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Searching for Articles published in February 2015.
Found 14 Results.

What You Do During A Meal Break May Mean More Pay

Posted on February 5, 2015, Authored by Dean R. Dietrich, Filed under Employment

A recent decision from the Sixth Circuit Court of Appeals addressed whether employees performing certain activities during a meal break must be compensated in the form of pay for that work. Fortunately, the Court of Appeals held in favor of the employer when security guards were asking for pay while on a meal break because they were monitoring their radio in case they were called to address an emergency.  The Sixth Circuit held that these employees were not entitled to pay for time worked during the meal break because the time they spent during their meal break was not “predominantly for the benefit of their employer.” The employees were not allowed to leave the premises and had to listen to their radio during the meal break but were not interrupted during their meal break unless an emergency occurred. This case, brought by security guards at a casino, is important because it clearly holds that employees who are on a meal break are not eligible to count that time as time worked even if they are listening to a work radio that is transmitting information about the happenings in the workplace and they are required to respond if an emergency occurs. The Court of Appeals held that after examining all of the circumstances, it was reasonable to conclude that no substantial job duties were being engaged in during the meal break and that emergency calls rarely interrupted the meal break time. As a result, the Court concluded, on a summary judgment motion, that the time spent during the meal break should not count as time worked for overtime pay purposes. If the guards were called out to respond to an emergency, the time would count as time worked. The Fair Labor Standard Act requires employers to pay overtime after 40 hours of work and count all time worked for purposes of reaching the 40-hour limit. Employers should be very careful when analyzing whether or not an employee is actually performing work for the company because there is a potential that time worked would count toward the 40-hour requirement. A recent budget proposal from President Obama includes an increase in monies for the Department of Labor to conduct investigations regarding overtime pay violations and other violations under the jurisdiction of the Department of Labor (i.e. immigration issues). Employers should recognize that the Department of Labor may be very active during the next two years so it is important to understand and follow all of the requirements of the Fair Labor Standards Act and other federal laws.

Retaliation Claims are at the Top

Posted on February 17, 2015, Authored by Dean R. Dietrich, Filed under Employment

A recent report issued by the Equal Employment Opportunity Commission shows that retaliation claims are the largest number of claims that are brought to the EEOC for consideration. Sex discrimination claims rank second and disability discrimination claims rank third, but for the second year, retaliation claims are the most prevalent claims that are brought to the EEOC.  Retaliation claims arise when an employer retaliates against an employee by taking some type of adverse employment action allegedly because the employee complained about a discriminatory practice or assisted someone else in complaining about a discriminatory practice. The difficulty with retaliation claims is that often an employee has alleged some type of discrimination that is not proven but then alleges the employer retaliated against the employee because of the complaint having been brought. In a sense, employees try to claim they have a “protected status” because they raised a complaint about discrimination and now the employer cannot take action against them because they complained. This is not true of course; however employers have to be very careful because they will often face a retaliation claim when they take adverse employment action against someone who had previously complained about discriminatory working conditions or discriminatory conduct. These types of claims often arise in sexual harassment scenarios where an employee has complained of harassment that actually did not occur or was not so pervasive as to constitute harassment but then the employee thinks they have been retaliated against if any type of disciplinary action is taken against them.  The EEOC is also very interested in pursuing retaliation claims against an employer because they do not want any employee who has objected to conduct to be retaliated against by the employer. As a result, the EEOC is very aggressive in pursuing retaliation claims and also is very likely to assume that retaliation has occurred when a complaint is brought to the attention of the EEOC. Employers must be very careful when taking disciplinary action against an employee who has complained about behavior in the workplace. Employers should not feel constrained from taking disciplinary action but must be able to show that the disciplinary action is based upon performance or conduct and not based upon any suggestion of retaliation against the employee for having raised a complaint in the workplace.

