Category: Labor & Employment

Maintaining Workplace Civility in an Era of Heightened Divide

Do as adversaries do in law, strive mightily, but eat and drink as friends.

William Shakespeare, The Taming of the Shrew, Act I, sc. 2

In the aftermath of the historic and divisive election, many of us welcome an end to the besiegement of ads, media commentaries, Facebook and Twitter postings, etc. that are not only uncivil, but in many cases just plain nasty.

The political climate of brinkmanship, rudeness, and lack of cooperation (let alone collaboration) appears to be increasingly reflected in the workplace. Collectively these behaviors are called “incivility,” and have become so prevalent that many scholarly studies have been conducted on the topic. Google “incivility in the workplace” or visit the Society for Human Resources Management (SHRM) website and you’ll get the idea.

What is “civil” and “uncivil” behavior in the workplace, and what are the legal and other implications of uncivil behavior?

“Civility” is a collection of positive behaviors that promote courtesy and respect. The word has its origins in the Latin word “civis,” which in Latin means citizen. Keith Bybee, the author of How Civility Works, put it this way in a 2019 NPR interview: “Civility is the baseline of respect that we owe one another in public life.”

To paraphrase the old Irish proverb by substituting “civility” for “diplomacy”, “Civility is telling someone to go to hell in such a way that they will look forward to the trip.”

On the flipside, what is “incivility”? One study describes it as “a low intensity deviant behavior with ambiguous intent to harm” (Anderson and Pearson, 1999). Other studies define it more thoroughly as bad or rude behavior, with diminished use of basic courtesies such as “please” and “thank you,” abrupt and curt language, especially when using technological communication, a lack of respect for leaders and colleagues, with behaviors including belittling, interrupting or ignoring others, spreading rumors or gossip, and sending “nasty grams” to co-workers. (Akella and Johnson, 2018, citing many other studies.)

Many employees appear to be under the impression that they have an absolute First Amendment right to say or send whatever they want to in the workplace. This is simply not true, especially in the private sector. Employers have the right and under some circumstances the duty to expect their employees to act toward one another with basic respect and courtesy. Unfortunately, email and social media have removed many of the “filters” that were previously in place in terms of the lack of ability to make an immediate and often not thought-out response, and that unfortunately has bled over to in-person communications. There are now unlimited opportunities for knee-jerk reactions that are not thought through before hitting the SEND button.

SHRM and other reputable sources report that numerous studies show that incivility in the workplace leads to lower production, higher turnover, lower profitability, poorer customer service and decreased morale.

So how might employers rein in on such behavior in the interest of maintaining a desirable workplace culture and mitigating liability? Some employers have addressed the problem of incivility by instituting Codes of Conduct designed to advise employees what is expected of them in terms of their interactions with one another. Of course, such Codes are not worth the space they take up on a network unless they are accompanied by commitment from leadership to communicate, train and enforce the Codes, and truly reflect the mores and values of the organization. Ideally, supervisors, who after all are responsible for enforcing Codes of Conduct on the “front lines”, should be involved in their creation and in all cases should be thoroughly trained regarding their contents and what to do in the event of a violation.

Codes of Conduct sometimes include other matters such as conflict of interest, gifts and gratuities, and use of Company resource policies, and are generally enforced through the Company’s disciplinary procedures.

From a legal standpoint, incivility is not generally regarded as in and of itself constituting illegal harassment or illegal conduct under discrimination laws, although it could and should be regarded as behavior which could easily escalate to that level if unchecked.

The coming days and weeks will tell us a lot about how people handle the inevitable fallout from the election, and of course a lot of that conversation will occur at the workplace. It’s important, even vital, to workplace harmony and even more important, to the fiber of who we are as a civilized nation to have those conversations in an atmosphere of mutual respect.

© 2020 Davis|Kuelthau, s.c. All Rights Reserved
For more articles on the workplace, visit the National Law Review Labor & Employment

How to Maintain a Positive Company Culture During COVID-19

Culture eats strategy for breakfast, or so we’ve been told by Mr. Drucker and others.

Coincidentally, I wholeheartedly agree.  So, how does leadership maintain, let alone improve, its company culture in the face of the first pandemic of its size in the last one-hundred-plus years?

Of course, it will not be a one-size-fits-all approach, but the following are three suggestions I have seen work recently for several of our clients.

Suggestion 1 – Maintain Visible and Engaged Company Leadership

“I always feel like somebody’s watching me” – Rockwell 1984

Admit it, this song is now stuck in your head (you’re welcome!).  It seems that employees are paying closer attention to company management than ever before.  How you communicate, your style of communication, transparency, consistency, accessibility, and responsiveness (even if only remotely) – it all matters.  What matters most in my humble opinion, however, is that you deliver all information in a timely and authentic way.  Being prompt in sharing good or bad news will be especially appreciated now.  And if you have more than one bad piece of news to share, share it all at once, and now.  Also, be yourself.  By way of example, if you don’t normally try to establish witty repartee, now is not the time to try.  Your employees should already know who you are if you have done your job.  Now is not the time to try and introduce them to someone “new” (even with the best of intentions), but instead is a great time for stability and to remind them why they have hopefully bought into and trusted your leadership style so far.

