Tag: Employment Law

Marijuana in the Workplace: The Growing Conflict Between Drug and Employment Laws

Despite the growing number of states that have legalized the use of marijuana, the drug remains illegal under federal drug laws. The legal landscape is made more confusing when considering the differing levels of employment protection that these state laws offer to marijuana users. With this patchwork of state laws, employers are left to grapple with whether and how to accommodate their employees who use marijuana for medical purposes or for off-duty personal consumption.

The Legal Landscape

Twenty-three states and the District of Columbia have legalized medical and/or recreational use of marijuana. These jurisdictions provide marijuana users with varying levels of protection against employment discrimination. The majority—Alaska, California, Colorado, Georgia, Hawaii, Maryland, Massachusetts, Michigan, Montana, New Jersey, New Mexico, Oregon, Vermont, and Washington—merely decriminalize use. Other jurisdictions—Arizona, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Minnesota, Nevada, New Hampshire, New York, and Rhode Island—in addition to decriminalizing use, also provide statutory protections against discrimination. Some of these jurisdictions even require accommodation of underlying disabilities.

However, marijuana is still classified as a Schedule I drug (high potential for abuse, no acceptable medical use) and remains illegal under the federal Controlled Substance Act (“CSA”). While last year Congress passed a bill to defund the Department of Justice’s efforts to challenge state-legal medical marijuana programs, the Obama administration’s public position is that it “steadfastly opposes legalization of marijuana.”

Federal precedent in this area has provided employers with broad rights to take adverse action against individuals who use marijuana, whether or not for medical purposes and/or protected under state law. For instance, under the Americans with Disabilities Act (“ADA”), courts have held that marijuana users—regardless of the legality of the use under state law—are not qualified individuals with a disability entitled to anti-discrimination protections. See, e.g., James v. City of Costa Mesa, 700 F.3d 394 (9th Cir. 2012).

Employers, however, must be careful not to rely on medical marijuana use as a pretext for firing an employee with an underlying disability. The U.S. Equal Employment Opportunity Commission (“EEOC”) recently took aim at a Michigan-based assisted living center that fired a nursing administrator who used medical marijuana to treat her epilepsy and thus failed a drug test on her second day of work. EEOC v. Pines of Clarkston, Inc., No. 13-CV-14076, 2015 U.S. Dist. LEXIS 55926 (E.D. Mich. Apr. 29, 2015). The district court denied the employer’s motion for summary judgment on the individual’s ADA claim. Although acknowledging that a positive test for medical marijuana constituted a legitimate, non-discriminatory reason for discharge, the district court concluded that the EEOC raised a genuine issue of material fact as to whether the articulated reason was a pretext for disability discrimination, particularly because the employee had been questioned about her disability during her interview and subsequently after the positive drug test. The case eventually settled but should be heeded by employers as a warning that a positive drug test for marijuana may not insulate them from discrimination claims under the ADA.

Unresolved Conflict Between Employer and Employee Rights Under State Law

State law provides greater protections to marijuana users. However, while courts have infrequently addressed the conflict between state law employment protection and marijuana use, those that have considered such issues generally have found in favor of an employer’s right to take adverse action against an employee who tests positive for marijuana.

The Colorado Supreme Court highlighted this issue when, in Coats v. Dish Network, 350 P.3d 849 (Colo. 2015), it held that an employee may be fired for using marijuana even though he legally used the drug off duty. Colorado law prohibits termination for lawful off-duty conduct, and Coats was a registered medical marijuana patient who only consumed marijuana during non-work hours. Nevertheless, because smoking marijuana was still illegal under the federal CSA, the court held that such use did not constitute lawful conduct under the Colorado statute.

The decision in Coats is consistent with earlier decisions in California, Montana, Oregon, and Washington that have held that decriminalization laws do not confer a legal right to smoke marijuana and that employers may take adverse action against users. See Ross v. RagingWire Telecomms., Inc., 174 P.3d 200 (Cal. 2008); Johnson v. Columbia Falls Aluminum Co., LLC, No. 08-0358, 2009 Mont. LEXIS 120 (Mont. 2009); Emerald Steel Fabricators, Inc. v. Bureau of Labor & Indus., 230 P.3d 518 (Or. 2010); Roe v. TeleTech Customer Care Mgmt. (Colo.) LLC, 257 P.3d 586 (Wash. 2011). Of course, statutes in these states have decriminalized marijuana use but do not expressly provide employment protections to users.

