Category: Labor & Employment

NLRB Chills At-Will Acknowledgements of Social Media in Employee Handbooks

The National Law Review recently published an article about the NLRB’s Social Media Rulings written by Jerrold J. Wohlgemuth of  Drinker Biddle & Reath LLP:

 

 

Having warned employers about the legality of their social media policies under theNational Labor Relations Act, NLRB Acting General Counsel Lafe Solomon has apparently turned his attention to at-will employment statements in employer handbooks and manuals.  Employers of union and non-union workforces need to pay careful attention to this development.

Many employers use standard language in their handbooks and manuals in which their employees acknowledge that their employment is at-will; that the employer may terminate the employment relationship at any time, for any reason; and that the at-will employment relationship cannot be amended, altered or modified except by a writing signed by a senior member of management.  The Acting General Counsel apparently believes that such at-will disclaimers may interfere with or chill the right of employees to engage in protected concerted activity.

In a case that did not receive extensive publicity, the General Counsel’s Office filed an unfair labor practice charge in February 2012 against Hyatt Hotels (NLRB v. Hyatt Hotels Corp., Case 28 CA-061114) in which it alleged that the at-will disclaimer in the company’s employee handbook violated Section 8(a)(1) of the Act to the extent it required employees to acknowledge that their at-will employment status could not be altered except by a writing signed by management.  The charge appears to reflect the Acting General Counsel’s belief that such an acknowledgement will have a chilling effect on the Section 7 right of employees to engage in concerted activity for the purpose of organizing to alter their employment relationship with the employer by choosing union representation.  The Hyatt case was settled before the issue was presented for a hearing.  An Administrative Law Judge issued a similar ruling in a case decided in early February against the American Red Cross; the case was resolved when the Red Cross agreed to modify its at-will disclaimer before the issue could be presented to the Board for review. (NLRB v. Am. Red Cross, 2012 WL 311334, Feb 1, 2012).

This is an important initiative on the part of the Acting General Counsel.  As we have seen in the social media context, in analyzing handbooks and policy manuals the Acting General Counsel will apply Section 7 broadly to find statements unlawful to the extent they could be interpreted in almost any fashion to chill employee rights to engage in protected concerted activity.  Accordingly, employers may want to take proactive steps to avoid NLRB scrutiny by including a disclaimer in the at-will sections of their handbooks to the effect that the at-will acknowledgment does not, and is not intended to, undermine or interfere with the employee’s right to engage in protected concerted organizing activity under Section 7 of the Act.

©2012 Drinker Biddle & Reath LLP

Impact of Agriculture Reform, Food and Jobs Act of 2012 on Dairy Farmers

The National Law Review recently published an article regarding Agriculture Reform written by Kristiana M. Coutu of Varnum LLP:

Varnum LLP

This summer, the U.S. Senate voted to proceed to consideration of theAgriculture Reform, Food and Jobs Act of 2012 (2012 Farm Bill). The proposed bill can be accessed on the Senate Agriculture Committee’s website, however, be warned, it will take time and perseverance to wade through the 1010 pages of text.  While a complete study of the 2012 Farm Bill may be fascinating for some of us, the practical concern is how it will affect specific industries within agriculture and individual farms. Because Michigan dairy farms are a vital component of our state’s economy, it seems appropriate to consider how this proposed legislation will affect dairy farmers.

Two new programs will replace the current Dairy Product Price Support Payment and the Milk Income Loss Contract Program (MILC).  The new programs are the Dairy Production Margin Protection Program (“Margin Protection Program”) and the Dairy Market Stabilization Program (“Stabilization Program”) which have the stated purpose of guaranteeing dairy farmers a certain margin of milk price over feed costs and assisting in balancing the supply of milk with demand when participating dairy farms are experiencing low or negative operating margins by encouraging dairy farmers to produce less milk.  The two programs must be looked at together since any dairy operation that participates in the voluntary Margin Production Program must also participate in the Stabilization Program.

