Category: Labor & Employment

Unpaid Internships: Free Today . . . Costly Tomorrow

An article by Rachel D. Gebaide and Melody B. Lynch of Lowndes, Drosdick, Doster, Kantor & Reed, P.A. was published recently in The National Law Review:

With the summer season approaching, college and high school students will be looking for opportunities to improve their resumes and gain valuable experience. The prospect of hiring a talented student – or someone transitioning between careers – who is willing to work for free is enticing to many employers.

In many cases, however, the unpaid aspect of the internship violates the Fair Labor Standards Act (FLSA). Lawsuits by unpaid interns to recover wages, including liquidated damages and attorney’s fees, although still uncommon, are on the rise.

Unpaid internship programs can be an appropriate method of providing training if they are designed properly and are primarily for the benefit of the intern and not the employer. However, to paraphrase this week’s Time magazine article titled “Hard Labor: Inside the Mounting Backlash Against Unpaid Internships,” employers are not entitled to free labor just because they slap the title “intern” on the position.

The U.S. Department of Labor uses the six criteria below to determine whether an unpaid internship falls outside the employment context covered by the FLSA.

  • The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  • The internship experience is for the benefit of the intern;
  • The intern does not displace regular employees, but works under close supervision of existing staff;
  • The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  • The intern is not necessarily entitled to a job at the conclusion of the internship; and
  • The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

We recommend that you evaluate your internship programs against these six criteria prior to extending offers of unpaid employment to prospective interns. Interns are unlikely to be exempt employees under the FLSA. As a result, if your internship program does not meet all six criteria, you should plan to pay interns at least minimum wage, currently $7.67 in Florida, and, when necessary, the applicable overtime rate for hours worked over 40 in a work week.

© Lowndes, Drosdick, Doster, Kantor & Reed, PA

Court Invalidates Ambush Election Regulation

Mark A. Carter of Dinsmore & Shohl LLP recently had an article, Court Invalidates Ambush Election Regulation, published in The National Law Review:

On May 14, 2012, the United States District Court for the District of Columbia invalidated the controversial regulation of the National Labor Relations Board (NLRB) that would have dramatically reduced the time frame of union organizing campaigns from the filing of a representation petition to the representational election. Chamber of Commerce, et al. v. NLRB. The “ambush election” regulation, which was implemented on April 30, 2012, was roundly criticized because it limited the ability of employers to exercise their right under §8(c) of the National Labor Relations Act to communicate with employees regarding the impact of selecting a collective bargaining representative.

In an 18 page opinion, Judge James E. Boasberg granted summary judgment to the United States Chamber of Commerce (US Chamber) and the Coalition for a Democratic Workforce (CDW), agreeing that the NLRB did not have statutory authority to implement the regulation because the NLRB was not possessed of a quorum when the regulation was voted on. On December 16, 2011 the vote on the regulation was conducted by e-mail. While Chairman Mark Pearce and former Member Craig Becker both voted to implement the regulation, Member Brian Hayes did not vote. The US Chamber and the CDW argued that as Member Hayes did not “participate” in the vote, there was not a quorum of three NLRB members on the vote, and as such, the implementation was invalid. The NLRB argued that as Hayes had an “opportunity” to vote, the NLRB did have a quorum and, therefore, the regulation was validly implemented as a quorum existed.

The Court disagreed, citing a Woody Allen observation that “eighty percent of life is just showing up.” The Court held that the statutory mandate of a quorum for an administrative agency to implement a regulation was a foundational requirement. In the e-mail era, that mandate was not fulfilled simply because a Board Member received an opportunity to vote. Rather, active participation in the vote is required. The Court noted that while it was unnecessary to treat the issue of whether the failure to participate in the vote was “intentional,” the parties were well served to acknowledge that “such things happen all the time.” (citing a New York Times story reporting on the Wisconsin legislators who fled the state in an effort to deny Republican legislators the ability to form a quorum to vote on legislation limiting the rights of public unions in that state)

The Court concluded that the “ambush election” regulation was invalid, granting judgment against the NLRB, and directing that “representation elections will have to continue under the old procedures.” While the Court did not enter an injunction prohibiting the NLRB from enforcing the final rule, this opinion is a final adjudication on the merits of the case in the district where the NLRB is headquartered and willful disobedience of the Court’s judgment is unlikely. An appeal of the decision by the NLRB is likely.