Employers must tread more carefully in jurisdictions that grant express protections to marijuana users. Courts in these states have not decided whether an employee’s rights under such a state statute trump the rights of an employer to take adverse action against the use of a drug categorized as illegal under federal law.

Advice for Employers

While many implications of legalizing marijuana use are yet to be decided by the courts, employers clearly may continue to prohibit the on-duty use of, or impairment by, marijuana. Employers, particularly federal contractors required to comply with the Drug Free Workplace Act, also may continue the implementation of workplace drug testing programs.

Employers, however, must treat positive tests for marijuana cautiously. Decisions in California, Colorado, Montana, Oregon, and Washington collectively provide support to take adverse action against employees who use marijuana, recreationally or medicinally, and may suggest that such employer-favorable rulings will issue even from courts reviewing state statutes providing employment protections. Thus, a bright-line approach to discharging or refusing to hire marijuana users may be defensible related to marijuana use. But given the uncertain state of the law, employers should consider taking the following steps to reduce potential liability:

  • Engage in the interactive process to determine whether medical marijuana use can be accommodated.

  • Particularly in jurisdictions providing employment protections for medical marijuana users, engage in a fact-based inquiry to determine whether the individual is a medical marijuana cardholder and whether the job can accommodate the individual’s use of medical marijuana.

  • Develop and/or review policies that expressly address the right to take adverse action upon a finding of marijuana use.

  • When taking such adverse action, document the reasons to avoid a pretext argument.

Of course, employers should work with legal counsel to closely monitor the changing legal landscape in their jurisdictions as this area of unsettled law is ripe for future litigation.

Article By Nathaniel M. Glasser & Jonathan K. Hoerner of Epstein Becker & Green, P.C.
©2015 Epstein Becker & Green, P.C. All rights reserved.

Facebook: Second Circuit "Likes" Employee Rights Under the NLRA

Employers should continue to proceed with caution before disciplining employees for their Facebook activity. In Three D, LLC d/b/a Triple Play Sports Bar and Grille v. NLRB, the Federal Appeals Court for Connecticut, New York and Vermont recently upheld a National Labor Relations Board decision that found that one employee’s “liking” another employee’s comments about the terms and conditions of their employment deserved protection under the National Labor Relations Act. The Court upheld the Board’s decision that terminating those employees was illegal.

In Three D, LLC, the employees of a sports bar had a discussion on Facebook about their employer’s alleged mishandling of their tax withholding. The exchange included both negative comments about their workplace and profanity. One of the employees joined into the conversation by writing a response, while another simply “liked” a co-worker’s statements. The employees happened to be Facebook friends with the bar’s owner’s sister, who told the owner about the post. The owner fired the employees, some of whom were interrogated about the posting and threatened with legal action before their termination. The Board found that this was illegal, and the Employer appealed to the Second Circuit.

In recent years the NLRB has been very open about focusing its efforts on the non-unionized workforce. Many employers assume that because they do not have a union, they do not have to worry about the National Labor Relations Act. However, the Act protects the rights of all employees-unionized or not-to engage in concerted activities for their mutual aid or protection. This includes talking together about their working conditions, wages, and even criticizing management. Interfering with that right may be considered an unfair labor practice.

Before the decision in Three D, LLC, the Board had held that the Act protected Facebook posts/conversations about working conditions. The Board did not make clear whether or not simply “liking” a post constituted enough employee participation to count as protected activity. Three D, LLC made clear that at least in Connecticut, Vermont and New York, such activity merits NLRA protection.

