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Searching for Articles by Dean R. Dietrich
Dean R. Dietrich
Chair of Employment, Benefits & Labor Relations Practice Group
Wausau Office
Found 171 Results.

Mixed Motive For Discrimination Decision - Be Careful

A recent Wisconsin Court of Appeals decision highlighted the importance of employers being very careful when making employment decisions to ensure that part of the rationale for a decision is not discriminatory in nature. In this decision, Milwaukee County terminated a manager for violation of County policies on use of technology. During the discussion with the employee, it was indicated he was being terminated because of his arrest for sexual assault which ultimately was dismissed in a criminal proceeding. The other reason for termination was a clear violation of the County policy on use of computers and improper communications using the County e-mail system but that was not discussed at the time of termination. The Court of Appeals found the termination decision was made "in part" for an impermissible reason, being discrimination on the basis of arrest record. The Court of Appeals ultimately found the employee should only receive limited back pay, a large sum for attorneys fees and a cease and desist order against Milwaukee County because there was clear legitimate reason for terminating the employee because of a violation of the e-mail usage policy. Unfortunately, Milwaukee County was found liable because the evidence showed the arrest of the employee was a factor in the decision to terminate the employee. This case is an example of the importance of how an employer communicates a decision to terminate an employee. It is also an example of the need for caution when dealing with arrest and conviction record situations. In this case, the employee ultimately was never arrested but rather was only investigated regarding inappropriate conduct, however, the allegation was still made (and upheld) that the employee was discriminated against because of his arrest record. The only saving point to the action by Milwaukee County was the fact that there was a legitimate reason to terminate the employee for violation of County policy which partially limited the recovery by the employee.

Broad Confidentiality Rule - Violation of Employee Rights?

A recent decision from the National Labor Relations Board has again highlighted the lengths to which the NLRB will go to seek out protection of employee rights under Section 7 of the National Labor Relations Act. This Section allows employees to communicate regarding union organizing activities and exchange information amongst employees regarding possible union organizing efforts without retaliation by the Employer. In a recent decision, the Board, by a 2-1 margin, found that the confidentiality rule in the Company Code of Business Conduct violated the employee rights to discuss things like wages and terms and conditions of employment. The confidentiality portion of the Code of Business Conduct was directed at employees and indicated that customer and employee information should be kept secure and that such information could only be used "fairly, lawfully and only for the purpose for which it was obtained." The majority of the Board felt that this language was unlawful because employees could "reasonably construe the admonition to keep employee information secure to prohibit discussion and disclosure of information about other employees, such as wages and terms and conditions of employment." It was argued that the Code of Business Conduct was designed to inform employees of the business ethics of the Company and not as an employee handbook with work rules affecting employee conduct. This argument fell on deaf ears even though the administrative law judge had used that rationale to find no violation of the employee rights protected by Section 7. This decision shows that the Board is taking every step to ensure employee rights. Some would suggest that it is reaching well beyond the rationale used in the past by the Board to find a violation of Section 7 rights. Employers must recognize the risks that exist under these very liberal interpretations of Section 7 rights afforded employees. A review of the Company handbook may be appropriate to ensure there is no provision that could fall under this scrutiny.