Suggestion 2 – Provide Opportunities to Interact and Contribute as Individuals

During the pandemic, even those more introverted employees have felt isolated.  A feeling of company connection goes a long way towards building loyalty, teamwork, and happy employees.  And even though we are all interacting with our customers and clients more virtually now, those folks get it when your employees genuinely enjoy each other’s company.  So, what are we to do when we have been advised by the CDC to limit our group gatherings, and stand six feet apart, wearing masks – and many of our workforces are still working one hundred percent remotely from home?

Some of our clients have virtual Zoom lunches or happy hours.  Some have encouraged employees to start book clubs or movie clubs and discuss the materials via Zoom.  But ultimately, it is imperative that the tenured employees who get the company culture in our various geographic locations are empowered to lead by example, and given the freedom to illustrate the company’s culture in the way they believe will be most effective.

Suggestion 3 – Fight Against “Checking the Box”/Staleness

This one is tricky.  Most of our clients spent a fair amount of time earlier this year coming up with ways to effectively address Suggestion 1 and Suggestion 2.  But over time, there is definitely a routine, we get comfortable, and inertia sets in.  Don’t be afraid to shake things up!  While we all have some level of Zoom fatigue now, there is no magic number to try and hit per week or month.  Likewise, if every company management communication looks identical background and content-wise (it’s now 10:15 and time for our HR Director to present x, y, or z) and is so predictable that each communication could have just been batch recorded and sent out, things should be adjusted.

Ultimately, we will get through this, and while mention of the number 2020 may produce a zeitgeist-like gag reflex for most of us for a long time to come, for now, work-wise all we have is your own company’s culture and co-workers.  Protect it and each other.

© 2020 Ward and Smith, P.A.. All Rights Reserved.
For more articles on company culture, visit the National Law Review Labor & Employment section.

Law Firm Marketing Professionals Face High Levels of Stress, Pandemic Pressures, and Lack of Respect: Report

Law firm marketing and business development staff are stressed-out and the COVID-19 pandemic has only ratcheted up the pressure, the 2020 Legal Marketing Mental Wellness Report published by fSquared Marketing, a consultancy that specializes in working with law firms, shows.

In a survey of 400+ law firm marketing and business professionals, 96% agreed there is significant stress in the legal marketing field. 71% reported often feeling overwhelmed at work and 79% said that their work-related stress had increased during the pandemic.

“Legal marketers have seen their workloads increase this year, as they maintain firm communications and respond to the challenges of this crisis,” observes Lynn Foley, CEO of fSquared Marketing. “They are working hard to ensure their firms are providing timely updates, maintaining strong relationships with clients, and adapting to remote working and new communication channels such as webinar presentations and virtual conferences. At the same time, many professionals have had the threat of layoffs hanging over their heads or seen their marketing budgets slashed and projects put on hold.”

“During this time of COVID-19, they furloughed my co-coordinator. The amount of work in the department has not changed so I have taken on all her work as well.” one respondent to the survey said. “…They also reduced my pay. I am happy I still have a job, but I feel like my work product has suffered and my stress level has skyrocketed.”

Legal Marketing is a demanding profession, even in less difficult times. In 2019, fSquared Marketing ran a similar survey that illuminated many of the issues which re-emerged in the 2020 report including overwork, a lack of respect and a lack of understanding of the marketer’s role by lawyers.

“The 2020 report builds on our team’s previous research,” says Foley. “We expanded the survey this year and– in partnership with the Legal Marketing Association (LMA)—we were able to more than double the number of responses collected.”

Stress is Impacting the Health and Wellness of Staff

It’s widely recognized that there is a mental health crisis in the legal industry. A landmark 2016 study by the ABA and the Hazelden Betty Ford Foundation found that 36% of lawyers qualified as problem drinkers and 28% report mild or higher depression symptoms. Through initiatives such as The National Task Force on Lawyer Well-Being and ABA Commission on Lawyer Assistance Programs and increased media attention, the industry is starting to take this issue seriously and take steps to improve itself.

Yet law firm professionals have often been overlooked. As this 2020 report makes clear, marketing and business professionals at law firms are also under considerable levels of stress. Nearly 80% of respondents said that their stress, on a scale of 1-10, was a 7 or higher. And 67% said that stress was negatively impacting their ability to concentrate on the task at hand. 63% of respondents said that stress from work was affecting the quality of their sleep and 48% said that stress from work gave them psychosomatic symptoms such as headaches or stomach pain.

“Overwork is part of the problem,” notes Foley, “but this report also reveals compounding factors, such as a lack of understanding of the marketer’s role and, in too many cases, a lack of respect from lawyers.”

Marketers Dismissed as “Non-Lawyers” But Still Essential

Many respondents pointed to a divide between the lawyers and law firm professionals, often dismissively labelled as “non-lawyers”, as a source of stress. 67% of respondents said that lawyers do not understand their role or the work they perform. 40% agreed with the statement: “There is a lack of respect for me/my role by the lawyers”.

“Most of the stress I experience comes from feeling like the lawyers won’t let/don’t trust me to do my job,” said one respondent.

Another respondent said: “I don’t see how lawyers who don’t even value my contribution to the firm would ever value my mental health.”

At the same time, Marketing professionals are well aware of the value they bring to the table: 93% felt that they “have an important role to play at their firm”.

Legal Marketing Might Be More Stressful Than Marketing in Other Industries

Of those respondents who had previously held marketing positions in other industries, 72% felt that marketing in legal was more stressful.