© 2012 Dinsmore & Shohl LLP

Benefit News of Note For Human Resources and Finance Departments

The National Law Review featured an article by Nancy C. Brower and Kelsey H. Mayo of Poyner Spruill LLP regarding Benefit News for Human Resources and Finance Departments:

It’s April.  For those of you in a planning mode, here’s what you may  want to think about…

Your Pension Plan and Retiree Medical Costs May Be Rising.  The culprit behind the cost increase, better than expected mortality improvement after the age of 55.   The Society of Actuaries exposure draft of a new mortality improvement scale, if adopted, is expected to  result in increases in traditional pension plan liabilities of 2% to 4% and in retiree health care liabilities of 6% to 9%.  The new mortality scale may be applied by the IRS as soon as 2014, and it is possible that auditors will push for its implementation even earlier.
401(k) Safe Harbor Plans IRS Compliance Check.  Employers with 401(k) plans that utilize safe harbor designs to pass nondiscrimination testing may soon be receiving a compliance check in the mail from the IRS.    The IRS will look to see whether the safe harbor requirements are being met, in addition to plan form qualification.   Accordingly, if you have never had your safe harbor notice reviewed by counsel, now is a great time to make sure it is compliant.  Also, note that if you  receive an IRS compliance check you should not just ignore it.  The IRS will refer for audit plans that do not respond to compliance checks.  Remember that plan errors can be corrected through the IRS voluntary correction program even after receipt of a compliance check, but the less expensive  voluntary correction programs are not available once the IRS commences a plan audit.
Identifying Executive Employment Contracts and Severance Arrangements with Release Language.   It is not unusual for employment agreements and severance arrangements to contain claims release language that the IRS believes violates Section 409A.   The IRS guidance on releases was issued after 2008, meaning this issue may not have been addressed through the Section 409A review process that companies completed in 2008.  The IRS has given employers an opportunity to correct deficiencies in release language without any penalties or reporting requirements, but to be entitled to relief, agreements must be amended no later than December 31, 2012.

Utilizing  a Private Health Insurance Exchange.  Some of the nation’s largest consulting firms (Aon Hewitt and Mercer), as well as other companies in the insurance business, are rolling out private health insurance exchanges for employers.  With a private health insurance exchange, a company provides its employees with a lump sum and then lets the employees choose from an array of insurance products that can be offered by more than one insurance company.  This type of arrangement may appeal to companies that wish to provide their employees with more flexibility to choose the type of coverage they wish while fixing the company’s share of the health insurance costs in a more predictable manner.  The exchanges are expected to result in cost savings and to better contain health insurance cost increases.

© 2012 Poyner Spruill LLP

Employers Urged to File H-1B Petitions Without Delay

Increased demand over previous years could see H-1B visas exhausted by June 2012 or earlier.

U.S. Citizenship and Immigration Services (USCIS) announced that as of April 27, U.S. employers have filed for 29,000 H-1B visas subject to the regular cap of 65,000 and 12,300 H-1B visas subject to the U.S. Master’s degree cap of 20,000 for FY2013. USCIS began accepting H-1B petitions on April 1, 2012. Approved petitions would authorize the employment of H-1B workers starting on October 1, 2012, or thereafter.

H-1B visas for this fiscal year are being used at a significantly increased rate from previous years. By comparison, for FY2012, 8,000 regular cap H-1B visas and 5,900 U.S. Master’s degree cap H-1B visas had been allotted by April 27, 2011. This increased rate of usage reflects the gradual improvement of the U.S. economy, as the demand for H-1B visas rises and falls in response to current economic conditions.

Type Cap Amount Cap Petitions Filed Date of Last Count
H-1B Regular Cap 65,000 29,200 04/27/2012
H-1B Master’s Degree Exemption 20,000 12,300 04/27/2012

Implications

We recommend that employers contemplating the hire of an H-1B worker file the petition with USCIS as soon as possible. Although it not possible to predict the exact date that either H-1B cap will be reached, at the current rate of usage, H-1B visas in either category will likely be exhausted much earlier than last year, perhaps as early as this summer.