Door Open to Working at Home

A recent decision from the Sixth Circuit Court of Appeals in Cincinnati has opened the door to the argument that an employer must provide a reasonable accommodation of allowing an employee to work from home instead of being at the office. In this decision, the Court of Appeals held that an employer cannot automatically require that actual presence at a physical site is an essential part of a job. The potential impact of this decision is enormous. The Equal Employment Opportunity Commission brought an action against Ford Motor Company on behalf of an employee that suffered from Irritable Bowel Syndrome. The employee was responsible for addressing emergency situations when supplies were not available for the company or its manufacturers and was responsible for ensuring that supplies would be immediately provided to the manufacturer to ensure continued production of cars. The employee asked to work from home several days a week because of her medical condition, but Ford Motor Company took the position that she had to work at the office because physical presence was a requirement of the position and interacting with other employees in emergency situations was part of her job responsibilities. The Court of Appeals held that attendance was an essential function of the job in the past, but technology has changed over the years and an ever increasing number of employers and employees are utilizing work from home arrangements such that attendance at a workplace can no longer be assumed to be an actual requirement of the job. The Court found that Ford Motor Company did not meet its burden to prove that physical presence at a work site was an essential function of her work duties. This is an opening of the door to the notion that employers may be required to provide a reasonable accommodation of allowing somebody to work from home. In our new age of technology and telecommunications, employers will be required to show the absolute necessity for an employee to be at the workplace rather than on a computer screen interacting with other employees. Employers should start now by modifying their job descriptions to clearly indicate why it is necessary for an employee to be at the workplace and interacting with other employees.

Is Six Months Enough?

A recent decision from the Tenth Circuit Court of Appeals has addressed the question whether a six-month leave of absence for a disabled employee is sufficient to satisfy the reasonable accommodation requirement. The Court of Appeals found that Kansas State University satisfied the reasonable accommodation requirements under the Rehabilitation Act when terminating an assistant professor suffering from cancer who had been granted a six-month paid leave of absence while undergoing cancer treatment. The Court found that the Rehabilitation Act did not generally compel an employer to hold a position for a non-performing employee for more than a six-month period. The Rehabilitation Act is a public sector law similar to the Americans with Disabilities Act. While this is an older law, it has the same concepts and language as found in the Americans with Disabilities Act and its Amendments. The Tenth Circuit Court of Appeals reviewed language from the EEOC manual which holds that an employer did not have to retain a worker who was unable to perform their job functions for more than six months by finding that the timeframe of more than six months was "beyond a reasonable amount of time." Wisconsin employers must remember that decisions under the Wisconsin Fair Employment Act have suggested that employers must show flexibility when considering whether or not to continue the employment status (without pay) of an employee who was undergoing treatment for a medical condition. The limit of six months does not automatically apply in a case involving a Wisconsin employer but it does offer some significant guidance as to what would be considered "reasonable" under the requirement that the employer provide a reasonable accommodation for an otherwise "qualified disabled person." We do not have a decision in Wisconsin that directly speaks to the length of time that an employer must continue the employment status of an employee suffering from a disabling condition but it appears the six month period would meet the standard of being "reasonable" under the circumstances.

Access to Company Property During Off-Duty Time - No Restrictions

An employer would normally think that it could pass a work rule that says an employee does not have access to company property when the employee is off-duty and not working. This makes sense, because there is no reason for the employee to be on company property if they are not there to perform work. We now have to think twice, because the National Labor Relations Board (NLRB) recently found that a company violated the rights of an employee when it implemented and enforced a policy preventing employees access to its property during off-duty time without prior supervisor authorization. In the recent decision of American Baptist Homes of the West d/b/a Piedmont Gardens and Service Employees International Union, United Healthcare Workers-West, the NLRB held the Nursing Home violated the rights of its employees when it disciplined two employees for meeting in the employee break room after their regular hours to visit with a union official. The rule restricted the access of off-duty employees without prior supervisor approval and a notice was posted stating the union was not permitted to hold meetings in the employee break room. The union challenged this rule claiming it violated the rights of the employees to organize and discuss working conditions. The NLRB found the rule was unlawful because it gave unlimited discretion to management to determine when and why employees would have access to company property. This is another example of the NLRB imposing restrictions on a company because of the exercise of union rights and the freedom of employees to engage in union-related activities. The NLRB is imposing a very distinct agenda that opens the door to an unfettered freedom for employees to engage in union organizing activities. Companies must be careful in the implementation of policies to avoid a finding that they have interfered with the rights of their employees. While such a finding may not be harmful to the company, the exercise of this right (and the support of the NLRB) may be damaging to the relationship between a company and its employees.