Wisconsin Court of Appeals Allows “Stacking” for Revision Prosthetic Procedures

Posted on February 12, 2015, Authored by Russell W. Wilson, Filed under Employment

The Wisconsin Court of Appeals issued its decision on February 4 in a consolidated appeal that allows permanent partial disability benefits to be “stacked” where revision prosthetic surgical procedures were necessary. The effect of the ruling is to double permanent partial disability benefits. Three workers had prostheses resulting from compensable industrial injuries: John Blasius had a knee prosthesis; John Peszko a shoulder prosthesis; and, Terry Gruenberg a hip prosthesis. Each worker was entitled to the minimum permanent partial disability (“PPD”) ratings established in DWD 80.32, i.e. 50% loss of use at the knee, 50% at the shoulder, and 40% at the hip joint, respectively. All three workers required revision procedures. The Labor and Industry Review Commission (“LIRC”) determined that the revision procedures allowed the minimum PPD ratings to be awarded again, i.e. “stacked” upon the earlier awards. The Wisconsin Court of Appeals found LIRC’s decision to be reasonable, and, therefore, controlling. The Court of Appeals found ample support for its decision in existing case law. In DaimlerChrysler v. LIRC, 2007 WI 15, the Wisconsin Supreme Court allowed stacking of PPD benefits following a revision anterior cruciate ligament procedure, and in Madison Gas Electric v. LIRC, 2011 WI App 110, the Court of Appeals had allowed stacking where the second surgery resulted in a total knee replacement. With that precedent, it was not much of a leap for the Court of Appeals to allow stacking in revision prosthetic procedures. This case is significant because its effect is to double PPD payments in revision prosthetic procedures. Total (100%) loss of use of the leg at the knee joint, for example, equates to 425 weeks times the PPD rate in effect at the date of the injury. For the sake of discussion, the maximum PPD rate for an injury in 2015 is $322. So an initial prosthetic procedure would be 212 ½ weeks times the PPD in effect for that injury. If we use the $322 rate as an example, the award for the first procedure would be $68,425. A revision procedure would allow for an additional $68,425 under the “stacking” rule determined by LIRC and found to be reasonable by the Court of Appeals. The case is General Contractor’s Corp. v. Blasius, 2015 WL 44852 (February 4, 2015).

Right-to-Work Legislation and the Union “Free-Rider” Conundrum: The Rest of the Story

Posted on February 27, 2015, Authored by Ruder Ware Attorneys, Filed under Employment

This week, the Wisconsin State Senate passed the much maligned “right-to-work” bill—which now moves onto the State Assembly [and is anticipated to be signed into law by Governor Walker]. In reading about the controversial legislation, and talking to friends and colleagues about it too, I’ve repeatedly heard about one of the arguments against the proposed law—the so-called union “free-rider” problem. In response to often inadequate coverage of, or misunderstanding of, the union “free-rider” problem, I feel compelled to channel my inner Paul Harvey, and share the “rest of the story.” The “free-rider” problem is a response to right-to-work legislation proposals. The basic tenet of the “free rider” problem is that right-to-work laws create an inherently unfair environment in which labor unions are forced to exclusively represent a unit of employees that includes those who choose to opt out of becoming union members and paying union dues—the “free riders.” For many, this concern intuitively makes sense and provokes impassioned support. However, it may also be shown that the “free-rider” problem is not really a problem at all—keep reading. The National Labor Relations Act, as interpreted by the National Labor Relations Board, has long permitted unions and employers to enter into “members-only” collective bargaining agreements, through which unions are only obligated to represent those employees within a designated bargaining unit that become union members and pay union dues—thus, avoiding the “free-rider” problem altogether. Generally, an employer is legally prohibited from recognizing and bargaining with a union for exclusive representation of a unit of employees—if the union does not represent a majority of the employees in the unit. In other words, it is illegal for an employer to bargain with or recognize a labor union in connection with a proposition for exclusive representation, if that union only has the support of a minority of the employees in the proposed bargaining unit [often called a “sweet heart union”]—based on notions of fundamental fairness [the notion that it is not right or fair for a minority of workers to be able to dictate the terms and conditions of employment for the majority of employees]. However, an employer may [but is not currently required to] recognize and negotiate with a minority union if the scope of representation is limited to “members only”—meaning only those employees who pay union dues [not all employees within a designated unit or classification of employees]. Presently, however, unions cannot force employers to negotiate “members-only” agreements. Nevertheless, “members-only” agreements are viable, and exist as a solution to the “free-rider” conundrum.  One can, and should, debate the merits of right-to-work legislation—this debate is healthy, worth having and essential in our democratic society. However, the persuasive power of the union “free-rider” problem must, to some degree, be tempered against the availability of “members-only” collective bargaining agreements as a realistic solution.