Marketers who worked in-house at a law firm were more likely to report feeling overwhelmed and disrespected than external marketing consultants with law firm clients.  Not surprisingly, in-house marketers also reported lower levels of job satisfaction than their external counterparts.

Taken together, this indicates that there are factors endemic to law firms that increase workplace stress. Several respondents pointed to a culture of perfection, the rigidly hierarchical nature of most firms, and the billable-hour model as culprits. “This job is custom-built for stress,” noted one respondent.

“We work at the request of lawyers, who don’t think about marketing or business development during the work day. Therefore, they contact us after the work day.  So by definition, our work needs to be completed after hours and on weekends.  Holidays are nonexistent. PTO is nonexistent. All that exists is a gigantic, gaping maw of legal work that needs to be done.  There is no escape.”

Skills Training the Most Requested Type of Law Firm Support

Access to training was the number one resource that legal marketers thought would help them to alleviate stress. 79% of respondents said that access to marketing/business development/technical training would help them to limit their stress.

Training was seen as more useful for managing stress than access to mental health professionals and mindfulness coaching. Access to external marketing resources to provide assistance on a project basis was seen as the second most useful form of law firm support for mental wellness and stress management.

“Marketing is a fast-changing field and it can be challenging to stay on top of new tech, changing client expectations, and methods,” notes Foley. “Law firms that provide their professionals with regular access to high-quality training will help their marketers to manage the pressures of the job while also empowering them to deliver meaningful results for their firm.”

Towards a Better Model

Research in workplace psychology has consistently found that employees perform to their highest potential when they feel respected, challenged but not overwhelmed, and valued for their contributions.

COVID-19 will continue to send shockwaves through the economy at large with implications for the legal market. Law firms that foster resilient, supportive cultures have an advantage in weathering downturns and periods of turmoil and emerging from the other side of the pandemic in a dominant market position.

“I know from firsthand experience how stressful it can be to work in-house at a law firm,” notes Foley. “This is always going to be a demanding profession within a high-pressure industry, but incivility and burnout benefit no one. This report shows how widespread these issues are in our industry. But they aren’t universal, and that is a cause for hope. Many law firms have fostered cultures of work-life balance and mutual respect. It’s possible and demonstrably profitable to ensure that law firm professionals feel understood, included, and valued for their contributions.”

© Copyright 2020 fSquared Marketing
For more articles on the legal industry, visit the National Law Review Law Office Management section.

A Biden Board at the NLRB: What to Expect and When

This past Labor Day, President-elect Joe Biden told a group of union supporters that he would be “the strongest labor president you have ever had.” Just how true those words will be hinges on what party controls the Senate after the dust settles on this election season.

As part of his labor goals, Biden has championed the PRO Act, a substantive and drastically pro-union rewrite of the 85-year-old National Labor Relations Act that was passed by the House in early 2020. The PRO Act would codify the ambush election rule and micro-unit policy, neuter employers’ ability to mount counter-campaigns to union organizing attempts, and weaken right-to-work laws that protect employee free choice. The ambitious legislation would also permit the NLRB to issue heavy monetary penalties on employers for violating the NLRA and would more strictly require bargaining after an initial certification of a new union.

The legislation would be destructive to companies, but it seems unlikely to become law in today’s political landscape. Indeed, a less ambitious pro-labor bill, the Employee Free Choice Act, failed to pass a Democrat-controlled Congress in 2009.

But even if the PRO Act does not come to fruition, one thing is clear: there will be changes. Employers have benefitted greatly from the pro-employer NLRB over the past four years. We have seen a flurry of positive changes including wins on issues like joint employers, micro-units, abolishing the ambush election rule, and making it easier for employers to make unilateral changes in the workplace.

When and how change might occur under President-elect Biden will largely depend on when he is able to gain control of the NLRB.

The NLRB is currently composed of three Republican members and one Democrat, with one vacant seat. Assuming President-elect Biden is able to fill the vacant seat, his first opportunity to flip control of the Board in his favor will come in August 2021, when Trump appointee Bill Emanuel’s seat expires. NLRB General Counsel Peter Robb’s term expires in November 2021. Even then, control depends on the Senate confirming both the new general counsel and Board member positions.

In short, we could expect there to be pro-union changes at the NLRB beginning in the fall or winter of 2021. This timeline is similar to the beginning of the Trump administration, when we saw the biggest flurry of pro-employer rulings come in December 2017 after Republicans gained control of the NLRB. Once Biden gains control, we might see a strategy similar to that employed by the Trump and Obama Boards. A mix of precedent-overturning NLRB decisions and rulemaking could be in store for employers.

© 2020 BARNES & THORNBURG LLP
For more articles on the NLRB, visit the National Law Review Labor & Employment section.

What Happens to an Employee’s Seniority after an Asset Sale?

In the recent decision of Manthadi v Asco Manufacturing, 2020 ONCA 485 (“Manthadi”), the Ontario Court of Appeal has clarified that an employee’s past service with their former employer does not automatically transfer to a successor employer for the purposes of calculating their common law reasonable notice entitlements. Instead, in order to fashion an appropriate notice period, the courts will consider the employee’s prior service broadly as a form of “experience” that was to the benefit of the purchaser/successor employer.

Background

In 1981, Ms. Manthadi was hired as a welder for an Ontario company. Her employment remained secure until the end of 2017, when the company was purchased in an asset sale by ASCO Manufacturing Limited (“ASCO”). After the sale, Ms. Manthadi continued to work similar hours at a similar rate of pay for ASCO until December 13, 2017, when she was laid off and never recalled.

