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Searching for Articles published in July 2014.
Found 10 Results.

Wisconsin Act 10 is Constitutional - Is there a Next Step?

Posted on July 31, 2014, Authored by ,

As you all may know, the Wisconsin Supreme Court has held, in a 5-2 decision, that Wisconsin Act 10 is constitutional and the limitations on collective bargaining, no dues deduction and yearly re-certification elections do not violate the constitutional rights of public sector employees. The decision is 122 pages in length so it will be subject to further interpretation; however, the statements from the Court are clear - there is no violation of associational rights or due process rights in the requirements of Wisconsin Act 10 that apply to all state and local government employees. It is very unclear whether there will be any "next steps" as a result of this decision. There is always the possibility of appeal to the United States Supreme Court, but that appeal may not be undertaken and may not be accepted by the U.S. Supreme Court. Local governments can feel free to continue to function with their current level of flexibility. Several local governments have continued to negotiate with public sector unions on all aspects of wages and working conditions. The continued validity of these extended labor agreements is subject to debate; however, local governments that have implemented employee handbooks and changes in working conditions are now fully authorized to proceed under those employee handbooks and new policies. Ruder Ware will be sponsoring a Local Government Seminar on September 30th, 2014 at the Great Dane Pub & Brewing Co. to talk about handling of public employees under this new environment of flexibility. We will continue to monitor developments regarding the Act 10 decision; however, it appears that litigation is close to being fully resolved in favor of Wisconsin Act 10 requirements. The September 30th seminar titled, ""Managing Employees In The Public Sector: A Dialogue On The Public Sector And Private Sector Models" will include several human resource managers from the public sector and private sector in a panel discussion about the management of public sector employees in our new era of heightened flexibility in addressing employee issues. A report will be given on the Act 10 litigation if a decision is received from the Wisconsin Supreme Court. However, it appears that public sector managers will continue to enjoy a great deal more flexibility in managing employees and addressing employment situations. This panel presentation will focus on all of the different aspects of employee management including use of employee handbooks, methods for addressing performance and performance appraisals, handling employee discipline and developing attractive employee benefits and working conditions. The panelists will discuss these and many other aspects of employee management in the public sector and how local governments can expand their efforts to be the most attractive place for individuals to work. With additional flexibility comes additional responsibility to oversee the management of employees and ensure the local government is receiving the most productive and effective work product from its employees. This panel discussion should help local government officials to improve their employee management systems and employee relations initiatives. Panelists will include: Ms. Roxanne Bornamann, former Superintendent of Antigo School District; Mr. Ed Reed, former Human Resource Director for Wood County; Mr. Jon Krueger, Senior Vice President of Human Resources for Greenheck, Inc. and former Human Resource Director for City of Marshfield; Attorney Dean Dietrich, Ruder Ware. Moderator will be Attorney Kevin Terry of Ruder Ware. Registration begins at 5:15 p.m., with dinner at 5:30 p.m., and program at 6:00. Contact Shannon Nest at if you are interested in attending.

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

Posted on July 22, 2014, Authored by Dean R. Dietrich, Filed under Employment

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.

Contracted Employees: Will You Become a New Employer?

Posted on July 7, 2014, Authored by Dean R. Dietrich, Filed under Employment

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.

It is Now EZier for Charities to File for Tax Exempt Status

Posted on July 2, 2014, Authored by Melissa S. Kampmann, Filed under Tax Deductions

On July 1, 2014, the IRS introduced the new Form 1023-EZ which is a shorter application form to help smaller charities apply for tax exempt status. The standard Form 1023 is a 26 page form that charities must complete in order to obtain tax exempt, or 501(c)(3), status with the IRS. The standard form can be confusing for some individuals to complete without the assistance of an accountant or attorney. The Form 1023-EZ is only three pages long and is much more simple and concise than the standard form. It is estimated that as many as 70 percent of new applicants will qualify to use the new form. In order to qualify as a "small charity" permitted to use Form 1023-EZ, the organization's gross receipts may not exceed $50,000 in the current year, the previous three years, or the next two years. In addition, the organization's total assets may not exceed $250,000. Most organizations that meet these two tests may apply for tax exempt status using Form 1023-EZ. However, before a charity completes the Form 1023-EZ, it must first complete the Form 1023-EZ checklist to ensure that it qualifies to use the consolidated form as there are various criteria that must be met in addition to the financial tests. We view the new Form 1023-EZ as an important step forward for charities. It is estimated there are more than 60,000 Form 1023 applications sitting with the IRS and the new form should help speed up the examination process so that charities can conduct their important work.

