side-by-side comparison of the 2008 and 2013 regulations can be found here.

While many of the changes relate to provisions that are seldom used by most employers (with the exception of airlines), every FMLA-covered employer must post the new notice poster and should review its forms and policies to ensure compliance with the new regulations.

© 2013 Poyner Spruill LLP

USCIS Correction: Most Employers Must Complete English Version I-9

Varnum LLP
On March 12, 2013 the USCIS announced the new Form I-9 is available and may be completed in English or Spanish. Today, March 13, 2013, USCIS clarified that Spanish I-9 is available for completion only by Puerto Rico employers.
USCIS incorrectly announced full use during a teleconference but has now clarified onwww.USCIS.gov that the Spanish new form I-9 may not be used by employers (except Puerto Rico employers). Employers may continue to use the Spanish form for reference, but the English version must be completed.

The new Form I-9 is available in English and Spanish. In addition, USCIS has published aHandbook for Employers to provide guidance for completing the new Form I-9.

Employers are required to use the new Form I-9 beginning on May 7, 2013, but it may be used immediately. USCIS will accept prior versions of Form I-9, “(Rev. 08/07/09) Y” and “(Rev. 02/02/09) N”, until May 7, 2013.

Internal Corporate Investigations and Forum for In-House Counsel – April 24-26, 2013

The National Law Review is pleased to bring you information regarding the upcoming Internal Corporate Investigations and Forum for In-House Counsel by the ABA:

Internal Corporate Investigations April 24-26 2013

 

April 24 – 26, 2013

Where

  • St. Regis
  • 923 16th St NW
  • Washington, DC 20006-1701
  • United States of America

This intensive National Institute remains incomparable in its examination of the demanding issues that define corporate internal investigations.   Our distinguished faculty is comprised of in-house & outside counsel, and government lawyers along with nationally-acclaimed forensic accountants and investigators.  These professionals, top in their field from years of corporate practice, will share key strategies for avoiding the pitfalls often faced by in-house counsel on a daily basis and particularly during corporate investigations.

Attendees of this advanced national curriculum will:

  • Learn strategies to avoid new challenges facing in-house counsel
  • Gain practical knowledge about the Responsible Corporate Officers Doctrine
  • Increase their proficiency in current compliance and fraud investigation procedures
  • Walk away with information that will address unique challenges and needs during daily practice

Final Family and Medical Leave Act (FMLA) Military Leave Regulations Issued

The National Law Review recently published an article by John A. Vering, III, Shelley I. Ericsson, and Michael B. Kass with Armstrong Teasdale regarding FMLA Military Leave:

ArmstrongTeasdale logo

 

The Department of Labor (DOL) recently issued final regulations addressing an amendment to the Family and Medical Leave Act (FMLA) that requires employers covered by the FMLA to provide certain types of military-related leave. The regulations, which will take effect on March 8, 2013, determine how the provisions  are to be interpreted and implemented. The DOL’s new regulations will require employers to update their FMLA policies, posters and forms and, among other things, change the way they administer family leave for servicemembers caregivers and employees with family members in the military. The text of the Final Rule can be found here: www.dol.gov/WHD/FMLA/2013rule/.

A brief overview of some of the changes in this Final Rule is set forth below. Please take specific note of the new FMLA poster requirement and new forms near the end of this Alert.

Qualifying Exigency Leave

The Final Rule revises regulations dealing with qualifying exigency leave to (a) include eligible employees with family members serving in the regular armed forces in a foreign country; (b) more clearly define what constitutes a qualifying exigency and adds a new qualifying exigency for parental care; and (c) increase the length of time an eligible family member may take for qualifying exigency leave for rest and recuperation from five days up to a maximum of 15 days.

Military Caregiver Leave

With respect to military caregiver leave, the new Rule: (a) specifically defines what conditions constitute a serious injury of illness for a current member of the Armed Forces or a covered veteran, and expands that definition; (b) defines who is a covered veteran; and (c) allows private physicians, outside the military healthcare system, to certify a serious injury or illness, but allows employers to request a second or third opinion if the employer questions the certification of one of these private physicians.

Calculation of Intermittent or Reduced Schedule Leave

The Final Rule also clarifies the calculation of intermittent leave for FMLA purposes to make clear that an employer cannot require that intermittent FMLA leave be taken in increments longer than the shortest period of time that the employer uses to account for use of other forms of leave provided that it is not greater than one hour and provided further that FMLA leave entitlement may not be reduced by more than the amount of leave actually taken.