In its most basic terms, the Margin Protection Program insures farmers a minimum $4.00 margin of average national milk price, termed the “all milk price” over the national average feed price based on the price of corn, soybean meal and alfalfa.   A margin of less than $4.00 for two consecutive months triggers a government payment based 80% of historical milk production. Dairy farmers may also purchase supplemental margin protection to insure up to an $8.00 margin on 90% of historical production.  Although these programs are sometimes referred to as insurance, they are not associated with the federal crop insurance program and no insurance agents are involved.

The Stabilization Program encourages farmers to produce less milk by ordering handlers not to pay farmers for a percentage of milk shipped during any month the Stabilization Program is “in effect” based on low national margins.   Handlers must reduce the producer’s milk check when milk shipped exceeds what is called the “dairy operation’s stabilization base.”  The money that would have gone to the producer is instead paid to the Secretary of Agriculture to use for building demand for dairy products and purchasing dairy products for donation.

These new programs provide a good deal of food for thought, including questions about the effectiveness in various geographic regions of the U.S., considering the difference in milk price and input costs; the effect on various farms based on size; and whether forcing handlers to submit milk proceeds to the government is essentially a tax on dairy farmers.  Dairy farmers should evaluate these programs in light of their individual farm’s circumstances to determine the impact should these programs be included in the final Farm Bill.

It is estimated that debate on the Senate floor will be ongoing for at least the next two weeks and that several amendments to the bill will be proposed and debated.  We will continue to monitor the progress of the Farm Bill in general and also specific dairy provisions.

© 2012 Varnum LLP

DOL Publishes New Employees’ Guide to the FMLA

The National Law Review recently published an article by Joel M. Nolan of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., regarding FMLA:

Recently, the U.S. Department of Labor released a user-friendly Employees’ Guide to the Family and Medical Leave Act.  The guide is targeted at employees, but may also serve as a helpful tool for employers looking for an efficient summary of the law.

The guide does not provide new information or legal interpretations of the law; rather, it provides a plain-language overview of the FMLA’s major provisions and contours, such as FMLA eligibility, FMLA rights and protections, the process for requesting leave (and associated notice provisions), FMLA certifications, and job reinstatement.  In addition, the guide highlights certain unique circumstances and incorporates some of the DOL’s  interpretive guidance on particular issues.  For example, the guide discusses eligibility guidelines for airline flight attendants and flight crew employees, describes when employees may be eligible to take FMLA leave to care for certain children with whom the employee has no legal relationship (or to care for another as such a child), and emphasizes the importance of employer FMLA policies.  Further, the guide provides clear flowcharts regarding FMLA eligibility and certification and the process for taking FMLA leave, as well as information for employees on filing an FMLA complaint with the DOL’s wage-and-hour division.

The DOL has also archived a webinar about the guide, which is available here:  http://www.dol.gov/whd/fmla/employeeguide-webinar.htm

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Employer Group Health Plans and the Constitutionality of the ACA

Focus turns to completing 2012 and 2013 compliance tasks following the U.S. Supreme Court’s decision.

Today, the U.S. Supreme Court ruled that virtually the entire Patient Protection and Affordable Care Act of 2010 (ACA) is constitutional (with the exception of a Medicaid issue that is not directly relevant to employers), validating the full range of past, present, and future ACA requirements. Employers now must continue to press ahead with 2012 and 2013 ACA compliance requirements, particularly if these tasks were placed on a back burner awaiting the decision.

The Decision

Writing for a 5-4 majority in National Federation of Independent Business et al. v. Sebelius, Chief Justice John G. Roberts, Jr., found that the individual mandate in the ACA is a permissible exercise of Congress’s taxing authority, stating that “[t]he Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax.” Chief Justice Roberts also wrote that “because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.” Chief Justice Roberts was joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor, Stephen G. Breyer, and Elena Kagan. Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel Anthony Alito, Jr., dissented.