Copyright © 2012 by Morgan, Lewis & Bockius LLP

CMS, CCIO, and IRS Release Guidance Proposals on Employer Health Insurance Coverage

The National Law Review recently published an article by Gary E. Bacher and Joshua Booth of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding Employer Health Insurance Coverage:

The Centers for Medicare & Medicaid Services Center for Consumer Information and Insurance Oversight (CCIIO) and the Internal Revenue Service (IRS) recently released four important documents related to the implementation of the Affordable Care Act (ACA) that address employer-provided health insurance plan reporting requirements and the availability of premium tax credits to individuals and families.  The ACA makes tax credits available to help individuals pay insurance premiums, but these credits do not apply if the individual is eligible for employer-provided coverage that is both affordable (in terms of required employee contribution to premium payments) and provides “minimum value” (in terms of overall cost-sharing).

CCIIO issued a Bulletin that describes the procedures it intends to use to verify whether an employee is eligible for employer-provided coverage, and thus precluded from claiming premium tax credits.  To help determine eligibility and availability of employer-provided coverage to an individual, the IRS issued a Notice and Request for Comment that solicits responses to how the IRS intends to determine whether coverage offered by an employer provides “minimum value,” as well as two Requests for Comment (RFC), Notice 2012-32 and Notice 2012-33, on how insurers, government agencies, and employers should be required to report insurance coverage data to implement sections 6055 and 6056 of the Internal Revenue Code, respectively.  The IRS will accept comments related to the above three issuances until June 11, 2012.

Together, all four issuances provide the government’s initial proposals of how to determine an individual’s eligibility for premium tax credits and when employers will be subject to penalties for failing to offer health care coverage.

The CCIIO Bulletin on Verification of Employer Coverage

The CCIIO Bulletin describes the process by which Health Insurance Exchanges (HIEs) will verify whether an individual is eligible for coverage through an employer. The CCIIO Bulletin recognizes that demonstrating that employer-sponsored coverage is unavailable or unaffordable requires data and documents that may not be easily obtainable by employees.  So, the CCIIO Bulletin suggests that theU.S. Department of Health and Human Services (HHS) will give applicants and employers guidance on what information will be needed, where it can be found, and the types of documentation required.  The CCIIO Bulletin also suggests that, where verification might be difficult, an HIE could initially accept an employee’s attestation that he or she is not eligible for employer-provided coverage and require the employee to provide supporting documentation of his or her ineligibility within 90 days of the attestation.  The CCIIO Bulletin anticipates that these strategies would be interim solutions to be used only until more reliable database systems can be implemented.

The IRS Notice on Calculating Minimum Value

The IRS Notice discusses approaches to determining whether employer-sponsored coverage provides minimum value.  The ACA generally states that a plan provides minimum value if it pays at least 60 percent of the enrollee’s costs for allowed expenses, thus having an actuarial value (AV) of at least 60 percent.  Minimum value is thus closely related to AV.  The Notice builds upon a bulletin regarding AV issued by CCIIO on February 24, 2012, and explicitly adopts many of its core calculation methodologies, such as basing AV on a standard population (adjusted for state or regional differences) and the methodology for evaluating employer’s contributions to an Health Savings Account (HSA).

Because the Notice applies to all employer-sponsored coverage including large group or self-insured health plans, while the February Bulletin applies only to individual and small group market plans, these plans’ distinct features required the IRS to propose an AV calculation methodology in the Notice that differs in certain ways from that proposed in the February Bulletin.  For instance, because self-insured and large group plans are not required to provide the essential health benefits (EHBs) upon which the calculations in the CCIIO Bulletin are based, the IRS has proposed that the AV for such plans would be calculated based on four core categories of benefits: “physician and mid-level practitioner care, hospital and emergency room services, pharmacy benefits, and laboratory and imaging services.” In addition, the population set on which this calculation is based will the population for a “typical self-insured employer-sponsored plan,” rather than the general population that is described in the February Bulletin.

New requirements related to employer-provided health coverage are an integral component of health care reform, so industry responses to the above-described guidance will be important in shaping how the ACA’s changes will be implemented.

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

E-Verify: North Carolina and Federal Requirements

An article by Jennifer G. Parser of Poyner Spruill LLP regarding E-Verify appeared recently in The National Law Review:

North Carolina’s Rule

Last June, 2011, North Carolina joined the ranks of an increasing number of states requiring the use of E-Verify.  E-Verify is a free internet-based system that allows employers to determine employment authorization by checking an employee’s documentation against Department of Homeland Security (DHS) and Social Security Administration (SSA) databases.  It applies to certain federal contractors, but also is being adopted by states, regardless of federal contracts being involved.