Obesity as a Disability Under the ADA

Posted on July 8, 2014, Authored by Kevin J.T. Terry, Filed under Employment

Recent court actions continue to support a claim that obesity is a covered disability. America's Car-Mart (Car-Mart) reached a mutual agreement to settle a claim brought by a former employee alleging that Car-Mart discharged him from his General Manager position because of his severe obesity and because his employer regarded him as being substantially limited in the major life activity of walking. In April, Car-Mart brought a motion to dismiss the disability discrimination claim on the grounds that severe obesity is not a "disability" under the ADA in the absence of an underlying physiological disorder. Judge Limbaugh, in the Eastern District of Missouri, rejected this argument relying on the EEOC's passage of the ADAAA and its position that severe obesity is a disability under the ADA. While this settlement is not a clear interpretation on how obesity will be treated by the courts, the decision by Judge Limbaugh to allow these types of claims to continue is not unique in the post ADAAA case law that we have seen. What is still unknown is how courts will treat varying degrees of obesity and just when obesity crosses the line into a protected condition under the ADA. For employers, the take away is that a conservative approach with employees is to treat all forms of obesity as a disabling condition under the ADA. That means employers should engage in the interactive process with employees to determine if reasonable accommodations exist to assist issues in job performance based on an employee's obesity.

Most Recent Final ACA Rules Address 90-Day Waiting Period: Getting Your Orientation

Posted on July 7, 2014, Authored by Ruder Ware Attorneys, Filed under Employment

Recently, the Departments of Labor, Health and Human Services, and Treasury, published final rules concerning the so-called "orientation" periods, which implicate the Affordable Care Act's ban on waiting periods exceeding 90 days. The final rules go into effect on August 25, 2014, and are applicable for plan years beginning on or after January 1, 2015. Pursuant to the final rules, employers are permitted to continue the common practice of implementing introductory employment periods to determine whether new employees are able to handle the duties and challenges of the job, without violating the ACA's prohibition on waiting periods in excess of 90 days. However the introductory period must be a reasonable and bona fide [something that has yet to be clarified, but will be analyzed on a case-by-case basis], employment-based orientation period, and not simply an attempt to evade regulatory obligations. According to the final rules, available here:, one-month (sort of-read on) is the maximum allowed length of an employment-based orientation period. The "one-month" period is determined by adding one calendar month and subtracting one calendar day, measured from an employee's start date in a position that is otherwise eligible for coverage. According to the final rules, "if an employee's start date in an otherwise eligible position is May 3, the last permitted day of the orientation period is June 2. If there is not a corresponding date in the next calendar month upon adding a calendar month, the last permitted day of the orientation period is the last day of the next calendar month." This means, "if the employee's start date is January 30, the last permitted day of the orientation period is February 28 (or February 29 in a leap year)." If an employer avails itself of the employment-based orientation period, the maximum, 90-day waiting period "begins on the first day after the orientation period," assuming the employee is otherwise eligible to enroll under the terms of a group health plan [having met the plan's substantive eligibility conditions]. NOTE: Compliance with the permissible orientation period does not determine compliance with Section 4980H of the Internal Revenue Code (which implements the so-called "shared responsibility" rules for applicable large employers). Under the shared responsibility rules, an applicable large employer is subject to penalties if it fails to offer affordable, minimum-value coverage to certain newly hired full-time employees by the first day of the fourth full calendar month of employment. For this reason, an applicable large employer may not be able to impose the full one-month orientation period and the full 90-day waiting period without possibly becoming subject to penalties. For example, if an applicable large employer hires a full-time employee on January 3, but offers coverage on May 2, which includes the "one month" orientation period plus 90 days,the employer may be subject to penalties under Code Section 4980H, because coverage was not provided on May 1 [which is the first day of the fourth full calendar month of employment]. Employers are encouraged to conspicuously preserve "at-will" employment in connection with permissible employment-based orientation periods.