Following the termination of her employment, Ms. Manthadi brought a successful summary judgment motion alleging wrongful dismissal. The motion judge found the common law and ESA to mirror one another with respect to how they treat an employee’s continuous employment. As such, the motion judge found that for the purposes of calculating her common law reasonable notice entitlements, Ms. Manthadi was deemed to be continuously employed by ASCO since 1981. On this basis, the motion judge found that the common law reasonable notice period for Ms. Manthadi was 20 months.

Court of Appeal

On appeal, the Ontario Court of Appeal overruled the summary judgment motion on a few grounds, including the improper use of a summary judgment motion for determining the matter. However, the Court of Appeal also took the opportunity to review and restate the law in terms of an employee’s right to reasonable notice from a purchaser of an ongoing business.

The Court of Appeal began by stating that “a sharp distinction must be drawn between termination of employment by a successor employer under the ESA and under the common law” (at para 48). Whereas notice under the ESA provided that Ms. Manthadi would be continuously employed, the common law was “equally clear that such employees are terminated (by constructive dismissal) when their employer sells the business and there is a change in the identity of the employer” (at para 48).

This distinction between the ESA and common law raises problems for long-term employees. Specifically, the duty to mitigate requires wrongfully dismissed employees to minimize their damages by taking up new work. In the context of a sale of a business, long-term employees are usually offered identical employment with the purchasing company. Failure to accept this employment will likely be considered a failure to mitigate, potentially ending any claim. Accepting the employment, however, means that any claim of wrongful or constructive dismissal will likely be mitigated out of existence.

The Court of Appeal recognized this problem for long-term employees, noting at paragraph 53:

“Thus, long-term employees, who are employed by the purchaser of their employer’s business, have little prospect of obtaining damages for the termination of their employment. Damages aside, people need jobs. Employees terminated by the sale of a business often have no realistic option other than to accept the offer of a new contract of employment with the purchaser if such is offered. If they are subsequently terminated by the purchaser, the new start date of their term of service weighs in favour of a shorter notice period than had the business not been sold.”

The resolution, says the Court of Appeal, involves reliance on the factors pronounced in the time-tested case of Bardal v The Globe & Mail Ltd. (1960), 1960 CanLII 294 (ON SC). Better known as the Bardal factors, the Court relies on such factors to determine reasonable notice at common law. In considering the Bardal factors, the Court accepted that the “experience” of an employee (and the benefit that such experience had for the purchaser) was a relevant factor that the Court could rely upon in fashioning the appropriate reasonable notice period where there had been a sale of a business and successive employment.

Implications from Manthadi

Prior to this decision, long-term employees seeking common law notice were usually given the benefit of having prior years of service recognized despite any sale of the business. This is no longer to be presumed. Rather, for calculating reasonable notice at common law, prior years of service with a former employer are translated into “experience.” While the Court of Appeal in Manthadi considered this to provide greater flexibility, it will almost certainly raise areas of contention for similar wrongful dismissal disputes going forward.

It remains to be seen whether trading off “years of service” for “experience” will decrease (or in certain cases increase) the notice entitlements for long-term employees being terminated after an asset sale. If notice entitlements do decrease, then purchasers inheriting a workforce may be exposed to less liability in the event of a wrongful dismissal claim.

© 2020 Miller, Canfield, Paddock and Stone PLC
For more articles on employee asset sales, visit the National Law Review Labor & Employment section.

Voters in Five States Approve Marijuana Ballot Initiatives on Election Day

Voters in Arizona, Mississippi, Montana, New Jersey, and South Dakota approved laws to legalize marijuana on Election Day 2020. Recreational marijuana was approved in Arizona, Montana, and New Jersey, while Mississippi voters approved medical marijuana. South Dakota voters approved both medical and recreational marijuana ballot initiatives.

Medical Marijuana

  1. Mississippi – Mississippi Ballot Measure 1 passed, with 68% voting “yes” and 32% voting “no.” Ballot Measure 1 asked voters to generally cast a vote for “either measure” Initiative 65 or Alternative 65A, or against both measures. Voters who cast a vote for “either measure” were then required to cast an additional vote for their preferred measure. Mississippi voters passed Initiative 65 with 74% voting for it and 23% voting for Alternative 65A.*

Initiative 65 allows the medical use of marijuana by patients who suffer from qualifying medical conditions. Qualified medical marijuana patients may possess up to 2.5 ounces of medical marijuana. The new law does not permit a qualifying patient to be “subject to criminal or civil sanctions for the use of medical marijuana.” However, it does not require “accommodation for the use of medical marijuana or require any on-site use of medical marijuana” in any place of employment. It also does not affect any “existing drug testing laws, regulations, or rules.”

The Mississippi State Department of Health has the authority to implement, administer, and enforce the law. It is required to issue final rules and regulations regarding medical marijuana by July 1, 2021. The Department must begin issuing medical marijuana identification cards and treatment center licenses no later than August 15, 2021.

  1. South Dakota – South Dakota’s Initiated Measure 26 passed, with 69% voting “yes” and 31% voting “no.” The new law allows the medical use of marijuana by patients who suffer from a debilitating medical condition. Medical marijuana card holders may possess up to three ounces of marijuana and cultivate marijuana plants. The law goes into effect July 1, 2021, but it may take up to a year before medical marijuana is available in the state.