New FMLA Poster and New Forms Required

The DOL is requiring a new FMLA poster and use of new FMLA forms effective March 8, 2013. A copy of the poster can be found on the DOL’s website and downloaded atwww.dol.gov/whd/regs/compliance/posters/fmla.htm. DOL has also created at least one new form and revised other key forms (the new form is WH-385-V, and the revised forms include WH-381, WH-384, and WH-385). The following FMLA forms can now be found on the internet atwww.dol.gov/whd/fmla/2013rule/militaryForms.htm:

 Conclusion

The FMLA generally applies to employers who have at least 50 employees within a 75-mile radius of a single site of employment. If the FMLA applies to your company, in light of these new regulations, you will want to review and likely revise your written FMLA policies and ensure your compliance going forward.

© Copyright 2013 Armstrong Teasdale LLP

Protect Your CEO’s Tweets and Posts from U.S. Securities Exchange Commission (SEC) Enforcement Action

vonBriesen

The U.S. Securities Exchange Commission (SEC) Enforcement Division altered the jet stream of blogosphere commentary last December by, for the first time, recommending legal action against a CEO on account of a Facebook post. Immediately after the announcement, a blizzard of articles, tweets, and blogs buried the mediascape with opinions about the critical role of CEO social media use in the new economy, the wisdom or foolishness of allowing CEO’s to Tweet or post, and whether the SEC should be time warped back to the Stone Age it seems to prefer.

Sweeping away the accumulated hyperbole reveals two important takeaways from the SEC’s announcement, applicable to both public and private companies: i) the more things change, the more they remain the same, and ii) this latest “grave threat” to the modern world is not a crisis, but an opportunity. Social media can be a valid, legal, and effective way to communicate with investors, if it’s done right.

About Regulation FD

The SEC’s action responded to a July 2012 Facebook post by CEO Reed Hastings stating that members watched over 1 billion hours on Netflix in June. Netflix estimated that Hastings had reached 200,000 people through his Facebook, Twitter, and LinkedIn accounts. The SEC felt this was material information for investors and that by announcing it through social media, rather than more traditional outlets, Netflix had violated Regulation Fair Disclosure (Reg. FD).

The SEC adopted Reg. FD in 2000 to fix a perceived lack of fairness in the public securities markets. Before Reg. FD, public companies could share material information with analysts who participated in conference calls or meetings not open to smaller investors. Well-connected investors got trading advantages over the general public. Reg. FD prohibits public companies from providing material information to limited groups of investors without simultaneously making the information available to the entire marketplace.

Under Reg. FD, public disclosures must be made by “filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.” The “other method” most often employed is a press release to an array of media outlets likely to disseminate the information broadly and quickly. Individuals and companies violating Reg. FD risk injunctions and monetary penalties.

Use of Social Media Growing, Creating Risks

Social media channels first became critical communication tools for companies after adoption of Reg. FD. A 2010 study of the 100 largest companies in the Fortune 500 found that 79% were using at least one of the four most popular social media platforms. See Burson-Marsteller Fortune Global 100 Social Media Study, Feb. 23, 2010, available at http://www.burson-marsteller.com/Innovation_and_insights/blogs_and_podcasts/BM_Blog/Lists/Posts/Post.aspx?ID=160

A 2012 Forbes article cited an IBM study saying 57% of surveyed CEO’s likely would be using social media by 2017. Mark Fidelman, IBM Study: If you Don’t Have a Social CEO, YourGoing to be Less Competitive, FORBES, May 22, 2012.

The SEC itself uses social media to disclose important information such as speeches, trading suspensions, litigation releases, and administrative proceedings.

While some CEOs see social media as “part of their job description,” others try to minimize risk by having employees write or review tweets before posting, and some CEOs have already tried social media and moved on. See Leslie Kwoh and Melissa Korn, 140 Characters of Risk: Some CEO’s Fear Twitter, WALL STREET JOURNAL, September 26, 2012.

Not everyone does, or should, use all forms of social media. The point of Twitter, for example, is to provide information contemporaneously with the occurrence of a thought or an event. This promptness is both the differentiating touchstone of the medium and its source of danger. Quick, unconsidered, unscripted communications by senior executives of public companies pose risks in the form of leaked intellectual property, disclosed business plans, angered customers, litigious investors, and frothy regulators. The SEC Netflix announcement demonstrates the potential for liability arising from disclosures of information requiring consideration through social media focused solely on promptness. A Facebook post subjected to prior review might have been a better choice.

Even where the SEC does not act, executives may be at risk. In May 2012, retailer Francesca’s Holdings Corporation fired its CFO, Gene Morphis after he tweeted: “Board meeting. Good numbers = Happy Board.” Mr. Morphis, who was also active on other social media outlets, had a history of postings about earnings calls, road shows, and other work related matters. Morphis lost his job even though the SEC took no action. Rachel Emma Silverman, Facebook and Twitter Postings Cost CFO His Job, WALL STREET JOURNAL, May 14, 2012.