North Carolina counties, cities and public universities were required to register and participate in E-Verify by October 1, 2011. Private sector employers’ participation in E-Verify is phased in more slowly, according to the employer’s size:

  • Employers with 500 or more employees will be required to participate by October 1, 2012;
  • Employers with 100 or more employees will be required to participate by January 1, 2013; and
  • Employers with 25 or more employees will be required to participate by July 1, 2013.

Federal E-Verify Rule

Private businesses in North Carolina are required to verify the employment eligibility of current employees regardless of the above phased-in legislation if the employer has been awarded a federal contract on or after September 8, 2009 that contains the Federal Acquisition Regulation (FAR) E-Verify clause. Such federal contractors must enroll in E-Verify within 30 days of the contract award date regardless of the business’ size. After enrollment, the federal contractor has 90 days to use E-Verify.  The federal contractor must then use E-Verify for new hires within 3 business days of the employee’s start date.

E-Verify must also used for existing employees assigned to work on the  federal contract within 90 days of the federal contract being awarded or within 30 days of the employee’s assignment to work on the federal contract, whichever is later. For existing employees to be required to be  run through E-Verify, the employee must perform substantial work under the federal contract which does not include administrative or clerical functions.  E-Verify does not apply to work that is performed outside the US, if the term of the federal contract lasts less 120 days, or if the federal contract pertains to commercially available off the shelf items.  A “commercially available off the shelf item”, known COTS, is something generally sold in substantial quantities in the open market.  A few examples are computer software, computer hardware and construction materials.  Also, industries that hire agricultural workers for 90 days or less in a 12 month period are exempt from enrolling in Federal E-Verify.

Unless the subcontractor is a supplier and not subject to the E-Verify federal contractor rule, a federal contractor must also ensure that its subcontractors enroll in and use E-Verify if:

  • The prime contract includes the Far E-Verify clause,
  • The subcontract is for commercial or noncommercial services or construction,
  • The subcontract has a value of more than $3,000, or
  • The subcontract includes work performed in the United States.

A Few Important Rules for Any Business Enrolled in E-Verify 

  • Post the notices that the business is now enrolled in E-Verify alongside antidiscrimination notices by the Office of Special Counsel for Immigration-Related Unfair Employment Practices
  • When completing the I-9 form, the employee’s choice of a List B document must contain a photograph in order to be run through E-Verify
  • Do not use E-Verify selectively
  • Do not use E-Verify to pre-screen job applicants; it is used post-hiring
  • Do not ask for additional documentation in the event of a “Tentative Nonconfirmation” by E-Verify: allow the employee time to correct any error by visiting the local SSA office
  • Do not terminate or take adverse action against an employee  who receives a tentative nonconfirmation: allow them time to correct the error

Penalties, Federal- and State-Imposed

There have been substantial fines levied for immigration-related offenses by Immigration and Customs Enforcement (ICE) against employers enrolled in E-Verify, proving enrollment in E-Verify will not save an employer from potential violations.

Civil penalties for violations of  North Carolina’s E-Verify law are assessed by the NC Commissioner of Labor and range from $1,000 to $10,000.

E-Verify Link

Unless already enrolled in E-Verify as a federal contractor or subcontractor or having elected to do so on a voluntary basis, North Carolina employers with 25 or more employees would do well to visit the E-Verify website.  Click here.  At this point, there is time to become acquainted with E-Verify and its enrollment procedures before registration becomes mandatory.

© 2012 Poyner Spruill LLP

Riding the Escalator (Principle) Safely: Recent Appellate Court Decision Underscores Challenges Facing Employers Reinstating Returning Servicemembers

The National Law Review recently published an article by Aaron R. Gelb and Mark S. Goldstein of Vedder Price regarding Reinstating Servicemembers:

With large numbers of soldiers returning home and, presumably, to the jobs they held before being called to active duty, employers would do well to brush up on the re-employment obligations imposed by the Uniformed Services Employment and Re-employment Rights Act (USERRA). Not only must an employer reinstate a returning servicemember (assuming reinstatement was requested in a timely manner), but that employer must place the servicemember in a position equivalent to the position the employee would have held but for the fact of the employee’s military leave.