Next Steps for Employers

Now that the ACA has been upheld, employer group health plans must focus on a number of pressing tasks for 2012 and 2013 compliance with the ACA. In the coming weeks and months, employers should do the following:

  • Determine whether they are appropriately aggregating group health plan valuation data in order to support 2012 Form W-2 reporting.
  • Prepare to receive, and properly distribute or apply, any Medical Loss Ratio rebates associated with 2011 insured health coverage.
  • Finalize Summary of Benefits and Coverage material for inclusion in the 2013 Open Enrollment package.
  • Complete updates to Summary Plan Descriptions and plan documents to capture and describe the 2011 and 2012 ACA changes to their plan design.
  • Reflect the 2013 plan year $2,500 cap on salary deferral contributions into healthcare spending accounts in 2013 Open Enrollment material, payroll processes, and administration systems.
  • Understand and begin to determine the patient-centered outcomes trust fund fees due in July 2013.
  • Begin to identify whether their group health plans are both affordable and available to full-time employees in order to avoid any shared responsibility penalty in 2014.
  • Prepare for audits associated with their participation in the Early Retiree Reinsurance Program, if applicable.
  • Review possible design changes to retiree drug programs to reflect the change in Medicare Part D subsidy taxation rules.
  • Review future plan design changes to blunt the balance sheet impact of the 2018 Cadillac Tax.

Implications

While the Supreme Court decision is an important milestone in the federal debate over expanding healthcare coverage, it likely represents just the first in a series of future federal discussions and actions in the coming months and years.

The federal debate now moves to the November election cycle. The ACA no doubt will play a large role in the upcoming elections, but it is premature to expect any quick legislative reversals to ACA provisions, as any changes would require a significant shift in power.

In the interim, employer group health plans should continue to examine and implement those ACA requirements that will be effective in 2012, 2013, and later years into the design and operation of their group health plans.

We will release future LawFlashes and hold webinars as further guidance becomes available.

Copyright © 2012 by Morgan, Lewis & Bockius LLP

Supreme Court Strikes Down Majority of Arizona SB 1070

The National Law Review recently published an article by Jennifer G. Roeper of Fowler White Boggs P.A. regarding Arizona’s SB 1070:

The two-year long fight over the controversial Arizona immigration law, SB 1070, finally came to an end on Monday, when the U.S. Supreme Court handed down its decision in Arizona v. United States. SB 1070, which permitted state officials to enforce federal immigration laws, made its way to the Supreme Court after the Ninth Circuit blocked portions of the bill last year. Three key provisions of the law were struck down on the grounds that they were preempted by federal immigration law, and one provision was upheld.

The first provision to be struck down was Section 3 of the bill, which made it a misdemeanor under state law for immigrants to fail to seek or carry federal registration papers. The Court held that the provision was preempted, as Congress intended registration of foreign nationals to be a “single integrated and all-embracing” federal system, leaving no room for states to regulate in the area.

The second provision appears in Section 5(C). Section 5(C) made it a crime in Arizona for immigrants to work or solicit work without employment authorization. The Court held that this provision was also preempted, as Congress had only imposed civil penalties on unlawful employment, specifically declining to impose criminal penalties.

The third provision struck down by the Supreme Court is Section 6, which gave local police the authority to make warrantless arrests of immigrants suspected of being removable. This provision would have provided state officers with greater arrest authority than federal immigration officers, and could be exercised with no instruction from the Federal Government. In writing the opinion of the Court, Justice Kennedy stated that Section 6 “violates the principle that the removal process is entrusted to the discretion of the Federal Government. …[It] creates an obstacle to the full purposes and objectives of Congress.”

Finally, section 2(B), one of the most controversial provisions, was upheld, as it was found to be too early to determine how the provision would be applied in practice. 2(B) requires local law enforcement to investigate into the immigration status of anyone stopped or arrested when “reasonable suspicion” exists that the person is in the U.S. unlawfully. This is the so-called “racial profiling” provision, as many believe the only way an officer could have “reasonable suspicion” that an immigrant is unlawfully present is through racial profiling. Even though the Court upheld the provision at 2(B), it nonetheless recognized these concerns, and thus left the door open for future challenges based on discrimination. Justice Kennedy stated that the Court’s holding “does not foreclose other preemption and constitutional challenges to the law as interpreted and applied after it goes into effect.”