Wisconsin Worker's Compensation Policy Favors Immunity

Posted on July 21, 2014, Authored by Russell W. Wilson, Filed under Employment

The legal protection to employers in worker's compensation is immunity from lawsuits by employees. Please the check out the following link for a recent case that applies this principle. {CCM:BASE_URL}/legal-updates/wisconsin-workers-compensation-policy-favors-immunity-suit/

Micro-Unions: Is This The Future?

Posted on July 31, 2014, Authored by Dean R. Dietrich, Filed under Employment

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.

Wisconsin Supreme Court Holds that Worker's Compensation Carrier's Settlement With Third Party Tortfeasor Binds the Employee to the Terms of the Settlement

Posted on July 31, 2014, Authored by Russell W. Wilson,

Under Worker's Compensation, an injured employee receives benefits on a "no-fault" basis and the employer receives immunity from civil suit for damages. When a third party's negligence causes or contributes to the employee's injury, however, the third party is fair game to be sued by the injured employee and/or the employer's worker's compensation carrier (or employer that is self-insured for worker's compensation). The employee and the worker's compensation carrier have an "equal voice" in the prosecution of third-party suits. Since 1953 it has been established that when the employee unilaterally decides to settle his or her claim, the worker's compensation carrier is bound by the settlement amount. The Wisconsin Supreme Court affirmed that principle in Bergren v. Staples, 263 Wis. 477, 57 N.W.2d 714 (1953). In that case Richard Bergren, a construction worker, was killed on the job while directing the unloading of trucks owned and operated by a third party. Liberty Mutual Insurance Company, the worker's compensation carrier for Bergren's employer, joined Bergren's widow, Beatrice, in prosecuting a lawsuit against the driver and operator of the truck that was being unloaded at the time of Bergren's death. The defendants offered a judgment to be taken in the amount of $5,500. Beatrice accepted this settlement maneuver offer, but Liberty Mutual objected. The Wisconsin Supreme Court held in Bergren that Beatrice's unilateral decision to accept the settlement offer bound Liberty Mutual to the $5,500 settlement. The proceeds of the settlement were then allocated between Beatrice and Liberty according to the allocation formula in section 102.29, Wisconsin Statutes, which governs the prosecution of third-party claims and lawsuits arising out of industrial injuries. On July 22, 2014, the Wisconsin Supreme Court issued its decision in Adams v. Northland Equipment Co., Inc., 2014 WI 79, which upheld the converse of Bergren. The unilateral decision of the worker's compensation carrier to settle with the third party tortfeasor compels the injured employee to accept the terms of the settlement over his objection. Russell Adams was driving a snow plow for the Village of Fontana when he was injured. Adams sued a company that had performed maintenance work on the snow plow truck, Northland Equipment. The worker's compensation carrier, The League of Wisconsin Municipalities Mutual Insurance Company (LWMMIC) joined the suit. LWMMIC had paid over $148,000 in worker's compensation benefits for temporary and permanent partial disability benefits and medical expenses. The discussion of the facts reveals that while Adam's barely survived a motion for summary judgment, his case for establishing causal negligence against Northland was weak. Presumably, LWMMIC acted on the principle that a bird in the hand is worth two in the bush, and unilaterally accepted a $200,000 settlement offer from Northland's liability insurance carrier. The majority decision held over a powerfully written dissent that the "equal voice" scheme under section 102.29 for prosecuting lawsuits against third parties applies equally to injured workers and worker's compensation carriers (and self-insured employers). As a result, Russell Adams was compelled by LWMMIC's settlement decision to settle, and he was not permitted to have his case be determined by a jury. The effect of Adams may be to create some leverage for liability insurers in defending third-party lawsuits by allowing them to exploit divergent interests between the employee and the worker's compensation carrier.