Social Media Without Big Risk

The SEC has never issued guidance about the use of social media, but it has issued guidance that websites could be deemed sufficiently “public” to satisfy Reg. FD when: (1) it is a recognized channel of distribution, (2) posting on the web site disseminates the information in a manner making it available to the securities marketplace in general, and (3) there has been a reasonable waiting period for investors and the market to react to the posted information. Indeed, “for some companies in certain circumstances, posting … information on the company’s web site, in and of itself, may be a sufficient method of public disclosure,” SEC Release No. 34-58288 (Aug. 7, 2008) at 18, 25.

This is an example of how “the more things change, the more they stay the same” when it comes to the intersection of law and technology. The purpose of Reg. FD is to make sure that all investors have access to the same information roughly simultaneously. The specific communications method is not important so long as the principle of public disclosure to the general market, not subsets of investors, is served. Because 8-K filings and press releases were the most common ways to quickly and broadly disseminate information in the past, investors knew where to look for them and could monitor those information outlets. Now, when companies establish their websites as well-known places to find press releases, SEC filings, and supplemental information, they, too, have become acceptable means for Reg. FD disclosures.

The same analysis applies to social media, as well as any new communications technology that may exist in the future. The critical question is: has the company sufficiently alerted the market to its disclosure practices based on the regularity, prominence, accuracy, accessibility, and media coverage of its disclosure methods? If so, social media should be just as acceptable as any other communication tool.

One company seems to have found the right balance. Alan Meckler, CEO of WebMediaBrands Inc. drew the SEC’s attention after a pattern of regularly disclosing company information through social media back in December 2010. The SEC’s Division of Corporation Finance questioned whether Mr. Meckler’s Tweets “conveyed information in compliance with Regulation FD.”SEC letter dated December 9, 2010. Despite, the investigation, the SEC brought no enforcement action.

To use social media with minimum SEC risk, the company must educate investors so that they know such communications will always occur at a particular place and at least simultaneously with other outlets. This is done by a regular pattern of social media disclosure and links to other sources, such as SEC filings, showing the way. A company should not force investors to win a shell game, finding the nut of important information in Twitter this time, on Facebook the next time, and Instagram after that. Consistency, predictability, and transparency are key. Used this way, social media present an opportunity to communicate with investors in new ways, not a source of legal problems.

©2013 von Briesen & Roper, s.c

Can Having Employees Pose for the Camera Pose Problems for You?

The National Law Review recently featured an article regarding Employee Photos written by Amy D. Cubbage with McBrayer, McGinnis, Leslie and Kirkland, PLLC:

McBrayer NEW logo 1-10-13

Employers have a variety of reasons for using employee photos, including:

  • internal company use (for a company directory or in the break room);
  • external use (such as the company website or a blog post—you’ll find my picture below);
  • for safety precautions (name badges or scan cards); and
  • for commercial use in advertisements or marketing.

Employees are usually amendable to having their picture taken. But, there may be a few who express their genuine disinterest in being photographed. Such employees could simply be camera shy; others may have a more serious reason to refuse to have an image published.  Some may need to protect anonymity for personal reasons, such as past domestic abuse.  Others may adhere to religions forbidding taking pictures.

There are generally no legal ramifications for using employee photos, unless it is for commercial purposes.  Most states, including Kentucky, have laws that require permission before using an individual or their “likeness” for commercial purposes. This is due to the commonly held notion that a person has property rights in his or her name and likeness and those rights should be shielded from exploitation. Kentucky’s law is codified in KRS 391.170.

If you need to use employee photos for a commercial use, there is a simple solution. Have employees sign releases in which they acknowledge that their picture may be used in a company advertisement and they will receive no compensation for the use of their photo. Keep these releases on file.

Even in a state where consent is not required, it is always a smart approach to use a release so that employees will not be surprised when they see their face plastered on a promotional piece. If minors appear in the commercial materials always use extra caution. Use a consent form, whether required or not, to be signed by the child’s parents.

A warning about taking photos of potential employees: if you take photographs of applicants applying for a job (to help remember who’s who), it may put you at risk for a discrimination claim. A photograph creates a record of certain protected characteristics (i.e., sex, race, or the presence of a disability) that employers generally cannot use in hiring considerations. If this information is collected and a discrimination claim arises, the burden will be on the employer to prove the photographs were not used to make a discriminatory employment decision.