New Decision - Same Result - Same Worry

Another decision from the National Labor Relations Board has created the same worry for employers. An NLRB judge recently ruled that several portions of a company employee handbook restricted the rights of workers to organize and discuss their conditions of employment and found there was a violation of the Section 7 rights of the employees. In a decision involving a hotel operator, Hostmark Hospitality Group, the administrative law judge found that the company violated the National Labor Relations Act by maintaining an overly restrictive employee handbook. The judge felt several policies in the employee handbook were improper or illegal including a policy that prevented employees from accessing the hotel facilities when not on duty. The judge also found that a policy which directed employees not to speak with the media was a violation of the law as well as a confidentiality policy which allegedly gave employees the impression they were prohibited from discussing their wages or conditions of employment. The judge ordered the company to rescind the handbook policies that he determined were in violation of the National Labor Relations Act. This is again another decision by the NLRB that scrutinizes the policies of a company and holds that a policy which seems to interfere with the freedom of speech of an employee to talk about wages and working conditions was a violation of the law even if the company policy was simply a declaration of the need for confidentiality of company records and information. This decision again shows the lengths the NLRB will go to find that a company policy violates the union organizing rights of employees and is therefore in violation of the National Labor Relations Act. Employers should give careful review to their employee handbooks to avoid this type of scrutiny and the potential for an unfavorable ruling by this pro-employee Board.

EEOC Issues Pregnancy Discrimination Guidelines - No Real Change for Wisconsin Employers

In the last two weeks, the Equal Employment Opportunity Commission (EEOC) has issued an Enforcement Guidance document on pregnancy discrimination and related issues. This Guidance is a comprehensive statement by the EEOC on pregnancy discrimination and the duty of employers to provide accommodations to a pregnant employee. One of the most significant statements in the Guidance is that employers must provide the same accommodation for a pregnant employee as it provides for other employees with a disabling condition and may not provide a benefit/leave solely for employees who suffer an on-the-job injury. In other words, policies for time-off that apply to an employee who suffers an on-the-job injury must be applied to employees who are pregnant. This is a change from some statements in other EEOC documents. The Guidance offered by the EEOC really does not change the obligations that an employer has under the Wisconsin Fair Employment Act. Almost all employers have assumed a requirement to make accommodations for a pregnant employee and generally understand they may not treat a pregnant employee differently than any other employee who suffers from a disabling condition and needs to be away from work. Some of the pronouncements in the EEOC Guidance provide clarification for Wisconsin employers but really do not change the general understanding that has been applied by Wisconsin employers. The Guidance document can be obtained by accessing the EEOC website at The real take-away from the Guidance and how things have been looked at in the past is that an employee who is pregnant must be treated the same as any other employee in the workplace. Most pregnancy discrimination cases arise during the hiring process when an individual is not hired or is removed from consideration because the employee announces she is pregnant. This is really hiring discrimination rather than inappropriate treatment in the workplace, but we can anticipate the EEOC pursuing more cases involving differential treatment of a pregnant employee compared to other company employees. Employers may want to review their personnel policies to make sure they are clearly following the same accommodation considerations whether it is an employee with a disabling condition or a pregnant employee.

Stop Talking About Your Compensation - Not

Many companies have a policy that prohibits employees from talking about their salary or benefits in order to avoid morale issues in the workplace. It is sometimes hard to enforce a policy like this, but companies believe it is important to make it clear that a discussion of salary that an employee receives is not acceptable in the workplace. Recent statements by General Counsel Richard Griffin Jr. have made it very clear that the NLRB will be looking to stop these types of policies from being implemented. General Counsel Griffin spoke at a recent labor law conference and stated that company policies which forbid workers from discussing compensation will be on the top of his list of priorities to eliminate on the theory that such policies are a violation of an employee's right to protect it's speech about wages, hours, and conditions of employment, known as Section 7 protected speech. General Counsel Griffin believes that policies of this type are a clear violation of NLRA rights and should not be included in an employee handbook or workplace rule. Attorney Griffin is relying upon a recent NLRB ruling which held that a trucking company violated federal law by maintaining a confidentiality policy that prohibited workers from discussing wages. General Counsel Griffin also spoke about the Board precedent that prevented employees from using company e-mails to engage in union discussions and union organizing campaigns. The NLRB is seeking arguments on a case that looks to overturn the prior precedent and would allow the use of company e-mail to communicate between employees about union organizing efforts. Employers must be very careful that they are aware of the new strategies being adopted by the NLRB. Company policies are under attack and will be used as a basis for unfair labor practice claims against a company even in a non-union setting.