An Employer naturally wants to act when its employees post negative or obscene comments about their workplace or their supervisor on Facebook. It is a public forum that the Employer cannot control, and interesting messages can go viral. Three D, LLC does not change the law that Employers have an interest in preventing negative comments about their products or services and protecting their business reputation. An employee’s public communications may lose protection of the Act if sufficiently disloyal or defamatory. This can happen if the statements are not connected with an ongoing labor dispute or are made maliciously and with knowledge of their falsity. However Employers must tread carefully before disciplining employees for their social media use to air workplace grievances.

All in all, Employers should continue to take a close look at their actions in response to employee Facebook posts, even if they do not “like” it.

Article By Michael Colgan Harrington & Jennifer A. Corvo of Murtha Cullina

© Copyright 2015 Murtha Cullina

Facebook: Second Circuit “Likes” Employee Rights Under the NLRA

Employers should continue to proceed with caution before disciplining employees for their Facebook activity. In Three D, LLC d/b/a Triple Play Sports Bar and Grille v. NLRB, the Federal Appeals Court for Connecticut, New York and Vermont recently upheld a National Labor Relations Board decision that found that one employee’s “liking” another employee’s comments about the terms and conditions of their employment deserved protection under the National Labor Relations Act. The Court upheld the Board’s decision that terminating those employees was illegal.

In Three D, LLC, the employees of a sports bar had a discussion on Facebook about their employer’s alleged mishandling of their tax withholding. The exchange included both negative comments about their workplace and profanity. One of the employees joined into the conversation by writing a response, while another simply “liked” a co-worker’s statements. The employees happened to be Facebook friends with the bar’s owner’s sister, who told the owner about the post. The owner fired the employees, some of whom were interrogated about the posting and threatened with legal action before their termination. The Board found that this was illegal, and the Employer appealed to the Second Circuit.

In recent years the NLRB has been very open about focusing its efforts on the non-unionized workforce. Many employers assume that because they do not have a union, they do not have to worry about the National Labor Relations Act. However, the Act protects the rights of all employees-unionized or not-to engage in concerted activities for their mutual aid or protection. This includes talking together about their working conditions, wages, and even criticizing management. Interfering with that right may be considered an unfair labor practice.

Before the decision in Three D, LLC, the Board had held that the Act protected Facebook posts/conversations about working conditions. The Board did not make clear whether or not simply “liking” a post constituted enough employee participation to count as protected activity. Three D, LLC made clear that at least in Connecticut, Vermont and New York, such activity merits NLRA protection.

An Employer naturally wants to act when its employees post negative or obscene comments about their workplace or their supervisor on Facebook. It is a public forum that the Employer cannot control, and interesting messages can go viral. Three D, LLC does not change the law that Employers have an interest in preventing negative comments about their products or services and protecting their business reputation. An employee’s public communications may lose protection of the Act if sufficiently disloyal or defamatory. This can happen if the statements are not connected with an ongoing labor dispute or are made maliciously and with knowledge of their falsity. However Employers must tread carefully before disciplining employees for their social media use to air workplace grievances.

All in all, Employers should continue to take a close look at their actions in response to employee Facebook posts, even if they do not “like” it.

Article By Michael Colgan Harrington & Jennifer A. Corvo of Murtha Cullina

© Copyright 2015 Murtha Cullina

Massachusetts Appeals Court Ruling: Contractor Justified Not Paying Subcontractor That Refused To Perform Work

The general contractor on a public demolition project paid nothing to a subcontractor that had performed the majority of its work but refused to perform work that it claimed was outside of its scope of work. The subcontractor sued the general contractor and after cross-motions for summary judgment the Superior Court sided with the general contractor, holding that the work in dispute was within the subcontractor’s scope and that the subcontractor breached the subcontract by refusing to perform the work. The Superior Court also held that the subcontractor was not entitled to be paid for the work it did perform because it had not substantially performed its obligations under the subcontract. The subcontractor appealed, and the Massachusetts Appeals Court affirmed the Superior Court’s decision. Acme Abatement Contractor, Inc. v. S&R Corporation, No. 2014-P-257, 2015 Mass. App. Unpub. LEXIS 855 (Aug. 20, 2015). Click here to view the Appeals Court decision.