Overall, the decision comes as both a victory and somewhat of a surprise to immigration community, as the Supreme Court Justices did not generally appear to be in favor of the law when oral arguments were heard in May. Nevertheless, the holding confirms what immigration advocates have argued all along— that immigration enforcement belongs to the Federal Government, and states are therefore prohibited from taking matters into their own hands.

©2002-2012 Fowler White Boggs P.A.

Supreme Court: Pharmaceutical Sales Reps Are Exempt from Overtime Pay Requirements Per FLSA’S Outside Sales Exemption

An article by David Barmak of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., regarding The Supreme Court’s Ruling about Pharmaceutical Sales Reps, was recently featured in The National Law Review:

In a major win for pharmaceutical companies, the Supreme Court has ruled that pharmaceutical sales representatives (PSRs) are exempt from federal overtime pay requirements under the “outside sales exemption” of the Fair Labor Standards Act (FLSA). The case, Christopher v SmithKline Beecham Corp., DBA GlaxoSmithKline (No. 11-204, Decided June 18, 2012), resolves a conflict between the Second and Ninth Circuit Courts of Appeal and impacts some 90,000 pharmaceutical sales representatives throughout the United States.

Under the relevant provision of the FLSA’s outside sales exemption, the employee’s primary duty must be making sales. But because of the unique regulatory environment that applies to drug companies, PSRs do not actually sell their employer’s products to physicians. Rather, PSRs meet with physicians and provide information about the benefits and uses of the company’s drugs and other medical products in the hope that the physician will be persuaded to prescribe the products to patients, as medically appropriate. Prescription drugs are then sold by pharmacies that dispense the drugs to individual customers who have a physician’s prescription. Therefore, PSRs do not actually make sales in the usual sense of the word.

As the Supreme Court noted, pharmaceutical companies have promoted their drugs through “sales reps” or “detailers” since at least the early 1950s, treating PSRs as exempt from the FLSA’s overtime requirements without objection from the Department of Labor (DOL). In fact, the DOL did not voice any objection to this classification until 2009, when it filed an amicus brief in a case pending against Novartis in the Second Circuit Court of Appeals, In re Novartis Wage and Hour Litigation, 611 F. 3d 141 (2nd Cir. 2010). DOL supported the PSRs’ bid for overtime pay in that case, arguing that PSRs are not exempt under the outside sales exemption because they were not involved in a “consummated transaction,” as contemplated by the regulations issued under the FLSA. The Second Circuit gave substantial deference to the DOL’s interpretation of its regulations and ruled that the exemption did not apply, and the Supreme Court declined to review the Second Circuit’s ruling. Meanwhile, a similar case against SmithKline Beecham (which trades as “GlaxoSmithKline”) had proceeded to the Ninth Circuit Court of Appeals. The DOL supported the PSRs’ claims in that case, too, but the Ninth Circuit ruled that the DOL’s interpretation of the FLSA was not entitled to controlling deference and that the sales repsdid make sales within the meaning of the regulations. The Supreme Court then agreed to review the Ninth Circuit’s ruling. (During the same period that the Novartis and SmithKline Beecham cases were wending their way through the courts, two other pharmaceutical companies, Johnson & Johnson and Eli Lilly, had won rulings in the Third and Seventh Circuits, respectively, that pharmaceutical sales reps qualified as exempt under a separate FLSA exemption, the administrative exemption.)