Under the new law, medical marijuana cardholders are entitled to “all the same rights under state and local laws” as the person would be afforded if they were prescribed a pharmaceutical medication as it pertains to: (1) any interaction with a person’s employer; (2) drug testing by a person’s employer; and (3) drug testing required by any state or local law, agency, or government official.

The new law requires the South Dakota Department of Health to issue regulations regarding medical marijuana within 120 days after the law goes into effect (October 29, 2021) and to begin issuing registry identification cards to qualifying patients within 140 days after the law goes into effect (November 18, 2021).

The new law does not apply to employers to the extent it would conflict with the employer’s obligations under federal law or regulation or if it would disqualify an employer from a monetary or licensing-related benefit under federal law or regulation.

Although employers may discipline employees for ingesting marijuana in the workplace or for working while under the influence of marijuana, employers may not consider a qualifying patient to be under the influence of marijuana solely because of the presence of metabolites or components of marijuana that appear in “insufficient concentration to cause impairment.” Employers in South Dakota should take note of this language because there is no universally accepted concentration of marijuana that proves “impairment.”

Recreational Marijuana

  1. Arizona – The Smart and Safe Arizona Act passed with nearly 60% voting “yes” and 40% voting “no.” Under the Smart and Safe Arizona Act, individuals 21 years of age or older may lawfully use and purchase less than one ounce of marijuana (except, not more than five grams may be in the form of marijuana concentrate) and may cultivate up to six marijuana plants for personal use at the individuals’ primary residence (subject to certain restrictions). The new law does not include a delayed effective date, but it will likely be several months before Arizonans can purchase recreational marijuana.

The new law requires the Arizona Department of Health Services to begin accepting applications for marijuana establishment licenses from “early applicants” beginning January 19, 2021 through March 9, 2021. Licenses will be issued to qualified applicants within 60 days of receiving an application.

The new law does not restrict the rights of employers to “maintain a drug-and-alcohol free workplace” or prevent employers from having workplace policies “restricting the use of marijuana by employees or prospective employees.” It also does not require employers to “allow or accommodate the use, consumption, possession, transfer, display, transportation sale or cultivation of marijuana in a place of employment,” nor does it restrict employers from prohibiting or regulating marijuana use that occurs on or in their properties.

Arizona passed the Arizona Medical Marijuana Act in 2010, prohibiting employers from discriminating against medical marijuana patients. The recreational marijuana law expressly states that is it not intended to limit any privilege or right of a qualifying patient under the Arizona Medical Marijuana Act.

  1. Montana – Montana’s Initiative 90 and Constitutional Initiative 118 both passed with approximately 57% voting “yes” and 43% voting “no” for Initiative 90.  Effective January 1, 2021, individuals age 21 or older may possess, use, or transport one ounce or less of marijuana, and grow up to four mature marijuana plans and four seedlings on the grounds of a private residence. The Montana Constitution provides that a person 18 years of age or older is an adult for all purposes, except that a different legal age may be established for purchasing, consuming, or possessing alcoholic beverages. Effective October 1, 2021, the Montana Constitution will similarly permit a different legal age (i.e., 21 years of age or older) to be established for the purchase, consumption, or possession of marijuana.

Certain provisions of the new law go into effect on October 1, 2021, which is the deadline for the Department of Revenue to issue rules and regulations related to licensure of adult-use marijuana providers and dispensaries. The Department must begin accepting applications from dispensaries, providers, and manufacturers on or before January 1, 2022. However, for the first 12 months, the Department will only accept such applications from providers and dispensaries licensed under Montana’s medical marijuana statute.

The new law does not impose restrictions on employers. It states that is may not be construed to: (1) require an employer to permit or accommodate recreational marijuana use (or any other conduct permitted by the law) in any workplace or on the employer’s property; (2) prohibit an employer from disciplining an employee for violation of a workplace drug policy or for working while intoxicated by marijuana; (3) prevent an employer from declining to hire, discharging, or otherwise taking adverse action against an individual with respect to hire, tenure, terms, conditions, or privileges of employment because of the individual’s violation of a workplace drug policy or intoxication by marijuana while working.

Montana has had a medical marijuana law since 2004.

  1. New Jersey – New Jersey’s Question 1 passed with 67% voting “yes” and only 33% voting “no.” Effective January 1, 2021, the New Jersey Constitution will be amended to legalize recreational use of marijuana for adults ages 21 and older. The constitutional amendment provides for the Cannabis Regulatory Commission to regulate recreational marijuana and subjects all retail sales of recreational marijuana products to state sales tax.

The Cannabis Regulatory Commission and New Jersey lawmakers will address the regulatory issues that will determine the amount individuals can possess legally, the requirements for operating dispensaries for sale of cannabis, and taxation by state and local authorities. This process is expected to take up to approximately one year.

New Jersey has approved the use of medical marijuana since 2013. Under 2019 amendments to the Jake Honig Compassionate Use Act, employers are not permitted to discriminate against those who use cannabis for medical reasons.

  1. South Dakota – South Dakota’s Constitutional Amendment A passed with 53% voting “yes” and 47% voting “no.” Effective July 1, 2021, the new law permits individuals 21 years of age or older to possess and use one ounce or less of marijuana and to grow up to six marijuana plants on the grounds of a private residence.