Contracting Background

S&R Corp. (“S&R”) was awarded a demolition contract by the Town of Weymouth (the “Town”). Part of S&R’s work included the demolition of concrete bleachers adjacent to an athletic field. S&R subcontracted the asbestos abatement work to Acme Abatement Contractor, Inc. (“Acme”). Among other things, Acme was required to remove asbestos containing paint from the bleachers prior to demolition.

Scope Dispute Arises

After Acme had commenced work, it informed S&R that it would remove paint only from the side walls of the bleachers but not the risers because Acme believed that paint did not contain asbestos and, therefore, was not within its scope. S&R directed Acme to the project specifications and identified the contract language that it believed clearly required Acme to remove the riser paint. Despite this language, Acme claimed it did not have to remove the riser paint and even went so far as to have the riser paint tested, which test results came back negative for asbestos. Even though tests performed after the subcontract was signed and work had commenced showed that the riser paint did not contain asbestos, the subcontract language included the risers within Acme’s scope and Acme “owned” that work. Nevertheless, Acme refused to remove the riser paint.

Acme performed the remainder of its obligations and then abandoned the project without removing the riser paint. S&R was forced to engage a substitute contractor to remove the riser paint because the project schedule was in jeopardy and S&R faced the prospect of being assessed liquidated damages by the Town if it did not complete the project on time. S&R did not issue payment for any of Acme’s work, even the two-thirds of the subcontract work that Acme performed, on the ground that Acme had materially breached its subcontract.

Subcontractor Sues and Contractor Wins Summary Judgment

Acme brought suit against S&R seeking $145,000 in damages for breach of contract and quantum meruit. Acme also sought treble damages and attorneys’ fees under M.G.L. c. 93A, for a total of damages in excess of $450,000. Both parties eventually moved for summary judgment. The Superior Court granted summary judgment in S&R’s favor finding that: (1) the subcontract required the removal of the riser paint; (2) the subcontract required that Acme perform the disputed work under protest and that Acme’s failure to do so was a material breach of the subcontract; (3) Acme had failed to provide required closeout documents; and, (4) Acme could not recover under quantum meruit for the work it did perform because it did not substantially complete its subcontract obligations.

Subcontractor Appeals

Acme appealed to the Massachusetts Appeals Court, which affirmed the Superior Court’s decision in S&R’s favor. Rather than address whether the removal of the riser paint was within Acme’s scope, the Appeals Court held that Acme breached the subcontract by not performing the disputed work as required by the subcontract. The relevant language provided:

Click here to continue reading…

Article By Andrew G. Wailgum & James F. Radke of Murtha Cullina
© Copyright 2015 Murtha Cullina

Another Paid Family and Medical Leave Proposal: District of Columbia Considers 16 Weeks of Paid Leave under a Local Government-Administered Mandatory Fund Using a Payroll Tax

Advocates of paid family and medical leave programs continue to press for change. In September, we reported on the Obama Executive Order that mandates paid family and medical leave for federal contractors as part of a paid sick leave requirement. Currently, both California and New Jersey have paid family and medical leave that supplements the unpaid leave benefits provided under the federal Family and Medical Leave Act (FMLA). Earlier this month, seven members of the District of Columbia’s local government Council introduced a bill (the Universal Paid Leave Act of 2015) that mandates up to 16 weeks of paid family and medical leave for all private and local public employees who spend at least 50 percent of their working time in the District of Columbia.

The District of Columbia proposal would require all employers to pay an amount equal to one percent of each employee’s annual compensation into a Family and Medical Leave Fund administered by the city. The contribution would be structured as an additional payroll tax paid by the employer, following the model of unemployment compensation. The proposal calls for the creation of a “user-friendly, online portal” on the Internet that provides information on the family and medical leave benefit and allows the submission of claims for these benefits. The resemblance to the web-based portal for Obamacare (the Patient Protection and Affordable Care Act) is probably not a coincidence.