New Ways of Finding Revenue at the Fire Department

Posted on February 3, 2015, Authored by Ruder Ware Attorneys, Filed under Local Governments and School Districts

Very recently, a staff arbitrator from the Wisconsin Employment Relations Commission sided with the City of Green Bay (City) and dismissed a grievance filed by the Firefighter’s Union giving the City the go ahead to develop a program with a local hospital. Under the program, the City’s Fire Department would direct EMT/paramedics to do non-emergency follow-up visits with patients discharged from the hospital. In return, the hospital would pay the City per visit.  Firefighters would be sent during the workday on appointments, subordinate to emergencies that arise, to review a patient’s medical needs, to do a safety check of the dwelling, and to complete an after visit summary. The impetus for the program came out of certain aspects of the Affordable Care Act (ACA) which denies reimbursement for the readmission of certain patients within 30 days of the hospital discharge. This aspect of the ACA caused a local hospital to look for ways to reduce the readmission rate of certain patients. Characteristics of such patients included individuals taking a lot of medications, those with multiple chronic diseases, and individuals who are isolated without much family support. Such individuals would not qualify for skilled nursing or home health care. At the hearing, the union argued that the above program violated the terms of the collective bargaining agreement prohibiting the assignment of duties which are unrelated to firefighting. In finding for the City, the arbitrator stated the following: “[These] visits are not home health care. Firefighters are not asked to provide patient care or treatment, unless an emergency arises during the course of their visit. Under [the program], the firefighter is assigned to report concerns that are medically related. The patients involved do not typically qualify for home health care. There is no basis for the delivery of patient care. Firefighter EMT’s have been identified for these calls, in part, because there is no medical justification or reimbursement for skilled home health care workers.                                                          *** I believe [the program] visits are related to fire prevention and to rescue with the meaning of [the collective bargaining agreement]. The safety check is designed to prevent fires and to eliminate trip hazards that might otherwise lead to injury and an emergency call. Similarly, the after visit summary is designed to preempt returns to the hospital…[The] visits also serve to preempt emergency EMT calls from individuals who need to be rescued.” A review of your collective bargaining agreement with your Firefighter’s Union and a discussion with a local health care provider may yield both savings for the health care institutions and new revenue for the Fire Department. As seen in this case, this can all be done within the parameters of the labor agreement.

Must Companies “Ban the Box” in Wisconsin?

Posted on February 4, 2015, Authored by Dean R. Dietrich, Filed under Employment

“Ban the box” legislation has become popular throughout the country. Fifteen states and a number of local jurisdictions have adopted legislation that involves arrest and conviction record discrimination and specifically “bans the box" that must be checked on an employment application if an applicant has been arrested or convicted of a crime. Many employers have a question on their application form that requires an employee to indicate whether they have been arrested for a crime or have been convicted of a crime; usually reference is made to crimes other than traffic violations. Various jurisdictions are passing legislation that requires an employer to eliminate this question from an employment application in order to help applicants that may have been convicted of a crime in the past from being summarily removed from employment consideration. This legislation does not mean an employer must hire an employee that has been convicted of a crime but rather changes the process to determine whether or not an applicant has a criminal record that must be considered.  Wisconsin has yet to consider legislation of this nature. Wisconsin does, however, have a rigid non-discrimination statute relating to arrest and conviction record discrimination.  An employer may not discriminate against an employee who has been arrested for a criminal violation but rather may defer the consideration of that applicant until a time after the criminal proceedings have been completed. A Wisconsin company may not refuse to hire an applicant who has been convicted of a crime unless the circumstances of the crime substantially relate to the job duties that would be performed in the position being filled. This requires the employer to have a clear understanding of the circumstances relating to the conviction and assess whether those circumstances substantially relate to the job duties that would be performed by someone in the position. The focus should be on whether the job duties of the position would afford an opportunity for the applicant to engage in conduct that is similar to the conduct which resulted in the criminal conviction. Cases relating to arrest and conviction record discrimination are very dependent upon the facts involved; however, the employer must be very careful to avoid making a decision that is solely based upon some type of arrest or conviction in order to avoid the risk of a discrimination complaint.  Wisconsin has not adopted the “ban the box” legislation as other jurisdictions have. It is still acceptable for a Wisconsin employer to ask a question on the employment application that would disclose whether or not an applicant has been arrested or convicted of a crime. The employer must make it clear, however, that the mere arrest or conviction will not result in the applicant being summarily removed from consideration for the vacant position. Employers must be careful that their employment application is in compliance with Wisconsin discrimination law.