In a 5-4 decision written by Justice Alito, the Supreme Court affirmed the Ninth Circuit, ruling that SmithKline Beecham’s PSRs qualified as outside salesmen within the meaning of the FLSA exemption, and holding that, at least in the highly regulated environment of pharmaceutical sales, the PSRs were engaged in sales even though physicians do not actually purchase prescription drugs from them. This is so, the Supreme Court reasoned, because the FLSA broadly defines “sale” to include “… any sale, exchange, contract to sell, consignment for sale, shipment for sale or other disposition.” It concluded that the “catchall phrase ‘other disposition’ is most reasonably interpreted as including those arrangements that are tantamount, in a particular industry, to a paradigmatic sale of a commodity,” and that the PSRs’ efforts to persuade physicians to prescribe their company’s drugs met this standard.

Significantly, the Supreme Court’s interpretation of the relevant FLSA and regulatory provisions was contrary to the DOL’s own interpretations. Usually, the agency’s interpretation would have been accorded substantial deference. It was not, in this instance, because the Court found that the DOL’s interpretation was, in effect, ex post facto, arrived at following decades of silence and only after there was litigation between Novartis and SmithKline Beecham and some of their PSRs.

While the Supreme Court was clearly influenced by the unique regulatory environment in which the pharmaceutical industry operates and its decision applies first and foremost to the pharmaceutical industry, the Court’s reasoning may provide the basis for other employers to argue for the application of exemptions in other situations where there has been a long history of treating a particular class of employees as exempt without DOL interpretive guidance or enforcement activity to the contrary.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

How The White House’s Endorsement of Same-Sex Marriage Affects Employment Law

Recently Anjali Chavan of Dinsmore & Shohl LLP had an article regarding the White House’s Endorsement of Same-Sex Marriage, featured in The National Law Review:

On May 9, 2012, President Barack Obama became the first sitting U.S. President to affirm his belief that same-sex couples should be able to get married. Weeks later, the First Circuit Court of Appeals declared a portion of the Defense of Marriage Act (“DOMA”) unconstitutional.1 These announcements are just two of many events that have shaped the current landscape in this country with respect to the rights of lesbian, gay, bisexual, and transgender (“LGBT”) Americans.

As LGBT issues are being placed at the forefront of American politics, employers would do well to pay attention, as these changes may necessitate changing employment policies, educating staff, and potentially defending against employment lawsuits for previously unchartered claims, including discrimination based upon sexual orientation and gender identity or expression.

On June 12, the U.S. Senate Health, Education, Labor and Pension Committee (“HELP Committee”) is set to consider the Employment Non-Discrimination Act (“ENDA”). ENDA seeks to expand the protections of Title VII to cover sexual orientation and gender identity and will prohibit discrimination in hiring and employment by nonreligious employers with at least 15 employees.

ENDA will be a federal mandate proscribing any discrimination based on sexual orientation or gender identity by both public and private employers—thereby bringing employees living in states without such protections like Ohio,2 Kentucky,3Pennsylvania,4 and West Virginia,5 under the umbrella of federal protection.

The Sixth Circuit Court of Appeals has found that Title VII protects transgender employees—holding that discriminating against employees who do not identify with their gender, act like members in their gender, or conform with sexual stereotypes is a form of sex discrimination violates Title VII. Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 2005); Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004).

Further underscoring the shifting landscape of LGBT rights was the Equal Employment Opportunity Commission’s (“EEOC”) recent ruling in Macy v. Holder, expanding the prohibition against sex discrimination of Title VII to cover transgender workers.

In Macy v. Holder, the EEOC held that Mia Macy’s complaint of discrimination based on gender identity, change of sex, and/or transgender status can be brought under Title VII. Macy, a former police detective in Phoenix, Arizona, relocated to San Francisco and applied for an open position at the Bureau of Alcohol, Tobacco, Firearms and Explosives (“Agency”) for which she was qualified. Macy originally applied for the position as a man and interviewed with the Director as a man. Macy asserted that the Director told her on two separate occasions that she would have the position pending completion of a background check. A few months after her original application, Macy informed the Agency that she was beginning the process of transitioning from male to female. After the Agency received notice of Macy’s change of name and gender, the agency contacted Macy and told her the position was no longer available due to lack of funding. Macy later discovered that the Agency filled this position with another person.