The structure of the paid family and medical leave benefit and the levy on employers that pays for it would be progressive in the tax sense, involving a subsidy of lower income employees’ benefits by contributions for higher income employees. The wages of higher income employees are not as fully protected as the wages of lower income employees. Benefits would be paid at 100 percent of the employee’s average wage up to $1,000 per week, and 50 percent of the employee’s average wage over $1,000, up to a maximum available benefit of $3,000 per week. However, the payroll tax is a flat one percent of all compensation without an upper limit. Further, if the Family and Medical Leave Fund accumulates at least a one-year reserve against claims, the payroll tax is reduced to zero percent for incomes under $10,000 per year, .5 percent for incomes under $20,000, .6 percent for incomes under $50,000, .8 percent for incomes under $150,000 and one percent of incomes over $150,000.

Although federal government employees would not be covered by the Universal Paid Leave Act, federal agencies and federal contractors may opt-in to participate. The program would apply to all other full and part time workers in the District of Columbia.

Article By Peter R. Spanos of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

EEOC Defends “Mark of The Beast” Ruling – Religious Beliefs Don’t Have To Make Sense To Be Protected

EEOCSealIn August 2015, the EEOC prevailed in a religious discrimination lawsuit against Consol Energy and was awarded in excess of $500,000.00.  Former Consol mine worker Beverly Butcher, who had been with the company for over 35 years, refused to use Consol’s new biometric hand scanners that were installed to track employee time and attendance.  He explained that he believed that scanners would leave the “mark of the beast” and would be a sign for the antichrist.  Consol required Butcher to use the scanners and refused to consider alternate means of tracking Butcher’s time, and Butcher believed he had no choice other than to retire.

Consol recently moved for judgment as a matter of law or for a new trial, arguing that Butcher had admitted that he did not actually believe the scanner would give him the mark of the beast (or any mark at all), but instead believed that future versions of the device would be capable of doing so. Butcher further admitted that his pastor did not agree with him that the hand scanners had any relationship to the mark of the beast.

The EEOC has responded to Consol’s motion and stated that although Butcher admitted that the current version hand scanner left no mark, he testified that these scanners “are being used as part of a system of identification being put into place that will be used to serve the antichrist as foretold in the New Testament Book of Revelation and which creates an identifier for followers of the antichrist known as ‘The Mark of the Beast,’” and that “[t]he fact that a believer draws a line at the first step in what he sincerely believes to be an immoral process rather than the last step of that process does not alter the employer’s accommodation duty.”

The EEOC responded to Consol’s efforts to poke holes in the logic of Butcher’s beliefs, stating that it is unconstitutional for Consol to demand theological accuracy or consistency.  “[A]s EEOC has previously pointed out, and as the Court instructed the jury, religious beliefs need not be seen as rational, doctrinally consistent, or accurate in order to be protected under Title VII.”

The takeaway of this is that if an employee seeks an accommodation based on religion, an employer should not subjectively evaluate the logic or wisdom of the employee’s beliefs, but instead should only consider whether the employee sincerely believes.

The case is EEOC v. Consol Energy, Inc., 1:13-cv-00215 in the United States District Court for the Northern District of West Virginia.

Article By Douglas M. Oldham of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

Medical Cannabis in Illinois: What Employers Need to Know

THE MEDICAL CANNABIS PILOT PROGRAM IN ILLINOIS

Is Illinois allowing recreational cannabis use, as is currently the case in Colorado and Washington?
No. The Illinois medical cannabis program is one of the most restrictive regulatory programs in the country, limiting individual usage and industry operations much more than a recreational cannabis state such as Colorado. The Illinois medical cannabis program is a four-year experiment. Illinois government leaders will evaluate a variety of outcomes before deciding whether to restrict, expand or modify the approved uses of cannabis.

How many patients in Illinois will be participating in the pilot program?
Currently, just over 3,000 patients have been approved by the Illinois Department of Public Health to participate in the program. Thousands more are expected to register once the program begins full operations.

How will I know if an employee is approved to participate as a patient in the pilot program?
Employees approved to participate in the program will be issued a State of Illinois identification card verifying registration with the Illinois Department of Public Health.

EMPLOYER CONCERNS

Are employers required to allow patients to use medical cannabis in the workplace?
No. The Illinois medical cannabis law does not require employers to permit employee use of cannabis in the workplace, even when the employee is registered as a patient in the pilot program.