Sticks and Stones Can Break My Bones But Words Will Never Hurt Me….Unless I Work in California!

Posted on February 2, 2015, Authored by Sara J. Ackermann, Filed under Employment

A California law that recently took effect requires company supervisors to undergo anti-bullying training. Mandated training is nothing new for California employers. Since 2005, California has required employers with 50 or more employees to conduct sexual harassment training of supervisors within 6 months of assuming a supervisory position and biennially thereafter. However, the new law expands the mandated content of this training to include training on prevention of “abusive conduct.” The statute defines "abusive conduct” as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests. The statute further provides that abusive conduct may include repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance. However, “a single act shall not constitute abusive conduct, unless especially severe and egregious.” The new law does not further specify the content of the training on prevention of abusive conduct, nor does it mandate that any specific amount of time be allotted to this topic within the 2-hour sexual harassment training.  Why should Wisconsin employers care about a California law if they don’t have employees in California? Because the passage of this law is a sign that anti-bullying legislation is here to stay. While California’s law does not create a private right of action for an employee against the employer to seek damages for workplace bullying, several states, including Wisconsin, have legislation pending that would create such a right. All employers, regardless of location, should integrate anti-bullying training into their current training programs. Whether or not unlawful, bullying increases attrition, decreases production and deflates morale. There is no better time than the present to create a bully-free workplace...whether or not it is unlawful.

What's in Your Wallet? Vested Rights and Employee Health Insurance

Posted on February 19, 2015, Authored by Ruder Ware Attorneys, Filed under Local Governments and School Districts

Does anyone remember a TV credit card commercial where a medieval Viking turns directly toward the camera and asks the rhetorical question: “What’s in your wallet?” An analogous question may come into focus when reviewing a collective bargaining agreement’s language, specifically those provisions dealing with employee health insurance and retiree benefits. Earlier this month, the Wisconsin Court of Appeals, District 2, decided a case over alleged vested rights of a retiree in Monreal v. City of New Berlin, 2015 WL 442469 (Ct. App., Feb 4, 2015). In short, the court found that whether or not there are vested rights depends upon the language found within the collective bargaining agreement. The case decision did “rise and fall” upon the contractual language used in the collective bargaining agreement. The City of New Berlin changed its health insurance plan for police officers so that it no longer provided active officers with 100% reimbursement for their in-network deductibles. Beginning in 2013, the new plan deductible became $6,000, with zero reimbursement. (It is unclear to this writer whether this change was the result of bargaining or an interest arbitration award). A police officer, who retired a few years prior to the effective date of the 2013 collective bargaining agreement, sued and claimed that the city was obligated to reimburse him at 100% for his post-2013 deductibles since the collective bargaining agreement language in effect at the time of his retirement provided a complete reimbursement of deductibles for life. The city countered that this was an improper interpretation as the only vesting was the retired officer’s access to city-provided health insurance. Further, the city pointed out another provision in the former collective bargaining agreement which allowed for the city to change health insurance plans. Thus, the city maintained, there was no retiree right to 100% reimbursement for deductibles for life, only the right to city-provided health insurance; when the city changed plans, the city was no longer required to fully reimburse the retired officer’s deductibles. In finding for the city, the appellate court carefully reviewed the language in the collective bargaining agreement in effect at the time of the officer’s retirement. That language gave coverage under a city-provided health insurance plan. That plan included 100% reimbursement on the plan’s deductibles. However, the language did not lock in a plan indefinitely or offer indefinite 100% reimbursement: “[N]othing in the CBA indicates that the contracting parties meant for the rights [of 100% reimbursement on deductibles] to endure beyond the contract’s expiration. No law or policy in Wisconsin freezes a contract of limited duration in time unless its language calls for that result.” Therefore, the court found that the city did not improperly take anything away. The case underscores the importance of good language in a collective bargaining agreement. Good language provides for a good “wallet” in a labor relations setting and a collectively bargained labor agreement. This case also underscores that when bargaining over changes to the collective bargaining agreement to review the contract in its entirety and to be certain not to change words that a party might assert as ever-lasting or that provide a lifetime benefit. This is especially true where municipalities are considering, or are changing, their health insurance plans either mid-contract or at the end of a labor agreement. This includes where municipalities are making changes to only a few of their departments’ health insurance plans due to a union’s inflexibility in bargaining or due to the high cost of maintaining the same level of health insurance benefits for a particular municipal unit.