Contracted Employees: Will You Become a New Employer?

Many companies use contracted employees to avoid the cost of human resources services and benefits. Under these arrangements, a company will hire another company to provide the employees that will do all or a portion of the production work for the business. This has become a popular way to manage human resources costs and benefits. The National Labor Relations Board has held that the company contracting with another company is a separate employer and not responsible for issues involving the employees (such as union organizing efforts) provided the company is not actually sharing in the ability to control or determine the essential terms and conditions of employment for these employees (things such as hiring, firing and direct supervision of the employees). The lack of control over the employment conditions for the employees of the contracted company is what gives protection to the contracting company from any requirements of being an employer of those individual employees. The world as we know it regarding contracted employees may be changing. The National Labor Relations Board and its General Counsel (Richard Griffin, Jr.) are looking to change the criteria for determining whether two companies are considered "joint employers" of these contracted employees. The NLRB is currently considering a case where the Teamsters Union is seeking to organize employees that are directly employed by a sub-contractor. The Union is asserting that the company is a joint employer with the sub-contractor and is seeking to overturn a long-standing precedent of the Board suggesting that it is time to "overhaul its (Board) dated and toothless test of joint-employer status." In this case, the sub-contractor has employees working on the premises of the contracting company. The desire of the NLRB to engage in a review and control of non-union work settings suggest that the Board will undertake a change in the "joint employer" standard and make it easier to organize these types of contracted workers to be considered an employee of the contracting company. Employers should look very closely at the current contracting arrangements used for obtaining employees that work for a sub-contractor who also do work for the company. There should be an assessment of whether there is a risk of a "joint employer" status and what the impact of that may be on the company operations and employee costs.

Texting While Driving - Illegal But Paid

Many municipalities and states have adopted a law that prohibits texting while someone is driving. Individuals are prohibited from texting or even dialing the phone while driving. This prohibition is probably violated much more than it is complied with, but regardless of what the prohibitions may be, employers may still be "on the hook" for paying an employee who is talking or texting while driving if the topic is work related. There has been a lot of litigation about whether time spent travelling by an hourly employee is compensable. Travel by an hourly paid employee may include (1) the regular commute to and from work; (2) travel during the regular work day; (3) travelling from one place of work to another place of work as part of regular duties; or (4) making a stop for business reasons while travelling to or from work. Under most of these circumstances, the employee will be paid for the time spent performing work and the time spent travelling from one location to another location to perform work duties. The interesting question is whether an employer is required to pay an employee for the commute time to and from work. Normally, this time is considered non-compensable because it is travel to and from work by the employee and not part of the work duties required to be performed by the employee. If the employee is stopping for business reasons during the commute at the start or end of the workday, it is likely that time would be considered work time because there is a requirement that some level of work be performed for the benefit of the employer. It will depend upon whether the stop for business reasons is incidental or an important requirement for work. The more challenging question is whether pay should be given to the employee if the employee is talking while travelling and the phone call is business-related. An argument can be made that the employee should be compensated for that time because they are performing work-related business. In a recent decision by the Connecticut Supreme Court, the Court acknowledged in a footnote, that the employee would be considered performing work if the employer is telephoning an employee during the regular commute time and engaging the employee in a discussion concerning work-related issues. Travel time to and from work may now become more of a work-related activity and subject to pay requirements.