No later than April 1, 2022, the South Dakota Department of Revenue is required to issue rules and regulations related to the commercial sale, cultivation, and testing of marijuana. The new law also directs the legislature to pass laws regulating the cultivation, processing, and sale of hemp and medical marijuana by April 1, 2022.

The new law does not require employers to permit or accommodate conduct authorized by it. It also does not affect an employer’s ability to restrict the use of marijuana by employees.

Next Steps

Employers should review their drug and alcohol policies – especially drug and alcohol testing policies – for compliance with applicable state laws.

While marijuana remains a Schedule I drug under the federal Controlled Substances Act, the trend in the courts over the last three years is to disregard marijuana’s status under federal law and to enforce state laws instead (with the exception of federally regulated employees such as those regulated by the U.S. Department of Transportation).

Employers must be familiar with the marijuana laws in the states where they operate before taking employment actions against those who use marijuana.

Jackson Lewis P.C. © 2020
For more articles on marijuana legalization, visit the National Law Review Biotech, Food, Drug section.

Employment Litigation Is on the Decline, but Expect More Wage and Hour Claims

A recent Lex Machina study (available via signup here) noted that the number of federal employment cases filed in the second and third quarter of 2020 was down. Not surprisingly, harassment and discrimination cases showed the biggest decrease, by almost 20%, likely due to the increase in remote work and decrease in actual interaction between workers.

However, Family and Medical Leave Act (FMLA) claims and wage and hour cases under the Fair Labor Standards Act (FLSA) were down only slightly.  A crystal ball is not needed to predict that FLSA claims are likely to increase. One obvious reason is the increase in remote work.  A change from office to remote work makes it harder to actually observe when someone is working.  And, for a large number of workers, especially those impacted by changes to school or child care, work schedules may have shifted, such as more early or late work, in order to accommodate other demands on their time, and those changes may contribute to poor or difficult tracking.

Other aspects of the FLSA also make challenges more likely.  One is the timing for filing a lawsuit. Pursuing federal harassment or discrimination claims requires first filing an administrative charge, which in most states typically has to be filed within 300 days (in some states it is 180 days).  In contrast, FLSA claims can be filed up to three years after the alleged violation (but may be limited to a two-year period depending on circumstances).

Another difference is the potential for individual liability.  Title VII does not allow for individual liability, but the FLSA does.  The financial distress of a company might deter some harassment claims, but that is less likely for FLSA claims, since individuals can be sued and may be jointly liable.  Finally, unlike harassment claims, FLSA claims cannot be easily waived in a release.  FLSA claims are not properly waived unless there is approval from the Department of Labor or a court.

In short, employers should not interpret the decline in litigation as a decreased need for vigilance, especially for FLSA (and state wage and hour) claims.

The potential for such claims begs the question of what should companies be doing now?  Below are a few suggestions:

  • If you have not already done so, reassess your procedures for timekeeping.Do they allow for or adequately address current work circumstances, in which many employees are teleworking?If not, make adjustments – in writing.If applicable, communicate the temporary nature of the changes.
  • Regularly remind nonexempt employees to follow established procedures regarding time tracking, which may include some of the following:
    • Reporting all time worked (and a reminder to either not work outside of scheduled hours or being sure to report the additional work time).
    • Asking for approval for overtime (but remember, even if not approved, overtime must be paid at time and a half of the regular rate) or otherwise communicating about the need for overtime.
  • Remind managers or supervisors to notice if someone seems to be working outside of normal hours, especially if it is a pattern (like frequent late night or weekend emails). And they should assess whether time reports are too regular (reflecting working Monday to Friday, 8-12 and 1-5).If so, the information is probably only reflecting the schedule for work, not the actual time the employee is working.
© 2020 Foley & Lardner LLP
For more articles on employment litigation, visit the National Law Review Labor & Employment section.

Driven To The Edge: Saga Of Uber And Lyft Litigation Continues As Court Of Appeal Affirms Order Forcing Driver Reclassification

On Thursday, October 22, 2020, the California Court of Appeal denied Uber and Lyft’s request to overturn a recent California Superior Court’s preliminary injunction ordering the companies to reclassify their drivers as employees, rather than independent contractors. With the appeal garnering Amicus Curiae briefs from more than 50 different organizations—ranging from the U.S. Chamber of Commerce to Mothers Against Drunk Driving—the decision marks the most recent entry in the highly watched ongoing litigation against the companies over their compliance with A.B. 5. With California’s upcoming vote on Proposition 22, however, many are left wondering what, if any, impact the denial might have on Uber, Lyft, or the gig economy as a whole.

The litigation involves a recent complaint filed by the California Labor Commissioner alleging, in relevant part, that Uber and Lyft violated California’s recently enacted legislation, A.B. 5, by classifying their app-based drivers as independent contractors, rather than employees. Under A.B. 5, companies are required to classify their workers as employees unless the companies can show:

  • The workers are generally free from the company’s direction and control over how they perform their work;
  • The workers are not engaged in the type of work the company usually engages in in its regular course of business; and
  • The workers are engaged in an established trade or professions separate and apart from the company itself.

Whether or not Uber and Lyft’s app-based drivers satisfy this test has been a hotly debated point of dispute. For Uber and Lyft, however, the consequences of being found to not pass this test are potentially dire, as an adverse decision on this point would force the companies to restructure their entire business model by changing the classification of their app-based drivers from independent contractors to employees.