Is permission to use medical cannabis required as a “reasonable accommodation” under the Americans with Disabilities Act?
Although some states have specific language in their laws that answer this question, Illinois law does not appear to include the use of medical cannabis as a required reasonable accommodation under the ADA. Although the underlying debilitating medical condition may qualify an individual for protections under the ADA, whether an employer decides to allow an employee to use medical cannabis as a reasonable accommodation under the ADA will be an individualized determination for the employer to undertake.

Am I required to tolerate medical cannabis use by an employee who works in a safety-sensitive position (i.e., a position in which the employee’s cannabis use could increase the risk of harm to the employee or others)?
No. An employer can enforce a zero-tolerance policy that disallows cannabis use by any employee, such as a physician, who works in a safety-sensitive position.

EMPLOYEE AND CANDIDATE DRUG TESTING

Can I require a medical cannabis patient who is in my employ or a candidate who I am considering hiring to undergo drug testing? What can or should I do if the employee or candidate tests positive?
In Illinois, an employer has discretion to require job candidates (as part of a conditional job offer) and employees to undergo drug testing, as long as the drug testing is conducted in a non-discriminatory manner. The employer also has the option of taking disciplinary action against a current employee who tests positive for a controlled substance (including cannabis), withdrawing an offer of employment issued to a job candidate who tests positive, or taking no action. However, the employer should be consistent in its policies and practices.

If I have contracts with the federal government, am I required to conduct drug tests for medical cannabis for job candidates and/or employees? If so, what am I required or permitted to do if a candidate or employee tests positive for cannabis use?
Some federal government contractors are required to conduct tests for drugs, including cannabis use, for employees and job candidates who are or will be performing certain safety-sensitive or security duties (e.g., owners of nuclear power plants, gas or oil pipelines, airlines and railroads). Action to be taken as a result of a positive drug test will depend on the pertinent circumstances. To ensure compliance with such requirements, employers should consult with an experienced employment law attorney for additional guidance.

Should I review and modify my personnel policies pertaining to drug use and testing? If so, what types of issues should I consider?
Yes, now is an ideal time to review personnel policies involving drug testing and protocols for responding to employee drug use and abuse. Management should carefully consider the company’s approach to drug testing of employees and develop a consistent and transparent plan for responding to drug test results.

Article By Bob Morgan of Much Shelist, P.C.

© 2015 Much Shelist, P.C.

Employee Fired for Facebook Selfie

facebook tab labelA Georgia employee was recently terminated from his position at a marketing firm as a result of a disgraceful Facebook “selfie.” In this case, the employee took a “selfie” with a co-worker’s African American son and uploaded the image as his profile picture. The employee’s picture resulted in a number of Facebook “friends” making derogatory, racist, and disgraceful remarks about the child (we won’t be posting them here). In response to some of the remarks, the employee described the child as “feral.” Not surprisingly, the company promptly terminated the employee’s employment.

Why is this story worth mentioning?  Because this Facebook post represents yet another clear example of social media activity that falls outside the scope of the National Labor Relations Act (NLRA).

As many employers are aware, the NLRA provides some protection to employees engaging in social media activity when the content amounts to “protected concerted activity.” This occurs when two or more employees take action for their mutual aid or protection regarding the terms and conditions of employment (e.g., wages, hours, safety, etc.).

Analyzing whether a post amounts to “protected concerted activity” can be a difficult process. As a result, we believe it is best to work through the analysis with examples. On one end of the spectrum you may have a Facebook post between employees engaging in a civil discussion regarding workplace safety. This discussion would arguably constitute protected concerted activity. On the other end of the spectrum you may encounter a post like the example discussed above – arguably not protected concerted activity. Along the spectrum you may encounter various other examples:

  1. “We don’t get paid enough to work overtime for that d@mn jerk!”

  2. “Good thing OSHA isn’t around because my dumb boss doesn’t care about safety.”

  3. “Our best customer, Mr. Smith, is a jerk.”

  4. “The boss is too old to run the company.”

  5. “I am going to beat up my supervisor and key his car.”