Watch Out - Protections Against Swearing at Boss

The National Labor Relations Board continues to reach out to provide protection to employees. In a recent decision, the Board concluded that an outburst in the workplace by an employee was considered protected speech, because the employee did not explicitly threaten violence and did not act in a violent fashion. The employee did, in a raised voice, call his supervisor by a number of unacceptable names using the "f" word in conjunction with other words. The employee even threatened the supervisor by saying that if the supervisor fired the employee, the supervisor would regret it. The employee was terminated and filed an unfair labor practice charge with the National Labor Relations Board. The Board concluded the termination of the employee was in retaliation for conduct that occurred at a meeting, and that the employee should be protected from retaliation to better serve the goal of fostering collective action without unduly impairing the employer's interest in maintaining workplace order. In other words, an employee can use swear words when addressing a supervisor and not be subject to termination, because the statements may be considered protected speech. This makes me wonder what will happen next. Is it protected speech to criticize the company in front of customers or can a company take action when there is a disruptive employee? I guess it remains to be seen.

Pray Before Local Government Meeting - Honor All Religions

The United States Supreme Court, in the recent decision in Town of Greece v. Galloway held that prayers before a town meeting delivered by a "chaplain of the month" did not violate the Establishment Clause and therefore were not prohibited from being used by a local township at the start of its meetings. The majority opinion, by a 5-4 vote found there was no violation of the First Amendment by holding that "ceremonial prayer is but a recognition that, since this nation was founded and until the present day, many Americans deem that their own existence must be understood by precepts far beyond that authority of government to alter or define." This quote by Justice Kennedy frames the ruling by the Supreme Court. The Supreme Court also found that a local government unit may not discriminate against non-Christians when taking steps to select a "chaplain of the month" for reading at the local government meeting. In other words, the local government unit must honor all religions and acknowledge all religions when choosing someone to read a prayer at the start of a government meeting. It is important to recognize that the prayers at the Town of Greece public meetings were generally secular in nature; however, the Town leadership had made it clear that any type of faith or even atheists were welcome to give the opening prayer. Local government units now are able to continue the practice of opening their meetings with a prayer but government leaders must be careful they offer the opportunity to all types of religions to give the opening prayer.

Denying Unemployment Benefits is Starting to Work

The definition of misconduct under the Wisconsin Unemployment Compensation Law was changed as of the first of the year. We are now starting to see decisions under this new standard that limit employees from receiving unemployment benefits when being terminated from employment due to inappropriate conduct. For many years, an employer was not able to challenge the granting of unemployment benefits unless the employee was terminated for misconduct and then had to meet a very high threshold for proving misconduct occurred and benefits should be denied. The rules have changed and now employers at least have a fighting chance to seek the denial of unemployment benefits when terminating an employee that has taken action that harms the company. The standards an employer must meet to deny unemployment benefits are either that the employee committed "misconduct" or was terminated for "substantial fault" while performing work duties. The definition of misconduct now reads: "One or more actions or conduct evidencing such willful or wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which an employer has a right to expect of his or her employees, or in carelessness or negligence of such degree or recurrence as to manifest culpability, wrongful intent, or evil design of equal severity to such disregard, or to show an intentional and substantial disregard of an employer's interests, or of an employee's duties and obligations to his or her employer." The definition of substantial fault which is the new category that allows for denial of benefits is: "Includes those acts or omissions of an employee over which the employee exercised reasonable control and which violate reasonable requirements of the employee's employer." Substantial fault would not include (1) one or more minor infractions of rules unless the infraction is repeated after a warning; (2) one or more inadvertent errors made by the employee; or (3) any failure of the employee to perform work because of insufficient skill, ability, or equipment. Employers now have more flexibility when deciding whether or not to challenge the granting of unemployment benefits to an employee who is terminated from his/her employment with the company. Remember to check the definition to make sure the company is able to challenge the granting of unemployment benefits in those settings.