The EEOC found that charges of discrimination based on transgender status or gender identity are cognizable under Title VII’s sex discrimination prohibition and any such claims must be processed by the EEOC.

That Title VII’s prohibition on sex discrimination proscribes gender discrimination, and not just discrimination based on biological sex, is important. If Title VII proscribed only discrimination on the basis of biological sex, the only prohibited gender-based disparate treatment would be when an employer prefers a man over a woman, or vice versa. But the statute’s protections sweep far broader than that, in part because “gender” encompasses not only a person’s biological sex but also the cultural and social aspects associated with masculinity and femininity.

* * *

[G]ender discrimination occurs any time an employer treats an employee differently for failing to conform to any gender-based expectations or norms.

The growing trend in the United States reveals that employment law is changing and adapting to provide a more inclusive environment for LGBT employees. Even though your state or federal circuit court may not recognize certain protections for LGBT individuals, many cities and counties around the country do have such protections in their local ordinances. As employers are navigating these issues in hiring, promoting, and firing, they should be cognizant of the local, state, and federal laws that may be at play. Employers must take the time to recognize and understand these changes, and consider revising their employee manuals and employment policies to comply with these changes.

(1) Massachusetts v. U.S. Dep’t of HHS, et al., Case Nos. 10-2204, 10-2207, & 10-2214, 2012 U.S. App. LEXIS 10950, (1st Cir. May 31, 2012) (affirming the lower court’s holding finding Section 3 of DOMA which defines marriage for federal purposes as a union between a man and a women, to be an unconstitutional encroachment on the power to define marriage granted to the states by the Tenth Amendment).
(2) Ohio prohibits discrimination by public employers based on sexual orientation.
(3) Kentucky prohibits discrimination by public employers based on sexual orientation and gender identity.
(4) Pennsylvania prohibits discrimination by public employers based on sexual orientation and gender identity.
(5) West Virginia provides no protections for LGBT employees.

© 2012 Dinsmore & Shohl LLP

On May’s Employment Report

The U.S. Department of Labor had an article regarding May’s Employment Report published in The National Law Review:

While Friday’s jobs report was a bump in the road to recovery, our labor market continues to show signs of economic growth. We have had 27 straight months of private sector job growth, which has helped 4.3 million Americans get back to work. This expansion has been broad, with every industry (except government) showing clear growth in the past two years.

Last month, we saw strong growth in health care, transportation and warehousing, and wholesale trade. In particular, manufacturing continues to be a symbol of the resilience of American industry, with nearly 500,000 jobs added over the last 28 months. This has been the strongest growth in manufacturing in any 28 month period since April 1995.

The ratio of available jobs to jobseekers has declined from 1:7 to 1:3 from 2009 to 2012.

Additionally, millions more Americans are working today compared to the end of 2009. Competition for jobs has also eased in recent months. During the height of the recession, there were 7 jobseekers for every available job, making it very difficult to find employment. Today, as more jobs are becoming available, the ratio has declined to just over 3 jobseekers for every job opening – improving the chances for an unemployed individual to find an opportunity.

The steady increase in employment has also helped drive the unemployment rate down to the low 8% mark. Yet, there has been some debate about what is causing the unemployment rate to decline – is it people leaving the labor force or people getting jobs? The facts are clear: since August 2011 (when the rate started its steady decline) the primary factor in bringing the unemployment rate down has been people getting jobs.

Decline in the Unemployment Rate

99% of Decline in Unemployment Rate Since August 2011 is Because of People Finding Jobs

But we have to do more. The economic situation continues to be a challenge for too many Americans who desperately want a job. We won’t be satisfied with our efforts until every American who wants a job can get a one.

At the Department of Labor, we are taking a number of steps to help the unemployed get back to work faster, including reforms to the unemployment insurance system. These reforms will provide states with more flexibility to respond to changes in the economy, provide employers with tools to avoid layoffs, help the unemployed get back into the workforce faster and even expand opportunities for the unemployed to start their own businesses.