The appeal was motivated by a California Superior Court’s recent decision to issue a preliminary injunction that ordered Uber and Lyft to begin this reclassification process, even prior to the suit’s resolution—a decision signaling that the Superior Court believed the companies to be fighting an uphill battle they would ultimately loose. In light of the order, Uber and Lyft promptly appealed the decision, citing in relevant part, the grave harm that the order would cause by necessitating “substantial changes to…organizational structure, hiring processes, software tools and management systems, and company culture.” To adapt to these forced changes, the companies explained that they would likely need to “reduce the number of drivers” allowed to use the platform, “control the drivers’ time…by having them work scheduled shifts,” and “prohibit drivers…from unilaterally rejecting or cancelling rides.” Unfortunately, Uber and Lyft’s arguments ultimately fell on deaf ears, as the Court of Appeal affirmed the lower court’s ruling forcing the companies to reclassify their app-based drivers—although the order isn’t set to take effect for at least 30 days.

Proposition 22 could save Uber and Lyft from this fate long before those 30 or so days are up. Currently set for the November 3rd ballot, Proposition 22, would exempt certain gig-economy companies, like Uber and Lyft, from the strictures of A.B. 5 while simultaneously allowing for a new middle ground between independent contractor and employee classification. The ballot initiative would do this: (a) allowing app-based drivers to maintain their traditional independent contractor status; while also (b) providing them with new and added benefits not previously available to independent contractors—a compromise that could inhere to the benefit of both parties.

If successful, Proposition 22 could stop the California Labor Commissioner’s suit in its tracks. As a result, only time will tell if the recent Court of Appeal ruling will ultimately have any impact on Lyft, Uber, or the gig economy generally.

©2020 Greenberg Traurig, LLP. All rights reserved.
For more articles on Uber & Lyft, visit the National Law Review Corporate & Business Organizations section.

Why Employees at Religious Organizations May Not Be Protected Against Discrimination

In Demkovich v. St. Andrew the Apostle Parish, the Seventh Circuit recently held in a 2-1 decision that the ministerial exception does not preclude church ministerial employees from asserting hostile work environment claims.

Supreme Court Rulings Clarify Ministerial Exception in Employment Discrimination Cases

The decision in Demkovich was preceded by two significant Supreme Court cases that clarified the reach of the ministerial exception by explaining the test for determining which employees of a religious institution are considered ministers. In the 2012 case Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, in a unanimous decision, the Court recognized that the ministerial exception bars ministerial employees from bringing employment discrimination claims against their religious employers. The issue was whether a teacher in a religious school who taught secular subjects should be considered a minister. The Court held, based on several specific facts about the teacher’s duties and status, that she was in fact a minister in the church’s view and thus was barred from bringing her claim that she was fired because of her disability. The ministerial exception bars all types of employment discrimination claims brought by ministers alleging discrimination under Title VII, the Age Discrimination in Employment Act, and the Americans with Disabilities Act, at issue in Hosanna-Tabor. Although it appears to protect bad actors, the ministerial exception serves to ensure that the ecclesiastical authority to select and control who will minister to the faithful is not undermined by the state.

More recently, this past July, in a 7-2 decision in Our Lady of Guadalupe v. Morrissey-Berru, the Court held that the primary consideration in determining whether a claim was barred by the ministerial exception turned on the tasks the employee performed. Hence, in determining whether two parochial school teachers who taught fifth and sixth grade classes and claimed they were fired—in one instance because of her age and in the other because she had breast cancer—could assert an age discrimination or a disability claim, the court determined they could not assert such claims, because the tasks they performed were vital religious duties such that the ministerial exception would apply. Specifically, the Court held that both teachers educated their students in the Catholic faith and guided them to live according to that faith.

As explained in the Demkovich decision, these Supreme Court decisions analyzed termination decisions by the religious schools and held that courts could not allow ministerial employees to challenge such decisions regardless of the reasons for their terminations. Demkovich, on the other hand, would determine whether the ministerial exception should apply to bar hostile work environment cases that did not involve such tangible employment action.

Applying the Ministerial Exception in Hostile Work Environment Cases

In September 2012, Mr. Demkovich began working as the Music Director, Choir Director, and Organist for the Archdiocese of Chicago and St. Andrew Parish in Calumet City. His supervisor, Saint Andrews Pastor, Reverend Jacek Dada, often made derogatory comments about Mr. Demkovich’s being an openly homosexual man engaged to a same-sex partner. Mr. Dada called Mr. Demkovich a bitch and his nuptials a fag wedding. Mr. Dada, also aware that Mr. Demkovich suffered from diabetes and a metabolic syndrome that caused weight gain, made additional remarks about his weight—urging him to walk his dog to lose weight, complaining about the cost of keeping him on the parish’s health and dental insurance, and commenting that he needed to lose weight because Mr. Dada did not want to preach at Mr. Demkovich’s funeral. After enduring prolonged verbal abuse, Mr. Demkovich was finally terminated in September 2014 after marrying his same-sex partner.

Mr. Demkovich initiated a Title VII, ADA, and wrongful termination claim. The defendants, Saint Andrews Parish and the Archdiocese of Chicago, moved to dismiss arguing the suit was barred by the ministerial exception. The district court granted the defendant’s motion, holding all the claims were barred. Mr. Demkovich filed an amended complaint dropping his wrongful termination claim, but seeking damages for a hostile work environment caused by discriminatory remarks and insults based on his disability and sex. The district court dismissed his hostile work environment claims based on sex, sexual orientation, and marital status because even though the claims were not barred by the ministerial exception, their adjudication would lead to excessive entanglement in matters of faith. The district court certified the following legal question for review by the Seventh Circuit: “Under Title VII and the Americans with Disabilities Act, does the ministerial exception ban all claims of a hostile work environment brought by a plaintiff who qualifies as a minister, even if the claim does not challenge a tangible employment action?”