Examples 1 and 2 arguably constitute “protected concerted activity.” Examples 3-5 arguably do not. Remember: the farther the post strays from the “terms and conditions of employment,” the more likely discipline will be permissible. Of course the analysis is much more complex than this. Many other factors could come into play. As such, it is always prudent to involve outside counsel when evaluating whether an employee should be disciplined for a social media post.

Article By Peter T. Tschanz of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

Paid Sick Days Required by Growing Number of Cities and States

Woman, Kleenex, SneezePaid sick leave laws are gaining traction across the nation and are not showing any signs of slowing down. As we recently reported, on September 7, 2015, President Obama signed an Executive Order requiring certain covered federal contractors and subcontractors to provide up to 56 hours of paid sick leave to an employee per year. Four states (California, Connecticut, Massachusetts and Oregon) have passed paid sick leave legislation, and more than 20 cities have passed comprehensive paid sick leave legislation, including:

  • CA: Emeryville, Oakland and San Francisco

  • MD: Montgomery County

  • NJ: Bloomfield, East Orange, Irvington, Jersey City, Monclair, Newark, Passaic, Paterson and Trenton

  • NY: New  York City

  • OR: Portland and Eugene (preempted by state law)

  • PA: Philadelphia and Pittsburgh

  • WA: Seattle and Tacoma

  • Washington, D.C.

Additional localities (e.g., Long Beach and Los Angeles, CA) have enacted paid sick leave ordinances to provide paid sick leave for employees working in certain industries, such as hotel workers. Some of these laws go into effect in 2016. However, most are already in effect, and covered employers must now comply.

For what reasons can employees use leave?

Though each varies, generally, these laws require employers to provide employees with paid leave to diagnose, care for or treat their own, or their family member’s illness, injury or condition, or for preventative medical care. Permissible uses are often broader than typical sick leave. Some laws also require employers to provide paid leave for domestic violence, stalking or sexual assaults. The local ordinance in Emeryville, CA, offers paid leave for care of service animals.

How much leave must employers provide?

Most of the jurisdictions allow employers to either provide a lump sum of leave up front each year or accrue one hour of paid sick leave per every 30 hours worked, but not all. Each law generally places a cap on usage and accrual. However, some jurisdictions such as Seattle, WA, offer much more generous caps on accrual.

What if we already provide paid leave (PTO or vacation) in excess of seven days per year? Do we need a separate sick pay policy, or can we incorporate it into PTO?

While it is possible to incorporate covered sick leave into a general PTO policy, employers must ensure that the PTO policy still meets the minimum requirements of the law(s), which is sometimes impractical. In most cases, employers will need to alter, for example, their accrual method, advance notice provisions, acceptable reasons for use and PTO carryover.

Which employees are eligible?

Employee eligibility requirements for paid sick leave tend to be minimal. For instance, many laws offer paid sick leave to not only regular full-time employees but also to part-time or temporary employees. Often times, an employer need not have a facility or office in the city or state to be covered. For instance, under California’s paid sick leave law, an employee need only work in California for 30 days per year to be eligible for paid sick time. This could mean that an employee who does not live in and/or is not based out of California may still be eligible for paid sick leave under California state law.

What other provisions do I need to consider?

In addition, the laws generally include anti-retaliation provisions, notice and posting requirements and recordkeeping obligations. Some laws, such as California’s, require employers to provide written notice of available paid sick time with each pay stub.

What should employers do?

Employers should first analyze whether their company is subject to any current or pending paid sick leave laws. Here are some initial questions to ask:

  • Does my company have a facility in any of the states/cities mentioned?

  • Does my company employ a sales force (or salesperson) or other employees in the city/state?

  • Do my company’s managers, salespersons, technicians or other employees travel for business in the city/state? If so, how frequently?

If employers determine their business may be covered under state and/or local paid sick leave law(s) listed above, they need to familiarize themselves with the specifics of those jurisdictions and implement the necessary changes to policies and practices. We are happy to assist in identifying coverage and implementing compliant changes.