Complying with this obligation—which is commonly referred to as the Escalator Principle—can present some challenges for employers struggling to determine how far an employee would have advanced (up the escalator) in terms of position, pay and benefits, had the employee worked the entire period of time spent in the military. This analysis is even more difficult when the returning employee held a position that does not entail lockstep increases or seniority-based promotions or benefits.

In late 2011, the US Court of Appeals for the Second Circuit (Connecticut, New York and Vermont) issued an opinion in Serricchio v. Wachovia Securities LLC that underscores the sort of complex analysis in which employers must engage when reinstating employees and determining their post-service compensation rate.

Background of the Case

Michael Serricchio worked as a financial advisor for Prudential Securities (whose retail brokerage business was subsequently subsumed by Wachovia Securities) from late 2000 through September 2001, when he was called to active duty in the United States Air Force Reserve. Serricchio earned approximately $75,000 in commissions during his predeployment employment. While serving his country abroad, however, most of Serricchio’s accounts were reassigned and several were taken by the partner to his new firm.

When Serricchio returned from active duty in October 2003, he requested reinstatement, but had to wait five months before Wachovia re-employed him. When he was finally reinstated in late March 2004, Wachovia offered Serricchio an advisor position with his preservice commission rate. Serricchio, however, objected to this, citing the fact that the account list provided to him by Wachovia was not nearly as lucrative as the one he managed before deployment. Indeed, the court noted in its opinion that the book of business provided by Wachovia would “generate virtually no commissions.” Wachovia made matters worse, since it provided no assistance to Serricchio in re-establishing either his book of business or his higher, preservice commissions. Serricchio thus filed a lawsuit in US district court, accusing the company of violating USERRA by failing to re-employ him in a position that would provide him with the same earnings opportunities that he had prior to his deployment.

The Serricchio Decision

Following trial, a jury determined that Wachovia had not satisfied its obligation to provide Serricchio with the position that he would have held had his employment not been interrupted by military service or, in the alternative, to a position of “like seniority, state and pay” upon return from active duty. As such, the jury found that Wachovia had a) failed to offer Serricchio re-employment within two weeks of his request; b) failed to reinstate him to a position with pay comparable to his pre-service earnings; and c) constructively discharged him by failing to offer a suitable and appropriate position.

After a bench trial on the issue of damages, the district court awarded Serricchio $778,906 in back pay and liquidated damages, $830,107 in attorneys’ fees and costs, plus $36,567 in prejudgment interest, and reinstated him as a Wachovia financial advisor with a three-month fixed salary and a nine-month draw. Wachovia appealed both the jury’s decision and the district court’s apportionment of damages, arguing that it had complied with its USERRA obligations by offering Serricchio his preservice commission rate. The Second Circuit disagreed.

Noting that Serricchio presented a USERRA issue that was a matter of first impression, the Second Circuit held that Wachovia’s provision of a position with the “same preservice commission rate” did not comply with USERRA because it disregarded the “amount of actual commissions” that Serricchio had earned from his preservice book of business. The court held that offering a commission-based employee the same commission rate “without regard to volume or size of the accounts in the servicemember’s pre-activation book of business” does not satisfy USERRA. Where an employee has received commission-based pay, the appropriate USERRA analysis must therefore include the amount of prior earnings. Thus, Wachovia violated USERRA because the position that it offered to Serricchio upon his return from active duty would have resulted in much lower actual earnings—despite the same commission rate—and “did not provide the same opportunities for advancement, working conditions and responsibility that [Serricchio] would have had but for his period of military service.”

Lessons Learned

With thousands upon thousands of soldiers returning to the workforce, employers should ensure that the individuals responsible for making decisions relating to the employee’s position, pay and benefits understand what USERRA generally requires with respect to re-employment, how to properly apply the Escalator Principle and what the Serricchio decision means for employees who are compensated in ways other than straight salary. If at all possible, employers should provide USERRA training to these decision makers so that they understand the broad requirements of the law with respect to re-employment, as well as to other employment rights accorded to the men and women in our military. Finally, all re-employment-related decisions affecting a returning service- member should be reviewed by human resources, and employment counsel should be consulted if any questions arise.

© 2012 Vedder Price

“Brogrammers” Giving Silicon Valley a Bad Name?