What Keeps Me up at Night About the Affordable Care Act?

Posted on February 3, 2015, Authored by Mary Ellen Schill, Filed under Employment

Expert? Guru? While I’d like to think that I merit those descriptions when it relates to the Affordable Care Act, I know for a fact that there is a lot about the ACA that, as they say, “keeps me up at night.” The practice of law is just that, practice, and practicing in the area of employee benefits after the passage of the ACA brings back Section 89 memories. For those of you who were blissfully unaware (or unalive) back in the mid to late 1980’s, there was one pre-ACA attempt to make employer-sponsored group health plans (and other welfare benefit plans) look more like qualified retirement plans as far as complexity and regulation. Section 89 of the tax code was enacted back in 1986, and it rivaled the ACA as far as its impact on group health plans. It imposed nondiscrimination and coverage requirements, and enhanced disclosure obligations. For benefits attorneys, it was non-stop seminars and presentations and CLIENTS WHO PROCRASTINATED! Then it was repealed before it ever became effective in 1989. And those who procrastinated slept better at night I’m sure. The ACA is different of course. It has survived court challenges and legislative action. It is well over half way to full implementation. And there still is lots to learn and master. My recent Guest Column in the Eau Claire Business Leader [link] brings you into my world of ACA and counting sheep.

Attorney John Leary Earns Minnesota Bar License

Posted on February 17, 2015, Authored by ,

Ruder Ware is pleased to announce that Attorney John Leary recently earned his Minnesota Bar license.  Being licensed in both Wisconsin and Minnesota will enable Leary to assist banks and financial institutions based in Wisconsin with their Minnesota matters. Leary works with clients in the areas of finance and creditors' rights, business counseling, transactions, and commercial law. His practice includes representing lenders, borrowers, and participants in negotiating and documenting financing of secured, unsecured, senior and subordinated debt including term loans, lines of credit, and floor plan financing.  In addition, John represents lenders in complex loan reviews, workouts, collections and bankruptcies for farms, developers, manufacturers, retailers, C-stores, builders, hotels,  suppliers, resorts, dealerships, and  golf courses.

Wisconsin Will Become A Right-To-Work State This Week?