Closed Session Agendas - How Much Detail?

There is a great deal of debate how much detail you must use on the open meeting agenda when the local government board is convening into closed session. It is clear the agenda must state what section of the Open Meetings Law is being used as the exception to allow a closed meeting, and there must be a statement, with some specificity, of the type to be discussed in the closed session. It is also clear that a local government body cannot simply state the number of the state statute being used to go into closed session and not indicate with more detail the topic to be discussed in the closed session. What is not clear is the amount of detail that must be used when preparing an agenda for a closed session meeting. It is commonly recognized that you must state in the meeting notice and in the motion to go into closed session, the statutory reference by number that is being relied upon to adjourn into closed session. We believe that the more appropriate practice is to state the number of the state statute and the actual language of the state statute as part of the meeting notice for going into a closed session meeting. While this level of detail may not be required by the statutes, it is the most effective way to communicate to the public the reason for going into the closed session and the rationale that is relied upon for adjourning into closed session. It is also necessary to identify with some degree of specificity the item that will be discussed in the closed session. You do not have to list names of individuals that will be talked about in the closed session, but you have to convey enough information so the public knows what will be talked about in the closed session. The exact language will, of course, depend upon the exact topic that you anticipate discussing and how much need there is for confidentiality. For example, a local government board that is adjourning into closed session to discuss the terms of a development agreement with a company that is proposing to locate in the municipality, has to indicate there is a discussion about a development agreement but would not have to name the company that the development agreement would apply to. There is a fine line between notifying the public of the purpose for the closed session meeting and the need to retain confidentiality because of the topic of the closed session. Local governments would be well-served to provide more detail about the statutory exception relied upon for adjourning into closed session and also provide some detail about the topic to be discussed in closed session without adversely affecting the need for confidentiality. Closed session agenda items should be reviewed closely with legal counsel to ensure compliance with the statutory requirements.

Off-Duty Conduct - Taking Adverse Employment Action

There is a lot of controversy today about the right of an employer to take adverse employment action (i.e. firing someone) for off-duty conduct. Employers have more access to things happening outside the workplace and are very concerned about their overall reputation in the community. Unfortunately, there are various laws that protect an employee from any type of adverse employment action because of lawful off-duty conduct. The most obvious protection is found in Wisconsin statutes which provide that it is discrimination to take adverse employment action against someone who engages in lawful off-duty conduct involving the use of products. This law was written to prevent discrimination against an employee who smokes off-duty when the employer prohibits smoking in the workplace. This law has been expanded, however, to cover many other types of uses of lawful products during off-duty hours. One example is medical marijuana that would be considered a lawful product in some states that could be used during off-duty hours although employers still may discipline an employee if the presence of marijuana exists when the employee is in the workplace. Another example might be use of caffeine before coming to work. Another law that protects employees for lawful conduct is the possession of concealed carry weapons when off work. Employers may not prohibit an employee from possessing a weapon and leaving it in their personal vehicle on Company property even though an employer can prohibit an employee from having a concealed carry weapon in the workplace. This again is an area where employers are limited in how they can address the conduct of an employee during off-work hours. A more difficult area to assess is the use of social media by an employee during non-work hours. The National Labor Relations Board has issued a number of decisions holding that an employer may not restrict what an employee says on social media about the workplace because a restriction would constitute a violation of the rights of an employee to organize or to comment about working conditions. The content of a social media post may be subject to some scrutiny by an employer but much will depend upon the nature of the comment and whether the comment addresses an issue of protected speech under the National Labor Relations Act. Regulating the off-duty conduct of an employee is something that has come under a great deal of scrutiny both through legislative acts and legal rulings. Employers must be very careful when considering adverse employment action against an individual because of what they have done during non-work hours. Employers still have the right to protect the reputation of their business but the limits to that protection require a great deal of scrutiny before action is taken.