An article by Emily Holbrook of Risk and Insurance Management Society, Inc. (RIMS) regarding “Brogrammers” recently appeared in The National Law Review:

According to a recent article, Silicon Valley tech firms are using marketing tactics geared more towards fraternity brothers than programming savants. The problem? Not only is it sexist at times, but it is alienating a large chunk of qualified tech professionals. Here are a few examples:

Of course, this is only a snipet of what’s going on as many of the antics are never publicized. Barbaic events like these may not only cost companies money (several businesses pulled their sponsorship from the Sqoot event), but it alienates those who may be talented programmers, but don’t adhere to the frat boy mentality.

There’s also an audience that feels left out of the joke. Women made up 21% of all programmers in 2010, down from 24% in 2000, according to the U.S. Bureau of Labor Statistics. Anything that encourages the perception of tech as being male-dominated is likely to contribute to this decline, says Sara Chipps, founder of Girl Develop It, a series of software development workshops. “This brogramming thing would definitely turn off a lot of women from working” at startups, says Chipps.

But is this really a serious problem in Silicon Valley or just young men being young men? I’ve heard both sides of the argument. Some companies that have taken this seriously, such as Etsy, have decided to do something about it. The e-commerce website is donating $5,000 to at least 10 women in an attempt to lure female coders to New York’s Hacker School this summer.

Whether this is an epidemic that should cause concern or merely programmers acting their age, one thing is for sure — having a working envrionment void of diversity is aiken to siloed idea generation. Silicon Valley should know this.

Risk Management Magazine and Risk Management Monitor

Social Media for Employers: Recent Cases Before Courts, NLRB

The National Law Review recently published an article by John Patrick White, Jeffrey T. Gray, Jr. and Luis E. Avila of Varnum LLP regarding Social Media and Employers:

Varnum LLP

Social media continues to be in the news.  The National Labor Relations Board (NLRB) issued an “updated” summary of social media cases earlier this year and social media continues to find its way into court decisions.

In 2011, the NLRB’s General Counsel issued a summary of 14 social media cases handled by that office.  On January 24, 2012, the General Counsel issued an updated summary covering another 14 cases.  The General Counsel’s position in these cases is that social media policies (or any other policies) that may “reasonably chill” employees in the exercise of their rights under the National Labor Relations Act (“Act”) are unlawful.  Here are the high points from the updated summary:

  • The General Counsel continues to find employer policies and work rules to be unlawfully broad when employees may reasonably view them as prohibiting conduct protected under the Act.  For example, work rules or policies prohibiting “insubordination or other disrespectful conduct” and “inappropriate conversation” were held to be unlawfully broad because employees might think that they cannot join together to complain about their terms and conditions of employment, which is protected activity under the Act.
  • Importantly, the General Counsel’s Office rejected a “savings clause” in a social media policy designed to prevent the policy from being overly broad.  The employer’s social media policy stated that “it would not be interpreted or applied so as to interfere with” employee rights under the Act.  The General Counsel found this language did not “save” the policy from being overbroad because an employee could not reasonably be expected to know that the clause would apply to discussions the employer deems inappropriate under the policy.  In light of the General Counsel’s approach, employers should narrowly tailor their social media policies rather than attempt to use “savings” language to fix overly broad policies.
  • On the other hand, the General Counsel found an employer’s “amended” social media policy to be lawful because it prohibited conduct that was “vulgar, obscene, threatening, intimidating, harassing, or a violation of the Employer’s workplace policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status, or characteristic.”  The General Counsel found the policy lawful because employees would not reasonably construe the policy’s language to prohibit conduct protected by the Act.
  • Individual gripes by employees are not protected activity.  Thus, the General Counsel found in several cases that employers did not violate the Act by discharging employees who complained about their employment on social media pages because they were acting solely on their own behalf rather than on behalf of themselves and other employees.
  • Employees can go overboard in their criticisms, however, and lose the protection of the Act.  Language that is “opprobrious,” or sufficiently “disloyal, reckless, or maliciously untrue” may remove the activity from protection, depending upon the circumstances.