I will leave you with a little common sense about employee photos. Always remember to publicize when the office picture day will be; no one likes showing up ill-prepared. Offer a “redo day” for those who are truly unhappy about how their picture turned out. If all else fails, resort to photoshopping. A little lighting adjustment or cropping can work wonders for a shutterbug humbug.

© 2013 by McBrayer, McGinnis, Leslie & Kirkland, PLLC

Federal Court Rejects Americans with Disabilities Act (ADA) Suit Over Random Alcohol Testing of Probationary Plant Employees

The National Law Review recently published an article regarding Random Alcohol Testing written by Robert S. Nichols, Robert E. Sheeder, and Amy Karff Halevy with Bracewell & Giuliani LLP:

Bracewell & Giuliani Logo

 

A federal judge in Pennsylvania has dismissed an Equal Employment Opportunity Commission challenge to U.S. Steel Corporation’s random alcohol testing of probationary employees at one of the company’s most safety sensitive facilities. The Court’s ruling in this carefully watched suit is significant for employers because it represents a forceful rejection of one of the more extreme positions the EEOC has taken in interpreting how the Americans with Disabilities Act (ADA) regulates workplaces.

EEOC’s Restrictive Interpretation of Employer Rights

The EEOC has adopted a very restrictive view of an employer’s right to conduct across-the-board medical examinations or inquiries of current employees even when the examination or inquiry is plainly motivated by workplace safety concerns. According to the EEOC, employers are prohibited in most circumstances from conducting generalized medical examinations, including random alcohol testing or periodic physical examinations of current employees.

The EEOC has pointed to a provision of the ADA that provides that an employer may not “require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.” 42 U.S.C. § 12112(d)(4)(A). Conducting random testing for the unlawful use of drugs, as opposed to testing for the use of alcohol, does not create the same legal impediments because a test for the unlawful use of drugs is generally not regarded as a “medical examination” under the ADA.

The very limited exceptions to this prohibition on across-the-board medical examinations or inquiries of current employees that the EEOC has recognized include examinations of certain public safety employees in police and firefighter positions as well as, of course, examinations or inquiries that are required by other federal agencies, such as the Department of Transportation.

EEOC Lawsuit Against U.S. Steel

In the U.S. Steel suit, the EEOC argued that across-the-board medical examination or inquiries, including random or other generalized alcohol testing, could not be justified by the business necessity defense even in a highly safety sensitive work environment. Rather, the EEOC has taken the position that alcohol testing can only be justified based upon individualized suspicion that the particular employee to be tested was under the influence of alcohol at work.

U.S. Steel argued in a motion for summary judgment that given the highly safety sensitive nature of the plant at issue, where employees work with materials that are at temperatures of more than 2,100 degrees, random testing was justified as a matter of business necessity.

The judge in the case granted U.S. Steel’s motion and dismissed the EEOC’s claims finding that the random alcohol testing of probationary employees was justified by the business necessity defense. The Court first pointed out that there was no disputing that safety in and of itself can be a matter of business necessity. As a result, according to the Court, the only question remaining was whether the policy of random alcohol testing served that asserted business necessity. After analyzing the facts at issue, the judge found that the alcohol testing policy plainly served the business necessity of workplace safety.

In doing so, the Court specifically rejected the EEOC’s position that across-the-board medical examinations or inquiries of current employees could only be justified in the case of law enforcement or firefighting employees. The Court explained that there was no legitimate basis for not extending the same rationale to employees in other highly safety sensitive positions. Also, the Court noted that in this instance selecting employees for testing based on individualized suspicion would not work effectively because personal protective equipment obscures the U.S. Steel employees’ faces and speech.

Additionally, the Court concluded that the random alcohol testing approach was not inconsistent with the ADA’s goal of preventing employers from targeting specific employees with disabilities based upon stereotypes and misconceptions. The Court pointed out that, after all, random testing, as opposed to individualized suspicion testing, was not potentially based upon conclusions about particular individuals with disabilities.

The Court also noted that the testing program at issue was the product of negotiations with the union representing plant employees and not a process unilaterally imposed by the employer.

Takeaways

The decision in the U.S. Steel case offers employers new hope that more federal courts will reject the EEOC’s very restrictive view of the right to conduct across-the-board medical examinations or inquiries, including, across-the-board random alcohol testing of employees in certain safety sensitive positions. While this decision is encouraging, employers need to recognize that the EEOC continues to adhere to its position regarding this issue and other federal courts may ultimately side with the EEOC. Nonetheless, the Court’s decision in the U.S. Steel suit is an encouraging sign for employers that courts, recognizing the importance of workplace safety, may adopt a far more reasonable and pragmatic view than the EEOC on this question of across-the-board medical examinations and inquiries of current employees.

© 2013 Bracewell & Giuliani LLP