Article By Farrah N.W. Rifelj & Holly E. Courtney of Michael Best & Friedrich LLP

© MICHAEL BEST & FRIEDRICH LLP

No Pay Can Be OK – A New Test to Determine the Primary Beneficiary in Unpaid Internships

This summer, two federal appellate courts declined to follow the U.S. Department of Labor’s six factors for determining whether an unpaid intern is an employee under the Fair Labor Standards Act (“FLSA”). In doing so, those courts — the Second Circuit (covering Connecticut, New York, and Vermont) and the Eleventh Circuit (covering Alabama, Florida, and Georgia) — instead adopted a more modern, flexible approach.

money, dollar sign

In the case before the Second Circuit, Glatt v. Fox Searchlight Pictures, Inc., the plaintiffs were unpaid interns who asserted that they were entitled to minimum wage and overtime pay. The district court concluded that the plaintiffs were improperly classified as unpaid interns and should rather be classified as employees, and granted a motion to certify the class of interns (a discussion of the district court’s decision is available here). The district court based the decision on a Supreme Court precedent from 1947, Walling v. Portland Terminal Co., 330 U.S. 148 (1947), a case dealing with the “trainee exception” to the FLSA for prospective railroad employees. Upon review, the Second Circuit vacated the district court’s order, setting out its own set of factors to be considered in determining whether an unpaid intern is entitled to compensation as an employee under the FLSA. In doing so, the Second Circuit departed from the six-part Department of Labor test based upon Portland Terminal, finding that test too rigid. The Second Circuit adopted a more flexible test looking to see whether the intern or the employer is the primary beneficiary of the relationship.

The Second Circuit indicated that the non-exhaustive factors for determining whether an unpaid intern at a for-profit business should be considered an employee for purposes of the FLSA include:

  1. The extent to which the intern and the employer clearly understand that there is expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

Each of these factors need to be weighed and balanced in light of the circumstances. No one factor is dispositive, and courts are permitted to consider relevant evidence that is not contained in the above factors.

The Second Circuit noted that this flexible test better reflects the role internships play in today’s economy, recognizing that students gain value from practical, real-world experience, while also remaining true to the Portland Terminal inquiry as to whether the intern or the employer is the primary beneficiary of the relationship. The Second Circuit noted that the updated test first looks at what the intern receives for his/her work, and second, that it provides courts flexibility to examine the economic reality between the intern and employer. Also of note is that the Second Circuit emphasized an individualized approach to examine whether an intern qualifies as an employee under the FLSA. This could indicate a limitation on class action suits for unpaid interns moving forward.

A few months after the Second Circuit’s decision in Glatt, the Eleventh Circuit considered a similar issue in Schumann v. Collier Anesthesia, P.A., a case where the plaintiffs were former students attending a master’s degree program to become certified registered nurse anesthetists. As part of obtaining a degree, the students were required to participate in clinical curricula. The plaintiffs sought wages and overtime for their clinical hours. The Eleventh Circuit also found the Department of Labor’s six factors too rigid and adopted the seven non-exhaustive factors that the Second Circuit identified in Glatt. The Eleventh Circuit did not expressly reach the issue of whether students were FLSA employees, and time will tell whether the decision is distinguished as applying primarily to internships for academic credit and/or certification requirements, or whether it will have broader application.

While the decisions from the Second and Eleventh Circuits are positive developments for employers, the landscape regarding unpaid interns and the FLSA is still evolving as case law in this area continues to develop. Many lawsuits have been filed by interns or former interns seeking wages and overtime under the FLSA. Many of these cases have settled in the multi-million dollar range, many other cases remain pending, and it is likely that more cases will be filed. The consensus between the Second and Eleventh Circuits on the departure from the Department of Labor’s six-part test toward a more flexible and updated primary beneficiary test may be persuasive as other circuits consider the issue, but it remains unknown to what extent other courts will agree with these decisions. Because only the Second and Eleventh Circuits have adopted this more flexible approach, the Department of Labor will continue to follow the stricter six-part test for determining whether an unpaid intern qualifies as an employee under the FLSA.

Article By Elise E. Libbey of Gonzalez Saggio & Harlan LLP

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