Hostile environment claims do not involve challenges to employment decisions made by religious officials, so the resolution of the question in Demkovich turned on whether litigating the claim would nevertheless result in excessive entanglement between church and state. The Demkovich court discussed both procedural and substantive entanglement. The court concluded there would be no undue procedural entanglement, which refers to the operation of the entire legal process. The church’s concern about the intrusive nature of litigation is shared by all litigants and thus concern of excessive entanglement would not bar hostile work environment claims by ministers any more than by the non-ministerial employees of a church. Next, the court discussed substantive entanglement, analyzing whether civil courts can decide substantive questions of law while avoiding issues of faith. The court discussed a variety of cases allowing claims against churches involving tax disputes, property disputes, tort claims, and application of the Fair Labor Standards Act to church employees. As in those cases, the court determined it was possible for a court to rule on a harassment claim without getting into matters of religious faith. Mr. Demkovich faced ongoing harassment in part due to his sexual orientation. The church argued that all comments made about Mr. Demkovich were motivated by church doctrine and the manner Reverend Dada expressed these beliefs were shielded from judicial scrutiny. The church also argued that haranguing Mr. Demkovich about his health was within his supervisor’s purview in implementing the proper formation of a member of the clergy. Although the district court had accepted the church’s argument in part, dismissing his sexual orientation claim, the court of appeals was not as persuaded that the risk of substantive entanglement was so great that hostile work environment cases should be dismissed without further inquiry. The court emphasized that Reverend Dada could have expressed the church’s views on gay marriage and obesity without being personally abusive, so the content of his religious reprimands did not excuse compliance with valid, neutral laws against harassment.

Courts Split on Reach of Ministerial Exception

The Seventh Circuit decision to narrow the reach of the ministerial exception deepens a split among the circuit courts of appeal. The Seventh Circuit now has joined the conclusion the Ninth Circuit reached in 2004 in Elvig v. Calvin Presbyterian Church, holding that the ministerial exception does not categorically bar ministers’ hostile work environment claims where the religious employer denies or disavows the conduct. At the same time, the Seventh Circuit has rejected the Tenth Circuit’s opposite conclusion in a 2010 case Skrzypczak v. Roman Catholic Diocese of Tulsa, holding that the ministerial exception bars all hostile work environment claims. Because of this lack of uniformity in applying the ministerial exception, ministerial employees who are victimized by any type of harassment constituting a hostile environment should consult an employment attorney to determine whether they can pursue a claim against their religious employer.

Katz, Marshall & Banks, LLP
For more articles on labor discrimination, visit the National Law Review Labor & Employment section.

Spooktacular Severability Ruling Raises Barr From The Dead, Buries TCPA Claims Arising Between November 2015 and July 2020

A few weeks ago, the Eastern District of Louisiana held that courts cannot impose liability under Sections 227(b)(1)(A) or (b)(1)(B) of the TCPA for calls that were made before the Supreme Court cured those provisions’ unconstitutionality by severing their debt collection exemptions.  The first-of-its-kind decision reasoned that courts cannot enforce unconstitutional laws, and severing the statute applied prospectively, not retroactively. Plaintiffs privately panicked but publicly proclaimed that the Creasy decision was “odd” and would not be followed.

So much for that. Yesterday, the Chief Judge of the Northern District of Ohio followed Creasy and dismissed another putative class action.  The new case—Lindenbaum v. Realgy—arose from two prerecorded calls, one to a cellphone and another to a landline. The defendant moved to dismiss, arguing that “severance can only be applied prospectively,” that Sections 227(b)(1)(A) and (b)(1)(B) were unconstitutional when the calls were made, and that courts lack jurisdiction to enforce unconstitutional statutes. The plaintiff opposed the motion, arguing, among other things, that a footnote in Justice Kavanaugh’s plurality opinion in Barr v. AAPC suggests “that severance of the government-debt exception applies retroactively to all currently pending cases.”

The court sided with the defendant. It began by agreeing with Creasy that this issue “was not before the Supreme Court,” and the lone footnote in Justice Kavanaugh’s plurality opinion is “passing Supreme Court dicta of no precedential force.” It then surveyed the law and found “little, if any, support for the conclusion that severance of the government-debt exception should be applied retroactively so as to erase the existence of the exception.” It reasoned that, while judicial interpretations of laws are “given full retroactive effect in all cases still open on direct review and as to all events,” severance is different because it is “a forward-looking judicial fix” rather than a backward-looking judicial “remedy.” In short, severance renders statutes “void,” not “void ab initio.”

Defendants are now two-for-two in seeking dismissal of claims based on the now-undeniable unconstitutionality of the debt-collection exceptions in Section 227(b)(1)(A) or (b)(1)(B). With more such motions pending in courts across the country, this may become a powerful weapon against whatever claims remain after the Supreme Court’s decision in Facebook v. Duguid.

© 2020 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.
For more articles on the TCPA, visit the National Law Review Litigation / Trial Practice section.