However, as Secretary of Labor Hilda Solis said on Friday, congress must come together to work on the to do list President Obama developed. These plans will encourage businesses to bring jobs back to the U.S.; help small businesses grow and hire more workers through tax credits; create more job opportunities for our veterans; invest in the clean energy economy; and help struggling homeowners with refinancing options so they can stay in their homes.

By Adriana Kugler on June 4, 2012

Adriana Kugler is the Chief Economist for Secretary of Labor Hilda L. Solis.

© Copyright 2012 U.S. Department of Labor

2013 H-1B Visa Cap Closing Soon

The National Law Review recently published an article by Kimberly A. Clarke, Nina Thekdi, and Luis E. Avila of Varnum LLP regarding 2013 H-1B Visa Caps:

Varnum LLP

As of June 1, 2012, approximately 10,000 H-1B visas remain within the fiscal year 2013 H-1B cap. This indicates that the cap will likely be reached within the next few weeks.   Employers will then need to wait until April 2013 to file new H-1B visa for an October 1, 2013 start date.

This H-1B cap limitation does not apply to extensions of H-1B status or those obtaining H-1B status to teach at colleges, universities, related nonprofit or government research organizations or J waiver physicians.

If your company has potential new H-1B candidates such as international students in their OPT work authorization period or foreign candidates, please contact us to prepare H-1B petitions for these individuals as soon as possible to secure an available visa.

© 2012 Varnum LLP

Ninth Circuit Holds Statistics Alone Can Establish Prima Facie Case of Age Discrimination in a RIF

The National Law Review recently published an article about Age Discrimination written by Michael T. Chin of Schiff Hardin LLP:

On May 29, 2012, the Ninth Circuit Court of Appeals issued a decision clarifying the standard for plaintiffs to establish a prima facie disparate treatment discrimination claim. In Schechner v. KPIX-TV, No. 11-15294, 2012 U.S. App. LEXIS 10766 (9th Cir. May 29, 2012), the court held that a plaintiff’s initial burden of proof is relatively low and can be met by the introduction of statistics showing an adverse impact on a protected category — in this case, older workers. While the plaintiffs met their initial burden here, the Ninth Circuit nevertheless affirmed the district court’s grant of summary judgment in the employer’s favor on plaintiffs’ age discrimination claims under the California Fair Employment and Housing Act (“FEHA”).

In March 2008, like many employers at the time and even now, defendant KPIX-TV (“KPIX”) was faced with the task of having to reduce its annual budget. As part of its cost-cutting measures, KPIX implemented a reduction in force (“RIF”), resulting in the termination of five members of the “on-air” news team, including both plaintiffs. Each member of the RIF group was male and over the age of forty. Plaintiffs filed suit, claiming that their terminations were the product of age and gender discrimination in violation of the FEHA. Plaintiffs submitted reports by an expert statistician who concluded that the age disparity between the RIF group and the group of individuals that KPIX decided to retain was “statistically significant” and age “correlated closely” with the decision to terminate.

The Ninth Circuit held that “statistical evidence that shows a stark pattern of age discrimination” is sufficient to establish a prima facie case, even though “it does not address the employer’s proffered non-discriminatory reasons for the discharge.”Id. at *14-15. The Ninth Circuit proceeded to consider the legitimate, non-discriminatory reasons for the RIF offered by KPIX. Here, KPIX presented evidence of reasons for layoff decisions unrelated to age, such as that news anchors generally would not be subject to termination because they were the “face” of the station, that specialty reporters would not be subject to termination because they were being promoted to push the brand of the station, and that general assignment reporters would be subject to termination based on their respective dates of contract expiration. The Ninth Circuit concluded that KPIX had established non-discriminatory reasons for its RIF decisions, and that the plaintiffs were unable to show pretext.

This case highlights the importance of establishing a set of reasoned, job-related factors to be considered in deciding which employees to include in a RIF. Numbers suggesting an adverse impact on protected classes can be problematic, but not necessarily fatal.

© 2012 Schiff Hardin LLP