Safety First

This past April, Governor Walker signed over 100 bills into law. A number of the bills affect local government units. Over the course of the next couple of weeks, we will be touching on those new laws to provide some guidance to municipalities on how business may change as a result of the new legislation. A number of the changes may require some additional discussion, so please feel free to contact us to learn more. As you may have guessed from the title of this blog post, the first bill, Assembly Bill 803, seeks to promote safe work environments for employers and employees performing work on a public works project. To do this, the bill extends a requirement that employers have in place and enforce a strict substance abuse program to all employees working on a public works project. It also requires employers to remove employees from the job site when the employee violates the substance abuse policy and to test the employee prior to return to the jobsite. Also, the bill extends the "move or slow down" law, which currently only applies to emergency vehicles, to vehicles working on a public works project. This requires drivers to abide by safer driving procedures when approaching vehicles working on a public works project. Municipalities need to be aware of these new requirements so that contracts can be reviewed before work is performed on public works projects.

Micro-Unions: Is This The Future?

Two recent decisions by the National Labor Relations Board in the retail sector have again raised questions about the new concept of micro-unions. A micro-union is a union representing a small group of employees within a large employer. This phenomena has created a significant stir in the legal community because of the potential for a Company being ordered to recognize a bargaining unit of a particular division or department rather than a union representing all employees at a location. Great concern arises of the potential foot in the door scenario where a union election is held amongst a small bargaining group and then the union becomes recognized for that small group in the Company with the potential for the union to recruit from the inside to represent more employees of the Company. In one recent decision, the National Labor Relations Board recognized a bargaining union for cosmetic and fragrance workers of Macys, Inc. which was comprised of 41 employees in its Boston area store employees. This decision implemented the Specially Health Care and Rehabilitation Center of Mobile decision which, in the health care field, was the first decision recognizing a bargaining unit for a separate division of a large health care/nursing home facility. The Macy decision opens the door to the recognition of small bargaining units for a large retail business. In another decision, however, the NLRB refused to recognize a bargaining unit of womens shoe sales workers on two floors of the Manhattan based Bergdorf Goodman store. In this decision, the NLRB refused to recognize a small bargaining unit of employees that worked on two floors in the main store of this large retail enterprise. This decision contradicts the previous decision in Macys, Inc. matter and raises significant questions about how the micro-union principles will be applied in the retail industry. Employers should recognize the potential for union organizing efforts in a small division of a big company. Unions will use this strategy to get a foothold in the company and then work from there to encourage more employees to be represented by the union. Employers must remain ever sensitive to potential union organizing activities in either an overall bargaining unit or a micro bargaining union.

Perfectly Clear Successor - Be Careful

Two recent events have refocused a concern about becoming a successor owner of a company in a setting where the company is being acquired/purchased. Situations arise on a regular basis where a company will purchase another business with the intention of operating the business as it has been previously operated and simply becoming the new owner of that business. In those settings, the new owner may be at risk of liability for the acts of the prior company such that the acquiring company needs to be very careful of assuming liability for such actions. The National Labor Relations Board (NLRB) recently announced its 2014 initiatives which highlight the legal issues the NLRB will be addressing and requiring oversight from the General Counsel Office. One of the areas involves "perfectly clear successors" which are situations where a successor company intends to retain all of the employees that are in a bargaining unit with a labor agreement with the purchased company. In most circumstances, the new owner has the right to set the wages and conditions of employment for the newly acquired company and then negotiate with the union over any changes to those wages and conditions of employment. The NLRB will be closely examining circumstances where a new company is deemed to be a "perfectly clear successor" and therefore required to adopt and follow the provisions of the labor agreement that previously existed with the purchased company. This could place the acquiring company at a great disadvantage if they are fully obligated to assume the terms and conditions of an existing labor agreement rather than having the right to re-negotiate over those terms and conditions. A recent decision from the Third Circuit Court of Appeals created the same risk for a successor company. The successor company was held liable for remedying Fair Labor Standards Act (FLSA) violations that had been committed by the purchaser company. The Court of Appeals held that the new company would be obligated to assume responsibility for FLSA violations under the federal common law standard holding that liability would be imposed on the successor company if (1) continuity of operations and workforce of the purchased and successor companies were the same; (2) notice was given to the successor company of the legal obligations of the purchased company; and (3) the extent of the ability of the purchased company to provide adequate relief for the alleged violations. Under this standard, it was easy for the Court to require the successor company to be responsible for the overtime violations that occurred during the time of ownership by the purchased company. Again, the new owner became responsible for the obligations of the purchased company. Similar liability can arise in other types of claims such as discrimination claims or ERISA claims. Acquiring a new business may be a positive thing but the acquiring company must be careful to ensure it is not assuming responsibility for violations that were made by the purchased company prior to the acquisition.