Wisconsin Worker's Compensation Policy Favors Immunity From Suit

Posted on July 14, 2014, Authored by Russell W. Wilson,

When the Worker's Compensation Act was adopted in Wisconsin the quid pro quo were no-fault benefits to the employee and protection to the employer against lawsuits. Wisconsin courts have consistently upheld the employers' end of the bargain. The Wisconsin Court of Appeals did so again in Hurt v. Cole, 2014 WL 3056165 decided on July 8, 2014. The result might seem counterintuitive in light of the facts of the case. Hurt's Recycling, LLC is a building demolition contractor; Dean Hurt is the only member of his limited liability company. Upon being hired to demolish a building in Fredonia, Hurt's Recycling, LLC hired four workers to assist in the demolition, and in doing so the workers signed "independent contractor" agreements. Two of these "independent contractors," Josh Cole and Joel Hegna, were working on overhead ductwork, which fell and injured Dean Hurt. Hurt did not have worker's compensation coverage because he had not elected to be considered as an employee of his own company. Section 102.075 of the Wisconsin Statutes allows sole proprietors, partners, and members of limited liability companies to elect worker's compensation coverage for themselves. Hurt filed suit against Cole and Hegna seeking civil damages for his injury. Cole and Hegna argued that they were immune from suit under the exclusive remedy provision of worker's compensation. Both the Barron County Circuit Court and the Wisconsin Court of Appeals agreed with Cole and Hegna. Dean Hurt was an "employee" of Hurt Recycling, LLC The first issue was whether Dean Hurt was considered to be an employee of Hurt's Recycling, LLC for purposes of the exclusive remedy provision. His argument was credible: Having not elected to be considered as an employee of Hurt's Recycling, LLC for purposes of benefits under worker's compensation, Hurt argued that he could not be considered an employee for purposes of immunity from suit. Cole and Hegna argued that under section 102.07(4)(a) Hurt's limited liability company is a distinct legal entity and that at the time of his injury Hurt was performing the type of work that one might expect to have been performed by an employee, i.e. deconstruction work. While acknowledging the logical consistency of Hurt's argument, the court of appeals pointed out two superseding factors, public policy and absurd results. First, Wisconsin has adopted a strong policy in favor of protecting employers from civil suits, including suits brought by one co-employee against another co-employee. Second, in light of this strong policy, absurd results would follow if one's immunity from civil suit were to be determined by the decision of an individual whether to elect coverage under the Worker's Compensation Act. Following Hurt's logic to its conclusion, since he had not elected coverage, Cole and Hegna were not immune from civil suit; yet if Hurt had elected coverage, then Cole and Hegna would have been immunized from suit. The court of appeals found that the potential for such unpredictable variability in outcome would lead to absurd results. Cole and Hegna were also "employees" of Hurt Recycling, LLC The court of appeals easily dispensed with this issue. The signed "independent contractor" agreement did not conform to all nine of the criteria specified for independent contractor status in section 102.07(8)(b)1-9. The court of appeals relied on established case law for the proposition that, for purposes of worker's compensation, the strict and relatively certain set of criteria in the statute supersedes the older, more general common law test of independent contractor status. Where a purported independent contractor agreement fails even one of the nine criteria, the default is employee status. Hurt Recycling, LLC is an "employer" for purposes of worker's compensation The statutory threshold for "employer" status under worker's compensation is low: payment of $500 in wages or employment of three employees during the quarter immediately preceding the injury. The threshold takes effect on the 10th day of the immediately succeeding quarter. The court of appeals determined that the evidentiary record contained ample evidence that the threshold had been crossed. Accordingly, the conditions for compensability were met: Hurt Recycling, LLC was an "employer", Hurt, Cole and Hegna were "employees", albeit for differing reasons, and Hurt was injured during the course of his employment. That being the case, Cole and Hegna were immune from civil suit by their "co-employee." Comment The real issue here was whether Dean Hurt, the sole member of his limited liability company and who had not elected to be covered under worker's compensation for his own injury, would be treated as an "employee" of his company. What tipped the balance in favor of Cole and Hegna was Wisconsin's strong policy immunizing employers from civil suits arising out of on-the-job injuries, a fundamental part of the bargain in the enactment of the Worker's Compensation Act. The outcome may seem off kilter on the facts of this particular case. Dean Hurt cannot receive compensation for his injury under worker's compensation and he cannot maintain his lawsuit for damages. He could have elected to be covered, but then he would have incurred a premium to do so. More generally, however, employers should cheer the court of appeals' decision. For employers increasing worker's compensation insurance premiums are an ever-present concern. The benefit of protection against civil suits is a less appreciated aspect of worker's compensation. It is too early to know whether the case will be petitioned for review to the Wisconsin Supreme Court.