In addition to the NLRB’s attention to employee activity, courts and arbitrators are increasingly addressing social media.  Here are just a few recent examples:

  • A federal district court in Illinois ruled that an employee, a marketing director for an interior design firm, could proceed with federal Stored Communications Act and Lanham Act claims against her employer based on her co-workers’ unauthorized use of her Facebook and Twitter accounts to promote the employer.  Maremont v. Susan Fredman Design Grp., No. 10C 7811 (N.D. Ill. Dec. 7, 2011).
  • A federal court in Washington ruled that a trial was necessary to determine whether an employee, who had been on leave for treatment of depression, was unlawfully discharged due to her suicidal comments made via social media.  Peer v. F5 Networks, Inc., No. C11-0879-JCC (March 19, 2012).
  • An arbitrator denied a grievance challenging the discharge of a Head Start teacher who started a closed Facebook page to “gripe” about employees, parents, and students at the Head Start program.  Although the members of the invite-only group complained about work, they were also exceedingly profane, many of the posts were not connected to working conditions, and, most importantly, there was “nothing about the conversations that would lead to the conclusion that [the employees] were seeking to band together to take action to address their workplace concerns.”  Vista Neuvas Head Start, 129 LA 1519 (VanDagens, 2011).
  • A federal court in California held that a mobile news website company sufficiently stated claims for negligent and intentional interference with prospective economic advantage by alleging that a former employee appropriated a company Twitter account that drove traffic to its website.  PhoneDog v. Kravitz, No. C 11-03474 MEJ (N.D. Cal. Jan. 30, 2012).
  • An NLRB administrative law judge recently ruled that a “Jimmy John’s” franchisee violated the Act when an assistant manager posted the telephone number of a known union supporter on an anti-union Facebook page and encouraged others to “text” him to let him know “how they feel.”  The ALJ believed this post amounted to an invitation for other anti-union co-workers to harass the employee in retaliation for this union activity.  Jimmy John’s, 18-CA-19707 (April 20, 2012).

Employers must act carefully when issuing disciplinary action in connection with social media activity.  Seeking legal advice is important because, as shown above, employee social media activity implicates numerous areas of employment law.

© 2012 Varnum LLP

Attendance May be an Essential Function of the Job

This case tests the limits of an employer’s attendance policy. Just how essential is showing up for work on a predictable basis? In the case of a neo-natal intensive care nurse, we conclude that attendance really isessential.

So begins the United States Court of Appeals for the Ninth Circuit in Samper v. Providence St. Vincent Medical Center.

The Samper plaintiff, a neonatal nurse in the defendant-hospital’s Neonatal Intensive Care Unit (NICU), suffered from fibromyalgia which, she claimed, limited her sleep and caused her chronic pain.  The nurse asked the hospital to accommodate this disability by allowing her to miss work whenever she was having a “bad day.”  After years of unacceptable absenteeism what the Court described as the hospital’s “Herculean efforts” to accommodate the plaintiff, she was terminated.  She sued the hospital, claiming that it failed to provide her with a reasonable accommodation for her disability.

The hospital did not dispute that the plaintiff was disabled, that she had the requisite technical skills for the job, or that she suffered an adverse employment action.  The hospital argued, however, that although the plaintiff possessed the technical qualifications of the job, she was unable to perform the essential function of showing up for work.

The burden was on the hospital to establish which functions were “essential” to the job.  Arguing that the hospital did not meet its burden to show that attendance was an essential function of the job, the plaintiff cited numerous cases for the proposition that regular attendance was not required.  For example, she cited to cases where “workers were basically fungible with one another, so that it did not matter who was doing the job on any particular day,” (dockworkers) as well as cases where the work could be performed remotely (medical transcriptionists).

The Court easily distinguished those cases, however, from cases like this one, where irregular attendance compromises essential functions.  Indeed, the Court stated:

To imagine a NICU facility, responsible for the emergency care of infants, operating effectively in such a manner, stretches the notion of accommodation beyond any reasonable limit. An accommodation that would allow [the plaintiff] to “simply . . . miss work whenever she felt she needed to and apparently for so long as she felt she needed to [a]s a matter of law . . . [is] not reasonable” on its face. Internal citations omitted.

Although the Court found in favor of the defendant-hospital, and held that regular attendance was an essential function of Ms. Samper’s job, it left open the possibility that regular attendance may not be an essential function for other jobs or jobs in other industries.  Nevertheless, the Court was crystal clear that an accommodation is not reasonable if it seeks an exemption from an essential function.

The case is noteworthy for several reasons.  First, while underscoring that the burden remains on the defendant to prove which functions of the job are “essential” functions, the case shows that in certain types of jobs an employer can make a compelling case that attendance is an essential function. Second, the case is a good illustration of how an employer’s initial efforts in “going the extra mile” to accommodate an employee’s disability can redound to the employer’s advantage when it ultimately decides that the disability can no longer be accommodated.

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