No More Record Keeping for Professionals

Wisconsin has always been a little different because it required employers to keep a record of the hours worked by a professional employee who was exempt from the overtime pay requirements of the Fair Labor Standards Act. This requirement also applied to other exempt employees such as administrative or executive employees that were considered exempt from the FLSA requirements. Recent legislation adopted by the Wisconsin Legislature and signed by the Governor removes the requirement of keeping a record of hours of work for exempt employees. 2013 Wisconsin Act 286 which is effective as of April 17, 2014 provides a specific exception to the record keeping requirement of Section 104.09 of the Wisconsin Statutes. Section 104.09 has been amended to provide that, "An employer is not required to keep a record of the hours of employment of an employee who is exempt under rules promulgated by the Department from the requirement under s. 103.02 that an employee being paid overtime compensation, as defined in s. 103.025(1)(c), and who is not compensated on an hourly rate basis." While this language is lengthy, the real impact of this language is that if you have an employee who is deemed exempt from overtime pay requirements and the employee is paid on a salary basis, an employer is not required to keep payroll records showing the hours worked by that employee. Employers may want to have an exempt employee sign a timesheet showing their regular hours of work for documentation purposes but a company is not required to do so as existed under the prior law. While many companies did not require these payroll timesheets be kept, it was a requirement of the law that has now been eliminated. Employers can now truly treat exempt employees as exempt professionals, executives or administrators that are not subject to overtime pay requirements. Each employer may want to review their payroll procedures and consider implementing this new statutory provision.

Age Discrimination Cases Can be Easy to Prove

Several recent stories have talked about huge layoffs because of a loss of federal contracts and a decline in available work. Companies are looking at large layoffs to reduce costs and survive the cutbacks in revenue from the loss of contracts. A reduction in the workforce can open the door for age discrimination claims if older employees are selected for layoff and younger employees remain employed. A recent decision by the Seventh Circuit Court of Appeals (which includes Wisconsin) again clarified the methods by which an employee can prove a claim of age discrimination. The Court briefly summarized the methods for proving a claim when it wrote the following: The direct method can be proved through direct evidence or circumstantial evidence of discrimination. Direct evidence required that the employer admit its discriminatory intent (e.g., the "smoking gun" case). The far more common case relies on circumstantial evidence, which allows the trier of fact to infer intentional discrimination by the decision maker. Circumstantial evidence typically includes (1) suspicious timing, ambiguous oral or written statements, or behavior toward or comments directed at other employees in the protected group; (2) evidence, whether or not rigorously statistical, that similarly situated employees outside the protected class received systematically better treatment; or (3) evidence that the employee was qualified for the job in question but was passed over in favor of a person outside the protected class, and the employer's reason is a pretext for discrimination. Circumstantial evidence must point directly to a discriminatory reason for the employer's action. It is good to remember an age discrimination claim can be proven by one of two methods. The more common method is proof based on circumstantial evidence of discrimination. Employers must be very careful to document their decisions when reducing the workforce to show the decision was not based upon age of the employee but rather based on the needs of the company and the type of work performed by different employees in the workforce.