Posted on February 23, 2015, Authored by Dean R. Dietrich, ,

Since the news broke last Friday, it is becoming very clear that Wisconsin will become a right-to-work state in the very near future. Dean Dietrich and a colleague had a conversation about this proposed legislation recently which we have summarized here. Dean: It looks like the Legislature is going to consider right-to-work legislation. What does that mean? Colleague: The right-to-work legislation being proposed has several elements to it. A person can be found guilty of a Class A Misdemeanor if he requires an individual to become or remain a member of a labor organization or pay dues of any kind to a labor organization. The legislation also provides that any provision of a labor agreement that would require a person to become or remain a member of a labor organization or pay dues is considered a void provision. Dean: So does this mean that provisions of current labor agreements requiring union membership are no longer valid? Colleague: Not necessarily. This law will apply to any collective bargaining agreement that contains provisions that are inconsistent with the prohibitions but only becomes effective at the time of renewal or extension of the labor agreement after the date the law becomes effective. This means that existing labor agreements are not affected, but new labor agreements may not have provisions like a union security (shop) provision or a dues deduction provision. Dean: The law seems to change several state statutes and creates new statutes relating to collective bargaining. What do you think this will do to collective bargaining in Wisconsin? Colleague: This will not change the duty of an employer to negotiate with a union representing its employees. The law means that an employer may not agree to language that makes membership in a union a mandatory condition of being employed by the company nor can an employer agree to language that would require all employees to pay union dues. The payment of union dues would be completely voluntary and at the discretion of each employee. Dean: The law makes it clear that employees have the right to "refrain" from forming or joining a labor organization or bargain collectively through representatives. Does this mean that employees can force a union to stop representing them? Colleague: Again, the law does not make this an automatic happening. Employees have the right to decertify a union but only at certain times and by following certain procedures. The new language makes it clear that employees are not required to join a union and an employer cannot agree to language that would cause that to happen. The new statutory language does not, however, mean that employees can automatically stop having a union representing them in negotiations with an employer. Dean: It's not very clear what will be the practical effect of this new legislation on unions. Any thoughts? Colleague: The design of the language is to prevent an employer from agreeing to a specific provision in a collective bargaining agreement that requires all employees to join a union. The new legislation may have the opposite effect of rallying union members and union officials to act more aggressively to show the value of belonging to a union. We will just have to see what the future brings. Dean: It is not clear whether this new legislation applies to those public sector unions that still have a right to bargain with public employers. Do you have any insights? Colleague: Apparently, the legislation will not apply to public employer situations. There were no changes to statutory language in the public sector labor relations law so it appears this law will not apply to public safety unions. The Wisconsin Legislature will be considering this proposed new law during this week. Governor Walker has indicated that he would sign legislation if it is presented to him.  Employers must be careful if they are negotiating with a union at this time because of the potential impact of this new legislation. The future impact of this legislation is unclear, so employers should be careful to make sure they are in full compliance with the law when it becomes effective.

A Quick Fix to the Quickie Election Rules?

Posted on February 13, 2015, Authored by Dean R. Dietrich, Filed under Employment

The United States Chamber of Commerce and several trade associations have filed a motion for summary judgment in a federal court in Washington D.C. seeking to overturn the “quickie election” rules recently adopted by the National Labor Relations Board. These rules are scheduled to go into effect on April 14 and are designed to create a very expedited process for holding an election to determine whether employees of a particular company wish to be represented by a union.  The NLRB adopted these rules in December and a federal lawsuit has been filed seeking to vacate the rule by arguing that it is inconsistent with the legal requirements of the National Labor Relations Act. The arguments focus on the rule being allegedly over-broad and interfering with the free speech and due process rights of an employer. Unfortunately, the National Labor Relations Board has asked for more time to file an answer to the complaint and a response to the summary judgment motion. It is still unclear whether the April 14 effective date will actually be implemented. Employers must watch this litigation very closely. If the “quickie election” rules are allowed to take effect, employers will be subject to election petitions from unions seeking to represent employees and the employer will have little time to respond to such a petition or even be able to effectively argue that certain employees listed in the petition should not be allowed to vote because of their supervisory status. The United States Chamber of Commerce argued that the process being proposed under this rule resembles legislative proposals that were rejected by Congress in 1947 and 1959. The Chamber also argued that the premise behind the rule for a quick election was contrary to the legislative history of the National Labor Relations Act which indicated that Congress felt there should be a period of at least 30-days between the petition and the election in order to ensure that employees are adequately informed before they are called upon to vote.  Even though this legal challenge is being pursued, companies should consider having non-union information and materials ready to go if a union election petition is filed. Companies should also recognize the potential for employee dissatisfaction in the workplace and work hard to address any concerns before they rise to the level of causing a union election petition to be filed.

Court Decision Leaves Bad Taste in Mouth of Restaurant Company: Found Liable for Predecessor Company’s Workplace Retaliation

Posted on February 18, 2015, Authored by Ruder Ware Attorneys, Filed under Employment

We’ve all heard of the concept of “paying for the sins of our ancestors.” Well, in that same vein, the federal Seventh Circuit Court of Appeals [which presides over Wisconsin employers] recently concluded that a Wisconsin restaurant company is liable for its predecessor’s past act of workplace reprisal, in response to an employee’s complaint concerning race-based workplace discrimination. The case is available here Equal Employment Opportunity Commission v. Northern Star Hospitality, Inc. d/b/a Sparx Restaurant No. 14-1660 (7th Cir., Jan. 29, 2015). The case involves an African-American cook/kitchen manager (“Miller”) at Sparx restaurant, who allegedly was fired in retaliation for opposing a racist episode in the workplace, which involved a defaced dollar bill depicting certain racially-charged symbols. Two supervisory-level employees took responsibility for posting the offensive display [according to court records, although a terminable offense, neither employee was fired, and only one was disciplined]. After Miller complained, the two supervisory-level employees began to criticize Miller’s job performance—although Miller previously had received no such criticism during his tenure. Two years later, Sparx folded, and another restaurant—Denny’s—opened in its stead. Significantly, Sparx, Denny’s, and a third company that owned the restaurant property, were owned by the same individual [who, according to the opinion, happens to be the sole shareholder, officer and director of both Sparx and Denny’s].  According to the Court, Denny’s will be held liable for Sparx’s race-based retaliation—predicated upon a “successor liability” theory. In the Court’s words, “[w]ithout it [successor liability], the victim of the illegal employment practice is helpless to protect his rights against an employer’s change in the business.” According to the Court, “[w]here the successor has notice of a predecessor’s liability, there is a presumption in favor of finding successor liability.” There is a five-factor test for successor liability in the employment-law context: 1.  Whether the successor [here, Denny’s] had notice of the pending lawsuit. 2.  Whether the predecessor [here, Sparx] could have provided the relief sought before the sale or dissolution. 3.  Whether the predecessor could have provided relief after the sale or dissolution. 4.  Whether the successor can provide the relief sought. 5.  Whether there is continuity between the operations and workforce of the predecessor and successor. The Court ultimately concluded that these factors, considered together, militated in favor of successor liability in this case.  This case is a valuable, cautionary tale for companies within the restaurant industry considering a corporate reorganization, or acquisition of another restaurant entity. Companies are encouraged to place “successor liability” on the due diligence checklist—another important consideration in the transactional context.

U.S. Supreme Court will Answer the Question of Who Must Give Notice of an Accommodation

Posted on February 26, 2015, Authored by Dean R. Dietrich, Filed under Employment

Yesterday, the United States Supreme Court heard oral argument in a religious discrimination case that asks the question whether an employee/applicant needs to request an accommodation of religious beliefs in order for an employer to be required to consider an accommodation. In this case, an applicant for a position with Abercrombie Fitch Stores, Inc. appeared at the interview wearing a hijab. The Company decided not to hire this person because that attire did not comply with company dress code standards for its sales persons. The applicant never asked for an accommodation based upon her religion to allow for the wearing of the hijab but company representatives assumed this would be a requirement of her religion and would not meet the company dress code.  The question being litigated in the Supreme Court case is whether the employee has to make a request for religious accommodation in order for a company to be required to consider an accommodation as part of the working conditions for the applicant. A trial court said that the company was obligated to consider an accommodation even though the employee made no request for an accommodation. The Court of Appeals ruled differently and held that the company was not obligated to provide an accommodation to the requirements of the company dress code because no request was made by the applicant. The United States Supreme Court will likely decide in late spring whether the applicant really had to make a direct request for an accommodation if she was to be hired for the sales position with the company. The oral argument before the Court suggested that this will be a closely debated decision. Religious discrimination cases do not happen often and mostly involve time-off to attend religious services or a requirement of certain clothing or facial hair as part of requirements of a particular religious sect. What happens far more often is a request for an accommodation due to a disability suffered by an employee or applicant. This case before the Supreme Court addresses religious discrimination but the same concepts apply in cases of disability discrimination.  The decision by the Supreme Court will give some guidance to employers as to whether they must assume a disability and an accommodation request from an employee simply because of physical characteristics or whether the request for an accommodation must come from the employee before an employer is required to consider whether or not it can make an accommodation for a disabling condition. Disability discrimination laws require an interactive process between an employer and a disabled employee but there is always a question whether that interactive process must be initiated by a request from the employee or whether the employer must engage in that interactive process when it seems obvious an employee needs assistance. Of course, disabilities relating to mental health are not obvious or easy to discern so the question of the employer’s duty to pursue a discussion about an accommodation becomes even more complex in mental health disability cases. Employers need to watch this decision. It is hoped that we will get guidance as to whether or not an employee must initiate a request for an accommodation whether it be for religious beliefs or due to a disability. More to come on this topic.